Answer:
Option (B) is correct.
Explanation:
Annual Subscription:
= 6000 × $125
= $750,000
Since, the payment was received for 1 Year, we will recognize 4 months revenue (1 September till 31st December) in the given year:
= $750,000 × (4/12)
= $250,000
Unearned Revenue as on 31st December:
= Total Payment Received - Revenue Recognized for 4 months
= $750,000 - $250,000
= $500,000
The unearned revenue for Vista newspapers as of December 31 is $500,000, which is the correct choice. This is found by calculating the monthly revenue from the total annual subscriptions and then multiplying it by the remaining eight months of the subscription period.
Explanation:The question pertains to the accounting concept of unearned revenue, which is relevant when a company receives payment for goods or services that have not yet been delivered or rendered. In this scenario, Vista newspapers sold 6,000 annual subscriptions at $125 each, totaling $750,000 in revenue on September 1. Since subscriptions cover an entire year, as of December 31, four months of the service will have been provided, leaving eight months unearned.
To calculate the unearned revenue as of December 31, we divide the total revenue by 12 months to get the monthly revenue and then multiply by the 8 months of service that will remain unprovided at that date:
Total Annual Revenue: $750,000Monthly Revenue: $750,000 / 12 = $62,500Unearned Revenue (8 months): $62,500 x 8 = $500,000Therefore, option b, $500,000, is the correct amount of unearned revenue that will exist as of December 31.
Aaron is being introduced to his new workplace and coworkers. His boss tells him the names of people and departments, but she says very little about each person's rank or the relationship between departments. She also does not speak much about the culture of the workplace. However, at the end of the introduction she says, "Hopefully now you have a better understanding of who we are, what we stand for, and how things work here." Aaron's boss's communication style seems to be best described as what?
Answer: An Intuitive communication style
Explanation: Those that use the intuitive communication style prefer a more casual, common-sense based approach to communicating ideas. They want to understand the big-picture concepts and aren’t interested in getting too bogged down in the details of the idea. In many ways, intuitive communicators are the opposite of analytical communicators, who prefer to have all of the relevant details on hand when making a decision.
The Prime Minister of Richlandia hires you as an economic consultant. He is concerned that the output level in Richlandia is too low and that this will cause unemployment to rise. He feels that it is necessary to increase output by $20 billion. He tells you that the MPC in Richlandia is 0.75. Which of the following would be the best advice to give to the Richlandian Prime Minister?
A) increase government purchases in Richlandia by $15 billion
B) reduce taxes in Richlandia by $10 billion
C) increase government purchases in Richlandia by $5 billion
D) reduce taxes in Richlandia by $4 billion
Answer:
A
Explanation:
The best advice given to the Richlandian Prime Minister is to increase government purchases in Richlandia by $5 billion. Option (c) is correct.
What do you mean by Output?
Any data that a computer or other electronic device processes and sends out is referred to as output.
Richlandia needs to pursue an expansionary fiscal strategy because it is struggling with unemployment and wants to boost its output by $20 billion. This can be done, for example, by increasing government purchases. Government spending boosts the economy's ability to produce goods and services, which facilitates the creation of jobs. This results in a multiplier effect, which causes the economy's income level to increase several times over. This can be represented mathematically as follows:
Given:
MPC = 0.75
Targeted change in income = $20 billion.
Government expenditure multiplier = Change in Income/ Change in government expenditure = 1/(1-MPC)
Change in Income = Change in Government Expenditure × 1/ (1-0.75)
$20 = Change in Government Expenditure × 1/0.25 $20 = Change in Government Expenditure × 4
Change in Government Expenditure = $20/ 4 = $5 billion.
Therefore, Option (c) is correct. The government expenditure must increase by $5billion in order to increase the income/ output in the economy by $20 billion.
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(a) If the demand equation is pq=k for a positive constant k, compute the elasticity of demand.
(b) What does your answer to part (a) mean in terms of the revenue function?
Choose all that apply.
1. All prices are critical points of the revenue function.
2. Revenue is increased by lowering the price.
3. Revenue is increased by raising the price.
4. Revenue does not change with changes in the price.
Answer:
a.Elasticity of demand is p = k/q (an inverse relationship between the price and quantity)
b.My answer in part (a) means that an increase in the price of the item will lead to a decrease in its demand, hence the following applies
1.All prices are critical points of the revenue function.
2.Revenue is increased by lowering the price
In A Knight's Tale, three friends are deciding what to do with 15 silver coins they won in a jousting tournament. They can spend their winnings immediately and live the good life for a while, or they can spend the money on training for the next tournament. They ultimately decide to spend most of the winnings on training for the next tournament. What does their decision represent? More than one choice may be correct. Correct Answer(s) Drag appropriate answerfs) here the only possible decision investment trade-off of present for future benefits consumption of consumer goods Incorrect Answer(s)
Answers:
Correct answer:
1. Investment
2. Trade-off of present for future benefit
Incorrect answers:
1. The only possible decision
2. The consumption of consumer goods.
Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000 ounces. The initial margin is $4,000, and the maintenance margin is $3,000. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call?
Answer:
$0.20
Explanation:
For computing the change in future price, first we have to determine the loss which is shown below:
Loss = Initial Margin - Maintenance Margin
= $4,000 - $3,000
= $1,000
Now the change in future price would be
= Loss ÷ size of the contract
= $1,000 ÷ 5,000 ounces
= $0.20
The future price is increased by $0.20
And, if the margin call is not meet than the broker will stop at best price so that he cannot suffer more loss
What is the conclusion of the test that determines the regression parameters ????_1 is equal to zero at a 0.01 level of significance? (Assume that the conditions necessary for proper inference are satisfied.) Select one: a) National income is a significant indicator of the company sales. b) National income is not a significant indicator of the company sales. c) Intercept is a significant indicator of the company sales. d) Intercept is not a significant indicator of the company sales.
Answer:
It implies that national income is not a significant indicator of the company's sales. The correct answer is B.
Explanation:
The reason is that regression coefficients are expected to be compared with table value. since the regression coefficients are zero at 0.01 level of significance, it means that the results are not statistically significant. Thus, we can conclude that national income is not a significant indicator of the company's sales.
The test that determines the regression parameter 1 equals zero at a 0.01 level of significance concludes that national income is not a significant indicator of company sales. Thus, option B is correct.
What is the regression parameter?The parameter (the regression coefficient) represents the amount by which a change in x must be multiplied to obtain the corresponding average change in y, or the amount y changes for every unit increase in x. It represents the degree to which the line slopes upwards or downwards in this manner.
The reason for this is that regression parameter should be compared to table values. The results are not statistically significant because the regression coefficients are 0 at the 0.01 level of significance.
Therefore, option B is correct, that we can conclude that national income is not a significant predictor of company sales.
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A company is considering two projects.
Project I Project II
Initial investment $120,000 $120,000
Cash inflow Year 1 $40,000 $20,000
Cash inflow Year 2 $40,000 $20,000
Cash inflow Year 3 $40,000 $32,000
Cash inflow Year 4 $40,000 $48,000
Cash inflow Year 5 $40,000 $50,000
What is the payback period for Project I?
(A) 2.5 years
(B) 3 years
(C) 3.5 years
(D)1 year
(E) 5 years
Answer:
Option (B) is correct.
Explanation:
Given that,
Project 1:
Initial investment = $120,000
Cash inflow Year 1, Year 2, Year 3, Year 4, Year 5 = $40,000
Hence,
Annual cash flow = $40,000
Payback period:
= Initial investment ÷ annual cash inflow
= $120,000 ÷ $40,000
= 3 years
Therefore, the payback period for Project I is 3 years.
After conducting a market research study, Magnificent Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $270. The annual target sales volume for interior doors is 29,000. Magnificent has target operating income of 40% of sales
Answer:
Target sales revenue = $7,830,000
Explanation:
given data
target price = $270
annual target sales volume = 29,000
target operating income = 40%
to find out
Target sales revenue
solution
we will get here Target sales revenue that is express as
Target sales revenue = target price × annual target sales volume .................1
put here value we get
Target sales revenue = $270 × 29000
Target sales revenue = $7,830,000
Gabriella Sax believes that customers in her dress shop find certain prices very appealing.
Between these price levels, all prices are seen as roughly the same—and price cuts in these ranges generally do not increase the quantity sold (i.e., the demand curve tends to drop vertically within these price ranges).
Therefore, Sax prices her items as close as possible to the top of each such price range.
This is:
A. bait pricing.
B. prestige pricing.
C. leader pricing.
D. psychological pricing.
E. odd-even pricing.
Answer:
Letter D is correct. Psychological pricing.
Explanation:
Psychological pricing is a marketing and pricing strategy whose fundamental principle is to have a favorable psychological impact on the consumer.
