The effect that the newly installed air conditioning system would have on the property's effective age would be: it decreases it.
<h3>What is a Property's Effective Age?</h3>
The effective age of a property can be described as the reflection of the true life of the property that is left remaining, based on the life expectancy that is typical of equipment or buildings that are similar to it and their usage.
So, when a property owner installs a new air conditioning system on a property, the air conditioning system, can cause wear and tear to the property which reduces how long the property can serve its purpose.
Therefore, we can conclude that the effect that the newly installed air conditioning system would have on the property's effective age would be: it decreases it.
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Answer: $8.81
Explanation:
To solve this, add the present values of the dividends from years 3, 4 and 5 and then add the present value of the terminal value of the stock at year 5.
Year 3 dividend = $0.50
Year 4 dividend = 0.50 * (1 + 49%) = $0.745
Year 5 dividend = 0.745 * 1.49 = $1.11005
= Dividend in year 3 / (1 + required rate of return)³ + Dividend in year 4 / (1 + required rate of return)⁴ + Dividend in year 5 / (1 + required rate of return)⁵ + (Dividend in year 5 * (1 + growth rate) / ( required rate of return - growth rate ) ) / (1 + required rate of return)⁵
= 0.5 / 1.16³ + 0.745/1.16⁴ + 1.11005/1.16⁵ + ( 1.11005 / (16% - 9%)) / 1.16⁵
= $8.81
Answer:
1.
- The firm increases its dividend payout ratio.
This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.
- The firm’s inventory turnover decreases, with no effect on the sales forecast.
If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.
2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.
Answer:
35.92%
Explanation:
The computation of cost of not taking the cash discount is shown below:-
Discount percentage ÷ (100 - Discount percentage) × (360 ÷ (Full Allowed Payment Days - Discount Days))
= 3% ÷ 97% × 360 ÷ (50 - 19)
= 3% ÷ 97% × 360 ÷ 31
= 0.03093 × 11.61290
= 0.359187
= 35.92%
Therefore for computing Mr. Warner's cost of not taking the cash discount we applied the above formula.
These are examples of D. documentation
Hope this helps!
