Answer:
Expenses
Explanation:
An expense is the cost of an asset used in order to generate revenue, therefore, to create sales (the central operation of a company). This cost is not a monetary measure because an expense is when an asset is used up.
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Maarvel Co. has 31,000 shares of common stock outstanding on December 31, 2018. The Paid-in Capital in Excess of Par account for the Common Stock has a $150,000 balance on December 31, 2018. Maarvel Co. also has some Treasury Stock on December 31, 2018. The Total stockholders' equity on December 31, 2018 applicable to the shares of common stock is $393,700. The the par value per common share is $10. Calculate Maarvel Co.'s Book Value per share on December 31, 2018.
a. $48 38
b. $1.80
c. $0.08
d. $10.0
Answer:
$12.7 per share
Explanation:
The formula and the computation of the book value per share are shown below:
Book value per share = (Total equity) ÷ (outstanding number of shares)
= ($393,700) ÷ (31,000 shares)
= $12.7 per share
Simply we divided the total equity by the outstanding number of shares to get the book value per share
A firm operating in a market economy has a strong incentive to be productively efficient and allocatively efficient because the former enables it to minimize production costswhile the latter ensures it of ample revenues.If a firm is productively and allocativelyefficient,it earns a profit; if it is not, it suffers a loss.Would you expect the new and better machinery and equipment to be adopted more rapidly in amarket economy or in a centrally planned economy?
Answer:
Market Economy
Explanation:
A firm operating in a market economy has a strong incentive to be productively efficient and allocatively efficient. this makes firms more likely to adopt new technology. whereas centrally planned economy are less competitive and less efficient. the competition in the market economy makes is more probable for it to adopt new technology
In an informed and voluntary exchange,__________.a. both parties receive something they value more than what they gave up.b. both parties place an equal value on what they received and what they gave up.c. neither party can gain more than the other.d. one trader can gain only at the expense of the other.
Answer:
a. both parties receive something they value more than what they gave up
Explanation:
Voluntary exchange is a practice where buyers and sellers freely and willingly partake in transactions, and these transactions are made in win-win methodology which implies that both parties are better off after the exchange than before.
Therefore in an informed and voluntary exchange both parties receive something they value more than what they gave up.
____________ is an economy in which the government- ideally- has nothing to say about what
Answer:
market economy
Explanation:
A market economy refers to the system in which supply and demand regulations direct commodity and service development. Supply involves natural, capital and labor. Demand involves customer, corporation, and government procurement.
In other terms, a market economy refers to the economic system in which innovation, manufacture and distribution choices are driven by the market mechanisms generated by market forces powers. The main feature of a market economy is really the presence of variable markets which play a leading role in allocating capital and output factors.
Which estimating technique uses a statistical relationship to calculate cost or duration based on historical data and other project parameters?Selected Answer:a. parametric estimatingAnswers:a. parametric estimatingb. analogous estimatingc. grass roots estimatingd. empirical estimating
Answer:
parametric estimating
Explanation:
parametric estimating - it is referred to as a technique that is induced to calculate the exact cost and duration for any project. It defined the relationship between the variables (published data) needed to estimate the cost and duration. it determined the total number of units that need to be required and unit cost for a particular project. The main application of this technique is seen in filed like engineering, life science, etc.
The continuous review system is used to manage inventory associated with independent demand, while the periodic review system is used to manage inventory associated with dependent demand. True or false?
Answer:
FALSE
Explanation.
Periodic inventory is a practice of inventory count that takes stock every week or month while 'continuous inventory' constantly tracks inventory levels mostly through a computerized method so that stock levels. are always known.
It is not very correct that the continuous review system is used to manage inventory associated with independent demand, while the periodic review system is used to manage inventory associated with dependent demand because most often, it is the nature of inventory that determines the method to be used and not the type of demand
Continuous inventory keeps a constant track of quantities; and is more appropriate for small unit items that could be too numerous for physical count because they are bought in large quantities. e.g. supermarkets
Periodic inventory has to be done with big items that are not too numerous like automobiles, televisions, houses and sets of furniture.
Final answer:
The statement is false as both the continuous and periodic review systems are used to manage independent demand inventory, while dependent demand inventory typically uses MRP or JIT systems.
Explanation:
The statement given is false. The continuous review system (or perpetual system) and the periodic review system are both used for managing independent demand inventory. The difference between them lies in how often inventory levels are reviewed and orders are placed. The continuous review system involves monitoring inventory levels continuously, with orders placed whenever stock falls below a certain point, called the reorder point. In contrast, the periodic review system reviews inventory at fixed intervals and orders enough inventory to reach a target level.
For dependent demand items—those items for which demand is tied to the production of another item—systems such as Materials Requirements Planning (MRP) or Just-in-Time (JIT) inventory management are commonly used.
If you are married filing jointly with your spouse and your income is $65,225.00, what is the amount of federal income tax you owe?
Answer:
The answer is $7,827.00
Explanation:
The 2019-2020 federal income tax brackets varies from 10%, 12% , 22%, 24%, 32%, 35% and 37%. For a married filing jointly couple or a qualifying widow(er), with an income of $65,225.00, the tax bracket allocated will be 12% ($19,401 - $78,950) due for April 15, 2020.
Partners Gary and Elaine have agreed to share profits and 1osses in an 80:20 ratio respectively, after Gary is allowed a salary allowance of $30,000 and Elaine is allowed a salary allowance of $15,000. If the partnership had net income of $30,000 for 2017 Elaine's share of the income would be A) 15,000 B) 12,000 C)18, 000 D) 3,000 E) None of the above
To calculate Elaine's share of income in the partnership with Gary, deduct their combined allowances from the net income, which results in having no remaining profit for the 80:20 sharing ratio. Hence, Elaine's share is only her allowance, which equates to $15,000. The correct option is a.
The subject of this question is a business scenario which involves the calculation of partners' shares in the profit of a partnership. Gary and Elaine have agreed to a specific profit sharing ratio and allowance structure for their partnership. To determine Elaine's share for 2017, we need to take into account the agreed allowances and the profit sharing ratio.
Step-by-step solution:
First, subtract the total allowance provided to Gary and Elaine from the net income: $30,000 - ($30,000 + $15,000) = -$15,000 (a loss).
Since the allowances exceed the net income, there's no remaining profit to share according to the 80:20 ratio.
Therefore, Elaine's share of the income is only her allowance of $15,000.
The correct answer is A) $15,000.
In a fuel economy study, each of 3 race cars is tested using 5 different brands of gasoline at 7 test sites located in different regions of the country. If 2 drivers are used in the study, and test runs are made once under each distinct set of conditions, how many test runs are needed?
Answer:
210
Explanation:
The number of race cars = N₁ = 3The number of gasoline brands = N₂ = 5The number of test sites = N₃ = 7The number of drivers that participated = N₄ = 2This study must include each N₁, and it has to be done at each N₃, using each N₂, while carried out by each N₄ ⇒ that means that the total number of possibilities:
N₁ x N₃ x N₂ x N₄ = 3 x 7 x 5 x 2 = 210
The total number of test runs is 210.
The total number of test runs needed for the fuel economy study is 210, considering 3 cars, 5 gas brands, 7 test sites, and 2 drivers.The total number of test runs needed for the fuel economy study is 210, considering 3 cars, 5 gas brands, 7 test sites, and 2 drivers.
To calculate the total number of test runs needed for the fuel economy study involving 3 race cars, 5 gasoline brands, 7 test sites, and 2 drivers, you can use the concept of combinations.
