1. Kelly's corner bakery purchased a lot in Columbus city five years ago at a cost of...
Question:
1. Kelly's corner bakery purchased a lot in Columbus city five years ago at a cost of $740,000. today, that lot has a market value of $780,000. at the time of the purchase, the company spent $55,000 to level the lot and another $5,800 to install storm drains. the company now wants to build a new facility on that site. the building cost is estimated at $1,300,000. The amount should be used as the initial cash outflow for this project $____.
2. Cow Company will pay a $3.00 dividend next year, Dividends are expected to grow at a constant rate of 5% per year. If the required return for this stock is 12%, how much should the stock sell for today?
3. Mountain Tops Inc. currently sells 9,000 motor homes per year at $60,000 each. The company wants to introduce a new portable camper to expand its product lines; upon the introduction, it expects to sell 15,000 of these campers per year at $13,000 each. However, due to this new product introduction, the sales of its motor homes would decline by 1,600 units per year. What should be the amount to use as the annual sales figure when evaluating this camper project? round it to a whole dollar.
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen