For each of the following cases, calculate the arc price elasticity of demand, and state whether demand is elastic, inelastic, or unit elastic.
a. When the price of milk increases from $2.25 to $2.50 per gallon, the quantity demanded falls from 100 gallons to 90 gallons.
b. When the price of paperback books falls from $7.00 to $6.50, the quantity demanded rises from 100 to 150.
c. When the rent on apartments rises from $500 to $550, the quantity demanded decreases from 1,000 to 950.

Answers

Answer 1

Answer:

a. Arc price elasticity of demand = - 1. The demand is unit elastic.

b. Arc price elasticity of demand = - 5.40. The demand is elastic.

b. Arc price elasticity of demand = - 0.54. The demand is inelastic.

Explanation:

The formula for calculating arc price elasticity of demand is as follows:

Arc price elasticity of demand = Percentage change in quantity demanded / Percentage change in price ................ (1)

Where, based on the arc price elasticity of demand, we have:

Percentage change in quantity demanded = {(New quantity demanded - Old quantity demanded) / [(New quantity demanded + Old quantity demanded) / 2]} * 100

Percentage change in price = {(New price - Old price) / [(New price + Old price) / 2]} * 100

Therefore, we have:

a. When the price of milk increases from $2.25 to $2.50 per gallon, the quantity demanded falls from 100 gallons to 90 gallons.

Percentage change in quantity demanded = {(90 - 100) / [(90 + 100) / 2]} * 100 = -10.5263157894737%

Percentage change in price = {(2.50 - 2.25) / [(2.50 + 2.25) / 2]} * 100 = 10.5263157894737%

Substituting the values into equation (1), we have:

Arc price elasticity of demand = -10.5263157894737% / 10.5263157894737% = - 1

Since the absolute value of the arc price elasticity of demand is equal to 1, it implies that the demand is unit elastic.

b. When the price of paperback books falls from $7.00 to $6.50, the quantity demanded rises from 100 to 150.

Percentage change in quantity demanded = {(150 - 100) / [(150 + 100) / 2]} * 100 = 40%

Percentage change in price = {(6.50 - 7.00) / [(6.50 + 7.00) / 2]} * 100 = -7.40740740740741%

Substituting the values into equation (1), we have:

Arc price elasticity of demand = 40% / -7.40740740740741 = - 5.40

Since the absolute value of the arc price elasticity of demand is equal to 5.40 which is greater than 1, it implies that the demand is elastic.

c. When the rent on apartments rises from $500 to $550, the quantity demanded decreases from 1,000 to 950.

Percentage change in quantity demanded = {(950 - 1000) / [(950 + 1000) / 2]} * 100 = -5.12820512820513%

Percentage change in price = {(550 - 500) / [(550 + 500) / 2]} * 100 = 9.52380952380952%

Substituting the values into equation (1), we have:

Arc price elasticity of demand = -5.12820512820513% / 9.52380952380952% = - 0.54

Since the absolute value of the arc price elasticity of demand is equal to 0.54 which is less than 1, it implies that the demand is inelastic.


Related Questions

Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.

a. In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.
b. The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
c. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.
d. In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors.

Answers

Answer:

1. not a competitive market

2. not a competitive market

3. competitive market

4. not a perfectly competitive market

Explanation:

To answer this question, i will first start by explaining what a competitive market is and the assumption of a perfectly competitive market as well

A competitive market is a market that has many producers and buyers of a particular product. The producers are usually in a competition to meet up with the needs of the buyers.

some assumptions of the market:

large sellers/producersidentical or homogenous goodsfree entryno discriminationperfect knowledge

a. in this question this is not a competitive market. the reason is simple. It says that there are only two providers of internet. So there are no enough producers or sellers

b. The government has limited entry into this market by giving patent to only one pharmaceutical company.

c. yes this market is competitive since there are many producers of the product and the consumers regard the products as identical or homogenous. this meets with all of the assumptions of a perfectly competitive market.

d. the product here is not homogenous or identical as this is not a perfectly competitive market since buyers would prefer to buy the coffee that tastes better and leave that of the competitors

thank!

