Answer:
The correct answer is (b)
Explanation:
The kids opened their own lemonade stand which led to an increase in the overall supply of lemonade. The increase in the overall supply of lemonade will lead to a decrease in the equilibrium price. Now, Sabrina must decrease the price of lemonade to compete with competitors. Increase in market competition always leads to a decrease in equilibrium price.
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Answer:
NPV= $4,079.63
Explanation:
Giving the following information:
Initial cost= -$20,000
Rate of return= 10%
<u>To calculate the net present value, we need to use the following formula:</u>
NPV= -Io + ∑[Cf/(1+i)^n]
<u>First, we need to discount the cash flows:</u>
PV= Cfn / (1+i)^n
Cf1= 5,000/1.1= 4,545.45
Cf2= 10,000/1.1^2= 8,264.46
Cf3= 15,000/1.1^3= 11,269.72
Total PV= $24,079.63
Now, the NPV:
NPV= -20,000 + 24,079.63
NPV= $4,079.63
When a firm plans to issue bonds, it creates a(n) -prime-, which is a legal document that explains its obligations to bondholders?