When production creates external costs greater than external benefits a market is?

Answers

Answer 1

When production creates external costs greater than external benefits a market is not produce the product without government intervention.

The danger of an accident when drinking alcohol and operating a vehicle increases. Others in the room are exposed to the health dangers of passive smoking when someone smokes in a closed environment. A new road's construction costs the environment and increases local residents' exposure to pollution.

When goods and services are created and consumed, external costs are expenses that are placed on a third party. The general public, who ultimately pays for them, is effectively subsidizing goods and services with external costs.

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Related Questions

Erin, a good friend of yours, is interested in investing. However, erin is concerned about the current state of the market. They are looking at an investment portfolio of bonds. Erin would like for her money to double in value in 9 years. How much would erin need to earn from her investment in bonds on an annual basis?.

Answers

Erin, a good friend of yours, is interested in investing. However, Erin is concerned about the current state of the market. They are looking at an investment portfolio of bonds. Erin would like for her money to double in value in 9 years. $1,000.00 using an investment that earns 8% interest compounded annually Erin needs to earn from her investment in bonds on an annual basis.

Investing is a good thanks to put your money to figure and potentially build wealth. The greater growth potential of investing is primarily thanks to the ability of compounding and therefore the risk-return tradeoff.

Investors are within the business of putting money into growing businesses so that they can make money. If you'll be able to demonstrate that your business will make them money, then you're 90% there. Investing comes with the potential of greater rewards (which can include more risk) over time.

Investing has the potential to come up with much higher returns than savings accounts, but that benefit comes with risk, especially over shorter time frames. If you're saving up for a short-term goal and can withdraw the funds within the near future, you're probably more happy parking the money in a very bank account.

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A customer calls in because her wireless speaker keeps dropping audio. she can't determine the cause of the issue. what should you say?

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Assuming a customer calls in because her wireless speaker keeps dropping audio but she can't determine the cause of the issue, you should say: C. "I'm sorry about that. Check your systray and tell me if your Bluetooth is enabled."

What is customer relations?

Customer relations can be defined as the series of methods that a business organization (company) designs and develops for its end-to-end engagement with previous, current, and potential customers.

The main purpose of customer relations is to improve the customer experience and foster long-term relationships with them. This ultimately implies that, good customer relations require courtesy, politeness, professionalism (expertise), and effective response.

In this context, if a customer calls in because her wireless speaker keeps dropping audio but she can't determine the cause of the issue, you should say "I'm sorry about that. Check your systray and tell me if your Bluetooth is enabled."

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Complete Question:

A customer calls in because her wireless speaker keeps dropping audio. She can't determine the cause of the issue. What should you say?

"That must be frustrating. Did you drop the speaker?"

"I'm sorry to hear that. When did this start happening?"

"I'm sorry about that. Check your systray and tell me if your Bluetooth is enabled."

"Can you bring your computer and speaker into a store? We can troubleshoot better there."

"I get this problem all the time. It's probably a broken soundcard."

financial management requires both short-term activities as well as long-term planning such as raising funds.

Answers

Financial management requires both short-term activities as well as long-term planning such as raising funds.TRUE

Financial management is the workout of handling an agency's budget in a manner that permits it to be successful and compliant with guidelines. That takes each a high-stage plan and boots-on-the-ground execution.

Economic management is the agency characteristic concerned with profitability, fees, coins, and credit, just so the agency may also have the way to carry out its goal as satisfactorily as feasible; the latter is often described as maximizing the rate of the firm for stockholders.

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6.
Tamara is a nurse. A patient asks her about
end-of-life options. Which should be the
basis for Tamara's response?
The nursing code of ethics and the
hospital's employee handbook
b. Tamara's personal religious beliefs
The views of the patient's friends
d. All of the above
a.
C.

Answers

The basis for Tamara's response should be: A. The nursing code of ethics and the hospital's employee handbook.

Who is a nurse?

A nurse refers to an expert (professional) who has been trained in a medical facility and licensed to provide health care for sick people (clients) and perform routine checks on them, as well as some medical instruments in a health facility such as an hospital.

What is a code of ethics?

A code of ethics can be defined as a set of rules, agreed behaviors, ideals, norms, accepted practices, and responsibilities set aside for the members of a group or business organization such as in hospitals.

This ultimately implies that, a code of ethics is a strategic policy that explicitly outlines the principles, ideals, and standard which the members and other third parties acting on behalf of a group or business organization must always adhere to in all circumstances.

In this context, we can reasonably infer and logically deduce that the basis for Tamara's response about end-of-life options should be the nursing code of ethics and the hospital's employee handbook.

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complete the statement about taxes on dividends. dividends that are are taxed the same as short-term capital gains, which is the investor’s marginal tax rate.

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Non qualified is the investor’s marginal tax rate, is the statement about taxes on dividends. Dividends that are taxed the same as short-term capital gains.

What is short-term capital gains?

Gains from selling assets a person owned for a year or less are considered short-term capital gains and are typically taxed at the same rate as the ordinary income, which can range from 10% to 37%.

The shares in the aforementioned case were sold through a reputable stock exchange after being held for less than a year and were subject to STT; as a result, the STCG can be referred to as STCG covered by section 111A. A 15% tax will apply to such STCG.

Thus, Non qualified is the investor’s marginal tax rate.

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Describe at least three supply chains that provide products to your school book store. do they use cooperative supply chain methods to help reduce their costs?

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Describe at least three supply chains that provide products to your school book store. do they use cooperative supply chain methods to help reduce their costs

Supply chain management (SCM) has become “a highly sophisticated, technology-dependent, and collaborative discipline that combines the business functions of purchasing, operations, inventory management and warehousing. There are three main flows of supply chain management: the product flow, the information flow, and the finances flow.

What is Supply chain management?

Supply chain management, which covers all procedures that convert raw materials into finished commodities, is the management of the movement of goods and services. It entails the deliberate simplification of a company's supply-side operations in order to optimize customer value and achieve a competitive edge in the market. The handling of a good or service's full manufacturing flow, from the raw materials to the delivery of the finished product to the customer, is known as supply chain management.

Therefore,

Describe at least three supply chains that provide products to your school book store. do they use cooperative supply chain methods to help reduce their costs

Supply chain management (SCM) has become “a highly sophisticated, technology-dependent, and collaborative discipline that combines the business functions of purchasing, operations, inventory management and warehousing.

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when an economy produces a combination of goods that lies inside the production possibilities curve: group of answer choices resources will never be depleated. opportunity cost is constant. resources are not being fully and efficiently used. resources are being fully and efficiently used. prices are constant.

Answers

When an economy produces a combination of goods that lies inside the production possibilities curve its resources are not being fully and efficiently used. Hence, option C is correct.

What is the Production possibility frontier?

The production possibility frontier, a curve, displays on a graph the maximum amounts that may be produced of two goods if they are both made from the same scarce resource. A different name for the PPF is the production possibility curve.

Opportunity cost is the money wasted in the production of a commodity when resources are transferred from one to another. On a graph, the maximum amount that could be generated is depicted as a curve.

Thus, option C is correct.

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the marketing mix for marketing focuses on a specified group, while the marketing mix for marketing is used to generally appeal to everyone

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Target marketing is the mix for marketing focuses on a specified group, while the marketing mix for marketing is used to generally appeal to everyone.

Marketing is the interest, set of establishments, and methods for creating, communicating, turning in, and replacing offerings that have value for customers, clients, partners, and society at huge.

It's miles, in quick, a movement taken to carry attention to a commercial enterprise' services; they can be bodily goods for sale or services presented. not unusual examples of advertising at paintings encompass tv advertisements, billboards on the side of the street, and mag classified ads.

The 4 ps of marketing and marketing—product, fee, place, and merchandising—are often called the advertising and marketing mix. those are the important thing elements involved in making plans and advertising and marketing a product or service, and they have interaction significantly with every other.

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Troy will receive $7,500 at the end of year 2. At the end of the following two years, he will receive $9,000 and $12,500, respectively. What is the future value of these cash flows at the end of year 6 if the interest rate is 8 percent?.

Answers

The future value of these cash flows at the end of year 6 if the interest rate is 8 percent is $33445

In order to calculate your income for the long run, use the subsequent formula: Beginning Cash + Projected Inflows – Projected Outflows = Ending Cash. Start together with your current balance. Add within the amount you expect to earn during the set period you're forecasting. The Closing Balance is the amount of money at the top of the month (last day of month).

