Question

In: Finance

Suppose the sales in the first year, R, are $100 and they growevery year at...

Suppose the sales in the first year, R, are $100 and they grow every year at a growth rate of g = 10%. Also, suppose that the net margin is 40%. This means that earnings in the first year are going to be 0.4*100 = $40. Assuming that the discount rate, d, is 25%. What is the present value of earnings assuming that the company survives for 10 years?

Solutions

Expert Solution

 

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Suppose the sales in the first year, R, are $100 and they grow every year at...
Suppose the sales in the first year, R, are $100 and they grow every year at a growth rate of g = 10%. Also, suppose that the net margin is 40%. This means that earnings in the first year are going to be 0.4*100 = $40. Assuming that the discount rate, d, is 25%. What is the present value of earnings assuming that the company survives for 10 years?
Suppose we are given the following information of a stock: S = 100, r = 5%,...
Suppose we are given the following information of a stock: S = 100, r = 5%, σ = 30%, and the stock doesn’t pay any dividend. Calculate the delta of a credit spread using two put options (strike price = $90 and $80) that matures in 0.5 year, based on BSM model. A. 0.135 B. -0.135 C. 0.337 D. -0.337
Suppose we are given the following information of a stock: S = 100, r = 5%,...
Suppose we are given the following information of a stock: S = 100, r = 5%, σ = 30%, and the stock doesn’t pay any dividend. Calculate the delta of a credit spread using two put options (strike price = $90 and $80) that matures in 0.5 year, based on BSM model. A. 0.135 B. -0.135 C. 0.337 D. -0.337
They forecast new revenues of $100 million in the first year and $200 million in year...
They forecast new revenues of $100 million in the first year and $200 million in year 2, growing at 2.5% per year thereafter. The cost of goods underlying these new revenues is 45 percent of the revenues. To achieve these synergies will require an investment of $400 million initially, and 5% of the added revenue each year, to fund working capital growth. Find the net present value of these synergies using a discount rate of 15% and a marginal tax...
Part 1: Suppose the mean score on the first exam is a 60 out of 100....
Part 1: Suppose the mean score on the first exam is a 60 out of 100. I would like to curve the exam to force the mean score to be an 80 out of 100. If I added 20 to everyone’s score, would the SD of the exam scores change? How about if I multiplied 4/3 to everyone’s score? Explain. Part 2: Continuing from Part 1, fill out the formulas put below that will always be true. Let a =...
Suppose the mean score on the first exam is a 60 out of 100. I would...
Suppose the mean score on the first exam is a 60 out of 100. I would like to curve the exam to force the mean score to be an 80 out of 100. If I added 20 to everyone’s score, would the SD of the exam scores change? How about if I multiplied 4/3 to everyone’s score? Explain. Part 2: Continuing from Part 1, fill out the formulas put below that will always be true. Let a = constant (-...
A business operated at 100% of capacity during its first month, with the following results: Sales...
A business operated at 100% of capacity during its first month, with the following results: Sales (112 units) $560,000 Production costs (140 units):    Direct materials $70,000    Direct labor 17,500    Variable factory overhead 31,500    Fixed factory overhead 28,000 147,000 Operating expenses:    Variable operating expenses $5,860    Fixed operating expenses 3,680 9,540 The amount of operating income that would be reported on the variable costing income statement is a.$559,860 b.$427,260 c.$458,940 d.$550,460
A business operated at 100% of capacity during its first month, with the following results: Sales...
A business operated at 100% of capacity during its first month, with the following results: Sales (106 units) $498,200 Production costs (132 units):    Direct materials $67,065    Direct labor 17,123    Variable factory overhead 29,965    Fixed factory overhead 28,539 142,692 Operating expenses:    Variable operating expenses $6,403    Fixed operating expenses 4,854 11,257 The amount of operating income that would be reported on the absorption costing income statement is a.$395,275 b.$400,129 c.$372,357 d.$498,068
NPV.  Miglietti Restaurants is looking at a project with the following forecasted​ sales: ​ first-year sales...
NPV.  Miglietti Restaurants is looking at a project with the following forecasted​ sales: ​ first-year sales quantity of 36,000​, with an annual growth rate of 4.00​% over the next ten years. The sales price per unit will start at ​$45.00 and will grow at 2.00% per year. The production costs are expected to be 55​% of the current​ year's sales price. The manufacturing equipment to aid this project will have a total cost​ (including installation) of ​$2,400,000. It will be...
Miglietti Restaurants is looking at a project with the following forecasted​ sales: ​ first-year sales quantity...
Miglietti Restaurants is looking at a project with the following forecasted​ sales: ​ first-year sales quantity of 35,000​, with an annual growth rate of 4.00​% over the next ten years. The sales price per unit will start at ​$42.00 and will grow at 2.00% per year. The production costs are expected to be 55​% of the current​ year's sales price. The manufacturing equipment to aid this project will have a total cost​ (including installation) of ​$2,500,000. It will be depreciated...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT