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hodyreva [135]
3 years ago
6

The discount rate includes ________ in the basic valuation model.

Business
1 answer:
Lana71 [14]3 years ago
4 0

Answer:

c. risk

Explanation:

The discount rate usually stands for the opportunity cost of investing elsewhere or the cost of sourcing finance. therefore, it includes a risk component.

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The product life cycle does not have a major impact on decision-making.
Dennis_Churaev [7]

Answer: Thats false.

3 0
2 years ago
Olive Corporation has two divisions, Pressing and Extracting. The company's primary product is Lavender Oil. Each division's cos
Alex777 [14]

Answer:

$15,000

Explanation:

Operating income is the difference between the net sales or revenue generated by a business and the operating expenses of the business.

The operating expenses of the business may be classified into 2 groups namely the fixed and variable costs.

The total operating cost of the business

= ( $9 + $6 + $28 + $32) per barrel

= $75

operating income of both divisions

= 200 ( $150 - $75)

= 200 * $75

= $15,000

5 0
3 years ago
Had columbus's voyage acquired wealth for spain, he was supposed to keep what amount?
kotegsom [21]
He was supposed to keep 10%.
The 10% share was one of the columbus demand' when both columbus and the crown agreed to the terms for his voyage fundinsg.
But, since <span>he had been relieved of his duties as governor, the Crown no longer feel obligated to honour the term of the contract.</span>
5 0
3 years ago
A firm has a debt-equity ratio of .64, a pretax cost of debt of 8.5 percent, and a required return on assets of 12.6 percent. Wh
irina1246 [14]

Answer:

15.22%

Explanation:

The computation of the cost of equity is shown below:

Required return on assets = Weightage of debt × pre tax cost of debt + weightage of  equity × cost of equity

where,

Weightage of debt is

= (Debt) ÷ (Debt + Equity)

= (0.64) ÷ (0.64 + 1)

= 0.39

And, the weightage of equity is

= (Equity) ÷ (Debt + Equity)

= (1) ÷ (0.64 + 1)

= 0.61

Now the cost of equity is

12.6% = 0.39 × 8.5% + 0.61 × cost of equity

12.6% = 3.315% + 0.61 × cost of equity

So, the cost of equity is 15.22%

4 0
3 years ago
You need a 20-year, fixed-rate mortgage to buy a new home for $190,000. Your mortgage bank will lend you the money at a 8.1 perc
motikmotik

Answer:

$388,301, the loan's principal balance increases because the monthly payment doesn't even cover interest expense

Explanation:

In order for you to pay the debt completely in 20 years, you would need to pay $1,601.08 per month. But since you can only afford to pay $950 per month, the remaining balance will be $388,301.

I prepared an amortization schedule in an excel spreadsheet

Download pdf
8 0
3 years ago
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