Answer:
$44,955.10
$38,131.84
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Investment X
Cash flow each year from year 1 to 9 = $6900
I = 7%
PV = $44,955.10
Investment Y
Cash flow each year from year 1 to 5 = $9300
I = 7%
PV = $38,131.84
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer:
AC Problems : Incurred even at 0 output level, much varying & deviant from cash flows
VC Problems : Doesn't include fixed cost, incomplete expenditure, incomplete financial (accounting) statements.
Explanation:
Average Cost is the cost per unit off output.
Problems with AC as a performance measure :
- It includes all (fixed & variable cost) average. So, including fixed cost, it is not zero even at zero output level.
- It's variance analysis during production & cost phases is very complicated.
- It's result are deviant as evident from cash flows.
Variable Cost is the cost incurred on variable factors of production.
Problems with VC as a performance measure :
- It doesn't include fixed cost. So, it is not a correct measure of complete total expenditure.
- Fixed costs are huge. No financial inclusion of them makes accounting information unreliable (for legal purposes)
<span>Intense competition!!!I hope this helped!!</span>
A turnover of 7 times represents the company issued and collected trade credit, at the level of its accounts receivable balance, 7 times during the year.
The number of times per year that a company collects its average accounts receivable is referred to as accounts receivable turnover.Accounts receivable turnover is a measure used by accountants and analysts to assess how effectively businesses collect on credit given to customers.
The higher your receivable turnover ratio, the better, because it indicates that your customers pay their invoices on time and that your company collects debts efficiently. A higher turnover ratio also indicates improved cash flow and a more solid balance sheet or income statement.
To know more about receivables turnover, click here.
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Answer:
$43.19
Explanation:
Use dividend discount model(DDM) to solve this question; specifically constant dividend growth model.
P0 = D1/(r-g)
P0 = Current price
D1 = Next year's dividend = $3.11
r = investors' required return = 11.4% or 0.114 as a decimal
g = dividend growth rate = 4.2% or 0.042 as a decimal
P0 = 3.11/(0.114 - 0.042)
P0 = $43.19
Therefore, this stock price is $43.19