A consumer buying decision process takes into account the characteristics of the product in association with price, so that there is a favorable balance between a product that meets its needs and the price determined for it.
Because of this psychological pricing emerges as a strategy to impact the consumer and influence the purchase, an example of this strategy is the use of broken and non-round values, for example a product that costs $ 99.99 has a greater impact on consumer perception than a product. product costing $ 100.00.
Although it is an inviting strategy for influencing the purchasing decision process, a company should combine this strategy with others that emphasize the characteristics and value of the product or service so that the essentials that determine the purchase are balanced, and thus there is balance and positive results.
Currie Company borrowed $13,000 from Sierra Bank by issuing a 10% three-year note. Currie agreed to repay the principal and interest by making annual payments in the amount of $4,321. Based on this information, what is the amount of the interest expense associated with the second payment? (Round your answer to the nearest dollar.)
To find the interest expense of the second payment, calculate the remaining balance after the first payment, then apply the 10% interest rate. Approximately $998 of the second payment is interest expense.
To calculate the interest expense associated with the second payment, we need to establish the balance of the loan after the first payment. Currie Company borrowed $13,000 at a 10% annual interest rate, and agreed to make annual payments of $4,321.
Here's a step-by-step breakdown of how we calculate the interest expense for the second payment:
First, calculate the interest for the first year by multiplying the principal by the interest rate: $13,000 times 10% = $1,300.
Subtract the first year's interest from the first annual payment to find out how much of the payment is applied to the principal: $4,321 - $1,300 = $3,021.
Subtract the principal repayment from the original loan amount to get the remaining balance: $13,000 - $3,021 = $9,979.
Calculate the second year's interest by multiplying the remaining balance by the interest rate: $9,979 times 10%
(approximately $998, but this amount will vary slightly depending on how exactly the bank rounds the cents in their calculation).
The second payment will again include this interest expense, so approximately $998 of the second annual payment of $4,321 will be interest expense.
Therefore, the interest expense for the second payment is approximately $998, rounded to the nearest dollar.
If your firm buys $1,000 worth of supplies on credit with terms 3/15 n60 and pays the bill on the 60thday after the purchase:
a. What is the approximate, or "nominal," cost of trade credit as an annual rate?
b. What is the exactcost of trade credit as an annual rate?
Answer:
Nominal Cost of Trade Credit = 25.09%
Exact Cost of Trade Credit = 28.03%
Explanation:
given data
buys worth = $1,000
terms = 3/15 n60
pays the bill = 60th day
to find out
Nominal Cost of Trade Credit and Exact Cost of Trade Credit
solution
we know here Discount % and time 60 day and discount period that is
Discount % = 3%
time for Payment = 60 days
and Discount Period = 15 days
so Nominal Cost of Trade Credit will be as
Nominal Cost of Trade Credit = Discount % ÷ (100 - Discount % ) × [ 365 ÷ (time for Payment - Discount Period) ] ..................1
put here value we get
Nominal Cost of Trade Credit = [tex]\frac{0.03}{1-0.03}[/tex] × [tex]\frac{365}{60-15}[/tex]
Nominal Cost of Trade Credit = 25.09%
and
Exact Cost of Trade Credit will be here as
Exact Cost of Trade Credit = (1+Discount % ÷ (100%-Discount %))^(365/(time for Payment - Discount Period) - 1 ..................2
put here value we get
Exact Cost of Trade Credit = [tex](\frac{1+0.03}{1-0.03})^{\frac{365}{60-15}} - 1[/tex]
Exact Cost of Trade Credit = 28.03%
eaver Chocolate Co. expects to earn $3.50 per share during the current year, its expecteddividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its common stock currently sellsfor $32.50 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity from new common stock
Answer:
cost of equity = 13.36 %
Explanation:
given data
earn = $3.50
ratio = 65%
growth rate = 6.0%
common stock currently sells = $32.50
flotation cost = 5%
to find out
cost of equity from new common stock
solution
we get here cost of equity from new common stock that is express as
cost of equity = [tex]\frac{D1}{Po-(1-f)}[/tex] + g ...................1
here D1 is expected dividend and Po is current price and g is growth rate and f is flotation cost and
D1 = 3.50 × 0.65
so from equation 1 we get
cost of equity = [tex]\frac{3.50*0.65}{32.50(1-0.05)}[/tex] + 6%
cost of equity = 0.1336
cost of equity = 13.36 %
Each of the following should trigger a review of the emergency plan, EXCEPT FOR:
A. Changes in operational resources or jurisdiction demographics.
B. Plan activation during an incident or exercise.
C. Hiring of new emergency management agency support staff.
D. Changes in laws, ordinances, or elected or appointed officials
Answer:
The correct answer is letter "C": Hiring of new emergency management agency support staff.
