Matt and Patricia are husband and wife and live in Oregon. In 2010 and using her funds, Patricia purchased a residence for $400,000, listing title to the property as "Matt and Patricia, joint tenants with right of survivorship." In 2020, Matt dies before Patricia when the residence is worth $2 million. A correct statement as to these transactions is:
Answers
Answer:
In 2020, Matt’s gross estate includes $1 million and a marital deduction of $1 million is been allowed for estate tax purposes
Explanation:
Patricia is said to made a gift to Matt her husband in 2010 which is (50% ×$400,000) $200,000 which means marital deduction of an equal amount will be allowed for the gift tax purposes .
Matt’s gross estate also includes $1 million which is (50% ×$2 million) and will as well be offset by a marital deduction of an equal amount which is why the correct statement is:
In 2020, Matt’s gross estate includes $1 million and a marital deduction of $1 million is been allowed for estate tax purposes.
Related Questions
4). Compare and contrast the typologies of followership defined by Chaleff and Kellerman
Answers
Chaleff's typology, which can be seen in the "The Courageous Follower, which fous on the types of followers while Kellerman's typology, focus on how Followers can bring about change with respoect to their leaders.
What is Kellerman typology of followership?Barbara Kellerman, can be een as one that focus on the typology of followership which can be seen as one that focus on the level of engagement.
She focus on the good followers as actively supporting effective as wwell as good leaders and responding appropriately to bad leaders however Chaleff's typology, which can be seen in the "The Courageous Follower, which fous on the types of followers ..
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True/False: The most common reason that ethical problems occur in business is an overemphasis on long-run profit maximization.
Answers
Answer:
False
Explanation:
The cash account of Aguilar Co. showed a ledger balance of $3,969.85 on June 30, 2020. The bank statement as of that date showed a balance of $4,150. Upon comparing the statement with the cash records, the following facts were determined.
1. There were bank service charges for June of $25.
2. A bank memo stated that Bao Dai’s note for $1,200 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.5 on the collection. (No entry had been made on Aguilar’s books when Bao Dai’s note was sent to the bank for collection.)
3. Receipts for June 30 for $3,390 were not deposited until July 2.
4. Checks outstanding on June 30 totaled $2,136.05.
5. The bank had charged the Aguilar Co.’s account for a customer’s uncollectible check amounting to $253.2 on June 29.
6. A customer’s check for $90 (as payment on the customer’s Accounts Receivable) had been entered as $60 in the cash receipts journal by Aguilar on June 15.
7. Check no. 742 in the amount of $491 had been entered in the cash journal as $419, and check no. 747 in the amount of $58.2 had been entered as $582. Both checks had been issued to pay for purchases and were payments on Aguilar’s Accounts Payable.
Required:
a. Prepare a bank reconciliation dated June 30, 2020, proceeding to a correct cash balance.
b. Prepare any entries necessary to make the books correct and complete.
Answers
Answer:
a) bank account reconciliation
bank account balance $4,150
+ deposits in transit $3,390
- outstanding checks ($2,136.05)
reconciled account $5,403.95
cash account reconciliation
cash account balance $3,969.85
- bank fees ($25)
+ note collected (including interest) $1,236
- bank fees for collecting note ($5.50)
- NSF check ($253.20)
- error in processing customer's check $30
- error in processing check no. 742 ($72)
+ error in processing check no. 747 $523.80
reconciled account $5,403.95
b) adjusting entries
1. Dr Bank fees expense 25
Cr Cash 25
2. Dr Cash 1,230.50
Dr Bank fees 5.50
Cr Notes receivable 1,200
Cr Interest revenue 36
3. and 4. no adjusting entry required
5. Dr Accounts receivable 253.20
Cr Cash 253.20
6. Dr Cash 30
Cr Accounts receivable 30
7. Dr Accounts payable 451.80
Cr Cash 451.80
which of the following would most likely result if the federal government increased spending without increasing tax revenues during a period of full employment? group of answer choices a recession a decrease in interest rates an increase in the price level a decrease in the national debt
Answers
In a situation when there is full employment in the economy and the government raises expenditure without boosting tax collection, prices for goods and services will rise.
What happens when the amount spent by the government rises?Government spending boosts overall demand, which drives up prices. More output is prompted by increased pricing, in accordance with the law of supply. More jobs are created in order to do this. Demand growth results in reduced unemployment rates and higher output.
