Answer:
According to the text, all of the following are ways managers can improve their writing skills EXCEPT:
b. writing lengthy explanations.
Explanation:
The key to successful business reports is writing briefly. Managers who write lengthy explanations will not get the attention of their readers. Business reports should be highly summarized, concise, and be relevant at all times. A brief report respects the reader's time. It shows that the writer knows the relevant points to include.
A city government adds streetlights within its boundaries at a total cost of $300,000. These lights should burn for at least 10 years but can last significantly longer if maintained properly. The city develops a system to monitor these lights with the goal that 97 percent will be working at any one time. During the year, the city spends $48,000 to clean and repair the lights so that they are working according to the specified conditions. The city also spends another $78,000 to construct lights for several new streets. Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements. Prepare the entries assuming infrastructure assets are capitalized with government using the modified approach on government-wide financial statements.
Answer: See explanation
Explanation:
a. Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements.
1. Debit: Infrastructure assets—street lights $300,000
Credit: Cash $300,000
(To record cash purchase of street light
2. Debit: Depreciation expense $300,000/10 = $30,000
Credit: Accumulated depreciation—infrastructure assets $30,000
(To record depreciation expense)
3. Debit: Maintenance expense—infrastructure assets $48000
Credit: Cash $48000
(To record maintenance expense)
4. Debit: Infrastructure assets—street lights $78000
Credit: Cash $78000
(To record cash expense for new light)
b. Prepare the entries assuming infrastructure assets are capitalized with government using the modified approach on government-wide financial statements.
1. Debit: Infrastructure assets—street lights $300,000
Credit: Cash $300,000
(To record purchase of street light)
2. Debit: Maintenance expense—infrastructure assets $48000
Credit: Cash $48000
(To record maintenance expense)
3. Debit: Infrastructure assets—street lights $78000
Credit: Cash $78000
(To record cash expense for new light)
Zonk Company needs to raise $47.5 million to fund a new project. The company will sell shares at a price of $27.90 in a general cash offer and the company's underwriters will charge a spread of 6 percent. The direct flotation costs associated with the issue are $650,000. How many shares need to be sold?
Answer:
Zonk Company
The number of shares that needs to be sold is:
= 1,842,569 shares.
Explanation:
a) Data and Calculations:
Amount needed to fund a new project = $47,500,000
Selling price per share = $27.90
Proceed per share after underwriter's spread = $26.132 ($27.80 * (1 - 0.06)
Underwriters spread per share = 6% * $27.80 = $1.668
Direct flotation costs = $650,000
Number of shares to float = ($47,500,000 + $650,000)/$26.132
= 1,842,569 shares
Expanded Proof:
Proceeds from share issue = $51,223,418 (1,842,569 * $27.80)
less underwriter's spread = 3,073,405 (1,842,569 * $1.668)
Net proceeds before flotation $48,150,013
less direct flotation costs = 650,000
Funds raised = $47,500,013
An overly optimistic sales budget may result in Group of answer choices increases in selling prices late in the year. insufficient inventories. increased sales during the year. excessive inventories.
Answer:
excessive inventories.
