Answer:
In the simple Keynesian model, inflation becomes a problem only if demand increases at full employment.
Explanation:
In the Keynesian view, price inflation is mainly the result of relative changes in supply and demand, which lead to price changes. Changes in the money supply have no direct influence here. According to this school, the money supply is the result of money creation by the banking system; but this plays only a limited role in the process.
In this vision, a distinction is made between:
-
Demand inflation: Inflation occurs when the aggregated demand for goods and services increases, with an initially constant supply.
-Cost inflation: Inflation occurs if there is a sudden decrease in supply when demand remains the same.
Answer:
$26,700 excess
Explanation:
The amount of deficiency or excess can be determined only when the ending cash balance is known. The ending cash balance is the addition of the net movement in cash to the opening cash balance.
The net movement is the difference between the total receipts and the total payments or disbursement.
Total receipts for January
= $1,061,200
Total payments
= $984,500
Net movement = $1,061,200 - $984,500
= $76,700
Ending balance = $290,000 + $76,700
= $366,700
If the minimum cash requirement is $340,000
The amount of the (deficiency)/excess cash (after considering the minimum cash balance required) for January
= $366,700 - $340,000
= $26,700
Solution:
a. The first year depreciation = $3,160
The second year depreciation = $5,100
b. By considering 75% used for business purchase
For 2018 , for 7 months remaining
Depreciation = $3,160 x 75% ( 
= $1382.50
For 2019 ,
Depreciation = $5,100 x 75% = $3,825
It is a period of time that the loaning company gives you before you have to start repaying the debt.
For instance: After graduating from college, you must start the payments to pay back your loan 3 months after graduation.
Answer:
(i) $26.49375
(ii) $29.11
(iii) 52.54%
Explanation:
Required rate of return using CAPM model:
= risk free rate + beta (expected return - risk free rate)
= 0.06 + 2.3 (0.15 - 0.06)
= 0.267 or 26.7%
Growth rate = (1 - dividend payout ratio) × ROE
= (1 - 0.45) × 0.18
= 0.099 or 9.9%
a)
Dividends per share will be $4.05 since payout ratio is 45%
Intrinsic value of share = D1 ÷ (Rate - growth)
= 4.05(1.099) ÷ (0.267 - 0.099)
= 4.45095 ÷ 0.168
= $26.49375
b)
Price after 1 year = 26.49( 1 + 0.099)
Price after 1 year = $29.11
c)
One year holding period return = ( $29.11 + 4.45 - 22) ÷ 22
= 0.5254 or 52.54%