What occurs when governments spend excessively?Overspending by the government results in budget deficits and imbalances. Overspending by the government has drawbacks including higher interest rates, a lack of national savings, and a default risk.
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4. When money doesn't deteriorate when it is
being handled.
Answers
Money has durability if it doesn't deteriorate when it is being handled.
What is money?Money is anything that serves as a medium of exchange. A medium of exchange is anything that is widely accepted as a means of payment.
Money serves three basic functions.
A Medium of Exchange- —money serve as a medium of exchange,
A Unit of Account-Money serves as a unit of account, which is a consistent means of measuring the value of things.
A Store of Value-is to serve as a store of value, that is, an item that holds value over time.
Money has durability if it doesn't deteriorate when it is being handled.
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5.6 Last month Quick Industries produced 900 units. This month they produced 1,264 units. What is the rate of change in production? a. 29.8% b. 32.8% c. 40.4% d. 60%
Answers
Answer: C. 40.4%
Explanation:
To find the rate of change in production, we can use the following formula:
Rate of change = (New value - Old value) / Old value * 100
Where,
Old value = Production of last month = 900
New value = Production of this month = 1264
Substituting the values in the formula,
Rate of change = (1264 - 900) / 900 * 100= 364 / 900 * 100= 0.404 * 100= 40.4%
Therefore, the rate of change in production is 40.4%, which is an option (c). I hope that this answer has helped you!
Answer:
The correct answer is C.
Explanation:
The rate of change in production is: (1264 - 900) / 900 = 0.404 or 40.4%. So, the correct answer is c. 40.4%
Suppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 50 in a day. If he only produces computer chips, he can produce 25 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph.
What is the opportunity cost of potato chip production in terms of computer chips?
a. 4/3
b. 1/2
c. 3/4
d. 25
e. 2
f. 50
Answers
50 potato chips are produced, so the opportunity cost versus computer chips (which is 25) is 50.
Basically its asking if you focus on one type or chip for a whole day, what do you get? You get 50 potato chips OR 25 computer chips. Since it’s asking for potato chips versus computer chips, the answer is 50 because you can produce 50 potato chips in one day.
The opportunity cost of producing potato chips in terms of computer chips for Ned is 1/2. This means for every potato chip he produces, he is giving up the opportunity to produce 1/2 of a computer chip.
Explanation:The opportunity cost of a good or service is the value of the next best alternative that must be forgone to produce that good or service. In this case, we are asked to calculate the opportunity cost of producing potato chips in terms of computer chips for Ned, who can produce 50 potato chips or 25 computer chips in a day.
To calculate the opportunity cost, we use the formula:
Opportunity Cost = What You Sacrifice / What You Gain
If Ned decides to make potato chips, we need to determine what he is sacrificing. If he makes potato chips, he sacrifices the ability to make 25 computer chips. Therefore, the opportunity cost of making each potato chip is: Opportunity Cost = 25 Computer Chips / 50 Potato Chips = 0.5 or 1/2 computer chips.
So, the opportunity cost of potato chip production in terms of computer chips is 1/2 (option b).
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You are bullish on Telecom stock. The current market price is $62 per share, and you have $6,200 of your own to invest. You borrow an additional $6,200 from your broker at an interest rate of 7.6% per year and invest $12,400 in the stock. a. What will be your rate of return if the price of Telecom stock goes up by 9% during the next year? (Ignore the expected dividend.) (Round your answer to 2 decimal places.)
Answers
Answer:
Telecom Stock
If the price of the Telecom stock goes up by 9% during the next year, your rate of return will be:
= 10.4%
Explanation:
a) Data and Calculations:
Current market price = $62 per share
Investment in stock = $12,400
Margin account = $6,200
Loan = $6,200 ($12,400 - $6,200)
Units of stock bought on margin = 200 ($12,400/$62)
Margin account interest rate = 7.6%
Growth rate of stock price = 9%
Expected market price of the stock = $67.58 ($62 * 1.09)
Expected value of stock = $13,516 (200 * $67.58)
Interest on loan = $471.20 ($6,200 * 7.6%)
Principal & loan amount $12,400
Return on the stock = $644.80
Rate of return = 10.4% ($644.80/$6,200 * 100)
Jasper Company has sales on account and for cash. Specifically, 61% of its sales are on account and 39% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of $523,000 for April, $533,000 for May, and $558,000 for June. The beginning balance of Accounts Receivable is $304,200 on April 1. Prepare a schedule of budgeted cash receipts for April, May, and June.
