Suppose the economy is currently in short run macroeconomic equilibrium, with actual GDP bigger than potential GDP.
(a) Depict this situation using AD-AS, being sure to label all curves and axes. What is the gap called?
(b) In the long run, what will happen to prices and output? Depict graphically and explain.
Answers
Answer:
attached below
Explanation:
Given that the economy has its actual GDP > potential GDP
A) using AD-AS to depict the situation
attached below is the graph
The gap( Lf - L1 ) is called inflationary gap
x-axis = real GDP , Y-axis = price level,
AD = aggregate demand curve , S = short run aggregate supply curve
L = long run aggregate supply curve,
B) In the long run the graph will adjust to the full employment level
attached below is the graph
Related Questions
Money demand refers to Group of answer choices the total quantity of financial assets that people want to hold. how much income people want to earn per year. how much wealth people want to hold in liquid form. how much currency the Federal Reserve decides to print.
Answers
Answer:
total quantity of financial assets that people want to hold
Explanation:
Consider the following argument from analogy. According our rules for appraising analogical reasoning, if a subsequent consideration strengthens the argument, answer a. Answer b if a consideration weakens the argument. Answer c if a consideration does not affect the argument.
Bill has taken three history courses and found them very stimulating and valuable. So he signs up for another one, confidently expecting that it too will be worthwhile.
25. Suppose that his previous history courses were in ancient history, modern European history, and American history.
26. Suppose that his previous history courses had all been taught by the same professor that is scheduled to teach the present one.
27. Suppose that his previous history courses all had been taught by Professor Smith, and the present one is taught by professor Jones.
28. Suppose that Bill had found his three previous history courses to be the most exciting intellectual experiences of his life.
29. Suppose that his previous history courses had all met at 9:00am, and the present one is scheduled to meet at 9:00am also.
30. Suppose that, in addition to the three history courses previously taken, Bill also had taken and enjoyed courses in anthropology, economics, political science, and sociology.
Answers
Answer:
Bill has taken three history courses and found them very stimulating and valuable. So he signs up for another one, confidently expecting that it too will be worthwhile.
25. Suppose that his previous history courses were in ancient history, modern European history, and American history.
Answer A
26. Suppose that his previous history courses had all been taught by the same professor that is scheduled to teach the present one.
Answer A
27. Suppose that his previous history courses all had been taught by Professor Smith, and the present one is taught by professor Jones.
Answer B
28. Suppose that Bill had found his three previous history courses to be the most exciting intellectual experiences of his life.
Answer A
29. Suppose that his previous history courses had all met at 9:00am, and the present one is scheduled to meet at 9:00am also.
Answer C
30. Suppose that, in addition to the three history courses previously taken, Bill also had taken and enjoyed courses in anthropology, economics, political science, and sociology.
Answer B
Explanation:
A closed economy has full employment level of output (Y) of 7000 (we got this from chapter 3 - the interaction of labor supply and demand). Government purchases, G, are 1600, taxes (T) are 1600 (G and T are our exogenous variables). Desired consumption (Cd) and investment (Id) are:
C^d= 3200+ 0.2(Y-T)- 200r
I^d= 1200- 3000r
Required:
Solve for the desired savings function in intercept -slope form
Answers
Answer:
sd = 2720-200r
Explanation:
we have savings function to be this eqiuaton
Sd = Y - C^d
from the question we have here:
Y = 7000
T = 1600
C^d = 3200+ 0.2(Y-T)- 200r
we put these values in the savings function
Sd = 7000 - [3200 + 0.2(7000-1600)-200r
Sd = 7000 - [3200 + 1400 - 320] -200r
Sd = 7000 - 3200 - 1400 + 320 - 200r
Sd = 2720 - 200r
Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $8 comma 000 for his CD investment. If the bank is offering a 6 % interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a a. two -year investment period? b. six -year investment period? c. ten -year investment period? d. fifteen -year investment period?
