Here are the journal entries for Crane Company and Thomas Co.,
The Journal Entry for Crane CompanyDec. 3: Accounts receivable 38,000
Dec. 4: Cost of goods sold 18,000
Dec. 8: Freight-out 700
Dec. 13: Accounts receivable 2,710
Dec. 13: Cost of goods sold 990
Thomas Co.
Dec. 3: Merchandise inventory 38,000
Dec. 8: Accounts payable 700
Dec. 13: Merchandise inventory 2,710
Dec. 13: Accounts payable 2,710
Assuming that Thomas Co. had a balance in Merchandise Inventory on December 1 of $6,000, the balance in the Merchandise Inventory account at the end of December would be $11,790.
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The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 31 4 8 13 Crane Company sold merchandise to Thomas Co. for $38,000, terms 2/10, n/30, FOB destination. This merchandise cost Crane Company $18,000. The correct company paid freight charges of $700. Thomas Co. returned unwanted merchandise to Crane. The returned merchandise had a sales price of $2.700 and a cost of $990. It was restored to inventory. Crane Company received the balance due from Thomas Co View Policies Current Attempt in Progress The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3 4 8 13. Crane Company sold merchandise to Thomas Co. for $38,000, terms 2/10, n/30, FOB destination. This merchandise cost Crane Company $18,000. The correct company paid freight charges of $700. Thomas Co. returned unwanted merchandise to Crane. The returned merchandise had a sales price of $2,700 and a cost of $990. It was restored to inventory. Crane Company received the balance due from Thomas Co. Prepare the journal entries to record these transactions on the books of Crane Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Prepare the journal entries to record these transactions on the books of Thomas Co. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Date Dec. 3 V Dec. 4 Dec. 8 V V Account Titles and Explanation Merchandise Inventory Accounts Payable (Purchase on account.) No Entry No Entry Accounts Payable Mrak Debit 38000 0 Credit 38 Assuming that Thomas Co. had a balance in Merchandise Inventory on December 1 of $6,000, determine the balance in the Merchandise Inventory account at the end of December for Thomas Co. (Post entries in the order of journal entries presented in the previous part.) Dec. 1 Dec. 3 Dec. 31 V Merchandise Inventory Dec. 8 Dec. 13 11
This information relates to Lopez Co.
April 5 Purchased merchandise from D. Nolan Company for $20,000, terms 2/10, net 30, FOB
shipping point.
April 6 Paid frieght costs of $900 on merchandise on purchase from D. Nolan Company.
April 7 Purchased equipment on account for $26,000 from Walsh Corporation.
April 8 Returned some of April 5 merchandise to D. Nolan Company which cost $2,800.
April 15 Paid the net amount due to D. Nolan Company.
Perpetual System | Debit | Credit | Periodic | Debit | Credit
If Lopez Co. had paid for the purchase of April 5 (less return on April 8) on May 4 instead of April 15,
what would the Journal entry have been.
Lopez Co. would have recorded the following journal entry on May 4 if they had paid for the purchase of April 5 (less return on April 8) instead of April 15:
Accounts Payable $17,200
Purchase Returns $2,800
Cash $20,000
How would the journal entry change if Lopez Co. paid on May 4 instead?The journal entry on May 4 reflects the payment for the purchase made on April 5, after deducting the return made on April 8. Accounts Payable is credited for the remaining balance owed to D. Nolan Company, while Purchase Returns is debited for the returned merchandise. Cash is debited for the total payment amount of $20,000, which represents the net purchase amount after deducting the return.
When a payment is delayed, the entry is adjusted to reflect the actual payment date. In this case, the original entry would have been made on April 15 to record the payment to D. Nolan Company. However, if the payment was made on May 4 instead, it would require an adjustment to accurately reflect the timing of the payment.
The adjusted entry debits Accounts Payable and Purchase Returns, while crediting Cash for the payment made. This adjustment ensures the financial records accurately reflect the actual payment date and the relevant account balances.
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Mercedes maintains an inventory of sport utility vehicles. The vehicles are essentially similar, but were purchased from a variety of sources at widely different prices. Which method of accounting for inventory might provide misleading information regarding Merceds Motors?
a. FIFO
b. LIFO
c. Weighted average (AVCO)
d. Specific identification
The method of accounting for inventory that might provide misleading information regarding Mercedes Motors is the specific identification method.option d.
The specific identification method involves tracking and valuing each individual item in the inventory based on its specific cost. This method would be misleading for Mercedes Motors because their sport utility vehicles are essentially similar, but were purchased from a variety of sources at widely different prices. With the specific identification method, Mercedes Motors would have to allocate the exact cost to each individual vehicle, which could lead to inconsistencies and distortions in the valuation of the inventory.
Since the sport utility vehicles are essentially similar, using the specific identification method would not accurately reflect the cost of the inventory. It would be challenging for Mercedes Motors to determine the exact cost of each vehicle, especially if they were purchased from various sources at different prices. This method would not provide a meaningful representation of the overall cost of the inventory and could lead to misleading financial statements and decision-making.
Instead, a more appropriate method for Mercedes Motors would be the weighted average (AVCO) method. This method calculates the average cost of the inventory by dividing the total cost of the goods available for sale by the total number of units. It provides a more reasonable and representative value for the inventory, considering the varying purchase prices of the sport utility vehicles without the complexities of specific identification.option d.
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Consider the demand equation given by: Qd = 120 - 20P. Total revenue by $_ (increases/decreases) This total effect can be decomposed into a price effect which caused total revenue to (increase/decrease) $ and a quantity effect which caused total revenue to by $ (increase/decrease) Provide a sketch that represents this graphically - you do not need a detailed accurate graph - rather, just a sketch (simple picture/graph) that shows me you understand what is being asked in this question. when the price decreases from $5 to $4. by
The demand equation is Qd = 120 - 20P, where Qd is the quantity demanded and P is the price. Here, the total revenue is the product of price and quantity demanded; that is, TR = P × Qd.
