Anytown households that earn more than $75,000 tend to buy sports equipment, while households that earn less than $75,000 tend t
1 answer:
You might be interested in
Answer: $329.75
Explanation:
The one year subscription is $40 per year. It is estimated that the average age of current subscribers is 38 and they will leave on average to 78. This means that they will leave for,
= 78 - 38
= 40 years
Evans Ltd average interest rate on long-term debt is 12% so this means that we can use that 12% as a discount rate for the cash-flow expected.
I have attached a Present Value Interest Factor of an Annuity table to this question. It helps calculate annuities faster.
The above can be treated as an annuity because the $40 is constant every year.
The present value of the $40 over 40 years can be calculated by,
= $40 * present value Interest Factor of an Annuity for 40 years at 12% (look at the table for where 40 years on the y axis intersects with 12% on the x axis)
= $40 * 8.2438 (this is the figure when it is not rounded off to 3 dp)
= $329.752
= $329.75
This shows that the lifetime flat fee of $480 is more profitable for Evans Ltd as opposed to the yearly subscription. They should therefore try to sell more of the lifetime contract with the flat fee.
If the<u> demand curve is inelastic</u>, a rise in the supply of grain will result in a decrease in the overall income received by grain producers.
The ability of firms to enter and exit a market over time means that, in the long run, the supply curve is more elastic.
Two basic economic concepts are combined in the law of supply and demand to explain how shifts in the price of a resource, good, or service affect its supply and demand. As the price rises, supply increases while demand decreases. On the other hand, as the price falls, demand increases and supply becomes more limited.
The degree to which changes in price translate into changes in demand and supply is known as the product's price elasticity.
Basic consumer demand is comparatively inelastic, or less responsive to price changes.
Discover the long-term impact of population growth on supply and demand: brainly.com/question/13353440
#SPJ4
