All categories

3 years ago

The consumption function will shift down if:

Business

1 answer:

andrezito [222]3 years ago

8 0

Answer:

The correct answer is option d.

Explanation:

The consumption function shows the relationship between income level and consumption. It includes autonomous consumption that does not depends on the income level, marginal propensity to consume, and income level.

The consumption function shifts because of a change in the expectations of the consumers. If consumers expect the minimum wage to decrease in future, the consumption function will shift downwards.

You might be interested in

Targaryen Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt.

Juli2301 [7.4K]

Answer:

a. What is the company’s WACC?

R_Wacc = 13% (65%) + 5% (5%) + 6% (30%) * (1-0,25) = 10,05%

b. What is the aftertax cost of debt?

The aftertax cost of debt is:

R_Debt : (1 - 0,25) x 6% = 4,50%

Explanation:

The WACC it's defined by the formula :

WACC: E/V*Re + D/V*Rd *(1-0,25)

Re: 13,00% Cost of Common Equity

Re: 5,00% Cost of Preferred STOCK

Re: 6% Cost of Debt

E/V: 65% Percentage of financing that is Common Equity

PS/V: 5% Percentage of financing that is Preferred Stock

DB/V: 30% Percentage of financing that is Debt

Tax: 25% Corporate tax rate

Now we have all of the components to calculate the WACC.

The WACC is:

R_Wacc = 13% (65%) + 5% (5%) + 6% (30%)*(1-0,25) = 10,05%

The aftertax cost of debt is:

R_Debt : (1 - 0,25) x 6% = 4,50%

5 0

3 years ago

Your parents will retire in 19 years. They currently have $300,000, and they think they will need $1 million at retirement. What

Svetlanka [38]

Answer:

rate = 6.54%

Explanation:

we need to find the rate at which a capital of 300,000 becomes 1,000,000 in a period of time of 19 years.

So we build the following equation:

$300,000 (1+r)^{19} =1,000,000$

$(1+r)^{19} =1,000,000 \div 300,000$

$r=\sqrt[19]{1,000,000 \div 300,000}-1$

rate = 0.065417765 = 6.54% after rounding

This will be the rate my parent will require to generate 1,000,000 in 19 years with their current savings of 300,000.

3 0

3 years ago

1. A formal report that shows what an individual owns, what an individual owes, and the difference between the two.

JulijaS [17]

Answer:

A net worth statement

Explanation:

A net worth statement is a financial report/ document that shows the assets and liabilities - both short and long-term - of an individual or company. The net worth is the result of deducting liabilities from assets.

The net worth statement paints a picture of a person or an entity's current financial position. Assets represent what a person owns, while liabilities are what they owe.

5 0

3 years ago

Katlin knew that her established customers liked her product much better than her competitor’s. She was planning to expand into

notsponge [240]

Answer:

Premium pricing

Explanation:

Premium pricing is the strategy of charging a high price to maintain a brand, a business, a product or a product status . In this, the sales volumes remain small, by keeping prices high. This allows carefully sustaining the value, status, prestige and brand value.

So according to the given scenario, Katlin wants to expand into new markets and planning to charge a higher price as compared to the competitors so it reflects the concept of premium pricing

6 0

3 years ago

Every year millions of crops are lost due to pests. In recent times, however, scientists have learned that they can insert a gen

Alika [10]

The best and most correct answer among the choices provided by the question is the first choice "gene splicing"

Gene splicing is a post-transcriptional modification in which a single gene can code for multiple proteins. Gene Splicing is done in eukaryotes, prior to mRNA translation, by the differential inclusion or exclusion of regions of pre-mRNA.Gene splicing is an important source of protein diversity.

I hope my answer has come to your help. God bless and have a nice day ahead!

4 0

4 years ago