This is because total revenue is the amount of money that a firm receives from selling a given quantity of goods. Let's decompose the total effect of price change into price and quantity effects.When the price decreases from $5 to $4, the price effect can be calculated as:Price effect = (TR2 - TR1)/TR1where TR1 and TR2 are the total revenues at the initial price of $5 and the new price of $4, respectively.At the initial price of $5:Qd = 120 - 20P = 120 - 20(5) = 20 unitsTR1 = P × Qd = $5 × 20 = $100At the new price of $4:Qd = 120 - 20P = 120 - 20(4) = 40 unitsTR2 = P × Qd = $4 × 40 = $160Therefore,Price effect = (TR2 - TR1)/TR1= ($160 - $100)/$100= $60/$100= 60%The price effect is positive because the total revenue increased as the price decreased. Thus, the price effect caused the total revenue to increase by $60.Now, the quantity effect can be calculated as:Quantity effect = (Q2 - Q1) × P1where Q1 and Q2 are the quantity demanded at the initial price of $5 and the new price of $4,
respectively. At the initial price of $5:Q1 = 20 unitsAt the new price of $4:Q2 = 40 unitsTherefore,Quantity effect = (Q2 - Q1) × P1= (40 - 20) × $5= 20 × $5= $100The quantity effect is also positive because the quantity demanded increased as the price decreased. Thus, the quantity effect caused the total revenue to increase by $100.The total effect of price change can be decomposed into price and quantity effects. The total effect is the sum of the price and quantity effects; that is,Total effect = Price effect + Quantity effect= $60 + $100= $160Thus, the total revenue increased by $160 when the price decreased from $5 to $4. Here is a simple graphical representation of the price and quantity effects:
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Explain how The Gourmet Shrine could engage in corporate social responsibility.
The Gourmet Shrine can engage in corporate social responsibility in several ways. Corporate social responsibility (CSR) refers to the voluntary actions of a business entity to make a positive impact on society beyond the legal requirements.
Some ways in which The Gourmet Shrine could engage in corporate social responsibility include
:1. Environment: The Gourmet Shrine can engage in environmental conservation by reducing its carbon footprint. The company can install solar panels and use energy-efficient light bulbs to conserve energy. The Gourmet Shrine can also reduce plastic waste by encouraging customers to use recyclable materials.
2. Philanthropy: The company can engage in philanthropic activities such as donating food or funds to local charities, sponsoring events, and supporting community development projects.
3. Workplace: The Gourmet Shrine can engage in social responsibility activities in the workplace by ensuring that it provides a safe and healthy work environment. The company can also offer its employees training and development opportunities and pay them fair wages.
4. Customer satisfaction: The company can engage in social responsibility activities by ensuring that it provides quality products and services to customer
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tam co. is negotiating for the purchase of equipment that would cost $100,000, with the expectation that $20,000 per year could be saved in after-tax cash costs if the equipment were acquired. the equipment's estimated useful life is 10 years, with no residual value, and would be depreciated by the straight-line method. tam's predetermined minimum desired rate of return is 12%. present value of an annuity of 1 at 12% for 10 periods is 5.65. present value of 1 due in 10 periods at 12% is .322. what is the accounting rate of return?
The accounting rate of return for the equipment investment is 20%, calculated by dividing the average annual after-tax cash savings by the initial investment cost and expressing it as a percentage.
The accounting rate of return can be calculated by dividing the average annual after-tax cash savings by the initial investment cost of the equipment and expressing it as a percentage.
Average annual after-tax cash savings = $20,000
Initial investment cost of the equipment = $100,000
Accounting Rate of Return = (Average annual after-tax cash savings / Initial investment cost) * 100%
Accounting Rate of Return = ($20,000 / $100,000) * 100%
Accounting Rate of Return = 20%
Therefore, the accounting rate of return for this investment is 20%.
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In its 20X5 income statement, Tow, Inc. reports proceeds from an officer's life-insurance policy of $90,000 and depreciation of $250,000. Tow was the owner and beneficiary of the life insurance on its officer. Tow deducted depreciation of $370,000 in its 20X5 income tax return when the tax rate was 30%. Data related to the reversal of the excess tax deduction for depreciation follow: Year Reversal of excess tax deduction Enacted tax rates 20X6 $50,000 35% 20X7 $40,000 35% 20X8 $20,000 25% 20X9 $10,000 25% There are no other temporary differences. In its December 31, 20X5 balance sheet, what amount should Tow report as a deferred income tax liability
Answer:
the deferred income tax liability is $25,200
Explanation:
The computation of the deferred income tax liability is given below:
= Excess of depreciation as per tax over books × Tax rate
= ($370,000 - $250,000) × 21%
= $25,200
Hence, the deferred income tax liability is $25,200
We simply applied the above formula so that the correct value could come
And, the same would be considered
Oscar received his credit report and sees that his VantageScore is 400. Which factor could be the cause?
a
He filed for bankruptcy 15 years ago.
b
He has five credits cards with high balances.
c
He has a low debt-to-credit ratio.
d
He has applied for his first loan in his life.
Answer:
b. He has five credits cards with high balances.
Explanation:
A VantageScore is a credit score model that shows the probability that someone will pay the loans. A 400 VantageScore is very poor and people can get this score for different situations like bankruptcies as they will appear in your report for up to 10 years, having high utilization rates on your credit card and missing payments. According to this, the answer is that the factor that could be the cause is: he has five credits cards with high balances because he would have a high utilization rate which hurts the credit score.
The other options are not right because a bankruptcy appears in the report for up to 10 years, a low debt to credit ratio shows that you use your credit in a responsible form and it won't hurt your credit acore. Also, if someone doesn't have a credit history, there is no score because there is no data to define that.
