Answer:
False.
Explanation:
Total cost is the market value of the inputs a firm uses in production while total revenue is the amount a firm receives for its output.
Basically, all the amount of money spent in the production of a particular product is known as the total cost while the revenue refers to the total amount the product generates when sold.
Total cost is equal to the sum of total fixed costs and the total variable costs.
In Financial accounting, fixed cost can be defined as predetermined expenses in a business that remain constant for a specific period of time regardless of the quantity of production or level of outputs. Some examples of fixed costs in business are loan payments, employee salary, depreciation, rent, insurance, lease, utilities etc.
On the other hand, variable costs can be defined as expenses that are not constant and as such usually change directly and are proportional to various changes in business activities. Some examples of variable costs are taxes, direct labor, sales commissions, raw materials, operational expenses etc.
Imprudential, Inc., has an unfunded pension liability of $415 million that must be paid in 20 years. To assess the value of the firm’s stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 5.2 percent, what is the present value of this liability?
Answer:
PV= $150,568,214.5
Explanation:
Giving the following information:
Future value (FV)= $415,000,000
Number of periods (n)= 20 years
Discount rate (i)= 5.2%
To calculate the present value, we need to use the following formula:
PV= FV/(1+i)^n
PV= 415,000,000 / (1.052^20)
PV= $150,568,214.5
What is the application of demand and supply in relation to housing shortage?
Answer:
House prices will increase
Explanation:
A shortage in the market supply occurs when sellers are unable to match the demand for a product. It is a situation where many buyers are chasing a few goods or services supplied in the market.
The price at which supply and demand match is the equilibrium price. Both sellers and buyers are happy at the equilibrium price. The housing sector is known for responding to the forces of supply and demand. In case of a shortage, the prices of houses will go up. As the many buyers compete for the few houses, suppliers will hike prices to make profits.
A bond has a coupon rate of 8.2 percent, a $1,000 par value, matures in 11 years, has a yield to maturity of 7.67 percent, and pays interest annually. What is the current yield
Answer:
a. 7.89%
Explanation:
Options includes "A. 7.89% , B. 8.21% , C. 8.43% , D. 7.67% , E. 8.52%"
Face value = -1000
PMT = -8.2%
n = 11.5
Market rate = 7.67%
Bond value = PV(7.76%, 11.5, -8.2%, -1000)
Bond value = $1.039.56
Current yield = 82/1,039.56
Current yield = 0.0788795259532879
Current yield = 7.89%
Scott plans to retire in 30 years when he has enough money to buy a perpetuity. Suppose the perpetuity pays $50,000 per year with an interest rate of 12%. How much must Scott save in order to retire if the perpetuity makes its first payment in 31 years.
Answer:
Scott must save 416,666.67 at the moment of retirement.
Explanation:
Giving the following information:
Cash flow (Cf)= $50,000
Interest rate= 12%
To calculate the value of the perpetuity at the moment of retirement, we need to use the following formula:
PV= Cf/ (i - g)
Cf= 50,000
i= 0.12
g= 0
PV= 50,000 / 0.12
PV= $416,666.67
Scott must save 416,666.67 at the moment of retirement.