Answers
Answer:
Jasper Company
Budgeted CAsh Receipts:
April May June
Cash sales (39%) $203,970 $207,870 $217,620
Cash collections 304,200 360,870 325,130
Total cash receipts $508,170 $568,740 $542,750
Explanation:
a) Data and Calculations:
April May June
Forecast sales $523,000 $533,000 $558,000
Cash sales (39%) 203,970 207,870 217,620
Credit sales (61%) 360,870 325,130 340,380
Cash collections 304,200 360,870 325,130
Budgeted CAsh Receipts:
April May June
Cash sales (39%) $203,970 $207,870 $217,620
Cash collections 304,200 360,870 325,130
Total cash receipts $508,170 $568,740 $542,750
Cartwright Brothers preferred stock has an annual dividend of $3.50 per share if the required rate of return on the preferred stock is 12% how much would you be willing to pay for one share of the preferred stock
Answers
Answer:
$29.17
Explanation:
Calculation for how much would you be willing to pay for one share of the preferred stock
Using this formula
Amount willing to pay=Preferred stock annual dividend/Required rate of return on preferred stock
Let plug in the formula
Amount willing to pay=$3.50 per share/0.12
Amount willing to pay=$29.166
Amount willing to pay=$29.17 (Approximately)
Therefore how much would you be willing to pay for one share of the preferred stock is $29.17
Interventions strategies to prevent restrictions or barrier in small businesses townships
Answers
To prevent restrictions or barriers in small businesses in townships, several intervention strategies can be implemented:
1. Business Development Support: Offer training programs, workshops, and mentorship opportunities to help small business owners develop essential skills such as financial management, marketing, and business planning.
2. Access to Capital: Establish microfinance programs or low-interest loan schemes to provide small businesses with the necessary funds to start or expand their operations. Additionally, create partnerships with financial institutions to streamline the loan application process.
3. Infrastructure Improvement: Invest in upgrading township infrastructure, including roads, electricity, and internet connectivity. This will enhance the business environment, attract investors, and facilitate smoother operations for small businesses.
4. Regulatory Simplification: Simplify and streamline licensing and permit procedures, reducing bureaucracy and paperwork burdens. This will make it easier for entrepreneurs to start and operate businesses, fostering a favorable environment for small enterprises.
5. Market Linkages: Facilitate connections between small businesses and larger supply chains, enabling them to access wider markets and secure stable customer bases. This can be achieved through networking events, trade fairs, and partnerships with established businesses.
6. Local Procurement Policies: Encourage local governments and institutions to adopt procurement policies that prioritize purchasing goods and services from small businesses in the townships, thereby boosting their economic growth and sustainability.
7. Collaborative Initiatives: Foster collaboration among small businesses by establishing business associations, cooperatives, or incubation centers. These platforms can provide shared resources, collective marketing efforts, and a supportive community.
By implementing these intervention strategies, the barriers and restrictions faced by small businesses in townships can be minimized, promoting their growth, sustainability, and contribution to the local economy.
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Stephanie notices that it is staring to get windy outside. The wind is moving from the north to the south. What is the cause of the wind
Answers
Wind is caused by air moving from high pressure areas to low pressure areas. Stephanie's observation of wind moving from north to south indicates that the wind is a type of polar easterly wind.
Stephanie notices that it is starting to get windy outside. The wind is moving from the north to the south. Wind is caused by air moving from high pressure areas to low pressure areas. Wind is the motion of the air molecules in the atmosphere that moves from the place where there is higher air pressure to the place where there is lower air pressure.
The earth is warmed by the sun's energy, which is not uniform throughout the earth's surface. It is warmer near the equator and cooler near the poles. This difference in temperature causes differences in air pressure, which then creates winds that blow from the cooler areas toward the warmer areas. Winds are classified according to the direction from which they come. The prevailing wind is the direction from which the wind most commonly blows.
