A market comprised of a downward-sloping demand curve that intersects an upward-sloping supply curve is said to be stable because at any price other than equilibrium, forces in the market move price towards the equilibrium.
What is an economic equilibrium?Economic forces must be in balance for there to be economic equilibrium. Economic variables essentially hold true to their equilibrium values in the absence of outside influences. Market equilibrium is another name for economic equilibrium.
The set of economic factors (often price and quantity) that the economy is driven toward by supply and demand is known as its economic equilibrium.
Any number of elements, including interest rates or total consumer spending, can be included in the definition of the phrase "economic equilibrium."
The point of equilibrium denotes an idealized state of rest where all hypothetically necessary economic transactions have already taken place, given the initial conditions of all pertinent economic variables.
What is a market?The trade of products and services can take place in a market, which is a gathering place for interested parties. Buyers and sellers are typically the parties engaged.
The market might be actual, like a physical store where people interact in person, or it could be virtual, like an online market, where there is no face-to-face interaction between buyers and sellers.
Markets might be real-world, like a physical store, or digital, like an online merchant. The black market, auction market, and financial market are more examples. Prices for products and services are set by markets based on supply and demand.
Hence, option D is the correct answer
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Suppose a report on CNN says that the United States is heading into a recession. As a result, Bert's family, as well as many other like-minded families and individuals, reduces their spending and instead fills up their savings accounts for potential hard times.As a result of this behavior, In macroeconomics, this result is known as ____
Answer: The paradox of thrift
Explanation: In simple words, paradox of thrift refers to a situation when in recession the individuals in the economy stops spending and starts saving more. This behavior further results in decrease in demand and hindrance in economic growth.
In the given case, many families starts saving more due to a report from the CNN that a recession is coming ahead.
Hence from the above we can conclude that the correct answer is paradox of thrift.
Audits can be categorized into five types: (1) financial statement audits,(2) audits of internal control, (3) compliance audits, (4) operational audits,and (5) forensic audits.
Required:
For each of the following descriptions, indicate which type of audit (financial statement audit, audit of internal control, compliance audit, operational audit, or forensic audit) best characterizes the nature of the audit being conducted. Also indicate which type of auditor (external auditor, internal auditor, government auditor, or forensic auditor) is likely to perform the audit engagement.
a. Evaluate the policies and procedures of the Food and Drug Administration in terms of bringing new drugs to market.
b. Determine the fair presentation of Ajax Chemical’s balance sheet, income statement, and statement of cash
flows.
c. Review the payment procedures of the accounts payable department for a large manufacturer.
d. Examine the financial records of a division of a corporation to determine if any accounting irregularities have occurred.
e. Evaluate the feasibility of forecasted rental income for a planned low income public housing project.
f. Evaluate a company’s computer services department in terms of the efficient and effective use of corporate resources.
g. Audit the partnership tax return of a real estate development company.
h. Investigate the possibility of payroll fraud in a labor union pension fund.
Answer:
The list is as follows:
a. Evaluate the policies and procedures of the Food and Drug Administration in terms of bringing new drugs to market - Operational - Government
b. Determine the fair presentation of Ajax Chemical’s balance sheet, income statement, and statement of cash flows - Financial Statement - External
c. Review the payment procedures of the accounts payable department for a large manufacturer - Compliance or operational or possibly internal control - Internal or external
d. Examine the financial records of a division of a corporation to determine if any accounting irregularities have occurred - Forensic/Financial - Internal, external or forensic
e. Evaluate the feasibility of forecasted rental income for a planned low income public housing project - Operational - Government, external, or internal
f. Evaluate a company’s computer services department in terms of the efficient and effective use of corporate resources - Operational - Internal or external
g. Audit the partnership tax return of a real estate development company - Compliance - Government
h. Investigate the possibility of payroll fraud in a labor union pension fund - Compliance or forensic - Government, external, or forensic
The answer describes which types of the audit correspond to each description provided and indicates the type of auditor who would be responsible for conducting the audit. The audits can be compliance, financial statement, audit of internal control, operational, or forensic, with related auditors being external, internal, government, or forensic auditors.
Explanation:a. The description corresponds to a compliance audit, typically performed by a government auditor to determine whether the FDA is in compliance with laws and regulations.
b. This falls under a financial statement audit, conducted by an external auditor to ensure that all financial statements are accurately presented.
c. This is an audit of internal control, which could usually be performed by an internal auditor to assess the effectiveness of internal controls in the accounts payable department.
d. This is a type of forensic audit which will usually be conducted by a forensic auditor to determine if there have been any inconsistencies or fraud in the financial records.
e. This is an example of an operational audit, which is likely to be done by either a government auditor or internal auditor to review feasibility of income projections.
f. This scenario indicates an operational audit, looking specifically at the effective use of resources in the computer services department, typically conducted by an internal auditor.
g. This is usually categorized as a financial statement audit performed by an external auditor to verify the fairness and accuracy of the tax return.
h. This task is an example of a forensic audit often performed by a forensic auditor to uncover potential fraud in payroll accounting.
