Answer:
We should discontinue Product B
Explanation:
We should check if Product B generates a contribution or not:
We subtract from the sales revenues the variable cost:
revenue 39,500
variable cost of goods sold (25,500)
variable selling expenses <u> (16,500) </u>
Contribution (2,500)
<em>As the contribution is negative, we should discontinue </em>Product B as is less expensevely to stop production than continue.
<span>selective attention
Selective attention is the process of focusing on a particular object in the environment for a certain period of time. Attention is a limited resource, so selective attention allows us to tune out unimportant details and focus on what really matters.</span>
Answer:
If no information of how many years expected for the FCF in Bayleaf, then I assume you expect FCF in 4 years only.
Then the Enterprise Value of Bayleaf is nil, since its valuation is negative of roughly $19,871.
However if we expect to have FCF in 20 years, in which the growth rate of FCF in year 4th is 3% year on year, then the valuation of Bay Leaf Inc. is roughly $347 million.
Explanation:
The valuation of enterprise is Net present value (NPV) of Free Cash Flow (FCF) minus its Net Debt
In the NPV, the discount rate is weighted average cost of capital (WACC); thus we can calculate NPV of FCF in Bayleaf by this function in excel = NPV(14%,70000,74000,80000) = $221,129,242
Then the valuation of company if considering FCF in 4 years is ($19,871)= NPV of FCF – Net Debt = $221,129,242 - $241,000,000
Please see excel attached for your details.
Answer:
Lowering the banks' reserve requirement (option C) is an example of the Fed's <u>expansionary monetary policy</u> tool.
Explanation:
<h3>General Concepts:</h3>
Monetary policy.
Expansionary monetary policy.
Contractionary monetary policy.
Open market operations.
Open market sale.
<h2>What is a Monetary Policy?</h2>
The Federal Reserve (or the Fed) implements its monetary policy by increasing or lowering the nation's money supply to achieve macroeconomic goals. The two types of monetary policies are <em>expansionary</em> and <em>contractionary</em> <em>monetary policies</em>.
<h3>Expansionary Monetary Policy</h3>
The Fed implements an expansionary monetary policy during periods of <em>recession</em> to increase the nation's money supply and stimulate aggregate demand for goods and services. The Fed has the following tools to implement its expansionary monetary policy:
- Purchasing of government securities through the Federal Open Market Committee's (FOMC) <u>open market operations</u> (OMO). The OMO increases the banks' reserve account, which allows the latter to loan its <em>excess reserves</em>.
- Lowering the reserve requirement means that the depository institutions will only have to maintain a lesser fraction of their <em>checkable deposits</em>. This allows banks to loan their excess reserves, thereby stimulating investment and consumer spending.
- Lowering the discount rate below the <em>federal funds rate</em> enables<em> reserve deficient </em>depository institutions to acquire a <u>discount loan</u> from The Fed at a lower <em>discount rate</em>.
<h3>Contractionary Monetary Policy</h3>
The Fed implements a contractionary monetary policy during periods of <em>inflation</em>, which decreases the nation's money supply and slows down economic growth. The following are the Fed's tools for implementing its contractionary monetary policy:
- The FOMC's open market sale of U.S. Treasury securities decreases the depository institutions' reserve account, and reduces the monetary base. Consequently, the banks will have lesser reserves to loan to borrowers.
- Increasing the required reserve ratio implies that the banks must maintain a larger portion of its required reserves. This action increases the cost of loaning funds from other banks through the <em>federal funds market</em>, which discourages consumer and investment spending.
- Increasing the discount rate above the federal funds rate discourages banks to acquire discount loans from the Fed. The banks' repayment of previous discount loans to the Fed also decreases the money supply.
<h2>Final Answer:</h2>
We can infer that lowering the banks' reserve requirement (option C) is an example of the Fed's <u>expansionary monetary policy</u> tool.
<h3>______________________</h3>
Learn more about monetary policy: brainly.com/question/13926715
Learn more about expansionary and contractionary monetary policies:
brainly.com/question/9046840
Put D' as (4,2) as your answer.