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CaHeK987 [17]
3 years ago
15

This occurs when a person or firm purchases new capital. This occurs when a person's income exceeds his consumption. Which of th

e following situations represent investment? Check all that apply. Your roommate earns $100 and deposits it in his account at a bank. Your family takes out a mortgage and buys a new house. You use your $200 paycheck to buy stock in AT&T. You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.
Business
1 answer:
Lostsunrise [7]3 years ago
3 0

Answer: Buying $200 stock in AT&T is an example of investment. As in this case the persons income exceeds his consumption and he buys new capital.

Borrowing $1000 from a bank to buy a car to use in business is also an investment as in this case buying a car is like investing in a cash flow producing asset, as the car will be an asset which will help earn money from the pizza business.

Explanation:

Roommate depositing $100 is an example of saving and not investing.

Taking out a mortgage and buying a house is an example of consumption and not investment.

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Jenna’s reason in regards of the job specialization in her business class is that the organization is likely to be too large for an individual or one person to do everything in an organization that is why each individual has his or her duties and departments assigned to complete certain tasks and keep the organization from running.

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3 years ago
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Describe one technology used to travel to space and one technology used to return from space
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One technology used to travel to space is a spacecraft. It is a vehicle or machine designed to fly in outer space. One technology used to return from space is a capsule. Astronauts occupy the capsule and as it goes down, the capsule performs systematic processes for a safe landing.
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3 years ago
You have been hired by the CFO of Lugones Industries to help estimate its cost of common equity. You have obtained the following
LekaFEV [45]

Answer:

Under CAPM:

Re = Rf + Beta(Rm - Rf)

Rf = 5%

Rm - Rf = 6%

Beta = 1.25

Re = 5% + (1.25 x 6%) = 12.5%

Under dividend discount model:

Re = (Div₁ / P₀) + g

Div₁ = $1.20

P₀ = $35

g = 8%

Re = ($1.20 / $35) + 8% = 11.43%

Under bond yield plus risk premium approach:

Re = Pre-tax cost of debt + risk premium over its own debt

Pre-tax cost of debt = 7%

risk premium over its own debt = 4%

Re = 7% + 4% = 11%

The highest cost of equity results from the CAPM model and it is 12.5% while the lowest results from using the bond yield plus risk approach (11%), the difference is 1.5% between them.

7 0
3 years ago
1. Briefly explain what a resource market is. Then, describe the role that resource markets play in the flow of goods and servic
scZoUnD [109]

In the resource market we find the materials required for production.

<h3>What is resource market?</h3>

The resource market refers to a market where it is possible to find all or some of the resources that are necessary for the production of goods and services.

Businesses depend on the resource materials for the supply of materials that aid the process of production hence the both are interdependent on each other. It is different from product markets which involves the sale of finished goods to consumers.

Learn more about resource markets: brainly.com/question/3964664

7 0
2 years ago
Assume that an analyst is using the constant dividend growth model to value a stock. Which of the following scenarios would be c
Sophie [7]

Answer: A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.

Explanation:

The formula for the Constant dividend growth model of valuing stock is:

<em>= Next dividend / (Required return - growth rate)</em>

From the formula above, one can tell that if the required return is higher, it would result in a lower value for stock because it would divide the numerator more.

If the analyst believes that the company is riskier and increases the required return, the value would therefore reduce if other measures are kept constant.

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2 years ago
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