Consider two nations, Spendia and Savia. The MPC for Spendia is 0.8, and the MPC for Savia is 0.5. Assume that both nations experience an increase in gross investment (I) of $100 million at their existing GDP levels.
a. Considering the multiplier effect, what will be the overall increase in income (Y) for each nation?
b. Now assume that a third nation experiences an increase of $250 million in its income and its gross investment (I) increases by the same amount as Spendia and Savia, which is $100 million.
The expenditures multiplier of this third nation is ________ suggesting an MPC of _________.
Answers
Answer:
a. Overall increase in income (Y) for Spendia is $500 million, while overall increase in income (Y) for Savia is $200 million
b. The expenditures multiplier of this third nation is 2.50 suggesting an MPC of 0.6.
Explanation:
a. Considering the multiplier effect, what will be the overall increase in income (Y) for each nation?
For Spendia
MPC = Marginal propensity to consume = 0.8
MPS = Marginal propensity to save = 1 - 0.8 = 0.2
Multiplier = 1 / MPS = 1 / 0.2 = 5
Overall increase in income (Y) for Spendia = Increase in gross investment * Multiplier = $100 million * 5 = $500 million
For Savia
MPC = 0.5
MPS = 1 - 0.5 = 0.5
Multiplier = 1 / MPS = 1 / 0.5 = 2
Overall increase in income (Y) for Savia = Increase in gross investment * Multiplier = $100 million * 2 = $200 million
b. Now assume that a third nation experiences an increase of $250 million in its income and its gross investment (I) increases by the same amount as Spendia and Savia, which is $100 million.
Note that generally in macroeconomics, savings (S) is equal to gross investment (I). Consequently, it is assumed that an increase in gross investment (I) eqauls to an increase in savings (S).
Based on this, we have:
Increase in income (Y) = $250 million
Increase in gross investment (I) = Increase in savings (S) = $100 million
MPS = Increase in savings / Increase in income = $100 / $250 = 0.40
Multiplies = 1 / MPS = 1 / 0.4 = 2.5
MPC = 1 - MPS = 1 - 0.4 = 0.6
Therefore, the expenditures multiplier of this third nation is 2.50 suggesting an MPC of 0.6.
Answer:
500, 5, 200, 2, 2.5, 6
Explanation:
Related Questions
All projects are unique:________.
Select one:
A. Therefore all project management circumstances are equally unique.
B. So knowledge should not be transferred to avoid bias in future projects.
C. So knowledge cannot be transferred.
D. But they may have several common points.
Answers
Answer:
D. But they may have several common points
Explanation:
Although all projects are unique, they still share similar similarities. So knowledge can be transferred.
Mr. Thano, age 47, withdrew $22,000 from his employer-sponsored qualified retirement plan to pay for his daughter's wedding. Compute the tax cost of the withdrawal if Mr. Thano has a 24% marginal tax rate on ordinary income. Tax Cost is_____
Answers
Answer:
$7,480
Explanation:
Mr Thano withdrew $22,000 at the age of 47
Marginal Tax rate= 24%
At the age of 47 means that the withdraw was made prematurely. Immature withdrawal of retirement plans means withdrawal made before the age of 60-65 years depending on the Country Policy
Hence, Tax Cost = 24% * 22,000
Tax cost = 5,280.
In addition, Mr Thano will be charge premature withdrawal cost of 10% as well
10% * 22000 = 2,200.
In total, the tax cost on the withdrawal of $22,000 is = $5,280 + $2,200 = $7,480
Mann, Inc., which owes Doran Co. $1,200,000 in notes payable with accrued interest of $108,000, is in financial difficulty. To settle the debt, Doran agrees to accept from Mann equipment with a fair value of $1,140,000, an original cost of $1,680,000, and accumulated depreciation of $390,000.
Instructions
(a) Compute the gain or loss to Mann on the settlement of the debt.
(b) Compute the gain or loss to Mann on the transfer of the equipment.
(c) Prepare the journal entry on Mann’s book to record the settlement of this debt.
(d) Prepare the journal entry on Doran’s books to record the settlement of the receivable.
