Answer:
25%
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = percentage change in quantity supplied / percentage change in price
0.2 =5% / percentage change in price
percentage change in price = 5/0.2 = 25%
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
Supply is inelastic if a small change in price has little or no effect on quantity supplied. The absolute value of elasticity would be less than one
Supply is unit elastic if a small change in price has an equal and proportionate effect on quantity supplied.
The following Information is avallable for the year ended December 31: Beginning raw materials inventory Raw materials purchases Ending raw materials Inventory Office supplies expense $ 4100 5,600 4,600 2,600 The amount of raw materials used in production for the year is: __________ a) $5.100 b) $8,300 c) $5,700 d) $5,600. e) $9,700
Answer:
a. $5,100
Explanation:
Raw materials used in production = Beginning raw materials inventory + Raw materials purchases - Ending raw materials inventory
Raw materials used in production = $4100 + $5,600 - $4,600
Raw materials used in production = $5,100
So, the amount of raw materials used in production for the year is $5,100.
A firm has to choose between two technologies; both produce same output with one being labor intensive and other being capital intensive. The firm will use labor intensive technology when _________________.
Answer:
The firm will use labor intensive technology when the marginal product of using labor intensive technology is greater than the marginal produce of capital intensive technology
Explanation:
Marginal product is the change in total product when the amount of input used in changed by 1 unit
When choosing which form of technology to use, a firm would choose the technology that yields the highest marginal product
For example, imagine a firm can choose between using labour or capital in its production. When labour is increased frim 10 to 20 units, output increase from 100 to 500 units
when capital is increased frim 10 to 20 units, output increase from 100 to 200 units
Marginal product of labour = 500 - 100 / ( 20 - 10) = 40
Marginal product of capital = (200 - 100) / (20 - 10) = 20
Marginal product of labour is higher than the Marginal product of capital. the firm should be labour intensive
Daniel derives utility from only two goods, cake (QC) and donuts (Qd). The marginal utility that Daniel receives from cake (MUc) and donuts (MUd) are given as follows:
MUc = Qd MUd = Qc
Daniel has an income of $240 and the price of cake (Pc) and donuts (Pd) are both $3.
1) What is Daniel's budget constraint?
A) 240 = 3Pc + 3Pd.
B) 240 = 3Qc + 3Qd.
C) 240 = (Pc)(Qc).
D) 240 = (Qc)(Qd).
2) Holding Daniel's income and constant at $240 and $3 respectively, what is Daniel's demand curve for cake?
A. Qc = 120/Pc.
B. Qc = 240/(3 + Pc).
C. Qc = 240/Pc.
D. Qc = 240 - Pc.
E. None of the above.
Answer:
1) What is Daniel's budget constraint?
B) 240 = 3Qc + 3Qd.Total budget = 240
Each cake or donut costs 3 each
2) Holding Daniel's income and constant at $240 and $3 respectively, what is Daniel's demand curve for cake?
E. None of the above.240 = 3c + 3d
3c = 240 - 3d
c = 80 - d
Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,000 with terms 2/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventory as of June 30.
Answer: $3,940
Explanation:
Purchase from Diamond
The company received a discount of 2% because they paid within 10 days as per the terms of the sale.
Cost of inventory from Diamond:
= (Cost of goods - Returns) * (1 - 2%)
= (4,100 - 1,100) * 98%
= $2,940
Purchase from Club
Discount period expired so the full $1,000 is paid.
Total inventory cost:
= 2,940 + 1,000
= $3,940
According to Laurent, managers in Sweden, Denmark, and Great Britain believe that employees should ________. A. adopt a collectivist mindset B. participate in problem solving C. be "fed" all the answers by their superiors D. not be involved in the decision-making process
Answer:
B. participate in problem solving
Explanation:
André Laurent published the Cross Cultural Puzzle of International Human Resource Management.
This citation looks at how managers in different cultures interact with their employees based on the prevalent sociological tendencies of the country.
People from different cultures tend to perceive communication differently when they interact in the workplace.
