Answer:
[tex]\Delta G= 400 billion \frac{1}{5}= 80 billions[/tex]
To close the expansionary gap, the government would need to spending by 80 billion
Explanation:
Assuming this question: "To close the expansionary gap, the government would need to spending by ? billion"
Previous concepts
The government expenditure multiplier "denoted by K, the impact of a change in income following a change in government spending".
The marginal propensity to consume denoted by MPC "is a metric that quantifies induced consumption, the concept that the increase in personal consumer spending occurs with an increase in disposable income"
Solution to the problem
Fo this problem we need to find the Government multiplier (K) with the following formula:
[tex] K=\frac{1}{1-MPC}[/tex]
Wehre MPC represent the marginal propensity to consume. And if we replace we got this:
[tex] K=\frac{1}{1-\frac{4}{5}}=5[/tex]
And now we can find the government decrease with the following formula:
[tex]\Delta G= \Delta Y \frac{1}{K}[/tex]
And for this case the output is [tex]\Delta Y = 400 billion[/tex], and we have everything in order to replace:
[tex]\Delta G= 400 billion \frac{1}{5}= 80 billions[/tex]
So thn the answer woud be: "To close the expansionary gap, the government would need to spending by 80 billion"
NCH Corporation, which markets cleaning chemicals, insecticides and other products, paid dividends of $2.00 per share in 1993 on earnings of $4.00 per share. The book value of equity per share was $40.00, and earnings are expected to grow 6% a year in the long term. The stock has a beta of 0.85, and sells for $60 per share. (The treasury bond rate is 7%.). How much would the return on equity have to increase to justify the price/book value ratio at which NCH sells for currently?
Answer:
The reutrn on equity should be of 9.53%
Explanation:
We can solve the return on equity by considering the gordon model of dividend growth:
[tex]\frac{divends_1}{return_{equity}-growth} = Intrinsic \: Value[/tex]
current dividends 2 dollars
next year dividends: current x (1 + g) = 2 x (1 + 0.06) = 2.12
[tex]\frac{2.12}{return_{equity}-0.06} = 60[/tex]
[tex]\frac{2.12}{60} +0.06= Ke[/tex]
Ke = 0.09533 = 9.53%
George Kyparisis owns a company that manufactures sailboats. Actual demand for George’s sailboats during each of the past four seasons was as follows: YEAR SEASON 1 2 3 4 Winter 1,400 1,200 1,000 900 Spring 1,500 1,400 1,600 1,500 Summer 1,000 2,100 2,000 1,900 Fall 600 750 650 500 George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 sailboats. Based on this data and the multiplicative seasonal model, what will the demand level be for George’s sailboats in the spring of year 5?
Using the multiplicative seasonal model, the projected demand for George’s sailboats in spring of year 5 is approximately 6,890 sailboats when the forecasted annual demand is given as 5,600 sailboats.
Explanation:To project the demand for George's sailboats in the spring of year 5 using a multiplicative seasonal model, we must first calculate the seasonal index for each season and then adjust the forecasted annual demand accordingly.
Steps to Calculate Seasonal Index:Find the average demand for each season over the past years.Calculate the average demand per season divided by the overall average demand across all seasons and years to get the seasonal index.Use the forecasted annual demand and multiply it by the seasonal index for spring to estimate spring's demand for year 5.Let's illustrate with the provided data:
Total demand over four years = (1,400+1,200+1,000+900) + (1,500+1,400+1,600+1,500) + (1,000+2,100+2,000+1,900) + (600+750+650+500) = 19,500.Total number of seasons = 4 years * 4 seasons/year = 16.Average demand per season = 19,500 / 16 = 1,218.75.Spring demand over four years = 1,500+1,400+1,600+1,500 = 6,000.Average spring demand = 6,000 / 4 = 1,500.Seasonal index for spring = Average spring demand / Average demand per season = 1,500 / 1,218.75 ≈ 1.2305.Forecasted annual demand for year 5 = 5,600.Projected spring demand for year 5 = Forecasted annual demand * Seasonal index for spring = 5,600 * 1.2305 ≈ 6,890 sailboats.Therefore, the predicted demand level for George’s sailboats in the spring of year 5, according to the multiplicative seasonal model, will be approximately 6,890 sailboats.
