Answer:
b. The most likely explanation for an inverted yield curve is that investors expect inflation to decrease
Explanation:
I have attached an image which plots the behavivour of a yield curve and inflation in a same period. As you can observe, there is an indirect relation between boths curves.
Answer:
Multiple IRRs:
Said another way, Multiple IRRs occur when a project has more than one <em>internal rate of return.</em> The problem arises where a project has non-normal cash flow (non-conventional cash flow pattern).
Internal rate of return (IRR) is one of the most commonly used capital budgeting tools. Investors make decisions by comparing the IRR of the project under consideration with the <em>hurdle rate</em>. If the IRR is greater than the hurdle rate, the project is accepted, otherwise it is rejected. When there are more than two IRRs, it is not exactly clear which IRR to compare with the hurdle rate.
Hurdle rate is the minimum required rate of return which businesses use as a benchmark to decide whether to invest in a project or not.
<em>So a typical situation which can generate negative cashflows which can in turn lead to multiple IRRs towards the end of the project is where the conditions of investment become adverse towards the end of the project.</em>
Imagine that toward the end of the lifecycle of a project, a forecasted increase external costs such as Interest Rate, influenced by government policies translates to an erosion of the bottom line generated by the business in that year.
Period 0 1 3 3 4 5
Unconventional cash flows ($)-19,000 16,000 16,000 6,000 6,000 -52,000
The series is non-conventional cash-flow pattern, which has two sign changes. This is the range in which the net present value of the non-conventional cash flow series is positive. The multiple IRR problem poses a series problem to analysts because the decision is not obvious.
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<u>Explanation</u>:
i. Limited cash on hand to make changes
It is apparent from the case that the company is experiencing a drop in the sales from the past 5 years and thus, the financial reserves will be a constraint in the accomplishment of the idea.
ii. Costumers purchase lifestyle products from people who they know and who have expertise
It is the idea that the director of the company mark always encourages direct interaction with the clients and personal selling rather than retail or online sales considering personal relation makes exposure to the experts and their advice.
iii. Meet with mark, your direct supervisor, about how to establish your credibility with the owner
Being a newbie to the company, it is a wise option to follow the instructions of the reporting authority to establish rapport with the owner of the organization.
iv. Sales have declined because customers have lower disposable income
It is also evident from the case of the financial crisis and recession in going in the market due to which the customer has a lower income to make purchases.
v. Suggesting techniques to help our sales reps become more trusted advisors
It is the time to perform a forward step by the sales reps to take the role of the advisors i.e. trusted ones for the customer in recommending the best of all.
Answer:
per-unit costs decrease as output increases
Explanation:
In simple words, Economies of scale can be understood s the cost benefits that businesses receive as a result of their size of operation. As the expense per unit of production decreases because scale increases. Because expenses are dispersed among a greater quantity of items this occurs.
Thus, from the above we can conclude that the correct option is B.
Answer:
D. $109,000
Explanation:
The total selling expense which is an element of the income statement is the sum of the marketing expense and the sales commission.
The sales commission as given is a percentage of the number of units sold.
Total selling expense
= $65,000 + (10% * $40 * 11,000)
= $65,000 + $44,000
= $109,000