Answer: $1387.5
Explanation:
Given data:
Useful life of the machine = 6years
Inflation for the 6years period = 3%
Interest rate = 8%.
Cost of maintenance = $5000
Yearly increments = $500 for five years.
Solution:
Total cost of maintenance for five years
= cost of maintenance + yearly increments x 5
= $5000 + $500(5)
= $5000 + $2500
= $7500.
Interest rate on the machinery = 8%
= 0.08 x $7500
= $600
Inflation rate
= 0.03 x 7500
= $225
Equal yearly maintenance cost
= $7500 + $600 + $225/ 6
= $8325/6
= $1387.5
The following are the transactions for the month of July. Units Unit Cost Unit Selling Price July 1 Beginning Inventory 40 $ 10 July 13 Purchase 200 11 July 25 Sold ( 100 ) $ 14 July 31 Ending Inventory 140 Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under (a) FIFO, (b) LIFO, and (c) weighted average cost. Assume a periodic inventory system is used.
Answer:
(a) FIFO (b) LIFO (c) weighted
average cost:
Cost of goods available for sale $2,600 $2,600 $2,600
Ending inventory 1,540 1,500 1,516
Sales $1,400 $1,400 1,400
Cost of goods sold 1,060 1,100 1,083
Gross profit $340 $300 $317
Explanation:
a) Data and Calculations:
Units Unit Cost Unit Selling Price
July 1 Beginning Inventory 40 $ 10 $400
July 13 Purchase 200 11 2,200
July 25 Sold ( 100 ) $ 14 (1,400)
July 31 Ending Inventory 140
July 31 Goods available 240
Average unit cost = $10.83 ($2,600/240)
FIFO:
Cost of goods available for sale $2,600 ($400 + $2,200)
Ending inventory 1,540 (140 * $11)
Sales $1,400 ($14 * 100)
Cost of goods sold 1,060 (40 * $10 + 60 * $11)
Gross profit $340
LIFO:
Cost of goods available for sale $2,600 ($400 + $2,200)
Ending inventory 1,500 (40 * $10 + 100 * $11)
Sales $1,400 ($14 * 100)
Cost of goods sold 1,100 (100 * $11)
Gross profit $300
Weighted Average:
Cost of goods available for sale $2,600 ($400 + $2,200)
Ending inventory 1,516 (140 * $10.83)
Sales $1,400 ($14 * 100)
Cost of goods sold 1,083 (100 * $10.83)
Gross profit $317
Kepler Company Comparative Income Statements This Year Last Year Sales $ 950,000 $ 900,000 Less: Cost of goods sold 500,000 490,000 Gross margin $ 450,000 $ 410,000 Less: Selling and administrative expenses 275,000 260,000 Operating income $ 175,000 $ 150,000 Less: Interest expense 12,000 18,000 Income before taxes $ 163,000 $ 132,000 Less: Income taxes 65,200 52,800 Net income $ 97,800 $ 79,200 Less: Dividends (common) 27,800 19,200 Net income, retained $ 70,000 $ 60,000 Also, assume that for last year and for the current year, the market price per share of common stock is $2.98. In addition, for last year, assets and equity were the same at the beginning and end of the year. Required: Note: Round all answers to two decimal places. 1. Compute the following for each year: This Year Last Year a. Return on assets % % b. Return on stockholders' equity % % c. Earnings per share $ $ d. Price-earnings ratio e. Dividend yield % % f. Dividend payout ratio
Kepler Company
Comparative Balance Sheets
This Year Last Year
Assets
Current assets:
Cash $ 50,000 $100,000
Accounts receivable, net 300,000 150,000
Inventory 600,000 400,000
Prepaid expenses 25,000 30,000
Total current assets $ 975,000 $680,000
Property and equipment, net 125,000 150,000
Total assets $1,100,000 $830,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 400,000 $290,000
Short-term notes payable 200,000 60,000
Total current liabilities $ 600,000 $350,000
Long-term bonds payable, 12% 100,000 150,000
Total liabilities $ 700,000 $500,000
Stockholders' equity:
Common stock
(100,000 shares) 200,000 200,000
Retained earnings 200,000 130,000
Total liabilities and
stockholders' equity $1,100,000 $830,000
Answer:
Kepler Company
a. Return on assets = Net Income/Total Assets
= $ 97,800/$1,100,000 $ 79,200/$830,000
= 8.89% = 9.54%
b. Return on stockholders' equity = Net Income/Stockholders' equity
= $ 97,800/$400,000 $ 79,200/$330,000
= 24.45% = 24%