Easy monetary policy reduces the real interest rate, which ______ the demand for dollars, ______ the supply of dollars, and ______ the equilibrium value of the dollar.a. Inflation rate; unemployment rate b. Exchange rate; real interest rate c. Growth of domestic real GDP; growth of foreign real GDP d. Real interest rate; exchange rate
The question is not complete! Here is the complete question and its answer!
Q.1. Easy monetary policy reduces the real interest rate, which ______ the demand for dollars, ______ the supply of dollars, and ______ the equilibrium value of the dollar.
Answer:
Easy monetary policy reduces the real interest rate, which decreases the demand for dollars, increases the supply of dollars, and decreases the equilibrium value of the dollar.
Q.2. In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the ________ and affects net exports by changing the ________.
a. Inflation rate; unemployment rate
b. Exchange rate; real interest rate
c. Growth of domestic real GDP; growth of foreign real GDP
d. Real interest rate; exchange rate
Answer:
In an open economy with flexible exchange rates, monetary policy affects consumption and investment by changing the real interest rate and affects net exports by changing the exchange rate.
1. The following data refers to the Daniels division of Tippett Inc. Daniels sells variablespeed drills. The standard drill sells for $ 40, and Daniels plans to sell 30,000 units in 2017. Tippett treats Daniels as an investment center with a total attributable investment of $ 800,000. Daniels' annual fixed costs are $ 200,000. Variable cost per standard drill is $ 24. The firm's required rate of return on investment is 15%.
1.1 What is the expected Return on Investment in 2017?
1.2 What is the expected residual income for Daniels in 2017?
1.3 A special order from a unit of the US Government has been received to buy from Daniel 10,000 units every year of the device at the price of $30 each. If the order is accepted, Daniels will have to incur additional annual fixed costs of $30,000 for administration and $150,000 to modify and expand the manufacturing facilities.
Based on the effect on ROI and/or Residual Income for the first year, will the manager accept this order? Why and why not?
Answer:
See below.
Explanation:
For part 1
Expected return can be computed by working out net profits from the production of drills.
Contribution per drill = Selling price - variable costs
Contribution = 40 - 24 = $16/ drill
Total contribution = 16 * 30,000 = $480,000
Profit = Contribution - Fixed costs
Profit = 480,000 - 200,000 = $280,000
Return on investment = Profit / Initial investment
ROI = 280,000 / 800,000 = 35%
Residual income = Net income - Equity charge
RI = 280,000 * (800,000*0.15) = $160,000
For part 2
We assume that this special order of 10,000 drills is in addition to the existing 30,000 drills bringing the total to 40,000 drills sold per year.
We first calculate the income effect of this isolated 10,000 additional drills.
Selling price = 30/drill
Variable cost / drill = 24
Contribution / new drill = 6
Total contribution from the order = 6*10,000 = $60,000
Total profit increment from this order = 60,000 - 30,000 = $30,000
This brings the total profit from 40,000 drills to
= 30,000+280,000 = $310,000
Total investment now has been increased by $150,000 bringing the total to 150,000 + 800,000 = $950,000
ROI has changed to = 310,000 / 950,000 = 32.63%
Residual income has changed to as,
RI = 310,000 - (950,000*0.15) = $167,500
Although the return on investment has fallen by around 2.37% the residual income has increased. Daniels may accept this order to ensure he has a good customer base and their total market share may actually improve thus this order might be strategically important for the future of the business.
Hope that helps.
Suppose Intel stock has a beta of 1.6, whereas Boeing stock has a beta of 1. If the risk-free interest rate is 4% and the expected return of the market portfolio is 10%, according to the CAPM, a. What is the expected return of Intel stock? b. What is the expected return of Boeing stock? Stock Price/Share ($) Number of Shares Outstanding (millions) Golden Seas 13 1.00 Jacobs and Jacobs 22 1.25 MAG 43 30 PDJB 5 10 M12_BERK5561_04_SE_C12.indd 400 12/10/16 12:03 AM Chapter 12 Systematic Risk and the Equity Risk Premium 401 c. What is the beta of a portfolio that consists of 60% Intel stock and 40% Boeing stock? d. What is the expected return of a portfolio that consists of 60% Intel stock and 40% Boeing stock? (Show both ways to solve this.)
