Answer: a. in the short run but not in the long run
Explanation:
The Short Run is usually considered in Economics/ Business as a point in time where at least ONE factor of production is FIXED. This factor is usually the Factory because it is hard to change the capacity of a Factory in the Short run. For instance a wing might need to be constructed. Labour on the other hand is considered variable in the Short run though because more people can be hired and the people already hired can put in more overtime.
The Long Run is classified as a point where EVERY factor of production is Variable. There is enough time to even change the capacity of a Factory. So here even Factory is Variable.
Answer:
7.20%
Explanation:
Given that
Coupon rate = 9%
Yield to maturity = 12%
And marginal tax rate is 40%
So by considering the above information, the after tax cost of debts is
= Yield to maturity × (1 - tax rate)
= 12% × (1 - 0.40)
= 7.20%
After considering the tax rate and then multiplying with the yield to maturity we can get the after tax cost of debt
We ignored the coupon rate
I’m sorry I don’t understand this language
Answer:
The minimum value is $196,362.95
Explanation:
Giving the following information:
Cash flow= $20,000
The number of years= 20 years
Interest rate= 8%
First, we need to calculate the future value of the cash flows. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= cash flow
FV= {20,000*[(1.08^20)-1]} /0.08
FV= $915,239.29
Now, we can calculate the present value. The present value is the minimum value yo accept.
PV= FV/(1+i)^n
PV= 915,239.29/ 1.08^20
PV= $196,362.95
Answer:
Buy in-store.
Explanation:
The Polya technique suggests the following steps to solve a problem:
Step 1: Understand the problem.
Nathan is facing two options for buying a new sweatshirt. We need to calculate and compare both prices in order to determine the better buy.
Step 2: Devise a plan.
To calculate and compare the prices we need to discount the coupons on both options and then buy the sweatshirt with the lower price.
Step 3: Carry out the plan (solve).
<h2><u>
Option A</u></h2>
Price: $36
Discount: -30%
Final price option A : 36 × ( 1 - 30%) = 25.2
<h2><u>
Option B</u></h2><h2><u>
</u></h2>
Price: $32
Discount: -25%
Final price option B: 32 × ( 1 - 25%) = 24
Step 4: Look back (check and interpret).
Final price option A < Final price option B.
<h2><em>With this analysis in cosideration, we deduce that the better buy is the option A. In-store purchase.</em></h2>
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