Bruno's Lunch Counter is expanding and expects operating cash flows of $28,500 a year for 6 years as a result. This expansion requires $95,800 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $7,000 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 10 percent

Answers

Answer 1

Answer:

$25,276

Explanation:

The computation of the net present value is shown below:

The Present value of inflows is

= Cash inflow × Present value of discounting factor (rate% , number of years)

= $28,500 ÷ 1.1 + $28,500 ÷ 1.1^2 + $285,00 ÷ 1.1^3 + $28,500 ÷ 1.1^4 + $28,500 ÷ 1.1^5 + $28,500 ÷ 1.1^6 + $7,000 ÷ 1.1^6

= $128,076.25

And,

Present value of outflows is

= $95,800 + $7,000

= $102,800

So

As we know that

NPV = Present value of inflows - Present value of outflows

= $128,076.25 - $102,800

= $25,276


Related Questions

The journal entry to record the use of utilities in a factory could include which two of the following: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Debit to Factory Overhead
Credit to Factory Overhead
Debit to Factory Utilities Payable
Credit to Factory Utilities Payable
Credit to Raw Materials
Credit to Factory Wages Payable

Answers

Answer:

Debit to Factory Overhead

Credit to Factory Utilities Payable

Explanation:

The journal entry to record the use of utilities in a factory is as follows:

Factory overhead Dr XXXXX

         To Factory utilities payable XXXXX

(Being the utilities usage is recorded)

Here the factory overhead is debited as it increased the expenses and credited the factory utilities payable as it also increased the liabilities

So, the above represent the answer

Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $140,000, and it estimates that 6% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $2,380 credit balance before the adjustment. (b) a $700 debit balance before the adjustment.

Answers

Answer:

estimated bad debt expense = $140,000 x 6% = $8,400

a) balance of allowance for doubtful accounts = $2,380

$8,400 - $2,380 = $6,020

Dr Bad debt expense 6,020

    Cr Allowance for doubtful accounts 6,020

b) balance of allowance for doubtful accounts = ($700)

$8,400 + $700 = $7,100

Dr Bad debt expense 7,100

    Cr Allowance for doubtful accounts 7,100

Allowance for doubtful accounts is a contra asset account with a normal credit balance.

Assume that Clark Electronics has a monopoly in the production and sale of a new device for detecting and destroying a computer virus. Clark Electronics currently incurs short-run losses, but it continues to operate.
a. What must be true for Clark to continue to operate in the short run?
b. Draw a correctly labeled graph, and show each of the following for Clark.
i. The profit-maximizing price and output
ii. Area of loss
C. Assume Clark is maximizing profit. What will happen to its total revenue if Clark raises its price? Explain.
d. If demand for the new device increases, explain what will happen to each of the following in the short run.
i. Profit-maximizing output
ii. Total cost

Answers

Solution :

c. MC=MR is the profit maximizing equilibrium point. The price rise beyond that is likely to raise the total revenue. But the total cost might increase equally or more then that to nullify or decrease the profit.

d. (i). The demand increase implies that the AR (demand) curve shifts rightwards. This will increase the equilibrium price.

(ii). Change in demand does not affect the total cost.

a. Monopoly might continue to produce in short earn even if its AR < AC. It continues to do so until shut down point. It refers that production continued until average revenue (AR) is greater than equal to the average variable cost (AVC). The monopoly is a market with a single seller.

This market's average revenue (AR) demand curve is above its marginal curve . The curves are downward sloping, illustrating price demand inverse relationship.

Equilibrium quantity : when the marginal revenue = marginal cost

Equilibrium price : equilibrium quantity corresponding price at AR (demand ) curve.

 

what are some requirements for Postal Service Mail Carriers?( Check all that apply. )


A.) a valid driver license

B.) a civil service exam

C.) a physical exam

D.) a passport

E.) a vocabulary exam

F.) an experience living in at least two states

G.) an age of at least eighteen years

Answers

Answer:

a.b,c,g

Explanation:

The requirements to work in United States Postal Service department is: a valid driver license, a civil service exam, a physical exam, and an age of at least eighteen years. Thus, the correct options are a, b, c, and f.

What is United States Postal Service?

The United States Postal Service (USPS), often known as the Post Office, U.S. Mail, or Postal Service, is a separate executive branch agency that is in charge of delivering postal service across the United States, including its associated states and insular territories.

