By comparing opportunity costs and gains from trade for two parties each making the same two goods, one can determine the exact exchange ratio at which the parties should agree to trade.A. TrueB. False

Answer:

$18,000

Explanation:

To find the Sales Revenue we simply add the $12,000 cash received immediately, and the $30,000 received as partial payment, totalling $42,000.

Then, we simply complete the proposed income statement:

Income Statement for the Month Ended in March 31

Sales Revenue               $42,000

Rent Expense                  $9,600

Wage Expense                $14,400

Net Income                      $18,000

Net Income is equal to Revenue - expenses.

Answer:

D. Venture Capital

Explanation:

Option A is wrong. As the restaurant has been operating for only six months, it is not a public limited company to offer a preferred stock.

Option B is incorrect. Since the restaurant company is new and expanding steadily, issuing common stock will cost them unnecessary expenses.

Option C is incorrect as taking bonds will see them provide another extra expense, interest cost.

Option D is correct. Venture capitalists seek to help those startups which are relevantly new and expanding steadily but nicely. Therefore, It would be an appropriate choice for Beverly to consider to raise that capital.

To raise capital for her restaurant, Beverly could consider seeking investors, applying for a loan, or crowdfunding.

To raise capital for her restaurant, Beverly could consider a few options:

Each option has its pros and cons, so Beverly should carefully consider her goals, financial situation, and long-term plans before making a decision.

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Answer:

Explanation:

Karen contributed $1000, so her account decreased by $1000

Company paid $1000 to WKUX radio, so WKUX income increased by $1000

Someone donated $20000 due to campaign, so those who donated decreased their cash account by $20000

VHRF paid Mercy Hospital $12000, so hospital's account increased by $12000

Company contributed to NC Fund of $8000, so their account increased by $8000

VHRF TRANSACTIONS EFFECT:

1. Cash account increased by $21000 (charitable contributions)

2. Cash account decreased by $1000 (radio advertisement)

3. Cash account decreased by $12000 (hospital bills)

4. Cash account decreased by $8000 (contribution to NC fund)

Final answer:

Karen White initiated the Vicky Hill Recovery Fund, contributing $1,000 for an advertising campaign that raised $20,000. $12,000 of the funds raised were used to pay for medical bills, and $8,000 was donated to the National Cyclist Fund, impacting the cash accounts of several entities.

Explanation:

Karen White helped organize a charity fund called the Vicky Hill Recovery Fund (VHRF) to assist with the medical expenses of a friend injured in a bicycle accident. Karen contributed $1,000 to the fund, which was used to pay WKUX, a local radio station, for an advertising campaign. This campaign successfully raised $20,000. Of this amount, $12,000 was paid to Mercy Hospital to cover Vicky’s medical bills, and the remaining $8,000 was donated to the National Cyclist Fund. The entities involved—Karen White, WKUX radio station, Vicky Hill Recovery Fund (VHRF), Mercy Hospital, and the National Cyclist Fund—experienced changes in their cash accounts due to these transactions.

Answer:

True

Explanation:

There are various manufacturing process some require skilled workers and some operations demand expensive machinery and capital equipment. The process that utilises inexpensive general-purpose capital equipment generally requires skilled workers to operate it. Inexpensive equipment is not easy to handle and require experts to maintain and operate, which is why the above statement is true.

Answer: (E) Trial

Explanation:

 The trial stage is one of the stage in the product adopting process in which the customer trail about the new products and the services in the market on a very small scale for estimating about the value of the given product.

In this process consumer trail the item and the decide about using the new launched product on the regularly basis.

According to the given question, the customers trying the new products sample of the instant drink are refers to the trial stage of the product adopting process.

 Therefore, Option (E) is correct answer.  

Answer:

Correct answer is (B). function.