Answers
Answer:
A. $168,000
B.$150,000
C.Dr Notes Payable1,200,000
Dr Interest Payable 108,000
Dr Accumulated Depreciation 390,000
Dr Loss on Disposal of Equipment 150,000
Cr Equipment 1,680,000
D.Dr Equipment 1,140,000
Dr Allowance for Doubtful Accounts 168,000
Cr Notes Receivable1,200,000
Cr Interest Receivable 108 ,000
Explanation:
Mann, Inc.,
(a)Computation of the gain or loss to Mann on the settlement of the debt will be:
Note payable$1,200,000
Add Interest payable108,000
Carrying amount of debt 1,308,000
Less Fair value of equipment (1,140,000)
Gain on restructuring of debt$ 168,000
(b)Computation of the gain or loss to Mann on the transfer of the equipment will be:
Cost$1,680,000
Less Accumulated depreciation (390,000)
Book value1,290,000
Less Fair value of plant assets (1,140,000)
Loss on disposal of equipment$ 150,000
(c) The Journal urnal entry on Mann’s book to record the settlement of this debt will be:
Dr Notes Payable1,200,000
Dr Interest Payable 108,000
Dr Accumulated Depreciation 390,000
Dr Loss on Disposal of Equipment 150,000
Cr Equipment 1,680,000
Cr Gain on Restructuring of Debt 168,000
(d) The journal entry on Doran’s books to record the settlement of the receivable will be:
Dr Equipment 1,140,000
Dr Allowance for Doubtful Accounts 168,000
Cr Notes Receivable1,200,000
Cr Interest Receivable 108 ,000
Suppose only two airlines, United and Delta provide flights between Atlanta and Greenville. Both firms must choose whether to advertise or not advertise.The advertising straategies with corresponding profits are depicted in the payoff matrix. United Aitlines profits are in blue and Deltas Airlines are in red.United Airlines dominant strategy is advertise or not advertise ( choose one),and Delta donminant strategy is to advertise or not advertise (choose ones)What is the Nash equilibrium for this game? (choose one)a) United will choose to advertise and Delta will choose not to advertiseb) United will choose not to advertise and Delta will choose to advertisec) United and Delta will both choose to advertised) United and Delta will both choose not to advertise
Answers
Answer and Explanation:
(1) A dominant strategy is a strategy selected by one player regardless of the other player 's strategy.
According to the question
United dominant strategy is to Advertise, as it contains higher payoff ($9,000 > $1,000 and $16,000 > $11,000).
While on the other hand, Delta dominant strategy is to Advertise, as it contains higher payoff ($9,000 > $1,000 and $16,000 > $11,000).
(2) If Delta advertises, the best option for United is to advertise as the payout is higher($9,000 > $1,000).
If Delta does not advertise, the better option for United is to advertise as the payoff is higher($16,000 > $11,000).
The best strategy for Delta as United Advertises is to advertise because the payoff is higher ($9,000 > $1,000).
If United doesn't advertise, the best strategy for Delta is to advertise as the payoff is higher($16,000 > $11,000).
Hence Nash equilibrium is: (United Advertises, Delta Advertises)
Cash flows of two mutually exclusive projects are as follows. Project A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year. Project B has initial cost of $120,000, an operating cost of $8,000 per year, and a $40,000 salvage value after its 3-year life. Assume the interest rate is 10% per year. Which of the following statements is true?
A. Two projects have different life cycle
B. Project A should be selected.
C. The present worth of project A is -$143,252.17.
D. The present worth of project B is -$109,842.22.
Answers
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Project A:
Costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year.
Project B:
The initial cost of $120,000, an operating cost of $8,000 per year, and a $40,000 salvage value after its 3-year life.
Assume the interest rate is 10% per year.
Both projects present a 3-year life cycle.
To determine which option is correct, we need to calculate the net present value using the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
Cf= cash flow
Project A:
Cf1= 30,000/1.10= 27,272.73
Cf2= 30,000/1.10^2= 24,793.39
Cf3= 45,000/1.10^3= 33,809.17
Total= 85,875.29
NPV= -80,000 + 85,875.29= 5,875.29
Because the net present value is positive, Project A should be accepted.
