Answer: Price per ticket should be charged in order to maximize revenue is $15.
70000 people will attend at this price.
Explanation:
Let 'x' represent the decrease .
Using the given information,
Price per ticket = 24 - 3x
Average no. of people that watch the game = 40000 + 10000x
Additional money spent by every person = 6(40000 + 10000x)
Revenue [R(x)] = Price per ticket [tex]\times[/tex] Average no. of people that watch the game + Additional money spent
Revenue [R(x)] = (24 - 3x)[tex]\times[/tex](40000 + 10000x) + 6(40000 + 10000x)
On solving the above equation we get ,
Revenue [R(x)] = -30000[tex]x^{2}[/tex] + 180000x + 1200000
In order to find the critical point we'll differentiate the following with respect to x;
R'(x) = -60000x + 180000
∵ R'(x) = 0
x = 3
Thus, the price per ticket that should be charged in order to maximize revenue is (24 - 3[tex]\times[/tex]3 = 24 - 9 = $15)
People that will attend at this price = (40000 + 10000[tex]\times[/tex]3) = 70000
Imagine you are the director of global business development for a large Swedish engineering company that wants to win a contract to build roads in Kenya, a project funded by the World Bank. You need to develop a relationship with the Ministry of Transportation in Kenya. Using what you learned in this course, discuss how you would handle a situation in which your firm wants to win the contract but has been directly asked for a bribe by a local official in charge of the decision making. Imagine that your competitors are from other countries, some of which are less concerned about the ethics of gift giving. Given what you have read in this course, how can you still win business in such a situation? What would you advise your senior management?
Answer: I would reject his demand for bribe straight away and i will recommend senior management to protect business ethics at all cost.
Explanation: first of all i would not accept the demand of bribe from the official and would try to report this corruption to the concerned authorities.I would try to pressure the authorities to take strict actions against the official and to make the process to be fair and honest in every way.
I as a representative of my company would recommend senior management to take hands off from the project until appropriate actions are taken by the authority as getting into unethical actions might result in problems in future .
The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed $550,000 in the common stock account and $4.7 million in the additional paid-in sur+ account. The 2015 balance sheet showed $590,000 and $5.1 million in the same two accounts, respectively. If the company paid out $505,000 in cash dividends during 2015, what was the cash flow to stockholders for the year? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
cash flow to stockholders = 65,000
Explanation:
2014
550,000 CS
4,700,000 Additional Paid-In
5,250,000 Total beginning Capital
2015
590,000 CS
5,100,000 Additional Paid-IN
5,690,000 Total ending Capital
Dividends - (Ending Capital - Beginning Capital) = cash low to stockholders
505,000 - (5,690,000 - 5,250,000) = 65,000
During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The actual pounds of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate Cisco's materials usage variance. a. $10,500 F b. $10,500 U c. $12,000 U d. $12,000 F
Answer:
Hence, Cisco's materials usage variance is 12,000 Unfavorable
So, the correct option is c. $12,000
Explanation:
Material Usage variance : The computation of material usage variance is shown below:
= (Standard Quantity - Actual Quantity ) × Standard price per pound
where,
Standard Quantity = Production units × Material allowed per unit
= 12,000 × 1.5
= 18,000 pounds
So,
Material Usage Variance = (18,000 - 19,500) × $8
= 12,000 Unfavorable
Hence, Cisco's materials usage variance is 12,000 Unfavorable
So, the correct option is c. $12,000
Albright Motors is expected to pay a year-end dividend of $3.00 a share (D1 = $3.00). The stock currently sells for $30 a share. The required (and expected) rate of return on the stock is 16 percent. If the dividend is expected to grow at a constant rate, g, what is g?
Answer: 14.4%
Explanation: The G that we are computing in this question is the sustainable growth rate, it is the growth rate that a company can attain and maintain without any problem.
we know that,
growth = (retention ratio)*(return on equity)
growth = (1- dividend payout ratio)*(return on equity)
[tex]growth\:=\:\left ( 1-\frac{3}{30} \right )*\left ( 0.16 \right )[/tex]
growth = 14.4%
A farmer needs 500 vats of fertilizer a week during the summer. He has a barn that can hold plenty of vats which cost around $1 a week for storage & handling per vat. The ordering costs for a new order are $250 regardless of the order size. What is the EOQ for this farmer during the summer months?
Answer:
Explanation:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
D = annual demand
S= supply cost = ordering cost
H= annual Holding Cost
We are asked for summer, so we work with a 3 months period
D = 500 * 12 weeks of summer = 6,000
S = 250
H= $1 x 12 weeks of summer = $12
[tex]Q_{opt} = \sqrt{\frac{2\times 6,000\times 250}{12}}[/tex]
[tex]Q_{opt} = 500[/tex]
How to Remember:
Demand per year and order cost goes in the dividend.
Holding cost goes in the divisor.
The farmer's Economic Order Quantity (EOQ) for the summer months, based on the given information, turns out to be 500 vats. This is calculated using the EOQ formula considering the annual demand, ordering cost, and holding cost.
Explanation:To calculate the Economic Order Quantity (EOQ), we need to apply the EOQ formula which is as follows:
EOQ = √ ((2DS) / H)
In this formula, D is the annual demand, S is the ordering cost per order, and H is the holding cost per unit per year.
The farmer's annual demand is calculated as (500 vats/week * 4 weeks/month * 3 months/summer), which equals 6000 vats. The ordering cost (S) is $250, and the holding cost (H) is $1 per week per vat for the duration of the summer months which equals $12/vat.
Substituting these values into the EOQ formula gives: EOQ = √ ((2*6000*250) / 12), or EOQ = √ 250,000. So, the Economic Order Quantity for the farmer for the summer months is 500 vats.
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Bayside Coatings Company purchased waterproofing equipment on January 2, 20Y4, for $190,000. The equipment was expected to have a useful life of four years and a residual value of $9,000. Instructions: Determine the amount of depreciation expense for the years ended December 31, 20Y4, 20Y5, 20Y6, and 20Y7, by (a) the straight-line method and (b) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Depreciation Expense Year Straight-Line Method Double-Declining-Balance Method 20Y4 $ $ 20Y5 20Y6 20Y7 Total $
Answer & Explanation:
Straight Line table
[tex]\left[\begin{array}{cccc}Year&dep \: expense&acc \: dep&net\: book \: value\\0&-&-&190,000\\1&45,250&45,250&144,750\\2&45,250&90,500&99,500\\3&45,250&135,750&54,250\\4&45,250&181,000&9,000\\\end{array}\right][/tex]
The straight-line Method is simply and easy to understand, It distribute the depreciation equally between years. So that implies that the formula should be:
[tex]\frac{Adquisition \: Value- \: Salvage \: Value}{useful \: life}= Depreciation \: coplete \: year[/tex]
195,000 - 9,000 = 181,000
181,000 / 4 = 45,250
Double Declining table
[tex]\left[\begin{array}{cccc}Year&Dep \: Exp&Acc \: Dep&Ending \:Book \:Value\\0&-&-&190,000\\1&95,000&95,000&95,000\\2&47,500&142,500&47,500\\3&23,750&166,250&23,750\\4&14,750&181,000&9,000\\\end{array}\right][/tex]
The Double declining You double the straight line rate
[tex]\frac{1}{useful \: life} \times 2 = DD \: rate \\\\(1/4) \times 2 = 1/2[/tex]
Current Book Value x rate = depreciation expense
190,000 x 1/2 = 95,000
The straight-line method results in a total depreciation expense of $181,000 over four years, while the double-declining-balance method results in a total depreciation expense of $200,500 over the same period.
Explanation:To calculate the depreciation expense using the straight-line method, we subtract the residual value from the initial cost of the equipment, and then divide that value by the useful life of the equipment. For each year, the depreciation expense will be the same ($45,250). Therefore, the total depreciation expense for the four years using the straight-line method will be $181,000.
To calculate the depreciation expense using the double-declining-balance method, we start with the initial cost of the equipment and multiply it by twice the straight-line rate (2/4 = 0.5). For each year, we multiply the previous year's book value by the double-declining-balance rate. The double-declining-balance method allows for higher depreciation expense in the early years. The total depreciation expense for the four years using the double-declining-balance method will be $200,500.
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In October 1, 2019, Westfield, Inc. sold machinery to a customer for $ 25 comma 000. The customer could not pay at the time of sale, but agreed to pay 12 months later, and signed a 12minusmonth note at 11% interest. How much interest revenue was earned during 2019? Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.
Answer:
Interest revenue for the year 2019 = $688
Explanation:
Total cost of asset = $25,000
Interest Revenue to be earned = 11% for 12 months
Total interest revenue = $25,000 X 11% = $2750
In the year 2011 the asset is sold on 1 October therefore interest revenue for the year 2011 will be from 1 October to 31 December = 3 months = $2,750 X [tex]\frac{3}{12}[/tex] = $687.50
Interest revenue for the year 2019 = $688
You have been hired to do a study of the cooking process at a restaurant. The manager has hired your consulting firm because he has heard that you specialize in work measurement studies. You arrive at the restaurant, and your first task is to observe the steak cooking station. The cooks pretty much stand in one location while cooking but have a lot of hand motion. The process is they reach for a steak, throw it on the grill, reach for the spices, sprinkle the spices on the steaks, turn the steak over at the proper moment, again sprinkle with spices, and finally put on the plate.What is the best methods analysis to use to identify wasted motion and idle time of the chefs cooking steaks? __________
Answer: Predetermined motion time system and synthetic method .
Explanation:
Predetermined motion time system : It is used to compute minute costing in labor oriented industries to ascertain and fix the wage rates of workers. In this system conditions are predefined and amount of time required to complete the task under such conditions is ascertained.
.
Synthetic method : This is also called division method, under this different activities required to perform the task is divided and the time for completing the each is recorded to find the activity in which idle time is going.
Final answer:
To identify wasted motion and idle time of chefs cooking steaks, a Time and Motion Study is the best method. This, combined with applying scientific management principles, can help standardize the most efficient methods for cooking steaks, thus improving overall efficiency at the restaurant.
Explanation:
The best methods analysis to use to identify wasted motion and idle time of the chefs cooking steaks in a restaurant is a Time and Motion Study. This method involves observing and recording the time it takes for chefs to complete each task involved in cooking steaks, including reaching for a steak, seasoning it, flipping it, and plating. By analyzing this data, you can identify any inefficiencies or unnecessary steps in the process. For example, if there is significant idle time between flipping the steak and seasoning, there might be opportunities to optimize these steps for better efficiency. Additionally, process analysis can provide insights into how all steps work together and identify opportunities for streamlining or reorganizing tasks to reduce overall cooking time and increase productivity.
Applying scientific management principles, as developed by Frederick Taylor, can also be beneficial. These principles focus on analyzing and planning work to improve efficiency. By standardizing the most efficient methods discovered through the Time and Motion Study, the restaurant can ensure that all chefs are trained to use the same optimized methods, reducing wasted motion and idle time even further.
Factory overhead rates LO P3 At the beginning of the year, a company estimates the following manufacturing costs for the next period: direct labor, $488,000; direct materials, $212,000; and factory overhead, $132,000. Required: 1. Compute its predetermined overhead rate as a percent of direct labor. 2. Compute its overhead cost as a percent of direct materials.
Answer:
1.- 25.205%
2.- 58.019%
Explanation:
The goal of the rate is to distribute the manufacturing overhead over a cost driver.
[tex]\frac{CostOf Manufacturing Overhead}{Cost Driver}= $Overhead Rate[/tex]
So the amount in the dividend remains the same, and the divisor will cahnge according to the driver we are asked for:
1.- Compute its predetermined overhead rate as a percent of direct labor.
[tex]\frac{132,000}{488,000}= 0.25205 = 25.205%[/tex]
2.- Compute its overhead cost as a percent of direct materials.
[tex]\frac{132,000}{212,000} = 0.58019 = 58.019%[/tex]
Russo Corporation manufactured 16,000 air conditioners during November. The variable overhead cost-allocation base is $31.50 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 16,000 units 18,000 units Machine-hours 7,875 hours 9,000 hours Variable overhead cost per machine-hour: $31.00 $31.50 7. What is the variable overhead spending variance? A) $4,500 unfavorable B) $3,937.50 unfavorable C) $4,500 favorable D) $3,937.50 favorable
Answer:
D) $3,937.50 favorable
Explanation:
We need to use the formula to work out the variance:
[tex]$$Actual hours worked * (standard overhead rate - Actual overhead rate)\\=Variable overhead spending variance[/tex]
We post the know values in your table and calculate the variance.
[tex]7,875 * (31.5 - 31) = 3.937,5[/tex]
It is favorable because the actual price was lower than standart, the company saved cash, it was a favorable spending.
Remember:
If Standard - Actual = positive --> favorable variance
If Standard - Actual = negative --> unfavorable variance
Presented below is information for Carla Vista Co. for the month of January 2017. Cost of goods sold $220,100 Rent expense $33,000 Freight-out 9,500 Sales discounts 9,100 Insurance expense 13,400 Sales returns and allowances 20,000 Salaries and wages expense 63,100 Sales revenue 399,500 Income tax expense 5,000 Other comprehensive income (net of $400 tax) 2,000 . Prepare an income statement using the multi-step format.
Answer:
Explanation:
The income statement is that statement which reflects gains & income and expenditure & losses for a particular year
A multi step format of income statement show a classification of sales and expenses.
Like to compute net sales, we deduct sales discount & sales return and allowances from sales revenue
like this, there are various expenses such as administrative expenses, selling expenses which come under operating expenses.
Administrative expenses includes rent and sales & wages expenses. whereas, selling expenses includes freight out charges.
The insurance expenses is come when these all expenses are recorded.
The preparation of income statement using the multi-step format is given under attachment sheet.
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 25%. The current stock price is P0 = $29.00. The last dividend was D0 = $2.25, and it is expected to grow at a 6% constant rate. What is its cost of common equity and its WACC? Do not round intermediate calculations. Round your answers to two decimal places.
Answer: THE COST OF EQUITY IS 14.2% AND WACC IS 11.33%
Explanation:
Here in the question we have been given the weight of debt(35% debt) and weight of equity(65% equity), with marginal tax rate as 25%, PO which is current stock price as $29 and DO which is he last dividend as $2.25, and lastly with growth rate of 6%.
So for us to calculate the cost of common equity, we have to use the approach of discounted cash flow(DCF), where we will us the formula of -
Dividend in the first year (D1) / Current price of stock (PO) + growth rate
Here we know the value of PO and growth rate but don't know the D1, so firstl we will have to calculate the D1 using formula =
D1 = D0 (1+GROWTH RATE)
= $2.25 ( 1+6%)
= $2.25 (1+.06)
= $ 2.385
Now putting the value of D1 in cost of common equity formula,
= $2.385 / $29 + 6%
= .082 + .06
= .142 ( when multiplied by 100 to make in percentage we get 14.2%)
therefore the cost of common equity is 14.2%
For taking out WACC ( weighted average cost of capital ) we will use the formula of =
weight of debt [cost of debt(1 - marginal tax rate)] + weight of equity x cost
of equity
= 35% [8%(1 - 25%)] + 65% x 14.2%
= .35 [.08(.75)] + .65 x .142
= .35 x .06 + .0923
= .021 + .0923
= .1133 ( multiplying by 100 to make it in percentage)
= 11.33%
The cost of common equity of Palencia Paints Corporation, calculated using the Gordon Growth Model, is approximately 8.22%. The Weighted Average Cost of Capital, incorporating debt and equity proportions as well as the cost of debt and tax rate, is approximately 7.09%.
Explanation:The cost of common equity can be calculated using the Gordon Growth Model. According to this model, the cost of equity (ke) is given by the formula: D1 / P0 + g
, where D1 is the dividend expected next year, P0 is the current stock price, and g is the growth rate of dividends. Here, D1 can be calculated as D0*(1+g) = $2.25 * (1+ 0.06) = $2.385. So, ke = $2.385 / $29 + 0.06 = 0.0822 or 8.22%. The Weighted Average Cost of Capital (WACC) can be calculated using the formula:
WACC = ke * E/V + kd * (1−T) * D/V
, where E is the market value of equity, D is the market value of debt, V is the total market value of equity and debt, T is the tax rate, and kd is the cost of debt. Given the company's capital structure (35% debt and 65% equity), an 8% before-tax cost of debt, and a 25% tax rate, WACC would be: 0.0822 * 0.65 + 0.08 * (1 - 0.25) * 0.35 = 0.0709 or 7.09%.
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When Andrea is presenting the new line of Johnson and Johnson products to her clients at CVS, she learns that they are apprehensive about buying more Band-aid products from J & J due to the decline in Band-aid brand sales within the last year. Andrea responds to their concerns by presenting them with the newest form of Band-aid, Band-aid Liquid, and proceeds to show them information about the dramatic increase in Band-aid sales in their test market. Andrea's _____ presentation is consistent with the _____ orientation. Formula selling; Sales Formula selling; Marketing Adaptive selling; Production Adaptive selling; Sales Adaptive selling; Marketing
In Andrea's case, it is evident that her marketing presentation technique is consistent with the adaptive selling orientation. It is a technique of product marketing that helps in boosting sales.
What are product marketing techniques?A product marketing technique is referred as a such a technique where a potential market for the product is oriented in such a way that there are higher chances in increase of sales.
In this technique, new methods and technological advancements of a product are generated in driving and boosting the overall sales of a firm, similar to the technique used by Andrea to marker for her company's band-aids.
Hence, it can be stated that Andrea's marketing presentation is consistent with the adaptive selling orientation.
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Andrea's interaction with CVS clients featuring the Band-aid Liquid shows an Adaptive selling approach aligned with a Marketing orientation, tailoring her presentation to meet specific client concerns and market data.
Andrea's Adaptive selling presentation is consistent with the Marketing orientation. In this scenario, Andrea is responding to the specific concerns of CVS clients regarding a decline in Band-aid sales by presenting a new product, the Band-aid Liquid, and sharing data about its increased sales in a test market.
This approach is adaptive because she tailors her pitch to address the clients' apprehensions and demonstrates an understanding of the marketing strategy, which includes accommodating different market needs and customer feedback, as seen in J&J's willingness to adjust margins and product sizes for different markets. Andrea's approach aligns with a marketing orientation because it focuses on meeting the customer's needs and wants rather than just pushing a product with a set sale presentation.
To gather evidence regarding the bank's balance in a bank reconciliation, an auditor would examine all of the following except theA.cutoff bank statement. B. general ledger. C. bank confirmation. D. year-end bank statemen
Answer:
B. general ledger.
Explanation:
hope this helped i did some research and that what i found xD
Policy and standards often change as a result of business drivers. One such driver, known as ___________________, occurs when business shifts and new systems or processes are incorporated; these business shifts and new systems and processes may differ from what a standard or policy requires.
Answer:
Business exceptions
Explanation:
Policy and standards often change as a result of business drivers. One such driver, known as business exceptions, occurs when business shifts and new systems or processes are incorporated.
Which of the following would not require the company to record an accrual on the balance sheet? Select one: A. The company owes $43,000 in wages to its employees for the previous two weeks. B. Interest will be paid when a note payable matures in the following accounting period C. Management believes a lawsuit against the company is meritless because they have never had a single complaint about dangerous side effects of their drug in two years. D. The company knows that they will be fined for pollution as a result of their manufacturing process and can estimate the amount of the obligation. E. None of the above
Answer:
C. Management believes a lawsuit against the company is meritless because they have never had a single complaint about dangerous side effects of their drug in two years
Explanation:
The contingency is not estimable, and the company is not expecting to do any cash disbursement. At most, it will be disclosure on a footnote because it doesn't know the amount of the lawsuit or probability of occurring.
Lopez Company uses both standards and budgets. For the year, estimated production of Product X is 597,000 units. Total estimated cost for materials and labor are $1,194,000 and $1,671,600. Compute the estimates for (a) a standard cost and (b) a budgeted cost. (Round standard costs to 2 decimal places, e.g. 1.25.)
Answer: (a) Materials = $2 and Labor = $2.8
(b) Materials = $11,94,000 and Labor = $16,71,600
Explanation:
(a) Standard cost :
Standard cost is evaluated as a per unit amount.
For Materials,
= [tex]\frac{1194000}{597000}[/tex]
= $2
For Labor,
= [tex]\frac{1671600}{597000}[/tex]
= $2.8
(a) Budgeted cost :
Budget cost are evaluated as the total amount.
Therefore, for this year the budgeted cost are Materials = $11,94,000 and Labor = $16,71,600
The standard cost per unit of product X would be $4.80 while the total budgeted cost would be $2,865,600.
Explanation:The standard cost of producing one unit of product X can be calculated by adding the costs for materials and labor, and then dividing by the total number of units. In this case, we need to add $1,194,000 and $1,671,600 together, then divide by the estimated production of 597,000 units:
($1,194,000 + $1,671,600) / 597,000 = $4.80/unit
The budgeted cost is calculated as the total estimated costs for materials and labor without dividing by the units. This is because budgeted cost is the total cost that a company expects to incur, not the cost per unit. Therefore, it would simply be the sum of $1,194,000 and $1,671,600 giving a total of $2,865,600.
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Suppose a company which sells breakfast cereal puts a coupon in each box of cereal that it sells during the month of December 2017. The coupon permits $1 off the purchase price of the next box of cereal. Customers will present the coupons to grocery stores when they wish to redeem the coupons. The manufacturer will reimburse the grocery stores $1 for each coupon that the stores send to the manufacturer. The manufacturer sells 1,000,000 boxes of cereal in December of 2017. Should the manufacturer accrue an expense in 2017 for the coupon promotion? Why or why not?
Answer: The manufacturer should accrue an expense for $1,000,000 (i.e. 1,000,000 boxes [tex]\times[/tex] $1 coupon) in December 2017.
Explanation:
The manufacturer should accrue an expense for $1,000,000 (i.e. 1,000,000 boxes [tex]\times[/tex] $1 coupon) in December 2017.
As per the matching concept, revenue should be matched with expenses that has been incurred to earn such revenue.
Hence, since the $1,000,000 is an expense incurred for the sales in Dec 2017, the same should be recognized in Dec 17, though the actual payment will be done in future.
Suppose that the USA can make 15,000,000 cars or 20,000,000 bottles of wine with one year's worth of labor. France can make 10,000,000 cars or 18,000,000 bottles of wine with one year's worth of labor. From these numbers, we can conclude:
Answer: The answer is as follows:
Explanation:
From these numbers, we can conclude that USA has a comparative in producing cars and France has a comparative advantage in producing bottles.
Opportunity cost shows that how many units of one good have to be foregone in order to produce one additional unit of other good.
In USA:
Opportunity cost of producing bottles = [tex]\frac{15000000}{20000000}[/tex]
= 0.75
Opportunity cost of producing cars = [tex]\frac{20000000}{15000000}[/tex]
= 1.33
In France:
Opportunity cost of producing bottles = [tex]\frac{10000000}{18000000}[/tex]
= 0.55
Opportunity cost of producing cars = [tex]\frac{18000000}{10000000}[/tex]
= 1.8
Above calculations clearly shows that USA has a lower opportunity in producing 1 unit of car as compared to the France, so it has a comparative advantage in producing cars.
