Answer:
c
c
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
An example of monopolistic competition are restaurants
When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero
If firms are earning negative economic profit, in the long run, firms leave the industry. This drives economic profit to zero
in the long run, only normal profit is earned
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is a utility company
Chance, Inc. sold 5,000 units of its product at a price of $172 per unit. Total variable cost per unit is $131, consisting of $92 in variable production cost and $39 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing.
Answer:
$400,000
Explanation:
Computation for the manufacturing margin for the company under variable costing
Using this formula
Manufacturing margin= Sales - Total variable production cost
Let plug in the formula
Manufacturing margin=( 5,000*$172)- (5,000*$92)
Manufacturing margin=$860,000-$460,000
Manufacturing margin= $400,000
Therefore the manufacturing margin for the company under variable costing is $400,000
type of power based on manager's ability to influence employees with something of value to them.
Answer:
incentive or reward
Explanation:
incentive pay, time and a half pay for overtime are examples
Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: M N O Unit sales price $ 16 $ 11 $ 13 Unit variable costs 10 9 10 Total fixed costs are $533,000. The contribution margin per composite unit for the current sales mix (round to the nearest cent) is:
Answer:
Madison Corporation
The contribution margin per composite unit for the current sales mix is:
= $26.
Explanation:
a) Data and Calculations:
Products M N O
Current sales mix 3 1 2
Unit sales price $16 $11 $13
Unit variable costs 10 9 10
Unit contribution $6 $2 $3
Contribution margin per
composite unit $18 $2 $6
= ($6 * 3) ($2 * 1) ($3 * 2)
b) The contribution margin per composite unit is computed as the addition of the contribution margin per composite unit for each product. Each product's contribution margin per composite unit is calculated as the contribution per unit multiplied by the sales mix for each product.
Chad is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Chad favors a top-down strategic planning approach in which he exerts strong control over all aspects of the business, from product development and design to manufacturing and marketing. What is wrong with this scenario
Answer:
a. The self-driving vehicle industry is changing too much for the top- down approach to be effective.
Explanation:
The top-down strategic planning approach involves the company goals and their subdivisions. The aim is to gradually move from the top to down in a specific hierarchy. This approach lies on higher authority and in contrast the bottom-up strategy favors decision making that gives complete staff a voice.Suppose a chair manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding to different numbers of workers:
Number of Workers Number of Chairs
1 10
2 18
3 24
4 28
5 30
6 28
7 25
a. Calculate the marginal and average product of labor for this production function.
b. Does this production function exhibit diminishing returns to labor
Answer:
(a)
MP = TPn - TPn-1
AP = TP/Q
No. of workers No. of chairs MP AP
1 10 - 10
2 18 8 9
3 24 6 8
4 28 4 7
5 30 2 6
6 28 - 2 4.6
7 25 -3 3.5
(b) Yes, this production function exhibits diminishing returns to labor. As we increase the number of laborers, the output per worker falls. we will see that the AP is falling with the rise parturient.
Your company buys a computer system from IBM for $3 million and pays IBM $200,000 to install the computer system. The $3 million is on credit and your company pays $100,000 of interest on the loan in the current year. The acquisition cost of the computer system at the end of the current year will be
Answer:
$3.2 million
Explanation:
Calculation to determine what The acquisition cost of the computer system at the end of the current year will be
Using this formula
Acquisition cost=Purchase price+ Installation cost
Let plug in the morning
Acquisition cost= $3 million +$200,000
Acquisition cost=$3.2 million
Therefore The acquisition cost of the computer system at the end of the current year will be $3.2 million
If the slope of the budget line changes, there MUST have been a change in the consumer's preferences. an increase in the consumer's income. a change in the price of at least one good. a change in the price of both goods. None of these
Answer:
you change in the price of at least one good
The first three cars I bought all fell apart around 50,000 miles. It was called planned obsolescence and no one seemed to care until companies entered the market and promised 70,000, then 80,000, and finally 100,000 warranties. What sets a great car apart from a good one now is not the quality, which is assumed, but performance, safety and fuel economy. A car that can achieve all three is highly sought after. In the automotive market, performance, safety and fuel economy are sterling examples of:
Answer:
Order Winners
Explanation:
Order winners basically mean the winning attributes that customers will seek in order to successfully buy a product.
