Answer:
A decrease in the elasticity of demand for the cartel's product.
Explanation:
The cartel is under the control of companies operating in the same area. This is undesirable. It is concluded between businesses and these contracts prevent competition. Such arrangements are also prevented by governments, which aims to promote competition among governments across the country. This type of arrangement creates unity and demonstrates business behavior in activities that prevent other competitors from entering the sector.
Adverse effects on consumers include:
1) Higher prices - cartel members can raise prices, which reduces the demand elasticity of any member.
2) Lack of Transparency - Members may agree to hide prices or hide information such as hidden charges in credit card transactions.
3) Limited production - Members may agree to limit market production, such as OPEC and oil quotas.
4) Build Market - Cartel members can collectively divide a market into regions or regions and not compete in each other's territory.
A decrease in the elasticity of demand for the cartel's product would make it easier to maintain an effective collusive agreement, as it reduces the incentive for firms to cheat by undercutting prices.
Explanation:To maintain an effective collusive agreement in a cartel, it would be easier if there was a decrease in the elasticity of demand for the cartel's product. This is because a less elastic demand means that a change in price will have a smaller effect on the quantity demanded, reducing the incentive for firms to undercut each other on price. On the contrary, both an increase in the number of potential entrants into the industry and an increase in the number of substitutes for the product produced by the cartel, as well as a new pricing method that hinders price monitoring, would all make it harder to maintain a collusive agreement.
A cartel attempts to act like a monopolist to maximize profits by setting higher prices and reducing output. However, individual firms within the cartel have an incentive to cheat by slightly undercutting the cartel price to increase their market share and profit. If one firm cheats, and the others follow, the result is often akin to the firms entering into cutthroat competition, which may reduce profits for all.
A sample of 1500 computer chips revealed that 27% of the chips do not fail in the first 1000 hours of their use. The company's promotional literature states that 25% of the chips do not fail in the first 1000 hours of their use. The quality control manager wants to test the claim that the actual percentage that do not fail is different from the stated percentage. Is there enough evidence at the 0.02 level to support the manager's claim?
Final answer:
The question concerns a hypothesis test at the 0.02 significance level to ascertain if the actual percentage of computer chips not failing in 1000 hours is different from the company's claim. A two-tailed Z-test for proportions can be used to determine if there is enough statistical evidence to support the quality control manager’s claim, with the p-value indicating the strength of the evidence.
Explanation:
The question involves determining whether there is enough evidence at the 0.02 level to support the quality control manager's claim that the actual percentage of computer chips that do not fail in the first 1000 hours is different from the stated percentage by the company. This scenario calls for a hypothesis test of a proportion. The observed proportion of non-failing chips is 0.27, while the company claims a proportion of 0.25. We would use a two-tailed test because the manager's claim is that the actual percentage is different, not specifically higher or lower, from the claimed 25%.
To perform the hypothesis test, we would set the null hypothesis as the proportion of non-failing chips being 0.25, and the alternative hypothesis as the proportion not being 0.25. The test statistic could be calculated using the Z-test for proportions. Once the test statistic is calculated, it is then compared to the critical values for a 0.02 significance level (or a confidence level of 98%). If the test statistic falls outside the range of values that correspond to the central 98% of the standard normal distribution, we would reject the null hypothesis, showing that there is enough evidence to support the manager's claim.
In terms of evidence and hypothesis testing, the situation is similar to other problems where a p-value is used to determine the strength of the evidence against the null hypothesis. For example, a p-value of 0.0067 indicates strong evidence against the null hypothesis, as it is well below the threshold of 0.02, justifying the rejection of the null hypothesis.
If your procurement budget request did not provide for buying a whole number of useable end items, this would be a violation of which funding policy?
Answer:
Full funding policy.
Explanation:
This would be a violation of Full funding policy.
Full funding strategy is a federal budgeting requirement implemented by Congress in the 1950s on the Department of Defense (DOD) that mandates all acquisition expenses of a weapons or piece of military equipment to be financed in the year the object is procured. Hence in the above example there is violation of Full funding strategy.
Marigold Corp. has 493000 shares of $10 par value common stock outstanding. During the year Marigold declared a 14% stock dividend when the market price of the stock was $36 per share. Three months later Marigold declared a $0.60 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by
Answer: $2,821,932
Explanation:
No. of shares outstanding before stock dividend = 493,000
Price per share = $36
Stock dividend issued (shares issued) = 493,000 x 14% = 69,020
Value of stocks issued as stock dividend = 69,020 x $36 = $2,484,720
No. of shares outstanding after stock dividend = 493,000 +69,020 = 562,020
Cash dividend = 562,020 x 0.60 = 337,212
Total reduction in retained earnings = total value of dividend issued
= $2,484,720+$337,212
= $2,821,932
Legal responsibility for someone else’s use of your possessions or someone else’s activity for which you are responsible is called __________.
a. negligence.
b. strict liability.
c. vicarious liability.
d. property risk.
e. pure risk
Answer:
The correct answer is letter "C": vicarious liability.
Explanation:
Vicarious liability may apply when a party is found responsible because of the acts of a third party and the first party is not able to take care of the responsibility. The party found responsible and the party responsible for the actions share responsibility in the acts.
Question 4: FastFit and Capital One are two very different organizations but both rely on information technology to enable business processes. What are the mission, goals, and representative strategies for these two organizations and how are they IT-enabled?
Answer and Explanation:
FastFit:
Mission: FastFit is an IT enabled company that thrives to meet quality and customer satisfaction
Goals:
To exceed customer satisfaction
Performing timely and quality services
Providing the best IT services. Ensuring complete compliance and privacy.
Representative Strategies: Use of internet medium to penetrate and reach customers
Capital One:
Mission: Capital One is an IT oriented company that provides quality service.
Goals:
Providing top performance and quality customer support.
Ensuring efficiency and providing detailed service information to users.
Providing support and privacy to clients.
Representative Strategies:
Using network based platform to engage with customers and suppliers.
American expansionism after the 1890s:
Select one:
a. was largely driven by the desire for expanded overseas trade.
b. was hampered by the continued U.S. observance of the Monroe Doctrine.
c. had little to do with American consumer demand for foreign products.
d. severely depressed the nation's agricultural and industrial production.
e. was not affected by the development of the railroad.
Answer:
American expansionism after the 1890s: a. was largely driven by the desire for expanded overseas trade.
Explanation:
The 1890 was the age when America faced a number of factors which converged together to give the State its desire to pursue imperial policy. Years that followed the Civil War helped the economy of the United States to expand. The conflict between the nations helped the Industrialization.
The mechanization and mass production helped the industries to find a potential market place for the consumer goods, and this on the other hand helped the growth of the business and the rise of a new modern America. The transportation in this picture was nothing less than a boon which allowed the moving of the finished products with ease.
American expansionism after the 1890s was primarily driven by the desire for expanded overseas trade, during an era known as the Age of Imperialism. This was motivated by increased consumer demand and the opportunities for American businesses in new markets overseas.
Explanation:The correct answer to your question about American expansionism after the 1890s is that it a. was largely driven by the desire for expanded overseas trade. This period of American history, often referred to as the Age of Imperialism, saw the US expand its interests abroad, largely as a result of increased consumer demand at home and the opportunities that new markets overseas offered to American businesses. The desire to expand trade and access resources played a significant role in driving American foreign policy and contributed to the country’s involvement in several conflicts, including the Spanish-American War.
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The Boot Department at the Omaha Department Store is being considered for closure. The following information relates to boot activity: Sales revenue $352,000 Variable costs: Cost of goods sold 282,000 Sales commissions 32,000 Fixed operating costs 92,000 If 80% of the fixed operating costs are avoidable, should the Boot Department be closed?A. Yes, Omaha would be better off by $35,600. B. Yes, Omaha would be better off by $54,000. C. No, Omaha would be worse off by $19,600. D. No, Omaha would be worse off by $38,000 E. None of the answers is correct.
We calculated that the store would be better off by $93,200 if the Boot Department were closed, so E: none of the answers is correct.
Explanation:To determine whether the Omaha Department Store should close the Boot Department, we use a series of equations to calculate the net contribution. First, let's calculate the contribution margin, which is the sales revenue minus the variable costs ($352,000 - $282,000 - $32,000) = $38,000. Next, let's determine the avoidable fixed costs, which are the fixed costs that will not be incurred if the Boot Department is closed. Here, 80% of the fixed operating costs are avoidable ($92,000 * 0.80) = $73,600. The net contribution, then, is our contribution margin plus the avoidable fixed costs. Here, that adds up to $111,600. This amount outweighs the unavoidable fixed costs (20% of $92,000) = $18,400. This would imply that the Omaha Department Store would be better off by $93,200 (net contribution minus unavoidable fixed costs) if the Boot Department were closed. Hence, exception E, none of the answers is correct.
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You invent a new pet care product – a rubber mat that keeps dogs from flying off the center console when their owner hits the brakes. You successfully file for a patent and bring the product to market. You can get as many of the units produced as you’d like at a cost of $8 each. In other words, the cost function is given by ????(????) = ????????. You pay for a market research firm to estimate the market demand for your product. The econometricians there estimate that the demand for your product is given by ???? = ????, ???????????? − ????????. Your partner says that demand seems really high, and suggests that you charge $75 per unit. You aced managerial economics but your partner didn’t – you are skeptical that she is guessing at a price and not maximizing profits.
