The Department of Service Financing in the city of Belmont, New York, has been experimenting with having city units provide serv
ices in-house versus having private contractors provide the same services. In the city's ground department, half of the landscaping work is performed by city crews, whereas the other half is performed by a private landscaping firm. The city manager has collected random samples of weekly expense report data for both providers. She asks you to conduct a difference of means test. What can the city manager conclude about the difference between in-house and private-service provision
1 answer:
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Answer:
shift demand and supply for loanable funds to the right (up), increasing interest rates.
Explanation:
According to the Fisher hypothesis when there is an increase in the expected inflation there is an equal increase in nominal interest rates.
As interest rates rise demand and supply for loanable funds will rise. This is illustrated in the attached diagram. Interest rate moves from i0 to i1.
Inflation is a reduction in the purchasing power of money. When inflation increases money regulation agencies reduce supply of money as a way to reduce price increase. This in turn reduces the amount of loanable funds commercial banks have to give out
Answer:<u> </u><u><em>Relevant cost of new preferred stock = 10.53%</em></u>
Explanation:
Given:
Dividend = $4.00 per share
Selling for = $40 per share.
Flotation costs = 5% of the selling price.
Marginal tax rate is 30%.
We can compute the cost of new preferred stocks using the following formula:
∴ Relevant cost of new preferred stock = 10.53%
Therefore, the correct option is (d)