Explanation:
The hiring of new emergency management support staff is not an action that implies the review of the emergency plan since that can take place when there is no major activity in the nation that requires the stand of the authorities to face the problem. It could be done at any time with no hurry.
Rework problem 27 in section 1 of Chapter 7 of your textbook, about the greenhouse operator, using the following data. Assume that each Type 1 layout uses 36 tulips, 24 daffodils, and 8 flowering shrubs; that each Type 2 layout uses 12 tulips, 42 daffodils, and 7 flowering shrubs; and that each Type 3 layout uses 22 tulips, 52 daffodils, and 5 flowering shrubs. Assume also that the greenhouse operator has on hand 1110 tulips, 890 daffodils, and 94 flowering shrubs. Assume also that the profit on each Type 1 layout is $85.00, the profit on each Type 2 layout is $40.00, and the profit on each Type 3 layout is $90.00.
How many layouts of each type of should the greenhouse operator plant in order maximize its profit?
Answer:
one of the first
then sixteen of the third.
none of the second
Explanation:
We can solve by hand using legrande multiplier
and derivate or we can use the solver tool of excel:
1) we build up a table on excel with the data for each layout
Then, we use solver.
We declare the quantity of each unit as out variable
the total profit as our goal to maximize
we stablish the restrictions based on our inventory at hand
And excel determinates that 16 of the third layout and one of the first layout will yield the greater profit
SOLVER
Q tulips daffodils flowerings PROFIT per layout
1 36 24 8 84
0 12 42 7 40
16 22 52 5 90
Totals 388 856 88
used (16 x 22 + 36) (16 x 52 + 24) ( 16 x 5 + 8)
Total profit: 1524
(16 x 90 + 84)
Qualcomm, a high-tech company headquartered in San Diego, owns the rights to several of the key components that permit cell phones to work. Instead of selling cell phones itself, Qualcomm grants permission to many companies to use specific forms of its intellectual property in exchange for monetary compensation. Qualcomm in engaging in an external growth strategy referred to as_______________.
Qualcomm in engaging in an external growth strategy referred to as licensing.
Explanation:
External development (or inorganic growth) approaches include growing the output or scope of companies through capital and capabilities that the organisation itself does not build internally. Instead, the merger with / acquiring or partnership with other companies generates these resources.
These assets are then purchased by merging/acquiring or partnering with other businesses. Therefore, external expansion approaches can be divided up between the M&A (M&A) and Strategic Alliance (e.g. partnerships) strategies.
Qualcomm is engaging in an external growth strategy referred to Licensing. Qualcomm uses a strategy called licensing by allowing other companies to use its intellectual property for monetary compensation. This approach helps Qualcomm expand its reach without directly selling products.
Qualcomm, a high-tech company headquartered in San Diego, engages in an external growth strategy referred to as licensing. By granting permission to other companies to use specific forms of its intellectual property in exchange for monetary compensation, Qualcomm utilizes this strategy to expand its influence and revenue without directly selling cell phones.Licensing allows Qualcomm to capitalize on its technological advancements and patents while leveraging other companies' manufacturing and distribution capabilities. This strategic move not only provides a steady income stream from royalties but also maintains Qualcomm's presence and importance in the cell phone industry.The Green Tomato purchased a parcel of land six years ago for $389,900. At that time, the firm invested $128,000 grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $48,000 a year. The Green Tomato is now considering building a hotel on the site as the rental lease is expiring. The current value of the land is $415,000. The firm has no loans or mortgages secured by the property. What value should be included in the initial cost of the hotel project for the use of this land?
Answer:
$415,000
Explanation:
Since the current value of the land is $415,000 which represents the opportunity cost whereas the purchase of land six years ago represents the sunk cost which is not relevant for the decision making the purpose and the grading cost is also not relevant.
So, in this case, the historical cost is ignored
All other information which is given is not relevant. Hence, ignored it
The organizational process of changing over from the current information system to a new one best defines: a. reorganization. b. replacement. c. system alteration. d. installation. e. physical design.
