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3 years ago

Economists believe that the best decisions are made at the margin. True or False

Business

1 answer:

Trava [24]3 years ago

8 0

Answer:

True

Explanation:

if we want to get the most out of our resources, options should be chosen only when the marginal benefits exceed the marginal cost. ... All these decisions are marginal because they involve consideration of additional costs and benefits

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If you had purchased 10 shares of GoPro at the IPO (Initial Public Offering) on June 26, 2014 at 31.34, you would have spent ___

My name is Ann [436]

Answer:

If you had purchased 10 shares of GoPro at the IPO (Initial Public Offering) on June 26, 2014 at 31.34, you would have spent $313.40.

If you were more of a “gambler” than an “investor”, and you saw the market shoot up for GoPro and hit 86.97 just 3 months later and decided to SELL, you would have recognized a capital gain of $869.70 - $313.40 = $556.30.

This would have resulted in a YIELD of ($556.30 / $313.40) x 100 = 177.5%.

Let’s say you hung on to your 10 shares of GoPro, believing that it would get even better. Today it is listed at 4.42. If you were to sell, you would recognize a loss of $44.20 - $313.40 = -$269.20.

This would result in a YIELD of (-$269.20 / $313.40) x 100 = -85.9%.

The average annual yield for 5.5 years would then be -12%.

Look up GoPro today. GoPro currently trading at $8.63 (January 7, 2021).

Explanation:

1 + 0.859 = (1 + r)⁵°⁵

⁵°⁵√1.859 = ⁵°⁵√(1 + r)⁵°⁵

1.12 = 1 + r

r = -0.12 (since the yield was negative, r must be negative)

7 0

3 years ago

Rick Co. had 30 million shares of $1 par common stock outstanding at January 1, 2021. In October 2021, Rick Co.'s Board of Direc

Pie

Answer:

The journal entry is as follows:

Retained earnings A/c Dr. $18 million

To common stock $0.30 million

To capital paid in excess A/c $17.70 million

(To record the stock dividend issued at 1%)

Working notes:

Shares issued = 1% of 30 million

= 0.30 million

Retained earnings:

= 0.30 million × $60 per share

= $18 million

Common stock:

= 0.30 million × $1 par value

= $0.30 million

Capital paid in excess:

= Retained earnings - Common stock

= $18 million - $0.30 million

= $17.7 million

8 0

3 years ago

Define liquidity risk and explain how it relates to bonds and bond yields.

nadya68 [22]

Answer:

Liquidity risk is the inability to quickly sell a bond for its full value. This risk exists primarily in thinly traded issues. Default risk is the likelihood the issuer will default on its bond obligations and is the basis for bond ratings.

Liquidity is a prime determiner of yield spreads, explaining up to half of the cross-sectional variation in spread levels and up to two times the cross-sectional variation in spread changes that is explained by the effects of credit rating alone.

Liquidity risk Liquidity refers to the investor's ability to sell a bond quickly and at an efficient price, as reflected in the bid-ask spread. High-yield bonds can sometimes be less liquid than investment-grade bonds, depending on the issuer and the market conditions at any given time.

(If some parts overlap/relate to the exactly to other parts, I'm sorry. But there ya go !)

5 0

3 years ago

Freese Inc. sells a product for 650 per unit. The variable cost is 455 per unit, while fixed costs are 4,290,000. Determine (a)

Dvinal [7]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Freese Inc. sells a product for 650 per unit. The variable cost is 455 per unit, while fixed costs are 4,290,000.

A) To calculate the break-even point both in units and dollars, we need to use the following formulas:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 4,290,000/ (650 - 455)

Break-even point in units= 22,000 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 4,290,000/ (195/650)

Break-even point (dollars)= $14,300,000

B) Now for a selling price of $655:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 4,290,000/ (655 - 455)

Break-even point in units= 21,450 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 4,290,000/ (200/655)

Break-even point (dollars)= $14,049,750

3 0

3 years ago

Read 2 more answers

Which of the following directly generates revenue for a business?

BartSMP [9]

Answer:

Assets is the answer. A is correct

7 0

3 years ago

Read 2 more answers