Answer: see affixed, a document containing the solution
Explanation:
When the cross price elasticity between good X and other related goods is positive and very low firm X can be assumed to have?
a. minimal market power
b. moderate market power
c. a significant amount of market power
d. virtually no market power.
Answer:
c. a significant amount of market power
Explanation:
Cross price elasticity measures the responsiveness of quantity demanded of a good to the changes in price of another good.
If the cross price elascitiy is postive, the goods are subsituites.
If the cross price elasticity is negative, the goods are complementary goods.
If the cross price elasticitiy is low the firm has market power. It means that it's consumers do not change the quantity demanded when the price of the good changes
If the cross price elasticitiy is high, the market has low market power.
I hope my answer helps you.
try it! 7-1 Zenefit Corporation sold laser pointers for $11 each in 2017. Its budgeted selling price was $12 per unit. Other information related to its performance is given below: Units made and sold Variable costs Fixed costs Actual 28,000 $90,000 $55,000 Budgeted 27,500 $ 3 per unit $58,000 Calculate Zenefit’s static-budget variance for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income.
Answer:
I have provided the answer in the attachment below.
To find the static budget variance, you simply substract the actual money spent from the budgeted money.
Remember that operating income = sales revenue - operating costs (variable costs - fixed costs).
Final answer:
Zenefit Corporation's static-budget variance is calculated by comparing actual financial performance with budgeted figures, resulting in unfavorable variances for revenues, variable costs, and operating income, and a favorable variance for fixed costs.
Explanation:
The analysis of Zenefit Corporation's static-budget variances involves comparing the actual results with the budgeted expectations. The static-budget variance for each category is calculated as follows:
Revenues: Actual revenues minus budgeted revenues equals ($11 × 28,000) - ($12 × 27,500) = $308,000 - $330,000 = -$22,000 (unfavorable).Variable Costs: Actual variable costs minus budgeted variable costs equals $90,000 - ($3 × 27,500) = $90,000 - $82,500 = $7,500 (unfavorable).Fixed Costs: Actual fixed costs minus budgeted fixed costs equals $55,000 - $58,000 = -$3,000 (favorable).Operating Income: The actual operating income is actual revenues minus total actual costs (variable and fixed). The budgeted operating income is budgeted revenues minus total budgeted costs (variable and fixed). Thus, the variance for operating income is ($308,000 - $90,000 - $55,000) - ($330,000 - $82,500 - $58,000) = $163,000 - $189,500 = -$26,500 (unfavorable).Fulkron, Inc. provides the following data taken from its third quarter budget: Jul Aug Sep Cash collections 67,000 $33,000 $42,000 Cash payments: Purchases of direct materials 33,000 34,000 30,000Operating expenses 12,000 20,000 24,000Capital expenditures 0 33,000 6,000The cash balance on June 30 is projected to be $12,000.Based on the above data, calculate the shortfall the company is projected to have at the end of August.
Answer:
-$20,000 short fall
Explanation:
July:
Total cash available:
= Cash balance + Cash collections
= $12,000 + $67,000
= $79,000
End cash:
= Total cash available - Cash payments
= $79,000 - (33,000 + 12,000)
= $79,000 - $45,000
= $34,000
August:
Total cash available:
= Cash balance + Cash collections
= $34,000 + $33,000
= $67,000
End cash:
= Total cash available - Cash payments
= $67,000 - (34,000 + 20,000 + 33,000)
= $67,000 - $87,000
= -$20,000 (Short fall)
Jennifer's pass-through business has total qualified business income of $100,000 and combined REIT dividends/PTP income of $20,000. Since her taxable income of $150,000, including $10,000 of net capital gain is below the applicable threshold, what is her pass through deduction?
A) $20,000
B) $24,000
C) $28,000
D) $30,000
Answer:
B. $24,000
Explanation:
The pass-through deduction or the section 199A deduction as it is officially called is a reduction by 20 percent of your income tax provided by the new tax law set in place for the 2018 tax year. It is eligible for small business owners who run a pass-through business and whose tax income doesn't exceed $157,500 for singles and $315,000 for married couples.
