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In: Finance
Water, Inc., expects to sell 3.7 million bottles of drinking water each year in perpetuity. This...
Water, Inc., expects to sell 3.7 million bottles of drinking water each year in perpetuity. This year each bottle will sell for $1.46 in real terms and will cost $.82 in real terms. Sales income and costs occur at year-end. Revenues will rise at a real rate of 1.8 percent annually, while real costs will rise at a real rate of .8 percent annually. The real discount rate is 5 percent. The corporate tax rate is 23 percent.
What is the company worth today? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.)
Solutions
jeff jeffy answered 9 months agoRelated Solutions
Sparkling Water, Inc., expects to sell 3.7 million bottles of drinking water each year in perpetuity....
Sparkling Water, Inc., expects to sell 3.7 million bottles of
drinking water each year in perpetuity. This year each bottle will
sell for $1.46 in real terms and will cost $.82 in real terms.
Sales income and costs occur at year-end. Revenues will rise at a
real rate of 1.9 percent annually, while real costs will rise at a
real rate of 1.1 percent annually. The real discount rate is 7
percent. The corporate tax rate is 22 percent. What...
Sparkling Water, Inc., expects to sell 2.98 million bottles of drinking water each year in perpetuity....
Sparkling Water, Inc., expects to sell 2.98 million bottles of
drinking water each year in perpetuity. This year each bottle will
sell for $2.15 in real terms and will cost $1.08 in real terms.
Sales income and costs occur at year-end. Revenues will rise at a
real rate of 6 percent annually, while real costs will rise at a
real rate of 5 percent annually. The real discount rate is 12
percent. The corporate tax rate is 34 percent.
...
Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year,...
Biscayne Bay Water Inc. bottles and distributes spring water. On
May 14 of the current year, Biscayne Bay Water Inc. reacquired
26,550 shares of its common stock at $67 per share. On September 6,
Biscayne Bay Water Inc. sold 12,750 of the reacquired shares at $73
per share. The remaining 13,800 shares were sold at $64 per share
on November 30.
Required:
A.
Journalize the transactions of
May 14, September 6, and November 30. Refer to the Chart of
Accounts...
For the coming year, Archway Computers Inc. expects to produce and sell 200,000 computers. Of these,...
For the coming year, Archway Computers Inc. expects to produce
and sell 200,000 computers. Of these, 80,000 will be consumer
(personal) computers and 120,000 will be small business computers.
Common fixed overhead is $700,000. Additional information for the
coming year is as follows:
Consumer
Computers Small Business
Computers
Price $780 $2,300
Unit Direct
Materials 500 1,800
Unit Direct
Labour 160 290
Unit Variable
Overhead 40 75
Unit Variable Selling
Expenses 75 70
Total Direct Fixed
Overhead 120,000 200,000
Fixed selling and administrative expense for Archway Computers
Inc. is $3,460,000 per year.
Required:...
A toy manufacturer expects to sell 4536 games in a year. The games cost $20 each...
A toy manufacturer expects to sell 4536 games in a
year. The games cost $20 each plus a fixed delivery cost
of $140 per order. If it cost $5 to store a game
for a year, find the order size and the number of orders that
minimizes inventory costs.
Lava Lake Inc. bottles and distributes spring water. On February 11 of the current year, Lava...
Lava Lake Inc. bottles and distributes spring water. On February
11 of the current year, Lava Lake reacquired 40,300 shares of its
common stock at $42 per share. On April 30, Lava Lake Inc. sold
32,400 of the reacquired shares at $49 per share. On August 22,
Lava Lake Inc. sold 7,900 shares at $41 per share.
Required:
A.
Journalize the transactions of
February 11, April 30, and August 22. Refer to the Chart of
Accounts for exact wording of...
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic...
Mystic Lake Inc. bottles and distributes spring water. On July 9
of the current year, Mystic Lake reacquired 60,000 shares of its
common stock at $42 per share. On September 22, Mystic Lake sold
45,000 of the reacquired shares at $51 per share. The remaining
15,000 shares were sold at $40 per share on November 23.
a. Journalize the transactions of July 9,
September 22, and November 23. If an amount box does not require an
entry, leave it blank....
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic...
Mystic Lake Inc. bottles and distributes spring water. On July 9
of the current year, Mystic Lake reacquired 40,300 shares of its
common stock at $42 per share. On September 22, Mystic Lake sold
32,400 of the reacquired shares at $49 per share. The remaining
7,900 shares were sold at $41 per share on November 23.
Required: a. Journalize the transactions of July 9, September
22, and November 23. Refer to the Chart of Accounts for exact
wording of account...
Jedi, Inc., expects to sell 10,000 lightsabres for $24.00 each. Costs per unit are as follows:...
Jedi, Inc., expects to sell 10,000 lightsabres for $24.00
each.
Costs per unit are as follows:
Direct materials costs are $6.00
Direct manufacturing labor is $4.00
Manufacturing overhead is $0.80 per lightsabre.
The following inventory levels apply to 2019:
Beginning
inventory Ending
inventory
Direct
materials
24,000
units
24,000 units
Work-in-process
inventory
0
units
0 units
Finished goods
inventory
2,000
units
2,500 units
What will be the budgeted cost of goods sold for 2019?
Perpetuity A pays $100 at the end of each year. Perpetuity B pays $25 at the end of each quarter.
Perpetuity A pays $100 at the end of each year. Perpetuity B pays $25 at the end of each quarter. The present value of perpetuity A at the effective rate of interest is $2,000. What is the present value of perpetuity B at the same annual effective rate of interest i?
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