Answer:
a.To implement the corporate valuation model, we discount projected free cash flows at the weighted average cost of capital.
Explanation:
Common sense requires that like should be compared like, the free cash flows are meant for all providers of finance, debt, and equity stockholders alike, hence, in discounting the free cash flows to firm, the discount rate is the one that captures the overall cost of finance to the firm which is the weighted average cost of capital, hence, option "a" is correct.
Net income and NOPAT cannot be discounted since they are not cash flows
In the same vein,the free cash flows which are meant for debtholders and stockholders cannot be discounted at the cost of equity which is only an equity required rate of return
The branch of macroeconomics that specifically focuses on developing economic issues is Development Economics.
Economics can be defined as the study of how individuals, businesses and governments make choices in allocating resources to meet their needs. These groups determine how resources are and how they are organized and coordinated to achieve maximum results. They are mostly concerned with the production, distribution and consumption of goods and services.
The economy is divided into two important parts, namely: Macroeconomics & Microeconomics
- Microeconomics can be defined as the study of decisions made by people and businesses regarding the allocation of resources and the prices of goods and services.
- Macroeconomics can be defined as a branch of economics that describes a substantial picture.
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Realized gains and losses on investment securities calculated (D). Both a and b
Explanation:
<u>Realized gain/loss</u> is the Total amount of gain and loss realized from the sale of securities.
<u> A realized loss refers to </u>the monetary value of a loss that is the outcome of a trade.
<u> A realized gain </u>is defined as the excessive cost obtained after the deduction of the cost and the prior unrealized losses(or adjusted cost basis) over the proceeds from the sale.
An Unrealized gain can be defined as an increase in the value of the investment which is the outcome of an increase in the market value
Thus we can say that Realized gains and losses on investment securities calculated (D). Both a and b
Answer:
Answer: US had a trade deficit and China had a surplus in its BOP
Explanation:
Inflow to US economy / Outflow of Chinese economy
1. Chinese tourist spent $ 1000
2. Chinese purchased a business $600
3. Puchased goods $300
Total Inflow $1900
US Outflow / China' inflow
US purchases goods $800
Sent aid $100
Investment in stocks $200
US tourist spent $1000
Total Outflow $2100
US had a trade deficit and China had a surplus in its BOP
Chinese government purchase of US bonds' value is not given, the purchase will be treated as credit to US BOP and the income received will be credit to China's BOP.
Answer: 1300
Explanation:
From the equation,
Qxs = 200 + 4Px - 3Py - 5Pw
where
Px = price of X = 500
Py = price of y = 250
Pw = price of input w = 30
Putting the figures back into the supply equation, we have:
Qxs = 200 + 4Px - 3Py - 5Pw
= 200 + 4(500) - 3(250) - 150
= 200 + 2000 - 750 -150
Qxs = 1300
