Answer:
After tax cost of debt is 6.45%
Explanation:
In computing the after tax cost of debt, the starting point would be to ascertain the pre-tax cost of debt-yield to maturity-before applying the tax.
The yield to maturity can be calculated using the rate formula in excel ,given as :=rate(
nper,pmt,-pv,fv)
nper is the nuer of coupon interest the bond would pay which is 20
pmt is the annual payment of the bond which is 13%*$1000=$130
pv is the current price of the bond $1,181.96
fv is the face value of the bond which is $1000
=rate(20,130,-1181.96,1000)
rate=10.75%
Pretax cost of debt is 10.75%
After tax cost of debt=pretax cost of debt*(1-tax rate)
tax rate is 40%=0.4
=10.75%*(1-0.4)
=6.45%
Answer:
Monopolist profit maximizing price
A: $3 per gallon , total output =270 Kelvins profit = $810(801/7/2 = $405
Maria's profit = $405
B. $2.5 per gallon . Kelvin's profit =$450 Maria's profit = 337.5
C = False. At the same quantity , fall in price brings fall in revenue
Cournot Nash equilibrium
Explanation:
In a monopolist market system , price are set higher than the marginal cost as the producer enjoy the dominance of the market through the production of a unique good.
At the price of $3 , change in demand =(270-225) =45 , change in revenue = ($810-$787.50)22.5 and marginal revenue = (45/22,5) = 0.5. That forms the maximizing price for a monopolist.
On the new arrangement , price drops to $2.5 , Maria's profit =(315-45/2)2.5 = $337.5 and Kelvin's = ($787.5-337.5) = $450
Cournot Nash equilibrium is business model that explains the competition among rival companies producing similar product on the level of output produced independently.
Answer:
d.efficient in production but not necessarily in allocation.
Explanation:
The production possibility curve portrays the cost of society's choice between two different goods. An economy that operates at the frontier has the highest standard of living it can achieve, as it is producing as much as it can using the same resources. If the amount produced is inside the curve, then all of the resources are not being used.
- all points on the curve are points of maximum productive efficiency
- However, an economy may achieve productive efficiency without necessarily being allocatively efficient. Market failure (such as imperfect competition or externalities) and some institutions of social decision-making (such as government and tradition) may lead to the wrong combination of goods being produced (hence the wrong mix of resources being allocated between producing the two goods) compared to what consumers would prefer, given what is feasible on the PPF.
Answer: Investing activities
Explanation:
The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is referred to as the investing activities.
The operating activities has to do with the reporting of cash payment for wages. The financing activities has to do with reporting issuance cash for the common stock.
