Exhibit 14.2 Use the Information Below for the Following Problem(S)

question 45

Multiple Choice

Exhibit 14.2
Use the Information Below for the Following Problem(S)
Modular Industries currently has a 16% annual growth rate while the market average is 6 percent. The market multiple is 10.
-Refer to Exhibit 14.2.Determine the justified P/E ratio for Modular Industries assuming Modular can maintain its superior growth rate for the next 5 years.

• A) 6.4
• B) 13.1
• C) 16.5
• D) 23.8
• E) 15.7

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Definitions:

Tenant-Days

A measurement in property management representing the total number of days rented out across all tenants.

Activity Variance

The difference between planned or budgeted cost and actual cost in activity-based costing, indicative of operational efficiency.

Administrative Expenses

Expenses that are not directly tied to the production of goods or services, such as salaries of office workers, rent, and utilities.

Tenant-Days

A measure used in the hospitality or rental industry, referring to the total number of days that units are occupied by tenants.