Answer:
1. $3,59,666.66
2. $4,10,066.66
Explanation:
1. The computation of value of firm is shown below:-
As the Earning before interest and tax given remains the same, this impact that there is no growth rate in the earnings to consider.
= Earning before interest and tax × (1 - Tax) ÷ Cost of equity
= $83,000 × (1 - 0.35) ÷ (0.15)
= $53,950 ÷ 0.15
= $3,59,666.66
2. The computation of value of levered firm is shown below:-
Value of unlevered firm + Debt × Tax rate
= 3,59,666.66 + ($144,000 × 35%)
= $4,10,066.66
Answer:
The correct answer is: c. toward which the economy gravitates in the short-run.
Explanation:
In the economic context, the Short Term is a period in which an economy does not have enough time to change its fixed expenses in order to reach new levels of profitability or production, so it must be limited to changes in variable costs. It is worth mentioning that the Short Term is not a defined period of time, but depends on each company, industry or economic variable.
One of the most important bases of the meaning of Short Term is that companies have fixed and variable costs. For example, some common expenses, wages and prices are fixed costs, so they cannot change to freedom to reach a new equilibrium.
Answer:
Brand Competition
Explanation:
Brand Competition arises when two or more different companies offer a similar product, under a different brand. The products are similar, but not fully substitutes: they can be distinguished in some way: quality, features, price, and so on.
In this case, what makes the Ford Mustang and the Audi R8 is the price. The Ford brand is significantly cheaper than the Audi brand, which might give Ford the upper hand in market share. However, this is not always the case because the Audi car could have the upper hand when it comes to quality, and obtain more marke share because of that.
Answer:
Life income with certain period annuity
Explanation:
This type of policy guarantees a certain amount of money during the remaining life of the insured. It also guarantees that during a minimum specified time, the certain period, the payments will be carried out even if the insured dies. In this case the benefits will be paid to his/her beneficiary. The insured determines the certain period when choosing the life insurance plan, and the certain period can vary from 5 to 30 years.
In the short run, a profit-maximizing monopolistically competitive firm sets it price: above marginal cost. Option C. This is further explained below.
<h3>What is
marginal cost?</h3>
Generally, The marginal cost of production is the incremental cost incurred to produce one more unit of a good or service.
In conclusion, Initially, a monopolistically competitive business sets its price at a level above its marginal cost in order to maximize its profits.
Read more about marginal cost
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