As a person engaged in the image business, the impression you project consists of your outward apperance the conduct you exhibt in the workplace is known as
Answer:As a person engaged in the image business, the impression you project consists of your outward apperance the conduct you exhibt in the workplace is known as
Explanation:j
If the total revenue variance is favorable and the revenue price variance is unfavorable, then the revenue volume variance must a.exceed the revenue price variance and be favorable b.be less than the revenue price variance and be favorable c.be less than the revenue price variance and be unfavorable d.be equal to the revenue price variance and be favorable
Answer: a.exceed the revenue price variance and be favorable
Explanation:
Revenue Volume x Revenue Price = Total Revenue
From the above formula, for the Total Revenue to be variated positively and yet the Revenue Price is of Negative Variance, it would follow logically that the other variable in the transaction contributed to the favorable variance of the Total Revenue apart from the Revenue Price.
The only other variable is the Revenue Volume. The Revenue volume must therefore have been large and favorable enough to offset the Negative Variance of the Revenue Price.
From the income statement, the corporation had a net income of $724 million for the year. Total dividends were $106 million. There were 400 million shares outstanding. How much is the dividends per share
Answer:
Dividend per year= $0.265 per share
Explanation:
Calculation of the dividend per year
Using this formula
Dividends per share=Total dividends/Total shares outstanding
Let plug in the formula
Dividend per share=$106/400
Dividend per share= $0.265 per share
Therefore the amount of dividend per share will be $0.265
Eviyan recently received a copy of his performance review report. During the review, his manager took notes regarding his performance and typed them up for the report, Eviyan was required to write a review of his own work following a questionnaire provided by the employer, and comments were solicited from other employees regarding his performance. Because he also has contact with the public, comments that were submitted to the company from the public concerning his performance were included in the report. After reading the report he received a phone call from his manager’s secretary informing him that he has been scheduled with an appointment with the manager the next day. If the manager is following good performance review policies, why has he scheduled the meeting with Eviyan? Group of answer choices The manager has scheduled him for a meeting for a performance feedback interview. The manager wants to meet with him so he can tell him about his evaluation and tell him in person that he is doing well or poorly and will then attempt to get Eviyan to agree to the performance evaluation. The manager has scheduled the meeting to solve Eviyan’s performance problems. The manager has scheduled the meeting to tell Eviyan what he has done well or poorly and give him the opportunity to defend himself.
Answer:
Eviyan's Performance Evaluation Report:
The manager has scheduled him for a meeting for a performance feedback interview.
Explanation:
Performance feedback interview is an opportunity for the employee to meet with his manager in order to iron out issues and reflect on the outcome of the evaluation. The employee will also be required at the interview to explain and defend the performance result face to face with the manager. Since there are always some differences in perception and evaluation, the interview provides that needed chance for a detailed discussion so that corrective measures will be defined and agreed upon. It is a good performance policy to schedule such an interview following a performance evaluation report.
MV Corporation has debt with market value of $ 95 million, common equity with a book value of $ 102 million, and preferred stock worth $ 20 million outstanding. Its common equity trades at $ 48 per share, and the firm has 5.6 million shares outstanding. What weights should MV Corporation use in its WACC? g
Answer:
Total market value $383.8 million
Debt is 24.75%
Preferred stock is 5.21%
Common equity is 70.03%
Explanation:
Calculation of the weights that MV Corporation should use in its WACC
Debt value : $95 million
Preferred stock value : $20 million
Market value of common equity:
$48 per share×5.6million shares= $268.8 million
Total market value of firm: $95 +20 +268.8 =$383.8 million
Weights for WACC calculation:
Debt =95/383.8
=24.75%
Preferred Stock =20/383.8
=5.21%
Common Equity =268.8/383.8
=70.03%
Therefore the total market value of the firm will be $383.8 million Debt is 24.85% of the total value, preferred stock is 5.21%, and common equity is 70.03%
ExxonMobil reports total assets of $198 billion and total liabilities of $92 billion. Citigroup reports total liabilities of $1,350 billion and stockholders' equity of $95 billion. Amazon reports total assets of $3.2 billion and total stockholders' equity of $0.15 billion. Nike reports an increase in assets of $1.05 billion and an increase in liabilities of $0.4 billion. Kellogg's reports a decrease in liabilities of $0.39 billion and an increase in stockholders' equity of $0.03 billion. (Enter your answers in billions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Required: What is the amount of stockholders' equity of ExxonMobil
Answers with its Explanation:
The fundamental accounting equation would be used to calculate the stockholder's equity, which is given as under:
Stockholder's Equity = Assets - Liabilities
For ExxonMobil,
Stockholder's Equity = $198 Billion - $92 Billion = $102 Billion
Likewise for CitiGroup,
Assets = $1,350 Billion + $95 Billion = $1,445 Billion
Likewise for Amazon,
Total Liabilities = $3.2 Billion - $0.5 Billion = $2.7 Billion
For Nike, we will use the following formula to calculate the change in shareholder's equity for the year:
Change in Stockholder's Equity = Change in Asset - Change in Liabilities
Change in Stockholder's Equity = $1.05 Billion - $0.4 Billion = $1.01 Billion
For Kellogg, we will use the following formula to calculate the change in Company's assets for the year:
Change in Total Assets = Change in Liabilities - Change in Stockholder's Equity
Change in Total Assets = $0.39 Billion - $0.03 Billion = $0.36 Billion
What is the coupon rate for a bond with 3 years until maturity, a price of $1,053.46, and a yield to maturity of 6%? Interest is paid annually.
