The price of soda would go-nowhere-because that is SOOO unrealistic! But it would go down because the more you have of something the cheaper it is
$20,000 is correct
When they ask for the amount the bank can "create" they are really asking for the <u>change in the money supply</u><u>.</u> They are required to reserve 20%, so they can loan out 80%
80% * $5,000= $4,000
Now, the bank can use this $4,000 by loaning it out to other customers and earning interest on those loans. The customers can use the money for investments or spending. So the first little deposit of $5,000 has now spread to a lot more people and created a lot more opportunity for growth. This is known as the <u>multiplier effect.</u> To put the multiplier effect in dollar amounts, we need to know how much we are multiplying by. This is called the <u>deposit multiplyer</u> and the formula is 1/(required reserve ratio). The reserve ratio here is 20% or .2
1/(.2)= 5
Our deposit multiplier which will calculate the multiplier effect on the money supply (aka the amount the bank can "create") is 5
5* $4,000= $20,000
Answer:
Product A because the contribution margin per MH is $23.33
Explanation:
In terms of efficiency, you have to look for the highest outcome with the fewer use of resources. In this case, the resources available are the machines, and the outcome is the profit (margin per unit). Applying the formula: Efficiency producing X (Ex) = [(1 hour of machine hour) / (Product x timed used per unit)]Margin per unit X, and comparing products A and B, you get that producing A is more efficient in terms of profits than producing B, by $10,1 per hour (23,33 - 13,2)
Answer:
The answer is $80,000
Explanation:
Permanent earnings are permanent. They are constant. They do not change in the nearest future.
Variables to consider in this question are:
Sales revenue - $860,000
Selling expense - $250,000
Interest expense - $10,000
Cost of goods sold - $520,000
Gross profit is Sales - cost of sales (cost of good sold) =
$860,000 - $520,000
=$340,000
Permanent Earnings = Gross profit -Selling expense - interest Expense
$340,000 - $250,000 - $10,000
=$80,000
Answer:
P0 = $60.23475 rounded off to $60.23
Explanation:
To calculate the market price of the stock today, we will use the two stage growth model of DDM. The two stage growth model calculates the values of the stock today based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n + [(D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n
Where,
- g1 is the short term growth rate
- g2 is the long term or constant growth
- r is the required rate of return on the stock
P0 = 2.15 * (1+0.30) / (1+0.11) + 2.15 * (1+0.30)^2 / (1+0.11)^2 +
2.15 * (1+0.30)^3 / (1+0.11)^3 + [(2.15 * (1+0.30)^3 * (1+0.04)) / (0.11 - 0.04)] / (1+0.11)^3
P0 = $60.23475 rounded off to $60.23