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Prairie Partnership has four equal partners, Dodd, Crank, Pick, and Mack. Each of the partners had a tax basis of $320,000 as of January 1, 20X5. Prairie’s 20X5 ordinary business income was $152,000 before deducting any guaranteed payments to the partners. During 20X5, Prairie paid Mack guaranteed payments of $4,000 for deductible services rendered. During 20X5, each of the four partners took a distribution of $50,000. What is Mack’s tax basis in Prairie on December 31, 20X5?
Answer
Option D.
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Who is responsible for announcing StartEx and EndEx during an operations-based exercise?
Answer:
The senior controller is responsible for announcing StartEx and EndEx during an operations-based exercise.
Final answer:
The Exercise Director is usually responsible for announcing StartEx (start of the exercise) and EndEx (end of the exercise) in operations-based exercises. These announcements mark the official beginning and end of the scenario for the participants.
Explanation:
The individual responsible for announcing StartEx and EndEx during an operations-based exercise is typically the Exercise Director or the person in charge of the exercise control. StartEx marks the beginning of the exercise scenario, signaling to all participants that the exercise has commenced. EndEx is the announcement that signifies the end of the exercise, indicating to participants that the scenario has concluded and the operations should cease. It is very important for the smooth execution of the exercise that these announcements are clearly communicated to ensure that all participants are aware of the start and end times, allowing for accurate evaluation and feedback.
Taco Casa is considering installing touch screen terminals for patrons to place their food orders. A terminal can typically accommodate the placement of 15 orders each hour while a human can process 20 orders each hour. If employee costs are $7.50/hour in wages and $4.50/hour in taxes, benefits and insurance, what is the per order opportunity cost of a touch screen?
Answer:
$0.8
Explanation:
Data provided in the question:
Number of orders each hour = 15
Number of orders processed each hour = 20
Wages = $7.50/hr
Taxes = $4.50/hr
Now,
Total cost per hour = $7.50 + $4.50 = $12
Therefore,
By installing touch screen, Taco Casa can save $12 per hour
but touch screen can accommodate only 15 orders
Thus,
Per order opportunity cost of a touch screen
= Total amount saved ÷ Number of Orders accommodated by touch screen
= $12 ÷ 15
= $0.8
Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $20. The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired?
a. There is insufficient information to answer this question.
b. $20
c. $40
d. $10
Answer:
option (c) $40
Explanation:
Data provided in the question:
The marginal cost of installing a tire = $20
The marginal productivity of the last worker = 2 tires per hour
Now,
The maximum hourly wage that Diane was willing to pay the last worker hired
= marginal cost of installing a tire × marginal productivity of the last worker
= $20 × 2
= $40
Hence,
The answer is option (c) $40
The maximum hourly wage Diane would pay is equal to the marginal revenue product of the worker, which is 2 tires at a marginal cost of $20 each, totaling $40 per hour.
Explanation:The maximum hourly wage that Diane was willing to pay the last worker hired to install tires, given that Diane's Auto World operates in a competitive market and the marginal cost of installing a tire is $20, can be determined by the marginal productivity of that worker. This productivity was 2 tires per hour, which implies that the value generated by this worker for the firm is the sale price of these two tires. As a profit-maximizing business owner, Diane would pay up to, but no more than, the value of the marginal product of the last worker. Knowing that the marginal cost of installing one tire is $20, and considering that each worker installs 2 tires per hour, the marginal revenue product is 2 tires times $20 per tire, equal to $40 per hour. Therefore, the maximum hourly wage Diane would pay is the marginal cost of the output produced by the worker, which in this case would be answer option c. $40.
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There are two types of drivers on the road today: Speed Racers have a 5% chance of causing an accident per year, and Low Riders have a 1% chance of causing an accident per year. There are equal numbers of Speed Racers and Low Riders in the population. The cost of an accident is $12,000.
(a) Suppose an insurance company knows with certainty each driver's type. What premium would the insurance company charge each type of driver if prices are actuarially fair?
(b) Now suppose that there is asymmetric information so that the insurance company does not know with certainty the driver's type. Describe the insurance contracts that would be offered if no information at all is known about individual driver's types.
(c) What if drivers self-reported their types to the insurance company?
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Actuarially fair premiums are $600 for Speed Racers and $120 for Low Riders. With no individual risk data, an average premium of $360 would likely lead to adverse selection. Self-reporting requires careful contract design to maintain honesty and manage risks.
Explanation:Premium Calculation for Actuarially Fair InsuranceIf insurance prices are actuarially fair, the premium charged will equal the expected payout for each group. For Speed Racers, with a 5% chance of causing an accident, the fair premium would be 0.05 × $12,000 = $600 annually. For Low Riders, with a 1% chance, it would be 0.01 × $12,000 = $120 annually.