To calculate the figure, you simply need to find 20% of your business profit. Jennifer has a taxable income of $150,000, which is less than the $157,500 limit to qualify for the pass-through deduction. So her pass through deduction becomes
20% of $100000 + $20,000
= 20/100 x $120,000
= $24,000
Note: Real Estate Investment Trust (REIT) dividend income and qualified Publicly Traded Partnership (PTP) income also are eligible for the pass-through deduction by law, hence the addition of the $20,000.
Based on Jennifer's taxable income and her other income, the pass though deduction is B. $24,000
If a single person's taxable income is below $157,500, then their pass through deduction is the lower amount of:
20% of Business income and Combined REIT income 20% of Taxable income less Net Capital GainThis applies to Jennifer who has a taxable income of $150,000.
Pass through deduction is lower of:
= 20% x (100,000 + 20,000) = 20% x (150,000 - 10,000)
= $24,000 = $28,000
In conclusion, pass through deduction is $24,000
Find out more on deductions at https://brainly.com/question/25767045.
Ben bought a local artist's painting for $2,100. Several years later. Ben sold it for $2,700. The year Ben sold the painting. He was in the 15% tax bracket. Ben's gain on the picture will be taxed at:
A-15%
B-25%
C_28%
D-33%
uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $200,000 ($300,000), purchases during the current year at cost (retail) were $2,000,000 ($2,800,000). Sales during the current year totaled $2,500,000, and net markups were $200,000. What is the ending inventory value at cost?
Answer:
The ending inventory value at cost is ($100,000)
Explanation:
To calculate the cost of ending inventory using the retail inventory method, we need to know:
The cost-to-retail percentage = COGS/ sales during current year = (sales – net markup)/sales = ($2,500,000-$200,000)/$2,500,000 = 92% The cost of goods available for sale= Cost of beginning inventory + Cost of purchases = $200,000 + $2,000,000 = $2,200,000 The cost of sales during the period = Sales × cost-to-retail percentage = $2,500,000 x 92% = $2,300,000 The ending inventory = Cost of goods available for sale - Cost of sales during the period = $2,200,000 - $2,300,000 = ($100,000)Debt service funds may be sued to account for all of the following except:
A) Repayment of debt principal
B) Lease payments under capital leases
C) Amortization of premiums on bonds payable
D) The proceeds of refunding bond issues
Answer: C) Amortization of premiums on bonds payable
Explanation:
A debt service fund is a cash reserve that is used to pay for interest and principal payments on some types of debt. Debt service funds may be sued to account for repayment of debts, the proceeds of refunding bond issues and also lease payment under capital leases but may not account for amortization of premiums on bond payable.
A price ceiling above $25 per box will not prevent the market from reaching equilibrium.
A. True
B. False
1. Suppose banks keep no excess reserves and no individuals or firms decide to hold more cash during the deposit expansion process. If someone suddenly discovers $50 million in buried treasure, explain what would happen to the money supply if the required reserve ratio is 10 percent. How would your answer change in the required reserve ratio was 20 percent?
Answer:
Increase by $500 m
Increase by $250 m instead of $500 m
Explanation:
Since all the deposits over and above the reserve requirements are loaned out by the banks,
We can calculate the Credit multiplier and see how a new 50 m deposit will affect the money supply.
Credit multiplier @ 10% reserve = 1 / 0.10 = 10 times
So a new deposit of 50 m will create new money of 10 * 50 = 500 m thus increasing the money supply by this amount.
For a 20% reserve ratio, Credit multiplier changes a,
Credit Multiplier = 1 / 0.2 = 5 times
This will change the money supply by = 5 * 50 = 250 m. This is the amount of new money that will be created with reserve ratio of 20%.
Hope that helps.
At the beginning of 2019, Patriots, Inc. has the following account balances: Accounts Receivable $45,000 (Debit) Allowance for Bad Debts $8,000 (Credit) Bad Debts Expense $0 During the year, credit sales amounted to $810,000. Cash collected on credit sales amounted to $770,000, and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 3.5%. The amount of bad debts expense for 2019 is ________.
