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3 years ago

Why might a town decide to issue bonds?

1 answer:

8 0

A town might decide to issue bonds to B) to build new roads or bridges. A town will achieve a specified amount of money by issuing the bond and there must be an obvious source for returning the bond value until its maturity date. Therefore, building projects or other projects related to the town's infrastructure would be the most appropriate reason for a town to issue bonds.

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Suppose the economy is initially at potential output and the quantity of aggregate output supplied increases. What information w

ankoles [38]

Answer:

We need to know if the price level is changing or not.

Explanation:

If the economy is at the potential output and the quantity of aggregate output supplied increases, we need to know if this increase is because of an increase in the price level.

If the aggregate price level is increasing then there will be a movement on the SRAS curve. If the increase in quantity supplied is because of a rightward shift in the LRAS curve, the price level will remain the same.

Also, if the quantity supplied goes back to its original level, in the long run, it implies that the increase in output was because of a short run movement.

7 0

3 years ago

The export business in China is growing. Uncle George, who has just returned from a trade expo in Shanghai, has informed you tha

vlada-n [284]

Answer:

Assuming that the capacity of the new X-ray machine is the same as the capacity of two older machines, the difference results from the number of units waiting in line (queue). You would need two different groups of workers to move the containers into the correct position if you use the two older machines, while you need only one group to move them to the new machine. This decreases lead time since coordinating work also requires time, it might be a short time, but it is more time at the end of the day.

4 0

2 years ago

Stormy Corporation has two service departments (S1 and S2) and two production departments (P1 and P2), and uses the step-down me

Marianna [84]

Answer:

E. Both S1's cost should be allocated (i.e., spread) over 140 employees and S2 should allocate a total of $390,000 to P1 and P2.

Explanation:

As S1 gives more service, So it would be allocated first

Here

S1 cost of $280,000 would be allocated to S2 P1 and P2 based on number of employees

The total employees in S2 P1 and P2 is

= 20 + 50 + 70

= 140

And, the Cost to be allocated per employee is

= $280,000 ÷ 140

= $2,000

Now cost received by S2 is

= $2,000 × 20

= $40000

And, the cost received by P1 is

= $2,000 × 50

= $100,000

And, the cost received by P2 is

= $2,000 × $70

= $140,000

Now

S2 contains total cost of

= $350,000 + $40,000 (from S1)

= $390,000

So this would be allocated to P1 and P2 as S1 has already allocated

Hence, option D is correct

3 0

3 years ago

Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the $1,708,000 in c

Sedaia [141]

Answer:

11.25%

Explanation:

Tunbull Co. are planning to start a project that requires an initial investment of $1,708,000

The firm is able to raise $1,708,000 in capital by issuing an amount of $750,000 in debt

Before-tax cost is 10.2%

Preferred stock is $78,000 at 11.4%

The equity is $880,000 at a cost of 14.3%

Tax rate is 40%

The first step is to calculate the weight of preferred stock, weight of debt, weight of equity and after-tax cost of debt.

(a)Weight of preferred stock

= $78,000/$1,708,000

= 0.0457

(b)Weight of debt

= $750,000/$1,708,000

= 0.04391

= $880,000/$1,708,000

= 0.5152

(d) After-tax cost of debt

= 10.2% × (1-25/100)

= 10.2% × ( 1-0.25)

= 10.2%×0.75

= 7.64

Therefore, the wacc can be calculated as follows

Wacc= (weight of debt×after-tax cost)+(weight of preferred stock×cost of preferred stock)+(Weight of equity×cost of equity)

= (0.4391×0.0765)+(0.0457×0.1140)+(0.5152×0.1430)

= 0.03359+0.0052+0.07367

= 0.1125×100

= 11.25%

Hence the wacc for this project is 11.25%

6 0

2 years ago

Argue why are Treasury bills a favorite place for financial managers to invest excess cash, as compared to other options? Your a

Maurinko [17]

Treasury bills are a favorite place for financial managers to invest excess cash because of the sizable and vibrant market in which they are traded.

<h3>What are treasury bills?</h3>

Treasury bills are referred to as short-term securities issued by the government when they require cash. In comparison to their face value, bills are offered at a discount.

As a result, the investor can choose any term from one day to a year, literally defining the desired maturity. Maximum liquidity is offered by the "T-bill" market, which may take on practically any volume of activity.

Learn more about Treasury bills, here:

brainly.com/question/7278415

#SPJ1

5 0

1 year ago