Answer:
3. Correctly ignored a sunk cost
Explanation:
Sunk costs refer to those costs which have been incurred in the past and which can no longer be recovered. For example, past expenditure on research and development with no current or future benefits represent sunk costs which can no longer be recovered.
Sunk costs are irrelevant for decision making process as they do not relate to current projects and yield no economic benefit.
In the given case, Manuel had already purchased a $10 movie ticket, which can neither be transferred nor eligible for a refund. Later when he does not exercise the option of going for the movie and opts for a concert instead, the amount of 10$ spent on the movie represents a sunk cost which is non recoverable.
Answer:
Leads the economy to the wrong mix of output
Explanation:
Market failure is the when there is an inefficient distribution of goods and services in the free market.
One of the types of market failure is externality
Externality is when the production or consumption activities of economic agents have effects on people not involved in the economic activity. Externality can either be positive or negative
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation
Answer:
The break-even EBIT using EPS is $1,288,000.
Explanation:
the break-even EBIT using EPS is the EBIT that will brings EPS under two different capital structure equal.
Denot X is the EBIT.
* We have:
+ EPS in all-equity firm = X/460,000
+ EPS in levered firm = ( X - interest rate)/230,000 = ( X - 4,600,000 x 14%)/230,000 = (X - 644,000) / 230,000.
* We have the equation:
X/460,000 = (X-644,000)/230,000 <=> X/460,000 = 2.8 <=> X = $1,288,000.
So, the break-even EBIT using EPS is $1,288,000.
Answer:
Following is given the solution for the question.
I hope it will help you a lot!
Explanation:
Answer:C
Explanation: Since you need 2.5 Canadian Dollars, .89 = to 1. Therefore 2.5 times the .89 equals to 2.225, or rounding up to 2.23
