Answer:
Current intrinsic value - equity = $1155.56
Explanation:
FCFE or Free cashflow to equity is the free cash flow attributable to the equity holders. Using the constant growth model of FCFE we can calculate the intrinsic value of the equity or intrinsic value per share. The formula for the constant growth model is as follows,
Value of equity = FCFE0 * (1+g) / (r - g)
Where,
Current intrinsic value - equity = 100 * (1+0.04) / (0.13 - 0.04)
Current intrinsic value - equity = $1155.56
Answer:
Option D is correct one.
Saving plus net taxes equals planned investment plus government purchases.
Explanation:
Total spending equals total output if and only if leakages are equal to injections—that is, only if the sum of saving and net taxes is equal to the sum of planned investment spending and government purchases.
Answer:
D. only when the sum of saving and investment equals the sum of net taxes and government expenditures
Explanation:
Based on the scenario being said in the question where it is asked that which total spending will equal total, that will happen only when the sum of the savings and investment.
Total spending can only equals total output if and only if leakages will be equal to injections, in other words, only if the sum of saving and net taxes (addition of Saving and Nets) is equal to the sum of planned investment spending and government purchases (addition of planned investment and government purchases.)
Answer:
D. decreasing returns to scale.
The answer and procedures of the exercise are attached in the image below.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Payoff $
b. What is the promised return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Promised return %
c. What is the expected return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Expected return %
Answer:
a. The payoff do bonholders expect to receive in the event of a recession=$83 million
b. The promised return is 0.30
c. The expected return is -16%
Explanation:
a. According to the given data the payoff do bonholders expect to receive in the event of a recession=$83 million
b. In order to calculate the promised return on the company's debt we would have to use the following formula:
promised return=(face value of debt/market value of debt)-1
promised return=($117 million/$90 million)-1
promised return=0.30
c. To calculate the expected return on the company's debt we would have to use the following formula:
expected vale of debt=($117*80%)+($90*20%=
=75.6 million
expected return=(75.6 million/$90 million)-1
expected return=-16%
2. Sep 8 Purchase painting equipment for $21,000 cash.
3. Sep 12 Purchase office supplies on account for $3,500.
4. Sep 15 Pay employee salaries of $4,200 for the current month.
5. Sept 19 Purchase advertising to appear in the current month for $1,000 cash.
6. Sep 22 Pay office rent of $5,400 for the current month.
7. Sep 26 Receive $15,000 from customers in (1) above.
8. Sep 30 Receive cash of $6,000 in advance from a customer who plans to have his house painted in the following month.
a) Record each transaction. The company uses the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Deferred Revenue, Common Stock, Retained Earnings, Service Revenue, Salaries Expense, Advertising Expense, Rent Expense.
Answer:
Explanation:
The journal entries are shown below:
1. Account receivable A/c Dr $20,000
To Deferred revenue A/c $20,000
(Being the paint house on account is recorded)
2. Equipment A/c Dr $21,000
To Cash A/c $21,000
(Being the equipment is purchased for cash)
3. Supplies A/c Dr $3,500
To Accounts Payable A/c $3,500
(Being the office supplies are purchased on credit basis)
4. Salaries expense A/c Dr $4,200
To Cash A/c $4,200
(Being the employees salaries are paid for cash)
5. Advertising expense A/c Dr $1,000
To Cash A/c $1,000
(Being the advertising are purchase for cash)
6. Rent expense A/c $5,400
To Cash A/c $5,400
(Being the rent is paid for cash)
7. Cash A/c Dr $15,000
To Account receivable A/c $15,000
(Being the cash is received)
8. Cash A/c Dr $6,0000
To Deferred revenue $6,000
(Being the cash is received)
The transactions of the Boilermaker House Painting Company are recorded considering the cash flow, accounts receivable, and deferred revenues with specific monetary changes respective of each transaction.
The transactions for Boilermaker House Painting Company can be recorded as follows:
#SPJ3
Answer:
MRTS means that if the input on the horizontal axis is increased by one unit, then the input on the vertical axis decreases by units and output will not change.
Explanation:
The marginal rate of technical substitution (MRTS) can be described as the amount by which one input's quantity must be decreased when an additional unit of another input is used to keep output constant. MRST is also known as technical rate of substitution.
Therefore, MRTS means that if the input on the horizontal axis is increased by one unit, then the input on the vertical axis decreases by units and output will not change.
b. Activities that add value
c. Activities that contribute to organizational capabilities
d. Activities that are followed by other vendors
Answer:
D.
Explanation:
According to VRIO there are 4 questions asked about a resource or capability to determine its competitive potential:
The Question of Value: Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?" (can it add value? )
The Question of Rarity: "Is control of the resource/capability in the hands of a relative few?"
The Question of Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?" (can other vendors do the same activities?)
The Question of Organization: "Is the firm organized, ready, and able to exploit the resource/capability?" "Is the firm organized to capture value?"
With those 4 questions, we analize the statements.
a. It is in accordance with the question of imitability.
b. It is in accordance with the question of value.
c. It is in accordance with the question of organization.
d. It should be avoided. We don't want our activities to be imitated.