He found that employees for Sweden, Denmark, and Great Britain like to participate in problem solving.
You are an economist studying the small country of Mardodus. As you look at the data, you see Mardodus has experienced an influx of updated technology to its manufacturing plants, service industry and the medical field in the last three years. This change boosted the growth of the country’s productivity by 75%, yet you see that wages have been very slow to respond to this growth. As you begin to analyze the natural unemployment rate for this time frame, what do you most likely discover?
Answer: Natural rate of unemployment will decrease because the productivity growth in the short term has passed up wage growth.
Explanation:
The natural unemployment rate simply means the lowest unemployment rate where the inflation in the economy is stable.
Based on the information given in the question, if the natural unemployment rate for this time frame.is analyzed, the natural rate of unemployment will reduce due to the fact that the productivity growth in the short term has passed up wage growth.
You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. If the yield to maturity on this bond is 4.9 percent, what is the dollar price of the bond
Answer:
$18,763.38
Explanation:
Calculation to determine the dollar price of the bond
Using this formula
Value of bond=Par value/(1+YTM/2)^(2*time period)
Let plug in the formula
Value of bond=10,000/(1+0.049/2)^(2*13)
Value of bond=10,000/(1.0245)^26
Value of bond=10,000/1.8763378
Value of bond=$18,763.38(Approx).
Therefore the dollar price of the bond is $18,763.38
South World has a total debt of $10 million and an annual GDP of $5 million. It currently pays 4% interest on its debt every year. What percentage of annual GDP does interest on the debt represent
Answer: 8.0%
Explanation:
The debt interest it pays is:
= 4% * 10,000,000
= $400,000
Its percentage of annual GDP is:
= 400,000 / 5,000,000 * 100%
= 8.0%
Refer to Exhibit 4-3. Suppose that the government imposes a price ceiling at a price of $12. The result would be a ________________ of _____________ units of good Z.
Answer:
The correct option is c. shortage, 70. That is, the result would be a shortage of 70 units of good Z.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Exhibit 4-3
PRICE OF GOOD Z:
$10 // QD: 300 // QS: 160
$12 // QD: 250 // QS: 180
$14 // QD: 200 // QS: 200
$16 // QD: 150 // QS: 220
Refer to Exhibit 4-3. Suppose that the government imposes a price ceiling at a price of $12. The result would be a ________________ of _____________ units of good Z.
a. surplus, 70
b. surplus, 20
c. shortage, 70
d. shortage, 20
The explanation of the answers is now provided as follows:
A price ceiling can be described as a maximum price set by the government whereby it is illegal to sell the good above it. A price ceiling will cause a product shortage if it is set below the product's equilibrium price.
Equilibrium price is the price at which quantity demanded (QD) is equal to the quantity supplied (QS).
From Exhibit 4-3, QD is equal to QS is equal to 200 at the price of $14. This implies that the ceiling price of $12 imposed by the government is below the equilibrium price.
Based Exhibit 4-3. the units of shortage of goods Z at $12 can be calculated as follows:
Units of shortage of goods Z at the price of $12 = QD at the price of $12 – QS at the price of $12 = 250 - 180 = 70 units
Therefore, the correct option is c. shortage, 70. That is, the result would be a shortage of 70 units of good Z.
Calculate the annual coupon payment if the semi-annual coupon paying bond price is $920, the yield for the bond is 6%, the bond's face value is $1,000 and matures in 9 years.
The annual coupon payment is $48.40.
Annual coupon paymentYield = 6%
Rate = Yield/2 = 6%/2 = 3%
YTM = 9
Nper = YTM×2 = 9×2 = 18
Face value = $1,000
Price(PV) = $920
Monthly payment = PMT(0.03, 18, -920, 1000)
Monthly payment = $24.1833
Coupon rate = (PMT/Face value) ×2
Coupon rate = (24.1833/1000) × 2
Coupon rate = 0.0241833 × 2
Coupon rate = 0.0483666×100
Coupon rate = 4.84%
Annual coupon payment = Face value ×Coupon rate
Annual coupon payment = $1000 ×4.84%
Annual coupon payment = $48.40
Inconclusion the annual coupon payment is $48.40.
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An American worker is hired by a German consulting firm operating in New York. They pay him $50,000 in wages. The new worker's contribution is to bring a new client to the firm that buys consulting services for $70,000 . Assume no other new cost was involved in this other than the wage. The client is a Mexican firm located in Mexico City. Which of the following is correct
a. National income increases by $50,000 and factor payments to abroad increase by $20,000, so US GDP increases by $70,000
b. Consumption increases by $70,000 and imports increase by $70,000,50 US GDP remains unchanged
c. Consumption increases by $50,000 and exports increase by $20,000, so US GDP increases by $70,000
d. National income increases by $50,000 and factor payments from abroad increase by $50,000, so US GDP remains unchanged
Answer:
a. National income increases by $50,000 and factor payments to abroad increase by $20,000, so US GDP increases by $70,000
Explanation:
The German firm hired an American worker and paid him $50,000. That means that American national income will increase by $50,000.
Since the company is German, that would increase factor payments ot abroad by the difference = $70,000 - $50,000 = $20,000.
Total GDP increases by the amount of $50,000 + $20,000 = $70,000
Matching Items Reported to Cash Flow Statement Categories (Indirect Method).
Adidas AG is a global company that designs and markets sports and fitness products, including footwear, apparel, and accessories. Some of the items included in its recent annual consolidated statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the Operating Activities, Investing Activities, or Financing Activities section of the statement or use Not Applicable if the item does not appear on the statement. (Note: This is the exact wording used on the actual statement).
1. Dividends paid.
2. Repayments of short-term borrowings.
3. Depreciation and amortization.
4. Proceeds from reissuance of treasury shares to employees.
5. [Change in] Accounts payable and other liabilities.
6. Cash collections from customers.
7. Purchase of investments.
8. Net income.
9. Purchase of property, plant, and equipment.
10. Increase in receivables and other assets.
Answer:
1. Dividends paid.
Classification: Financing Activity
2. Repayments of short-term borrowings.
Classification: Financing Activity
3. Depreciation and amortization.
Classification: Operating Activities
4. Proceeds from reissuance of treasury shares to employees.
Classification: Financing Activity
5. Change in Accounts payable and other liabilities.
Classification: Operating Activities
6. Cash collections from customers.
Classification: Not Applicable
7. Purchase of investments.
Classification: Financing Activity
8. Net income.
Classification: Operating Activities
9. Purchase of property, plant, and equipment.
Classification: Investing Activities
10. Increase in receivables and other assets.
Classification: Operating Activities
Prepare journal entries for each transaction and identify the financial statement impact of each entry.
The financial statements are automatically generated based on the journal entries recorded.
Assume Adams Services began the year with the following balances: Cash, $41,000;
Accounts receivable, $11,200; and Common stock, $52,200.
Jan. 1 Leslie Adams invested $21,200 cash in the company in exchange for common stock.
Jan. 2 The company provided services to a client and immediately received $4,500 cash.
Jan. 3 The company received $11,200 cash from a client in payment for services to be provided next year.
Jan. 4 The company received $5,900 cash from a client in partial payment of accounts receivable.
Jan. 5 The company borrowed $11,000 cash from the bank by signing a note payable.
Answer:
Cash (Dr.) $21,200
Common Stock (Cr.) $21,200
Cash (Dr.) $4,500
Services to client (Cr.) $4,500
Cash (Dr.) $11,200
Unearned Revenue (Cr.) $11,200
Cash (Dr.) $5,900
Accounts Receivable (Cr.) $5,900
Cash (Dr.) $11,000
Notes Payable (Cr.) $11,000
Explanation:
Adams services may record these transactions as journal entries. The transactions may have some changes after they are recorded then adjusting entries will be prepared to reflect the correct effect of transaction on business activities.
arget costing can be applied to components of products as well as the new products as a whole. B. Implementing target costing requires detailed information on the cost of alternative activities. C. A primary advantage of target costing is that it requires little or no coordination among processes. D. Short product life cycles increase the importance of target costing.
Answer:
Target costing can be applied to components of products as well as the new products as a whole.
Explanation:
Target cost is the maximum cost to develop, produce, and deliver the product or service and earn the desired profit
Target Cost = Selling Price – Profit Margin
Features of target cost
1. The price at which the good and service is sold is determined by market conditions
2. Cost reduction is the difference between current cost and target cost
Advantages if target cost
1. It ensures that a product being created is profitable
2. Due to the fact that the product is developed in line with consumers wants, it increases the sales of the product
Disadvantage of target costing
1. If cost estimate is wrong, it can lead to failure of the venture
Question I - Debbie Debtor borrowed $1,000.00 from First Big Bank. Debbie Debtor agreed to repay the $1,000.00 over eight months plus interest. Debbie Debtor loses her job and stops making payments to First Big Bank after two months. What is the source of law that governs the subsequent remedies that may be available to First Big Bank
Answer:
First Big Bank can file a lawsuit.
Explanation:
Debbie took the loan when he has the job and agreed to refund the loan or borrowed money. Unfortunate circumstances lead to the loss of his job resulting in the stoppage of loan repayment. Since Debbie did not make any crime so it will not come under criminal law but the bank can file a lawsuit against Debbie and he will be liable to pay a fine and penalties.
South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $55,000 in 2015, $60,000 in 2016, and $65,000 in 2017. South Carolina's pretax financial income for 2014 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2014.Instructions(a) Compute taxable income and income taxes payable for 2014.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.(c) Prepare the income tax expense section of the income statement for 2014, beginning with the line ?Income before income taxes.?
Answer:
Following are the solution to the given question:
Explanation:
For point a:
Calculating taxable income tax payable in accordance with the following figures:
[tex]Particulars \ \ \ \ \ \ \ \ \ 2017 \ \ \ \ \ \ \ \ \ 2016 \ \ \ \ \ \ \ \ \ 2015 \ \ \ \ \ \ \ \ \ 2014\\\\\text{Pre- tax financial income} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 300,000\\\\\text{Future taxable amounts}\\\\2014 =-(65 000+60 000+55,000) \ \ \ \ \ 65,000 \ \ \ \ \ \ 60,000 \ \ \ \ \ \ \ 55,000 \ \ \ \ \ -180,000\\\\\text{Taxable income for 2014} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 120,000[/tex][tex]\text{Income tax payable} \\\\ (120,000 \times 30 \%) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\\[/tex]
For point b:
Following are the journal:
[tex]Date \ \ \ \ \ \ \text{Account Titles and Explanation} \ \ \ \ \ \ \ \ \ \ \ Dr \ \ \ \ \ \ \ \ \ \ \ Cr\\\\[/tex]
[tex]\text{Income tax expense} \ (36,000 + 90,000)\ \ \ \ \ \ 90,000 \\\\[/tex]
[tex]\text{Income tax payable} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\[/tex]
Deferred tax liability [tex]\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 54,000\\\\[/tex]
[tex]\text{(To record the income tax expense)}\\\\[/tex]
Calculating the deferred tax liability:
[tex]Particulars \ \ \ \ \ \ \ \ \ \ \ \ 2017 \ \ \ \ \ \ \ \ \ \ \ 2016 \ \ \ \ \ \ \ \ \ \ \ 2015 \ \ \ \ \ \ \ \ \ \ \ \ Total\\\\\text{Future taxable anlounts} \ \ \ \ \ \ \ 65,00 \ \ \ \ \ \ \ 60,000 \ \ \ \ \ \ \ 55,000 \ \ \ \ \ \ \ 180,000\\\\\text{Tax rate} \ \ \ \ \ \ \ \ \ 30\% \ \ \ \ \ \ \ \ \ \ 30\% \ \ \ \ \ \ \ \ \ \ 30\% \\\\[/tex]
Deferred tax liability [tex]\ \ \ \ \ \ \ \ \ 192500 \ \ \ \ \ \ \ \ \ \ 18,000 \ \ \ \ \ \ \ \ \ 16,500 \ \ \ \ \ \ \ \ \ \ 54,000[/tex]
For point c:
Following are the preparation of the income tax section for the income statement session 2014:
[tex]\text{Income before income taxes} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 300,000\\\\ \text{Income tax expense} \\\\[/tex]
[tex]Current \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\\[/tex]
Defensed [tex]\ 54,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 90,000\\\\[/tex]
[tex]Net\ \ income \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 210,000[/tex]
A farmer sells a bushel of corn to the supermarket for $12. The supermarket then sells the corn to customers for $25. What is the total contribution to GDP?
