(b)
Equilibrium output will be greater than the efficient output
- Equilibrium output is the point where national income is equal to planned aggregate expenditure.
- Equilibrium output occurs where AD (Aggregate Demand)= AS (Aggregate supply)
- Equilibrium - It is that type of state where market demand and market supply are balanced.
- Disequilibrium- It is the opposite of equilibrium or when is not in the state of equilibrium position it is automatically considered as disequilibrium.
- Different types of equilibrium are as follows-
- Economic equilibrium
- Competitive equilibrium
- General equilibrium
- Underemployment equilibrium
- Lindahl equilibrium
- Intertemporal equilibrium
- Nash equilibrium
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Answer:
c. Are the excess of the book value over the cash proceeds.
Explanation:
The property, plant, and equipment are classified as the fixed assets which are reported in the asset side of the balance sheet
If the cash sales of property, plant, and equipment are sold more than the book value then it would be the gain.
But if the cash sales of property, plant, and equipment is sold less than the book value than it would be the loss to the company.
Before a business selects the process of transporting their goods, they need to consider some important steps in the transportation process. How long will the items take to reach their destination? How soon would the supplier need the product once they are produced? Which option would be the quickest? Safest? Businesses should also consider the self-life of their product. Is the item perishable? What is the weight of the item/s being transported?
Answer:
The WACC of the firm is 11.91%
Explanation:
The WACC or weighted average cost of capital is the rate of return that a business is expected to pay to all of its security holders- bonds, common stock, preferred stock- or is the cost of capital for the business.
To calculate the WACC, we use the following formula,
WACC = D/A * (1-tax rate) * rD + E/A * rE
Where,
- D/A and E/A is the weightage of debt and assets as a proportion of total assets
- rD * (1-tax rate) is the after tax cost of debt
- rE is the cost of equity or required rate of return on equity
We first need to calculate the required rate of return on equity (r). We will use the CAPM formula for r.
r = 0.034 + 1.37 * 0.082
r = 0.14634 or 14.634%
The total assets are equal to,
Assets = Debt + Equity
If for every $1 of equity, there is $0.45 of debt as given by debt-equity ratio.
Then,
Assets = 0.45 + 1
Assets = $1.45
WACC = 0.45/1.45 * (1-0.23) * 0.076 + 1/1.45 * 0.14634
WACC = 0.11908 or 11.908% rounded off to 11.91%