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Stimpleton Company engages in the following cash payments:
Purchase equipment $4,000
Pay rent 700
Repay loan to the bank 5,900
Pay workers' salaries 1,050
What is the total amount of cash paid for operating activities?
A.$1,750
B.$4,000
C.$6,950
D.$9,900
Answer:
A. $ 1.750
Explanation:
from the given infomation, the operating activities are:
1. pay rent = $ 700
2. pay workers salaries = $ 1.050
The total cash paid fpr operating activities = $ 700 + $ 1.050
= $ 1.750
Therefore, the total amount of cash paid for operating activities is $ 1.750.
The total cash paid for operating activities by Stimpleton Company is $1,750, which includes rent and workers' salaries, as purchase of equipment and loan repayment are not operating activities.
Explanation:The total amount of cash paid for operating activities by Stimpleton Company can be calculated by adding up only those expenses that are related to the company's primary operations. In this case, that includes the payment of rent and salaries to workers. The purchase of equipment and repayment of a loan are not considered operating activities; these are investing and financing activities, respectively. To find the total, we sum the rent payment of $700 and the workers' salaries of $1,050 which equals $1,750 (Option A).
Transportation rates:
(A) are established primarily by government regulation.
(B) are established primarily through negotiation.
(C) are lower for LTL than TL shipments.
(D) typically decrease as delivery speed increases.
(E) typically do not change when smaller shipments are consolidated.
Answer:
(B) are established primarily through negotiation.
Explanation:
Transportation rates can be referred to as the cost paid by users for transportation services. They are the negotiated economic cost of moving a traveler or a unit of freight between a specific origin and location. Rates are often visible to the consumers since transport service providers must provide this information to secure transactions.
In transportation, the scale of operations change by:
Adding more vehicles to the fleet Adding more cars to a train Increasing the size of vehicles Operating in a larger networkTransportation rates are primarily established through negotiation, reflecting the shift towards market-driven mechanisms following significant deregulation in the transport sector in both the United States and Canada.
Explanation:The question relates to the establishment of transportation rates. Historically, transportation in various forms (aviation, trucking, railroads) underwent significant deregulation starting in the late 20th century in both the United States and Canada. In the United States, under President Jimmy Carter, a series of laws were enacted that removed most regulatory barriers, allowing companies to compete more freely by setting their own rates. Similarly, Canada has seen widespread transportation deregulation since the 1980s, highlighted by the Canada Transportation Act of 1996 which removed many previous restrictions and subsidies, favoring a more competitive rate structure.
Therefore, the correct answer is:
(B) are established primarily through negotiation.This reflects the shift from government-regulated to market-driven mechanisms in determining transportation rates. The deregulation has led to more competitive pricing structures, where rates are often negotiated based on market demand, the type of goods being transported, and the specifics of the service provided (e.g., delivery speed and shipment size). This negotiation process allows for flexibility and can accommodate the diverse needs of shippers and carriers.
Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return.
Answer: The statement 2, "Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return." Is TRUE.
Explanation: "Finding the FUTURE VALUE of cash flows tells you what a cash flow will be worth in future years at a specified rate of return." is the definition for FUTURE VALUE.
Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return.
Understanding the present value (PV) of cash flows is essential in financial planning and investment analysis.
The present value calculation allows investors to determine the current worth of a future sum of money, factoring in a specific rate of return or discount rate. This is critical because money has a time value, meaning a certain amount today is worth more than the same amount in the future due to its potential earning capacity.Here's a detailed breakdown:
Concept: Present value helps in determining how much to invest today to reach a desired future value. Application: It is used in various fields like finance, real estate, and retirement planning to make informed investment decisions. Importance: It accounts for the time value of money, helping investors understand the worth of future cash flows in today's terms.For instance, if you want $1,000 in 5 years and the annual interest rate is 5%, you would need to invest approximately $783.53 today, calculated using the PV formula.
In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Each of the following questions is independent of the others.
38. Refer to the above information. Tiffany is paid $60,000, and no goodwill is recorded. In the journal entry to record Tiffany's withdrawal:
A. Tiffany, Capital will be credited for $60,000.
B. Ron, Capital will be debited for $5,000.
C. Stella, Capital will be debited for $4,000.
D. Cash will be debited for $60,000.
Answer:
C. Stella, Capital will be debited for $4,000.
Explanation:
As for the provided information, we have,
Out of all the partner's Tiffany is retiring.