The Closing Balance is calculated by the subsequent equation: Closing Balance = Opening Balance add Total of Income less Total of Expenditure. Future Value (FV) Formula may be a financial terminology accustomed to calculate the worth of money flow at a futuristic date as compared to the first receipt.

Net income may be a profitability metric that represents the number of cash produced or lost by a business interest rate during a given period. Usually, you'll be able to calculate net income by figuring out the difference between your business's cash inflows and cash outflows.

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What are the limitations of broadcast as a method of sending data to the intended receiver of communication?

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The limitation of broadcast as a method of sending data to the intended receiver of the communication is that it can handle only one transmission at a time.

The major dilemma of broadcast as a verbal exchange mechanism is that it miles very inefficient. A maximum of the facts a station gets in broadcast networks together with Ethernet isn't of interest to the station. The identical factor happens with the ECRWSS service supplied with the aid of the Postal provider, where the mail provider provides mail to each deal alongside his course. As a result, numerous ECRWSS broadcast mail customers get hold of each day falls in the category of junk mail. As an end result, whilst broadcast is notable for small networks, it's far flawed for massive networks.

Broadcasting is the distribution of audio or video content material to a dispersed target audience through any digital mass communications medium, but usually on the use of the electromagnetic spectrum, in a one-to-many model.

In computer networking, broadcasting refers to transmitting a packet in an effort to be acquired by each tool on the network. In exercise, the scope of the broadcast is confined to a broadcast domain.

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Under what circumstances would it most likely be considered beneficial for a government to be a large borrower of foreign investment capital?

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A country's trade in manufactured goods diminished substantially, causing it to lose tax revenue and become a net borrower of foreign funds. Foreign investment entails capital transfers from one country to another, with foreign investors gaining substantial ownership shares in indigenous enterprises and assets.

A recent tendency is toward globalization, with multinational corporations investing in a range of countries. Foreign indirect investment is made up of corporations, financial institutions, and private investors who buy stock in foreign enterprises that trade on a foreign stock exchange. Large multinational firms will seek new prospects for economic growth in other nations by building branches and growing their investments.

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Which appears to provide the best opportunity for increases in productivity? a. labor b. raw materials c. management d. capital

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Capital appears to provide the best opportunity for increases in productivity. Capital is often cash or liquid assets maintained or earned for the purpose of spending. In a larger sense, the phrase can refer to all of a company's monetary assets, such as its equipment, real estate, and inventory.

Capital in business refers to the funds required for a company to run and grow. Cash on hand and accounts receivable are common forms of capital, as are close cash, equity, and capital assets. Capital assets are long-term assets that are not intended to be sold as part of your ordinary operation.

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If the coupon interest rate is 4. 375% for the first six months and changes to a rate equal to the 10-year treasury bond rate plus 1. 3% thereafter, the bond is called a bond.

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If the coupon interest rate is 4.375% for the first six months and changes to a rate equal to the 10-year Treasury bond rate plus 1.3% thereafter, the bond is called a floating-rate bond.

A Bond may be defined as the securities of an investment wherein an investor lends money to a company/firm/organization or government for a definite period in exchange for regular interest payments. After a bond reaches its mature stage the issuer of the bond can return all the money to the investor.

A floating Rate Bond may be defined as the type of bond in which the rate of interest can fluctuate or change at regular intervals based on the benchmark rate set. In other words, the interest rates may vary throughout the tenure of the bond.

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Determining the worst payoff for each alternative and choosing the alternative with the best worst is called?

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Determining the worst payoff for each alternative and choosing the alternative with the best worst is called Laplace.

What is  alternative?

Alternative is a term used to describe something that deviates from accepted norms. One example of an alternative medical procedure is acupuncture. Alternative Use denotes a use for the asset that was not conceivably possible prior to the loss. One exception is that newer equipment could come with features that weren't even thought of when the old, broken equipment was purchased. You cannot avoid making those improvements.

Therefore,

Determining the worst payoff for each alternative and choosing the alternative with the best worst is called Laplace.

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The health care sector constituted what percentage of the u.s. gross domestic product in 2014?

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The health care sector constituted 17.1% percentage of the u.s. gross domestic product in 2014. GDP quantifies the monetary worth of final products and services. It includes all of the output produced within a country's borders.

Gross domestic product (GDP) is a monetary measure of the market value of all final products and services produced by countries in a given time period. Because of its complexity and subjectivity, this metric is frequently changed before being regarded a credible indication. GDP (nominal) per capita, on the other hand, does not account for changes in the cost of living and inflation rates among countries.