Explanation:
If there is an overall optimistic sales budget so there would be the excessive inventories as the sales budget predicts that in the future the number of units is to be sold for the given period of time. And, when this budget would be optimistic so it over predicted the sales due to this there would be the chances of the excessive inventories
hence, the last option is correct
GenX has a target capital structure of 40 percent common stock, 5 percent preferred stock, and 55 percent debt. Its cost of equity is 22 percent, the cost of preferred stock is 8.5 percent, and the pre-tax cost of debt is 8 percent. What is the firm's WACC given a tax rate of 35 percent
Answer:
12.085 %
Explanation:
WACC = Cost of Equity x Weight of Equity + Cost of Preference Stock x Weight of Preference Stock + Cost of Debt x Weight of Debt
Remember to use the after tax cost of debt :
after tax cost of debt = interest x ( 1 - tax rate)
= 8.00 % x (1 - 0.35)
= 5.20 %
therefore,
WACC = 22.00 % x 0.40 + 8.50 % x 0.05 + 5.20 % x 0.55
= 12.085 %
thus
the firm's WACC given a tax rate of 35 percent is 12.085 %
Payton Inc. reports in its Year 7 annual report, sales of $7,362 million and cost of goods sold of $2,945 million. For next year, you project that sales will grow by 3% and that cost of goods sold percentage will be 1 percentage point higher. Projected cost of goods sold for Year 8 will be:
THe answer is scjkgnsgjnDVDJ
Hillary considers herself a shrewd commodities investor. She bought a May cotton contract (50,000 pounds) at a pound, and later sold it at a pound. What were her profit and her return on invested capital if her initial margin was and the size of a cotton futures contract is 50,000 pounds of cotton?
Answer: See explanation
Explanation:
Based on the information given in the question, the profit will be calculated as:
Profit = (Selling price - Buying Price) × Size
= ($0.6485 - $0.6264)*50,000
= $0.0221 × 5000
= $1,105
Then, the return on the invested capital will be:
= Profit/Initial Margin
= 1105/1060
= 1.0425
= 104.25%
Stock Issuance (Par, No-Par, and Stated Value) The following independent stock transactions occurred during January 20-- for Various Corporations: (a) Issued 5,800 shares of $10 par common stock for $58,000 cash. (b) Issued 3,800 shares of $10 par common stock for $49,000 cash. (c) Issued 4,900 shares of no-par common stock for $54,100 cash. (d) Issued 3,900 shares of no-par common stock for $41,500 cash. (e) Issued 6,300 shares of no-par common stock with a stated value of $8 per share for $50,400 cash. (f) Issued 2,700 shares of no-par common stock with a stated value of $8 per share for $22,800 cash. Prepare general journal entries for these stock transactions, identifying each transaction by letter. If an amount box does not require an entry, leave it blank.
Answer:
Various Corporations
Journal Entries:
(a) Debit Cash $58,000
Credit Common stock $58,000
To record the issuance of 5,800 shares of $10 par common stock for $58,000 cash.
(b) Debit Cash $49,000
Credit Common stock $38,000
Credit Additional Paid-in Capital $11,000
To record the issuance of 3,800 shares of $10 par common stock for $49,000 cash.
(c) Debit Cash $54,100
credit Common stock $54,100
To record the issuance of 4,900 shares of no-par common stock for $54,100 cash.
(d) Debit Cash $41,500
Credit Common stock $41,500
To record the issuance of 3,900 shares of no-par common stock for $41,500 cash.
(e) Debit Cash $50,400
Credit Common stock $50,400
To record the issuance of 6,300 shares of no-par common stock with a stated value of $8 per share for $50,400 cash.
(f) Debit Cash $22,800
Credit Common stock $21,600
Credit Additional Paid-in Capital $1,200
To record the issuance of 2,700 shares of no-par common stock with a stated value of $8.
Explanation:
a) Data and Analysis:
(a) Cash $58,000 Common stock $58,000
Issued 5,800 shares of $10 par common stock for $58,000 cash.
(b) Cash $49,000 Common stock $38,000 Additional Paid-in Capital $11,000
Issued 3,800 shares of $10 par common stock for $49,000 cash.
(c) Cash $54,100 Common stock $54,100
Issued 4,900 shares of no-par common stock for $54,100 cash.
(d) Cash $41,500 Common stock $41,500
Issued 3,900 shares of no-par common stock for $41,500 cash.
(e) Cash $50,400 Common stock $50,400
Issued 6,300 shares of no-par common stock with a stated value of $8 per share for $50,400 cash.
(f) Cash $22,800 Common stock $21,600 Additional Paid-in Capital $1,200
Issued 2,700 shares of no-par common stock with a stated value of $8 per share for $22,800 cash.
approximates the dollar cost of producing x units of a product. The manu- facturer believes it cannot make a profit when the marginal cost goes beyond $210. What is the most units the manufacturer can produce and still make a profit? What is the total cost at this level of production?
