Answer:
PV of the stock today = $115.83
Explanation:
We will use the discounted cash flows approach to calculate the price of the stock today. This approach values the stock by accumulating the present value of all the expected future cash flows from the stock/asset.
As the preferred stock pays a constant dividend after equal intervals of time and for an indefinite period, it can also be treated as a perpetuity. Thus, the formula for the present value of perpetuity will be used to calculate the price of the stock at year 10 that we will discount back to today.
Present value of perpetuity = Cash flow / expected rate of return
PV of stock at Year 10 = 10 / 0.052
PV of stock at Year 10 = 192.3076923
The value of the today will be,
PV of the stock today = 192.3076923 / (1+0.052)^10
PV of the stock today = $115.83
Answer:
c. a necessary risk of doing business on a credit basis.
Explanation:
Bad debt is an amount that is owed to a creditor , which will not be paid back . Bad debt expense could be as a result of company who took a loan and is not able to pay back due to bankruptcy.
Before bad debt expense occur in a business, management often make provisions for such debt. Provision for bad debt expense is an amount set aside to cushion the effect of debts that are likely not to be paid back.
It therefore means that bad debt expense is a necessary risk of doing on a credit basis.
Answer:
The answer is: Negative marginal utility means that at some point you will be worst off if you keep consuming extra units of a product. That means that you will stop consuming that product to stop getting worse even if that product is given to you for free.
Explanation:
The law of diminishing marginal utility states that as someone consumes a product, the satisfaction that they get from the product wanes out as they consume more and more of that product. Eventually they wouldn´t get any more satisfaction from consuming that product, they may even get worse if they consume more of that product (negative marginal utility). At that point they will stop consuming it. They will either change to some other substitute product or not consume at all.
A great example for this is an all you can eat buffet. A person eats until they are full. They may eat a lot, but eventually they will stop eating even if the extra food is "free" or already paid for.
Answer:
COGS= $81,770
Explanation:
Giving the following information:
Beginning inventory= 477 units that cost $65 each.
Purchases:
715 units at $68 each
364 units at $70 each.
Units sold= 1,197
<u>To calculate the cost of goods sold under the LIFO (last-in, first-out) method, we need to use the cost of the lasts units incorporated into inventory:</u>
COGS= 364*70 + 715*68 + 118*65
COGS= $81,770
The first step is the idea development. The proper order for the capital budgeting process is search for and discovery of investment opportunities, then there is a collection of data, then there is an evaluation and decision making, and then if it is necessary there is a reevaluation and adjustment. This is <span>used to determine whether an organization's long term investments are worth the funding of cash through the firm's capitalization structure</span>
