Other Economics Answers

Researcher is using data for a sample of 10 observations to estimate the

relation between consumption expenditure and income. Preliminary analysis

of the sample data produces the following data. (20%)

Y=B+B,X +6,, i=l.

Y=20

2X =100

-r-nFY = 850

x'-x -nXX = 1000

y-XY - nY = 700

- 10,= 2

Hint: the t-value (critical value) of 59% (0.05) =2.306 or -2.603

A, compute OLS estimates of A, and B, and interpret it.

B, calculate the variance and standard deviation of p and B,.

C, Compute the value ofR (coefficient of determination) and interpret the

result.

D, Compute 95% confidence interval for the B, and .

E, Test the significance of the ,.and B, parameter at 5% level of confidence

using t-test

How can Incoterms be used as a competitive advantage?

Given Q=400-8P + 0.05Y. Where P=15 and Y=200. Fina the price elasticity of demand and income elasticity of demand

Vhembe Limited has a target capital structure of 60% equity and 40% debt. The before-tax of debt is 8.50% and the cost of new equity is 12%. Tax rate is 28%. The finance manager is currently

considering a project with an expected return of 14% which will be financed from the issue of ordinary shares as all retained income is already budgeted for in more profitable projects. The

company recently issued debentures therefore, the present capital is more heavily weighted towards debt.

Required:

(a) Calculate WACC for Vhembe Limitd using the target capital structure. (4 Marks)

(b) Briefly explain (giving reasons) whether the project under consideration should be accepted or not. (5 Marks)

Vhembe Limited has a target capital structure of 60% equity and 40% debt. The before-tax of debt is 8.50% and the cost of new equity is 12%. Tax rate is 28%. The finance manager is currently considering a project with an expected return of 14% which will be financed from the issue of ordinary shares as all retained income is already budgeted for in more profitable projects. The company recently issued debentures therefore, the present capital is more heavily weighted towards debt.

Required:

(a) Calculate WACC for Vhembe Limitd using the target capital structure. (4 Marks)

(b) Briefly explain (giving reasons) whether the project under consideration should be accepted or not. (5 Marks)

Assess why perfect competition is a more ideal market structure than oligopoly.

Compare the firm’s pricing power between monopoly and monopolistic competition.

Explain the extent of competition among different market structures.

Cite two forms of a market and distinguish between them.

Describe a market using an example.