Answer:
D) a decrease in both the aged cheddar cheese and bread markets.
Explanation:
A 10% income tax increase will shift the aggregate demand curve to the left, reducing total demand. This should affect both necessities and luxury goods.
In this case, the demand curve for both aged cheddar cheese and bread will shift to the left, reducing the total quantity demanded at every price level. This will result in a lower equilibrium price for both goods.
Answer:
The correct answer is letter "B": strategy.
Explanation:
The strategy section of a business plan highlights all the techniques the firm could carry out to produce, publish, and sell its goods or services. Besides, in this section, the main problems a company might face during operations are exposed and the methods specialists will implement to attempt to figure out those situations.
Answer:
a) Pre-tax cost of debt is 8.45%
b) After tax cost of debt is 5.07%
Explanation:
a) Given:
Debt issue outstanding = $15.5 million
Semi-annual coupon rate = 0.063 / 2 = 0.0315
Assumed par value (FV) = $1,000
Coupon payment (pmt) = 0.0315 × 1000 = $31.5
Current bond price (PV) = 92% of $1,000 = $920
Time period (nper) = 5 × 2 = 10 periods
Calculate semi-annual rate using spreadsheet function =Rate(nper,pmt,PV,FV)
Semi-annual rate = 4.14%
Pmt and FV are negative as they are cash outflows.
YTM = 4.14 × 2 = 8.28%
Effective annual rate = 
= 
= 0.0845 or 8.45%
b) Tax rate is 40%
After tax cost of debt = Pre tax cost of debt × (1 - 0.4)
= 0.0845 × 0.6
= 0.0507 or 5.07%
Answer: Points of indifference
Explanation: Point of indifference can be defined as that level of EBIT at which two alternative financial plans have same amount of net income. It is used by managers as an evaluating tool, when it comes to choose between two cost structures which are alternative of one other.
In the given case, the company must have build point of indifference before launching of new product, and must have expected higher profits than normal beer.
Answer:
A. Behaviorally Anchored Rating Scale
Explanation:
The behaviorally anchored rating scales, called BARS for short, indicates both qualitative and quantitative data to the employees appraisal process. BARS uses behavioural movements as reference rather than using the traditional generic descriptors. It identifies critical behaviours of a large group, classify these behaviors into performance dimensions and then rank these behaviors into levels of performance.
