The basic determinant of the transactions demand for money is the multiple choice 1 interest rate. level of nominal GDP. reserve ratio. price level. b. The basic determinant of the asset demand for money is the multiple choice 2 interest rate. price level. level of nominal GDP. reserve ratio. c. Total money demand is the multiple choice 3 vertical sum of the private demand for money and the public demand for money. vertical sum of the transactions demand for money and the asset demand for money. horizontal sum of the consumer demand for money and the producer demand for money. horizontal sum of the transactions demand for money and the asset demand for money. d. The equilibrium interest rate in the money market is determined multiple choice 4 by how much the interest rate fluctuates over time. at the intersection of the aggregate demand and aggregate supply curves. at the intersection of the total demand for money curve and the supply of money curve. by the Fed. e. Complete the following statement: If there is an increase in the total demand for money, multiple choice 5 the equilibrium interest rate will rise. the money supply will rise. the money supply will fall. the equilibrium interest rate will fall. PrevQuestion 1 of 10 Total1 of 10Visit question mapNext

Answers

Answer 1

Answer:

1. level of nominal GDP.

2. interest rate.

3. horizontal sum of the transactions demand for money and the asset demand for money.

4. at the intersection of the total demand for money curve and the supply of money curve.

5. the equilibrium interest rate will rise.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

Additionally, the rate at which an asset can be used to purchase any goods or services refers to its liquidity. Thus, liquidity is a quality or characteristics of money as a medium of exchange. Therefore, money is a generally accepted medium of exchange around the world.

The three (3) main functions of money all over the world are;

I. Medium of exchange.

II. Unit of account.

III. Store of value.

Some of the characteristics of money includes the following statements;

1. The basic determinant of the transactions demand for money is the level of nominal GDP.

2. The basic determinant of the asset demand for money is the interest rate.

3. Total money demand is the horizontal sum of the transactions demand for money and the asset demand for money.

4. The equilibrium interest rate in the money market is determined at the intersection of the total demand for money curve and the supply of money curve.

5. If there is an increase in the total demand for money, the equilibrium interest rate will rise.


Related Questions

Vaughn Manufacturing had the following transactions during 2022:

1. Issued $272500 of par value common stock for cash.
2. Recorded and paid wages expense of $130800.
3. Acquired land by issuing common stock of par value $109000.
4. Declared and paid a cash dividend of $21800.
5. Sold a long-term investment (cost $6540) for cash of $6540.
6. Recorded cash sales of $872000.
7. Bought inventory for cash of $348800.
8. Acquired an investment in Zynga stock for cash of $45780.
9. Converted bonds payable to common stock in the amount of $1090000.
10. Repaid a 6-year note payable in the amount of $479600.

What is the net cash provided by financing activities?

a. $(228900).
b. $250700.
c. $861100.
d. $1318900.

Answers

Answer and Explanation:

The computation of the net cash provided by financing activities is given below:

Cash provided by financing activities

Issuance of the common stock for cash $272,500

Less: cash dividend paid -$21,800

Less: repaid note payable $479,600

Net cash used in financing activities -$228,900

The positive means cash inflow and the negative means cash outflow

When a partnership is formed, assets contributed by the partners should be recorded on the partnership books at their: Group of answer choices fair market value at the time of the contribution. assessed values for property tax purposes. original costs to the partner contributing them. book values on the partners' books prior to their being contributed to the partnership.

Answers

Answer:

When a partnership is formed, assets contributed by the partners should be recorded on the partnership books at their:

fair market value at the time of the contribution.

Explanation:

This fair market value of the assets contributed by each partner provides the best measurement value at which assets contributed in a partnership should be recorded.  The asset class is debited while the partner's capital account is credited with this fair market value and not the book or cost value.

