Answer: 14.95%
Explanation:
The firm required return is;
= Risk free rate + beta * (Market return - RIsk free rate)
= 6.5% + 1.30 * ( 13% - 6.5%)
= 14.95%
<em>It is better to use the estimated future return. </em>
Answer:
The amount that should be allocated to the oven is $771.12.
The amount that should be allocated to the installation services is $102.75.
The amount that should be allocated to the maintenance services is $166.13.
Explanation:
Total price=Standard price oven +Standard price Installation +Standard price
Maintenance
=$803+$107+$173
=$1,083
Price allocated=Stand alone price of oven
/ Total price ×Price paid by customer
= $803
/ $1,083 ×$1,040
=$771.12
Price allocated=
Stand alone price of installation service/
Total price
×Price paid by customer
=
$107
/ $1,083 ×$1,040
=$102.75
Price allocated= Stand alone price of maintenance service /Total price
×Price paid by customer
= $173
/$1,083 ×$1,040
=$166.13
Answer:
The correct option is B
Explanation:
Rational economic decision is the process where the costs as well as the benefits of the various options are being compared in order to determine or evaluate the which option is rational. Rational decisions have total benefit greater than or equal to their cost. So, the rational economic decision concerned with the efficiency not with the fairness or equity.
