Answer:
Explanation:
The reverse mortgage is the mortgage which is give to the people who age is 62 years or below . The main aim of providing reverse mortgage loan is to take the loan in exchange of collateral security. The collateral security here means the home which is belongs to the borrower. The loan amount is depend upon the value of the home. The time period to repay the amount is of 6 months . If an borrower is unable to pay the amount, than bank or financial institution has the right to recover the loan amount by selling the house property of the borrower, and also it does not entertain with the monthly payments.
A reverse mortgage is a product offered by a bank to provide liquidity for people who are typically in retirement. The basic idea of a reverse mortgage is for the homeowner to use their equity as a source for retirement income. When the owner of the property dies, the bank must be paid back on that loan.
Omega Instruments has budgeted $300,000 per year to pay for certain ceramic parts over the next 5 years. If the company expects the cost of the parts to increase uniformly according to an arithmetic gradient of $10,000 per year, what is it expecting the cost to be in year 1, if the interest rate is 10% per year?
Answer:
281,281.28
Explanation:
expected cost 300,000 + 10,000 = 310,000
with an inerest rate of 10%
discount value equals to 281,281.28
Omega Instruments is expecting the cost of the parts to be $341,000 in Year 1.
Data and Calculations:
Annual budgeted payment for ceramic parts =$300,000
Period of budget = 5 years
Expected increase in the cost of the parts = $10,000 per year
Price of the parts in Year 1 = $310,000 ($300,000 + $10,000)
Interest rate per year = 10%
Expected cost of the ceramic parts in Year 1 based on 10% interest rate = $341,000 ($310,000 x 1.1)
Thus, Omega Instruments expects the cost of the parts to rise to $341,000 in Year 1.
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Before the year began, Johnson Manufacturing estimated that manufacturing overhead for the year would be $160,000 and that 12,000 direct labor hours would be worked. Actual results for the year included the following: Actual manufacturing overhead cost $175,000 Actual direct labor hours 15,000. If the company allocates manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been: A. $15,000 overallocated. B. $15,000 underallocated. C. $25,000 overallocated. D. $25,000 underallocated.
Answer:
C. $25,000 overallocated.
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
160,000 / 12,000 = 13.33333333 = 13 + 1/3 (to avoid rounding issues)
Applied Overhead
[tex]rate \times actual \: labor \: hours = applied \: overhead[/tex]
(13 + 1/3) * 15,000 = 200,000
Actual Overhead (175,000)
Overapplied for 25,000
Remember that the overhead is done by distributing the estimated overhead cost over a cost driver, which usually is direct labor or machine hours
Final answer:
Johnson Manufacturing overallocated manufacturing overhead by approximately $25,000. This was determined by calculating the predetermined overhead rate, applying it to the actual labor hours, and then comparing to the actual overhead incurred. The correct answer is option (C).
Explanation:
Johnson Manufacturing initially estimated that the manufacturing overhead would be $160,000 for 12,000 direct labor hours, which gives us a predetermined overhead rate (POHR). To calculate the POHR, we divide the estimated manufacturing overhead by the estimated direct labor hours: $160,000 / 12,000 hours = $13.33 per labor hour. This rate is then applied to the actual labor hours to allocate manufacturing overhead.
Using the actual labor hours of 15,000, we multiply by the POHR: 15,000 hours x $13.33 per hour = $199,950. This is the amount of overhead that should have been applied based on actual hours worked. However, the actual manufacturing overhead incurred was $175,000.
Now, we compare the applied overhead ($199,950) to the actual overhead ($175,000). Since the applied overhead is greater than the actual overhead, manufacturing overhead was overallocated by the difference: $199,950 - $175,000 = $24,950. The closest answer is C. $25,000 overallocated.
Let’s assume you purchased a new car and finance it through the dealer. The purchase price was $30,000 including all fees, taxes and delivery costs. The dealer offered an ‘all inclusive’ financing plan at a 12% rate. Your 30 monthly payments were $1,300, derived by adding interest of $9,000 to the $30,000 and dividing by 30 monthly payments. Your friends tell you that your interest rate is above 20% and that you should have borrowed from your home equity line at a lower rate. Are they right?
Answer:
real rate = 0.214051525
Your friends are right
Explanation:
We have to calculate the rate at the present value of an annuity of 30 monthly payment of 1,300 which equals 30,000
[tex]C * \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]1300 * \frac{1-(1+r)^{-30} }{rate} = 30,000\\[/tex]
we use excel, iteractive process or a financial calculator to solve for rate
0.0178376
this rate will be the monthly rate, we need to multiply by 12
0.0178376
x 12
0.214051525
Which of the following statements is CORRECT? Question 8 options: An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks. The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio. It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock. Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount. An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Answer:
Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
Explanation:
a) are e) are the same just the working is diferent but are true:
A stock’s stand-alone will be higher than a portfolio of more stocks.
