C aggregate demand shocks
Play little or no role in the economy in the short run
Answer:
A change in quantity demanded is caused only by
A) price
B) a shift
C) Market
D) Income
The answer is Price(A)
Explanation:
Hope this helps :D
Answer: True
According to the law of demand, the demand for a good increases when its price falls. Thus, when a fruit or vegetable is in season, it is relatively less expensive than in off seasons. Thus, consumers buy more of these seasonal fruits in season. Thus, demand for the good increases when it becomes cheaper.
Thus, the statement is true.
Answer:
D both A and b
Explanation:
For the fire inspectors, not only are they expected to confirm that appropriate materials are being used but also, to ensure that the quality are top notch. This is to prevent outbreak of fire. For example, in a place where metal bin with lid are to be used, if plastic bin is being used, there is high chances of fire outbreak occurring when a used cigarette stick is thrown into it.
Answer:
cost of common equity = 14.46%
WACC = 11.29%
accept = Project A
Explanation:
Cost of common equity is the return that is required by Holders of Common Stock.
The available details can be used to calculate the cost of common equity using the Dividend Growth Model as follows :
Cost of common equity = (Next year`s Dividend / Current Market Price of a Stock) + Expected Growth
= ($2.20/$26)+6%
= 14.46%
WACC is the minimum return that a project must offer before it can be accepted.It shows the risk of the company.
Cost of Debt = Market Interest Rate × (1 - tax rate)
= 9.00% × (1-0.40)
= 5.40%
Capital Source Weight Cost Total
Debt 35% 5.40% 1.89%
Common Equity 65% 14.46% 9.40%
Total 100% 19.86% 11.29%
Therefore WACC is 11.29%
When evaluating projects, Compare the Project`s Internal Rate of Return (IRR) to the WACC.
<u>Project A</u>
IRR 12% > WACC 11.29%
Therefore Accept
<u>Project B/S</u>
IRR 11% < WACC 11.29%
Therefore Do Not Accept
