Zumwalt Corporation's Class S bonds have a 12-year maturity, $1,000 par value, and a 5.75% coupon paid semiannually (2.875% each 6 months), and those bonds sell at their par value. Zumwalt's Class A bonds have the same risk, maturity, and par value, but the A bonds pay a 5.75% annual coupon. Neither bond is callable. At what price should the annual payment bond sell? (hint: Bonds with same risk should have same effective rate of return, or YTM).

Answers

Answer 1

Answer:

$993.23  

Explanation:

Note that the yield to maturity for the Class S bond is 5.75% because when a bond sells at par its coupon rate and yield should be the same.

However, Class A, pays annual coupons and the fact they both have the same level of risk means that yields are the same, however, S's yield is 5.75% compounded semiannually, in the case of A we need  an equivalent yield but compounded once a year since annual coupons are to be made, as a result, for A we would convert the yield to an equivalent effective annual yield

EAR=(1+yield/2)^2-1

there are 2 semiannual periods in a year, that is the reason for 2 in the formula above

EAR=(1+5.75%/2)^2-1

EAR=5.83%

The price of bond A is the present value of 12 annual coupons and face value discounted at 5.83% effective annual yield

annual coupon= 5.75%*$1,000

annual coupon=$57.50

bond price=$57.50/(1+5.83%)^1+$57.50/(1+5.83%)^2+$57.50/(1+5.83%)^3+$57.50/(1+5.83%)^4+$57.50/(1+5.83%)^5+$57.50/(1+5.83%)^6+$57.50/(1+5.83%)^7+$57.50/(1+5.83%)^8+$57.50/(1+5.83%)^9+$57.50/(1+5.83%)^10+$57.50/(1+5.83%)^11+($1000+$57.50)/(1+5.83%)^12

bond price=$993.23  


Related Questions

After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture into his own business. As he prepared his SWOT analysis, he evaluated where he stood at this time. He was fortunate to have $100,000 financing to get the business under way. He knew of three skilled installers who were willing and interested to work for him, and he was aware that new construction was at an all-time low, with several residential properties being foreclosed. In reviewing his list, you would categorize these events as __________. Multiple Choice three opportunities and one threat two strengths and one opportunity two strengths and one threat three opportunities and one weakness

Answers

Answer:

two strengths and one threat

Explanation:

Since in the given situation it is mentioned that that Jake was fortunate to have $100,000 financing also the skilled installers are willing to work but at the same time he was aware that the new construction was all time low

So here there are two strengths and one threat

In this way the events are categorized

What is the greatest concern with applying new technologies like the cloud in manufacturing?

theft of intellectual property
obsolete technology
limited storage capacity
global warming

Answers

Answer:

Theft of intellectual property.

Explanation:

Cloud computing is making hardware, software and data available on demand via a network, often the internet. The cloud stands for a network that, with all the computers connected to it, forms a kind of 'cloud of computers', where the end user does not know how many or which computers the software runs on or where those computers exactly stand. In this way, the user no longer needs to be the owner of the hardware and software used and is therefore not responsible for maintenance. The details of the information technology infrastructure are hidden from view and the user has his own virtual infrastructure, scalable in size and possibilities. The cloud is therefore a technique with which scalable online services can be offered. Without the ability to scale, an online service offered does not relate to cloud computing.

Cranial Inc.has newly set up a website where customers can obtain information as well as buy its products.It notices that people who visit its website are instantly interested in the products,and 85% of the visitors end up making purchases.However,it also notices that the number of visitors are very low as they don't find it on their searches very often.Which of the following should Crayola include in its IBP campaign to increase its website's visibility and traffic?
A) Pop-under ads
B) Interstitial ads
C) Buzz marketing
D) Search engine optimization

Answers

Answer: D) Search engine optimization

Explanation:

When you search for a query and various websites pop up, the websites that you would most likely pick are the very first ones that you see and these websites are so high up because they have very good search engine optimization.

Search engine optimization increases the visibility of a website so that people can be able to find the website better. The major way it does this is by using keywords that people search. Cranial Inc. needs to work on its Search engine optimization so as to increase traffic to their website.

Answer:

D) Search engine optimization

Explanation:

Search engine optimization (SEO) can be defined as a strategic process which typically involves improving and maximizing the quantity and quality of the number of visitors (website traffics) to a particular website by making it appear topmost among the list of results from a search engine such as Goo-gle, Bing, Yah-oo etc.