Explanation:

By assigning workers to different department base on the skill, the HipHop Music Company is differentiating their tasks base on the functions of each department

Answer:

Entry for Bryant company mistake:

                                    Debit             Credit

Rent Revenue          $36,600

Advance Rent                                     $36,600

Entry for recording rent revenue for the month of November:

                                    Debit             Credit

Advance Rent             $6,100

(36,600/6)

Rent Revenue                                  $6,100

Explanation:

The journal entry which should have been recorded by the Bryant Company on receipt of rent on November 1 should have been following:

                                    Debit             Credit

Cash                            $36,600

Advance Rent                                     $36,600

But the Bryant company has recorded the following entry on November 1 instead of above mentioned correct entry:

                                    Debit             Credit

Cash                            $36,600

Rent Revenue                                     $36,600

On November 31, the following two journal entries shall be recorded in the accounts of the Bryant Company in order to correct the earlier wrong entry made by the Bryant company and to record the rent income entry for the month of the November.

Entry for Bryant company mistake:

                                    Debit             Credit

Rent Revenue          $36,600

Advance Rent                                     $36,600

Entry for recording rent revenue for the month of November:

                                    Debit             Credit

Advance Rent             $6,100

(36,600/6)

Rent Revenue                                  $6,100

Answer:

Economies of Scale

Explanation:

If a firm expands its scale of production and finds that it is able to negotiate better prices with its suppliers then the curve that best applies to the firm is 'economies of scale'

Economies of scale is a concept in microeconomics that holds that there are benefits of cost reduction that is due to an enterprise when it increases its scale of operation.

The benefit is better demonstrated in the average cost per unit because as more and more units are produced, lesser and lesser portion of the fixed costs of the overhead fixed costs become attributable to each unit and even the variable cost falls because material price becomes cheaper as a result of quantity discounts, even labour could double their output with overtime payment which is less than doubling wages.

Answer:

c. $20,660.00

Explanation:

Given that

Current bid price = $103.25

Ask price = $103.30

Number of shares = 200 shares

By considering the above information, the amount of money for buying these shares would be equal to

= Number of shares × ask price

= 200 shares × $103.30

= $20,660

Since the shares are of buy market order, so we consider the ask price only, instead of the current bid price

Final answer:

The total cost to buy 200 shares of IBM at the ask price of $103.30 per share is $20,660.00.

Explanation:

When you place a market buy-order for shares, you agree to buy the shares at the current ask price. In this case, the ask price for International Business Machines (IBM) shares is $103.30. If you buy 200 shares at this price, the total cost will be calculated as follows:

Therefore, the total cost to buy 200 shares of IBM at the ask price of $103.30 per share is $20,660.00.

Answer:

$20,800,000

Explanation:

The formula and computation is shown below:

Value of the firm = {(Firm's current profits) × (1 + firm’s opportunity cost of funds)} ÷ (firm’s opportunity cost of funds - constant growth annual rate)

= {($400,000) × (1 + 0.06) ÷ (0.06 - 0.04)

= $424,000 ÷ 0.02

= $21,200,000

Hence, we recognized all the information which is mentioned in the question.  

The value of the firm just before it pays out current profits as dividends is $20,000,000.

To determine the value of the firm just before it pays out current profits as dividends, we need to calculate the present value of the firm's future profits. The formula to calculate the present value is:

Present Value = Cash Flow / (Discount Rate - Growth Rate)

In this case, the current profits are $400,000 and the annual growth rate is 4%. The opportunity cost of funds is 6%. Using these values, we can calculate the present value:

Present Value = $400,000 / (0.06 - 0.04) = $20,000,000

Therefore, the value of the firm just before it pays out current profits as dividends is $20,000,000.

Answer:

The correct answer is letter "C": General Agreement on Tariffs and Trade (GATT).

Explanation:

The General Agreement on Tariffs and Trade (GATT) is a treaty effective from 1948 that pursues fairness when it comes to international trade by reducing tariffs and that promotes equal treatment among countries. The GATT was replaced by the World Trade Organization (WTO) in 1995 under the same objectives but with more participation of the member nations.

Answer:

True

Explanation:

Financial managers should manage foreign exchange and political risks by using proper tools and instruments . This deals with (and take advantage of) market imperfections  also benefits from the expanded investment and financing opportunities

Answer:

operational Excellence

New Product, Services & Business models

Customer & Supplier Intimacy

Operational excellence  

Improved decision making  

Competitive advantage  

Survival

Explanation:

1) Operational Excellence – Information systems are essential tools available to managers in order to achieve optimum levels of efficiency and productivity in business operations thereby higher profitability.

