The economics concepts of income effect and substitution effect express changes in the market and how these changes impact consumption patterns for consumer goods and services. The income effect expresses the impact of increased purchasing power on consumption, while the substitution effect describes how consumption is impacted by changing relative prices. Different goods and services experience these changes in different ways. Some products, called inferior goods, generally decrease in consumption whenever incomes increase. Consumer spending and consumption of normal goods typically increases with higher purchasing power, in contrast with inferior goods.
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The project's projected NPV is $185.11. (second option)
<h3>What is the NPV?</h3>
Net present value is the present value of after-tax cash flows from an investment less the amount invested. Only projects with a positive NPV should be accepted.
A project with a negative NPV should not be chosen because it isn't profitable. NPV is calculated by taking the present value of all cash flows over the life of a project. Then, the present value of cash flows is subtracted from the investment's initial investment
NPV = -1200 + 400 / 1.0975 + 425 / 1.0975² + 450 / 1.0975³ + 475 / 1.0975^4
= $185.11
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Answer:
TRUE
Explanation:
Opportunity cost refers to those costs that can help us save more money. When we move from one investment to another, then the additional income from the other investment is called opportunity cost.
In this case, if Joe chooses Invest in a bank deposit in the place of Gold coins, he can enjoy 3% more return at the place of no profit and loss, so Joe had loss his 3% opportunity cost.
Answer:
Actual Cost of Supplier A: $291.60
Actual Cost of Supplier B: $271.60
Explanation:
<u>Supplier A:</u>
Cost - 270
Shipping FOB shipping point
Purchase Discount = Invoice Price * Discount
For Supplier A, the invoice price is 270 and discount is 2/10 = 2%, so:
Purchase Discount = 270 * 0.02 = $5.4
Cost is:
270 + 27(shipping FOB point) - 5.4 = $291.60
<u>Supplier B:</u>
Cost - 280
Shipping Destination (so 0)
Purchase Discount = Invoice Price * Discount
For Supplier B, the invoice price is 280 and discount is 3%, so:
Purchase Discount = 280 * 0.03 = $8.4
Cost is:
280 - 8.4 = $271.60
Answer: B) They have to take time out from their actual jobs.
Explanation: Line managers are often referred to personnels in an organization who are in charge if a particular department or sector and hence, charged with the responsibility of handling and overseeing the performance of particular employees and output of his or her department. This puts line managers in a position of knowing the employees in his or her department, what the department needs in terms of personnel in other to raise and drive productivity. However, charging line managers with the responsibility of recruiting for the organization will result in the disruption of their actual job role and will definitely have to take time out in other to facilitate the recruitment process which will definitely have an effect on their performance and actual duty.