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Serjik [45]
3 years ago
12

Jenin recently purchased 100 shares of Tarifi's Optical common stock for $6,000. The stock is expected to provide an annual cash

flow of dividends of $400 indefinitely. Assuming a discount rate of 8 percent, how does the price Jenin paid compare to the value of the stock?
Business
1 answer:
dusya [7]3 years ago
8 0

Answer:

Since the present value of the perpetuity ($5,000) is less than the price that Jenin paid for the stocks ($6,000), we can conclude that she paid an excessively high price for them.

Explanation:

Jenin invested $6,000 in stocks that yield a perpetual dividend. In order to compare if Jenin made a good deal we must find the present value of the perpetuity:

present value = annual cash flow / discount rate = $400 / 8% = $5,000

Since the present value of the perpetuity is less than the price that Jenin paid for the stocks, we can conclude that she paid an excessively high price for them.

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Coronado Industries incurred the following costs for 68000 units: Variable costs $408000 Fixed costs 392000 Coronadohas received
Elis [28]

Answer:

B) $8.80

Explanation:

Coronado's current variable costs = $408,000 / 68,000 units = $6 per unit

Since this special order wouldn't increase fixed costs, they should not be considered in this calculation.

What has to be considered are the additional $2,800 spent for shipping the goods = $2,800 / 3,500 units = $0.80 per unit

Coronado's total costs for this special order = $6.80 per unit

If it wants to earn a $7,000 profit for this order, that means that they will need to earn a profit of $2 per unit (= $7,000 / 3,500 units).

The unit price for this special order should be = $6.80 + $2 = $8.80

7 0
3 years ago
4. Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. T
anyanavicka [17]

Answer:

present value = $6,246.34

Explanation:

given data

loan payment 1st year  = $200 per month

loan payment 2nd year = $400 per month

annual interest rate =  12%

solution

we get here present value of 2 year loan that is express as

present value of 1st and 2

present value = present value of 1st + present value of 2nd year

we get here

present value = { $200 × \frac{1}{0.01} - \frac{1}{0.01(1.01)12} + $400 × \frac{1}{0.01} - \frac{1}{0.01(1.01)12} } ÷ 1.0112

present value = $6,246.34

7 0
3 years ago
Ginger is a United States citizen who paid the following foreign income taxes: $10,000 tax paid to England on consulting fee inc
liberstina [14]

Answer:

$0

Explanation:

Ginger has to choose between claiming a tax credit of a deduction for income taxes paid to foreign countries. She has already claimed a $5,000 foreign income exclusion (for taxes paid in Spain), and she has already made the deduction for the $1,000 paid in taxes to France. She can also claim a deduction for the $10,000 paid in taxes to England.

Since she already claimed tax deductions, she can no longer claim a tax credit, it is either one or the other.

6 0
3 years ago
Golf Inc. and Golfanatics Corp. are close competitors. Last year, both had the same level of cost of goods sold, but Golf Inc. t
Gemiola [76]

Answer:

b. Golfanatics did a better job because its inventory turnover was higher.

Explanation:

Inventory turnover is defined as the number of times a business sells off its inventory in a year. Businesses target higher inventory turnover as this implies that they are making more sales.

The inventory turnover of Golf Inc was 5 times in the year.

The inventory turnover of Golfanatics was every 65 days, so in a year turnover would have been= 365/65 = 5.615

So Golfanatics turned over their inventory more times (5.615 times) than did Golf Inc (5 times).

4 0
3 years ago
Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which
34kurt

Answer:

marginal analysis

Explanation:

it is believed that the rational man makes marginal analysis.

for example, a rational man would continue consumption up to the point that the marginal utility of the last bottle consumed equal marginal price.

If marginal utility falls below price, consumption should stop.

If marginal utility is above price, consumption should continue

4 0
3 years ago
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