Estimates of a stock's intrinsic value calculated with the free cash flow methodology depend most critically on the terminal value used.
What is intrinsic value of stock?
A thing, asset, or financial contract can have intrinsic value if it has some basic, objective value. It may be a good buy or a good sale if the market price is less than that value. There are various approaches for determining a reasonable appraisal of a share's intrinsic value when reviewing equities.
What does terminal value mean?
The worth of a firm, project, or asset after the period for which future cash flows can be predicted is known as its terminal value (TV). After the projected period, terminal value assumes a company will continue to expand at a specific pace indefinitely.
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Answer:
Cost of Goods Sold will decrease by $2,679 after proration.
Explanation:
Under-applied or over applied overhead:
= Overhead incurred - Overhead applied
= $76,000 - $79,700
= (-$3,700)
Therefore, the Cost of Goods Sold after the proration:
= (over applied overhead × Overhead applied to COGS) ÷ Total overhead applied to cost of goods sold and finished goods
= ($3,700 × $57,700) ÷ ($57,700 + $22,000)
= $213,490,000 ÷ $79,700
= $2,679
Hence, the Cost of Goods Sold will decrease by $2,679 after proration.
Answer:
A. Answer questions about the project prior to submittal of proposals
Explanation:
A bidder conference is a meeting held by a buyer to discuss a possible purchase with multiple potential suppliers.
Answer:
Option (B) is correct.
Explanation:
Implicit costs refers to the opportunity cost that is associated with the selection of the alternative.
In this question, the Rosa wants to migrate to another country, if she do so then she have to foregone her earnings in the home country.
Therefore, Rosa's stream of future earnings in her home country is $500,000 and it is considered as implicit cost. She give up this much of income to earn $800,000.
Explicit costs includes:
(i) Transportation = $5,000
(ii) Application and other processing fees = $4,000
Answer:
b. Relevant range includes all possible levels of activity that a company might experience.
Explanation:
In the cost-volume profit analysis, there are following assumptions which are described below:
1. There are two types of cost i.e variable cost and the fixed cost.
2. The sale mix remains same in case of multi product company
3. The volume of sales equals to volume of production
4. The cost is linear over the appropriate range i.e variable cost per unit and the fixed cost which remains same plus the selling price is also constant.
