Economics Answers

A firm has Sh 3,000,000 debt at 5% interest in its capital structureand the expected annual operation income is sh 1,000,000 and equity capitalization rate is 10%. Calculate the value of the firm and overall cost of capital.

Individual retirement accounts (IRA) allow some taxpayers to set aside kshs.160000 a year for retirement, and the interest earned on these accounts is exempt from taxation. If an individual starts selling aside money in an IRA early in her working life, its value at retirement can be substantially higher than the amount actually put in. Wanjiku sets aside kshs.160, 000 a year and starting when she is 25 years for an expected retirement age of 65, and expects to make 8% p.a return on investments. Calculate the total expected value when she retires. What if the income is taxed at 40% per year

You have a relative who has accumulated savings of kshs.250, 000 over his working lifetime and now plans to retire. Assuming that he wishes to withdraw equal installments from these savings for the next 25 years of his life, how much will each installment amount to if he is earning 5% on his savings

Suppose you have rights to gold mine for the next 20 years, during which you plan to extract 5000 kg every year. Assume a discount rate of 10%. The current price per kg is kshs.24, 000 but it’s expected to increase to 3% a year. Compute the present value of the gold.

denote the banks desired reserve ratio as x and the public's desired ratio of cash to bank deposits as b.Then the level of high powered money in theeconomy will be what?

1.5 In the labour market for carpenters, the current market clearing wage rate is R800 per day. With the
aid of a diagram, discuss the welfare effects of government intervention in the form of legislation that
sets the minimum wage rate for a carpenter at R1000 per day. (20 marks)

In the labour market for carpenters, the current market clearing wage rate is R800 per day. With the
aid of a diagram, discuss the welfare effects of government intervention in the form of legislation that
sets the minimum wage rate for a carpenter at R1000 per day.

Explain the important issues crucial for promotion of Indian exports and hence need to be addressed in India's trade policy

Process the journal entries for the following transactions in the Journal worksheet provided.2/4/2016 Durable Pty Ltd receives a cheque (no 683) from Perth News. The cheque is attached to a remittance advice that refers to invoice 1638 issued by Durable Pty Ltd in 12/4/06. Perth News is paying the balance of its account. 650.00
3/4/2016 Durable Pty Ltd issues Invoice 1692 and stock to News Plus relating to its order dated 14/4/05
for magazines 1025.00

(A) the determinants of the price of a product in a perfectly competitive market is where the

(1) supply and demand curves intersect
(2) quantity supplied and quantity demanded intersect
(3) marginal cost equals the price of the product
(4) marginal revenue equals the marginal cost

(B) A minimum wage in a perfectly competitive labour market

(1) will normally be imposed below the equilibrium wage
(2) which is imposed above the equilibrium wage,will lead to an excess demand of labour
(3) which is set above the equilibrium wage, will lead to unemployment
(4) can be instituted in an attempt to exploit low-wage workers and to depress their living standard even further

(C) A utility maximising consumer will choose to purchase another unit of a good if

(1) the opportunity cost of consuming the good is constant
(2) the marginal utility of the good is falling
(3) the good has the lowest weighted marginal utility
(4) the good has the highest weighted marginal utility