Answer:
$1,384.24
Explanation:
The computation of the expected terminal enterprise value in year 2 is shown below:
Terminal value in year 2= Free cash flows for the year 3 ÷ (Capitalization Rate - growth rate)
= $88 million × (1 + 10%) × (1 + 10%) × (1 + 4%) ÷ (12% - 4%)
= $110.7392 ÷ 8%
= $1,384.24
Hence, the expected terminal enterprise value in year 2 is $1,384.24
We simply applied the above formula so that the approximate value could arrive
Given:
Total number of shares = 150
Selling price = $42
Purchase price = $27
Find:
Angela’s profit on investment = ?
Computation of Angela’s profit on investment:
Angela’s profit on investment = Total sales value - Total purchase value
Angela’s profit on investment = (150 x $42) - (150 x $27)
Angela’s profit on investment = $6,300 - $4,050
Angela’s profit on investment = $2,250
Therefore, Angela’s profit on the selling of investment is $2,250.
Answer: production in excess of normal capacity cannot be sold.
Explanation:
We say that there's a favorable volume variance in a situation whereby the production that's budgeted is less than the actual production.
Favorable volume variances may be harmful when production in excess of normal capacity cannot be sold. This is because since it can't be sold, this can bring about losses to the business.
Answer:
The aim of financial management is the maximization of shareholder's wealth. Shareholder's wealth takes into consideration dividend payments and capital appreciation to the shareholders.
The concept of stakeholders take into account shareholders, customers, suppliers, employees and workers of an organization and is thus a wider concept.
Focusing merely upon current stock value i.e current market value is short sightedness from the point of managers. Managers should rather focus upon long term implications of the projects and financing decisions.
More attention should be assigned to the long term performance and efficiency of a firm with respect to dividend and investment decisions which cast a long term bearing on the operations and performance of a firm.