Tiffany's capital balance = $50,000
On his retirement he is paid $60,000
Since no goodwill is recorded, the excess amount paid over capital = $60,000 - $50,000 = $10,000, will be debited in remaining partner's ratio.
Ron's share in these $10,000 = $10,000 [tex]\times[/tex] 3/(3+2) = $6,000
Stella's share = $10,000 [tex]\times[/tex] 2/(2+3) = $4,000
Thus, Correct answer is debiting Ron's capital by $6,000 and Stella's capital by $4,000
The stockholders' equity section of Gunkel Corporation as of December 31, 2014, was as follows:
Common stock, par value $2; authorized 20,000 shares;
issued and outstanding 10,000 shares
$20,000
Paid-in capital in excess of par
30,000
Retained earnings
95,000
$145,000
On March 1, 2015, the board of directors declared a 15% stock dividend, and accordingly 1,500 additional shares were issued. On March 1, 2015, the fair value of the stock was $6 per share. For the two months ended February 28, 2015, Gunkel sustained a net loss of $15,000.
What amount should Gunkel report as retained earnings as of March 1, 2015?
Answer:
The ending balance of the retained earning is $71,000
Explanation:
For computing the ending balance of the retained earning account, we need to apply the equation which is presented below:
Ending retained earning balance = Beginning retained earning balance - net loss - dividend declared
= $95,000 - $15,000 - (1,500 shares × $6 per share)
= $95,000 - $15,000 - $9,000
= $71,000
The 15% dividend represents additional shares issued
Your wealthy uncle established a $2,200 bank account for you when you were born. For the first 8 years of your life, the interest rate earned on the account was 6%. Since then, rates have been only 4%. Now you are 21 years old and ready to cash in. How much is in your account? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
$5.838,52
Explanation:
First of all, you have to calculate the future value of your money with a compound interest rate, but initially you have to calculate the first 8 years with the interest rate of 6% so you have to do the next operation:
Future Value= Present Value *(( 1+ interest rate)^(n))
where n represents the number of years
Future Value= 2.200* (( 1+ 6%)^(8))
Future Value 8 year = $3.506,47
Now that you have that value you need to calculate the money generated in the next 13 years with the same formula but with the new amount of money
Future value 21 year= $3.506,47 *(( 1+4%)^(13))
Future value 21 year= $5.838,52
Finally, you can ask to the bank the $5.838,52 cash
The amount in your account at age 21 is $5,841.22. This includes the interest accrued over both periods.
Step 1
To determine the amount in the bank account at age 21, we need to calculate the compound interest in two phases: from birth to age 8 (at 6%) and from age 8 to age 21 (at 4%).
Phase 1: From Birth to Age 8 (6% Interest)
The formula for compound interest is:
[tex]\[ A = P \left(1 + \frac{r}{n}\right)^{nt} \][/tex]
where:
- A = the future value of the investment/loan, including interest
- P = the principal investment amount ($2,200)
- r = the annual interest rate (6% or 0.06)
- n = the number of times that interest is compounded per year (assumed to be 1 for simplicity)
- t = the number of years the money is invested (8 years)
First, calculate the amount after 8 years:
[tex]\[ A_1 = 2200 \left(1 + 0.06\right)^8 \][/tex]
[tex]\[ A_1 = 2200 \left(1.06\right)^8 \][/tex]
[tex]\[ A_1 = 2200 \times 1.593848 \][/tex]
[tex]\[ A_1 = 3506.47 \][/tex]
Step 2
Phase 2: From Age 8 to Age 21 (4% Interest)
Now we use the amount from Phase 1 as the principal for the next period.
- [tex]\( P = 3506.47 \)[/tex]
- [tex]\( r = 0.04 \)[/tex]
- [tex]\( t = 21 - 8 = 13 \)[/tex]
Calculate the amount after the next 13 years:
[tex]\[ A_2 = 3506.47 \left(1 + 0.04\right)^{13} \][/tex]
[tex]\[ A_2 = 3506.47 \left(1.04\right)^{13} \][/tex]
[tex]\[ A_2 = 3506.47 \times 1.665318 \][/tex]
[tex]\[ A_2 = 5841.22 \][/tex]
We calculate the future value of the initial deposit over the first 8 years at a 6% interest rate, then use the resulting amount as the principal for the remaining 13 years at a 4% interest rate. The compound interest formula is applied in both phases to determine the final amount.
Arturo Manufacturing, Inc. provided the following information for the year: Beginning Balancelong dashWork-in-Process Inventory $ 152 comma 000 Ending Balancelong dashWork-in-Process Inventory 63 comma 000 Beginning Balancelong dashDirect Materials 269 comma 000 Ending Balancelong dashDirect Materials 52 comma 200 Purchaseslong dashDirect Materials 131 comma 000 Direct Labor 73 comma 120 Indirect Materials 52 comma 700 Indirect Labor 133 comma 500 Depreciation on Factory Plant and Equipment 73 comma 780 Plant Utilities and Insurance 71 comma 600 How much is the cost of goods manufactured?
