a. Money multiplier = 1 / Reserve ratio = 1 / r = 1 / 0.10 = 10.
b. The money supply is $400 billion.
c. The currency deposit ratio is 0.20
a. Money multiplier is defined as the quantity by which a given change in the money base will impact the amount of money in the economy.
The formula for the money multiplier is:
Money multiplier = 1 / Reserve ratio = 1 / r = 1 / 0.10 = 10.
b. The money supply, which is calculated by multiplying the money base by the money multiplier, is:$40 billion x 10 = $400 billion.
c. The currency deposit ratio (c) is 0.20, implying that 20% of the money supply is held in the form of currency.
Therefore, the remaining 80% of the money supply is held in the form of bank deposits.
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The question demands that we calculate the money multiplier, the money supply, and how much of the money supply will be held in the form of currency and in the form of bank deposits. However, to do so, we must first understand what these terms refer to.
Money Multiplier is the formula which is used to calculate the maximum amount of money that a bank can loan out to its customers. It can be calculated using the formula, Money Multiplier = 1 / Required Reserve Ratio.The money supply refers to the total amount of money circulating in an economy, including currency and bank deposits. Finally, currency refers to physical money (bills and coins) held by households and businesses. The bank deposits, on the other hand, refers to the money deposited into the bank accounts by the households and firms.
Calculation of Money Multiplier, Required reserve ratio, r = 0.1Currency to deposit ratio, c = 0.2Excess reserve, ER = 0 (Given)Using the formula of the money multiplier:Money Multiplier = 1 / Required Reserve Ratio= 1 / 0.1= 10Hence, the money multiplier is 10. Calculation of the Money Supply,Price Level, P = 1 or 100%Money Base, MB = $40 BillionUsing the formula,Money Supply = Money Multiplier × Money Base= 10 × 40 billion= 400 billionTherefore, the money supply is $400 billion.
Calculation of Currency and Bank DepositsCurrency Ratio, c = 0.2Money Supply, MS = 400 billion (Given)Currency = Currency Ratio × Money Supply= 0.2 × 400 billion= 80 billionBank Deposits = Money Supply - Currency= 400 billion - 80 billion= 320 billionTherefore, $80 billion of the money supply will be held in the form of currency, and $320 billion of the money supply will be held in the form of bank deposits.
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General Electric needs to have $100 million accumulated to fund health insurance payments for its retirees. Will General Electric have enough accumulated at the end of 3 years if it deposits $75 million today if compounding occurs semi annually with an annual rate of 8%
General Electric (GE) needs to have $100 million accumulated to fund health insurance payments for its retirees. The company is planning to deposit $75 million today if compounding occurs semi-annually with an annual rate of 8%.
For this situation, we will utilize the compound interest formula given as follows: FV = PV(1 + i/n)^(n*t)Here, FV is the future value, PV is the present value, i is the annual rate of interest, n is the number of compounding periods in one year, and t is the time in years. We can plug in the given values to the above formula: FV = $75,000,000(1 + 0.08/2)^(2*3)FV = $75,000,000(1 + 0.04)^6FV = $75,000,000(1.04)^6FV = $90,065,871.84.
Thus, General Electric will not have enough accumulated at the end of 3 years. As per the given problem, the company requires $100 million to fund health insurance payments for its retirees. However, the future value of $75 million with 8% annual rate of interest compounded semi-annually, will only be $90,065,871.84 after 3 years.
Therefore, General Electric will not have enough accumulated at the end of 3 years if it deposits $75 million today if compounding occurs semi annually with an annual rate of 8%.
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The nature and logic of the conditions for macro- and microeconomic equilibrium.
Explain the nature and logic of real and monetary shocks and their role in causing micro- and macroeconomic imbalances. (15/100)
NB: you do not need to go into the detail of the derivation of these conditions; just explain their underlying logic.
Macroeconomic and microeconomic equilibria, which are the fundamental objectives of economic analysis, have very different conditions. Microeconomic equilibrium pertains to the optimal allocation of resources, while macroeconomic equilibrium pertains to the optimal allocation of resources. Both require a market to exist.
Microeconomic equilibrium is achieved in a market where the quantity of a good or service demanded equals the quantity of that good or service supplied, and where prices are set at the equilibrium point. Meanwhile, macroeconomic equilibrium is achieved when the nation's total quantity of output demanded is equal to the nation's total quantity of output supplied, as well as its national income.
The concept of real shocks refers to the occurrence of unexpected and uncontrollable events that affect the supply or demand of goods and services. Examples of real shocks include changes in consumer preferences, the occurrence of natural disasters, wars, and other such events.
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The following information relates to ABC Company's utilities cost and activity
for the first six months of 2021:
Month Utilities Costs Units Produced
January $17,200 6,200
February 14,500 5,300
March 18,600 7,100
April 13,700 4,800
May 15,900 5,900
June 12,800 4,600
ABC Company expects to produce 6,500 units during July.
Using the high-low method, calculate ABC Company's expected utilities cost
for July.
ABC Company's expected utilities cost for July using the high-low method is $15,080.
How to calculate expected utilities cost using the high-low method?To calculate ABC Company's expected utilities cost for July using the high-low method, we need to identify the highest and lowest activity levels and their corresponding utilities costs.
From the given information, we can determine that the highest activity level occurred in March with 7,100 units produced, and the corresponding utilities cost was $18,600. The lowest activity level occurred in June with 4,600 units produced, and the corresponding utilities cost was $12,800.
