Differentiate between economic growth and economic development ?

Match the measures of worth in the first column with an appropriate definition from the list below.

alexira [117]

Answer:

1. Future worth.

2. Present worth.

3. Annual worth.

4. Internal rate of return.

5. Discounted payback period.

6. External rate of return.

7. Capitalized worth.

Explanation:

Rate of return can be defined as the percentage of interest or dividends earned on money that is invested.

In Financial accounting, a return refers to the amount of profit generated by an investor on an investment over a specific period of time.

Basically, the rate of return which is typically expressed as a percentage of the initial costs of an investment can either be a gain or a loss on an investment. Therefore, a positive rate of return on an investment over a specific period of time, simply means that an investor is making a profit (gains) while a negative rate of return on an investment over a specific period of time, indicates that the investor is running at a loss.

The measures of worth with an appropriate definition is listed below;

1. Future worth: converts all cash flows to a single sum equivalent at t-(planning horizon) using i = MARR.

2. Present worth: converts all cash flows to a single sum equivalent at t = 0 using i = MARR

3. Annual worth: converts all cash flows to an equivalent uniform series over the planning horizon

4. Internal rate of return: determines an interest rate that yields a PW (or FW or AW) of O

5. Discounted payback period: determines how long it takes for the cumulative present worth to be positive at i = MARR.

6. External rate of return: Determines the interest rate that equates the future worth of invested capital to the future worth of recovered capital invested at i = MARR

7. Capitalized worth: Determines the PW when the planning horizon is infinitely long

6 0

3 years ago

Baa-rated bonds currently yield 6%, while Aa-rated bonds yield 4%. Suppose that due to an increase in the expected inflation rat

ollegr [7]

Answer: The new confidence index is 0.7143

Explanation: Consumer confidence index which is known as the confidence index is an index used for estimating the economy of the U.S, it is published by the conference board which shows the decree of excitement in peoples's activities on their savings and spendings.

To calculate the new confidence index;

STEP1: Add the bond increase to the current bond;

6% + 1% = 7%

4% + 1% = 5%

STEP 2: FIND THE NEW CONFIDENCE INDEX

5% ÷ 7% = 0.7143

The old confidence index can also be calculated as

4% ÷ 6% = 0.6667

8 0

4 years ago

Problem 10A specialty coffeehouse sells Colombian coffee at a fairly steady rate of 280 pounds annually. The beans are purchased

SOVA2 [1]

Answer:

The computations are shown below:

Explanation:

a. The computation of the economic order quantity is shown below:

$= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}$

$= \sqrt{\frac{2\times \text{280}\times \text{\$45}}{\text{\$0.48}}}$

= 229 units

The carrying cost is come from

= $2.40 × 20%

b. Time between placement of orders is

= Economic order quantity ÷Annual demand

= 229 ÷ 280

= 0.8179 years

So,

= 0.8179 × 365 days

= 298.53 days

We assume 365 days in a year

c. The average annual cost of ordering cost and carrying cost equals to

= Holding cost + ordering cost

= (Economic order quantity ÷ 2 × Holding cost) + (Annual demand ÷ Economic order quantity × ordering cost)

= (229 units ÷ 2 × $0.48) + (280 ÷ 229 units × $45)

= $54.96 + $55.02

= $109.98

d) Now the reorder level is

= Demand × lead time + safety stock

where, Demand equal to

= Expected demand ÷ total number of weeks in a year

= 280 pounds ÷ 52 weeks

= 5.38461

So, the reorder point would be

= 5.38461 × 3 + $0

= 16.15 pounds

7 0

3 years ago

When several alternative investment proposals of the same amount are being considered, the one with the largest net present valu

Likurg_2 [28]

Answer:

The answer is c. present value index

Explanation:

Present value index is the ratio decided by dividing net present value of the project by its require initial net cash outflows.

Once having constraint on selecting investment with positive NPV to be made due to lack of fund, a firm's usually use Present value index for further decision making.

The investment with higher present value index shows that it generates more net cash flow or in other words, more efficient and requires less initial cash outflow, and thus usually be chosen over the other ones with lower present value index.

4 0

3 years ago

Leisure Enterprise’s total cost of producing speedboats is given by TC = 10 Q 3 – 4 Q 2 + 25 Q + 500. On the basis of this infor

Anastasy [175]

Answer:

The marginal cost of producing the 25th speedboat is 18,575.

Explanation:

Note that the given Leisure Enterprise’s total cost (TC) of producing speedboats is correctly stated as follows:

TC = 10Q^3 - 4Q^2 + 25^Q + 500 …….………….. (1)

Where Q represents the quantity of speedboats produced.

To obtain the marginal cost (MC) of producing speedboats, equation (1) is differentiated with respect to Q as follows:

MC = dTC/dQ = 30Q^2 - 8Q + 25 ………………… (2)

Finding the marginal cost (MC) of producing the 25th speedboat implies that Q = 25.

Substituting Q = 25 into equation (2), we have:

MC = (30 * 25^2) - (8 * 25) + 25 = 18,575

Therefore, the marginal cost of producing the 25th speedboat is 18,575.

4 0

3 years ago

Differentiate between economic growth and economic development ?​

Differentiate between economic growth and economic development ?