A firm's current profits are $400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent. If a firm's opportunity cost of funds is 6 percent, determine the value of the firm.
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A firm's current profits are $400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent. If a firm's
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- A firm's current profits are $1,000,000. These profits are expected to grow indefinitely at a constant annual rate of 3.5 percent. If the firm's opportunity cost of funds is 5.5 percent, determine the value of the firmA firm's current profits are $900,000. These profits are expected to grow indefinitely at a constant annual rate of 2 percent. If the firm's opportunity cost of funds is 4 percent, determine the value of the firm: (a). The instant before it pays out current profits as dividends (b). The instant after it pays out current profits as dividendsA firm's current profits are $550,000. These profits are expected to grow indefinitely at a constant annual rate of 3 percent. If the firm's opportunity cost of funds is 5 percent, determine the value of the firm: Instructions: Enter your responses rounded to two decimal places. a. The instant before it pays out current profits as dividends. $18.33 x million
- A firm’s current profits are $900,000. These profits are expected to grow indefinitely at a constant annual rate of 2 percent. If the firm’s opportunity cost of funds is 4 percent, determine the value of the firm: a.The instant before it pays out current profits as dividends. b.The instant after it pays out current profits as dividendsShawna bought an antique table for $200 last year and is now selling it for $250. Her rate of return on the table is Multiple Choice 10 percent. 20 percent. 25 percent. 30 percent.Assume that a firm is considering building a factory that will cost $5 million. It believes that it can get a profit from this factory of $600,000 per year for many years. The interest rate at which the firm can borrow money is 15 percent. After evaluating whether it should build the factory, the firm decides that it should Select one: a. build b. not build
- Only typed answer and don't use chatgpt A firm's current profits are $950,000. These profits are expected to grow indefinitely at a constant annual rate of 6 percent. If the firm's opportunity cost of funds is 8 percent, determine the value of the firm:Instructions: Enter your responses rounded to two decimal places.a. The instant before it pays out current profits as dividends. $ millionb. The instant after it pays out current profits as dividends. $ millionSuppose the interest rate is 10 percent and the firm is expected to grow at a rate of 5 percent for the foreseeable future. The firm’s current profits are $100 What is the value of the firm (the present value of its current and future earnings)? What is the value of the firm immediately after it pays a dividend equal to its current profits?A publisher is deciding whether or not to invest in a new printer. The printer would cost $500, and it would increase cash flows by $600 for the next two years. What is the present value of the cash flows from the investment?
- Select the following statement that is accurate regarding entrepreneurs. Entrepreneurs must always make decisions for the company they started. If an entrepreneur wants to reduce their risks, they can pass the risks on to a CEO. Entrepreneurs only need a willingness to take a risk to start a business. An entrepreneur can fire and replace the managers of their company.Imagine that you are a financial manager for a medium-sized company. Describe how you would use capital budgeting techniques to determine whether a business investment is a good idea. Give an example of a business investment venture and how you would use capital budgeting to ensure it is a good investment.Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $60,000 a year, and he pays workers $110,000 in wages. In return, he produces 150,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $. (Enter your response as an integer.) What is the farmer's accounting profit? The peach farmer earns accounting profit of $ (Enter your response as an integer.)
