Answer: It should shot down immediately.
Explanation:
If the market price is equal to average cost at the profit-maximizing level of output, then the firm is making zero profits. If the market price that a perfectly competitive firm faces is below average variable cost at the profit-maximizing quantity of output, then the firm should shut down operations immediately.
Answer:
<u>True.</u>
Explanation:
This statement is true. In Kenya there is a system called M-PESA, which can be defined as a more developed payment system worldwide, this system acts as a tool that allows payments and purchases to be made via cell phone.
This system revolutionized the lives of the citizens of that region, due to the ease of being able to carry out commercial transactions and manage their money without needing a bank.
Answer: The answers to the question are provided below.
Explanation:
The basic objective of the monetary policy is to achieve economic growth, full employment, and price stability in an economy. The major strengths of the monetary policy are its flexibility and speed when compared to fiscal policy. Monetary policy is faster to implement and brings about desired changes faster.
Monetary policy is easier to conduct than fiscal policy because:
• Monetary policy is implemented by independent monetary authorities. Therefore, unpopular decisions such as the increase of interest rates to decrease inflationary pressure can be used.
• Fiscal Policy is the use of taxation and government spending to control economic activities but it is difficult to get a department that is willing to have its spending cut in order to help the economy.
• Increasing taxes will always be unpopular among individuals and firms and increasin corporations and income tax may lead to supply side effects. For example, increasing income tax may lead to the reduction in the incentives to work.
Fiscal and monetary policies are both effective. In a deep recession and a liquidity trap, the fiscal policy can be more effective than the monetary policy because the government creates job, pays for new investment schemes, rather than relying on the use of monetary policy to indirectly motivate businesses to invest. Likewise, the monetary policy is also more flexible and faster.
Answer:
A. -$425.91
Explanation:
Given that
Start up cost = 2700
Cash inflow 1 = 811
Cash inflow 2 = 924
Cash inflow 3 = 638
Cash inflow 4 = 510
Rate = 11.2% or 0.112
Recall that
NPV = E(CF/1 + i]^n) - initial investment or start up cost
Where
E = summation
CF = Cash flow
i = discount rate
n = years
Thus
NPV = -$2,700 + $811 / 1 + 0.112 + $924 / 1 + 0.112^2 + $638 / 1 + 0.112^3 + $510 / 1 + 0.112^4
NPV = -$425.91
Therefore, NPV = -$425.91