c. Earnings per share = Net Income/Outstanding common shares
= $ 97,800/100,000 $ 79,200/100,000
= $0.98 = $0.79
d. Price-earnings ratio = Market price/Earnings per share
= $2.98/$0.98 = $2.98/$0.79
= 3.04 times = 3.77 times
e. Dividend yield = Dividend per share/price per share
= $0.28/$2.98 = $0.19/$2.98
= 9.40% = 6.38%
f. Dividend payout ratio = Total dividends/Net Income
= $27,800/$97,800 = $19,200/$79,200
= 28.43% = 24.24%
Explanation:
Kepler Company
Comparative Income Statements
This Year Last Year
Sales $ 950,000 $ 900,000
Less: Cost of goods sold 500,000 490,000
Gross margin $ 450,000 $ 410,000
Less: Selling and
administrative expenses 275,000 260,000
Operating income $ 175,000 $ 150,000
Less: Interest expense 12,000 18,000
Income before taxes $ 163,000 $ 132,000
Less: Income taxes 65,200 52,800
Net income $ 97,800 $ 79,200
Less: Dividends (common) 27,800 19,200
Net income, retained $ 70,000 $ 60,000
The balance sheet of Hidden Valley Farms reports total assets of $815,000 and $955,000 at the beginning and end of the year, respectively. The return on assets for the year is 15%. What is Hidden Valley's net income for the year
Answer:
$132,750
Explanation:
Calculation for Valley net income for the year
Net income=[815,000+955,000/2]*15%
Net income=(1,770,000/2)*15%
Net income=885,000*15%
Net income=$132,750
Therefore Valley net income for the year will be $132,750
Identify the accounting assumption or principle that is described below. (a) Belief that a company will remain in operation for the foreseeable future. (b) Indicates that personal and business record-keeping should be separately maintained. (c) Only those items that can be expressed in money are included in the accounting records. (d) Separates financial information into time periods for reporting purposes. (e) Measurement basis used when a reliable estimate of fair value is not available. (f) Dictates that companies should report all circumstances and events that make a difference to financial statement users.
Answer:
(a) Belief that a company will remain in operation for the foreseeable future.
Accounting assumption or principle: Going concern assumption
(b) Indicates that personal and business record-keeping should be separately maintained.
Accounting assumption or principle: Economic entity assumption
(c) Only those items that can be expressed in money are included in the accounting records.
Accounting assumption or principle: Monetary unit assumption
(d) Separates financial information into time periods for reporting purposes.
Accounting assumption or principle: Periodicity assumption
(e) Measurement basis used when a reliable estimate of fair value is not available.
Accounting assumption or principle: Historical cost principle
(f) Dictates that companies should report all circumstances and events that make a difference to financial statement users.
Accounting assumption or principle: Full disclosure principle
A bank estimates that their average balance on demand deposit accounts is $3,500, net of float. Each account costs the bank $250 per year in processing costs. The bank collects an average of $10 per month on each account in service charges. Assume reserve requirements are 10%. What is the net cost of an average demand deposit
Answer:
4.1%
Explanation:
Net cost of average demand deposit is computed as;
Net cost = (Non interest expense - Non interest income) / [Average balance × (1-RR)]
Annual non interest income= 12 × $10 = $120
Non interest expense = $250
Average balance = $3,500
RR = 10%
Therefore,
Net cost = ($250 - $120) / [$3,500 × (1-0.10)]
Net cost = $130 / $3,150
Net cost = 4.1%
Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.40 per card, and the cost of printing is $0.10 per card. The company receives $3.75 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,300 and standard deviation 200. (Assume these four are independent.)
