Answer:
A) What is Avicorp's pre-tax cost of debt?
B) If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?
Explanation:
in order to calculate the pretax cost of debt, I will use a $1,000 bond
coupon rate = 5.8% x $1,000 = $58 / 2 semiannual coupons = $29
current bond price $960
years to maturity = 5 x 2 coupons = 10 periods
you can use a financial calculator or an excel spreadsheet to calculate effective annual yield, but we can also calculate it using the yield tot maturity formula:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {29 + [(1,000 - 960)/10]} / [(1,000 + 960)/2] = 3.367% x 2 coupons per year = 6.73%
the after tax cost of debt = 6.73% x (1 - 40%) = 6.73% x 0.6 = 4.04%
Answer:
Tan Furniture Manufacturing Company
Peggy's gross income from the above is:
= $3,000.
Explanation:
a) Data and Calculations:
Retail price of the furniture = $12,500
Discounted price for employees = $9,500
Gross income received by Peggy = $3,000 ($12,500 - $9,500)
b) The gross income represents the total amount of benefit derived by Peggy by purchasing the furniture from Tan Furniture Manufacturing Company instead of from another manufacturer.
Answer:
Explanation:
Advanced manufacturing is the use of innovative technology to improve products or processes, with the relevant technology being described as "advanced," "innovative," or "cutting edge." Advanced manufacturing industries "increasingly integrate new innovative technologies in both products and processes.
Answer:
Macroeconomics is a very relevant subfield of economics because it studies economic matters at the aggregate level, that means things such as inflation, unemployment, economic growth, investment, saving, and many other economic phenomena that are very relevant for all countries, all governments, and essentially everybody around the world.
Macroeconomics is a contested field, with some points in agreement, but many others in dispute among economists. For this reason, the policy recommendations that are based on macroeconomic criteria are often very different, and frequently clash into political conflict.
Economic policy decisions never produce exactly the expected result, but they often give a satisfactory result (not always). For example, the monetary policy based on the principles of monetarism did manage to bring down inflation substantially ever since it began to be applied in the late 1970s.
Answer:
Difficulty managing public investment so it's done in a cost effective way
Explanation:
An Economy
This is simply known as a well arranged means by which nations supply or provide for the needs and wants of its people.
Resources
This are simply all the materials or things that is put in place that is used in producing goods and services.
Factors of production includes land, labor, capital, and entrepreneurship.
The reasons for government intervention is due to the allocation function, market failure occurs in case of Public Goods, externalities, Insufficient Competition; distribution function and stabilization function. Government influences decision making by establishing legal framework within which businesses and households operate.