Answer:
The computation is shown below:
Explanation:
The computation is shown below:
As we know that
a) Marginal Propensity to Consume (MPC) = Change in consumption ÷ change in disposable income
MPC = $15 billlion ÷ $20 billion
MPC = 0.75
And,
Marginal Propensity to Save (MPS) = change in saving ÷change in disposable income
MPS = $5 billion ÷ $20 billion
MPS = 0.25
Now
b) Before the increase in disposable income
The average propensity to consume (APC) is
= Consumption ÷ disposable income
= $150 billion ÷$200 billion
= 0.75
And,
After the increase in the disposable income
New disposable income = $200 billion + $20 billion
= $220 billion
And,
New consumption = $150 billion + $15 billion
= $165 billion
So,
APC = New consumption ÷ new disposable income
= $165 billion ÷ $220 billion
= 0.75
Answer:
Explanation:
arithmetic average growth rate = {[(1.33 - 1.25)/1.25] + [(1.40 - 1.33)/1.33] + [(1.51 - 1.40)/1.40] + [(1.59 - 1.51)/1.51]} / 4 = {0.064 + 0.053 + 0.079 + 0.053} / 4 = 0.06225 x 100 = 6.225%
geometric growth rate = ⁴√{0.064 x 0.053 x 0.079 x 0.053} = 0.061%
a) using arithmetic average growth rate
Div₁ = $1.59 x 1.06225 = $1.689
P₀ = $40
g = 6.225%
40 = 1.689 / (Re - 0.06225)
Re - 0.06225 = 1.689 / 40 = 0.04222
Re = 0.04222 + 0.06225 = 0.10447 = 10.45%
b) using geometric average growth rate
Div₁ = $1.59 x 1.061 = $1.68699
P₀ = $40
g = 0.061%
40 = 1.68699 / (Re - 0.061)
Re - 0.061 = 1.68699 / 40 = 0.04217
Re = 0.04217 + 0.061 = 0.103174 = 10.32%
Answer:
A price Floor
Explanation:
The minimum wage is a price floor. The minimum wage is a price below which you cannot sell labor, and the suppliers of labor exceed the buyers of labor.
Answer:
a. Current ratio = Total current assets / Total current liabilities = $366 / $226 = 1.62 to 1
b. Average receivable = (Beginning receivables + Ending receivables) / 2 = ($156 + $160) / 2 = $158
Average collection period = Number of days in year / Credit sales * Average accounts receivable = 365 / $1,702 * $158 = 33.88 days
c. Average Stockholder's equity = (Beginning equity + Ending equity) / 2 = ($500 + $550) / 2 = $525
Return on stockholder's equity = Net income / Average stockholder's equity = $112 / $525 = 21.33%
d. Earnings per share = Net income / Common shares outstanding = $112 / 46 = $2.43 per share
Price earnings ratio = Market price per share / Earnings per share = $50 / $2.43 = 20.58 times
e. Dividends per share = Dividends / Common shares outstanding = $92 / 46 = $2.00 per share
Dividend yield ratio = Dividend per share / Market price per share = $2.00 / $50 = 4.00%
Workings
Beginning retained earnings $346
Add: Net income $112
Less: Ending retained earnings -<u>$366</u>
Dividends <u>$92</u>
