Answer:
$830,000
Explanation:
Ultra Co.'s inventory for January:
Date Number of units Unit balance Unit cost Total cost
January 1 20,000 20,000 $13 $260,000
January 20 30,000 50,000 $15 $710,000
January 23 40,000 90,000 $17 $1,390,000
January 31 (50,000) ($16.60) ($830,000)
Ending inventory 40,000 $560,000
Using the last-in, first-out (LIFO) method, the COGS = (40,000 units x $17 per unit) + (10,000 units x $15 per unit) = $680,000 + $150,000 = $830,000
"Securitization" is used to pool contractual debt together and resell this debt in the form of securities to investors. Which of the following debt can be "securitized"?
I. Residential Mortgages
II. Commercial Mortgages
III. Student Loans
IV. FHA Mortgages
Answer:
the correct answer is ALL OF THEM
Explanation:
Most forms of contractual debt can be securitized. This includes all of the choices listed here, as well as auto loans, personal loans, credit card debt, etc. CMOs are one of the most common "securitizations" that exist
GOOD LUCK
Securitization can apply to a range of debts, including residential and commercial mortgages, student loans, and FHA mortgages. It allows banks to sell loans as securities to investors, providing advantages like risk diversification and balance sheet improvements, although it can also lead to credit assessment issues.
Securitization is a financial technique that pools various types of contractual debts such as residential mortgages, commercial mortgages, student loans, and FHA mortgages and sells consolidated debt as securities to investors. The debt that can be securitized includes:
I. Residential Mortgages
II. Commercial Mortgages
III. Student Loans
IV. FHA Mortgages
This process has been made easier and more cost-effective due to technological improvements, especially the use of computers. These securitized loans offer diversification against default risk and are attractive to institutional investors seeking large, round sums. Through securitization, banks can specialize in originating loans and improve their balance sheets by selling off loans, which in turn enables them to fund new loans. Investors are drawn to these securities for their assumed steady stream of income. However, the reliance on credit rating agencies during the rise of mortgage-backed securities sometimes led to overly lenient credit assessments, presenting significant risk exposure.
A recession tends to cause the federal budget deficit to ________ because tax revenues ________ and government spending on transfer payments ________. increase; rise; falls decrease; fall; rises increase; fall; rises decrease; rise; falls'
Answer:
increase; fall; rises
Explanation:
A recession is when there's a contraction in economic activities. It is when the GDP of a country is negative for two consecutive quarters.
When there's a recession, the government undertakes expansionary fiscal policy to stimulate the economy. Therefore, the government would increase its spending or reduce amount of tax paid. Therefore , government spending rises.
Also, during a recession, tax revenues falls because income of individuals, firms fall and therefore revenue from tax would fall.
I hope my answer helps you.
Natalie wants to make a 25% profit on her $70,000 land investment (there is no mortgage). She figures agents charge a 6% commission, and that closing costs will be an additional $1,200. What should she accept as a final sale price (to the nearest hundred)?
Natalie wants to make a 25% profit on a $70000 sale. That would be:
(125 ÷ 100) × 70000 = $87500.
Natalie wants to make $87500. But the agent would charge a 6% for the sale, Natalie will add a 6% to the $87500, that would be:
(106 ÷ 100) * 87500 = $92750.
On this $92750, there's a closing cost of $1200,
Add $92750 + $1200 = $93950.
$93950 to the nearest hundred will be $94000.
Natalie should make the final sale price $94000 in order to make a profit of %25.
Answer:
Final sale price = $94000
Explanation:
Price of investment = $70000
Profit accrued on investment = 1.25 * $70000= 87500
Agent commission= 6%
Agent commission = .06 * 87500
= $5250
Additional fee = 1200
Final sale price = $87500 +1200 + 5250 =93950 =$94000(nearest hundred)
Assume there is an increase in the number of consumers in the market for a good sold by perfectly competitive firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:a. a decrease in price and increase in the profit-maximizing quantity of output.b. an increase in both price and the profit-maximizing quantity of output.c. an increase in price and decrease in profit-maximizing quantity of output.d. a decrease in both price and the profit-maximizing quantity of output.
Answer:
Option (B) is correct.
Explanation:
Number of consumers in the market is one of the determinants of demand which shifts the demand curve.
