Answer:
A. after tax income should increase shifting AD to the right to a higher equilibrium level of output
Explanation:
If the government reduces tax, the after tax income would increase and so woold demand. Thus, the aggregate demand curve would shift rightward to a higher equilibrium level of output.
If the government cuts taxes, after tax income should decrease shifting AD to the left to a lower equilibrium level of output
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Answer:
Return on company's stock = 15.6%
Explanation:
<u><em>The capital asset pricing model (CAPM)</em></u><em> relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c</em>
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 6%, Rm- 14%, β- 1.2
E(r) = 6% + 1.2× (14- 6)%
= 6% + 9.6%
= 15.6%
Return on company's stock = 15.6%
Answer:
The answer is $3,214,285.71
Explanation:
Price of each award is $45,000
And there are 5
Therefore, we have 5 x $45,000
=$225,000.
So, $225,000 is the future value.
Rate of return(r) in 7% and it is being assumed that it is forever.
So, so how much will be needed to fund his prizes(present value)?:
PV = FV/r
= $225,000/0.07
=$3,214,285.71
Answer:
$67,150
Explanation:
The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net income $12,750
Adjustment made:
Add : Depreciation expense $32,600
Add: Decrease in accounts receivable $21,500
Less: Increase in inventory -$18,300
Add: Increase in accounts payable $19,800
Less: Decrease in interest payable -$1,200
Total of Adjustments $54,400
Net Cash flow from Operating activities $67,150