The Discount rate is the interest rate charged by the Federal Reserve for loans, while the Federal funds rate is the interest rate charged by banks to one another for overnight loans. Banks typically borrow from each other first due to the lower Federal funds rate before turning to the Federal Reserve.
Explanation:The Federal funds rate is the interest rate at which one bank lends funds to another bank overnight. In this case, the Bank of Key West could borrow money from other banks at a rate of 0.25%, which is lower than the rate to borrow from the Federal Reserve.
On the other hand, the Discount rate is the interest rate charged to commercial banks by the Federal Reserve for loans. In your situation, borrowing directly from the Federal Reserve at a rate of 1.15% would be utilizing the discount rate.
The Bank of Key West would typically explore borrowing from other banks first, due to the lower federal funds rate, before turning to the Federal Reserve, which charges a higher discount rate. This is a common practice by banks to fulfill their reserve requirement at a lower cost.
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The federal funds rate is 0.25%, and the discount rate is 1.15%.
The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. In the context of the given scenario, the federal funds rate is the rate at which the Bank of Key West can borrow money from other banks, which is 0.25%.
The discount rate, on the other hand, is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility, the discount window. In this scenario, the discount rate is the rate at which the Bank of Key West can borrow directly from the Federal Reserve, which is 1.15%.
An assembly line can produce 90 units per hour. The line’s hourly cost (total salaries of workers) is $4,283 an hour (the first 8 hours). Workers are guaranteed a minimum of 6 hours (i.e., they will be paid for 6 hours per day, even if they work less than 6 hours). There is a 50% premium for overtime (i.e., salary is increased 50% during overtime hours), however, productivity for overtime drops by 7% (i.e., the number of units produced per hour drops 7%). What is the total costs if 966 units needs to be produced?
To produce 966 units, the total cost would be $56,133.825. This includes regular hours and overtime hours.
Explanation:To calculate the total cost of producing 966 units, we need to consider the regular hours and the overtime hours.
Regular hours: The assembly line can produce 90 units per hour, so it will take 966/90 = 10.73 hours to produce 966 units. Since workers are guaranteed a minimum of 6 hours, we can assume 6 hours of regular hours.
Overtime hours: The remaining 4.73 hours will be considered as overtime. Overtime salary is increased by 50%, so the hourly cost will be $4,283 * 1.5 = $6,424.5. However, productivity drops by 7%, so the assembly line will produce 90 * 0.93 = 83.7 units per hour of overtime.
Total cost: The total cost of regular hours is $4,283 * 6 = $25,698. The total cost of overtime hours is $6,424.5 * 4.73 = $30,435.825. The total cost of producing 966 units is $25,698 + $30,435.825 = $56,133.825.
est Co. recorded the following inventory information during the month of February: Units Unit cost Total cost Units on Hand Balance on 2/1 800 $2 $1,600 800 Purchased on 2/8 1,000 $3 $3,000 1,800 Sold on 2/14 1,500 300 Purchased on 2/17 2,000 $1 $2,000 2,300 Sold on 2/23 1,600 700 Purchased on 2/28 800 $4 $3,200 1,500 West uses the LIFO method to cost inventory. What amount should West report as inventory at the end of February under each of the following methods of recording inventory
Answer:
period: 3,700
perpetual: 4,200
Explanation:
periodic system:
available goods:
800 + 1000 + 2000 + 800 = 4,600
sales: 1,500 + 1,600 = 3,100
ending inventory 1,500 units
under LIFO we sale the newest units first so the ending inventory is compose of the beginning inventory + oldest purchase:
ending inventory 1,500
beginning inventory (800)
from purchase 700
Ending inventory valuation:
800 x 2 + 700 x 3 = 1,600 + 2,100 = $3,700
Perpetual System:
We evaluate after each sale so:
inventory available at first sale:
beginning 800
2/8 purchase 1,000
sale for (1,500)
ending inventory 300 units of beginning inventory
inventory available at second sale:
beginning 300 units
2/17 purchase 2,000
Sales for (1,600) units
ending inventory:
beginning 300 units x 2 = 600
2/17 purchase 400 units x 1 = 400
+ 2/28 purchase 800 units x 4 = 3,200
total valuation 4,200
You are the manager of a medium-sized farm with 100 acres of workable land. You can farm the land yourself, rent the land to another farmer for $2,000 per acre, or sell the land to a developed for $40,000 per acre. You have an investment opportunity that pays a return of 6 percent a year. If you decide to farm the land yourself, your opportunity cost for a year will be
Answer:
The opportunity cost for a year will be $240,000.