This is in fact because a customer's decision in buying a product is based on the value for money, so things such as price, availability, performance, and design are things to be considered by customers before deciding on the product.
As in the case above, the winning attributes in making a car great are performance, safety, and fuel economy. If such is found in a car then it would lead the car to be highly sought by the customers.
Interim financial statements: Multiple Choice Are required by the Congress. Are necessary to achieve full disclosure about a business's operations. Are statements prepared for periods of less than one year. Require the use of the perpetual method for inventories. Cannot be prepared if the company follows the conservatism principle.
Answer:
Are statements prepared for periods of less than one year.
Explanation:
Interim Financial Statements
This is simply known as a financial statements prepared for a timeframe (period) that is part of the entity's annual fiscal period. discontinued operations and extraordinary items that occur at midyear initially are often reported in net income and open up in the notes to interim financial statements.The fundamental principle guarding interim reporting is that
interim reports must be considered as a part of the integral of the annual reporting period.
An interim statement as a financial report timeframe is often less than one year. It often shows an organisation's performance before the end of normal full-year financial reporting cycles and often, this statements do not need to be audited.
Nut and Bolt guy Inc, sells nuts, bolts, fasteners and other related equipment. The CFO projects that net FCF for the next three years will be $11,000, $12,500 and $16,000, respectively. After that, the cash flows are expected to increase by 4.5 percent annually. What is the value of the firm if the WACC is 12.2%?
Answer:
$184791
Explanation:
The calculation of the value of the firm is given below:
Year Future Cash Flow PVF at 12.2% PV of Cash Flow
1 11000 0.891 9801
2 12500 0.794 9925
3 16000 0.708 11328
Total 31054
Present Value of Terminal Value
= [16000 × (1 + 0.045) ÷ 0.122 - 0.045] × 0.708
= [16720 ÷ 0.077] × 0.708
= 153737
Now
value of Firm = 31054 + 153737
= $184791
A project has an initial cost of $44,000. Expected cash flows as a result of this project are projected as follows. Calculate the payback period for this project. Assume a discount rate of 9%.
Answer:
3.5 year
Explanation:
The computation of the payback period is given below:
Year Cash Inflow Cumulative Cash Inflow
1 $10,000 $10,000
2 $10,000 $20,000
3 $15,000 $35,000
4 $18,000 $53,000
Now the payback period is
= 3 year + ($53,000 - $44,000) ÷ $18,000
= 3 year + 0.5
= 3.5 year
XYZ has two divisions: South and West. Overall net operating income is $26,900. South Division's segment margin is $42,800 and West Division's segment margin is $29,900. What is the amount of the common fixed expense not traceable to the individual divisions?
a. $45,800.
b. S56800.
с.$69,700.
d. $72,700.
Answer:
a. $45,800.
Explanation:
The computation of the common fixed expense not traceable is given below
Combined segment margin of two divisions ($42,800 + $29,900) $72,700
Less: net income -$26,900
Non traceable fixed cost $45,800
Hence, the amount of the common fixed expense not traceable to the individual divisions is $45,800
Therefore the option a is correct
Why do mortgage brokers normally have no risk in the mortgage process? A. The broker usually does not loan the money. B. The mortgage broker doesn't sell you the property.
C. The mortgage broker simply brings the home buyer and the lender together. D. All of the above
Answer
D, all of the above.
Explanation:
ing using a calculator) Jesse Pinkman is thinking about trading cars. He estimates he will still have to borrow $ to pay for his new car. How large will Jesse's monthly car loan payment be if he can get a -year ( equal monthly payments) car loan from the university's credit union at an APR of percent compounded monthly?
Answer:
Monthly car loan payment = $414 (Approx.)
