Answer:
C
Explanation:
According to the Consider This box about hypothetical countries Slogo, Sumgo, and Speedo, small differences in economic growth rates make for large differences in real GDP per capita over several decades, assuming the same growth of population for each country.
For small countries ( less population and same growth of population over the years) even small growth rates makes a large change in real GDP per capita over the years.
Answer:
Gathering publicly available comparable company information
Creating detailed forecasts for both companies
An accretion/dilution and sensitivity analysis
Determining and calculating items related to the acquisition structure
Answer:
We expect investment spending to increase by $ 1 billion
Explanation:
If investment decreases by $ 1 billion if a 1 % change is made then that is sensitivity of investment to change in interest rate. Thus if there is a 1 % reduction in interest rate we expect to see a $ 1 billion increase in spending if this holds true.
Answer:
The present value of this cash flow will be decreased following the increase in the interest rate.
Explanation:
We have the formula for calculating present value is:
PV = FV / ( 1+r)^n
where:
PV is the present value
FV is the future value which is $10,000 in the described question
r is the discount rate which is the interest rate
n is the number of discounting periods which is one year in the described question
So, once the interest rate increase, the denominator - (1+r)^n - will increase. Then, if FV remains constant, PV will decrease.
So, The present value of this cash flow will be decreased following the increase in the interest rate.
