Most time, it is reasonable to refer to the opportunity cost as the price because it entails the benefit of the foregone good or service.
<h3>
What is an opportunity cost?</h3>
It refers to a value of what is rejected in order to perform the chosen alternative, that is, the value one have to give up to buy what you want in terms of other goods or services.
Therefore, it is sometimes reasonable to refer to the opportunity cost as the price because it entails the benefit of the foregone good or service.
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Answer:
Minimum transfer price when operating at capacity is the marginal cost + opportunity cost
Maximum transfer price is marginal cost only, when not operating at capacity.
Explanation:
Minimum transfer price when operating at capacity is the marginal cost + opportunity cost because when operating at capacity there are 2 elements involved - the cost at which it has made the units it will be transferring to another department within the organisation, and the profit it would have made if it had sold those units to others (opportunity cost)
Maximum transfer price is marginal cost only, when not operating at capacity because the department is constrained, it can only produce for the satisfaction of internal demand, not external customers; hence there is no case of opportunity costs.
Answer:
Why did you choose to become a mechanic?: Practice your interviewing skills.
In what ways is my résumé lacking if I want to
find a position as a mechanic?: Get advice and information.
Can I contact you with any other questions
that I may have?: Build your professional network.
Explanation:
Plato
Answer:
Yes, the results are the same in both frameworks. Please see below for explanation.
Explanation:
With regards to the bond supply and demand framework, people will look to buy more bonds since they are more wealthy now. Hence, the supply of bonds will increase. The supply curve and the demand curve will both move to the right, with the former shifting more than the latter. The equilibrium interest rate will increase.
With regards to the liquidity preference framework, once the economy experiences a positive shift, there will also be an increase in the demand for money. People will make an increased number of transactions as well and hence, the demand curve will move towards the right. The equilibrium interest rate will rise too.
Answer:
1. PV = 101.87
2. YTM = 7.46%
3. Price of the bond is $100.92
Explanation:
PV = 8.5/ (1.065) + 108.5/ (1.075)2
PV = 7.981 + 93.889
PV = 101.87
Part B:
PV = 101.870
FV = 100
N = 2
PMT = 8.5
Using Financial Calculator:
r = 7.459237
YTM = 7.46%
Part C:
The forward rate for next year, derived from the zero-coupon yield curve, is approximately:
(1 + forward Rate) = (1 + 0.075)2/ (1.065)
forward rate = 8.51%
Price of the bond = 108.5/ (1.0851)
Price of the bond = 100
Part D:
Interest Rate = 8.51% - 1% = 7.51%
Price of the bond = 108.5/ (1.0751)
Price of the bond = 100.92