Consider the following information for Watson Power Co.: Debt: 3,500 7 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. Common stock: 84,000 shares outstanding, selling for $59 per share; the beta is 1.06. Preferred stock: 10,000 shares of 6 percent preferred stock outstanding, currently selling for $104 per share. Market: 8.5 percent market risk premium and 5.5 percent risk-free rate. Assume the company's tax rate is 35 percent. Find the WACC.

Answers

Answer:

9. 82 %

Explanation:

WACC = Cost of equity x Weight of equity + Cost of Preferred Stock x Weight of Preferred Stock + Cost of Debt x Weight of Debt.

Remember to always use the After tax cost of debt :

Cost of Debt :

PV = - $1,020

FV = $1,000

N = 20 x 2 = 40

P/YR = 2

PMT = ($1,000 x 7 %) ÷ 2 = $35

I/YR = ???

The Cost (I/YR) is calculated as 6.82 %. The  After tax cost of debt is 4.433 %.

Cost of Equity :

Cost of Equity = Return from risk free security + beta x market premium'

                        = 5.5 % + 1.06 x 8.5 %

                        = 14.51 %

Cost of Preferred Stock :

Cost of Preferred Stock = 6 %

therefore,

WACC = 14.51 % x 51.8 % +  6 % x 10.87 %+ 4.433 % x 37.3 %

            = 9. 82 %

Whirlwind mowers manufacturers and sells power lawnmower still public and distributes the products through its own dealers. Andrew is a homeowner who has purchased a power mower from an authorized dealer on the basis of the dealer's recommendation that the mower is the best one available to the job. Andrew was cutting his lawn when the mower blade flew off and seriously injured his leg.

Required:
a. Andrew sues Whirlwind Mowers and asks for damages based on negligence in producing the power mower. Is Whirlwind Mowers guilty of negligence? Explain your answer.
b. The doctrine of res ipsa loquitur can often be applied to cases of this type. Show how this doctrine can be applied to this case. Your answer must include a definition of res ipsa loquitur .
c. Explain the various types of damages that Andrew might receive if Whirlwind Mowers is found guilty of negligence.

Answers

Answer:

A) Yes Whirlwind mowers are guilty

B) If

The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipment

C)  Compensative damages : special and general

Explanation:

A)

Andrew can sue whirlwind mowers and claim damages for production negligence ( i.e. not following the standard of care ) as enshrined in the doctrine of " res ipsa loquitur " hence Whirlwind mowers are guilty

B)  

"res ipsa loquitur ."  means the thing speaks for itself and this doctrine can be applied to this case following that the:

The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipment

c) The various types of damages

Compensative damages ( divided into 2 )

i) special damages which includes hospital expenses and other properly documented damages  ii) general damages : includes damages that are non-measurable damages

Suppose during 2022 that Cypress Semiconductor Corporation reported net cash provided by operating activities of $96,447,240, cash used in investing of $46,576,080, and cash used in financing of $7,957,440. In addition, cash spent for fixed assets during the period was $27,888,840. No dividends were paid. Calculate free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answers

Answer:

Free cash flow = $68,558,400

Explanation:

Free cash flow represents the amount that is left to all the providers of capital after the payment of all all operating expenses, working capital and investment in fixed asset expenditures.

It is computed as cash flow made from operation less capital expenditures

Free cash flow = net cashflow from operating activities - fixed assets

                    =  $96,447,240 - $27,888,840

                   = $68,558,400

Free cash flow = $68,558,400

A local partnership is liquidating and is currently reporting the following capital balances: Barley, capital (50% share of all profits and losses) $ 44,000 Carter, capital (30%) 32,000 Desai, capital (20%) (24,000 ) Desai has indicated that a forthcoming contribution will cover the $24,000 deficit. However, the two remaining partners have asked to receive the $52,000 in cash that is currently available. How much of this money should each of the partners receive

Answers

Answer:

Barley $29,000; Carter $23,000 ;Desai $0

Explanation:

Calculation to determine How much of this money should each of the partners receive