This ultimately implies that, search engine optimization (SEO) helps individuals and business firms to maximize the amount of traffic generated by their website i.e strategically placing their website at the top of the results returned by a search engine through the use of algorithms, keywords and phrases, hierarchy, website updates etc.

Hence, search engine optimization (SEO) focuses on improving the ranking in user searches of a particular website by simply increasing the probability (chances) of the website emerging at the top of a web search.

In conclusion, Crayola should include search engine optimization (SEO) in its IBP campaign in order to increase its website's visibility and traffic.

10. If you are under 18 years you shall not operate a motor vehicle between the hours of ....... and...... unless you are
driving to or from a scheduled event. This curfew remains in effect until you turn 18, regardless of when your
driver's license was issued.
A
1 am to 5 am
B. O 12 pm, 5 am
c. O5 pm, 5 am
D. O 10 pm, 5 am

Answers

Answer:

its a 1 am to 5 am

Explanation:

i took the test

Which investor is making a common error?

A) an employee of a popular hardware store who invests only in that company’s stock
B) an employee of a popular software company who invests in many similar companies
C) someone who sells the slumping stock while they are still able to make a profit based on what they paid
D) someone who buys stock in both domestic and more risky international companies

Answers

Answer:

A

Explanation:

The investor who is making a common error is an employee of a popular hardware store who invests only in that company’s stock. The correct option is A.

Who is the investor who avoided risk?

Investors that are risk-averse are sometimes referred to as conservative investors. They are unable to accept volatility in their financial portfolios either by nature or by circumstance. They desire very high liquidity for their investments. That is, the money must be present in its entirety when they are prepared to withdraw it.

"Putting all your eggs in one basket" is a mistake made by this investor. They are taking a significant risk by investing just in one company's shares because the stock's performance is closely correlated with the success of that one business. The stock's value will probably decrease if the business has a downturn, which will cost the investor money.

Thus, the ideal selection is option A.

Learn more about investors here:

https://brainly.com/question/30828591

#SPJ5

business do not maximise output from the given inputs​

Answers

Answer:

Allocative inefficiency.

Explanation:

Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.

In Economics, there are four (4) main factors of production and these are;

I. Land.

II. Labor (working).

III. Capital resources.

IV. Entrepreneurship.

When these aforementioned factors of production are combined effectively and efficiently, they can be used for the manufacturing or production of goods and services to meet the unending requirements or needs of the consumers.

Basically, there are two (2) types of inefficiency associated with the production of goods and services to meet the unending requirements or needs of consumers, these includes;

1. Technical (productive) inefficiency: it occurs when a company or business firm produce goods and services that consumers do not want.​ This is typically as a result of the incorrect and inefficient allocation of scarce resources by a business firm or entity.

2. Allocative inefficiency: it occurs when a company or business firm do not maximise output from the given inputs such as raw materials, capital, etc. Thus, it arises when businesses fail to increase the level of their production or productivity from a number of given inputs.

Hence, when a business do not maximise output from the given inputs, it is referred to as an allocative inefficiency.

In conclusion, allocative inefficiency typically occurs when the price of a good or service isn't equal to its marginal cost i.e P ≠ MC.

Explain how you would apply any five pricing techniques to attract ccustomers

Answers

Answer:

1. Price skimming. Skimming involves setting high prices when a product is introduced and then gradually lowering the price as more competitors enter the market.  2. Market penetration pricing  3. Premium pricing.  4. Economy pricing.  5. Bundle pricing. (these are just some that I know)

Explanation:

So much percent off, give the costumers discounts

AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2018. The bonds sold for $150 million. For bonds of similar risk and maturity the market yield was 9%. Upon issuance, AI elected the option to report these bonds at their fair value. On June 30, 2018, the fair value of the bonds was $145 million as determined by their market value on the NASDAQ. Will AI report a gain or will it report a loss when adjusting the bonds to fair value? If the change in fair value is attributable to a change in the interest rate, did the rate increase or decrease? Will the gain or loss be reported in net income or as OCI?

Answers

Answer and Explanation:

A will report the gain at the time when the bond is adjusted to the fair value as there is a reduction in the far value of the liabilities that occured the gain. In the case when the fair value is changed so there is also the changed in the rate of interest due to this the rate of interest is rised.

