A. Adam Smith, Father of Modern Economics," believed that competition is a regulatory force. He argues that keeps self-interest at bay by restraining the ability to take advantage of consumers.
B. Friedrich Von Hayek, often called F.A. Hayek, believed that less government intervention gives people more economic freedom. He wrote about it in his pamphlet, "Economic Freedom and Representative Government."
C. John Maynard Keyness, according to Keynesian economics, one of the tenets of this school of thought is that government intervention is necessary for stability.
D. Milton Friedman (not Friedrich), said that the government's role in the role should be restricted. The government should not control the money supply.
Answer:
The cost of equity for ABC is 11.74 percent and for XYZ it is 14.47 percent.
Explanation:
a. For ABC
ABC cost of equity = Earning before interest and tax (EBIT) / Equity = $62,222 / $530,000 = 0.1174, or 11.74%
b. For XYZ
Perpetual debt = $530,000 - $310,000 = $220,000
Interest on debt = $220,000 * 7.9% = $17,380
Earning after interest = $62,222 - $17,380 = $44,842
XYZ cost of equity = $44,842 / $310,000 = 0.1447, or 14.47%
Answer:
137,000
Explanation:
Jan Feb March
Units produced 94000 80000
Raw materials 26,000
Raw materials 213800 239800 295800
Ratio of raw material to a product is 2:1
Ending inventory = 30% of next month production
Represent budgeted production in February by F
239800=2F + (80000*2*30%)-(2F*30%)
239800 = 2F +48000 =0.6F
239800-48000=2F-0.6F
191800=1.4F
F= 191800/1.4 =137000