PARTNER WITH DEFICIT CAPITAL BALANCE

Barley,Capital(50%) Carter,Capital(30%)

Desai,Capital(20%)

Reported balances $44,000 $32,000 $(24,000)

Potential loss from Desai deficit

(split 5/8:3/8)

($15,000)($9,000) $24,000

Barley (5/8*$24,000=$15,000)

Carter (3/8*$24,000=$9,000)

Desai($15,000)($9,000) =$24,000

Cash distributions $29,000 $23,000 $0

Barley ($44,000-$15,000=$29,000)

Carter, ($32,000-$9,000=$23,000)

Desai($24,000-$24,000=0)

Therefore The amount of the money that each of the partners should receive is :

Barley $29,000; Carter $23,000 ;Desai $0

What is one of the best known functions of The Consumer Product Safety Commission?
O product recalls
O identity theft damage repair
O food safety
Ofree credit reports

Answers

Answer:

product recalls

Explanation:

Note, the Consumer Product Safety Commission is an agency that is concerned with consumer product safety in general regardless of whether they are food-related products or not.

Hence, this agency among its stated primary objectives on its official website includes carrying out product recalls where necessary.

Who is Ackerman?

A. Levi

B. Petra

C. Erwin





Answers

I think it’s A
I hope it’s help

Answer:

levi

Explanation:

Hordel Company needs to determine a markup for a new product. Hordel expects to sell 6,100 units and wants a target profit of $93 per unit. Additional information is as follows: Variable product cost per unit $ 80 Variable administrative cost per unit 35 Total fixed overhead 53,000 Total fixed administrative 11,050 Using the variable cost method, what markup percentage to variable cost should be used

Answers

Answer:

See below

Explanation:

Total variable cost = Variable product cost + Variable administrative cost per unit

= (6,100 × $80 per unit) + (6,100 × $35)

= $488,000 + $213,500

= $701,500

Total fixed cost = Total fixed overhead + Total fixed administrative cost

= $53,000 + $11,050

= $64,050

Total fixed cost per unit = $64,050 ÷ 6,100 = $10.5

Total cost = Total variable cost + Total fixed cost

= $701,500 + $64,050

= $765,550

Target profit = 6,100 × $93 = $567,300

Desired selling price = Total cost + Target profit

= $765,550 + $567,300

= $1,332,850

Desired selling price per unit = $1,332,850 ÷ 6,100 = $218.5

Therefore,

Markup percentage on variable cost

= [(Desired selling price per unit - Variable cost per unit) ÷ Variable cost per unit] × Variable cost per unit

= [($218.5 - 115) ÷ (115)] × 115

= 103.5%

The master budget at Western Company last period called for sales of 225,000 units at $8.60 each. The costs were estimated to be $4.00 variable per unit and $270,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $8.70 per unit. Variable costs were $4.75 per unit. Actual fixed costs were $270,000. Required: Prepare a flexible budget for Western.

Answers

Answer:

$765,000

Explanation:

Particulars                                              Amount

Sales revenue = (225,000*$8.60) =   $1,935,000

Less: Variable Cost = (225,000*$4) = $900,000  

Contribution Margin                             $1,035,000

Less: Fixed Costs                                 $270,000

Operating Profits                                 $765,000

Several years ago, Nipher paid $70,000 to purchase equipment to use in its business. This year, it sold the equipment for $76,500. Accumulated MACRS depreciation through date of sale was $18,000. Determine the amount and character of Nipher's gain recognized. Group of answer choices $18,000 ordinary gain and $6,500 Section 1231 gain $24,500 Section 1231 gain $18,000 ordinary gain and $6,500 capital gain $24,500 ordinary gain

Answers

Answer:

$18,000 ordinary gain and $6,500 Section 1231 gain

Explanation:

Calculation to Determine the amount and character of Nipher's gain recognized.