A. $28,350
B. $18,350
C. $18,000
D. $56,875
Answer:
Option (A) $28,350
Explanation:
Data provided in the question:
Accounts Receivable = $45,000 (Debit)
Allowance for Bad Debts = $8,000 (Credit)
Bad Debts Expense = $0
During the year, credit sales = $810,000
Cash collected on credit sales = $770,000
Amount written off = $18,000
Percent of Bad debts expense = 3.5%
Therefore,
Bad debt expenses = credit sales × Percent of bad debts expense
= $810,000 × 3.5%
= $28,350
Hence,
Option (A) $28,350
Which of the following is not one of the principles of corporate public relations that a company should follow
a. To make sure management thoughtfully analyzes its overall relation to the public
b. To create a system for informing all employees about the (company's) general policies and practices
c. To ensure secrecy and security regarding the company's actions
d. To create a system giving contact employees (those having direct dealings with the public) the knowledge needed to be reasonable and polite to the public
e. To create a system drawing employee and public questions and criticism back up through the organization to management
Answer:
C. To ensure secrecy and security regarding the company's actions
Explanation:
Ensuring secrecy and security regarding the company's actions is not one of the principles of corporate public relations that a company should follow.
On January 1, 2021, Crane Company sold property to Wildhorse Company. There was no established exchange price for the property, and Wildhorse gave Crane a $5400000 zero-interest-bearing note payable in 5 equal annual installments of $1080000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 10%. The present value of the note at 10% was $4094064 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of Wildhorse at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used?
Answer:
interest expense 409,406.4 debit
note payable 409,406.4 credit
Explanation:
We have to apply the market rate to the carrying value of the note payable:
$4,094,064 x 10% = 409,406.4 interest expense
We will increase the note payable and declare the interest expense
Then, at payment we decrease our note payable account against cash.
The existence of high exit barriers such as ownership of specialized assets such as tower cranes for building very large crude oil carriers in the shipbuilding industry indicates thatSelect one:a. buyers are relatively weak because of the high switching costs created by tower cranesb. the competitive rivalry in the industry is severe.c. the economic segment of the external environment has shifted, but shipbuilders’ strategies have not changed.d. the industry is moving toward differentiation of shipbuilding process.
Answer:
a. Buyers are relatively weak because of the high switching costs created by tower cranes .
Explanation:
Buyers have lower bargaining power because of higher switching costs.
Bargaining power is a scope of the ability of buyers to influence another. It is an important issue in negotiation because buyers with higher bargaining power are able to conditionate their circumstances to obtain more profitable agreements with others.
An issue log is a document that identifies the specific issues that must be resolved before a particular project management meeting adjournsa. Trueb. False
Answer:
An issue log is not a document that specifies the specific issues that must be resolved before a particular project management meeting adjourns
Explanation:
An issue log is also referred to as an issue register. It is a document on which it is recorded all negative issues affecting a particular project. It is a tool used for communicating all issues impacting on a project.
The company budgeted for production of 6,400 units in October, but actual production was 6,500 units. The company used 610 direct labor-hours to produce this output. The actual direct labor rate was $21.80 per hour. The labor efficiency variance for October is:
Answer:
Labor efficiency variance = $218 favorable.
Explanation:
We know,
Labor efficiency variance = (Standard Hour - Actual hour) × Standard rate
Given,
Standard labor hour = (Actual labor hour ÷ actual production) × budgeted production
Standard labor hour = (610 hours ÷ 6,500 units) × 6,400 units
Standard labor hour = 600 hours
Actual hour = 610 hours
Standard rate = $21.80 per hour
Therefore, Labor efficiency variance = (610 - 600) hours × $21.80
Labor efficiency variance = $218 favorable.
You are creating a portfolio of two stocks. The first one has a standard deviation of 20% and the second one has a standard deviation of 37%. The correlation coefficient between the returns of the two is 0.1. You will invest 43% of the portfolio in the first stock and the rest in the second stock. What will be the standard deviation of this portfolio's returns? Answer in percent, rounded to two decimal places (e.g., 4.32%=4.32).
Answer:
23.56
Explanation:
Standard deviation of the first stock (σ1) = 20%
Standard deviation of the second stock (σ2) = 37%
The correlation coefficient between the returns (ρ) = 0.1.