First, determine how many distinct sets of conditions are involved in the study:
1. Race cars: 3 different cars
2. Gasoline brands: 5 different brands
3. Test sites: 7 different sites
4. Drivers: 2 drivers
Now, calculate the total number of test runs:
Total test runs = (Number of race cars) x (Number of gasoline brands) x (Number of test sites) x (Number of drivers)
Total test runs = 3 x 5 x 7 x 2 = 210 test runs
So, 210 test runs are needed for the fuel economy study when considering each distinct set of conditions. Each race car is tested with each gasoline brand at each test site with each driver, resulting in a total of 210 test runs to complete the study.
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The accounting concept Consistent Reporting is being applied when a word processing service business reports revenue per page one year and revenue per hour the next year.
A) True
B) False
The concept of Consistent Reporting requires that the same accounting methods are used from period to period. Changing the method of reporting revenue (from per page to per hour) violates this principle, making the statement False.
The principle of Consistent Reporting in accounting states that a business should use the same accounting methods and principles from period to period. This consistency ensures that financial statements are comparable across periods and helps stakeholders understand business performance over time. So, reporting revenue per page one year and revenue per hour the next year is not an application of the Consistent Reporting principle. Therefore, the correct answer to whether the accounting concept of Consistent Reporting is being applied is False.
The set of activities that relate to the creation of goods and services through the transformation of inputs to outputs is referred to as ________
Answer:
Operations management
Explanation:
Operations management is the term which is defined as the administration of the practices of the business in order to create the highest level of the efficiency which is possible within the business.
It is related to the converting of the raw materials and labor into the services and the goods for the business.
Therefore, the operations management is the one which dealt with the set of the activities which relate to the creation of the goods and the services by the transformation of the inputs to output.
The set of activities that relate to the creation of goods and services through the transformation of inputs to outputs is referred to as production.
Production is the process by which a firm uses economic inputs such as labor, capital, and raw materials to produce outputs, such as goods or services. For example, in pizza making, the pizzaiolo (pizza maker) transforms inputs like flour, water, yeast, tomatoes, and spices into a finished product (the pizza) through a series of steps, including preparing the dough, creating sauce, assembling toppings, and baking the pizza.
Production is essential in economics as it involves all activities that transform various inputs into valuable goods and services that people consume.
How much higher or lower will net operating income be for the year if the underapplied or overapplied overhead is allocated rather than closed directly to cost of goods sold? (?
Answer:
Higher by 39,000 dollars
Explanation:
NOTE YOU POSTED THE QUESTION BUT NOT THE PROBLEM INTRODUCTION.
Ludacris Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies to manufacture overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $900,000 of total manufacturing overhead for an estimated activity level of 75,000 machine- hours.
During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year:
Machine-hours 60,000
Manufacturing overhead cost $ 850,000
Inventories at year-end:
Raw materials $ 30,000
Work in process (includes overhead applied of $36,000) $100,000
Finished goods (includes overhead applied of $180,000) $500,000
Cost of goods sold (includes overhead applied of $504,000) 1,400,000
The company applied overhead for:
36,000 + 180,000 + 504,000 = 720,000
The actual overhead cost where 850,000
Thus, there was 130,000 dollar of underapplied overhead.
We do cross multiply to know the amount it should be allocate to cost COGS
504,000/720,000 x 130,000 = 91,000
This means we should increase COGS by 91,000 if we allcoate the underapplied overhead.
If we directly post into COGS then it will increase by 130,000
The difference of 39,000 dollars will mean a lower COGS thus, a higher operating income as a portion of the underapplied overhead is distribute among inventory and work in process.
If underapplied or overapplied overhead is allocated rather than closed directly to cost of goods sold, it will impact the net operating income.
Explanation:If underapplied or overapplied overhead is allocated rather than closed directly to cost of goods sold, the net operating income will be affected. To calculate the impact on net operating income, follow these steps:
Determine the amount of underapplied or overapplied overhead.Determine the impact on net operating income by allocating the underapplied or overapplied overhead to cost of goods sold.Calculate the difference in net operating income between allocating the overhead and closing it directly to cost of goods sold.Learn more about Allocation of overhead here:https://brainly.com/question/32005738
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Performance Element: Acquire foundational knowledge of business laws and regulations to
understand their nature and scope.