We are given the following information for the Pettit Corporation.
Sales (credit) $3,549,000
Cash 179,000
Inventory 911,000
Current liabilities 788,000
Asset turnover 1.40 times
Current ratio 2.95 times
Debt-to-assets ratio 40%
Receivables turnover 7 times
Current assets are composed of cash, marketable securities, accounts receivable, and inventory.
Calculate the following balance sheet items:
a. Accounts receivable.
b. Marketable securities.
c. Fixed assets.
d. Long-term debt.

Answers

Answer:

See below

Explanation:

a. Accounts receivables

= Sales / Receivables turnover

= $3,549,000 / 7x

= $507,000

b. Marketable securities

= Current assets - (Cash + Accounts receivable + Inventory)

Where;

Current asset = Current ratio × Current liabilities

Current asset = 2.95 × $788,000

Current asset = $2,348,240

Hence,

Marketable securities

= $2,348,240 - ($179,000 + $507,000 + $911,000)

= $2,348,240 - $1,597,000

= $751,240

c. Fixed assets

Total assets = Current assets + Fixed assets

$2,535,000 = $2,348,240 + Fixed assets

Fixed assets = $2,535,000 - $2,348,240

Fixed assets = $186,760

d. Long term debt

= Total debt - Current liabilities

Where,

Total debt = Debt to assets × Total assets

= 40% × ($3,549,000 / 1.40)

= 40% × $2,535,000

= $1,014,000

Hence,

Long term debt

= $1,014,000 - $788,000

= $226,000

Monopoly in the competitive environment a. is enjoyed by few organizations as sole suppliers of a good or service. b. is typical of public utilities -- even more so now than twenty years ago. c. cannot be achieved temporarily even through the use of patents and similar legal devices. d. is the logical extension of a firm's control of its production and labor resources. e. is, all in all, the most common type of competition in the U.S. market.

Answers

Answer:

b

Explanation:

and services.

An example of a monopoly is a utility company

A natural monopoly occurs due to the high start-up costs or a large economies of scale.

Natural monopolies are usually the only company providing a service in a particular region  

Because the demand curve for a monopoly is downward sloping, marginal revenue is less than price. As prices fall, more units of the product are bought.

In a monopoly When the average cost is falling, the marginal cost lies below the average cost. If the government sets price to be equal to marginal cost, which lies below the average cost, the monopoly would incur losses.

Gilmore, Inc., had equity of $135,000 at the beginning of the year. At the end of the year, the company had total assets of $290,000. During the year, the company sold no new equity. Net income for the year was $29,000 and dividends were $3,400. a. What is the sustainable growth rate for the company

Answers

Answer:

A. 18.96%

B. 18.96%

C. 15.94%

Explanation:

A. Calculation to determine the sustainable growth rate for the company

First step is to calculate the Ending equity

Ending equity = 135,000 + 29,000 -3,400

Ending equity=$160,600.

Second step is to calculate the return on equity

Return on equity =29,000/160,600

Return on equity=0.18057285

Third step is to calculate the retention ratio

Retention ratio =(Net income- dividends) / Net income

Retention ratio= (29,000-3400) / 29,000

Retention ratio=25,600 /29,000

Retention ratio=0.88275862.

Now let calculate the Sustainable growth rate using this formula

Sustainable growth rate = (Return on equity *Retention ratio) / [1-(Return on equity*retention ratio)]

Let plug in the formula

Sustainable growth rate=(0.18057285*0.88275862)/ [1-(0.18057285*0.88275862)]

Sustainable growth rate=0.15940224/ [1-0.15940224]

Sustainable growth rate=0.1896*100

Sustainable growth rate=18.96%.

b. Calculation to determine the sustainable growth rate if you use the formula ROE band beginning of period equity

First step is to calculate the return on equity using beginning of the period equity

Return on equity using beginning of the period equity=$29,000 /135,000

Return on equity using beginning of the period equity=0.21481481.

Now let calculate the sustainable growth rate if you use the formula ROE band beginning of period equity

roe * b = 0.21481481*0.88275862

ROE band=0.1896*100

ROE band=18.96%.

c.return on equity using ending of period equity = 29,000/160,600

=>0.18057285

roe*b=>0.18057285*0.88275862

=>0.1594

=>15.94%.