Here A would be reported the gain in the net income as there is the change in the rate of interest due to the change in the fair value

In the case when there is the chaneg in the fair value of the bond so this is because of the change in the credit risk and the same should be shown in the statement of the comprehensive income as other comphrensive income

provide a term for the statement: "when businesses produce goods and services that consumers do not want"​

Answers

Answer:

Productive or technical inefficiency.

Explanation:

Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.

In Economics, there are two types of inefficiency associated with the production of goods and services, these includes;

1. Allocative inefficiency: it occurs when businesses do not maximise output from the given inputs. Thus, it arises when businesses fail to increase the level of their production or productivity from a number of given inputs.

In conclusion, allocative inefficiency typically occurs when the price of a good or service isn't equal to its marginal cost i.e P ≠ MC.

2. Technical or productive inefficiency: it occurs when businesses produce goods and services that consumers do not want.​ This is typically as a result of the incorrect and inefficient allocation of scarce resources by a business firm or entity.

Hence, productive or technical inefficiency is a term for the statement: "when businesses produce goods and services that consumers do not want."​

Hãy lựa chọn một công ty sử dụng dịch vụ nghiên cứu marketing của các nhà cung cấp bên ngoài 1.Lý do công ty phải thuê ngoài 2.Những tổ chức nào đã cung cấp dịch vụ marketing cho công ty? 3.CÔNG TY THUÊ MỘT HAY THUÊ TOÀN BỘ CAC HOẠT ĐỘNG NGHIÊN CỨU MARKETING

Answers

uuuuuuummmmmmmmmmmmmmmmm.....

5. Do a SWOT analysis for the business idea you chose in question 2 above. Describe at least 2 strengths, 2 weaknesses, 2 opportunities, and 2 threats for that company idea. (1-8 sentences. 4.0 points)

6. Make a list of at least 3 people you would want to give copies of your business plan to, and explain why you chose each of those people. (1-5 sentences. 3.0 points)

Answers

PART I

Answer:

The business idea is that of a Bakery that specializes in pastry that is mixed with fruits.

Explanation:

SWOT

Strengths

Unique Value Proposition which is healthier bread and cake recipes20 years experience in baking which translates to strong industry  knowledge

Weaknesses

Insufficient Equipment to go withWeak or zero visibility for new business

Opportunities

Little or no competition as the recipes are unique to meHuge demand for healthier pastry especially in my current location

Threats

The industry is heavily regulated and may be shut down if there are compliance issuesOne competition that knows what they are doing and combines pastry with healthy drinks such as smoothies. We don't do smoothies.

Part II

Answer:

The persons I would give the business plan to are:

My family An angel investor who I met on LinkedIn who supports small businesses and start-upsMy banker of over 20 years

I would give the business plan to my family members because they are the easiest people to raise funds from and also because family, can decide to contribute in cash or in-kind with no interest required.I would give the business plan to an angel investor because their funds are cheaper than those of the banks though a little more difficult to come byBanks always have the funds but the funds come at a higher cost than the first two.

Cheers

What is an example of a comparative advantage of Mexico over the United States?
PLEASE HELP, NO LINKS

Answers

Answer:

For example, a trade where the U.S. exports 4,000 refrigerators to Mexico in exchange for 1,800 pairs of shoes would benefit both sides, in the sense that both countries would be able to consume more of both goods than in a world without trade.

hope it's help you plz mark as brain list

A City Electric Utility Enterprise Fund made its annual interest payment on its outstanding $20 million of 6% bonds, which were originally issued at a premium. Assuming the City maintains it books and records in a manner that facilitates preparation of its fund financial statements, the entry to record this would include a credit to Cash for the amount of the interest checks written and debit(s) to ___________.

Answers

Answer:

Debit to Interest expenditure and bond premium.

Explanation:

Based on the information the Appropriate journal entry to record this would include a CREDIT TO CASH for the amount of the interest checks written and DEBIT(S) to INTEREST EXPENDITURE AND BOND PREMIUM reason been that we were told the ANNUAL INTEREST PAYMENT on the company its outstanding was the amount of $20 million of 6 percent bonds, which were ISSUED AT A PREMIUM.

Debit to Interest expenditure and bond premium $1.2 million

($20 million*6%)

Cr Cash $1.2 million

What are the three broad sections of a state or local government's CAFR? a. Introductory, financial, and statistical. b. Financial statements, notes to the financial statements, and component units. c. Introductory, statistical, and component units. d. Component units, financial, and statistical

Answers

Answer:

The answer is A.

