Answer:
D. Entrepreneurship and knowledge
Explanation:
According to my research on starting a business, I can say that based on the information provided within the question the two main factors of production that Darnell needs in order to succeed would be Entrepreneurship and knowledge. He needs to learn the process of designing, launching and running a new business as well as gaining a vast knowledge of graphic arts.
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Answer:
Diversifiable
Explanation:
Diversifiable risk is risk that is peculiar to a company or industry. It can be eliminated by diversifying portfolio.
Systematic or Market risk is risk that is peculiar to the market and it can't be diversified away.
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Answer:
Explanation:
Given
For ABC
rE = 15%
rD = 7.5%
D/E = 3/7
rE = rA + (rA-rD)*(D/E)
15 = rA + (rA-7.5)*(3/7)
105 = 7rA + 3rA - 22.5
10rA = 127.5
Hence,
rA = 12.75%
Now,
Weighted average cost of capital is the rate of return required from the firm. Irrespective of its capital structure.
WACC = (D/V)* rD + (E/V)*rE
Since, D/E = 2/7
So, D/V = D/(D+E) = 3/10
SImilary, E/V = 7/10
Hence,
WACC = (3/10)*7.5 + (7/10)*15
= 12.75%
c
Since this is perfect capital market and firms are competitors with different capital structure.
According to MM proposition the Asset return and WACC of two identical firms with different capital structure are same
Hence
rA of XYZ = 12.75%
d
similarly as question c
WACC of XYZ = 12.75%
E AND F is solved in the attached below
When preparing the statement of cash flow using the indirect method, Depreciation Expense is Added back to net income under the operating activities.
<h3>What is the indirect method for a cash flow statement?</h3>
The indirect method for a cash flow statement serves as one of the methods that helps in the presentation of data which can be used to display the expenditure of a company during a certain period .
This method takes the company's net income , then perform addition or subtraction on balance sheet items to determine cash flow.
hence, When preparing the statement of cash flow using the indirect method, Depreciation Expense is Added back to net income under the operating activities.
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Answer:
D. It increases the ability of an expansionary monetary policy to affect aggregate demand.
Explanation: