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kupik [55]
2 years ago
7

If the present value of $280 paid one year from now is $250 what is the one-year discount factor?

Business
2 answers:
OleMash [197]2 years ago
7 0

Answer:

12%

Explanation:

The discount rate  will be  PV/FV -1

i.e., i =  (Fv/pv )-1

i=  (280/250) - 1

i = 1.12-1

i=12%

lora16 [44]2 years ago
7 0

Answer:

0.89

Explanation:

1/1+r

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firm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. It has 2,000 bonds outstanding, each
Yuki888 [10]

Answer:

A Firm

The firm's WACC is:

= 12.16%

Explanation:

a) Data and Calculations:

                                              Common               Bonds

                                                  Stock

Outstanding shares/bonds  2,000,000              2,000

Market price per unit                $2                     $1,200

Total market value             $4,000,000   $2,400,000

Total value of debt and equity = $6,400,000

Weight                                      62.5%                37.5% ($2,400/$6,400*100)

Cost of bonds (coupon rate) = 10%

Tax rate = 34%

Firm's beta = 1.5

Risk-free rate = 5%

Market risk premium = 7%

After-tax cost of bonds = 6.6% (1 - 0.34) * 10%

Cost of common stock =

Risk Free Rate + Beta x (Market Return - Risk Free Rate)

= 5% + 1.5 x (7%)

= 5% + 10.5%

= 15.5%

WACC = 15.5% * 62.5% + 6.6% * 37.5%

= 0.096875 + 0.02475

= 0.1216

= 12.16%

7 0
2 years ago
Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the poll
vitfil [10]

Answer:

d. Firm A will spend $4,000.

Explanation:

Since Firm B cost of Cleanup before it gets the the river is less than the cost of pollution permits, it will choose to clean up its pollution.

However, since Firm A cleanup cost per ton ($100) is greater than the cost of the pollution permit, it will choose to buy permits.

Maximum Allowable Number of Permits=40

Therefore, Firm A will clean up 10 Tons and dump 40 Tons of Waste.

Cost =(10 Tons *$100)+(40 Tons * $75)

=$(1000+3000)

=$4000.

Firm A will spend $4000.

4 0
3 years ago
Read 2 more answers
Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginnin
Veronika [31]

Answer:

Overhead rate= 34.24

Explanation:

Giving the following information:

Labor-hours for the upcoming year at 38,600.

The estimated variable manufacturing overhead was $5.90.

The estimated total fixed manufacturing overhead was $1,093,924.

Overhead rate= Estimated indirect cost/allocation measure

Overhead rate=[(38600*5.90+1093924)]/38600= 34.24

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3 years ago
Financial literacy is the set of skills and knowledge needed to make __________ about money matters. A.informed decisions B.unin
JulsSmile [24]
Financial literacy is the set of skills and knowledge needed to make INFORMED DECISION about money matters.  The correct option is A.
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Which of the following statements would need to be documented in a report? a. Damaging winds, common in strong tornadoes, caused
trasher [3.6K]

Answer:

The answer is letter C.

Explanation:

The statement that would need to be documented in a report is The Fujita-Pearson tornado scale rates tornadoes with wind speeds of 261 to 318 miles per hour as F5 storms.

3 0
3 years ago
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