Answer:
1) The transaction cost of both he bank deposit and mutual fund are almost equal as transaction in both can be made by visiting a branch or using internet banking or brokering.
2) The risk for the bank deposits are lower thank mutual funds because even thought the mutual fund is highly diversified, its value can still decline because of changes in market or some market crash like the 2008 recession, where as the money in the bank remains intact
3) The liquidity is higher for bank deposits because money can be withdrawn instantly, whenever the depositor wants, where as the liquidity for mutual funds is a bit lower as it takes a couple of business days to make transactions.
Explanation:
Answer: B. Lower Taxes and increase in spending
Explanation:
Recession is a period of less productive activity , demand deficiency , deflationary gap .
Fiscal Solution is that approach to solve such issues - which uses government budgetary elements (tax , govt spending /subsidy) to adjust excess / deficient demand
To correct the demand lack while recession , government should - Reduce Taxes , Increase govt spending / subsidy . So that ,people's disposable income & hence their demand increases .
I
Answer:
B. Accept X and reject Y
Explanation:
Here are the options
A. Accept both X and Y
B. Accept X and reject Y
C. Reject X and accept Y
D. Reject both X and Y
E. The answer cannot be determined based on the information provided
the project should be accepted if the WACC of the department is less than the rate of return on the project
WACC = weight of equity x cost of equity + weight of debt x after tax cost of debt
weight of debt = D / (D + E) = 0.45E /1.45E
weight of equity = E / (D + E) = E / 1.45E
WACC = ( 0.45E /1.45E) x (5.1) + ( E / 1.45E) x 14.7
= 5.1 x (0.45/1.45) + 14.7 x (1/1.45)
=1.583 + 10.138
11.72%
Division X's WACC = 11.72% - 0.5% = 11.22%
Division Y's WACC = 11.72% + 1% = 12.72%
The rate of return of Division Y's project is 12.3%. Thus, division Y's project should not be accepted
the rate of return of Division X's project is 11.64%. Thus, division X's project should be accepted
Answer:
can revoke the contract as informal verbal agreements are not binding
Explanation:
Since in the question it is mentioned that sherry would pay her $5,000 in the case when she runs marathon now once she starts running so here alan can revoke the contract legally as there is only verbal agreements not the written agreement also they are not binding to each other
So as per the given situation, the above statement should be considered