Imagine that you are the CEO of an oil company. Your company owns the right to drill on an offshore tract of land, having won an auction and paid $2 million for those drilling rights. The expected return to drilling on this land was 17% (with conventional cash flows) at the time you placed the bid, and your required return at the time was 14%, so the project was expected to have a positive NPV. Since then, however, government policy has changed. Extra regulatory costs of drilling have lowered the expected return to 15% (not including the cost of the lease), while the added risk of drilling under an administration that disapproves of oil exploration and production has raised the required return to 16%. Based on the principles of capital budgeting from Chapters 9 and 8, which of the following are correct? Choose all that apply. (Select all the choices that apply.) A. Your decision should not be influenced by regulatory costs. B. You should not drill now, because the current NPV is negative. C. You still have a valuable option - the option to delay commitment and thus you should wait and perhaps drill later if the regulatory costs and risk go back down again. D. You should begin drilling now, because the expected return is still positive. ☐E. You should begin drilling now, because the expected return is still above the original required return of 14%. ☐F. Your decision should not be influenced by the cost of purchasing the drilling rights, because that is a sunk cost.
NPV (Net present value) is the difference between the present value of cash inflows and outflows. The correct options are C. You still have a valuable option - the option to delay commitment and thus you should wait and perhaps drill later if the regulatory costs and risk go back down again.
The expected return to drilling on this land was 17%, and the required return was 14%, making the NPV positive and the project profitable.The government policy changed, regulatory costs increased, and the expected return decreased to 15%. At the same time, the risk associated with drilling under an administration that opposes oil exploration and production has increased, raising the required return to 16%.
A. Your decision should not be influenced by regulatory costs - False. As the regulatory cost of drilling has increased, the expected return of the project has reduced. Therefore, the decision to drill should consider regulatory costs.B. You should not drill now, because the current NPV is negative - False.
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1. The decision to purchase a new machine is a working capital management O Inventory management O capital budgeting capital structure decision
The decision to purchase a new machine is capital budgeting.
Capital budgeting involves identifying and evaluating capital expenditures for long-term investments such as the purchase of fixed assets such as machinery, land, buildings, or any other productive asset. Thus, the decision to purchase a new machine is a capital budgeting decision.
In other words, Capital budgeting is a long-term investment decision-making process that includes planning, analyzing, and deciding whether to allocate available funds to a project or investment that would increase a company's profitability.
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Suppose the government wanted to regulate this market using a price-based instrument. What is the efficient level of a tax on emissions?
Answer:
Tax = Marginal External Damage
Explanation:
When a negative externality distorts market outcome, we often see that a government intervention is needed. We must incorporate the negative externality into the private decision of the producer. That is to say that we add marginal damage caused by the externality to the marginal private cost of production. The social outcome will be at the point where marginal social cost (MSC) is equal to Marginal private benefit (MPB).
Thus, the efficient level of tax on emission is set equal to the marginal external damage.
Tax = t = MED
MSC = MPC + MED
= MPC + t
Suppose Dawson's began June with cash of $4,000. During June, Dawson's paid $2,000 cash and ended the month with a cash balance of $5,000. How much were Dawson's cash receipts in June? $11,000 $6,000 $5,000 $3,000
Dawson's cash receipts in June were $3,000. The option which represents the correct answer is $3,000.
Given information:
Starting cash balance = $4,000
Cash paid during June = $2,000
Ending cash balance = $5,000
We need to find Dawson's cash receipts in June.
How to calculate cash receipts:
Cash receipts = Starting cash balance + Cash received - Cash paid
Starting cash balance = $4,000
Cash paid = $2,000
Ending cash balance = $5,000
We can use this formula:
Cash receipts = Starting cash balance + Cash received - Cash paid
Re-arranging it, we can get the cash receipts as follows:
Cash receipts = Starting cash balance + Cash received - Cash paid$
Cash received$ = Cash receipts + Cash paid - Starting cash balance
Putting the values in the above equation, we get:
Cash received = $5,000 + $2,000 - $4,000
Cash received = $3,000
Therefore, Dawson's cash receipts in June were $3,000.
The option which represents the correct answer is $3,000.
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Identify the step in the innovation process at which the following actions are most likely to occur. Development Application A shoe company now has its marketing and distribution departments work together on release dates; this prevents ads from appearing before the shoes are actually available. Rosa compares several recent sneaker releases to choose the colorways for her company's next limited edition shoe. A book publisher starts reading each chapter of an author's work as soon as it is written, rather than the former practice of waiting for the entire manuscript to be completed. Although few cell phone manufacturers offered touchscreen phones in the early 2000s, other companies figured out how to add similar technology to their products. Once Maria's new clothing line got publicity on blogs and social media, and people began to see the products, sales started to steadily increase. A manufacturer that makes compact disk (CD) players sold fewer CD players once people began buying music in MP3 format. O O an holow O O O O O O Launch O Growth Maturity Decline O O O O O O O O O O O O O O O O O O O O O O O
Development is the step in the innovation process at which the following action is most likely to occur: A shoe company now has its marketing and distribution departments work together on release dates.
This prevents ads from appearing before the shoes are actually available. Innovation is the development of new ideas, products, or methods that provide value to consumers. To maximize the advantages of innovation, organizations typically follow a six-step innovation process that involves the following steps:
Define the problem or the chance Brainstorm ideas Evaluating ideas Prototype concepts Test ideas Commercialization As per the given question, A shoe company now has its marketing and distribution departments work together on release dates; this prevents ads from appearing before the shoes are actually available. Therefore, it occurs in the commercialization step.
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They include the use of conventions and trade shows O They include the use of display allowances O They include a wide range of tools like samples, coupons, and refunds Question 14 What is native advertising? 1 pts O Native advertising is a type of performance-based advertising where you receive commission for promoting someone else's products or services on w website O Native advertising is a strategy for using a digital platform to engage with the indigenous people who occupied a given region before Western colonization Native advertising is a method of driving traffic to your website by paying a publisher every time your ad is clicked Native advertising refers to ads that are primarily content-led and featured on a platform alongside other, non-paid content Native advertising promotes your brand and your content on social media channels to increase brand awareness, drive traffic, and generate business
The correct answer is: Native advertising refers to ads that are primarily content-led and featured on a platform alongside other, non-paid content.
