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3 years ago

The price elasticity of demand for lightbulbs is likely to be unit elastic because

Business

1 answer:

Montano1993 [528]3 years ago

7 0

Answer:

The correct answer is: is relatively inelastic because there are very few substitutes for lightbulbs.

Explanation:

The demand for unit elasticity is an intermediate situation between an elastic and other inelastic demand curve, so that the price elasticity is equal to one, which means that in the face of variations in price, the total ingrowth (price per cantidad), if it decides, if the price increases, the demanded cantidad will diminish in an amount such that the previous and the present in the same ones. The same would occur in the case that the price had fallen, the song would increase so much that the ingrowth remained constant.

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The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%. a. Calculate the required rate of retur

svet-max [94.6K]

Answer:

a) The required rate of return is 14.75%

b) The expected return on this stock is 16% which is more than its required rate of return 14.75%, thus it is underpriced.

Explanation:

Using the SML equation, we can calculate the required rate of return (r) of a stock.

r = rFR + β * (rM - rFR)

r = 6% + 1.25 * (13% - 6%)

r = 0.1475 or 14.75%

The SML shows the return that is required on a security based on the risk is carries. Using SML we calculate the required rate of return which is the percentage return that investors require a security to provide.

If the expected return is greater than the required rate of return which means that security is expected to provide more than is required then the security is underpriced.

The expected return on this stock is 16% which is more than its required rate of return 14.75%, thus it is underpriced.

5 0

3 years ago

Organizations have three levels of management: first-line, middle, and top. Each of the managers at these levels has different l

Karolina [17]

Management is of three levels. managerial, middle and top level management.

Explanation:

levels of management can be defined as a part of an organization that maintains responsibility for the overall productivity and the work performance of employees.

Managerial or top level management consists of board of directors. It also consists of the board of directors. Executive or middle level management consist of line or department managers and in this level mostly the managers report top the top level management. next lowest level is the operative or supervisory level management.

Thus mostly consists of supervisors, first line managers. It comes under the organisational hierarchy of a company. top management is responsible and controls the entire organisation.

8 0

3 years ago

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $150,000 or $290,000 with equal

lara [203]

Answer:

(A) The price you will be willing to pay for the portfolio is $194,690.

(B) The expected rate of return is 13%.

Explanation:

A. If you require a risk premium of 7%, how much will you be willing to pay for the portfolio?

The amount you be willing to pay for the portfolio can be calculated using the following formula:

The price you will be willing to pay for the portfolio = Expected cash flow / (1 + Required rate of return) ................... (1)

Where;

Expected cash flow = ($150,000 * 0.5) + ($290,000 * 0.5) = $220,000

Required rate of return = Risk free rate + Risk premium = 6% + 7% = 13%, or 0.13

Therefore, we have:

The price you will be willing to pay for the portfolio = $220,000 / (1 + 0.13) = $220,000 / 1.13 = $194,690

B. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be?

The expected rate of return (E(r)) can be calculated using the following formula:

Amount to be paid for the portfolio * [1 + E(r)] = Expected cash flow

Therefore, we have:

$194,690 * [1 + E(r)] = $220,000

$194,690 + ($194,690 * E(r)) = $220,000

$194,690 * E(r) = $220,000 - $194,690

$194,690 * E(r) = $25,310

E(r) = $25,310 / $194,690 = 0.13, or 13%

Therefore, the expected rate of return is 13%.

C. Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?

Required rate of return = Risk free rate + Risk premium = 6% + 15% = 21%, or 0.21

Using equation (1) in part A, we have:

The price you will be willing to pay for the portfolio = $220,000 / (1 + 0.21) = $220,000 / (1.21) = $181,818

6 0

3 years ago

According to the human relations approach, employee commitment to an organization is gained by ______. Select one: 1. economic m

NemiM [27]

Answer:

"4"

Explanation:

Human relations approach to employees management believes that employees are not only motivated by financial incentives but other factors like praises , interpersonal relationship and delegation of roles and this in return , boost their commitment.

The managers are involved in active support of employees' growth and performance.

It underscores the importance interpersonal and social relationship in a work environment.

5 0

3 years ago

Question 13 Pina Colada Corp. has the following inventory data: July 1 Beginning inventory 108 units at $19 $2052 7 Purchases 37

schepotkina [342]

Answer:

Endign inventory cost= $3,708

Explanation:

Giving the following information:

Purchases 378 units at $20

Purchases 54 units at $22

<u>Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the cost of the lasts units incorporated into inventory:</u>

Ending inventory in units= 180

Endign inventory cost= 54*22 + 126*20

Endign inventory cost= $3,708

5 0

2 years ago