The organizational process of changing over from the current information system to a new one best defines installation.
Option D
Explanation:
Corporate change takes place when a company moves from its current state to a planned future state. Corporate change management is the practice of initiating and executing behavioral improvements so that staff opposition to change is reduced and the business benefits maximized at the same time.
In today's business climate, businesses must continuously experience transition if they are to remain competitive. In order to survive, companies react to factors like market globalization and rapidly developing technology. These improvements may be quite minor— as in the case where a new software system is set up— or quite large— as when the overall marketing strategy is re-focused, a hostile takeover is combatted, or a company is changed in the face of increasing foreign competition.
Under what circumstances is it advantageous for a taxpayer to make a nondeductible contribution to a traditional IRA rather than a contribution to a Roth IRA? Tax Payer Status Maximum AGI limit Starting phase out limit a. Married filing joint b. Single/Head of household
Answer and Explanation:
In the year 2018, ROTH IRA contribution limit is $5500 for people less than 50 years of age and $6500 if people are above 50 years of age.
These are the circumstances in the year 2018:
(a) ROTH IRA income limits for married filing jointly: Phase out starts at $189000 and ineligible at $199000.
(b) ROTH IRA income limits for Single filers: phase out starts at $120000 and ineligible at $135000.
Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling, Inc., on January 2, 2021, for $410 million. At the date of purchase, the book value of Vancouver's net assets was $780 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $10 million for the inventory and by $15 million for the plant facilities. The estimated useful life of the plant facilities is 15 years. All inventory acquired was sold during 2021. Vancouver reported net income of $150 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $20 million.Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. What amount should Northwest report as its income from its investment in Vancouver for the year ended December 31, 2021? 3. What amount should Northwest report in its balance sheet as its investment in Vancouver? 4. What should Northwest report in its statement of cash flows regarding its investment in Vancouver?
Northwest should record journal entries for the purchase, adjustment for fair values, share of net income, and dividends received. It should report $60 million as its income from the investment, $377 million on the balance sheet as its investment in Vancouver, and detail cash flows for the purchase and dividend received.
Explanation:Journal Entries for 2021To record the purchase of Vancouver Timber and Milling, Inc. shares:
To adjust the purchase price allocation for excess of fair value over book value:
For the excess amount in inventory sold during the year:
To recognize the share of net income from Vancouver:
To record the dividend received:
Northwest should report $60 million as income from its investment in Vancouver for the year, which represents 40% of Vancouver's net income.
Investment in Balance SheetOn the balance sheet at year-end, Northwest should report an investment amount of $377 million. This is calculated as the initial investment amount ($410 million) plus the share of net income ($60 million), less the dividend received ($8 million), and less the excess fair value over book value charged to expense ($10 million) for inventory that was sold.
Statement of Cash FlowsIn the statement of cash flows, Northwest should report the outflow of $410 million for the purchase of shares and inflow of $8 million for the dividend received.
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You deposited ($1,000) in a savings account that pays 8 percent interest, compounded quarterly, planning to use it to finish your last year in college. Eighteen months later, you decide to go to the Roshy Mountains to become a ski instructor rather than continue in school, so you close out your account. How much money will you receive? (Round to the nearest whole dollar
Answer:
Present value (PV) = $1,000
Interest rate (r) =8% = 0.08
Number of years (n) = 18 months = 1.5 years
No of compounding periods in a year = 4
Future value (FV) = ?
FV = PV(1 + r/m)nm
FV = $1,000(1 + 0.08/4)1.5x4
FV = $1,000(1 + 0.02)6
FV = $1,000 x 1.1262
FV = $1,126
Explanation:
The amount to be received in 18 months is $1,126. This is obtained by compounding the present value at 8% compounded quarterly for 18 months. The formula to be applied is the formula for future value of a lump sum(single investment).
As the chief marketing officer at Chevrolet, you'd like to determine how much the engineering team's redesigned dashboards are going to influence your sales forecasts. You've decided to use the Delphi technique, but you're not sure who to include in your research. Of the following groups who might provide useful insights, which group are you least likely to turn to for feedback?Academic researchers in automotive engineeringAudio/hearing specialistsExperts in efficient environmental designVision and visual processing scientists
Answer:
Vision and visual processing scientists
Explanation:
The vision and visual processing scientists can give a better feedback on how the new dashboards will be received by the customer. This is a user experience approach which supports their study in techniques like Delphi.
