Answer:
S.S.S. should not purchase the shopping center because its NPV is negative, i.e. -$1,952,890.30
Explanation:
Note: See the attached file to see how the net present value is calculated.
From the file, it can seen that the project will result in a negative NPV of $1,952,890.30. Therefore, S.S.S. should not purchase the Shopping center.
Answer: False
Explanation:
The Basic Financial Statements for a Proprietary Fund includes:
1. Statement of net position
2. Statement of revenues, expenses
3. Statement of changes in fund net position
Financial institutions are organizations that process monetary transactions, including business and private loans, customer deposits, and investments. Some examples of depository financial institutions are commercial banks and credit unions. Some examples of Non-depository institutions are mutual funds, Security Firms (Investment banking, Equity Broking), Pension Funds, and Insurance Companies.
Answer: Ke = 8% = 0.08
ROE = 10% = 0.10
Expected EPS = $6
Plowback rate ( b) = 40% = 0.40
Dividend per share (D) = 60%x $6 = $3.60
Po = D(1+g )/ke-g
Po = $3.6(1+0.04)/0.08-0.04
Po = $3.744/0.04
Po = $93.60
The current market price is $93.60
The price-earnings ratio = market price per share/Earnings per share
= $93.6/$6
= 15.6
The correct answer is C
Explanation: The price-earnings ratio is the ratio of market price per share to earnings per share. In this scenario, it is important to obtain the market price per share using the above formula. Thereafter, the market price per share is divided by the earnings per share. There is need to calculate the dividend per share based on the retention rate of 40%. since the retention rate is 40%, the dividend pay-out rate will be 60%. Thus, dividend is 60% of the expected earnings per share. The estimation of growth rate (g) is based on Gordon's growth model, which is g = r x b. r represents return on equity while b denotes the plowback(retention rate).
Answer:
$1,120,500
Explanation:
January 1 $500,000*12/12*9%=$45,000
March 1 $600,000*10/12*9%=$45,000
July 31 $480,000*5/12*9%=$18,000
September 30 $600,000*3/12*9%=$13,500
December 31 $300,000*0/12=0
Interest on Bonds Outstanding $11,100,000*9%=$999,000
Total Interest to be capitalized=$1,120,500
