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3 years ago

9

Assuming a company has no other funding sources other than debt and common equity, what is the difference between enterprise val

ue and equity value?

1 answer:

lyudmila [28]3 years ago

3 0

Answer:

eat potato bitc 1234567890

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Consider how Hunter Valley, a popular ski resort, could use capital budgeting to decide whether the $9 million River Park Lodge

Vesnalui [34]

Answer:

1.$2,035,692

2.$1,091,248

3.8.24 years

4.22.97%

Explanation:

Hunter Valley

1. Computation for the average annual net cash inflow from the expansion.

Formula for Average annual net cash inflow from operation

= Numbers of skiers day * Contribution margin per skier

(122*162) * ($245 - $142)

=19,764*$103

= $2,035,692

2.Computation for the average annual operating income from the expansion

Formula for Average annual operating income from expansion

= Annual cash inflow - Depreciation

= $2,035,692 - ($9,000,000 - $500,000) / 9

= $2,035,692-$8,500,000/9

$1,091,248

3.Computation for the Payback period

Payback period = Initial investment / Annual cash inflows

= $9,000,000 / $1,091,248

= 8.24 years

4.Computation for the ARR

ARR = Average annual income / Average investment

Hence:

Average investment = (Cost +Residual value) / 2

= ($9,000,000 +$500,000) / 2

=$9,500,000/2

= $4,750,000

ARR = $1,091,248 / $4,750,000

=0.2297×100

= 22.97%

4 0

3 years ago

On January 1, 2017, the Morgantown Company ledger shows Equipment $59,000 and Accumulated Depreciation – Equipment $9,600. The d

Arada [10]

Answer:

Revised annual depreciation $9,380

Explanation:

Equipment $59,000

Accumulated Depreciation – Equipment $9,600

Useful life of 7 years

Salvage value of $2,500

Annual Depreciation updated

$59,000 - $9,600 - $2,500 = $,9380

To find the revised annual depreciation we have to deduct of the total equipment the accumulated depreciation Year to Date.

$59,000 - $9,600 = $49,400

At this value we have to substract the Salvage Value of the equipment,

$49,400 - $2,500 = $46,900

So, the revised annual depreciation it's $ $46,900 / 5 Years = $9,380

7 0

4 years ago

Natasha and sergio want to prevent their daughter from contracting a specific sti, so they arrange for her to receive a vaccinat

frez [133]

The STI that Natasha and Sergio is trying to prevent into having their daughter not have it from vaccination is HIV or also known as the Human Immunodeficiency Virus, this causes infection and for it to be developed into AIDS over time.

5 0

4 years ago

Read 2 more answers

Philip Morris has issued bonds that pay semiannually with the following characteristics:

topjm [15]

Answer:

a) ≈ 9.6 years

b) Modified duration is a better measure because Modified duration consider the concept of negative convexity

c) i) coupon of bond = 4%

Modified duration will increase since the coupon rate of payment decreased

ii) Maturity of bond = 7

Modified duration will decline as Maturity period has declined to 7 years

Explanation:

A) Calculate modified duration using the preceding information

modified duration = Macaulay duration / ( 1 + (yield to maturity / 2 ))

= 10 / ( 1 + ( 0.08 / 2 ))

= 9.615 years

B) Modified duration is a better measure because Modified duration consider the concept of negative convexity while Macaulay methods shows the inverse relationship between the duration of the bond and coupon payment .

<u>C) Determine Direction of change in modified duration if </u>

i) coupon of bond = 4%

Modified duration will increase since the coupon rate of payment decreased

ii) Maturity of bond = 7

Modified duration will decline as Maturity period has declined to 7 years

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3 years ago

________ can adopt one of two competitive strategies: they can challenge the leader or they can play along with competitors and

Tcecarenko [31]

I need more evidence or is this just it

6 0

3 years ago