Answer:
The business objective that I want Holden Evan to achieve in Tuatara is to sell their products throughout the Tuatara territory.
Explanation:
As the VP of Global Marketing, the business objective that i want Holden Evan to achieve in Tuatara is to sell their products throughout the Tuatara territory reason been that Holden Evan is a multinational corporation that deal in selling of beauty products as well as other consumer goods and since Tuatara is an emerging market for consumer products, this means that Holden Evan’s main aim and objective in Tuatara territory should be to manufacture and sell their products throughout the Tuatara territory.
Winkin contributes property with a value of $45,000 and Blinkin contributes property with a value of $90,000 to form Boat Corp in exchange for 25 and 50 shares of Boat, respectively. Which shareholder qualifies for Section 351 deferral of any gain or loss
Answer:
Winkin, with 25 shares of Boat Corporation, qualifies for Section 351 deferral of any gain or loss.
Explanation:
IRC Section 351 has this major requirement; it only applies to the exchange of property for voting stock in the corporation. If any shareholder involved in the transaction receives equity for something other than voting stock, e.g. services; the transaction may not qualify for tax deferral.
Oral Roberts Dental Supplies has annual sales of $5,625,000. 80% are on credit. The firm has $475,000 in accounts receivable. Compute the value of the average collection period.
Answer:
The answer is 38 days
Explanation:
The average collection period is the number of days it takes a company to convert its credit sales to cash
Average collection period = (account receivables/average credit sales) x 360 days
Credit sales = 80% of $5,625,000
=0.8 x $5,625,000
=$4,500,000.
Average collection period is therefore,
($475,000/$4,500,000) x 360 days
=0.10555556 x 360days
=38 days
Bonds with a face amount $1,000,000, are sold at 96. The entry to record the issuance is
A. Cash 1,000,000
Premium on Bonds Payable 40,000
Bonds Payable 960,000
B. Cash 960,000
Premium on Bonds Payable 40,000
Bonds Payable 1,000,000
C. Cash 960,000
Discount on Bonds Payable 40,000
Bonds Payable 1,000,000
D. Cash 960,000
Bonds Payable 960,000
Answer:
Option C is correct
Explanation:
The cash proceeds from the bond issuance is 96% of its face value i.e 96%*$1,000,000=$960,000
The discount on bonds payable=Face value-cash proceeds
The discount on bonds payable=$1,000,000-$960,000=$40,000
The appropriate entries would be to credit bonds payable with $1000,000 while cash and discount on bonds payable are debited with $960,000 and $40,000 respectively
Sony has a better opportunity to reach the potential Millennial market segment, compared to unestablished manufacturers, because of its:_______
Answer:
full spectrum of product offerings
Explanation:
Sony has always been striving to serve its customer better. Millennial are the top brands that are considered in market. They are the organizations which capture major market share and are massive market segment. Sony has offered wide range of products to its customers.
Prepare the Budgets given the following information Budgeted sales are expected to be: January 200 Units February 300 Units March 400 Units April 300 Units May 400 Units Selling Price $10 Per unit A. Prepare the sales Budget (5 points) Sales Budget January February March Quarter Budgeted sales in units 200 300 400 900 Times selling price per unit $10 $10 $10 $10 Budgeted sells in dollars $2,000 $3,000 $4,000 $9,000 B. Prepare the Production Budget (5 points)
Answer:
Sales Budget
January February March April May
Units Sold 200 300 400 300 400
Price per unit $10 $ 10 $ 10 $ 10 $ 10
Sales Rev $ 2.000 $ 3.000 $ 4.000 $ 3.000 $ 4.000
Explanation:
We have to multiplithe amount of units sold each month by the sales price per unit of each month.
For the second question, which is the production budget we require the beginning inventory at Jan 1st and the desired inventory policy else, we cannot complete it. Please add this as details for the question Thank you =)
___ are the criteria the firm uses to screen credit applicants in order to determine which of its customers should be offered credit and how much.