Native advertising is a form of advertising that blends in with the natural content of a platform, making it appear more organic and less like a traditional ad. These ads are designed to match the look, feel, and context of the surrounding content, making them less disruptive and more engaging to the audience.
Native ads can be found on various platforms such as websites, social media feeds, and online publications. They are typically labeled as "sponsored," "promoted," or "recommended" to indicate that they are paid advertisements. The goal of native advertising is to provide valuable content that resonates with the target audience while also promoting a brand or product.
The question should be
What is native advertising?
Native advertising is a type of performance-based advertising where you receive commission for promoting someone else's products or services on website Native advertising is a strategy for using a digital platform to engage with the indigenous people who occupied a given region before Western colonization Native advertising is a method of driving traffic to your website by paying a publisher every time your ad is clicked Native advertising refers to ads that are primarily content-led and featured on a platform alongside other, non-paid content Native advertising promotes your brand and your content on social media channels to increase brand awareness, drive traffic, and generate businessLearn more about native advertising here:-
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Question 3 1 points Ehsan contributed a building at $22.500 and a land valued at $60,000. The journal entry to record this transaction for the partnership is OA Ehsan, Capital 89,100 Building 22,500 L
By making this journal entry, the partnership properly records Ehsan's capital contribution, ensuring accurate tracking of the partners' capital accounts and reflecting the increased value of the partnership's assets due to Ehsan's contribution of the building and land.
To record Ehsan's contribution of a building valued at $22,500 and land valued at $60,000 to the partnership, the journal entry would be as follows:
Date: [Date of the transaction]
Debit: Ehsan, Capital - $89,100
Credit: Building - $22,500
Credit: Land - $60,000
Explanation:
The journal entry reflects the increase in Ehsan's capital account by the total value of the contributions. The debit to Ehsan, Capital represents the increase in his capital account by the combined value of the building and land, which amounts to $89,100.
On the credit side, the Building account is credited with $22,500 to recognize the addition of the building as a partnership asset. Additionally, the Land account is credited with $60,000 to acknowledge the inclusion of the land in the partnership's assets.
By making this journal entry, the partnership properly records Ehsan's capital contribution, ensuring accurate tracking of the partners' capital accounts and reflecting the increased value of the partnership's assets due to Ehsan's contribution of the building and land.
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One downside of arbitration is that if the parties are not satisfied with the decision, they: a. can still mediate the issue. b. cannot appeal the decision. c. can still litigate the issue. d. can sue for damages separately.
The correct answer is b. cannot appeal the decision. Arbitration is an alternative dispute resolution method in which the parties involved present their case to an arbitrator or a panel of arbitrators who make a binding decision.
While arbitration offers several advantages, such as faster resolution, cost-effectiveness, and confidentiality, it does have a downside when it comes to the finality of the decision.
One of the drawbacks of arbitration is that the decision reached by the arbitrator is usually final and binding. This means that the parties involved cannot appeal the decision to a higher court or seek a review of the arbitrator's ruling based on errors of law or fact. Unlike in a court trial, where parties have the option to file an appeal if they disagree with the judgment, arbitration limits the right to challenge or modify the decision.
The finality of the arbitration decision is generally favored to promote efficiency and ensure the swift resolution of disputes. It provides certainty and closure to the parties involved, allowing them to move on and avoid prolonged litigation processes. However, it also means that if the parties are not satisfied with the decision or believe that an error has occurred, they are generally unable to seek further legal remedies through the traditional court system.
Instead of appealing the decision, the parties must generally abide by the arbitrator's ruling, even if they disagree with it. This finality is one of the trade-offs involved in choosing arbitration as a means of dispute resolution. It is important for parties to carefully consider the implications of arbitration and the potential limitations on their ability to challenge the decision before agreeing to it as a method of resolving their disputes.
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1. Identify whether the following items are counted in M1 only, M2 only, both M1 and M2, or neither:
A) A $1,000 balance in a checking account at a mutual savings bank
B) A $100,000 certificate of deposit issued by a New York bank.
C) A $10,000 time deposit an elderly widow holds at her credit union.
D) A $50 traveler's check
E) A $50,000 money market deposit account balance
2. Suppose Bob digs up a box in his front yard that contains $1000.
A) Would anything happen to the money supply (M1)? Explain
B) What would happen to the money supply when Bob deposits this in a bank (reserve-deposit ratio is .05)? What is the maximum amount of money that can be created? How does this occur?
3. A month later, Bob buys a $1000 government bond from the Fed with this money.
A) What happens to the money supply (M1)? Does it increase or decrease? By how much?
B) How would this impact Bob's future spending? Would it increase or decrease?
C) Under what circumstances would Bob be likely to buy bonds ? (describe the economy, his perceptions)
D) 5 years later Bob sells the bond for $1000 and buys $1000 in common stock. Describe the differences in Bob's investment portfolio. (how does it differ; what are the risks; what are his returns)
1) A) Both M1 and M2. B) Neither M1 nor M2. C) Neither M1 nor M2. D) Both M1 and M2. E) Both M1 and M2. 2) A) No impact on M1. B) Money supply increases to $20,000. The maximum amount is determined by the reserve-deposit ratio. This occurs through the money multiplier effect. 3) A) M1 remains unchanged. B) No direct impact on future spending. C) Bob is likely to buy bonds in a low-inflation economy, perceiving them as a safe investment. D) Portfolio changes to common stock, with higher risks and returns depending on company and market performance.
1 The items categorized into M1 only, M2 only, both M1 and M2, or neither are as follows:
A) A $1,000 balance in a checking account at a mutual savings bank - Both M1 and M2
B) A $100,000 certificate of deposit issued by a New York bank - Neither M1 nor M2
C) A $10,000 time deposit an elderly widow holds at her credit union - Neither M1 nor M2
D) A $50 traveler's check - Both M1 and M2
E) A $50,000 money market deposit account balance - Both M1 and M2
2 A) The money supply (M1) would not be affected by Bob finding $1000 in his front yard because it is not part of the official money supply.
