Answer: elastic
Explanation:
The price elasticity of supply will be:
The percentage change in price will be:
= (1.50 - 0.50)/0.50 x 100
= 1.00/0.50 × 100
= 200
The percentage change in quantity will be:
= (4 -2)/2 x 100
= 2/2 × 100
= 100
Elasticity = % change in quantity/% Change in Price = 200/100 = 2
Since elasticity = 2, this indicates supply is elastic as it's greater than 1.
MAD Inc. has a capital structure consisting of 40 percent debt and 60 percent common equity financing. The company has $400 million in net income and plans to pay out 25 percent of their earnings as dividends. What is the maximum amount of new financing that the company can raise without selling new common stock
Answer:
$500 million
Explanation:
Retained earnings = Income * (1 - Dividend payout percentage)
Retained earnings = $400 million * (1-0.25)
Retained earnings = $400 million * 0.75
Retained earnings = $300 million
Amount that can be raise without selling new stock: Retained earnings / % of equity financing in total capital
= $300 million / 60%
= $300 million / 0.60
= $500 million
On January 1, a company issued and sold a $399,000, 9%, 10-year bond payable, and received proceeds of $394,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:
Answer:
Cash Interest payable on Bond = $399,000*4.5% = $17,955
Discount to be amortized = ($399,000-$394,000)/20 = $250
Interest expense = $17,955+$250 = $18,205
Date Journal Entry Debit Credit
Interest Expense $18,205
Discount on bonds payable $250
Cash $17,955
The discount rate used to calculate the net present value of a capital budgeting project should be: a. The risk-free rate. b. The weighted average cost of capital. c. LIBOR. d. The internal rate of return.
Answer:
B
Explanation:
Capital budgeting is the determination of the profitability of proposed investments
One of the capital budgeting methods is the net present value
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
the Weighted cost of capital is used to determine NPV
WACC = weight of equity x cost of equity + weight of debt x cost of debt x (1 - tax rate)
It is the minimum rate of return a company expects from a project
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested. It is a captial budgeting method
Which of these are considered both short- and long-term investments? Select four options.
CDs
stocks
savings accounts
mutual funds
bonds
commodities
Edge answers please
Answer:
CDs
Stocks
Mutual funds
Commodities
Explanation:
:)
'Investments' are defined as the 'process of allocating money having an aim of receiving a profit.'
The items that can be considered as both the short, as well as, long-term investments would be:
A). CDs
B). Stocks
C). Mutual funds
E). Commodities
A CD or Certificate of Deposit(CD) is characterized as both the 'short, as well as, long-term' investment because it provides interest and offers a lump-sum on its maturity. Stocks are also such an investment as it offers both intra-day trade and long-term holding options as well. Mutual funds are also a good option for generating both regular incomes in the short-term and big capital gain over a time period. Commodities like gold, crude oil, etc. also offer such an option as it is the item whose price keeps growing and thereby providing an opportunity to earn.Thus, options A, B, C, and E are the correct answers.
Learn more about 'short-term investment' here:
brainly.com/question/16462918
A company projects an increase in net income of $135,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment
Answer:
the annual rate of return is 22.50%
Explanation:
The computation of the annual rate of return is shown below:
Average investment is
= ($900,000 + $300,000) ÷ 2
= $600,000
Now
Annual rate of return is
= Annual net income ÷ Average investment
= $135,000 ÷ $600,000
= 22.50%
hence, the annual rate of return is 22.50%
Assume that Saudi Arabia has production possibilities to produce either 100 barrels of oil using 100 worker hours or 25 bushels of corn using 100 worker hours. If it decides to produce 60 barrels of oil, how many bushels of corn can it produce
Answer: 10 bushels
Explanation:
If they produce 100 barrels of oil using 100 worker hours, it means that the number of work hours taken for 1 barrel is:
= 100 / 100
= 1 work hour
For bushels however, 1 worker hour produces:
= 25 / 100
= 0.25 bushels of corn
If 60 barrels of oil are produced, it means 60 worker hours were used which would leave 40 worker hours.
Bushels of corn produced is therefore:
= 40 * 0.25
= 10 bushels