Answer:
The demand for Jim’s product is elastic
Explanation:
In this question, we are to calculate the price elasticity of demand for the product.
We proceed as follows;
The formula for calculating elasticity of demand is
e = [(Q2 - Q1) / {(Q1 + Q2) / 2}] / [(P2 - P1) / {(P1 + P2) / 2}]
Here, Q2 = 6000
Q1 = 8000
P2 = $250
P1 = $200
e = [(6000 - 8000) / {(8000 + 6000) / 2}] / [($250 - $200) / {($200 + $250) / 2}]
e = [(- 2000) / 7000] / [(50 / 225]
e = - 1.3
That means absolute value of e is 1.3.
So, as the absolute value of e is more than 1 (i.e., 1.3), that means the demand for the product is elastic.
Answer:
The correct answer is option ii.
Explanation:
In the case of imposition of tax on a good, the suppliers will bear the greater share of burden if the demand is more elastic than the supply.
The imposition of tax leads to an increase in the price of the product. If the demand is more elastic, the quantity demanded will decrease to a greater extent with the increase in price.
The supply being less elastic will change to a smaller extent, thus a greater tax burden will be borne by the suppliers.
<span>A middleman that carries a select group of products within a single line is called a speciality line wholesaler.
A speciality line wholesaler often carries products that are all related to a set industry but ay be fro multiple supplies. These wholesalers carry a limited line of products making it easier to sell/keep track of what they have and serve a decent size audience. </span>
Answer:
WACC is 7.24%
After tax cost of debt is 3.95%
Explanation:
WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V
Ke is the cost of equity of 9% or 0.09
Kd is the cost of debt at 5% or 0.05
Kp is the of preferred stock of 4% or 0.04
E is the weight of equity of 65% 0r 0.65
D is the weight of debt of 25% 0.25
K is the weight of preferred stock of 10% or 0.10
t is the tax rate of 21% or 0.21
WACC=(0.09*0.65)+(0.05*0.25*1-0.21)+(0.04*0.10)
WACC=(0.09*0.65)+(0.05*0.25*0.79)+(0.04*0.10)
WACC=7.24%
after tax cost of debt=pretax cost of debt*(1-t)
=0.05*(1-0.21)
=0.0395=3.95%
Answer:
correct option is b. $167
Explanation:
given data
free cash flow FCF 1 = -$10 million
t = 1
free cash flow FCF 2= $20 million
t = 2
FCF grow rate = 4%
average cost of capital = 14%
to find out
what is the firm's value of operations
solution
first we get here firm value in year 2 that is express as
firm value in year 2 = expected FCF in 3 ÷ (cost of capital - growth) .........1
put here value
firm value in year 2 = 
firm value in year 2 = 208 million
and
firm value of operation this year will be as
firm value = discounted value in year 2 + discounted FCF1 and FCF2 .............2
firm value = 
firm value = 166.67 = 167 million
so correct option is b. $167