B) When Bob deposits the $1000 in a bank with a reserve-deposit ratio of 0.05, the maximum amount of money that can be created is $20,000. This occurs through the money multiplier effect, where banks are able to create new loans and increase the money supply based on the reserve requirements set by the central bank.
3 A) When Bob buys a $1000 government bond from the Fed, the money supply (M1) remains unchanged as the money is transferred from Bob to the government. There is no increase or decrease in the money supply.
B) This transaction does not directly impact Bob's future spending as the money supply remains the same.
C) Bob may be likely to buy bonds when the economy is experiencing low inflation and he perceives bonds to be a relatively safe and stable investment option.
D) By selling the bond for $1000 and buying $1000 in common stock, Bob's investment portfolio changes from a fixed-income bond to equity ownership in a company.
The investment in common stock carries higher risks but potentially higher returns compared to government bonds. The returns on common stock are dependent on the performance of the company and the stock market.
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Assume you have the utility function U( X; Y ) = XY: You have 20 liras to spend. Price of good X is a lira per unit and price of good Y is a lira per unit. Given this information, you can solve for optimal consumption bundle and conclude that consuming 10 units of X and 10 units of Y maximizes your utility. Now assume that price of X increases to 2 liras.Price of good Y is constant and your income is still 20 liras. Now, the new optimal consumption bundle is 10 units of Y and 5 units of X. We observe that good X consumption declines from 10 to 5. This is what we call as total effect. Decompose the decline in X consumption into income effect and substitution effect. Decompose numerically. Explain your answer using a graph as well.
1. Substitution Effect:
The substitution effect captures the change in X consumption due to the relative price change of good X. When the price of X increases, it becomes relatively more expensive compared to good Y, leading to a substitution effect. Consumers tend to substitute away from the relatively more expensive good towards the relatively cheaper good. In this case, the substitution effect causes a decrease in X consumption.
2. Income Effect:
The income effect captures the change in X consumption due to the change in purchasing power resulting from the price change. In this scenario, the price of X has increased while the consumer's income remains constant. Since the consumer's income can purchase fewer units of X due to the price increase, the income effect leads to a decrease in X consumption.
Now, let's decompose the decline in X consumption numerically and illustrate it graphically:
Initial Prices: Px = 1 lira, Py = 1 liraInitial Optimal Bundle: (X, Y) = (10, 10)New Prices: Px = 2 lira, Py = 1 liraNew Optimal Bundle: (X, Y) = (5, 10)Change in X consumption (ΔX) = 10 - 5 = 5 unitsTo decompose this change, we need to determine the substitution effect and the income effect.
1. Substitution Effect (ΔX(substitution)):
To calculate the substitution effect, we need to hold the consumer's utility constant at the initial level. Since the utility function U(X, Y) = XY, the initial utility level is U(10, 10) = 10 * 10 = 100.
Using the new price ratio (Px/Py), we calculate the quantity demanded of X at the initial utility level:
10 = X * 10 / X * 1X = 10 / 10 = 1Therefore, the substitution effect (ΔX(substitution)) = 5 - 1 = 4 units.
2. Income Effect (ΔX(income)):
To calculate the income effect, we need to determine the change in purchasing power resulting from the price change. The consumer's income is still 20 liras, and the price of X has doubled. Therefore, the consumer's purchasing power for X has halved.
Therefore, the income effect (ΔX(income)) = 10 - 5 = 5 units.
Graphically, the income effect can be represented as a parallel shift of the budget line inward (to the left) due to the decrease in purchasing power. The substitution effect can be represented as a movement along the new budget line from the initial optimal bundle to the new optimal bundle.
By decomposing the decline in X consumption into income and substitution effects, we can understand the relative contributions of each effect to the change in consumption.
About SubstitutionSubstitution is a solution that involves substituting one equation into another. This method is good to use if one of the equations has been solved for a certain variable.
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ABC Company's performance report for April included the following for sales revenue: Budgeted revenue = $98,000; Actual revenue = $93,000; Variance = $ Use F or U to identify the variance as favorable
ABC Company's performance report for April included the following for sales revenue: Budgeted revenue = $98,000; Actual revenue = $93,000; Variance = $5000;
The company experienced an unfavorable variance of $5000 since the actual revenue of $93,000 was less than the budgeted revenue of $98,000 by $5000. A favorable variance would have occurred if the actual revenue was greater than the budgeted revenue. Sales revenue variance can be determined by the formula: Variance = Actual revenue - Budgeted revenue.
The variance indicates whether the actual revenue is higher or lower than the budgeted revenue.The ABC company has experienced an unfavorable variance of $5000. An unfavorable variance occurs when the actual results are worse than the budgeted results. If the actual results were better than the budgeted results, the variance would be called favorable.In conclusion, ABC Company's sales revenue variance for April is unfavorable, which means that the company's actual revenue was less than the budgeted revenue.
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The next two questions involve the following data:
The phase III trial for the Pfizer vaccine against SARS-CoV-2 had a total of 21,720 individuals receiving the vaccine and 21,720 individuals receiving a placebo. During the monitoring period that started 7 days after the second dose, the vaccine group had a total of 8 cases of COVID-19 while the placebo group had 162 cases. Cases of severe COVID-19 were also reduced with 1 severe case of the 8 cases in the vaccine group being severe and 4 severe cases of the 162 cases in the placebo group.
Design and execute statistical tests of the null hypothesis that the vaccine had no effect on disease prevention as well as the null hypothesis that it had no effect on severe disease (that is, conduct two tests). Show your work and explain your rationale for any choices you make along the way (e.g., one-sided or two-sided test).
