Amechanic builds an engine and then sells it to a customized body shop for $7,000. the body shop inserts the engine into the car and resells it to a dealer for $20,000. the dealer then sells the finished vehicle for $35000. a. when the consumer drives off with the car, gdp increases by $ . b. what is the value added by the mechanic? (assume that the value of the materials used to build it is zero.) $ c. what is the value added by the body shop? $ d. what is the value added by the dealer? $ e. the total value added is the amount that gdp increased.

What factors excluding price affect demand

When the federal reserve buys and sells bonds to member banks, it is called a. monetary policy b. reserve ratio c. interest rate adjustment d. open market operations

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity.calculate the cost of new stock using the dividend growth approach.what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics.each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings.equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g