In a perfectly competitive market, if there is an increase in the number of consumers in the market then as a result the demand for the product also increases which shifts the demand curve rightwards.
This rightward shift in the demand curve will result in an increase in both equilibrium price and equilibrium quantity which is also a profit maximizing quantity of output.
In July 2007 The Wall Street Journal (WSJ) reported that a growing shortage of skilled labor in Eastern European countries such as Slovakia was driving up wages in key industries and reducing business income. The reason for the shortages was a large migration of skilled Eastern European workers to Western European countries. According to the simple immigration model, the supply of workers will a. rise in both Western European and Eastern European countries until the wage rates fall in both countries.
b. fall in both Western European and Eastern European countries until the wage rates rise in both countries.
c. fall in Western European countries and rise in Eastern European countries until the wage rates become more equal.
d. rise in Western European countries and fall in Eastern European countries until the wage rates become more equal.
Answer:
D) rise in Western European countries and fall in Eastern European countries until the wage rates become more equal.
Explanation:
Two important factors must be considered:
wages in western European nations are still much higher than those in eastern European nationsworkers that come from member countries of the European Union may travel freely and work in any country that they can and that belongs to the European Union.As long as the wages in western European countries continue to be higher and European workers can establish themselves in those counties, the supply of workers will continue to flow from poorer eastern European countries to richer western European countries.
rise in Western European countries and fall in Eastern European countries until the wage rates become more equal.
Bulldog, Inc. has budgeted sales for the first quarter of the next year to be 35,000 units. The inventory on hand at the beginning of quarter is 5,000 units. The desired ending inventory is 3,000 units. Calculate the budgeted production for the first quarter.
A. 2,000 units
B. 42,000 units
C. 32,000 units
D. 30,000 units .
The budgeted production for the first quarter is 32,000 units. This is calculated by adding the budgeted sales (35,000 units) to the desired ending inventory (3,000 units) and subtracting the beginning inventory (5,000 units). Option C is correct.
To calculate the budgeted production for the first quarter, we need to consider the desired ending inventory.
[tex]\[ \text{Budgeted Production} = \text{Budgeted Sales} + \text{Desired Ending Inventory} - \text{Beginning Inventory} \][/tex]
- Budgeted Sales = 35,000 units
- Beginning Inventory = 5,000 units
- Desired Ending Inventory = 3,000 units
Substitute these values into the formula:
Budgeted Production = 35,000 + 3,000 - 5,000
Budgeted Production = 33,000
Therefore, the correct answer is:
C. 32,000 units
The Virginia House of Burgesses:____________
A) Was dissolved by King James because he objected to all representative government.
B) Was created as part of the Virginia Company’s effort to encourage the colony’s survival.
C) Banned the importation of servants.
D) Had more power than the governor.
E) Was included in the original charter for the Jamestown Colony.
Answer:
B)
Explanation:
The Virginia House of Burgesses was created as part of the Virginia Company’s effort to encourage the colony’s survival. This house was created in 1642 as the elected representative element of the Virginia General Assembly which had been established in the year 1619. Which is known today only as the General Assembly.
Final answer:
The Virginia House of Burgesses was established by the Virginia Company in 1619 to provide a form of representative government in the American colonies, evolving into the lower house of the Virginia General Assembly.
Explanation:
The Virginia House of Burgesses is significant for being the first legislative assembly in the American colonies, established by the Virginia Company in 1619. Initially meeting in Jamestown's church, it included property-owning white men as members who were selected to vote on matters such as taxation and local laws, reflecting the influence of the British Parliament. Over time, the House of Burgesses expanded and evolved, becoming the lower house of the Virginia General Assembly, with the Governor's Council acting as the upper house. The council members were appointed by the Crown and served for life, indicating a level of governance separate from the governor's immediate control.
Regarding the options provided in the student's question, Option B is the most accurate: The Virginia House of Burgesses was created as part of the Virginia Company’s effort to encourage the colony’s survival. It was not included in the original charter for Jamestown Colony, it did not ban the importation of servants, and it did not have more power than the governor. King James did not dissolve it specifically because he objected to all representative government, rather it was part of the company's efforts to ensure the colony thrived economically and politically.