Performance Indicators:
Discuss the nature of law and sources of law in the United States (SP)
Describe the United States' judicial system (SP)
Describe methods used to protect intellectual property (SP)
Describe legal issues affecting businesses (SP)
Answer:
1.answer:Rules that guide the way people act or rules that prevent people from doing certain things that is against the law
2. The Judicial branch interprets the laws of the land.
3. Ways to protect your intellectual property include: copyrights,patent,trademark,trade secret, and licensing. Intellectual property is creative work created by you.
4. Lazy employees,
discrimination at the place of work, harassment, immigration audits, copy rights and patent issues, Unstable government policies. High tax rate.
Explanation:
Discuss the nature of law and sources of law in the United States (SP
answer:Rules that guide the way people act or rules that prevent people from doing certain things that is against the law .
Describe the United States' judicial system (SP)
answer:The Judicial branch interprets the laws of the land.
Describe methods used to protect intellectual property (SP)
Ways to protect your intellectual property include: copyrights,patent,trademark,trade secret, and licensing. Intellectual property is creative work created by you.
Describe legal issues affecting businesses (SP)
Lazy employees,
discrimination at the place of work, harassment, immigration audits, copy rights and patent issues, Unstable government policies. High tax rate.
Answer:
cExplanation:
i got it right on edgIndicate whether the following items would appear on the income statement, balance sheet, or owner’s equity statement. (a) Notes payable (b) Advertising expense (c) Owner’s capital (d) Cash (e) Service revenue
Answer:
Explanation:
All revenues generated and expenses incurred during a given period are recorded in the income statement.
The Statement of equity of the stockholder includes the common stock and the retained earnings which could be used to assess the ending balance.
The balance sheet records the assets and liabilities of the organization
So, the categorization is shown below:
a) Notes payable = Balance sheet. It can be current or long term
(b) Advertising expense = Income statement
(c) Owner’s capital = owner’s equity statement
(d) Cash = Balance sheet as a current asset
(e) Service revenue = Income statement
a set of economic and political relationships that organizes food production from the development of seed to marketing the products is known as
Answer:
Agribusiness
Explanation:
Agricultural business also known as agribusiness is a set of business related activities that deals with farm establishment, management, processing of agricultural product and marketing of agricultural products, it also include production and marketing of farm inputs.
Agripreneurs always operate their agribusiness on a large scale and often make use of technology which allows large scale production.
Answer:
B
Explanation:
Yes
Sadie is looking over the expenses and revenue of the company in order to prepare the company’s income statement. After this is completed, she will likely look at all other transactions so that other reports can be completed as well. What is this an example of?
Answer:
To prepared statement of Retained earning, items like dividend paid must be considered.
To prepare Balance Sheet, Assets (Non-current & current assets), Liabilities (Non-current & current liabilities) and Common stock items must be considered.
To prepare cash flow statement, changes in operating, financing and investment activities must be adjusted for.
Explanation:
The FASB has the authority to establish accounting and financial reporting standards for which of the following? a) both answers are true b) neither answer is true c) private not-for-profits d) commercial businesses
Answer:
c) private not-for-profits
Explanation:
The FASB is an independent non-profit organization whose responsibility involves establishing and implementing accounting and reporting standards in the US. The Generally Accepted Accounting Principles (GAAP) guides FASB or Financial Accounting and Standards Board in fulfilling its mandate.
The FASB has the authority to interpret the GAAP for all organizations, including private and public companies, as well as profit and non-profit institutions. FASB set accounting rules and regulations to ensure standards and uniformity in the accounting industry.
