C.
pretty sure that’s right but if not, sorry!
Answer:
$14,882.44.
Explanation:
Given
Future value= $1,200,00
Time= 27 years
Interest rate= 7.5%
let PV= present value
The question is solved by computing the amount of annual deposit.
Enter the below in a financial calculator to compute the amount of annual deposit:
FV= 1,200,000
N= 27
I/Y= 7.5
PV= FV÷(1+I)^N
putting values we get
PV= $1,185,117.56
Now Benefit = FV- PV= 1,200,000-1,185,117.85= $14,882.44.
Therefore, the amount of annual deposit is $14,882.44.
Answer:
If Jack bought 21 DVDs last year when his income was $30,000 and he buys 23 DVDs this year when his income is $35,000, then his income elasticity of demand is <u>0.571</u> which means that DVDs are a(n) <u>normal </u>good for Jack.
Explanation:
Ei = ⌂Q/Q /⌂I/I
⌂Q = 23-21 = 2
⌂I = 35000-30000 =5000
I = 30000
Q=21
Ei=⌂Q/⌂I * I/Q = 2/5000 * 30000/21 = 2*6/21 =12/21 = 0.571
The income elasticity of demand is 0.571
<span>The marginal propensity to consume (MPC) is the the change in consumption divided by change in income. Where change in in consumption = $50B and change in income = $200B. So we have 50/200 =1/4 = 0.25. So the MPC is $250M</span>
Answer:
8.67%
Explanation:
The computation of cost of equity is shown below:-
Before capitalization the value of equity = Interest and taxes × (1 - tax rate) ÷ Cost of capital
= $1,500 × (1 - 0.35) ÷ 0.08
= $1,500 × 0.65 ÷ 0.08
= $12,188
Value of firm with debt = The value of equity before capitalization + (Bonds outstanding × tax rate)
= $12,188 + ($3,500 × 0.35)
= $13,413
After recapitalization debt equity ratio = Cost of capital + ((Cost of capital - Coupon percentage) × Tax rate × (1 - tax rate)
= 0.08 + ((0.08 - 0.05) × (0.35) × (0.65))
= 0.08 + ((0.03) × (0.35) × (0.65))
= 8.67%