Answer:
Coupon rate is 8%
Explanation:
We can ascertain the coupon rate by first of all determine the amount of coupon with pmt excel function below:
=pmt(rate,nper,-pv,fv)
rate is yield to maturity of 6%
nper is the number of coupons before maturity i.e 3 annual coupons in three years
pv is the current market price of $1,053.46
fv is the par value of $1,000
=pmt(6%,3,-1053.46,1000)=80
Coupon rate=pmt/face value=80/1000=8%
The Alfa Co. has a 6% coupon bond outstanding that pays annual interest. Calculate the annual interest payment on a $1,000 face value bond. Group of answer choices.
Answer: $60
Explanation:
The Annual Interest payment is also known as the Coupon payment.
The Issuers of the bond pay this to the Holders in periods until the bond matures.
Annual Interest Payment = Face value of bond * Coupon rate
= 1,000 * 6%
= $60
The following is TRUE about Inventory:________.A. Firms decrease inventory because there is a risk of significant and unpredictable fluctuations in downstream demand B. Firms decrease inventory because there are price discounts or transportation discounts associated with ordering in larger quantities C. Firms decrease inventory because the more we spend on inventory, the more we need to spend on other inventory-related expenditures D. Firms decrease inventory because there is a risk of interruptions in the flow of components/materials from upstream suppliers E. Firms decrease inventory because there is a risk of interruptions due to unreliable productivity and quality.
Answer:
The correct answer is option (c).
Explanation:
Solution
From the question sated above the answer is, Firms or organisation decrease inventory because the more we spend on inventory, the more we will need to spend on the other related inventory expenditures.
The reason is because if the inventory is kept full or complete, then the cost related or connected with the maintenance of the inventory increases or goes up and it is not beneficial for the company itself.
The true statement about inventory is that Firms decrease inventory because the more we spend on inventory, the more we need to spend on other inventory-related expenditures.
Inventory management is simply known as a systematic approach to sourcing, storing, and selling inventory.
It includes raw materials and finished goods. It is also regarded as having the right stock and at the right cost.
Inventory management is used by companies to know which and how much stock to buy and at what time.
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Drag each option to the correct location on the image. Match the pairs to their respective categories.
The correct answers are Pairs of Substitutes: tea- coffee, butter-margarine, petroleum-natural gas; Pairs of Complementary goods: printer-ink cartridge, pen-refill
Explanation:
In economics and related fields, substitutes are goods or products that are considered similar by customers and due to this, one product can replace the other. For example, butter and margarine are substitutes because they have similar properties and uses, which makes one product replace the other. This also occurs with tea and coffee, and petroleum and natural gas because one product can replace the other. Also, because of this, it is common customers buy only one of the products rather than both depending on preferences, price, availability, etc.
On the other hand, complementary goods are those that are used together, this often implies customers buy the two products and changes in one product affect the other. This occurs in the case of printer and ink cartridge because the products are used together and buying a printer often implies customers need to buy the cartridges. Similarly, pens and refills for pens are used and bought together, and one cannot replace the other.
There are two goods that you can spend your income on; good X and good Y. The price of good X is Px and the price of good Y is Py. The level of income is N$1800 and tour utility function is
Answer:
N$1800 = PxX ≤ PyY
Explanation:
Utility is the sanctification a consumer services from consuming a good or a service.
