Answer:
C. the financial risk of the firm may increase and thus drive up the cost of all sources of financing.
Explanation:
As we know that debt financing is the cheapest source of capital but it could not be used in excess as it rises the financial risk in terms of high interest payments made to the debt holders
Also at the time of recession, the firm is not able to earn properly so it would be very difficult to make the fixed payments i.e. interest and principal payments
Also the weighted average cost of capital also rises in the case when there is an excess of debt financing
Hence, the option c is correct
Answer:
1.6
Explanation:
The formula and the computation of the price elasticity of supply is shown below:
Price elasticity of supply = (Percentage change in quantity supplied) ÷ (percentage change in price)
where,
Percentage change in quantity supplied = 16%
And, the percentage change in price = 10%
So, the price elasticity of supply is
= 16% ÷ 10%
= 1.6
Answer:
the private cost of the 10,000th gallon is $2.25
Explanation:
The computation of the private cost is shown below:
Private marginal cost is
= Social marginal cost - External cost
= $3.5 - $1.25
= $2.25
hence, the private cost of the 10,000th gallon is $2.25
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Macroeconomic factors include <u>inflation</u>, <u>unemployment</u>, and <u>GDP </u>among others. These can be used to evaluate Venezuela or any economy!
Answer:
They shouldn't because they are making a net profit of £45,000
Explanation:
They make around £250,000 I got this by multiplying 100,000 by 2.50 and the cost to produce is 0.80, so 100,000x0.80 is 80,000 and the costs are 125,000. if we merge the total costs and subtract it by the total profit ; 80,000+125,000 we get 205000, 250,000-205000 we get 45,000.