Answer:
$40,970
Explanation:
The computation of the total cost of the material K is given below;
Material needed for August sales:
= 14,000 × 3
= 42,000
Desired ending inventory:
= 14,500 × 3 × 20%
= 8,700
Beginning inventory:
= 2,500
Now
Purchases in August:
= (42,000 + 8,700 - 2,500) × $0.85
= $40,970
He will borrow 80% of the cost of the car.
80/100*11350= <span>$ 9080</span>
Answer:
The net present value is $3,624
Explanation:
Net present value is the sum of all cash inflows and outflows in present value terms. It is calculated by discounting each cash flow with given interest rate and for specified period of time.
Net present value of this project is $3,623.84
All the workings and calculations are made in an MS Excel File which is attached with this answer.
Answer:
5%
Explanation:
In order to compute the abnormal return first we have to find out the actual return which is shown below:
Actual return is
= ($21 - $18 + 1.32) ÷ ($18) × 100
= 24%
And, the expected return is
= Risk free rate of return + Beta × (Market rate of return - risk free rate of return
= 7% + 1.20 × (17% - 7%)
= 7% + 1.20 × 10%
= 7% + 12%
= 19%
So, the stock abnormal return is
= 24% - 19%
= 5%
