Answer: positive cross elasticity of demand.
Explanation: In simple words, cross elasticity refers to the degree of change in the demand of a good with respect to change in the price of another goods.
In case of substitute goods, one good can easily be used in the place of another good. Thus, if the price of one good increases the demand for its substitute good also increases.
Hence from the above we can conclude that substitute goods have positive cross elasticity.
Answer:
The beta of stock T is 1.82
Explanation:
The portfolio beta is made up of the weighted average of the individual stock betas in the portfolio.
The formula for portfolio beta is,
Portfolio beta = wA * beta of A + wB * beta of B + ... + wX * beta of X
The weight of stock T in the portfolio is = 1 - (0.11 + 0.56) = 0.33 or 33%
Let beta of Stock T be x. The beta of Stock T is:
1.47 = 0.11 * 0.84 + 0.56 * 1.39 + 0.33 * x
1.47 = 0.0924 + 0.7784 + 0.33x
1.47 - 0.0924 - 0.7784 = 0.33x
0.5992 / 0.33 = x
x = 1.815 rounded off to 1.82
Franchising is the practice of paying a company to use its name, resources and operation systems.
Answer:
$51,164
Explanation:
The project's terminal cash flow is basically the cash flow of the project's last year.
depreciable value = $80,000 + $6,000 - $23,031 = $62,969
depreciation expense per year = $62,969 / 5 = $12,593.80 per year
net cash flow year 5 = [(savings - depreciation expense) x (1 - tax rate)] + depreciation expense + salvage value + recovery of net working capital = [($28,000 - $12,593.80) x (1 - 35%)] + $12,593.80 + $23,031 + $5,525 = $51,163.83 ≈ $51,164
What is the original statement?
