Answer: $287,000
Explanation:
Sunk costs are costs that have already been incurred and so should make no impact on the decision to be made. In the case of fixed assets to be replaced, the Sunk cost would be the Book value of the Asset.
Sunk Cost of Old Machine = Book Value of old machine
Sunk Cost of Old Machine = Cost Price - Accumulated Depreciation
Sunk Cost of Old Machine = 410,000 - 123,000
Sunk Cost of Old Machine = $287,000
Answer:
$29.13
Explanation:
first we need to calculate the growing perpetuity value for year 2:
= dividend / (discount rte - growth rate) = $2.24 / (10.2% - 2.8%) = $2.24 / 7.4% = $30.27
Now we have to calculate the present value of the dividends for the next two years and the growing perpetuity:
present value = ($2.60 / 1.102) + ($2.24 / 1.102²) + ($30.27 / 1.102²) = $2.36 + $1.84 + $24.93 = $29.13
Answer:
Weight of stock A = 60.33%
Weight of stock B= 39.66%
Explanation:
Stock A has 134 shares that is sold at $44
Stock B has 114 shares that is sold at $34
The total market value of stock A can be calculated as follows
= 134×44
= 5,896
The total market value of stock B can be calculated as follows
= 114×34
= 3,876
Total value of both stocks = 5,896+3,876
= 9,772
Therefore the weights of the portfolio can be calculated as follows
Weight of stock A = 5896/9772
= 0.603×100
= 60.33%
Weight of stock B
= 3876/9772
= 0.3966×100
= 39.66%