University Car Wash built a deluxe car wash across the street from campus. The new machines cost $234,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows:

Year Hours Used
1 2,800
2 1,900
3 2,000
4 2,000
5 1,800
6 1,500

Required:
a. Prepare a depreciation schedule for six years using the straight-line method.
b. Prepare a depreciation schedule for six years using the double-declining-balance method.
c. Prepare a depreciation schedule for six years using the activity-based method.

Answers

Answer:

University Car Wash

a. Straight-line Method:

Year  Cost            Depreciation   Accumulated     Net  Book

                                  Expense       Depreciation       Balance

1        $234,000         $34,500          $34,500         $199,500

2       $234,000         $34,500          $69,000        $165,000        

3       $234,000         $34,500         $103,500        $130,500

4       $234,000         $34,500         $138,000         $96,000  

5       $234,000         $34,500         $172,500         $61,500        

6       $234,000         $34,500        $207,000        $27,000                  

b. Double-Declining-Balance Method:

Year  Cost            Depreciation   Accumulated     Net  Book

                                  Expense     Depreciation       Balance

1        $234,000        $77,220          $77,200        $156,780

2       $234,000         $51,737         $128,937       $105,043

3       $234,000        $34,664         $163,601         $70,379

4       $234,000        $23,225        $186,826         $47,154

5       $234,000         $15,561        $202,387         $31,583

6      $234,000           $4,593       $206,980        $27,000

c. Activity-Based Method:

Year  Cost            Depreciation   Accumulated     Net  Book

                                  Expense       Depreciation       Balance

1        $234,000        $48,300          $48,300          $185,700

2       $234,000        $32,775           $81,075          $152,925

3       $234,000       $34,500          $115,575           $118,425

4       $234,000       $34,500         $150,075           $83,925

5       $234,000        $31,050          $181,125           $52,875

6      $234,000        $25,825       $206,950          $27,050

Explanation:

a) Data and Calculations:

Cost of new machines = $234,000

Residual value of equipment = $27,000

Depreciable amount = $207,000

Estimated useful life = 6 years

Straight-line depreciation expense per annum = $34,500 ($207,000/6)

Double-declining-balance rate = 33% (100%/6 * 2)

Year  Depreciation  Declining Balance

1          $77,220           $156,780

2         $51,737            $105,043

3        $34,664             $70,379

4        $23,225             $47,154

5         $15,561              $31,583

6          $4,593             $27,000

Estimated useful life in hours = 12,000

Depreciation rate per hour = $17.25 ($207,000/12,000)

Actual usage per year:

Year Hours Used  Usage Charge

1           2,800            $48,300 (2,800 * $17.25)

2          1,900             $32,775 (1,900 * $17.25)

3         2,000             $34,500 (2,000 * $17.25)

4         2,000             $34,500 (2,000 * $17.25)

5         1,800              $31,050 (1,800 * $17.25)

6         1,500              $25,825 (1,500 * $17.25)

3. Assume that on January 2, 2022, the copyrighted item was impaired in its ability to continue to produce strong revenues. The other intangible assets were not affected. Starn estimated that the copyright would be able to produce future cash flows of $22,100. The fair value of the copyright was determined to be $21,100. Compute the amount, if any, of the impairment loss to be recorded.

Answers

Answer:

The amount of the impairment loss to be recorded is $6,800.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

On January 1, 2020, Starn Tool & Manufacturing Company purchased a copyright for $31,000 cash. It is estimated that the copyrighted item will have no value by the end of 10 years.

Assume that on January 2, 2022, the copyrighted item was impaired in its ability to continue to produce strong revenues. The other intangible assets were not affected. Starn estimated that the copyright would be able to produce future cash flows of $22,100. The fair value of the copyright was determined to be $21,100. Compute the amount, if any, of the impairment loss to be recorded.

The explanation of the answer is now provided as follows:

Amortization expenses for 2020 = Annual amortization expense = Copyright cost / Estimated useful life of the copyright = $31,000 / 10 = $3,100

Book value of copyright on January 2, 2022 = Copyright cost - Amortization expenses for 2020 = $31,000 - $3,100 = $27,900

Copyright fair value = $21,100

Impairment loss = Book value of copyright on January 2, 2022 - Copyright fair value = $27,900 - $21,100 = $6,800

Therefore, the amount of the impairment loss to be recorded is $6,800.

