1. Rainey Co. issued $7 million face amount of 8.25%, 10-year bonds on April 1, 2010. The bonds pay interest on an annual basis on March 31 each year. Calculate the interest expense that Rainey Co. will show with respect…
Sales of the product during the year ended 31 December 2008 and the next three years are expected to be as follows: 2008 50000 sales units2009 52500 sales units2010 55000 sales units2011 54000 sales units selling price unit variable cost…
Radon Homes’ current EPS is $6.50. It was $4.42 five years ago. The company pays out 40% of its earnings as dividends, and the stock sells for $36. a. Calculate the historical growth rate in earnings. (Hint: This is a…
Description of Income Elasticity During the past year,MP sold 150,000pairs of brake shoes at an average wholesale price of $13per pair. This year, GNP per capita is expected to fall from $21,000 to 19000 as nation enters a steep recession.…
Y = F(K, L) = A K0.4L1.0 a) Calculate the marginal product of labor (MPL) b) Does this production function exhibit diminishing marginal product of labor? Please explain your reason.
Calculating arc price elasticity of demand Arc Price Elasticity. Assume that amazon.com cut the price on a 1.10 ct Princess Cut Diamond Solitaire engagement ring from $4,500 to $2,500, and sales rose from 50 to 75 units per week. A.…
Helen gets smart and realizes that she is the only pie shop around. Calculate the marginal revenue she gets for each additional sale as the change in total revenue (price times sales). Graph this and show the new quantity of…
Cross price-elasticity, Income elasticity A. Calculate the cross-price elasticity of demand coefficient of a firm’s product X, given that a 5% increase in the price of its close substitute, product Y, causes the quantity demand of product X to increase…
Viera Corporation is considering investing in a new facility. The estimated cost of the facility is $2,045,000. It will be used for 12 years, then sold for $716,000. The facility will generate annual cash inflows of $400,000 and will need…
Calculate the income elasticity of demand for product X when I= $30. How could we classify product X? Do you consider commodity X a cyclical or non cyclical good? Explain why. Do you consider product X a luxury good or…
