Answer:
A monopoly is a company that can control the market. For example the government could put a hight import tax on shoes so no one would ship shoes into the countryman this means that the only shoe brand in the country can adjust there prices of their shoes and people would still buy them because there is no other shoe brand. This shows that they have control over the market (Or sitting at at monopoly position)
At high price levels, demand tends to be elastic and the price effect is small relative to the output effect.
Answer:
Yes we should go with this project because it has a positive NPV of $4,350
Explanation:
We need to calculate the net present value of the machine to decide whether to invest in the machine or not.
As per Given Data
Costs $270,000
Cash Inflows
Year 2 $100,000
Year 3 $150,000
Year 4 $75,000
Interest Rate = 6%
Net Present Value
As we know Net Present value is calculated by discounting each years cash flows using using the Weighted Average cost of Capital.
Year Cash Inflows Discount factor 13% Present values
Year 0 $(270,000) (1+6%)^-0 $(270,000)
Year 2 $100,000 (1+6%)^-2 $89,000
Year 3 $150,000 (1+6%)^-3 $125,943
Year 4 $75,000 (1+6%)^-4 <u>$59,407 </u>
Net present value <u>$4,350 </u>
Answer:
How long will it take them to cover the cost of refinancing = 29months
Explanation:
Number of months = $1,690 / $58
Number of months = 29 months
Answer: The answers are provided below.
Explanation:
A stock dividend occurs when the firm uses the money that was meant to be paid to the shareholders as cash dividend to buy additional common shares for them. A stock split occurs when a firm gives two or more new shares to every existing share that an investor holds.
As an investor, I'll consider whether the aim of the company in making a stock split or issuing a stock dividend aligns with my aim of investing in the company. In a case where the aims doesn't align with mine, I'll go and invest in another firm.
A company declaring 100% dividend shows growth and also, as a stakeholder, tax may not be paid by me. Stock split gives room for small investors to invest and it also reduces share price.
