Answer:
The ratio of flotation cost to funds raised is 20.13%
Explanation:
First of all, it is noteworthy that actual amount received per share by Deep Hollow Oil is the issue price minus the underwriting spread of $2.6565
(8.05% of $33),in other words the net issue price is $30.3435
The total amount raised is $ 4,096,372.50 (135000*$30.3435
),while total flotation costs are as follows:
Underwriting costs $ 358,627.50
Legal and accounting fees $418,000
Indirect costs $48,000
Total flotation costs $824,627.50
However, the flotation costs as a percentage of funds raised is given below:
$824,627.50 /$4,096,372.50=20.13%
Competitive price taker firms always earn zero economic profit in long-run equilibrium because of the following reasons which include easy entry & exit, small player etc.
Perfect competition exists when there are many sellers, firms can easily enter and exit, products are identical from one seller to the next, and sellers are price takers.
A perfectly competitive firm must accept the equilibrium price at which it sells goods because it is a price taker.
A perfectly competitive firm will be unable to make any sales if it charges even a small amount more than the market price.
Furthermore, a perfectly competitive firm must be a very small player in the overall market, allowing it to increase or decrease output without affecting the overall quantity supplied and price in the market.
Hence, Competitive price taker firms always earn zero economic profit in long-run equilibrium.
Learn more about Long-run equilibrium:
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Answer:
C. the purchase of new buses by Greyhound
Explanation:
The investment is the amount that should be invested in order to generate the income
So as per the given situation,the option C is correct as if we puchase the new buses so there is a big investment but after investing into it it generated the income on daily basis
So this should be the example of the investment
