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1 year ago

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If the economy's real GDP doubles in 9 years, we can rev: 05_30_2018 Multiple Choice not say anything about the average annual r

ate of growth. conclude that its average annual rate of growth is 8%. conclude that its average annual rate of growth is 12%. conclude that its average annual rate of growth is 4%.

1 answer:

DiKsa [7]1 year ago

8 0

If the economy's real GDP doubles in 9 years, we can conclude that its average annual rate of growth is 8%.

<h3>How can we determine average annual rate of growth?</h3>

The rule of 72 can be used to determine when the real GDP of an economy would double. In order to determine the doubling time, divide 72 by average annual rate of growth.

average annual rate of growth = 72 / average annual rate of growth

72 / 9 = 8%

To learn more about real GDP, please check: brainly.com/question/15225458

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During the current month, the Acme company had receivables of $16,590. It also had outgoing expenditures of $12,730. The company

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Answer:

$3,849.87

Explanation:

The change in balance is the net of the receipts and the payments.

The receipts include the receivables and the interest paid by the bank while the payments include the outgoing expenditure and bank charge.

Balance change

= $16,590 - $12,730 -$12.50 + $2.37

= $3,849.87

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3 years ago

Viet drives around and checks meters to document the amount of electricity used in homes. What Energy pathway is he a part of? E

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Answer:

he would be part of the energy distribution process

Explanation:

As Viet drives around and checks meters to document the amount of electricity used in homes since the electricity is distributed off a power line into the house and then within the house by the wiring to the lights and the electrical outlets for usage by the inhabitants.

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3 years ago

Read 2 more answers

Your birthday is next week and instead of other presents, your parents promised to give you $2,200 in cash. Since you have a par

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Answer:

Interest revenue from the CD 470.04

Explanation:

we will calcualte the future value of the CD and from there calculate the interest:

$Principal \: (1+ r)^{time} = Amount$

Principal 2,200.00

time 8.00 (2 years x 4 quarter per year)

rate 0.02450 (9.8% divided by 4 quarter per year)

This divisions and multiplication are done to make time and rate be express i nthe same metric.

$2200 \: (1+ 0.0245)^{8} = Amount$

Amount 2,670.04

Now, we calculate interest revenue:

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2,670.04 - 2,200 = 470.04

3 0

3 years ago

The price elasticity of supply is affected by

valentina_108 [34]

Answer:

B. the passage of time.

Explanation:

Price elasticity of supply measures how sensitive quantity supplied are to changes in price.

Price elasticity of supply is determined by the passage of time.

Typically, in the short run, the elasticity of supply is usually inelastic. Prices do not usually impact quantity supplied because in the short run, some of the factors of production are fixed. But in the long run, the price elasticity of supply are more elastic.

The other factors listed above in the options affect the price elasticity of demand.

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3 years ago

Instructions: Please make sure that you show all your work when solving the problems. Feel free to make any assumptions whenever

My name is Ann [436]

Answer:

Explanation:

From the given information:

The current price = $\dfrac{Dividend(D_o) \times (1+ Growth \ rate) }{\text{Cost of capital -Growth rate}}$

$15 = \dfrac{0.50 \times (1+ Growth rate)}{8\%-Growth rate}$

$15 \times (8 -Growth \ rate) = 0.50 +(0.50 \times growth \ rate)$

$1.20 - (15 \times Growth \ rate) = 0.50 + (0.50 \times growth \ rate)$

$0.70 = (15 \times growth \ rate) \\ \\ Growth \ rate = \dfrac{0.70}{15.50} \\ \\ Growth \ rate = 0.04516 \\ \\ Growth \ rate \simeq 4.52\% \\ \\$

2. The value of the stock

Calculate the earnings at the end of 5 years:

$Earnings (E_o) \times Dividend \ payout \ ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%} \\ \\ = \$1.42857$

$Earnings (E_5) year \ 5 = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \ 5 = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5 = \$2.51763$

Terminal value year 5 = $\dfrac{Earnings (E_5) \times (1+ Growth \ rate)}{Interest \ rate - Growth \ rate}$

$=\dfrac{\$2.51763\times (1+0.04516)}{8\%-0.04516}$

=$75.526

Discount all potential future cash flows as follows to determine the stock's value:

$\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 +Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no\ of\ years} }$

$+ \dfrac{Terminal\ Value }{(1+interest \ rate )^{no \ of \ years}} \Bigg)$

$\implies \bigg(\dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}} + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$75.526}{(1+8\% )^{5}} \bigg )$

$\implies \bigg(\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$75.526}{1.4693} \bigg)$

=$ 54.1945

As a result, the analysts value the stock at $54.20, which is below their own estimates.

3. The value of the stock

Calculate the earnings at the end of 5 years:

$Earnings (E_o) \times Dividend payout ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%}\\ \\ = \$1.42857$

$Earnings (E_5) year \ 5 = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \ 5 = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5 = \$2.51763 \\ \\$

Terminal value year 5 = $\dfrac{Earnings (E_5) \times (1+ Growth \ rate)\times dividend \ payout \ ratio}{Interest \ rate - Growth \ rate}$

$=\dfrac{\$2.51763\times (1+ 7 \%) \times 20\%}{8\%-7\%}$

=$53.8773

Discount all potential cash flows as follows to determine the stock's value:

$\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 + Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no \ of\ years} }+ \dfrac{Terminal \ Value }{(1+interest \ rate )^{no \ of \ years }} \bigg)$

$\implies \bigg( \dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}} + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$53.8773}{(1+8\% )^{5}} \bigg)$

$\implies \bigg (\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$53.8773}{1.4693} \bigg)$

=$39.460

As a result, the price is $39.460, and the other strategy would raise the value of the shareholders. Not this one, since paying a 100% dividend would result in a price of $54.20, which is higher than the current price.

Notice that the third question depicts the situation after 5 years, but the final decision will be the same since we are discounting in current terms. If compounding is used, the future value over 5 years is just the same as the first choice, which is the better option.

The presumption in the second portion is that after 5 years, the steady growth rate would be the same as measured in the first part (1).

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3 years ago