Answer:
a. Overstates Inflation.
In the case of Mary and Bob, the CPI would have already increased but in this case the price of the minivan increased as well. This will overstate inflation because it will not measure the general rise in price alone (inflation), it will also measure the rise in price as a result of the new minivan having better features.
b. Understated Inflation
Donna's case represents an understated inflation because the quantity shrank yet the price stayed the same. This means that the price is now buying less quantity than it used to which is inflation because more dollars are now required to buy the previous amount. This was not however recorded as there was no change in price.
c. Overstates Inflation
In the case of Zach, the inflation will be overstated because Zach is no longer buying bagels and is now buying muffins so continuing to use bagels as a representative good in the basket of goods used to calculate CPI would be overstating it.
d. Accurate representation of Inflation
In Chris's case, the increase in the price of the same shoe over the years has been because of a general rise in prices and not because it is a different model. It is the same shoe and its price is rising generally so this is an accurate depiction of inflation.
Answer:
The value of the stock is $28.57
Explanation:
Data provided in the question:
Dividend paid at the end of the year, D1 = $2.00 per share
Increase in dividend = $1.50 per share
Growth rate, g = 5% = 0.05
Required rate of return = 12% = 0.12
Now,
Price with constant Dividend Growth model = D1 ÷ ( r - g )
= $2 ÷ ( 0.12 - 0.05 )
= $28.57
Hence,
The value of the stock is $28.57
A. Bid/no bid decision
A "bid" is what contractors call their proposals, and in some cases it will not be worth it to even submit a proposal on a job. The stage where contractors decide if it is worth it is called bid/no-bid.
True Market Research is necessary to discover existing products
Answer:
the number of students to register for break even is 40 students
Explanation:
The computation of the number of students to register for break even is as follows
Let us assume the break even point be X,
Now as we know that
At break even
Total Expense = Total Revenue
$6,400 + $15 × X = $175 × X
160 × X = $6,400
So,
X = $6,400 ÷ 160
= 40 students
hence, the number of students to register for break even is 40 students
