Answer:
If an economy experiences deflation, then
the prices of all goods in the economy are decreasing.
Explanation:
Generally, deflation is an economic condition whereby there is a decrease in the general price level of goods and services. As the opposite of inflation, deflation occurs when the inflation rate falls below 0%. During deflation, consumers spend less money on goods and services because of the decreasing demand. This demand drop with increasing supply leads to a general decline in prices, with organizations trying to sell off their inventory.
Answer:
C. An aggregate price level is declining.
Explanation:
literally doing this same assignment right now in ECON2301, C was the right answer on mine
Which secondary effect of advertising refers to a change in the customer’s opinion of the product over a period of time?
Last year, Big W Company reported earnings per share of $2.70 when its stock was selling for $40.50. If its earnings this year increase by 10% and the P/E ratio remains constant, what will be the price of its stock?
Answer: $44.55
Explanation:
P/E ratio last year = Market price / Earnings per share
= 40.50/2.70
= 15
PE ratio remains constant.
Earnings increase by 10% = 2.70 * 1.10 = $2.97
15 = Market Price / 2.97
Market Price = 15 * 2.97
= $44.55
A stock just paid an annual dividend of $1.8. The dividend is expected to grow by 8% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 8% after 3 years to 5% in year 6. The required rate of return is 12%.
1. What is the current stock price if the dividend growth rate will stay 0.05 (5%) forever after 6 years?
2. In 6 years, the P/E ratio is expected to be 23 and the payout ratio to be 80%. What is the current stock price when using the P/E ratio?
Answer:
1.
The current stock price is $28.71
2.
The current stock price is $149.15
Explanation:
1.
We need to calculate the present value of the dividends with each growth
First calculate the dividend each year
Year _________________________ Dividend
1 _____( $1.8 x ( 1 + 8% )^1__________ $1.9440
2_____( $1.8 x ( 1 + 8% )^2__________ $1.1664
3_____( $1.8 x ( 1 + 8% )^3__________ $2.2675
4_____( $2.2675 x ( 1 + 7% )________ $2.4262
5_____( $2.4262 x ( 1 + 6% )________ $2.5718
6_____( $2.5718 x ( 1 + 5% )_________ $2.7004
Calculate the present value of each years dividend
Year _________________________ present value
1 _____( $1.9440 / ( 1 + 12% )^1 __________ $2.1773
2_____$1.1664 / ( 1 + 12% )^2___________ $0.9298
3_____$2.2675 / ( 1 + 12% )^3___________$0.7118
4_____$2.4262 / ( 1 + 12% )^4___________$1.5419
5_____$2.5718 / ( 1 + 12% )^5___________ $1.4593
6_____$2.7004 / ( 12% - 5% ) / ( 1 + 12% )^5_$21.8897
Total _____________________________ $28.7098
Hence priec of the stock is $28.71
2.
First calculate dividend of Year 6
Dividend = EPS x Payout ratio = 23 x 80% = $18.40
Present value = $18.4 / ( 12% - 5% ) / ( 1 + 12% )^5 = $149.15
In U.S. price support programs, the "loan rate" is:______.
a. determined by Federal Reserve policy.
b. the interest rate a farmer must pay if he borrows from the government with his crop as collateral.
c. the difference between the market price and the target price.
d. the proportion of the farmer's crop he can loan to the government.
e. the effective price (i.e. price floor) for the commodity to ensure loan repayment.
Answer: E. the effective price (i.e. price floor) for the commodity to ensure loan repayment
Explanation:
The Price Support Programm is a policy by the government that is used in order to help farmers when there's a reduction in prices of agricultural products by giving out insurance to the farmers.
In U.S. price support programs, the "loan rate" is simply the effective price (i.e. price floor) for the commodity to ensure loan repayment.
Question 10 of 10
Harland just got his second major credit card, so his credit score rose from
671 to 711. According to the following table for a $150,000 mortgage, how
much less per year would Harland have to pay on a $150,000 mortgage with
the new credit score?