Project B doesn't provide income, therefore it shouldn't be accepted.
On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $203,433.00 with an accumulated depreciation of $183,089.70. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $18,308.97. What is the amount of the gain or loss on this transaction
Answers
Answer:
loss= $2,035.33
Explanation:
Giving the following information:
Purchasing price= $203,433.00
Accumulated depreciation= $183,089.70.
The company found a company that is willing to buy the equipment for $18,308.97.
The gain or loss from selling an asset depends on the book value. If the selling price is higher than the book value, the company gain from the sale.
Book value= purchasing price - accumulated depreciation
Book value= 203,433 - 183,089.7= 20,343.3
Gain/loss= 18,307.97 - 20,343.3= $2,035.33 loss
The following information is available for Elliot Company.
January 1, 2013 2013 December 31, 2013
Raw materials inventory $26,000 $30,000
Work in process inventory 13,500 22,200
Finished goods inventory 30,000 21,000
Materials purchased $170,000
Direct labor 220,000
Manufacturing overhead 180,000
Sales 800,00
Required:
Compute cost of goods manufactured $____________________
Answers
Answer:
The cost of goods manufactured is $557,300
Explanation:
In order to calculate the cost of goods manufactured we would have to make the following calculation:
cost of goods manufactured=Work in process inventory 1/1+Total manufacturing costs-Work in process 12/31
Work in process inventory 1/1)= $13,500
Total manufacturing costs=Direct materials used+Direct labor+Manufacturing overhead
Total manufacturing costs=166000+220000+180000=$566,000
Work in process 12/31=$22,200
Cost of goods manufactured=$13,500 +$566,000 -$22,200
Cost of goods manufactured= $557,300
The cost of goods manufactured is $557,300
Motorzone offers replacement parts for old Volkswagen Beetles. The company calculates shipping charges based on shipping parts from Boston, even though some parts actually ship from St. Louis. Motorzone most likely practices ________ pricing.
Answers
Answer:
basing-point
Explanation:
Basing point pricing is a system used to establish prices in which the business charges a fixed amount for the product and an additional charge for the shipping that is determined according to the customer's distance from a certain place that is called the basing point. According to this, the answer is that Motorzone most likely practices basing-point pricing because they establish the shipping charges based on a pre-determined location even though some products are not in this place.
Expenses for a Pizza restaurant include raw material for pizza at $4.00 per slice, $116.00 as monthly rental and $45.00 monthly as insurance. Lost sale expense is considered to be $4.00 per unhappy customer. Leftover Pizza can be sold for $3. The restaurant is open 25 days in a month. Today the restaurant prepared 200.00 pizza slices and sells them for $10.00/slice. There was a party at a nearby office so the demand for pizza went up to 212.00 slices. How much profit did the restaurant earn today
Answers
Answer:
The restaurant earned a profit of $1145.56 which is approximately $1146
Explanation:
the formula is given as:
Q x (sale price – material cost) – ( rental + insurance)/day - loss
Q = 200
Sale price = $10
Material cost = $4
rental = $116
insurance = $45
lost sale expense = $4
day = 25
increased demand = 212
= 200(10 - 4) - (116 + 45)/25 - (212 - 200)4
= 200(6) - 6.44 - 48
= 1200 - 6.44 - 48
= $1145.56
This is approximately $1146
The shape of a production possibility curve is downward-sloping because ____________________. Select the correct answer below: you can get more of one good only by giving up some of another good quantities produced are always negative you cannot get any more of good, even by giving up some of another good none of the above
Answers
Answer:
you can get more of one good only by giving up some of another good
Explanation:
A production possibilities frontier shows the opportunity cost of producing one good instead of another. This way, as you follow the curve, the combination of goods will vary, increasing the production of one good but deceasing the production of the other.
Opportunity costs are the benefits lost or extra costs associated to choosing one activity or investment over another alternative. Since resources are scarce, you must always give something up in order to obtain another thing, e.g. you give up your leisure time in order to study.