Answer:
Credit standards
Explanation:
The credit standard refers to the guidelines that are issued by the organization which analyzed whether the borrower is eligible for the loan or not. It could be checked by his or her credit score that reflects the full picture of borrower credit history i.e borrower is paying the amount of loan within in the given time or not or he is a defaulter that helps in deciding whether to offer credit or not and by how much
Identify the following questions as most likely to be asked by an internal or an external user of accounting information
1. What are reasonable payroll benefits and wages?
2. Should we make a five-year loan to that business?
3. What are the costs of our product's ingredients?
4. Do income levels justify the current stock price?
5. Should we spend additional money for redesign of our product?
6. Which firm reports the highest sales and income?
7. What are the costs of our service to customers?
Answer:
The answer is:
1. - Internal user of accounting information(management)
2. External user of accounting information(banks)
3. Internal user of accounting information(management)
4. External user of accounting information(potential investors)
5. Internal user of accounting information(management)
6. External user of accounting information
7. Internal user of accounting information(management)
Explanation:
Internal users of accounting information are people within a organization who use the accounting information for decision making. Examples of are the management and employees. External users are people that are not within the organization. Examples are government, the public, banks, potential investors etc
1. - Internal user of accounting information(management)
2. External user of accounting information(banks)
3. Internal user of accounting information(management)
4. External user of accounting information(potential investors)
5. Internal user of accounting information(management)
6. External user of accounting information
7. Internal user of accounting information(management)
Find the amount of the payment to be made into a sinking fund so that enough will be present to accumulate the following amount. Payments are made at the end of each period. $95 comma 00095,000; money earns 66% compounded semiannually for 2 and one half2 1 2 years
Answer:
PV= $81,947.83
Explanation:
Giving the following information:
Future value= $95,000
Interest rate= 0.03
Number of periods= 5
To calculate the initial investment required to reach the objective, we need to use the following formula:
PV= FV/(1+i)^n
PV= 95,000/(1.03^5)
PV= $81,947.83
Leaper Corporation uses an activity-based costing system with the following three activity cost pools:
Total Activity Activity Cost Pool machine- Fabrication 35,000 hours Order processing 300 orders Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries Depreciation $420,000 170,000 190,000 Occupancy $780,000 Total The distribution of resource consumption across activity cost pools is given below:
Activity Cost Pools Order Processing Fabrication other Total Wages and salaries Depreciation 30% 25% 45% 100% 20% 50% 30% 100% 40% 35% 100% 25% Occupancy
The activity rate for the Order Processing activity cost pool is closest to:
The activity rate for the Order Processing activity cost pool is closest to:
a) $633 per order
b) $1,745 per order
c) $855 per order
d) $572 per order
Answer:
Order processing= $846.67 per order
Explanation:
Giving the following information:
Activity costs:
Wages and salaries= 420,000
Depreciation= $170,000
Occupancy= $190,000
Activity Cost Pools:
Order Processing:
Wages and salaries= 0.3
Depreciation= 0.25
Occupancy= 0.45
Order processing 300 orders
First, we need to calculate the total overhead cost for order processing:
Wages and salaries= 0.3*420,000= 126,000
Depreciation= 0.25*170,000= 42,500
Occupancy= 0.45*190,000= 85,500
Total= $254,000
Now, using the following formula, we can determine the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Order processing= 254,000/300= $846.67 per order
You need to borrow money and you are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a stated rate of 3.125% compounded monthly. Loan B offers a stated rate of 3.15% compounded semi-annually. What are the effective annual rates for the loans? Which one do you prefer
Answer:
For Loan A = 3.170%
For Loan B = 3.174%
Loan B has a higher effective annual rate.
Explanation:
The computation of effective annual rates for the loans is shown below:-
For Loan A
We will assume effective annual rate is a
Stated rate(r) = 3.125% compounded monthly
= Number of periods in an year n = 12
So,
(1 + a) = (1 + r ÷ n) × n
= a = (1+0.03125 ÷ 12) × 12 - 1
= 0.03170
or
= 3.170%
For Loan B
We will assume the effective annual rate is b
Stated rate (r) = 3.15% compounded semi annually
= Number of periods in an year n = 2
So
(1 + a) = (1 + r ÷ n) × n
= a = (1 + 0.0315 ÷ 2) × 2 - 1
= 0.03174
or
= 3.174%
From the above calculation we can see that Loan B, is greater than Loan A and has a higher effective annual rate.