Explanation:
Missing information;
Amount borrow = $29,000
NUmber of payment = 7 year x 12 = 84
Rate = 5.3% yearly = 0.053 / 12 monthly
Find:
Monthly car loan payment
Computation:
PV = $29,000
N = 84
r = 0.053/12
FV = 0
PV = (PMT/r)[1 – 1/(1 + r)ⁿ] + FV/(1 + r)ⁿ
29,000 = [PMT/(0.053/12)][1 – 1/(1 + 0.053/12)^84] + 0
PMT = 413.98
Monthly car loan payment = $414 (Approx.)
If the U.S. economy is producing at a level that is substantially less than potential GDP and the government's budget deficits are increasing aggregate demand, then ____________________________ is not much of a danger.
Answer:
an inflationary increase in the price level.
Explanation:
Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country.
In order to boost economic growth, a monetary policy is implemented to increase money supply (liquidity). Also, it is used to prevent inflation by reducing money supply.
An inflationary gap, also referred to as an expansionary gap in economics, is typically used for measuring the difference between the gross domestic product (GDP) and the current level of Real Gross Domestic Products that exists when a country's economy is gauged at a full employment rate. Consequently, this situation causes the price of goods and services to go up with a low income level among the people living in the country.
A budget deficit is the amount by which spending exceeds income.
All other factors held constant or all things being equal (ceteris paribus), an increase in government's budget deficit drives the interest rate up.
Generally, when there's a deficit in government budget, they resort to issuing more bonds or borrowing money from creditors. These creditors are likely to be sceptical about the government's ability to repay the debt and as such would increase the interest rate.
Hence, an inflationary increase in the price level of goods and services is not much of a danger if the U.S. economy is producing at a level that is substantially less than potential gross domestic product (GDP) and the aggregate demand is being increased by government's budget deficits.
When considering buying a new carpet that costs $3000, Regina was told there was a rebate of 10 percent. How would this affect Regina's purchase?
a) she would get back 10% of her $3000.
b) she would be less likely to buy this carpet.
c) she would have to pay 10% more money in addition to the $3000.
d) she would not have to pay taxes over 10% of the purchase price.
Answer: a) she would get back 10% of her $3000.
Answer: She would get back 10 percent of her $3000.
A bicycle repair company conducted segmentation research and then targeted their direct mail coupons for a first bike tune-up to that identified customer segment. What basic question did targeting and segmentation answer for the company
Answer:
Who am I trying to reach?
Explanation:
Targeting and segmentation is the process by which a company focuses marketing activities regarding a particular product to a defined customer profile.
Certain criteria like income, age, location, culture and so on can be used as a basis for segmentation.
Basically the question that segmentation and targeting answers is - Who am I trying to reach?
In the given scenario the bicycle repair company conducted segmentation research and then targeted their direct mail coupons for a first bike tune-up to that identified customer segment.
So they answered who they want to sell to.
On December 31, Jacoby Company's Prepaid Rent account had a balance before adjustment of $6,000. Three months' rent was paid in advance on December 1, the first day of the lease term. The adjusting entry needed on December 31 is:
Answer:
Debit Rent Expense $2,000; credit Prepaid Rent $2,000.
Explanation:
Assuming On December 31, the Company's Prepaid Rent account had a balance before adjustment of the amount of $6,000 which means that if the Three months' rent was paid in advance on December 1, The adjusting entry needed on December 31 is:
Debit Rent Expense $2,000
Credit Prepaid Rent $2,000.
($6000/3month)
(To record Rent Expense)
Calculate the current price of a $1,000 par value bond that has a coupon rate of 6 percent, pays coupon interest annually, has 27 years remaining to maturity, and has a current yield to maturity (discount rate) of 15 percent. (Round your answer to 2 decimal places and record without dollar sig
Answer: $413.81
Explanation:
Price of a bond = Present value of coupon payments + Present value of face value
Coupon is a constant payment so is an annuity.