Lifeworks is a nongovernment not-for-profit organization that recently received a large gift from a donor in the amount of $3,000,000 in cash. The donor wishes to leave a legacy and therefore specified that Lifeworks cannot spend the $3,000,000 but can invest the $3,000,000 and use any earnings from the investments to support the organization. In the first year, $100,000 was earned but has not yet been spent. How would the $3,000,000 gift and the $100,000 in earnings impact the net assets of Lifeworks?
Answer:
Explanation:
The net assets would increase. This is because the $100,000 earnings from investments are additional cash inflows hence an increase in current assets. For the $3,000,000 if invested, it will be considered an asset. It is a cash donation invested to generate earnings for the non-profit organization. Thus, these two instances add onto the net asset value of Lifeworks.
Texarkana Company exchanged equipment that cost $85,000 and has accumulated depreciation of $29,800 and a fair value of $60,000. It receives in exchange an equipment with a fair value of $48,000 and received $12,000 cash. The exchange lacks commercial substance. The gain to be recognized from the exchange is __________.
Final answer:
The gain to be recognized from the exchange of equipment lacking commercial substance is $960. This is calculated by determining the book value of the old equipment, the total gain on disposal, and then recognizing the proportion of cash received as part of the gain.
Explanation:
The question relates to the accounting treatment of non-monetary exchanges, specifically when an exchange lacks commercial substance. To calculate the gain to be recognized on the exchange of equipment, we first need to determine the book value of the old equipment and then the gain on disposal.
The book value of the old equipment is the original cost minus the accumulated depreciation. In this case, the book value is $85,000 cost - $29,800 accumulated depreciation = $55,200 book value.
The next step is to calculate the total gain on disposal, which is the difference between the fair value and the book value of the old equipment. This gives us a total gain of $60,000 fair value - $55,200 book value = $4,800.
However, because the exchange lacks commercial substance and cash is received, the gain to be recognized is the proportion of cash to total consideration received. We calculate this as $12,000 cash received / ($48,000 fair value of new equipment + $12,000 cash) total consideration = 20%.
The gain that is recognized is then 20% of the total gain, which is 0.20 × $4,800 = $960.
When Simple Semiconductors was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $45. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $47. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as?A) Minimum efficient scaleB) Diseconomies of scaleC) Experience curve effectD) Learning-curve effect
Answer:
Option A
Explanation:
It is the lowest point on the cost curve where company produces at competitive price while producing at maximum output.
Every licensed broker must keep and maintain a file of agency disclosures, listings, offers, closing statements and other transaction-related documents for a period of _________ years.
Answer:
3 years
Explanation:
Based on the information provided within the question it can be said that the licensed brokers must keep and maintain all of this information for a period of 3 years. This is in case that the information is needed in the future for any kind of reason such as an audit. The auditor can ask for the information and the broker must present it or risk prosecution.
When does the taxpayer sign the tax return?
A. Before quality review and before being advised of their responsibility for the accuracy of the information on the return.
B. Before quality review and after being advised of their responsibility for the accuracy of the information on the return.
C. After quality review and before being advised of their responsibility for the accuracy of the information on the return.
D. After quality review and after being advised of their responsibility for the accuracy of the information on the return.
Answer:
A
Explanation:
Assume a Demand shift (a decrease in income) moves the economy from Point C to Point A. At Point A the Rate of Unemployment will be _______ per cent.
Answer:
8
Explanation:
After decrease in income economy moves from point C to point A , at point A unemployment will reach at 8%.
Ace company's inventory was destroyed by fire. Their records show net sales of $90,000, beginning inventory of $20,000, net purchases of $75,000 and a gross profit rate of 30%. What is the estimated value of the ending inventory?
Answer:
$32,000
Explanation:
Gross profit = (sales - cost of sales)/sales
30% = ($90000-Cost of sale)/$90000
cost of sale = $63000
Closing inventory = (opening inventory + purchases) - cost of sale
closing inventory = (20000 + 75000) - 63000
Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion. If the MPC is 0.625, what change in aggregate expenditures is needed to achieve full employment?
Answer:
increase the aggregate expenditure to $15 billion ($40-$25)
to achieve full employment.
Explanation:
Note:
If change in aggregate expenditures is equal to change in aggregate income then MPC=1.