The question is incomplete. The complete question is :
A manufacturer believes that the cost function : [tex]$C(x) =\frac{5}{2}x^2+120 x+560$[/tex] approximates the dollar cost of producing x units of a product. The manu- facturer believes it cannot make a profit when the marginal cost goes beyond $210. What is the most units the manufacturer can produce and still make a profit? What is the total cost at this level of production?
Solution :
Given the cost function is :
[tex]$C(x) =\frac{5}{2}x^2+120 x+560$[/tex]
Now, Marginal cost = [tex]$\frac{d}{dx}C(x)$[/tex]
So, if the marginal cost = $ 210, then the manufacturer also makes a profit and if it goes beyond $ 210 than the manufacturer cannot make a profit.
Therefore, we have to equate : [tex]$\frac{d}{dx}C(x)= \$ 210$[/tex]
[tex]$\frac{d}{dx}C(x)= \frac{5}{2}(2x)+120 = 210$[/tex]
[tex]$5x + 120 = 210$[/tex]
[tex]$5x=210-120$[/tex]
[tex]$5x=90$[/tex]
[tex]$x=45$[/tex]
So when x = 45, then C(x) = $ 8042.5
Therefore, the manufacturer [tex]$\text{can make up}$[/tex] to 45 units and [tex]$\text{still makes a profit.}$[/tex] This leads to a total cost of $ 8042.5
10 POINTS!! FINANCE
Explain how having an honest conversation about money can affect a person’s ability to take control of their finances.
Answer:
Having and honest conversation about money can affect them in many ways. They could realize how important it is and start to take control in action for it. They could realize if they don’t take control of it they’ll end up poor, homeless, or worse. They could also realize if they want a family, money and finance is what’s going to make that possible.
Explanation:
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour. Assume that Sam has an upward-sloping labor supply curve. If the opportunity cost of Sam's leisure time increases, he will respond by working:__________
Answer:
more hours
Explanation:
Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives
time is a limited resource that has to be shared between work and leisure. If the opportunity cost of leisure increases, it means he is giving up more work to rest. As a result, he would increase his work hours
Terp Corp.'s transactions for the year ended December 31, 2021 included the following: Purchased real estate for $1,250,000 cash which was borrowed from a bank. Sold investment securities for $1,000,000. Paid dividends of $1,200,000. Issued 500 shares of common stock for $500,000. Purchased machinery and equipment for $250,000 cash. Paid $900,000 toward a bank loan. Reduced accounts receivable by $200,000. Increased accounts payable $400,000. The net cash used in financing activities for 2021 was
Answer:
$1,600,000
Explanation:
Cashflow from financing activities
Dividends ($1,200,000)
Issue of Stocks $500,000
Bank Loan Repayment ($900,000)
Net Cash flow ($1,600,000)
thus
The net cash used in financing activities for 2021 was $1,600,000
Nick's Marine Company (NMC) currently has a stock price per share of $38. If NMC's cost of equity capital (the discount rate for equity) is 15.2% and capital gains rate (gain/loss in prices relative to today's price) for the next year is expected to be 11.4%, the dividend in the upcoming year (t = 1) should be?
Answer:
$ 1.44
Explanation:
Given :
The stock price of 1 share = $ 38
The cost of equity capital, r = 15.2%
The capital gains rate for the next year, g = $ 11.4
Therefore, as per the dividend discount model,
The price per share = [tex]$\frac{D}{r-g}$[/tex]
[tex]$\$ 38=\frac{D}{(0.152-0.114)}$[/tex]
[tex]$\$ 38=\frac{D}{0.038}$[/tex]
D = 38 x 0.038
= 1.44
Therefore, the dividend = $ 1.44
Information related to plant assets, natural resources, and intangible assets at the end of 2022 for Tamarisk, Inc. is as follows: buildings $1,140,000, accumulated depreciation—buildings $652,000, goodwill $421,000, coal mine $509,000, and accumulated depletion—coal mine $107,000. Prepare a partial balance sheet of Tamarisk, Inc. for these items.
