The steady state of the Solow Growth model occurs when the amount of physical capital reaches the point where replacing worn out capital amounts to all of the capital investment of a country. Group of answer choices True False
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The steady state of the Solow Growth model occurs when the amount of physical capital reaches the point where replacing worn out capital amounts to all of the capital investment of a country. Group of answer choices True False
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- c. Define the term capital intensity. Explain how a decline in capital intensity would affect the AFN, other things held constant. Would economies of scale combined with rapid growth affect capital intensity, other things held constant? Also, explain how changes in each of the following would affect AFN, holding other things constant: the growth rate, the amount of accounts payable, the profit margin, and the payout ratio.Which investment criteria answers the question: "How quickly do we recover our investment, in nominal dollars?" A) net present value B) internal rate of return C) profitability index D) payback periodDefine the term self-supporting growth rate. What is Hatfield’s self-supporting growth rate? Would the self-supporting growth rate be affected by a change in the capital intensity ratio or the other factors mentioned in the previous question? Other things held constant, would the calculated capital intensity ratio change over time if the company were growing and were also subject to economies of scale and/or lumpy assets?
- Which of the following statements is true? Question 3Select one: a. The inflation rate is a measure of how much providers of capital expect the purchasing power of their investment to grow. b. The real cost of capital is a measure of how much providers of capital expect the purchasing power of their investment to grow. c. The real cost of capital is a measure of how much providers of capital expect their wealth, as measured by the number of dollars they have, to grow. d. The nominal cost of capital is a measure of how much providers of capital expect the purchasing power of their investment to grow.Which of the following statement is true? Select one: O A. Increase in the operating net working capital will increase the free cash flow to equity O B. To issue new debt will increase the free cash flow to equity O C. To pay off the loan will increase the free cash flow to equity D. The increase in the capital expenditure will increase the free cash flow to equity The constant dividend growth model requires which of the following conditions? Select one: O A. g r O C. g is the lower than, or equal to, the growth rate of the economy O D. A and C O E. All of the above.The internal rate of return measures the: Select one: a. discount rate that the firm uses in computing the cost of capital b. number of years to recover the original investment c. discount rate at which the net present value is zero d. discounted future cash flows
- According to Wald's criterion, which investment is decided by looking at the profitability of three investments such as S1, S2 and S3 in the following economic environments? Economic Conditions S1 S2 S3 Vivid Economic Situation 13 6 7 Normal Economic Condition 10 9 8 Stagnant Economic Condition 7 14 4 Recession Condition 8 7 15Calculate Computron’s return on invested capital (ROIC). Computron has a 10% cost of capital (WACC). What caused the decline in the ROIC? Was it due to operating profitability or capital utilization? Do you think Computron’s growth added value?Calculate Computron’s return on invested capital (ROIC). Computron has a 10% cost of capital (WACC). What caused the decline in the ROIC? Was it due to operating profitability or capital utilization? Do you think Computron’s growth added value?
- Which one of the following is the maximum growth rate that a firm can achieve without any additional external financing? A. External growth rate B. Internal growth rate C. DuPont rate D. Cash flow rateAn increase in the interest rate will cause A an increase in planned investment and an increase in the equilibrium GDP B a decrease in planned investment and a decrease in the equilibrium GDP C an increase in planned investment and a decrease in the equilibrium GDP D. a decrease in planned investment and an increase in the equilibrium GDPWhen a lump sum investment shows growth, even if the interest rate stays low, it is known as.. 1- discount rate 2-opportunity cost 3-return on investement 4-compounding growth