Insurance Contracts with Asymmetric InformationWith asymmetric information and no knowledge of individual driver types, the insurance company might charge an average premium reflecting the combined risk of both groups, which would be equal to the sum of the individual expected losses divided by the number of types. Thus, the premium would be ($600 + $120) / 2 = $360, not considering overhead and profit. However, this leads to adverse selection where only higher risk drivers would buy the insurance, leading to potential losses for the insurer.
Self-Reporting Driver TypesIn case drivers self-reported their types, the insurer must create incentives for truthful reporting. This might involve making the lower premium attractive enough for Low Riders while being unattractive to Speed Racers, who would then opt for a different contract designed for higher risks.
Single linkage is a measure of calculating dissimilarity between clusters by
a. considering the distance between the cluster centroids.
b. considering only the two most similar observations in the two clusters.
c. computing the average dissimilarity between every pair of observations between the two clusters.
d. considering only the two most dissimilar observations in the two clusters
Answer:
Single linkage is a measure of calculating dissimilarity between clusters by
b. considering only the two most similar observations in the two clusters.
Explanation:
Single Linkage:
It is a type of hierarchical clustering which is used to measure the dissimilarity between clusters by considering the only two observations that are closest in the clusters.
So, according to above point the option b is correct.The option a is not correct as we don't consider the distance between the cluster centroids.The option c is not correct as computing the average dissimilarity between every pair of observations between the two clusters is not done rather we consider the two closest similar observations in the cluster so that's why the option d is also incorrect.Final answer:
Single linkage measures dissimilarity between clusters by considering the distance between the two most similar observations in the two clusters.
Explanation:
Single linkage is a measure of calculating dissimilarity between clusters by b. considering only the two most similar observations in the two clusters. This method involves identifying the closest (or most similar) pair of observations where one member of the pair is from each cluster and calculating the distance between this pair as the measure of dissimilarity between the two clusters.
This approach is different from other clustering measures such as the centroid method (which considers the distance between cluster centroids) or the complete linkage method (which considers the distance between the most dissimilar observations in clusters). Single linkage can lead to a chaining effect where clusters may be joined together due to single close pairs, even though the remaining elements in the clusters may be far from each other.
Suppose the following data describe output in two different years:
Item Year 1 Quantity Year 1 Price Year 2 Quantity Year 2 Price
Oranges 15,000 $ 0.20 20,000 $ 0.25
Computers 600 $750.00 700 $ 840.00
Video Games 8,000 $ 0.75 10,000 $ 1.00
Compute nominal GDP in year 2 (Enter as a numeric value e.g. 100000)
Answer:
$603,00
Explanation:
Nominal GDP is the addition of current year prices multipled by quantity produced.
Gross domestic product is the sum of all final goods and services produced in an economy within a given period.
Nominal GDP = ($20,000 × $ 0.25) + (700 × $ 840.00) + (10,000 $ 1.00) = $5,000 + $588,000 + $10,000 = $603,000
I hope my answer helps you
An irrigation project costs $1000 to build and will last for 5 years. It will double farmers’ crop yields and increase their sales by $500 a year. The pumps used in the irrigation system use 100 gallons of gasoline a year to operate and require $50 a year to maintain. The domestic price of gasoline is 50 cents a gallon, but it is heavily subsidized and costs the government $2 a gallon to import. Assume that for political reasons the government cannot charge farmers for the water. a. If the government’s discount rate is 10%, what is the present value of this project? Should the government build it? Show and explain all your calculations. b. If the discount rate is 5%, what is the present value? Should the government build it? Now suppose a private firm can charge $400 per year for the water and can borrow at 10% to finance the project. Is it profitable for the private firm to build it?
Answer:
a. * The government should not invest because it yields a lower than 0 NPV which is -$52.30 . Please see calculations in the explanation part.
b. * If the discount rate is 5%, the government should invest because it yields a higher than 0 NPV which is $82.37. Please see calculations in the explanation part.
* The private firm should take the project because the profitability or the NPV is $137.24
Explanation:
Because the government is responsible for the increase in common goods of the society while the private firm is not; when calculating NPV for the Government, increase in farmers' sales of corp should be included while it is excluded when doing so for private firm.
Gasoline price should be used domestic price for private firm while for Government, the actual price paid ( import price) is used.
a.
We have the cash flow for the project as followed:
Y0: -1,000; Y1-Y5: Increase in corp sales - Increase in gasoline consumption with price per gallon is calculated at import price - Maintenance cost = 500 - 2 x 100 - 50 = $250
=> NPV = -1,000 + 250/10% x ( 1-1.1^(-5)) = -$52.30
=> Project should not be taken.
b.
* Discount rate for the government is 5%; cash flow in part (a) is remained the same for this scenario:
=> NPV = -1,000 + 250/5% x ( 1-1.05^(-5)) = $82.37
=> Project should be taken.