Explanation:

CAFR means Comprehensive Annual Financial Report.

The CAFR has 3 sections - Introductory, Financial and Statistical

The Introductory section guides the user of the report through the report.

The Financial section presents the government's financial statements as well as notes to the statements and the independent auditors’ report.

The Statistical section provides statistical and financial data.

Noise pollution has been insereted as pollution in the air act in, (a) 1981 (b)1987 (c)1982 (d)2000

Answers

Answer:A

Explanation:Noise though not defined in any statute but it is included as environmental pollutants in Section (a) of the Air Act 1981. After this included noise is recognized as a kind of air pollution and steps are taken to control it efficiently.

A line cook at a restaurant was inspired to become a chef, but he lacked the necessary training. The line cook asked the chef at the restaurant if he could borrow $2,400 to take a professional cooking class. The chef agreed in a writing signed by both parties to loan him the money, provided that the line cook repaid her $200 each month for a year, beginning when the six-month class was over. The line cook made the first payment, but then missed the next two payments. The chef brought an action against the line cook prior to the time the fourth payment was due. How much is the chef entitled to in a judgment against the line cook?
Answers:
A. Nothing, because the entire loan amount was not yet due.
B. $400
C. $600
D. $2,400

Answers

Answer:

The answer is "Option B".

Explanation:

In the event of an infringement, unless the sole remaining performing duties are the violating duties of a Party as well as the fee by payments which are not mutually related, this same violation of – anti shall result throughout the infringement, whether in followed or accompanied by either a condemnation, not leading to a legal claim in full or partial contravening. Another claim for part-infringement damages is for compensation based only on the portion of the residual music rights of the wounded person. Here the cook only has the right to judge the amount due to the line cook after 2 months of payment.

You purchased a call option for $3.45 17 days ago. The call has a strike price of $45, and the stock is now trading for $51. If you exercise the call today, what will be your holding-period return? If you do not exercise the call today and it expires, what will be your holding-period return?

Answers

Answer:

73.9%;-100%

Explanation:

1. Calculation to determine what will be your holding period return If you exercise the call today

First step is to determine the Forest profit

If the call is exercised

Gross profit =$51 - 45

Gross profit= $6

Second step is to calculate the Net profit

Net profit =$6 -$3.45

Net profit = $2.55.

Now let calculate The holding period return Holding period return=$2.55/$3.45

Holding period return = .739 *100

Holding period return=73.9%

Therefore If you exercise the call today, what will be your holding-period return will be 73.8%

2. Calculation to determine what will be your holding period return If you do not exercise the call today and it expires,

Holding period return= ($0 -$3.45)/$3.45

Holding period return=-$3.45/$3.45

Holding period return = -1.00*100

Holding period return= -100%

Therefore If you do not exercise the call today and it expires, what will be your holding period return will be -100%

June 1: Byte of Accounting, Inc. Acquired $78,200 in cash from lauren and issued 3,400 shares of its common stock.

Answers

Answer:

Question requires that a journal entry is done;

Date                 Account Title                                     Debit                    Credit

June 1              Cash                                                $78,200

                        Common Stock                                                            $78,200

Market competition may sometimes encourage a firm to innovate out of fear because of the perception that Group of answer choices they will inevitably fall behind other competitors seeking out innovations. the firm will only have a very temporary edge over its competitors. the ability to earn above-normal profits is also available to its competition. higher profits can only be earned by finding less expensive ways to produce.

Answers

Answer:

they will inevitably fall behind other competitors seeking out innovations.

Explanation:

Innovation typically involves the creation of a new product of any category such as automobile, building, phones, electronics, etc., that generates money for the innovators or manufacturers through purchase made by the end users (consumers).

Competitive advantage can be defined as conditions, factors or circumstances that allow a business firm (organization) to manufacture finished goods or services better and perhaps cheaper than other (rival) firms in the same industry. Thus, it's responsible for putting a business firm in a superior or more favorable position than rival firms.

This ultimately implies that, a competitive advantage has a significant impact on a business because it increases its level of sales, revenue generation and profit margin when compared to rival firms in the same industry.

Hence, market competition may sometimes encourage a firm to innovate out of fear because of the perception that they will inevitably fall behind other competitors in the same industry who are seeking out innovations.

