Answer:
It's called a Normal Good
Explanation:
Normal Goods are a type of goods whose demand shows direct relations with a consumer's income. The consumption of a normal good increases with the increase of a consumer's income, if the income decreases the consumption decreases.
Normal goods have a positive income elasticity of demand. Income elasticity of demand measures the magnitude with which the quantity demanded for a good changes in reaction to a change in income. A normal good has an income elasticity positive, but minor to one.
In this case, if the price of a good increases, the income of the consumer decreases, therefore it consumes fewer quantities of the product. An example of a normal good is Organic food.
An inferior good has an income elasticity of demand negative, meaning that if the income increases, the consumption decreases. An example of an inferior good is margarine if the income increases, consumers will start buying a superior product like butter.
A Luxury good presents an income elasticity of demand superior to one. The consumption of a luxury product increases more than proportional to the increase in income. An example of a luxury good is luxury cars.
Answer:The minimum number of bonds it must sell to raise the money it needs will be 73,242 bonds
Explanation:
Number of bonds = Amount need to expand business / Bond price
But
Bond price = $1,000 / [1 + (0.0575 / 2)^(15 × 2)
Bond price = $1,000 / 1.02875 ^ 30
Bond price = $1,000 /2.340
Bond price = $427.350
Therefore the Number of bonds = $31, 300,000 / $427.350
Number of bonds= 73,242 bonds
The minimum number of bonds it must sell to raise the money it needs will be 73,242 bonds
Answer:
Current price = $20.50
Explanation:
Data provided in the question;
Growth rate, g = 20% = 0.2 for the 2 years
Growth rate, g' = 15% = 0.15 for the following 2 years
after 4 years annual dividend = $3
Last dividend paid, D0 = $1
Required rate of return, r = 12% = 0.12
Now,
D1 = D0 × (1 + g)
= $1 × (1 + 0.2)
= $1.2
D2 = $1 × (1 + 0.2)²
D3 = $1 × (1 + 0.2)² × (1 + 0.15)
D4 = $1 × (1 + 0.2)² × (1 + 0.15)²
D5 = 3
Therefore,
Current price = 
+ 
+ 
+ 
+ 
⇒ Current price = $20.50
Answer:
Decision Tree
Explanation:
The main purpose of a decision tree is to identify whether a firm or organisation is suffering from crises or not. It helps to identify crises, and it assists in identifying the members which must be included to solve the crises and to decide remedial measures. It usually helps to solve a crisis in a very effective manner.