Next, we can calculate the variable cost per unit using the high and low points:
Variable cost per unit = (Highest utilities cost - Lowest utilities cost) / (Highest units produced - Lowest units produced)
Variable cost per unit = ($18,600 - $12,800) / (7,100 - 4,600)
Variable cost per unit = $5,800 / 2,500
Variable cost per unit = $2.32
Finally, we can calculate the expected utilities cost for July by multiplying the expected units produced (6,500) by the variable cost per unit:
Expected utilities cost for July = Variable cost per unit * Expected units produced
Expected utilities cost for July = $2.32 * 6,500
Expected utilities cost for July = $15,080
Therefore, using the high-low method, ABC Company's expected utilities cost for July is $15,080.
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A and B formed a partnership on December 31, 2020. A contributed $60,000 cash. B's investment consisted of cash, $8,000; inventory, $24,000; and supplies, $8,000 - all at fair market values. Profit for 2020 and 2021 was $75,000 and $85,000, respectively.
The partner A's capital account is $135,000, and partner B's capital account is $200,000.
To determine the individual capital accounts for partners A and B in the partnership, we need to consider their initial investments and their share of profits.
Partner A's Capital Account:
Initial investment: $60,000Share of profits for 2020: $75,000Partner B's Capital Account:
Initial investment (cash): $8,000Initial investment (inventory): $24,000Initial investment (supplies): $8,000Share of profits for 2020: $75,000Share of profits for 2021: $85,000To calculate the capital accounts, we need to account for the initial investments and the share of profits for each partner.
Partner A's Capital Account:
$60,000 (initial investment) + $75,000 (share of profits for 2020) = $135,000Partner B's Capital Account:
$8,000 (cash) + $24,000 (inventory) + $8,000 (supplies) + $75,000 (share of profits for 2020) + $85,000 (share of profits for 2021) = $200,000Therefore, partner A's capital account is $135,000, and partner B's capital account is $200,000.
About InvestmentsInvestment is an activity, either directly or indirectly, with the hope that in the future the owner of the capital will receive a number of benefits from the results of the investment.
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On January 1, 2020, Blossom Corporation had 106,000 shares of no-par common stock issued. 5,000 shares are held as treasury stock. The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 10,000 additional shares of common stock for $16 per share. June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30. July 10 Paid the $1 cash dividend. Dec. 1 Purchased 1,800 additional shares of common stock for $15 per share. Dec. 15 Declared a cash dividend on outstanding shares of $1.30 per share to stockholders of record on December 31. -/5 E Prepare the entries, if any, on each of the three dividend dates.
The entries for each of the three dividend dates are as June 15:, Retained Earnings (or Dividends Payable) $101,000, Dividends Payable (or Retained Earnings) $101,000, July 10: Dividends Payable $101,000, Cash $101,000, December 15 : Retained Earnings (or Dividends Payable) $134,300, Dividends Payable (or Retained Earnings) $134,300.
To prepare the entries for each of the three dividend dates, we need to consider the relevant information provided.
June 15: Declaration of a cash dividend of $1 per share to stockholders of record on June 30.
Date: June 15
Dividends Declared: ($1 per share) * (106,000 shares - 5,000 treasury shares) = $101,000
The entry to record the declaration of the dividend:
Retained Earnings (or Dividends Payable) $101,000
Dividends Payable (or Retained Earnings) $101,000
July 10: Payment of the $1 cash dividend.
Date: July 10
Dividends Payable: $101,000
The entry to record the payment of the dividend:
Dividends Payable $101,000
Cash $101,000
December 15: Declaration of a cash dividend of $1.30 per share to stockholders of record on December 31.
Date: December 15
Dividends Declared: ($1.30 per share) * (106,000 shares - 5,000 treasury shares) = $134,300
The entry to record the declaration of the dividend:
Retained Earnings (or Dividends Payable) $134,300
Dividends Payable (or Retained Earnings) $134,300
These entries reflect the declaration and payment of dividends to the stockholders of Blossom Corporation.
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Explain the reason for higher reduction of a carrying value of a
lease assets in comparison to the carrying value of a lease
liability.
The reason for a higher reduction in the carrying value of a lease asset compared to the carrying value of a lease liability is related to the accounting treatment of leases under certain circumstances.
In lease accounting, a lease liability represents the present value of future lease payments that a company is obligated to make over the lease term. On the other hand, a lease asset represents the right to use the leased asset over the lease term.
When determining the carrying value of a lease liability, it is typically calculated as the initial measurement of the lease liability minus any lease payments made and adjusted for interest expense. As the lease liability is reduced over time through the payment of lease installments, the carrying value of the lease liability decreases gradually.
However, the carrying value of a lease asset may be subject to impairment if its value becomes impaired or if there is a change in the estimate of the lease term. Impairment occurs when the carrying value of the asset exceeds its recoverable amount, which is the higher of its fair value less costs to sell or its value in use.
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First Hollywood major in modern era to create a US TV network
a. Warner Bros
b. Disney
c. Paramount
d. 20th Century-Fox
e, MGM
First Hollywood major in modern era to create a US TV network is disney.
The correct answer is option B.
In the modern era of Hollywood, it was The Walt Disney Company (Disney) that became the first major studio to create a US television network. This significant development in the entertainment industry took place in the mid-1980s when Disney launched the Disney Channel as a cable and satellite television network.
The Disney Channel was initially a premium cable channel that featured family-friendly programming, including original shows, animated series, and movies. It quickly gained popularity and became a staple in households across the United States. The success of the Disney Channel prompted Disney to further expand its television presence.
In 1995, Disney made a groundbreaking move by acquiring the American Broadcasting Company (ABC), one of the major television networks in the United States. This acquisition solidified Disney's foothold in the television industry, marking a significant milestone in Hollywood history.
By acquiring ABC, Disney gained access to a wide range of television programming, including news, sports, and primetime series. This strategic move not only increased Disney's television presence but also allowed the company to leverage its vast library of content across multiple platforms.