What is the optimal production quantity for the card?
Answer:
≈ 9644 quantity of card
Explanation:
given data:
n = 4 regions/areas
mean demand = 2300
standard deviation = 200
cost of card (c) = $0.5
selling price (p) = $3.75
salvage value of card ( v ) = $ 0
The optimal production quantity for the card can be calculated using this formula below
= u + z (0.8667 ) * б
= 9200 + 1.110926 * 400
≈ 9644 quantity of card
First we have to find u
u = n * mean demand
= 4 * 2300 = 9200
next we find the value of Z
Z = ( [tex]\frac{p-c}{p-v}[/tex] )
= ( 3.75 - 0.5 ) / 3.75 = 0.8667
Z( 0.8667 ) = 1.110926 ( using excel formula : NORMSINV (0.8667 )
next we find б
б = 200[tex]\sqrt{n}[/tex] = 400
A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the year were $9 million. The company recognizes revenue over time according to percentage of completion. How much revenue and gross profit or loss will appear in the company’s income statement in the first year of the contract? (Enter your answer in whole dollars.)
Answer:
$2 million or $2,000,000
Explanation:
The computation of the revenue and gross profit or loss will appear in the company’s income statement in the first year is shown below:
= revenue recognized - cost incurred
The Total cost is
= $6 + $9
= $15
And, the revenue recognized is
= $6 ÷ $15 × $20
= $8
So, the gross profit is
= $8 - $6
= $2
hence, the gross profit is $2 million
What employment issue for flexible employees does the Walling v. A.H. Belo Corporation Supreme Court ruling address
Answer:
Fixed weekly pay
Explanation:
The Walling v. A.H. specified weekly salary for variable employees job challenge for flexible workers Ruling document of the Belo Company Supreme Court. Workers who work varying workweeks receive a set wage, irrespective about how many times per week may work. For starters, if they operated 35 or 40 hours, the employee should receive the same weekly wage. Therefore, the hourly wage of a salaried employee differs depending according to how many hours they work.
If someone drank a six pack beer ($10) everday for ten years what would the opportunity cost be relative to putting that same money in a stock fund earning 7%
To fund your dream vacation, you plan to save $1,475 per year for the next 15 years starting one year from now. If you can earn an interest rate of 6.25%, how much will you have saved for your vacation?
Answer:
FV= $34,993.05
Explanation:
Giving the following information:
Annual deposit= $1,475
Number of periods= 15 years
Interest rate= 6.25%
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {1,475*[(1.0625^15) - 1]} / 0.0625
FV= $34,993.05
stock that has a current price of $25.00, a beta of 1.25, and a dividend yield of 6%. If the Treasury bill yield is 5% and the market portfolio is expected to return 14%, what should MUSS’s stock sell for at the end of an investor's two year investment horizon?
Answer:
$30.2067
Explanation:
From the given question, using the dividend discount model
[tex]V_0 = \dfrac{D_1}{r - g}[/tex]
where:
r is the Expected return on stock and be calculated as:
Expected return on stock = Risk free rate + Beta × (Expected Market Return - Risk free rate)
Expected return on stock = 5% + 1.25 × (14% - 5%) = 16.25%
However, the current price in this process will b used as the dividend price for all future expenses.
