Southwest Airlines employees all know about when CEO Herb Kelleher visited one of the airline's hangars in the middle of the nig
2 answers:
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Answer:
YTM = 8.93%
YTC = 8.47%
Explanation:
The first part is the present value of the coupon payment until the bond is called.
The second is the present value of the called amount
P = market price value = 1,200
C = annual coupon payment = 1,000 x 12% 120
C/2 = 60
CP = called value = 1,060
t = time = 6 years
Using Financial calculator we get the YTC
8.467835879%
The first part is the present value of the coupon payment until manurity
The second is the present value of the redeem value at maturity
P = market price value = 1,200
C = coupon payment = 1,000 x 12%/2 = 60
C/2 = 60
F = face value = 1,060
t = time = 10 years
Using Financial calculator we get the YTM
8.9337714%
Answer:
total revenue for 500 is $2500
total revenue for 400 is $2800
Explanation:
given data
price of good A = $50
quantity demanded of good A = 500 units
price of good A rises = $70
quantity demanded of good A falls = 400 units
solution
we get here Elasticity of demand that is express as
Elasticity of demand = (change in quantity ÷ average quantity) ÷ (change in price ÷ average price) .......................1
here
Change in quantity is = 400 - 500 = -100
and average quantity is = = 450
and change in price is = 70 - 50 = 20
average price is = = 60
so now we put all value in equation 1
Elasticity of demand =
Elasticity of demand = -0.67
as here the elasticity of demand is inelastic because elasticity is above -1
so about total revenue when price will increases as elasticity is inelastic
so increase in price will cause increase in revenue because revenue is maximum when elasticity = -1
and increase in price will cause increases elasticity in the absolute term and revenue will increase
total revenue = price × quantity
so
total revenue for 500 = 500 × 5 = $2500
total revenue for 400 = 400 × 7 = $2800