The acquisition of ABC transformed Disney into a major player in both the film and television industries. It paved the way for the company to expand its reach and influence in the global entertainment market. Today, Disney operates a diverse portfolio of media assets, including television networks, film studios, theme parks, and streaming platforms, solidifying its position as a powerhouse in the entertainment industry.
In conclusion, The Walt Disney Company was the first major Hollywood studio in the modern era to create a US television network, with the launch of the Disney Channel and the subsequent acquisition of ABC. This strategic move propelled Disney's growth and established its dominance in the television industry.
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The following information relates to Alfie Co. for its taxation year that ends on December 31, 2021 Note 1: The Company has UCC balances on January 3, 2021 for its tangible assets as follows: Class 1
Alfie Co., the company has the following UCC (Undepreciated Capital Cost) balances for its tangible assets as of January 3, 2021:
Class 1 (4%): $461,790
Class 8 (20%): $203,378
Class 10 (30%): $91,520
Class 12 (100%): $19,890
Class 50 (55%): $23,830
These UCC balances represent the remaining cost of the assets that have not been depreciated.
The percentages in parentheses indicate the prescribed CCA (Capital Cost Allowance) rates for each asset class.
The UCC balances are used for tax purposes to calculate the allowable depreciation expense or CCA deductions in the current year.
To determine the tax deduction for each asset class, the UCC balance is multiplied by the respective CCA rate.
For example, if the CCA rate for Class 1 assets is 4%, the tax deduction for Class 1 assets in the current year would be
$461,790 x 4% = $18,471.60.
These calculations will be used to determine the tax deductions for each asset class when preparing the company's tax return for the year ending December 31, 2021.
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Question - The following information relates to Life Co. for its taxation year that ends on December 31, 2021 Note 1: The Company has UCC balances on January 3, 2021 for its tangible assets as follows: Class 1 The following information relates to Alfie Co. for its taxation year that ends on December 31, 2021 Note 1: The Company has UCC balances on January 3, 2021 for its tangible assets as follows: Class 1
Why would it be economically efficient to require a natural monopoly to charge a price equal to marginal cost? Why do most regulatory agencies require natural monopolies to charge a price equal to average cost instead?
A natural monopoly is an industry where a single firm provides the product to the entire market at a lower cost than a hypothetical multiple-firm industry with the same output.
For such a company, a high level of fixed expenses is required, such as infrastructure and start-up expenses, that cannot be covered by a single firm operating in a competitive market.
To put it another way, a natural monopoly is a form of monopoly that occurs when there are significant barriers to entry, such as high fixed costs or economies of scale, that make it impractical or uneconomical for new businesses to join the industry. As a result, it's only natural that regulators keep an eye on natural monopolies to ensure that they're not overcharging their customers.The regulators often put a cap on the prices of natural monopolies, and it is economically efficient to require them to charge a price equal to marginal cost rather than a price equal to average cost. This is because charging a price equal to marginal cost encourages companies to produce the socially optimal level of output, which is where marginal cost equals marginal revenue. When a natural monopoly sets a price equal to marginal cost, it is creating an output that is socially optimal, and the resulting price would be lower and more efficient than charging a price equal to average cost. Because natural monopolies charge lower prices than those who set prices equal to their average cost, charging a price equal to marginal cost reduces the deadweight loss of charging too much to customers while also ensuring that natural monopolies recover their costs.This helps to guarantee that the market's natural monopoly operates efficiently, produce the right amount of output, and charge a reasonable price to consumers. However, since charging a price equal to marginal cost does not cover all costs and earnings, most regulatory agencies require natural monopolies to charge a price equal to average cost instead.
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Investment X offers to pay you $4,800 per year for 9 years, whereas Investment Y offers to pay you $7,100 per year for 5 years.
If the discount rate is 6 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Present value
Investment X $
Investment Y $
Investment X has a present value of approximately $31,875.56, while Investment Y has a present value of approximately $30,540.27, both calculated at a discount rate of 6%.
For Investment X:
C = $4,800 per year
r = 6% = 0.06
n = 9 years
Using the formula, we can calculate:
PV(X) = $4,800 × ((1 - (1 + 0.06)^(-9)) / 0.06) ≈ $31,875.56
For Investment Y:
C = $7,100 per year
r = 6% = 0.06
n = 5 years
Using the formula, we can calculate:
PV(Y) = $7,100 × ((1 - (1 + 0.06)^(-5)) / 0.06) ≈ $30,540.27
The corrected present values are approximately:
PV(X) ≈ $31,875.56 for Investment X
PV(Y) ≈ $30,540.27 for Investment Y
These values represent the present worth of the cash flows considering the discount rate of 6%. Please note that the calculations may differ slightly due to rounding.
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y Tools ips ps Is A ples of Numbers and Graphs: Prices: Free, Controlled, and Relative (Ch 04) Back to Assignment Attempts Average / 3 6. Working with Numbers and Graphs Q6 Suppose the absolute price
The price of a typical good is $80.
The absolute price of gasoline in the United States is $4 per gallon, and the relative price of gasoline to other goods is 1/20 (a gallon of gasoline costs 1/20th of what a typical good costs).
Then the price of the typical good must be $80.
The price of gasoline is $4 per gallon.
The relative price of gasoline to other goods is 1/20.
We can write this as:
(price of gasoline)/(price of other goods) = 1/20
we can solve for the price of other goods as follows:
(price of other goods) = (price of gasoline)/(1/20)
We can simplify this expression by multiplying the numerator and denominator of the fraction by 20:
(price of other goods) = (price of gasoline) x 20(price of other goods)
= $4 x 20(price of other goods)
= $80
Therefore, the price of a typical good is $80.
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the irr rule can lead to bad decisions when cash flows are _____ or projects are mutually exclusive. multiple choice question.
