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Verdich [7]
3 years ago
8

What will happen if the current asset price is greater than the present value of income? Question 2 options: Buyers will bid the

asset's price down until it equals the discount rate. Sellers will lower the asset's price until it equals the present value of income. Sellers will raise the asset's price until it equals the present value of income. Buyers will bid the asset's price down until it equals the present value of income.
Business
1 answer:
Inessa05 [86]3 years ago
5 0

Answer:

The answer is:  Buyers will bid the asset's price down until it equals the present value of income.

Explanation:

As the current asset price is greater than the present value of income, it is overpriced.

So, seller is much willing to sell at this price, however, buyers does not want to buy asset at this price as they only want to purchase it at the price equals to the present value of its income.

So, Buyers will bid the asset's price down until it equals the present value of income which is the level they are willing to buy and also at which the seller is willing to sell also.

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A manager that looks at loans and deposits increases and decreases among other things to measure the bank's liquidity position i
Mademuasel [1]

Answer:

The answer is letter C

Explanation:

The sources and uses of funds approach.

6 0
3 years ago
Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows. DU
Ghella [55]

Answer:

Companywide income would increase by $6,000 if West Division is eliminated.

Explanation:

The amount by which the companywide income will increase or decrease if West Division is eliminated can be determined by comparing Revenue with avoidable cost.

Avoidable cost refers to the cost that will be eliminated or not incurred if a firm decides to change the course of a business.

In this question, avoidable cost is simply the cost or expenses that will be eliminated if West Division is eliminated.

Among all the expenses in the question, only Companywide facility-sustaining costs which is $78,000 cannot be eliminated if West Division is eliminated.

Therefore, avoidable cost can be calculated as follows:

Avoidable cost = Salaries for drivers + Fuel expenses + Insurance + Division-level facility-sustaining costs = 210,000 + 30,000 + 42,000 + 24,000 = $306,000

Since, Revenue = $300,000

Decision rule:

1. If revenue is greater than avoidable cost, we have a decrease in income. Therefore, the division should not be eliminated.

2. If revenue is less than avoidable cost, we have an increase in income. Therefore, the division should be eliminated.

Since the revenue of $300,000 is less than the avoidable cost of $306,000, it implies we have an increase in income based on the decision rule 2. The increase in income is calculated as follows:

Increase in income if West Division is eliminated = Avoidable cost – Revenue = $306,000 - $300,000 = $6,000

Therefore, companywide income would increase by $6,000 if West Division is eliminated

Since there would be an increase in income of $6,000, West Division should therefore be eliminated.

4 0
3 years ago
The __________ Rate is the interest rate the Fed charges banks and thrifts to borrow to meet the reserve requirement.
adoni [48]

Answer:

Federal funds rate

Explanation:

The federal funds rate is the interest rate at which depository institutions (banks and thrifts) lend reserve balances to each other to meet reserve requirements.

Reserve requirements are the amount of funds required by the central bank  that banks should keep as reserves to meet liabilities

the Federal funds rate is currently  maintained at a range of 0% to 0.25%

5 0
3 years ago
The market price of pomegranates is $2, and JoAnne sells 25 pomegranates at the local farmer's market. The total revenue is and
leva [86]

Answer:

$50 and $2

Explanation:

The computation of the total revenue and the marginal revenue is shown below:

Total revenue is

= Price ×  quantity

= $2 × 25

= $50

And, the marginal revenue is received collected from one unit i.e price of the one units that equivalent to $2

Hence, we simply applied the above formula to determine the total revenue and the marginal revenue

4 0
3 years ago
Suppose you were assigned the task of choosing a price that maximized economic surplus. What price would you​ choose? ​ Why? A.
mote1985 [20]

Answer:

C. Choose the price where the quantity demanded equals the quantity supplied because that is the equilibrium condition.

Explanation:

The equilibrium price is the most ideal because at this price the consume is willing to buy, if price goes above this the consumer may look for an alternative and this will further increase surplus.

Also when there is surplus the suppliers will find a way to sell competitively at the equilibrium price.

8 0
3 years ago
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