2) New product services and business models – They play a vital role in the creation of new products and services. New business models help to create,describe how a company produce, create and sell the products for profitability.

3) Customer and Supplier intimacy – Information system provide the foundation of customer satisfaction. they make sure a business serves its customers well, thereby improving customer satisfaction that will enable customer to purchase more and generate revenue

4) Improved decision making – they generate real time data from the marketplace when making decision

5) Competitive advantage – Information System help in doing things better than competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales, and higher profits

6) Day to Day survival – Information System help to provide ease in business

information systems are so important for business today. Information systems are crucial instruments managers have at their disposal for achieving the highest levels

An innovative company or group that engages in professional activities is referred to as a business. They could be industrial, commercial, or something else. Businesses that are for-profit operate to make a profit, whereas those that are nonprofit do so to further a philanthropic cause.

1) Operational Excellence - Information systems are crucial instruments managers have at their disposal for achieving the highest levels of productivity and efficiency in business operations, which leads to increased profitability.

2) New product, service, and business model development - These factors are crucial in the development of new goods and services. In order to design, explain, create, and sell items profitably, new business models are helpful.

3) Closeness between customers and suppliers - Information systems serve as the cornerstone of client happiness. They ensure a company provides excellent customer service, increasing client happiness and encouraging increased sales and revenue.

4) Better decision-making: They obtain real-time market data when making decisions.

5) Competitive advantage: Information systems facilitate greater performance.

Therefore, In today's commercial world, information systems are crucial. Information systems are important tools for managers.

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Answer:

D. Supply side, Demand side, Prices, Real GDP

Explanation:

Economists who asset that the AS curve is vertical believe that changes in Real GDP originate only on the Supply side of the economy; so government policy that is intended to impact the Demand side of the economy will change only Prices, not Real GDP.

Answer:

D

Explanation:

Economists who asset that the AS curve is vertical believe that changes in Real GDP originate only on the supply side of the economy; so government policy that is intended to impact the demand side of the economy will change only prices, not Real GDP.

Answer:

Purpose of business is to increase general well being of people by selling goods and services.

Explanation:

The main purpose of business is to increase well being of people, make profits for its stakeholders and offering value for money to its customers or clients through products and or services. The products and services provided by the company should not harm its customers and clients instead these products and services should provide benefits to its users and satisfy their needs. While making profits a company should keep scarce resources in mind so the needs of the future generation is not compromised also it does not harm the environment by its poisonous wastage. Every business requires some form of investment as an input though which quality output can be provided to its customers and clients.

Answer:

Corporate citizenry

Explanation:

Many business people believe that marketing should focus on factors other than financial goals, such as Corporate citizenry

Marketing's focus should not be solely on financial goals. Other important factors can include brand reputation, customer satisfaction, sustainability, and social impact. These elements help establish a positive image, customer loyalty, and contribute to societal good.

Many business people believe that marketing should focus on a variety of factors beyond just financial goals. These alternative focal points can include elements such as brand reputation, customer satisfaction, sustainability efforts, and social impact. For example, a business can focus on increasing its brand reputation by ensuring high-quality services or products or good team processes. Customer satisfaction is another vital aspect. Businesses may focus on customer feedback and experiences to improve and meet their needs. Sustainability efforts are another focus area, with businesses emphasizing environmentally friendly practices. Lastly, many businesses aim to have a positive social impact by contributing to the community or society at large.

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Final answer:

The appropriate journal entry to illustrate earned revenue for PRISM Marketing is to debit Unearned Revenue and credit Service Revenue by $50,000, which is half of the retainer fee received for one year out of the two-year service period.

