I<span>n this example, Gavin eating food he prepared himself suggests that he is most influenced by Familiarity. It means </span><span>a good knowledge of something, in this case, the food that Gavin brought to the party. </span>
Answer:
The answer is: D) All of the above are correct.
Explanation:
A) The state beach will tend to be overused because it is a public good that cannot exclude anyone from using it.
B) The state beach is a direct competition to other public or private beaches when it is used by the general public, since only one can be used at a given point in time.
C) The state beach is a common resource because it provides users with tangible benefits.
Option 1: PV = $400,000
Option 2: Receive (FV) $432,000 in one year
PV = FV(1/(1+i)^n), where i= 8% = 0.08, n = 1 year
PV = 432,000(1/(1+0.08)^1) = $400,000
Option 3: Receive (A) $40,000 each year fro 20 years
PV= A{[1-(1+i)^-n]/i} where, n = 20 years
PV = 40,000{[1-(1+0.08)^-20]/0.08} = $392,725.90
Option 4: Receive (A) $36,000 each year from 30 years
PV = 36,000{[1-(1+0.08)^-30]/0.08} = $405,280.20
On the basis of present value computations above, option 4 is the best option for Kerry Blales. This option has the highest present value of $405,280.20
Answer:
Before-tax cost of debt ⇒ A. The interest rate the firm must pay on new long-term borrowing.
This refers to the interest rate that a firm will pay on long term borrowing as compensation to the lenders for lending the company some funds.
Cost of preferred stock ⇒ C. rate of return investors require based on the preferred stock dividend.
The cost of the preferred stock is the rate of the preferred dividend that investors require they are paid every year if dividends can be paid and sometimes even when it cannot.
Cost of Common Stock ⇒ B. the rate of return on retained earnings, and adjusted for flotation costs .
Commons stock costs is the required return on the retained earnings of a company.
WACC ⇒ D. the average cost of raising new financing.
Weighted Average Cost of Capital (WACC) represents the total cost of raising capital for the company as it incorporates the costs of debt, preferred stock and common stock.