Coupon = 6% * 1,000 = $60
Price of bond = Present value of annuity + Present value of face value
= (Coupon * Present value interest factor of annuity (PVIFA), 27 periods, 15%) + (Face value / (1 + rate) ^ number of periods)
= (60 * 6.514) + (1,000 / (1 + 15%)²⁷
= $413.81
The Japanese economy has been experiencing slow growth. As a result the Prime Minister, who thinks John Maynard Keynes was the greatest economist ever, has decided to increase government spending. As head of the economic council the Prime Minister asks you to determine the size of the increase needed to bring the economy to full employment.
Assume there is a GDP gap of 1 billion yen and the marginal propensity to consume (MPC) is .60. What advise do you give the Prime Minister?
a. The recessionary gap is equal to 625 million yen.
b. The inflationary gap is equal to 1 billion yen divided by 2.5 or 0.4 billion yen.
c. The recessionary gap is equal to 1 billion yen divided by 2.5 or 0.4 billion yen.
d. The inflationary gap is equal to 1 billion yen divided by 1.66 or 0.625 billion yen.
Answer:
c. The recessionary gap is equal to 1 billion yen divided by 2.5 or 0.4 billion yen.
Explanation:
The computation is shown below:
The multiplier is
= 1 ÷ (1 - MPC)
= 1 ÷ (1 - 0.60)
= 2.5
Now the increase in government expenditure for closing out the recessionary gap should be
Change in income = change in government purchase × multiplier
100 = change in government purchase × 2.5
So, the change in government purchase should be
= 100 ÷2.5
= 40
Hence, the option c is correct
The discount rate is a. the rate at which the Fed lends to banks. b. the rate at which public banks lend to other public banks. c. the percentage difference between the face value of a Treasury bond and what the Fed pays for it. d. the percentage of deposits banks hold as excess reserves.
Answer:
a. the rate at which the Fed lends to banks
Explanation:
The discount rate is the interest rate that are applied for measuring the present value of future cash flows
It is the rate where the federal reserve would lends to the financial insituation or bank
So as per the given options, the option a is correct
And, the other options should be considerd as wrong or incorrect
True or false? if false explain. An internally held public debt is like a debt of the left hand owed to the right hand.
Answer:True
Explanation: AN internally held debt is like a debt of the left hand owned to the right hand. This is a true statement. Left hand and right hand is ib the same body. Similarly,internal debit is taken from public of one's own nation. Just like things are in left hand or right hand, it remains in same person. Similarly, internal debit is borrowed from the people of the nation itself and is held within the nation.
the gap between 'where we are now' and 'where we want to be' is known as the.....
Answer:
Planning gap.
Explanation:
Planning can be defined as the process of developing organizational objectives and translating them into action plans or courses of action.
This ultimately implies that, planning is a strategic technique used by organizations to make an aggregate plan for its manufacturing (production) process typically ahead of time, in order to have an idea of the level of goods that are to be produced and what resources are required so as to reduce the total cost of production to its barest minimum.
The planning gap can be defined as the gap between "where we are now?" and "where we want to be?"
Basically, "where are we now?" describe the current situation of things or financial and non-financial activities that a business firm currently holds.
On the other hand, "where we want to be?" is a vision and mission statement that focuses on achieving the goals and objectives set for a business firm.
Vaughn Manufacturing is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Vaughn would sell it for $51. The cost to assemble the product is estimated at $14 per unit and the company believes the market would support a price of $61 on the assembled unit. What decision should Vaughn make?
