Answer:
The correct answer of the given question is B) an abnormal return
Explanation:
Abnormal return which is also termed as excess return or alpha return , is the rate of return which we get from the portfolio ( portfolio's return ), which is not explained by the rate of return of market. This abnormal return can be positive or negative, and that depends on what the actual return would be in relation to the normal return. So we can say that the abnormal return can be calculated as -
Actual return - Normal return
Answer:c. continue to operate her business, but in the long run she will probably face competition from newly entering firms
Explanation:
Monthly revenue = $4500
Monthly Variable costs = $1000
Monthly Revenue is higher than Monthly Variable Costs, Susan's catering business will earn an economic in the short run. SHE should continue to operating.
Susan will face competition in the long run because other firms will want to enter the market because of economics profits in the catering industry.
Answer:
You can create the time line below or submit a separate Word or PowerPoint document containing the time line. If your tim
Explanation:
You can create the time line below or submit a separate Word or PowerPoint document containing the time line. If your tim
Answer:
No, you should not purchase the equipment if your interest rate is 10% because you would spent more money on the equipment than what you would save in labor costs.
Explanation:
First, you have to calculate the total amount that you would save in 8 years which is the result of multiplying the amount you save per year for the number of years:
$35,000*8=$280,000
Second, you have to calculate the total amount you would have to pay to purchase the equipment if your interest rate is 10% using the following formula:
A= P(1+rt)
A= accrued amount
P= principal amount: $200,000
r= rate: 0.1
t= time period: 8
A= 200,000*(1+(0.1*8))
A= 200,000*1.8
A= 360.000
According to this, in 8 years you would save $280,000 in labor costs but you would have to pay $360,000 for the equipment which means that you will pay more for the machine than what you would save in costs. Because of this, you should not purchase the equipment if your interest rate is 10%.