Answer:
A) change in the cost of eating index = <u>20% increase</u>
B) Suppose that consumers are completely indifferent between two chickens and one ham. For this example, how large is the substitution bias in the official "cost-of-eating" index?
The <u>INCREASE</u> in the cost-of-eating index is <u>18</u> %.
The <u>OVERESTIMATE</u> of inflation in the cost of eating reflects substitution bias.
Explanation:
2015
product units unit cost total
chickens 30 $4 $120
hams 10 $5 $50
<u>steaks 10 $8 $80</u>
total $250
2016
product units unit cost total
chickens 30 $5 $150
hams 10 $7 $70
<u>steaks 10 $8 $80</u>
total $300
A) ($300 - $250) / $250 = 20%
B)
if consumers are indifferent for 2 chickens per 1 ham, then the new basket should be assuming consumers will purchase the cheapest option:
2016
product units unit cost total
hams 25 $7 $175
<u>steaks 10 $8 $80</u>
total $255
the increase in inflation would have been = ($255 - $250) / $250 = 2%
the substitution bias = reported inflation - real inflation = 20% - 2% = 18%
Answer:
5%
Explanation:
In this question, we have to find out the dividend yield which is shown below:
Dividend yield = (Annual dividend ÷ current market price) × 100
where,
Market price = $40 per share
Annual dividend = $2 per share
So, the dividend yield = ($2 per share ÷ $40 per share) × 100
= 5%
All other information which is given is not relevant. Hence, ignored it
Answer:
B/E ratio 1.2356
Explanation:
300,000 - 43,000 = 257,000
257,000/0.04 = 6,425,000
initial cost 2,200,000
unkeep cost 120,000/0.04 = 3,000,000
6,425,000/(2,200,000+3,000,000) = 1.235576923
Note we are given a discount rate, which means the upkeep, benefits and disbenefits are perpetual.
Answer: credit or debit cards
Explanation:
Answer:
Salvage value
Explanation:
Salvage value is the value of an asset after all depreciation expenses has been expensed.
For example, an asset cost $500,000, it has a 2 year useful life. the depreciation percentage is 20% for each of the useful life of the asset, the salvage value =
Cost of the asset - accumulated depreciation
accumulated depreciation = 2 x($500,000 x 0,2) = $200,000
Salvage value = $500,000 - $200,000 = $300,000
$300,000 is the estimated amount of money that can be expected from some buyer at the end of asset’s useful life