Answer:
Option (E) is correct.
Explanation:
The opportunity cost refers to the benefits that are sacrificed by choosing some other alternative.
In our case, there are two restaurants as follows:
One is 2 miles away from home with higher prices
Second one is 15 miles away from home with lower prices
But Melissa chooses the first one by comparing the opportunity cost associated with each option relative to the other option.
This is because of the higher opportunity cost associated with second restaurant offsets the higher monetary cost of the first restaurant.
Answer:
0.875
Explanation:
The income elasticity of demand measures the responsiveness of quantity demanded to changes in income.
Income elasticity of demand = percentage change in quantity demanded / percentage change in income
14% / 16% = 0.875
Demand is inelastic because the coefficient of elasticity is less than one.
I hope my answer helps you
Answer: B. One asset would increase $1,750 and a different asset would decrease $1,750, causing no effect
Explanation:
From the information given in the question, the journal entry at the time of sales will be represented as:
Debit Accounts receivable $1,750
Credit Sales $1750
Now, when the credit receipt is received as illustrated in the question, the journal entry will be:
Debit Cash $1,750
Credit Accounts receivable $1,750
Therefore, one asset would increase $1,750 and a different asset would decrease $1,750, causing no effect.
The correct option is B.
Answer:
-9.92%
Explanation:
P₀ = Div₁ / (Re - g)
- Div₁ = next year's expected dividend = $1.12 x (1 - 11.5%) = $0.9912
- Re = cost of equity = ?
- P₀ = current stock price = $62.91
- g = dividend's growth rate = -11.5%
Re = (Div₁ / P₀) + g
Re = ($0.9912 / $62.91) - 11.5%
Re = 1.58% - 11.5% = -9.92%
Since the cost of equity or required rate of return cannot be negative, I suppose that investors are not worried about Abbott distributing dividends, instead, they prefer that the company reinvests earnings in new projects.
A. Which Firm will have Higher Profits in a Recession Period ?
During a recession period trade and industries are unsuccessful and there is allot of unemployment. During the period supply in the market and level of output in the company are likely to be low. Robotic automated process seems to be relatively cheap under high production output in a firm. Also the cost of maintenance of machinery is quite high which the firm can`t cater for during the period. In this period human workers are more recommended as the cost of production will be accounted for due to small numbers of employees where the cost of wages and salaries is quite low.
B. Which Firm will have a Higher Profit During a Boom?
During a boom the industry experiences a period of economic success as demand in the market is high. Automated robotics process are machines and carry out their work with allot of efficiency. Compared to human beings they are relatively faster and more efficient. This will will help the industry meet its high level of production target. They also reduce the cost of production as their maintenance cost is low under large scale production. Human workers seem expensive during this period because cost of wages and salaries is subject per-head.
The Firm with a Higher Beta.
The automated robotics firm will have a higher beta this is because the output will be high leading to increased supply and sale for better profitability. The robots will also function as an asset to the firm increasing the net worth to the company.