On an absolute scale, the case counts (and particularly the severe cases) during the Pfizer trial were low. Generate 95% confidence intervals for the absolute risk of all four categories (cases w/ vaccine, severe cases w/ vaccine, cases w/ placebo, severe cases w/ placebo). Absolute risk for each category is estimated by dividing the number of cases by the total individuals in that category. Show your work and note any assumptions you're making.
The statistical tests of the null hypothesis that the vaccine had no effect on disease prevention and the null hypothesis that it had no effect on severe disease were conducted. A two-sided test was used for both tests. Absolute risk of all four categories was generated for 95% confidence intervals. The estimated absolute risk for each category was calculated by dividing the number of cases by the total individuals in that category. Assumptions were made that the sample size was representative and that the data collected was accurate and reliable.
For the statistical tests, a two-sided test was used to ensure that both directions of an effect were considered. This allowed for a more comprehensive analysis of the data. For the confidence intervals, assumptions were made that the sample size was representative of the population and that the data collected was accurate and reliable. The estimated absolute risk for each category was calculated by dividing the number of cases by the total individuals in that category. This allowed for an estimation of the potential risk reduction associated with the vaccine. The generated confidence intervals provided a range of values that could be used to estimate the true population values with a certain degree of confidence.
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Discuss the role of financial assets (instruments) in market economy and why they are important for successful functioning of the economy. Use shares, bonds, and mortgages as examples. A good answer should discuss how they help individuals, firms, and society at large?
Crypto currencies are a new type of financial instruments that are increasingly becoming popular. Elaborate that why and why not they are as reliable for investment as conventional assets such as shares and bonds. You may use bitcoin as an example and should research to display your knowledge.
Instruments of finance are a vital component of any economy. Financial instruments are used for investment purposes to achieve financial objectives. They include shares, bonds, mortgages, currencies, and other derivatives. They are significant in a market economy because they play an important role in the economic growth of a country.
They assist individuals, companies, and the economy as a whole in making sound financial decisions. The financial system in a market economy provides a variety of financial instruments to cater to the requirements of all sections of society. The financial market can be split into two categories: the primary market, where new shares and bonds are sold for the first time, and the secondary market, where existing financial instruments are traded by buyers and sellers on the stock exchange.
Shares: Companies issue shares to raise capital for investment and growth. The investor receives a portion of the company's profits and has voting rights. The buying and selling of shares is a vital element of the financial market, which aids in the mobilization of savings and investment.
Bonds: The government, as well as companies, issue bonds to raise money. The issuer promises to pay the investor interest on the borrowed sum as well as the principal amount. The investor who buys the bond earns interest and gets back the principal sum when the bond matures.
Mortgages: A mortgage is a loan secured by a property that enables individuals and businesses to purchase homes and commercial buildings. Mortgages are essential in the economy because they allow people to acquire property and for businesses to acquire commercial property.
Crypto-currencies are digital assets that are created as a medium of exchange utilizing blockchain technology. Bitcoin is a well-known digital currency. The most significant advantages of cryptocurrencies are anonymity and security, which offer privacy to users. They are a new form of investment that may give investors a high rate of return. However, they are not backed by governments or regulated by central banks, which makes them less secure than conventional assets. Cryptocurrency prices are highly volatile and difficult to predict, which makes investing in them risky. Additionally, the lack of regulation, as well as the complexity of the technology, makes them susceptible to fraud and hacking. As a result, investment in cryptocurrencies is a risky endeavor that is not suitable for everyone.
In conclusion, financial instruments play a vital role in a market economy by mobilizing savings and investment. Shares, bonds, and mortgages are examples of instruments that are utilized to raise capital for growth and investment. They are essential because they assist in making sound financial decisions and contribute to the economic growth of a country. Crypto-currencies, on the other hand, are a new form of digital currency that is gaining popularity but are still not as dependable for investment as traditional assets. While cryptocurrencies provide anonymity and security, the lack of regulation, high volatility, and the likelihood of fraud and hacking make investing in them a risky proposition.
Therefore, investors must conduct thorough research and consult with financial professionals before investing in cryptocurrencies. To diversify their portfolios, investors should consider investing in traditional assets as well as cryptocurrency. Additionally, governments should consider regulating cryptocurrencies to protect investors and ensure that they contribute to the growth of the economy.
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A: What is intertemporal price discrimination? full explanation
B: Explain in detail with the help of your own example?full explanation
C: Especially, explain why a profits maximizing monopoly can be better off if it can commit not to engage in intertemporal price discrimination.full explanation
Intertemporal price discrimination can lead to backlash from customers who feel like they are being taken advantage of or unfairly targeted. Avoiding this negative reaction can also benefit the monopolist.
A) Intertemporal price discrimination refers to the practice of charging different prices for the same product or service depending on when it is consumed. In other words, the seller charges higher prices during periods of high demand and lower prices during periods of low demand. This type of price discrimination is also known as peak-load pricing.
B) Suppose a movie theater operates in a small town. It has only one screen and can seat 100 people. During the weekdays, the theater's attendance is low, and it can only sell 50 tickets per screening. On weekends, however, the theater is much busier, and it can sell all 100 seats. The movie theater might implement intertemporal price discrimination by charging higher ticket prices on weekends to capture the increased demand. On weekdays, it would offer lower prices to attract more customers and fill up the theater.
C) A monopolist that can commit not to engage in intertemporal price discrimination can be better off because it may avoid creating an incentive for customers to substitute their consumption across time periods. In other words, if the monopolist charges higher prices during periods of high demand, customers may respond by consuming less of the product during those times and more during times when prices are lower.
By committing not to engage in intertemporal price discrimination, the monopolist can encourage customers to consume more of the product overall and maximize its profits.
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A company wants to hire a model to appear in a television ad to promote its products. Prospective candidates have been asked to audition so that the company can choose the most suitable person. The candidates are being subjected to a(n) _____ test.
a. performance
b. discriminatory
c. analytical
d. reference
e. integrity
A company wants to hire models to appear in TV commercials promoting its products. Potential candidates were asked to audition so that companies could select the best candidates. Candidates undergo a performance test.