Dividend Yield = Current Dividend/The Share Price
Current dividend D0 = 6% × $25.00 = $1.50
D₁ = D₀ × (1 + g)
D₁ = 1.5 × (1 + g)
Thus, we can now employ the use of the growth dividend model (constant) to determine the value of g as follows:
[tex]25 = \dfrac{1.5 \times (1 + g)}{0.1625 - g}[/tex]
By cross multiply, we have:
4.0625 - 25g = 1.5 + 1.5g
collect like terms, we have:
4.0625 - 1.5 = 1.5g + 25g
2.5625 = 26.5g
Divide both sides by 26.5, we have:
2.5625/26.5 = 26.5g/26.5
g = 9.67%
Similarly, suppose the value for the second year-end to be Y₂;
Then the constant growth dividend model can be computed as:
[tex]Y_2 = \dfrac{D_3}{r - g}[/tex]
where;
D₃ = D₂ × (1 + g)
D₂ × (1 + g) = D₁ × (1 + g) × (1 + g)
D₁ × (1 + g) × (1 + g) = D₀ × (1 + g) × (1 + g) × (1 + g)
D₁ × (1 + g) × (1 + g) = D₀ × (1 + g) × (1 + g) × (1 + g) = D₀ × (1 + g) × 3
D₃ = 1.5 × (1 + 9.67%) × 3
D₃ = $1.9876
Finally:
[tex]Y_2 = \dfrac{D_3}{r - g}[/tex]
[tex]Y_2 = \dfrac{1.9876}{0.1625 - 0.0967}[/tex]
Y₂ = $30.2067
1.Processes A, B, C, D, E, and F require service times of 3, 5, 2, 5, 3, and 5. Their arrival times are 0, 1, 3, 9, 10, and 12. What is the average turnaround time, waiting time, response time, and throughput when using SRJF, RR (q
Answer:
please check attachment for the answers I gave. they are in tabular form
Explanation:
What factors should be considered for a leader when delegating responsibilities to committee members?
a. Politics and personnel
b. Money and connections
c. Trust and respect
d. Character and job code
What should be considered as key elements when planning the logistics of your event?
a) location, contracts, parking
b) date, director, charity
c) date, location, budget
d) location, budget, profit
What should you do during the development phase regardless of the type of event you are implementing?
a) identify your goals and objectives
b) identify the charity for the event profits
c) identify the location of the event
d) identify who will be the master of ceremonies
Which responsibility best describes the responsibility of the media or marketing director?
a. contracts
b. public relations
c. risk management
d. venue selection
Answer:
1) Character and job code
2) date, location, budget
3) identify your goals and objectives
4) public relations
Explanation:
When considering a committee member for a certain delegated role, a leader must select a person judged to have impeccable character and whose job code corresponds to the role you want to delegate to him/her.
When planning the logistics of an event, a suitable date must be chosen, an accessible and suitable location must be selected and the budget must be fair and manageable.
At the development phase of event planning, the event planner must identify exactly what the goals and objectives of the event are before other factors are considered.
The media or marketing director has the important role of promoting the image of the organization by engaging the public in issues regarding the organization. Hiss/her primary role has to do with public relations.
From 2015 to 2016, the overall price level rose from 200 to 220. Over the same period, tuition rates at the local community college rose from $100 to $115 per credit hour. What can be concluded from the rise in tuition relative to overall inflation. EXPLAIN your answer.a) Tuition rates increased at the same rate as inflation
b) Tuition rates increased at a slower pace than inflation
c) Tuition rates increased at a faster pace than inflation
d) Tuition rates and inflation cannot be compared with the numbers given
Answer:
C
Explanation:
Inflation is a persistent rise in general price level
Rise in Inflation rate = 220 / 200 - 1 = 10%
Rise in tuition fees = 115 / 100 - 1 = 15%
From the calculations, the percentage change in tuition fees is higher than the percentage change in inflation rate
The Carlton Corporation has $5 million in earnings after taxes and 2 million shares outstanding. The stock trades at a P/E of 10. The firm has $5 million in excess cash. a. Compute the current price of the stock. (Do not round intermediate calculations and round your answer to 2 decimal places.) b. If the $5 million is used to pay dividends, how much will dividends per share be? (Do not round intermediate calculations and round your answer to 2 decimal places.) c. If the $5 million is used to repurchase shares in the market at a price of $30 per share, how many shares will be acquired? (Do not round intermediate calculations and round your answer to the nearest whole share.) d. What will the new earnings per share be? (Use the rounded number of shares computed in part c but do not round any other intermediate calculations. Round your answer to 2 decimal places.) e-1. If the P/E ratio remains constant, what will the price of the securities be? (Use the rounded answer from part d and round your answer to the nearest whole dollar.) e-2. By how much, in terms of dollars, did the repurchase increase the stock price? (Use the rounded whole dollar answer from part e-1. A negative value should be indicated with a minus sign. Round your answer to the nearest whole dollar.) f. Has the stockholders' total wealth changed as a result of the stock repurchase as opposed to receiving the cash dividend? Yes No
Answer:
a. Compute the current price of the stock.