Broker Jill has an agreement with that says Jill will receive compensation if anyone except Alice sells Alice's home. What kind of agreement is this? A. Exclusive agency B. Net listing. C. Exclusive right to sell. D. Open listing
Answer:
A. Exclusive Agency
Explanation:
Listing Agreement is an essential contract in the real estate business especially when listing a property. It is a contract that is legally binding by creating a relationship between a broker and the principal in the real estate transaction. The principal is the client for instance who wants to list and sell a property and the broker is the agent who sells the property.
Exclusive agency listing represents a legally binding agreeement between the broker and the princpal/seller where an agreement is binding that the agent is to be paid a commission if the listed propery is to be sold through the efforts the efforts of any except the effrots of the principal or the seller.
In the agreement between Broker Jill and Alice, if anyone should assist Alice sell the property then Broker Jill is to be paid a commission, however, if Alice sells the property through personal efforts then Broker Jill is not entitled to any commission.
Erin collides her 940-kg Mazda Miata into the rear of a 2460-kg pick-up truck which was at rest at the light on Lake Avenue. The Mazda pre-collision speed was 12.5 m/s. Determine the post-collision speed of the two entangled cars as they slide across the ice.
Answer:
3.46 m/s
Explanation:
This is actually a Physics question and not a Business question.
According to the property of conservation of momentum, the speed of the Mazda before the collision multiplied by the mass of the Mazda must equal the speed after the collision multiplied by the mass of both cars:
[tex]m_1v_1=(m_1+m_2)*v_2\\940*12.5=(940+2460)*v_2\\v_2= 3.46\ m/s[/tex]
The post-collision speed of the two entangled cars is 3.46 m/s.
Resource leveling is a network scheduling technique that seeks to assign nearly equivalent work units to each member of the project team True False
Answer:
False
Explanation:
Resource leveling in project management is a technique used to ensure that over-allocation of resource or conflicts as a result of over-allocation does not occur.
Cheers
The web-based human resource systems (eHR) that many organizations have implemented have not really helped to effectively communicate human resource programs.True/false
Explanation:
The E-HR system has not helped much to communicate effectively in human resource programs. I am listing down the disadvantages of it.
The main disadvantage is that confidentiality is lost The cost of designing E-HR is more and it is definitely a challenging one for the start up or low-budget organization.Security is one of the major issueThe organization use the software toa) convey HR details
b) induce individuals’ attitudes and behaviors.
Inconsistency with practice and useYou have to decide between going on a cruise with friends and going on a service trip with Alternative Spring Break. You could also work over the break and earn some extra money, but this would be less valuable to you than either experience. If you choose the cruise, what is your opportunity cost?
Choose one:
A. All of the above
B. The money you could make working over spring break
C. The dollar amount of the cruise
D. Alternative Spring Break
Answer:
Alternative Spring Break
Explanation:
Opportunity Cost
Opportunity cost is described as the next best alternative to an action chosen. And it can be described as that cost an individual incurs for foregoing the potential benefits that could be enjoyed if the alternative to a choice is taken. The opportunity cost is the cost of choosing one activity over another activity that is also as good.
In the case of going on the cruise, the opportunity cost is the entire package the Alternative Spring Break brings. Since, it has been decided that the cruise will be embarked upon the entire Alternative Spring Break from the experience to the work and potential earnings represent the opportunity cost.
The opportunity cost of choosing the cruise over the other options is the Alternative Spring Break, as this is deemed the most desirable and valuable alternative that is given up by deciding to go on the cruise.
The concept being discussed is opportunity cost, which is a fundamental aspect of economics. Opportunity cost refers to the value of the next best alternative that is forgone when making a decision to choose one option over another. In the scenario where a student must decide between going on a cruise with friends or participating in Alternative Spring Break, and there's also the option to work over the break, the opportunity cost of choosing the cruise would not be the money spent on the cruise itself, nor the money that could have been earned by working. Instead, it's the experience and benefits they would have gained from the Alternative Spring Break, assuming that is the most valuable alternative given up.
