Firstly, real disposable income is the main influence of consumer expenditure. Richer households tend to spend more than poorer ones. This is important because the amount of real disposable income will dramatically effect the AD as if the amount is low then barely any money will be spent. Secondly, wealth is another factor. The richer people are the higher their APC.
Precedents usually yield higher valuations than trading comps because a buyer must pay shareholders more than the current trading price to acquire a company. This is referred to as the control premium (use 20 percent as a 31 Customized for: JJ (jchen59@wisc.edu) Vault Guide to Private Equity and Hedge Fund Interviews Finance benchmark). If the buyer believes it can achieve synergies with the merger, then the buyer may pay more. This is known as the synergy premium. Between LBOs and DCFs, the DCF should have a higher value because the required IRR (cost of equity) of an LBO should be higher than
This is as the economy is larger in developed countries, their currency appreciates and is much higher compared to less developed countries, thus labor is cheaper to be paid in less developed countries. As many companies carry out manufacturing off-shores, companies that refuses to do so would be left behind as their manufacturing cost would be higher and thus less profit is made. This is as said by David Manners where stated that as manufacturing in China and India is cheaper compared to most countries, and as globalisation is part of the economy now, it is best to welcome and not go against it. Due to this in 2000-2004, UK gained a
They elect or appoint a representative to bargain on their behalf so can have a much larger effect than each individual do it themselves. Neo- classical economic theory predicts that trade unions can improve working conditions but create unemployment in competitive labour markets. If labour markets are competitive, Better working conditions (including higher wages) means higher cost of production to firms, which can shift the demand curve to the right and with the new higher wage, there would be unemployment (Q3-Q2). In this case trade union successfully created benefit for some of its members. The hourly wages of union member saver aged £12.43 in 2006, 16.6% more than the earnings of non-members (£10.66 per hour).
One reason for the widening gap between the rich and the poor is that since 1970, the government taxation policies have changed, these policies are more favorable to the wealthy people. This means that households within the higher tax bracket are paying less tax, this in turn then makes the rich people richer meaning the gap between the poor even greater. for example as item 3B shows in 1970 the share of total income taken by the top 1% of earners was only 7.1%this had risen by more than half in 2005 and the share of total income take by the top one percent of income was now 14.3%. A second reason for the widening gap between the rich and the poor in the UK is changes to the labour market, these changes have led to more relatively low paid jobs such as in the tertiary sector. With less people working in the higher paying primary and secondary sectors the gap between the rich and the poor will be widening as more people will begin to work within the substantially lower paying tertiary sector, this will widen the gap between the rich and the poor as it means there will be more people working in lower paid jobs.
From this we know that a. Firm A has a higher profit margin than firm B b. Firm B has a higher profit margin than firm A c. Firm A and B have the same profit margin d. Firm A has a higher equity multiplier than firm B e. You need more information to say anything about the firm's profit margin 3. If a firm has $100 in inventories, a current ratio equal to 1.2, and a quick ratio equal to 1.1, what is the firm's Net Working Capital? a.
The net present value for company “A” was $29,425.85with a IRR of 6% while company “B” had a NPV of $12,656.03 with an IRR of 13%. Company “B” has a lower NPV than Company “A” but the internal rate of return is 13% to only 6% for company “A”. So if I’m reading this correctly I would choose Company “A” due to NPV is significant higher. The higher rate of return would be a factor also because company “B” stands to make more money in the long run but we want our return on investment quicker. IRR is a percentage that will go with NPV most of the time but sometimes you get conflicting directions telling you to choose Company “A” over Company “B”.
Also, Inditex has less operation expenses than H&M’s. All of these imply that Inditex is able to operate with high net profit margins. When the capital efficiency is considered, Inditex is less efficient in terms of capital than H&M due to some indicators. First is that working capital of H&M is higher than Inditex’s which can calculated by extracting other non-current assets from total assets and found as 2129 for H&M and 2082 for Inditex. Other indicator is ROA which can be calculated by dividing net income to total assets.
We can conclude that they use FIFO because the inventory amount increases through 06 in 65% and then decreases in 07 by -13%. The rise in prices in 2006 is the reason why the inventory is more expensive because the increase in purchases was not as big as the increase in inventory price. If they used LIFO the inventory in 2006 would not have
The rich will pay more than the poor in absolute terms, but the burden of the tax will be no greater on the rich than it is on the poor. For example, a household earning 20 000 euros may pay 10% tax to the government, totalling 2 000 euros. A rich household in the same country pays 10% on its income of 200 000 euros, totalling 20 000 euros in taxes. There is a difference in total value but the proportional burden is the same on the rich household as it is on the poor household. A regressive tax in one in which the percentage decreases as the taxpayers’ income rises.