A rational investor can eliminate the diversifiable risk by holding the stock in a well-diversified portfolio, and the risk that remains is called market risk So are FALSE
b) higher correlation means the stocks behave in the same direction, so the risk is not eliminate. To decrease the risk it should be a portfolio of lower correlation
FALSE
c) two stock one with risk of 10% and one with risk of 2%
the portfolio of this two shares, assuming same quantity, would be less than 10% making the statment false.
FALSE
d) Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
That is correct, because the market risk is there even if the portfolio is compose of all the of the market.
Because It cannot be eliminated through diversification
TRUE
An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Explanation:The correct statement among the options is: An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Diversification is an important concept in investing. It involves spreading investments across different assets, such as stocks, bonds, and mutual funds, to reduce the risk associated with investing in a single asset or company.
By holding a well-diversified portfolio that includes a large number of different stocks and assets, an investor can reduce the impact of any individual stock's performance on their overall portfolio and eliminate most of the risk that is specific to individual stocks.
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A company purchased land for $70,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at
Answer:
UNDER THE HISTORICAL COST OF PRINCIPLE THE COST OF LAND WOULD BE $82,000
Explanation:
Historical cost principle is one of many principle that is used in the accounting , where it states that the value of the asset which will be recorded in the asset side of the balance sheet will be based on the original amount of price which was incurred to acquire the asset at the time of purchase. In this we will include the broker's commission and amount spent for demolishing old building
COST OF LAND = purchase price + broker commission + cost on demolishing
= $70,000 + $5000 + $7000
= $82,000
A newly created design business, Teri's Art, is finishing its first year of operations. During the year, credit sales were $ 42,000 and collections of credit sales were $ 34,000. One account for $ 650 was written off. Teri's Art uses the aging-of-receivables method to account for bad debts expense. It has estimated $ 200 as uncollectible at yearminusend. What is the amount of the Bad Debts Expense for the first year of operations?
Answer:
The bad debt expense for the year was 650
Explanation:
bad debt expense 200 DEBIT
allowance 200 CREDIT
allowance 200 DEBIT
bad debt expense 450 DEBIT
account receivable 650 CREDIT
The bad debt expense for the year was 650
Final answer:
The Bad Debts Expense for Teri's Art for the first year is calculated by adding the already written-off uncollectible account ($650) and the end-of-year estimated uncollectible amount ($200), totaling $850.
Explanation:
To calculate the Bad Debts Expense for the first year of operations for Teri's Art, we need to take into account the credit sales, collections, write-offs, and the estimated uncollectible amount based on the aging-of-receivables method. Teri's Art had credit sales of $42,000, of which $34,000 were collected. An account of $650 was already written off as uncollectible. Additionally, the company has estimated another $200 as uncollectible at year-end.
Using this information, the Bad Debts Expense for the year would be the sum of the written-off account and the estimated uncollectible amount:
$650 + $200 = $850.
The Bad Debts Expense for Teri's Art in its first year is therefore $850.
Yi Company began operations on January 1, 2013. During 2013, the company engaged in the following cash transactions:
1) issued stock for $48,000
2) borrowed $29,000 from its bank
3) provided consulting services for $46,000
4) paid back $19,000 of the bank loan
5) paid rent expense for $11,000
6) purchased equipment costing $16,000
7) paid $3,400 dividends to stockholders
8) paid employees' salaries, $25,000
What is Yi's cash flow from financing activities?
Answer:
Financing
from stock issuance 48,000
loan from bank 29,000
payment of loan (11,000)
dividends paid (3,400)
Cash flow generated from financing activities 62,600
Explanation:
Financing activities:
Thse associate with the issaunce of stock, the dividen of those stock, and debt operation, such as issued bonds or loan and their payment.
The people of a previously quiet and peaceful country have come to recognize the need to expand and improve their security forces after a wave of terroristic threats and acts. Considering their resource limitations, the extent to which security is enhanced will most likely be determined by _________.
Answer:
The extent to which security is enhanced depends on the amount of goods and services people are willing to forego.
Explanation:
We know that resources in an economy is limited and unlimited wants are satisfied used these limited resources. People will obviously prefer security due to increase terrorist threats. Enhancement in security though will be determined by the amount of other goods and services that people are willing to forego. The amount that people forego will be invested on enhancing security.