The person who is interested to work in United States Postal Service department must have a valid driver's license, cleared the civil service exam and a physical exam, and is at least eighteen years of age.

Therefore, the options that apply to the requirements for Postal Service Mail Carriers are A, B, C, and G.

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Bronco High School issues $10 million in bonds on January 1, 2021 that pay interest semi-annually on June 30 and December 31. A portion of the bond amortization schedule appears below: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 01/01/2021 $ 8,800,000 06/30/2021 $ 400,000 $ 440,000 $ 40,000 8,840,000 12/31/2021 400,000 442,000 42,000 8,882,000 What is the face amount of the bonds

Answers

Answer:

the face amount of the bonds is $10 million

Explanation:

the journal entry to record the issuance of the bonds is:

January 1, 2021, bonds issued at a discount

Dr Cash 8,800,000

Dr Discount on bonds payable 1,200,000

    Cr Bonds payable 10,000,000

the face value of the bonds = total amount of the issue, while the carrying value of the bonds = face value - discount = $10,000,000 - $1,200,000 = $8,800,000

ABC Inc.'s capital structure is 40% debt, 15% preferred, and 45% common equity, and its tax rate is 40%. For financing, (a) ABC sold a non-callable bond several years ago that now has 15 years to maturity with 8% annual coupon, paid semiannually, at a price of $1,065, and a par value of $1,000. (b) ABC sold a perpetual preferred stock for $95.50 per share, with a $7.50 annual dividend and a flotation cost of 3.00% of the price. (c) ABC also has beta

Answers

Answer:

The answer is B (im pretty sure)

Hope this helps plz consider marking brainliest

Explanation:

During August, Boxer Company sells $360,000 in merchandise that has a one-year warranty. Experience shows that warranty expenses average about 4% of the selling price. The warranty liability account has a credit balance of $12,400 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,000 in parts for repairs. The entry to record the estimated warranty expense for the month is:

Answers

Answer:

Debit Estimated Warranty Liability $12,400

Credit Warranty Expense $12,400

Explanation:

Warranty Expense = 0.04 * Total Sales

Warranty Expense = 0.04 * $360,000

Warranty Expense = $14,400

Warranty Liability Account = Warranty Expense + Opening balance of the Warranty liability Account

Warranty Liability Account = $14,400 + $12,400

Warranty Liability Account = $26,800

The business would incur actual warranty expense of $12,400.

Debit Estimated Warranty Liability $12,400

Credit Warranty Expense $12,400

Gallonte Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for April, May, and June were $60,000, $80,000, and $70,000, respectively, what were the firm's budgeted collections for May

Answers

Answer:

Total cash collection May= $60,000

Explanation:

Giving the following information:

Cash collection:

30% are collected in the month of sale

60% are collected in the first month after sale

10% are collected in the second month after sale.

Sales:

April= $60,000

May= $80,000

We need to calculate the cash collection for May:

Cash collection:

Sales in cash May= (80,000*0.3)= 24,000

Sales in account from April= (60,000*0.6)= 36,000

Total cash collection May= $60,000

A transformational leadership style would not work well with

a project designed by a team

someone who works best independently

those who appreciate regular feedback

employees who had a strong belief in the company that they work for

Answers

Answer:

someone who works best independently

Explanation:

A transformational leadership style is the leadership style in which the leader is involved with the team and works in tandem with them to achieve the set goal.

With this in mind, a transformational leadership style would not work well with someone who works best independently.

. In an income statement segmented by product line, the salary of the corporation chief executive officer (CEO) should be: a. allocated to the product lines on the basis of sales dollars. b. allocated to the product lines on the basis of segment margin. c. classified as a traceable fixed expense and allocated to the product lines. d. classified as a common fixed expense and not allocated to the product lines.

Answers

Answer:

d. classified as a common fixed expense and not allocated to the product lines.

Explanation:

In the case when the income statement is segmnented by the product line so the salary of the  chief executive officer (CEO) would be categorized as a common fixed expenses as it has fixed in a nature so it would not be allocated to the product lines

Therefore as per the given situation, the option D is correct

Hence, the same is to be considered

Furniture purchased from Kailash for Rs. 6,000.​

Answers

Answer:

What's the question or is this a statement?

Explanation:

?

After the introductory period, all consumers who have this Platinum Card will...

