Answer:
Capital gain = $2.16
Explanation:
The return on equity is the sum of the dividends earned and capital gains made during the holding period of the investment.
Dividend is the proportion of the profit made by a company which is paid to shareholders.
Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal.
Therefore, capital gain as follows:
Capital gain = $45.36-43.20
Capital gain = $2.16
Answer: D
Explanation:
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Answer:
A. Payback period
- payback period = 2.875 years, therefore, the project should be accepted because the payback period is less than 3 years.
B. Internal Rate of Return (IRR)
- IRR = 22.69%, therefore, the project should be accepted since the IRR is higher than the required rate of return (8%).
C. Simple Rate of Return
- simple rate of return = 18%, therefore, the project should be accepted because the simple rate of return is higher than the required rate of return.
D. Net Present Value
- NPV = $4,647.85
, therefore, the project should be accepted since the NPV is positive.
Explanation:
year cash flow
0 -$10,000
1 $2,400
2 $4,800
3 $3,200
4 $3,200
5 $2,800
6 $2,400
discount rate 8%
I used a financial calculator to determine the NPV and IRR.
Payback period = $10,000 - $2,400 - $4,800 = $2,800 / $3,200 = 0.875
payback period = 2.875 years
simple rate of return:
average cash flow = ($2,400 + $4,800 + $3,200 + $3,200 + $2,800 + $2,400) / 6 = $3,467
depreciation expense per year = $10,000 / 6 = $1,667
simple rate of return = ($3,467 - $1,667) / $10,000 = 18%
Answer:
Decreases.
Explanation:
The law of demand states that for an elastic good an increase in price results in a decrease in quantity demanded.
Elasticity of demand is the degree of responsiveness of quantity demanded to changes in price.
When a good is highly elastic that means the elasticity is above 1. For example if elasticity is 2, an increase in price by 1 unit will result in a decrease in quantity supplied by 2 units.
As total revenue is equal to price multiplied by units sold, total revenue will also reduce with price increase of a highly elastic good.
Answer:
$90
Explanation:
Initial number of shares purchased = 15
Initial value of a share during purchase= $42
Initial amount used to purchase shares = $42*15=$630
Divided received per share=$2
Total amount of divided received for the shares= $2*15=$30
Selling amount per share=$46
Total selling amount for the shares=$46*15=$690
Returns in shares= $30 + ($690-$630) = $30+$60=$90