Based on the information given we were told that the Accumulated MACRS depreciation was the amount of $18,000 which means that the ORDINARY INCOME will be $18,000 as well as $6,500 SECTION 1231 GAIN Calculated as:

Gain= Fair Value of Equipment -Book value of Equipment

Gain=$76,500-$70,000

Gain=$6,500

Therefore the amount and character of Nipher's gain recognized will be $18,000 ordinary gain and $6,500 Section 1231 gain

On January 1, Boston Enterprises issues bonds that have a $2,100,000 par value, mature in 20 years, and pay 7% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months

Answers

Answer:

$73,500

Explanation:

Calculation to determine How much interest will Boston pay (in cash) to the bondholders every six months

Semiannual cash interest

payment =$2,100,000 × 7% × 1/2

Semiannual cash interest

payment = $73,500

Therefore How much interest will Boston pay (in cash) to the bondholders every six months is $73,500

what's the meaning of GDP?

Answers

what's the meaning of GDP?

It means Gross domestic product.

Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Gross domestic product tracks the health of a country's economy. It represents the value of all goods and services produced over a specific time period within a country's borders. ... Investors can use GDP to make investments decisions—a bad economy means lower earnings and lower stock prices.

The charter of a corporation provides for the issuance of 99,983 shares of common stock. Assume that 38,266 shares were originally issued and 4,896 were subsequently reacquired. What is the amount of cash dividends to be paid if a $4 per share dividend is declared

Answers

Answer:

$1,337,480

Explanation:

Dividend is paid on outstanding shares. So, the amount of cash dividends to be paid = [38,266 - 4,896] * $4 = $33,4370 * $4 = $1,337,480

Holbrook, a calendar year S corporation, distributes $89,500 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $107,400, Holbrook's AAA balance is $40,275, and Holbrook has $13,425 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $89,500 is from AAA and AEP as well as how Cody's stock basis is affected. If an amount is zero, enter "0".

Distribution from Account Affect on Stock Basis Balance after Distribution
From AAA Account $8000 $8000 $0
From AEP Account $2500 $0 $0
From Cody's stock basis $ $ $

Answers

Answer:

Explanation:

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Answers

BOWSERRRRRR .... BOZO

Cusic Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $24,700, and the company expects to sell 1,640 per year. The company currently sells 1,990 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,660 units per year. The old board retails for $23,100. Variable costs are 53 percent of sales, depreciation on the equipment to produce the new board will be $1,035,000 per year, and fixed costs are $3,250,000 per year. If the tax rate is 24 percent, what is the annual OCF for the project

Answers

Answer: $9,524,922

Explanation:

The annual OCF of the project will be calculated as

= EBIT + Depreciation - taxes

First, we have to calculate the EBIT which will be:

= [ $24,700 x 1,640 - ( 1,990-1,660 x $23,100 ]

= $40,508,000 - (330 × $23100)

= $40,508,000 - $7,623,000

= $ 32,885,000

Variable cost will then be:

= $32,885,000 × 53%

= $32,885,000 x 0.53

= $ 17,429,050

Therefore, EBIT will be:

= $32,885,000 - $ 17,429,050 - Fixed cost - depreciation

= $32,885,000 - $ 17,429,050 - $3,250,000 - $1,035,000

= $11,170,950

Then, we calculate the value of tax which will be:

= $11,170,950 x 0.24

= $2,681,028

Therefore, OCF will be:

= EBIT + Depreciation - taxes

= $11,170,950 + $1,035,000 - $2,681,028

= $9,524,922

Garth is best friends with Wayne, the CEO of Great Pharma, Incorporated (GPI), a publicly traded corporation. GPI had just made an important discovery: the cure for cancer. The information has been kept secret by GPI. Before the news was made public in a press conference, Wayne told Garth about it on May 1 and that day Garth bought 10,000 shares of GPI stock. The press conference was on May 2 and after the announcement, GPI stock went up $50 a share. Garth immediately sold his stock and made $500,000. Garth is known in the law of insider trading as a/an

Answers

Answer:

Garth is known in the law of insider trading as a

secondary insider.

Explanation:

Garth's contact with inside information in GPI is not primary since he does not have the direct privileged information, unlike Wayne, his friend, who is also the CEO of GPI.  However, he has benefited from secondary information through Wayne.  His conduct is also a violation of the Securities Act as amended.  He used non-publicly available information to trade on the stock of GPI and made huge profits.

You would like to combine a risky stock with a beta of 1.68 with a treasury bill in a way that the risk level of the portfolio is equivalent to the risk level of the market. What weight of the portfolio should be invested in the Treasury Bill?

Answers

Answer:

0.60 or 60%

Explanation:

Calculation of weight of the portfolio

Assume that the weight is x

x*[Beta of stock) + (1+x)*(Beta of Tbills) = 1

x * (1.68) + (1-x)*(0) = 1

1.68x + (1-x)*0 = 1

1.68x + 0 = 1

x = [1/1.68]

x = 0.5952

x = 0.60 or 60%

So, the weight of the portfolio that should be invested in the Treasury Bill is 0.60 or 60%.

With regard to social welfare, oligopolists forming a cooperative alliance is Group of answer choices good because it leads to less disagreement and lower prices and more variety. good because forming a cooperative alliance closely resembles a perfectly competitive outcome. bad because prices will then be too high and output will be too low. bad because output will then be too high and prices will be too high. Flag question: Question 11

Answers

Ok hello what hi lol

Steps in the Accounting Cycle Listed below, out of order, are the steps in an accounting cycle.
1. Prepare the unadjusted trial balance.
2. Post journal entries to general ledger accounts.
3. Analyze transactions from source documents.
4. Journalize and post adjusting entries.
5. Prepare the financial statements.
6. Record transactions in a journal.
7. Prepare the post-closing trial balance.
8. Prepare the adjusted trial balance.
9. Journalize and post closing entries.
(a) Place the numbers from the above list in the order in which the steps in the accounting cycle are performed.
3, 6, 2, 1, 4, 8, 5, 9, 7
2, 3, 6, 1, 4, 8, 5, 9, & 7
3, 6, 2, 1,4,8,5,7, & 9
6, 3, 2, 1, 4, 8, 5, 9, & 7
(b) identify the steps in the accounting cycle that occur daily.
1, 2, 3, & 6
2, 3, & 4
1, 2, 3, 4,&6
2, 3, & 6

Answers

Answer:

Steps in the Accounting Cycle

a) The order in which the steps in the accounting cycle are performed is:

3, 6, 2, 1, 4, 8, 5, 9, 7

b) The steps in the accounting cycle that occur daily are:

2, 3, & 6

Explanation:

The correct ordered steps in the account cycle are:

3. Analyze transactions from source documents.

6. Record transactions in a journal.

2. Post journal entries to general ledger accounts.

1. Prepare the unadjusted trial balance.

4. Journalize and post adjusting entries.

8. Prepare the adjusted trial balance.

5. Prepare the financial statements.

9. Journalize and post closing entries.

7. Prepare the post-closing trial balance.

Firm Aay operates a pool hall in Boom Town. Business has been very profitable. However, there are dark clouds on the horizon. Firm Bee is considering entering the pool hall market in Boom Town. The profits of Aay are 15 if it is a monopoly; if Bee enters and Aay accommodates and shares the market the duopoly profits are 5 for each firm; is Bee enters and Aay launches a price war, both firms earn -1.
a) Draw the game tree for this scenario and determine the subgame perfect equilibrium (SPE).
b) What if launching a price war involves not only charging a low price, but printing flyers to inform the public of the great deals available? If there is a price war, both firms print flyers, and the net result of the price war is -1 for each firm (that is, the -1 takes into account the cost of printing the flyers.) Assume that Aay can have flyers printed up prior to Bee's entry decision and that the printing cost is $8. Draw the game tree for this scenario and determine the subgame perfect equilibrium.
c) What does your answer to (b) imply about the relationship between sunk costs, firstmover advantages, and entry deterrence? plz type down u answer

Answers

Solution :

a). The game tree is attached below. In the game tree, the (SPE) or subgame perfect equilibrium is for Bee firm to enter and Aay firm to accommodate.

b). If launching the price war consists of not only charging low price, but also printing flyers in order to inform the public.  

