Answer: magnifies spending-income changes into greater changes in aggregate demand, causing demand-pull inflation
Explanation:
The spending multiplier is the ratio of the change in GDP to the change in the autonomous expenditure.
The spending income multiplier magnifies spending-income changes into greater changes in aggregate demand, causing demand-pull inflation. In a situation whereby there's a reduction in the investment spending, there'll be a recession.
Use the information for Geiberger Corporation from BE21.12, except assume the collectibility of the rentals is not probable. Prepare any journal entries for Geiberger on December 31, 2019.
In BE21.12
Geiberger Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $120,000 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $40,800 payable each December 31, beginning December 31, 2019. An interest rate of 8% is implicit in the lease agreement. Collectibility of the rentals is probable. Prepare Geiberger’s December 31, 2019, journal entries.
Answer:
Date Account title Debit Credit
12/31/2019 Lease Receivable $175,934
Cost of Goods sold $120,000
Sales Revenue $175,934
Inventory $120,000
Date Account title Debit Credit
12/31/2019 Cash $40,800
Deposit Liability $40,800
The rental amount is constant and is made on the first day of the lease period so this is an annuity due.
As the collectability is probable, you need to find the present value of this lease:
= 40,800 * Present value of annuity due factor, 5 year, 8%
= 40,800 * 4.3121
= $175,933.68
= $175,934
Corporation has 73,000 shares of common stock outstanding. It declares a $2 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend
Answer: See explanation
Explanation:
The entries to record the declaration and payment of the cash dividend will be:
Novemeber 1:
Debit Dividend expenses $146000
Credit Dividend payable $146000
(To record dividend payable liability)
December 1:
Debit Dividend payable $146000
Credit Cash $146000
(To record payment of dividend)
Note: Cash dividend was calculated as:
= 73000 × $2
= $146000
Jamestown Supply is trying to decide whether to lease or buy some new equipment. The equipment costs $72,000, has a 4-year life, and will be worthless after the 4 years. The equipment will be replaced. The cost of borrowed funds is 9 percent and the tax rate is 34 percent. The equipment can be leased for $23,800 a year. What is the amount of the aftertax lease payment
Answer:
$15,708
Explanation:
Calculation to determine What is the amount of the aftertax lease payment
Using this formula
Aftertax lease payment=Leased equipment(1-Tax rate)
Let plug in the formula
Aftertax lease payment = $23,800 (1 - 0.34)
Aftertax lease payment=$23,800(.66)
Aftertax lease payment = $15,708
Therefore the amount of the aftertax lease payment is $15,708
Cox (1997) has argued that the concept of the supply chain is insufficient and that it can on
be fully understood when it is mapped with a parallel value chain.
Answer:
Due to lack of practical approaches and avoidance of normal or location-scale distributions factors, a real parallel value chain is required
Explanation:
Remaining part of Question
Justify
Solution
According to Cox there was a difference in making theoretical decision as it takes into account only normal or location-scale distributions which implies that less money is preferred over more. Several measures such as variance, standard deviation, expected or absolute values of deviation in financial engineering and financial risk management of a supply chain poses it to the downside risk and hence there is a need of parallel value chain
Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:
Answer: completed in the period
Explanation:
Job order costing system refers to the system when small batches of the products are ordered by the customers. It is useful in knowing the cost that's used in the manufacturing of each product.
It's usually used when different products are being produced and the cost for each individual job need to be calculated. Under a job-order costing system, the dollar amount transferred from Work in Process to the finished goods will be the sum of the costs that's charged to all jobs that are completed in the period.
- Nhà xuất khẩu ở thành phố Hải Phòng
- Công ty mua hàng ở HongKong
- Địa điểm đưa hàng đến là thành phố Dallas, Mỹ.
Hãy lựa chọn điều kiện thương mại Incoterms 2020 thích hợp cho các trường hợp sau:
a) Hàng hóa xuất khẩu là cà phê 10.000 tấn. Sau khi làm thủ tục xuất khẩu, người bán
thuê phương tiện vận tải, trả cước phí vận tải, mua bảo hiểm cho hàng hóa. Địa điểm
chuyển giao rủi ro về hàng hóa từ người bán sang người mua sau khi hàng được giao
lên phương tiện vận tải ở nước xuất khẩu (TP. Hải Phòng).