After the JPR Corporation paid its employees on May 15, 2019, and recorded the corporation’s share of payroll taxes for the payroll paid that date, the firm’s general ledger showed a balance of $1,730 in the Social Security Tax Payable account, a balance of $356 in the Medicare Tax Payable account, and a balance of $1,972 in the Employee Income Tax Payable account. On May 16, 2019, the business issued a check to deposit the taxes owed in the local bank. Record this transaction in a general journal form.
Answer:
Given that the firm's general ledger showed the following:
Balance in the Social Security Tax Payable account = $1,730
Balance in the Medicare Tax Payable account = $356
Balance in the Employee Income Tax Payable account = $1,972.
Record this transaction in a general journal form:
Date: May 16, 2019
Account title: Social Security Tax Payale. Dr. $1,730
Medicare Tax Payable. Dr. $356
Employee Income Tax Payable, Dr. $1,972
Bank/Cash(Total), Cr. $4,058
Understanding cost behavior depends on all of the following except a.intangibles. b.relevant range. c.activity drivers. d.activity bases.
Answer:
a.intangibles.
Explanation:
The cost behavior refers to behavior in which it shows the changes in the cost if there is a change in any kind of activity
It can be based on given range, activity drivers, activity bases but not with the intangible cases as intangible refers to the asset which cannot be visible or even touched like intellectual properties i.e copyrights, patents, goodwill, etc
Hence, the correct option is a.
The cost of an asset is $ 1 comma 050 comma 000, and its residual value is $ 130 comma 000. Estimated useful life of the asset is ten years. Calculate depreciation for the second year using the doubleminusdecliningminusbalance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)
Answer:
$168,000
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
Depreciation factor = 2 x (1/10) = 0.2
depreciation expense in year 1 = 0.2 x $1,050,000 =$210,000
book value at the beginning of year 2 = $1,050,000 - $210,000 = $840,000
depreciation expense in year 2 = 0.2 x $840,000 = $168,000
A customer owns 100 shares of ABC stock and owns 1 ABC Put option. The customer wishes to sell the stock by exercising the put, but wishes to retain a recently declared cash dividend. The first date that the customer can exercise the put and still retain the dividend is:
Answer:
July 15th
Explanation:
Hope this helps :)
If Mikael decides to go out with his friends instead of study for his biology test, what is the opportunity cost?
Answer:
Studying his biology test
Explanation:
opportunity cost refers to the cost of the forgone alternative inorder to enjoy another service
Nabors Company reported the following current assets and liabilities for December 31 for two recent years: Dec. 31, Current Year Dec. 31, Previous Year Cash $1,430 $1,710 Temporary investments 3,120 3,840 Accounts receivable 7,150 2,610 Inventory 2,340 2,300 Accounts payable 6,500 5,100 Required: a. Compute the quick ratio on December 31 of both years. If required, round your answers to one decimal place. Quick Ratio December 31, current year December 31, previous year b. Is the quick ratio improving or declining?
Answer:
a. Quick ratio for current year =2.16
Quick ratio for current year =2.05
b. Improving
Explanation:
A.
To find quick ratios we need to divide current assets by current liabilities
Quick Ratio = [tex]\frac{currentasssets}{currentliabilities}[/tex]
Current assets Dec 31 current year Dec 31 previous year
Cash $1,430 $1,710
Temporary investment $3,120 $3,840
Accounts receivable $7,150 $2,610
Inventory $2,340 $2,300
Total current assets $14,040 $10,460
Current liability
Account payable $6,500 $5,100
Quick Ratio [tex]\frac{14040}{6500 }[/tex] [tex]\frac{10460}{5100}[/tex]
Quick Ratio 2.16 2.05
B.
As you can see above that in the previous year Nabors company had a quick ratio of 2.05 but it has slightly increased by 0.11 in the current year.
