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kotegsom [21]
3 years ago
8

Timmy can edit 2 pages in one minute and he can type 80 words in one minute. Olivia can edit 1 page in one minute and she can ty

pe 100 words in one minute. Timmy has an absolute advantage and a comparative advantage in editing, while Olivia has an absolute advantage and a comparative advantage in typing. True or false?
Business
1 answer:
RUDIKE [14]3 years ago
7 0

Answer:

True

Explanation:

A person has comparative advantage in production if he produces at a lower opportunity cost when compared with other people.

A person has absolute advantage in the production of a good or service If he produces more quantity of the good when compared with other people

To calculate comparative advantage, first find the opportunity cost:

Opportunity cost of timmy editing = 80/2=40 words

Opportunity cost of timmy typing = 2 / 80 = 0.025

Opportunity cost of oliva editing = 100/1= 100

Opportunity cost of oliva typing = 1/100=0.01

Olivia has a comparative advantage in typing while timmy has a comparative advantage in editing.

Olivia types more words than timmy, therefore she has an absolute advantage in typing.

Timmy edits more pages than oliva, Therefore, he has am absolute advantage in editing.

I hope my answer helps you

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You have taken out a $225,000, 3/1 ARM. The initial rate of 5.8% (annual) is locked in for three years and is expected to increa
RoseWind [281]

Answer:

$1,320.19

Explanation:

Loan amount = $225,000

Rate = 5.80%

Years = 30

PMT = ?

Initial payment = PMT(Rate/12, Years*12, -225,000)

Initial payment = PMT(5.80%/12, 360, -225,000)

Initial payment = 1320.185230439806

Initial payment = $1,320.19

Therefore, the initial payment on the loan is $1,320.19

8 0
2 years ago
A company has preferred stock with a current market price of $18 per share. The preferred stock pays an annual dividend of 4% ba
scZoUnD [109]

Answer:

Answer:

Dividend (D) = 4% x $100 = $4

Current market price (Po) = $18

Flotation cost (FC) = $1.50

Tax rate (T) = 40% = 0.40

Kp =   <u> D </u>

       Po-FC

Kp =   <u>  $4 </u>

        $18-$1.50

Kp = <u>$4 </u>

      $16.5

Kp = 0.24 = 24%

Explanation:

Cost of preferred stock equals dividend divided by the difference between current market price and flotation cost. Cost of preferred stock is not tax deductible.

3 0
2 years ago
The market value of​ Fords' equity, preferred​ stock, and debt are $ 7 ​billion, $ 2 ​billion, and $ 13 ​billion, respectively.
Alisiya [41]

Answer: 9.48%

Explanation:

Given Data

Debts ;

$7 billion

$2 billion

$13 billion

Beta of Fords stock = Beta = 1.50

Market risk premium = Rp = 8.0%

Risk free rate of interest = Rf = 4.0%

Equity rate = 1.7

Market risk rate = 0.8

Risk free rate = 0.03

Therefore;

Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium

= 0.03 + (1.7 × 0.8)

= 0.166

Preferred Stock Cost ( PSC)= Dividend ÷ stock price

= 4 ÷ 30

= 0.1333

Total debt = 13 + 6 + 2 = 21 billion

D% = 13 billion ÷ 21 billion

      = 0.619

E% = 6 billion ÷ 21 billion

     = 0.286

P% = 2 billion ÷ 21 billion

     = 0.095

RD = debt capital at 8% maturity rate

Tc= 30%

Rwac =(w/ preferred stock)

= Re × E% + PSC × P% + Rd ( 1- Tc) D%

Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)

= 0.094803 * 100

= 9.48%

At 30% tax rate Ford weighted average cost is 9.48%

4 0
2 years ago
Describe two examples of important things that financial planning skills can help you do, and explain why these things are impor
Alexxandr [17]
Being able to read and do math
5 0
3 years ago
Fixed cost is:________.
musickatia [10]

Answer:

d. any cost that does not change when the firm changes its output.

Explanation:

Fixed costs are the expenses that remain constant throughout a financial period. They are not dependent on the output level for the period. Fixed costs are budgeted at the beginning of the season and will not change as long as production does not go beyond the optimal level. Examples of fixed costs are depreciation, rents,  administrative salaries, and insurance.

Variable costs contrasts fixed costs. Whereas fixed costs remain constant, variable cost change depending on the level of production. Adding fixed costs to variable costs results in the total costs for a business.  The average total cost is the total cost divided by the total output.

4 0
3 years ago
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