ABC Hospital invests $5,095,000 in a joint venture with a reputable oncology group and the hospital agrees to a 55% interest in
the joint venture. Based on the estimates, the first year cash flow will be $1,500,000, the second year cash flow will be $3,000,000, the third year cash flow will be $4,500,000, and the fourth year cash flow will be $6,500,000. The expected return of 8.9% is used as the discount rate. Explain which of the two options you would recommend to the CEO. You may only select one option. Support your position and show your calculations. It is essential that you use at least two different financial ratio calculations.
Year Cash Flow Cumulative Cash flow Discounted Cash Flow(8.9%) 0 $5,095,000 $5,095,000 $453,455 1 $1,500,000 $3,595.000 $3,141,5452 $3,000,000 $ 595,000 $141,5453 $4,500,000 ($3,905,000) $3,4515454 $6,500,000ABC Hospital will get ROI in 3 years, this option I would recommend to the CEO.
<span>One of the benefits of contracting with celebrities to endorse the company's brand of athletic product is: It attracts attention A celebrity tend to has huge followers. By making that celebrity endorse our product, we will increase our brand recognition in the market and increases our customers.</span>
When Innove Tech is obtaining the technology from Ziff Corp.they are incurring acquisition cost.
Acquisition cost is the cost incurred for obtaining a property or asset including shipping, installation, taxes, customer fees, and testing.
The total cost of acquisition is what will be recorded as the book value.
For example if a software is purchased for $200,000. Installation and training cost is $30,000, the book value recorded for the software will be $230,000.
Weighted average cost of capital is a function of cost of common stock and the proportion of common stock in the capital structure plus after-tax cost of debt and proportion of debt in the capital structure plus cost of preferred stock and the proportion of preferred stock in the capital structure. Ke = Cost of equity or common stock, kd = cost of debt and kp = cost of preferred stock.
Answer: C.) Horizontal sum of all the individual firm's supply curve
Explanation: A perfectly competitive market, is that in which sellers or suppliers of a certain product are numerous such that a slight increase in price, and demand could fall to 0. Here, an individual seller has no control over the price of commodities. The supply curve tells how much quantity will be produced at different prices. Therefore the market supply curve is determined by all individual sellers individual price in other to determine the overall quantity to be produced at varying market price. Prices are drawn horizontally from the y-axis to determine quantity produced at different prices for each indivudual seller which is summed to generate the market supply curve.