The game tree is attached below.

In the game tree, it can be explained that :

Aay has a priority printing, cost of printing is 8. If he prints and Bee does not enter equilibrium will be (15-8) = 7, 0. Profit if Bee does not enter.

It is given that if Aay enters and Bee enters, there will be price war = -1, -1

or they will accommodate = (5, 8, 5). Here the profit while accommodating is 5 and printing cost is 3. Therefore, (-3, 5)

c). Sunk cost such as that of printing allows Aay to make a credible threat to engage in a prior war and thus deny entry of Bee.

Now when he had first move advantage and make investment in flyers he could make a credible threat and deter entry of Bee. If he did not have the advantage, his treat would not have much of an effect.


The marketing concept emphasizes satisfying customer needs and wants. How does marketing satisfy your needs as a college student? Are certain aspects of your life influenced more heavily by marketing than others? Provide examples​

Answers

Answer:

JAGAJABAAJAKABAGAHAJABSBS

As a student, it could satisfy my needs by showing the benefits of the college and/or acknowledging me of things I didn’t know before, it satisfies my entertainment aspects

If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is: _______.
a. for your firm to advertise and the other not to advertise.
b. for neither firm to advertise.
c. for each firm to advertise.
d. None of the answers is correct.

Answers

Answer:

D. None of the answers is correct.

Explanation:

An early frost destroys 20% of the coffee bean crop. If the supply and demand for coffee beans are both relatively inelastic, and the frost does not impact the quality of the coffee beans that make it to market.

Required:
What will most likely occur to the equilibrium price and quantity of coffee beans?

Answers

Answer:

Option C, Price will increase, quantity will decrease

Explanation:

The options for the given question are

(A) Price and quantity will both increase

(B) Price and quantity will both decrease

(C) Price will increase, quantity will decrease

(D) Price will decrease, quantity will increase

(E) Price will not change, quantity will decrease

Solution

Inelastic demand of a product means that the price (high or low) of the product does not affect the demand.

Since the frost destroys the crop, then there are probabilities of variation in the price of coffee (price will rise). Price will be increased to fetch the loss because of frost.

Price will increase and quantity will decrease.

Hence, option C is correct

Given the following information, calculate the debt coverage ratio for this investment. Potential gross income: $120,000, Vacancy rate: 9%, Net operating income: $57,900, Operating expenses: $51,300, Acquisition Price: $520,000, Debt service: $40,000.

Answers

Answer:

the debt coverage ratio is 1.4475 times

Explanation:

The computation of the debt coverage ratio is shown below;

The Debt coverage ratio for investment is

= net operating income  ÷ Total debt

= $57,900 ÷ $40,000

= 1.4475 times

BY dividing the net operating income by the total debt we can get the debt coverage ratio

hence, the debt coverage ratio is 1.4475 times

1. The amount of income that would result from an alternative use of cash is called opportunity cost.
A. True
B. False
2. When a segment of a company is showing a net loss, it is always best to discontinue the segment in order not to continue with losses.
A. True
B. False

Answers

Answer: 1. True

2. False

Explanation:

1. Opportunity cost simply means the cost of what we've to forgo for something else. It's the amount of income which would be gotten when we use cash in an alternative way. Therefore, the answer is true.

2. A net loss occurs when the expenses are more than the income for a given period of time. Rather than discontinuing, it's required for a disclose to be made based on the rules, Therefore, the correct answer is false.

