Answer:
The correct answer is option C.
Explanation:
`If firms can easily enter and exit the market, then firms operating in the market will earn zero economic profit in the long run. This is because the short run is too short for firms to enter and exit so potential firms will enter and exit in the long run.
If the existing firms will be having negative profits, the firms having loss will exit the market. This will reduce market supply. As a result, the price level will increase. This will go on until all firms will have zero economic profits.
Similarly, if the existing firms are having positive economic profits in the long run, the other firms will enter the market. This will increase the market supply such that the price level decreases. This will go on till all the firms will be having zero economic profits.
Answer:
Explanation: A - MPS + MPC = 1
The marginal propensity to save (MPS) is the proportion of an household's income that is saved
The marginal propensity to consume (MPC) is the proportion of an household's income that is consumed.
Income is either saved or consumed, therefore the sum of MPS and MPC should equal 1
The value of each company's shares of stock
Red: $91.25
Yellow:$52.14
Blue: $36.50
Step 1
The constant dividend growth model, which is written as
Pt = Dt (1 + g)/(R - g)
<h3>Step2</h3>
Therefore, the current stock price for each company is:
Price of the red stock is $3.65/(0.08 -0.04) = $91.25.
Price of the yellow stock is $3.65/(0.11 -0.04) = $52.14.
Price of the blue stock is $3.65/(0.14 -0.04) = 36.50.
The stock price falls as the needed return rises. A greater discount rate reduces the present value of cash flows, which is a function of the time value of money. The stock price can be significantly affected by even slight changes in the needed return, which is another crucial point to remember.
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Answer:
89.66 years
Explanation:
In this question, we use the NPER formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,500
Future value = $4,000
Rate of interest = 1.1%
The formula is shown below:
= NPER(Rate;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the answer would be 89.66 years
