Answer:
A company agrees to pay more to build a plant in order to be able to change the plant's inputs and/or outputs at a later date if conditions change.
Explanation:
Real option analysis
This is simply described as a form of an analysis of capital budgeting projects. It is often used by managers so as to influence the size and riskiness of a project's cash flows. And this can be done only by taking different actions or at the end of the project's life.
It uses the usual NPV capital budgeting analysis along with an analysis of opportunities as a result of manager's responses to changing circumstances that can change a project's outcome.
Examples of Real Options
1. Investment timing
2. Abandonment/shutdown
3. Flexibility
4. Growth/expansion
Flexibility Option
This type of re option simply allows operations to be changed based on how conditions change during a project's life. It is said to exists when it is useful spending money today, which therefore helps one to maintain flexibility down the line. That is, either inputs or outputs (or both) can be altered.
Formula for calculating GDP;
GDP = Consumption + Investment + Government spending/Expenditure + Exports - Imports
Y = C + I + G + XM
Y = 10.53 + 6.32 + 3.40 + 1.28 - 2.26
GDP = 19.27 Trillion Rupees
Answer: 1.20
Explanation:
The Portfolio beta will be a weighted average of the individual stock betas.
Portfolio beta = (22% * 0.88) + ( 23% * 0.94) + ( 42% * 1.34) + ( 13% * 1.79)
= 0.1936 + 0.2162 + 0.5628 + 0.2327
= 1.2053
= 1.20
Answer:
The additional paid-in capital will increase by $850,000
Explanation:
Additional paid up capital: It is that paid up capital which is excess of par value. It is mentioned in the balance sheet when new shares is issued.
The computation of additional paid up capital are shown below:
= Difference of per share price × Number of shares
where,
difference = $22 - $5 = $17
So, the value equals to
= $17 × 50,000
= $850,000
So, the additional paid-in capital will increase by $850,000
Marketing and sales innovations make use of advertising to create awareness about products. Advertising is a kind of communication which typically persuade people to buy an idea, product or service. Advertisers usually intentionally create messages to convince the consumers that they need the product that is been advertised. Along with advertising, companies also provide innovative means by which consumers can engage in wide scale shopping. All these encourages consumers to acquire goods and to increase their consumption of diverse products; this leads to conspicuous consumerism in America.
