With the calculated WACC, the initial rate must be at least 7.96% to determine whether to purchase the stocks. Since the revenue has increased, the profit margin will have changes as well. The profit margin equals to Net Income divided by Sales. The Net Income increases as the revenues increasing. In that case, whether the efficiency improves or not is determined by the sales.
In the short-run, a larger government deficit would cause an increase to “total planned expenditures and higher aggregate demand “(Miller, 2012, pg. 308). The real GDP equilibrium would rise above the full-employment level because of deficit spending. The price level would also increase. In the long-run, the economy “adjusted to changes in all factors” and the “equilibrium real GDP remains at its full-employment level” even though the increase in the budget deficit causes a rise in the aggregate demand.
With the value of the dollar raising it will increase real Gross Domestic Product. When the country as a whole is better it will make people feel good about spending money. Once people start spending money, the country will start to resemble what it used to be. In addition exchange rate could be a big factor on the amount of product that you export. This could have a bearing on what the company’s bottom line
Chiffon project is designed to increase a company bottom line. And since the Chiffon project itself is a project designed to provide facilities to manufacture and distribute a new product or line; then, the minimum criteria (hurdle rate) for this project is ten year average ROFE must be greater or equal than 40%. General Foods currently employs an incremental basis method to analyze its projects. Under incremental basis, the capital spending for this project is $20 million, and it can yield ROFE around 63%. This high ROFE exceeds the hurdle rate that the company establishes to accept a project.
First, I think that Eskimo Pieâ€™s market share and market presence commands a higher price than what Goldman estimated. The case mentioned that at least one of Eskimoâ€™s products was in 98% of grocery stores across the US, and that has huge implications in estimating Eskimoâ€™s worth. Also, the case said that Eskimo Pie was 3rd in terms of market share with 5.3%. Popsicle had the most of the market with 7.6% market share, and Klondike was second with 5.4%. As we can see, these two factors would give any company a big edge in the frozen novelty industry, which in my mind commands a higher premium.
d. If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation. e. The more depreciation a firm has in a given year, the higher its EPS, other things held constant. 2. Which of the following statements is CORRECT? a.
Park Attendance- the more people come to the park, the more sales they will get. c. Sales Mix/Up selling- If cashiers suggestive sell the upgrade (medium to large, since the price difference is small) and small to children, this will increase sales. d. Placement- If the ICG stalls are placed near popular rides, when customers get off the ride they are expected to have increased sales due to increased traffic. 2. The expectation of the amount of gross revenue is found by Multiplying last year revenue by the percentage increase expected to occur in 20X2 for WEEKDAYS: (66 days of over 80 degrees) x (30% increase of sales for each day) 66 * .3 =19.8 Then we take this 19.8 to convert into a percent: 19.8 * .01 = .198 or 19.8% and this will be the expected increase.
Strong market position allows the company to launch new products and also increases its bargaining power in the market. However, the high transportation cost resulting from the higher oil prices has increased PepsiCo’s shipping and handling cost from $4.1 billion in 2005 to $5.1 billion in 2007. Given the intense competition in the market, the company may not be able to pass on increases in operating costs to its customers. High oil prices would adversely affect the margins of the company. Page 1 of 2 PepsiCo SWOT Analysis Strengths, Weaknesses, Opportunities and Threats (SWOT) Location of Factor TYPE OF FACTOR Favorable Internal Strengths Unfavorable Weaknesses Strong market
| Time is so important when it comes to financial matters because money received today will have different values in the future. The amount can increase or decrease depending on inflation and interest (Baker and Baker, 2011). | How would you use the time value of money to your financial benefit? | I would invest as much money as I could when interest rates were higher. This would make more money for me.
Fuel expenses grew at a faster rate than sales, fuel costs although seeing a fall off in 2009 by 20.52% rose by 29% in 2010. These costs continue to a major challenge for the company as referenced in the 2010’s annual report. Likewise, generation expenses will also increase when fuel increases as oil is the largest expense in that process. Due to efficiencies in the generating plant, the increases in costs were lower than that of fuel. Distribution expenses rose significantly in 2010 by 10.12% from 1.18% in 2009.This was as a result of Hurricane Tomas in 2010 as the distribution network was significantly impacted when several power lies were damaged.