Explanation:

The appropriate journal entry for PRISM Marketing to illustrate earned revenue at the end of the fiscal year on December 31st, 2022, for the retainer fee received is a debit to an asset account called "Unearned Revenue" and a credit to a revenue account, probably called "Service Revenue". Since the retainer covers two years and assuming a straight-line recognition of revenue, half of the $100,000 would be recognized as of December 31st, 2022, which is $50,000. The journal entry would be:

Debit Unearned Revenue: $50,000

Credit Service Revenue: $50,000

This entry moves the portion of the retainer that has been earned during the year from a liability to a revenue account, reflecting that the money is no longer unearned since services have been provided for one year out of the two-year agreement. It is important for the accountants to recognize this revenue according to the appropriate accounting principles to accurately reflect the financial state of the company.

Answer:

1.)  The internal controls which were missing are from the separation of responsibilities. There must have been in place an inner regulator were an individual works with advisers while alternative individual or unit take-care of the expense procedure, then somebody else allow expenses and then office should distribute the expenditures. There is an absence of inner controls as you can realize that the corporation amalgamated with a larger corporation and no one measured other accounts such as Jackson and company any longer.

2.)  With the lack of control, this offered Helen the chance to effect the fraud. With this presence said, she was talented to emulate sign receipts and spend the retailer’s expenditures. She were also the one in responsibility of office the initial and final of accounts. In short, she had several accountabilities that should have remained separated up better and had diverse individuals for the separations of the job. In addition, she needed a bank description from the corporation where she was capable to put the expenditures and pay individual expenditures.

3.)  The method this fraud might be noticed is the inspection squad can ask the bank for reports. They might also conference sellers. The accounting section should have ended sure they were doing the due diligence in dealers and corresponding the receipts with statements and expenditures.

The internal controls missing in Helen's company include a lack of segregation of duties, no proper reconciliation of vendor accounts, and an absence of regular audits or checks. Helen was able to perpetrate the fraud because of her supervisor's trust and the lack of oversight in her responsibilities. The fraud could have been detected through regular reconciliation of accounts, auditing the payment process, and reviewing bank statements.

1. The internal controls missing in Helen's company include:

2. Helen was given the opportunity to perpetrate the fraud due to her supervisor's complete trust in her and the lack of oversight in her job responsibilities.

3. The fraud could have been detected through:

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Answer:

C. $15,000

Explanation:

January 1, 2014;

Cost of asset = $60,000

Initial useful life = 10 years

Depreciation (which is the systematic allocation of cost to an asset for usage) based on initial assessment

= $60,000/10

= $6,000

During 2016 (assuming the date to be January 1, 2016) the asset is estimated to have a remaining life of three more years with a salvage value of $3,000.

The accumulated depreciation as at the time of this assessment

= $6,000 × 2 = $12,000

Carrying amount then = $60,000 - $12,000

= $48,000

Depreciation of 2016 = (carry value - salvage value)/remaining life

= ($48,000 - $3,000)/3

= $15,000

The correct option is B. $12,000.

To calculate the depreciation for 2016, we need to consider the change in the estimated useful life and salvage value of the asset.Initially, JME estimated the asset would last 10 years with no salvage value. The straight-line depreciation method calculates depreciation by subtracting the salvage value from the cost of the asset and then dividing by the useful life.

The initial annual depreciation would be:

Initial Depreciation = (Cost of Asset - Salvage Value) / Useful Life

Initial Depreciation = ($60,000 - $0) / 10 years

Initial Depreciation = $6,000 per year

For the first two years (2014 and 2015), JME would have depreciated the asset by:

Total Depreciation for first two years = Initial Depreciation * 2 years

Total Depreciation for first two years = $6,000 * 2

Total Depreciation for first two years = $12,000

In 2016, JME revised the estimated remaining life of the asset to three more years with a salvage value of $3,000. The book value of the asset at the beginning of 2016 would be the original cost minus the depreciation taken in the first two years:

Book Value at beginning of 2016 = Cost of Asset - Total Depreciation for first two years

Book Value at beginning of 2016 = $60,000 - $12,000

Book Value at beginning of 2016 = $48,000

Now, we need to calculate the remaining depreciation based on the revised estimates:

