Answer:
58.81% annual
or 3.93% monthly
Explanation:
Using a financial calculator, we can determine the internal rate of return of this investment. The initial outlay is -$110,000, and the 60 $4,800 cash flows follow. The IRR is 3.93 per month. In order to determine the effective annual rate, we can use the following formula:
effective annual rate = (1 + 3.93%)¹² - 1 = 58.81%
Answer:
Explanation:
Owning a franchise has the following main advantages:
1) A franchise owner gets valuable help throughout the lifespan of the business. Upon acquiring a franchise, the business owner receives a continuous training and assistance necessary for marketing and management.
2) Owning a franchise comes with a low rate of failure. A franchise comes with an established business concept that is already successful in the market which assures the owner of better chances of success compared to starting up an independent business.
If the company receives a discount for paying for merchandise purchased within the discount period, the amount of the discount be recorded in a perpetual inventory system by being credited to inventory.
Inventory financing can be defined as a credit obtained by businesses to pay for products that aren't intended for immediate sale. Financing that collateralized by the inventory is used to purchase. Smaller privately-owned businesses that don't have access to other options are usually used inventory financing. Inventory financing is particularly critical as a way to smooth out the financial effects of seasonal fluctuations in cash flows and can help a company achieve higher sales volumes by allowing it to acquire extra inventory for use on demand.
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Answer:
The answer is D.
Explanation:
The price of a stock is also known as price of equity. This is the price the equity of a company is presently worth. The price the potential investors will be able to purchase it. One of the ways of calculating price of a stock is the Dividend Discount Model which can be calculated by:
Ke = (D1÷Po) - g
Ke is the Cost of equity(i.e the required rate of return for investors)
D1 is the next year dividend payments
Po is the price of the stock
g is the expected dividend growth rate
To get Po, we can rewrite the formula as:
Po = D1÷Ke - g÷Ke
We can see now that the expected future dividends will be discounted at the ''Ke'' which is the investors'required rate of return
