Scribd Logo
Upload

Welcome to Scribd!

  • iiiii.in: by监 for

    Uploaded by

    Zack Zhang
    12 views4 pages
    1. The company should choose the declining balance depreciation method to increase NPV by $25. 2. If a stock's expected return is above the security market line, it has a higher return for a given level of risk than the overall market. This creates an arbitrage opportunity. 3. Using FIFO for inventory valuation will result in higher reported net income compared to LIFO, since costs are based on older, lower historical costs under FIFO.

    Original Description:

    Original Title

    HW6

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    1. The company should choose the declining balance depreciation method to increase NPV by $25. 2. If a stock's expected return is above the security market line, it has a higher return for a given level of risk than the overall market. This creates an arbitrage opportunity. 3. Using FIFO for inventory valuation will result in higher reported net income compared to LIFO, since costs are based on older, lower historical costs under FIFO.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views4 pages

    iiiii.in: by监 for

    Uploaded by

    Zack Zhang
    1. The company should choose the declining balance depreciation method to increase NPV by $25. 2. If a stock's expected return is above the security market line, it has a higher return for a given level of risk than the overall market. This creates an arbitrage opportunity. 3. Using FIFO for inventory valuation will result in higher reported net income compared to LIFO, since costs are based on older, lower historical costs under FIFO.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 4

    15 25 x25 2 0.

    5814
    Time 1 1 7.5
    Time 2 Citi5 ㄨ 25
    o
    2
    47.5
    ⼼ 251
    _o 2516
    Time 了 11 7 划 了

    Time4 4
    iiiii.in 0.234
    NPV 0.5814 0.2516 o 0958
    The company should double declining
    choose

    balance and this will increase the NPV by 监


    国
    the is above the SML it has a
    If point
    higher return for a given level of risk that the
    market does So this will Cause an

    arbitra oppotnniy.AM
    then
    Stock will increase
    the demand for the
    in the stock
    resulting
    price's increase If
    the price goes up
    the expected return will decrease This
    process will continue until the expected
    return falls to normal level
    They can report higher Net Income
    compared with LI FO
    if they used To
    Under FIFO the oldest inventory
    items are corded sold first so coGs
    is based on the cost
    anger FIFO of
    inventory earlier Under LI FO It's just
    the opposite
    The host
    of producing widget has
    been so COGS under t.io
    rising
    will be less Net Income higher
    so FIFO will be ⽄
    逛
    出 It will decrease Sales 10的
    cni.ge
    Gross profit magpenen sales

    since they sell more products than


    due this year they sell a
    they.pro
    significant part of their inventory
    percentage 1 OGS sales
    COGS here will reflect recent colt of material
    So WGS sales increases The percentage as down
    GO CFL
    ⼩ B 筘 年6 250

    NPV 290 ⼗ 点弧 器 23.13


    IRR 1373 s 13 cost
    of capital
    it will
    be better
    didnt
    The other guy's opinion is
    wn_ng.lt
    consider the NPV
    of two pupils
    幽 incandescent
    PV for cost
    24
    LED 5.43

    Ai PV.cl F 24Inj
    o.q HL 黹⽠PV'CRF 543x
    875 0

    LEDbetter.name
    MO Total benefit 85 7 15oooo

    EAC of new
    jet
    ⼆
    器㥃 764106 4

    PV of
    Aiii
    incremental cost ⼆
    器
    恐
    136783.36
    since PV of incremental cost so
    The company let others use th

    WO
    yet
    Tiger
    7
    N Of incremental 㞴
    答
    笟
    509140
    pvco if we can let he other
    guys to use
    the
    boteting
    new jet
    jet and
    first

    You might also like