Answer:
Partial balance sheet of Tamarisk, Inc.
Non Current Assets :
Buildings $1,140,000
Less accumulated depreciation—buildings ($652,000) $488,000
Coal mine $509,000
Less accumulated depletion—coal mine ($107,000) $402,000
Goodwill $421,000
Total $1,311,000
Explanation:
The Items above are Non- Current Assets. Non Current Assets are resources expected to generate economic benefits for a period exceeding 12 months.
Golden Eye Co., a hi-tech satellite company, has asked you to value the company for possible cross-listing in the U.S. The company has estimated revenues, earnings before interest and taxes, change in net working capital, and Net Capital spending (defined as Capital spending – depreciation) for the next three years (see Exhibit 1 below.) The free cash flow in year 4 is estimated to be $250 million and is expected to grow at 4% forever. The tax rate is 36%. The company’s unlevered cost of capital is 16.43%. Golden Eye Co. has just borrowed $1 billion of long-term debt at 9% interest rate. It will repay $200 million per year in the first three years, and then will maintain the debt at $400 million forever. What is the value of the firm?
Exhibit 1:
Year T=1 T=2 T=3
Revenues 6,619 7,417 8,564
EBIT 540 680 750
Net Capital spending 150 170 190
Change in NWC 70 75 80
Answer:
Explanation:
Let's first determine the free cash flow of the firm
Particulars Years
1 2 3
EBIT 540 680 750
Tax at 36% (0.36*540) (0.36*680) (0.36*750)
Less: 345.6 435.2 480
Net Capital -
Spending 150 170 190
Change in NWC 70 75 80
Less: 125.6 190.2 210
The terminal value at the end of T =(3 years) is:
[tex]= \dfrac{Free \ cash \ flow}{unlevered \ cost - expected \ growth \ rate}[/tex]
[tex]= \dfrac{250}{0.1643-0.04}[/tex]
[tex]= \dfrac{250}{0.1243}[/tex]
= 2011.26
Finally, the value of the firm can be computed as follows:
Years Free Cash Flow PVIF PV
1 125.6 0.6589 107.88
2 190.2 0.7377 140.31
3 210 0.6336 133.06
Terminal Value 2011.26 0.6336 1294.33
Value of the firm ⇒ $1655.58
When researching and planning for your future career, you should consider these things about yourself?
O your hobbies and interests
O your personality
o the things you do well
o all of the above
Being Human, Inc., recently issued new securities to finance a new TV show. The project cost $14.5 million, and the company paid $775,000 in flotation costs. In addition, the equity issued had a flotation cost of 7.5 percent of the amount raised, whereas the debt issued had a flotation cost of 3.5 percent of the amount raised. If the company issued new securities in the same proportion as its target capital structure, what is the company’s target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)
Answer: 1.54
Explanation:
Based on the information given in the question, the company’s target debt-equity ratio will be:
The total costs will be:
= $14.5 million + $775000
= $15.275 million
Since amount needed = amount raised × (1-fT)
Therefore, 15.275 × (1-f) = 14.5
15.275 - 15.275f = 14.5
f = floatation costs = 5.074%
Therefore, 5.074% × (1 + D/E) = 7.5% + (D/E) × 3.5%
Solving for debt-equity ratio, the value will be = 1.54
Bonita Industries received $108000 in cash and a used computer with a fair value of $384000 from Carla Vista Co. for Bonita Industries's existing computer having a fair value of $492000 and an undepreciated cost of $461700 recorded on its books. The transaction has no commercial substance. How much gain should Bonita recognize on this exchange, and at what amount should the acquired computer be recorded, respectively
Answer:
$30,300 and $384,000
Explanation:
The computation of the gain and the amount should acquired is shown below;
The gain is
= Fair value - undepreciable cost
= $492,000 - $461,700
= $30,300
And, the amount at which the computed should be recorded is equivalent to the fair value i..e $384,000
The same is considered and relevant
Bethany’s regular hourly wage rate is $12, and she receives an hourly rate of $18 for work in excess of 40 hours. During a January pay period, Bethany works 50 hours. Bethany’s federal income tax withholding is $99, and she has no voluntary deductions. Compute Bethany’s gross earnings and net pay for the pay period. Assume that the FICA tax rate is 7.65%.