Option a is correct .
In this scenario, a company conducts auditions to select models for TV commercials. An audition is a type of performance test in which candidates must demonstrate their skills, abilities and talents in front of company representatives. The purpose of the performance test in this case is to assess the candidate's ability to convey the desired image and promote the company's product.
During auditions, candidates may be asked to demonstrate their skills as models. By posing, walking, expressing emotions, and delivering texts and messages. They are judged on their good looks, confidence, charisma, ability to follow directions, and overall performance on camera.
Hence, Option a is correct .
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Check my work 4 Katie Pairy Fruits Inc. has a $2.600 18-year bond outstanding with a nominal yield of 15 percent (coupon equals 15% * $2,600-$390 per year). Assume that the current market required interest rate on similar bonds is now only 12 percent. Use Appendix Band Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the current price of the bond. (Do not round Intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.) eBook Current price of the bond Pont b. Find the present value of 3 percent $2.600 (or $78) for 18 years at 12 percent. The $78 is assumed to be an annual payment. Add this value to $2,600. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.) Present value 18 points
The Current Price of the Bond when Katie Pairy Fruits Inc. has a $2.600 18-year bond outstanding with a nominal yield of 15 percent is $2,799.75
How to calculate the amountCoupon Payment = Coupon Rate * Face Value
Coupon Payment = 15% * $2,600 = $390 per year
PV Coupon = Coupon Payment * [(1 - (1 + Interest Rate)⁻ⁿ) / Interest Rate]
Interest Rate = Current market required interest rate = 12% = 0.12
n = Number of years = 18
PV Coupon = $390 * [(1 - (1 + 0.12)⁻¹⁸) / 0.12]
= $2,383.03
PVPrincipal = Principal Payment / (1 + Interest Rate)ⁿ
Where:
Principal Payment = Face Value = $2,600
Interest Rate = Current market required interest rate = 12% = 0.12
n = Number of years = 18
PVPrincipal = $2,600 / (1 + 0.12)¹⁸
= $416.72
Current Price of the Bond = PVCoupon + PVPrincipal
Current Price of the Bond = $2,383.03 + $416.72
= $2,799.75
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Riparian water rights would improve the efficiency of water allocations in Colorado
True
False
Annual land rent can be used to calculate real estate market prices.
True
False
True. Riparian water rights would improve the efficiency of water allocations in Colorado
False. Annual land rent alone cannot be used to accurately calculate real estate market prices.
Riparian water rights, which are based on the principle of allocating water to those who own property along a water source, can contribute to the efficiency of water allocations in Colorado. This legal doctrine helps ensure that water is distributed fairly and sustainably among competing users in a region with access to water bodies. By linking water rights to property ownership along water sources, riparian rights help incentivize responsible water use and discourage wasteful practices.
While land rent can be a factor in determining property values, it is just one component among many factors that influence real estate market prices. Market prices for real estate are influenced by a range of factors, including location, demand and supply dynamics, property condition, amenities, market conditions, and various other economic and non-economic factors. Therefore, relying solely on annual land rent would not provide a comprehensive and accurate assessment of real estate market prices.
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A historical example of is when communities used cocoa beans or cowrie shells as a kind of money. O commodity money O M3 O fiat money
A historical example of commodity money is when communities used cocoa beans or cowrie shells as a kind of money. Option a is correct.
Commodity money refers to a type of currency that has intrinsic value based on the commodity it represents. In this case, cocoa beans or cowrie shells were used as a medium of exchange because they were valued commodities in the respective communities. The value of the commodity itself determined its purchasing power, and it was widely accepted in trade transactions.
Unlike fiat money, which has no intrinsic value and relies on government authority for acceptance, commodity money derives its value directly from the commodity it represents. This historical example demonstrates the use of tangible and valuable commodities as a form of money in specific societies. Option a is correct.
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French carmaker Renault rallied following news that it was expanding its collaboration with US chipmakers Qualcomm. At the Consumer Electronics Show in Las Vegas, Qualcomm said it would be equipping upcoming Renault motors with "the latest connected and intelligent solutions for its next-generation vehicles".
Source: Adapted from R. Douglas (2022), "Wall Street", The Financial Times, (6th January 2022).
1. How does the principal-agent problem apply to the Renault-Qualcomm partnership?
The principal-agent problem refers to a situation in which one party, known as the principal, delegates decision-making authority to another party, known as the agent, to act on their behalf. The principal-agent problem arises when there is a conflict of interest between the principal and the agent, as the agent may not always act in the best interests of the principal.
In the case of the Renault-Qualcomm partnership, the principal-agent problem could potentially arise in several ways:
1) Misalignment of Objectives: Renault and Qualcomm may have different objectives and priorities. Renault's main objective might be to improve the functionality and connectivity of its vehicles, while Qualcomm's objective might be to increase the adoption of its technology in the automotive industry. This misalignment could lead to conflicts in decision-making and resource allocation.
2) Information Asymmetry: The principal-agent problem can also occur when there is a disparity in information between the principal and the agent. Renault may not have complete knowledge or control over the technology and its implications for their vehicles. This information asymmetry could result in Qualcomm making decisions or implementing solutions that may not fully align with Renault's long-term goals or strategic direction.
3) Monitoring and Control: The principal (Renault) may face challenges in effectively monitoring and controlling the agent (Qualcomm) to ensure that their actions and decisions are consistent with the agreed-upon objectives. This can be particularly difficult when the partnership involves complex technology and innovation, where the principal may have limited expertise or access to detailed information.
To mitigate the principal-agent problem, it is important for Renault and Qualcomm to establish clear communication channels, define roles and responsibilities, and align their objectives and expectations through well-defined contractual agreements. Regular monitoring and evaluation mechanisms should be put in place to ensure that the partnership remains on track and that both parties are acting in the best interests of each other. Effective governance structures and mechanisms can help minimize the risks associated with the principal-agent problem and foster a successful collaboration.