Stuart tells his student government representative at his college to propose rent controls on local rental housing as a way to help students afford rental housing. Maria disagrees with Stuart, saying rent controls will make students worse off. Who is correct and why
Answers
Answer:
Both are correct in part. Rent controls will be better for the students who are able to find housing at the reduced price but worse for students as a whole because there will be a shortage of rental housing, a lower future supply, and the quality will deteriorate.
Explanation:
Rent control involves use of price regimes such as price floor and price ceiling to control the cost of rent by the government.
Price ceiling is the maximum price allowed for rent while price floor is the minimum amount a property is allowed to be rented out.
The aim of rent control is to make housing cost cheap for everyone.
So both Stuart and Maria are correct. Rent control will make housing affordable for the students.
However when unfavourable rent ceiling is imposed by government, suppliers always aim to make profit and will refuse to give property out for rent. Resulting in shortage of rental housing, a lower future supply, and the quality will deteriorate.
Ginny currently earns a (real or nominal) wage of $12.00 per hour; in other words, the amount of her paycheck each week is $12.00 per hour times the number of hours she works. Suppose the price of sparkling water is $2.50 per gallon; in this case, Ginny (real or nominal) wage, in terms of the amount of sparkling water she can buy with her paycheck, is gallons of sparkling water per hour. When workers and firms negotiate compensation packages, they have expectations about the price level (and changes in the price level) and agree on a (real or nominal) wage with those expectations in mind. If the price level turns out to be higher than expected, a worker's (real or nominal) wage is than both the worker and employer expected when they agreed to the wage.
Ginny and her employer both expected inflation to be 4% between 2012 and 2013, so they agreed, in a two-year contract, that she would earn $12.00 per hour in 2012 and $12.48 per hour in 2013. However, suppose inflation between 2012 and 2013 actually turned out to be 5%, not 4%. For example, suppose the price of apple juice rose from $2.00 per gallon to $2.10 per gallon. This means that between 2012 and 2013, Ginny's nominal wage by___________ % , and her real wage by approximately____________ .
Answers
Answer:
since we are using this year as our base year, Ginny's real and nominal wage is $12 per hour
price of sparkling water $2.50 per gallon
Ginny can buy 4.8 gallons of sparkling water per hour of work
If the price level turns out to be higher than expected, a worker's real wage is LOWER than both the worker and employer expected when they agreed to the wage.
Ginny and her employer both expected inflation to be 4% between 2012 and 2013, so they agreed, in a two-year contract, that she would earn $12.00 per hour in 2012 and $12.48 per hour in 2013. However, suppose inflation between 2012 and 2013 actually turned out to be 5%, not 4%. This means that between 2012 and 2013, Ginny's nominal wage INCREASED by 4%, and her real wage by DECREASED BY approximately 0.92%.
Ginny's real wage in 2013 = $12.48 / 1.05 = $11.89
it decreased by ($11.89 - $12) / $12 = -0.92%
Firms that charge relatively low prices and offer substantial differentiation are following a best-cost strategy. A best cost strategy can be an effective level strategy to the extent that a firm whose fixed costs and overhead are very low relative to the competition.
What is an example of an industry where you think a best-cost strategy could be successful?
How would you differentiate a company to achieve this success in this industry?
Provide an example of a firm in Jacksonville that is following a best cost strategy? Explain
Answers
Answer: The answer is given below
Explanation:
A best-cost strategy is a strategy that is used by companies as they focus on low cost in order to give their customers better value for the money spent on the purchase of goods or services from them. The goal of this strategy is to keep the prices and costs lower when compared with the other competitors that offer similar products.
This strategy can be very successful in retail stores. Retail stores offer similar products to their competitors and using this strategy could help in making the store get more customers and hence push up its income.
For this strategy to work in such industry, firstly, the company will need to study its market very well, get to know its competitors, have a good working relationship with the manufacturers of different products, and have a friendly and amazing staffs who know what is and expected of them. With all these in place, success will be achievable.
An example of a firm in Jacksonville that is following a best cost strategy is
McDonald. The company over the years, has been successful and laid s foundation of offering fast-food meals that are of low prices and affordable.
