Question 7 (3 points)

Making a prediction today about the world's population in twenty years based on current growth trends is an example of ▼ normat

iragen [17]

Answer: Positive, Normative

Explanation: Positive economics is based on facts and objects that can be verified. While, normative economics is based on value based judgement that are difficult to verify.

Making a prediction today about the world's population in twenty years based on current growth trends is an example of positive economics.

Advising the residents of a town to choose a toll road over a freeway extension due to a limited budget and high trucking usage is an example of normative economics.

6 0

3 years ago

Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.50 percent, a par value of $1,000 pe

katrin [286]

Answer:

2.9652%

Explanation:

to determine the cost of debt we must use the FMV of the bonds plus the YTM:

first bond:

FMV = 1.09 x $1,000 = $1,090 x 3,600 bonds = $3,924,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {17.5 + [(1000 - 1090)/16]} / [(1000 + 1090)/2] = (17.5 - 5.625) / 1045 = 1.136% x 2 = 2.27% annual

second bond:

FMV = 0.95 x $2,000 = $1,900 x 3,950 bonds = $7,505,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {59.4 + [(2000 - 1900)/42]} / [(2000 + 1900)/2] = (59.4 + 2.38) / 1950 = 3.168% x 2 = 6.34% annual

total debt = $3,924,000 + $7,505,000 = $11,429,000

weighted average after tax cost of debt:

{($3,924,000/$11,429,000 x 2.27%) + ($7,505,000/$11,429,000 x 6.34%)} x (1 - 0.40) = (0.779% + 4.163%) x 0.6 = 4.942% x 0.6 = 2.9652%

6 0

3 years ago

Suppose NanoSpeck, a biotechnology firm, is selling stocks to raise money for a new lab—a practice known as finance. Buying a sh

marishachu [46]

Answer: Bond holders

Explanation: In simple words, bondholders refers to the creditors of the organisation. The holders of the bond are not the owners as they are paid fixed interest and are not able to participate in the decision making of the company.

In the event of liquidation, bondholders are paid first because it is assumed that the decision makers should be punished for the liquidation and hence they should be paid at last.

5 0

3 years ago

What happens when the Federal Reserve puts money into the banking system

Anton [14]

When the Federal Reserve puts money into the banking system, short term interest rates fall because there is more capital in the system. This means that banks are willing to take more risks.

>>>The Federal Reserve System‍—‌also termed as the Federal Reserve or the Fed‍—‌is the central banking system of the United States.

4 0

3 years ago

John Walker, the Chief Executive Officer of Consolidated Industries, had a tough decision to make. He had to decide which of fou

Afina-wow [57]

Answer:

A) Diffusion of responsibility; escalation of commitment.

Explanation:

Diffusion of responsibility relates to the concept of psychology in which the individual tends to create the responsibility of some different person, because the group size is to large and then the individual thinks not to take the responsibility.

Escalation of commitments relates to the fact that an individual continues with all the previous decisions and do not alter his actions, in consideration to the current circumstances.

In the given instance, John Walker the CEO never met any of the employees of third-world nation, and therefore, he continues his decision, that this plant shall be closed as he once again do not study all the plants, but believes illogically that the close of this plant will be beneficial to company.

8 0

3 years ago