Answer:
Price of the bond = $1,252.65 (Approx)
Explanation:
Required Return = Real rate of return + Risk premium + Inflation premium
Required Return [After 5 yr] = 5% + 4% + 2%
Required Return [After 5 yr] = 11%
Number of year left [for maturity] = 30 -5 = 25 year
Interest payment = $1,000 x 14%
Interest payment = $140
Using Formula in excel;
Price of the bond = pv(rate,nper,pmt,fv)
Price of the bond = pv(11%,25,140,1000)
Price of the bond = $1,252.65 (Approx)
Answer:
store of value
Explanation:
Based on this information it can be said that seashells would be unfit to act as money because they could not act as a store of value. Money needs to be easily divisible and storable in order for it to be used as a medium of exchange. This also allows money to easily measure the value of a certain good or service. Therefore, since seashells cannot be stored since they are very fragile and cannot be divided then they would not be fit as money.
Answer:
Answer to each part of the question is given below separately under specific headings with detailed explanation.
Explanation:
<u>a) Branding strategy recommendation</u>
The branding strategy they should opt is a multi-branding strategy, in which a company's objective is to market more than one product and/or brand under the same hood in order to increase their overall market share. This strategy is somewhat used by other known car manufacturers such as Toyota (Lexus), Honda (Acura) etc.
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<u>b) Branding strategy trade-offs</u>
The trade-off with this strategy is that the attention of Ferrari would be diverted from their main market segment and therefore, they will not be providing new products to the luxury market.
This will give the other companies in the same market segment the opportunity to increase their market share in the same segment.
<u>c) Opinion on the trading-down strategy</u>
It is fairly a risk for Ferrari to opt for the trading down strategy. This is due to the fact that their main market and objective is the luxury market to buy their expensive cars. Focusing on the new strategy could hurt their brand equity and this may impact their loyal buyers.
However, such could be avoided if they market this strategy with a foreign brand name and promote the name under the Ferrari hood by saying that the foreign brand has been designed by the Ferrari. Keeping the original Ferrari name and objective separate from this brand.
Answer:
The correct answer is 11.28%
Explanation:
Solution
Recall that:
Investment center A Investment center B
Investment center income $ 530,000 $ 640,000
Investment center average
invested assets $ 4,700,000 $ 3,100,000
Now,
We calculate for return on investment (ROI) for Investment Center A
The ROI A=Investment center income/Average invested assets which is
= (530000/4,700,000)
=11.28%