Explanation:
The opportunity cost of any decision is the second-best alternative that is given up or sacrificed.
Here, the manager has a farm of 100 acres of land.
If he sells it to a developer for $40,000 per acre, he will get $4,000,000 for the whole land.
He can invest this amount and get an interest of 6% per year.
The opportunity cost of keeping the farm to the manager himself will be
= 6% of $4,000,000
= [tex]\frac{6}{100}\ \times\ \$ 4,000,000[/tex]
= $240,000
Answer:
other person is right
Explanation:
240,000 is the right answer
Which of the following statements regarding the exercise of options contracts are TRUE? The exercise of equity options settles the next business day. The exercise of equity options settles in 2 business days. The exercise of index options settles next business day. The exercise of index options settles in 2 business days.
Equity options settle in 2 business days, while index options settle the next business day.
Explanation:The statement that is true regarding the exercise of options contracts is that the exercise of equity options settles in 2 business days.
Equity options are options contracts that give the holder the right to buy or sell shares of a specific company's stock at a predetermined price within a specified time period. When an equity option is exercised, the settlement process takes 2 business days for the transfer of ownership to occur.
On the other hand, index options settle the next business day. Index options are options contracts based on the performance of a financial index, such as the S&P 500. When an index option is exercised, the settlement occurs on the next business day.
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"The correct statements regarding the exercise of options contracts are:
1. The exercise of equity options settles in 2 business days.
2. The exercise of index options settles next business day.
To understand the settlement process for options contracts, it is important to distinguish between equity options and index options:
1. Equity Options: These are options contracts on individual stocks. When an equity option is exercised, the transaction is settled in two business days. This means that if an investor decides to exercise an equity call option, they will receive the shares of the underlying stock two business days after the exercise notice is submitted. Conversely, if an equity put option is exercised, the investor will be required to deliver the shares of the underlying stock two business days after exercising the option.
2. Index Options: These are options contracts on stock indices, such as the S P 500. The settlement process for index options is different from that of equity options. When an index option is exercised, it is settled on the next business day. This is because index options are cash-settled rather than settled by the delivery of the underlying asset. Upon exercise, the option holder receives or pays the cash value of the option based on the difference between the strike price and the index level, which is determined on the day following the exercise.
Therefore, the statements "The exercise of equity options settles in 2 business days" and "The exercise of index options settles next business day" are accurate and true. The other two statements, "The exercise of equity options settles the next business day" and "The exercise of index options settles in 2 business days," are incorrect and do not reflect the standard settlement procedures for these types of options contracts."
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc.
Balance Sheet
Beginning
Balance Ending
Balance
Assets
Cash $ 129,000 $ 132,000
Accounts receivable 344,000 471,000
Inventory 568,000 471,000
Plant and equipment, net 819,000 826,000
Investment in Buisson, S.A. 392,000 434,000
Land (undeveloped) 253,000 251,000
Total assets $ 2,505,000 $ 2,585,000
Liabilities and Stockholders' Equity
Accounts payable $ 386,000 $ 349,000
Long-term debt 1,027,000 1,027,000
Stockholders' equity 1,092,000 1,209,000
Total liabilities and stockholders' equity $ 2,505,000 $ 2,585,000
Joel de Paris, Inc.
Income Statement
Sales $ 4,700,000
Operating expenses 4,042,000
Net operating income 658,000
Interest and taxes:
Interest expense $ 121,000
Tax expense 204,000 325,000
Net income $ 333,000
The company paid dividends of $216,000 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company.
Required:
1.
Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round your answers to 2 decimal places.)
2.
The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 21%. What was the company’s residual income last year?
Final answer:
1. Margin: 7.1%, Turnover: 714%, ROI: 12.8%. 2. Residual income: $138,180
Explanation:
1. Compute the company’s margin, turnover, and return on investment (ROI) for last year:
Margin: Margin is calculated by dividing net income by sales. In this case, the net income is $333,000 and the sales are $4,700,000. Therefore, the margin is 0.071 or 7.1%.Turnover: Turnover is calculated by dividing the cost of goods sold by the average inventory. The cost of goods sold can be calculated by subtracting the gross profit from the operating expenses. In this case, the cost of goods sold is $3,711,000 and the average inventory is ($568,000 + $471,000)/2 = $519,500. Therefore, the turnover is 7.14 or 714%.Return on Investment (ROI): ROI is calculated by dividing the net income by the total assets. In this case, the net income is $333,000 and the total assets are $2,585,000. Therefore, the ROI is 0.128 or 12.8%.2. The company’s residual income last year:
Residual income is calculated by subtracting the minimum required rate of return from the net operating income. In this case, the net operating income is $658,000 and the minimum required rate of return is 21%. Therefore, the residual income is $138,180 ([$658,000 - (0.21 * $2,505,000)].
Service revenue $ 78,500 Rent expense 21,000 Postage expense 1,500 Salaries expense 22,000 Legal fees expense 2,600 Supplies expense 20,000 In addition, the balance of common stock at the beginning of the year was $175,000, and the balance of retained earnings was $36,000. During the year, the company issued additional shares of common stock for $30,000 and paid dividends of $20,000. Required: Prepare an income statement. Prepare a statement of stockholders’ equity.
Answer:
statement of stockholders' equity
for the year ended 31th December 20XX
Common Stock Retained Earings Total
Balance Jan 1 175,000 36,000 211, 000
Net Earnings 30,900 30,900
Dividends -20,000 -20,000
Stock issued 30,000 30,000
Balance, Dec 31 205,000 46,900 251,900
Explanation:
The first step, will be to calculate the net incoem:
Revenue 78,000
Rent expense 21,000
postage expense 1 ,500
salaries expenses 22,000
legal fees expense 2,600
Total expense (47,100)
Net earnings 30,900
And now we can build the statement of Stockholders equity
MaltHanks Inc., a leading American firm, starts its operations in China. It incurs a lot of additional costs in comparison to the local firms. These costs originate in limited local knowledge and local stakeholders' discriminatory attitudes. Which of the following best describes the problem faced by MaltHanks?
a. Foreign premium
b. Liability of foreignness
c. Liability of localization
d. International premium
Answer: Liability of foreignness
Explanation: In simple words, the extra cost incurred by a company operating in a foreign country as compared to the local companies over there is called the liability of foreignness.
In the given case, the American company incurred extra cost in china due to their lack of local knowledge and discrimination from the locals.
Thus, from the above we can conclude that Malt hanks faced liability of foreignness.
A company makes greeting cards and their research shows that that price and demand are related linearly: p = m x + b . They know that for every additional card they wish to sell they need to drop the price by $0.10. They also know that in order to sell 260 cards they need to set the price at $7. Find the linear equation relating price to demand.
Answer: p = (-0.10)x + 33
Explanation:
Given that,
p = m x + b .......(1)
Price and demand are related linearly.
m = -0.10, x = 260 and p = 7
Substituting all these in equation (1) for calculating the value of b,
7 = -0.10 × 260 + b
b = 7 + 26
b = 33
Therefore, linear equation relating price to demand is as follows:
p = (-0.10)x + 33
Final answer:
The linear equation relating price to demand for the company's greeting cards, given the decrease in price per additional card and a specific price-quantity example, is p = -0.10x + 33.
Explanation:
The question asks for the linear equation relating price to demand for a company that makes greeting cards. Given that for every additional card sold the price must decrease by $0.10, and to sell 260 cards the price is set at $7, we can use the linear equation p = mx + b. Here, m (slope) represents the change in price per card, which is -$0.10, and x represents the quantity of cards. Knowing one point on the line allows us to solve for b, the y-intercept. Substituting the values, we have 7 = -0.10(260) + b. Solving this equation for b gives us b = $33. Therefore, the linear equation relating price to demand is p = -0.10x + 33.
Which of the following statements is true of global agnostics?
a. They are in favor of buying global brands that signal prestige and cachet.
b. They are skeptical about whether global brands deliver higher-quality goods.
c. They are most likely to lead anti-globalization demonstrations.
d. They may not be able to afford, but nevertheless admire, global brands.
Answer:
c. They are most likely to lead anti-globalization demonstrations.
Explanation:
Global agnostics refers to the consumers who do not purchase the products based on global attitude towards the brands. Such consumers evaluate the brands in the same way as they evaluate the local products. In the United States and South Africa, such types of consumers are the maximum. While around the globe there is very less percentage of such consumers.
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number of Units Unit Cost
Apr. 1 Beginning inventory 410 $2.33
Apr. 20 Purchase 380 2.74
Dunbar sold 640 units of inventory during the month. Ending inventory assuming FIFO would be (Do not round your intermediate calculations. Round your answer to the nearest dollar amount):
A. $349.
B. $955.
C. $411.
D. $1,123.
Answer: The correct answer is "C. $411.".
Explanation: The inventory before the sale is:
Date Transaction Number of Units Unit Cost Total Cost
Apr.1 Beginning Inv. 410 $2,33 $955,30
Apr.20 Purchase 380 $2,74 $1041,20
The sale according to the FIFO (First in - First out) system would be:
Transaction Number of Units Unit Cost Total Cost
Sales 410 $2,33 $955,30
230 $2,74 $630,20
Total: $1585,50
Ending inventory is:
Number of Units Unit Cost Total Cost
150 (380-230) $2,74 $411
To calculate the ending inventory by FIFO, first deduct the no. of sold units from the beginning inventory and then remaining from the purchase inventory. Multiply the remaining units with their purchase unit cost.
Explanation:To determine the ending inventory assuming FIFO (First-In-First-Out), we need to assume the items that Dunbar Incorporated sold first were the ones they acquired first. Given the units sold are 640, these will be 410 units from the beginning inventory plus 230 out of the 380 units purchased on April 20th. To calculate the cost for this, the cost corresponding to these transactions is calculated as follows:
(410 units * $2.33) + (230 units * $2.74).
For the ending inventory, we consider the remaining inventory which is (380 purchase units - 230 sold units) * $2.74 (unit cost). This gives us the value of the ending inventory in the FIFO method.
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Larcker Manufacturing's cost accountant has provided you with the following information for January operations. Direct materials $ 34 per unit Fixed manufacturing overhead costs $ 230,000 Sales price $ 190 per unit Variable manufacturing overhead $ 18 per unit Direct labor $ 30 per unit Fixed marketing and administrative costs $ 205,000 Units produced and sold $ 6,000 Variable marketing and administrative costs $ 8 per unit Required: a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement.
Answer:
Please see details below
Explanation:
Gross Margin income statement
Sales $ 1.140.000
Direct Labor -$ 180.000
Direct Materials -$ 204.000
Variable Manuf. Overhead -$ 204.000
Gross Profit $ 552.000
Manufacturing Overhead -$ 230.000
Fixed Mktg Costs -$ 205.000
Operating Expenses -$ 35.000
Variable Mktg Cost -$ 48.000
Net Income $ 34.000
Contribution Margin Inc. statement.
Sales $ 1.140.000
Direct Labor -$ 180.000
Direct Materials -$ 204.000
Variable Manuf. Overhead -$ 204.000
Gross Contribution Margin $ 552.000
Variable Mktg Cost -$ 48.000
Fixed Mktg Costs -$ 205.000
Operating Expenses -$ 35.000
Contribution Margin $ 264.000
Manufacturing Overhead -$ 230.000
Net Income $ 34.000
Nonconstant Growth Stock Valuation Assume that the average firm in your company's industry is expected to grow at a constant rate of 5% and that its dividend yield is 6%. Your company is about as risky as the average firm in the industry and just paid a dividend (D0) of $3. You expect that the growth rate of dividends will be 50% during the first year (g0,1 = 50%) and 25% during the second year (g1,2 = 25%). After Year 2, dividend growth will be constant at 5%. What is the required rate of return on your company’s stock? What is the estimated value per share of your firm’s stock? Do not round intermediate calculations. Round the monetary value to the nearest cent and percentage value to the nearest whole number.
Answer:
Rate of return of the company 8.15%
Explanation:
"Do not round intermediate calculations." We will work with as many decimal as needed to provide the most accurate answer.
From the dividends yield we will calculate the Stock market price:
dividends/market price = 0.06
3/market price = 0.06
3/0.06 = market price = 100
100 is the value of the PV of all the dividends inflow
Now we will calcualte the grow in the market prce:
100 x 1.5 in the first year x 1.25 in the second = 187.5
Then, we can solve for rate using the gordon model:
D2 will be the D0 of the model
So we use Dividends for the third year.
D0 = $3
D1 = D0 x 1.5 = 3 x 1.5 = 4.5
D2 = D1 x 1.25 = 4.5x 1.25 = 5.625
D3 = 5.625 x 1.05 =5,90625
We set up the gordon formula
[tex]\frac{divends}{return-growth} = Intrinsic \: Value[/tex]
[tex]\frac{5.90625}{return-0.05} = 187.5[/tex]
[tex]\frac{5.90625}{187.5} = return - 0.05[/tex]
[tex]\frac{5.90625}{187.5} + 0.05 = return[/tex]
rate of return: 0.0815 = 8.15%
Heather deposited $1,700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years?
Answer: $3865.8
Explanation:
The formula to find the simple interest is given by :-
[tex]I=Prt[/tex], where P is the initial amount deposited , r is the rate of interest in decimal and t is the time period in years.
Given : P= $1700 ; r= 9.8%=0.098 ; t=13 years
Then , the simple interest earned in 13 years will be :-
[tex]I=1700\times0.098\times13=2165.8[/tex]
Now, the combined amount = P+I =$1700+$2165.8= $3865.8
Hence, the credit union would owe Heather $3865.8 in 13 years.
Answer:= $3,865.80
Explanation:
alculate the future value (FV) of the investment in 13 years as follows:
I = Interest Earned in One Year x Number of Years
= (9.8% x $1,700.00) per year x 13 years
= $2,165.80
FV n = Initial Investment (PV 0 ) + Total Interest Earned (I)
FV 13 = $1,700.00 + $2,165.80
= $3,865.80
Selected financial information for Allen, Inc. for the month is provided below. Beginning work in process inventory $3,800 Direct materials used 16,300 Direct labor 19,100 Manufacturing overhead Total manufacturing costs 65,800 Total cost of work in process Ending work in process 9,100 Cost of goods manufactured Beginning finished goods Cost of goods available for sale 78,400 Ending finished goods Cost of goods sold 75,200 Compute the total cost of work in process. $69,600 $12,900 $5,300 $65,800
Answer:
$69,600
Explanation:
For computing the total cost of work in process, we need to apply the formula which is shown below:
= Ending work in process inventory + Total manufacturing costs
= $3,800 + 65,800
= $69,600
The other costs which are given in the question are not considered in the computation part. Hence, we ignored that cost.
At what amount will accounts receivable be reported on the balance sheet if the gross receivable balance is $35,000 and the allowance for uncollectible accounts is estimated at 18% of gross receivables? (Do not include a comma or dollar sign in your answer.)
Answer:
Accounts Recevable will be reported with same gross value 35000
Explanation:
The accounts receivable keep the same balance, the difference is that you have to add an assets current account named allowance for uncollectible accounts with a credit balance for the amount indicated 6300, and the net value of accounts receivable it's 28700.
A mini-calculator company saw its sales decrease over the last year and decided to launch a new marketing mix strategy to boost awareness and sales. One of the company’s implemented tactics was to sell its mini-calculators through Amazon. It spent $5,000 to add new colors to their product offerings and $5,000 launching a video ad campaign. After tracking its online sales metrics, it saw a leap in sales of $20,000 in three months. What is this company's ROI on their marketing efforts?
Answer:
The ROI is 2
Explanation:
For computing the ROI we have to apply the formula which is shown below:
= Return in terms of benefit ÷ investment
where,
Return is in terms of sales which equals to $20,000
And, the investment equals to
= New color cost + video launching cost
= $5,000 + $5,000
= $10,000
Now put these values to the above formula
So, the answer would be equal to
= $20,000 ÷ $10,000
= 2
Final answer:
The Company's invested $10,000 in its marketing strategy. With a $20,000 increase in sales, this leads to a net profit of $10,000 and an ROI of 100%.
Explanation:
To calculate the Return on Investment (ROI) for the mini-calculator company’s marketing efforts, one must look at the net profit from the marketing strategy and compare it to the cost of that strategy. The company spent a total of $10,000 on adding new colors and launching a video ad campaign. It saw an increase in sales of $20,000 over three months as a direct result of these marketing efforts. To calculate ROI, we subtract the total marketing costs from the increased sales to find the net profit, which is then divided by the total marketing costs and multiplied by 100 to get a percentage.
First, we find the net profit from the marketing strategy: $20,000 (increase in sales) - $10,000 (total marketing costs) = $10,000 net profit. Now, we calculate the ROI: ($10,000 net profit / $10,000 total marketing costs) x 100 = 100% ROI.
Consider the following events: A petty cash fund of $200 was established on April 1, Year 1. Employees were reimbursed when they presented petty cash vouchers to the petty cash custodian. On April 30, Year 1, the petty cash fund contained vouchers totaling $196.50 plus $2.20 of currency. Required Answer the following questions: a. How did the establishment of the petty cash fund affect (increase, decrease, or have no effect on) total assets? Increase Decrease No effect
Establishing a petty cash fund results in an increase in a company's total assets. It's considered an asset because it's used to cover minor business expenses. However, it does not provide an overall increase in total assets, as it is a re-allocation from existing assets (e.g. bank account).
Explanation:When the petty cash fund was established, it increased total assets. The establishment of a petty cash fund is a financial transaction involving cash - an asset. When the fund was set up with $200, that amount was taken from another asset account (potentially a bank account) and transferred into the petty cash fund, essentially relocating these assets instead of creating or losing them. However, total assets remain the same because one asset (bank account balance) was reduced while another asset (petty cash) was increased.