Problems and Applications Q11 You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. When should you raise the admission price in order to increase revenue

Answers

Answer: Only when demand is inelastic

Explanation:

For a product that has an inelastic demand, the demand of a buyer with regards to a product has minimal changes when when there is a change in price. In such case, an increase in the price will lead to an increase in revenue.

On the other hand, for a product that has an elastic demand, there will be a greater change in the demand of the buyer when when there is a change in price. In such case, an inrease in the price will lead to an reduction in revenue as buyers will go for other products.

Therefore, the admission price should be increased when demand is inelastic in order to increase revenue.

A manufacturer produces two types of computer software, Word processing (W) and Spreadsheet (S), which is offered to two different retail outlets (#1 and #2). The following table shows the maximum price each retail outlet is willing to pay for each individual software product.
Product W Product S
Retail #1 $170 $105
Retail #2 $95 $135
What is the optimal pricing strategy that will maximize revenue for the manufacturer, given the maximum the retail outlets are willing to pay?
a. Bundle both products (W and S) and sell them at $275.
b. Price product W at $95 and Product S at $105.
c. Price product W at $170 and Product S at $170.
d. Price product W at $170 and Product S at $135.
e. Bundle both products (W and S) and sell them at $230.

Answers

Answer:

e. Bundle both products (W and S) and sell them at $230.

Explanation:

Calculation to determine the optimal pricing strategy that will maximize revenue for the manufacturer

Using this formula

Optimal pricing=Retail #2 Product W+ Retail #2 Product S

Let plug in the formula

Optimal pricing=$95+$135

Optimal pricing=$230

Therefore based on the above calculation the OPTIMAL PRICING STRATEGY that will MAXIMIZE REVENUE for the manufacturer, given the MAXIMUM the retail outlets are willing to pay will be to BUNDLE BOTH PRODUCTS (W and S) AND SELL THEM AT $230.

Your sister just deposited $5,500 into an investment account. She believes that she will earn an annual return of 8.8 percent for the next 6 years. You believe that you will only be able to earn an annual return of 8 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 6 years

Answers

Answer:

$5749.02

Explanation:

The first step is to determine the future value of my sister's deposit

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years

5500 (1.088)^6 = $9122.97

the second step is to determine the present value of  $9122.97 using an interest rate of 8%

$9122.97 / (1.08)^6 = $5749.02

Which economic concept helps explain the changing demand for jewelry?

A. fungibility
b. non-excludability
c. substitution
d. elasticity

Answers

Answer:

A.fungibility is a economic concept which helps explain the changing demand for jewelry.

As

Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets .

Q2. With the help of book please elaborate What is the difference between a corporate strategy and a competitive strategy? Give three examples of each. (Words limit up to 150)

Answers

Answer and Explanation:

Competitive and corporate strategy are very important for the success and good management of a business. Competitive strategy is one that allows a company to promote elements capable of making it different from its competitors. Examples of competitive strategy are offering lower prices, higher quality products and negotiation between customers.

Corporate strategy, on the other hand, is one that allows the company to generate elements that will increase its profit and strengthen its capacity to be more competitive. Examples of this type of strategy are the acquisition of subsidiary companies, the merger of competing companies and the restructuring of the company.

A state is conducting an examination of mortgage loan originator Basil Thyme. During the examination, the agency is authorized to do all of the following, except:a. Administer oaths or affirmationsb. Control access to Basil’s officec. Subpoena witnessesd. Require production of relevant documents

Answers

Answer: B. Control access to Basil’s office.

Explanation:

During the conduct of the examination of mortgage loan originator Basil Thyme, the agency is authorized to administer oaths or affirmations, subpoena witnesses and require production of relevant documents.

The agency cannot control the access to Basil's office. It can only control access to any records or documents of an individual whim is under investigation.

The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.
Work in Process Inventory
Beginning WIP 5,200
Direct materials 47,800
Direct labor 30,300
Applied Overhead 16,500
Total Manufacturing Costs 99,800
To Finished Goods ?
Ending WIP 10,300
The cost of units transferred to finished goods is:_________

Answers

Answer:

the  cost of units transferred to the finished goods is $89,500

Explanation:

The computation of the cost of units transferred to the finished goods is shown below:

Cost of units transferred to finished goods

= Beginning WIP + Direct materials+ Direct labour + Applied overheads-Ending WIP

= $5,200 + $47,800 + $30,300 + $16,500 - $10,300

= $89,500

Hence, the  cost of units transferred to the finished goods is $89,500

Could anyone help with this question?