* The private firm's cash flow is as below:
Y0: -1,000; Y1-Y5: Water charge - Increase in gasoline consumption with price per gallon is calculated at domestic price - Maintenance cost = 400 - 0.5 x 100 - 50 = $300.
=> NPV = -1,000 + 300/10% x ( 1-1.1^(-5)) = $137.24
=> Project should be taken.
On Friday Huron Investments stock closes at $5.35. The Huron Investments 8.125% Convertible debenture maturing September 13, 2044 closes at 239.320. After the closing bell Huron Investments announces that the debenture will be called at 111.250. The debenture is convertible into common stock at $5 per share. A $1,000 bond is now worth?
Solution:
Investment stock price = $5.35
Debenture is convertible at $5 per share
The worth of $1000 bond = (1000/5)*5.35 = $1070
Following are the transactions of a new company called Pose-for-Pics.Aug. 1 Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for common stock.2 The company paid $2,100 cash for an insurance policy covering the next 24 months.5 The company purchased office supplies for $880 cash.20 The company received $3,331 cash in photography fees earned.31 The company paid $675 cash for August utilities.Prepare an August 31 trial balance for Pose-for-Pics.a. Debit Creditb. Cashc. Officesd. Prepaid insurancee. Photography equipmentf. Common stockg. Photography fees earnedh. Utilities expensei. Totals
Answer and Explanation:
Journal Entries:
Cash 6500
Photography equipment 33500
Capital 40000
Prepaid Insurance 2100
Cash 2100
Office Supplies 880
Cash 880
Cash 3331
Revenue 3331
Utilities Expense 675
Cash 675
Cash account = 6500 - 2100 - 880 + 3331 - 675 = 6176
POSE-FOR-PIC
Trial Balance
Debit Credit
Cash 6176
Prepaid Insurance 2100
Supplies 880
Revenue 3331
Utilities Expense 675
Capital 40000
Photography Equipment 33500
Total 43331 43331
A trial balance for Pose-for-Pics for August 31 is created by listing every account and calculating the debit or credit balances after considering all transactions for the month. After calculating all balances, the company's debit and credit totals should be equal, in this case, $42,731.
Explanation:To prepare a trial balance for Pose-for-Pics for August 31, start by listing every account that has a balance. Then, calculate their respective balances, as per debits or credits, based on all the transactions of the month. Here is a step-by-step process for the transactions:
August 1: Cash increases (debit) by $6,500 and Photography equipment increases (debit) by $33,500. These increasements are balanced by a credit of $40,000 (= $6,500 + $33,500) in the Common stock account.August 2: Insurance expense decreases (credit) cash by $2,100 and increases (debit) Prepaid insurance by the same amount.August 5: Office supplies expenditure decreases (credit) cash by $880.August 20: Photography fees earned increased (credit) by $3,331, which is balanced by a similar increase (debit) in cash.August 31: Payment of utilities decreases (credit) cash by $675, and increases (debit) utility expense by the same amount.Finally, prepare the balance of each account:
Cash: $6,500 (Aug 1) - $2,100 (Aug 2) - $880 (Aug 5) + $3,331 (Aug 20) - $675 (Aug 31) = $6,176Office supplies: $880Prepaid Insurance: $2,100Photography Equipment: $33,500Common stock: $40,000Photography fees earned: $3,331Utilities expense: $675The trial balance total whether debit or credit should be equal, which in this case is $42,731.
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Which of the following is a cognitive strategy protecting goal value and promoting self-control?
(A) Decreasing the value of temptations
(B) Both decreasing the value of temptations and increasing the value of goal-consistent stimuli
(C) None of the answers provided are correct
(D) Increasing the value of goal-consistent stimuli
Answer:
The correct answer is (B)
Explanation:
Self-control and goal value both are important to achieve motivation and satisfaction at work. According to cognitive strategy goal, value and promoting self-control helps to decrease the value of temptation, and it helps to increase the value of consistent goal stimuli. It helps to stay focus to achieve goals and objectives. Similarly, if a person is dedicated and build self-control he/she will resist temptation.
Cheetah Copy purchased a new copy machine. The new machine cost $140,000 including installation. The company estimates the equipment will have a residual value of $35,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 3,000 2 2,000 3 2,000 4 2,000 Required: 1. Prepare a depreciation schedule for four years using the straight-line method.
