When a person receives an increase in wealth, Consumption increases and saving decreases
Both present and future consumption rises as a consumer's current income does as well. Savings increase because current spending increases but does so at a slower rate than current income growth. Again, both present and future consumption rises when the customer receives an increase in predicted future income.
Savings declines because current consumption rises while current income does not. Current and future consumption both grow when the consumer's wealth increases. Again, because current income has not increased, saving has decreased. These individual actions to adjust one's consumption and saving habits have a cumulative effect on the aggregate amount of desired consumption and saving.
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Answer: 9.48%
Explanation:
Given Data
Debts ;
$7 billion
$2 billion
$13 billion
Beta of Fords stock = Beta = 1.50
Market risk premium = Rp = 8.0%
Risk free rate of interest = Rf = 4.0%
Equity rate = 1.7
Market risk rate = 0.8
Risk free rate = 0.03
Therefore;
Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium
= 0.03 + (1.7 × 0.8)
= 0.166
Preferred Stock Cost ( PSC)= Dividend ÷ stock price
= 4 ÷ 30
= 0.1333
Total debt = 13 + 6 + 2 = 21 billion
D% = 13 billion ÷ 21 billion
= 0.619
E% = 6 billion ÷ 21 billion
= 0.286
P% = 2 billion ÷ 21 billion
= 0.095
RD = debt capital at 8% maturity rate
Tc= 30%
Rwac =(w/ preferred stock)
= Re × E% + PSC × P% + Rd ( 1- Tc) D%
Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)
= 0.094803 * 100
= 9.48%
At 30% tax rate Ford weighted average cost is 9.48%
Answer:
a) become certified in ISO 9000 standards
Explanation:
Currently, the European Union requires companies that have businesses within their borders, to comply with ISO 9000 quality standards
Answer:
Present value is $74,116.62
Explanation:
Giving the following information:
The machine pays= $2,655.00 every six months
n= 27 years= 54 semesters
Interest rate= 0.13/2= 0.065
First, we need to calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual pay
FV= {2,655*[(1.065^54)-1]}/0.065= $1,183,854.61
Now, we can calculate the present value using the following formula:
PV= FV/(1+i)^n
PV= 1,183,854.61/(1.065)^44= $74,116.62
FICA is a payroll deductions that is required by law. Correct answer:C FICA is an acronym for "Federal Insurance Contributions Act." and denotes the money you pay in taxes is not held in a personal account for you to use when you get benefits.
The Federal Insurance Contributions Act (FICA) is a U.S. law .