Answers

Answer:

Qualify for an A.P.R. based on their creditworthiness

Explanation:

After the introductory period is over you will be set a new APR

Financial services Consumers, who have Platinum Card after some introductory period, qualify for APR (Annual Percentage Rates).

The qualification for APR depends on the customer's creditworthiness.  This is the assessed financial ability of a customer to pay on her credit terms.  If the credit performance of the customer is adjudged worthy, the cardholder may be given a Titanium card with a higher credit limit.

When a credit card account is opened for a customer, the customer is charged with the introductory rate.  Then, after the introductory period, the customers are charged with the APR, which is usually less than the introductory rate.

Credit card account holders may also attract penalty APR when the penalty terms are triggered.   Some credit card accounts attract variable APR, which means that the rate changes depending on stated circumstances.

Thus, the rate charged at the introductory period of a Platinum Card is higher than the APR.

Learn more about Annual Percentage Rates at https://brainly.com/question/23806178

g The following information pertains to Lee Corp.'s defined benefit pension plan for year 2: Service cost $160,000 Actual and expected gain on plan assets 35,000 Unexpected loss on plan assets related to a year 1 disposal of a subsidiary 40,000 Amortization of unrecognized prior service cost 5,000 Annual interest on pension obligation 50,000 What amount should Lee report as pension cost in its year 2 income statement

Answers

Answer:

$180,000

Explanation:

Calculation for the amount that Lee should report as pension cost in its year 2 income statement

Using this formula

Pension cost =Service cost-Actual and expected return on plan assets+Prior service cost amortization+Interest cost

Let plug in the formula

Pension cost =$160,000 – $35,000 + $5,000 + $50,000

Pension cost =$180,000

Therefore the amount that Lee should report as pension cost in its year 2 income statement will be $180,000

Data for Yvavxs408 Corporation and its two divisions, Domestic and Foreign, appear below:
Sales revenues, Domestic $620,000
Variable expenses, Domestic $359,700
Traceable fixed expenses, Domestic $ 74,100
Sales revenues, Foreign $478,400
Variable expenses, Foreign $273,000
Traceable fixed expenses, Foreign $ 61,900
(ID#54797) In addition, Yvavxs408's common fixed expenses totaled S167.800 and were allocated as follows: 587,100 to the Domestic division and $80.700 to the Foreign division
What is the segment margin for the Domestic division?

Answers

Answer:

Segment margin Domestic = $186,200

Explanation:

Giving the following information:

Sales revenues= $620,000

Variable expenses= $359,700

Traceable fixed expenses= $74,100

To calculate the segment margin for the Domestic division, we need to use the following formula:

Segment margin Domestic = segment contribution margin - traceable fixed expense

Segment margin Domestic = (620,000 - 359,700) - 74,100

Segment margin Domestic = $186,200

Dan Pink argues that for 21st century tasks in creative businesses the mechanistic, reward-and-punishment approach will not work best because creativity is often constrained when immediate monetary rewards are offered in return for success. a. Trueb. False

Answers

Answer: True

Explanation:

This statement is true. Dan Pink argued that when it came to creative businesses, it would be best to use intrinsic as opposed to extrinsic rewards to encourage employees as extrinsic rewards such as money could constrain creativity.

Intrinsic rewards are those that are psychologically rewarding such as giving employees tasks that are fulfilling and make them feel part of the team as well as positive feedback from employers.

A three-month forward contract on a stock index is trading at $1000. The current index level is $985.1. Assuming a continuously compounded interest rate of 5%. Additionally, assume that the stock index does not pay any dividends. Which one of the following statements reflects a potential arbitrage strategy:
I. Long the forward contract, short the stock index, and lend at the risk-free rate
II. Short the stock index and lend at the risk-free rate, while entering in a forward contract agree- ment to purchase the asset in three months for $1000.
(a) I alone
(b) II alone
(c) I and II
(d) None of the above

Answers

Answer:

d

Explanation:

ddddddddddddddddddddddd

Mentor Corp. has provided the following information for the current year: Units produced 3,500units Sale price$200per unit Direct materials$70per unit Direct labor$55per unit Variable manufacturing overhead$20per unit Fixed manufacturing overhead$350,000per year Variable selling and administrative costs$30per unit Fixed selling and administrative costs$150,000per year Calculate the unit product cost using variable costing.

