Question 2 – ALL CALCULATIONS MUST BE SHOWN

A local theme park is losing money. The current price of admission is $60 per person with an average daily attendance of 750 people. You are an independent consultant employed to recommend a pricing strategy. The demand schedule estimated by the consultant is shown in the table below.

a. Fill in the blanks in the table above. There are 7 empty cells [marked as 0.5 marks per cell correctly filled]. Use the point method (ΔQ/ΔP)*(P/Q) to calculate the own-price elasticity of demand. (3.5 marks)

b. As a consultant what would be your recommendation regarding pricing strategy? Should the theme park change the price from $60? Justify your answer based on the price elasticity of demand. .

c. From the information in the table write the equation for the daily demand for theme park tickets in price dependent form (P=a-bQ). (2.5 marks)

d. Use the midpoint method to calculate the price elasticity of demand from $85 to $90. Explain whether demand is price elastic or price inelastic and interpret the value of this elasticity.

e. Theme park customers are able to purchase a $15 photographic package. At the current ticket price of $60, 34% of customers purchase photographic packages. The theme park estimates that a $3 price increase in theme park tickets would result in a 20% reduction in photographic packages purchased. Provide the name of, and calculate the value of, this elasticity. Interpret its value. What does this elasticity value tell the theme park managers about the relationship between theme park ticket prices and photographic packages? How many customers would purchase the photographic packages if theme park tickets increased by $3?

The first question:- below is the expected cash flow of the two investment opportunities (Project A, Project B) available to Rafidain, if you know that the net investment initial investment of project (A) is JD 500,000, while the net investment for project B is 600,000 JD. The company intends to finance the net investment for both projects according to the following: 40% with long-term loans, interest rate 8%, 40% in ordinary shares, if you know that the risk-free rate is 2%, the existing risk premium is 10%, and the beta is 1.5%. And 20% financing with retained profits. The tax rate is 30%.
Project A: First year 200,000, second year 200,000, third year 150,000, fourth year 50,000.
The second project B: the first year 150,000, the second year 150,000, the third year 250,000, the fourth year 150,000.

REQUIRED ;- The two projects are required to be evaluated in the light of
1- The standard of the period of recovery
2 - the price of the profitability index.

Please explain to me how they calculating 10.4 M , 1.4M and also 4.4M A construction company entered into a fixed-price contract to build an office building for $26 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the year were $9 million. During the first year the company billed its customer $9 million, of which $3 million was collected before year-end. What would appear in the year-end balance sheet related to this contract using the percentage-of-completion method? (Enter your answers in whole dollars.) Assets: Accounts receivable $6,000,000 Costs plus profit in excess of billings $1,400,000 Explanation: Assets: Accounts receivable ($9 million – 3 million) = $6,000,000 Cost plus profit ($6 million + $4.4 million*) in excess of billing ($9 million) = $1,400,000 * First year gross profit = $10,400,000 – 6,000,000 = $4,400,000

OK.

2. Company manufactures and sells bikes. Each bike costs M R.O to make. The company's fixed costs are 500 R.O. In addition, the company owners know that the price of each bike comes from the price function p= 60 - 1/2 x

(Note: Mis the first two digit from your MEC ID after alphabetic (S or F), for example if the ID is 19F18140 take the two digit after F which are 18)

a. Find the Break-even point of the company
b. Find the numnber of bikes at maximum profit of the company
C. Find the maximum revenue the company earned

This is what was mentioned in the question

The DCF can be used to estimate the value of future cash flows and the impact upon the current value of the stock price. As reported in Morningstar, Visa reported FCF of 11,995 (million) in 2018. To perform this calculation, we first calculate the Discounted Free Cash Flow. Using this information, we project the future cash flows based upon a fixed growth rate.

Assumptions for Calculations

Assumptions

FCF Annual Growth 15%

Discount Rate 8.0%

Shares outstanding 2231

Debt 16630

Cash 11709

In your initial response, critically analyze the assumptions, potential errors, and modifications you might make in your estimations for the valuation of Visa stock price.

Pukri Ltd is deciding whether to pay out R90 000 in excess cash in the form of an extradividend or a share repurchase. Current profits are R2,40 per share and the share sells forR20. The abbreviated balance sheet before paying out the dividend is:Equity 240 000 Bank/cash 90 000Debt 160 000Other Assets 310000400 000400 000Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by:1.1 Calculating the number of shares in issue (4)1.2 The dividends per share (for the first alternative, i.e. pay the dividend) (2)1.3 Calculate:1.3.1 The new share price (6)1.3.2 The EPS (4)1.3.3 The price-earnings ratio

On January 1, 2000, Vick Company issued $500,000 of 8%, 15 year bonds, at a price of 94. The bonds pay

semiannual interest on June 30 and December 31 of each year. Vick records the interest payments every six months by amortizing the discount on bonds payable using the straight-line method. On Januray 1, 2005 Vick Company retires 30% of these bonds by buying them on the open market at a price of 97.

How does the market rate compare to the stated rate (market rate higher or lower)?

Journalize the issuance on 1/1/05

Journalize the first interest payment on June 30.

Journalize the retirement on January 1, 2005

Miglietti Restaurants is looking at a project with the following forecasted? sales: ? first-year sales quantity of 31,000?,

with an annual growth rate of 2.00?% over the next ten years. The sales price per unit will start at $42 and will grow at 4.50?% 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 depreciated using? MACRS, and has a? seven-year MACRS life classification. Fixed costs will be $340,000

per year. Miglietti Restaurants has a tax rate of 30?%. What is the operating cash flow for this project over these ten? years?

a. Assuming that the expectations hypothesis is valid, compute the expected price of the four-year zero coupon bond shown below at the end of (i) the first year; (ii) the second year; (iii) the third year; (iv) the fourth year. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Beginning of Year Price of Bond

1. 950.90

2. 899.97

3. 877.62

4. 785.26

b. What is the rate of return of the bond in years 1, 2, 3, and 4? Conclude that the expected return equals the forward rate for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places.)