Northern purchased the entire business of Southern including all its assets and liabilities for $682,500. Below is information related to the two companies: Northern Southern Fair value of assets $ 1,048,000 $ 797,000 Fair value of liabilities 580,000 320,000 Reported assets 811,000 647,000 Reported liabilities 496,000 257,000 Net Income for the year 56,000 51,000 How much goodwill did Northern pay for acquiring Southern
Answers
Answer:
Explanation:
Good will is the excess of the purchase consideration over the fair value of the net identifiable assets of an acquired business as a result of the intangible assets acquired along.
Purchase consideration is the amount paid in exchange an assets which can be in the foe of cash , shares or the fair value of other agreed means of exchange.
Fair value is the amount that an asset or a liability can be exchanged for at an arms length transaction
Workings
Northern Southern
fair value of asset 1,048,000 797,000
Fair value of liabilities 580,000 320,000
Reported Assets 811,000 647,000
Reported liabilities 496,000 257,000
Net Income 56,000 51,000
Fair value of net asset
1,048,000-580,000 468,000 477,000
797,000- 320,000
Purchase consideration = 682,500
Good will = Purchase consideration - fair value of the net asset acquired
682,500 - 477,000 =205,500
The opening balance of Company A is 25,000, and the repayment is scheduled for 1,000 per month at an annual interest rate of 5%. Use the average debt balance to calculate the interest payment. The closing balance of debt at the end of the month is _____ and the interest payment is _____.
Answers
Answer:
Closing balance of debt at the end of the month = $24,000
Interest payment = $102.08
Explanation:
The computation of closing balance of debt at the end of the month and the interest payment is shown below:-
Closing balance of debt at the end of the month = Opening balance of company A - Scheduled Repayment per month
= $25,000 - $1,000
= $24,000
Interest payment = Average Debt × Annual interest rate × 12 months
= (($25,000 + $24,000) ÷ 2) × 0.05 ÷ 12 months
= $102.08
Therefore we have applied the above formulas.
Jarrett Baker is the founder of an enterprise software company located in Chevy Chase, Maryland. By looking at the income statements for Jarrett’s business over the past 3 years, you see that its working capital has declined from $42,400 in 2012 to $17,900 in 2013 to $3,100 in 2014. If this trend continues, in what ways could it jeopardize the future of Jarrett’s business?
Answers
Answer and Explanation:
In this particular case, the working capital continues to fall and hits a value below zero otherwise the business would have a negative cash flow.
Company's assets are below its liabilities which including its current working capital would not be able to manage its debts. The Company would be faced with extreme difficulty in paying back its creditors.
If, as in the case at hand , the company continues to operate in low working capital and work capital declines over time, the company can encounter extremely serious financial problems.
Following Effects may include declining revenue from purchases, non-inventory management, or issues with the specific total accounts receivable.
Cretically analyse the difference and the point of convergence between floor inspection and functional inspection
Answers
Answer and Explanation:
The connection between Floor and Function Inspection is that these two techniques are used to eliminate and identify defective raw materials prior to the development of the same. Quality is the key priority for both processes, where standards are reviewed and evaluated to ensure that the operation continues correctly.
The distinction between the two is that in Floor Inspection the system inspects the material in process doe the machine or at the time of production to ensure that each and every machine or floor is working effectively. It is to make share the material processing costs don't go out or it could easily be found by hand and defect.
The Functional Inspection, on the other hand, will have the key feature tested which the product is supposed to perform. For instance, if the same has the right speed and output, the electric motor could be tested up. It doesn't inform us about the variability throughout all parts but gives us an overall view of the satisfaction that comes from investigating the same commodity.