The scenario provided about Singleton Bank and Hank's Auto Supply shows that deposits and loans are both assets, deposits for the depositor and loans for the bank. The bank expects to earn interest from the loan, hence, it is an asset. Similarly, the petty cash fund in a company is considered an asset because the company can use it to pay for small business expenses.
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The CPI is more commonly used as a gauge of inflation than the GDP deflator is because...
a. the CPI better reflects the goods and services bought by consumers.
b. the GDP deflator cannot be used to gauge inflation.
c. the CPI is calculated more often than the GDP deflator is.
d. the CPI is easier to measure
Answer:
I think answer the gDp deflator cannot be used to gauge inflation
The CPI is favored over the GDP deflator for gauging inflation because it more closely reflects the consumer spending on goods and services, representing the cost of living experienced by individuals.So,option a is correct.
The CPI (Consumer Price Index) is more commonly used as a gauge of inflation than the GDP deflator because a. the CPI better reflects the goods and services bought by consumers. The CPI is designed to measure the average price changes of a basket of goods and services typically purchased by urban consumers, which aligns closely with the general cost of living and consumer spending patterns. Unlike the CPI, the GDP deflator includes all new, domestically produced, final goods and services in an economy, regardless of whether they are purchased by consumers or not, such as investment goods and government services. Therefore, while the GDP deflator can serve as a measure of inflation across the entire economy, the CPI is more representative of the inflation experienced by individual consumers.
Suppose that a country increased its saving rate. In the long run it would have
a. higher productivity, and another unit of capital would increase output by more than before.
b. higher productivity, but another unit of capital would increase output by less than before.
c. lower productivity, and another unit of capital would increase output by more than before.
d. lower productivity, but another unit of capital would increase output by less than before.
Answer:
a. higher productivity, and another unit of capital would increase output by more than before.
Explanation:
The productivity will be higher as more saving will increase investment.
Therefore, the economy will be more productive as there is more capital per worker.
Is important to comment that due to diminished return theory each additional unit of capital would increase this productivity by a fewer amount. But, this applies on the short run, when the other factors don't change.
Therefore, option a is the correct as the capital increase is not faced agains a bottleneck of the other factor (labor, business and land)
Increasing a country's saving rate leads to higher productivity due to increase in capital stock. However, due to the law of diminishing returns, each additional unit of capital increases output less than the previous unit.
Explanation:In economic terms, if a country increases its saving rate, it suggests that more of the citizens' income is being put in savings rather than being spent on consumption. In the long run, this increased saving will lead to a rise in the capital stock, as resources that might have been used for consumption can now be invested in physical capital or human capital. This results in higher productivity as the increase in capital stock improves the ability to produce goods and services.
However, as the country accumulates more capital, it experiences what's known as the law of diminishing returns. In other words, each additional unit of capital results in less and less additional output. This is because as capital increases while keeping other factors same (like labor), it becomes more difficult to efficiently utilize the additional pieces of capitals. So, the correct answer should be: b. higher productivity, but another unit of capital would increase output by less than before.
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If the interest rate is 3% and a total of $4,370.91 will be paid to you at the end of 3 years, what is the present value of the sum
Answer:
vp= $1,989.49
Explanation:
To calculate the present value we use the following formula;
[tex]vp = \frac{vf}{1+i^{n} }[/tex]
[tex]vp = \frac{4,370.91}{(1+0.3)^{3} } = 1,989.49[/tex]
Assume Italy and Niger can both produce grain and dates, and that the only limited resource is the farming labor force, meaning that land, water, and all other resources are plentiful in both countries.
Each farmer in Italy can produce 10 tons of grain or 5 tons of dates in a season. In Niger they can produce 10 tons of grain of due to the climate 25 tons of dates.
Which country has the absolute advantage in producing dates?
Which country has comparative advantage in producing dates?
Which country has the absolute advantage in producing grain?
Which country has the comparative advantage in producing grain?
Answer:
absolute on grain: neither, both produce 10
comparative grain: Italy as renounce to less tonds of dates: 0.5 to 2.5
absolute dates: Niger 25 to 5
comparative dates: Niger as it cost 0.4 tonds of grain to produce 1 ton of dates.
Explanation:
For the absolute, we will check which yield the better number.
Fot the comparative, we will check the opportunity cost:
output/potential output of another product
opp cost grain in Italy: 5/10 = 0.5 tons of dates
opp cost grain in Niger: 25/10 = 2.5 tonds of dates
opp cost dates in Italy: 10/5 = 2 tonds of grain
opp cost dates in Niger 10/25 = 0.4 tonds of grain
Suppose a firm produces a PERISHABLE good: produces $10 million worth of final goods only sells $9 million worth $1 million worth of final goods spoils Does this violate the expenditure = output identity?