An utility function measures the preferences of a consumer over a set of goods or services.
given income of $1,800 and prices px and py, a consumer has to choose a bundle of good that maximises utility given income as total expenditure cannot exceed income
Broussard Skateboard's sales are expected to increase by 20% from $7.6 million in 2016 to $9.12 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 70%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Assume that an otherwise identical firm had $5 million in total assets at the end of 2016. The identical firm's capital intensity ratio (A0*/S0) is higher than than Broussard's; therefore, the identical firm is -Select- capital intensive - it would require -Select- increase in total assets to support the increase in sales.
Answer:
$510,560
Explanation:
AFN = (A/S) x (Δ Sales) - (L/S) x (Δ Sales) - (PM x FS x (1-d))
A = assets = $4,000,000S = sales = $7,600,000L = liabilities that vary according to sales level = $450,000 + $450,000 = $900,000Δ Sales = change in sales = $9,120,000 - $7,600,000 = $1,520,000PM = profit margin = 4%FS = forecasted sales = $9,120,000d = payout ratio = 70%AFN = ($4,000,000/$7,600,000) x ($1,520,000) - ($900,000/$7,600,000) x ($1,520,000) - (4% x $9,120,000 x (1 - 70%)) = $800,000 - $180,000 - $109,440 = $510,560
Mattola Company is giving each of its employees a holiday bonus of $125 on December 16 (a non payday). The company wants each employee's check to be $125. The supplemental tax percent is used. Round your calculations and answers to the nearest cent.
a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)?
b. What would the net amount of each bonus check be if the company did not gross-up the bonus?
Answer:
a. $193.65
b. $80.69
Explanation:
The computation is shown below:
a) The gross amount of each bonud is
= Holiday bonus ÷ (1 - supplemental tax rate - OSADI tax rate - HI rate - state tax rate)
= $125 ÷ (1 - 0.25 - 0.062 - 0.0145 - 0.028)
= $125 ÷ 0.6455
= $193.65
b) Now the Net amount of each bonus check is
= Holiday bonus - (Holiday bonus × supplemental tax rate - Holiday bonus × OSADI tax rate - Holiday bonus × HI rate - Holiday bonus × state tax rate)
= $125 - ($125 × 0.25) - ($125 × 0.062) - ($125 × 0.0145) - ($125 × 0.028)
= $125 - $31.25 - $7.75 - $1.8125 - $3.5
= $80.69
Refer to the different tax table rate
On January 1, 2021, an investor paid $296,000 for bonds with a face amount of $316,000. The contract rate of interest is 12% while the current market rate of interest is 15%. Using the effective interest method, how much interest income is recognized by the investor in 2022 (assume annual interest payments and amortization)
Answer:
$45,372
Explanation:
The computation of the interest income using the effective interest method is shown below
Interest Income is
= [Paid amount + (Paid amount × current market rate of interest) - (face value of the bond × contract rate of interest)] × current market rate of finterest
= [$296,000 + ($296,000 × 15%) - ($316,000 × 12%)] × 15%
= [$296,000 + $44,400 - $37,920)} × 15%
= $45,372
We simply applied the above formula
Ace Industries has current assets equal to $3 million. The company's current ratio is 1.5, and its quick ratio is 1.1. What is the firm's level of current liabilities? What is the firm's level of inventories? Do not round intermediate calculations. Round your answers to the nearest dollar.
Answer:
a
Explanation:
I have no clue but good luck on test
Stylon Co., a women's clothing store, purchased $48,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system. Stylon returned merchandise with an invoice amount of $7,500, receiving a credit memo. a. Journalize Stylon's entry to record the purchase. If an amount box does not require an entry, leave it blank. b. Journalize Stylon's entry to record the merchandise return. If an amount box does not require an entry, leave it blank. c. Journalize Stylon's entry to record the payment within the discount period of 10 days. If an amount box does not require an entry, leave it blank. d. Journalize Stylon's entry to record the payment beyond the discount period of 10 days. If an amount box does not require an entry, leave it blank.
Answer:
Stylon Company.
General Journal
Net Method
The following entries have been passed using net method.
Sr. No Particulars Debit Credit
a. Merchandise Inventory 47040
Accounts Payable 47040
Purchased $48,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system
b. Accounts Payable 7350
Merchandise Inventory 7350
Stylon returned merchandise with an invoice amount of $7,500,
c. Accounts Payable 39690
Cash 39690
Stylon's entry to record the payment within the discount period of 10 days
d. Discount Lost 810
Accounts Payable 810
Accounts Payable 40500
Cash 40500
Stylon's entry to record the payment beyond the discount period of 10 days.
