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zavuch27 [327]
3 years ago
8

Suppose the U.S. government encouraged consumers to trade in their old automobiles for more​ efficient, new models by paying up

to​ $5,000 for the old automobiles. These consumers would be exemplifying the economic idea that:_____.
A. people are rational.
B. people respond to economic incentives.
C. optimal decisions are made at the margin.
D. equity is more important than efficiency.
Business
1 answer:
VARVARA [1.3K]3 years ago
7 0

Answer:

B. people respond to economic incentives.

Explanation:

Economic incentive is material given by someone, that is capable of motivating the other person to behave or act in a certain way. If economic incentives come from a government, it can be in form of tax incentives, subsidies or any monetary gift in form of cash or near cash.

To the economist, human being being rational, will respond to economic incentives in various forms.

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Suppose a foreign investor who holds tax-exempt Eurobonds paying 10.50% is considering investing in an equivalent-risk domestic
timurjin [86]

Answer:

14.58%

Explanation:

Return on Bond is the actual rate that is received by an investor on investment in bond.  

As per given data

After Tax return = 10.50%

Tax Rate = 28%

Deduction of 28% withholding tax will be made on the return of the bond in that country where investment is made and investor will have return net of tax.

We can calculate the after tax return on the bond as follow

After tax return = Before tax return x ( 1 - Tax rate )

10.5% = Before tax return x ( 1 - 28% )

0.105 = Before tax return x ( 1 - 0.28 )

0.105 = Before tax return x 0.72

Before tax return = 0.105 / 0.72

Before tax return =  0.1458 = 14.58%

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3 years ago
An owner of a corporation is known as a(n):Group of answer choicesLimited partner.Stockholder.General partner.Director.
alexdok [17]

Answer:

Director

Explanation:

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3 years ago
The owners of Arthouse Inc., a national artist supplies chain, are contemplating purchasing Craftworks Inc, a smaller chain. Art
Elodia [21]

Answer:

It can purchase at most, $18.13 per share.

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We are given with  the present value of the merger at Craftworks discount rate. The shares can be purchase at most at the same level of the present value of the increase in the free cash flow.

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72,520,000 Millions

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price per share 18.13

The crafworks shares can be purchase at most for 18.13 above this, it would yield the 16% required

Currently the share are at 16.25 so it could be possible to do the take-over

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