A. Suppose the wages of computer-factory workers rises. This will cause (the supply / the demand) of tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
B. Suppose the price of notebook computers (a substitute for tablets) falls. This will cause (the supply / the demand) of tablet computers to (shift in / shift out) , causing price of tablet computers to (rise / fall) and quantity to (rise / fall) .
C. Suppose the number of tablet computer manufacturers rises. This will cause (the supply / the demand) the supply the demand of tablet computers to (shift in / shift out) , causing price to (rise / fall) and quantity to ( (rise / fall) .
D. Suppose an exciting new game is released that is only available on tablet computers. This will cause the supply / the demand the supply the demand for tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
E. Suppose the prices for popular apps (complements to tablet computers) rise. This will cause (the supply / the demand) the supply the demand of tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
Answers
Answer:
Supply, shift in , rise fall
the demand, shift in, fall ,fall
supply , shift out fall, rise
the demand , shift out rise rise
the demand shift in fall fall
Explanation:
If the wages of factory worker increases, it becomes more expensive to hire workers, the cost of production increases and the demand for labour would fall. as a result, production would fall and the supply of tablets would fall. a decrease in supply leads to an inward shift of the supply curve. as a result of the fall in supply, quantity would fall and there would be a rise in price.
Substitute goods are goods that can be used in place of another good. If the price of notebooks falls, it becomes cheaper to purchase notebooks, so the quantity demanded of notebooks would rise and the demand for tablets would fall since it is cheaper to buy a tablet. the demand curve for tablets would shift in as a result of the fall in demand. As a result, price and quantity of tablets would fall.
Increase in the number of manufactures would lead to an increase in supply. this would cause a rise in the supply of tablets. when there is a rise in supply, the supply curve shifts out, prices fall and quantity increases.
the new game would increase demand for tablets because people would be interested in playing the game. as a result of the rise in demand, the demand curve would shift out, the quantity would rise and prices would rise
A complement is a good that is consumed together with another good. if the price of apps rise, it would become more expensive to buy apps as result the demand for tablets would fall. the demand curve would shift in and price and quantity would fall
When the wages of factory worker increases, it becomes more expensive to hire workers, also the cost of production increases, and also the demand for labor would fall. as a result, when the production would fall also the supply of tablets would fall. when a decrease in supply leads to an inward shift of the supply curve. Although as a result of the fall in supply, the quantity would fall, and also there would be a price rise.
When Substitute goods are goods that can be used in place of another good. also If the price of notebooks falls, it becomes cheaper to purchase notebooks, so the quantity demanded of notebooks would rise, and also the demand for tablets would fall since it is cheaper to buy a tablet. the demand curve for tablets would shift in as a result of the fall in demand. So As a result, the price and also the number of tablets would fall.
When Increase in the number of manufacturers would lead to an increase in supply. this would cause a rise in the supply of tablets. when there are a rise in supply, the supply curve shifts out, prices fall, and also quantity increases.
When the new game would increase demand for tablets because people would be interested in playing the game. So as a result of the rise in demand, the demand curve would shift out, the quantity would rise and also prices would rise
Thus A complement is a good that is consumed together with another good. if the price of apps rises, it would become more expensive to buy apps as a result the demand for tablets would fall. Then the demand curve would shift in and price and also quantity would fall
Find out more information about Demand and supply here:
https://brainly.com/question/12252562
Related Questions
The Walthers Company has a semi-annual coupon bond outstanding. An increase in the market rate of interest will have which one of the following effects on this bond?
a. increase the coupon rate.
b. decrease the coupon rate.
c. increase the market price.
d. decrease the market price.
e. increase the time period.
Answers
Answer:
The answer is D.
Explanation:
An increase in the market rate of interest of a bond will decrease the market price of the bond. Market rate of interest of a bond is inversely related to the market price of the bond.
For example, A bonds is issued with a higher interest rate, the price of existing bonds will fall because the demand for this bond falls.
