Homework Answers
Price of Immediate Perpetuity = $ 10000, Let the first payment be $ k (which happens immediately), Force of Interest = 0.06, Annual Interest = 6 % and Perpetual Growth Rate = - 0.4 %
Therefore, 10000 = k + [k/{0.06-(-0.004)}]
10000 = k + k/0.064
k = $ 601.5038 ~ $ 604
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following questions :
1 – What is the relevance of the $2,000 monthly payment
to Dave Verden on the analysis of Jones’ financing needs?
2 – What metrics could you use to compare the historical financial
results for Jones with the projected financial results under the
four defined scenarios?
3 – Other than financing needs, what other issues should Jones
address as he considers the different growth
scenarios?...
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Required: You need to prepare a comprehensive
12-month budget, including supporting schedules and a report for
the period January 1, 2020 to December 31, 2020 for Hedron,
Inc.
INFORMATION FOR HEDRON, INC.
Hedron, Inc. is a company that re-sells one product, a
particularly comfortable lawn chair. An overseas contractor makes
the product exclusively for Hedron, so Hedron has no manufacturing
related costs.
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