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tangare [24]
3 years ago
5

The net present value of future growth opportunities (NPVGO) will contribute to an above average P/E multiple when the additiona

l share value created is:
Business
1 answer:
Simora [160]3 years ago
3 0

Complete Question:

The net present value of future growth opportunities (NPVGO)will contribute to an above average P/E multiple when the additional share value created is

A) positive and the return on new investment is lower than the cost of equity capital.

B) positive and the return on new investment is greater than the cost of equity capital.

C) negative and the return on new investment is lower than the cost of equity capital.

D) negative and the return on new investment is greater than the cost of equity capital.

Answer:

The net present value of future growth opportunities (NPVGO)will contribute to an above average P/E multiple when the additional share value created is

B) positive and the return on new investment is greater than the cost of equity capital.

Explanation:

A firm can determine the net present value of growth opportunities (NPVGO) by calculating the net present value of all future cash flows involving projects with growth opportunities.  The NPVGO provides an alternative way of thinking about stock valuations and can be determined by comparing the return on investment with the investment cost.  The NPVGO determines the per-share value of these growth opportunity projects in order to ascertain the firm's actual value.

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If the price level increases by 0.2 percent for every $100 billion increase in the money supply, by how much might prices rise i
Gala2k [10]

Answer:

3%

Explanation:

Increase in money supply ($ billion) = Increase in reserves / Reserve ratio

Increase in money supply ($ billion) = 150 / 0.1

Increase in money supply ($ billion) = 1,500

Increase in price level = (Increase in money supply / 100) * 0.2

Increase in price level = (1,500/100) * 0.2

Increase in price level = 3%

8 0
3 years ago
Aggregates all cash inflows, which the company receives from its ongoing activities and investment sources, and all cash outflow
levacccp [35]

The balance sheet aggregates all cash inflows, which the company receives from its ongoing activities and investment sources, and all cash outflows.

A company , abbreviated as co., is a felony entity representing an association of humans, whether herbal, criminal or a mixture of each, with a particular goal. company contributors share a common reason and unite to achieve unique, declared dreams.

An organization is a felony entity shaped by a group of individuals to interact in and operate an enterprise in a business or industrial capability. An organization's business line depends on its structure, which may vary from a partnership to a proprietorship, or maybe an employer.

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7 0
1 year ago
Suppose a new technology makes it possible to perfectly predict the weather on your computer. As a result, there isn't as much o
Zinaida [17]

Answer:

demand of

Fall

decrease

Explanation:

Here are the options to this question:

1.expect the (supply of/ demand of )

2.forecasters to (increase/ decrease)

3. weather forecasters to (decrease/ increase)

The new technology would reduce the need for weather forecasters. So t.v. stations and radios would no longer employ weather forecasters and might even lay off some forecasters. So the demand for forecasters would fall.

Due to the reduced demand for forecasters, there would be a large number of unemployed forecasters with no one willing to employ them. This would lead them to a reduction in their salary. When supply exceeds demand, prices fall.

I hope my answer helps you

6 0
3 years ago
Rahls issues stock to investors for $20,000, and has $5,000 of net income in its first year of operations. During Year 2, Rahls
Eva8 [605]

Answer:

The balance in stockholders' equity at the end of year 2 is $31,000

Explanation:

For computing the balance in stockholder equity at the end of year 2, first, we have to compute the balance for year 1  which is shown below:

Year 1 equity balance = Issue of stock + Net income

                                     = $20,000 + $5,000

                                     = $25,000

Now, year 2 balance would equal to

= Year 1 balance + Net income - Dividend paid

= $25,000 + $10,000 - $4,000

= $31,000

Hence, the balance in stockholders' equity at the end of year 2 is $31,000

4 0
3 years ago
E10-12 The following are selected 2017 transactions of Pedigo Corporation.
kap26 [50]

Entries are given.

DATE                 ACCOUNT TITLES                          DEBIT          CREDIT

Dec 31,2019       No entry                                                0                    

                                  No entry

                         (Considering that goodwill has an                               0

                         infinite existence, goodwill should

                         not be amortised.)

Dec 31, 2019      Patent Amortization                           $10,000

                           [$75,000×(1/5)×(8/12)] patents

                          (To record patent amortizations for                    $10,000

                           8 months)

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6 0
1 year ago
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