You are considering purchasing a stock that currently sells for $50. The expected price of the stock in a year is $45, and during the coming year a $2 dividend is expected to be paid. The risk-free rate is 5% and the market return is 10%. The stock has a beta of 0.85. What is the holding period return of the stock
Answers
Answer:
The holding period return of the stock is - 6 % or - 6.0%
Explanation:
Solution
Given that:
You are thinking of purchasing a stock that currently sells for= $50
The expected price of the stock =$45
Dividend expected to be paid =$2
Risk free rate = 5%
Market return = 10%
Stock (beta) = 0.85
We will now find the holding period return of the stock which is given below:
The formula for calculating the holding period return of a stock is given as,
= The Expected price in a year + Dividend earned during the year – Purchase Price / Purchase Price
We recall that:
The Purchase Price = $ 50
Expected price in a year = $ 45
Dividend earned during the year = $ 2
Now,
By Applying the above values in the formula we have the holding period return of the stock as :
= [45 + 2 – 50] / 50
= - 3 / 50
= - 0.0600 = - 6.00 %
= - 6.0 % ( when rounded off to one decimal place )
Therefore, the Holding period return of the stock is - 6 % or - 6.0%
Lynn, a company owner, looks at her financial statements. She wants to know how much the cash balance contributed to total assets on the balance sheet. What would you suggest
Answers
Answer:
conduct a vertical financial analysis using a total from the balance sheet
Explanation:
Based on what exactly Lynn wants, the best suggestion for her in this scenario would be to conduct a vertical financial analysis using a total from the balance sheet. This is a method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement. Doing so will give her the percentage that each asset contributed to the total balance sheet.
Your uncle lends you $2,000 less $100 (interest at 5 percent), and you receive $1,900. Use the APR formula to find the true annual percentage rate. Assume you repay the entire loan in one year
Answers
Answer:
APR =5.263%
Explanation:
Computation of the true annual percentage rate
Using the APR formula to find the true annual percentage rate
APR=(2 × n × I) / [P × (N + 1)]
Hence;
APR= (2 × 1 × $100) / [$1,900 × (1 + 1)]
APR=$200/($1,900×2)
APR=$200/$3,800
APR= 0.05263 ×100
APR =5.263%
Therefore the true annual percentage rate using the APR formula will be 5.263%
The company has an opportunity to sell 40,000 additional units at $12 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 16% and (2) administrative expenses would increase by $172,000.
Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit.
Answers
Answer:
$1,576,000
Explanation:
The computation of the combined total net income is shown below:
Particulars Normal volume Additional volume Combined total
Sales $6,000,000 $480,000 $6,480,000
(40,000 × $12)
Less: Costs and expenses
Direct material $800,000 $80,000 $880,000
($800,000 ÷ 400,000 × 40,000)
Direct labour $1,600,000 $160,000 $1,760,000
($1,600,000 ÷ 400,000 × 40,000)
Overhead $400,000 $64,000 $464,000
($400,000 × 16%)
Selling expenses $600,000 $0 $600,000
Administrative
expense $1,028,000 $172,000 $1,200,000
Total costs
and expenses $4,428,000 $476,000 $4,904,000
Incremental
income
(loss) from
new busines $1,572,000 $4,000 $1,576,000
We assume reduced price of $12 per unit instead of $13 per unit
Choose the preferred sentence from each pair and justify your choice.
a. (1) Lindsay’s request to telecommute was denied, but she will begin a flextime schedule in two weeks.
(2) Although her request to telecommute was denied, Lindsay will begin a flextime schedule in two weeks.
Answers
Answer:
(2)
Explanation:
"Although" Implies that even though her request was denied, she will begin something else in two weeks. "But" makes it sound like a negative thing, even though it isn't
XYZ Company makes 400 widgets. The variable costs are $35.60 per unit and fixed costs are $30.00 per unit; however, $21.40 in fixed costs per unit is unavoidable. What is the effect on net income if the company instead buys the widgets from an outside supplier for $44.00 per unit?
Answers
Answer:
increase in income of $80
Explanation:
Prepare an Analysis of Costs and Savings if the Company buys from Outside Supplier.
Note : The fixed costs per unit at are unavoidable are irrelevant and disregarded in this decision.
Analysis of Costs and Savings
Purchase Price (400 widgets × $44.00) = ($17,600)
Savings :
Variable Costs ($35.60 × 400 widgets) = $14,240
Fixed Cost ( $8.60 × 400 widgets) = $3,440
Net Income effect = $80
Conclusion :
The effect on net income if the company instead buys the widgets is an increase in income of $80
According to the Phillips curve, policymakers could reduce both the inflation rate and the unemployment rate by Group of answer choices increasing the money supply. raising taxes. increasing government expenditures None of the other answers is correct
Answers
Answer:
None of the other answers is correct.