Answer:
$ 25
Explanation:
As per the description, the exact amount that is being contributed from the corn bushel to the Gross Domestic Product would be $ 25. The price at which the farmer sold it to the supermarket would not be included in the GDP because it would be considered as an intermediary good because the good purchased for the resale purpose is not included in GDP as it leads to double-counting. Thus, only the price of the final good i.e. $ 25 would be included in GDP as it will now be used for final consumption by the customers.
Both Eden's company and SAS have cultures that reflect their environments. _______ theory explains this by saying that effective organizations have cultures that are correctly aligned with their external environments.
Answer: Contingent theory
Explanation:
The Contingent theory of management believes that management cannot possibly know the best way to manage the activities of a company because things could go wrong at any time.
The theory goes further to suggest that the best bet that a company has is to try to align its internet environment to its external environment. In other words, it should align its corporate culture with the culture of the environment that it is based in.
Imagine that I start a bar in Clemson. Each year I order $200,000 worth of food, beer and drink which is turned around and sold to customers. I also hire part-time staff, where the combined annual wages add up to $100,000. I also pay rent on my building which is $100,000 a year. Assume these are my only expenses. My bar is unusually successful and I generate $1,000,000 in revenue. How much does my bar contribute to GDP? (Hint: Think about using the national spending approach or the factor income approach. One is easier to use than the other)
a) $1,000,000
b) $1,300,000
c) $1,400,000
d) $1,200,000
Answer:
The correct option is a) $1,000,000.
Explanation:
Under factor income approach contribution to gross domestic product (GDP) is calculated by adding up wages, rent, interest, and profit.
Using the factor factor income approach, contribution to GDP can be determined as follows:
Purchases = $200,000
Wages = $100,000
Rent on building = $100,000
Expenses = Wages + Rent on building = $100,000 + $100,000 = $200,000
Revenue = $1,000,000
Profit = Revenue - Purchases - Expenses = $1,000,000 - $200,000 - $200,000 = $600,000
Contribution to GDP = Wages + Rent on building + Profit = $200,000 + $200,000 + $600,000 = $1,000,000
This implies that your bar contributes $1,000,000 to GDP. Therefore, the correct option is a) $1,000,000.
A firm's total output is 1500 units. The same firm's average variable cost is equal to $5 while its average fixed cost is equal to $15. How much is the firm's total cost of production
Answer:
$30,000
Explanation:
Total cost of production = Total unit cost x units produced
hence,
Total cost of production = ($5 + $15) x 1500 units
= $30,000
The firm's total cost of production is $30,000
A 1996 bill reforming the federal government's antipoverty programs limited many welfare recipients to only two years of benefits. This change gives people the incentives to find a job ________ quickly than if welfare benefits lasted forever. The loss of benefits after two years will result in the distribution of income becoming _______ equal.
Answer:
more
less
more
Explanation:
The limit on unemployment benefits would increase the incentives to find a job because after the 2 years period is over, those without jobs would get no benefits from the government.
Income distribution becomes more unequal because those who don't find jobs after the 2 year period would have no income
The economy would become more efficient because there would be an increase in the number of people employed as a result of the policy and output would increase.
