Answer:
e). all of the above
<u>Multiple-choices</u>
a). working capital
b). current ratio
c). quick ratio
e). all of the above
Explanation:
Working Capital is the difference between the total current asset and current liabilities. I.e., working capital = total current assents - total current liabilities. It is calculated to assess a company's ability to pay its current liabilities.
The Current Ratio is calculated using the formula below.
current ratio= total current assets / total current liabilities. It measures the company's ability to meet its current liabilities with its current assets.
Acid-test Ratio (Quick Ratio) evaluates a company's ability to meet its current liabilities using cash or cash equivalents only. It measures the ability to repay current debts without having to sell inventory.
Quick ratio or acid test is calculated as follows= (cash + short-term investments + receivables) / total current assets
Answer:
1) 22%
2) YES as the return in the investment is 12% while the average cost of capital in this case; is of 8% hence there is a gain above the minimum accepted return.
Explanation:
IRR = 12%
weighted-average cost of capital:
DEBT 80,000 x 5% = 4,000
EQUITY 120,000 x 10% =<u> 12,000</u>
VALUE 200,000 16,000
16,000 / 200,000 = 8%
Answer:
The net present value of the machine = $ 1590
Explanation:
Solution
The first step is to compute the present value of annual cash inflows as shown below:
The present value of the inflow of cash = (Annual inflow of cash * PVIFA rate, period)
which is
= $11,000 * PVIFA 12%, 4
= $11,000 * 3.0373
= $ 33,410
Note: the present value of inflow of cash has been computed by multiplying Annual cash inflows and Cumulative factor of 12% and 4 years. Annual cash inflow is $11,000 and from the table of PVIFA rate for a 4 periods at 12% discount rate is 3.0373.
Next step is to compute the Net value as shown in the equation below:
Net present value = (present value of inflow of cash - Investment)
which is
=$ 33, 410 - $ 35,000
= $1590
The net present value is = $ 1590
Note: Net present value has been computed be subtracting investment from the present value of inflow of cash.
The opening investment is $35,000 and the present value of inflow of cash is $33,410. since the initial investment is more than the present value of cash inflows, the net present value is seen as negative.
Answer:
P8 = $105.5994 rounded off to $105.60
Explanation:
The constant growth model of DDM is used to calculate the price of a stock whose dividend growth rate is constant. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for the price of stock today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
- D0 * (1+g) is the dividend for the next period of D1
- r is the required rate of return
- g is the growth rate in dividends
80 = 5 * (1+g) / (0.1 - g)
80 * (0.1 - g) = 5 * (1+g)
8 - 80g = 5 + 5g
8 - 5 = 5g + 80g
3 = 85g
3/85 = g
g = 0.03529 or 3.529% rounded off to 3.53%
To calculate the price today, we use D1. Thus, to calculate the price 8 years from now or P8, we will use D9
P8 = 5 (1+0.0353)^9 / (0.1 - 0.0353)
P8 = $105.5994 rounded off to $105.60
It really depend on the situation, but you could transfer on approximately 6 month.
All you need to do if you're already meeting the requirements is to tell your human resource manager your decision to transfer and why you want to make the transfer. Then, the HR manager will discuss it with his/her team whether you'll be authorized to do so.