I think it’s d but not sure
Answer: c. small changes in economic growth rate lead to large GDP changes over time.
Explanation:
If there is even a small change in the rate at which the economy is growing, this increase will increase by even more the year afterward and then even more as time goes on. This is because the interest is being compounded overtime.
Look at the future value formula that shows compounding for instance:
Future value = Amount * (1 + rate) ^ number of periods
Assume even a change of 2% in the growth rate. In 30 years, this rate would have increased the economy by:
= 1 * ( 1 + 2%)³⁰
= 1.81
Which is a rate of:
= 1.81 - 1
= 81%
What started off as only 2% became 81% in 30 years. This is what compounding does.
Answer:
12.64%
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4% + 0.87 × 7.4%
= 4% + 6.438%
= 10.438%
The Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is applied.
Now the required rate of return would be
= 10.438% + 2.2%
= 12.64%
Answer:
The answer is: C) If Jack does not accept the $100,000, there is a valid contract for the sale of the business, without a non-competition clause.
Explanation:
Non competition clause (NCC) is a legal contract that binds one party to not work for or start a rival company (in the same trade) that will compete against the other party.
In this case, Jack said he would probably agree to sign a NCC if they paid him $100,000 more, but he never said he would sign for sure the NCC. So Jack can refuse to sign the NCC and reject the extra $100,000. The selling contract would still be valid, it was never stated that if no NCC was signed, then the contract would be dismissed.