Answer and Explanation:
The computation of the gross earnings and the net pay is shown below;
Gross pay = Regular pay + Overtime pay
= (40 × $12) + (50 - 40) × $18
= $480 + $180
= $660
Net pay = Gross pay - FICA taxes - Federal income taxes withholding
= $660 - ($660 × 7.65%) - $99
= $510.51
Hence, the same is to be considered and relevant
Dean Company has sales of $163,000, and the break-even point in sales dollars is $102,690. Determine the company's margin of safety percentage. Round answer to the nearest whole number. fill in the blank 1 %
Answer:
37%
Explanation:
The Dean company has sales of $163,000
The break even point in sales dollars is $102,690
Therefore, the company's margin of safety can be calculated as follow;
Margin of safety = (Sales - Break even sales ) / Sales
Margin of safety = ($163,000 - $102,690) / $163,000
Margin of safety = $60,310 / $163,000
Margin of safety = 0.37 × 100
Margin of safety = 37%
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:
Office Expenses Total Allocation Basis
Salaries $ 31,000 Number of employees
Depreciation 20,500 Cost of goods sold
Advertising 41,500 Net sales
Item Drilling Grinding Total
Number of employees 1080 1620 2700
Net sales 326,625 477,375 804,000
Cost of goods sold 76,500 127,500 204,000
The amount of the total office expenses that should be allocated to Grinding for the current period is (Do not round your intermediate calculations.)
a) $56,054.
b) $46,204.
c) $93,000.
d) $36,954.
e) $600,000.
Answer:
a) $56,054.
Explanation:
The computation of the amount of the total office expenses that should be allocated to Grinding for the current period is shown below:
= Salaries + Depreciation + Advertising
= (31,000 ÷ 2700) × 1620 + (20,500 ÷ 204,000) × 127,500 + (41,500 ÷ 804,000) × 477,375
= $56,054
Hence, the first option is correct
A brewery produced regular beer and a low carb "light beer". Steady Customers of the brewery buy 10 units of regular beer and 15 units of light beer monthly. While setting up the brewery to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular is $32,000 and the cost per unit if light beer is $50,000. Every unit of regular beer brings in $120,000 in revenue, while every unit of light beer brings in $300,000 in revenue. The brewery wants at least $9,000,000 in revenue. At least 20 additional units of beer can be sold (a) How much of each type of beer should be made so as ti minimize total production cost (b) Suppose the minimum revenue is increased to $9,500,000.Calcualte the total production cost
Answer:
Regular Low Carb Total
a) Units to be produced 20 22 42
(to minimize total production cost)
b) Total production costs $704,000 $1,150,000 $1,854,000
Explanation:
a) Data and Calculations:
Regular Low Carb
Monthly customers demand 10 15
Ratio of customers demand 40% 60%
Cost per unit $32,000 $50,000
Revenue per unit 120,000 300,000
Contribution per unit $88,000 $250,000
Total required revenue = $9,000,000
With 20 additional units of beer, total units produced = 45 (25 + 20)
To minimize production costs and generate a total revenue of $9,000,000, more of the units that cost less should be produced. Units should be produced according to the following ratio:
Regular Low Carb Total
New Production and Sales units 20 22 42
Total production cost = $640,000 $1,100,000 $1,740,000
($32,000 * 20) ($50,000 * 22)
Total revenue = $2,400,000 $6,600,000 $9,000,000
($120,000 * 20) ($300,000 * 22)
To achieve a minimum revenue of $9,500,000,
New production units 22 23 45
Total production cost = $704,000 $1,150,000 $1,854,000
Total revenue = 2,640,000 6,900,000 9,540,000
View Point Industries has forecasted a rate of return of 20.00% if the economy booms (25.00% probability); a rate of return of 15.00% if the economy is in a growth phase (45.00% probability); a rate of return of 2.50% if the economy is in decline (20.00% probability); and a rate of return of -15.00% if the economy is in a depression (10.00% probability). What is View Point's standard deviation of returns
Answer: 10.46%