P/E ratio = 10
EPS = $5,000,000 / 2,000,000 stocks = $2.50 per stock
price = $2.50 x 10 = $25
b. If the $5 million is used to pay dividends, how much will dividends per share be?
$2.50, same as EPS
c. If the $5 million is used to repurchase shares in the market at a price of $30 per share, how many shares will be acquired?
$5,000,000 / $30 = 166,666.7 ≈ 166,667 stocks
d. What will the new earnings per share be?
outstanding stocks = 2,000,000 - 166,667 = 1,833,333
EPS = $5,000,000 / 1,833,333 = $2.73
e-1. If the P/E ratio remains constant, what will the price of the securities be?
price = $2.73 x 10 = $27.30
e-2. By how much, in terms of dollars, did the repurchase increase the stock price?
$27.30 - $25 = $2.30
f. Has the stockholders' total wealth changed as a result of the stock repurchase as opposed to receiving the cash dividend?
No
State the method of acknolwdgement
Explanation:
A page of acknowledgements is usually included at the beginning of a Final Year Project, immediately after the Table of Contents.
Acknowledgements enable you to thank all those who have helped in carrying out the research. Careful thought needs to be given concerning those whose help should be acknowledged and in what order. The general advice is to express your appreciation in a concise manner and to avoid strong emotive language.
Note that personal pronouns such as 'I, my, me …' are nearly always used in the acknowledgements while in the rest of the project such personal pronouns are generally avoided.
The following list includes those people who are often acknowledged.
Note however that every project is different and you need to tailor your acknowledgements to suit your particular situation.
Main supervisor
Second supervisor
Other academic staff in your department
Technical or support staff in your department
Academic staff from other departments
Other institutions, organizations or companies
Past students
Family *
Friends *
Charter Company, which uses the perpetual inventory method, purchases different letters for resale. Charter had a beginning inventory comprised of seven units at $4 per unit. The company purchased five units at $6 per unit in February, sold seven units in October, and purchased two units at $7 per unit in December. If Charter Company uses the LIFO method, what is the cost of its ending inventory
Answer:
Ending inventory cost= $34
Explanation:
Giving the following information:
Beginning inventory= 7 units for $4 per unit.
Purchased= 5 units for $6
Sold= 7 units
Purchased= 2 units for $7 each
Under the LIFO (last-in, first-out) method, the cost of ending inventory is calculated using the cost of the firsts units incorporated into inventory. The perpetual inventory system recognizes sales after it happens.
Ending inventory:
Beginning inventory= 7*4= 28
Purchased= 5*6= 30
Sold= (5*6) + (2*4)= (38)
Purchased= 2*7= 14
Ending inventory cost= $34
Marr Co. had the following sales and accounts receivable balances, prior to any adjustments at year end: Credit sales $10,000,000 Accounts receivable 3,000,000 Allowance for uncollectible accounts (debit balance) 50,000 Marr uses 3% of accounts receivable to determine its allowance for uncollectible accounts at year end. By what amount should Marr adjust its allowance for uncollectible accounts at year end
Answer:
$140,000
Explanation:
The computation is shown below:
Ending allowance for uncollectible accounts is
= Accounts receivable × Given percentage
= $3,000,000 × 3%
= $90,000
Now the
Adjusted balance is
= Ending allowance for uncollectible accounts + debit balance of Allowance for uncollectible accounts
= $90,000 + $50,000
= $140,000
Each unit requires 4 hours of direct labor at a rate of $13 per hour. Variable factory overhead is budgeted to be 70% of direct labor cost, and fixed factory overhead is $179,000 per month. Prepare a factory overhead budget for August.