Answer:
Quick Ratio for the current year = 3.78
Quick Ratio for the previous year = 1.6
Explanation:
Nabors Company
Dec. 31, Current Year Dec. 31, Previous Year
Cash $1,430 $1,710
Temporary investments 3,120 3,840
Accounts receivable 7,150 2,610
Inventory 2,340 2,300
Accounts payable 6,500 5,100
Quick Ratio = Cash + Cash Equivalents + Accounts Receivables/ Accounts Payables
Quick Ratio for the current year = $ 1430+ 3120 + 7150/ 6500
= 24570/6500= 3.78
Quick Ratio for the previous year = $ 1710+ 3840 + 2610/ 5100
= 8160/5100= 1.6
A quick ratio less than 1.0 means that the current liabilities exceed the quick assets. a rule of thumb the quick ratio must have a value greater than 1.0 to conclude that the company is unlikely to face near term liquidity problems. . A value less than 1.0 raises the liquidity concerns unless the a company can generate enough cash from inventory sales or if much of its liabilities are not due until late in the next period.
Similarly a value greater than 1.0 can hide a liquidity problem if payable are due shortly and receivables are not collected late until next period.
It is improving.
If a major misdeed is committed by a brokerage that results in a substantial drain on the real estate recovery trust account, what options are available to replenish the fund?
Answer:
Explanation:
Real Estate Recovery Trust Account are accounts that are funded by administrative penalties and dispersed to consumers that are owed damages due to a license holder's conduct and subsequent inability to pay. These licence holders may be charged an additional $10 fee on the renewal date in order to make up for the substantial drain, or receive a special assessment if the replenishment is urgent.
The journal entry to record the transfer of partially completed work in process to the next process in process costing is a(n):
Answer:
Explanation:
The Journal Entry in these types of situations is done as Debit Work in Process-department #2 and credit Work in Process-department #1. Since it is being transferred from one to the other meaning the first department is losing the completed work (credit) while the second department is gaining the completed work (debit)
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below:________.
Activity Cost Pool Activity Measure Activity Rate
Order size Number of direct labor-hours $ 16.85 per direct labor-hour
Customer orders Number of customer orders $ 320.00 per customer order
Product testing Number of testing hours $ 89.00 per testing hour
Selling Number of sales calls $ 1,090.00 per sales call
The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing, and 2 sales calls.Required:Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
Answer:
Overhead Report for heavy-duty trailer axles.
Order size ($ 16.85 × 200) $3,370.00
Customer orders ($ 320.00 × 1) $320.00
Product testing ($ 89.00 × 4) $356.00
Selling ( $ 1,090.00 × 2) $2,180.00
Total $6,226.00
Conclusion :
The total overhead cost assigned to the order is $6,226.00
Explanation:
ABC system allocates overheads to jobs using cost drivers.
First an Activity Center where costs accumulate is identified these can be several in our scenario we have four Activity Centers.
Then the Cost driver rate is calculated for each Activity Center. Our question has provided these.
The final step is to allocate the overheads to a particular job using the cost driver rate.
Pledging receivables: A) Allows firms to raise cash. B) Allows a firm to retain ownership of its receivables. C) Does not transfer risk of bad debts to the lender. D) Should be disclosed in the financial statements. E) All of the above
Answer:
E
Explanation:
Pledging receivables is when the receivables are used as collateral during a financial arrangement. When a business uses it's business assets as collateral to gain a loan.
All the options in the question constitutes what pledging receivables consists. Therefore option E is the right answer.
Use the following information for Meeker Corp. to determine the amount of equity to report. Cash $ 72,000 Buildings 126,500 Land 208,600 Liabilities 131,500 A. $22,600. B. $275,600. C. $407,100. D. $538,600. E. $285,600.
Answer:
$276,500
Explanation:
The computation of the total equity is shown below;
As we know that
Accounting equation is
Total assets = Total liabilities + total stockholder equity
where,
Total assets is
= Cash + land + buildings
= $72,000 + $208,600 + $126,500
= $407,100
And, the total liabilities is $131,500
So, the total stockholder equity is
= $407,100 - $131,500
= $276,500
We simply applied the above formula
A retired married customer, age 73, has a portfolio that is invested in Blue Chip stocks and Treasury bonds that provides current income. The customer is concerned that he is paying a very high Federal and State combined income tax rate. An appropriate recommendation for this customer would be to diversify part of his portfolio into an investment in:
Answer:
The answer is Municipal bonds
Explanation:
Municipal bonds are securities(debt securities) issued by states, cities, counties etc. It is generally issued to fund capital project like construction of roads, schools etc.