Answer:
Cost of good manufactured= $841700
Explanation:
To calculate the cost of manufactured goods we need to use the following formula:
Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress
Beginning work in progress= $152000
Direct materials = beginning inventory + purchase - ending inventory= 269000 +131000 - 52000= 348000
Direct labor= 73120
Manufactured overhead=ndirect Materials + Indirect Labor + Depreciation on Factory Plant and Equipment + Plant Utilities and Insurance= 52700 + 133500 + 73780 + 71600= $331580
Ending work in progress= 63000
Cost of good manufactured= 152000 + 348000 + 73120 + 331580 - 63000= $841700
To calculate the cost of goods manufactured, you need to consider various components like materials, labor, and overhead costs. By utilizing the given information, the total cost of goods manufactured can be calculated. In this case, the cost of goods manufactured amounts to $550,700.
The cost of goods manufactured is calculated by adding the beginning Work-in-Process Inventory to the total manufacturing costs incurred during the period and then subtracting the ending Work-in-Process Inventory. In this case, the calculation would be: Beginning Work-in-Process Inventory + Direct Materials + Direct Labor + Indirect Materials + Indirect Labor + Depreciation + Plant Utilities and Insurance - Ending Work-in-Process Inventory.
Using the values provided in the question, the cost of goods manufactured would be: $152,000 + $131,000 + $73,120 + $52,700 + $133,500 + $73,780 + $71,600 - $63,000 = $550,700.
A product manager is eager to develop a new product idea. To gain approval to do so, the product manager orders the research team to survey a small group of customers that have been briefed on the product concept already and who reacted favorably to it. This type of research effort is known as _____(A) sugging.(B) advocacy research.(C) product research.(D) consumer research.(E) focus group research.
Final answer:
The product manager's research approach, where a small group of customers who have previously shown approval are surveyed, is known as advocacy research. The correct option is (B).
Explanation:
The product manager is employing a type of research known as advocacy research. This occurs when a research team surveys a group of customers who are already familiar with a product concept and have previously reacted favorably to it.
This is done to ensure that the data collected will support the development and approval of the new product idea. While this approach can provide insights, it risks bias as it does not represent a broad and unbiased sampling of potential customers.
Correct product development requires the design team to choose one concept, using a structured decision process, where each concept is evaluated against certain constraints and criteria. The best concept that meets these requirements is then selected for implementation.
Additionally, buy-in from all stakeholders, especially in conducting consumer research, is crucial for the smooth running of the project and for obtaining genuine feedback that can inform future project design.
On February 1, you bought 100 shares of stock in the Francesca Corporation for $42 a share and a year later you sold it for $46 a share. During the year, you received a cash dividend of $1.20 a share. Compute your HPR and HPY on this Francesca stock investment. Round your answer for HPR to three decimal places. Round your answer for HPY to one decimal place
Answer:
12.381%
Explanation:
For computing HPY and HPR, the formula is same which is given below:
The formula to compute the HPY is shown below
= Dividend income + (Selling price - purchase price) ÷ purchase price
= ($1.20 + $46 per share - $42 per share) ÷ $42 per share
= ($1.20 + $4 per share) ÷ $42 per share)
= $5.20 per share ÷ $42 per share
= 12.381%
To calculate the HPR, first determine the total earnings by subtracting the initial investment from the final value and adding dividends. Then, divide the total earnings by the initial investment and express it as a percentage. The HPY is calculated by dividing the HPR by the number of years.
Explanation:To compute the Holding Period Return (HPR) for your Francesca stock investment, you need to calculate the percentage change from the initial value to the final value, including dividends received. Your initial investment was 100 shares at $42 per share, which amounts to $4,200. The final value is 100 shares at $46 per share, which amounts to $4,600. You also received a cash dividend of $1.20 per share, which amounts to $120. So your total earnings are $4,600 (final value) + $120 (dividend) - $4,200 (initial investment) = $520.
The HPR is calculated by dividing the total earnings by the initial investment and expressing it as a percentage: HPR = ($520 / $4,200) * 100 = 12.381% (rounded to three decimal places).
To calculate the Holding Period Yield (HPY), you divide the HPR by the number of years: HPY = 12.381% / 1 = 12.4% (rounded to one decimal place).
At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many copies of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.
Answer: Using technology
Explanation: The backstreet books is using technology to say aware of the needs of customers and make their business operations more fast.
