| 2.91V | 0.06A | 3. | 4.07V | 0.09A | 4. | 5.01V | 0.10A | 5. | 6.02V | 0.13A | 6. | 6.99V | 0.14A | 7.
0.53C. 0.71D. 1.10E. 1.07 | 7 | e | A firm has total debt of $4,850 and a debt-equity ratio of 0.57. What is the value of the total assets?
Since capital is assumed to be the only binding production constraint, investment (I) in the Harrod-Domar model is defined as the growth in capital stock. I = (change in K) But investment is also equal to savings (S), which is equal to the average propensity to save (APS) times GDP (Y). Denote APS = s I = S = APS * Y = s*Y So, ICOR = (s Y) / (change in Y) Rearranging terms, G(Y) = (change in Y) / Y = s / ICOR Growth Rate of GDP per Capita The growth rate of GDP per Capita is defined as G(Y/P) = G(Y) – G(P) From (1), G(Y/P) = s / ICOR - G(P) (2) where G(P) = the population growth rate (1) Thus, a 1 percent increase in population growth will cause the growth rate of GDP per capita to decrease by 1 percent. The empirical question is whether policy makers can achieve a constant marginal product of capital when the centralize investment decisions. Examples 1.
A. $260,000 B. $325,000 C. $360,000 D. $425,000 5. What nominal annual return is required on an investment for an investor to experience a 12% gain in purchasing power? Assume inflation to be 4%.
Value the project using the Adjusted Present Value (APV) approach, assuming the firm raises $750,000 of debt to fund the project and keeps the level of debt constant in perpetuity. Assuming that Sampa maintains a constant debt level of $750K, the value of the project using the APV approach is made up of two parts: a) the unlevered present value of the forecasted FCFs minus the initial investment and, b) the present value of the debt tax shields (DTSs). The calculations for both of these can be seen below. First, it’s important to note that the unlevered present value of the forecasted FCFs minus the initial investment results in the same project value that was calculated in question #1, using rA as the discount rate and assuming the project was entirely equity-financed. Then, for the present value of all the DTSs, we used rA as the discount rate, taking the unknown likelihood of the project’s profitability into consideration.
Thus, weighted average the interest rates for debt is: (8.95*0.51 + 8.72 * 0.49) = 8.84% Full cost of debt will be government fixed rates plus debt rate premium. Therefore, Kd=8.84%+1.3%=10.14% Cost of equity: CAPM Model: Rf + (Rm – Rf)*β = Ke Rf-risk free rate Rf is measured as the currently prevailing yield on a government security. Thus, it refers us to table B. There are long-term and short-term maturity. The principal we are using – the match of the free risk government security with the life of the analyzed assets.
Fixed asset turnover c. Price-earnings ratio d. Cash coverage ratio e. Return on Assets 2. Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Both firms have a total debt ratio (D/V) equal to 0.8. Firm A has an asset turnover ratio of 0.9, while firm B has an asset turnover ratio equal to 0.4. From this we know that a.
| | | $30.45 per unit and $27,721 respectively. | | | $30.45 per unit and $69,775 respectively. | | | 6. If sales are $791,788, variable costs are 80% of sales, and operating income is $233,054, what is the contribution margin ratio? Select the correct answer.
The LM Curve will see a shift to the left and decrease the value of "Y" if the IR is higher than the ER of the market. The GDP is increasing in value and there will be an increase of savings.. If the IR was below the equilibrium, the opposite of the previously stated would occur. The LM Curve would see a shift to the right, therefore increasing the value of "Y". The GDP value would then decrease, due to the move from Point A to C, and increase employment which would decrease savings.
Public Question Time value of money 1. Harry invested $10,600 in an account that pays 4 percent simple interest. How much money will he have at the end of five years? a. 12,897 b.