Answer: The correct answer is "a. negative, and the good is an inferior good.".
Explanation: Assuming that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of a good, the income elasticity of demand for the good is negative because the good is an inferior good.
Inferior goods are those material elements that are related to the consumption of people who have lower incomes and who cover their basic needs.
Its income elasticity coefficient is negative. Therefore, when the consumer's income increases, the demand for these goods decreases because the consumer can choose other higher quality products..
Answer:
Yes the statement does
Explanation:
Retaining small predictable layers of risk and transferring the unpredictable catastrophic layer of risk to a more capable body is a very good approach towards promoting appropriate risk financing decision making, this is because
Financial risk decisions are decisions taken between alternatives i.e risks associated with business activities . it is more appropriate to take alternatives with a predictable layer of risk,that way it would be easier for the management to handle the risk associated with it, while transferring the unpredictable catastrophic layer of risk to a more capable body ,like the Insurance companies .
Answer:
The profit margin earned if each unit requires two machine-hours is 25%
Explanation:
For computing the profit margin, first, we have to compute the estimated overhead rate per unit which is shown below:
Estimated Overhead rate = (Estimated manufacturing overhead costs) ÷ (estimated machine hours)
= ($240,000) ÷ (40,000 machine hours)
= $6
Now the profit per margin would equal to
= Selling price per unit - direct cost per unit - overhead cost per unit × number of required machine hours
= $20 - $3 - $6 × 2
= $5
Now the profit margin would equal to
= (Profit per unit) ÷ (selling price per unit) × 00
= ($5 ÷ $20) × 100
= 25%
Answer:
23.3%
Explanation:
Expected return refers to the anticipated profit or loss of financial investment. Essentially, it's the value of the return that investors anticipate. We can find the expected return by using the formula given below
Δ
IR = 5-5% - 2% = 3.5%
Δ
IP = 6% - 4% = 2%
Formula
Expected return = Expectedreturn(previous year) + (betaIP x Δ
IP) + (betaIR x Δ
IR)
Expected return = 12% + (2.5 x 2%) + (1.8 x 3.5%)
Expected return = 23.3%
