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City Gas is a natural monopoly that supplies natural gas to a particular city. Its cost and demand information are given below.

gavmur [86]

Answer:

Fall, rise

Explanation:

City Gas is a natural monopoly that supplies natural gas to a particular city. It's cost and demand information are given below. Quantity (Millions of therms) Price ($ per therm) Total Cost (million $) 1 48 35 2 44 64 3 38 90 4 30 113 5 20 133 6 8 150 If the government decides to regulate this natural monopoly by forcing them to produce at the point where the demand curve intersects average cost, then compared to the unregulated natural monopoly, the price will _____fall_______ and the quantity will _____rise______.

4 0

4 years ago

Weston Corporation just paid a dividend of $1.00 a share (i.e., D0 5 $1.00). The dividend is expected to grow 12% a year for the

Oduvanchick [21]

Answer:

D1 = $1.12

D2 = $1.25

D3 = $1.40

D4 = $1.48

D5 = $1.55

Explanation:

The formula to calculate dividends for next years is:

$D_n=D_{n-1}(1+g)$

Where D_n is successive year dividend

D_(n-1) is previous year dividend

g is the growth rate (given as 12% = 12/100 = 0.12)

Initial dividend is $1, D_0

So, lets calculate the dividends for 5 years:

Year 1:

D1 = 1(1+0.12) = 1(1.12) = $1.12

Year 2:

D2 = D1(1+g) = 1.12(1.12) = 1.2544 = $1.2544

Year 3:

D3 = D2(1+g) = 1.2544(1.12) = 1.404928 = $1.404928

Year 4:

D4 = D3(1+g) = 1.404928(1+0.05)1.404924(1.05) = $1.4751744

Year 5:

D5 = D4(1+g) = 1.4751744(1.05) = $1.54893312

8 0

3 years ago

Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y5 20Y6 Net income $1,324,

ss7ja [257]

Question Completion:

b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable?

Answer:

Black Bull Inc.

20Y5 20Y6

1. Earnings per share (EPS) $18.20 $21.50

2. The change in the earnings per share from 20Y5 to 20Y6 is favorable.

More revenue and profits were generated in 20Y6 and despite the increased number of shares outstanding, the EPS for 20Y6 performed better than 20Y5's.

Explanation:

a) Data and Calculations:

20Y5 20Y6

Net income $1,324,000 $2,630,000

Preferred dividends $50,000 $50,000

Earnings available to common

stockholders $1,274,000 $2,580,000

Average number of

common shares outstanding 70,000 shares 120,000 shares

Earnings per share (EPS) $18.20 $21.50

($1,274,000/70,000) ($2,580,000/120,000)

3 0

4 years ago

Joanette, Inc., is considering the purchase of a machine that would cost $520,000 and would last for 7 years, at the end of whic

Ostrovityanka [42]

Answer:

The present value of the project is -$10,465.64

Explanation:

The net present value computation for Joannette Inc is set below

In year zero $520,000 and $600 would be incurred on the machine purchase and working capital respectively.

In years 1 to 6 the cash inflow of $112,000 would recorded in respect of reduction in labor costs and other costs

In year 7 ,the cash inflow of $112,000 and recoupment of net working capital would be recorded

NPV=-$526000+($112,000/(1+14%)^1+$112,000/(1+14%)^2+$112,000/(1+14%)^3+$112,000/(1+14%)^4+$112,000/(1+14%)^5+$112,000/(1+14%)^6+$112000+$52000+$6000/(1+14%)^7= ($10,465.64)

Find attached.

Download xlsx

5 0

3 years ago

A change in income preferences or prices of other goods or services leads to a that causes a:______

exis [7]

Answer:

change in demand; shift of the demand curve.

Explanation:

We know that income elasticity of demand derives by considering the percentage change in quantity demanded and percentage change in income

In mathematically,

Income elasticity of demand = (percentage change in quantity demanded) ÷ (percentage change in income)

By considering the above information, the change in income preferences is due to change in demand plus it also shift of the demand curve

7 0

4 years ago