Answer: (C) Long term debt
Explanation:
The long term debt is one of the type of long and fixed rate of interest and effectively balance the organizational liabilities and the cash flow process.
The long term debt is the term which is used to refers to the higher quality of principle balance in which it is easy to manage the payments and the budget on the basis of the operational income.
According to the given question, the long term debt is needed when the firm has the positive external financing factors and the main benefit of the long term debt that the investors are invested due to the interest payment and the fixed rate in the market.
Therefore, Option (C) is correct answer.
Answer: 0.8; 5
Explanation:
From the question, we are informed that people decide to save 20 percent of their incomes. We should note that the addition of the marginal prospensity to consume(MPC) and the marginal prospensity to save(MPS) will be equal to 1.
Therefore, the value of the marginal propensity to consume will be:
= 1 - 20%
= 1 - 0.2
= 0.8
The value of the spending multiplier will be calculated as:
= 1/MPS
= 1/0.2
= 5
Answer:
a. 16.50%
Explanation:
Find the beta as of last year using CAPM;
CAPM ; r = risk free + beta(Market risk premium)
0.125 = 0.03 + beta(0.0475)
Subtract 0.03 from both sides;
0.125-0.03 = 0.0475beta
0.095 = 0.0475beta
Divide both sides by 0.0475;
0.095/0.0475 = beta
beta = 2
Next, use CAPM again to find the new required return with a market risk premium is 4.75%+ 2% = 6.75%
r = 0.03 + 2(0.0675)
r = 0.03 + 0.135
r = 0.165 or 16.5%
Therefore, the new required return is 16.5%
Answer: Delegation.
Explanation:
Dante being the operations manager in his company has delegated, half of the project work to the supervisors working under him. Delegation involves a higher authority giving a duty to a subordinate to carry-out, of which the subordinate must give a report at the end, on how the duty was carried out.
