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3 years ago

Explain why the sale of used goods is not included in GDP.

1 answer:

8 0

Used goods are not included in the current year GDP, as they were already included in the year that they were produced. GDP stands for Gross Domestic Product, and includes the values of goods and services created that year in that specific country alone.

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Nyeil is a consumer products firm that is growing at a constant rate of 6.5 percent. The firm’s last dividend was R3.36. If the

OleMash [197]

Answer:

31.12

Explanation:

Given that,

Growing at a constant rate = 6.5%

Firm’s last dividend, R = 3.36

Required rate of return = 18%

Expected dividend next year = 3.36 × (1 + 6.5%)

= 3.5784

Market value of stock:

= Expected dividend next year ÷ ( required return - growth rate)

= 3.5784 ÷ (0.18-0.065)

= 31.11652

= 31.12

3 0

4 years ago

J Corp. common stock is priced at $36.50 per share. The company just paid its $0.50 quarterly dividend. Interest rates are 6.0%.

viva [34]

Answer:

Explanation:

The time (T) = 6 months = 6/12 years = 0.5 years

Interest rate (r) = 6% = 0.06

The stock is priced [S(0)] = $36.50

The price the stock sells at 6 months ( $V_c$ ) = $3.20

European call (K) = $35

The price (P) is given by:

$P=V_c+K.e^{-rT}-S(0)+Dividends\\But, Dividends = 0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\Therefore, P=V_c+K.e^{-rT}-S(0)+0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\Substituting:\\P=3.2+35*e^{-0.06*0.5}-36.5+0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\P=3.2+33.9656-36.5+0.4926+0.4852\\P=1.64$

The price of a 6-month, $35.00 strike put option is $1.65

5 0

3 years ago

If any, which of the following statements is FALSE?A. NPV measures the value created by taking on an investmentB. NPV indicates

dedylja [7]

Answer:

C. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investment.

Explanation:

NPV means Net Present Value, this is calculated by computing the present value of cash returns and not the accounting income, as accounting income takes in account non cash items also, although while computing returns the non cash transactions are not considered.

Therefore the chosen statement which states about accounting income less initial investment is false as even in case the project requires additional mid term investment then that is also considered.

Thus, false statement is

Statement C

3 0

3 years ago

g Robert Hitchcock is 40 years old today and he wishes to accumulate $500,000 by his 65th birthday so he can retire to his summe

Mariana [72]

Answer:

The correct answer is $6934.48.

Explanation:

According to the scenario, the given data are as follows:

Time period ( 41 - 64 years) (n)= 24 years

Rate of interest (r) = 8%

Future value (FV) = $500,000

Annual deposit amount = P

So, we can calculate the annual deposit amount by using following formula:

FV = P × (1+r) × [{ (1+r)^n - 1} ÷ r]

By putting the value, we get

$500,000 = P × ( 1 + 0.08) [{ (1+0.08)^24 - 1} ÷ 0.08]

$500,000 = P × ( 1.08) [{ (1.08)^24 - 1} ÷ 0.08]

$500,000 = P × ( 1.08) [{ 6.34118073724 - 1} ÷ 0.08]

$500,000 = P (72.1035)

P = $500,000 ÷ 72.1035

P = 6934.48

8 0

3 years ago

g Marlboro Construction enters into a contract with a customer to build a warehouse for $725,000 on April 15, 2021 with a comple

Nookie1986 [14]

Answer:

B. $725,000

Explanation:

The expected value for the contract will be :

10% ($725,000 + 12,000 + 12,000 ) + 30% ($725,000 + 12,000 ) + 25% ($725,000 ) + 20% ($725,000 - 12,000 ) + 15% ($725,000 - 12,000 - 12,000 )

= $ 74,900 + $221,100 +$181,250 + $142,600 + $105,150 = $725,000

Marlboro constructions expected value of the contract is 725,000 based on the given probability estimates of contract completion.

8 0

3 years ago