Answer:
E(5r5) = 0.06
Explanation:
The expected rate <u><em>(which is the the projected return on a monetary investment)</em></u> on the treasury bonds at 4.05% can be calculated as seen below:
Rate on 5-year Treasury Bonds, E(r5) = 2.20%
Rate on 10-year Treasury Bonds, E(r10) = 4.05%
(1 + E(r5))^5 * (1 + E(5r5))^5 = (1 + E(r10))^10
1.0220^5 * (1 + E(5r5))^5 = 1.0405^10
1.11495 * (1 + E(5r5))^5 = 1.48738
(1 + E(5r5))^5 = 1.33403
1 + E(5r5) = 1.05933
E(5r5) = 0.05933
E(5r5) = 0.06
The correct answer is B.
A price floor is a policy established by economic authorities that consists on setting a threshold so that the price of a certain product or service cannot decrease under that. It distorts the market outcome when it is larger than the equilibrium price, because the amount supplied at the price floor level would the larger than the amount demanded by consumers and, hence, there is an excess of supply or surplus. Therefore, <u>the market does not clear because the rationing function of prices has been externally influenced. </u>
A price ceiling is a similar policy established by economic authorities. A threshold is set so that the price of a certain product or service cannot increase over it. It distorts the market outcome when it is smaller than the equilibrium price, because the amount supplied at the price ceiling level would the smaller than the amount demanded by consumers and, hence, there is an excess of demand of shortage. Again, <u>the market does not clear because the rationing function of prices has been externally distorted. </u>
<em>A market clears when the equilibrium is reached and the amount supplied equals the amount demanded, so that the desires of both producers and consumers meet. </em>
Answer:
$6,200
Explanation:
Beginning Work in progress $15,000 $8,000
Units started $60,000 $38,500
Total process $75,000 $46,500
Less: Units transferred to tax $65,000
Ending work in progress $10,000
Average cost method material cost of work in progress = Material cost ÷ Total units
$46,500 ÷ $75,000
= $0.62
Material cost of work in progress = $0.62 × $10,000
= $6,200
Answer:
1. 32.68%
2 .C. Two years
Explanation:
1. Using Excel or a scientific calculator, you can calculate the IRR which is the discount rate that makes the Net Present Value to equal $0.
= IRR(-2100000,1200000,1200000,1200000)
= 32.68%
2. The Payback period is how long it takes for the cash inflows to pay off the original investment.
Original Investment = -$2,000
After year 1 = -2,000 + 600 = -$1,400
After year 2 = -1,400 + 1,400 = $0
It took 2 years to payback the original investment so Two years is the Payback period.
Answer:
If the company were to locate departments X, Y, and Z in areas 1, 2, and 3, respectively, the total distance (in meters) loads would be moved each week is 8,000.