A publisher faces the following demand schedule for the next novel from one of its popular authors:
Price Quantity Demanded
(Dollars) (Copies)
100 0
90 100,000
80 200,000
70 300,000
60 400,000
50 500,000
40 600,000
30 700,000
20 800,000
10 900,000
0 1,000,000
The author is paid $2 million to write the novel, and the marginal cost of publishing the novel is a constant $10 per copy.
Complete the second, fourth, and fifth columns of the following table by computing total revenue, total cost, and profit at each quantity.
Quantity Total Revenue Marginal Revenue Total Cost Profit
(Novels) (Dollars) (Dollars) (Dollars) (Dollars)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Answer and Explanation:
The completion of the second, fourth, and fifth columns of the given table is to be shown in the attachment below:
As we know that
Profit = Total revenue - total cost
Total revenue is the revenue earned by the company by multiplying the price with the quantity demanded
While the total cost is
= Fixed cost + variable cost
The marginal revenue comes from
= Change in total revenue ÷ change in quantity
We simply use these formulas in the spreadsheet below.
The following attachment should be used to demonstrate how the second, fourth, and fifth columns of the provided table have been completed:
As we are aware of
Total revenue - total costs = profit.
Total revenue is the amount of money the business brings in by multiplying the price by the quantity of customers.
While the overall expense is
= Variable cost + fixed cost
The source of the marginal revenue is
= Change in quantity x Change in total revenue
These formulas are merely used in the spreadsheet that follows.
The table is completed and explained in the attachments.
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A support level is the price range at which a technical analyst would expect the Multiple Choice demand for a stock to decrease substantially. price of a stock to fall. supply of a stock to increase dramatically. supply of a stock to decrease substantially. demand for a stock to increase substantially.
Answer:
The answer is D. demand for a stock to increase substantially.
Explanation:
The point where technical analysts expect a substantial increase in the demand for a stock to occur is called a support level.
Most stock prices remain stable and fluctuate up and down. The lower limit to these fluctuations is called a support level - the price range where a stock appears cheap, making its demand to increase substantially.
Adonis Corporation issued 10-year, 7% bonds with a par value of $220,000. Interest is paid semiannually. The market rate on the issue date was 6%. Adonis received $236,371 in cash proceeds. Which of the following statements is true?
a. Adidas must pay $220,000 at maturity plus 20 interest payments of $6,600 each.
b. Adidas must pay $236,371 at maturity and no interest payments.
c. Adidas must pay $220,000 at maturity plus 20 interest payments of $7,700 each.
d. Adidas must pay $220,000 at maturity and no interest payments.
e. Adidas must pay $236,371 at maturity plus 20 interest payments of $7,700 each.
Answer:
The answer is C
Explanation:
The interest payment is semiannual, meaning it pays interest twice in a year.
Adonis corporation issued a 10-year bond. Since the interest payment is paid twice a year, the number of periods the interest will paid is 20 times(10 years x 2).
And interest to paid is:
$220,000 x 7%
Annual interest paid is $15,400
Since it is semiannual, interest payment will be $7,700($15,400 ÷ 2)
The principal payment at maturity is $220,000. Par value means face value at maturity or principal value at maturity.
The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30, for Finnegan Co.:
Accumulated Depreciation $32,000
Fees Earned 78,000
Depreciation Expense 7,250
Rent Expense 34,000
Prepaid Insurance 6,000
Supplies 400
Supplies Expense 1,800
Requried:
Prepare an income statement.
Answer:
Its 4oo
Explanation:
Its option C
Answer:
Fees Earned: 78,000
Expenses:
Rent Expense: (7,250)
Depreciation Expense: (34,000)
Supplies Expense: (1,000)
Total Expenses: 43,050
Net Income: 34,950
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $700 million. The depreciation expense for 2020 is expected to be $150 million. The capital expenditures for 2020 are expected to be $375 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 7% per year. The required return on equity is 13%. The WACC is 11%. The firm has $199 million of non-operating assets. The market value of the company's debt is $3.534 billion. 120 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today
Answer:
The company's stock price today should be $71.17 per share.