Trade winds are winds that blow from east to west between the equator and 30 degrees latitude. Prevailing westerlies blow from west to east between 30 and 60 degrees latitude, and polar easterlies blow from east to west between 60 degrees latitude and the poles. Therefore, Stephanie's observation of wind moving from north to south indicates that the wind is a type of polar easterly wind.
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Determine the missing amount:
Assets=Liabilities+owners Equity x 272000 573000
Answers
Based on the given amounts of assets and liabilities, the missing amount of Owner's equity is $301,000
How to find the equity?The Owners equity is one of the parts of the Accounting equation which is:
Assets = Liabilities + Owners Equity
The Assets in this instance is $573,000 and the Liabilities are $272,000.
The Owner's equity is the missing amount and it can be found as:
573,000 = 272,000 + Owners Equity
Owners Equity = 573,000 - 272,000
Owners Equity = $301,000
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According to the video, what are some challenges faced by Advertising and Promotions Managers? Check all that apply
angry customers
cost of ads
long hours
stressful deadlines
Answers
Answer:
long hours
stressful deadlines
Explanation:
mhm
Long hours and stressful deadlines are some challenges faced by Advertising and Promotions Managers. Thus, option C and D are correct.
What do advertising managers do?Advertising managers oversee a company's advertising initiatives and work with staff to create innovative, dependable brand-specific advertising campaigns. They set project goals, collaborate with other personnel, oversee them, and monitor a project's progress and results. A manager of advertising generates interest among potential customers for a department, for the entire company, or for a specific project (account).
They work for media companies that offer advertising time or space, advertising agencies that create advertising campaigns for customers, and widely advertised companies. To come up with ideas for an advertising campaign, they work with sales employees and others, and they also manage the team that creates the advertising. Additionally, they meet with the finance division to create a budget and cost estimate.
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Isabella and Antonio are auto mechanics. Isabella takes 6 hours to replace a clutch and 4 hours to replace a set of brakes. Antonio takes 8 hours to replace a clutch and 6 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage.
Answers
Isabella has an absolute advantage in both clutch replacement and brake replacement due to her ability to complete each task in less time.
- Isabella also has a comparative advantage in both clutch replacement and brake replacement, assuming similar skills and pay rates.
How to determine the whether anyone has an absolute advantage at either task and, for each taskTo determine absolute and comparative advantages in this scenario, we need to compare the productivity of Isabella and Antonio in replacing clutches and brakes.
Let's analyze the tasks:
1. Clutch Replacement:
- Isabella takes 6 hours.
- Antonio takes 8 hours.
Based on the time taken, Isabella has an absolute advantage in clutch replacement because she can complete the task in less time than Antonio.
2. Brake Replacement:
- Isabella takes 4 hours.
- Antonio takes 6 hours.
Again, based on the time taken, Isabella has an absolute advantage in brake replacement because she can complete the task in less time than Antonio.
Similar to clutch replacement, if we assume similar skills and pay rates, Isabella would also have a comparative advantage in brake replacement due to her ability to complete the task more quickly.
Comparative advantage is based on a comparison of opportunity costs, and without specific information about the trade-offs involved, we can infer that Isabella's ability to complete both tasks more quickly gives her a comparative advantage in both.
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Copies of sales tickets or sales invoices issued to customers or clients provide information about
Select one:
a.
cash payments.
b.
purchases of goods or services.
c.
cash receipts.
d.
sales of goods or services.
Answers
A.cash payments
that's my answer hope it's help
Match each type of insurance with an example of when the insurance
company would make a payment.
Renter's
insurance
?.
You cause an accident
that damages someone
else's car.
Liability coverage
?
You have to take a month
off from work because of
a broken leg.
Health insurance
2
Your stereo and computer
are stolen from your
apartment
Disability
insurance
?
You go to the emergency
room after a car accident.
Answers
Answer:
See below
Explanation:
Renter's insurance
Your stereo and computer are stolen from your apartment. Renters insurance provides coverage for policyholder's properties other than their dwelling place.
Liability coverage
You cause an accident that damages someone else's car. It protects against claims arising from damages to other people or their properties.
Health insurance
You go to the emergency room after a car accident. Offers insurance coverage for medical bills incurred by the policyholder or their dependents.
Disability Insurance
You have to take a month off from work because of a broken leg. Provides protection against loss of income as a result of serious bodily injuries to the policyholder.
Describe some methods to deal with disappointment in the workplace.