In the given case, the company is using the scanner so that they can keep records of inventory and sales they made. They are using the technological advancement in their business operations for running the activities more efficiently.
The use of scanner for inventory and best selling book records will help the company to keep up with the demand of customers and also helps in future planning.
What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?
a. Small automobiles become more fashionable:
b. The price of large automobiles rises (with the price of small autos remaining the same):
c. Income declines and small autos are an inferior good:
d. Consumers anticipate that the price of small autos will greatly come down in the near future:
e. The price of gasoline substantially drops:
Answer:
a. Demand will increase.
b. Demand will increase.
c. Demand will increase.
d. Demand will decline.
e. Demand will increase.
Explanation:
a. If small automobiles become more fashionable, people will prefer them more. This will lead to an increase in demand for autos.
b. If there is an increase in the price of large automobiles and the price of the small automobiles remain the same, people will prefer the cheaper substitutes. This will cause the demand for small automobiles to increase.
c. Inferior goods have a negative income effect. SO, when income declines the demand for small autos will increase and vice versa.
d. If consumers expect the price of small autos to fall in the near future, they will hold their money to buy autos when their price fall. This will cause the current demand to fall.
e. When the price of gasoline drops it will become cheaper to use autos. This will lead to an increase in demand for autos.
Answer:
(a) This will lead to an increase the demand for small automobiles such as mini-cooper and fiat 500.
(b) An increase in the price of its related good, will lead to an increase the demand for small automobile.
(c) There is an inverse relationship between the income of an individual and the demand for an inferior good. So, if the income of an individual declines as a result the demand for small autos increases.
(d) This will reduces the demand for small automobiles as future prices of small autos are expected to be fall.
(e) This is ambiguous. We know that autos and gasoline are complimentary goods, so if there is a decrease in the price of gasoline then this will result in rising demand for all the cars.
When responding to questions face-to-face, how should you organize your response?
(A) Using the same format you would use if you were responding in writing.
(B) Using a direct format.
(C) Using the same format as a goodwill message.
(D) By asking for clarification.
(E) Using an indirect format.
Answer:
A. Using the same format you would use if you were responding in writing
Explanation:
here the answer should be A that is
A. Using the same format you would use if you were responding in writing.
What this means is that, the response should be neutral and catered in a way that we would if we're writing the answer in order to allow a better, more neutral understanding of the process, unless otherwise stated.
Suppose that France and Sweden both produce oil and shoes. France's opportunity cost of producing pair of shoes is 4 barrels of oil, while Sweden's opportunity cost of producing a Pair of shoes is 8 barrels of oil. By comparing the opportunity cost of producing shoes in the two countries, you can tell that has a comparative advantage in the production of shoes and has a comparative advantage in the production of oil. Suppose that France and Sweden consider trading shoes and oil with each other. France can gain from specialization and trade as long as it receives more than of oil for each pair of shoes it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than of shoes for each barrel of oil it exports to France. Based on your answer to the last question, which of the following terms of trade (that is, price of shoes in terms of oil) would allow both Sweden and France to gain from trade? Check all that apply. 3 barrels of oil per pair of shoes 1 barrel of oil per pair of shoes 5 barrels of oil per pair of shoes 9 barrels of oil per pair of shoes
Explanation:
France's opportunity cost of producing a pair of shoes is
= 4 barrels of oil
Sweden's opportunity cost of producing a pair of shoes is
= 8 barrels of oil
France's opportunity cost of producing a barrel of oil is
= [tex]\frac{1}{4}[/tex]
= 0.25 pairs of shoes
Sweden's opportunity cost of producing a barrel of oil is
= [tex]\frac{1}{8}[/tex]
= 0.125 pairs of shoes
A country is considered to be having a comparative advantage in producing a good if it can produce it at a lower opportunity cost as compared to the other country.
Here, France has a lower opportunity cost of producing shoes. So we can say that it has a comparative advantage in making shoes.
Sweden has a lower opportunity cost in producing oil so it has a comparative advantage in making oil.
France can gain from trade if it gets more than 4 barrels of oil for a pair of shoes. While Sweden can gain from trade if it gets more than 0.125 pairs of shoes for a barrel of oil.
The price for trade to happen should be 5 barrels of oil per pair of shoes as France want more than 4 barrels of oil which is its opportunity cost.
9 barrels of shoes is more than Sweden's opportunity cost of producing a pair of shoes, so Sweden will not be willing to pay it.
Losses and business failures a. illustrate why government subsidies are necessary if resources are going to be allocated efficiently. b. will help redirect resources away from unproductive projects. c. reflect that buyers value the product highly relative to costs. d. indicate that sellers are producing the commodity at the lowest possible cost.
Answer:
b. will help redirect resources away from unproductive projects
Explanation:
When a project return are lower, it is destroying capital as the return are lower than the cost to generate the capital.
Therefore, when the business stop generating income or it does losses or lower returns than the cost of capital either case, it will stop funding.
The investor will stop funding that unproductive projects and move to better projects and business which yields a gain.
Tim mows neighborhood lawns for extra money. Suppose that he would be willing to mow one lawn for $10, a second lawn for $15, and a third lawn for $24. Also suppose that three neighbors are interested in having their lawns mowed. Mrs. Jones would be willing to pay $31 to have her lawn mowed, Mr. Wilson would be willing to pay $30, and Ms. Smith would be willing to pay $24. If Tim offers to mow lawns for $24 each, what will be his producer surplus? $ nothing. (Enter a numeric response using an integer.)
Answer:
The producer surplus is $23
Explanation:
Producer surplus: The producer surplus show a difference between the producer willing to supply and the received price
In mathematically,
Producer surplus = (willing to supply - received price by the consumer)
So,
The producer surplus would equal to
= ($24 - $10) + ($24 - $15) + ($24 - $24)
= 14$ + $9 + $0
= $23
Card Corp. purchased bonds at a discount of $49,000. The bonds were classified as available for sale. Subsequently, Card sold these bonds at a premium of $12,000. During the period that Card held this investment, amortization of the discount amounted to $19,000. What amount should Card report as gain on the sale of bonds?
Answer:
The amount that the card should report as gain on sale of bonds $42000.
Explanation:
carrying cost = 49000 - 19000= 30000
amount should card report as gain on sale of bond = cost of bond + premium price - (cost - carrying value cost )
amount card report as gain = 49000 + 12000 - ( 49000 - 30000)
= 42000
Therefore, the amount that the card should report as gain on sale of bonds $42000.
You will make the following investments for a trip around the world: $2,600 today, $4,000 at the end of year two, and $1500 at the end of year five. (A) How much will you have in six years if you can earn 4.2% on your investments? (B) What equivalent amount could you put away today as a lump sum and have the same amount in six years?
Answer:
a) $9606.53
b) $7505.16
Explanation:
Giving the following information:
Investment
$2,600 year 0
$4,000 at the end of year two
$1500 at the end of year five.
i=0,42
A) FV=2600*(1,042^6)= $3328
FV=4000*(1,042^4)= $4715,53
FV=1500*(1,042^1)= $1563
Total= $9606.53
B) We need to find the present value of $9606.53
PV= FV/[(1+i)^n]
PV= 9606.53/1,042^6= $7505.16
Connecticut, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Connecticut, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase / (Decrease) Cash $ 22 comma 000 $ 18 comma 000 $ 4 comma 000 Accounts Receivable 31 comma 000 39 comma 000 (8 comma 000) Merchandise Inventory 56 comma 000 25 comma 000 31 comma 000 Plant and Equipment 126 comma 000 93 comma 000 33 comma 000 Accumulated DepreciationminusPlant and Equipment (48 comma 000) (40 comma 000) (8 comma 000) Total Assets $ 187 comma 000 $ 135 comma 000 $ 52 comma 000 Additional information provided by the company includes the following: 1. Equipment was purchased for $ 67 comma 000 with cash. 2. Equipment with a cost of $ 34 comma 000 and accumulated depreciation of $ 7 comma 100 was sold for $ 47 comma 000. What was the amount of net cash provided by (used for) investing activities? A. $(166 comma 000) B. $ 166 comma 000 C. $(20 comma 000) D. $ 20 comma 000 Click to select your answer.
Answer:
D. $ 20 comma 000
Explanation:
First is necessary to find the total cash by indirect method which is equal to the variance in the amount of Cash at the Balance Sheets.
Next is necessary remove from that balance the Equipment purchased by 67,000 and then the Equipment sold by 47,000, with this modifications we have the amount of net cash provided by investing activities.
Assets 2019 2018
Cash $22,000 $18,000
Accounts Receivable $31,000 $39,000
Inventory $56,000 $25,000
TOTAL CURRENT ASSETS $109,000 $82,000
Property and Equipment $126,000 $93,000
Depreciation Acc. -$48,000 -$40,000
Building $33,000
TOTAL ASSETS $220,000 $135,000
Cash Flow Ind Method $4,000
Depreciation $8,000
Equipment Sold $40,000
Inventory $31,000
Accounts Receivable -$8,000
Equipment Purchased -$67,000
Answer:
$20 comma (,) 000
Explanation:
The following information is available from the records of a manufacturing company that applies factory overhead based on direct labor hours: Estimated overhead cost: $500,000 Estimated labor hours: $200,000 Actual overhead cost: $515,000 Actual labor hours: $210,000 Based on this information, factory overhead is
Answer:
The manufactured overhead was under-estimated.