Proportion invested in the first stock (W1) = 43%
Proportion invested in the second stock (W2) = 57%
The standard deviation of a two-stock portfolio's returns is given by
[tex]\sigma_{portfolio} = \sqrt{w_1^2\sigma_1^2+w_2^2\sigma_2^2+2w_1w_2\rho\sigma_1\sigma_2} \\\sigma_{portfolio} = \sqrt{0.43^2*0.2^2+0.57^2*0.37^2+2*0.43*0.57*0.1*0.2*0.37}\\\sigma_{portfolio} =0.2356=23.56\%[/tex]
The standard deviation of this portfolio's returns IS 23.56%
Suppose you are working for a firm producing cotton balls – an industry for which there are many different firms producing an identical product. The market price is $20 per case of cotton balls, and the firm is currently producing 30 cases. As the manager tasked with making production decisions for the firm, you begin by estimating the cost function, and find that the cost function is given by: c(????) = 10 + ???? + 1/3 ????^2 .
a. Is this a short run or long run cost function?
b. What adjustments to the production decisions would you make to increase profits?
c. Given your recommendation to (b) above, by how much would the firm’s profits increase?
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
A statement of an employee's biweekly earnings is given below.
What is the employee's gross pay?a.$703.86b.$714.40c.$716.26d.$726.80
Answer:
$ 726.80
Explanation:
Gross payment means the total amount of money made by an employee or received by an employee before any deductions such as taxes, insurance, social security and others is removed.
Total amount received by the by employee = $ 62 + $ 45.06 + $ 10.54 + $ 12.40 + $ 596.80 = $ 726.80
Answer:
The answer is in fact D. $726.80
Explanation:
I took the test on EDG
Onyx Company has prepared a static budget at the beginning of the month. At the end of the month, the following information has been retrieved from the records.
Static budget:
Sales volume: 1,000 units: Prices: $70 per unit
Variable expense: $32 per units:
Fixed expenses: $37,500 per month
Operating income: $500
Actual results:
Sales volume: 990 units: Price $74 per unit
variable expenses:$35 per unit: Fixed expenses:$33,000 per month
Operating income: $5,610
Calculate the flexible budget variance for fixed expenses.
a.$4,500U
b. $4,500F
c. $0
d. $5,490
Island Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $375,000 and budgeted machine-hours were 12,500. Actual factory overhead was $387,920 and actual machine-hours were 13,150.
Required:
a. Compute the overhead application rate.
b. Compute the amount of overhead applied to production.
c. Determine the amount of over- or underapplied overhead.
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Island Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $375,000 and budgeted machine-hours were 12,500. Actual factory overhead was $387,920 and actual machine-hours were 13,150.
A) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 375,000/12,500= $30 per machine hour
B) Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 30*13,150= $394,500
C) Over/under allocation= real MOH - allocated MOH
Over/under allocation= 387,920 - 394,500= 6,580 overallocated
The difference between a profit center and an investment center is
Select one:
a. an investment center incurs costs, but does not directly generate revenues.
b. an investment center incurs no costs but does generate revenues.
c. an investment center is responsible for investments made in operating assets.
d. an investment center provides services to profit centers.
e. There is no difference; investment center and profit center are synonymous.
Answer:
c
Explanation:
investment center measures the use of capital
The difference between a profit center and an investment center is an investment center is responsible for investments made in operating assets. The correct option is (C).
What do you mean by the profit and investment center?
An extension of the profit center where revenues and costs are calculated is what is referred to as an investment center.
A branch or division of a business that directly contributes to or is anticipated to contribute to the overall bottom line is referred to as a profit center. It is handled as a distinct, stand-alone company that generates its own revenues and profits.
An organizational unit called an investment centre is answerable to top management for its profitability in respect to its own investment base. Assets used are measured in addition to revenues and expenses, as in profit centers.
Therefore, the difference between a profit center and an investment center is an investment center is responsible for investments made in operating assets.
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Your grandmother has invested $9000 in a mutual fund each year on your birthday (she made her first payment when you turned 1 year old). The mutual fund has grown at an annual interest rate of 6.8%. How much is your account worth on the day of your 21st birthday immediately after your grandmother’s deposit?
