Answer and Explanation:
The computation of LCM's cost depletion for years 1, 2, and 3 is shown below:
Particulars Year 1 Year 2 Year 3
Tons extracted 2,000 7,200 3,800 (A)
Depletion rate $62.50 $62.50 $62.50 (B)
Depletion $125,000 $450,000 $237,500 (A × B)
By multiplying the tons extracted with the depletion rate we can get the depletion for each year i.e for year 1, year 2 and year 3
Answer: 7.12%
Explanation:
Effective Annual Interest rate is the nominal interest rate adjusted for the number of compounding periods a financial product will experience in a period of time.
To calculate the Effective Annual Rate one can use the following formula,
Effective Rate of Interest = (1+r/m)^m - 1
where r is the rate and
M is the no of compounding periods per year which in this case would be 2 because the payments are semi annual
Plugging in figures would give us,
Effective Rate of Interest = (1+0.07/2)^2 - 1
=0.0712
= 7.12%
If you need any clarification do comment or react.
Answer:
c. the well-being of sellers.
Explanation:
A surplus is the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.
Producer surplus is the amount a buyer is willing to pay for a good minus the cost of producing the good.
On the other hand, consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.
Hence, an export subsidy will increase producer surplus.
In conclusion, producer surplus directly measures the well-being of sellers.
Answer: consists of two or more independent organizations that combine requirements for materials, services and capital goods to gain better pricing, service and technology from suppliers.
Explanation:
Purchasing consortium is simply defined as an arrangement that involves collaboration which takes place between two or more organisations who join hands together in order to gain better prices and achieve terms which are favorable from their suppliers.
Purchasing consortium consists of two or more independent organizations that combine requirements for materials, services and capital goods to gain better pricing, service and technology from suppliers.
It should be noted that it's not only used by public institutions, therefore option A is incorrect. Purchasing consortium helps speed up the purchasing process.
Answer:
a. What is the value today of Steinberg's debt and equity?
b. What is the value today of Dietrich's debt and equity?
c. Steinberg’s CEO recently stated that Steinberg’s value should be higher than Dietrich’s because the company has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement?
- A. Disagree: a company's value is determined by by its operating income (EBIT), not by there capital structure (M&M theory).
Explanation:
economic expansion 80% chance, EBIT $3.5 million
economic recession 20% chance, EBIT $1.9 million
expected EBIT = (3.5 x 0.8) + (1.9 x 0.2) = $2.8 million + $0.38 million = $3.18 million
Steinberg's debt obligations $980,000 at the end of next year
Dietrich's debt obligations $2,000,000 at the end of next year
total company value = $3.18 million / (1 + 10%) = $2,890,909