Whereas, France has a lower opportunity in producing 1 unit of bottle as compared to the USA, so it has a comparative advantage in producing Bottles.
Final answer:
The USA has an absolute advantage over France in producing both cars and wine because it can produce a greater quantity of both with the same amount of labor. Comparative advantage suggests countries should specialize in producing goods with the lowest opportunity cost, enhancing trade efficiency.
Explanation:
The question you've asked pertains to the economic concept of opportunity costs and production possibilities, which fall under the subject of comparative advantage and absolute advantage in international trade theory.
When examining the production capabilities of the USA and France, we can determine their comparative and absolute advantages. The USA can produce 15,000,000 cars or 20,000,000 bottles of wine in a year with their labor. France can produce 10,000,000 cars or 18,000,000 bottles of wine in the same timeframe. By these numbers, the USA has an absolute advantage in producing both cars and wine since it can produce a greater quantity of both goods with a year's worth of labor than France can.
In contrast, when workers are analyzed in terms of productivity, such as in the example provided where 40 workers in the United States and Mexico make different products, we notice productivity differences. The comparison of how many products a certain number of workers can make in each country helps determine which country should specialize in which good. Specialization, according to comparative advantage, is based on which country has the lowest opportunity cost for producing a good. This concept promotes international trade efficiency.
Treasury bills are currently paying 8 percent and the inflation rate is 2.8 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact real rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer: Approximate real rate of interest = 5.2% and Exact real rate of interest = 5.058%
Explanation:
Inflation rate, π = 2.8%
T- bills currently paying = 8%
Approximate real rate of interest:
So, approximate real rate of interest = current rate - inflation rate
= 8% - 2.8%
= 5.2%
Exact real rate of interest:
Exact real rate of interest = [tex](\frac{1 + nominal rate}{1 + inflation rate} )-1[/tex]
= [tex](\frac{1 + 8%}{1 + 2.8%} )-1[/tex]
= 1.05 - 1
= 5.058%
A manufacturer would likely make an ___________ in a market following the long-run process of beginning and expanding production in response to ________________ .
Answer:
A manufacturer would likely make an entry in a market following the long-run process of beginning and expanding production in response to a sustained pattern of profits.
A manufacturer would likely make an entry into a market following the long-run process of beginning and expanding production in response to a sustained pattern of profits.
What is manufacturer market entry?A manufacturer that enters the market having perfect competition often experiences NO entry barriers. Here, in the short-run profits are high but to maintain this profit in the long run, expansion of production is needed.
Therefore, long-run provides normal profits in a sustained manner to a large number of manufacturers.
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Which of the following is most likely to characterize a fascist regime? Select one: a. a strong respect for human rights b. tolerance of ethnic and religious diversity c. centralized planning of the economy d. a propensity to engage in war
Answer: (D.) a propensity to engage in war
Explanation: A fascist regime or government is a political philosophy, movement, or regime that lauds nation and often race above the individual and that stands for a centralized authoritarian government headed by a dictator, severe economic and social regimentation, and forcible suppression of opposition.
The term was first used by Italian political leader Benito Mussolini under his totalitarian, anti-communist government.
Which of the following are examples of job amenities?A. a child-care center at work B. health insurance benefits C. pleasant working conditions D. a workplace gymnasiumE. all of the above
Answer:
The correct option here is E) all of the above.
Explanation:
Job amenities are nothing but the perks or benefits that a employee receives from his or her employer company . There can be various benefits that a employee can receive like health insurance, pension plan , dental insurance, vacation, or sick days , good working conditions etc.
All of the choices given in the question are examples of job amenities that a employee receives
Determine the discounted payback period (in years) for a project that costs $1,000 and would yield after-tax cash flows of $525 the first year, $485 the second year, $445 the third year, and $405 for the fourth year. The firm's cost of capital is 11%.
Answer:
During the 3rd year:
It will be in the 5th month of the Third year
Explanation:
We have to discount each year cash flow at present day using the firm's cost of capital of 11%
[tex]\left[\begin{array}{ccc}\\$Year&$Cash Flow&$Discounted Cash Flow \\\\1&525&472.97 \\2&485&393.63\\3&445&325.38\\4&405&266.78\end{array}\right] \\[/tex]
Adding the discounted cash flow we got that the firm will achieve the payback during the third year.
Now in the attempt of being more precise:
At the end of the 2nd year, we are 133.40 away from payback
By the end of the third year, the company receive 325.38
So in 12 months, we generate 325.38
In how many months do we manage to generate 133.40 and payback the investment?
133.40*12/325.38 = 4.91
So in the 5th month of the Third year, the firm will achieve the payback.
