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taurus [48]
3 years ago
7

Fauver Industries plans to have a capital budget of $650,000. It wants to maintain a target capital structure of 40% debt and 60

% equity, and it also wants to pay a dividend of $225,000. If the company follows the residual dividend policy, how much net income must it earn to meet its investment requirements, pay the dividend, and keep the capital structure in balance?
Business
1 answer:
Anon25 [30]3 years ago
8 0

Answer:

$ 615,000

Explanation:

Data provided :

Capital budget = $ 650,000

Debt ratio = 40%

Equity ratio = 60%

thus,

The capital funded by the equity = 60% of the capital = 0.6 × $ 650,000

= $ 390,000

Dividend to be paid = $ 225,000

Therefore,

the net income must be earned = $ 390,000 + $ 225,000

or

The net income must be earned = $ 615,000

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Suppose the price of a bag of jelly beans rises from $1.60 to $2.00, with the result that sales of jelly beans falls from 120 ba
andrey2020 [161]

Answer:

The elasticity of demand for jelly beans is 1.80

Explanation:

The elasticity of demand is the principle of economic which is defined as the measure that extent the consumer response to the changes in the quantity demanded as a consequence of price change and being others factors are equal.

Computing the elasticity of demand for jelly beans as:

Elasticity of demand = Price Change / Quantity Change

where

Price Change is as:

Price = $1.60 + $2.00

= $3.60

Quantity change is as:

Quantity = 120 + 80

= 200

So,

Elasticity of demand = $3.60 / 200 × 100

Elasticity of demand = 1.80

5 0
3 years ago
Nora contracts to work for ABC Investments during June for $2,500. On May 31, ABC cancels the contract. Nora refuses to accept a
kap26 [50]

Answer:

c. $500

Explanation:

A contract is an agreement by two or more parties to perform a.certain activity within a given time.

When contract are breached, the beneficiary has the right to gain back the amount promised.

If the beneficiary can get another option, the other party is obligated to pay the balance.

On this instance Nora had the chance to get a new job at $2,000 salary the balance is $2,500 - $2,000= $500. Since she rejected the job she is responsible for that loss.

However ABC is still liable to pay the balance of $500

6 0
3 years ago
In many cases, companies that enter a market after innovative products have been introduced can achieve long-term competitive ad
yuradex [85]

Answer:

First-mover

Second-mover

Explanation:

A first mover is a provider of product, that achieves a market advantage by being the first type of product to be marketed. Generally, being gets the first firm in the market to get the advantage of the strong market and customer satisfaction.

The "second mover's advantage" is the value of joining others into a business or imitating an old product that a new innovative company gets.

In this case VisiCalc is a First-mover and Microsoft is a Second-mover.

3 0
3 years ago
ERIC: Hi, Hubert. This is my first economics course, and many of the concepts discussed in class are really confusing. Today the
Ymorist [56]

Answer:

ERIC: Hi, Hubert. This is my first economics course, and many of the concepts discussed in class are really confusing. Today the professor explained that the true cost of going to college includes both the tuition I pay as well as something called the "opportunity cost" of going to college. I don't understand. I pay $32,000 per year in tuition. The tuition is what I pay to the school, so it seems like that should be my true cost!

HUBERT: Hi, Eric. Many concepts in economics can be confusing at first. Let's talk it through.

Economists think of costs a bit differently than just the dollar amount that you pay. To an economist, the true cost of college includes the total value of what you give up in order to acquire your college education. In other words, not only did you give up the tuition money that you paid, but by attending college, you gave up opportunities to do other things with your time as well. This is where the idea of opportunity cost comes from.

The opportunity cost of your decision to go to college is the value of the next best alternative that you gave up. Suppose that your next best alternative to college is to work as a cashier. By not going to college, and taking this job, you could earn $16,000 per year. Then your opportunity cost of college is <u>$16,000</u>, and your total cost of a year of college is <u>$48,000</u> per year.

ERIC: I think I get it now. So when I take into account the opportunity cost of college, the true cost is actually <u>more </u>than just the tuition.

HUBERT: Correct. Thinking about costs in this way will help you make more rational decisions in your everyday life. Now tell me, how can you explain your decision to go to college?

ERIC: I chose to go to college because, for me, the value of a year in college <u>gives me a higher stand and offers me a better long-term opportunity that someone without a college degree.</u>

Explanation:

The question poses a discussion about the opportunity cost of attending college. The understanding behind this is that by choosing to go to college, Eric is forfeiting the opportunity to get a job as a cashier that would earn him $16,000 a year while incurring his college fees of $32,000. Therefore, the total cost of attending college to him should be $48,000.

3 0
3 years ago
Suppose the price elasticity of demand for cereal is negative −1.03. If​ so, then the demand for cereal is (unit-elastic, elasti
kari74 [83]

Answer:

The demand for cereal is elastic.

The demand for the magazine is inelastic.

Explanation:

The price elasticity of demand is the degree of responsiveness of quantity demanded to change in price. A negative price elasticity implies that the product is a normal good.

The price elasticity of demand for cereal is −1.03. This means that the demand is price elastic. An elastic demand implies that a change in price will cause more than proportionate change in quantity demanded.

The price elasticity of demand for a particular magazine is −0.72. This means that the demand is price inelastic. An inelastic demand implies that a change in price will cause less than proportionate change in the quantity demanded.

5 0
3 years ago
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