The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative B and for the United States is alternative U. China Production Possibilities Product: A - B - C - D - E - F Apparel: 120,000 - 96,000 - 72,000 - 48,000 - 24,0000 Chemicals(tons): 0 - 24 - 48 - 72 - 96 - 120 U.S. Production Possibilities Product: R - S - T - U - V - W Apparel: 40,000 - 32,000 - 24,000 - 16,0000 - 8,0000 Chemicals(tons): 0 - 16 - 32 - 48 - 64 - 80a. Are comparative-cost conditions such that the two countries should specialize?
Answer:
The multiple choices are:
9.98 percent
10.04 percent
10.79 percent
10.37 percent
10.45 percent
The third option of 10.79% is correct
Explanation:
The cost of equity according to Miller and Modgiliani capital asset pricing model is given below:
Ke=Rf+beta*(Mrp-Rf)
Rf is the risk free rate which is the return on government security is 2.7%
beta is 1.14
Mrp is the market risk premium is 7.1% which is given in the formula as (Mrp-Rf)
Ke=2.7%+1.14*7.1%
Ke=2.7%+8.09%
Ke=10.79%
Hence the correct option out of the options given above is the third option
It is expected that any shareholder that invests in the shares of Southern Home Cooking would get return of 10.79%
Answer:
$42,000
Explanation:
Direct Labor per Unit = $5.60
Total Planning Budget Units = 7,500 Units
Direct Labor for Planning Budget = Total Planning Budget Units * Direct Labor per Unit
Direct Labor for Planning Budget = 7,500 Units * $5.60
Direct Labor for Planning Budget = $42,000
So, the direct labor in the planning budget for May would be closest to $42,000.