Hope This Helps :)
Colette Value Inc., a game development firm, has received a new project that involves the development of a mobile game. The project must be completed within a year. The company, however, is facing a shortage of mobile game developers and must hire 50 developers to ensure the timely completion of the project. As a result, the firm decides to take part in a job-related event that would give the firm access to a large pool of applicants at the same time. Which of the following recruitment options has Colette Value decided to use to find a large number of suitable candidates in a short time?
a. Alumni networks.
b. Job fairs.
c. Job posting systems.
d. Employee referrals.
Answer:
b. Job fairs.
Explanation:
Job fairs is the quickest method to bring the right talent as at the job fairs the people who wants to look for the job presently and on urgent basis so it will be considered. Also it considered the young and the latest talent plus the right candidates that hired in some days. Due to this, it saves the cost also received the best talent
So as per the given situation, the option b is correct
The DEF partnership reported net income of $130,000 for the year ended December 31, 20X8. According to the partnership agreement, partnership profits and losses are to be distributed as follows in the following order:
D Â Â Â Â Â Â Â Â Â Â Â Â EÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â F
Salaries               $25,000            $20,000        $15,000
Bonus on net income        10%                       -----                -----
Remainder            60%            30%         10%
Required:
How should partnership net income for 2008 be allocated to D, E, and F?
Answer:
The DEF Partnership
Allocation of Partnership Net Income for 2008:
D E F Total
Net income $130,000
Salaries $25,000 $20,000 $15,000 (60,000)
Bonus on net income 13,000 ----- ----- (13,000)
Remainder 34,200 17,100 5,700 (57,000)
Total allocation $72,200 $37,100 $20,700 $130,000
Explanation:
a) Data and Calculations:
Net income for the year ended December 31, 2008 = $130,000
Order of distribution of partnership profits and losses:
D E F
Salaries $25,000 $20,000 $15,000
Bonus on net income 10% ----- -----
Remainder 60% 30% 10%
Bonus on net income = $13,000 ($130,000 * 10%)
Remainder after salaries and bonus = $57,000 ($130,000 - $73,000)
D = $34,200 ($57,000 * 60%)
E = $17,100 ($57,000 * 30%)
F = $5,700 ($57,000 * 10%)
Bailey Company incurred the following costs in manufacturing desk calculators: Direct materials $18 Indirect materials (variable) 3 Direct labor 9 Indirect labor (variable) 7 Other variable factory overhead 13 Fixed factory overhead 34 Variable selling expenses 26 Fixed selling expenses 12 During the period, the company produced and sold 2,000 units. What is the inventory cost per unit using absorption costing
Answer:
$84
Explanation:
Calculation to determine the inventory cost per unit using absorption costing
Direct materials $18
Indirect materials (variable) $3
Direct labor $9
Indirect labor (variable) $7
Other variable factory overhead $13
Fixed factory overhead $34
Inventory cost per unit $84
($18 + $3 + $9 + $7 + $13 + $34 = $84
Therefore the inventory cost per unit using absorption costing is $84
Assume that a hypothetical economy with an MPC of 0.75 is experiencing severe recession. Instructions: In part a, round your answers to 2 decimal places. Enter positive numbers. In part b, enter your answers as whole numbers. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion? $ billion. How large a tax cut would be needed to achieve the same increase in aggregate demand? $ billion. b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt (because it maintains a balanced budget, G = T).
Answer:
a-1. Amount of rise in government expenditure required = $6.25 billion
a-2. Tax multiplier = -3
b. The combination is as follows:
Increase in spending = $25 billion
increase in taxes = $25 billion
Explanation:
a-1. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion? $ billion.
Spending multiplier = 1 / (1 - MPC) = 1 / (1 - 0.75) = 4
Amount of rise in government expenditure required = Change in aggregate demand / Spending multiplier = $25 / 4 = $6.25 billion
a-2. How large a tax cut would be needed to achieve the same increase in aggregate demand? $ billion.
Tax multiplier = - MPC / (1 - MPC) = - 0.75 / (1 - 0.75) = -3
Amount of tax cut required = Change in aggregate demand / Tax multiplier = $25 / (-3) = $8.33 billion
b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt (because it maintains a balanced budget, G = T).
