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3 years ago

Why do economists generally favor deregulation of most industries?

1 answer:

8 0

Sorry this description is a bit confusing but i couldn't really think of a way to phrase it properly :)

most economists believe that deregulation has the potential to be helpful because the fact that things aren't regulated by the government increases competition in people selling the same wares, which normally ends up lowering the price of that specific good and/or improving the quality of the good drastically (which means more people will be buying, it whatever it may be, which is good for the economy)

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Which of the following expresses the value of a levered firm (VL) in the Static Tradeoff model of optimal capital structure [Not

Brut [27]

Answer:

C. VL = VU + PV(Tax Shield) - PV(CFD)

Explanation:

The static trade off theory is a theory of capital structure in corporate finance, first proposed by Alan Kraus and Robert H. Litzenberger. The theory emphasizes the trade-offs between the tax benefits of increasing leverage and the cost of bankruptcy associated with higher leverage. The <u>answer is C</u> as we know relative to the unleveraged firm, leverage provides both costs and benefits. The benefits are the tax shields provided by debt.

7 0

4 years ago

Vito Co. had current assets of $9,000 and current liabilities of $6,000 at the end of the year. Net income during the year was $

Fynjy0 [20]

The current ratio for Vito Co. with respect to the period under review is 1.5

<h3>What is current ratio?</h3>

The current ratio, also known as the working capital ratio, measures the capability of a business to be able to meet its short term financial obligations.

The Current Ratio formula is

= Current Assets / Current Liabilities

= $9,000 / $6,000

= 1.5

Therefore, the current ratio for Vito Co. with respect to the period under review is 1.5

Learn more about current ratio here: https://brainly.in/question/45000916

5 0

3 years ago

Last year Janet purchased a $1,000 face value corporate bond with an 10% annual coupon rate and a 20-year maturity. At the time

Firdavs [7]

Answer:

33.8%

Explanation:

Purchase price of the bond will be computed using the formula below.

$p=\frac{A(1-(1+r)^{-n} }{r} + \frac{F}{(1+r)^{n} }$

where A = annual coupon = 10% * 1000 = 100

r = yield to maturity = 0.1384

n = time to maturity = 20 years

F = face value = $1,000

p = price of the bond.

$p=\frac{100(1-1.1384^{-20} }{0.1384} + \frac{1,000}{(1.1384)^{20} }\\p = 668.4721 + 74.8346\\p = 743.31$

Therefore, if Janet sold the bond a year later for $994.79,

the profit on sale = $\frac{994.79}{743.31} -1=0.3383$

= 33.8% profit (rate of return).

7 0

3 years ago

Suppose that a country has no public debt in year 1 but experiences a budget deficit of $50 billion in year 2, a budget deficit

cluponka [151]

Answer:

= $62 billion

Explanation:

Since the country started year 1 with no public debt,

The country's debt at the end of year 5 = $50 (deficit year 2) + $30 (deficit year 3) - $20 (surplus year 4, negative deficit) + $2 (deficit year 5)).

= $62 billion

The country's debt at the end of year 5 = $62 billion

Public debt is the sum of deficits and surpluses (negative deficits) over time.

5 0

3 years ago

Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil f

Stels [109]

Answer:Profit margin = 29.94%

Asset Turnover =0.50

Return on investment (ROI) =15.09%

Explanation:

Given

Sales for the year = $ 17,700,000

Net Operating Income = $ 5,300,000

Average Operating Assets = $ 35,100,000

a)Profit margin = (Net operating income/Net sales ) x 100%

= $5,300,000/$17,700,000 x 100% = 29.94%.

This shows that the Alyeska Services company has ability to turn income to profit by 29.94%

b. Asset Turnover = Total Sales/ Average Total Assets = $17,700,000/$35,100,000 = 0.50

c. Return on investment (ROI) =Net income/Total investment x 100%

= $ 5,300,000/ $ 35,100,000 x 100% =15.09%

3 0

3 years ago