The internal rate of return (IRR) rule can lead to bad decisions when cash flows are uneven or when projects are mutually exclusive. The IRR rule is an investment appraisal method that determines the discount rate at which the net present value (NPV) of an investment is equal to zero.
It is an indicator of the profitability, efficiency, and potential of a project or investment opportunity. However, the IRR rule can lead to bad decisions when cash flows are uneven, as it assumes that all cash flows are reinvested at the IRR and that the timing and amount of cash flows are irrelevant.
This can result in inaccurate or misleading information and lead to suboptimal decisions. Furthermore, the IRR rule can lead to bad decisions when projects are mutually exclusive, as it cannot compare the profitability of different projects or investments.
In this case, the NPV rule is a better method, as it compares the present value of the cash inflows and outflows of different projects at a common discount rate and selects the one with the highest NPV.
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Scenario: You have been asked to meet the physical growth needs of Top Dog Project Services. Company Growth Needs Top Dog Project Services is a company with several offices throughout the country. The
To meet the physical growth needs of Top Dog Project Services, a company with several offices throughout the country and a steady growth rate of 5% to 10%, a comprehensive strategy should be implemented.
To accommodate the physical growth needs of Top Dog Project Services, it is crucial to consider factors such as office space, infrastructure, and resources. The company's growth rate of 5% to 10% implies an annual increase in size.
This expansion can be achieved by leasing or acquiring additional office spaces, ensuring they meet the company's requirements. By analyzing the projected growth rate, the company can estimate the space needed for each office location. Additionally, the company should invest in necessary infrastructure upgrades to support the growth, such as scalable IT systems and equipment.
Furthermore, hiring and training new employees will be essential to meet the increased workload and demands resulting from the growth. By proactively addressing these physical growth needs, Top Dog Project Services can ensure a smooth and efficient expansion while maintaining its business operations effectively.
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The complete question:
Scenario: You Have Been Asked To Meet The Physical Growth Needs Of Top Dog Project Services. Company Growth Needs Top Dog Project Services Is A Company With Several Offices Throughout The Country. The Company Growth Rate Is Holding Steady At 5 To 10
If there is a planned order release of 120 units in week 5 and the lead time is 2 weeks, 120 will show up in week 7 under ________.
Planned Order ReceiptProjected On-hand InventoryScheduled ReceiptsAll of the above
If there is a planned order release of 120 units in week 5 and the lead time is 2 weeks, 120 will show up in week 7 under Scheduled Receipts.
The correct answer is: Scheduled Receipts.
If there is a planned order release of 120 units in week 5 and the lead time is 2 weeks, the 120 units will show up in week 7 as Scheduled Receipts. Scheduled Receipts represent the planned arrival of inventory or materials into the system.
In this case, the order release in week 5 triggers a planned order receipt after a lead time of 2 weeks, resulting in the arrival of the 120 units in week 7 as Scheduled Receipts. Therefore, the correct choice is Scheduled Receipts.
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If the first pay period for a new business begins on May 1, what would the end date be for each pay period type shown? (match)
Weekly May 31
Biweekly May 7
Semimonthly May 14
Monthly May 15
If the first pay period for a new business begins on May 1, the end date for each pay period type shown would be as follows:Weekly: May 31Biweekly: May 7Semimonthly: May 15Monthly: May 31Weekly pay period.
A weekly pay period is one in which the employee is paid every week. If the first pay period for a new business begins on May 1, the last day of the week would be May 7, and the pay period would end on May 31.Biweekly pay periodA biweekly pay period is one in which employees are paid every two weeks.
The first pay period of the month would end on May 7.Semimonthly pay periodA semimonthly pay period is one in which employees are paid twice a month.
The first pay period of the month would end on May 15.Monthly pay period.A monthly pay period is one in which employees are paid once a month. Therefore, if the first pay period for a new business begins on May 1, the pay period would end on May 31.
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At year-end, the perpetual inventory records of Gutierrez Company showed merchandise inventory of $113,150. The company determined, however, that its actual inventory on hand was $111,200.
The inventory error should be corrected by debiting the cost of goods sold and crediting inventory for the amount of the error. The effect of the inventory error on the cost of goods sold and net income will depend on whether the error is overstated or understated.
Calculate the amount of the inventory error: $113,150 - $111,200 = $1,950
Determine the effect of the inventory error on the cost of goods sold and net income:
If the inventory error is overstated, the cost of goods sold will be understated and net income will be overstated.
If the inventory error is understated, the cost of goods sold will be overstated and net income will be understated.
Make the necessary journal entries to correct the inventory error:
If the inventory error is overstated, debit the cost of goods sold and credit inventory for the amount of the error.
If the inventory error is understated, credit the cost of goods sold and debit inventory for the amount of the error.
In this case, the inventory error is understated. This means that the company's inventory is actually less than what is shown on the books. The effect of this error is to overstate the cost of goods sold and understate net income.
To correct the error, the company should debit the cost of goods sold and credit inventory for $1,950. This will reduce the cost of goods sold by $1,950 and increase net income by $1,950.
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tacoma corp.'s stock is $25 per share. its expected return is 25% and variance is 12%. element corp.'s stock is $18 per share. its expected return is 16% and variance is 6%. sedes corp.'s stock is $50 per share. its expected return is 10% and variance 8%. what would be the expected return of a portfolio consisting of 10.00% tacoma and 90.00% element?
The expected return of the portfolio consisting of 10.00% Tacoma and 90.00% Element is 16.9%.
