Answer:
A. wastefulness - production inside PPC ; B. Economy growth - PPC shift outwards/rightwards ; C. Economy at Productive Efficiency - production on PPC ; D. Unattainable Production- Outside PPC
Explanation:
PPC is graphical representation of production combinations that an economy can produce, given resources & technology.
PPC is based on assumption : That resources are best efficiently utilised. So, all product combinations ON PPC reflect 'Economy is at Productive Efficiency'
All production points INSIDE PPC reflect inefficient utilisation of resources i.e 'Wastage'
Points OUTSIDE PPC are 'Unattainable Product Combinations'- as they are beyond economy's best optimum production, given resources & technology.
'Economic growth' is increase in resources &/or technology which increases economy's production potential and PPC curve SHIFTS rightwards or outwards.
Question
you are a consultant to a firm evaluating an expansion of its current business. The cash flow forecasts (in millions of dollar) for the project as follows:
Year cashflow
0 -100
1-10 15
0n the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.30. Assuming that the rate of return available on risk-free investments is 5% and that the expected rate of return on the market portfolio is 15% what is the net present value of the project
Answer:
NPV= -$32.58
Explanation:
The net present value of the investment is the cash inflow from the investment discounted at required rate of return. The required rate of return can be determined using the the formula below:
Ke= Rf +β(Rm-Rf)
Ke =? , Rf- 5%,, Rm-15%, β- 1.30
Ke=5% + 1.30× (15-5)= 18%
The NPV = Present value of cash inflow - initial cost
= A×(1-(1+r)^(-10)/r - initial cost
A- 15, r-18%
NPV = 15× (1-1.18^(-10)/0.18 - 100= -32.58
NPV = -$32.58
Please help me! This is due tomorrow and I really need some help! Thank you.
Answer:
c. initially decreases the firm's taxes
Explanation:
Accelerated depreciation provides for a higher rate of capital allowance on the assets that is New and Unused and brought in the business for use in manufacturing for the first time. This allowance then lowers for the other years. The purpose of this is to encourage investment in plant and equipment as it initially decreases the firm's taxes.
I would say the inventory department.