Answers
2. Spend time on reflecting on how how you ended up disappointment
3. Don’t take it too personally and let it go
Answer:
1. If one is passed over for promotion, one can speak to their superiors or hiring manager(s) and find out why he or she was not promoted. If one wasn't promoted due to a performance issue, one can perhaps learn from their superiors what he or she needs to do to rectify the problem.
2. One can seek the advice of a career coach or mentor in order to better prepare oneself professionally for future career opportunities.
3. When given criticism from a superior, one should not consider such to be a personal attack but, rather, use the criticism or feedback in a constructive manner and consider adjusting oneself in accordance.
Explanation:
Got it correct on edge, 100%
Estate has an ROI of 16% based on revenues of $400,000. the residual income is $14,000 and the investment turnover is 2. what is the hurdle rate? With Explanation
Answers
If Estate has an ROI of 16% based on revenues of $400,000. the residual income is $14,000 and the investment turnover is 2. The hurdle rate is 9%.
How to find hurdle rate?First step is to find the investment turnover using this formula
Investment turnover=Sales/invested capital
Investment turnover = ($14,000 / $400,000) × 2
Investment turnover = 0.035 × 2
Investment turnover =0.07
Second step is to find the hurdle rate using this formula
Hurdle rate = ROI - Investment turnover
Hurdle rate = 0.16 - 0.07
Hurdle rate = 0.09× 100
Hurdle rate = 9%
Therefore the hurdle rate is 9%.
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the term _________ refers to all raw materials, components, completed or partially completed products, and pieces of equipment a firm uses.
Answers
The term Inventory management refers to all raw materials, components, Finished or semi-finished goods and equipment used by the company. Inventory management is the process of ordering, storing, and using a company's inventory (raw materials, parts, and finished goods).
Inventory refers to the goods and products of a company that are ready for sale together with the raw materials used in their manufacture. Inventory can be categorized in three different ways: raw materials, work in process, and finished goods Inventory is considered a current asset in accounting because companies typically expect to sell finished goods within a year. Inventory valuation methods include Last In First Out (LIFO). first-in first-out (FIFO); and weighted average method. Imagine a seasonal fashion retailer like Zara. Fast fashion sales force Zara, like other fashion retailers, to sell inventory quickly. Zara products are an example of end-of-life inventory. On the other hand, cloth and other crafting materials are considered resource forms of inventory.
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Betsey has completed coursework, one thousand hours of financial counseling experience, passed
examinations, and submitted two letters of recommendation. What is she qualified to receive?
Answers
As Betsey has completed coursework, 1000 hours of financial counseling experience, passed examinations and submitted two letters of recommendation; she is qualified to receive certification of being an accredited Financial Counselor.
Who are Financial Counselor?A financial counselor is a professional who can offer educational and emotional support to help you manage your money objectively. They will not assist you in selecting specific investments or making trades on your behalf, but they will assist you in developing a strategy to achieve your financial objectives.
Also, these financial counselors can be especially beneficial if you are experiencing financial difficulties or want to improve your money management abilities.
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Asorting tool is most likely used to
find missing data
present ordered data
generate search results
find information sources
Answers
If you think a task is boring, you should avoid it.
Please select the best answer from the choices provided
True
False
Answers
False
Do not give up on a task just because it doesn't interests you
.kuewgh rvl;3qirutnb';eibtybu'4t/yp4 'be65w
Answer:
Is False
explanation ajsdasd
You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulic hoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a present worth comparison at an interest rate of 14% per year
Answers
Which of the following is a possible scenario if food processors do not adhere to safety standards?
O A salmonella outbreak may leave thousands sick.
Orange juice prices may rise exponentially
Nutrition labeling may harm the sales of packaged snacks.
O Grocery stores may not offer fresh produce
Answers
Answer:
A
Explanation:
the answer is a salmonella outbreak may leave thousands sick.
QUESTION ONE
ABC Ltd wishes to expand its business. On 31 Dec 2021, the company had
the following existing and proposed capital structures to support the
expansion programme.
1. The existing 8% debt capital has a book value of Ksh 50 000 000 and
matures in 10 years. The market value of debt at the close of business on
31 Dec 2021 was Ksh 40 000 000
2. A ten year loan of Ksh 300 000 000 is to be raised at an interest of 10
percent p.a. A cost of Ksh 20 000 000 will be incurred in raising this loan
3. A 12% preference stock capital stands in the books at Ksh 100 000 000
( 1 000 000 shares) and has a total market value of Ksh 150 000 000.