Let the expected returns for Tacoma Corp, Element Corp, and Sede Corp be denoted as R1, R2, and R3 respectively
.Let the proportion of the investment in Tacoma Corp and Element Corp be represented by x and (1-x) respectively. Therefore ,x = 0.1 (Tacoma Corp is 10.00% of the portfolio)and(1-x) = 0.9 (Element Corp is 90.00% of the portfolio)
Expected return of a portfolio, R = xi + (1 - x)jR = 0.1 x 25% + 0.9 x 16%R = 2.5% + 14.4%R = 16.9%
Hence, the expected return of the portfolio consisting of 10.00% Tacoma and 90.00% Element is 16.9%.
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An economy has a fixed price level, no imports and no income taxes. MPC is 0.75 and real GDP is $150 billion. Government increases expenditures by $5 billion. Calculate the: 1. Multiplier and interpret the meaning of the multiplier. 2. Change in real GDP and new level of real GDP.
Previous question
An economy has a fixed price level, no imports, and no income taxes. The MPC is 0.75, and the real GDP is $150 billion. The government increases expenditure by $5 billion. The question is to calculate the following:1. Multiplier and interpret the meaning of the multiplier.2. Change in real GDP and the new level of real GDP.1. MultiplierThe multiplier formula is given as follows:Multiplier = 1 / (1 - MPC)Where MPC is the marginal propensity to consume.Substituting the given value, we get:Multiplier = 1 / (1 - 0.75) = 1 / 0.25 = 4
The multiplier value is 4, which means that a change in autonomous spending of $1 will cause the real GDP to change by $4.2. Change in real GDP and new level of real GDP.The formula to calculate the change in real GDP is given by:Change in Real GDP = Multiplier * Change in Autonomous Spending Substituting the given values, we get:Change in Real GDP = 4 * $5 billion = $20 billionThe change in real GDP is $20 billion. The new level of real GDP will be the initial real GDP ($150 billion) plus the change in real GDP.New level of real GDP = $150 billion + $20 billion = $170 billionThus, the new level of real GDP will be $170 billion.
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The expected returns from the investments are 10% and 15%; the standard deviations of the returns are 16% and 24%, and the correlation between returns is 0.8. What are the expected return and standard deviation of the portfolio if the portfolio weights are given by w1= - 0.5 and w2=1.5? (2 marks) b. Suppose a US company is expected to pay 100 million Australian Dollars (AUD) in 6 months and wants to hedge its exposure to exchange rate risk. The following instruments are available – a 6-month forward contract to buy/sell US dollars (USD) at the exchange rate USD/AUD = K, and a put option to sell USD at the exchange rate USD/AUD = K. Assume the price of the put option is p AUD to sell one USD at the strike K, and the risk-free rate is zero. i. If the company uses a forward contract, decide whether to go long or short, then then draw the payoff diagram, with the USD/AUD exchange rate on the x-axis and the net amount the company pays in 6 months (in USD) on the y-axis. (2 marks) ii. If the company uses a put option, decide whether to go long or short, then then draw the payoff diagram, with the USD/AUD exchange rate on the x-axis and the net amount the company pays in 6 months (in USD) on the y-axis. (2 marks)
Expected return of the first investment = 10%
Expected return of the second investment = 15%
Standard deviation of the first investment = 16%
Standard deviation of the second investment = 24%
Correlation between the returns = 0.8
Portfolio weights = w1 = -0.5
and
w2 = 1.5
Expected return of the portfolio = w1 × Expected return of the first investment + w2 × .
Expected return of the second investment= -0.5 × 10 + 1.5 × 15= 17.5%
Formula for variance of the portfolio,
σ^2p = w1^2σ1^2 + w2^2σ2^2 + 2w1w2σ1σ2ρp,1,2= (-0.5)^2 × (0.16)^2 + (1.5)^2 × (0.24)^2 + 2(-0.5)(1.5) × 0.16 × 0.24 × 0.8= 0.0679
Standard deviation of the portfolio = √0.0679= 0.2606 or 26.06%
When a company wants to hedge its exposure to exchange rate risk by using a 6-month forward contract to buy/sell US dollars (USD) at the exchange rate
USD/AUD = K,
the company has the option to go either long or short on the forward contract.
Since the company expects to pay AUD 100 million in 6 months, it will purchase the USD forward contract, so it will be long on the forward contract. The payoff diagram of the company after purchasing the forward contract is given as below: ii. When a company wants to hedge its exposure to exchange rate risk by using a put option to sell USD at the exchange rate
USD/AUD = K,
the company has the option to go either long or short on the put option. Since the company expects to pay AUD 100 million in 6 months, it will be the buyer of the put option, so it will go long on the put option. The payoff diagram of the company after purchasing the put option is given as below:
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How does the 12(a)(2) defense apply to "expertise" positions of
the prospectus? What remedies are available for A cause of action
under 12(a)(2)?
The 12(a)(2) defense applies to "expertise" positions by requiring that the issuer of securities must prove that they made a reasonable investigation of the offering's accuracy and omitted information.
A cause of action under 12(a)(2) allows investors to sue issuers for offering securities that contain untrue or misleading statements or omitted important information.
Investors who have purchased securities that are offered using a prospectus have legal remedies in the event that they were provided with incomplete, inaccurate, or misleading information. A prospectus is a document that a company or organization issues to inform potential investors about the offering of its securities. A prospectus usually contains information about the company, including its financial performance and the securities being offered. The Securities and Exchange Commission (SEC) has strict guidelines on what should be included in a prospectus to ensure that investors have enough information to make an informed decision.
The 12(a)(2) defense 12(a)(2) defense is a provision of the Securities Act of 1933 that provides an exemption for issuers of securities in the event of litigation. It applies specifically to securities offerings made using a prospectus. Under the 12(a)(2) defense, issuers can defend themselves against legal action brought by investors if they can prove that they conducted a reasonable investigation of the accuracy of the offering and omitted information and that the investor had access to the information that was omitted. Remedies available for a cause of action under 12(a)(2)If an investor has a cause of action under 12(a)(2), they have legal remedies available to them. These remedies may include Rescission - This legal remedy allows the investor to cancel the transaction and receive a purchase price refund. Damages - The investor may be entitled to damages for any losses they incurred due to inaccurate or misleading information.
