1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Olenka [21]
3 years ago
12

Suppose that two firms, A and B, are considering the same project. The project is in the same risk class as firm A's overall ope

rations. The project has an IRR of 13.0 percent. Firm A has a beta of 1.2, while firm B's beta is 0.9. The risk-free rate is 4.5 percent and the market risk premium is 7.0 percent. Which firm(s) should accept the project?A) firm A onlyB) firm B onlyC) both firms A and BD) neither firm A nor BE) The answer cannot be determined without more information.
Business
1 answer:
mario62 [17]3 years ago
5 0

Answer:

Firm A should accept the project beacause it has high required rate of return which means low risk involved.

Explanation:

Rate of return = risk free return + Beta ( market risk premium)

Firm A

rate of return = 0.045 + 1.2 (0.07)

= 0.045 + 0.084

= 12.9%

Firm B ;

 rate of return = 0.045 + 0.9(0.07)

= 0.045 + 0.063

= 10.8%

You might be interested in
Employees at House of Pancakes pretend that they like their boss even though most of the time they do not. These employees are e
tia_tia [17]

Although they frequently don't, House of Pancakes employees pretend to like their employer. These workers are performing emotional labor known as surface acting.

When someone engages in surface acting, they don't truly strive to experience the emotions they want to portray; instead, they fake the necessary feelings. They might put on "false smiles" or other necessary emotional displays that don't accurately represent how they really feel.

You are surface acting if you feel one feeling and try to express a different one. Imagine you have a stressful commute and arrive at work. Even though you're still not in a particularly good mood, you might put on a false smile for a coworker as you get your morning brew.

Learn more about Emotional labor here

brainly.com/question/14330116

#SJP4

8 0
2 years ago
Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result o
guajiro [1.7K]

Under a system of freely floating exchange rates, an increase in the international value of a nation's currency will cause its imports to rise.

<h3>What are floating exchange rates?</h3>
  • A floating exchange rate (also known as a fluctuating or flexible exchange rate) is a type of exchange rate regime in which the value of a currency is permitted to fluctuate in reaction to foreign exchange market occurrences.
  • A floating currency is one that uses a floating exchange rate, as opposed to a fixed currency, the value of which is determined in terms of material items, another currency, or a group of currencies (the idea of the last being to reduce currency fluctuations).
  • When the international value of a country's currency rises, so do its imports, and vice versa.

As it is given in the description itself, when the international value of a country's currency rises, so do its imports, and vice versa.

Therefore, Under a system of freely floating exchange rates, an increase in the international value of a nation's currency will cause its imports to rise.

Know more about floating exchange rates here:

brainly.com/question/11160294

#SPL4

The question you are looking for is here:

Under a system of freely floating exchange rates, an increase in the international value of a nation's currency will ____.

3 0
2 years ago
When using a __________ strategy, there is no change in either the basic product line or the markets served. Instead, increased
Dima020 [189]

Answer: market development

Explanation: In simple words,market development refers to the strategy in which a firm tries to cover new market or increase its sales in the existing market through promotion or product development etc.

These strategies are usually used by the multinational corporations that are going to start their business in some new foreign country.

Hence from the above we can conclude that the correct option is B.

6 0
3 years ago
Suppose that an economy produces 2,400 units of output, employing 60 units of input, and the price of the input is $30 per unit.
Vinil7 [7]

an economy produces 2,400 units of output, employing 60 units of input, and the price of the input is $30 per unit. the level of productivity in this economy is 40

<h3>What is productivity?</h3>
  • It is possible to study patterns in salary growth, wage levels, and technical advancement by further segmenting labor productivity.
  • Productivity increase is directly related to corporate earnings and shareholder returns.
  • Productivity is a measure of a company's production process efficiency at the corporate level.
  • It is calculated by comparing the number of units produced to employee labor hours or by comparing the company's net sales to employee labor hours.
  • Productivity is calculated as a company's output divided by the units utilized to produce that output.
  • In the workplace, productivity simply refers to how much "work" is completed in a given amount of time.

To learn more about productivity with the given link

brainly.com/question/23987161

#SPJ4

8 0
2 years ago
Gugenheim, Inc., has a bond outstanding with a coupon rate of 7.7 percent and annual payments. The yield to maturity is 8.9 perc
Anna [14]

Answer:

Bond price= $1,793.62

Explanation:

Giving the following information:

Face value= $2,000

Number of periods= 17

Cupon rate= 0.077

YTM= 0.089

T<u>o calculate the price of the bond, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 154*{[1 - (1.089^-17)] / 0.089} + [2,000/1.089^17)

Bond Price​= 1,324.21 + 469.41

Bond price= $1,793.62

3 0
3 years ago
Other questions:
  • Christian brought his proposal to Rita before the meeting saying, "I’m sure you have some ideas on this, and we could try to get
    7·1 answer
  • El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about
    10·1 answer
  • On January 1, Year 1, Duffy Enterprises issued $100,000 in bonds that mature in 10 years. The bonds were issue at face value. Th
    9·1 answer
  • The entries for the debit account titles in the "Account Title" column are written
    10·1 answer
  • A holistic, evolutionary, field-based and comparative perspective________________.a. is the hallmark of all social sciences, not
    13·1 answer
  • What is the benefit of purchasing a generalized insurance policy?
    8·2 answers
  • Ready Ride is a trucking company. It provides local, short-haul, and long-haul services. It has developed the following three co
    11·1 answer
  • Your uncle the banker offers to lend you $25,000 to start a new business. You will have to make a payment of $7,000 at the end o
    13·1 answer
  • A producer of fixed proportion goods X and Y ( Q = QX = QY) has marginal costs and revenues of MC = 12 Q, MRX = 54 – 6 QX, MRY =
    11·1 answer
  • Pleaseeeeeeeeeee follow on the gram at FelineKrew!!!!
    6·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!