Answer:
$714,980.95
Explanation:
The most it would be willing to pay is the present value of the cash flows
present value is the sum of discounted cash flows from a project
present value can be determined with a financial calculator
Cash flow each year from year 1 to 6 = $150,000
I = 7%
Present value = $714,980.95
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer:
- 34 coupons.
- $33.75
Explanation:
The coupons are the interest payments the bond makes.
1. The bond has a term of 17 years and coupons are to be paid semi-annually.
This means that for every year, 2 coupon payments will be made.
In 17 years therefore:
= 17 * 2
= 34 coupons
2. The interest on this bond is 6.75% in a year. The coupon is however, semi-annual. Payment per coupon will therefore be half of the yearly rate:
= 6.75% * 1,000 * 1/2
= $33.75
Answer: initially Sam gross profit would drop. But overtime when he starts gaining customers in his new branch added to the already existing customers in his old branch there would a very large gross profit increase.
Explanation: Gross profit is the percentage of revenue a company retains after accounting for cost of goods/services.
In this case payment of staffs in both the old and new branches would be accounted for, with the new branch still very much dependent on the old branch for payment of staff until it can get its own customers, only then would the new branch be able to be self reliant and also make profit.
Your answer is true! The root of the word "retention" is retain, so basically customer retention means retaining customers, which also means having them return. Hope I helped!