Explanation:
The corporate valuation model approach can be used to estimate this by using the following steps:
Step 1: Calculation of the free cash flow
Free cash flow is the cash a firm generates after accounting for capital expenditure. This can be estimated using the following formula:
Free Cash Flow (FCF) = After-tax operating income + Depreciation expenses - Capital expenditure
For this question, we therefore have:
Free Cash Flow (FCF) = $700 + $150 - $375 = $475 million
Step 2: Calculation of Value of operations (Vo)
Vo = FCF / (WACC - FCF growth rate) = 475 / (11% - 7%) = $11,875 million
Step 3: Calculation of the Firm value
Firm value = Vo + Non-operating assets = $11,875 + $199 = $12,074 million
Step 4: Calculation of value of equity
Value of equity = Firm value - Debt = $12,074 - $3,534 = $8,540 million
Note: The correct amount of debt is $3,534 not $3.540 as mistakenly given, may be due to typographical error, in the question.
Step 5: Calculation of stock price per share today
Stock price per share = Value of equity / Number of shares outstanding = $8,540 / 120 = $71.17 per share
Therefore, the company's stock price today should be $71.17 per share.
You want to have $13,000 in 9 years for a dream vacation. If you can earn an interest rate of .4 percent per month, how much will you have to deposit today?
Answer:
PV= $8,447
Explanation:
Giving the following information:
Future value= $13,000
Number of months= 9*12= 108
Interest rate= 0.4/100= 0.004 compounded montlhy
To calculate the initial investment required, we need to use the following formula:
PV= FV/(1+i)^n
PV= 13,000/(1.004^108)
PV= $8,447
A company had the following purchases during its first year of operations:
January: 17 units at $127
February: 27 units at $137
May: 22 units at $147
September: 19 units at $157
November: 17 units at $167
On December 31, there were 61 units remaining in ending inventory. These 61 units consisted of 9 from January, 11 from February, 13 from May, 11 from September, and 17 from November. Using the specific identification method, what is the cost of the ending inventory?
a. $8,960.
b. $7,620.
c. $9,294.
d. $9,127.
e. $7,714.
Answer:
Ending inventory value= $9,127
Explanation:
Giving the following information:
January: 17 units at $127
February: 27 units at $137
May: 22 units at $147
September: 19 units at $157
November: 17 units at $167
Using the specific identification method, we need to multiply each unit for its specific cost.
Ending inventory:
January= 9*127= 1,143
February= 11*137= 1,507
May= 13*147= 1,911
September= 11*157= 1,727
November= 17*167= 2,839
Ending inventory value= $9,127
Milar Corporation makes a product with the following standard costs:
Standard Quantity or Hours Standard Price or Rate
Direct materials 7.7 pounds $ 4 per pound
Direct labor 0.1 hours $ 20 per hour
Variable overhead 0.1 hours $ 4 per hour
In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for January is:
a. $1,690 U
b. $1,540 F
c. $1,540 U
d. $1,690 F
Answer:
Direct material price variance= $1,690 favorable
Explanation:
Giving the following information:
Direct materials 7.7 pounds $ 4 per pound
During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
actual price= 65,910/16,900= $3.9
Direct material price variance= (4 - 3.9)*16,900
Direct material price variance= $1,690 favorable
Consider a firm that employs some resources that are owned by the firm. When accounting profit is zero, economic profit Multiple Choice must also equal zero. is sure to be positive. must be negative and shareholder wealth is reduced. cannot be computed accurately, but the firm is breaking even nonetheless.
Answer:
must be negative and shareholder wealth is reduced
Explanation:
In terms of economic benefit, the "breaking even though" can not be accurate, since economic profit looks for certain options for capital. There is no guarantee that the resources can not be distributed to any other attempt to achieve positive accounting benefits.
So, the right option is must be negative and shareholder wealth is reduced.
You are the supervisor for a team of employees who have a high number of product defects. They also waste materials. You recognize that products defects and wasted materials affect your department's budget. You have told your team to decrease the amount of wasted materials, bur your employees do not seem to are. How can you get them to increase their quality and decrease waste
Answer:
I will write a memo to the management office requesting for a complete change of team members in my department.
Explanation:
In this case in which the staffs do not care about the high number of defective products, and material wastage, I will try to persuade the team to decrease the amount of waste as stated. If talking to the team members does not fix the problem, then I will write to the management office requesting for a complete change of team members. The reason is that first, my effectiveness and job as the supervisor of such a wasteful team will be questioned and will be at risk, and I stand to lose a lot if I do not do anything about it. Requesting for a change of some of the team member won't fix the problem, the members that are retained in the team will still pass this wasteful culture to the new team members, which would not justify the change. Bringing in a fresh batch of workers will allow me set the new standard, and enforce the new standard, which will be to minimizing defective products and waste.
Gross Profit MethodBased on the following data, estimate the cost of the ending merchandise inventory: Sales (net) $9,250,000 Estimated gross profit rate 36% Beginning merchandise inventory $180,000 Purchases (net) 5,945,000 Merchandise available for sale $6,125,000
Answer:
$205,000
Explanation:
The computation of the cost of the ending merchandise inventory is shown below:-
Cost of the ending merchandise inventory = Merchandise available for sale - (Net Sales - Gross profit)
= $6,125,000 - ($9,250,000 - $9,250,000 × 36%)
= $6,125,000 - ($9,250,000 - $3,330,000)
= $205,000
Therefore we applied the above formula so that the cost of ending merchandise inventory could come
When a financial friction is added to the short-run model it: Group of answer choices shifts the MP curve up. shifts the IS curve down. shifts the AS curve down. is represented by a movement along the MP curve. is represented by a movement along the IS curve.
Answer:
When a financial friction is added to the short-run model it: shifts the MP curve up.
Explanation:
The short-run model, IS/MP model, describes the Investment-Savings/Monetary Policy model used by the US Federal Reserve to decrease the real interest rate through the Federal Funds rate, i.
The Federal Funds rate is the interest rate that commercial banks with excess reserves lend to others in deficit. The resulting shift occasions a decrease in the real interest rate which triggers an increase in the inflation rate, and vice versa. With such short-run changes in the interest rate, inflation and output is influenced in desirable directions by the Federal Reserve as a foundation to achieve long-term shifts in the AD-AS model.
The AD-AS model is a long-term model that describes Aggregate Demand and Aggregate Supply which impact long-term inflation, interest rates, and output.
When you decide to go and have a dinner with your friends in a world class hotel such as the Golden Tulip or La Pleasure Beach, perhaps you would be horrified by the high price you would have to pay for a bottle of soft drink such as Coca Cola or Pepsi Cola or wine or even bottled water. Perhaps you begin to ponder why the same commodity that you can get at a supermarket at one tenth the hotel price is going for such an astronomical price at the hotel. Of course, such facilities will have a warning such “you are not allowed to bring in your own food or drinks” posted at appropriate places in the facility for the attention of customers.In another scenario, you enter a designer shop to buy clothes with a designer label for a friend on their birthday or on Valentine day and you reckon the clothes are so much expensive compared to similar own brand clothes from a clothing or chain store, even though they may cost a similar amount to produce. Using your knowledge in basic economics, especially of the concept of demand and supply, attributes of a competitive market and price elasticity of demand, briefly discuss the following:
A. Why may a hotel charge such very high prices for wine, soft drinks or even bottled water and yet quite reasonable prices for food and still get away with such high prices? B. Why are designer shops able to price their clothes so very expensive and yet still get clients even though similar clothes that are available in a supermarket chain shops cost pretty much less?
Answer:
A. Price makers
B. Brand name
Explanation:
A. The hotels charge very high prices for wine and soft drinks because they are not price takers. They do not consider the price prevailing in the market for the products they are offering to the customers. They are price makers and select to charge the price they want to maintain their current hospitality. It their perception that wine and soft drinks are part of luxury. The food is an essential and people are not allowed to bring outside food in the hotel so they will buy it but when they will consume food they will also require the drinks as a part of their meal.
B. The people in today's world are so much brand conscious. They will pay for a name tag so they will be regarded for their high status in the society despite of low quality products. The ease of shopping at the branded stores is another reason for their high sales.
A company had the following transactions during September, the first month of its operations: Issued 50,000 shares of common stock in exchange for $600,000. Purchased land for $400,000, using a $150,000 cash down payment and signing a note payable for the balance. Received $5,000 from a customer for services to be performed in December. Made a $60,000 payment on the note payable from the purchase of the land. Total monthly sales: Cash sales $50,000 Credit Sales: $17,000 Purchased equipment on credit for $63,000. Collected $8,000 from customers on account. Paid $2,000 for September employee wages. Received a utility bill for $500 which will be paid next month. What is net income for the month of September
Answer:
Net income for the month of September is $451,000
Explanation:
Particulars Amount
Issue of common stock 600,000
Receipt from customer 5,000
Cash sales 50,000
Collection from customer 8,000 663,000
Less:
Cash down-payment made (150,000)
Payment made on notes payable (60,000)
Employee wage paid (2,000)
Cash balance as at end of Sep. 451,000