Municipal bonds are generally valued for being exempt from federal, state or local taxes taxes. Hence, the reason why the customer should invest in this type of bond since the customer is being concerned about high tax that he has been paying.
1 points eBookPrintReferences Check my work Check My Work button is now disabled3Item 2Item 2 1 points Today, your dream car costs $65,500. You feel that the price of the car will increase at an annual rate 2.4 percent. If you plan to wait 4 years to buy the car, how much will it cost at that time
Answer:
$72,018.011
Explanation:
Calculation of how much will it cost at that time you plan to wait 4 years to buy the car
Using this formula
Cost =Car cost (Increase in price)^ Number of years
Let plug in the formula
Cost =$65,500(1+0.024)^4
Cost =$65,500(1.024)^4
Cost =$65,500(1.09951162)
Cost =$72,018.011
Therefore the amount that it will cost at that time you plan to wait 4 years to buy the car will be $72,018.011
Innovations are allowing consumers to utilize gesture, touch, and voice to control computers and other devices. This is an example of a(n) __________ force that could impact many industries.
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Economic
b) Technological
c) Competitive
d) Regulatory
e) Social
And the correct answer is the option B: Technological.
Explanation:
To begin with, those kind of innovations like gesture, touch and voice commands that are focused in controlling the computers in a major amount of ways so therefore the use of the device will be easier for the users, are only trying to tend to the new ways of technology that will eventually in the future dominate in the industries and will cause an increase in the production of those companies that use that kind of technology because it only makes it easier to do the tasks and therefore that the technology force mentioned will only impact in a great way in many industries.
In the Chase case, Chase segmented customers based on the types of rewards they preferred. Which segmentation strategy does Chase use?
Answer:
The answer is behavioural segmentation
Explanation:
Behavioral Segmentation is a form of customer segmentation that divides consumers according to behavior patterns as they interact with a company. One of the objectives is to understand how to address the particular needs and desires of customer groups..
It helps us to analyze how consumers used their cards and how much they valued rewards. We have benefit-seeking buyers, Loyalty-oriented purchasing etc
The production department in a process manufacturing system completed 94,000 units of product and transferred them to finished goods during a recent period. Of these units, 28,200 were in process at the beginning of the period. The other 65,800 units were started and completed during the period. At period-end, 16,700 units were in process. Compute the departments equivalent units of production with repect to direct materials under each of three seperate assumptions, using the weighted average method, then using the FIFO method
a. All direct materials are added to products when processing begins.
b. Beginning inventory is 40% complete to materials and conversion costs. Ending inventory is 75% complete as to materials and conversion costs
c. Beginning inventory is 60% complete as to materials and 40% complete as to conversion costs. Ending Inventory is 30% complete as to materials and 60% complete to conversion costs.
Answer:
Weighted Average Method.
a. 110,700 units
b. 106,525 units
c. 82,090 units
FIFO
a. 85,500 units
b. 95,245 units
c. 99,010 units
Explanation:
Calculation of equivalent units of production with respect to direct materials.
FIFO.
a. All direct materials are added to products when processing begins.
Materials
To finish Opening Work in Process 0
Started and Completed 65,800
Closing Work in process (16,700 × 100%) 16,700
Total equivalent units of production 85,500
b. Beginning inventory is 40% complete to materials and conversion costs. Ending inventory is 75% complete as to materials and conversion costs
Materials
To finish Opening Work in Process (28,200 × 60%) 16,920
Started and Completed (65,800 × 100%) 65,800
Closing Work in process (16,700 × 75%) 12,525
Total equivalent units of production 95,245
c. Beginning inventory is 60% complete as to materials and 40% complete as to conversion costs. Ending Inventory is 30% complete as to materials and 60% complete to conversion costs.
Materials
To finish Opening Work in Process (28,200 × 40%) 11,280
Started and Completed (65,800 × 100%) 65,800
Closing Work in process (16,700 × 30%) 5,010
Total equivalent units of production 82,090
Weighted Average Method.
a. All direct materials are added to products when processing begins.
