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What happens to the value of average fixed cost as the level of output increases?
The average fixed cost is equal to fixed cost divided by level of output, if the output increases; the average fixed cost is less.
What happens to the economy when the economy's capital stock increases?
Supposing that with capital you mean physical capital (all kind of physical investments like machines, and so on), it tends to increase the Gross Domestic Product (GDP), but increases in capital along time lead to lower increases in GDP.This is known in economics as the diminishing marginal returns.
What happens to the quantity demanded for credit if the cost of borrowing increases or decreases?
As the cost of credit increases, the quantity demand decreases. in contrast, if the cost of borrowing drops, the quantity of credit demand rises.
What happens if a company over invests in net working capital?
If a firm over invest in net working capital, it incurs cost in the form of opportunity cost.
For the average total cost curve of a firm without economies of scale what happens to cost as output increases?
costs go down
What happens to NPV when cost of capital increased?
NPV decreases when the cost of capital is increased.
What are the disadvantages of share capital?
Disadvantage of share capital is that it increases the risk of default which causes the increase in cost of capital.
What happens to the value of average fixed cost as the level of output increases?
The average fixed cost is equal to fixed cost divided by level of output, if the output increases; the average fixed cost is less.
What happens to the economy when the economy's capital stock increases?
Supposing that with capital you mean physical capital (all kind of physical investments like machines, and so on), it tends to increase the Gross Domestic Product (GDP), but increases in capital along time lead to lower increases in GDP.This is known in economics as the diminishing marginal returns.
What happens to npv when Cost of capital decreased?
When the cost of capital decreases, the net present value (NPV) of a project typically increases. This is because a lower cost of capital reduces the discount rate applied to future cash flows, making them more valuable in present terms. Consequently, projects that may have had a negative NPV at a higher discount rate could become positive, making them more attractive for investment. Overall, a decrease in the cost of capital enhances the potential profitability of investment opportunities.
What happens to the quantity demanded for credit if the cost of borrowing increases or decreases?
As the cost of credit increases, the quantity demand decreases. in contrast, if the cost of borrowing drops, the quantity of credit demand rises.
What happens to a preferred share if the government increases capital by buying common shares of a bank?
we can became ungry
What happens if a company over invests in net working capital?
If a firm over invest in net working capital, it incurs cost in the form of opportunity cost.
For the average total cost curve of a firm without economies of scale what happens to cost as output increases?
costs go down
What happens when a nation's currency depreciates?
Exports increase. Imports decrease. FDI increases. Foreign capital investment increases. Economic growth rises. Besides these positives there is the negative effect and thats inflation which increases.
What happens when a nation's currency depreciate?
Exports increase. Imports decrease. FDI increases. Foreign capital investment increases. Economic growth rises. Besides these positives there is the negative effect and thats inflation which increases.
What happens to NPV if the cost of capital changes?
The cost of capital is inversely proportional to the NPV. As capital costs increase (i.e. the interest rate increases), NPV decreases. As capital costs decrease (i.e. the interest rate decreases), NPV increases. You can see the relationship in the following equation: NPV = a * ((1+r)^y - 1)/(r * (1+r)^y) Where: NPV = Net Present Value (The present value of a future amount, before interest earnings/charges) a = Amount received per year y = Number of years r = Present rate of return
