This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A manufacturer of LCD televisions has seen sales increase from 125,000 units per year to 500,000 ... (Read 64 times)

Bernana

  • Hero Member
  • *****
  • Posts: 530
on: Jul 10, 2018
A manufacturer of LCD televisions has seen sales increase from 125,000 units per year to 500,000 units per year in 8 years.
 
  What has been the firm's average annual rate of increase in the number of television sets sold? Use the Rule of 72 to determine your answer.
  A) The average annual rate of change has been between 10 and 11.
  B) The average annual rate of change has been between 18 and 19.
  C) The average annual rate of change has been between 15 and 16.
  D) There is not enough information to answer this question.

Question 2

Patrick Company expects to generate free-cash of 120,000 per year forever.
 
  If the firm's required return is 12 percent, the market value of debt is 300,000, the market value of preferred stock is 70,000, and the company has 100,000 shares of stock outstanding. What is the value of Patrick's stock?
  A) 6.30
  B) 10.00
  C) 7.00
  D) 9.70


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

brbarasa

  • Sr. Member
  • ****
  • Posts: 308
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: B
Explanation: B) Unit sales doubled from 125,000 to 250,000 and doubled again to 500,000 in 8 years. Thus, at a doubling rate of every four years the Rule of 72 suggests an annual rate of = 18. Via the formula the actual growth rate is 18.92 per year.

Answer to Question 2

A


Bernana

  • Member
  • Posts: 530
Reply 2 on: Jul 10, 2018
Excellent

robbielu01

  • Member
  • Posts: 336
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

The steel lamination used in an E coil helps increase the magnetic field strength, which helps the ... The steel lamination used in an E coil helps increase the magnetic field strength, which helps the ...
Honey should never be given to children younger than one year of age Honey should never be given to children younger than one year of age
Average Number of Days per Year with Thunderstorms Average Number of Days per Year with Thunderstorms
Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1000 a year for ... Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1000 a year for ...
You deposit $2000 each year into an account earning 4% interest compounded annually. How much ... You deposit $2000 each year into an account earning 4% interest compounded annually. How much ...
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Video: Alzheimer's Disease

For a complete list of videos, visit our video library