Answer:
$60.00
Explanation:
Calculation to estimate the stand-alone selling price
Hara Amount $ Note
Staff compensation $50.00
Mark up % 20%
Mark up amount $10.00
(20%*$50)
Standalone selling price of club fitting services $60.00
($50.00+$10.00)
Therefore the estimated stand-alone selling price will be $60.00
Answer: Dividend yield is 3.3%
Capital gains yield is 17.24%
Explanation:
Dividend yield is given as the ratio of annual dividend per share and stock's price per share.
Dividend per share = $1.9
Share price = $58
Dividend yield = 1.9/58 = 0.033 or 3.3%
Capital gain yield is the appreciation in the price of a stock expressed as a percentage.
Capital gain yield = (current price – original price) / original price x 100
Current price = $68
Original price = $58
CGY = (68-58)/58 * 100 = (10/58)*100 = 17.24%
Answer:
Everything else being equal, you should invest if the discounted value of the security's expected future cash flows is greater than or equal to the current cost of the security.
Explanation:
You would use the capital budgeting technique known as net present value (NPV) . In order for a project or investment to be accepted, the sum of the present values of future cash inflows generated by the project should be greater than the initial amount invested or the initial cost. If the PV of the future cashflows is lower than the initial cost of capital, the investment would be rejected. On the other hand, if they are equal, the investor would be indifferent between accepting or rejecting the investment.
Answer:
False
Explanation:
It does not necessarily means that when a firm gets a normal rate of return, it earns economic profit also, as it depends on various factors:
- In the short run every firm aims to recover its variable cost, and in it's long term duration to recover its total cost, but it does not necessarily conclude that the return will attain the level of earning economic profit.
- Normal rate of return is based on competitive market, as an average rate of return on market, but if the investment is made from borrowed funds, it might be that the company is not able to pay the cost of borrowing in that case it is even after attaining the normal rate of return it will not earn economic profit.
