Answer: 7.48%
Explanation:
Weighted Average Cost of capital is simply the weighted average of the costs of equity and debt.
Cost of Equity
= 
= 
= 9.80%
Cost of debt
= Interest ( 1 - Tax)
= 0.075 (1 - 0.40)
= 4.65%
WACC = 9.80% * 0.55 + 4.65% * 0.45
= 7.48%
Answer:
255 gallons
Explanation:
The level at Jackson & Jacinto Auto Repair should order more oil is the re-order point.
To calculate the re-order point, we require for Jackson and Jacinto.
Average daily usage
Delivery lead time ... which is three days
The average daily usage for oil is 510 gallons divided by six working days
= 510/6
= 85 gallons
Formula for getting the re-order point
= (average daily usage x delivery time)
= (85 x 3)
=255 gallons
They should re-order when they have a balance of 255 gallons
Fixed costs are costs of the company that do not depend of the business activities of the company. This means that they <span> do not change with an increase or decrease in the amount of goods or services produced or sold.</span>
<span>Fixed costs that do not differ between two alternatives are </span>irrelevant to the decision.
Answer:
a) 8%
b) 5%
c) 4%
Explanation:
Given:
Growth in real GDP = 3%
Growth of money stock = 8%
Nominal interest rate = 9%
Now,
(a) As per Classical Quantity Theory of Money
Money Supply (M) × Velocity (V) = Price level (P) × Real GDP (Y)
also,
Nominal GDP = P × Y
Change in M + Change in V = Change in P + Change in Y
Since,
V = Constant
thus, Change in V = 0
Change in M = Change in P + Change in Y
Change in P + Change in Y = Change in Nominal GDP = Change in M
thus,
Change in Nominal GDP = 8%
(b)
8% = Change in P + Change in Y
8% = Change in P + 3%
Change in P = Inflation Rate = (8 - 3)% = 5%
(c) Real interest rate = Nominal interest rate - Inflation rate
= (9 - 5)%
= 4%
Answer:
$1,500 billion
Explanation:
Data provided in the question:
Trade deficit = $1500 billion
Private savings = $3,000 billion
Government budget deficit = $3,000 billion
Now,
The value of private investment will be
= Private savings + Trade deficit - Government budget deficit
= $3,000 billion + $1,500 billion - $3,000 billion
or
The value of private investment = $1,500 billion
