In essence, the likelihood of profitability is a longer-term gamble with Acme Consulting than it would be with the Interstate Travel Center, but the upfront risk is lessened by the experience, lower startup costs, and more diverse sources of startup funding that Acme Consulting plans to employ. These are the reasons that the risks associated with this firm are medium instead of high, and the discount rate should reflect this median level of risk. The rate of payoff in the discount rate should also, of course, reflect the amount of time projected to be necessary for true profitability to be achieved (as explicitly outlined in the business plan), as well as the increased level of competition that the company will face in the Silicon Valley (or would have faced in the mid to late nineties).
Silvera and Sons
The most sound investment opportunity provided in these three business plans -- and thus what should be the lowest discount rate to be offered -- comes form the Silvera and Sons business plan. This company has already been in operation under current ownership and management for six years, and has been in operation for a total of more than twenty, with the current owner (Silvera...
Value A."Suppose your bank account will be worth $15,000.00 in one year. The interest rate (discount rate) that the bank pays is 7%. What is the present value of your bank account today? What would the present value of the account be if the discount rate is only 4%?" PV at 7% =$15,000/1.07 =$14,018.69 With a discount rate of 7.00% of the bank account and a span of 1 year, the projected cash flows
city of Four Oaks, North Carolina is involved in the planning stages of development of a new diamond interchange at Keen Road. Unfortunately, several businesses lie in the way of the design and construction of the project and must be relocated to other parts of the town. Ronnie's Place, Inc. is at the center of controversy as the business must be demolished and a new building must be constructed
Data Warehousing: A Strategic Weapon of an Organization. Within Chapter One, an introduction to the study will be provided. Initially, the overall aims of the research proposal will be discussed. This will be followed by a presentation of the overall objectives of the study will be delineated. After this, the significance of the research will be discussed, including a justification and rationale for the investigation. The aims of the study are to
Enron could engage in their derivative trading strategy with no fear of government intervention because derivative trading was specifically exempted from government regulation. Due in part to a ruling by the Commodity Futures Trading Commission's (CFTC) chairwoman, Wendy Graham, derivatives remained free of regulatory oversight. Ms. Graham, wife of Texas senator Phil Graham, made this ruling 5 weeks before resigning as chairwoman of the CFTC and joining the Enron Board
Direct to Consumer Advertising HISTORY OF DRUG ADVERTISING THE DTC ADVERTISING PHENOMENON CREATING DEMAND DECEPTIVE ADVERTISING - A WOLF IN SHEEP'S CLOTHING CAUSE OF DEATH PROFIT UTILIZATION, PRICING, AND DEMOGRAPHICS LEGISLATION, POLITICS AND PATENTS LEGISLATIVE INITIATIVES REGARDING DTC RECALLED and/or DEADLY DRUGS In order to provide the most efficient method of evaluation, the study will utilize existing stores of qualitative and quantitative data from reliable sources, such as U.S. Government statistical references, University studies, and the studies and publications of non-profit
g = Growth rate in dividends DPS = Cathay Bank has a dividend of $0.010 Ks = 6% + (6.8%) * 1.0 = 12.8% (we employ a Beta of 1 since it should be the same as the one used for the market during period of stable growth) g = 5.53% (3.53% inflation + 2% GDP growth). V = 0.010 * (1.055) / (.1280-.0553) V = $145 Rate of return Rate of return = [Dt + (Pt
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