Buhao Construction currently is all-equity-financed. It has 17,000 shares of equity outstanding, selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $270,000 with the proceeds used to buy back stock. The debt will pay an interest rate of 11%. The firm pays no taxes.
a. What will be the debt-to-equity ratio if it borrows $220,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Debt-to-equity ratio
b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EPS $
c. What will EPS be if it borrows $420,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EPS $
Answers
Answer:
Buhao Construction
a) Debt-to-Equity Ratio if it borrows $220,000
= Debit/Equity
= $220,000/$1,700,000
= 12.94%
b. EPS = $195,800/17,000
= $11.52
c. EPS = $173,800/17,000
= $10.22
Explanation:
a) Data and Calculations:
Outstanding Equity = 17,000 shares x $100 = $1,700,000
Interest rate = 11%
It is assumed that Buhao Construction pays no taxes
EBIT = $130,000
Debit = $220,000
Interest Expense = $24,200
Net Income = $195,800 ($220,000 - 24,200)
Debit = $420,000
Interest Expense = $46,200
Net Income = $173,800 ($220,000 - 46,200)
b) Debt-to-Equity Ratio of Buhao Construction is the relationship in ratio terms between debts and equity of the company. It shows the percentage of debts over the stockholders' equity.
c) EPS or Earnings per share shows the net income of Buhao Construction that can be attributed to each share. Stockholders use this measure to learn the profits that are generated for each share by the company during the period. A high EPS indicates that the business is profitable for stockholders.
The trial balance for Skysong, Inc. appears as follows: Skysong, Inc. Trial Balance December 31, 2022 Cash $280 Accounts Receivable 480 Prepaid Insurance 75 Supplies 166 Equipment 3680 Accumulated Depreciation, Equipment $550 Accounts Payable 353 Common Stock 1100 Retained Earnings 1290 Service Revenue 2768 Salaries and Wages Expense 920 Rent Expense 460 $6061 $6061 If, on December 31, 2022, the insurance still unexpired amounted to $18, the adjusting entry would contain a:
Answers
Answer:
Debit Insurance expenses for $57
Credit Prepaid insurance for $57
Explanation:
From the Trial Balance, Prepaid Insurance is $75. Since on December 31, 2022, the insurance still unexpired amounted to $18, the insurance expenses for the year can therefore be calculated as follows:
Insurance expenses = $75 - $18 = $57
The adjusting entries will therefore be as follows:
Particulars Dr ($) Cr ($)
Insurance expenses 57
Prepaid insurance 57
(To record insurance expenses for the year.)
Note that the amount of $18 unexpired insurance will now be the Prepaid insurance that will appear as an asset under the Current Asset in the balance sheet, while the $57 insurance expenses will be charged as an expense in the income statement.
"A market maker enters a quote of $20.50 Bid; $21.00 Ask; with a size of "5 x 5" into the NASDAQ System. If a market order to buy is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell:"
Answers
Answer: 500 shares at $21.00
Explanation:
A market maker is one who buys and then sells security from which the stated market is made into, and using the account of the the firm. It should be noted that a market order to buy will have to be matched in sequence.
Therefore, if a market order to buy is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell 500 shares at $21.00.
When the price of erasers increases from $1.50 to $2.50, the quantity demanded of pencils is unchanged. The cross-price elasticity of demand between erasers and pencils is
Answers
Answer:
The cross elasticity of demand is zero
Explanation:
Cross elasticity of demand measures the percentage change in the quantity demand of a product occasioned by a change in the price of another but related commodity.
If the the commodities are complements, the cross of elasticity of demand between them would be negative. his implies an increase(decrease) in the price of one would lead to a decrease(increase) in the demand of the other.
If the the commodities are substitutes, the cross elasticity of demand between them would be positive. This implies an increase(decrease) in the price of one would lead to a increase (decrease) in the quantity demand of the other.
Where the cross elasticity of demand is zero, this implies that the goods are not in any way related. This implies that a change in the price of one would produce no change in the quantity demand of the other.
1. A small-scale businessman deposits money at the beginning of each year into his savings account, depending on the level of the business’ returns. He deposits $1000 in the first year, $3000 in the second year, $5000 in the third and $7000 in the fourth year and annual interest rate of 7%. What is the value of the investment at the time of his first deposit?
Answers
Answer:
The value of the investment at the time of his first deposit is $1,000.
At the end of the first year, the investment will be worth $1,070.
