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3 years ago

How is an emergency fund simalar to and different from a savings fund?

1 answer:

3 0

The difference is that you use an emergency fund for dire situations such as paying off hospital fees or paying sudden unexpected bills

Savings fund is more where you save for a down payment or a car or other things you are saving up for

The things these have in common is that for each fund you are saving for an event like how you save up for a car or unexpected bills

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The Two Dollar Store has a cost of equity of 11.9 percent, the YTM on the company's bonds is 6.2 percent, and the tax rate is 40

Fofino [41]

Answer: 9.03%.

Explanation:

Given: The Two Dollar Store has a cost of equity of 11.9 percent, the YTM on the company's bonds is 6.2 percent, and the tax rate is 40 percent.

Debt to equity ratio is .54

i.e. $\dfrac{debt}{equity}=\dfrac{0.54}{1}\ ...(i)$

Adding denominator to numerator on both the sides, we get,

$\dfrac{debt+equity}{equity}=\dfrac{1.54}{1}\\\\\Rightarrow\ \dfrac{equity}{debt+equity}=\dfrac{1}{1.54}$

i.e. Weighted equity = $\dfrac{1}{1.54}\ ....(ii)$

From (i)

$\dfrac{equity}{debt}=\dfrac1{0.54}\$

Adding denominator to numerator on both the sides we get,

$\dfrac{equity+debt}{debt}=\dfrac{1+0.54}{0.54}$

$\dfrac{equity+debt}{debt}=\dfrac{1.54}{0.54}$

Thus, weight of debt= $\dfrac{1.54}{0.54}$

Now,

Weighted average cost of capital=(Weight of equity) × (cost of equity)+(Weight of debt)×(Cost of debt)×(1-tax rate)

$\dfrac{1}{1.54}\times (0.119)+\dfrac{0.54}{1.54}\times(0.062)\times(1-0.40)\\\\=0.07727+0.02174(0.60)\\\\=0.07727+0.02174(0.60)\\\\=0.07727+0.013044\\\\=0.090314\approx9.03\%$

Hence, the weighted average cost of capital is 9.03%.

3 0

4 years ago

If the government requires a natural monopoly to price at marginal cost, Group of answer choices monopoly firms will earn zero e

MissTica

Answer:

monopoly firms will operate at a loss because P < AC

Explanation:

A monopoly is when there is only one firm operating in an industry.

A natural monopoly exists either because of high start-up costs or high economies of scale.

A natural monopoly has a decreasing average cost for some output. When the average cost is falling, the marginal cost lies below the average cost. If the government sets price to be equal to marginal cost, which lies below the average cost, the monopoly would incur losses.

3 0

4 years ago

Ramona enjoys her job because she is able to help kids in an after school program. The work value Ramona feels strongest about i

ehidna [41]

Answer:

work with people

Explanation:

because she enjoys her job working with the kids and helping them out in the after school program at the same time she is showing good leadership to the kids but she gets along with the get and enjoy helping them

7 0

3 years ago

Read 2 more answers

The decision to purchase a good or service or a customer benefit package is based on an assessment by the customer of the percei

quester [9]

Answer: True

Explanation:

The decision to purchase a good or service or a customer benefit package is totally based on the price of that package or a good and on the benefits that a consumer will received after the purchase. A rational consumer will compare the price of a good with the perceived benefits. If the perceived benefits worth greater or equal to price then a consumer may purchase that product otherwise not. Therefore, a consumer's decision is largely depend upon the ratio of price and benefits.

8 0

4 years ago

The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a

liraira [26]

Answer:

Yes; $2.0 million

Explanation:

Yes, SHOULD YOU GO AHEAD and do so reason been that the TOTAL LOSS would then be the amount of $3 million instead of the amount of $5 million which therefore means that The MOST YOU SHOULD PAY in order to complete the development would be the amount of $2 million calculated as ($5 Million-$3 Million).

8 0

3 years ago