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consider a 10-year, $50 annuity that makes annual payments. the first payment is made exactly 4 years from today and the appropriate discount rate is 6%. what is the present value of this annuity?

Answers

The present value of the annuity in today's terms is $308.98

What is the present value of the annuity?

The present value of the annuity is the present value of cash flows of $50 per year for 10 years bearing in mind that the first cash flow is in 4 years, we need to note that the present value formula of an annuity discount cash flows from year 4 to year 3

PV=PMT*(1-(1+r)^-N/r

PV=present value of annuity=unknown

PMT=annual cash flow=$50

r=discount rate=6%

N=number of annual cash flows in 10 years=10

PV(year 3)=$50*(1-(1+6%)^-10/6%

PV(year 3)=$368.00

PV(year 0)=$368.00/(1+6%)^3

PV(year 0)=$308.98

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What type of audit is used to provide a systematic assessment of an organization's triple bottom line?

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Social audit is a  type of audit is used to provide a systematic assessment of an organization's triple bottom line.

What is Social audit ?

A social audit  can be described as the  formal review of a company's endeavors,  as well as the code of conduct  with respect to the social responsibility .

This can be used to know the and the company's impact on society as well as  how well the company is achieving its goals o.

Hence, Social audit is a  type of audit is used to provide a systematic assessment of an organization's triple bottom line.

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Aiden is a graphics designer for an advertising agency. What talent might Aiden use to do well at his job?
A.
be friendly and outgoing

B.
be artistic and like to create things

C.
enjoy the outdoors

D.
be kind and a good listener

Answers

Its B, kinda obvious

Answer:

B

Explanation:

He is designing, that is all.

The three most important items to keep in mind when reviewing an income statement are?

Answers

The three most important items to keep in mind when reviewing an income statement are:

GAAPCash verses non-cash items.Time and costs.

The four basic financial statements.

In Financial accounting, there are four (4) basic financial statements and these include the following:

Income sheetStatement of retained earningsBalance sheetStatement of cash flows

What is an income statement?

An income statement can be defined as a type of financial statement which is typically used by an entrepreneur or business firm to record the amount of money (revenues) that are entering or flowing into the business.

What is GAAP?

GAAP is an abbreviation for Generally Accepted Accounting Principles and it comprises the financial accounting standards, procedures and principles that must be used by all public institutions that are operating in the United States of America.

In conclusion, the three most important items to keep in mind when reviewing an income statement are:

GAAPCash verses non-cash items.Time and costs.

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dexter, incorporated, had a cost of goods sold of $43,921. at the end of the year, the accounts payable balance was $7,943. how long on average did it take the company to pay off its suppliers during the year?

Answers

It takes an average 66 days for the company to pay off its suppliers during the year.

Calculation

Days Payable Outstanding can be calculated using this following formula:

Days Payable Outstanding = (Accounts Payable × 365) / Cost of Goods Sold

= (7,943 × 365) / 43,921

= 66.01

So, Days Payable Outstanding is 66 days and we can assume that it takes an average 66 days for the company to pay off its suppliers during the year.

What is accounts payable balance?

Accounts payable (AP), sometimes known as "payables," is the term used to describe a business's current short-term obligations to its suppliers or creditors. A company's payables are listed as a current obligation on its balance sheet.

The business division or department in charge of making payments due by the company to suppliers and other creditors is referred to as "AP" in another, less prevalent usage.

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if, for a particular consumer, the marginal utility of ties is greater than the marginal utility of shirts, this consumer should: a buy the same amount of each. b not do anything until more information is available. c buy more ties and fewer shirts. d not buy any ties or shirts. e buy more shirts and fewer ties.

Answers

If the marginal value of ties is higher for a certain customer than the marginal utility of shirts, that consumer should wait until further information is available before taking any action.

How Does Marginal Utility Work?

The additional pleasure a consumer has from owning one extra unit of an item or service is known as marginal utility. Economists utilize the idea of marginal utility to estimate the quantity of a good that consumers will buy.

When the overall utility is increased by the consumption of an additional item, positive marginal utility occurs. On the other side, negative marginal utility arises when the overall utility is reduced by the consumption of one extra unit.