Beck Manufacturing reports the information below for 2017. Raw Materials Inventory Begin. Inv.12,900 Purchases48,000 Avail. for use60,900 DM used48,500 End. Inv.12,400 Work in Process Inventory Begin. Inv.17,400 DM used48,500 Direct labor30,700 Overhead63,000 Avail. for mfg.159,600 Cost of goods mfg145,200 End. Inv.14,400 Finished Goods Inventory Begin. Inv.16,600 Cost of goods mfg145,200 Avail. for sale161,800 Cost of Goods Sold143,200 End. Inv.18,600 Required: 1. Prepare the schedule of cost of goods manufactured for the year. 2. Compute cost of goods sold for the year.
Answer:
Beck Manufacturing
1. Schedule of Cost of Goods Manufactured for the Year:
Inventory of Work in Process $17,400
Direct materials used 48,500
Direct labor 30,700
Overhead 63,000
Cost of production $159,600
Less Ending Inventory of WIP 14,400
Cost of Manufactured Goods $145,200
2. Cost of goods sold for the year
Beginning inventory of finished goods $16,600
Cost of manufactured goods 145,200
Cost of goods available for sale $161,800
Less Ending inventory of finished goods 18,600
Cost of Goods Sold $143,200
Explanation:
a) Data and Calculations:
Raw Materials Inventory Begin. Inv. 12,900
Purchases 48,000
Avail. for use 60,900
DM used 48,500
End. Inv. 12,400
Work in Process Inventory
Begin. Inv. 17,400
DM used 48,500
Direct labor 30,700
Overhead 63,000
Avail. for mfg. 159,600
Cost of goods mfg 145,200
End. Inv. 14,400
Finished Goods Inventory
Begin. Inv. 16,600
Cost of goods mfg 145,200
Avail. for sale 161,800
Cost of Goods Sold 143,200
End. Inv. 18,600
The ________ of a firm is the amount of time required for a company to convert cash invested in its operations to cash received as a result of its operations. Group of answer choices
Answer:
The cash conversion cycle of a firm is the amount of time required for a company to convert cash invested in its operations to cash received as a result of its operations.
Janetta Corp. has an EBIT of $1,010,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 15 percent, and the corporate tax rate is 35 percent. The company also has a perpetual bond issue outstanding with a market value of $1.99 million.
Required:
What is the value of the company?
Answer:
$5,073,166.67
Explanation:
Calculation to determine the value of the company
Using this formula
VL= [EBIT(1 − TC) / R0] + TCB
Let plug in the formula
VL= [$1,010,000(1 − .35) / .15] + .35($1,990,000)
VL=[$1,010,000(0.65)/.15]+696,500
VL=($656,500/.15)+$696,500
VL=$4,376,666.67+$696,500
VL= $5,073,166.67
Therefore the value of the company is $5,073,166.67
Gabriele Enterprises has bonds on the market making annual payments, with twelve years to maturity, a par value of $1,000, and selling for $960. At this price, the bonds yield 6.5 percent. What must the coupon rate be on the bonds
Answer: 6.01%
Explanation:
To solve this question, we.will use the financial calculator. Based on the information given, then we will have:
FV = Future Value = $1,000.00
PV = Present Value = -$960.00
Bonds yield = 6.50
N = Number of years = 12
Therefore, CPT > PMT = Payment will be = $60.0973
Then, Coupon rate will be:
= Payment / Face Value
= 60.0973 / 1000
= 6.01%
Chester Corp. ended the year carrying $18,711,000 worth of inventory. Had they sold their entire inventory at their current prices, how much more revenue would it have brought to Chester Corp.
Answer:
Chester Corp.
Had they sold their entire inventory at their current prices, the revenue that it would have brought to Chester Corp. is:
= $18,711,000.
Explanation:
a) Data:
Ending inventory at year-end = $18,711,000 at current prices
b) The current price represents the market value of each item of inventory being held by Chester Corp at the end of the year. It is the price at which an item will be sold in the open market. This implies that the revenue that would have been generated from the sale of the inventory will be equal to the carrying value of the ending inventory.
You decide to make quality improvements in order to build brand esteem. brian's the site manager is in charge of general operations and employee management, first suggestion for achieving this goal is to fill upcoming staff openings with vet tech; they will cost at least 10% more than current caregivers, but would add strong, tangible evidence of quality. they could wear special name tags to inform customers that they are canine health care professionals.