Answer:
Depreciation Expense for year 1 = $26,250
Depreciation Expense for year 2 = $26,250
Depreciation Expense for year 3 = $26,250
Depreciation Expense for year 4 = $26,250
Explanation:
Cheetah Cop use the straight-line method depreciation, Depreciation Expense each year is calculated by following formula:
Annual Depreciation Expense = (Cost of machine − Residual Value )/Useful Life = ($140,000 - $35,000)/4 = $105,000/4 = $26,250
Depreciation Expense for year 1 = $26,250
Depreciation Expense for year 2 = $26,250
Depreciation Expense for year 3 = $26,250
Depreciation Expense for year 4 = $26,250
The question deals with business accounting, focusing on the calculation of yearly depreciation for an asset using the straight-line method. In this case, Cheetah Copy should record $26,250 in depreciation for their new copy machine each year for 4 years.
Explanation:The subject you are asking about is depreciation in accounting for a business's equipment purchase. Depreciation is used to account for the reduction in value of an asset over time due to use, wear and tear, obsolescence etc.
Let's calculate the depreciation using the straight-line method:
Determine the initial cost of the asset. In this case, it's $140,000.Next, calculate its residual (salvage) value. For Cheetah Copy, this is $35,000.Determine the lifespan of the asset or how long it will be useful. Here, it's 4 years.Calculate the total depreciation over the lifespan of the asset by subtracting the residual value from the initial cost. That's $140,000 - $35,000 = $105,000 total depreciation.Depreciation per year (using the straight-line method) is equal to the total depreciation divided by the lifespan of the asset. Therefore, $105,000 / 4 = $26,250 annual depreciation.So, Cheetah Copy should record $26,250 in depreciation for their copy machine each year for 4 years.
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Let's consider the effects of inflation in an economy composed of only two people: Bob, a bean farmer, and Rita, a rice farmer. Bob and Rita both always consume equal amounts of rice and beans. In 2013, the price of beans was $1, and the price of rice was $3. Suppose that in 2014 the price of beans was $2 and the price of rice was $6. What was inflation? Was Bob better off, worse off, or unaffected by the changes in prices? What about Rita?
b. Now suppose that in 2014 the price of beans was $2 and the price of rice was $4. What was inflation? Was Bob better off, worse off, or unaffected by the changes in prices? What about Rita?
c. Finally, suppose that in 2014 the price of beans was $2 and the price of rice was $1.50. What was inflation? Was Bob better off, worse off, or unaffected by the changes in prices? What about Rita?
d. What matters more to Bob and Rita�the overall inflation rate or the relative price of rice and beans?
Inflation involves the rise in prices for goods or services over time. The relative effects of inflation on Bob and Rita depend on how their production and consumption are affected. More important to their individual economic conditions are the relative prices of beans and rice.
Explanation:The inflation rate is calculated by comparing the price increase of goods or services over a specified time period. To determine how inflation affects Bob and Rita, we should examine the price changes of beans and rice.
Inflation is 100% as price of both beans and rice has doubled. Bob and Rita are worse off as they have to spend more for the same amount of goods.For beans, inflation is 100%, while for rice it's 33%. Since Bob and Rita consume equal amounts of both, the overall effect of inflation depends on how the price changes affect their budgets. If they can't limit their consumption or find alternatives, they're worse off.With the price of beans doubling (100% inflation) and the price of rice decreasing (50% deflation), the impact on Bob and Rita depends on how much of each good they consume and their production. If they maintain equal consumption, Bob is better off since the price for his product has increased. Rita is possibly worse off, unless the reduced cost of beans allows her to increase her rice production without increasing costs.Relative prices tend to matter more than the overall inflation rate for Bob and Rita, as changes in the relative prices of rice and beans directly affect their economic situations. Inflation or deflation alone gives us an average, but individual experiences can vary greatly from the average.
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Final answer:
Inflation affects purchasing power, making goods and services cost more nominally. Bob and Rita, characters in a hypothetical two-person economy, are impacted differently depending on how the prices of beans and rice change relative to their incomes. The relative prices of goods consumed and income adjustments determine their economic well-being more than the overall inflation rate.
Explanation:
Understanding Inflation and Its Impact on Bob and Rita
When assessing the effects of inflation, it is crucial to consider both the nominal price and the real price. Inflation represents the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Consider the hypothetical economy with Bob, a bean farmer, and Rita, a rice farmer.
Scenario Analysis
In 2014, with bean prices at $2 and rice prices at $6, the inflation rate would be 100% for both beans and rice (since their prices doubled from 2013). Bob and Rita would both be worse off if their incomes did not double to compensate for these price increases.With bean prices at $2 and rice prices at $4 in 2014, the inflation rate for beans would still be 100%, but rice would see a lower inflation rate of about 33%. Bob would again be worse off unless his income increased by more than the inflation rate. Rita would be worse off if her income did not increase by at least 66% to match the weighted average inflation of beans and rice.If, in 2014, bean prices were $2 and rice prices were $1.50, inflation for beans would be 100%, but rice would experience deflation of -50%. Bob would be worse off due to the higher prices for his goods unless his income increased accordingly. Rita, on the other hand, might be better off if her income remained stable or increased, as the cost of her primary good, rice, has decreased.For both Bob and Rita, the relative prices of rice and beans and their changes are critical since they consume these goods in equal amounts. Therefore, the specialization and the relative prices matter more than the overall inflation rate to their individual economic statuses.In conclusion, inflation affects individuals based on their consumption patterns and income changes. The overall inflation rate is important, but for Bob and Rita, the relative price changes of beans and rice are more significant.
