<span>When it is reported that a nation is experiencing a "balance of payments deficit," this is best interpreted to mean that the nation is experiencing? If it is reported that the nation is experiencing a balance of payments deific, the country is importing more goods, services and capital than it is exporting. When this happens, the nation has to borrow funds and items from other countries to help pay for what they are importing until the have the cash funds to pay for them, themselves. When this starts the happen, the nation that this is hurting should try and balance their payments and monitor transactions better to eliminate this in the future. </span>
Answer:
a) $3077
b) The owner should make this investment because the marginal benefit is greater than the marginal cost
Explanation:
Given data :
Total cost = $2000
depreciation rate = 8% per year
expected increase in revenue (CF ) = $400
interest rate = 5%
a) Determine the present value of the stream of revenue due to the upgrades
= CF / ( 1 + r ) ^t where ( 1 + r )^t = 13%
= 400 / 13%
= $3077
b) The owner should make this investment because the marginal benefit is greater than the marginal cost
Answer:
D. Tim consumes more hamburgers and fewer hot dogs.
Explanation:
For his utility to remain constant, Tim will neither consume more goods in total, nor spend more money than before.
Therefore, because the price of hot dogs has risen, while the price of hamburger has remained the same, he will now buy more hamburgers and less hot dogs, because eating more hamburgers and less hot dogs will not decrease his satisfaction, it will remain the same. We can also conclude from that both fast food products are perfect substitutes for Tim.
Answer:
Explanation:
The multiplier is calculated by two marginal decisions by firms and individuals. A firm can decide whether to save the revenue or to consume it, therefore there is marginal propensity to consume and marginal propensity to save as options for both firms and individuals. Therefore, the size of the multiplier which is applied to a change in AD is dependent upon size of the marginal propensity to consume and marginal propensity to save.
Answer:
a. 10.14%
Explanation:
WACC = wE*rE + wP*rP + wD*rD(1-tax) whereby;
w= weight of...
r = cost of..
Find the market values;
Common equity(E) = 5,000,000* 8 = 40,000,000
Preferred stock(P) = 10,000,000
Debt (D) = 100,000 *1000 *0.96 = 96,000,000
Total value = 146,000,000
Therefore;
wE= 0.2740
wP = 0.0685
wD = 0.6575
Cost of capital;
rE = 19% or 0.19
rP = 15% or 0.15
rD = 9% or 0.09
WACC = (0.2740*0.19) + (0.0685 * 0.15) + [0.6575*0.09(1-0.34)]
WACC = 0.0521 + 0.0103 + 0.0391
WACC = 0.1015 or about 10.14%