Another option is to introduce one or more high quality, tangible new products. this approach is riskier beacuse it involves a large upfront investment in inventory and because you have limited experience in retail marketing. but a product development or product diversification strategy would have potential to boost revenues while reinforcing both brand esteem and brand recognition.
how should caninecare ehance its percieved quality?
Answer:
Canine Healthcare Company
The combination of the two approaches will skyrocket Canine's brand image more than a single strategy. However, the employment of the vet technicians seems like a logical short-term measure. It must be improved by a long-term approach, which involves a high-quality product development or diversification strategy.
Explanation:
The introduction of a high-quality, tangible new product is one strategy for improving the brand esteem in the eyes of customers. Product development or diversification strategy enhances brand image, reinforces brand esteem, and increases brand awareness and recognition. Increasing the number of vet technicians employed by Canine Healthcare is another strategy to show tangible evidence of enhanced brand image and quality.
ART Inc. has come out with a new and improved product. As a result, the firm projects an ROE of 25% a year until the end of year 3 and 15% a year afterwards, and it will maintain a plowback ratio of 20%. Its earnings in the coming year, i.e., E1, will be $3 per share. Investors expect a 12% rate of return on the stock. What would be its P0/E1 ratio?
Answer:
$11.43
Explanation:
In order to determine the price to earnings ratio, we need to know what the price (p0) would be
price can be determined using the constant growth dividend model
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
Sustainable growth rate is the rate of growth a company can afford in the long term
sustainable growth rate = plowback rate x ROE
0.25 x 0.2 = 0.05 = 5%
dividend = payout ratio x earnings
Payout ratio = 1 - retention rate
1 - 0.2 = 0.8
0.8 x 3 = $2.4
$2.4 / 0.12 - 0.05 = $34.29
P / E = $34.29 / $3 = $11.43
___________ are issued by administrative agencies to interpret and implement statutes enacted by a legislature
Answer:
"Regulations" is the correct answer.
Explanation:
Statutes of something like the legislative process shall be implemented or approved. Nevertheless, the statutes of elected officials or federal departments are generally understood as well as properly executed.Although most laws regulating conduct are adopted. Public administrators usually provide rules concerning the applicability as well as enforcement of statutory provisions.Amy and Ethan are married and file a joint return for 2020. Their taxable income is $192,100. The amount of their tax liability, rounded to the nearest dollar, is $ .
Answer:
$34,264
Explanation:
Given :
Taxable income = $192,100
The 2020 federal tax bracket for 2020 is given thus for married and filing jointly for return :
If taxable income falls within the bracket : ($171,051 to $326,600)
$29,211 plus 24% of the amount over $171,050
Hence, this applies to Ethan and Amy's taxable income of $192,100 ;
There taxable income is :
$29,211 + 24% of $(192,100 - 171,050)
$29,211 + (0.24 * $21,050)
$29,211 + $5,052
= $34,264
Select each concept with its best description by selecting its letter in the dropdowns. Focuses on quality throughout the production process. Flexible product designs can be modified to accommodate customer choices. Every manager and employee constantly looks for ways to improve company operations. Reports on financial, social, and environmental performance. Inventory is acquired or produced only as needed.Just-in-time manufacturing 2. Continuous improvements 3. Customer orientation 4. Total quality management 5. Triple bottom line
Answer:
Selection of Concept with its Best Description:
Concept Best Description
4. Total quality management Focuses on quality throughout the
production process
3. Customer orientation Flexible product designs can be modified
to accommodate customer choices.
2. Continuous improvements Every manager and employee constantly
looks for ways to improve company
operations.
5. Triple bottom line Reports on financial, social, and
environmental performance.
1. Just-in-time manufacturing Inventory is acquired or produced only
as needed.
Explanation:
1. Just-in-time manufacturing reduces manufacturing flow times and suppliers' and customers' response times. The purpose is to reduce waste and continuously improve operations.
2. Continuous improvement is a business approach that focuses on incremental or breakthrough improvement of processes, services, or products.
3. Customer orientation: An organization that has customer orientation focuses on the customer first and tries to satisfy the customer before meeting its own needs.
4. Total quality management: This is a management strategy whereby all members of the organization improve customer services, processes, products, and organizational culture in order to achieve long-term success.
5. Triple bottom line (TBL): To create greater business value, some organizations adopt the TBL performance evaluation framework, with a focus on social, environmental (or ecological) and financial performance.
You are the owner of a local organic food market in an urban area at the crossroads of four farming communities that supply fresh, organic foods. As the owner of the market, you are interested in growing the business. Customers in the area have been asking local vendors for more organic and locally sourced fresh food options. You decide to create a catering service for clients within 25 miles of the market to celebrate the market’s 10-year anniversary. You plan to start this catering business in 30 days to address the increasing market need for organic, fresh catering. Catering orders will be prepared and packaged at the organic food market and then driven to the customer’s location. Lunch orders will be delivered within 60 minutes of receiving the order. Special event catering orders will require one week to fulfill the order. The catering company has one van that will be used exclusively for catering services.
You have identified the following goals for this catering business:
• The catering business will need to be able to sell the same quality, organic foods that are sold in-store and supplied daily.
• The catering customers can be no farther than 25 miles from the store so that food can be delivered within an hour.
• The catering business should be profitable within one year.
• The cost of developing the catering business should not negatively impact the in-store retail operations budget, staffing, events, and farmer partnerships.
You plan to launch the catering business by providing a free catered lunch to the first 10 businesses that subscribe to the weekly lunch catering services. The catered lunch for each business will be for up to 30 people and will be held at a local conference center ballroom at noon on a day of the customer’s choosing. The budget for this launch of 10 catered lunches is $7,000. Two weeks before the launch, you are working with catering staff to calculate the costs of the launch to date, review tasks that need to be completed, and assess the overall impact of catering on in-store retail operations. You learn that the costs associated with the launch of the free catered lunches have already exceeded $7,700. Additionally, a local farmer that provides the fresh lettuce for lunch salads notifies you that the lettuce will not be available in time for the catered lunch. No other local farmers have lettuce available for purchase, and the only option is to use nonorganic lettuce in order to keep the menu as communicated to the 10 businesses subscribing to the weekly lunch catering services. A financial company representative wants to inquire about possibly financing your company for this project. The representative sends a request for information to you as listed in the requirements for this task.
Task 1: Project Management
A. Discuss how you would plan the catered lunch project by completing each of the following 5 distinct project management phases:
1. Project Initiation
a. (A1A) Describe the project and the need for the project. Include information from the provided scenario for support.
b. (A1B) Identify three relevant stakeholders and discuss how the project impacts each stakeholder.
c. (A1C) Discuss whether the project is feasible by addressing each of the three triple constraint components: scope, cost, and timeline.
2. Project Planning
a. (A2A) List three milestones for the project plan and provide a timeline for each milestone.
b. (A2B) Write a SMART goal for the project.
c. (A2C) Identify two different potential risks to this project’s success and describe how each risk could be managed.
3. Project Execution
a. (A3A) Discuss a way to address being over budget by 10 percent. Include information from the provided scenario for support.
b. (A3B) Discuss a way to address a scheduling conflict that could affect the timeline of the project. Include information from the provided scenario for support.
4. Project Monitoring and Control
a. (A4A). Discuss how scheduling conflicts and budget constraints could affect the scope of the project. Include information from the provided scenario for support.
5. Project Closure
a. (A5A) Discuss two ways to change how the project was planned, considering the timeline and budget conflicts that were encountered.
How does PESTLE help your strategic development team?
PESTLE helps in identification of business risks and threats an organization might face in the process of achieving the organizational goals.
What is PESTLE?PESTLE is a method of analysis in strategic management where there is focus on identifying the risks to the business even before the implementation of the activities.
Hence, the significance of PESTLE is aforementioned.
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Even if a stock split has no information content, and even if the dividend per share adjusted for the split is not increased, there can still be a real benefit (i.e., a higher value for shareholders) from such a split, but any such benefit is probably small. True False
Answer:
True
Explanation:
Stock split is used to increase number of shares floating in the market. In this strategy current shares are increased by issuing more shares to current shareholders. This increases the number of shares which each shareholders holds while value of total shares remains the same.
Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $6.80 per direct labor hour; the budgeted fixed manufacturing overhead is $72,000 per month, of which $20,000 is factory depreciation.
If the budgeted direct labor time for October is 5,000 hours, then the total budgeted manufacturing overhead for October is:
A) $52,000
B) $106,000
C) $54,000
D) $86,000
Answer:
B. $106,000
Explanation:
Total budgeted manufacturing overhead for October = Budgeted variable manufacturing overhead + Budgeted fixed manufacturing overhead
Total budgeted manufacturing overhead for October = ($6.8 × 5,000 hours) + $72,000
Total budgeted manufacturing overhead for October = $106,000
Tim wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $750. He has only $1,537 in his checking account, so he cannot afford to purchase both. After much thought, Tim buys the computer and writes a check for $1,299. Identify what role money plays in each of the following parts of the story. Hint: Select each role only once. Role of Money Medium of Exchange Unit of Account Store of Value Tim has $1,537 in his checking account. Tim writes a check for $1,299. Tim can easily determine that the price of the computer is more than the price of the vacation.
Answer:
Role of Money in Each Part of the Story:
1. Tim can easily determine that the price of the computer is more than the price of the vacation = Unit of Account
2. Tim has $1,537 in his checking account = Store of value
3. Tim writes a check for $1,299= Medium of Exchange
Explanation:
Money is countable and can be used to value exchanges and calculate profits and losses, income and expenses, and debts and wealth. It can also be stored currently, retrieved at a later date, and exchanged for value in the future without significant loss of value. Money facilitates transactions between parties.
At the Santa Barbara fishing hole, people come from all around to catch fish to sell at the fish market.The total number of fish caught is F= 10x−x2 where x is the number of fishermen. Suppose it costs each person $20 a day to fish and that fish sell for $10 each at the market. At the social optimum,how much would it hurt all the other fishermen (combined) if one more person started fishing?
(a) $30
(b) $20
(c) $10
(d) $40
The following describes production activities of Mercer Manufacturing for the year.
Actual direct materials used 18,000 lbs. at $4.15 per lb.
Actual direct labor used 5,555 hours for a total of $106,656
Actual units produced 30,060
Budgeted standards for each unit produced are 0.50 pound of direct material at $4.10 per pound and 10 minutes of direct labor at $20.20 per hour.
AH = Actual Hours
SH = Standard Hours
AR = Actual Rate
SR = Standard Rate
AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price
(1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit" answers to 2 decimal places.)
(2) Compute the direct labor rate and efficiency variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
Answer:
See below
Explanation:
1
Direct material price variance
= (Standard price - Actual price) × Actual quantity
= ($4.10 - $4.15) × 18,000
= -$0.05 × 18,000
= $900 Unfavorable
Direct material quantity variance
= (Standard quantity - Actual quantity) × Standard price
= (30,060 × 0.50 - 18,000) × $4.10
= (15,030 - 18,000) × $4.10
= -2,970 × $4.10
= 12,177 Unfavorable
2.
Direct labor rate variance
= (Standard rate - Actual rate) × Actual quantity
= ($20.2 - $106,656/5,555 hours) × 18,000
= ($20.2 - $19.2) × 5,555
= $1 × 5,555
= $5,555 Favourable
Direct labor efficiency variance
= (Standard quantity - Actual quantity) × Standard rate
= (10/60 × 30,060 - 5,555) × $20.2
= (5,010 - 5,555) × $20.2
= -545 × $20.2
= $11,009 Unfavourable
why is rent seeking bad for the economy?
Answer:
Explanation:
Rent seeking harms economic growth by reducing competition and innovation. It leads to the wasteful use of valuable resources and talents in unproductive activities and invariably redistributes resources from large unorganised populations to small organised groups.
At a firm's quarterly dividend meeting held on December 5, the directors declared a $1.50 per share cash dividend to be paid to the holders of record on Monday, January 1. Before the dividend was declared, the firm's accumulated retained earnings balance and cash balance were $1,280,000 and $30,000 respectively. The firm has 10,000 shares of common stock outstanding. On January 2, the cash, dividends payable, and retained earnings accounts had balances of ________.
