Armstrong Corporation manufactures bicycle parts. The company currently has a $19,800 inventory of parts that have become obsole

te due to changes in design specifications. The parts could be sold for $7,300, or modified for $10,300 and sold for $20,900Calculate the benefit under each alternative for disposing of the obsolete parts.

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CHERCRO Inc. is a startup. It is estimated that the company will not be paying any dividends for the coming 4 years. If the comp

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Policy 1: The price at the end of year 4 is calculated as D5/(rs-g) = 3 /(.12-.02) = 3/.10 = $30 per share. The current price is determined using PVF12%,4* Price at year 4 =.63552 * 30 = $19.07 per share. Policy 2: The price at the end of year 4 is D5/(rs-g) = 2 /(.12-.06) = 3/.06 = $50 per share. The current price is then calculated as PVF12%,4* Price at year 4 =.63552 * 50 = $31.78 per share. Policy 2 should be favored as it offers a higher market price per share.

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