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a manufacturer is an organization that performs manufacturing and/or purchasing needed to produce a product or device not for itself but as a service to another firm.

Answers

Contract manufacturer is a manufacturer is an organization that performs manufacturing and/or purchasing needed to produce a product or device not for itself but as a service to another firm.

What is meant by Contract manufacturer ?  

A contract manufacturer (CM) is a third-party producer of parts or goods on behalf of a business. Outsourcing is what this is. Typically, a corporation may present a CM with a design or product and request a quote for manufacturing it based on factors such manufacturing procedures, labor costs, tooling prices, and material costs. Utilizing a CM may offer a variety of advantages, including cost savings, superior quality, easy access to skilled labor, and economies of scale. However, there may also be dangers, such as a lack of control, a reduction in responsiveness and adaptability, and a reduced capacity for quality control.

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On november 26, civic company purchased $1,200 of supplies on account. the journal entry to record this transaction will include?

Answers

On November 26, the civic company purchased $1,200 of supplies on account. There will be "a debit to suppliers as well as a credit to trade payables" in the journal entry to document this transaction.

What journal entries?

Journaling is the practice of keeping or producing records of all transactions, whether or not they are pecuniary. There may be several entries in the journal, each of which represents either a credit or a debit. If indeed the total of the credits and debits does not equal, the journal entry is regarded to be unbalanced.

Journal entries can list one-time or ongoing events, such as bond amortization or depreciation. Accounts payable normally has its own sub-ledger that indirectly impacts the general ledger, and journal entries in accounting software are typically entered using a distinct module from those.

As a result, general ledger account balances are changed directly by journal entries. The correct date, amount(s) to be debited, amount to be credited, description of the transaction, and specific reference number are all parts of a properly formatted journal entry.

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Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. you notice that the price of bananas has increased. as a result, your demand for vanilla pudding would?

Answers

You observe that bananas has increased. Your request for vanilla pudding would get smaller.

Increased Demand:

Demand is the quantity of consumers  willing and able to purchase a product at various prices over a  period of time. Consumers' desire to buy products and their willingness and ability to pay for them are referred to as their demand for those products. Consumer demand for a product is influenced by the product's pricing, the price of competing items, the consumer's income, as well as their own preferences and tastes. When one or more of these variables change, the quantity of products selected by consumers can also change. If the prices of other commodities, consumer incomes, and preferences are constant, the optimal quantity of a product chosen by a consumer becomes completely dependent on its price.

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finch construction company expects to build three new homes during a specific accounting period. the estimated direct materials and labor costs are as follows. expected costs home 1 home 2 home 3 direct labor $ 60,000 $ 93,000 $ 171,000 direct materials 102,000 131,000 189,000 assume finch needs to allocate two major overhead costs ($48,600 of employee fringe benefits and $29,540 of indirect materials costs) among the three jobs.

Answers

The total cost for each house are: $178,140, $247,120, $398,880.

Total cost

1. The allocation bases rates:

                               Employee fringe benefits Indirect materials

Estimated overhead cost $48,600             $29,540

Total overhead driver          $324,000             $422,000

($60,000+$93,000+$171,000)    ($102,000+$131,000+$189,000)

Overhead allocation rate     15%                          7%

($48,600/$324,000)  ($29,540/$422,00)

2. The total cost of each house:

                              Home 1     Home 2    Home 3                     Total

Direct labor          $60,000 $ 93,000       $171,000                 $324,000

Direct materials  $102,000 $131,000          $189,000              $422,000

Fringe benefit cost allocated $9,000  $13,950 $25,650       $48,600

($60,000 x 0.15)        ($93,000 x 0.15)         ($171,000 x 0.15)

Indirect materials cost allocated $7,140  $9,170 $13,230      $29,540

($102,000 x 0.07) ($131,000 x 0.07) ($189,000 x 0.07)

Total cost $178,140         $247,120 $398,880                  $824,140

Therefore the total cost for each house are: $178,140, $247,120, $398,880.

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The complete question is:

finch construction company expects to build three new homes during a specific accounting period. the estimated direct materials and labor costs are as follows. expected costs home 1 home 2 home 3 direct labor $ 60,000 $ 93,000 $ 171,000 direct materials 102,000 131,000 189,000 assume finch needs to allocate two major overhead costs ($48,600 of employee fringe benefits and $29,540 of indirect materials costs) among the three jobs.

Required:

Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.)