Answers
Answer:
A = P * (1 + r/n)^nt. Where A = Maturity amount = ? P = Principal amount = $8,000, r = Rate of interest = 6%, n = Number of compounding per year = 1, t = Number of year
a. t = 2
A = $8,000 * (1 + 0.06/1)^1*2
A = $8,000 * (1.06)^2
A = $8,000 * 1.1236
A = $8,988.80
b. t = 6
A = $8,000 * (1 + 0.06/1)^1*6
A = $8,000 * (1.06)^6
A = $8,000 * 1.418519
A = 11348.152
A = $11,348.15
c. t = 10
A = $8,000 * (1 + 0.06/1)^1*10
A = $8,000 * (1.06)^10
A = $8,000 * 1.7908477
A = 14326.7816
A = $14,326.78
d. t = 15
A = $8,000 * (1 + 0.06/1)^1*15
A = $8,000 * (1.06)^15
A = $8,000 * 2.3965581931
A = 19172.4655448
A = $19,172.47
Given below are several ratios. Select the accounts or amounts that would be used in order to calculate the ratio. You will have more than one response to each ratio. Some accounts or amounts may not be used at all. (Select all that apply.) Debt-to-equity ratio a.Cash paid for acquisitions b.Interest expense c.Total dividends paid d.Cash flow from operations before interest and tax payments e.Total stockholders' equity f.Net income g.Total liabilities h.Cash flow from operations
Answers
Answer:
Total stockholders' equity.Total liabilities.Explanation:
The Debt to equity ratio shows the proportions of the financing options used to finance the operations of the company namely debt and equity.
It is calculated by the formula:
= Total liabilities / Total stockholders' equity * 100%
As shown by the formula , the relevant accounts are:
Total stockholders' equity.Total liabilities.g Which of the following statements best differentiates between franchising and licensing? A. Licensees must often meet strict guidelines on product quality, day-to-day management duties, and marketing promotions unlike franchisees. B. Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property. C. Licensing gives a company greater control than franchising over the sale of its product in a target market. D. Franchising is common in manufacturing industries while licensing is primarily used in service industries.
Answers
Answer:
B. Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property.
Explanation:
Licensing can be defined as the recognition (permission to practice) given to an individual by a regulatory agency or government for meeting a set of pre-defined requirements and after passing a license examination.
On the other hand, franchising is a business format that involves issuing or granting a license, consisting of a contractual arrangement between a parent company (franchiser or franchisor) and another (franchisee), that allows individuals or an organization access to its knowledge, processes, trademarks in order to provide a service.
Hence, the difference between franchising and licensing is that, franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property and the beneficiary continues with the operation of the business to his or her own preference.
Drag the tiles to the correct boxes to complete the pairs
Match each phrase with the scenario that illustrates it.
Tiles
-international competition
-consumer sovereignty
-wealth creation
-property rights
-profit motive
Answers
Answer:
Explanation:
Here you go! Should help.
Answer:
profit motive, property rights, international competition, consumer sovereignty, wealth creation
Explanation:
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In order to produce a new product, a firm must lease equipment at a cost of $100,000 per year. The managers feel that they can sell 50,000 units per year at a price of $75. What is the highest variable cost that will allow the firm to at least break even on this project
Answers
Answer:
$73 = unitary variable cost
Explanation:
To calculate the unitary variable cost that will yield the break-even point, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
50,000= 100,000 / (75 - unitary variable cost)
3,750,000 - 50,000unitary variable cost= 100,000
3,650,000 = 50,000unitary variable cost
$73 = unitary variable cost
For years, Luke has had the idea of making his own business. As Luke will realize, he will face three basic economic questions. What are these questions?
a. When, How, For whom
b. Who, when, why
c. What, How, for whom
d. What, When, How
Answers
Define Total Quality Management. Explain how important of TQM in a coffee store chain and provide examples.