A quota-bonus plan is applicable when __________-.
A. employee performance exceeds the quota.
B. performance management is outsourced.
C.an employee has a salary plan based solely upon performance.
D. there are no other incentives.
Answer:A. Employee performance exceeds the qouta
Explanation:
A quota bonus plan is an incentive method where the employees are promised bonus payments on the agreement that certain conditions are surpassed.
Outsourcing is when a firm transferred some of it's functions to another firm e.g human resources functions.
Salary is incentive to be paid to an employee in the ordinary course of the performance of his assigned duties.
There various incentives that are available to an employee such overtime performance, outstation bonus etc.
Rajan Company's most recent balance sheet reported total assets of $1.76 million, total liabilities of $0.87 million, and total equity of $0.89 million. Its Debt to equity ratio is:
a) 0.494
b) 0.506
c) 1.02
d) 1.00
e) 0.978
Answer:
Debt to equity = 0.978
so correct option is e) 0.978
Explanation:
given data
total assets = $1.76 million
total liabilities = $0.87 million
total equity = $0.89 million
solution
we get here Debt to equity that is express here as
Debt to equity = Total liabilities ÷ Total equity ......................1
put here value we get debt to equity that is
Debt to equity = [tex]\frac{0.87million}{0.89million}[/tex]
Debt to equity = 0.978
so correct option is e) 0.978
A good with a supply generates no deadweight loss when taxed. D a. somewhat inelastc O b. somewhat elastic O c. slowly increasing O d. perfectly elastic e perfecty inelastic QUESTION 11 A local merchant raises the price of his good and finds that his total revenues increase. The demand for this good is D a. unitary elastic O b. inelastic. O c. relatively price sensitive. O d. elastic O e. perfectly elastic. QUESTION 12 Because a product's demand for an input to its production depends on the decision to produce this product, i is called demand. O b. input O c. dependent o d. production O e. derived
Answer:
e perfecty inelastic
b. inelastic
e. derived
Explanation:
Deadweight loss is inefficiency that occurs as a result of taxation.
Deadweight loss is the difference between the quantity demanded/ supplied when there's no tax and the quantity demanded / supplied as a result of tax.
When a good has a perfectly inelastic supply, the quantity supplied doesn't change when there's a change in price.
A good with perfectly inelastic supply has zero deadweight loss.
A good has an inelastic demand when a change in price has a little effect on the quantity demanded. If a good has an inelastic demand, if price is increased, there's little or no change in quantity demanded and therefore total revenue increases.
Derived demand is when the demand for a good or a factor of production is as a result of the demand for another good. For example, if there's no demand for bread, there would be no demand for bakers.
I hope my answer helps you.
Tax imposition on goods with perfectly inelastic supply does not change the quantity produced, and the burden falls on the producer, while perfectly elastic supply places the burden on consumers. Price increases in inelastic demand do not greatly reduce quantity demanded, leading to higher revenue. Derived demand is when the input demand depends on the output's production level.
Explanation:The elasticity of supply and demand affects how a tax on a good impacts the market price and quantity, as well as who bears the burden of the tax. When a tax is imposed on a good with perfectly inelastic supply, the quantity produced remains unchanged because the supplier is unable to adjust the quantity in response to price changes. As a result, the producer bears the burden of the tax. In contrast, with a perfectly elastic supply, any tax imposed would result in an increase in market price, but the quantity supplied would not change; the burden falls on consumers. If the demand is inelastic, an increase in price due to the tax does not significantly reduce the quantity demanded, leading to a higher tax revenue.
For example, if a local merchant raises the price of his good and total revenues increase, it indicates that the demand for the good is inelastic. Consumers continue buying nearly the same quantity despite the price hike. Conversely, with elastic demand, an increase in price would lead to a large decrease in quantity demanded, thus decreasing total revenue. Similarly, the concept of derived demand denotes that the demand for an input is dependent on the production level of the final good; the input's demand is not based on the input's own price or features but on the demand for the product it helps to produce.
Exodus Limousine Company has $1,000 par value bonds outstanding at 17 percent interest. The bonds will mature in 40 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the current price of the bonds if the percent yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)
Answer:
Consider the following calculation
Explanation:
Yield to maturity is not given here. So we assume that Yield to maturity is 10%.