Mary Delany, owner of Delany Salsas, is curious to know whether the new packaging for her line of salsas is being noticed by supermarket consumers. Accordingly, she ventures out to the local supermarket and passively watches the reactions of shoppers as they pass by one of the many Delany Salsas displays. Mary Delany is collecting ____ data through ____ methods.

Answers

Answer:

primary/observational

Explanation:

The primary data may be defined as the data or the information that is collected by the researcher or the experimenter directly from the subjects through any interviews or surveys. It is a first hand information or data collected directly from the source.

In the context, Mary Delany is collecting or gathering the data which is considered as a primary data through an observational methods. The data collected by Mary is primary because she collected the data first hand directly by visiting the local supermarkets from the customers.

And the method of gathering data is observational as she collected data by observing the people or the customers coming to the supermarkets and not by interviewing them.

So, the answer is  primary/observational.

Liz would like to study abroad for a year before graduating from college. She would like to live someplace that is close to her native country of Ireland in terms of development because she will need to use the Internet for many of her classes. She can choose from programs in three countries. What could she use to measure the economic performance of the three countries

Answers

Answer:

Gross domestic productivity

Explanation:

In simple words, The monetary worth of all completed products and services produced inside a country over a certain period is known as that of the gross domestic product (GDP). GDP is a measure of a nation 's economic health that is used to determine its size as well as rate of increase.

Thus, the best option for Liz in the given case is to analyze the GDP of these countries.

Question 5 :Sharon has been directed to put together a disaster recovery plan based on directives from her company's executive management team. The company's core business is operating an e-commerce website selling winter apparel with 85 percent of its revenue received during the holiday season. If there was a prolonged outage, it would put the company's ability to continue as a financially viable operation in peril. Sharon has been instructed to create a plan that will restore operations in the shortest amount of time possible. Which disaster recovery model should she implement

Answers

Answer:

Hot site

Explanation:

A disaster recovery model or plan

This is simply regarded as different documented procedures and plans ut together simply aim on how to react and handle an emergency or disaster scenario, usually from the operational perspective.

This entails or covers things that should be done before, during and after a disaster. It aim is to reduce or eradicate disruption to business and IT operations and this can be done by keeping downtime of systems to a minimum and preventing important data loss.

Preventative measures

This is simply regarded as any methods, procedures or systems used or put in place that will efficiently reduce drastically the impact of a disaster. It includes also anything that is to be done before an actual disaster that can minimize the overall downtime of the event.

Alternative processing facilities includes

1. Cold site

2. Hot site

Hot Site

This is actually refered to as an off-site location, equipped to take over the company's data processing. The Backup copies of essential data files and programs can be maintained at the location or a nearby data storage facility. In the event of a disaster, the organization's personnel do shipped to the disaster recovery facility to load the backup data onto the standby equipment.

"Dave, I know that you are trained to work as a chemist and not to solve scheduling problems. But as lab manager, you are a frontline supervisor. You cannot immediately tell your staff to take their problems to higher management," said Quint. "You must first work with your staff to solve the problems. If you are unable to do so, you can consult with higher management. In our bureaucratic firm, we follow the chain of command so that
A. jobs can be redesigned to optimize operation of a new technology."
B. employees have freedom to seek out their preferred managers to solve their problems."
C. mathematical models are used for problem solving."
D. supervisors gain experience in and are accountable for solving problems in their work units.

Answers

Answer: D. supervisors gain experience in and are accountable for solving problems in their work units.

Explanation:

A chain of command is necessary in business because it diversifies authority such that decisions can be made faster.

It works by dividing employees into units which will answer to a manager. That manager will make decisions for the unit and this leads to decisions being made faster because everybody wouldn't have to go to upper management when they already have a manager.

Supervisors/ managers of these units are therefore accountable for their units and will gain experience from being so.

Aa jaaaaaao not for bad
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Answers

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4. Select the FALSE statement below: A. A partnership approach to planning for mass casualty incidents helps to ensure that the plans for your organization are compatible with those of the agencies that would respond if an incident occurred. B. A plan for mass casualty incidents should include protective actions to reduce vulnerabilities, response actions to minimize negative consequences, and postincident actions to promote community recovery. C. It is important to customize your emergency plan to reflect the risks, realities, and resources that characterize the local area and your own organization. D. When an organization is planning for mass casualty incidents, an effective approach is to request law enforcement personnel to develop a separate plan for mass casualty incidents for the organization.

