Answer:
1-The four characteristics of the price system are that it is neutral, market driven, flexible, and efficient. It is neutral because prices do not favor the producer or the consumer because the they both make choices that determine the equilibrium price.
2-Why is the price system an efficient allocator of economic resources? Prices are neutral, which means they are equally fair to both consumers and producers. They are flexible which means they can adapt to changing economic conditions. Prices are familiar which means that everyone understands how they work.
3-how do prices serve as signals and incentives to producers to leave a particular market? it showed that when a strong competitor offers similar products for lower prices other producers must also lower their prices. Less efficient companies were driven from the market.
4-demonstrates the effects of competitive pricing because it shows how the company strategically lured customers away from rival producers while still making the highest profit.
Explanation:
:)
Abc migrated to a Corporation type of company to reduce cost.
Answer:
Ans. 16 years to maturity
Explanation:
Hi, first we need to establish the amount of money of the coupons, in our case, 7% semi-annual, that means that we have to do use the following formula:
Now, in order to find the yield to maturity in semi-annual terms, we have to do the following.
Then we have to use the "find goal" function of MS Excel in order to solve the following equation, which must be equal to $1,023.46
As you can see, solve this is not easy or practical therefore we have to use the "find goal" function" of MS Excel. Please see the file attached to this answer for more details in the formula. Below, please find how I propose to organize the information and the answer.}
Face Value $1.000
<u>Price $1.023,46 </u>
Coupon(annual) 7%
Coupon (semi-annual) 0,035 $35
YTM(Years) 6,72%
YTM(Semester) 3,3054%
<em>years to maturity 15,62771676 = 16
</em>
PV Coupons $400,83
PV Final PMT $622,63
<u>Price Given (n) $1.023,46 </u>
<u />
Best of luck.