Answer:
(1) Payback period is 4.588 years or 4 years and 215 days
(2) 5.13%
Explanation:
(1)
Payback period is the time period in which Initial Investment made in the project is recovered in the form of cash inflows.
Payback period = Initial Investment / Annual net cash flow
Payback period = $390,000 / $85,000 = 4.588 years = 4 years and 215 days
(2)
As per given data
Net Income = $20,000
Initial Investment = $390,000
Annual rate of return is the ration of net income to the investment made in the project.
Annual rate of return = Annual net Income / Initial Investment
Annual rate of return = ($20,000 / $390,000) x 100 = 5.13%
Answer:
Price lowers and becomes negative or -5.37 dollars
Explanation:
Market risk premium's formula could be written as dividends/price + dividend's growth rate. Therefore, we dividend growth rate according to the current price and dividend level equal to market risk premium - dividends/price or 0.15 - 1/15.43 = 0.086 or 8.6%. If the dividend growth rate rises by 25% than new one is 33.6%. Price is equal to dividends/market risk premium - dividend growth rate or in this case 1/0.15-0.336 or 1/-0.186 or -5.37 dollars. If the price is negative that would mean that any future selling of the stock would mean that ABC would have to pay in order to sell it.
Answer:
$52
$ 1.33
- consumer price will increase
- consumer surplus will decrease
- import will decrease
- reduced export
- portends gloom for the general outlook for the economy
Explanation:
Given domestic demand curve, S(p) = 20p⁻⁰°⁵
the domestic supply curve S(p)= 5p⁰°⁵
world price is $7.00
using calculus to determine the changes in consumer surplus
by consumer surplus means in this case supply exceeds demand
we establish the equilibrium point where the supply and demand functions meet or are equal
solving 20p⁻⁰°⁵ = 5p⁰°⁵
20/5 = p⁰°⁵/p⁻⁰°⁵
4 = p⁰°⁵⁺⁰°⁵
4= p = q which is the quantity produced
consumer surplus = maximum price willing to pay - Actual price
= ∫⁴₀ dp dp - p* q
= ∫⁴₀20p⁻⁰°⁵ dp- 7* 4
= 20∫⁴₀p⁻⁰°⁵ dp -28
= 20/0.5 p⁰°⁵- 28
= 40 *4⁰°⁵ - 28 = $52
producer surplus = it is a measure of producer welfare. It is measured as the difference between what producers are willing and able to supply a good for and the price they actually receive
thus producer surplus = p* q - ∫⁴₀ d(s) dp
= 7 * 4 - ∫⁴₀ 5p⁰°⁵ dp
= 28 - 5 ∫⁴₀ p⁰°⁵ dp
= 28 -5 *2/3 p¹°⁵
= 28 -5 *2/3 4¹°⁵
=$ 1.33
welfare from eliminating free trade
- consumer price will increase
- consumer surplus will decrease
- import will decrease
- reduced exports
- portends gloom for the general outlook for the economy
Answer:
This is an example of an emergent strategy
Explanation:
An emergent strategy is an unplanned strategy it is the strategy that actually happens as a result of changes in the external environment of the business and it shows the responds to such changes. Although it is unintended, adopting an emergent strategy helps a business adapt more flexibly to the practicalities of changing market conditions.
Therefore the type of strategy adopted is an emergent strategy
