Answer:
$200 (million)
Explanation:
If the government spending increases by $200 million, then associated change in equilibrium income will be $ 200 million, assuming that Marginal Propensity to Consume (MPC) is 1
Answer:
The required rate of return is 12.2%
Explanation:
Dividend growth model is used to calculate the price of the stock based on the dividend, its growth and required rate of return.
Formula to calculate the price
Price = Dividend / ( Required rate of return - Growth rate )
P = D / ( r - g)
P = $11.54
D = $0.95
g = 4%
Now placing the given values in the formula
$11.54 = $0.95 / ( r - 4% )
r - 4% = $0.95 / $11.54
r - 4% = 8.2%
r = 8.2% + 4%
r = 12.2%
Answer: False
It seems very unlikely that a blind person would go door to door to ask for help.
Answer:
<u>Part(a) Differential analysis as at February 24</u>
Make (Alternative 1) :
Direct Materials $35.00
Direct labor $18.00
Variable Overheads $2.70
Fixed Overheads $0.00
Total Make Costs $55.70
Buy (Alternative 2) :
Total Purchase Cost $59.00
<u>(b) On the basis of the data presented, would it be advisable to make the carrying cases or continue buying them? </u>
It is clear that from comparison of the cost of Purchase and the Cost of Making the Carrying Cases, the Cost of Making the Carrying Cases is lower than the Cost of Purchasing the Cases by $3.30
It is thus advisable to make carrying cases instead of buying them
Explanation:
Total Make Costs;
The Factory fixed overheads are irrelevant to this decision hence they were ignored in the make cost calculations.
Answer: $100,000 outflow
Explanation: Investing activities refers to those activities in a cash flow statement that are related to purchase or sale of long term assets. The sale of assets results inflow of cash and purchase of assets results in outflow of cash.
In the given case, it can be computed as follows :-
cash flow from investing activities = sale of property - purchase of equipment
= $300,000 - $400,000
= $100,000 outflow