Explanation:
Based on the information given in the question, View Point's standard deviation of returns will be calculated thus:
Firstly, we have to calculate the expected rate of return which will be the respective returns multiplied by the respective probabilties and this will be:
= (0.2 × 0.25) + (0.15 × 0.45) + (0.025 × 0.2) + (-0.15 × 0.10)
=10.75%
Then, we'll calculate the total probability and this will be:
= [0.25 × (20 - 10.75)²] + [0.45 × (15 - 1.75)²] + [0.2 × (2.5 - 10.75)²] + [0.1 × (-15 - 10 75)²]
= 21.3906 + 8.1281 + 13.6125 + 66.3063
= 109.7375%
Therefore, View Point's standard deviation of returns will be:
= [Total of Probability × (Return-Mean)²/✓Total probability
=10.46%
Central Park Inc. is a company that sells women's clothing. It recently shut down its physical store and is operating as an app-based store now. The app allows users to access the store's products anytime and anywhere using their cell phones, and it also has features that allow users to compare the prices of similar products across different online stores. This scenario exemplifies _______.
Answer:
M-commerce
Explanation:
Since in the given situation it is mentioned that Central Park Inc sells the women clothing and currently they shut down the physical store and they are operated now through app based. With this feature, anyone could access anywhere via using the mobile phones also at the same time the customer compared the prices
So this situation represent the mobile commerce or M -commerce as the people can access this from anywhere at any time, it is easy to use also it save the cost and time
What is the basic purpose of the consumer price index (CPI)? A. to track monthly changes in prices paid by urban consumers B. to track consumer spending on thousands of goods and services C. to predict future price increases for representative goods and services D. to predict and avoid deflation, or a decline in the general level of prices
Answer:
A). to track monthly changes in prices paid by urban consumers.
Explanation:
CPI(Consumer Price Index) is characterized as 'a statistical estimate of the price level of goods and services bought by consumers for consumption purposes by the households.' It primarily aims to estimate the change or swap in the prices of the weighted average price of the common basket(consumption goods, as well as, services that the consumers pay for). It is calculated using the formula;
[tex]CPI_{t} = \frac{C_{t} }{C_{0} } * 100[/tex]
where,
[tex]CPI_{t}[/tex] = current Consumer Price Index
[tex]C_{t}[/tex] = Current price basket
[tex]C_{0}[/tex] = Cost of price basket in the base year
It assists in deducing whether the average prices have received a fall or rise and determines inflation or deflation. Thus, option A is the correct answer.
Roberto Corporation was organized on January 1, 2021. The firm was authorized to issue 84,000 shares of $5 par common stock. During 2021, Roberto had the following transactions relating to shareholders' equity: Issued 10,800 shares of common stock at $6.00 per share. Issued 20,400 shares of common stock at $8.20 per share. Reported a net income of $108,000. Paid dividends of $59,000. Purchased 3,100 shares of treasury stock at $10.20 (part of the 20,400 shares issued at $8.20). What is total shareholders' equity at the end of 2021
Answer:
$249,460
Explanation:
Calculation to determine the total shareholders' equity at the end of 2021
Issued of stock $64,800
(10,800 shares * $6.00 per share)
Issued of stock $167,280
(20,400 shares * $8.20 per share)
Net income $108,000
Less dividends ($59,000)
Less Treasury stock $31,620
( 3,100 shares* $10.20)
Total shareholders' equity $249,460
Therefore total shareholders' equity at the end of 2021 is $249,460
cegg The change in the optimal objective function value per unit increase in the right-hand side of a constraint is given by the Group of answer choices shadow price. objective function coefficient. None of the choices listed here. allowable increase. restrictive cost.