Final answer:
The discounted payback period for the project is approximately 2.416 years. It is obtained by discounting the future cash flows at the firm's cost of capital of 11%, and then calculating the time at which the cumulative discounted cash flows exceed the initial investment of $1,000.
Explanation:
Determining the Discounted Payback Period
To calculate the discounted payback period for a project, we need to discount the projected after-tax cash flows by the firm's cost of capital and compare them to the initial outlay. The cost of capital in this case is 11%, and the project costs $1,000. The future cash flows are $525 in the first year, $485 in the second year, $445 in the third year, and $405 in the fourth year.
To find out when the payback period occurs, we calculate the discounted cash flow for each year using the formula:
Discounted Cash Flow = Actual Cash Flow / (1 + r)^t
where r is the discount rate (0.11 in this case), and t is the time period.
First Year: $525 / 1.11 = $473.42
Second Year: $485 / (1.11)^2 = $393.78
Third Year: $445 / (1.11)^3 = $319.61
Fourth Year: $405 / (1.11)^4 = $260.79
Now, we sum these discounted cash flows until the cumulative amount exceeds the initial investment of $1,000. The payback period occurs during the third year, as the total discounted cash flows after the second year is $867.20, which is less than $1,000. By adding the discounted cash flow of the third year ($319.61), the total becomes $1,186.81, exceeding the initial investment. Therefore, the discounted payback period is somewhere in the third year.
To be more precise, we need to calculate how much into the third year the payback occurs. For this, we take the remaining amount to be recovered after the second year ($1,000 - $867.20 = $132.80) and divide it by the discounted cash flow of the third year: $132.80 / $319.61 = 0.416 (approximately 41.6% of the year). Hence, the discounted payback period is approximately 2.416 years.
Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the 30minusgallon heavyminusduty plastic container. Budgeted quantity Budgeted price Direct materials 0.7 pounds $ 30 per pound Direct labor 0.8 hours $ 13 per hour During July, GII produced and sold 3 comma 000 containers using 2 comma 400 pounds of direct materials at an average cost per pound of $ 29 and 2 comma 490 direct manufacturing labor hours at an average wage of $ 13.50 per hour. July's direct material flexibleminusbudget variance is ________.
Answer:
The quantity variance = -900 unfavorable
Explanation:
Direct materials flexibel - budget variance:
standard
0.7 pounds $30 per pound
3,000 x 0.7 = 2,100 standard pounds
actual
2,400 pound $29 per pound
quantity variance:
30(2,100 - 2,400) = -900
If consumption increases, a) the SRAS curve will shift rightward, which will push the price level up. b) the SRAS curve will shift leftward, which will push the price level up. c) the AD curve will shift leftward, which will push the price level down. d) the AD curve will shift rightward, which will push the price level up.
Answer: Option (d) is correct
If consumption increases, the AD curve will shift rightward, which will increase the price level.
Explanation:
If the consumption increases in an economy as a result there is a rightward shift in the aggregate demand curve. This shift in the aggregate demand curve lead to increase in the price level as well as in the output level.
Because there is more demand in the economy which gives an advantage for the producer to charge higher price.
If consumption increases, the AD curve will shift rightward, which will push the price level up. The correct answer is option D.
When consumption rises, aggregate demand (AD) increases, leading to a rightward shift of the AD curve. This higher demand, with the same short-run aggregate supply (SRAS), results in upward pressure on the price level, reflecting inflationary tendencies. This is a fundamental concept in macroeconomics where demand-side factors directly influence the price levels and economic output.
Increase in consumption leads to higher aggregate demand.AD curve shift rightward increases price levels.Reflects inflationary pressure in the short run.Understanding these shifts helps in analyzing economic policies and their impact on inflation and overall economic health.
Vid Co., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $12 per share dividend 10 years from today and will increase the dividend by 4 percent per year thereafter. If the required return on this stock is 13 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:Therefore the current stock price is [tex]P_{0}[/tex] = $44.384
Explanation:
Stock price for [tex]9^{th}[/tex] year or [tex]P_{9}[/tex] is as follows:
[tex]P_{9} = \frac{Next Dividend\left ( D_{10} \right )}{(Required Rate(r) - Growth rate(g))}[/tex]
[tex]P_{9}[/tex] = [tex][\frac{12}{(13-4)}][/tex]
[tex]P_{9}[/tex] = $133.33
The current stock price or [tex]P_{0}[/tex] is
[tex]P_{0}[/tex] = [tex]\frac{P_{9}}{(1 + Required rate of return)^9}[/tex]
[tex]P_{0}[/tex] = [tex]\frac{133.33}{(1 + 0.13)^9}[/tex]
[tex]P_{0}[/tex] = $44.384
Therefore the current stock price is [tex]P_{0}[/tex] = $44.384
Stu is working on a bid for a contract. Thus far, he has determined that he will need $218,000 for fixed assets and another $41,000 for net working capital at Time 0. He had also determined that he can recover $79,900 aftertax for the combined fixed assets and net working capital at the end of the 3-year project. What operating cash flow will be required each year for the project to return 14 percent in nominal terms?