Consider the cash flows in selections 1 through 4. In each case, the first cash flow occurs at the end of the first period, the second cash flow at the end of the second period, and so on. Which of the following selections has the lowest PRESENT VALUE if the discount rate is 10%?1. $100; $100; $100; $1002. $0; $0; $0; $5003. $350; $0; $0; $04. $50; $50; $50; $375
Answer:
Selection 1 has lowest NPV = $316.9
Explanation:
Rate of discount is 10% therefore PV factor for every year = [tex]\frac{1}{(1+0.1){^n}}[/tex]
Here 0.1 because interest rate is 10% n = number of year for year 1 = 1 for year 2 = 2 and so on.
Selection 1
Year Cash Flow PV Factor Value
1 $100 0.909 $90.9
2 $100 0.826 $82.6
3 $100 0.751 $75.1
4 $100 0.683 $68.3
Net Present Value = $316.9
Selection 2
In this only in 4th year the payment is received = $500 X 0.683 PV Factor
= $341.5
Selection 3
Only in year 1 $350 is received = $350 X 0.909 = $318.15
Selection 4
Year Cash Flow PV Factor Value
1 $50 0.909 $45.45
2 $50 0.826 $41.3
3 $50 0.751 $37.55
4 $375 0.683 $256.125
Net Present Value = $380.425
Selection 1 has lowest NPV = $316.9
Selection a) has the lowest present value of approximately $364.20 when the discount rate is 4%. The correct answer is option a : $100; $100; $100; $100
To find the present value of each selection, we use the formula for calculating the present value of a series of cash flows:
[tex]\[ PV = \frac{CF_1}{(1+r)^1} + \frac{CF_2}{(1+r)^2} + \frac{CF_3}{(1+r)^3} + \frac{CF_4}{(1+r)^4} \][/tex]
where [tex]\( CF_n \)[/tex] represents the cash flow at the end of period n and r is the discount rate.
Let's calculate the present value for each selection:
a) [tex]\( PV_a = \frac{100}{(1+0.04)^1} + \frac{100}{(1+0.04)^2} + \frac{100}{(1+0.04)^3} + \frac{100}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_a = \frac{100}{1.04} + \frac{100}{1.04^2} + \frac{100}{1.04^3} + \frac{100}{1.04^4} = 96.15 + 92.59 + 89.29 + 86.17 = 364.20 \][/tex]
b) [tex]\( PV_b = \frac{0}{(1+0.04)^1} + \frac{0}{(1+0.04)^2} + \frac{0}{(1+0.04)^3} + \frac{450}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_b= \frac{450}{1.04^4} = \frac{450}{1.1699} = 384.69 \][/tex]
c) [tex]\( PV_c = \frac{400}{(1+0.04)^1} + \frac{0}{(1+0.04)^2} + \frac{0}{(1+0.04)^3} + \frac{0}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_c = \frac{400}{1.04} = 384.62 \][/tex]
d) [tex]\( PV_d = \frac{50}{(1+0.04)^1} + \frac{50}{(1+0.04)^2} + \frac{50}{(1+0.04)^3} + \frac{275}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_d = \frac{50}{1.04} + \frac{50}{1.04^2} + \frac{50}{1.04^3} + \frac{275}{1.04^4} = 48.08 + 46.30 + 44.59 + 242.71 = 381.68 \][/tex]
Therefore, selection a) has the lowest present value of approximately $364.20.
Complete question : Consider the cash flows in selections a through d. In each case, the first cash flow occurs at the end of the first period, the second cash flow at the end of the second period, and so on. Which of the following selections has the lowest present value if the discount rate is 4%?
a) $100; $100; $100; $100
b) $0; $0; $0; $450
c) $400; $0; $0; $0
d) $50; $50; $50; $275
Alpha Company was preparing its month-end bank reconciliation. The cash balance per the general ledger was $1,645. Alpha's accountant discovered that the bank had charged $15 in service charges for the month, that outstanding checks were $60, and that there were no deposits in transit. What is the correct adjusted ending cash balance?
Answer:
bank service expense 15 debit
cash 15 credit
Adjusted cash = 1,630
Explanation:
1,645
-15 bank services
1,630 adjusted cash balance
The accountant realize of the service fee at the momentof receive the bank statement, so it wasn't recorded. It must be adjusted
The outstanding checks are an adjustment made on the bank statement
The adjusted ending cash balance for Alpha Company after preparing its month-end bank reconciliation is $1,570.
Explanation:To find the adjusted ending cash balance for Alpha Company after preparing its month-end bank reconciliation, we need to make the necessary adjustments to the cash balance per the general ledger. The cash balance per Alpha's general ledger is $1,645. We then subtract the $15 bank service charges and the outstanding checks amount of $60 from the general ledger balance. Therefore, the adjusted ending cash balance is $1,645 - $15 - $60 = $1,570.
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A company received a bank statement with a balance of $ 6 comma 300. Reconciling items included a bookkeeper error of $ 400long dasha $ 400 check recorded as $ 600long dashtwo outstanding checks totaling $ 820, a service charge of $ 22, a deposit in transit of $ 260, and interest revenue of $ 22. What is the adjusted bank balance?
