Answer:
Profit Maximisation
Explanation:
Profit is the difference between total revenue (receipts) from sale & total cost (expenditure) on production.
Total Revenue = Price x Quantity ; Total Cost = Average Cost x Quantity
Economists study all the producer behaviour, based on assumption that : Goal of firm is Profit Maximisation.
Maximising Profit implies maximising the difference between Total Revenue & Total Cost [ TR - TC] . This further leads to producer equilibrium rule of Marginal Revenue = Marginal Cost [MR = MC] ; i.e additional revenue per unit sold equals additional cost per unit production.
Answer:
The slope of the CML = (13% - 7%)/25% = 0.24
Explanation:
Given that:
expected rate of return of 17%
standard deviation of 27%.
The T-bill rate is 7%.
You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25%.
The slope of the CML is
Slope of the CML = (Expected return of Market - Risk free return)/Standard deviation of market
The slope of the CML = (13% - 7%)/25% = 0.24
= (0.13 - 0.07) /0.25
= 0.24
Answer: (a) $295 million
(b) $326 million
Explanation:
Given that,
Sales = $900 million during 2016
Cash = $871 million
Cost of goods sold = $280 million
Expenses for the year totaled = $325 million
Paid for Inventory = $375 million
Paid for everything else = $285 million
Beginning cash = $115 million
(a) Net Income = Sales - Cost of goods sold - Expenses for the year totaled
= $900 - $280 - $325
= $295 million
(b) Carter's cash balance at the end of 2016:
= Cash + Beginning cash - Paid for Inventory - Paid for everything else
= $871 + $115 - $375 - $285
= $326 million
Answer:
1) Household consumption, which accounts for about <u>68%*</u> of the economy, grew at a 4.2% annualized rate during the second quarter of 2016.
*Data obtained from federal government sources.
2) Since household/consumer spending (consumption) represents almost 70% of the nation's GDP, any change will cause a major change in the total GDP. E.g. if consumption increases by 5%, then the whole economy will grow by 5% x 68% = 3.4%.