Answers

I think the second choice is the answer.

For each of the following sentences, select the phrase or group of words that best completes the statement. Earnings per share Dividend yield ratio Dividend payout ratio Return on assets ratio Return on common stockholders' equity ratio

Answers

Answer:

Note See complete and organized question as attached as picture below

1. Dividend yield ratio

Correct phrase: Relationship between dividends and the market price of a company's stock.

2. Dividend payout ratio

Correct phrase: Percentage of earnings paid out as dividends.

3. Return on assets ratio

Correct phrase: Measure of a company's success in earning a return for all the providers of the capital.

4. Return on common stockholders' equity ratio

Correct phrase: Measure of a company's success in earning a return for the common stockholders.

1. Given the following demand and supply functions Qd = 500 - 3P Qs = 100 + 5P Calculate; i. The equilibrium price and the equilibrium quantity ii. The consumer surplus iii. The producer surplus)R​

Answers

Given:

The demand and supply functions are:

[tex]Q_d=500-3P[/tex]

[tex]Q_s=100+5P[/tex]

To find:

i. The equilibrium price and the equilibrium quantity.

ii. The consumer surplus .

iii. The producer surplus.

Explanation:

(i) At equilibrium, the demand and supply are equal. So, equating both functions, we get

[tex]500-3P=100+5P[/tex]

[tex]500-100=3P+5P[/tex]

[tex]400=8P[/tex]

Divide both sides by 8, we get

[tex]\dfrac{400}{8}=P[/tex]

[tex]50=P[/tex]

Putting [tex]P=50[/tex] in the demand function, we get

[tex]Q_d=500-3(50)[/tex]

[tex]Q_d=500-150[/tex]

[tex]Q_d=350[/tex]

Therefore, the equilibrium price is 50 and the equilibrium quantity is 350.

(ii)

The area under the demand curve and above the equilibrium price is known as consumer surplus. It is represent by the green area in the below figure.

The area of a triangle is:

[tex]A=\dfrac{1}{2}\times base \times height[/tex]

So, the area of consumer surplus is:

[tex]A=\dfrac{1}{2}\times 50 \times (500-350)[/tex]

[tex]A=25 \times 150[/tex]

[tex]A=3750[/tex]

Therefore, the consumer surplus is 3750.

(iii)

The area above the supply curve and below the equilibrium price is known as producer surplus. It is represent by the purple area in the below figure.

So, the area of producer surplus is:

[tex]A=\dfrac{1}{2}\times 50 \times (350-100)[/tex]

[tex]A=25 \times 250[/tex]

[tex]A=6250[/tex]

Therefore, the producer surplus is 6250.

For each transaction:
a. analyze the transaction using the accounting equation
b. record the transaction in journal entry form
c. post the entry using T-accounts to represent ledger accounts.

1. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value in exchange for common stock.
2. On May 21, Elegant Lawns purchases office supplies on credit for $500.
3. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
4. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.

Answers

Answer:

Elegant Lawns

a. Analysis of transactions using the accounting equation:

1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000

2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500

3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000

4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000

b. Journal Entries:

Date          Account Titles        Debit        Credit

1. May 15, Assets: Cash         $7,000

Assets: Equipment                $3,000

Equity: Common stock                             $10,000

2.

May 21, Assets: Office supplies $500

Liabilities: Accounts Payable                       $500

3. May 25, Assets: Cash       $4,000

Equity: Service Revenue                          $4,000

4. May 30, Assets: Cash       $1,000

Equity: Service Revenue                          $1,000

c. T-accounts:

