Answer:
A) The current supply will shift to the left
Explanation:
The supply curve shifts to the left when the total quantity supplied decreases, which results in a price increase at any given quantity.
If everyone expects that the football team will have a great season, the quantity demanded for tickets will increase, which will increase their price. But the suppliers will also hold to their tickets until a day or two before the games to increase expectations and fans' anxieties. That way the price will increase even more, and they will make a higher profit.
Answer:
$127,400
Explanation:
Gross profit ratio = [(sale - cost) ÷ sale price] × 100
= [($5,000,000 - $3,700,000) ÷ $5,000,000] × 100
= 0.26 × 100
= 26%.
Gross profit on down payment is recognized in 2019:
= Down payment × Gross profit ratio
= $490,000 × 26%
= $127,400
Answer:
$8.078 million
Explanation:
we must use the same time periods, so instead of using an annual discount rate, we should use a quarterly rate:
effective quarterly interest = (1 + 0.16)¹/⁴ - 1 = 0.0378 = 3.78%
dividends per quarter = 0.3 million + 0.05 million = $0.35 million
terminal value of firm in quarter 4 = 0.35 / 0.0378 = $9.26 million
present value of terminal value = $9.26 / (1.0378)⁴ = $7.983 million
present value of 4 quarterly dividends = $0.3 x 3.64879 (PVIFA, 3.78%, 4 periods) = $1.095 million
NPV = -$1 + $1.095 + $7.983 = $8.078 million
Answer:
Rate of interest = 6/60% = 10%
Explanation:
Net rate of bonds after tax will be = Rate of interest X (1 - Tax)
Heflin bond = 6% X (1 - 40%) = 3.6%
Surething Bond = 9% X (1 - 40%) = 5.4%
Since both bonds provide interest and Surething provides more than Heflin
then in order to make both incomparable Surething can decrease the rate of interest to that of Heflin so that Hugh remains indifferent will be 6%
In case there is no tax on Heflin Bond, as Hugh is in 40% marginal tax bracket, then net interest = 6 %
But for Surething Hugh will have to pay tax then after tax value of interest shall be 6% i.e. 6% = 1 - 40%
Rate of interest = 6/60% = 10%
Surething needs to pay Interest @10% on bonds. to make Hugh indifferent of both the bonds.
Answer:
$466,500
Explanation:
Assuming Metlock, Inc is free of tax, tax rate = 0%
Net profit of the year = (revenues - expenses) * (1- tax rate)
= $487,000 - $384,000 = $103,000
Retained earnings balance at the end of the year
= Retained earnings balance at beginning of the year + net profit - dividend paid
= $402,000 + $103,000 - $38500
= $466,500