Explanation:
Williams A. Phillips was a notable economist born in New Zealand. Phillips wrote a famous article titled "The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957" published in 1958 by Economica. In the article, he used data for the United Kingdom (U.K) to illustrate on a graph, a negative or inverse relationship between the rate of change of employee wages in the U.K and the unemployment rate in the United Kingdom (U.K).
Consequently, using the Phillips curve it is practically impossible for policymakers to reduce both the inflation rate and the unemployment rate because as the inflation rate decreases; the unemployment rate increases and vice-versa.
However, according to the Phillips curve, policymakers can reduce inflation and increase unemployment if aggregate demand is contracted.
1) Using the average cost method, compute the equivalent units of production in each of the following cases:
A) Units started in production during the month, 72,000; units completed and transferred, 52,800; and units in process at the end of the month (100% complete as to materials; 60% complete as to conversion), 19,200. (There was no beginning inventory.
B) Units in process at the beginning of the month (100% complete as to materials; 30% complete as to conversion), 12,000; units started during the month, 48,000; and units in process at the end of the month (100% complete as to materials; 40% complete as to conversion), 24,000.
2) In Department D, materials are added uniformly throughout processing. The beginning inventory was considered 80% complete, as was the ending inventory. Assume that there were 6,000 units in the beginning inventory and 20,000 in the ending inventory, and that 80,000 units were completed and transferred out of Department D. What are the equivalent units for the period using the average cost method?
3) If in question 2 the total costs charged to the department amounted to $960,000, including the $48,000 cost of the beginning inventory, what is the cost of the units completed and transferred out?
Answers
Answer:
1. the equivalent units of production
A. Materials = 72,000 units Conversion = 64,320 units
B. Materials = 60,000 units Conversion = 45,600 units
2. Materials = 45,600 units
3. $ 1,684,000
Explanation:
1. the equivalent units of production
The Concept of Equivalent Units of Production Measures the number of units completed to the extend of inputs introduced in the process
A.
Materials
units completed and transferred (52,800×100%) = 52,800
units in Ending Work In Process (19,200 × 100%) = 19,200
Total equivalent units of production = 72,000
Conversion
units completed and transferred (52,800×100%) = 52,800
units in Ending Work In Process (19,200 × 60%) = 11,520
Total equivalent units of production = 64,320
B.
First Determine the number of units completed and transferred.
units completed and transferred = 12,000 + 48,000 - 24,000
= 36,000
Materials
units completed and transferred (36,000×100%) = 36,000
units in Ending Work In Process (24,000 × 100%) = 24,000
Total equivalent units of production = 60,000
Conversion
units completed and transferred (36,000×100%) = 36,000
units in Ending Work In Process (24,000 × 40%) = 9,600
Total equivalent units of production = 45,600
2. the equivalent units of production
Materials
units completed and transferred (80,000×100%) = 80,000
units in Ending Work In Process (20,000 × 80%) = 16,000
Total equivalent units of production = 45,600
3. the cost of the units completed
First Calculate the cost per equivalent of production
cost per equivalent = Total Cost / Total Equivalent units
= $960,000 / 45,600
= $21.05
Then , calculate the cost of the units completed and transferred out
cost of the units completed and transferred = $21.05 × 80,000
= $ 1,684,000
Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $176,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $35,000.
What is its approximate internal rate of return?
Answers
Answer:
i think the answer218
Explanation:
if you add 176.000+35.000=211+7=218 you get the right answer
The approximate internal rate of return is 176.000+35.000=211+7=218. From calculating the cost and salvage value we get the internal rate of return.
What is internal rate of return?In financial analysis, the internal rate of return (IRR) is a statistic used to calculate the profitability of possible investments. IRR is a discount rate that, in a discounted cash flow analysis, reduces all cash flows' net present values (NPV) to zero. The same formula is used for NPV calculations and IRR calculations.
A useful tool for comparing investments is the internal rate of return (IRR), which is the interest rate at which the sum of all cash flows equals zero. If we substitute 13.92% for the 8% in the aforementioned case, NPV will be zero, and that represents your IRR. IRR is therefore defined as the discount rate at which a project's NPV equals zero.