Explanation:
The value of a deposit investment is determined by the interest rate and time. Time affects the value of an investment by this small-scale businessman in many ways. The passage of time increases the value of his investment. However, the total increase may not be due to the interest rate, but inflation also affects asset's value. For this businessman to make a gain in the investment, the interest rate must be higher than the inflation rate. Otherwise, the investment loses money due to the effects of inflation, which reduces the real value of an asset over time.
A fund earned a net investment income (i.e. Ending Balance Starting Balance + Deposits/Withdrawals)) of 9200 during 1999. The beginning and ending balances of the fund were 100000 and 129200, respectively. A deposit was made at time K during the year. No other deposits or withdraws were made. The fund earned 8% in 1999 using the dollar-weighted method. Determine then date corresponding to time K
(a) April 1 (b) May 1 (c) July 1 (d) Sept. 1 (e) Oct. 1
Answer:________
Answers
Answer:
k = April 1 ( A )
Explanation:
Given data :
net investment income : $9200
Beginning balance = $100000
ending balance = $129200
deposit made
no withdrawals
interest earned = 8%
net investment ( $9200) = [ending balance - (starting balance + deposits/withdrawals )]
9200 = 129200 - 100000 - deposits
deposit = 129200 -100000 - 9200 = 20000
8% interest was earned on starting balance
= 8% of $100000 = $8000
interest earned on the deposit made = net income - interest earned on beginning balance = 9200 - 8000 = $1200
using the dollar-weighted method
assuming the deposit was made for Y months
interest earned on deposit = deposit * interest rate * (y/12)
1200 = 20000 * 8% * ( y /12 )
hence ( y/12) = 0.75 hence y = 9 months from December 31
which makes K = April 1
Inflation is a general rise in the level of prices experienced by people in a nation.
Answers
Answer:
True.
Explanation:
Inflation is an economic term that can be defined as the increase in the prices of a product on the market in a given period.
It can occur due to several factors, when there is an imbalance between supply and demand, then it is correct to say that when the demand for a product is greater than the supply, there will be an increase in prices and, consequently, inflation.
It can also occur when there are situations of monopoly, which is the pricing of a product controlled by a company.
Another factor that causes inflation is the increase in a company's production costs, which can be caused by factors such as scarcity, or economic crisis.
Uncontrolled inflation has a negative impact on the consumer's life, which starts to lose its purchasing capacity and has its quality of life reduced.
Flapjack Corporation had 7,600 actual direct labor hours at an actual rate of $12.41 per hour. Original production had been budgeted for 1,100 units, but only 950 units were actually produced. Labor standards were 7.0 hours per completed unit at a standard rate of $13.00 per hour. The direct labor time variance is
Answers
Answer:
-$12,350 Unfavorable
Explanation:
The computation of direct labor variance is shown below:
Labor time variance = (Standard hours - Actual hours) × standard rate
= (950 × 7.0 - 7,600) × $13
= (6,650 - 7,600) × $13
= -950 × $13
= -$12,350 Unfavorable
Therefore for computing the direct labor variance we simply applied the above formula by considering the given information
An electric power plant uses solid waste for fuel in the production of electricity. the cost Y in dollars per hour to produce electricity is Y=11+0.4X+0.29X2, where X is in megawatts. Revenue in dollars per hour from the sale of electricity is 16X−0.2X2. Find the value of X that gives maximum profit. (Round to two decimal places.)
Answers
Answer:
The value of X that gives maximum profit is 15.92.
Explanation:
Before answering the question, Y and Revenue (R) given in the question are first correctly restated as follows:
Cost = Y = 11 + 0.4X + 0.29X^2 .......................................... (1)
Revenue = R = 16X − 0.2X^2 .............................................. (2)
Differentiating each of equations (1) and (2) with respect to X to obtain marginal cost (MC) and marginal revenue (MR), we have:
dY/dX = MC = 0.4 + 0.58X .................................................. (4)
dR/dX = MR = 16 - 0.4X ....................................................... (5)
In production theory, profit is maximized when MR = MC. Therefore, we equate equations (4) and (5) and solve for X as follows:
0.4 + 0.58X = 16 - 0.4X
0.58X + 0.4X = 16 - 0.4
0.98X = 15.6
X = 15.6 / 0.98
X = 15.92
Therefore, the value of X that gives maximum profit is 15.92.