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An estate distributes an asset to its sole Income beneficiary. The distribution was not a specific bequest. The basis of the asset to the estate is $1,000, and the assel's fair market value is $5,000. Distributable net income of the estate is $9,500. No other distributions are made, nor was an election made by the fiduciary with respect to this distribution. 10. The basis of the asset to the beneficiary after the distribution is: a. $1,000. b. $4,000. c. $5,000. d. $9,500.
The basis of the asset to the beneficiary after the distribution is $9,500 (option d).
The premise of the resource for the recipient after the circulation relies upon the kind of resource and the relevant principles for ascertaining the premise. For this situation, the conveyance was not a particular estate, meaning it was not explicitly assigned for the recipient.
Assuming the resource dispersed is a capital resource, the common guideline is that the recipient's premise would be the honest evaluation of the resource at the hour of dissemination, which is $5,000 for this situation.
This would permit the recipient to possibly understand a capital addition or misfortune when they sell or discard the resource later on.
In any case, in the event that the resource is viewed as pay in regard of a decedent (IRD), unique principles apply. IRD resources incorporate things like neglected compensation, money due, and other pay that the departed individual would have gotten assuming they were alive.
On account of an IRD resource circulation, the recipient takes a premise equivalent to the distributable net income (DNI) of the domain, which is $9,500 in this situation.
Consequently, in this particular case, the premise of the resource for the recipient after the circulation would be $9,500 (choice d). It is critical to talk with an expense proficient or survey the particular duty guidelines to guarantee precise assurance of the premise in some random circumstance.
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Which does impact the output of the irr calculation?
Initial Investment, Timing of Cash Flows, Cost of Capital,Expected Returns, Risk impact the output of the irr calculation
The Internal Rate of Return (IRR) is used to measure and compare the profitability of different projects or investments. The result of the IRR calculation can be affected by several factors that have an impact on the output.What impacts the output of the IRR calculation?The output of the IRR calculation is influenced by the following factors:1. Initial Investment: The initial investment amount is the amount of capital that is needed to begin a project or investment. The IRR calculation takes into account the size of the initial investment and the expected returns that will be generated by the project. A higher initial investment will usually lead to a lower IRR.
2. Timing of Cash Flows: The timing of cash flows can have a significant impact on the IRR calculation. If the cash flows are received earlier in the project, the IRR will be higher. If the cash flows are received later in the project, the IRR will be lower.3. Cost of Capital: The cost of capital is the rate of return that is required by investors to invest in a project. The higher the cost of capital, the lower the IRR will be.4. Expected Returns: The expected returns that will be generated by the project also have an impact on the IRR calculation. A higher expected return will usually lead to a higher IRR.5. Risk: The level of risk associated with a project or investment can also affect the IRR calculation. The higher the risk, the higher the required rate of return will be, which will lower the IRR.Therefore, these are the factors that impact the output of the irr calculation.
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You are an executive at a large technology firm that has been around for over a decade. The competition within your industry has exploded within the past few years making feature updates to your current product line and investments into new technology crucial for your company's survival. This rapid innovation accompanied by unpredictable moves and countermoves from your competitors has risked displacing your competitive advantage. Based on what is known about innovation, what BEST describes your current circumstances? 1) Experience within your particular industry has equipped you with the strategies and tools necessary to maintain competitive advantage without much worry. 2) It is often better for you to make a reasonable move quickly as opposed to investing resources into extensive analysis hoping for the perfect move. 3) It is typical for technology firms to phase in and out of the spotlight because it is only natural for newer technologies to replace you eventually 4) Due to the high stakes of your decisions, it is important to invest heavily into each decision with extensive analysis and time-consuming research 5) Abandoning the saturated industry your firm currently occupies is the only way for long-term survival.
Innovation is known about that It is often better for you to make a reasonable move quickly as opposed to investing.
The correct answer to the given question is option 2.
The resources into extensive analysis hoping for the perfect move. Explanation:When it comes to innovation, the key for survival is to make a move, no matter how perfect or imperfect the move might be. Innovating is a continuous process and in order to stay relevant in a fast-paced industry, it is important to stay on your toes and constantly make progress.
Investment in new technology is a crucial factor that determines the success or failure of a company. The competition within the industry often forces the players to be one step ahead of the competition. Hence, investing in new technology or updating the current products become essential to maintain a competitive edge. For a large technology firm that has been around for over a decade, the experience within the industry might not necessarily guarantee a competitive advantage.
Innovation comes in unpredictable ways and relying on past experience alone might not be enough to make a move that will benefit the company. In such a scenario, it is often better to make a reasonable move quickly instead of investing resources into extensive analysis hoping for the perfect move.
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Your manager asks you for advice about the tone of a request letter she is composing to an irate customer.
What advice would you give?
When your manager asks you for advice about the tone of a request letter she is composing to an irate customer, there are several things that you should consider. Here are some tips to help you provide effective advice to your manager:
1. Be Empathetic: When writing a letter to an irate customer, it is essential to show empathy. Your letter should convey that you understand the customer’s frustration and that you are taking their complaint seriously. It is important to begin your letter with an apology.
2. Use Positive Language Using positive language is essential when composing a letter to an irate customer. The tone of your letter should be positive and should convey a message of hope and optimism. Instead of using negative language, use positive words and phrases to convey your message.
3. Keep It Professional: It is essential to keep your letter professional. Your letter should be clear, concise, and well-structured. It should be easy to read and should be free of grammatical and spelling errors. Your letter should also be written in a respectful tone.
4. Provide a Solution: When writing a letter to an irate customer, it is important to provide a solution. Your letter should outline the steps that you will take to resolve the customer’s issue. Your solution should be clear and actionable, and it should be communicated in a positive and respectful tone.
5. Follow Up: After sending your letter, it is essential to follow up with the customer. Following up shows that you care about their concerns and that you are committed to resolving their issue. It is also an opportunity to make sure that the customer is satisfied with the solution that you provided.
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