In this specific example provided in the question, if the cruise is chosen, the correct answer is D. Alternative Spring Break, because this is the most desirable alternative that the student won't experience due to their decision to go on the cruise.
The principle that studies the relationships between participants in the marketplace, such as buyers and sellers or landlords and tenants, is the principle of______________--
Answer:
The principle of Competition
Explanation:
The principle that studies the relationships between participants in the marketplace, such as buyers and sellers or landlords and tenants, is the principle of Competition
In response to a change in the price of good X from $10 to $6, the quantity demanded of good X increases from 100 to 150 units. What is the price elasticity of demand for good X? (Use the midpoint formula and express as a decimal - e.g. 0.2)
Answer:
- 0.80
Explanation:
Price elasticity of demand describes the extent to which the quantity demanded of good X changes as result of a change in its own price.
The midpoint formula for price elasticity of demand is presented and used as follows:
Percentage change in quantity = %ΔQ = [Q2 - Q1] / [(Q2 + Q1) ÷ 2] × 100
Percentage change in quantity = %ΔP = [P2 - P1] / [(P2 + P1) ÷ 2] × 100
Midpoint price elasticity of demand = %ΔQ / %ΔP
Where:
Q2 = New quantity of good X = 150
Q1 = Initial quantity of good X = 100
P2 = New price of good X = $6
P1 = Initial price of good X = $10
Therefore,
Percentage change in quantity = %ΔQ = [150 - 100] / [(150 + 100) ÷ 2] × 100
= [50/(250 ÷ 2)] × 100
= (50/125) × 100
= 40.00%
Percentage change in quantity = %ΔP = [$6 - $10] / [($6 + $10) ÷ 2] × 100
= [-$4/($16 ÷ $2)] × 100
= (-$4/$8) × 100
= - 50.00%
Price elasticity of demand = 40% / 50% = - 0.80
The elasticity of demand of -0.80 less than 1. That indicate that the quantity demand is inelastic. That is the change in the degree of change in the quantity demanded of good X is lower than the degree of change in its price.
The city of Mesa has developed a street improvement plan that will add lanes to one of the major north/south corridors. Because of the addition of the lanes, businesses along the corridor will lose frontage. However, none of the businesses will be required to move. Which of the following statements is true?
a.The city need not compensate the businesses since they will still remain intact.
b.The city must compensate the businesses for taking.
c.The city cannot take land for this purpose.
d.The city can attach "0" value to the frontage.
A(n) ____ is a category of object, person, or other entity that poses a potential risk of loss to an asset.
Answer:
Hazard
Explanation:
A(n) Hazard is a category of object, person, or other entity that poses a potential risk of loss to an asset.
By definition, a hazard is any object or entity that is potentially harmful persons, property, or place.
Hazards could be referred to as unsafe condition(s) that if not eradicated could material and cause damage to assets in the production floor or any place
If Company XYZ sells $1,000,000 in assets to pay down $1,000,000 in debt, what impact would this have on the company’s debt to total assets ratio?A) It would increaseB) It would decreaseC) It would stay the sameD) We don’t have enough information to decide
Answer:
B) It would decrease
Explanation:
Suppose that Company XYZ assets before the sale of assets were $2,000,000 and is total debts were $1,500,000. The debt to asset ratio before the sale of assets were:
Debt/Asset ratio=$1,500,000/$2,000,000=0.75
Now the Company XYZ has decided to sell the the assets worth $1,000,000 to pay Debts so the assets now will become $1,000,0000 while the Debts now will become $500,000 and accordingly the debt to asset ratio will be calculated as follows:
Debt/Asset ratio=$500,000/1,000,000=0.50
So based on the above discussion, the answer shall be B) It would decrease
Exotic crafts inc., a handicraft manufacturing company, has an established marketing department responsible for various important functions. The marketing department is most likely engaged in _.
