Answer:
CCC's new required rate of return is 16.5%
Explanation:
in the first we need to determine the risk free rate using the Capital Asset Pricing Model formula of Miller and Modgiliani as shown below
required return=Rf+beta*(average market return-Rf)
Rf is the risk free rate that is unknown
Beta is 1.5
average market return is 10%
required rate of return is 12%
Rf?
12%=Rf+1.5*(10%-Rf)
12%=Rf+15%-1.5Rf
1.5Rf-Rf=15%-12%
0.5Rf=3%
Rf=3%/0.5
Rf=6%
Average rate of 10% has now increased by 30% i.e 10%*(1+30%)=13%
Required rate of return=6%+1.5*(13%-6%)
=6%+1.5*7%
=6%+10.5%=16.5%
Explanation:
Income Elasticity of Demand(IED)= Percentage change in quantity demanded/ Percentage change in income
-Percentage change in Q:
%Change in quantity demanded= (q2-q1/q1) = (10-8)/8= 0.25
-Percentage change in Income:
%Change in income= (i2-i1/i1) = (4,500-4,000)/4,000= 0.125
IED= 0.25/0.125= 2
This indicates that the Shaffers are very sensitive to changes in income when it comes to eating out. Which means that changes in income will change significantly the number of times they eat out.
2. Restaurant meals are normal goods, in this case, because when income rises, they ate more in restaurants, then the units consumed for this good increase too.
Answer:Jalen journal $
Date
Jan 1 ,2021
Land Dr. 860,887
Note payable Cr. 860,887
Narration. Issuance of note of above amount payable in four installment for purchase of land.
June 30,2021
Note payable Dr 215,221.64
Cash Cr. 215,221.64
Narration. Payment of first installment on land purchase.
December 31,2021
Note payableDr 215,221.64
Cash.Cr. 215,221.64
Narration. Payment of second installment on land purchase.
2. Balance on note payable as at December 31, 2021 $400,000
Balance on Interest expenses $30,443.28
Explanation:
The land account is debited to recognized it's purchase and a credit is made to the notes payable account to recognise the credit.
The total installment is debited for payment made in the first and second period.
The balance on the note payable represents the two outstanding principal payment of the $800,000 and the interest expenses represents the excess over the principal sum.
Answer: b
Explanation:
This strategy and world wide product divisional structure may hinder economy of scale( whish is actually the reduced costs enjoyed by business entities due to the scale of their business) typically, this strategy and organizational structure restricts products to certain region which the demand may not be enough for effective cost management to enhance profit.
Other divisions might have some demand for certain products that are not available in their own division.
200,000 have to find what 10 percent is and multiply that by 10
