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Vadim26 [7]
3 years ago
15

Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and cos

ts $1.00. How should Pat get to work?
Business
1 answer:
Harrizon [31]3 years ago
7 0

Answer:

pat should drive if saving half an hour is worth $0.50 or more

Explanation:

Marginal cost is the additional cost generated by producing an additional unit of output.

Marginal cost of taking the bus = 1 / 2 = 0.50

Marginal utility is the additional utility derived from consuming one more unit of a good

Marginal utility per good = marginal utility / price of the good

Pat should take the action that would yield him the highest utility given the marginal cost

So,pat should drive if saving half an hour is worth $0.50 or more

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1. You have a portfolio that is invested 21% in Stock A, 34% in Stock B, and 45% in Stock C. The betas of the stocks are .66, 1.
MrMuchimi

Answer:

1.

Portfolio Beta = 1.225 rounded off to 1.23

Option e is the correct answer.

2.

r = 0.13338 or 13.338% rounded off to 13.34%

Explanation:

1.

The portfolio beta is a function of the weighted average of the individual stocks' betas that form up the portfolio. To calculate the beta of a portfolio, we use the following formula,

Portfolio Beta = wA * Beta of A  +  wB * Beta of B  + ... + wN * Beta of N

Where,

w is the weight of each stock

Portfolio Beta = 0.21 * 0.66  +  0.34 * 1.21  +  0.45 * 1.5

Portfolio Beta = 1.225 rounded off to 1.23

2.

Using the CAPM, we can calculate the required rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate

rM is the market return

r = 0.037  +  1.22 * (0.116 - 0.037)

r = 0.13338 or 13.338% rounded off to 13.34%

3 0
2 years ago
Larry, the owner of small hotel resort, would like to advertise his hotel in major American newspapers and magazines as a part o
timama [110]

Answer:

Serendipity

Explanation:

From the question we are informed about Larry, who is the owner of small hotel resort, would like to advertise his hotel in major American newspapers and magazines as a part of his larger strategy. However, he doesn't have enough money to do so. One day, he meets Todd, the owner of a group of newspapers and magazines, who offers him advertising space in his publications on the condition that Larry provides him with a free stay at the hotel. This is an example of Serendipity.

Serendipity can be regarded as unplanned fortunate discovery, which is a common occurrence that could take place throughout the history of a particular product invention as well as scientific discovery. It can be explained as the luck that comes to some people way as they are finding or creation of interesting things as well as valuable things by chance

5 0
3 years ago
Suppose that a rap grouprap group called RG 2RG2 has released its first CD with LiveLive Records at an intended list price of​ $
GuDViN [60]

Answer:

D) The recording label should expand the production and distribution of RG 2RG2​'s first CD.

Explanation:

According to the law of supply and demand, since the customers are willing to pay a price higher than equilibrium price, that means that their is a shortage of the product or service and that the supply should increase in order to get the price back to equilibrium price.

7 0
3 years ago
Sweet Treats common stock is currently priced at $17.15 a share. The company just paid $1.22 per share as its annual dividend. T
ddd [48]

Answer:

cost of equity =  9.68%

so correct option is d. 9.68%

Explanation:

given data

currently priced = $17.15

paid annual dividend = $1.22

dividends increasing = 2.4% annually

to find out

firm's cost of equity

solution

we get here cost of equity by apply price equation that is express as

Price = recent dividend × ( 1 + growth rate ) ÷ ( cost of equity - growth rate)   .....................1

put here value we get

$17.15 = \frac{1.22*(1+0.024)}{cost\ of\ equity - 0.024}

solve it we get

cost of equity =  9.68%

so correct option is d. 9.68%

5 0
2 years ago
At the beginning of a year, a company predicts total direct materials costs of $1,010,000 and total overhead costs of $1,270,000
marin [14]

Answer:

1.267 = Overhead Rate

Explanation:

<em>As general approach,</em> the manufacturing rate, along with any rate is done by dividing the cost by a cost driver.

\frac{Cost\:Of\: Manufacturing\: Overhead}{Cost\: Driver}= $Overhead \:Rate

In this case teh cost is the manufacturing overhead and the cost driver the direct materials cost:

\frac{1,270,000}{1,010,000}= $Overhead Rate

<em>Using Direct Materials cost, the rate would be:</em>

1.257425743= $Overhead Rate

3 0
3 years ago
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