Answer:
No
Explanation:
This does not violate the expenditure = output identity because this idenity says that goods-in-stock /unsold goods produced and ready for sale but not yet sold (inventory) are also a part of output, which if sold in the next accounting period, would still be calculated as sale in the current period, since it is the sale of output produced in the current year.
The scenario does not violate the expenditure = output identity because the value of spoiled goods is included in the output but not in the expenditures.
In national accounting, the total value of final goods produced (output) includes both sold and unsold goods. Thus, the firm produces $10 million worth of goods, of which $9 million is sold, and $1 million spoils. The spoiled goods are part of the output but are not reflected in the expenditure, maintaining the identity.
Output includes all produced final goods, sold or not.Expenditure accounts for the actual sales.Spoiled goods are counted in output but not in expenditure.This ensures that the accounting identity holds true as output still equals the sum of expenditures and unsold (including spoiled) goods.
Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $ 308,000 Cash dividends declared for the year 68,750 Proceeds from the sale of equipment 118,000 Gain on the sale of equipment 6,750 Cash dividends payable at the beginning of the year 30,250 Cash dividends payable at the end of the year 37,500 Net income for the year 151,250 The ending balance in retained earnings is:
Answer:
Ending balance in retained earnings = $397,250.
Explanation:
The opening balance in the Retained Earnings account is 308,000. which will be on the Credit side.
The following items will be credited to the account:
Gain on the sale of equipment - 6,750Net income for the year - 151,250The following item will be debited to the account:
Cash dividend declared for the year - 68,750Total sum of the Credit side will be 466,000. Less the sum of items on the Debit side[68,750] will result to a closing balance of 397,250.
A more visual representation is detailed in the attachment.
Assume that Best Buy made a December 31 adjusting entry to debit Salaries Expense and credit Salaries Payable for $4,200 for one of its departments. On January 2, Best Buy paid the weekly payroll of $7,000. Prepare Best Buy's (a) January 1 reversing entry; (b) January 2 entry (assuming the reversing entry was prepared); and (c) January 2 entry (assuming the reversing entry was not prepared).
Answer:
salaries payable 4,200 debit
salaries expense 4,200 credit
----- reversing entry -----
salaries expense 7,000 debit
cash 7,000 credit
----payment of wages7wtih reserving entry----
salaries payable 4,200 debit
salaries expense 2,800 debit
cash 7,000 credit
---- payment without reversingentry ----
Explanation:
(A) the reversal entry will be like the adjusting entry done backwards.
(B) when the journal entry is made, then we recognize expense for the full amount. leaving a balance for the expense for the current period:
wages expense
debit credit
4,200
7,000
2,800 debit balance
(C) if no reversing entry was made, then we use the payable and recognize expense for the period
7,000 - 4,200 = 2,800 expense
Windsor, Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,850 cash. 16 Receives $400 from clients for services performed. 27 Pays secretary $1,760 salary.
Answer:
a) the accounting equations keeps equals
b) in the explanation at the bottom
Explanation:
Agu 1.
a)the effect on the accounting equation
1. Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock.
the asset keeps the same
Pays insurance in advance for 6 months, $1,850 cash
the asset keeps the same
Receives $400 from clients for services performed
the asset increase because the cash increase +$400 and the accounts receivable decreased
Pays secretary $1,760 salary.
The cash decrease because paid -$1,760 and the account of the salaries to pay decrease -$1.760
b) the debit-credit analysis
debit credit
Cash -$4.100 assets account
investing +4100 assets account
Cash -$1.850 assets account
Pays insurance +1.850 assets account
Cash +400 assets account
Acc receivable -400 assets account
cash -1.760 assets account
wages to pay -1.760 liabilities account
Inventory 12/31/17 $59,030 Cost of Goods Sold $224,679 Common Stock 76,110 Selling Expenses 16,230 Retained Earnings 45,580 Administrative Expenses 38,719 Dividends 18,337 Income Tax Expense 30,480 Sales Returns and Allowances 11,914 Sales Discounts 15,020 Sales Revenue 417,650 Prepare closing entries for Wildhorse Co. on December 31, 2017.
