Answer:
b. $11.43
Explanation:
g = 25% * 0.20
g = 0.05
g = 5%
D1 = 3 * (1 - 0.2)
D1 = 3 * 0.8
D1 = $2.40
Price = D1 / Expected RR - g
Price = 2.40 / 0.12 - 0.05
Price = 2.40 / 0.07
Price = 34.28571428571429
Price = 34.30
P/E Ratio = Price / Earning per share
P/E Ratio = $34.30/$3
P/E Ratio = 11.43333333333333
P/E Ratio = $11.43
Answer:
recessionary gap = 8 billion
so correct option is c) $8 billion
Explanation:
given data
MPC = 0.80
GDP = $40 billion
to find out
the size of the recessionary gap
solution
we get here first Multiplier that is
Multiplier = ..................1
Multiplier =
Multiplier = 5
so recessionary gap will be
recessionary gap = ................2
recessionary gap =
recessionary gap = 8 billion
so correct option is c) $8 billion
Answer:
6,000 units
Explanation:
We know that
Break even point in units = (Fixed expenses ) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
The selling price would be
= $500 - $500 × 4%
= $500 - $20
= $480
And, the Variable expense per unit is $350
So, the contribution margin per unit would be
= $480 - $350
= $130
So, the break even point in unit should be
= $780,000 ÷ $130 per units
= 6,000 units