Answers

Answer: D. When an organization is planning for mass casualty incidents, an effective approach is to request law enforcement personnel to develop a separate plan for mass casualty incidents for the organization.

Explanation:

Mass casualty incident refers to a situation in which medical services are overwhelmed by the number of casualties.

From the options given, the false statement is that "When an organization is planning for mass casualty incidents, an effective approach is to request law enforcement personnel to develop a separate plan for mass casualty incidents for the organization".

This is incorrect. In a mass casualty, a separate plan cannot be developed for an organization. All the casualties are entitled to same plan.

When using supply and demand to analyze trade, one can assume that the domestic market being small relative to the world market leads to: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices an upward-sloping domestic supply curve. a horizontal world supply curve. a vertical domestic demand curve. a downward-sloping domestic demand curve.

Answers

Answer:

a horizontal world supply curve.

Explanation:

When the supply curve is horizontal, it means that supply is perfectly elastic.

Supply is perfectly elastic, if a small change in price leads to supply falling to zero.

A seller delivered a deed to a buyer at the closing. A title search disclosed no serious defects, and the title did not appear to be based on doubtful questions of law or fact nor did it appear to expose the buyer to possible litigation. The seller's title did not appear to present a threat to the buyer's quiet enjoyment, and the title policy was sufficient to convince a reasonably well-informed person that the property could be resold. The title conveyed would commonly be called

Answers

Answer:

A marketable title

Explanation:

A marketable title in real estate is on that is legally considered free from defect. Buyers will have no issues with accepting the title because there are no objectionable items associated with the title.

It means the property in question is free of easements, liens, encumbrances or other legal defects.

In the given scenario a title search disclosed no serious defects, and the title did not appear to be based on doubtful questions of law or fact nor did it appear to expose the buyer to possible litigation.

This is a marketable title.

________ refers to searching for information that is not immediately evident and sorting through that information to interpret what is important.
A) Competitive skimming
B) Data classification
C) Environmental scanning
D) Knowledge browsing
E) Information foraging

Answers

Answer:

C) Environmental scanning

Explanation:

Environmental scanning is a management strategy that focuses on systematically acquiring informations about occasions, trends, events or patterns through surveys and analysis of these information in an organisation's external and internal environment. The informations acquired through environmental scanning is then used by the executive management in strategically planning the organisation's future and exploitation of available opportunities for the success of the organization.

The internal environmental scanning offers an organization strength and weakness while the external environmental scanning provides information about opportunities and threats.

Generally, the external environmental scanning gives an overview of the opportunities in the market as well as potential threats to an organization.

Hence, the search for an information that isn't immediately evident and sorting through or analyzing that information to interpret what is important to an organization is generally referred to as environmental scanning.

3. Which of the following is the account title used to include
instances of price adjustment in case if there is a defective item.
A. Sales returns
B. Purchase discounts
C. Sales returns and allowances

Answers

Answer:

The correct answer is C. Sales returns and allowances.

Explanation:

Sales allowances are discounts that the seller of the product offers to the buyer when there is some type of failure or error in the product or service offered, that is, the buyer pays a lower price because the quality offered is also lower. In this way, there is a double advantage: on the one hand, the buyer obtains the product at a lower price saving money and, on the other hand, the seller discards a defective product without losing money.

Answer:

C. Sales returns and allowances.

Explanation:

Sales returns and allowances is a deduction from sales that shows the sale price of goods returned by customers, as well as discounts taken by them to retain defective goods.

Benny spends all of his money buying wine and cheese. The marginal utility of the last bottle of wine he bought is 60, and the marginal utility of the last block of cheese he bought is 30. The price of wine is $3, and the price of cheese is $2. Benny: Group of answer choices is buying wine and cheese in the utility-maximizing amounts. should buy more wine and less cheese. should buy more cheese and less wine. is spending too much money on wine and cheese.

Answers

Answer:

should buy more wine and less cheese

Explanation:

Marginal utility is the additional utility derived from consuming one more unit of a good

The consumption decision is to consume more units of a good that gives the higher utility per good.  

Marginal utility per good = marginal utility / price of the good  

Wine = 60 / $3 = 20

Cheese = 30 / $2 = 15

Wine has a higher utility per good when compared with cheese. Benny should buy more wine and less cheese

Other Questions
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