Answer: $15,000, $0, and $1,265,000, respectively
Explanation:
Based on the information given in the question, the total amount of dividend will be:
= Outstanding shares × Dividend
= 10000 × $1.50
= $15000
Amount of cash balance will be:
= Ending cash balance - Dividend
= $30000 - $15000
= $15000
Dividend payable will be:
= $15000 - $15000
= $0
Retained earnings will be:
= $1280000 - $15000
= $1265000
is a field of study focused on understanding, explaining, and improving attitudes of individuals and groups in organizations. a. Organizational behavior b. Values in organizations c. Management d. Strategic human approach
Answer:
i think its a. Organizational behavior
Treasury Bonds are generally considered safer than Corporate bonds. Yet both types of fixed income instruments are subject to some sources of risk. Which sources of risk typically affect the price of domestic Corporate Bonds more than Treasury Bonds.
Answer: Liquidity risk and Default risk.
Explanation:
The sources of risk that affect the price of domestic Corporate Bonds more than Treasury Bonds are the liquidity risk and the default risk.
Treasury bonds are referred to as the government debt securities that typically have more than 20 years of maturity and earn periodic interest until they mature. Corporate bond is the bond that is issued by a corporation.
Corporate bonds typically offer list risk which is why they pay high yields this they've more default risk than the treasury bonds.
What would you estimate as to the cost of equity if a stock sells for $40, pays a $4.25 dividend, and is expected to grow at a constant rate of 5%
Answer:
15.63%
Explanation:
Calculation to determine cost of equity
Using this formula
P = D/(r-g)
Where,
P=40
D=4.25
g=0.05
r=?
Let plug in the formula
Cost of equity=40 = 4.25/(r-0.05)
Cost of equity=r = (4.25/40)+0.05
Cost of equity=r =0.1063+0.05
Cost of equity=r =0.1563*100
Cost of equity = 15.63%
Therefore cost of equity is 15.63%
In the Land of Milk and Honey, they produce two goods: Milk and Honey. In 2014, milk cost $2 a gallon and they produced 10 gallons. Honey cost $1 a pint and they produced 20 pints. In 2015, milk cost $2 a gallon and they produced 12 gallons. Honey cost $1 a pint and they produced 24 pints. In 2016, milk cost $2.50 a gallon and they produced 12 gallons. Honey cost $1.25 a pint and they produced 24 pints. The base year is 2015. Calculate real GDP in 2014.
a. $20.
b. $40.
c. $48.
d. $60.
e. $80.
f. $100.
g. $125.
Answer:
Land of Milk and Honey
The real GDP in 2014 is:
= b. $40.
Explanation:
a) Data and Calculations:
Milk Honey Total GDP
Cost per gallon in 2014 $2 $1
Quantity produced 10 20
Total production value $20 ($2*10) $20 ($1*20) $40 ($20 + $20)
Cost per gallon in 2015 $2 $1
Quantity produced 12 24
Total production value $24 ($2*12) $24 ($1*24) $48 ($24+ $24)
Cost per gallon in 2016 $2.50 $1.25
Quantity produced 12 24
Total production value $30 ($2.50*12) $30 ($1.25*24) $60 ($30 + $30)
The real GDP in 2014 is the calculated value of $40. Using 2015 as the base year, there is no inflation since the unit prices of milk and honey remained the same in both years.
The real GDP in 2014 would be $40.
What is GDP?The full form of GDP is gross domestic product. In simple words, it means the total of all value added produced in an economy.
The value added intends the value of goods and services that have been produced minus the value of the goods and services wanted to produce them.
Computation of the real GDP:From the given information, data and calculations are given in the image below:
Hence, The real GDP of the year 2014 would be $40. Taking 2015 as the base year, there is no inflation since the unit prices of milk and honey stay on the same in both years.
Therefore, option B is correct.
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During the 1990s, several airlines were on the brink of bankruptcy. These same airlines were giving away millions of dollars in free airline travel through their frequent-flyer programs. Do you think it would have been a good idea for these airlines to eliminate their frequent-flyer programs in order to earn higher profits?
Answer:
Assuming that the elimination of frequent-flyer programs would have enabled the airlines to earn higher profits and remain in business, then it would be a purely good idea for the airlines to eliminate their frequent-flyer programs.
The big question is, how much did the frequent-flyer programs cost the airlines? Would the cost-savings be sufficient to eliminate their bankruptcies? It is a known-fact that the airlines that create such programs always recover the program costs by charging higher fares.
Explanation:
The issue of airlines going bankruptcy does not seem to stem from customer-loyalty programs like the frequent-flyer programs. The root cause lies in operational and other costs that airline managements have not been able to control.