Materials
Completed and transferred (94,000 × 100%) 94,000
Closing Work in process (16,700 × 100%) 16,700
Total equivalent units of production 110,700
b. Beginning inventory is 40% complete to materials and conversion costs. Ending inventory is 75% complete as to materials and conversion costs
Materials
Completed and transferred (94,000 × 100%) 94,000
Closing Work in process (16,700 × 75%) 12,525
Total equivalent units of production 106,525
c. Beginning inventory is 60% complete as to materials and 40% complete as to conversion costs. Ending Inventory is 30% complete as to materials and 60% complete to conversion costs.
Materials
Completed and transferred (94,000 × 100%) 94,000
Closing Work in process (16,700 × 30%) 5,010
Total equivalent units of production 99,010
A fire has destroyed a large percentage of the financial records of the Excandesco Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 14.9 percent. Sales were $1,750,000, the total debt ratio was .33, and total debt was $651,000.
What is the return on assets (ROA)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Return on assets __%
Answer:
10%
Explanation:
For computing the return on assets we have to do the following calculations:
As we know that
Total debt ratio = Total debt ÷ Total assets
0.33 = $651,000 ÷ Total assets
So,
Total assets = $1,972,727.27
Now the total equity is
Total assets = Total debt + Total Equity
$1,972,727.27 = $651,000 + Equity
So,
Equity = $1,321,727.27
Now
ROE = Net income ÷ Equity
0.1490 = Net income ÷ $1,321,727.27
Net income = $196,937
So,
ROA = Net income ÷ Total assets
= $196,937 ÷ $1,972,727.27
= 9.98%
= 10%
An aging of a company's accounts receivable indicates that $3140 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $820 debit balance, the adjustment to record bad debts for the period will require a:__________
a. debit to Bad Debt Expense for $3140.
b. credit to Allowance for Doubtful Accounts for $820.
c. debit to Bad Debt Expense for $3960.
d. debit to Bad Debt Expense for $2320.
Answer:
c. debit to Bad Debt Expense for $3960.
Explanation:
The journal entry to record the bad debt expense is shown below;
Bad debt expense Dr ($3,140 + $820) $3,960
To Allowance for doubtful debts $3,960
(Being the bad debt expense is recorded)
For recording this we debited the bad debt expense as it increased the expenses and credited the allowance for doubtful debts as it decreased the assets
Therefore option c is correct
Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players: Movietonia and Videotech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its players.
Videotech Pricing
High Low
Movietonia Pricing High 11, 11 2, 15
Low 15, 2 8, 8
For example, the lower-left cell shows that if Movietonia prices low and Videotech prices high, Movietonia will earn a profit of $15 million and Videotech will earn a profit of $3 million. Assume this is a simultaneous game and that Movietonia and Videotech are both profit-maximizing firms.
1. If the firms do not collude, what strategies will they end up choosing?
2. The game between Movietonia and Videotech is an example of the prisoners' dilemma.
a. true
b. false
Answer:
pricing low
yes
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
if either firm charges high, they either earn 11 million or 2 million.
if either firm charges low, it would earn either 15 million or 8 million.
because the payoffs of charging low is higher than the payoffs of charging high, the best strategy is for the firms to charge low if there is no cooperation.
the game is a prisoners dilemma because the choice the firms make isn't the choice that will yield the highest payoffs. the choice that would yield the highest payoffs is to both charge high prices.
A large company is accused of gender discrimination in wages. The following model has been estimated from the company's human resource information.
In (WAGE) = 1.439 + .0834 EDU + .0512 EXPER + .1932 MALE
Where WAGE is hourly wage, EDU is years of education. EXPER is years of relevant experience, and MALE indicates the employee is male How much more do men at the firm earn, on average?
a) $1.21 per hour more than females
b) 19.32% more than females
c) $19.32 per hour
d) $19, 320 more per year than females^2
Answer: b) 19.32% more than females
Explanation:
According to the model for calculating how wages are paid to employees, there is a .1932 coefficient attached to being a male employee. This means that 0.1932 (19.32% ) is added to an employees salary if they are males. This simply means that males are getting paid 19.32% more than other employees in the company which is this case are females.