Answers
Answer:
Total quality management (TQM) is an ongoing process for manufacturing errors to be detected and minimized or eliminated, the management of the supply chain is simplified, customer experience improved and training for employees is up to date.
Explanation:
The overall quality management aims to ensure the overall quality of the final product or service is accountable to all the parties involved in the production process.
Comprehensive quality management is a continuous detection and eradication process. Total quality management (TQM).
It is used for streamlining supply chain management, improving customer service, and providing training for employees.
The goal is to improve the quality of the products and services of an organization by continuously improving internal practices.
Total quality management is intended to make all involved parties responsible for the overall quality of the final product or service in the manufacturing process.
TQM approach requires small companies to understand (and are) their existing customers, to recognize and keep these expectations at the forefront of their strategy and processes. TQM approach This principle should also apply to internal customers who treat employees like customers and meet their demands.
Total quality management refers to a long-term management approach which pursue success through customer satisfaction.
The quality management aims to ensure the overall quality of the final product is accountable to all the parties involved in the production process.
The goal of the total quality management is to improve the quality of the products and services of an organization by continuously improving internal practices.
Finally, the total quality management is important in a store chain because it improve customer satisfaction through customer focus process and consistently meeting of customer expectations.
Read more about total quality management
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ou invent of a new type of dog leash. You choose a market segmentation approach and decide to target the large national population of dog owners. After reviewing what identifies an ideal market you realize your segmentation approach does not meet any of the effective segmentation conditions. At this point you should:
Answers
Answer: refine your approach by going back to the drawing board
Explanation:
Based on the information given, since after reviewing what identifies an ideal market, it's realize that the segmentation approach does not meet any of the effective segmentation conditions, then one should refine their approach by going back to the drawing board.
When this is done, one can then restrategize and then choose a segmentation approach that meets the effective segmentation conditions.
The time required to collect information about the current state of the economy is known as A. the effect lag. B. the recognition lag. C. the fiscal lag. D. the action lag.
Answers
Answer:
B. the recognition lag.
Explanation:
Recognition lag means the delay that lies between the economic shock arise and when it should be seen by the economist, government etc. Here the delays could be arise as the data that documented the economy state should not be available on the instant basis and after this it takes the time to analyze it correctly
Therefore as per the given situation, the option b is correct
Read the following coping options and categorize them as either problem or emotion focused and as either behavioral or cognitive in nature.
1. Ignore
2. Perspective
3. Plan
4. Other activities '
5. Vent
6. Pep talk
7. Longer hours
8. Ask supervisors
A. Problem-Focused B. Emotion-Focused
C. Cognitive Methods
D. Behavioral Methods
Answers
Answer:
1. Ignore - A
2. Perspective - C
3. Plan - A
4. Other activities - D
5. Vent - B
6. Pep talk - D
7. Longer hours - D
8. Ask supervisors - A
Cheers
Barth Company reports the following year-end account balances at December 31, 2016. Prepare the 2016 income statement and the balance sheet as of December 31, 2016.
Accounts payable $16,000 Inventory $36,000
Accounts receivable 30,000 Land 80,000
Bonds payable, long-term 200,000 Goodwill 8,000
Buildings 151,000 Retained earnings 160,000
Cash 148,000 Sales revenue 500,000
Common stock 150,000 Supplies inventory 3,000
Cost of goods sold 180,000 Supplies expense 6,000
Equipment 70,000 Wages expense 40,000
Answers
Answer and Explanation:
The preparation of the income statement and the balance sheet is presented below
Income statement
REVENUE
Sales $500,000
Less: EXPENSES
Cost of goods sold ($180,000)
Supplies expenses ($6,000)
Wages expenses ($40,000)
Total expenses ($226,000)
Net income $274,000
Balance sheet :
Assets Amount Liabilities & stockholder equity Amount
Cash $148,000 Account payable $16,000
Account receivable $30,000 Bonds payable, long term $200,000
Supplies $3,000
Inventory $36,000 Total liabilities $216,000
Total current assets $217,000 Common stock $150,000
Land $80,000 Retained earnings $160,000
Building $151,000
Equipment $70,000
Goodwill $8,000
Total assets $526,000 Total liabilities and equity $526,000
TD Bank has the following assets and liabilities as of year-end. All assets and liabilities are currently priced at par and pay interest annually.
