What was the inflation rate for economy

Assignment Help Financial Management
Reference no: EM131074519

Suppose that the price of beer rose by 6%, the price of pizza rose by 2.7% and the price of chocolate did not rise at all. Also, suppose that beer preresents 8 percent of the economy and pizza represent 31 percent. Chocolate is the rest of the economy. What was the inflation rate for this economy?

Reference no: EM131074519

Questions Cloud

What is the equipment after-tax net salvage value : Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $23 million, of which 75% has been depreciated. The used equipment can be sold today for $8.05 million, and its tax rate is 35%. What is the equipment..
What is the effective annual cost of forgoing the discount : Assume a trade creditor offers you terms of 2/10 net 40. What is the effective annual cost of forgoing the discount?If the firm=s bank charges 14% on loans, would you take the trade credit discount?
What is the project operating cash flow for the first year : Operating Cash Flow The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service: Projected sales $25 million Operating costs (not including depreciation) 8 millio..
Bonds make annual payments and mature : You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature 14 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7..
What was the inflation rate for economy : Suppose that the price of beer rose by 6%, the price of pizza rose by 2.7% and the price of chocolate did not rise at all. Also, suppose that beer preresents 8 percent of the economy and pizza represent 31 percent. Chocolate is the rest of the econom..
How much tax do you owe on the interest : You sell a 7 percent $10,000 bond for $9,500 plus $100 in accrued interest for a total outlay of $9,600. Soon thereafter the company makes a $400 interest payment. You are in the 20 percent income tax bracket. How much tax do you owe on the interest?
Construct arbitrage strategy to exploit mispriced forward : Stock XYZ pays dividends of $2 every three months, namely at T1 = 2/12, T2 = 5/12, T3 = 8/12, . . .. Consider a forward contract on XYZ with maturity T = 9/12, i.e 9 months. If S0 = 200, F = 200 and r = 0.04, construct an arbitrage strategy to exploi..
Why is the evidence base for effectiveness of win : Write a summary paper about the article "Why is the evidence base for effectiveness of win-win interventions to benefit humans and biodiversity so poor?" by Andrew S. Pullin.
Describe the ways in which ses influences access : Describe the ways in which SES influences access we have to resources - Give an example of a collectivism culture and a tradition or behavior that illustrates their collectivist beliefs

Reviews

Write a Review

Financial Management Questions & Answers

  Competition in line of sporting goods limits selling price

Competition in a line of sporting goods limits the selling price on a certain item to $25. If the store owner feels a margin of 35% is needed to cover expenses and return a reasonable profit, what is the most the owner can pay for this item?

  What is the value of safeco stock when required return

Financial analysts forecast Safeco Corporation (SAF) growth for the future to be a constant 8 percent. Safeco's recent dividend was $0.88. What is the value of Safeco stock when the required return is 12 percent?"

  Evaluating purchasing line of cement mixing trucks

McClellan Cement is evaluating purchasing a line of cement mixing trucks. McClellan can either purchase new trucks that will produce $70,000 per year for five years, or used trucks that will produce $60,000 per year for five years. Which project has ..

  Mortgage plan problem

You are financing a 300K home with 20% down payment. The 30-year interest rate (APR) is 4.5%, and the 15-year interest rate (APR) is 3.5%. What is the difference in the monthly payment if choose 30- year and 15-year mortgage plan?

  What was the rate of return on this investment

Of all the types of investments Jordan could have chosen, he decided to try real estate because, according to Jordan, "as everyone knows, real estate never goes down". Yea, right. Last year he bought an apartment house in Camden, DE. (Of all the plac..

  How sensitive is the npv to changes in the quantity sold

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company.  The company originally repaired radios and other household appliances when it was found..

  Calculate the coefficient of variation

The following probability distribution of expected returns have been determined for Benko Corporation Probability Expected Returns (Outcomes) .30 12%, .40 15%, .20 25%, .10 0%. First calculate the expected rate of return, r with ^? Now calculate the ..

  Appropriate discount rate-what is the present value

An investment will pay you $33,000 in 12 years. If the appropriate discount rate is 6 percent compounded daily, what is the present value?

  Minority shareholders

Comment on the following quote:"... agency problems do not mean that the corporate firm will not act in the best interest of shareholders, only that is costly to make it do so. However, agency problems can never be perfectly solved ..."

  Should the company accept the special order

Prepare a report to management explaining the findings for the situations described above. Include in the report a description of the steps that the company should the following to make these short term decisions. Explain the importance of develop..

  Two different bonds currently outstanding

Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $50,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $1,600 every six months over the subsequent eight years, and ..

  Market capitalization rate-produce level dividend stream

Company Y does not plow back any earnings and is expected to produce a level dividend stream of $5.20 a share. If the current stock price is $40.20, what is the market capitalization rate?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd