Answer:
$41.96
Explanation:
The first thing you need to do is to calculate terminal value at the end of time t = 3. Then the intrinsic value of the stock is sum of discounted cashflow from t =1 to t = 3 (cashflows at t = 3 includes dividend as well as terminal value).
Terminal value at t = 3 = Dividend in year 4/(Required rate of return - Dividend growth)
= 4.25 x (1 + 3%)/(12.5% - 3%)
= 46.08
Then value of the stock is calculated as below:
Stock intrinsic value = 3.8/(1 + 12.5%) + 4.1/(1 + 12.5%)^2 + (4.25 + 46.08)/(1 + 12.5%)^3
= 41.96
Answer:
payback 5 years
if the ltaer years cash flow increases several times, it would not affect the payback date. This is a disavantage of this method, it is focus on recover the investment without considering the total cash flow of the project.
Explanation:
Payback = the time in the life of a project on which the initial ivnestment is recover.
-31,000 Balance
Year 1 2,000 - 29,000
Year 2 0 - 29,000
Year 3 8,000 - 21,000
Year 4 9,000 - 12,000
Year 5 12,000 0
At year 5 the proejct achieve payback
Answer:
C
Explanation:
An increase in underdeveloped countries cannot be the reason why businesses would expand abroad because there wont be as much potential buyers in underdeveloped economies as they have very low capita income and most of the residents live in very poor conditions. But however other options are valid because favorable trade agreements and developed transportation and IT makes the international trade easy and beneficial to both the buyer and the seller. Moreover, when domestic markets matures, the rate of growth slows down and falls to zero. this is when the businesses want to emerge and find new markets abroad in order to benefit from the trade as in matured market there is less chance for businesses to grow and it becomes risky
Answer:
A.) 270 units (b.) Increase
Explanation:
Given the following :
Annual demand (A) = 2870
Working days = 205
Review period (P) = 16 working days
Lead time (L) = 2 working days
Standard deviation (σ) = 6 per working day
Service probability = 76%
Therefore, z = NORMSINV(0.76) = 0.71
Average demand (D) = 2870 / 205 = 14
Optimum target level, (S) is given by the relation:
D×(P+L) + z×σ×√(P+L)
14×(16+2) + 0.71×6×√(16+2)
(14×18) + 4.26 × √18
252 + 4.26*4.242
252 + 18.07
= 270.07 units = 270 units
B) If service probability increases to 97%, Z will automatically increase, hence a corresponding increase in the optimal target level.
In my opinion, we all have our own values and true colors so we can't judge and predict by only looking cover so we need time to make sure what kind of other stuffs need to fill up after her or his probation period. After that we should decide which is the best way and shouldn't terminate by just only watching cover of a new one during his or her probation period.