4. There are 40 000 000 ordinary shares with a current market price of Ksh
1500 each. The firm’s expected earnings per share (EPS) stand at Ksh
200, its growth rate is 6% and has a dividend payout of 60%.
5. The company plans to issue 10 000 000 ordinary shares at a market price
of Ksh 1 500 per share. The cost of floating the shares is estimated at Ksh
10 000 000.
Required:
i) Firm’s current weighted average cost of capital (10 marks)
ii) Firm’s expected weighted average cost of capital after the expansion
programme (i.e. marginal cost of capital) (5 marks)
QUESTION TWO
An investor intends to place Ksh 112,000,000 in the 91 days Treasury bill at a quoted rate/yield of 7.65%
p.a.
Required:
a) Compute the investor’s return, assuming that he is withholding tax-payer
b) Compute the investor’s return, assuming that he is non-withholding taxpayer (6 marks)
Answers
Answer:
rat
Explanation:
Which of these are mathematical laws that help us solve numerical problems? O A decimals O B. graphs O C. formulas OD. percentages O E. tractions
Answers
Answer:
The answer is C. Formulas.
Explanation:
Formulas: It is just a mathematical rule that is expressed in numerals or some other symbols and is used to solve a numerical problem.
The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 158,800 $ 123,000 Accounts receivable 84,000 95,000 Inventory 98,000 83,000 Investments 4,300 2,300 Long-term assets: Land 510,000 510,000 Equipment 820,000 700,000 Less: Accumulated depreciation (458,000 ) (298,000 ) Total assets $ 1,217,100 $ 1,215,300 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 102,000 $ 88,000 Interest payable 7,500 12,300 Income tax payable 9,500 5,300 Long-term liabilities: Notes payable 100,000 200,000 Stockholders' equity: Common stock 730,000 730,000 Retained earnings 268,100 179,700 Total liabilities and stockholders' equity $ 1,217,100 $ 1,215,300 Additional information for 2021: Net income is $88,400. Sales on account are $1,628,900. Cost of goods sold is $1,230,800. Required: 1. Calculate the following risk ratios for 2021: (Round your answers to 1 decimal place.)
Answers
Answer:
Missing word: "a. Receivables turnover ratio b. Inventory turnover ratio c. Current ratio d. Acid-test ratio d. Debt-equity ratio"
a. Receivable turover ratio = Net credit sales/ Average receivbles
= $1,628,900/ (($84000+$95000)/2)
= $1,628,900 / $89,500
= 18.2 Times
b) Inventory Turnover ratio = Cost of goods sold / Average inventory
= $1,230,800/ (($98,000+$83,000)/2)
= $1,230,800/$90,500
= 13.6 Times
c) Current ratio = Current assets / Current liabilities
= ($158,000+$84,000+$98,000+$4,300) / ($102,000+$7,500+$9,500
= $344,300/$119,000
= 2.893277311
= 2.89 to 1
d) Acid test ratio = ( Current assets - Inventory ) / Current liabilities
= ($344,300 - $98,000) / $119,000
= $246,300 / $119,000
= 2.0697478992
= 2.07
e) Debt-equity ratio = Total Liability (Current + Non-current) / Stockholders' equity
= ($119,000+$100,000) / ($730,000+$268,100)
= $219,000 / $998,100
= 0.2194169
= 22%
What is a commodity
Answers
Answer:
Something useful or valuable.
Explanation:
• a useful or valuable thing, such as water or time
Free Cash Flow
100
Growth rate
2%
Tax Rate
1%
Cost of Capital
5%
Debt-to-total value
50%
Given the data in the above, what is the terminal value of the business (using the growing perpetuity formula)?
Answers
Answer:
Explanation:
Terminal value of business Formula = FCF (1+g)/(WACC- g)
Where:
FCF= current free cash flow = 100
g= Growth rate = 2%
WACC = Weighted average cost of capital = Cost of capital = 5%
Terminal Value of the business= FCF (1+g)/(WACC- g)
Terminal Value of the business= 100 (1+2%)/(5%- 2%)
Terminal Value of the business= 3,400