Answer:
The cash flow should be equal to 88,634.74
Explanation:
218,000 investment on fixed assets
41,000 working capital
investment at year 0 259,000
present value of salvage value
79,900
time = 3 years
rate = 0.14
[tex]\frac{Principal}{(1 + rate)^{time} } = PV[/tex]
[tex]\frac{79,900}{(1 + 0.14)^{3} } = PV[/tex]
PV 53,222.75
259,000 - 53,222.75 = 205,777.25 present value of the operating cash flow
Now we have to calcualte the cuota of a 3 years annuity of present value equal to 205,777.25 at 14% rate
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]C \times \frac{1-(1+.014)^{-3} }{0.14} = 205,777.25\\[/tex]
[tex]205,777.25 \div \frac{1-(1+.014)^{-3} }{0.14} = C\\[/tex]
C = 88,634.74
The cash flow should be equal to 88,634.74
Classify the following items as Direct materials, Selling and administrative expense, Factory overhead, or Direct labor. a. Rent expense on factory building b. Sales supplies used c. Factory supplies used d. Indirect materials used e. Wages of assembly line personnel f. Cost of primary material used to make product g. Depreciation on office equipment h. Rent on office facilities i. Insurance expired on factory equipment j. Utilities incurred in the office k. Advertising expense
Answer:
a. Rent expense on factory building = Factory overhead, because it is the factory building. b. Sales supplies used = Selling and administrative expense.c. Factory supplies used = Factory overhead.d. Indirect materials used = Factory overhead.e. Wages of assembly line personnel = Direct Labor.f. Cost of primary material used to make product = Direct Materials.g. Depreciation on office equipment = Selling and administrative expense.h. Rent on office facilities = Selling and administrative expense.i. Insurance expired on factory equipment = Factory overhead. j. Utilities incurred in the office = Selling and administrative expense.Advertising expense = Selling and administrative expense.Direct materials, direct labor, factory overhead, and selling and administrative expenses are different categories of costs in a business.
Explanation:To classify the items, we need to understand their nature and purpose. Direct materials are materials used in the production of a product, such as the cost of primary material used to make the product. Direct labor refers to the wages of assembly line personnel who directly work on producing the product. Factory overhead includes indirect materials used, factory supplies used, and rent expense on the factory building. Selling and administrative expenses include sales supplies used, depreciation on office equipment, rent on office facilities, insurance expired on factory equipment, utilities incurred in the office, and advertising expense.
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Lohn Corporation is expected to pay the following dividends over the next four years: $16, $12, $11, and $6.50. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price?
Answer:
Intrinsic Value of the bond $90.69
Explanation:
[tex]\left[\begin{array}{ccc}Year&Dividends&Present Value\\1&16&14.2857142857143\\2&12&9.56632653061224\\3&11&7.82958272594752\\4&92.8571428571429&59.0123929947343\\Intrinsic&Value&90.6940165370084\\\end{array}\right][/tex]
The dividends value are givens:
Then on year 4 we apply the Dividends growth model
[tex]\frac{divends}{return-growth} = Intrinsic \: Value[/tex]
[tex]\frac{6.50 }{0.12-0.05} = Intrinsic \: Value[/tex]
Next step, we take all the values to present date
[tex]\frac{Nominal}{(1+rate)^{time} } = PV[/tex]
Year 1 /1.12
Year 2 /1.12^2
Year 3 /1.12^3
Year 4 /1.12^4
Final step, we add them to get the intrinsic value of the bond today.
The current share price is found by calculating the present value of dividends for the first four years, then calculating the present value of the growing perpetuity starting at year 5 and discounting it back to today.
Explanation:The current share price of Lohn Corporation can be calculated using the concept of the present value of dividends and the required return on the stock. In the first four years, we calculate the present value of each year's dividend by dividing them by (1 + required return) raised to the power of the respective year number. Therefore, the present value of the dividends for the initial 4 years would be: (16/(1+0.12)) + (12/(1+0.12)²) + (11/(1+0.12)³) + (6.50/(1+0.12)^4). After these four years, the dividends will grow at a stable rate of 5%. This represents a growing perpetuity which can be calculated by the formula: Dividend in year 5 / (Required return - Constant growth rate) which gives us (6.5*1.05) /(12% - 5%). We find the present value of this perpetuity at year 4 before adding it to the present value of the first four dividends to find the current share price.
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