Answer:
lower
Explanation:
A natural monopoly appears when there are high entry costs like large infrastructure costs or economies of scale where a company can provide the products at a lower costs than others which provides a big advantage to the firm in the market and makes it difficult for any potential competitor to be able to compete. According to that, the answer is that a natural monopoly exists when a single seller experiences lower average total costs than any potential competitor as this represents a barrier for the competitor to be able to enter the market.
Answer:
WACC is 9%
Explanation:
WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.
According to WACC formula
WACC = ( Cost of equity x Weightage of equity ) + ( Cost of debt ( 1- t) x Weightage of debt ) + ( Cost of Preferred equity x Weightage of Preferred equity )
As per given data
Market Values
Equity = $7 billion,
Preferred stock = $2 billion
Debt = $13 billion
Cost
Equity
Capital asset pricing model measure the expected return on an asset or investment. it is considered as the cost of common stock.
Formula for CAPM
Cost of Equity = Risk free rate + beta ( market return - risk free rate )
Cost of Equity = Rf + β ( Mrp )
Cost of Equity = 3% + 1.6 ( 8% ) = 15.8%
Preferred stock = $2 / $26 = 0.077 = 7.7%
Debt = 8%
Placing values in the formula
WACC = ( 15.8% x $7 billion / $22 billion ) + ( 8% ( 1- 0.3) x $13 billion / $22 billion ) + ( 7.7% x $2 billion / $22 billion )
WACC = 5.03% + 3.31% + 0.7% = 9.04%
Answer:
C. Tax revenues decrease and payments to individuals decrease.
Explanation:
Automatic stabilizers acts as shock absorbers and reduce the impact in an economy.
<em>Automatic stabilizers are ongoing government policies that automatically adjust tax rates and transfer payments in a manner that is intended to stabilize incomes, consumption, and business spending over the business cycle</em>
Answer:
195,000 bottles
Explanation:
Given that,
Beginning inventory = 20,000 bottles
Budgeted sales for the four quarters:
Quarter 1 = 200,000 bottles
Quarter 2 = 150,000 bottles
Quarter 3 = 250,000 bottles
Quarter 4 = 400,000 bottles
Ending inventory = 10% of the subsequent quarter's sales
Production:
= Ending inventory + Sales - Beginning inventory
= (150,000 × 10) + 200,000 - 20,000
= 195,000 bottles
Therefore, the production needs for the first quarter is 195,000 bottles.