Answer:
A) and goes further than necessary to ensure full coverage
Answer:
The owner will maximize value if it waits 29th years Assuming 5% continuos inflation
Explanation:
the price formula for the future years is:
while it is adjusted for inflation at:
so the complete formula for value is:
Now, we can derivate and obtain the roots
Getting at a root exist at the 29th year.
The owner will maximize value if it waits 29th years Assuming 5% continuos inflation
Answer:
The annual rate of return of the invesment will be -14,97%
Explanation:
The initial investment is 45.000 and after 5 years the value of the investment is only 20.000. Here we can see a destruction of value (20.000 < 45.000). In finance, the time takes an essential part in calculation, so through the interest rate we calculated how bad was the investment in annual terms. The formula is as follows: Final investment value=(Initial investment*(1+interest rate)^(total years)) in our case would be: 20.000=(45.000*(1+interest rate)^(5)) From this formula we got -14,97%
Answer:
d. a monopoly firm reducing its price in an attempt to maintain its monopoly.
Explanation:
In a competitive system, a firm practices predatory pricing when it charges prices below its costs in order to eliminate competitors. When the prevailing system is a monopoly, the firm is the only company providing the good and it can practice predatory pricing in the short term to prevent a competitor from entering the market. Thus the firm remains monopolistic.