Explanation:
Giving the following information:
The actual manufacturing overhead costs incurred were $515,000.
Estimated Manufacturing overhead was $500,000.
Overhead allocation is the distribution of indirect costs to produced goods. When the administration has undervalued and under-funded the amount of money needed for non-production costs, they have under-allocated overhead.
Over applied manufacturing overhead:
Applied overhead>Actual overhead
Under applied manufacturing overhead:
Applied overhead<Actual overhead
In this exercise:
Actual manufacturing overhead - Estimated Manufacturing overhead= 515000- 500000= 15000
The manufactured overhead was under-estimated.
How does the pay-as-you-go procedure apply to wage earners? To persons who have income from sources other than wages?
Answer:
Pay as you go require employers to withhold taxes from the employee wages. Other persons have to make payments quarterly to IRS.
Explanation:
This mean that the employers will act as an IRS agent
A factory costs $400,000. You forecast that it will produce cash inflows of $120,000 in year 1, $180,000 in year 2, and $300,000 in year 3. The discount rate is 12%. a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
Value of factory = $64,220
Explanation:
Here, for the given information,
To calculate value of factory we will calculate the Net Present Value.
Net Present Value = Present value of cash inflows - Present value of cash outflow.
Present value of cash outflow = Cost of factory today = $400,000
Discounting factor @ 12% for each year shall be
Year 1 = [tex]\frac{1}{(1+0.12)^1} = 0.893[/tex]
Year 2 = [tex]\frac{1}{(1+0.12)^2} = 0.797[/tex]
Year 3 = [tex]\frac{1}{(1+0.12)^3} = 0.712[/tex]
Therefore, present value of cash inflows = [tex](120,000 \times 0.893) + (180,000 \times 0.797) + (300,000 \times 0.712) = 464,220[/tex]
Net Present Value = Value of factory = $464,220 - $400,000 = $64,220
You have 25 years left until retirement and want to retire with $1.1 million. Your salary is paid annually, and you will receive $61,000 at the end of the current year. Your salary will increase at 4 percent per year, and you can earn a return of 10 percent on the money you invest. If you save a constant percentage of your salary, what percentage of your salary must you save each year?
Answer:
percentage of your salary save each year is 13.24%
Explanation:
given data
time period t = 25 year
amount = $1.1 million
salary = $61000
increase r1 = 4 percent per year = 0.04
return r2 = 10 percent = 0.1
to find out
what percentage of your salary must you save each year
solution
we consider here annual saving = A
so amount formula is
amount = A × [tex]\frac{(1+r1)^t -(1+r2)^t}{r1-r2}[/tex]
here A is annual saving and r1 is increase rate and r2 is return rate
1100000 = A × [tex]\frac{1.1^{25} - 1.04^{25}}{0.1-0.04}[/tex]
A = $8079.45
so
proportion of salary is [tex]\frac{8079.45}{61000}[/tex]
proportion of salary = 13.24%
so percentage of your salary save each year is 13.24%
(Check your book for an explanation of double counting costs) Consider Diego’s decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Diego’s cost of going to college is
Answer:
$42,600
Explanation:
Diego's cost to go to school is what he spends less what he stops earning if he works.
Data:
Tuition = $21,000
Room and Board = $11,000
Books = $1,800
Total expenses going to school =?
Salary if he works = $16,000
Expenses if he works = $7,200
Net Income =?
C = Diego’s cost of going to college =?
Calculations:
Expenses of going to school:
$21,000 + $11,000 + $1,800 = $33,800
Net income if you work:
$16,000 - $7,200 = $8,800
C = $33,800 + $8,800 = $42,600
Diego’s cost of going to college is $42,600
Hope this hepls!
All of the following are methods that aid management in analyzing the expected results of capital budgeting decisions EXCEPT:
a. accrual accounting rate-of-return method
b. discounted cash-flow method
c. future-value cash-flow method
d. payback method
Answer: Option A
Explanation: Capital budgeting is the process by which an analyst using different tools such as discounted cash flow, future cash flow and payback period tries to evaluate the prospective long term investments of an organisation.
Accrual accounting method is an accounting convention and not a capital budgeting tool. It states that every transaction of the entity must be recorded on accrual basis.
Thus from the above we can conclude that the correct option is A.
The future-value cash-flow method is not typically used in analyzing the expected results of capital budgeting decisions. Instead, the accrual accounting rate of return, discounted cash flow, and payback methods are commonly used.
Explanation:All of the options provided are methods that may help management to analyze the expected results of capital budgeting decisions except for the future-value cash-flow method. The accrual accounting rate of return method, the discounted cash-flow method, and the payback method are all widely utilized to analyze capital budgeting. However, the future-value cash-flow method is not typically used in this context as capital budgeting is about evaluating the present value of future cash inflows and outflows relevant to a project, rather than the future value of these cash flows.
