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leva [86]
3 years ago
14

Qualcomm has developed a groundbreaking new CPU chip. The patent on the chip will last 17 years. You expect that the chip’s prof

its to be $4 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, Intel will be able to produce the same chip and competition will likely drive profits to zero. What is the present value of the new chip if the interest rate is 8% per year?
Business
1 answer:
umka21 [38]3 years ago
4 0

Answer:

$50.74 million

Explanation:

Interest rate per annum = 8%

Number of years = 17

Number of compounding per annum = 1

Interest rate per period (r) = 8%/1 = 8%

Number of period (n) =17 * 1 = 17

Growth rate (g) = 5%

First payment (P) = 4 ($'million)

PV of the new Chip = p/(r-g) * [1 - [(1+g)/(1+r)]^n]

PV of the new Chip = 4/(8%-5%) * [1 - [(1+5%)/(1+8%)]^17]

PV of the new Chip = 4/0.03 * [1 - [1.05/1.08]^17]

PV of the new Chip = 4/0.03 * [1 - 0.972222^17]

PV of the new Chip = 133.333 * (1 - 0.6194589804)

PV of the new Chip = 133.333 * 0.3805410196

PV of the new Chip = 50.7386757663268

PV of the new Chip = $50.74 million

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Ensuring that the organization meets goals, and working with employees to accomplish organizational goals are both classified as
attashe74 [19]

Answer: Management

Explanation:

Management ensures that organizational goals are met. The management plans, leads, control and organizes in order to ensure goals are achieved.

The function of accounting is to give financial information whihc are required by the business and its stakeholders.

The function of marketing is to ensure that products reach the consumers. It ensures delivery of products.

The human resource develops the workers. They train, revruit, discuss wages and salaries etc.

Based on the above, the answer is management.

7 0
3 years ago
Beta Corporation acquired 100 percent of the voting shares of Yang Inc. by issuing 10,000 new shares of $10 par value common sto
poizon [28]

Answer:

The question is not complete.

Here is the complete question:

Beta Corporation acquired 100 percent of the voting shares of Yang Inc. by issuing 10,000 new shares of $10 par value common stock with a $40 market value.

Required:

1) Which company is the parent and which is the subsidiary?

2) Define a subsidiary corporation.

3) Define a parent corporation.

4) Which entity prepares consolidated worksheet?

5) Why are elimination entries used?

Here are the answers:

1. Beta Corporation is the parent while Yang Inc. is the subsidiary.

2.A subsidiary  corporation is an investee company in which another entity has a controlling interest in. This controlling interest is majorly achieved when the entity has more than 50% f the total voting shares.

3. A parent corporation is the investment entity which has a controlling interest in another entity called subsidiary.

4. It is the parent corporation that prepares consolidated worksheet.

5. Elimination entries are used to avoid double recording of values of assets, liabilities and equity in the consolidated accounts.

Explanation:

Parent and subsidiary is a form of relationship that exists where one entity has a controlling investment in another.

6 0
3 years ago
When comparing a Variable Rate Demand Obligation (VRDO) to an Auction Rate Security (ARS), which statement is FALSE?
lozanna [386]

Answer:

Both have tender options.

Explanation:

Variable rate demand obligation and Auction rate securities both are long term bonds which have interest rate that reset weekly or monthly.  This advantages the issuer with lower short term rates despite of long term security. Both of these securities are subject to credit risk of the issuer and they are marketed by broker dealers.

5 0
3 years ago
Elite Trailer Parks has an operating profit of $225,000. Interest expense for the year was $35,200; preferred dividends paid wer
riadik2000 [5.3K]

Answer:

<em>Earnings per share (EPS) =</em> $4.70 per share

<em>Dividend per share  (DPS)= </em>$1.82 per share

Explanation:

                                               Elite Trailer Parks

                                           Income statement

                                                       $

Operating Profit                       225,000.00

less interest expense             <u>  (35,200.00)</u>

Profit before Tax                        189,800.00

Less Tax                                        <u>64,600.00)</u>

Profit after tax                       125,200.00

Preferred dividends                (<u>30,700.00)</u>

<em>Earnings to common stock </em>       <u>   94,500.00</u>

Dividend to Common stock           36,600.00

<em>Earnings per share (EPS)</em>

<em>Earnings per share (EPS) = Earnings available to ordinary shareholders /unit of shares</em>

=$94,500.00/20,100 units

= $4.70 per share

<em>Dividend per share  (DPS)</em>

=<em> Total dividend to common stock/ units of shares</em>

=36,600.00/ 20,100 units

=$1.82 per share

<em>Earnings per share(EPS) =</em> $4.70 per share

<em>Dividend per share  (DPS)= </em>$1.82 per share

5 0
3 years ago
Jackson enjoys seeing the end result of his hard physical labor. The interest area that he should consider careers in would be _
VLD [36.1K]

There are a lot of professions this could pertain to, but one of the most obvious is construction.

8 0
3 years ago
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