Answer:
the main function of Exotic Craft's marketing department is to ensure that the firm's products reach the hands of satisfied clients.
Explanation:
The marketing department plays a very important double role; it must ensure that our customers' demands are satisfied and that our total sales and market share continuously increase. The marketing department is the face of any company and it must represent the company in the best possible manner.
A manufacturing company is termed as the company that processes the raw materials and then produces the final product for the final consumption of the consumers or the customers.
The manufacturing companies or firms have the option to choose whether they can avail their products to dealers, or wholesalers, or any of the other manufacturers.
The correct answer is----The marketing department is most likely engaged in the maximum stisfaction of the customers in the market.
The marketing department does have a significant dual role to perform:
It must guarantee that our customers' needs are met while also ensuring that our overall sales and market share continue to grow. The marketing department is a firm's public face, and it must depict the organization in positive light possible.To know more about the manufacturing companies, refer to the link below:
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Asarta Inc. is polluting into a nearby fishing stream; doing so benefits them $40,000 a year. The fishermen are unhappy as their trout are dying off. Typically, the fishermen can catch trout and sell it to a local market where they can earn about $8,000 a year. Currently, Asarta Inc. has the rights to use the stream as they see fit. Which of the following is an optimal solution according to the Coase Theorem?
a. Asarta Inc. could pay the fishermen $8,500 and keep polluting
b. Asarta Inc. could pay the fishermen $7,000 and keep polluting
c. There is no optimal solution given the current property rights
d. The fishermen cout The fishermen could pay Asarta Inc. $4,000 to stop them
Answer:
a. Asarta Inc. could pay the fishermen $8,500 and keep polluting
Explanation:
The fishermen sell the fish for $8,000 a year at local market.
Due to pollution emitted by company into stream, their catch is dwindling and also their income.
The company benefits from usage of stream to the tune of $4,000 a year. In such scenario, if company compensates the fishermen for any amount between $8,000 and $40,000 then, in that case, optimal solution to the problem can be achieved in absence of any other transaction cost as per the Coase Theorem.
Therefore, The Asarta Inc. could pay the fishermen $8,500 and keep polluting.
Final answer:
According to the Coase Theorem, the optimal solution in the given scenario is for Asarta Inc. to compensate the fishermen $8,500, which is greater than their usual earnings from fishing, while still being less than Asarta's benefit from polluting.
Explanation:
The Coase Theorem suggests that if property rights are well-defined and transaction costs are low, parties will negotiate to reach an efficient outcome regardless of the initial allocation of rights. In the scenario with Asarta Inc. and the fishermen, the theorem would suggest negotiating a solution in which resources are used in the way that maximizes total value.
Given that Asarta Inc. has the rights to the stream, the optimal solution according to the Coase Theorem would likely be the one in which Asarta compensates the fishermen for the lost trout earnings but does so at a cost lower than the benefit they receive from polluting. So, option (a) where Asarta Inc. could pay the fishermen $8,500 and keep polluting is the optimal solution. This is because the fishermen gain $500 more than their usual earnings, and Asarta Inc. still benefits since the payment is less than their $40,000 benefit from using the stream.
However, it's important to note that real-world applications of the Coase Theorem may be more complex due to externalities, legal constraints, or other market failures.
Clip Joint company is ready to sell its bonds. Which of the following financial questions is most relevant to the issue of the bonds and that investors will most likely want answered before they purchased the bonds?
a) how many product lines did clip joint have last year?
b) what will be Clip Joint company's cost to start operations in another city?
c) How much debt does clip joint company already have?
Answer:
(C) How much debt does clip joint company already have?
Explanation:
Bond investors are more likely to ask a bond issuer (the company issuing the bonds) its current level of debt before investing. This information is important as it informs the order that the current bond holders will occupy in a repayment hierarchy if the company was unable to pay back the debt and it needs to be liquidated.