Answer:
Sell before assembly, The company will be better off by $4 Per Unit
Explanation:
Calculation to determine what decision should Vaughn make
PROFIT BEFORE ASSEMBLY
Profit = Sale price - Cost price
Profit= $51 - $24
Profit= $27 Per Unit
PROFIT AFTER ASSEMBLY
First step is calculate the Cost of Assembled Product
Cost of Assembled Product =$24 + $14
Cost of Assembled Product= $38 Per Unit
Now let determine the profit
Profit = Sale price - Cost price
Profit= $61 - $38
Profit = $23 Per Unit
Now let Determine what decision should Vaughn make
Hence, the Profit by selling assembled product is LOWER than selling the Unassembled product by :
$27 Per Unit - $23 Per Unit
= $4 Per Unit
Therefore the decision that Vaughn should make is: Sell before assembly, The company will be better off by $4 Per Unit
On June 1, 2021, Dirty Harry Co. borrowed cash by issuing a 6-month noninterest-bearing note with a maturity value of $510,000 and a discount rate of 8%. Assuming straight-line amortization of the discount, what is the carrying value of the note as of September 30, 2021
Answer: $503,200
Explanation:
Carrying value of note = Face value of note - Interest remaining
Interest remaining = Face value * Periodic interest rate * Number of months remaining / Total number of months for note
= 510,000 * 8%/2 * 2 / 6 months
= $6,800
Carrying value of note = 510,000 - 6,800
= $503,200
Note: Note is for 6 months so periodic interest was divided by 2 to make it a semi-annual rate.
American Corp. is currently an all-equity firm that has 22,000 shares of stock outstanding with a market price of $27 a share. The current cost of equity is 12 percent and the tax rate is 35 percent. The firm is considering adding $225,000 of debt with a coupon rate of 6.25 percent to its capital structure. The debt will sell at par. What will be the levered value of the equity
Answer: $447,750
Explanation:
The value of a levered firm is calculated as:
= (Number of shares outstanding * Market price) + (Debt * tax rate)
= (22,000 * 27) + (225,000 * 35%)
= $672,750
Equity = Value of levered firm - Debt
= 672,750 - 225,000
= $447,750
Assume the marginal tax rate is 10% for the first $20,000 of taxable income, 25% for taxable income from $20,001 to $50,000, and 35% for taxable income above $50,000. If Mr. Smith had taxable income of $80,000, how much tax does he owe
Answer:
the tax amount is $20,000
Explanation:
The computation of the tax amount is given below:
= 10% of $20,000 + ($50,000 - $20,001) × 25% + ($80,000 - $50,000) × 35%
= $2,000 + $7,499.75 + $10,500
= $19,999.75
= $20,000
hence, the tax amount is $20,000
The same should be considered and relevant too
Willa and Westley are siblings who built a hair salon business from the ground up. They are now contemplating opening an additional salon location. The estimate to open an additional salon would mean adding $1 million in expenses with their profit increasing by $400,000 each year for the next 5 years (all other things equal). Willa and Westley decide:_____________
a. to take on the new salon because the expected marginal benefit ($2 million over 5 years) is greater than the estimated marginal cost ($1 million).
b. to not open a new salon because the marginal costs prove to be too high.
c. to open a second salon because the marginal cost of the new salon is low compared to other similar projects.
Answer:
A
Explanation:
The marginal benefit of a production activity is the change in total benefit as a result of increasing quantity produced by one unit
Marginal cost is the change in total cost as a result of increasing the quantity produced by one unit.
An activity should be undertaken if the marginal cost is less than the marginal benefit. It means that the activity is profitable.
Here the marginal benefit = 400,000 x 4 = 2,000,000
the marginal benefit is greater than the marginal cost. Thus, the new salon can be established
Suppose potential income is $80 billion, actual income is $40 billion, and expenditures don't vary with income. If the actual budget deficit is $8 billion and the marginal tax rate is 20 percent, the cyclical deficit:________
a) is $4 billion.
b) is $8 billion.
c) cannot be determined from the given information.
d) is between zero and $8 billion.
Rev. Elvin Snider is the ordained minister at Crossroads United Methodist Church. His salary on his Form W-2 is $20,000. He also receives a $12,000 housing allowance. His housing costs for the year are $14,000. What is Rev. Snider's self-employment income?
Answer: $32000
Explanation:
It should be noted that ministers or clergymen can exclude the home rental value or housing cost from the calculation of the gross income
Rev. Snider's self-employment income
Therefore, in this case, Rev. Snider's self-employment income will be:
Salary = $20,000
Add: Housing allowance = $12000
Total = $32000
