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3 years ago

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A project has an initial cost of $89,800, a life of 7 years, and equal annual cash inflows. The required return is 8.2 percent.

According to the profitability index decision rule, what is the minimum annual cash flow necessary to accept the project?

1 answer:

aliina [53]3 years ago

5 0

8.2 percent (the answer)

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Valorous Corporation will pay a dividend of $ 1.75 per share at this year's end and a dividend of $ 2.35 per share at the end o

IgorLugansk [536]

Answer:

The maximum price that a prudent investor would be willing to pay for a share of Valorous stock today is $37.92

Explanation:

In order to calculate the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today we would have to use the following formula:

Current price=future dividends*present value of discount factor(8%, time period)

Therefore, current price= $40/1.08^2 + $2.35/1.08^2 + $1.75/1.08 =

current price=$34.29+$2,01+$1,62

current price=$37.92

The maximum price that a prudent investor would be willing to pay for a share of Valorous stock today is $37.92

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A consumer's goal in buying a good or service is to get the most out of his or her income, or to maximize total utility. This is

marissa [1.9K]

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3 years ago

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Which of the following would be considered common financing activities: Sale of Common Stock Purchasing fixed assets Payment of

gtnhenbr [62]

Answer:

The correct answer to the following question is D) both options A ( sale of common stock ) and C ( payment of cash dividend ) would be considered as common financing activities.

Explanation:

Financing activities, whenever we talk about this, we refer to cash flow from financing activities , where cash flow is a form of financial statement which shows changes in balance sheet accounts and income statements accounts affect a company's cash and cash equivalents, and cash flow from financing activities is one of the three components of cash flow statement , where we will record all the cash inflows and outflows from the company which are related to financing activities. IN this type of activities we will include sale and purchase of stock, issuing of stocks, borrowing and repaying of short term and long term loans and also payment of dividends.

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3 years ago

1. You recently inherited some property between a wealthy neighborhood and a fairly poor neighborhood. You have constructed a bu

pishuonlain [190]

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Pricing is a very important component of Marketing. Marketing is essential for business performance.

The first objective of pricing is to ensure that the business is profitable.

The second is to ensure that one does not under price or over price. In order words, one would like to ensure that they get the best value possible for their products and or services.

A major factor for consideration when setting prices is the existence and behaviour of the competition and those of the customers.

According to the question, the convenience store will be the only one situated in the wealthy neighbourhood and those who are poor will not mind paying higher prices as the only other store which is the poorer neighbourhood is dangerous.

The challenge here is this, if the prices become too high for the poor residents to pay, they will start to think outside the box. They will opt for a solution(s) that will help them resolve the dilemma of having to choose between danger and having to spend so much at the new convenience store.

Their solutions could be to contribute some money to purchase a store at a safe location, where they can set up a business that will serve the community (both wealthy and rich) at reasonable prices.

Therefore, the best option is to ensure that the prices are just okay as an incentive for the poor to commute all the way to the new store rather than the one that has little or no security. The opportunity cost lost in terms of profit that would have been made is the cost to the company for ensuring that competition does not arise in the nearest future.

The consideration for whether or not the rich will pay is already attended to. Given that the wealthy don't have a convenience store within reach, this store most likely will be welcome as a relief to those who had to travel outside of their locality to do their shopping.

Cheers!

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3 years ago

TransactionsUnitsUnit Cost a. Inventory, Beginning 4,000 $24 For the year: b. Purchase, March 5 10,000 25 c. Purchase, September

Komok [63]

Answer:

Explanation:

1. Number of goods available for sale = Beginning Inventory + Purchase, March 5 + Purchase, September 19 = 4,000+10,000+6,000 = 20,000 units

Cost of goods available for sale = Beginning Cost of inventory + Cost of Purchase, March 5 + Cost of Purchase, September 19 = 4,000×24 + 10,000×25 + 6,000×27 = 96,000+250,000+162,000 = $508,000

2. Number of units in ending inventory = Number of units available for sale - Number of units sold = 20,000-4,200-9,000 = 6,800 units

3. Calculations are attached

4.

Income statement FIFO:

Sales $937,800 (4,200×69 + 9,000×72)

Less: Cost of Goods Sold ($326,000)

Gross profit $611,800

Less Operating expense $602,000

Net income $9,800

Income statement LIFO:

Sales $937,800 (4,200×69 + 9,000×72)

Less: Cost of Goods Sold ($342,000)

Gross profit $595,800

Less Operating expense $602,000

Net loss $($6,200)

Income statement LIFO:

Sales $937,800 (4,200×69 + 9,000×72)

Less: Cost of Goods Sold ($334,092)

Gross profit $603,708

Less Operating expense $602,000

Net income $1,708

**Cost of goods sold:-

Under FIFO = 96,000+5,000+225,000 = $326,000

Under LIFO = 105,000+162,000+75,000 = $342,000

Under weighted average method = 103,782+230,310 = $334,092

6. LIFO method minimize taxes

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3 years ago