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xz_007 [3.2K]
2 years ago
6

The appropriate discount rate for the following cash flows is 7.38 percent per year.

Business
1 answer:
Kaylis [27]2 years ago
6 0

Answer:

Present value = $7107.76379 rounded off to $7107.76

Explanation:

The present value of cash flows can be calculated by discounting each of the cash flow back to today's value and summing them up. The present value of the cash flows can be calculated using the following formula,

Present Value = CF1 / (1+r)  +  CF2 / (1+r)^2  +  ....  +  CFn / (1+r)^n

Where,

  • n is the total number of periods
  • CF represents the cash flow in each year
  • r is the discount rate

Present value = 2480 / (1+0.0738)  +  0  +  3920 / (1+0.0738)^3  +  

2170 / (1+0.0738)^4

Present value = $7107.76379 rounded off to $7107.76

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Answer:

Company A's price per share is $45

Explanation:

The P/E ratio of one company can be used by investors and analysts to determine the value of another companie's stock in the industry. This is called apples-to-apples comparism.

The P/E ratio is used to value a company by comparing its share price to earnings per share.

P/E ratio= market value of shares/ earnings per share

For company B

P/E ratio= 30/2= $15

Using company B's P/E ratio as a benchmark for company A

15= Price per share /3

Price per share = 15*3= $45

8 0
3 years ago
Joe sends for a MBA catalog from State University. According to the catalog, the MBA applications are evaluated on the basis of
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Answer:

The answer is: C) There is a valid contract

Explanation:

According to Appellate Court ruling in Steinberg v. Chicago Medical School;

The two parties (Joe and Sate University) entered a valid contract agreement upon receiving the $100 dollar application fee from Joe. State University´s catalog is considered to be the Offer part of this contract and the $100 application fee is considered the Consideration part of the contract.

7 0
3 years ago
Ethier Enterprise has an unlevered beta of 1. Ethier is financed with 55% debt and has a levered beta of 1.1. If the risk free r
tresset_1 [31]

Answer:

The correct answer is 0.4%.

Explanation:

According to the scenario, the computation for the given data are as follows:

If no debt, then required return can be calculated by using following formula:

Required return ( no debt) = Risk free rate + Unlevered Beta × Market risk premium

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= 0.06 + 0.04

= 0.10 or 10%

If debt, then required return can be calculated by using following formula:

Required return ( with debt) = Risk free rate + levered Beta × Market risk premium

= 6% + 1.1 × 4%

= 0.06 + 0.044

= 0.104 or 10.4%

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6 0
3 years ago
22. Akshay worked at a cafe while he was a college senior in Boston,
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Answer: The answer is C

Explanation: I got this correct on a test

7 0
2 years ago
Read 2 more answers
When a company discontinues an operation and disposes of the discontinued operation (component), the transaction should be inclu
Ne4ueva [31]

Answer:

1. an amount after continuing operations.

Explanation:

In preparing the income statement the transactions resulting into gain or loss from the discontinued operations are always reported in income statement.

For this there is special heading that is

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This provides for reporting all the transactions as part of business but in an highlighted manner.

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