Managerial capitalism posits that dominant CEOs would no longer run businesses but instead hired employees would run the businesses as a new class of professional CEOs.
All economic systems must answer the 3 basic questions:
1. What goods and services will be produced
2. How will the goods and services be produced?
3. Who will consume the goods and services?
Answer:
Chen should buy the machine
Explanation:
Buying of the new milling machine would make a business sense if the net present value of the new machine is positive.
By net present value I mean if the today's worth of the asset considering its initial cash outflow and subsequent cash inflows bring about a positive worth today.
Net present value=initial cost-cash inflows(discounted to today's terms)
Net present value=-$40,000+($8000*6.4177)
=-$40,000+51341.6
=$11,341.60
The 6.4177 is the annuity factor for 9% cost of capital for 10 years.
Since the project has a positive net present value,Chen should buy the machine
Answer:
the current stock price is $19.25
Explanation:
The computation of the current stock price is shown below:
= Dividend × (1 + growth rate) ÷ (Required rate of return - growth rate)
= $1.10 × (1 + 0.05) ÷ (11% - 5%)
= $1.155 ÷ 6%
= $19.25
hence, the current stock price is $19.25
We simply applied the above formula
Answer: The answer would be $536.73
Explanation: Add up all the deduction amounts which will equal to 198.51, take away that amount from the 735.24 he earned and it will give you your answer of $536.73.
