Answer:
<u>CLASSICAL</u> macroeconomists focused on the <u>LONG-RUN</u> effects of <u>MONETARY</u> policy on the aggregate price level, ignoring any <u>SHORT-RUN</u> effects on aggregate output.
Explanation:
Classical macroeconomists focused mostly on the long-run since they perceived the economy was self-adjusting. That means that they should only set a guideline for the economy, and the economy itself would adjust to fulfill that guideline.
For example, just because the Fed carries out an expansionary monetary policy by lowering interest rates, it doesn't mean that the economy will start to grow and unemployment will lower. Other adjustments are necessary, like a tax reduction or an increase in government spending.
Answer:
correct option is D) The vertical axis crossing point cannot be calculated since the cash inflows are in perpetuity
Explanation:
given data
hair salon spends = $1,000,000
increase cash flow = $220,000 per year
to find out
what dollar value should the NPV profile cross the vertical axis
solution
we know that discount rate is = 0 %
as sum of cash flow is infinite
because cash flow = $220000
cash flow is here perpetual
so we can say that correct option is D) The vertical axis crossing point cannot be calculated since the cash inflows are in perpetuity
Answer:
E) standard deviation of the company's common stock
Explanation:
The weighted average cost of capital (WACC) is dependent on cost of equity and cost of debt. Cost of Equity depends on company's beta (CAPM Model), growth rate of dividends (constant growth dividend discount model), so option A and C are not the answer. Cost of debt depends on coupon rate (for yield) as well as marginal tax rate (for post tax cost of debt) so option B and D are incorrect. So, answer is E. Standard deviation is the least probable factor that may cause change in WACC.
Answer:current balance of retained earnings=$206,000
Explanation:
Net Retained Earnings = Total Income since Incorporation−
Total Cash Dividend Paid− Value of Stock Dividend distributed
Where
cash dividends distributed among the stakeholders= $55,000
value of stock dividends distributed = $31,000
Total Dividend Distributed = $86,000
Net Retained Earnings = $292,000 -($86,000)=$206,000
Explicit costs are business expenses that are easily identifiable and can be accounted for.
1) Wages and salaries = 100,000
2) Utilities expenses = 15,000
3) Materials and Supplies = 150,000
4) Gasoline expense = 5,000
100,000 + 15,000 + 150,000 + 5,000 = 270,000 answer is C.