Formula for MPC:
MPC=Change in Consumption or expenditure/ Change in Income
Given MPC=0.62
0.625=Change in Consumption or expenditure/ (240-200)
Change in Consumption or expenditure=[tex]0.625 * 40\\[/tex]
Change in Consumption or expenditure=$ 25 billion
Since the change in income is $40 billion($240-$200) and Change in aggregate expenditure we calculated above is $25 billion so we need to increase the aggregate expenditure to $15 billion ($40-$25)
to achieve full employment i.e to make MPC to 1.
The impact of inflation places ______________ and risk in the savings and borrowing relationships.
a) guacamole (the possibility that you may end up with green spots on your shirt)
b) mayonnaise (the possibility that you may end up with white spots on your chin)
c) uncertainty (the possibility that benefits may be less than expected)
d) none of the above
Answer:
The correct answer is the option C: uncertainty (the possibility that benefits may be less than expected).
Explanation:
To begin with, the concept of inflation refers to the sustained increase in the general price level of goods and services produced inside an economy and therefore consequently a reduction in the purchasing power per unit of money.
Secondly, it is understandable that the inflation causes that the uncertainess and riskness both take places in the saving and borrowing relationships due to the fact that the price that products and services will have in the future are not determinated and will probably increase in an unexpected way and therefore causing that benefits may be less than expected as well too.
A primary reason that a firm would use average-cost pricing is that it
A primary reason that a firm would use average-cost pricing is that it helps in making decisions about production output and purchasing during short run period.
What is average cost?Average cost refers to the cost per unit of goods produced or manufactured in production, which comprises fixed costs, which are important for production, that does not change no matter the output.
Average cost represents the average amount of money spent to produce a product. However, average-cost pricing works well if the firm actually sells the quantity it used to calculate the average-cost price.
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The null hypothesis for this test is _____. a. μ1 – μ2 < 0 b. μ1 – μ2 ≠ 0 c. μ1 – μ2 > 0 d. μ1 – μ2 = 0
Answer:
D
Explanation:
Null hypothesis is identified by the equality sign
Ceteris paribus, if the price of Pepsi increases, the equilibrium price of Coca-Cola will ________ and the equilibrium quantity of Coca-Cola will ________.
Answer:
Rise
Rise
Explanation:
Pepsi and Coca cola are considered substitutes. If the price of Pepsi increases, consumers would begin to consume more coca cola and the demand for coca cola would increase. This would lead to an excess of demand for coca cola over supply and prices would rise.
I hope my answer helps you
Final answer:
Ceteris paribus, if the price of Pepsi increases the equilibrium price of Coca-Cola will increase, and the equilibrium quantity of Coca-Cola will increase as well.
Explanation:
Ceteris paribus, if the price of Pepsi increases, we can expect a substitution effect where consumers switch their preference to a similar but cheaper alternative like Coca-Cola. Assuming Pepsi and Coca-Cola are close substitutes, the equilibrium price of Coca-Cola will increase, and the equilibrium quantity of Coca-Cola will increase as well.
This is because the demand for Coca-Cola will rise as consumers look for a substitute for the more expensive Pepsi. The market for Coca-Cola adjusts to this higher demand by increasing the price and the quantity supplied to reach a new equilibrium.
Bernard's firm has set corporate direction to become one of the leaders in each of its significant market segments. It was Bernard's job to examine the firm's pricing strategy to determine how to maximize market share, even at the expense of profits in the short run. What kind of company objective would guide Bernard's effort?
Answer:
Sales-Oriented Pricing objective
Explanation:
Sales-oriented pricing objective focuses on increasing sales and gaining a greater market share.
This strategy prioritizes increasing sales over increasing profits, and it can be achieved by cutting costs and reducing prices to attract more customers.
Among the many factors that influence purchasing decisions are _____, who control the flow of information within an organization.
a. influencers
b. users
c. deciders
d. buyers
e. gatekeepers
Answer: gatekeepers
Explanation: Gatekeeper refers to a member of a judgment-making system or social circle acting to suppress or deter purchasing by restricting the flow of details and information exposure to the purchasing center's members.
A parent who does not permit her children in the store to choose from a sweetened cereal serves as just a gatekeeper. In a company, the gatekeeper is almost the same as the picture that the term brought to mind — anyone sitting right at an access point to avoid undesired traffic.
This is the individual tasked with keeping a judgment-maker from being distracted by what they or he find insignificant and distracting guests and interviewees to be.
