The answer to this question is what we called the low cost strategy. The low cost strategy is a type of pricing strategy where in the company offers a very low price for its products and services in order to produce more goods and service. The price for this strategy is more cheaper than the competitors.
<span>Answer:
The beta of MSFT is 1.05. The security market line of the CAPM tells us that the required rate of return is given by: E [ R MSFT ] = R f + β MSFT ( E [ R M - R f ]) = . 04 + 1 . 05 × . 06 = 10 . 3%</span>
Answer:
a. $750
b. $750
Explanation:
The first thing to do is calculate the monthly interest as follows:
Monthly interest = Total interest ÷ 12 = $4,500 ÷ 12 = $375
The rent for two months in year 0 (November and December) = $375 × 2 = $750.
Prepaid expenses (January to October of year 1) = $4,500 - $750 = $3,750.
Decision:
Prepaid expenses is not deductible under either cash accounting method or accrual accounting method for tax purposes.
Therefore, Jaxon can deduct only $750 two months (November and December) relevant for year 0 under both cash accounting method and accrual accounting method.
The prepaid expenses of $3,750 is not deductible in year 0 but can only be deducted in year 1.
Answer:
APR would be 3.9607805% compounded semiannually
APR would be 3.9284877% compounded monthly
Explanation:
We calcualte consider these rates should be inancially equivalent to an equivalent rate of 4% annually.
<u>The semiannual compounding will capitalize two times:</u>
<u>The monthly will capitalize 12 times per year:</u>
![(1+APR/12)^12 = 1+EAR\\(\sqrt[12]{1.04} -1) \times 12 = 0.039284877](https://tex.z-dn.net/?f=%281%2BAPR%2F12%29%5E12%20%3D%201%2BEAR%5C%5C%28%5Csqrt%5B12%5D%7B1.04%7D%20-1%29%20%5Ctimes%2012%20%3D%200.039284877)
