Manuel is retired and receives a fixed payment from his pension each there is inflation when the buying power of his pension will fall
This is further explained below.
<h3>What is
inflation?</h3>
Generally, Inflation refers to the rate at which prices continue to grow during a certain period of time, and the term may also refer to inflation itself. In most cases, inflation is assessed on a broad scale, such as the overall increase in prices or the growth in the cost of living in a particular nation.
To put inflation in its most basic form, it may be thought of as the general upward trend in the prices of goods and services over time. What this implies is that a dollar spent now won't purchase as much in the future. In other words, it will lower your ability to purchase things in the future.
In conclusion, Manuel is now retired and receives a certain amount from his pension on an annual basis. In the event that there is inflation, Manuel will be able to buy a lesser total amount with his pension money.
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The perpetual equivalent annual cost is - $35013
<h3 /><h3>The perpetual annual cost calculation</h3>
interest i = 10%
Period = n = 7 years
Formula
A/F = i/(1+i)^n-1
= 0.1/(1+0.1)^7-1
= 0.1054
The perpetual annual cost
= -250000*0.1-95000(0.1054)
= -25000-10013
= - 35013
Therefore the perpetual equivalent annual cost is $35013
This is a profit, which increases next year's budget.
<h3>Two ways in which can adapt to the challenges of the business environment</h3>
- Recognize the Size of the Change
- Be open to new and different ideas
Today's business concerns are more pressing than ever before. Businesses are competing on a much greater scale as a result of technical advancements and globalization. And, in light of the current economic and health crises, business owners confront an even greater challenge: prospering, not just surviving. Here are four strategies to explore in order to assist your company adjust amid difficult times.
<h3>1. Recognize the Size of the Change</h3>
- To most seasoned company and executive leaders, the word 'adapting' may sound cliché. Adaptability, on the other hand, in the context of business simply means being open to new ideas and methods. Accept that the world is changing at a quick speed, and that in order for businesses to thrive, they must adapt their strategy to meet the demands of the moment.
<h3>2. Be open to new and different ideas.</h3>
- In order to be competitive, a business owner needs understand a few things. The first step is to think about what other options you have. Consider your backup plans and procedures in case the market situation changes unexpectedly. A business owner must constantly be prepared for any kind of tweaks and changes that their company may experience, and have a contingency plan in place that can be implemented promptly.
Answer:
a. Value.
Explanation:
The opportunity cost of a choice is the value of the opportunities lost.
In Economics, Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.
Hence, the opportunity cost of a choice is the benefits that could be derived in from another choice using the same amount of resources.
<em>For instance, if you decide to invest resources such as money in a food business (restaurant), your opportunity cost would be the profits you could have earned if you had invest the same amount of resources in a salon business or any other business as the case may be.</em>