Olivia is a part-time worker at a jam-producing company in her village. Her job entails plucking and cleaning grapefruits. Because grapefruits grow only in winter, Olivia is unemployed for most part of the year. The given scenario exemplifies _____.
a. seasonal unemployment.
b. frictional unemployment.
c. classical unemployment.
d. cyclical unemployment.
Answer:
a
Explanation:
because seasonal unemployment is when peoples work during busy seasons and are without work during slack seasons.
Examples: agriculture, ice factory, tourist industry etc
The _________ states that the value of the firm is determined solely by the value of its assets.
Answer:
M&M proposition
Explanation:
M&M proposition is also called Modigliani Miller hypothesis says that the estimation of a firm is unaffected by how that firm is financed. The manner in which an organization funds its advantages decides the capital structure of an organization
An organization can back its activities by either obligation or value or can follow half breed strategy by joining the two.
Veterinarians generally derive some of their income from selling several manufacturers' lines of pet-care products. Knowing that pet owners rarely throw away mail from their pet's veterinarian unread, one manufacturer of pet-care products offered free promotional materials on its products to veterinarians for mailing to their clients. Very few veterinarians accepted the offer, however, even though the manufacturer's products are of high quality.
Which of the following, if true, most helps to explain the veterinarian's reaction to the manufacturer's promotional scheme?
(A) Most of the veterinarians to whom the free promotional materials were offered were already selling the manufacturer's pet-care products to their clients.
(B) The special promotional materials were intended as a supplement to the manufacturer's usual promotional activities rather than as a replacement for them.
(C) The manufacturer's products, unlike most equally good competing products sold by veterinarians, are also available in pet stores and in supermarkets.
(D) Many pet owners have begun demanding quality in products they buy for their pets that is as high as that in products they buy for themselves.
(E) Veterinarians sometimes recommend that pet owners use products formulated for people when no suitable product specially formulated for animals is available.
Answer:
(C) The manufacturer's products, unlike most equally good competing products sold by veterinarians, are also available in pet stores and in supermarkets.
Explanation:
Only option (C) explains why very few veterinarians accepted the offer. If the manufacturer offers free promotional materials to all veterinarians clients and all this material is available at other supermarkets and malls their will be good probability that clients will go directly to supermarkets and malls reducing income of veterinarians.
The amount of capital equipment used up or destroyed is called the ____________..
Answer:
Consumption of fixed capital (CFC)
Explanation:
Consumption of fixed capital (CFC) is a phrase used for the depreciation of fixed assets ,or write-offs, in business accounts, tax assessments and national accounts.
CFC is used in addition to depreciation to demonstrate how fixed capital is used up as a result of creating new revenue.
CFC can also include certain expenses incurred in the use or construction of fixed assets beyond real depreciation costs.
The term normally applies only to manufacturing companies, but it sometimes also applies to real estate assets.
Which of the following happens when there are market failures? A) Firms compete more leading to more efficiency. B) The invisible hand automatically lowers prices and increases quality of products. C) The private sector promotes competition D) The public sector steps in to help allocate resources E) Firms temporarily seek society’s goals rather than maximize profit.
Answer:
The correct answer is option D.
Explanation:
A market failure refers to the situaion where the market forces fail to efficiently allocate resources. It happens because of a number of reasons such as externalities, monopoly, asymmetrical information, tragedy of commons etc.
In case of market failure, the government has to intervene to efficiently allocate resources. The failure of price mechanism to produce goods efficiemtly results in government to intervene.
Based on the following information, what is the balance on the financial account? Exports of goods and services = $5 billion Imports of goods and services = $3 billion Net income on investments = -$2 billion Net transfers = -$2 billion Increase in foreign holdings of assets in the United States = $4 billion Increase in U.S. holdings of assets in foreign countries = -$1 billion
Answer:
3 billion
Explanation:
the financial account will be the cash inflow less the cash outflow:
Increase in foreign holdings of assets in the United States = $4 billion Increase in U.S. holdings of assets in foreign countries = -$1 billion
4 billion of dollar enter the US from aboard while 1 billion left the country with destination aboard in total the financial account will be:
4 billion - 1 billion = 3 billion
The voting paradox suggests that the "voting market," as represented by elections,
A) Leads to a superior outcome in representing consumer preferences compared to the private market for goods and services.
