Reference no: EM13997392
The head of the accounting department at a major software manufacturer has asked you to put together a pro forma statement of the company's value under several possible growth scenarios and the assumption that the company’s many divisions will remain a single entity forever. The manager is concerned that, despite the fact that the firm’s competitors are comparatively small, collectively their annual revenue growth has exceeded 50 percent over each of the last five years. She has requested that the value projections be based on the firm’s current profits of $2.8 billion (which have yet to be paid out to stockholders) and the average interest rate over the past 20 years (8 percent) in each of the following profit growth scenarios:
a. Profits grow at an annual rate of 9 percent. (This one is tricky.)
a. The firm will have to shut down at this growth rate
b. The firm's value is infinite
c. The firm's value is zero
d. The growth rate is not possible
Instructions: Round your responses to 2 decimal places.
b. Profits grow at an annual rate of 5 percent. ___billion
c. Profits grow at an annual rate of 0 percent. ___billion
d. Profits decline at an annual rate of 5 percent. ___ billion
|
About the relation between a firms productivity
: What do researchers have to say about the relation between a firm’s productivity and exposure to global competition? Provide 2 real- world examples in which international trade lead to increases in productivity for a firm or industry.
|
|
Commodity in market that resembles perfect competition
: You are the manager of a firm that sells a “commodity” in a market that resembles perfect competition, and your cost function is C(Q) = 40Q + 5Q2 (so MC = 40+10Q). Calculate the expected market price. What output should you produce in order to maximi..
|
|
Fiscal and monetary policy is appropriate to fight recession
: In the most recent recession of 2008 and 2009, the United States saw a declining GDP, rising unemployment, and, sometimes, deflation. Please describe these variables during the 2008 and 2009 recession and in the subsequent years. What type of fiscal ..
|
|
What is the name of step 2 of glycolysis
: What is the name of step 2 of glycolysis and what are the products and reactants?
|
|
Statement of company value under several possible growth
: The head of the accounting department at a major software manufacturer has asked you to put together a pro forma statement of the company's value under several possible growth scenarios and the assumption that the company’s many divisions will remain..
|
|
Definition of the prevention strategy
: The definition of the prevention strategy and where you learned of it, How it is put into practice, What environment this prevention strategy is used in and The efficacy of the prevention strategy
|
|
What is net cash provided by operating activities
: What is net cash provided by operating activities under the indirect method? a. $216,000 b. $268,000 c. $290,000 d. $416,000
|
|
Which lead
: Which lead is this?Standard and aVR, aVF, aVL, v1, v2, v3, v4, v5, v6
|
|
How many atp is formed through glycolysis
: How many ATP is formed through glycolysis and where does the ATP come from?
|