Present value of interest payment :
PV = A*PVIFA (n= 40,i =10%)
= 170*9.7791
= 1662.45
Present value of principal payment at maturity
PV = FV*PVIF (n= 40,i =10%)
= 1000 * .0221
= 22.10
Current price of bond = 1662.45+22.10
= $ 1684.55
The current price of the bonds can be calculated using the formula for present value of a bond. The formula is PV = C/(1 + r)^n. Plugging in the given values, the current price of the bonds is approximately $8.34.
Explanation:The current price of the bonds can be calculated using the formula for present value of a bond. The formula is:
PV = C/(1 + r)^n
Where:
PV is the present value of the bondC is the annual interest paymentr is the percent yield to maturityn is the number of years until maturityIn this case, the annual interest payment is $170 (17% of $1000) and the number of years until maturity is 40. Let's assume the percent yield to maturity is 15%. Plugging these values into the formula:
PV = 170/(1 + 0.15)^40 = $8.34
So the current price of the bonds is approximately $8.34.
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The newspaper reported last week that Bennington Enterprises earned $34.08 million this year. The report also stated that the firm’s return on equity is 17 percent. The firm retains 75 percent of its earnings.
What is the firm's earnings growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
What will next year's earnings be? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Answer:
Growth rate = 12.75%
Next year earnings = $38,425,200
Explanation:
Data provided in the question:
Earnings = $34.08
Firm’s return on equity = 17%
Retention rate = 75%
Now,
Growth rate = [ Retention rate ] × [ Return on equity ]
= 0.75 × 0.17
= 0.1275
or
= 0.1275 × 100%
= 12.75%
Next year earnings = Earnings × ( 1 + Growth rate )
= $34.08 million × ( 1 + 0.1275 )
= $38.4252 million
= $38,425,200
Brad's Robotics Incorporated will earn $60 in one year if it does well. The debtholders are promised payments of $40 in one year if the firm does well. If the firm does poorly, expected earnings in one year will be $10 and the repayment will be $5 because of the dead weight cost of bankruptcy. The probability of the firm performing poorly or well is 40%. If bondholders are fully aware of these costs what will they pay for the debt?
Answer:
pay for the debt = $17.76
Explanation:
given data
earn = $60
debt holders payments = $40
earnings = $10
repayment = $5
probability = 40%
to find out
what will they pay for the debt
solution
we consider here interest rate on the bonds = 7%
so we now get here pay for the debt that is express as
pay for the debt = ( debt holders payments × probability + earn × repayment ) ÷ ( 1 + interest rate ) ..........................1
put here value we get
pay for the debt = [tex]\frac{0.4*40+0.6*5}{(1+0.7)}[/tex]
pay for the debt = $17.76
Using 2010 U.S. dollars, in 2000 annual real per capita gross domestic product (GDP) in the United States was around ________, whereas in China, it was around ________.
Answer:
$44,000; $5,200
Explanation:
Please see attachment.
Based upon acquiring equity or wealth, purchasing a car is to purchasing a home as leasing a car is to a. improving a house. b. repairing a house. c. buying a condominium. d. joining a cooperative. e. renting an apartment.
Answer:
Option ( E ) is the right answer.
Explanation:
According to the scenario, the most appropriate answer is option (E) because of the following reasons :
Purchasing a car means to buy a car so that the owner of the car is the purchaser. Leasing a car means to give a car to another person on lease for a fixed time duration in return of which he will pay you but the owner of the car is still purchaser.
Similarly purchasing a house is to own the house by making full payment of it but renting an apartment means to take home on rent by giving rent every month or at a fixed period but the owner of the house still remains the purchaser.
While the options are wrong because of the following reasons:
Improving a house can be defined as to make a home more luxurious. Repairing a house can be defined as renovation work in the house. Buying of condominium tells the concept to buy another property. Joining a cooperative has no connection with buying a house.Alternative explanations of wage disparities
Suppose that a labor economist claims that recipients of economics PhDs gain little in terms of acquired productive skills from their graduate studies but that, instead, the degree simply reflects a high level of inherent mathematical ability.
Which one of the following characterizes the labor economist's perspective on the link between education and wages?
A. Human capital
B. The superstar phenomenon
C. Compensating differentials
D. Signaling
Answer:
D. Signaling
Explanation:
According to the signaling theory in education, productivity does not dependent on education, but higher education acts as a "signal" for an individual's greater ability. The labor economist believes that having a PhD in economics reflects a high level of inherent mathematical ability, although it does not change much in acquired productive skills. This view is clearly characterized by signaling.