Assume that your roommate is very messy. According to campus policy, you have a right to live in an uncluttered apartment. Suppose she gets a $200 benefit from being messy but imposes a $100 cost on you. The Coase theorem would suggest that an efficient solution would be for your roommate to
Answers
Answer: b. pay you at least $100 but less than $200 to live with the clutter.
Explanation:
The options are:
a. stop her messy habits or else move out.
b. pay you at least $100 but less than $200 to live with the clutter.
c. continue to be messy and force you to move out.
d. demand payment of at least $100 but no more than $200 to clean up after herself.
According to the Coase theorem, if a party has the rights to a property, then an efficient output level will be achieved when there is some sort of bargaining between the parties that are involved.
Since the roommate gets a $200 benefit from being messy but imposes a $100 cost on me, an efficient solution would be for my roommate to pay me at least $100 but less than $200 to live with the clutter.
Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,600,000. Suppose management projects that its current year's quarterly sales will increase by 3% in quarter 1, by another 7% in quarter 2, by another 5% in quarter 3, and by another 4% in quarter 4. Management expects cost of goods sold to be 45% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters, 25% of revenues during the third quarter, and 20% during the fourth quarter.Required:a. Prepare a budgeted income statement for each of the four quarters and for the entire year.b. Prepare the first portion of the budgeted income statement through gross profit, then complete the statement.
Answers
Answer:
Budgeted Income Statement for each of the four quarters and for the entire year
Quarter 1st 2nd 3rd 4th
Sales $4,738,000 $5,069,660 $5,323,143 $5,536,069
Cost of Sales ($2,132,100) ($2,281,347) ($2,395,414) ($2,491,231)
Gross Profit $2,605,900 $2,788,313 $2,927,729 $3,044,838
Operating Costs ($1,421,400) ($1,520,898) ($1,330,786) ($1,107,214)
Operating Profit $1,184,500 $1,267,415 $1,596,943 $1,937,624
Explanation:
Pay attention to the calculation of the following amounts :
Sales - These are based on increments per quarterCost of Sales - The Cost for quarter is at 45% of RevenueOperating Costs - Based on Sales amounts ( 30 % in the first two quarters , 25% in third and 20% in the 4th quarter.)3. When Blackstone investment company borrowed funds to buy out the stockholders of Busch Entertainment, it was participating in a(n)
Answers
Answer: c. Leveraged Buyout
Explanation:
A Leveraged buyout as the term suggests, is when a buyout is sponsored mainly by the use of debt. In Business Leveraged Buyouts usually occur when either the management, employees or private investors buys out or attempts to buy out the Shareholders of a company by using debt funding so that they can then own the company. The debt is acquired by using both assets of the company being bought and that of the company buying (unless they do not have any) as collateral.
When Blackstone investment company borrowed funds to buy out the stockholders of Busch Entertainment, it was participating in a Leveraged Buyout.
The perceived demand for a monopolistic competitor
Answers
Carly Corporation issued $200,000 of 30-year, 8% bonds at 106 on January 1, 2016. Interest is payable semiannually on June 30th and December 31st. The straight-line method of amortization is to be used. After 11 years, what is the carrying value of the bonds?
Answers
Answer:
$207,600
Explanation:
The journal entry to record the issuance of the bonds:
January 1, 2016
Dr Cash 212,000
Cr Bonds payable 200,000
Cr Premium on bonds payable 12,000
Premium on bonds payable $12,000 / 60 semiannual coupons = $200 amortization per coupon payment
after 11 years, 22 coupons were paid 22 x $200 = $4,400
bonds carrying value after 11 years = $200,000 + $12,000 - $4,400 = $207,600
LSM subcontracted with Henry Isaacs Home Remodeling and Repair (Isaacs) to perform the roofing work on the project. Isaacs in turn subcontracted with Hal Brewster Home Improvements (Brewster), to conduct the roofing work on Isaacs' behalf. When Brewster performed work on the roof, he "botched the job" and caused extensive leaking inside the house. LSM and Issacs attempted to correct the problems, but eventually abandoned the project, leaving Logan-Baldwin to hire others to complete the renovations. Logan-Baldwin sued LSM, Isaacs, and Baldwin for breach of contract. Isaacs sought to dismiss Logan-Baldwin's claim against it, arguing no privity of contract existed between themselves and Logan-Baldwin, and therefore Isaacs should not be liable for any damages.
