All categories

3 years ago

When a good is rival in consumption,

1 answer:

7 0

<span>When a good is rival in consumption, one person's use of the good diminishes another person's ability to use it.

A rival good is a good that can only be purchased or consumed by a single user. When they use this good or purchase it, they take the ability of someone else to use it away. This item can be durable or not durable but consumption destroys it.
</span>

You might be interested in

Which of the following statements is CORRECT?

musickatia [10]

Answer:

C) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.

Explanation:

There is no avoidance to double taxation under corporate form, as company's pays tax on net income earned, and then if there is any distribution of income to shareholders, the shareholders are charged individually.

There is no such ease in transfer of share whether in corporate form or partnership form.

There is an indefinite liability in case of insolvency of sole proprietorship on the sole proprietor, as he is the only person in ownership of such shares.

No, voting rights in a corporate form are dependent on number of shares held.

Therefore, the correct statement is:

C) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.

6 0

4 years ago

You are making a $120,000 investment and feel that a 20 percent rate of return is reasonable given the nature of the risks invol

Kryger [21]

200 i think but idk my name is tytianna btw

7 0

3 years ago

Explain what is meant by the term, "promiscuous" pollinator. what characteristics evolved in plants to improve pollination effic

mezya [45]

Answer:

Explanation:

If we look at the term "Promiscuous" pollinator, it is meant by when the long-nosed fly does not stick to one plant species, but go to any other flower species. The members of the guild have evolved to deposit their pollen on differing parts of the nectar-seeking fly, each part characteristic of the plant species. Characteristics evolved in plants to improve pollination efficiency by a “promiscuous” pollinator is when the even though the female reproductive structure prevent them from getting the “right” pollen, the stigmata of plants in the guild of mega nosed fly do not clog because among those plants. The long-nosed flies obviously get privileged access to pools of nectar.The plants pollinated by long-nosed flies benefit from a near-exclusive pollen courier service.

6 0

3 years ago

If Wild Widgets, Inc., were an all-equity company, it would have a beta of 0.9. The company has a target debt-equity ratio of .4

Veronika [31]

Answer:

a. 6.5%

b. 13.06%

c. 10.91%

Explanation:

Cost of debt of a bond is yield to maturity. Yield to maturity is the rate of return that a investor actually receives or a borrows actually pays on a bond. It is long term return or payment which is expressed in annual term.

Formula for yield to maturity is as follow

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

By placing values in the formula

Assuming the bond face value is $1,000

Yield to maturity = [ (1000x7.2) + ( 1,000 - $1,090 ) / 20 ] / [ ( 1,000 + $1,090 ) / 2 ]

Yield to maturity = [ $72 + ( 1,000 - $1,090 ) / 20 ] / $1,045

Yield to maturity = [ $72 - $4.5 ] / $1,045

Yield to maturity = $67.5 / $1,045

Yield to maturity = 6.5%

So, the cost of Debt is 6.5%

As 0.9 is the unlevered beta, We need Levered beta due to restructuring of capital.

Beta Levered = Beta Unlevered x ( 1 + ( 1 - tax rate ) x Debt / Equity)

Beta Levered = 0.9 x ( 1 + ( 1 - 0.35 ) x 0.4 )

Beta Levered = 1.134

Cost of equity can be calculated using CAPM

CAPM calculated the expected return on an equity investment based on the risk free rate, market premium and risk beta of the investment.

Formula for CAPM is as follow

Expected return = Risk free Rate + Beta ( Market premium)

As we know the Risk premium is the difference of market return and risk free rate.

Expected return = Risk free Rate + Beta ( Market Return - Risk free Rate )

Ra = Rf + β ( Rm - Rf )

Ra = 4.1% + 1.134 ( 12% - 4.1% )

Ra = 13.06%

Cost of Equity is 13.06%

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity )+ ( Cost of debt ( 1- t) x Weightage of debt )

Placing the values in formula

If the debt to equity 0.4 the equity value should be 1 and total capital is 1.4 ( 1 + 0.4 )

WACC = ( 13.06% x 1 / 1.4 )+ ( 6.5% ( 1- 0.35) x 0.4 / 1.4 ) = 9.71% + 1.2% = 10.91%

WACC is 10.91%

4 0

3 years ago

Knowledge Check 01 Which of the following is a correct statement regarding control of over-the-counter cash receipts: multiple c

nevsk [136]

Answer: The supervisor should compare the register transactions with the cash receipts report to make sure that both are correct.

Explanation:

The cash register shows the actual amount of money that is collected by the business during the day and the cash receipts journal records the cash collected.

There is therefore a need to ensure that these two tally up as a control method. The supervisors should therefore check for this and if they find that these two are not the same, it means that there is an error somewhere that needs to be rectified.

4 0

3 years ago