Answer:
Shadow price
Explanation:
A shadow price can be understood as the hypothetical price for everything that is n't currently priced or distributed in the economy. It's commonly utilized in cost analysis to measure intangible properties, and it could also be utilized by analysts to determine the actual worth of a commodity market share or even to value spillovers.
Thus, from the above we can conclude that the correct answer is shadow price.
Assuming that the term structure of interest rates is determined as posited by the pure expectations theory, which of the following statements is CORRECT? a. Inflation is expected to be zero. b. Consumer prices as measured by an index of inflation are expected to rise at a constant rate. c. The maturity risk premium is assumed to be zero. d. In equilibrium, long-term rates must be equal to short-term rates. e. An upward-sloping yield curve implies that future short-term rates are expected to decline.
Answer:
c. The maturity risk premium is assumed to be zero.
Explanation:
In the case when the term structure of the rate of interest would be measured via the pure expectations theory so here the maturity risk premium would be zero as under this theory it is assumed that the risk premium i.e. of the long term would be equivalent to the zero
Therefore the option c is correct
And, the rest of the options seems wrong
mixed economy is characterized by a co existence of?
Answer:
See explanation below
Explanation:
A mixed economy is a mixture of capitalism (private enterprise) and socialism (public enterprise).
It is important when regulating a market with a natural monopoly to maintain on going business incentives for the firm involved. A cost-plus approach to regulating a market does not provide this. What would a benefit to not utilizing a cost plus approach to regulation be
Answer:
The natural monopoly will have incentives for efficiency and innovation
Explanation:
Monopoly my be defined as taking or having an excessive control or charge over the trade of a particular commodity or product or the control over the supply of a particular product on the market by one particular group or person.
In the context, the cost-plus approach requires the monopoly in order to change the price which includes normal return to the average cost. So the monopolist does not have any incentive for innovating efficient technology so as to reduce its cost. Thus we can promote innovation and efficiency by not using the cost plus policy.
Consumers know that some fraction x of all new cars produced and sold in the market are defective. The defective ones cannot be identified except by those who own them. Cars do not depreciate with use. Consumers are risk-neutral and value nondefective cars at $10,000 each. New cars sell for $8,000 and used ones for $2,000. (Note that since buyers are risk-neutral, the price of a new car reflects the expected value of purchasing a car that may or may not be defective.)What is the fraction x?Instructions: Enter x as a number rounded to two decimal places. For example, if x = 1/3 enter 0.33.
Answer:
0.25
Explanation:
Given :
The [tex]$\text{consumers value}$[/tex] the non defective cars = [tex]$\$ 10,000$[/tex]
We will consider all the defective [tex]$\text{ cars are used cars}$[/tex] only. This is only because the value of the used car is $ 2000 and it is lower than the price of a good car that is $10,000. Thus only defective cars are being sold as the old cars.
For a risk neutral customer, the price that he is ready to give for the new car is the reservation price of a non defective car. It means that (the amount of $ 8000 is the value of the good car x chances of getting a good car) +( the value of the bad car x chances of getting a bad car).
Since we know that x is the fraction of all the cars sold in the market are defective, it means that the fraction of the good cars is 1 - x. Thus putting the values,
[tex]$x\times 2000+(1-x)\times 10000=8000$[/tex]
[tex]$10000-8000x=80000$[/tex]
[tex]$8000x=2000$[/tex]
[tex]$x=\frac{2}{8}$[/tex]
= 0.25
Thus the value of :
[tex]$x=\frac{2}{8} = 0.25$[/tex]