<span>This oral contract may not be legally enforceable at all. Cody and Debora did not sign an official document with clear and precise expectations of Cody’s work schedule. This was a mere oral agreement which does not legally hold Cody responsible for follow through at work. This oral agreement may not be admissible in court, as there is no supportive documentation to argue the work schedule.</span>
Scarce resources are those resources that have limited availability in combination with greater productive uses. Time is a scarce resource as well as all have limited time in our life. In addition, out of the limited time we have, a significance portion of that time is spent on unproductive tasks such as sleeping, bathing among other tasks. As more and more time is spent on a given activity the opportunity cost of that activity in terms of other activities rises. Opportunity cost in this case is the benefit that a person could have received by involving himself in a given task, but gave up to take up another task.
Answer:
The correct answer is FALSE.
- First it's not sound investment advice to put all his savings into an investment because as the narrative rightly points out, he may have other needs.
- Second, high growth stock are also
- high risk
- they only pay in the long term only if the company is successful because dividends are re-invested which is one of the reasons the companies grow quickly.
Although they are high risk, they also have great advantages such as:
- High growth rate: this means if all goes well David will enjoy a good return on his investment;
- It's also a way to protect his money from erosion by inflation
What can David do?
Subject to the advise of a professional investment professional
- David needs to take into consideration his immediate needs, set aside some funds to take care of that.
- Invest the balance into a mix of high growth rate stock which are high yielding but risky and low growth rate but secure investment like government bonds.
- Start a small business by the side or get a job in the interim as he continues with his new life.
Cheers!
Answer:
B. fixed costs, variable costs, and mixed costs
Explanation:
Mainly there are three types of cost i.e variable cost, fixed cost, and the mixed cost. The variable cost is that cost which is change when the production level change whereas the fixed cost is that cost which remains constant whether production level changes or not
.
The mixed cost is a semi-variable cost which include some part of the fixed cost and some part of the variable cost
So, the variable cost includes indirect material, indirect labor, and factory supplies
The fixed cost includes supervision, taxes, and depreciation expense.
And, the mixed cost includes insurance, utilities, etc.
Cost of equity capital is closest to: 16 percent
Solution:
WACC is covered on page 120 Corporate Finance, under Capital Structure.
Using the standard equation for WACC = %wt Equity x cost of equity (re) + %wt Debt x cost of debt (rd).
Since there is a 20% tax rate for the firm, the cost of borrowing is reduced by that amount. So the cost of debt is 4%, not 5%.
Plug the formula: 10% = 50% x re + 50% x 4%
The formula ( i.e. 0.1+(0.1-0.05)(1)(1-0.2)) in CFAI reading is questionable.
The calculation is 0.1+(0.1-0.05*(1-0.2))*(1)=16%