Answer:
Bank adjusted balance 5,720
Explanation:
6,300
-840 outstanding check
+260 deposit in ransit
5,720 bank adjustment balance
Notes:
the bookkepper error needs to be done on books cash accountthe service charge are included in the bank statemnt, is at adjustment to the book cashthe interest revenue is also 22 an adjustment for the book cash accountPoskey Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Wages and salaries $ 349,000 Depreciation 290,000 Utilities 199,000 Total $ 838,000 Distribution of resource consumption: Activity Cost Pools Assembly Setting Up Other Total Wages and salaries 65% 20% 15% 100% Depreciation 35% 20% 45% 100% Utilities 15% 75% 10% 100% How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?
Answer:
[tex]\left[\begin{array}{cccccc}&Cost&Assembly&Setting Up&Other&Total\\wages&349,000&226,850&69,800&52,350&349,000\\Depreciation&290,000&101,500&58,000&130,500&290,000&Utilities&199,000&29,850&149,250&19,900&199,000&Total&838,000&358,200&277,050&202,750&838,000&\end{array}\right][/tex]
Explanation:
We mulitply each line by the stated percent of each activity
for example
Setting Up % x Utilities= Utilities cost assigned to setting up
199,000x 75% = 149,250
Assembly % Depreciation= Depreciation cost assigned to assembly
35% x 290,000 = 101,500
This process must be done to assign each portion of cost.
What is the argument commonly used by supporters of a state income tax? A. It will probably be quite regressive. B. It is a fairer but highly unreliable source of revenue. C. It makes Texas more attractive to businesses that are considering relocating from out of state. D. It is a fair and more reliable source of revenue.
Answer:
D. It is a fair and more reliable source of revenue.
Explanation:
Their tax base is reliable and the amount is tie to the person or business income, so more tax implies that the person is having higher income as well. This make it fair, because high-income taxpayers contribute more nominal amount than low-income taxpayers, but the rate is the same for both.
Which of the following is true of cellphone communication? It is free from policies and legal restrictions. It is cost-effective when communicating with people located in several time zones. It ensures complete confidentiality and is not prone to misuse. It improves performance among salespersons by improving their outreach to clients.
Cellphone communication helps improve performance among salespersons by expanding their outreach to clients, making it an efficient tool for long-distance communication. It does not ensure complete confidentiality and is subject to policies and legal restrictions.
Explanation:Of the given statements related to cellphone communication, the one that holds true is: it improves performance among salespersons by improving their outreach to clients. Cellphones, thanks to advancements in technology like microwave transmission and communications satellites, have revolutionized our communication methods. They provide cheap, and often better-quality services, thus accommodating more consumer choice.
With regards to long-distance communication, they have proven to be cost-effective. Cellphones are being increasingly used for economic activities, enabling long-distance connections of production and sales, with many services including travel planning, financial advice, and music being available at lower costs. However, it's important to note that cell phone communication does not ensure complete confidentiality and it is certainly not free from policies and legal restrictions.
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Bountiful Water Services had net income for the month of October of $ 40 comma 400. Assets as of the beginning and end of the month totaled $ 346 comma 000, and $ 462 comma 000, respectively. Calculate Bountiful Water Services' ROA for the month of October
Answer:
The ROA for the month of October was 10%
Explanation:
Return over Assets: It represent the yield of the company base on the resources it has during the period.
Return Over Assets = Net income / average Assets
were average assets = ( beginning + ending ) / 2
Net income $40,400
Beginning Assets $346,000
Ending Assets $462,000
Average Assets $404,000
ROA = 40,400/404,000 = 10%
The law of supply declares which of the following?a. supply falls as price fallsb. supply increases as price fallsc. supply stays the same no matter how prices changed. supply falls as prices increase
The law of supply states that supply increases as the price falls.
Explanation:A market equilibrium occurs when the total quantity of goods and services demanded in an economy equals the total quantity supplied, resulting in stable economic conditions without inflation or recession. Thus, it is directly influenced. by both the forces of demand and supply.
The law of supply declares that supply increases as the price falls. This means that when the price of a good or service goes down, suppliers are willing to produce and sell more of it. Conversely, when the price goes up, suppliers are willing to produce and sell less of it. This relationship remains true as long as all other factors influencing supply, such as production costs and technology, remain constant.
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The correct answer to the student's question is 'a. supply falls as price falls,' as the law of supply states there is a direct relationship between price and quantity supplied.
The law of supply is a fundamental concept in economics that describes how producers respond to changes in price. According to the law of supply, if all other factors are held constant (ceteris paribus), an increase in the price of a good or service will lead to an increase in the quantity supplied of that good or service. Conversely, if the price of a good or service falls, the quantity supplied will also decrease. Therefore, the correct answer to the student's question is 'a. supply falls as price falls.'
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company $171,000. According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. Required: 1. According to the standards, what cost for plastic should have been incurred to make 35,000 helmets? How much greater or less is this than the cost that was incurred?
Answer: cost of plastic = $168,000
excess cost = $3000
Explanation: This can be done as follows :-
cost of plastic = (standard quantity per * (standard price * ( no. of helmet)
should been helmet) per kg of plastic)
incurred
= (0.6) * (8) * (35,000)
= $168,000
so the extra cost incurred is $3000 that is $171,000 - $168,000 .
The standard cost for plastic to produce 35,000 helmets should have been $168,000. The actual cost incurred was $171,000, which means $3,000 more was spent than the standard cost.
Explanation:According to the standard cost card, the standard cost for plastic to make 35,000 helmets would be calculated by multiplying the standard amount of plastic required for one helmet by the standard cost per kilogram and then by the total number of helmets. The standard amount of plastic per helmet is 0.6 kilograms, and the cost per kilogram is $8.
The calculation would be:
Standard cost = 0.6 kg/helmet × $8/kg × 35,000 helmets
Therefore, the standard cost = 21,000 kg × $8/kg = $168,000.
Now, comparing this to the actual cost incurred, which was $171,000, we can find the difference:
Difference = Actual cost - Standard cost = $171,000 - $168,000 = $3,000.
Therefore, the actual cost incurred was $3,000 more than the standard cost.
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The percent markup on a pickup truck is known to be 252% based on cost to the seller. If the seller paid $15,800 for one, then what would be the corresponding percent markup based on selling price? (round to the nearest tenth of a percent)
Answer:
The markup rate under selling price will be 71.59%
Explanation:
Using markup base on cost the formula is:
sales price = cost x markup percentage + cost
sales price = COST X 252% + COST = 2.52 COST + COST = 3.52 COST
SALES PRICE = 3.52 x COST
Knowing that price is 15,800 the cost is 15,800/3.52 = 4,488.64
Using selling price the formula is:
cost / ( 1 - markup) = Price
Replacing Price with the ammount given in the cost-base markup we got:
4,488.64/(1-markup) = 15,800
now we solve for the markup
1 - 4,488.64/15,800 = markup = 0.7159 = 71.59%
For each of the following transactions, what is the initial effect (increase or decrease) on M1? On M2? a. You sell a few shares of stock and put the proceeds into your savings account. b. You sell a few shares of stock and put the proceeds into your checking account. c. You transfer money from your savings account to your checking account. d. You discover $0.25 under the floor mat in your car and deposit it in your checking account. e. You discover $0.25 under the floor mat in your car and deposit it in your savings account. 2. There are three types of money: commodity money, commodity-backed money, and fiat money. Which type of money is used in each of the following situations? a. Bottles of rum were used to pay for goods in colonial Australia.
Answer: The description are as follows:
Explanation:
Monetary aggregates are as follows:
M1 = Currency with public + Check-able deposits + other deposits with RBI
M2 = M1 + Post office Savings A\c
(a) Selling shares of stocks doesn't affect any of the monetary aggregates, M1 or M2. But depositing the selling amount into savings account have an impact on M2. As savings account is a constituent of M2, which lead to increase in M2 and doesn't have any impact on M1.
(b) Selling shares of stocks doesn't affect any of the monetary aggregates, M1 or M2. But depositing the selling amount into checking account have an impact on both M1 and M2. As checking account is a constituent of M1 and M1 is a constituent of M2, so, this will increase both M1 and M2.
(c) If the amount is transferred from savings account to checking then this will increase the M1 and doesn't change M2. As checking account is a component of M1, so this will increase M1. M2 consists of both checking & savings account, so there is no impact on M2.
(d) Depositing cash into a checking account doesn't impact M1 or M2. Because there is just a transfer of funds from one component of M1 (that is currency with public) to another component of M1 (that is checking account).
(e) Depositing cash into a savings account doesn't have any impact on M2 but it decreases M1. Because there is a fall in the component of M1 (that is currency with public) which will decreases M1. There is no change in M2, as M2 consists of both M1 and Savings account.
Commodity Money is used in a situation where bottles of rum were used to pay for goods in colonial Australia. Commodity money is a money that is used for buying goods. Ideally, there is a trade of a commodity for a commodity.
How does nominal GDP differ from real GDP?a. nominal GDP includes intermediate goods and real GDP does notb. Nominal GDP is based on current prices and real GDP is based on constant pricesc. nominal GDP includes only durable goods and real GDP includes durable and nondurable goodsd. nominal GDP is calculated using current output and real GDP is calculated using constant goods
Answer:
The correct answer is option b.
Explanation:
The nominal GDP is a measure of economic growth. It shows the quantity of final goods produced in an economy at the current market prices. It is not inflation adjusted and thus includes fluctuations in price level.
The real GDP on the other hand is exclusive of inflation. IT is a inflation adjusted measure and measures the growth in economic output at constant prices.
So, the basic difference between the two is that nominal GDP is based on current prices, while real GDP is based on constant prices.
Nominal GDP is based on current market prices and can be influenced by changes in prices from one year to the next, whereas Real GDP is computed using constant prices from a particular base year, adjusting for the inflation impacts and providing a more precise measure of economic growth.
Explanation:In economics, the key difference between nominal GDP and real GDP lies in how each measurement adjusts for inflation and changes in the economy's price level over time. Nominal GDP is calculated at current market prices, including both the changes in production and changes in prices. This means if prices change from one year to the next, it can affect Nominal GDP.
On the other hand, Real GDP is calculated using constant prices from a specific base year. This adjusts for the effects of inflation, providing a more accurate measure of the actual growth of the economy. It reflects changes in the economy due to rises in output and not due to rises in prices. Therefore, the answer is option b: Nominal GDP is based on current prices and real GDP is based on constant prices.
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Parent Corporation purchased land from S1 Corporation for $220,000 on December 26, 20X8. This purchase followed a series of transactions between P-controlled subsidiaries. On February 15, 20X8, S3 Corporation purchased the land from a non affiliate for $160,000. It sold the land to S2 Company for $145,000 on October 19, 20X8, and S2 sold the land to S1 for $197,000 on November 27, 20X8. Parent has control of the following companies:
Subsidiary Level of Ownership 2008 Net IncomeS3 80% $100,000S2 70% $70,000S1 90% $95,000Parent reported income from its separate operations of $200,000 for 20X8.10-3. Based on the preceding information, at what amount should the land be reported in the consolidated balance sheet as of December 31, 20X8?A. $145,000B. $220,000C. $197,000D. $160,000
Answer:
$160,000
Explanation:
On February 15, 20X8, S3 Corporation purchased the land from a non affiliate for $160,000.
That was the last operation involving a third party.
The rest of the operation should not recognize any income or loss.
If not, a company can create artificial gains and losses by selling the asset at diferent prices.
It will sale higher on one company to avoid a net loss
and then sale cheaper on another to decrease the taxable income.
That's why it will be "lock" at 160,00 until an operation is made with a non-affiliate company
Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500. A. Upland has higher productivity and higher real GDP per person than Lowland. B. Upland has higher productivity but lower real GDP per person than Lowland. C. Upland has lower productivity but higher real GDP per person than Lowland. D. Upland has lower productivity and lower real GDP per person than Lowland.
Answer:
A.- Upland has higher productivity and higher real GDP per person than LowlandExplanation:
GDP per person: GDP / population
Productivity: GDP / hours worked
GDP per person Upland 342,000 / 15,000 = 22,8
Hours worked Upland = 9,000* 8 = 72,000
Productivity Upland = 342,000 / 72,000 = 4.75
GDP per person Lowland 171,500 / 8,000 = 21.4375
Hours worked Lowland 7,000* 7 = 49,000
Productivity Lowland = 171,500 / 49,000 = 3.5
Comparison
22.8 > 21.4375 & 4.75 > 3.5
This problem involves calculating productivity (output per hour) and real GDP per person (total output per person). It is found that Upland has higher productivity and higher real GDP per person than Lowland.
Explanation:In order to answer this question, we need to understand two economic concepts: productivity and real GDP per person. Productivity is the output produced per hour of work. In Upland, workers produce $342,000 in 8*9000 hours, which gives a productivity of about $4.75/hour. In Lowland, workers produce $171,500 in 7*7000 hours, leading to a productivity of about $3.50/hour. Hence, Upland has higher productivity.
Real GDP per person is the total output divided by the population. Upland has a real GDP per person of $342,000/15,000 which is approximately $22.8/person, whereas Lowland has a real GDP of $171,500/8,000 amounting to about $21.44/person. Therefore, Upland has a higher real GDP per person. This means the correct answer would be Upland has higher productivity and higher real GDP per person than Lowland.
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One of the advantages of starting your own business is
A. no hassles. B. profit. C. free time. D. lack of responsibility .8
Answer:
B. profit
Hope this helps
Explanation
One of the advantages of starting your own business is B profit
The advantages of having businessOne of the advantages of starting your own business is the potential to earn a profit. As a business owner, you have the opportunity to generate income and build wealth through the success of your venture.
Unlike being an employee, where your earnings are typically limited to a salary or wages, owning a business allows you to reap the financial rewards of your efforts and entrepreneurial activities.
However, it is important to note that starting and running a business also comes with various challenges, responsibilities, and risks. B profit is correct
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A firm is trying to decide which of two machines to install to reduce excessive costs of repairs due less reliable old machines. The new machines cost $1000 and have useful lives of five years, and no salvage value. Machine A can be expected to result in $300 savings annually. Machine B will provide cost savings of $400 the first year, but will decline $50 annually, making the second-year savings $350, the third year savings $300, and so forth. With interest at 7%, which machine should be purchased based on benefit-cost ratio?
Answer:
TMachine B will be the most benefical.
Explanation:
1,000 5 year savings for $300
1,000 5 year saving of 400 and decreasing 50 per year
interest rate 7%
TIR first machine: 15,2382%
TIR second machine: 17,4663%
The better option would be the second machine, because it produce a better yield and therefore it will have a better NPV when calculate a 7% rate
Nancy Henderson is a saleswoman for a manufacturer of small kitchen appliances. She does not directly solicit orders. Her primary duties involve promotional activities and introducing new products to her employer's indirect customers. She spends much of her time demonstrating appliances at various retail stores. Nancy would be classified as a(n):
Answer: sales and marketing person
Explanation: Nancy Henderson would be considered as a sales and marketing employee with detailed knowledge. She will be considered as a hardworking employee as she spends much of her time in demonstration of new products to prospective customers. She is focused on her job as she carefully follow orders which are not even direct from her manager. Her primary duties regarding promotion and introduction clarifies she is involved in sales and marketing activities.
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,000 units) $ 248,000 $ 31.00 Variable expenses 144,000 18.00 Contribution margin 104,000 $ 13.00 Fixed expenses 55,700 Net operating income $ 48,300 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units
Answer:
An increase in sale for 90 units, will increase the net income for 1$,170
Explanation:
We are not given with any information of additional cost or special price for this units, so we use the current values.
So we simply multiply the contribution per unit by the increase in sale.
Contribution Margin x Δ sales = Δ income
13 x 90 = 1,170
Each unit contributes with 13 additional income, there are 90 additional units
Total income added 1,170
n Crawford Company, the predetermined overhead rate is 80% of direct labor cost. During the month, $210,000 of factory labor costs are incurred, of which $180,000 is direct labor and $30,000 is indirect labor. Actual overhead incurred was $200,000. The amount of overhead debited to Work in Process Inventory should be:
Answer:
WIP 144,000 debit
Factory Overhead 144,000 credit
Explanation:
210,000 labor cost
30,000 indirect labor
180,000 direct labor
The rate is based on direct labor cost, so we use this figure.
180,000 x 80% = 144,000
Remember, the rate is calculate using a given cost driver. So it only this cost driver matters.
Final answer:
The amount of overhead debited to Work in Process Inventory for Crawford Company would be $144,000, based on the predetermined overhead rate of 80% of the $180,000 direct labor cost.
Explanation:
In the Crawford Company scenario, the predetermined overhead rate is calculated as 80% of the direct labor cost. Given that the direct labor cost for the month is $180,000, we would apply the overhead rate to this figure to determine how much overhead should be debited to Work in Process Inventory.
Calculating the overhead debited, we take 80% of $180,000, which is:
0.80 × $180,000 = $144,000Therefore, the amount of overhead debited to Work in Process Inventory would be $144,000.
It is important to note that this figure is based on the predetermined overhead rate and not on the actual overhead costs incurred by the company during the month.
Which of the following is a condition in which observation is an appropriate method for data collection? A. Anonymity is desiredB. Respondents are widely dispersedC. Attitudinal information is neededD. Natural setting is imperativeE. Extensive amount of information is needed
The correct option here is D) natural settings are imperative.
Observation method of collecting data(primary) is one of the most popular method used , where data is collected by an observer, who personally observes the person from whom data is being collected or collecting knowledge through observation of the phenomena. This method comes to be very handy when the natural settings are very crucial or plays an important role, as an observer might have to use different observation practices for different research approaches.
Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.50%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
The total amount of all common equity investors' investments in a firm, along with the total value of all common shares, plus retained earnings (RE) and additional paid-in capital (APIC), is known as common equity.
Explanation:
The stock of a company is neither an asset nor a liability. A common stock is a type of investment.