Answer:
Prepare closing entries for Wildhorse Co. on December 31, 2017
Explanation:
Sales revenue 417.650
Sales discount 15.020
Cost of goods 224.679
Selling expense 16.320
Administrative expense 38.719
Income tax expense 30.480
sales return and allowance 11.914
retained earnings 104.346
You work as an assistant coach on the university basketball team and earn $11 per hour. One day, you decide to skip the hour-long practice and go to the local carnival instead, which has an admission fee of $8. The total cost (valued in dollars) of skipping practice and going to the carnival (including the opportunity cost of time) is
Answer:
$19 plus additional $11 per hour if you decide to stay longer in the carnival.
Explanation:
The initial cost of this decision would be the 8 dollars that the entrance to the carnival costs. But because an opportunity cost was incurred (failing to receive the income generated as a coach in the basketball team) so the opportunity cost is 11 dollars, this added to the cost of entry gives us a Total cost of $ 19 for the decision made.
564/5000
The initial cost of this decision would be the 8 dollars that the entrance to the carnival costs. But because an opportunity cost was incurred (failing to receive the income generated as a coach in the basketball team) so the opportunity cost is 11 dollars, this added to the cost of entry gives us a total cost of $ 19 for the decision made
Note: This only if you are in the carnival for an hour, if you are longer, the opportunity cost will increase $11 for each hour of income not perceived as a basketball coach
Billy’s Exterminators, Inc., has sales of $592,000, costs of $284,000, depreciation expense of $36,000, interest expense of $28,000, a tax rate of 35 percent, and paid out $40,000 in cash dividends. The firm has 80,000 shares of common stock outstanding. What are the earnings per share?
Answer:
EPS = $1.9825
Explanation:
EPS (earnings per share) = Net Income / shares of common stock outstanding
Income before taxes = $592,000 - $284,000 - $36,000 - $28,000 = $244,000
Tax = $244,000 x 35% = $85,400
Net Income = $244,000 - $85,400 = $158,600
EPS = $158,600 / 80,000 = $1.9825
Hope this helps!
Allison will graduate from high school next June. She has ranked her three possible post-graduation plans in the following order: (1) work for two years at a consulting job in her hometown paying $20,000 per year, (2) attend a local community college for two years, spending $5,000 per year on tuition and expenses, and (3) travel around the world tutoring a rock star’s child for pay of $5,000 per year. What is the opportunity cost of her choice?
Answer:
tutoring opportunity cost: 20,000 consulting job
consulting job opportunity cost: 5,000 + travel from tutoring
collegue: 20,000 consulting job
Explanation:
opportunity cost: cost of the best rejected project, proposal or income
income from work as a consulting job: 20,000
income from tutoring: 5,000 ( externality of travel around the world)
collegue cost of 5,000
The tutorng has an externality of travel around the world. We can measure how much Allison values that chances but it is something she will consider when picking her plan.
The opportunity cost of Allison's choice is $30,000.
Explanation:The opportunity cost of Allison's choice is the value of the next best alternative that she is giving up. In this case, her opportunity cost is the income she could have earned if she chose to work for two years at the consulting job instead of pursuing her other options.
Here's how we can calculate the opportunity cost:
Option 1: Work for two years at a consulting job = $20,000/year x 2 years = $40,000
Option 2: Attend a local community college for two years = $0 (no income)
Option 3: Travel around the world tutoring a rock star's child for two years = $5,000/year x 2 years = $10,000
Therefore, the opportunity cost of Allison's choice is $40,000 - $10,000 = $30,000.
Daniel is a baker who has decided to create his own brand of chain restaurants, Short and Sweet. He negotiates with three suppliers for weeks and ultimately signs contracts with these suppliers. Francis, who owns a new sugar plantation, agrees to sell Daniel freshly refined sugar on the condition that Daniel helps him advertise his brand of sugar. Diana runs an orchard and provides Daniel with fruit. She enters into the partnership knowing that she can dramatically increase her profits if she can sell fruit to Daniel. Lastly, Ryan, who owns a mill, decides to purchase a new piece of machinery so that he can sell Daniel flour at a lower price than his competitor. The end result of Daniel\'s interactions with his suppliers is that folks in his neighborhood have a chance to buy delicious baked goods at reasonable prices. This is an example of:
A) Market Failure
B) A command economy
C) The invisible Hand
D) A recession
Answer:
C) The invisible hand
Explanation:
Daniel here seeking to produce and increase his welfare is "led by an invisible hand" to negotiate with his suppliers and to sell goods to his neighbors in a way that everybody is better off as a result from these transactions.
This is also a clear example to what Adam Smith was referring to the invisible hand:
"in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. " Adam Smith, The Wealth of Nations, Book 4, Chapter 2