The amount is the amount of the balanced budget, which has a multiplier of one. This indicates that spending and taxes need be increased by $25 billion each to boost GDP by $125 billion. Therefore, the combination is as follows:
Increase in spending = $25 billion
increase in taxes = $25 billion
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 5 years ago for $9,639,708 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3,650,288. An engineer was hired to study the land at a cost of $810,081, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $6,880,840 million to build, and the site requires $529,656 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Answer:
the proper cash flow amount is $11,060,784
Explanation:
The computation of the proper cash flow amount is shown below:
= land value + plant value + grading value
= $3,650,288 + 6,880,840 + $529,656
= $11,060,784
Hence, the proper cash flow amount is $11,060,784
So the same should be considered and relevant
A notepad company is looking to repackage and reposition its small notepads. It is thinking of coloring the pages yellow, resizing them into the shape of a stick of butter, and selling them through novelty stores. The company needs this repositioning of its product to succeed. In order for the company to avoid common pitfalls, which areas it should cover in the repositioning process?
Answer: See explanation
Explanation:
Tou didn't give the options to your question but based on further research online, the correct options are given below:
• reinforce the “back to basics” version of the product to retain what customers care about most
• create clean and understandable positioning between its old and the new product positions
• do sufficient research with market perceptions or target segments.
Outsourcing of jobs from large corporations to domestic subcontractors has been one reason job have been become more insecure in the U.S. recently.
a. true
b. false
Answer:
a. true
Explanation:
In Business management, outsourcing can be defined as a process which involves an agreement between two companies that allows for the provision of services or job functions by another.
When a company is outsourced, it engages the service of another company (third-party) to perform some of its duties rather than the use of an in-house department or employees to handle them. The outsourcing firm is saddled with the responsibility of physically distributing the goods or services of the outsourced company.
Hence, outsourcing simply means the use of supply chain partners of a large corporation to provide products or services for the end users or consumers.
In the United States of America, outsourcing of jobs and services from large corporations to domestic subcontractors (outsourcing companies) is one of the main reason job have become more insecure recently.
Since its establishment on January 1, 1999, the euro has more than tripled in appreciation against the U.S. dollar, reaffirming the ability of the European Central Bank to manage monetary policy within the euro zone.
A. True
B. False
Answer:
B. False
Explanation:
The exchange rate between the euro and the dollar was 1.1719 dollars per 1 euro. Currently, the exchange rate is 1.18 dollars per euro. The euro has appreciated slightly against the US dollar, but it is a small percentage. It is not even close to multiplying its value by 3.
Alternative Financing Plans
Owen Co. is considering the following alternative financing plans:
Plan 1 Plan 2
Issue 7% bonds (at face value) $5,000,000 $3,400,000
Issue preferred $1 stock, $20 par — 3,600,000
Issue common stock, $25 par 5,000,000 3,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming income before bond interest and income tax is $750,000.
Enter answers in dollars and cents, rounding to the nearest whole cent.
Plan 1 $_____________________ Earnings per share on common stock
Plan 2 $_______________________ Earnings per share on common stock
Answer:
Owen Co.
Alternative Financing Plans
Plan 1 Plan 2
Earnings per share $1.20 $1.06
Explanation:
a) Data and Calculations:
Plan 1 Plan 2
Issue 7% bonds (at face value) $5,000,000 $3,400,000
Issue preferred $1 stock, $20 par — 3,600,000
Issue common stock, $25 par 5,000,000 3,000,000
Income tax is estimated at 40% of income.
EBIT = $750,000 $750,000
Interest on bonds 350,000 238,000
Income before taxes $400,000 $512,000
Income tax 160,000 204,800
Net income $240,000 $307,200
Preferred dividend - $180,000
Earnings available to common
stockholders $240,000 $127,200
Outstanding shares 200,000 120,000
Earnings per share $1.20 $1.06
$1.20 ($240,000/200,000) $1.06 ($127,200/120,000)
Preferred stock dividend rate = 5% ($1/$20 * 100)
Preferred stock dividend = $180,000 ($3,600,000/$20 * $1)
or 5% of $3,600,000