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Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, and worksheets. Answer the questions following the scenario. When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the X s as directed, or with any four digits of your choice. view Notes - Kendall and Siena are married and file a joint return. - Siena is a full-time science teacher at a local public middle school. She spent $600 of her own money to purchase supplies for labs she conducted with her students. She did not receive any reimbursement for these expenses. - Kendall is a self-employed driver for Delicious Deliveries. Kendall provided a statement from the food delivery service that indicated the number of miles driven and fees paid for the year. These fees are considered ordinary and necessary for the food delivery business: - 4,786 miles driven while delivering food from 1/1/2022−6/30/2022 - 4,880 miles drived while delivering food from 7/1/2022−12/31/2022 - Insulated box rental: $300 - Vehicle safety inspection (required by Delicious Deliveries): $50 - GPS device fee: $120 - Kendall's record keeping application shows he also drove 4,833 miles between deliveries (2,393 miles from 1/1/2022-6/30/2022 and 2,440 miles from 7/1/2022-12/31/2022) and 4,062 miles (2,051 miles from 1/1/2022-6/30/2022 and 2,011 miles from 7/1/2022−12/31/2022 ) driven between his home and his first and last delivery point of the day. Kendall has a separate car for personal use. He bought and started using his second car for business on September 1, 2020. - Kendall also kept receipts for the following out-of-pocket expenses: - $100 on tolls - \$120 for car washes - $48 for parking tickets - $75 for Personal Protective Equipment (PPE) used during deliveries - \$150 for snacks and lunches Kendall consumed while working - Kendall provided the Form 1099-NEC and Form 1099-K that he received from Delicious Deliveries. - Kendall also received $500 in cash tips that were not reported elsewhere. - Kendall was sick with Covid-19 and was unable to work for 14 days in May 2022. - Kendall purchased virtual currency through an electronic transfer of cash from his checking account. He had no other virtual currency transactions. - The U.S. federal student loan that Siena owed for postsecondary educational expenses was forgiven in 2022. The amount of student loan canceled was $15,000. Siena cid not receive any tax form reporting this amount. - Kendall and Siena are U.S. citizens, have valid Social Security numbers, and Itvad ln se. Sinited States all year. They have not taken distributions from any retirement plans.
The amount of Kendall's Schedule C gross income is $17,345. The correct answer is option (D).
The Schedule C form is utilized for reporting self-employment income. It is used to calculate profits or losses from a company in which you have a financial interest. The Schedule C form is where self-employed individuals record all business income and expenses.
Schedule C gross income refers to the total amount of money a company made from its services and goods before taking deductions and taxes into account. The Schedule C form, which is part of the 1040 tax form, is used to report income and expenses for a business owner or sole proprietorship. The net profit or loss is calculated by subtracting expenses from gross receipts. The amount of Kendall's Schedule C gross income is $17,345 because this is the total amount he earned from his self-employment with Delicious Deliveries. Hence, the right answer is option (D).
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TRUE / FALSE. T/F 1. the insured must repair or replace the damaged property in order to receive full replacement cost.
T/F 2.coverage A protects the insured when a claim or suit for damages is brought because of bodily injury or property damage.
T/F 3.the homeowners policy has exclusions applying to activities of the named insured's minor children.
True. In order to receive the full replacement cost, the insured must repair or replace the damaged property.False. Coverage A of a homeowner's policy is not meant to protect the insured when a claim or suit for damages is brought about because of bodily injury or property damage.
False. The homeowners policy does have exclusions, but they do not apply to the activities of the named insured's minor children. An insurance policy provides protection against financial loss from certain events and occurrences. The policy may cover property damage, personal liability, and other types of claims. The coverage provided by an insurance policy is based on the terms of the policy and the specific coverage that is included.In order to receive the full replacement cost, the insured must repair or replace the damaged property. This is true, but there may be certain limitations and conditions that apply.Coverage A of a homeowner's policy typically provides protection against financial loss when a claim or suit for damages is brought about because of bodily injury or property damage. This statement is false, as coverage A typically provides protection for the dwelling and related structures. It does not cover liability claims that may arise.The homeowner's policy does have exclusions that apply to certain situations and conditions. However, the exclusions do not apply to the activities of the named insured's minor children. This statement is false.
In summary, the statements presented in the question are true, false, and false, respectively. It is important to carefully review the terms of an insurance policy in order to understand the coverage that is provided and any limitations or conditions that may apply.
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Youth Athletic Services (YAS) provides adult supervision for organized youth athletics. It has a president, William Mayes, and five employees. He and one of the other five employees manage all marketing and administrative duties. The remaining four employees work directly on operations. YAS has four service departments: managing, officiating, training, and dispute resolution. A time card is marked and records are kept to monitor the time each employee spends working in each department. When business is slow, there is idle time, which is marked on the time card. (It is necessary to have some idle time because some direct labor-hours must be available to accommodate fluctuating peak demand periods throughout the day and the week.)
Some of the July operating data are as follows:
Idle Time
Managing
Officiating
Training
Dispute Resolution
Sales revenue
$8,850
$9,800
$4,400
$2,100
Direct labor (in hours)
25
320
110
155
120
Direct overhead traceable to departments:
Equipment
$1,140
$1,065
$890
$15
Supplies
$390
$490
$440
$390
Transportation
$565
$1,190
$275
$80
Other Data:
The four employees working in the operating departments all make $18 per hour.
The fifth employee, who helps manage marketing and administrative duties, earns $3,200 per month, and William earns $3,950 per month.
