Answer:
Elasticity is an economic concept used to measure the change in the aggregate quantity demanded of a good or service in relation to price movements of that good or service. A product is considered to be elastic if the quantity demand of the product changes more than proportionally when its price increases or decreases
Answer:
B)The cost of energy for a company can be both a fixed cost and a variable cost.
Explanation:
Energy is a fixed cost because it is an utility that companies have to pay regardless of the level of production; they need energy to function.
Energy is a variable cost because energy is an input to production, and the amount of energy used (and hence its cost) can vary a lot depending on how much output is produced. In the question, ethanol is referenced, which is also a type of variable cost, because it is an energy source that depends on another input (corn), and its used as a substitue for gasoline.
Answer:
(64,000- 5,200 = 58,800).
Explanation:
Subtract your originial cost from the residual value. (64,000- 5,200 = 58,800).
Answer:
Reward to risk ratio = (Expected return - Risk free rate) / Beta
Reward to risk ratio of Y = ( 0.145 - 0.056) / 1.2
Reward to risk ratio of Y = 0.089 / 1.2
Reward to risk ratio of Y = 0.0741666
Reward to risk ratio of Y = 7.42%
Reward to risk ratio of Z = (0.093 - 0.056) / 0.7
Reward to risk ratio of Z = 0.037 / 0.7
Reward to risk ratio of Z = 0.0528571
Reward to risk ratio of Z = 5.29%
Security market line (SML) reward-to-risk ratio is the market risk premium itself which is 6.6%.
Stock Y has a reward-to-risk ratio that is higher than the market risk premium, it is currently under-valued in the market. Similarly, since stock Z has a reward-to-risk ratio that is lower than the market risk premium, it is currently over-valued in the market.
