If brazil gives up 3 automobiles for each ton of coffee it produces, while peru gives up 7 automobiles for each ton of coffee it produces, then Brazil should focus on producing coffee because it has a competitive edge in this area.
What does Brazil have a comparative advantage in?
- Brazil is rich in minerals, especially iron ore, but it also has oil and other basic materials. Although technically speaking they are economic rents rather than comparative advantages, they nonetheless exist and the majority of other nations do not.
- In terms of actual comparative advantage, it is the low-cost producer of a number of agricultural items, most notably sugar, where Brazil is unquestionably the global heavyweight, but also soy, cotton, coffee, and other crops, as well as beef, poultry, and other protein.
- Brazil's issue is not its producing side. In general, they are effective producers. It relates to infrastructure. Usually, the top three producers of most commodities are the US and Brazil.
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The company's external equity comes from those funds raised from public issuance of shares or rights. The cost of external equity is the minimum rate of return which the shareholders supply new funds <span>by </span>purchasing<span> new shares to prevent the decline of the market value of the shares. To compute the cost of external equity, we should use this formula:</span>
Ke<span> = (DIV 1 / Po) + g</span>
Ke<span> = cost of external equity</span>
DIV 1 = dividend to be paid next year
Po = market price of share
g = growth rate
In the problem, the estimated dividend to be paid next year is $1.50. The market price is $18.50 and the growth rate is 4%.
<span>Substituting the given to the formulas, we need to divide $1.50 by $18.50 giving us the result of 8.11% plus the growth rate; this would yield to the result of 12.11% cost of external equity.</span>
Answer:
$250,000
Explanation:
The depreciable cost of the equipment is the amount that will be used to provide for depreciation on the asset also known as Depreciable Amount.
<em>Depreciable Cost = Cost - Salvage Value</em>
therefore,
Depreciable Cost = $300,000 - $50,000 = $250,000
Answer:
Option "B" is the correct answer to the following statement.
Explanation:
The price elasticity of demand determines the flexibility of the volume needed to adjust the price.
The demand of an individual or market becomes inelastic if it will not adjust much to increasing prices, and it is elastic for an individual or market if the demand of a particular commodity will shift a lot as prices shift.
Answer: <em><u>Cash to be distributed to Harding = $ 17000, Jones = $ 3000
</u></em>
Explanation:
It has been indicated that the ($9,000) deficit will be covered with a forthcoming contribution
∴ The Remaining Capital Balance is = (24000 + 24000) = $48000
∵Total cash Available = $20000
Loss = 48000 - 20000
= $ 28000
Loss will be shared between Harding & Jones in ratio = 16:48
∴ Harding Capital balance = 
= $ 17000
∴ Jones Capital balance = 
= $ 3000
Cash will be Distributed in their capital balance ratio
Therefore,
<u><em>Cash to be distributed to Harding = $ 17000, Jones = $ 3000
</em></u>
