Answer:
Omar's plan of retaining earnings can work depending on the liquidity preference of the shareholders.
If the shareholders have interest in short-term liquidity benefit (i.e. dividend), then his plans might be frustrated and vice versa.
Answer:
A. The quantity demanded for bread will decrease , quantity supplied will increase
Explanation:
PRICE FLOOR is the minimum mandated price set by government , usually above equilibrium price , to ensure producers' protection (if market price is perceived to be low) . EG : Minimum Support Price for agricultural products to protect farmers .
However at this raised price : There is Excess Supply , as Quantity Supplied increases with price increase (law of supply - price & supply direct relationship) , Quantity Demanded falls (law of demand - price & demand inverse relationship)
Answer:
Results are below.
Explanation:
Giving the following information:
Inflation rate= 7%
Real rate of return= 10%
Present value (PV)= $10,000
Number of periods (n)= 10 years
<u>The real rate of return incorporates the effect of the inflation rate. Therefore, the nominal rate of return:</u>
Nominal rate of return= 0.1 + 0.07= 17%
<u>To calculate the Future Value, we need to use the following formula:</u>
FV= PV*(1 + i)^n
FV= 10,000*(1.17^10)
FV= $48,068.28
This is the n<u>ominal valu</u>e received after ten years.
<u>If Sally wants to determine the real value of the investment after 10 years, we must use the real rate of return:</u>
<u></u>
FV= 10,000*(1.1^10)
FV=$25,937.42