Assets Amount($millions) Annual Rate Liabilities Amount ($ millions) Annual Rate
2-years loans $40 8% 3-years GIC $60 7%
3-years loans $60 8% 5-years term deposit $30 6%
Equity $10
Total $100 Total $100
Required:
a. What is the change in the value of its assets if all interest rates decrease by 1 percent?
b. What is the change in the value of its liabilities if all interest rates decrease by 1 percent?
c. What is the effect on the value of the Fi's equity if interest rates decrease by 1 percent?
Answers
Answer:
a) Change of $2.6 million
b) Change of $3.3 million.
c) Decrease in equity by $0.7 million
Explanation:
a) Determine change in value of assets when interest rates decrease by 1%
i) 2-year loans
Principal Amount = $40 , Annual rate = 8%
Value of asset = P + interest = $40 + 6.4 = $46.4
Interest earned = PRT = (40 * 8 * 2) / 100 = $6.4
Given that Annual rate = 8 - 1 = 7%
value of asset = P + interest = $45.6
interest = ( 40 * 7 * 2 ) / 100 = $5.6
change in 2-year loan assets = 46.4 - 45.6 = $0.8 million
ii) 3-year loan assets
Principal amount = $60 , annual rate = 8%
Value of asset = P + interest = 60 + 14.4 = $74.4
interest earned = PRT = ( 60 * 8 * 3 ) / 100 = $14.4
When Annual rate = 8 - 1 = 7%
value of asset = P + interest = 60 + 12.6 = $72.6
interest = ( 60 * 7 * 3 ) / 100 = $12.6
Change in 3-years loan assets = 74.4 - 72.6 = $1.8
∴Total change in value of assets = 1.8 + 0.8 = $2.6 million
B) Change in value of liabilities when interest rates fall by 1%
i) 3-years GIC liability
Principal amount = $60 , interest rate = 7%
Value of liability = P + interest = $72.6
interest = ( 60 * 7 * 3 ) / 100 = $12.6
When interest rate = 7 - 1 = 6%
Interest = ( 60 * 6 *3 ) / 100 = $10.8
value = 60 + 10.8 = $70.8
change in 3 years GIC liability = 72.6 - 70.8 = $1.8
ii) 5 - years term deposit liability
principal amount = $30 , interest rate = 6%
value of liability = P + interest accrued = 30 + 9 = $39
Interest accrued = ( 30 * 6 * 5 ) / 100 = $9
when Interest rate = 6 - 1 = 5%
value of liability = P + interest accrued = 30 + 7.5 = $37.5
interest accrued = ( 30 * 5 * 5 ) / 100 = $7.5
change in 5-years term deposit liability = 39 - 37.5 = $1.5
∴ Total change in value of liabilities = 1.8 + 1.5 = $3.3 million
c) Effect on the value of FI's equity is that there will be an DECRESE in equity because of the Increase in Liability value more than increase in asset value
Equity = asset - liability
= 2.6 - 3.3 = -$0.7 million
Manufacturing overhead was estimated to be $200,000 for the year along with 5,000 direct labor hours. Actual manufacturing overhead was $240,000, and actual labor hours were 5,500. The amount debited (left-side) to the Manufacturing Overhead account would be:
Answers
Answer:
the amount debited (left-side) to the Manufacturing Overhead account would be is $220,000
Explanation:
The computation of the amount debited (left-side) to the Manufacturing Overhead account would be is shown below:
= $200,000 ÷ 5,000 direct labor hours × 5,500 direct labor hours
= $220,000
Hence, the amount debited (left-side) to the Manufacturing Overhead account would be is $220,000
The same should be considered
Capri Industries is considering an investment that has an initial cost of $26,500 and the following expected cash inflows: Year Cash Inflow 1 $6,000 2 $8,000 3 $10,000 4 $5,000 5 $3,000 The expected payback period is
Answers
Answer:
It will take 3.5 years to cover the initial investment.
