What is limited writing system
1 answer:
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Answer:
net present value NPV = $79800
so correct option is D) $79,800
Explanation:
solution
we knw that Net Present value = PV of cash inflow - PV of cash outflow ............1
so here PV of cash outflow = $300000
and Net sales = $200000
expenses = $80000
Depreciation =
Depreciation = $50000
so Net income before taxes = Net sales - Depreciation - expenses
Net income before taxes = $200000 - $80000 - $50000
Net income before taxes = $70000
and Tax expenses @ 40% = $28000
so
Net income = Net income before taxes - Tax expenses
Net income = $70000 - $28000
Net income = $42000
and
Depreciation = $50000
Net cash inflow = Net income + Depreciation
Net cash inflow = $42000 + $50000
Net cash inflow = $92000
and
PVIFA @ 10% 5 years = $3.7908
so
PV of cash inflow = $348755
PV of salvage value = $50000 ×0.6209
PV of salvage value = $31045
and
so here Total PV of total cash inflow = $379800
and
net present value NPV = Total PV of total cash inflow - PV of cash outflow
net present value NPV = $379800 - $300000
net present value NPV = $79800
so correct option is D) $79,800
Answer:
b. Will always be higher than the dividend paid per share
Explanation:
A firm pays dividend to it's stockholders based upon it's earnings.
Earnings per share (EPS) is expressed as:
=
Dividend payout ratio on the other hand is expressed as:
= EPS (1 - b)
wherein, b = retention ratio which denotes the percentage of earnings retained by a firm i.e not distributed as dividends.
Thus, a firm's earnings per share would always be higher than the dividend paid by it per share.