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lorasvet [3.4K]
3 years ago
10

When a market experiences a positive externality,

Business
1 answer:
antoniya [11.8K]3 years ago
5 0

Answer:

b. The demand curve does not reflect the value to society of the good.

Explanation:

An externality is a financial term alluding to an expense or advantage caused or got by an outsider. Nonetheless, the outsider has no power over the making of that cost or advantage.

An externality can either be positive or negative which can be caused by either production or consumption of a good or service. The cost or the benefit  can affect an individual or a society as a whole. A typical example of a negative externality is pollution which can cause negative cost to a third party in terms of health expenses. An example of a positive externality on the other hand is when a well educated labor force increase their productivity.

The government and local authorities can control negative externality by imposing taxes and regulation of these products. The government can also overcome negative externality by imposing subsidies on the goods that improve positive externality.

The demand curve however does not reflect the value to society of the good. It only reflects the relationship between the price and the quantity of goods consumed.

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The answer to this question is Transformational leaders.

<span>Transformational leaders are leaders who inspire their subordinates / followers by being a role model in order for the members or followers to enhance their performance. Transformational leaders increase the morale of the members by creating a vision for them to be guided and inspire the members to do their best and be motivated always.</span>

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You wish to take an Excel course. You may enroll at one within your school or you may take a community class at the local librar
Paraphin [41]

Answer:

The chosen option (considering enrollment costs and opportunity cost) is:

b) College course.

Explanation:

a) Data and Calculations:

Costs/Benefits

                           College Course          Community Course

Cost                              $2,600                         $1,390

Opportunity costs         -2,080                          2,080

Net costs                         $520                        $3,470

Distance to course      0.40 miles                    16 miles

                                  (walking distance)      (driving distance)

Timing of course          Weekday                     Weekend

Number of meetings    16                                 8

b) With the College course option, you will earn $2,080 ($260 * 8) weekdays to offset part of the enrollment cost.  With the Community course option, $2,080 will be lost in opportunity cost, thereby increasing the total costs incurred.  These costs are apart from the driving costs associated with traveling 16 miles to the Community Course at the local library.

5 0
3 years ago
During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were so
photoshop1234 [79]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Units manufactured= 2,400

Units sold= 2,000

Sales= $2,150,000

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Direct labor= $420,000

Variable manufacturing cost= $156,000

Fixed manufacturing cost= $288,000

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Fixed= $96,000

Total= $300,000

<u>Under the absorption costing, the cost of goods sold is calculated using the direct materials, direct labor, and total unitary manufacturing overhead.</u>

First, we need to calculate the cost of goods sold:

Unitary product cost= total cost/units produced

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3 0
3 years ago
Instructions: Please make sure that you show all your work when solving the problems. Feel free to make any assumptions whenever
My name is Ann [436]

Answer:

Explanation:

From the given information:

The current price = \dfrac{Dividend(D_o) \times (1+ Growth  \ rate) }{\text{Cost of capital -Growth rate}}

15 = \dfrac{0.50 \times (1+ Growth rate)}{8\%-Growth rate}

15 \times (8 -Growth \  rate) = 0.50 +(0.50 \times growth  \  rate)

1.20 - (15 \times Growth \ rate) = 0.50 + (0.50 \times growth \ rate)

0.70 = (15 \times growth  \ rate) \\ \\ Growth  \ rate = \dfrac{0.70}{15.50} \\ \\ Growth  \ rate = 0.04516 \\ \\ Growth  \ rate \simeq 4.52\% \\ \\

2. The value of the stock  

Calculate the earnings at the end of  5 years:

Earnings (E_o) \times Dividend \  payout  \ ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%} \\ \\ = \$1.42857

Earnings (E_5) year \  5  = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \  5  = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5  = \$2.51763

Terminal value year 5 = \dfrac{Earnings (E_5) \times (1+ Growth \ rate)}{Interest \ rate - Growth \ rate}

=\dfrac{\$2.51763\times (1+0.04516)}{8\%-0.04516}

=$75.526

Discount all potential future cash flows as follows to determine the stock's value:

\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 +Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no\ of\ years} }

+ \dfrac{Terminal\ Value }{(1+interest \ rate )^{no \ of \ years}} \Bigg)

\implies \bigg(\dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}}  + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$75.526}{(1+8\% )^{5}} \bigg )

\implies \bigg(\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$75.526}{1.4693} \bigg)

=$ 54.1945

As a result, the analysts value the stock at $54.20, which is below their own estimates.

3. The value of the stock  

Calculate the earnings at the end of  5 years:

Earnings (E_o) \times Dividend payout ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%}\\ \\ = \$1.42857

Earnings (E_5) year  \ 5  = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year  \ 5  = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \  5  = \$2.51763 \\ \\

Terminal value year 5 =\dfrac{Earnings (E_5) \times (1+ Growth \ rate)\times dividend \ payout \ ratio}{Interest \ rate - Growth \ rate}

=\dfrac{\$2.51763\times (1+ 7 \%) \times 20\%}{8\%-7\%}

=$53.8773

Discount all potential cash flows as follows to determine the stock's value:

\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 + Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no \ of\ years} }+ \dfrac{Terminal \ Value }{(1+interest \ rate )^{no \ of \ years }}   \bigg)

\implies \bigg( \dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}}  + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$53.8773}{(1+8\% )^{5}} \bigg)

\implies \bigg (\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$53.8773}{1.4693} \bigg)

=$39.460

As a result, the price is $39.460, and the other strategy would raise the value of the shareholders. Not this one, since paying a 100% dividend would result in a price of $54.20, which is higher than the current price.

Notice that the third question depicts the situation after 5 years, but the final decision will be the same since we are discounting in current terms. If compounding is used, the future value over 5 years is just the same as the first choice, which is the better option.

The presumption in the second portion is that after 5 years, the steady growth rate would be the same as measured in the first part (1).

8 0
3 years ago
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