Required:
Does Logan-Baldwin have contract rights over Isaacs as an intended third-party beneficiary?
1. Because Henry Isaacs delegated its duty to repair the roof to Brewster, Henry Isaacs remains responsible for Brewster's failure to install the new roof on the residence properly.
a. True
b. False
2. Logan-Baldwin is entitled to compensatory damages (covering the cost of hiring other contractors to fix the roof) caused by the breach of contract by LSM and Henry Isaacs.
a. True
b. False
3. Logan-Baldwin qualified as a third party creditor beneficiary of the contract between LSM and Henry Isaacs and the contract between Henry Isaacs and Brewster, even if Logan-Baldwin is not named in those contracts.
a. True
b. False
4. Palisades Plaza is not entitled to damages for breach contract by LSM, Henry Isaacs, and Brewster unless Palisades Plaza has clean hands and has tendered performance under the contract.
a. True
b. False
5. If the agreement between Henry Isaacs and Brewster to install a new roof is a novation, Henry Isaacs is not liable for breach of contract for the failure to install the new roof properly.
a. True
b. False
Answers
Answer:
1. true
2. true
3. false
4. true
5. false
A stock has a beta of 1.28, the expected return on the market is 12%, and the risk-free rate is 4.5%. Using the CAPM, what is the expected return on this stock
Answers
Answer:
14.10%
Explanation:
The calculation of expected return on this stock is shown below:-
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4.5% + 1.28 × (12% - 4.5%)
= 4.5% + 1.28 × 7.5%
= 4.5% + 9.6%
= 14.10%
The Market rate of return - Risk-free rate of return) is also called as the market risk premium
hence, the expected rate of return is 14.10%
The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of outstanding shares is:
Answers
Answer:
12,000
Explanation:
The following data was reported for an organisation
Authorized shares is 20,000
Issued shares is 15,000
Treasury shares is 3,000
Therefore, the number of outstanding shares can be calculated as follows
Number of outstanding shares= Issued stock-Treasury stock
= 15,000-3,000
= 12,000
Hence the number of outstanding shares is 12,000
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $420,000 to its supplier using a 12-month, 12% note.
Required:
1. The loan of $420,000 and acceptance of the note receivable on April 1, 2021
2. The adjustment for accrued interest on December 31, 2021
3. Cash collection of the note and interest on April 1, 2022.
Answers
Answer:
1. April 01, 2021
Dr Notes receivable 420,000
Cr Cash 420,000
2. December 31,2021
Dr Interest receivable 37,800
Cr Interest revenue 37,800
3. April 01, 2022
Dr Cash 470,400
Cr Notes receivable 420,000
Cr Interest receivable 37,800
Cr Interest revenue 12,600
Explanation:
Preparation of the Journal entries Shoemaker Corporation
1. Preparation of the Journal entry for loan o amount of $420,000 as well as the acceptance of the note receivable on April 1, 2021
April 01, 2021
Dr Notes receivable 420,000
Cr Cash 420,000
2. Preparation of the Journal entry for the adjustment for accrued interest on December 31, 2021
December 31,2021
Dr Interest receivable 37,800
Cr Interest revenue 37,800
($420,000 × 12% × 9/12=$37,800)
3. Preparation of the Journal entry for the Cash collection of the note and interest on April 1, 2022
April 01, 2022
Dr Cash 470,400
Cr Notes receivable 420,000
Cr Interest receivable 37,800
Cr Interest revenue 12,600
($420,000 × 12% × 3/12=$12,600)
On January 1, 20X6, Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:______.
Pumpkin Spice Cash 50,000 15,000 Accounts Receivable 70,000 25,000 Inventory 30,000 20,000 Land 150,000 80,000 Buildings and Equipment 250,000 200,000 Less: Accumulated Depreciation -70,000 -20,000 Investment in Spice Co. 210,000 Total Assets 690,000 320,000 Accounts Payable 40,000 10,000 Bonds Payable 150,000 40,000 Common Stock 300,000 90,000 Retained Earnings 200,000 180,000 Total Liabilities and Equity 690,000 320,000 At the date of the business combination, the book values of Spice's assets and liabilities approximated fair value except for inventory, which had a fair value of $30,000, and land, which had a fair value of $95,000. 1. what amount of total inventory will be reported in the consolidated balance sheet prepared immediately after the business combination?
