Answer:
The expected rate of return on this investment is:
21%
Explanation:
Cost of computer = $200,000
Annual cash flows for 5 years = $48,271
Total cash flows = $241,355 ($48,271 x 5)
Returns = $41,355 ($241,355 - $200,000)
The expected rate of return = Returns/Costs * 100
or the average of returns and the average of investments (they yield the same results)
Using the total returns and investment:
= $41,355/$200,000 * 100
= 21%
Using the average returns and investment:
= $8,271/$40,000 * 100
= 21%
Answer:
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Explanation:
The level which indicates the point of maximum economic efficiency IS THE LOWEST POINT ON AVERAGE COST CURVE.
The average cost curve is the curve that graphically represents the relationship between average cost by a company and the product produced. The point of maximum efficiency on the curve is the lowest point on the curve.
Answer:
D) 1,200 shares held at a cost basis of $37.50 per share
Explanation:
Since the company paid a stock dividend, it increased the number of stocks held by the stockholders. The investor initially had 1,000 shares plus a 20% dividend = 1,000 x 1.2 = 1,200 shares. Since each stock should theoretically be worth less, his/her basis should decrease. The basis for each stock was $44(price) + $1(commission) = $45, after the dividend is paid it will be adjusted to $45 / 1.2 = $37.50 per stock
Economies of scale refers to the cost advantage that emerges or become visible with higher or improved output of a product. There is an inverse relationship between the quantity proposed and per unit fixed costs therefore, if the product or good is produced in large or high quanity the per unit fixed cost goes down because it can already be shared with other large number of goods. There are two types of economics of sale, the internal and of course the external.
