Answer:
A. We can use Modigliani and Miller's first proposition to derive an explicit relationship between leverage and the equity cost of capital.
Explanation:
Their main conclusions can be summarized as: In the absence of taxes, firm capital structure is irrelevant. With taxes, a firm's cost of capital can be lowered through issuing debt. This highlights the importance of debt as a tax shield.
Modigliani and Miller's conclusion went against the common view that even with perfect capital markets, leverage would affect a firm's value.
Answer: Premium
Explanation: T
he premium is the per month payment you make to retain insurance, and the deductible is what you pay a provider before insurance takes over.
Answer:
A) Discounted cash flow
Explanation:
The IRR gives a rate as an answer, which represent the yield of the project.
The NPV gives a valuation in dollars, same for the cost benefit analysis.
Only the payback discounted cash flow gives the answer at which point the project pays itself. Which is an answer in years or month.
Answer:
a. 15,500 units
b. 6,200 bats and 9,300 gloves
Explanation:
Fixed costs (F)=$620.000
Sales mix=40% bats and 60% gloves
Selling price of bats (Sb) =$90
Variable cost of bats (Vb) =$50
Selling price of gloves(Sg) =$105
Variable cost of gloves (Vg)=$65
The average contribution (C) per unit can be determined as:
In order to reach the break-even point the total contribution of 'n' units must equal fixed costs:
Since we know the sales mix, the number of bats (B) and gloves (G) are:
At the break-even point, 6,200 bats and 9,300 gloves would be sold.
Answer:
aggregate; marginal product; positive; diminishing.
Explanation:
Slopes are well depicted in image attachment.
Aggregate production function:
This function shows how the available inputs (production) of an economy affects the total real gross domestic product.
Note: another word for aggregate implies the whole or total production in an economy.
Marginal product function: The marginal product is the slope of the total aggregate function.
Remember, marginal product is the change in output that results from adding more unit of labor, in this case in an entire economy.