Remaining Depreciation = Book Value at beginning of 2016 - Salvage Value

Remaining Depreciation = $48,000 - $3,000

Remaining Depreciation = $45,000

The remaining depreciation should be spread over the revised remaining useful life of three years:

Revised Annual Depreciation = Remaining Depreciation / Remaining Useful Life

Revised Annual Depreciation = $45,000 / 3 years

Revised Annual Depreciation = $15,000 per year

Therefore, the depreciation for 2016, based on the revised estimates, is $15,000. However, this is not the final answer, as we need to account for the depreciation already taken in the first two years. The total depreciation for 2016 is the sum of the depreciation taken in the first two years plus the depreciation for 2016 based on the revised estimates:

Total Depreciation for 2016 = Initial Depreciation * 2 years + Revised Annual Depreciation

Total Depreciation for 2016 = $6,000 * 2 + $15,000

Total Depreciation for 2016 = $12,000 + $15,000

Total Depreciation for 2016 = $27,000

However, since the question asks for the depreciation for 2016 only, we should not include the depreciation from the first two years in our final answer. The correct depreciation for 2016, based on the revised estimates, is $15,000. But this is not one of the answer choices provided. Upon reviewing the calculation, it appears there was an error in the interpretation of the revised annual depreciation. The correct calculation for the revised annual depreciation should consider the remaining book value at the beginning of 2016 and the revised remaining life:

Revised Annual Depreciation = Remaining Book Value / Remaining Useful Life

Revised Annual Depreciation = $48,000 / 3 years

Revised Annual Depreciation = $16,000 per year

However, since the salvage value is $3,000, we need to subtract this from the annual depreciation to get the depreciation for 2016:

Depreciation for 2016 = Revised Annual Depreciation - (Salvage Value / Remaining Useful Life)

Depreciation for 2016 = $16,000 - ($3,000 / 3)

Depreciation for 2016 = $16,000 - $1,000

Depreciation for 2016 = $15,000

This calculation still results in $15,000, which is not one of the answer choices. The error lies in the fact that we should not subtract the salvage value per year from the annual depreciation since the salvage value has already been considered in the remaining book value.The correct calculation for the depreciation for 2016 is simply the revised annual depreciation based on the remaining book value and the remaining useful life:

Revised Annual Depreciation = Remaining Book Value / Remaining Useful Life

Revised Annual Depreciation = $48,000 / 3 years

Revised Annual Depreciation = $16,000 per year

Since the question asks for the depreciation for the year 2016, and we have calculated the revised annual depreciation to be $16,000 per year for the remaining three years, this is the correct depreciation amount for 2016.

Therefore, the correct answer is D. $16,000.

Answer:

The correct answer is letter "E": hold a weekly "employee appreciation" party.

Explanation:

Organizational commitment plays a key role in employees' performance. The more engaged workers are with the company they work for, the more likely their production is going to be higher. Affective commitment refers to increasing the bonds that link workers within the organization. Casual reunions after every period of time are one of the many activities firms could use to engage employees with their brand.

Final answer:

Companies can foster bonding and affective commitment by offering various initiatives such as free leadership seminars, holding weekly 'employee appreciation' parties, and providing college reimbursement for business classes.

Explanation:

To foster bonding and affective commitment, a company could hold a weekly "employee appreciation" party. This action is likely to create a sense of community and belonging among employees, as it acknowledges their efforts and contributions in a regular and social setting. Such an approach aligns with the principles of organizational behavior, which suggest that positive experiences at work can lead to a deeper commitment to the company.

Organizations can foster bonding and affective commitment among employees by offering various initiatives such as free leadership seminars to all employees, holding weekly 'employee appreciation' parties, and providing college reimbursement for business classes. These actions create a positive work environment and strengthen employee engagement and commitment.

Answer:

Explanation:

Cost of new machine=43750+1880=45630

Annual depreciation=(Cost-Salvage value)/life in years=(45630-5000)/10=4063

Answer:

The correct answer is letter "E": Facilities in advanced nations are moving to less developed countries that have lower environmental regulations.