Indirect overhead amounted to $1,168 and is assigned to departments based on the number of direct labor-hours used. Because there are idle hours, some overhead will not be assigned to a department.
In addition to salaries paid, marketing costs for items, such as advertising and special promotions totaled $790.
In addition to salaries paid, other administrative costs were $320.
All revenue transactions are cash; all others are on account.
No inventories are kept.
Management wants to know whether each department is contributing to the company’s profit. Prepare an income statement for July that shows the revenue and cost of services for each department. To get more information on Job Costing in service organizations, refer to your textbook (Chapter 7 pp. 286, 296-298).
YOUTH ATHLETIC SERVICES
INCOME STATEMENT
For Month Ending July 31
Managing
Officiating
Training
Dispute Resolution
Total
Revenue
Cost of Services:
Labor
Direct Overhead
Indirect Overhead
Total costs of services
Department margin
Less other costs:
Unassigned labor costs
Unassigned overhead indirect costs
Marketing and administrative costs
Operating profit (loss)
YOUTH ATHLETIC SERVICES INCOME STATEMENT For Month Ending July 31 Managing Officiating Training Dispute Resolution Total Revenue $8,850 $9,800 $4,400 $2,100 $25,150.Cost of Services:Labor $450 $5,760 $1,980 $2,790 $10,980 Direct Overhead $1,140 $1,065 $890 $15 $3,110 Indirect Overhead $333 $4,262 $1,471 $2,073 $8,139Total costs of services $1,923 $11,087 $4,341 $4,878 $22,229 Department margin $6,927 $2,713 $59 ($2,778) $7,921Less other costs:Unassigned labor costs - - - - -Unassigned overhead indirect costs - - - - -Marketing and administrative costs $790 $790 Operating profit (loss) $7,131 $1,923 $59 ($2,778) $6,335.
Revenue, Labor and Overhead costs are given. Direct overhead cost is the cost that can be traced to the cost object. Here, the direct overhead costs are equipment, supplies, and transportation. Indirect overhead cost is the cost that cannot be traced directly to the cost object but is allocated using some basis (such as direct labor-hours, machine-hours, or direct labor cost). Here, the basis is direct labor-hours.
Indirect overhead rate = $1,168/ 760 hours = $1.537/hour.Indirect overhead costs per department = Indirect overhead rate × Direct labor hours.Operating profit (loss) = Department margin - Other costs.Unassigned labor and overhead costs are considered under Cost of Services.
Here, there is no idle time in managing department and hence no unassigned labor costs. Also, since idle time is marked for only 120 hours, there will be some unassigned indirect overhead costs that cannot be allocated to a department.
Hence, Unassigned overhead indirect costs is 120 hours × $1.537/hour = $184. Explanation for each department:
Managing department:Revenue = $8,850 Cost of Services = Labor ($450) + Direct Overhead ($1,140) + Indirect Overhead ($333) = $1,923 Department margin = Revenue - Cost of Services = $6,927
Officiating department:Revenue = $9,800 Cost of Services = Labor ($5,760) + Direct Overhead ($1,065) + Indirect Overhead ($4,262) = $11,087 Department margin = Revenue - Cost of Services = $2,713 Training department:Revenue = $4,400 Cost of Services = Labor ($1,980) + Direct Overhead ($890) + Indirect Overhead ($1,471) = $4,341
Department margin = Revenue - Cost of Services = $59 Dispute Resolution department:Revenue = $2,100 Cost of Services = Labor ($2,790) + Direct Overhead ($15) + Indirect Overhead ($2,073) = $4,878
Department margin = Revenue - Cost of Services = ($2,778) (Loss)Total department margin = $7,921 Marketing and administrative costs = $790 Operating profit (loss) = Department margin - Other costs = $6,335
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How does the WTO enforce the trade dispute settlements?
a. Reports to the world supreme court.
b. Increases tax in countries.
c. Changes countries’ laws.
d. Authorizes countries to use tariff retaliation.
The WTO enforces trade dispute settlements by authorizing countries to use tariff retaliation. The correct answer is option (d).
When a member country is found to have violated WTO rules and fails to comply with the rulings of the Dispute Settlement Body (DSB), the affected country can request authorization from the DSB to retaliate by imposing tariffs or other trade measures on the offending country's exports. This process is known as "tariff retaliation." Tariff retaliation serves as a mechanism to encourage compliance with WTO rulings. Hence option (d) is the correct answer.
It allows the affected country to impose additional tariffs on specific products imported from the non-compliant country. The level of retaliation is determined by the affected country but is subject to approval by the DSB to ensure that it remains proportionate to the violation. By authorizing tariff retaliation, the WTO provides a means for enforcing its dispute settlement rulings. It aims to encourage compliance by creating economic incentives for countries to adhere to their trade obligations and rectify any violations.
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This is an example of two countries (Nepal and Japan) and two
products (Rice and Cloth) under theory of comparative cost
advantage. The production cost for Nepal to produce 1 unit of Rice
is 20 labor
Production cost for Japan's Rice is unknown.
What is the production cost for Japan's Rice in the example of Nepal and Japan under the theory of comparative cost advantage?To determine the comparative cost advantage between Nepal and Japan for the production of Rice and Cloth, we would need the production costs for Japan, as well as the production costs for both countries for Cloth.
Without that information, it is not possible to assess the comparative cost advantage between the two countries accurately. Please provide the production costs for Japan and the production costs for both countries for Cloth to proceed with the analysis.
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Oweninc has a current stock price of $13.30 and is expected to pay a $0.95 dividend in one year. If Oweninc's equity cost of capital is 11%, what price would Oweninc's stock be expected to sell for immediately after it pays the dividend? OA. $13,81 OB. $14.76 OC. $9 67 OD. $11.05
The price that Oweninc's stock would be expected to sell for immediately after it pays the dividend is $13.81. The correct answer is option A.