Answer:
394,549
Explanation:
this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:
[tex]s_{n} =P*\frac{(1+i)^{n}-1 }{i}[/tex]
where [tex]s_{n}[/tex] is the future value of the annuity, [tex]i[/tex] is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:
[tex]s_{21} =9,000*\frac{(1+0.068)^{21}-1 }{0.068}[/tex]
[tex]s_{21} =394,549[/tex]
Kate has a 20-square-foot plot of land in her backyard that she uses to grow tomatoes and lettuce. Every square foot of land can produce either 5 tomatoes or 3 heads of lettuce each summer. Her neighbor, Jim, has a 30- square-foot plot of land that has a lot more shade than Kate's, which is better for lettuce but worse for tomatoes. Every square foot of Jim's land can produce either 3 tomatoes or 6 heads of lettuce.
a) How many tomatoes and heads of lettuce will Kate produce?
b) How many tomatoes and heads of lettuce will Jim produce?
Answer:
a) Kate will produce 100 tomatoes and 0 heads of lettuce.
b) Jim will produce 0 tomatoes and 180 heads of lettuce.
Explanation:
As climatic conditions are better for tomatoes at Kate's plot of land, she should choose to grow those because of better quality. Also, production of lettuce per square-foot is lower at Kate's land compared to Jim's (3 heads vs 6 heads of lettuce). So on 20-squire-foot Kate could produce 60 heads and Jim - 120 heads of lettuce (2x more). So Kate should avoid production of lettuce due to quality and quantity.
Same explanation can be applied to Jim's production of tomatoes. If Jim produce tomatoes, he will only have quantity of 60 tomatoes at 20-square-foot plot, compare to Kate's 100 tomatoes. So he should avoid production of tomatoes.
Answer: dedserwgergeeq
Explanation:
The inflation rate is 12 percent, and the central bank is considering slowing the rate of money growth to reduce inflation to 8 percent. Economist Eric believes that expectations are very sluggish, whereas economist Kenji believes that expectations of inflation change quickly in response to new policies. True or False: Economist Eric is more likely to favor using contractionary policy to reduce inflation than economist Kenji. True False
Answer:
False
Explanation:
economist Kenji supports contractionary monetary policy because he believes that expectations adjust quickly in response to changes in policy and the efforts made by fed( an decrease in government spending and/or an increase in taxes) will be worth and the costs of reducing inflation will be less.
Whereas economist Eric, thinks that change in money supply is not a good idea to reduce inflation as it will work very slowly.
Final answer:
The statement is false; Eric, who believes in sluggish inflation expectations, would be less likely to favor aggressive contractionary policy to reduce inflation compared to Kenji, who expects quick adjustments to new policy. Inflation expectations play a crucial role in the effectiveness of monetary policy.
Explanation:
The question deals with the beliefs of two economists, Eric, who thinks that inflation expectations are sluggish, and Kenji, who believes they adjust quickly. Given this context, the statement is false. Economist Eric, believing that expectations adjust slowly, would likely be more cautious about using contractionary policy to reduce inflation, as such expectations can lead to a slower response in the economy and potentially higher costs of reducing inflation. On the other hand, Economist Kenji, who believes in quick adjustments, would favor the use of contractionary policy as he would expect a faster economic response to new policies, thus reducing the costs associated with slowing the economy.
Understanding inflation expectations is crucial for policymakers. From the history of the Federal Reserve's actions and current research, it seems evident that when inflation expectations and actual inflation align, economic outcomes are more predictable, and monetary policies tend to be more effective. The effectiveness of contractionary monetary policy in reducing inflation depends largely on how quickly the public adjusts its expectations in response to policy changes.
On Aprilâ 1, 2017, Banne Services received a 9â-month note for $ 13 comma 000 at 11â%. Calculate the amount of interest due at maturity.â (Round any intermediate calculations to two decimalâ places, and your final answer to the nearestâ dollar.
Answer:
$1,073
Explanation:
The computation of the interest due is shown below"
= Total amount borrowed × interest rate × number of months ÷ total months in a year
= $13,000 × 11% × 9 months ÷ 12 months
= $1,073
The five months are calculated from April 1 to December 31. We assume the books are closed on December 31.
Simply we apply the simple interest formula so that the correct amount can come