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A1 As mentioned in the question above the data is assumed to be normally distributed.It is a property of a normally distributed data that it is symmetric about the mean i.e. half of t...
Posted On: Feb. 9, 2018
Author: Shipra




"Perpetuity Value = ( CFn x (1+ g) ) / (R - g) CFn = Cash Flow in the Last Individual Year Estimated, in this case Year 10 cash flow g = Long-Term Growth Rate R = Discount Rate, or Cost of Ca...
Posted On: Feb. 9, 2018
Author: Shipra




Present Age 25 Years Retirement 65 Years Ending 84 Years rate 6% Year Amount i NPV 65 $50,000 40 $4,861 66 $50,000 41 $4,586 Lump sump amount to invest...
Posted On: Feb. 9, 2018
Author: Shipra




Ans a) Risk / Reward of Share A 1.92 Ans B) Risk / Reward of Share B 3.33 HIGH RISK Ans C) Expected Return of Share B 4.50% Ans D) Volatility 9%
Posted On: Feb. 9, 2018
Author: Shipra




The CML is considered to be superior to the efficient frontier since it takes into account the inclusion of a risk-free asset in the portfolio. The SM...
Posted On: Feb. 9, 2018
Author: Shipra




"ra = rrf + Ba (rm-rrf) where: rrf = the rate of return for a risk-free security rm = the broad market's expected rate of return Ba = beta of the asset" ...
Posted On: Feb. 9, 2018
Author: Shipra




risk free rate 3% market 5% Ke 5.2% b) WACC 5.42%
Posted On: Feb. 9, 2018
Author: Shipra




Year 1 Year 2 Year 3 Current Asset 16870 18732 19950 Non Current Asset 24066 29318 29920 Total Asset 40936 48050 49870 Current Liability 13466 15284 16574 NonCurrent Liability 11998 14584 1841...
Posted On: Feb. 9, 2018
Author: Shipra




Year 1 Year 2 Year 3 Sales 21807 22992 26613 interest 75 90 81 Cost of Good Sold 16182 17709 20481 Administraive and selling expenses 3966 4533 5547 Income tax expenses 324 252 192 Earning af...
Posted On: Feb. 9, 2018
Author: Shipra




Company buys 100 x $10 reams of paper to take advantage of a supplier's discount but only uses 50 reams during the financial reporting period. So while the company outlays $1,000 in cash, it only ...
Posted On: Feb. 9, 2018
Author: Shipra




Working Capital Net Operating Cash Flow Cash flow from investment activities Cash flow from finance activities Shares are issued for cash - - 0 - goods from inventory are sold for cash - - 0 - a...
Posted On: Feb. 9, 2018
Author: Shipra




Share are issued for cash + - - 0 Goods from inventory are sold for cash + + - + Goods from inventory are sold on account + - - 0 A fixed asset is sold for cash for less than book value + - + - ...
Posted On: Feb. 9, 2018
Author: Shipra




Cash 400000 Short Term Debt 296000 Account Receivable 80000 Account Payable 40000 Inventory 2400000 Total Current Asset 2880000 Total Current Liabilities Net Fixed Asset 2120000 Long Te...
Posted On: Feb. 9, 2018
Author: Shipra




ACCOUNTING
Posted On: Feb. 9, 2018
Author: Shipra




Time line Now End-of- End-of- End-of- End-of- End-of- year 1 year 2 year 3 year 4 year 5 Cash flow ($110,000) $30,000 $30,000 $30,000 $30,000 $30,000 Cost of capital 10% Net pre...
Posted On: Feb. 9, 2018
Author: Shipra




Salvage Value 0 Depreciation period 5 Years
Posted On: Feb. 9, 2018
Author: Shipra




Bond's Flat Price : The price of a bond that does not include accrued interest. The price paid by the purchaser is the full price. Bond's Flat Price : The price of a bo...
Posted On: Feb. 9, 2018
Author: Shipra




Operating Margin Invested Capital Turnover Debt Ration Share are issued for Cash + - 0 Goods from inventory are sold for cash at a profit + + - A fixed asset is sold for cash at its book value +...
Posted On: Feb. 9, 2018
Author: Shipra




Return on equity (ROE) = net income / total equity ROIC = (ROE - DIVIDEND / EQUITY) / EQUITY MULTIPLIER
Posted On: Feb. 9, 2018
Author: Shipra




Year 1 Year 2 Year 3 Sales 22100 24300 31600 Cost of good sold 17600 19300 25100 Selling general and admin expenses 3750 4000 5000 Depreciation 100 100 150 EBIT 650 900 1350 Net income 110 13...
Posted On: Feb. 9, 2018
Author: Shipra