Answer:
A.- DECREASE
B.- DECREASE
C.- INCREASE
D.- INCREASE
E.- INCREASE
Explanation:
a. The discount rate increases
DECREASE the discoutn factors will be higher therefore, the present values lower.
b. The cash flows are in the form of a deferred annuity, and the total to $100,000. You learn that the annuity lasts for 10 years rather than 5 years, hence that each payment is for $10,000 rather than for $20,000
DECREASE Because the cashflow is generate on a longer period there is more exposure to discount rates.
c. The discount rate decreases
INCREASE The discount factor are lower. This situation is the opposite as (a)
d. The riskiness of the investment's cash flows <u>decreases</u>
INCREASE a lower risk derivates in lower cost of capital thus, lower iscount rates. This increase the present value of the cashflow.
e. The total amount of cash flows remains the same, but more of the cash flows are received in the earlier years and less are received in the later years.
INCREASE as most of the future cash flows are at the beginning they have less exposure to time value of money.
Answer: (d.)The bakery faces a flat demand curve.
Explanation:
The bakery faces a flat demand curve because a firm in a perfectly competitive market is a price taker and the demand curve for a firm is equal to the price the supply curve is a part of Marginal cost above Average variable cost , so the supply curve is upward sloping
. The bakery is in the perfectly competitive market so it can earn positive, negative or zero economic profit in the short run and zero economic profit in the long run.
Answer:
I think that the answer is B, The The general likelihood of business success is very high.
Explanation:
I got it right on edgenuity
Answer:
a) decrease the quantity demanded
Explanation:
According to the law of demand, an increase in the price of a good reduces the quantity demanded for that good.