Answers
Answer:
Total inventory in consolidated balance = $60,000
Explanation:
In the consolidated balance sheet, we record the sum of both parent and subsidiary assets. Here pumpkin and spice both have an inventory of $30,000.
Total inventory in consolidated balance = Pimpkin's Inventory + fair value of Spice's inventory
Total inventory in consolidated balance = $30,000 + $30,000
Total inventory in consolidated balance = $60,000
if the broker dies or loses her license, the state's real estate licensing agency may choose to appoint a ________ to close any transactions that are pending.
Answers
Answer:
temporary broker
Explanation:
A temporary broker is someone who is charged with responsibility of closing, or winding up the existing or pending business of a permanent or original licensed broker, in the event that, the original licensed broker dies or loses her license.
To become a temporary broker, the state's real estate licensing agency will issue a temporary license as a broker to a licensed or unlicensed person for a period of not more than ninety days and will not be extended, except on a special cases such as personal representative.
Hence, if the broker dies or loses her license, the state's real estate licensing agency may choose to appoint a TEMPORARY BROKER to close any transactions that are pending.
Stellar Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory280$31$ 8,680 April 15 purchase4503716,650 April 23 purchase 270 40 10,800 1,000 $36,130 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
Answers
Answer:
inventory - $13,120
cost of goods sold - $23,010
Explanation:
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.
the cost of goods sold would be taken from the cost of the newest purchases.
April 23 purchase 270 x 40 = $ 10,800
600 - 270 = 330
April 15 purchase ; 330 x $37 = $12,210
cost of goods sold = $12,210 + $ 10,800 = $23,010
Inventory = the remaining part of the April 15 purchase and beginning inventory
450 - 330 = 120 x $37 = $4440
$4440 + 8,680 = $13,120
Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
a. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _ and the level of investment spending to _.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to _______ and the level of investment to ________.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget __________ which ________ national saving. This causes the interest rate to ________ and the level of investment spending to _______
Answers
Answer:
a. Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _decrease and the level of investment spending to increase_.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to ___increase____ and the level of investment to ___decrease_____.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget ___surplus_______ which ___increases_____ national saving. This causes the interest rate to ___decrease_____ and the level of investment spending to __increase_____
Explanation:
Interest rate decreases with increased savings and this results to increased investment as funds are available at affordable costs. The situation is reversed when the savings are decreased, since the interest rate will increase as there are less savings for investment purposes.
There is a continuous interaction between taxation, savings, government spending, inflation, and investment versus interest rates. This means that interest rates also reflect these factors put together. This why in both fiscal and monetary policies, governments try to strike some balance in order to direct the economy towards desired targets. For example, when the government wants to stimulate the economy, it works to reduce interest rates in order to encourage investments, but this also lowers the propensity to save and encourages the propensity to spend, which trigger inflation and increases interest rate as an aftermath. And this seems to be an endless vicious or virtuous circle, depending on what is achieved by the monetary and fiscal measures in operation.
A researcher who has no concern for issues of control or ability to generalize, instead choosing focus on providing rich descriptions would be following the _________ approach.
A. positivistic/empirical
B. interpretive
C. critical
D. scientific
Answers
Answer:
B. interpretive
Explanation:
A researcher who has no concern for issues of control or ability to generalize, instead choosing focus on providing rich descriptions would be following the interpretive approach.
In an interpretive approach to research, researchers are mainly focused on deciphering detailed meaning or rich descriptions so they can have a better understanding of the subject matter.
Under interpretive study, it is assumed that the meaning associated with matters are subjective and inter-subjective depending on their perception, thus researchers attempt to understand matters through the meanings attached by individuals in the sampling population.
Hence, interpretive researchers assume that issues are not singular or objective but depends on various human experiences.
A bond's credit ratingt provides a guides to its risk. suppose that long term bonds Aa currently offers yield to mjaturity of 7.5%. A-rated bonds sell at yields of 7.8%. Sud- pose that a 10-year bond with a coupon rate of 7.6% is downgraded by Moody's from an Aa to A rating.
