Answer:
Rate of interest = 6/60% = 10%
Explanation:
Net rate of bonds after tax will be = Rate of interest X (1 - Tax)
Heflin bond = 6% X (1 - 40%) = 3.6%
Surething Bond = 9% X (1 - 40%) = 5.4%
Since both bonds provide interest and Surething provides more than Heflin
then in order to make both incomparable Surething can decrease the rate of interest to that of Heflin so that Hugh remains indifferent will be 6%
In case there is no tax on Heflin Bond, as Hugh is in 40% marginal tax bracket, then net interest = 6 %
But for Surething Hugh will have to pay tax then after tax value of interest shall be 6% i.e. 6% = 1 - 40%
Rate of interest = 6/60% = 10%
Surething needs to pay Interest @10% on bonds. to make Hugh indifferent of both the bonds.
Answer:
Value is the benefit that a consumer could receive if they consume a certain type of goods or service. This value tend to be different between customers' situation.
Price is the amount of resources that the consumer need to sacrifice in order to obtain a certain type of goods or services.
The value of the products and services will determine the amount of money that the consumes willing to pay to acquire them. Most consumers are not willing to make a purchase if the price exceeds the perceived value.
A consumer surplus will occur if the amount of price that the consumers spend to purchase that goods is lower compared to the amount of price that they're willing to pay based on the value.
Answer:
The good is inferior
Explanation:
For instance, if the income of a consumer increases, his demand for cheap shoes and shirt decreases and the demand for expensive shoes and shirt increases. So, therefore, the cheap shirt and shoes are inferior goods in the instance. So, whenever quantity demanded of a good fall when the income rises, the goods is considered inferior goods.
Answer: I would reject his demand for bribe straight away and i will recommend senior management to protect business ethics at all cost.
Explanation: first of all i would not accept the demand of bribe from the official and would try to report this corruption to the concerned authorities.I would try to pressure the authorities to take strict actions against the official and to make the process to be fair and honest in every way.
I as a representative of my company would recommend senior management to take hands off from the project until appropriate actions are taken by the authority as getting into unethical actions might result in problems in future .
A decrease in the required reserve ratio increases the money supply; an open market purchase increases the money supply.