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Stolb23 [73]
2 years ago
13

Your bank account pays an interest rate of 9 percent. You are considering buying a share of stock in XYZ Corporation for $90. Af

ter 1, 2, and 3 years, it will pay a dividend of $4. You expect to sell the stock after 3 years for $100.Is XYZ a good investment?
Business
1 answer:
dlinn [17]2 years ago
7 0

Answer: It is NOT a good investment.

Explanation:

Your bank account pays an interest of 9% per annum. This can be used as a discount rate to discount the dividends and the final Sales price to the present to see if the present value of Future benefits is more than what the stock is valued at now.

If the Present Value of the future benefits is higher than the cost now, XYZ is a good investment.

$4 are expected every year for 3 years and then on the third year, the stock will be sold for $100.

Discounting therefore gives us,

= (4 / (1 + 9%) ) + (4 / (1 + 9%)^2) + ( 4 / ( 1 + 9%) ^ 3) + ( 100 / ( 1 + 9%) ^ 3)

= 87.34

= $87.34

The Present Value of the future benefits including the future sales price is $87.34 which is less than the current cost of the stock at $90.

XYZ is NOT a good investment.

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Although there are some clear disadvantages associated with extending credit to customers, such as bad debt costs, most managers
WITCHER [35]

Answer:

The primary advantage they refer to is additional sales revenue.

Explanation:

Extending credit to customers is generally done through use of credit cards these days. This does allow the customers to buy goods and services on credit and pay later for those goods.

Offering credit is beneficial for both the shopkeepers or merchants and the buyers. Customers do not have to pay cash (as they can run out of cash at times), so they buy more and this increases the sales revenue for the merchants, which becomes the primary advantage for them and outweighs the costs.

5 0
3 years ago
ABC Corporation reports the following information:
Tpy6a [65]

Answer:

$480,000

Explanation:

Data provided as per the question below:-

Net income = $380,000

Depreciation = $70,000

Decrease in accounts receivable = $30,000

The computation of cash provided by operating activities is shown below:-

= Net income + Depreciation + Decrease in accounts receivable

= $380,000  + $70,000  + $30,000

= $480,000

Therefore we applied the above formula.

7 0
3 years ago
Alto Company issued 7% preferred stock with a $100 par value. This means that:
RideAnS [48]

Answer:

Option "C" is the correct answer to the following question.

Explanation:

Given:

Issue price of share = $100

Market price per share = $100

Preferred stock dividend rate = 7%

Computation of dividend per year :

Dividend per year = Issue price of share × Preferred stock dividend rate

Dividend per year = $100 × 7%

Dividend per year = $7

Dividends are always paid to preferred stock at fixed rates at face value.

7 0
3 years ago
Read 2 more answers
Sharon is unhappy with her job as a salesperson at a retail store for many reasons. Yesterday a customer asked her where the sha
postnew [5]

Answer:

<u>Customer satisfaction.</u>

Explanation:

Customer satisfaction is an extremely relevant factor for a company as it can directly influence the success or failure of a business.

The whole experience that the customer will have with your company will influence their perception and decision to re-establish relationships with the organization. The company should pay attention to the set of determinants responsible for customer satisfaction, the product must meet their needs, service and service should be cordial and optimized to clarify doubts and assist in the process of purchase and customer loyalty.

So on that issue, an employee like Sharon will negatively impact customer satisfaction, which has not been answered and badly answered. What the organization can do to improve this cycle is to invest in employee training and motivational policies that help increase job satisfaction and thereby increase customer satisfaction.

6 0
3 years ago
What is the acceleration of an object that has a mass of 4.0 kg if the net force acting on it is 26N
Lynna [10]
Use Newton's Second Law: Fnet = ma
where Fnet = total net force, m = mass of object, and a = acceleration of object.

You are given Fnet = 26N and m = 4.0kg. Plug them into the equation and solve for a:
26 = 4.0a
a = 6.5

The answer is 6.5 m/s^2
7 0
3 years ago
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