Explanation:

To reduce costs and avoid strict regulations that could harm their operations, countries move their businesses to developing or underdeveloped countries. Most of the time this is considered an unethical practice because it takes away job opportunities in the country where the operations of the company will be removed and is an easy way to surpass necessary regulations that other countries do not even consider that could bring negative damages to society.

Answer:

The correct answer is (B)

Explanation:

Economist intelligence unit is a survey institution that emphasis on various economic, social and political indicators. Countries around the globe are having a different set of government institutions. According to the economist intelligence unit considering various factor concluded that almost half of the world's democracies are full or flawed democracies which means the elections are fair and transparent.

Answer:

correct answer is a. planning phase

Explanation:

project have 4 phase of life cycle and they are

so in these 4 phase Projects identified in planning phase because

in planning phase we identifies all type of the work to be done and here project solutions also developed in detail and necessary steps taken for project planned

it cover approx 50% of the whole process

so  here tasks and resource requirement is identified

so correct answer is a. planning phase

Answer:

Part 1:

[tex]Book\ value\ per\ share\ of\ the\ preferred=\$25[/tex]

[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\$17.6428[/tex]

Part 2:

[tex]Book\ value\ per\ share\ of\ the\ preferred=\$28[/tex]

[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\$16.7857[/tex]

Explanation:

Part 1: (the book value per share of the preferred and common stock under No preferred dividends are in arrears)

Book value per share of the preferred :

[tex]Book\ value\ per\ share\ of\ the\ preferred=\frac{(Preferred\ Stock+Cumulative\ dividends)}{Number\ of\ shares\ of\ preferred\ stock}[/tex]

In our case Cumulative dividends=0

[tex]Book\ value\ per\ share\ of\ the\ preferred=\frac{\$250000+0}{10000} \\Book\ value\ per\ share\ of\ the\ preferred=\$25[/tex]

Book value per share of the common stock:[tex]Book\ value\ per\ share\ ofthecommonstock=\frac{Stockholder\ equity-Preferred\ Stock-Cumulative\ dividends}{Number\ of\ shares\ of\ preferred\ stock}[/tex]In our case Cumulative dividends=0

[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\frac{\$867500-\$250000-\$0}{35000} \\Book\ value\ per\ share\ of\ the\ common\ stock=\$17.6428[/tex]

Part 2:

Annual Preferred Dividend=4%*$25*10,000=$10,000

Three years of preferred dividends are in arrears= 3*Annual Preferred Dividend

Three years of preferred dividends are in arrears= 3*$10000=$30,000

Formula for  the book value per share of the preferred is same as above,so we will direct calculate:

In our case Cumulative dividends=$30,000

Book value per share of the preferred :

[tex]Book\ value\ per\ share\ of\ the\ preferred=\frac{\$250000+\$30000}{10000} \\Book\ value\ per\ share\ of\ the\ preferred=\$28[/tex]

Book value per share of the common stock:

Formula for  the book value per share of the common stock is same as above,so we will direct calculate:

[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\frac{\$867500-\$250000-\$30000}{35000} \\Book\ value\ per\ share\ of\ the\ common\ stock=\$16.7857[/tex]

Answer:

The wage of the marginal  employee is related wiht the marginal productivity of this employee

Explanation:

If the employer offer less, the employer can hire more employees, an the marginal productivity of the employees will decreases, and the employer will fire the employees and hire new ones, but if the employer offer more, it will cause losses, and the employer will fire this marginal employee and hire a new one. The wage it is  determined by the average productivity, if there are to much sickly workers, the average productivy will be low, also the wage that the employer will offer.

Final answer:

In a competitive labor market, an employer must pay a competitive wage if not offering health insurance, balancing the risk of paying too much or too little based on their capacity to attract skilled workers while managing adverse selection in health insurance.

Explanation:

In a competitive labor market, an employer deciding to hire a new employee and offer a marginal value product of MP without health insurance must pay a wage, w, that reflects the going market rate for the job, skill level, and conditions, including the lack of health insurance benefits. If the employer offers less than this market rate, potential employees might choose to work elsewhere where they can get a better package, leading to the employer not being able to attract enough skilled workers. Conversely, if the employer offers more, they might attract a higher caliber of applicants, but it might also lead to increased labor costs that are not sustainable in the long run. Given the complexities of the health insurance market, employers are faced with the decisions of either offering health insurance to all employees or none, due to U.S. law restrictions, which plays a significant role in their ability to manage adverse selection problems and compete for talent in cases where job-specific human capital is inherently intertwined with employees' health status.

Answer:

The correct answer is letter "A": overstating expenses.

Explanation:

For accounting record-keeping, the company's expenses are not included within the labor direct costs. Expenses refer to all those expenditures a company may incur as a result to handle businesses and pursuing to keep it going. Those transactions are recorded in the income statement.

Answer:

1. Reduces

2. Decrease in

3. Less Quantity

4. Increased level

5. Higher level

Explanation:

The challenge with the monetary policy introduced by the government is that it is a contractionary policy. A contractionary monetary policy fights inflation by reducing the money in supply in order to increase the cost of borrowing.

However, the problem with contractionary policy is that once the demands for goods and services decrease, the price of products will go down to entice people to consume and purchase. Once the price of products go down, the manufacturers are demotivated to produce more, hence production will go down.

Once production goes down, people are laid off work, and firms can no longer employ more leading to a higher level of unemployment.

The challenge therefore is that lowering inflation will lead to increased unemployment due to the ripple effects.

A contractionary monetary policy reduces demand for goods and services, leading to lower prices and less production. This, in turn, increases the level of unemployment. This policy illustrates the trade-off between inflation and unemployment.

When the government sees the economy is overproducing, it may enact a contractionary monetary policy. Doing so involves decreasing the available money in the market. This decision reduces the economy's demand for goods and services, leading to lower product prices. As prices decrease in the short term, firms become discouraged from producing excess goods and services and thus produce fewer goods. Consequently, this leads to an increased level of unemployment. This scenario represents the economic trade-off between inflation and unemployment, essentially meaning lower inflation can lead to higher unemployment.

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The price of a share of the company's common stock is $113.33, after calculating the market value of equity using the market/book ratio and dividing by shares outstanding. The firm's EV/EBITDA is 14.48, found by computing the Enterprise Value and dividing by EBITDA.

To find the price of a share of the company's common stock, first, we need to calculate the market capitalization of the equity. Since we know the market/​book ratio is 1.7 and the book value of equity is $4 billion, the market value of equity is $4 billion * 1.7 = $6.8 billion. With 60 million common shares outstanding, the price per share is $6.8 billion / 60 million = $113.33 per share.

For the firm's EV/EBITDA calculation, we need to find the Enterprise Value (EV) first. The EV is calculated as market value of equity + market value of total debt - cash and equivalents. Thus, EV = $6.8 billion + $8 billion - $320 million = $14.48 billion. Then, EV/EBITDA = $14.48 billion / $1 billion = 14.48. Hence, the firm's EV/EBITDA ratio is 14.48.

Answer:

a. 6.64% and 8.45%

b. Division B

Explanation:

The computation of the profit margin is shown below:

Profit margin = (Profit ÷ sales) × 100

For Division A, it would be

= ($178,000 ÷ $2,680,000) × 100  

= 6.64%

For Division B, it would be

= ($32,600 ÷ $386,000) × 100  

= 8.45%

b. Based on the profit margin, we can conclude that Division B has a higher profit margin that reflects the superior position

Profit margin is calculated by dividing the profit by sales and multiplying by 100. Division A has a profit margin of 6.64% and Division B has a profit margin of 8.45%. Therefore, Division B is superior as it has a higher profit margin, meaning it's more efficient at converting revenue into profit.

To calculate the profit margin (also known as return on sales), you divide the profit by the sales and multiply by 100 to get the percentage. For Division A, the profit margin is ($178,000 / $2,680,000) * 100 = 6.64%. For Division B, it is ($32,600 / $386,000) * 100 = 8.45%.

From these results, we can conclude that even though Division A earned more in terms of absolute values, Division B is a superior division, as it has a higher profit margin. This means that Division B is able to convert more of its revenue into profit, making it more efficient.

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