Answer:
A buyer would be willing to pay at most $24,000.
Explanation:
There is a 40% chance of getting low quality cars.
Value of high quality car is $30,000.
Value of low quality car is $15,000.
Price of car that buyer will be willing to pay
=40% of lower quality+60% of higher quality
=40% of $15,000+60% of $30,000
=0.4*15,000+0.6*30,000
=$6,000+$18,000
=$24,000
So, the buyers will be willing to pay a maximum value of $24,000.
Well a bond is a government loan where they take ur money and pay u back with interest usually low interest tho
Answer:
B) reach.
Explanation:
Sine the marketing campaign will only last 45 days, it will be very short, and the potential audience is very large. Also during Holiday season a lot of campaigns are launched, so EA's campaign will have competition. So the ad agency must be very concerned with reaching a high percentage of their target audience. They want to produce a high market share and in order to do so, they must reach a lot of people.
In advertising, reach means how many people or households are exposed to your marketing campaign.
100%Equity
<span>---------------------------- </span>
<span>EBIT: $200,000 </span>
<span>Interest: $0 </span>
<span>Taxes: ($80,000) </span>
<span>EAT: $120,000 </span>
<span>Equity: $1,000,000 </span>
<span>ROE12.0% </span>
<span>50% Debt </span>
<span>-------------- </span>
<span>EBIT: $200,000 </span>
<span>Interest: ($40,000) </span>
<span>Taxes: ($64,000) </span>
<span>EAT: $96,000 </span>
<span>Equity: $500,000 </span>
<span>ROE: 19.2% </span>
<span>This is my thought and is contingent on interest expense being tax deductible to the corporation. </span>
<span>Under the equity scenario. Taxes are $80,000 or 40% of $200,000 which is 20% of the $1mm asset base. So the $120,000 earnings after tax divided by the $1mm base is 12% </span>
<span>With 50% leverage, you deduct $40,000 (8% of $500,000 financing) and taxes on remaining amount. The new equity base is smaller at $500,000 so the ROE is higher at 19.2%.</span>
