Answer:
1. An index determined by measuring the price of standard goods brought by urban consumers.
2. Producers raise prices to meet increased cost.
3. Demand-pull theory.
4. It rises
5. 4 percent.
Explanation:
CVP analysis is more difficult because its requires costs to be broken down between variable and fixed which is not done in absorption costing.
<h3>What is a
CVP analysis?</h3>
This is an analysis that find out how changes in the firm's variable and fixed costs affect the firm's profit.
Hence, the analysis is difficult when using absorption costing than when using variable costing because its requires costs to be broken down between variable and fixed which is not done in absorption costing.
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Answer:
9.43%
Explanation:
The computation of the internal rate of return is calculated by using the spreadsheet which is shown in the attachment
The internal rate of return is the return at which the net present value comes to zero i.e.
Net present value = 0
initial investment = Present value of cash flows after taking the discounting factor
After solving the given problem, the internal rate of return is 9.43%
When you are valuing a stock, proper research must be done on the company's anticipated future growth rate which must be most careful about when performing your calculations.
When the case of deciding on which valuation method is to be used for the first time to value stock as it is actually easy to get overwhelmed by various valuation techniques available for the investors. Fairly straightforward valuation techniques are also present, however, other techniques are more involved and complicated.
In general, there is actually no particular method that is best suited for every situation to make performed. Since each stock is different and each industrial sector or firm exhibits unique characteristics it may be required to process valuation methods which are in multiple cases.
Due to many factors to be considered while stock valuation, it must be done on basis of the complete anticipated future growth rate of the company. This should be done carefully based on proper research on the future growth of the particular company to perform calculations of stock valuation.
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Answer:
Explanation:
Profit on a long call option = max(St - X, 0) - premium paid
Profit on a long call option = max(29 - 27, 0) - 1.1
Profit on a long call option = max(2, 0) - 1.1
Profit on a long call option = 2 - 1.1
Profit on a long call option = 0.9 per share
Total profit on the long call option = 0.9 * 100 shares per contract * 3 contracts = 0.9 * 100 * 3 = $270
Net profit on this investment = 270 - 10
Net profit on this investment = $260