Explanation:
Giving the following information:
Initial investment= $26,500
Cash flows:
1 6,000
2 8,000
3 10,000
4 5,000
5 3,000
The payback period is the time required to cover the initial investment:
Year 1= 6,000 - 26,500= -20,500
Year 2= 8,000 - 20,500= -12,500
Year 3= 10,000 - 12,500= -2,500
Year 4= 5,000 - 2,500= 2,500
To be more accurate:
(2,500/5,000)= 0.5
It will take 3.5 years to cover the initial investment.
The expected payback period is 3.19 years.
Expected payback period is the amount of time it take to recover the amount invested from the cumulative cash flows.
Amount invested = $26,500
Cumulative cash flow in year 1 = $6000
Cumulative cash flow in year 2 = $14, 000
Cumulative cash flow in year 3 = $24,000
Cumulative cash flow in year 4 = $29,000
Cumulative cash flow in year 5 = $32,000
The amount invested would be recovered in the third year.
3 + [tex]\frac{29,000 - 24,000}{26,500}[/tex] = 3.19 years
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When using email to request action, the subject line should be as vague as possible.
Question 7 options:
True
False
Answers
Answer:
False
Explanation:
When using an email to request an action the subject line should be brief but specific. Leaving a vague subject line can often confuse another, however, making the subject line too lengthy and specific defeats the purpose. The best subject lines are brief but give a general idea of what the email contains.
Answer:
False
Explanation:
To email someone to request action, you can't be vague or you might not get what you exactly want from that person.
Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 40 billion cases of beer were sold every year at a price of $7 per case. After the tax, 34 billion cases of beer are sold every year; consumers pay $8 per case, and producers receive $4 per case (after paying the tax), and producers receive $5 per case. The amount of the tax on a case of beer is $1 per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $ per case.
True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. True False
Answers
Answer:
$4
$1
$3
False
Explanation:
Tax is a compulsory sum levied by the government or an agency of the government on goods and services.
Taxes increases the price of products
Total amount of tax = new price of a case of beer - amount producers receive
$8 - $4 = $4
Burden of tax on consumers = new price of a case of beer - initial price
$8 - $7 = $1
Burden of tax on producers = Total amount of tax - Burden of tax on consumers
$4 - $1 = $3
the statement is false because if the tax has been imposed on producers, producers would not be able to share the burden of the tax with consumers. Thus, the whole burden of tax would have been borne by producers and the effect would be higher
What happens to the percentage of
business liability divided equally among
partners as more partners are added to
the ownership group?
A. It increases per partner.
B. It decreases per partner.
C. It remains the same for every partner.
Answers
Answer:
B
Explanation:
A new partner inherits debts prior to the partnership. However it doesn't touch on personal assets of the new partner entering the partnership.
Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will increase the price paid by buyers of picture frames by a. $0.50. b. between $0.50 and $1. c. $1. d. less than $0.50.
Answers
SSSSSSSDDDDDSADDDDDDDDDDDDDSADSA
On January 1, Year 1, Renquist Corp. borrowed $100,000 by signing a 5-year note payable with annual interest of 8%. The terms of the contract require Renquist to repay the principal over 5 years with a payment of $20,000 made at the end of each year. On December 31, Year Renquist made the first payment plus interest On January 1 Year 2. what portion of the note should be classified as noncurrent liabilities?
a. $60,000
b. $20,000
c. $80,000
d. $100,000
Answers
Answer: $60,000
Explanation:
The portion of the note that should be classified as noncurrent liabilities will be calculated thus:
Note payable balance on January 1, year 1 = $100,000
Since the terms of the contract require Renquist to repay the principal over 5 years with a payment of $20,000 made at the end of each year, the note payable repaid on December 31, year 1 will be $20,000
Therefore, the note payable balance on Jan 1, year 2 will then be:
= $100,000 - 20,000
= $80,000
Therefore, from the $80,000 note payable, $20,000 will represent current liabilities. Hence, the non current liabilities will be:
= $80000 - $20000
= $60000
The following discussion focuses on the change in production and selling strategies of Timken Co., the Canton, Ohio, firm that is a major producer of bearings:
To counter the low prices of imports, Timken Co. in 2003 began bundling its bearings with other parts to provide industrial business customers with products specifically designed for their needs. Timken had begun bundling prelubricated, preassembled bearing packages for automobile manufacturers in the early 1990s. Evidence indicated that companies that sold integrated systems rather than discrete parts to the automobile manufacturers increased their sales. Other industrial customers put the same pressure on Timken in the late 1990s to lower prices, customize, or lose their business to lower-priced foreign suppliers. Manufacturers are increasingly combining a standard part with casings, pins, lubrication, and electronic sensors. Installation, maintenance, and engineering services may also be included. Suppliers, such as Timken, saw this as a means of increasing profits and making themselves more indispensable to the manufacturers. The strategy also required suppliers to remain in proximity with their customers, another advantage over foreign imports. This type of bundling does require significant research and development and flexible factories to devise new methods of transforming core parts into smart assemblies. The repackaging is more difficult for industrial than automobile customers because the volumes of production are smaller for the former. Timken also had to educate its customers on the variety of new products available.
Timken has an 11 percent share of the world market for bearings. However, imports into the United States doubled to $1.4 billion in 2002 compared with $660 million in 1997. Timken believes that the uniqueness of its product helps protect it from foreign competition. However, the company still lobbied the Bush administration to stop what it calls the dumping of bearings at low prices by foreign producers in Japan, Romania, and Hungary.
Required:
a. What factors in the economic environment, in addition to foreign imports, contributed to Timken’s new strategy in 2002 and 2003?
b. How does this strategy relate to the discussion of bundling presented in the chapter? What additional factors are presented in this case?
Answers
Answer:
Timken Co.
a. Factors in the Economic Environment that contributed to Timken;s new strategy in 2002 and 2003 in addition to foreign imports at cheaper prices:
1. The needs of industrial business customers for integrated systems
2. Lowering of prices resulting from bundling
3. Addition of installation, maintenance, and engineering services, leading to increasing profits
b. The relationship of this strategy to bundling
1. Remaining in proximity with customers
2. Significant research and development
3. Flexible factories
4. Education of customers on product variety
c. Additional factors presented in this case are:
1. Customization
2. Means of making entity more indispensable to manufacturers
3. Uniqueness of products
4. Lobbying to stop dumping
Explanation:
a) Data and Calculations:
Share of the world market for bearings = 11%
Value of bearing imports in 2002 = $1.4 billion
Value of bearing imports in 1997 = $660 million
b) Companies engage in bundling by offering their main products together with several others together with services as a single combined unit. This strategy always lowers the bundled price when compared with the prices of the separate products and services. Thus, companies that sell bundled products and services often achieve more sales at the expense of profits.
g The process of gathering information and forecasting relevant trends, competitive actions, and circumstances that will affect operations in geographic areas of potential interest is called ________. A. cultural analysis B. sustainable development C. environmental scanning D. internal analysis
Answers
Answer:
C. environmental scanning
Explanation:
Environmental scanning is a management strategy that focuses on systematically acquiring informations about occasions, trends, events or patterns through surveys and analysis of these information in an organisation's external and internal environment.
Basically, the informations acquired through environmental scanning are used by the executive (top) management in strategically planning the organisation's future and exploitation of available opportunities for the success of the organization.
Furthermore, the internal environmental scanning offers an organization strength and weakness while the external environmental scanning provides information about opportunities and threats.