The dividend discount model (DDM) is a financial model that estimates the intrinsic value of a company's stock based on the theory that its present-day price is equivalent to the sum of all of its future dividend payments when discounted back to their present value by the appropriate discount rate.
The dividend discount model (DDM) values a stock based on the theory that the value of a share is determined by the present value of its future dividends. If the expected dividend increases, the cost of equity (Ke) will decrease.
The price of Oweninc's stock immediately after it pays the dividend can be determined using the following formula:
Price = (Dividend / (cost of equity - dividend growth rate)) + previous dividend= $0.95 / (0.11 - 0) + $13.30= $13.81
Therefore, the price that Oweninc's stock would be expected to sell for immediately after it pays the dividend is $13.81 i.e. Option A.
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Capital Consulting Company had 380,000 shares of common stock outstanding on December 31, 2020. On that date, there were also 4,800 shares of $100 par, 5% noncumulative preferred stock outstanding. On March 1, 2021, the company's common stock split 4-for-1. On December 15, 2021, a preferred dividend was declared and paid in the amount of $23,000. Net income for 2021 was $2,800,000. Required: Compute basic earnings per share for the year ended December 31, 2021.
The basic earnings per share (EPS) for the year ended December 31, 2021, is approximately $0.174.
To compute the basic earnings per share (EPS) for the year ended December 31, 2021, we need to consider the weighted average number of common shares outstanding during the year.
Calculate the weighted average number of common shares outstanding:
On December 31, 2020: 380,000 common shares
After the stock split on March 1, 2021: 380,000 * 4 = 1,520,000 common shares
Weighted average common shares = (Number of shares before split * Number of months) + (Number of shares after split * Number of months)
= (380,000 * 2) + (1,520,000 * 10)
= 760,000 + 15,200,000
= 15,960,000
Calculate the preferred dividend:
Preferred dividend = $23,000
Calculate the earnings available to common shareholders:
Earnings available to common shareholders = Net income - Preferred dividend
= $2,800,000 - $23,000
= $2,777,000
Calculate basic EPS:
Basic EPS = Earnings available to common shareholders / Weighted average common shares
= $2,777,000 / 15,960,000
= $0.174
Therefore, the basic earnings is approximately $0.174.
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You buy a car today for $30,000. If you finance it with a 6% APR, 4 year loan, what is the difference in your payments if you agree to pay at the beginning of each month rather than at the end. Assume monthly compounding.
If you agree to pay at the beginning of each month instead of at the end, the difference in your payments can be calculated by considering the effect of monthly compounding on the loan.
First, let's calculate the monthly interest rate. The Annual Percentage Rate (APR) of 6% needs to be divided by 12 to obtain the monthly interest rate. So, the monthly interest rate is 6% / 12 = 0.5%.
Next, let's calculate the monthly payment for a 4-year loan with a principal amount of $30,000 using the standard end-of-month payment schedule. We can use the loan payment formula:
Monthly Payment = (Principal * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate) ^ (-Number of Months))
Using the values, the monthly payment is:
Monthly Payment = ($30,000 * 0.5%) / (1 - (1 + 0.5%)^(-4 * 12))
Monthly Payment ≈ $709.96
To calculate the difference in payments when paying at the beginning of each month, we need to consider the effect of compounding. Since the interest is compounded monthly, the outstanding balance decreases slightly with each payment. As a result, the total amount paid over the loan term will be slightly lower compared to the end-of-month payment schedule.
The exact difference in payments cannot be determined without knowing the specific terms of the loan, such as the compounding period and the loan amortization schedule. However, it can be expected that the difference in payments between paying at the beginning and end of each month will be relatively small due to the monthly compounding effect.
Please note that for a more accurate calculation and to understand the exact difference in payments, it is recommended to consult with a financial professional or use specialized loan calculators that can provide detailed amortization schedules based on the specific terms of the loan.
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At EOQ:
Ordering costs will equal the carry costs
Costs do not have an influence over EOQ
Ordering costs will break-even into total
costs
The quantity ordered will equal the average
inventory
In light of the below mentioned information, the correct option among the given alternatives for the sentence "At EOQ" is:
a. Ordering costs will equal the carry costs.
EOQ refers to Economic Order Quantity, and is the amount of inventory to be ordered in one go in order to minimize the sum of carrying and ordering costs per unit of inventory. This method is used by many companies to balance the cost of inventory storage with the cost of inventory ordering.
The formula is defined as: EOQ = √2DS/H, where D is the annual demand, S is the cost of placing one order, and H is the cost of holding one unit in inventory.
At the Economic Order Quantity (EOQ), the total ordering costs will be equal to the total carrying costs. The cost of placing one order will be equivalent to the holding cost of one unit of inventory, and this is the optimal amount to be ordered because it minimizes the total inventory cost per unit ordered.
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Question 15 Marin's is a reflection of how they both percieve information and repsond to it. O Big Data perception O location on the introvert/extrovert scale decision-making style time orientation am
Marin's decision-making style is influenced by factors such as values, personal traits, locus of control, cognitive style, and perception of risk, shaping how they perceive and respond to information.
The most relevant term in relation to the given statement is decision-making style. The decision-making style reflects how individuals perceive and respond to information. The decision-making style is characterized by cognitive processes that individuals use to evaluate alternatives and reach decisions.
The various factors influencing decision-making style include Values, personal traits, locus of control, cognitive style, perception of risk, etc. It is important to note that the decision-making style is different from the decision-making itself.
While decision-making is the process of selecting one option among many, decision-making style is the cognitive and emotional processes that guide how the decision is made. Therefore, Marin's decision-making style is a reflection of how they perceive information and respond to it.
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