A.
The cheese and crackers that are being consumed
by Carlos is not considered to be inferior goods because when there is a time
that his income may rise, he will likely consume other products aside from it.
B.
If the price of the cheese falls, what will
likely happen is that there will be a presence of substitution effect of where
the crackers will be fewer consumed and the cheese will be consumed more. When
there is a presence of income effect on the other hand, the cheese will be
consumed more as this will be considered as a good that is normal and the
crackers to be consumed fewer as this will be classified as an inferior good. The
likely outcome of it in both scenarios, Carlos will still consume fewer
crackers and the cheese to be more consumed.
Answer:
The correct answer is letter "E": To a large extent, the decision to dissolve a firm through liquidation versus keeping it alive through reorganization depends on a determination of the value of the firm if it is rehabilitated versus the value of its assets if they are sold off individually.
Explanation:
Liquidation refers to the termination of an enterprise and the transfer of its properties to the creditor or business owners. The liquidation most frequently happens in the context of a bankruptcy. A bankruptcy trustee must sell the company properties to the creditors and split the proceeds.
<em>The decision of keeping a business against liquidating it will depend on the comparison between the value of continuing operating which relies on the current value the firm has in the market against the value of the individual assets the firm has. Whichever greater will determine if the business will remain open or if it will be closed.</em>
Answer:
FV= $159,840.60
Explanation:
Giving the following information:
Initial investment= $1,000
Number of years= 2016 - 1912= 104
Interest rate= 5%
<u>To calculate the value of the investment today, we need to use the following formula:</u>
FV= PV*(1+i)^n
FV= 1,000*(1.05^104)
FV= $159,840.60
Answer:
Only if the stock price is greater than 
Explanation:
-Ignoring time value of money, the stock's holder will only make a profit if the stock price at time of maturity is greater than .
-Price must be greater than total cost ($120+$6) of buying the option.
-The option will not be exercised if the stock price is between $120 and $126. If exercised at these prices, the holder will make a loss.
Answer:
First plane = 3.5 years
Second plane = 4 years
The first plane should be chosen.
Explanation:
Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.
Payback period = Cost/ annual cash flows
For the first plane: $23,100,000 / 6,600,000 = 3.5 years
For the second plane = $32,000,000 / $8.000,000 = 4 years
Using the cash payback period, the plane with the shorter payback period would be chosen. So the first plane would be chosen.
I hope my answer helps you