A manufacturer of industrial sales has production capacity of 1,000 units per day. Currently, the firm sells production capacity for $10 per unit. At this price, all production capacity gets booked about one week in advance. A group of customers have said that they would be willing to pay $15 per unit if capacity was available on the last day. About ten days in advance, demand for the high-price segment is normally distributed with a mean of 250 and a standard deviation of 100. How much production capacity should the manufacturer reserve for the last day
Answer:
The production capacity the manufacturer should reserve for the last day = 206.00 units.
Explanation:
Normal production = 1000 X $ 10
Normal production = $ 10,000
Spot production = 1,000 X $ 15
Spot production = $ 15,000
p* = 15,000 - 10,000 / 15,000
p* = 0.33
Q = norminv(0.33,250,100)
The production capacity the manufacturer should reserve for the last day = 206.00 units
Suppose a firm has two types of customers but cannot tell which type of buyer a customer is before a purchase is made. One group of customers has an inverse demand of P = 100 – 10Q, while another group of customers has an inverse demand curve of P = 110 – 22.5Q. If the firm wanted to use a quantity discount pricing scheme, what prices should it set? Assume that the marginal cost of production is constant at $20.
A) The firm could charge $65 per unit for any quantity purchased or $60 per unit if buying 4 or more units.
B) The firm could charge $50 per unit for any quantity purchased or $40 per unit if buying 8 or more units.
C) The firm could charge $25 per unit for any quantity purchased or $20 per unit if buying 2 or more units.
D) The firm could charge $85 per unit for any quantity purchased or $75 per unit if buying 6 or more units.
I know the answer is A but do not understand how to get there. thanks!
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
If an investor owns less than 20% of the common stock of another corporation as an investment.
a. it is presumed that the investor has relatively little influence on the investee.
b. no dividends can be expected.
c. it is presumed that the investor has significant influence on the investee.
d. the equity method of accounting for the investment should be employed.
Answer:
The correct answer is letter "A": it is presumed that the investor has relatively little influence on the investee.
Explanation:
According to the United States Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standard (IFRS), investments between 20% and 50% of the voting stock of a different company are considered minority. Minority appears as noncurrent assets on the balance sheet.
Then, if an investor has less than 20% of the common stock of another company, it implies that investor has few to no influence on the investee.
Bryant Co. reports net income of $20,000. For the year, depreciation expense is $7,000 and the company reports a gain of $3,000 from sale of machinery. It also had a $2,000 loss from retirement of notes. Compute cash flows from operations using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
$26,000
Explanation:
Operating activities: It includes those transactions which affect the working capital after net income. The increase in current assets and a decrease in current liabilities would be deducted whereas the decrease in current assets and an increase in current liabilities would be added.
These changes in working capital would be adjusted. Moreover, the depreciation expense is added to the net income
The computation of the cash flows from operations is shown below:
Cash flow from Operating activities
Net income $20,000
Adjustments made:
Add: Depreciation expense $7,000
Less: Gain on sale of machinery - $3,000
Add: Loss from the retirement of notes $2,000
Net Cash flow from Operating activities $26,000
Using the indirect method, Bryant Co.'s cash flow from operations is calculated by adjusting the net income with non-cash expenses and non-operating gains and losses. After calculating, the cash flow from operations is $26,000.
Explanation:The indirect method for calculating cash flows from operating activities starts with the net income and then adds or subtracts items to adjust to the cash amount. To compute cash flows from operations for Bryant Co., we start with a net income of $20,000. Then we add back depreciation expense, which is a non-cash expense, for $7,000. We then subtract the gain on the sale of machinery for $3,000 because it's a non-operating activity. Finally, we add back the loss from the retirement of notes because it's a non-cash loss. This gives us a total cash flow from operations of $26,000. Therefore, Bryant Co.'s operating cash flow, using the indirect method, is $26,000.
Learn more about Cash Flow Calculation here:https://brainly.com/question/31000080
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You are considering adding a microbrewery on to one of your firm's existing restaurants. This will entail an increase in inventory of $8,000, an increase in Accounts payable of $2,500, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged. What the change in net working capital resulting from the addition of the microbrewery is?
