Answer:
appropriate cost of capital to evaluate the business is 8%
Explanation:
given data
cost of equity capital = 12%
revenue from software = 50%
cost of equity capital = 8 %
to find out
the appropriate cost of capital
solution
we know that
Cost of capital = cost of capital in same industry or cost of capital in the related division
so here cost of capital equal to business is 8% so that Cost of capital will be 8%
hence the appropriate cost of capital to evaluate the business is 8%
Answer:
$926,000
Explanation:
For computing the initial cost of the warehouse project, we consider the current value of the land i.e represent the opportunity cost and the land value which is purchased six years ago for $874,500 represent the sunk cost which is not recoverable now. So, this sunk cost is not relevant.
And, the lease cost is also not relevant as the lease period will be ended soon.
All other information which is given is not relevant. Hence, ignored it
Answer:
A. Public good
B. Common resource
C. Private good
Explanation:
A. Here, a fountain in the park is a public good as it is freely available to everyone. Its consumption is non-rival and non-excludable. Everyone can consume it without reducing the consumption of others.
B. A dock on the lake is not a public good because people cannot use it freely. To use it people need to pay so those who don't pay can be excluded. Too many people cannot use it at the same time. So we can say it is a common resource whose consumption is expensive.
C. A new drone is a private good. Its use depends on ownership if one person is using it at a time another person cannot. People can be excluded from using it based on ownership.
Answer:
C. The price level has risen.
Explanation:
GDP deflator = (Nominal GDP ÷ Real GDP) × 100
GDP deflator of 2017=(10,000 ÷ 9,500) × 100
= 105.263158
GDP deflator of 2018
= (12,000 ÷ 10,500) × 100
=114.285714
Inflation = (Consumer price index of 2018 - Consumer price index of 2017) ÷ CPI of 2017) × 100
=((114.285714 - 105.263158) ÷ 105.263158) × 100
=8.57142819
=8.57%
From 2017 to 2018 the price level increased by 8.57%