if financial management is the heartbeat of competitive businesses, what keeps that heartbeat stable?

Ronny's Pizza House operates in the perfectly competitive local pizza market. If the price of pizza cheese increases, ceteris

larisa [96]

Answer:

Option (A) is correct.

Explanation:

A particular profit maximizing firm is produces at a point where marginal cost is equal to the marginal revenue.

Pizza cheese is used as an input for producing pizza, so if there is an increase in the price of pizza cheese then this will results in an increase in the cost of production for the Ronny's Pizza House and this change will shift the marginal cost curve upwards.

We know that marginal revenue curve is downward sloping and marginal cost curve is upward sloping, so if there is a upward shift in the MC curve then it cuts the marginal revenue curve at a lower level of output.

8 0

4 years ago

The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond wit

pychu [463]

Answer:

a. Calculation of the yield to maturity for a bond with a maturity years

Yield to Maturity = [(Face value/Bond price)^(1/Time period)] - 1

i. One year = (1000/920.90) - 1 = 0.0858942339 = 8.59%

ii. Two year = (1000/912.97)^(1/2) - 1 = 0.04657835011 = 4.66%

iii. Three year = (1000/826.62)^(1/3) - 1 = 0.06552758403 = 6.55%

iv. Four year = (1000/785.62)^(1/4) - 1 = 0.06217693669 = 6.22%

b. Calculation of the forward rate

Forward rate = [(1 + Next year YTM)^Period / (1+Previous year YTM)^Period} - 1

i. Second year = (1+4.66%)^2/(1+8.59%) - 1 = 0.00872231328 = 0.87%

ii. Third year = (1+6.55%)^2/(1+4.66%) - 1 = 0.08474130517 = 8.47%

iii. Fourth year = (1+6.22%)^2/(1+6.55%) - 1 = 0.05891022055 = 5.89%

5 0

3 years ago

Which of the following statements is true of foreign direct investment?

kotegsom [21]

Answer: Option B

Explanation: Foreign direct investment can be defined as a situation in which a company invest in a country other than its home country. In such a case, the company starts a new setup in the new country with the same business operation.

For example an automobile company of Germany opening their car showrooms in america.

Thus, from the above we can conclude that the correct option is B.

7 0

3 years ago

Problem 9-1 Comparing Renting and Buying [LO9-2] Rental Costs Buying Costs Annual rent $ 7,380 Annual mortgage payments $ 9,800

s2008m [1.1K]

Answer:

Computation of Rental Costs

Particulars Amount

Rent $7,380

Insurance $145

Loss of Interest on Security Deposit $39 ($650*6%)

Total Rental Costs $7,564

Computation of Buying Costs

Particulars Amount

Annual Mortgage Payments $9,800

Taxes, Insurance and Maintenance $2,830 ($1,050+$1,780)

Loss of Interest on Down Payment $270 (4,500*6%)

Growth in Equity -$225

Annual Appreciation -$1,700

Mortgage Interest Tax Savings -$2,681 (9,575*28%)

Tax Savings from Property Taxes -$498 (1,780*28%)

Total Buying Costs $7,796

b. Based on the cost criteria, i would recommend renting as it results in lesser cost

5 0

3 years ago

The interest rate a company pays on 1-year, 5-year, and 10-year loans is a function of:.

Firlakuza [10]

A company will pay interest based on its credit rating and the length of time over repayment is scheduled to occur (1-year, 5- years, or 10 years).

<h3>How is interest decided?</h3>

It is based on various risks such as credit risk and maturity risk.
Credit risk of a company is shown in its credit rating.
The maturity risk increases as the length of time to repayment increases.

The interest paid will therefore be dependent on the credit rating of the company and the term of the loan that it took out as these show different types of risk.

In conclusion, option A is correct.

Find out more on maturity risk at brainly.com/question/24780094.

3 0

2 years ago