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4 years ago

A useful economic model

Business

1 answer:

Jet001 [13]4 years ago

6 0

Answer:

The correct answer is letter "D": yields usable predictions and implications for the real world.

Explanation:

Economic models are representations of real-world complex economic phenomena. Based on certain facts, economists take those premises to establish a theory aiming to explain why those series of events happen, when they happen, and what is likely possible to be done in front of them.

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Decision Point: Your Final Meeting: RC Helicopter Piloting Radio controlled helicopter Your next client is Alan, who runs a high

hoa [83]

Answer:

Leave the price alone. Although it may lack some of the features that competitors’ models have, the Boss brand is well-recognized and well-respected in the market

Explanation:

You chose to lower the price to $359.That was the best choice.During the maturity stage of the product life cycle, increased competition eventually forces price cutting, and market share leadership may outweigh profit as a pricing objective, so this is a good option. However, it would take some research to determine whether the company can still make a profit at this price.

8 0

3 years ago

Look at the graph. The retailer decreased the price of green glass ornaments to $10. Which of these would occur?

elena55 [62]

B.. I might be wrong tho. Lol

6 0

4 years ago

Read 2 more answers

How does inertia affect a person who is not wearing a seatbelt during a collision?

Ludmilka [50]

When the car stops, the person continues forward, at the same speed that the car was travelling at. Into the dash, into the windscreen, maybe even THROUGH the windscreen and onto the road. Beat up, cut up and run over - not a good thing

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3 years ago

Read 2 more answers

Problem 14-13 Calculating the WACC [LO3] Dinklage Corp. has 4 million shares of common stock outstanding. The current share pric

sleet_krkn [62]

Answer:

WACC = 8.97%

Explanation:

total value of equity = $70 x 4,000,000 = $280,000,000

cost of equity:

$70 = $4.4935 / (Re - 4.5%)

Re - 4.5% = 6.42%

Re = 10.92%

total value of debt:

$75 million x 0.95 = $71,250,000

YTM = {70 + [(1,000 - 950)/25]} / [(1,000 + 950)/2] = 72 / 975 = 7.3846%

$60 million x 1.07 = $64,200,000

YTM = {60 + [(1,000 - 1,070)/8]} / [(1,000 + 1,070)/2] = 51.25 / 1,035 = 4.9517%

weighted cost of debt = ($71,250,000 / $135,450,000 x 7.3846%) + ($64,200,000 / $135,450,000 x 4.9517%) = 3.8845% + 2.347% = 6.2315%

total value of the firm = $280,000,000 + $135,450,000 = $415,450,000

equity weight = $280,000,000 / $415,450,000 = 0.674

debt weight = 1 - 0.674 = 0.326

WACC = (0.674 x 10.92%) + (0.326 x 6.2315% x 0.79) = 7.36% + 1.605% = 8.965% = 8.97%

8 0

4 years ago

Allied Biscuit Co. is expected to generate a free cash flow (FCF) of $8,140.00 million this year (FCF₁ = $8,140.00 million), and

Anarel [89]

Answer:

The answer is $259,116.04 million

Explanation:

The current total firm value of Allied Biscuit Co will be equal to the present value of future cash flow of the firm.

Present value of FCF1 = 8,140 million / 1.063 = $7,657.57 million;

Present value of FCF2 = (8,140 x 1.19) / 1.063^2 = $8,572.45 million;

Present value of FCF3 = (8,140 x 1.19^2) / 1.063^3 = $9,596.63 million.

Present value of the growing perpetuity at 2% of cash flow after year 3:

[ (8,140 x 1.19^2 x 1.021) / ( 6.3% - 2.1%) ] / 1.063^3 = $233,289.39 million.

So, the current total firm value:

7,657.57 + 8,572.45 + 9,596.63 + 233,289.39 = $259,116.04 million.

3 0

3 years ago