FICO
score
720-850
Interest
rate
5.59%
Monthly
payment
$860
700-719
5.71%
$872
$924
675-699
6.25%
7.40%
620-674
560-619
500-559
8.53%
$1039
$1157
$1238
9.29%
Answer: 2004
Explanation:
Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $1,600 account of a customer, C. Green. On March 9, it receives a $1,100 payment from Green.
1. Prepare the journal entry or entries for January 31
2. Prepare the journal entry or entries for March 9; assume no additional money is expected from Green.
Answer: Please see explanation for answers
Explanation:
1. Journal entry to record bad debt on January 31st
Date Account Titles and Explanation Debit Credit
Jan. 31st Allowance for doubtful account $1,600
Account receivables ( Customer C. Green) $1.600
2. Journal entry to record recovery of bad debt on March 9
A) To reinstate Amount previously written off
Date Account Titles and Explanation Debit Credit
March 9 Account receivables ( Customer C. Green) $1,100
Allowance for doubtful account $1,100
B) To record payment of account
Date Account Titles and Explanation Debit Credit
March 9 Cash $1,100
Account receivables( Customer C. Green) $1,100
Because price and quantity supplied are directly related, we would expect the sign of the price elasticity of supply to be:_________
Answer:
Positive
Explanation:
Price elasticity is the measure to assess the responsiveness of the supply of a good or service after changing the price of the good or service.
According to basic principles of economics, the price and supply of good or services are directly proportional, it means that if the price increases the supply of good increases and vice versa. The sign of the price elasticity will be positive because they are directly related.
Form example
At Price $5 supply is 200 units
At price $6 supply 250 units
Calculate the change in price and change in supply as well.
Cange in price = ($6 - $5) / 5 = 0.2 = 20%
Cange in supply = 250 units - 200 units = 50 units / 200 unit = 0.25 = 25%
Price elasticity of supply = Change in supply / Change in price
Price elasticity of supply = 25% / 20%
Price elasticity of supply = 1.25
Hence, the sign is positive
During the taking of its physical inventory on December 31, Barry's Bike Shop incorrectly counted its inventory as $222,138.00 instead of the correct amount of $184,409.00. The effect on the balance sheet and income statement would be:______.
a. assets overstated by $52,094.00; retained earnings understated by $52,094.00; and net income statement understated by $52,094.00.
b. assets overstated by $223,182.00; retained earnings understated by $171,088.00; and no effect on the income statement.
c. assets, retained earnings, and net income all overstated by $52,094.00.
d. assets and retained earnings overstated by $171,088.00; and net income understated by $223,182.00.
Answer:
c. assets, retained earnings, and net income all overstated by $37,729.
Explanation:
since the ending inventory was overstated by $222,138 - $184,409 = $37,729, it means that cost of goods sold was understated by that same amount. Since COGS were less, that resulted in higher operating income and net income.
Merchandise inventory will be overstated by $37,729 (current asset), while retained earnings will also be overstated by $37,729 since net income increases retained earnings.
How much interest does a $407 investment earn at 6% over seven years?
Answer:
$170.94
Explanation:
interest is calculate using the formula
I= p x r x t
where p = principle amount: $407
r = interest rate: 6% or 0.06
t= time: 7 year
I= $407 x 0.06 x 7
I= $24.42 x 7
I= $170.94
Mary's team is located in different countries. Because of the time zone differences, it is difficult for the team to meet all together so their meetings are conducted ________.
Answer:
Asynchronously
Explanation:
With regards to the above, the meeting would be conducted asynchronously due to the different time zone in each team member's country. What this means that the meeting will not be taken place at the same time or in a real time due to the differences in time zones.
Where a meeting is conducted asynchronously, such would be easy to schedule because attendees would have to adjust their own time unlike synchronous meeting where everyone would be expected to clear their schedule for a specific time to hold the meeting.
When the demand is equal or lower than the minimum efficient scale, multiple production facility locations are preferred. True False
Answer:
True
Explanation:
The money lost by not working is called
it's called bankrupt