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3 years ago

As capital investment levels off business spending decreases and leads to a possible contraction to the economy. True or False?

Business

2 answers:

notka56 [123]3 years ago

8 0

Answer:

TRUE

Explanation:

GDP counts consumption, investments, public spending and trade balance. All of these variables affect economic activity. When capital investment decreases, it means that less money will circulate in the economy, which represents a decrease in economic transactions and consequently leads to a cooling of the economy and GDP. An economy with a drop in investment is a recessive bias economy!

k0ka [10]3 years ago

7 0

It is a true statement that as capital investment levels off business spending decreases and leads to a possible contraction to the economy. The correct option among all the options that are given in the question is the first option. I hope that this is the answer that has actually come to your help.

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MC Qu. 84 Two investment centers... Two investment centers at Marshman Corporation have the following current-year income and as

dusya [7]

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%

8 0

3 years ago

The average annual stock return is 11.3%. If you begin your investment portfolio with $2,000, what will your portfolio be worth

Natasha_Volkova [10]

Answer:

6780$

Explanation:

We first find 11% of 2000 by the following equation

2000 x .11

From this we get the annual interest 226$

226$ x 30 = $6780

6 0

3 years ago

Read 2 more answers

The market capitalization treasure on the stock of flex steel company is 12%. the expected ROE is 13% and the expected EPS are 3

VLD [36.1K]

Answer:

a. ROE (r) = 13% = 0.13

EPS = $3.60

Expected dividend (D1) = 50% x $3.60 = $1.80

Plowback ratio (b) = 50% = 0.50

Cost of equity (ke) = 12% = 0.12

Growth rate = r x b

Growth rate = 0.13 x 0.50 = 0.065

Po= D1/Ke-g

Po = $1.80/0.12-0.065

Po = $1.80/0.055

Po = $32.73

P/E ratio = Current market price per share

Earnings per share

P/E ratio = $32.73

$3.60

P/E ratio = 9.09

b. ER(S) = Rf + β(Rm - Rf)

ER(S) = 5 + 1.2(13 - 5)

ER(S) = 5 + 9.6

ER(S) = 14.6%

Explanation:

In the first part of the question, there is need to calculate the expected dividend, which is dividend pay-our ratio of 50% multiplied by earnings per share. We also need to calculate the growth rate, which is plowback ratio multiplied by ROE. Then, we will calculate the current market price, which equals expected dividend divided by the difference between return on stock (Ke) and growth rate. Finally, the price-earnings ratio is calculated as current market price per share divided by earnings per share.

In the second part of the question, Cost of equity (return on stock) is a function of risk-free rate plus beta multiplied by market risk-premium. Market risk premium is market return minus risk-free rate.

8 0

3 years ago

The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market isa. the five f

Alexxx [7]

Answer:

The correct answer is letter "A": the five forces framework.

Explanation:

Porter's Five (5) Forces is an analysis scheme created by American economist Michael E. Porter (born in 1947). The ultimate goal of this analysis is to help managers set their expectations of profitability because as competition increases, profitability decreases. Three of the five forces relate to those involved in the industry. The other two apply to the suppliers, the vertical participants, and consumers.

4 0

3 years ago

The responsibility report for the Augusta Division shows budgeted contribution margin of $2,000,000 and budgeted controllable fi

Mumz [18]

Answer:

D) is 20% above expectations.

Explanation:

The Augusta Division was supposed to earn a net profit of $1,000,000 (= $2,000,000 - $1,000,000). Since the division's manager and his/her team were able to cut reduce fixed costs to $900,000 and increase contribution margin to $2,100,000 (either by increasing selling price or reducing variable costs), then the division earned a net profit of $1,200,000 (= $2,100,000 - $900,000). This net profit is 20% higher than expected, therefore the manager's (and his/her team's) overall performance was 20% above expectations.

5 0

3 years ago