Answers

Answer:

the unit product cost using variable costing is $145 per unit

Explanation:

The computation of the unit product cost using variable costing is as follows:

= Direct materials per unit +  direct labor per unit + variable overhead per unit

= $70 + $55 + $20

= $145 per unit

Hence the unit product cost using variable costing is $145 per unit

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Jaguar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash 23000 Accounts payable 21000
Investments (short-term) 34000 Notes receivable (long-term) 36000
Accounts receivable 4200 Accrued liabilities payable 5300
Inventory 26000 Additional paid-in capital 90900
Equipment 49000 Retained earnings 33900
Factory building 101000 Notes payable (current) 48,000
Intangibles 4100
During the current year, the company had the following summarized activities:
a. Purchased short-term investments for $8,400 cash.
b. Lent $5,600 to a supplier who signed a two-year note.
c. Purchased equipment that cost $23,000; paid $5,600 cash and signed a one-year note for the balance.
d. Hired a new president at the end of the year. The contract was for $87,000 per year plus options to purchase company stock at a set price based on company performance. The new president begins her position on January 1 of next year.
e. Issued an additional 1,400 shares of $0.50 par value common stock for $11,000 cash.
f. Borrowed $16,000 cash from a local bank, payable in three months.
g. Purchased a patent (an intangible asset) for $1,900 cash.
h. Built an addition to the factory for $30,000; paid $8,100 in cash and signed a three-year note for the balance.
i. Returned defective equipment to the manufacturer, receiving a cash refund of $3,100.
Required:
Post the current year transactions to T-accounts for each of the accounts on the balance sheet.

Answers

Answer:

Jaguar Plastics Company

Cash Account

Account Titles                 Debit         Credit

Balance                          23000

Short-term investments                  $8,400

Notes Receivable                              5,600

Equipment                                         5,600

Common stock                  700

Additional capital           10300

Notes payable               16000

Intangible (Patent)                              1900

Equipment (refund)         3100

Investments (short-term)

Account Titles                 Debit         Credit

Balance                          34,000

Cash                                8,400

Accounts Receivable

Account Titles                 Debit         Credit

Balance                          4200

Inventory

Account Titles                 Debit         Credit

Balance                          26000

Equipment

Account Titles                 Debit         Credit

Balance                          49000

Note payable                  17400

Cash                                5600

Cash (refund)                                       3100

Factory building

Account Titles                   Debit         Credit

Balance                             101000

Cash                                     8100

Note Payable (long-term) 21900

Notes receivable (long-term)

Account Titles                 Debit         Credit

Balance                          36,000

Cash                                5,600

Intangibles

Account Titles                 Debit         Credit

Balance                            4100

Cash                                 1900

Notes payable (current)

Account Titles                 Debit         Credit

Balance                                            48,000

Equipment                                         17400

Cash                                                  16000

Common Stock (Calculated)

Account Titles                 Debit         Credit

Balance                                             78200

Cash                                                     700

Additional paid-in capital

Account Titles                 Debit         Credit

Balance                                             90900

Cash                                                   10300

Notes Payable (Long-term)

Account Titles                 Debit         Credit

Factory building                                 21900

Explanation:

a) Data and Calculations:

Cash                                 23000 Accounts payable                     21000

Investments (short-term) 34000 Accrued liabilities payable        5300

Accounts receivable          4200   Notes payable (current)         48,000

Inventory                          26000 Additional paid-in capital       90900

Equipment                       49000   Retained earnings                 33900

Factory building              101000  Common Stock (Calculated) 78200

Notes receivable

(long-term)                      36000  

Intangibles                          4100

Corporation produces shiny discs. A special order has been placed by the customer for 2,200 units of the shiny disc for $27 a unit. While the disc would be modified slightly for the special order, the normal unit product cost for each disc is $20.50:
Direct materials $ 5.80
Direct labor 4.00
Variable manufacturing overhead 2.90
Fixed manufacturing overhead 7.80
Unit product cost $ 20.50
Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs.The customer would like modifications made to each disc that would increase the variable costs by $1.90 per unit and that would require an investment of $16,000 in special equipment that would have no salvage value.This special order would have no effect on Rick Corp.'s other sales. The company has enough spare capacity for producing the special order.What would be the annual financial advantage (disadvantage) for Rick as a result of accepting this special order?a. $40,760b. ($15,700)c. ($2,000)d. $16,200

Answers

Answer:

Effect on income= $11,280 increase

Explanation:

Giving the following information:

A special order has been placed by the customer for 2,200 units of the shiny disc for $27 a unit.