Required:
a. Is the bond likely to sell above or below par value before the downgrade?
b. Is the bond likely to sell above or below par value after the downgrade?
Answers
Answer:
a.- above par (premium)
b.- below par (discount)
Explanation:
Currenly the bonds par yield will be of 7.6%
Before the downgrade the expected return on that risk was 7.5% so it was above par.
Once the downgrade occurs: the expected return considering the increased risk is 7.8% Therefore the market price will decrease. This will move the yield to maturity from 7.5% to 7.8% and the market price below par.
a) While excavating, the Contractor hits a rock layer. Since the plans and soil report did not mention such rock, the contractor files a claim under: i. Force majeure. ii. Differing site conditions. iii. Design errors/omissions. iv. Unusual weather conditions. v. Changes in owner’s requirements.
Answers
Answer:
Differing site conditions
Explanation:
A differing site condition is a condition that has been changed. Since the plan did not mention this rock, the contractor can file a claim under this.
It is a hidden physical condition that is discovered at a site which is actually different from what was expected. It can also be regarded as unforeseen site condition.
Swing Co. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,130.35. However, Swing Co. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on Swing Co.’s bonds?
Answers
Answer:
YTM = 7.77%
YTC = 7.62%
Explanation:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {90 + [(1,000 - 1,130.35)/18]} / [(1,000 + 1,130.35)/2]
YTM = 82.758333 / 1,065.175 = 0.07769 = 7.77%
YTC = {coupon + [(call value - market value)/n]} / [(call value + market value)/2]
YTC = {90 + [(1,060 - 1,130.35)/8]} / [(1,000 + 1,130.35)/2]
YTC = 81.20625 / 1,065.175 = 0.07623 = 7.62%
A new operating system for an existing maching is expected to cost $786000 and have a useful life of six years. The system yields an incremental after-tax income of $230000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $90000. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment.
Answers
Answer:
NPV is $771,739
Explanation:
As we know that:
Net Present Value = Present Value of Cash inflow (STEP 1) - Present Value of Cash outflow
STEP 1. Present Value of Cash Inflow
Here
Present Value of Cash Inflow = Annuity of Annual Cash flow - PV of Scrap Value
Annual Cash flow is $346,000 ($230,000 + ($786,000 - $90,000)/6)
So
Annuity of annual cash inflow = $346,000 * Annuity Factor
Here
Annuity Factor for 6 years is 4.3553
Now this means that:
Annuity of annual cash Inflow = $346,000 * 4.3553 = $1,506,934
Present Value of Residual Value ($90,000 * 0.5645) = $50,805
Present Value of cash inflows $1,557,739
Now putting values in the above equation, we have:
Net Present Value = $1,557,739 - $786,000
Net Present Value = $771,739
DIP LLC reports ordinary income (before guaranteed payments) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, DIP paid guaranteed payments to partner Percy of $20,000. If Percy owns a 40% capital and profits interest, how much income will he report for the year and what is its character?
Answers
Answer:
$24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Explanation:
Calculation for what how much income will Percy report for the year and what is its character
Calculation for Percy Ordinary income: 120,000 - 40,000 - 20,000
= 60,000 x 40%
= 24,000.
Calculation for Percy Interest income:
4,000 x 40%
= 1,600
Guaranteed Payment: 20,000
Therefore what Percy will report will be: $24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Bagwell's net income for the year ended December 31, Year 2 was $175,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Year 1 Common Stock, $5 par value $500,000 $450,000 Paid-in capital in excess of par 948,000 853,000 Retained earnings 688,000 582,000 A. $95,000. B. $201,000. C. $69,000. D. $79,000. E. $50,000.
Answers
Answer:
C. $69,000
Explanation:
Computation of the cash paid for dividends during Year 2
First step is to calculate the difference in Retained earnings for Year 2 and Year 1
Retained earnings =$688,000-$582,000
Difference in retained earnings =$106,000
Second step is to calculate for the cash paid for dividends during Year 2
Using this formula
Cash paid dividend = Year 2 Net income- Retained earnings difference
Let plug in the formula
Cash paid dividend=$175,000-$106,000
Cash paid dividend =$69,000
Therefore the cash paid for dividends during Year 2 will be $69,000