Answer:
$136,363
Explanation:
For computing the willing amount to pay, first we have to determine the expected cash flow that is shown below:
Expected cash flow is
= $80,000 × 0.5 + $220,000 × 0.5
= $40,000 + $110,000
= $150,000
Now the willing amount is
= Expected cash flow × 1 ÷ (1 + risk free investment + risk premium)
= $150,000 × 1 ÷ (1 + 10%)
= $150,000 × 0.9090
= $136,363
2. The price of lumber, a commodity, rises drastically due to the effect of heavy winter weather in the American Northwest, where much of the world's lumber is grown.
3. The production of a new type of blade for their combine harvesters, a tractor used to harvest crops, has allowed wheat farmers, like Herbert, to increase productivity by 40%.
Answer:
1.Aggregate supply falls
2.Aggregate supply falls
3.Aggregate supply rises due to rise in productivity.
Explanation:
1. In simple words, when the cost of production rises the profit margin of the supplier decreases leading as an incentive to supply less.
2. If the price of the input rises the cost of production also rises leading to lower supply because of lower profit margins.
3. The technological improvement leading to high production would lead to more profits and advantage of economies of scale thus working as an invective to supply more.
Answer:
1. Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is;
Value of market basket of the good in 2017
= (50 * 2) + (5 * 6)
= $130
Value of market basket of the good in 2018
= (70 * 2) + (6 * 6)
= $176
CPI in 2017
= 130/ 130 * 100
= 100
CPI in 2018
= 176 / 130 * 100
= 135.38
Percentage change
= (135.38 - 100)/100
= 35.38%.
2. Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is ;
Nominal GDP in 2017
= (50 * 20) + (5 * 60)
= $1,300
Nominal GDP in 2018
= (70 * 21) + (6 * 80)
= $1,950
Real GDP using 2017 prices
Real GDP in 2017
= (50 * 20) + (5 * 60)
= $1,300
Real GDP in 2018
= (50 * 21) + (5 * 80)
= $1,450
GDP deflator in 2017
= (Nominal GDP in 2020 / Real GDP in 2020) * 100
= (1,300 / 1,300) * 100
= 100
GDP deflator in 2021
= (Nominal GDP in 2021 / Real GDP in 2021) * 100
= (1,950 / 1,450) * 100
= 134.48
Percentage Change
= [(134.48 - 100) / 100] * 100
= 34.48%
3. Which of the following statements is correct
a. The inflation rate in 2018 is not the same using the two methods.
b. The GDP deflator allows the basket of goods and services to change.
The inflation rate calculated using a method similar to the consumer price index is 35.38%, while the rate calculated using a method similar to the GDP deflator is 50%. These reports indicate a significant rise in prices in this nation.
To calculate the percentage change in the overall price level using a method similar to the consumer price index or CPI, you first establish a 'basket' of goods, in this case, 2 karaoke machines and 6 CDs. We then need to calculate the total cost of this basket for the two years in question. In 2017, the total cost was (2 karaoke machines * $50) + (6 CDs * $5) = $100 + $30 = $130. In 2018, the total cost was (2 karaoke machines * $70) + (6 CDs * $6) = $140 + $36 = $176.
The percentage increase is: ((176-130) / 130) * 100% = 35.38%, so the inflation rate as measured by a CPI-like method is 35.38%.
The GDP deflator method, by contrast, measures the price of everything produced in an economy, rather than a fixed basket of goods. In 2017, the nation produced 20 karaoke machines at $50 each and 60 CDs at $5 each, so the total GDP was ($1000 + $300) = $1300. In 2018, they produced 21 karaoke machines at $70 each and 80 CDs at $6 each, so the total GDP was ($1470 + $480) = $1950. Therefore, the percentage increase in prices according to the GDP deflator method is ((1950-1300) / 1300) * 100% = 50%, so inflation as measured by a GDP deflator-like method is 50%.
Either inflation measure could be meaningful, depending on the situation, but it's clear that prices are rising significantly in this small nation.
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Answer:
10.00%
Explanation:
Calculation for what will be your rate of return after 1 year if Microsoft is selling at $24
Using this formula
Rate of return = (Current price - Initial price ) /Current price *margin
Let plug in the formula
Rate of return=($25 per share-$24)/$25 per share*0.40
Rate of return=$1/10
Rate of return=0.1*100
Rate of return=10.00%
Therefore what will be your rate of return after 1 year if Microsoft is selling at $24 is 10.00%
In this short sale, the initial selling price of the shares was $15,000. A 40% margin was posted, amounting to $6,000. After the price dropped to $24 per share, the shares were bought back for $14,400. The profit gained, which is $600, is divided by the initial investment to obtain a rate of return of 10%.
In a short sale, the initial transaction involves selling a borrowed stock in the hopes of buying it back later at a lower price to earn a profit. The rate of return in a short sale is calculated using the profit earned from the short sale divided by the amount of capital invested originally.
First, we need to calculate how much the total value of the shares was at the time of selling short, so that’s 600 shares × $25/share = $15,000. You posted a 40% margin for the short sale, which means you committed $6,000 (40% of $15,000).
After one year, the Microsoft stock drops to $24 per share. At that price, you can buy back all 600 shares for 600 shares × $24/share = $14,400. The difference between the amount you sold the shares for and what you bought them back at is $15,000 - $14,400 = $600.
Now to calculate the rate of return, take the profit ($600) and divide by the amount of capital originally committed to the transaction ($6,000), so the rate of return is $600 / $6,000 = 0.10 or 10%.
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Answer: Formal training is an integral part of employee development. It helps employee to get introduced to the nature of the job.
a) It makes clear to the workers what the employer needs, without which workers may not understand which work should be done on priority basis.
b) It eliminates waste of resources like time, money, etc. If a work is done without any formal training, such work might not be in desired standard; this thing is the waste of money as well as time. Therefore, in order to prevent it the formal training is required.
In rudimentary terms, every firm depends on its workforce to a great extent. After all, it is the people that run the operations of the company.
The employer that provide training to their employees see the following benefits:
Greater productivity,better cooperation,continuous growth of employees
and enhanced job satisfaction.
Answer:
The Skulls
The location that Skulls should select is:
Alpha Avenue.
Explanation:
a) Data and Calculations:
Estimated number of persons living in this new chapter house = 30
Fixed Variable Total Cost
Alpha Ave. $5,000 $200 per person $11,000
Beta Blvd. $8,000 $150 per person $12,500
b) The location that Skulls should select must minimize the total cost. The location which meets this criterion is Alpha Avenue, with a total cost of $11,000. This is purely because of the number of persons living in the chapter house. Assuming that this number would increase, then it may be considered economically better to choose the Beta Boulevard instead of the Alpha Avenue.
Answer:
a) 6+/- 2%; 3+/- 2%
b) 8+/- 2%; 1+/- 2%
c) 3+/- 2%
Explanation:
The market equilibrium price is $5 per bushel. With the price floor of $8 per bushel, the quantity sold is 4 thousand bushels, creating a surplus.
The market equilibrium is determined by the intersection of demand and supply curves. At this point, the price and quantity are in balance. In this case, the equilibrium price is $5 per bushel and the equilibrium quantity is 2 thousand bushels.
With the price floor set at $8 per bushel, the price is held above the equilibrium price. This leads to a surplus, where the quantity supplied exceeds the quantity demanded. The price will remain at $8 per bushel, and the quantity sold will be 4 thousand bushels.
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