18) 20 points Steve's Hardware Store uses the perpetual inventory system. The business incurred the following transactions: A. On November 1, 10 snow blowers were purchased on account at $1,000 each. Credit terms were 2/10, net 30. B. On November 10, the business sold three of the snow blowers on account at $1,500 each. The credit terms were 2/10, net 30. C. OnNovember12,thebusinesspaidforthesnowblowerspurchasedonNovember1. D. On November 20 Steve's received payment for the November 10 sale. E. On November 30, the business paid rent of $1,500 and wages of $2,000.

Answers

the first one is the right answer

Your company has finished working on an open world video game, CyberPerson 2080. You now have a decision to make. You can auction your game off to a publisher, or you can keep your game and do the marketing and publishing yourself. If you auction your game off, your analytics team estimates there is a 25% chance you will earn $5 million, a 35% chance you will earn $12 million, and a 40% chance you will earn $16 million. If you keep your game, your marketing and publishing costs will be $7 million. If you keep your game, your analytics team estimates there is a 30% chance your game will be a critical and commercial hit, a 25% chance your game will sell well and make gross revenues of $12 million, and a 45% chance another similar game will come out at the same time and you will make gross revenues of $1 million.

If your game is a critical and commercial hit, there is a 60% chance it is on the "best of the year" lists and makes gross revenues of $64 million, a 35% chance it stays on the top seller lists for weeks and makes gross revenues of $28 million, and a 5% chance it makes gross revenues of $18 million. Assume you make decisions using expected value, and you are an expected value maximizer. If you make the optimal decision, how much will you expect to earn from your game?

Answers

Answer:

CyberPerson 2080

If you make the optimal decision, the amount you will expect to earn from your game is:

= $11.85 million.

Explanation:

a) Data and Calculations:

Expected value of game being a critical and commercial hit:

Probability   Gross Revenue    Expected Revenue

60%                 $64 million           $38.4 million

35%                   28 million                9.8 million

5%                      18 million                0.9 million

100%                                              $49.1 million

Value of auctioning game:

Probability   Gross Revenue    Expected Revenue

25%                    $5 million              $1.25 million

35%                   $12 million             $4.20 million

40%                   $16 million             $6.40 million

100%                                                $11.85 million

Value of keeping game:

Probability   Gross Revenue    Expected Revenue

100%                -$7 million                -$7.00 million

30%              $49.1 million                $14.73 million

25%                 $12 million                $3.00 million

45%                   $1 million                 $0.45 million

100%                                                  $11.18 million

b) The optimal solution will be to auction the game and make $11.85 million, which is higher than $11.18 million made from keeping the game and doing the marketing and publishing.

At December 31, 2021, Sunland Company had a credit balance of $15,300 in Allowance for Doubtful Accounts. During 2022, Sunland wrote off accounts totaling $12,800. One of those accounts of $1,700 was later collected. At December 31, 2022, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $26,800. Prepare journal entries to record the 2022 transactions of Sunland Company.

Answers

Answer:

See below

Explanation:

During 2022, Sunland Company wrote off accounts totalling $12,800

Entry

Allowance for doubtful account Dr $12,800

---------- To Accounts receivable Cr $12,800

(Being entries to write off accounts initially provided for)

Only one of those accounts ($1,700) was later collected

Entry

Cash account Dr $1,700

----------- To Bad debt expense Cr $1,700

(Being entries to record receipt of cash from account previously written off)

At December 31, 2022 an aging schedule indicated that the balance in Allowance for Doubtful accounts should be $26,800

Entry

Bad debt expense Dr $24,300

---------------- To Allowance for doubtful debt Cr $24,300

(Being entries to recognize bad debt expense at year end based on aging schedule)

Workings

Adjustment required for doubtful accounts

= $26,800 - ($15,300 - $12,800)

= $24,300

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