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1) The following information relates to Questions 1 and 2 Sales in a company are $243 million in 2018 and increase to $250 million in 2019
1) The following information relates to Questions 1 and 2 Sales in a company are $243 million in 2018 and increase to $250 million in 2019. Compute the percentage increase in sales, using the usual percentage fomula: 100 x (Sales 2019- Sales 2018) Sales 2018 (Report your answer as a percentage to two decimal places, without a % The percentage increase using the usual percentage formula is: sign) Compare this value to the following logarithmic approximation: 100 x (In (Sales 2019) - In(Sales 2018)) The percentage increase using the logarithmic approximation formula is: without a % sign) (Report your answer as a percentage to two decimal places, QUESTION 2 0.5 points Save Answer Continue to use the information from Question 1. Repeat the calculations in Question 1, assuming that Sales2019 = $255 million, Sales2019 = $260 million, and Sales2019 = S265 million, respectively. (Report all answers as a percentage to two decimal places, without a % sign) Using the "usual percentage formula' The percentage increase when Sales 2019 = $255 million is The percentage increase when Sales 2019 = $260 million is The percentage increase when Sales 2019 = $265 million is Using the "logarithmic approximation formula": The percentage increase when Sales 2019 = $255 million is The percentage increase when Sulus 2019 = $260 million is The percentage increase when Sales 2019 = $265 million is
2) sabin recruiting inc paid a $4.10 dividend last year. it's expected to grow at only 5% this year, due to heavy funding needs. After that growth will increase to 8% per year forever. if owners need to earn 16% what is fair value?
3)Melanie has purchased a fitness centre/gym which will be open 24 hours a day, 7 days a week. She only intends to have the gym supervised with staff from 6am - 9pm and after 9pm, customers can enter the gym and use the facilities by swiping their membership cards on the keypad. Melanie is concerned that her customers may injure themselves with the machines or weights when there are no staff supervising. Melanie would like to know if there is/are anything she could include in the contract or on her premises to ensure that she will not be liable for losses in the event a customer carelessly injures themselves. In your own words, advise Melanie.
Expert Solution
1)
1]Using usual % formula
% increase = 100 * (($250 million - $243 million) / $243 million) = 2.88%
Using logarithmic approximation
% increase = 100 * (ln($250 million) - ln($243 million)) = 2.84%
please see the attached file for the complet solution.
2)
The formula for the Constant dividend growth model is
Stock Price= Dividend for next period / (Required rate of Return - Growth Rate)
Dividend for Next Period = Last year Dividend( 1 + Expected Growth Rate)
= 4.1 (1 + 0.05)
= 4.305
Fair Value of Stock = 4.305 / (0.16 - 0.08)
= 53.8125
So the fair va;lue of the stock is $53.8125\
3)
Melanie intends to save on the overheads and fixed cost by deciding not to employ any supervisor for the night shifts. While this strategy will make the business more profitable, there is a risk of potential injury to the customers due to lack of supervision. This can also result in legal lawsuit by the customers who can sue Melanie for the losses/damages. The following methods can be implemented by Melanie for the night shift (9 pm - 6am to Limit the risk :
1. CCTV security cameras can be deployed in the premises to monitor customers .
2. Any customer found to be careless during workout session should be educated and guided to be desciplined.
3. Fee Concession can be given to customers visiting in the night shift to compensate for the supervisor absence.
4. Clause should be added in the contract that No Liability shall be borne by Melanie in case of any injury to the customers during night shift.
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