<span>b. decrease in the gdp of canada</span>
Answer:
WACC = 0.079 and firm value = 12,658.23.
Explanation:
WACC is equal to
Where debt cost is 0.05, debt weight is 0.3, tax rate is 0.4, equity cost is 0.1 and equity weight is 1-0.3 = 0.7
So, WACC = 0.05*0.3*0.6 + 0.1*0.7 = 0.079 or 7.9%.
The value of the fir is calculated FCF/WACC, in this case 1,000/0.079 = 12,658.23.
Answer:
Expenses will increase.
Explanation:
In this method, the revenue should be rised according to the forecasting method also the expense contains the similar percentage of revenue that was for the previous periods
So in the case when the revenue is increased so the expense should also be increased with the real terms
Therefore the last option is correct
Answer:
All of the following statements about the geography of meat production in the United States and Canada are true EXCEPT: Consumer demand for organic foods has significantly decreased the amount of meat produced by most agribusiness firms.
Explanation:
Organic foods are grown without the use of synthetic additives like fertilizer and pesticides for plants, antibiotics and growth hormones for animals.
Consumer demand for organic products due to its health benefits has not significantly decreased the amount of meat produced by most agribusiness firms. Instead, it has created another lucrative business niche for meat production corporations.
Organic foods are now being produced to meet the demand for it along side with those that are not organic.
There is however a higher charge associated with organic foods.
Answer: Net capital outflow is determined by the real interest rate, not the real exchange rate
Explanation:
In the foreign-currency market, the supply of dollars is not dependent on the real exchange rate and so the supply curve will be vertical to indicate this independence by showing inelasticity which means that it is unaffected by the variables in the foreign-currency market.
Supply of dollars is rather dependent on the real interest rate.
This is because dollars get into the world economy (supply of dollars) as a result of investments by Americans into markets abroad in the form of Net Capital Outflow. If American real interest rate is low, Americans will invest in other countries with a higher rate of return thereby pumping more dollars into the world economy.