Answer:
The change in net working capital resulting from the addition of the microbrewery is $5,500 (decrease)
Explanation:
There are 3 key elements of working capital. These are;
InventoryAccounts payableAccounts receivableGiven;
increase in inventory = $8,000
increase in Accounts payable = $2,500
Change in net working capital resulting from the addition of the microbrewery = -$8,000 + $2,500
= -$5,500
Dana has a portfolio of 8 securities, each with a market value of $5,000. The current beta of the portfolio is 1.28 and the beta of the riskiest security is 1.75. Dana wishes to reduce her portfolio beta to 1.15 by selling the riskiest security and replacing it with another security with a lower beta. What must be the beta of the replacement security? a. 1.21 b. 0.91 c. 0.73 d. 1.62
Answer:
Option c. 0.73
Explanation:
Data provided in the question:
Market value of securities = $5,000
Current beta of the portfolio = 1.28
Beta of the riskiest security = 1.75
Required beta = 1.15
Now,
let the beta of the other security be 'x'
Portfolio beta = weighted average of individual betas in the portfolio
or
1.28 × 8 × $5000 = [ x × (8 - 1) × $5000 ] + [ 1.75 × $5000 ]
or
$51,200 = $35,000x + $8750
or
$35,000x = $42,450
or
x = 1.21
Thus,
If she wishes to reduce the beta to 1.15, by replacing the riskiest security,
let the beta of the replacement security be 'y'
Therefore,
1.15 × 8 × $5000 = [ 1.21 × (8 - 1 ) × $5000 ] + [ y × $5000 ]
or
$46,000 = $42,350 + $5,000y
or
$5,000y = $3,650
or
y = 0.73
Hence,
Option c. 0.73
MacKenzie Company sold $640 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 2.0% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made.The journal entry to record this sale transaction would be:A)Debit Cash of $640 and credit Sales $640.B)Debit Cash of $640 and credit Accounts Receivable $640.C)Debit Accounts Receivable $640 and credit Sales $640.D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640.E)Debit Cash $627.20 and credit Sales $627.20.
Answer:
.D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640
Explanation:
Sales = $640
To recognize this,
Debit Cash $640
Credit Sales $640
Being entries to recognize sale and cash received.
On this sale, the bank deducts 2% of the sales value
Amount deducted = 2% × $640
= $12.80
To recognize this,
Debit Credit Card Expense $12.80
Credit Cash $12.80
Being entries to recognize credit card expense incurred on sale.
As such, the net effect of the two entries
Debit Cash $627.20
Debit Credit Card Expense $12.80
Credit Sales $640
The right option is D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640.
Worthington Chandler Company purchased equipment for $12,000. Sales tax on the purchase was $800.
Other costs incurred were freight charges of $200, repairs of $350 for damage during installation, and installation costs of $225.
What is the cost of the equipment?
a. $12,000
b. $12,800
c. $13,225
d. $13,575
Answer:
d. $13,575
Explanation:
The entirety of the costs incurred during the purchase of the asset, that are used to make it functional are generally capitalized. This involves the freight expense paid to bring the asset to the premises of operation, the installation costs and all other costs that are paid for the asset to be functional and hence a total of $13,575 are capitalized in this case.
Total cost of equipment = 12,000 + 800 + 200 + 350 + 225 = $13,575
Hope that helps.
Pearson Collections (PC) sells one-pound cans of coffee for $25 each. The variable cost to produce each can is $17.50, and fixed operating costs are $1,500. PC normally sells 30,000 pounds of coffee each year, has an interest expense equal to $300, and its marginal tax rate is 40 percent. Given this information, what is PC’s operating breakeven point?
Answer:
200 cans
Explanation:
Given that,
Selling price per can = $25
Variable cost = $17.50 each can
Fixed operating costs = $1,500
Marginal tax rate = 40 percent
Profit per unit = Selling price - Variable cost
= $25 - $17.50
= $7.50
PC’s operating break-even point:
= Fixed cost ÷ Profit per unit
= $1,500 ÷ $7.50
= 200 cans
Final answer:
Pearson Collections' operating breakeven point is reached when 200 one-pound cans of coffee are sold, which is calculated by dividing the total fixed costs by the difference between the price per unit and the variable cost per unit.
Explanation:
To calculate Pearson Collections' (PC) operating breakeven point, we need to find the level of output at which the company's total revenues equal its total fixed and variable costs, without considering interest expense or taxes, since operating breakeven focuses on operations alone. The formula for the operating breakeven in units is given by total fixed costs divided by the price per unit minus the variable cost per unit. In this case, the price per unit is $25, and the variable cost per unit is $17.50.
The calculation for PC's breakeven point would be:
Operating Breakeven Point in Units = Total Fixed Costs / (Price per Unit - Variable Cost per Unit)
Operating Breakeven Point in Units = $1,500 / ($25 - $17.50) = $1,500 / $7.50 = 200 Units
Therefore, PC needs to sell 200 one-pound cans of coffee to reach its operating breakeven point.