Answer:
n = 40
i = 3% (semiannual)
face value = $80 million
coupon payment = $2,000,000
market price:
PV of face value = $80 / (1 + 3%)⁴⁰ = $24.52 million
PC of coupon payments = $2 x 23.115 (PV annuity factor, 3%, 40 periods) = $46.23 million
market value = $70.75 million
The answer is sunk cost
This incurred cost usually could not be recovered in any way.
For example, let's say for the business operation, you make a prepaid rent for a building for the whole year.
In this situation, the prepaid rent could be considered as a sunk cost because it's already incurred and not recoverable anymore
Answer:c
Explanation:
Since there’s a reduction in dollar then they will be a reduction in price thereby increasing demand
Answer:
1) B - Inaction
2)B - Faulty
3)A - Dissolution
Explanation:
1) Inaction: The company's strategy is not responsive to technological trends
2) Faulty: Downsizing to save cost is not a good strategy for a business to adopt, they could have divest to other sectors
3)Dissolution: liquidate or wind up before the company runs in to serious financial crisis.
Answer: d. spending depends on income people expect over the long term, rather than on current income.
Explanation:
The permanent income hypothesis states that people will spend money at a level equal to their permanent income which is their expected long-term average income.
The consumption function states that consumption is equal to autonomous consumption and consumption is dependent on disposable income.
The savings function shows the relationship between savings and income.