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Stockholders' Equity Section of Balance SheetThe following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year:Common Stock, $15 par $181,500Paid-In Capital in Excess of Par 14,520Paid-In Capital from Sale of Treasury Stock 7,800Retained Earnings 300,000Treasury Stock 11,305Prepare the Stockholders' Equity section of the balance sheet as of June 30. Fifty thousand shares of common stock are authorized, and 595 shares have been reacquired.Goodale Properties Inc.Stockholders' EquityJune 30, 20XX
Answer: $492,515
Explanation:
Total Paid-In Capital:
= 12,100 shares of common stock at $15 par + Paid in capital in excess of par -Common Stock + Paid in capital from Sale of treasury stock
= $181,500 + 14,520 + 7,800
= $203,820
Total Stockholders' Equity = Total Paid-In Capital + Retained Earnings - Treasury stock
= $203,820 + 300,000 - 11,305
= $492,515
The stockholders' equity of Gorsky Company at the beginning and end of 2018 totaled $ 125,000 and $ 131,000, respectively. Assets at the beginning of 2018 were $ 145,000. If the liabilities of Gorsky Company increased by $ 71,000 in 2018, how much were total assets at the end of 2018? Use the accounting equation.
Answer:
The assets at the end of 2018 will be for 222,000
Explanation:
We solve using the accounting equation:
Assets = Liabilities + Equity
2017
Equity 125,000
Assets 145,000
Assets = Liabilities + Equity
145,000 = Liabilities + 125,000
145,000 - 125,000 = Liabilities
Liaiblities = 20,000
2018
Equity 131,000
"Liabilities increase by 71,000"
Liabilities = 2017 + increase = 20,000 + 71,000 = 91,000
Assets = Liabilities + Equity
Assets = 91,000 + 131,000 = 222,000
9 . Implied interest rate and period Consider the case of the following annuities, and the need to compute either their expected rate of return or duration. Jacob needed money for some unexpected expenses, so he borrowed $2,138.41 from a friend and agreed to repay the loan in three equal installments of $800 at the end of each year. The agreement is offering an implied interest rate of . Jacob’s friend, Devan, wants to go to business school. While his father will share some of the expenses, Devan still needs to put in the rest on his own. But Devan has no money saved for it yet. According to his calculations, it will cost him $31,897 to complete the business program, including tuition, cost of living, and other expenses. He has decided to deposit $3,800 at the end of every year in a mutual fund, from which he expects to earn a fixed 6% rate of return. It will take approximately for Devan to save enough money to go to business school.
To calculate the implied interest rate and period, we can use the future value of an annuity formula. For Jacob's loan, we can find the implied interest rate by solving an equation. For Devan's savings, we can use the formula to calculate the time it will take him to save enough money for business school.
Explanation:The implied interest rate and period can be calculated using the formula for the future value of an annuity. For Jacob's loan of $2,138.41, with three equal installments of $800, the implied interest rate can be determined by finding the annuity's future value and then calculating the interest rate. To do this, we can solve the equation:
2,138.41 = 800 × [(1 + r)³ - 1] / r
We can then use numerical methods or an online annuity calculator to find the implied interest rate. For Devan's situation, we can use the future value of an annuity formula to calculate how long it will take him to save enough money for business school. The formula is:
PV = PMT × [(1 - (1 + r)⁻ⁿ) / r]
By substituting the given values, such as PV = $31,897, PMT = $3,800, and r = 6%, we can solve for n to find the approximate time.
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Use the following data to determine the total dollar amount of assets to be classified as current assets. Skysong, Inc. Balance Sheet December 31, 2017 Cash $193000 Accounts payable $199000 Accounts receivable 140000 Salaries and wages payable 30500 Inventory 171000 Mortgage payable 237000 Prepaid insurance 89900 Total liabilities $466500 Stock investments (long-term) 270000 Land 251000 Buildings $316000 Common stock $395400 Less: Accumulated depreciation (62500) 253500 Retained earnings 728500 Trademarks 222000 Total stockholders' equity $1123900 Total assets $1590400 Total liabilities and stockholders' equity $1590400
Answer:
Total Current Assets - $593,900
Explanation:
Current assets are resources that are easily used for business transactions.
These are assets that are usually accounted, sold or used by the business for one year or over the next period of time. Current assets include cash and cash equivalents, accounts receivable, merchandise inventory, and prepaid assets.
Thus, the total current assets of Skysong, Inc amount to $593,900 (Cash - $193,000, Accounts receivable - $140,000, Inventory - $171,000, and Prepaid insurance - $89,900).