Answer:
Answer is $10,500.
Refer below.
Explanation:
Camille's Café is considering a project that will not produce any sales but will decrease cash expenses by $12,000. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. The amount of the operating cash flow using the top-down approach is:
$10,500
The correct option is: For each unit of the good that is sold, buyers bear <u>one-half of the tax burden and sellers bear one-half of the tax burden.</u>
<u>Explanation</u>:
Incidence of tax is a term referred in economics which deals with division of taxes. Tax incidence refers to division of tax among the buyer and seller for a product. The tax incidence is related to the price elasticity of supply and demand.
When a product is sold, the buyer of the product is charged with one-half of the tax burden and the seller of the product bears the other-half of the tax burden.
The incidence of tax can be observed in two ways:
i) Formal incidence
ii) Effective incidence
Answer: $0.25
Explanation:
Fron the question, we are informed that Tri-coat Paints has a current market value of $50 per share with earnings of $5.97. We are further told that the required return is 12%.
The present value of its growth opportunities (PVGO) will be:
= $50 - ($5.97/12%)
= $50 - ($5.97/0.12)
= $50 - $49.75
= $0.25
Therefore, the present value of its growth opportunities (PVGO) if the required return is 12% is $0.25.
Answer:
The Producer surplus = 19.6.
consumer surplus = 12.25.
Aggregate supply = 31.85.
Explanation:
Normally, the demand equilibrium function equals to supply equilibrium function will get us the price which is $3 that is Qd = Qs. Hence, if we equate both function together like;
15 - 2P = 5P - 6.
15 +6 = 5P + 2P.
21 = 7P.
P = $3.
Thus, Qd = 15 - 2P= 15 - 2(3) = 15 - 6 = 9 units.
Qs = 5P - 6 = 5(3) - 6 = 15 - 6 = 9.
Therefore, if the price is going to be Increased by $4, we will have that;
Qd = 15 - 2P= 15 - 2(4) = 15 - 8 = 7 units.
=> The Producer surplus = 1/2 × 14 (4 - 1.2) = 19.6.
=> consumer surplus = 1/2 × 7 (7.5 - 4) = 12.25.
Aggregate supply = Producer surplus + consumer surplus = 19.6 + 12.25 = 31.85.
Answer:
10,064 bonds
Explanation:
Given:
Amount to be raised = $2,800,000
Par value (FV) = $1,000
Maturity (nper) = 20×2 = 40 periods
Yield (rate) = 6.49 ÷ 2 = 3.245% or 0.03245
Coupon payment is 0 as it's a zero coupon bond.
Assume it's compounded semi-annually.
Calculate the price of the bond today using spreadsheet function =PV(rate,nper,pmt,FV)
Price of bond is $278.23
PV is negative as it's a cash outflow.
Number of bonds to be sold = Total amount to be raised ÷ Price of bond
= 2,800,000 ÷ 278.23
= 10,064 bonds
Company should sell 10,064 bonds to raise $2.8 million
