The equity multiplier is obtained by adding one to the debt ratio.
Therefore, the equity multiplier of XYZ inc is given by 1 + 0.62 = 1.62
Answer:
Instructions are listed below
Explanation:
Giving the following information:
For the purchase option:
Buying price= $22 per unit.
For the make option:
Weekly rental payment of $30,800
The firm also has to hire five operators to help make product A. Each operator works eight hours per day, five days per week at the rate of $14 per hour.
The material cost for the make option is $15 per unit of product A.
A) We need to find the number of units that makes the unitary fixed costs= $7
Weekly rental= 30800
Direct labor= ($14*8 hours*5workes)*5 days= 2800
Total fixed costs= $33,600
Unitary fixed costs= total fixed costs/ Q
7=33600/Q
Q= 4800 units
B) Now Q= 6600
Buy= 6600*22= $145,200
Make= 6600*15 + 33600= $132,600
Answer:
Export
true
Explanation:
Because the price of meekers in meekertown is lower than the world price for meekers, meekers from meekertown are cheaper. so if free trade is allowed, other countries would want to purchase meekers from meekertown because it is cheaper.
So, meekertown would export meekers if free trade is allowed.
When a country is too small affect the world price, allowing for free trade will always increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.
this is so because if the country is efficient in production of a good (producing at a lower price when compared to the world price), export of the good would increase thus increasing producer surplus. if on the other hand, the country is inefficient in producing a good and the country allows for free trade, the country can import the good. this would increase consumer surplus.
Answer:
Excess supply
Explanation:
Demand is the quantity required or requested by buyers while supply is the quantity of a good that a producer is able to supply to the buyer.
When demand is equal to supply there is equilibrium and no excess in demand or supply.
However when the amount supplied exceeds the demand for a product there will be excess product in the market. This is called excess supply.
Conversely when the quantity demanded is more than that supplied it is excess demand
Answer:
The risk free rate is 6.50%
Explanation:
The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.
The equation is,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
As we know the figures for r, Beta and rM, we will input these figures in the equation to calculate risk free rate.
Let risk free rate be x.
0.135 = x + 1.4 * (0.115 - x)
0.135 = x + 0.161 - 1.4x
0.135 - 0.161 = x - 1.4x
-0.026 = -0.4x
-0.026 / -0.4 = x
x = 0.065 or 6.50%
r = 0.1475 or 14.75%
