Answer:
The correct answer is letter "C": Kelvin buys more donuts at $0.80 per donut than at $0.95 per donut, other things equal.
Explanation:
The demand law states that if the price of a good or service decreases, the quantity demanded for that good or service will increase. On the other hand, if the price of a god or service increases, the quantity demanded will decrease. The price-quantity demanded of the demand law is inversely proportional, <em>ceteris paribus</em>.
Thus, Kelvin's case is an example of the demand law since he purchases more donuts when the price is lower ($0.80) and purchases fewer donuts when the price is higher ($0.95).
Answer:
$1100
Explanation:
Compound Interest is a multiplying effect interest , in which interest for each successive period is calculated on (Principal + Interest) of each preceeding period .
Formula : A = P(1+r/n) power 'nt .
r = Interest rate , t = time , n = compound in time 't' , P = Principal
A = 1000 (1+10/1) power'(1X1) = 1000 X 11 power 1' = 1000 X 11 = 1100
Answer:
$23.25
Explanation:
the maximum that you would be willing to pay for a stock of Universal today can be determined using the multistage dividend discount model
The first step is to find the present value of the dividends over the next four years :
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = $8
Cash flow in year 2 = $4
Cash flow in year 3 = $2
Cash flow in year 4 = $2
I = 15%
Present value = $12.44
Next we would find the present value of the perpetual growth of dividend
($2 x 1.04 ) / 0.15 - 0.04 = 18.91
the present value of this amount = $18.91 / = $10.81
Maximum value = $12.44 + $10.81 = $23.25
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
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