IRR can be used to rank a variety of potential investments or projects on a pretty even basis because it is consistent for investments of all types. Generally speaking, the investment with the highest IRR would be regarded as the best when comparing options with other similar attributes.
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Riviera Township reported the following data for its governmental activities for the year ended June 30, 20X9: Item Amount Cash and cash equivalents $1,000,000 Receivables 300,000 Capital assets 8,500,000 Accumulated depreciation 1,200,000 Accounts payable 400,000 Long-term liabilities 4,000,000 Additional information available is as follows: All of the long-term debt was used to acquire capital assets. Cash of $475,000 is restricted for debt service. 1) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for total net assets?A) $2,425,000B) $4,200,000C) $2,900,000D) $3,625,0002) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets invested in capital assets, net of related debt?A) $4,200,000B) $2,900,000C) $2,825,000D) $3,300,0003) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets, unrestricted?A) $425,000B) $900,000C) $525,000D) $825,000
Answers
Answer:
1. B) $4,200,000
2. D) $3,300,000
3. B) $900,000
Explanation:
1. Total net assets = Total assets - Total Liabilities
=(1,000,000+300,000+8,500,000) - (1,200,000 + 400,000 + 4,000,000)
=9,800,000 - 5,600,000
=$4,200,000
2. The amount that should be reported for net assets invested in capital assets, net of related debt is
=(Capital assets- Accumulated Dep) - Long term debt
=(8,500,000 - 1,200,000) - 4,000,000
=7,300,000 - 4,000,000
=$3,300,000
3. The amount that should be reported for net assets, unrestricted is
=Total Net assets - Net of related debt
=4,200,000 - 3,300,000
=$900,000
If the interest rate in the United Kingdom is 8 percent, the interest rate in the United States is 10 percent, the spot exchange rate is $1.75/£1, and interest rate parity holds, what must be the one-year forward exchange rate?
Answers
Answer:
The answer is $1.78 / £1
Explanation:
Solution
Given that
Interest rate of United kingdom = 8%
Interest rate of United States =10%
Spot exchange rate =$1.75£1
The next step is to find the one year forward rate of exchange
Thus
Forward Rate = S₀ * [ ( 1 + Rus) / ( 1 + RE) ]
=$ 1.75 * ( ( 1 + 10%) / ( 1 + 8%) )
$1.78
Therefore, the forward exchange rate is $ 1.78 / £1
Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His total cost each day is $250, of which $50 is a fixed cost. He mows 5 lawns a day. In the short run, Bob should_________ . In the long run, Bob should___________ the industry.
Answers
Answer:
In this case, the unitary variable cost is higher than the selling price. In the short run, Bob should leave the industry.
Explanation:
Giving the following information:
Earning a day= 30*5= $150
Unitary variable cost= (250 - 50)/5= $40
Fixed costs= $50
The general rule is that if the selling price is higher than the unitary variable cost, in the short run the company should continue operations. If this situation continues, in the long run, the company should stop operations.
In this case, the unitary variable cost is higher than the selling price. In the short run, Bob should leave the industry.
Yosko Company expects to sell 2 comma 000 units of finished product in January and 2 comma 150 units in February. The company has 260 units on hand on January 1 and desires to have an ending inventory equal to 40% of the next month's sales. March sales are expected to be 2 comma 270 units. Prepare Yosko's production budget for January and February.
Answers
Answer:
Production budget
January 2,600 units
February 2,198 units
Explanation:
The sales budget is adjusted for the projected opening and closing inventories unit to arrive at the production budget:
The production budget can be determined using the formula below
Production budget = Sales budget + closing inventory- opening inventory
January production budget
Sales budget = 2,000 units
Closing inventory = 40% × February sales = 40% × 2,150
Opening inventory = 260 units
Production budget for January = 2000 + (40% × 2,150) - 260= 2,600 units
February production budget
Sales budget = 2,150
Opening inventory = January closing inventory = 860 units
Closing inventory = 40% × March sales= 40% × 2,270
Production budget fro February = 2,150 + (40% × 2,270) - 860= 2,198 units
Production budget
January 2,600 units
February 2,198 units