I would say perhaps such capital would likely be non-refundable which would have to be balanced with the knowledge that since it is a franchise then it is likely that it would be a business that iswell known and well established ie with a good name and good products so that would increase chances of success given a hard working, industrious franchisee and a good location, presuming that the franchisor will help with the setting up of the business.
Answer:
fair value is $761
Explanation:
Given data
bond value = $1000
rater r = 12 %
rate R = 16%
time = 20 year
to find out
a fair price
solution
we know compounding period in year is = 4
so time 20 x 4 = 80
fair Price = 
[(Quarterly Coupon) / (1 + R/400)^t] +bond value / (1 + R /400)^t
here
Quarterly Coupon = 12 × 1000/400 = 30
so
fair Price = [(30) / (1 + 16/400)^k] + 1000 / (1+16/400)^80
solve it we get
fair value is $761
Answer:
buying puts
Explanation:
A put option is a sale option. It gives the buyer the right (but not the obligation) to sell an asset in the future to the seller of the option at a previously determined price.
The owner or buyer of a put option benefits from the option if the underlying asset falls, that is, if when the put option expires, the asset (a share for example) has a price lower than the agreed price . In that case, the option buyer will exercise his right and sell the asset at the agreed price and then buy it at the current market price, earning the difference.
If the price turns out to be higher than the agreed price, known as the strike or strike price, the buyer will not exercise his right and will simply have lost the premium he paid to acquire the option. Therefore, your benefit may be unlimited, but your loss is limited to the premium you paid.
Answer:
27.79
Explanation:
According to the given situation, the computation of average fixed inspection cost per unit is shown below:-
Average fixed cost of inspection = Inspection cost ÷ Machine hous in a month
= $197,309 ÷ 7,100
= 27.79
Therefore for computing the average fixed inspection cost per unit we simply applied the above formula.
Answer: 11.26%
Explanation:
From the question, we are told that Roy's Welding has annual sales of $96,700, a profit margin of 7.45 percent, and a payout ratio of 40 percent ans that the firm has $11,500 of debt and owners' equity of $31,200.
The internal growth rate for this firm assuming the payout ratio remains constant goes thus:
We have to calculate the net income first and this will be:
= $96700 × 7.45%
= $7204.15
The total assets will be debt plus the equity. This will be:
= $11500 + $31200
= $42700
ROA will now be net income divided by
the total assets which will be:
=7204.15/42700
= 0.1687
Retention ratio will be:
= 1-payout ratio
= 1 - 40%
= 1 - 0.4
= 0.6
Therefore, internal growth rate will be:
=(ROA × Retention ratio)/[1-(ROA × Retention ratio)]
=(0.1687 × 0.6)/[1-(0.1687 × 0.6)]
= 0.10122/(1 - 0.10122)
= 0.10122/0.89878
= 0.1126
=11.26%