The lower the personal cost of helping others, _____.
a. the more help we offer
b. the less help we offer
c. the higher the marginal benefit
d. the lower the marginal benefi

Answers

The lower the personal cost of helping others, a. the more help we offer.

An example of help is a person who is going out of his manner to aid you. help method to offer aid or assistance, or to improve a state of affairs. An instance of assistance is while you mow your older neighbor's garden for free. An example of assistance is whilst tutoring makes your grades get better.

Helping others improves social interaction, distracts human beings from their very own troubles, and improves and competence. bodily properly-Being - supporting others leads to expanded social integration which allows people to steer greater active existence.

The phrase is recorded as a cry of misery from overdue 14c. The experience of "serve a person with meals at desk" (1680s) is translated from French servir "to help, stead, avail," and led to supporting (n.) "part of food."

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The income statement shows the amount of profits earned based on any one given day. True or false?.

Answers

Answer:

False

Explanation:

The income statement shows the amount of profits earned at the end of the financial year

Thomas invests $120 in an account that pays 4 percent simple interest. how much money will thomas have at the end of 6 years?

Answers

Thomas will have $148.8 at the end of 6 years.

Given the amount Thomas invests is $120.

The rate of interest at which Thomas invests the amount is 4%.

Time = 6 years.

we need to calculate the simple interest.

P= $120

t = 6 years.

r = 4%

Simple interest = P×t×r/100

= 120 × 6 × 4/100

= $28.8

Future value = Principal + Simple interest

Future value = $120 + $28.8

Future value = $148.8

So, Thomas will have $148.8 at the end of 6 years.

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mainline produce corporation acquired all the outstanding common stock of iceberg lettuce corporation for $30,000,000 in cash. the book values and fair values of iceberg’s assets and liabilities were as follows: book value fair value current assets $ 11,400,000 $ 14,400,000 property, plant, and equipment 20,200,000 26,200,000 other assets 3,400,000 4,400,000 current liabilities 7,800,000 7,800,000 long-term liabilities 13,200,000 12,200,000 required: calculate the amount paid for goodwill.

Answers

Mainline produce corporation acquired all the outstanding common stock of iceberg lettuce corporation for $30,000,000 in cash. The book values and fair values of iceberg’s assets and liabilities were as follows:

The amount paid for goodwill will be $5,000,000.

How to calculate the goodwill amount?

We will first find the fair amount of the required assets:

The acquired assets are:

Current asset - $14,400,000

Property plant and equipment - $26,200,000

Other assets - $4,400,000

Hence, the total fair value of the assets is $45,000,000

Now, will find the fair amount of the total liabilities:

The liabilities are:

Current liabilities - $7,800,000

Long - term liabilities - $12,200,000

Hence, the total fair value of the total liabilities is $20,000,000.

Now, we can compute for the Fair Value of Net Assets:

Fair value of net assets = Fair value of acquired assets – Fair Value of liabilities

Fair value of net assets = 45,000,000 - 20,000,000 = $25,000,000

Now,

Goodwill = Purchase Price - Net assets

Goodwill = $30,000,000 - $25,000,000

Goodwill = $5,000,000

Hence, the amount paid for goodwill will be $5,000,000.

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after-tax cost of debt ll incorporated's currently outstanding 8% coupon bonds have a yield to maturity of 13%. ll believes it could issue new bonds at par that would provide a similar yield to maturity. if its marginal tax rate is 30%, what is ll's after-tax cost of debt? round your answer to two decimal places.

Answers

Cost of debt  = 12(1-.30) = 8.40% if the marginal tax rate is 30%.

The marginal tax fee is the quantity of additional tax paid for every additional greenback earned as profits. The common tax fee is the full tax paid divided by the general profits earned. The marginal tax charge is critical because it will let you apprehend the tax outcomes of earning additional income or taking sure deductions.

The marginal tax rate is essential as it let you recognize the tax effects of income extra profits or taking positive deductions. Issuing bonds is one manner for companies to elevate money. A bond functions as a mortgage between an investor and an organization. The investor consents to provide the organization with a certain sum of money for a selected time frame. In alternate, the investor gets periodic interest payments.

Incorporated's currently outstanding = 8%

coupon bonds have a yield to maturity = 13%

marginal tax rate = 30%,

cost of debt

 = 12(1-.30) = 8.40%

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