B) May often lead to an inefficient outcome in representing consumer preferences compared to the private market for goods and services.
C) Is no different from the private market for goods and services in terms of representing consumer preferences.
D) May not lead to an efficient outcome but certainly leads to a more equitable outcome in terms of distributing goods and services.
Answer:
B) May often lead to an inefficient outcome in representing consumer preferences compared to the private market for goods and services.
Explanation:
By definition the "Condorcet paradox (or th voting paradox) in social is a situation noted by the Marquis de Condorcet in the late 18th century, in which collective preferences can be cyclic, even if the preferences of individual voters are not cyclic". And that can be extrapolated to Business since the people tend to change their preferences in a cyclic process.
A) Leads to a superior outcome in representing consumer preferences compared to the private market for goods and services.
False the paradox is not about the comparison between consumer and private market.
B) May often lead to an inefficient outcome in representing consumer preferences compared to the private market for goods and services.
Correct duee to the cyclic change we will have an inefficient outcome in order to describe the consumer preferences in all the markets.
C) Is no different from the private market for goods and services in terms of representing consumer preferences.
That's FALSE the private market have own characteristics and typical patterns associated to the consumer preferences.
D) May not lead to an efficient outcome but certainly leads to a more equitable outcome in terms of distributing goods and services.
We can't ensure that we will have more equitable outcome since the the paradox not ansure this, but we can say that we will have an ineffcient outcome since the preferences will change.
The Hackman's home is valued at $650,000. Properties in their area are assessed at 60% of the value, and the local tax rate is $2.85 per one hundred dollars of assessed value. How much are the Hackman's MONTHLY taxes?
Answer:
$926.25
Explanation:
First, we obtain the assessed value:
$650,000 * 60% = $390,000
Now, we obtain the benchmark for determining the yearly tax. We divide the assessed value by one hundred because the local tax rate is $2.85 per one hundred dollars of assessed value. In other words, one hundred dollars is the benchmark:
$390,000 / 100 = $3,900
Now, to find the total tax paid in a year we simply multiply the local tax rate by the benchmark:
$2.85 x 3,900 = $11,115
Finally, we divided the yearly value by twelve to obtain the monthly value:
$11,115 / 12 = $926.25
Final answer:
The Hackman's' monthly property taxes are $926.25.
Explanation:
To calculate the Hackman's' monthly property taxes, first determine the assessed value of the home by multiplying the home's value by the assessment rate. Then, calculate the annual taxes by applying the local tax rate to the assessed value. Finally, divide the annual taxes by 12 to find the monthly taxes.
The assessed value is 60% of the home's value:
$650,000 x 0.60 = $390,000.
The annual tax is then calculated by the tax rate per hundred dollars of assessed value:
$390,000 / 100 = 3,900 (hundreds of dollars);
3,900 x $2.85 = $11,115 (annual taxes).
To find the monthly taxes, divide by 12:
$11,115 / 12 = $926.25.
Therefore, the Hackman's' monthly property taxes are $926.25.
Michael is a successful business owner who can develop his ideas into productive enterprises. Although he was an average student in school, his great social skills and common sense indicate that Michael might score highly in what Sternberg calls _________ intelligence.
Answer: Practical
Explanation:
The practical intelligence is one of the type of human cognitive intelligence and it is refers to the ability in which the individual person find out the best way according to the actual demand of environment.
It is basically proposed by the Robert J. Sternberg and it is one of the form of technique which we can apply and also implement according to our knowledge in practically way.
We can also measure our practical intelligence by using the tacit knowledge as it incorporated various types of practical knowledge for implementing various types of tasks.
Therefore, Practical is the correct answer.
Final answer:
Practical intelligence in Sternberg's triarchic theory emphasizes street smarts and problem-solving abilities based on life experiences, separate from traditional IQ measures.
Explanation:
Robert Sternberg proposed the triarchic theory of intelligence, which includes three parts: practical, creative, and analytical intelligence.
Practical intelligence is likened to 'street smarts' where individuals apply knowledge based on experiences to find solutions that work in everyday life.
Practical intelligence is separate from traditional IQ and can be seen in individuals like Michael, who excel in developing their ideas into successful enterprises due to their common sense and social skills.