Answer:
The present value of the cash flows from the investment is $1015.85.
Explanation:
The present value of the cash flows can be calculated using the discounted cash flows approach also known as the DCF approach. Under this approach, the cash flows are discounted to the present day value using a certain discount rate.
The formula to calculate the present value of the cash flows is,
Present value = CF1 / (1+i) + CF2 / (1+i)^2 + ... + CFn / (1+i)^n
Where,
- CF are the cash flows
- i is the interest rate which is also the discount rate
Present value = 500 / (1+0.12) + 800 / (1+0.12)^3
Present value = $1015.85277 rounded off to $1015.85
If too high ppl won't buy. If no buyers, no profit, and it is basically a cause and effect :)
Answer:
<u><em>The correct answer is:</em></u> clarifies (1) how the business will provide customers with value, and (2) why the business will generate revenues sufficient to cover costs and produce attractive profits.
Explanation:
The business model of a company is a tool that helps a new enterprise to enter the market seeking to understand all the variables that make up the business and that integrated will assist in providing value to customers and generating enough revenue to cover costs and produce attractive profits.
Because it is an easy tool to make, cheap and easy to implement, it is essential that each company develop its business model with a focus on creating value in order to achieve innovation and creativity for business success.
It is important for the entrepreneur to follow some steps to realize his business model, which can be constantly modified when he finds more creative strategies to generate business value. Some questions can be asked such as: What will be done, how will it be done, for whom will it be done and how much will be spent. According to all these premises, it will be possible to seek the best way to implement a business that is profitable and competitive in the market.
Answer:
a.) Long-run earnings growth occurs primarily because firms retain earnings and reinvest them in the business.
Explanation:
Retained earnings are portions of a firm's net income that is plowed back into the business. For example if it makes a net income of $2,000,000 and it pays out 30% of that as dividends, the dividends in dollars would be 0.30*2,000,000 = $600,000. The remaining portion i.e 70% is retained back into the company, hence the amount would be 0.70*2,000,000 = $1,400,000.
This retained amount could be used to invest in potential profitable businesses that will result in increase in shareholder value. In a nutshell, the higher percentage of retained earnings the higher the growth rate a company will experience.
Answer: $22,500
Explanation:
First calculate the rate of allocation based on sales to determine how much of Department T's sales should be attributed to Advertising.
The Rate of Allocation based on Sales = Advertising Expense/Total sales
= 50,000/475,000
= 0.105263
= 10.5263%
This 10.5% can then be used to find out how much of Advertising to apportion to Department T based on department sales,
= Department sales * Allocation rate
= 213,750 * 10.5263%
= $22,500
$22,500 should be allocated to Department T.