On the other hand, the external environmental scanning gives an overview of the opportunities in the market as well as potential threats to an organization.
In conclusion, environmental scanning is a process which typically deals with gathering external and internal informations, forecasting relevant trends to an organization, competitive actions, and circumstances that will affect business operations in geographic areas of potential interest to an organization.
A manufacturer of banana chips would like to know whether its bag filling machine works correctly at the 420 gram setting. Is there sufficient evidence at the 0.01 level that the bags are underfilled or overfilled? Assume the population is normally distributed.
State the null and alternative hypotheses for the above scenario.
Answers
Answer: See explanation
Explanation:
The null hypotheses for the above scenario will be the statement of no effect and it'll be the mean weight of the bag that filled will be 420 grams.
H0: μ = 420
The alternative hypotheses for the above scenario will be that the bag isn't filled with 420 grams. They are either underfilled below 420 grams or overfilled above 420 grams.
Ha: μ ≠ 420
_____ is the quantity of a good or service that people are willing to buy at various prices. Group of answer choices Capacity Market share Market potential Supply Demand
Answers
Answer:
Demand
Explanation:
Demand is the total quantity of a good or service that people are willing to buy at various prices
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
So, at higher prices, demand would be lower than at lower prices
Jeff recently purchased a house for $350,000. He made a down payment of $50,000 and financed the balance over 30 years at 7%. If Jeff 's first payment is due on March 1st of the current year, how much interest expense will Jeff pay in the current year
Answers
Answer: $17,434.43
Explanation:
First find the amount that he financed by a loan:
= Purchase price - Down payment
= 350,000 - 50,000
= $300,000
Find the annuity payment using the excel PMT formula:
Rate = 7% / 12 months
Number of periods = 30 * 12 months = 360 months
Present value = -300,000
Future value = 0
Annuity = $1,995.91
Then the schedule is attached.
How can the cost allocation methods in activity-based costing be utilized to target process improvements
Answers
Answer:
In simple words, Activity-based costing can be understood as more precise approach of estimating the cost of a commodity or service, resulting in more precise pricing decisions.
ABC allows for a more effective examination of operational expenses in order to identify better methods to allocate and eliminate overheads. It also allows for more accurate measurement of brand and client profitability.
Differentiate between an active partner and sleeping partner?
Answers
Answer:
active partners are involved in daily running of the business.
sleeping partner are not involved in daily running of the business
Explanation:
Active partners are always involved in management while sleeping partners are not and mostly consists of financing not the business.
The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows:
Dividend Stock price
Boom $3.00 $60
Normal economy 1.20 58
Recession .75 49
Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely.
Answers
Solution :
Holding Period return is given by :
Holding period return [tex]$=\frac{\text{ending value - beginning value + dividend income}}{\text{beginning value}}$[/tex]
Now the holding the period return for the various cases :
Boom
Ending stock price = $ 60
Beginning stock price = $ 50
Dividend income = $ 3
Hence, holding period return is [tex]$=\frac{60-50+30}{50}$[/tex]
= 0.26
So, the holding period return = 26%
Normal economy
Ending stock price = $ 58
Beginning stock price = $ 50
Dividend income = $ 1.2
Hence the holding period return [tex]$=\frac{58-50+1.2}{50}$[/tex]
= 0.184
So, the holding period return = 18.4%
Recession
Ending stock price = $ 49
Beginning stock price = $ 50
Dividend income = $ 0.75
Hence the holding period return [tex]$=\frac{49-50+0.75}{50}$[/tex]
= -0.005
So, the holding period return = -0.5%
As all the cases, the probability is same = 0.333
Therefore, the expected holding period return is :
The expected holding period return = (0.333 x 0.26) + (0.333 x 0.184) + (0.333 x -0.005)
= 0.8658 + 0.06127 - 0.00166
= 0.149515
Therefore, the expected holding period return = 14.95%