Because it is a special order, we will take into account only the differential fixed costs.

First, we need to calculate the total unitary cost and differential fixed costs:

Total unitary variable cost= 5.80 + 4 + 2.9 + 1.9

Total unitary variable cost= $14.6

Total fixed cost= $16,000

Now, we can determine the effect on income:

Effect on income= 2,200*(27 - 14.6) - 16,000

Effect on income= $11,280 increase

A payroll tax is collected by which of the following methods?
A.
It is automatically deducted as a percentage of the paycheck.
B.
The paycheck is brought to the bank for the tax to be deducted.
C.
The payroll tax is paid with the income tax on April 15 of each year.
D.
The government deducts a percentage of your paycheck directly from your personal bank account.


Please select the best answer from the choices provided

A
B
C
D

Answers

A. It’s automatically deducted as a % of the paycheck. This is based on the assumption you are not a contracted employee receiving a 1099 tax form.

Answer:

A.

It is automatically deducted as a percentage of the paycheck.

Explanation:

just did it on the exam

Requirements for legal capacity for an individual are that a person must be at least sixteen and intelligent. true false

Answers

Answer:

False

Explanation:

You have to be 18

What is one major drawback of globalization?

Answers

Answer:

The oppression of weaker and poorer economies by those that are more robust; “the rich get richer, the poor get poorer”

Explanation:

Olive, the owner of Olive’s Orchard, contracts to sell its harvest to Pure Foods, Inc. Later Olive refuses to perform. Pure Foods files a suit to enforce the contract. Olive and Pure Foods are in a state that does not recognize the doctrine of unconscionability. To defend successfully against enforcement of the contract on similar grounds, Olive might rely on traditional notions of a. ​materiality. b. ​mistake. c. ​value. d. ​fraud.

Answers

Answer:

D)fraud

Explanation:

From the question, we are informed about Olive, the owner of Olive’s Orchard, contracts to sell its harvest to Pure Foods, Inc. Later Olive refuses to perform. Pure Foods files a suit to enforce the contract. Olive and Pure Foods are in a state that does not recognize the doctrine of unconscionability. To defend successfully against enforcement of the contract on similar grounds,. In this case, Olive might rely on traditional notions of a fraud. Fraud can be regarded as an act of deception which is intentional to deprive those that fall for it their legal right. It is activities that gives the perpetrator an unlawful gain or to deny a victim their right. It is carried out by people to get financial or personal gain in an unlawful manner. Some types of fraud that are common are are tax fraud, bankruptcy fraud. as well as credit card fraud,

Select the correct answer.
Information security professionals hack into computer systems.
A True
B. False

Answers

Answer:

true

Explanation:

Answer:

false

Explanation:

koshys coffe in bagalore is quaint establishment nesteld near mg road in the central business distirct it serves coffee and fruit cake to a clientel that has been enjoying these products for over fifty years the demand for coffee beans is 6600 cases per year each case has 24 ten pound bags it would be distraus fro them to run out of coffe so tye keep a safety stock of 30 cases the cases cost 4800 and it costs 5 per case to order coffee. as coffee is perishable prudct the holding ocst is fairly hight 40/case/year the lead time to recive an order is seven days koshys is open 300 days a year.
What is their annual ordering cost if they order at their EOQ level?

Answers

Answer:

812.41

Explanation:

Demand D = 6600 cases

Ordering cost S = 5

Holding cost H= $40

Economic order quantity = EOQ

Q = [tex]\sqrt{2DS/H}[/tex]

Q = [tex]\sqrt{(2*6600*5)/40}[/tex]

Q = [tex]\sqrt{1650}[/tex]

Q = 40.620192

Q = 40.62 cases

Annual ordering cost = D * S / EDQ

Annual ordering cost = 6600 * 5 / 40.62

Annual ordering cost = 33000 / 40.62

Annual ordering cost = 812.4076809453471

Annual ordering cost = $812.41

So, their annual ordering cost if they order at their EOQ level is 812.41

A notary signing agent has been providing signing services with no incidents for over 10 years without undergone a background screning . Therefore. he or she

Answers

Answer:

Explanation:

Notary

On January 1, 2019, Sandhill Corporation acquired machinery at a cost of $1290000. Sandhill adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2022 would be

Answers

Answer:

$94,354.29

Explanation:

Depreciation rate = 100/10*2 = 20%

2019 Depreciation = 1290000 * 20% = $258000

2020 Depreciation = 1290000 * 80% * 20% = $206400

2021 Depreciation = 1290000 * 80% * 80% * 20% = $165120

Accumulated depreciation (2019 to 2021) = $258000 + $206400 + $165120 = $629,520

Depreciation expense for 2022 = (1290000 - 629,520) / 7

Depreciation expense for 2022 = 660480 / 7

Depreciation expense for 2022 = $94,354.29

Pepsico experienced great success in Latin America with its numeromania contest which lured consumers promise of big cash prize. They used the same contest in Poland successful. This shows that ?

Answers

Answer:

E.leverage experience gained in one country can be used in another country

Multiple- choices

A. Numeromania helped in developing a taste for Pepsi in both countries.

B. Numeromania can be used in cash starved countries.

C. Numeromania can be used in different languages.

D. economically squeezed consumers love Pepsi.

E.leverage experience gained in one country can be used in another country

Explanation:

Pepsico is a Multinational operating in different countries.  It is common for a multinational to use different marketing strategies s in different countries based on market research findings.  It is also reasonable to implement a strategy that has been successful in one country in other countries.  

In this scenario, Pepsico took advantage of the contest strategy in Latin America to implement it in Poland. The company must have observed some similarities between the customers in the two countries.

If an economist is a proponent of free trade amongst nations, what would be concerning about the proliferation of regional trade agreements?
A. The nations involved with regional trade agreements make the economies more independent from each other.
B. Regional trade agreements may restrict trade from outside of the regions in the agreement.
C. Terms of regional trade agreements often conflict with agreements of the Anti- Tariff Act.

Answers

Answer: B. Regional trade agreements may restrict trade from outside of the regions in the agreement.

Explanation:

Regional trade agreement is a form of trade agreement usually between two or more countries in a particular region which will allow for easy movement of goods between the borders of that particular region. Examples are North American Free Trade Agreement, European Union etc.

If an economist is a proponent of free trade amongst nations, the economist will be worried that the proliferation of regional trade agreements may restrict trade from outside of the regions in the agreement. This is because there'll only be free trade for the countries that are in that particular region.

Identify the impact on either the supply or demand of loanable funds following the events listed below. Economic conditions deteriorate, prompting households to save a larger portion of their income. will In an effort to balance the budget, the government increases taxes paid by businesses. will Economic conditions improve, increasing the demand for goods and services. will Innovations in robotics technology vastly improves productivity within manufacturing firms. will

Answers

Answer:

1. Economic conditions deteriorate, prompting households to save a larger portion of their income. SUPPLY will INCREASE.

Loanable funds are created by financial institutions from the savings that households deposit in them. If households start saving more, the amount of loanable funds created will be more which means an increase in supply.

2. In an effort to balance the budget, the government increases taxes paid by businesses. DEMAND will DECREASE.

Businesses comprise a large portion of the market demanding loanable funds. If their taxes increase, they will reduce the loanable funds they get which they use for investment because they will not see the need of investing more if their profitability will suffer from taxation.

3. Economic conditions improve, increasing the demand for goods and services. DEMAND will INCREASE.

With goods and services in high demand, businesses will seek more loanable funds to expand their capacity and produce more goods and services.

4. Innovations in robotics technology vastly improves productivity within manufacturing firms. DEMAND will INCREASE.

Demand for loanable funds will increase as businesses invest in the innovations to take advantage of the improved productivity offered by them.

The impact of the demand and supply in the given situations would be as follows:

1). Increase in Supply

2). Decrease in Demand

3). Increase in Demand

4). Increase in Demand

Demand and Supply

Demand and Supply are affected by various factors including price, income, and many others.

The fall in the economic conditions and people promoting savings would cause an increase in supply because the demand would decrease due to emphasis on savings.

The increased taxation would cause the purchasing power of the people to fall and thus, the demand would decrease.

The improvement in economic conditions implies more purchasing powers and hence, the demand will increase.

The enhanced productivity increases employment and hence, more will be demanded.

Learn more about "Demand" here:

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