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3 years ago

What are the short-run economic effects when u.s. firms substitute labor outside of the u.s. for labor inside the u.s.?

1 answer:

4 0

<span>There will be a rise in employment and drop in the unemployment rate. It will be ideal for the US economy as the economy is driven on consumerism. More people with jobs means more spending. This will improve the GDP forecast and overall strengthen the broader economy.</span>

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Consider the following projects. Project CO C1 C2 СЗ C4 C5 A -1,000 +1,000 0 0 0 10 B -2,000 |+1,000 |+1,000 +4,000 +1,000 +1,00

Nuetrik [128]

Answer:

a) $3,458

Explanation:

The net present value is the present value of future cash flows discounted at the firm's weighted average cost of capital(which is the appropriate discount rate in this case) minus the initial investment outlay

cost of equity=risk-free rate+beta*(expected market return-risk free rate)

cost of equity=2.5%+1.5*(12%-2.5%)

cost of equity=16.75%

after-tax cost of debt=5.2%*(1-21%)

after-tax cost of debt=4.11%

WACC=(weight of equity*cost of equity)+(weight of debt*after-tax cost of debt)

weight of equity=value of equity/(value of equity+value of debt)

value of equity=6 billion*$3=$18 billion

value of debt=$5 billion

weight of equity=$18 billion/($18 billion+$5 billion)

weight of equity=78.26%

weight of debt=1-78.26%

weight of debt=21.74%

WACC=(78.26%*16.75%)+(21.74%*4.11%)

WACC=14.00%

present value of a future cash flow=future cash flow/(1+WACC)^n

n is the year in which the cash flow is expected, it is 1 for year 1 cash flow, 2 for year 2 cash flow ,and so on

NPV of project B=1000/(1+14%)^1+1000/(1+14%)^2++4000/(1+14%)^3+1000/(1+14%)^4+1000/(1+14%)^5-2000

NPV of project B=$ 3,458.00

5 0

2 years ago

Why is nominal value important ?

lara31 [8.8K]

Answer: A preferred stock's nominal (par) value is important in that it is used to calculate its dividend while the nominal value of common stock is an arbitrary value assigned for balance sheet purposes. In economics, nominal value refers to the current monetary value and does not adjust for the effects of inflation.

Explanation:

Hope it helps

3 0

3 years ago

What is the safest way to dispose of old bank account statements?

zheka24 [161]

Soaking the documents in water after tearing them up words well, burning them is less safe, but is the safest for your records, always tear or shred them no matter what

7 0

3 years ago

The management of Truelove Corporation is considering a project that would require an initial investment of $321,000 and would l

Art [367]

Answer:

2.6 years

The appropriate response to carry out the project if the payback period is within the acceptable payback period of the company

Explanation:

Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.

Payback period = amount invested / cash flow

Cash flows is used in calculating the payback period.

To derive the payback period from net income, add depreciation to net income

$82,000 + $42,000 = $124,000

$321,000 / $124,000 = 2.6 years

I hope my answer helps you

4 0

3 years ago

An investment counselor calls with a hot stock tip. he believes that if the economy remains strong, the investment will result

vlabodo [156]

Expected profit is the probability of receiving a profit multiplied by the profit

Strong 50,000 * .30 = 15,000

Moderate = 10,000 * .60 = 6,000

Recession = -50,000 * .10= -5,000

Add those up, and you should expect a profit of around 16,000

6 0

3 years ago

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