Answer:
Some numbers are missing, so I looked for similar questions and found the following:
Miami solar budgets production of 5,300 solar panels for August. Each unit requires 4 hours of direct labor at a rate of $13 per hour. Variable factory overhead is budgeted to be 70% of direct labor cost, and fixed factory overhead is $179,000 per month.
direct labor costs per unit = $13 x 4 = $52
variable overhead costs per unit = $52 x 70% = $36.40
Miami Solar
Factory Overhead Budget
For the month of August, 202x
Budgeted production units 5,300 units
Variable overhead per unit $36.40
Budgeted variable overhead $192,920
Budgeted fixed overhead $179,000
Budgeted total overhead $371,920
A company, which is currently operating at full capacity, has sales of $2,480, current assets of $820, current liabilities of $510, net fixed assets of $1,670, and a 5 percent profit margin. The company has no long-term debt and does not plan on acquiring any. The company does not pay any dividends. Sales are expected to increase by 10 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year
Answer:
$61.60
Explanation:
Equity funding need = Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings
Equity funding need = $2,739 - $561 - $1,980 - $136.40
Equity funding need = $61.60
Workings
Projected assets = (Current assets + Fixed assets) * 1.10 = 820+1,670 * 1.10 = $2,739
Projected liabilities = Current liabilities * 1.10 = 510 * 1.10 = $561
Current equity = Current assets + Fixed assets - Current liabilities = 820 + 1,670 - 510 = $1,980
Projected increase in retained earnings = Sales*5% * 1.10 = $2,480*5% * 1.10 = 124*1.10 = $136.40
Let us imagine that there is a country which displays the following statistics. C (Consumption) is one-half of GDP, and I (Investment) is one-sixth of GDP. G (Government expenditure) is $2000 larger than investment. The country has a trade deficit of $700. What is the country's GDP
Answer: $3903
Explanation:
The gross domestic product for a country is simply used to know the value of the goods and the services that are being produced in that particular country. It should be noted that the formula for calculating GDP = C+I+G+(X-M)
Based on the information given in the question, the answer is $3903.
Check the attachment for further explanation.
An equivalent description of the holding of a receive-floating pay-fixed swap is as follows: A. An exchange of a long position in a fixed-rate bond for a short position in a floating-rate note. B. A portfolio of long positions in forward-rate agreements (FRAs) for each swap payment date, all at the same fixed rate as the swap. C. All of the above. D. A bond that pays the fixed rate minus the floating rate each period.
Answer:
The correct answer is
A) An exchange of a long position in a fixed-rate bond for a short position in a floating-rate note.
Explanation:
Swapping a fixed interest for a floating one can occur if the fixed interest tenure in comparison to a floating exchange rate becomes less expensive for the entity who took the loan.
Also executing a swap in interest rates (that is giving up the fixed tenure for the floating tenure) helps to ensure that liabilities are kept at minimum whilst assets are maximised.
It is important to note that the capital remains unmodified.
Cheers
Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $3,000 in the bank and leave it there: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. How much interest will you earn in the first year?
Answer:
Interest= $90
Explanation:
Giving the following information:
Initial investment= $3,000
i= 3%
Number of periods= 1
First, we need to calculate the future value, using the following formula:
FV= PV*(1+i)^n
FV= 3,000*1.03= $3,090
Now, the interest earned:
Interest= 3,090 - 3,000
Interest= $90
Select all that apply What is the difference between an adjusted trial balance and an unadjusted trial balance? (Check all that apply.) Multiple select question. The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. The unadjusted trial balance is more up to date and should be used to prepare financial statements. The adjusted trial balance is used to prepare financial statements. The adjusted trial balance generally has more accounts listed than the unadjusted trial balance.
Answer:
The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted.The adjusted trial balance is used to prepare financial statements. The adjusted trial balance generally has more accounts listed than the unadjusted trial balance.Explanation:
The Adjusted Trial balance lists the accounts that the company has at their ending balances which means that adjusting entries have been posted.
As a result of the Adjusted Trial Balance having final account balances, it is used to prepare the financial statements for the company as only final balances should be used in such.