Cash

Date          Account Titles        Debit        Credit

1. May 15   Common stock     $7,000

3. May 25, Service revenue    4,000

4. May 30, Service revenue    1,000

Equipment

Date          Account Titles        Debit        Credit

1. May 15   Common stock     $3,000

Office Supplies

Date          Account Titles        Debit        Credit

2. May 21, Accounts Payable $500

Common Stock

Date          Account Titles        Debit        Credit

1. May 15   Cash                                        $7,000

1. May 15   Equipment                                3,000

Accounts Payable

Date          Account Titles        Debit        Credit

2. May 21, Office supplies                         $500

Service Revenue

Date          Account Titles        Debit        Credit

3. May 25, Cash                                       $4,000

4. May 30, Cash                                          1,000

Explanation:

a) Data and Analysis with Accounting Equation:

1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000

2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500

3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000

4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000

Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. Right after he achieves the utility-maximizing level of consumption of the two goods, the price of peanut butter falls. After he adjusts to this event, the marginal utility of peanut butter goes _____ and that of ice cream goes _____.

Answers

Answer:

The marginal utility of peanut butter goes down and that of ice cream goes up.

Explanation:

The substitution effect states that when the price of a product falls, it will lead to a rise in the quantity demanded of the product as buyers will buy more of the product that is now relatively cheaper.

And as more of a good is bought, its marginal utility falls. And as less of a product is bought, its marginal utility increases.

Based on the above explanation therefore, the marginal utility of peanut butter goes down and that of ice cream goes up after Kawamura adjusts to the event.

This is because as more of peanut butter is bought due to the fall in its price, its marginal utility falls. And as less of ice cream is bought as it is now relatively more expensive, its marginal utility increases.

What type of plan does a property manager implement to manage renters who do NOT pay their rent in a timely way

Answers

Answer:

collection plan

Explanation:

The rent collection plan is a system that is used for the enforcement of rent, in terms of late rent payment as well as lease terms. This is more than just telling the tenant when the rent is due. It has all of the information on all the ways that rent could be paid and also the repercussions for late rent payment or a situation whereby the rent is not even paid at all.

While on a trip to South Africa, Madison was impressed with the colorful woven outdoor placemats, floor mats, chair cushions, and umbrellas that local artisans were weaving. Upon returning to the United States, she was confident that U.S. consumers would be as intrigued by these accessories as she was. Madison decided to explore the possibility of starting an import business to bring these products to the United States. Which statement seems to be good advice for Madison?

Answers

Answer: A) Learn from others who import goods from abroad, and particular from Africa.

Explanation:

Nothing beats experience when it comes to acquiring knowledge so if Madison wants to acquire the knowledge necessary to bring the goods she saw in South Africa to the U.S., she should go to people who have experience in the matter and find out what they know.

This will giver her insight on the amount of money she needs to startup with as well as what business status she should have. They will also give her insight into cost cutting measures to enable her import with more efficiency and make more profit.

Your broker suggests that the stock of DUH is a good purchase at $25. You do an analysis of the firm, determining that the recent $1.40 dividend and earnings should continue to grow indefinitely at 5 percent annually. The firm's beta coefficient is 1.3, and the yield on Treasury bills is 1.4 percent. If you expect the market to earn a return of 8 percent, what is your valuation of DUH

Answers

Answer:

The correct answer is "$28.03".

Explanation:

The given values are:

Good purchase,

= $25

Dividend,

= $1.40

Annually earning,

= 5%

Beta coefficient,

= 1.3

Treasury bills,

= 1.4%

Now,

= [tex]1.4+1.34\times 8-1.4[/tex]

= [tex]1.34\times 8[/tex]

= [tex]10.244[/tex] (%)

hence,

The fair value will be:

= [tex]1.4\times \frac{1.05}{.10244}-.05[/tex]

= [tex]28.03[/tex]

Absolutely, the proposal including its brokerage must be adopted because as fair market value was almost $25.

Everything else equal, if the United States runs a large foreign trade deficit, the financing of the deficit will: a. increase government subsidies. b. increase interest rates. c. decrease sales of Treasury securities. d. increase the money supply. e. decrease tax revenue.

Answers

Answer: decrease tax revenue

Explanation:

A trade deficit occurs when the import of a country's is more than the export of the country for a given period of time period. The main cause is when there's an imbalance between the savings of a country and the investment rates.

In this case, financing the deficit will lead to the reduction in the tax revenue. When part of the tax revenue gotten from economic agents are used in the finance of the deficit, there'll be a reduction in the tax revenue.

