Answer:
A. Entrepreneur
Explanation:
Andy Yocom is an entrepreneur, because he saw a market opportunity, took a financial risk (he had to finance the advertising in the golf course, either with his own capital, or by taking up debt), hoping to recover the investment in the near-future, and earn a profit as well.
That is what entrepreneurs do: they try to find market opportunities, set up businesses to meet take advantage of those opportunities, assuming financial risks in the process, with the hopes of earning a profit afterwards.
Answer:
D. private property rights must be allocated and defended by government.
Explanation:
A property right is the exclusive or sole authority which determines the legal ownership of resources and how these resources are to be used, whether by individuals or government.
Also, a competitive market is a type of market that comprises of numerous producers who compete with each other so as to satisfy or meet the material needs and wants of consumers at a specific period of time.
Hence, for a market to exist, private property rights must be allocated and defended by government.
This ultimately implies that, when the ownership of resources are well defined and markets are competitive, all benefits from trade between the consumers and producers of goods and services has been maximized, and each units creating more benefit to the consumers than cost have been produced in the economy.
Answer:
(A) $93.33 million
(B) $98.25 million
Explanation:
Milton expects a free cash flow of $14 million each year
The corporate tax rate is 21%
The unlevered cost of capital is 15%
Milton has an outstanding debt of $23.44 million.
(A) The value of Milton's industry without leverage can be calculated as follows
= Free cash flow/unlevered cost of capital
= $14 million/15%
= $14 million/0.15
= $93.33 million
(B) The value of Milton with leverage can be calculated as follows
= unlevered value + tax rate × debt
= $93.33 million + 21% × $23.44 million
= $93.33 million + 0.21 × $23.44 million
= $93.33 million + $4.922 million
= $98.25 million
Answer: b. a market where savers and borrowers interact.
Explanation: Capital markets can be seen as one for long-term securities, including the stock market and the bond market. Its definition actually is an avenue where savings and investments are exchanged between those who have capital (savers) such as retail and institutional investors, and those who are in need of capital (borrowers) such as businesses, people and governments.
Capital markets is categorized into the primary and secondary markets and the most common capital markets are the stock market and the bond market.
Capital markets consist of the primary market (new securities are issued and sold here), and the secondary market (here, already-issued securities are traded between investors).
Answer:
The flexible budget variance for the 40minusinch pipe is $1,200 favorable
Explanation:
According to the given data we have the following:
Actual sales revenue=$31,700
Flexible budget=$30,500
Therefore, in order to calculate the the flexible budget variance for the 40minusinch pipe, we would have to use the following formula:
Flexible budget variance = Actual sales revenue - Flexible budget
Flexible budget variance =$31,700 - $30,500
Flexible budget variance =$1,200 F
avorable
The flexible budget variance for the 40minusinch pipe is $1,200 favorable