More often than not, the Adjusted trial balance will have more accounts than the unadjusted balance because in process of adjustment, more accounts may be created for transactions that were not posted properly. For instance, there might be liability accounts for expenses if the expenses were not paid in the current period.
The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of A. increasing opportunity cost. B. decreasing marginal price. C. total benefits. D. increasing marginal cost. E. decreasing marginal benefit.
Answer:
E. decreasing marginal benefit.
Explanation:
The law of diminishing marginal utility can be explained as whenever there is rise in the supply of particular goods/services, then the marginal utility falls. Utility in Economics can be regarded as Satisfaction derived from particular goods/services.
Therefore, in the case of the question, point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle
decreasing marginal benefit. Because as the consumption of the lemonade increases, marginal utility gotten from
every added units taken will start reducing like that.
Imagine that Scott has asked your opinion about whether Barcelona should try to reduce involuntary turnover. What is an advantage of the current practice of firing a large percentage of employees?
a. Barcelona can replace less effective performers with better performers.
b. Barcelona can develop a monoculture in which all employees behave similarly.
c. Barcelona saves money on training costs.
d. Barcelona can gain valuable feedback about deficiencies in the company by conducting exit interviews.
Answer:
a. Barcelona can replace less effective performers with better performers.
Explanation:
As per the conversation i.e. you cant give the training to the people for enthusiastic them as you want to hire them also it is a transient business
So here you need to fire the old employees who are less effective and hire new employees who are enthusiastic that ultimately benefits the company
Therefore option a is correct
and the same is to be considered
A buyer always wants to pay a price that is as _____ as possible, but never _____ than the buyer's willingness to pay.
Answer: low: higher
Explanation:
A buyer always wants to pay a price that is as low as possible, but never higher than the buyer's willingness to pay.
As a way to save costs, a buyer will always seek to pay the lowest price they can possibly pay for a good or service. This is why some buyers negotiate prices and seek trade discounts.
Buyers will however have in mind a maximum price that they would be willing to pay. This is called their willingness to pay and it is a threshold that they would not want to exceed. If a good's price is higher than their willingness to pay, they will not buy the good.
5. The Market Place recently offered 5,000 shares of stock for sale via a Dutch auction. The firm received bids as follows: 500 shares at $22.50; 2,500 shares at $22.20; 3,300 shares at $22; and 5,500 shares at $21. Ignoring all costs, how much will the firm receive from this auction
Answer:
$110,000
Explanation:
No of Shares Price Total number of shares
500 22.50 500
2500 22.20 3000
3300 22.00 6800
5500 21.00 12300
In Dutch auction, share are allotted from highest no. of share to lowest at the price where all the shares are taken. So in this case, highest number of shares are asked by Bidder D which is 5500 shares (available 5000 shares). The bidder will be getting shares at $22 because this is the price when all the shares were taken.
Hence, the amount the firm will receive from this auction = 5,000 *22 = $110,000
Assume you short sell 100 shares of IBM common stock at $125 per share. If the initial margin is 70%, what is the amount that you put in as cash buffer?a) $3750b) $12500c) $5000d) $8750
Answer: d) $8750
Explanation:
The Cash buffer is also the margin of the total value of the stock.
= Initial margin * Investment value
= 70% * (125 * 100)
= 70% * 12,500
= $8,750
What would be most likely to happen if the discount rate were raised?
A. Depositors would make a run on a bank.
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B. Banks would make fewer loans.
C. Creditors would refuse to pay back loans.
D. Banks would stop opening savings accounts.
Answer:
B. Banks would make fewer loans
Explanation:
The discount rate is the interest rate that commercial banks pay to the Federal Reserve for loans received. Banks usually borrow to cater to their short-term cash-flow requirements. The discount rate is higher than the inter bank rate or the fed funds rate(the rate that banks charge each other for loans).
An increase in the discount rate causes the inter bank rate to rise (the Fed controls both rates). It means commercial banks are borrowing money from the Fed and each other at a higher interest rate. Consequently, commercial banks charge a higher interest rate for loans advanced to customers. An increase in interest rates at the banks discourages customers from borrowing.