The cost of common equity at Pearson is 14%.Given:WACC =12.50%Tax rate = 25%Outstanding bibds = 12%Capital structure = 30:70[tex]\text{After-tax cost of debt}[/tex] [tex]= \text{yield to maturity}[/tex] × [tex](1-\text{tax rate})[/tex]
[tex]= 12(1-0.25)[/tex]
[tex]=9[/tex]%
[tex]\text{WACC} =[/tex] [tex]\text{Respective costs}[/tex] × [tex]\text{Respective weight}[/tex]
[tex]12.5 = (9) (0.3) + (0.7)[/tex] × [tex]\text{Cost of common equity}[/tex]
[tex]\text{Cost of common equity}[/tex] = [tex]\frac{(12.5-2.7)}{0.7}[/tex]
[tex]=14.00[/tex]%
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The cost of common equity for Pearson Motors is 14.67%.
To find the cost of common equity (rs), we can use the Weighted Average Cost of Capital (WACC) formula:
[tex]\[ WACC = \frac{D}{V} \times rd \times (1 - t) + \frac{E}{V} \times rs \][/tex]
We can plug these values into the WACC formula:
[tex]\[ 0.1250 = 0.30 \times 0.12 \times (1 - 0.25) + 0.70 \times rs \][/tex]
Solving for [tex]\( rs \):[/tex]
[tex]\[ 0.1250 = 0.30 \times 0.12 \times 0.75 + 0.70 \times rs \][/tex]
[tex]\[ rs = \frac{0.0980}{0.70} \][/tex]
[tex]\[ rs = 0.1400 \][/tex]
Converting to percentage form and rounding to two decimal places:
[tex]\[ rs = 14.00\% \][/tex]
However, since we are not rounding intermediate calculations, the precise value before rounding to two decimal places is:
[tex]\[ rs = 14.666666666667\% \][/tex]
Rounded to two decimal places, the cost of common equity is 14.67%.
Fields Cutlery, a manufacturer of gourmet knife sets, produced 20,000 sets and sold 23,000 units during the current year. Beginning inventory under absorption costing consisted of 3,000 units valued at $66,000 (Direct materials $12 per unit; Direct labor, $3 per unit; Variable Overhead, $2 per unit, and Fixed overhead, $5 per unit.) All manufacturing costs have remained constant over the 2-year period. At year-end, the company reported the following income statement using absorption costing: Sales (23,000 × $45) $ 1,035,000 Cost of goods sold (23,000 × $22) 506,000 Gross margin $ 529,000 Selling and administrative expenses 115,000 Net income $ 414,000 60% of total selling and administrative expenses are variable. Compute net income under variable costing.
Answer:
Net income under variable costing would be $429,000.
Explanation:
Under the variable costing method the most important point to understand here is that fixed cost of the previous period ( 3000 units in this case ) would not be carried over to current period. Which means that the fixed cost and cost of goods sold be less now and the profit will increase.
NET INCOME =
SALES = $ 1035,000 ( 23,000 X 45 )
(-) COST OF GOODS SOLD = ($ 391,000) ( 23000 X 17 )
( We have multiplied 23,000 units by 17 because now those fixed cost of $5 are not carried forward to this period)
GROSS CONTRIBUTION MARGIN = $1035,000 - $391,000
= $644,000
(-)VARIABLE SELLING AND ADMINISTRATION EXPENSES = ($69,000)
( $115,000 X 60% )
CONTRIBUTION MARGIN = $644,000 - $69,000
= $575,000
(LESS) FIXED COSTS = ($146,000) [ $100,000 + $46,000 ]
1) MANUFACTURING COST = 20,000 X $5
= $100,000
2) SELLING AND ADMINISTRATION EXPENSES = $115,000 X 40%
= $46,000
INCOME = $575,000 - $146,000
= $429,000
Under variable costing, only variable manufacturing costs are included in the product cost. The cost per unit is $17. After calculating the total variable cost, cost of ending inventory, cost of goods sold (COGS) under variable costing, and total variable selling and administrative costs, the net income under variable costing is calculated to be $414,000.
Explanation:Under variable costing, only variable manufacturing costs are included in the product cost. Thus, the cost per unit would be the sum of direct materials, direct labor, and variable overhead, which equals $12 + $3 + $2 = $17.
With the production of 20,000 sets, total variable cost would be 20,000 * $17 = $340,000.
End inventory consists of unsold units (i.e., produced units minus sold units), which in this case is 2000 sets (20,000 units - 18,000 units). So, the variable cost of ending inventory would be 2000 * $17 = $34,000. Now subtract the cost of ending inventory from the total variable cost to get the Cost of Goods Sold (COGS) under variable costing; $340,000 - $34,000 = $306,000.
Next, compute the Total Variable Selling and Administrative Costs like this: 60% * $115,000 = $69,000.
Now you can calculate Net Income under variable costing using the formula: Sales - (COGS under variable costing + Total Variable Selling & Administrative Expenses + Fixed costs). Which is: $1,035,000 - ($306,000 + $69,000 + $5*20,000) = $414,000.
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