Answer:
The answer and procedures of the exercise are attached in the following archives.
Explanation:
Consider this explanation too
The IRR is the project’s expected rate of return, assuming that intermediate cash flows also earn the IRR. If this return exceeds the cost of the capital invested in the project, the excess value goes to the firm’s shareholders. Therefore, independent projects whose IRR is greater than the WACC should be accepted.
Therefore in this case WACC of the project is 7% and IRR of the project is 1.86% which is less than WACC of the project. Hence the firm reject the project delta.
Calculation of IRR is based on Cash inflows and outflows for the number of years so that increase in cost of capital will not affect IRR.
Explanation:
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Answer:
wages decrease
Explanation:
Labor is a factor of production and has a price like all other inputs. In the economy, labor is a commodity whose price is determined by the forces of demand and supply. When there is an oversupply of labor, its equilibrium price will decrease.
The equilibrium price of labor is the prevailing wage rate, where demand matches supply. When immigration adds to the labor force, it means an additional supply of able and willing workers in the markets. There will be many sellers or workers offering to supply labor services to the existing job openings. As a result, the price of labor will reduce as buyers or employers can lower the wage rate and still get the labor services they require.
Pure competition simply means a market that's has a wide range of competitors who are selling the same products.
Your information is incomplete. Therefore, an overview of pure competition will be given. In pure competition, all the companies sell identical products.
In pure competition, the market share does not influence the price. Also, companies can enter or exit the industry whenever they like as there's no barrier. The buyers have perfect information as well.
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The answer is in each term's definition. bonds are less risky no matter what the quality. Stocks may earn bigger profits, but more of a gamble.