Answer:
a. 50, which is high by historical standards.
Explanation:
a. 50, which is high by historical standards.
It is high because current price is high than earnings.
Earning yield is the reciprocal of price earning ratio that is = 1/ (P/E ratio) expressed as a percentage.
So
PRice Earning ratio = Market price per share/ Earning per share
Price Earning ration= $20/ 0.4 = 50
Earning per share= Earnings/ No of shares outstanding
EPS= $ 1 million/$ 2.5 million = 0.4
Answer:
Need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.
Explanation:
The main objective of every company is to earn profits and grow in the market. But to attain that objective company needs to formulate and implement some business strategies which shall provide them the edge to success.
The management has the duty to run the company with the resources available and optimise them at their best.
To attain maximum profit the management shall formulate a strategy that shall provide the customers with maximum benefits with the product, and the business an extra edge to market share so that the competitors fall behind and the business gains maximum reach.
Answer:
The answer is: You should invest in Project B since it has a higher NPV ($12.65) than Project A ($12.04)
Explanation:
Using an excel spreadsheet we can determine the net present value (NPV function) of the cash flows associated with each project.
<u>Project A</u> <u>Project B</u>
40 30
50 30
60 30
0 30
discount rate for both projects = 15%
NPV Project A's cash flows = $112.04 minus the amount invested (100) = $12.04
NPV Project B's cash flows = $85.65 minus the amount invested (73) = $12.65
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