Holt Enterprises recently paid a dividend, D0, of $3.50. It expects to have nonconstant growth of 19% for 2 years followed by a constant rate of 10% thereafter. The firm's required return is 13%. How far away is the horizon date? The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. The terminal, or horizon, date is infinity since common stocks do not have a maturity date.

Answers

Answer:

Holt Enterprises

The terminal, or horizon, date is:

the date when the growth rate becomes constant.  This occurs at the end of Year 2.

Explanation:

a) Recent dividend, DO = $3.50

Expected non-constant growth = 19%

Period of non-constant growth = 2 years

Expected constant rate of growth = 10% after 2 years of non-constant growth

The firm's required return rate = 13%

b) The terminal or horizon date is, therefore, from the end of year 2 or beginning of year 3, when constant growth sets in with the Holt stock.

At the horizon date the dividend, D3, must have grown to $5.42 approx.

Then, the horizon value is given by the formula = D3 / required rate - growth rate

 = 5.42 / 0.13 - 0.01

= 5.42 / 0.03

= $181

Hyundai's Assurance program empathized with American consumers during uncertain financial times, helping to create a psychological and emotional:_______

a. brand association.
b. differentiation strategy.
c. consumer response.
d. marketing campaign.

Answers

The correct answer is B. Differentiation strategy

Suppose independent truckers operate in a perfectly competitive constant cost industry. If these firms are earning positive economic profits, what happens in the long run to the following: The price of trucking services

Answers

Answer:

The price of trucking services would fall until equilibrium prices are reached. Only normal profit would be earned in the long run

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.  

In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

In 20X4, Bosh Corporation had income of $60,000 using absorption costing. Beginning and ending inventories were 13,000 and 8,000 units, respectively. The fixed manufacturing overhead cost was $4.00 per unit. What was the net income using direct/variable costing

Answers

Answer:

Net income under variable costing $80,000

Explanation:

The computation of the net income using direct/variable costing is shown below:

Net income under absorption costing $60,000

Add fixed cost under applied $20,000

Net income under variable costing $80,000

Working

Beginning inventory 13000

Less ending inventory -8000

Decrease in inventory 5000

Now under applied inventory $20,000

who has given general principle of management?​

Answers

Answer:

I think it's " Henri Fayol's "

Answer:

14 management principle of Henri Fayol

Explanation:

1.  Division of work or division labor.

2. Balancing Authority and responsibility.

3. Discipline.

4. Unity of command.

5. Unity of Direction.

6. Subordination of individual interest to the general interest.

7. Remuneration.

8. Centralization.

9. Scalar chain.

10. Order.

11. Equity.

12. Stability of tenure of personal.

13. Initiative.

14. Esprit de corps.

You can borrow and lend at the interest rates of 7.00% in the US and 5.00% in Canada. Based on Interest Rate Parity, the forward premium for CAD should be exactly equal to: Group of answer choices 1.90% - 1.87% 1.02% 98.11%

Answers

Answer:

1.90%

Explanation:

Note that that CAD exchange rate would be in terms of how many US dollars can be exchanged for 1 CAD, which means that the formula for forward premium would be stated in terms of US dollars, I mean the US$ as the numerator and CAD's interest rate would be the denominator

the forward premium for CAD=((1+US interest rate)/(1+Canada interest rate))-1

the forward premium for CAD=((1+7%)/(1+5%))-1

the forward premium for CAD=1.90%

ABC Company operates two divisions with the following operating information for the month of May:

Division 1: sales, $128,000; operating income, $39,680; operating assets, $320,000.
Division 2: sales, $84,000; operating income, $42,336; operating assets, $420,000.

ABC Company expects a minimum return of 10% should be earned from all investments.

Required:
Prepare ABC Company’s ROI analysis using the DuPont model for each division.

Answers

Requiere abc no minimum da carne

Workman Software has 11 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 108.3 percent of par. a. What is the current yield on the bonds

Answers

Answer:

10.16%

Explanation:

Coupon amount = 11% * 1000

Coupon amount = $110

Price of bond = 1000*108.3%

Price of bond = $1,083

Current yield = Coupon amount / Price of bond

Current yield = $110 / $1,083

Current yield = 0.1015697

Current yield = 10.16%

So, the current yield on the bonds is 10.16%.

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