Bridget, a single taxpayer, sold a building used in her business during the current year. The realized gain on the sale was $135,000. Of this amount, $95,000 is unrecaptured Section 1250 gain. How will Bridget be taxed on this gain assuming her marginal tax rate is 32 percent and her LTCG rate is 15%?
Answers
Answer:
$95,000 will be taxed at 25% and $40,000 will be taxed at 15%
Explanation:
(See attachment below for Long-term capital gains tax rate)
Depending on income and marital status, the long-term capital gains tax rates are 0%, 15% and 20% respectively.
Bridget is single and her realised gain is $135,000
Out of which $95,000 is unrecaptured Section 1250 gain.
The capital gain attracts 15%
(See attachment below)
The capital gain is calculated as
$135,000 - $95,000 = $40,000
The $95,000 will be taxed at 25% under the unrecaptured Section 1250 gain.
Related Questions
squash patch currently has 120 pounds of butternut squash. For each additional day in the patch, the amount of butternut squash increases by 6 pounds. If the price of butternut squash is currently 80 cents per pound, but decreases by 2 cents each day, how long should the butternut squash grow to maximize the profit
Answers
Answer:
10
Explanation:
To maximize the profit, the butternut squash should grow for 370 days.
Explanation:To maximize the profit, we need to determine the point at which the marginal revenue equals the marginal cost. The marginal revenue is the price per pound, which is 80 cents, and the marginal cost is the decrease in price per pound, which is 2 cents. The marginal cost is also the rate at which the butternut squash increases by 6 pounds. So, we can set up the equation 80 - 0.02x = 6, where x is the number of days the squash grows. Solving for x, we find x = 370.
Answer:The butternut squash should grow for 370 days to maximize the profit.
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Inflation is often measured by evaluating chances in the cost of a fixed basket of goods and services. This method ____________ inflation because it does not account for changes in spending patterns that result from relative price changes. overestimates underestimates This problem in known as __________.
Answers
Inflation is often measured by evaluating chances in the cost of a fixed basket of goods and services. This method overestimates inflation because it does not account for changes in spending patterns that result from relative price changes
Explanation:
Most analysts agree that inflation indexes continue to overestimate the actual rise in living costs. This means that analysts assume the real cost of living has generally risen by less than 3% while the inflation rate is reported as 3%.
It means inflation overestimates the real rise in living prices because the customer is not better off when the new goods are launched.
Example: Assume whether you have $100,000 to invest on the Amazon marketplace of 2015 or the genuinely low cost Sears Collection, 1963. How are you going to pick? In 1963 costs were much smaller, and you could buy a lot of things, but you'd not like a lot of low quality products. So even if the collection for 2015 is so much more expensive, a greater consistency compensates for part of this issue.
A ballplayer became ill soon after consuming sunflower seeds marketed by a farm products company. The package of seeds was inspected and foreign matter was discovered on the seeds. Of the ballplayer brings an action against the farm products company on the basis of strict tort liability, what would be most helpful for the company to avoid liability?
Answers
Options:
A The foreign matter on the seeds was a rare mold that could not be detected by tests commonly used for establishing that sunflower seeds are safe for human consumption.
B The seeds were sold in their natural state, and had not been manufactured or processed by the farm products company in any way.
C In answer to an interrogatory, the ballplayer has acknowledged that he has no evidence that his illness was caused by the foreign matter on the seeds.
D Although marketed under the label of the farm products company, the seeds had been collected and packaged for distribution by another company and any foreign matter on the seeds was the other company’s fault.
Answer:
B) The seeds were sold in their natural state, and had not been manufactured or processed by the farm products company in any way.
Explanation:
Farmers that sell their products in their natural state, without any type of processing or manufacturing, are less liable for any foreign objects found with their products. For example, a farmer that sells con is not liable if a worm is found in the ear of the corn. The key here is what represents processing or manufacturing. This varies a lot depending on the state and even the county or town.
Some states consider packaged food, as processed even if they were just put in a bag. Other states require actual processing and the food being labeled as ready to eat. This is based on the consumer expectations test. For example, can a consumer expect to find a worm in unprocessed corn, probably yes, it is something natural. But should a consumer expect to find a pebble in a can of peaches, certainly not.
The point is that if the producer didn't process the food, he/she is not liable for negligence, but again the definition of processed food varies form place to place. If the company can prove that they sell unprocessed sunflower seeds, then consumers should expect to find foreign objects on them, e.g. dirt, tiny rocks and even some small insects. Those are things that happen naturally, and are eliminated through food processing.
Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $58. The value of the CPI in 2016 was
Answers
Answer:
$111.53
Explanation:
CPI is a statistic applied to measure the average cost of a basket of usually-used goods and services in a period relative to some base period.
Consumer Price Index (CPI) = [tex]\frac{Current Period Price of the Basket}{Base Period Price of the Basket} \times100[/tex]
= [tex]\frac{58}{52} \times100 = 111.53[/tex]
Therefore, The value of the CPI in 2016 was $111.53 taking 2014 as base year.
To increase the sales of low-involvement products, marketing managers can: Group of answer choices focus on the package design of the products. promote the products extensively to the target market. design advertisements with highly emotional messages. adopt strategies used for marketing high-involvement products.
Answers
Answer:
focus on the package design of the products.
Explanation:
Low involvement products are by definition products that are purchased without having to pay much attention to the buying process. Convenience goods are usually low involvement products, and are generally low price goods that are purchased frequently, and they do not any risk to the buyer. For example, if you forget to buy Dove soap and instead you buy a Palmolive soap, nothing bad will happen to you or your property. On the other hand, if instead of buying gasoline for your car you purchase diesel, you might end up ruining your car's engine. Soap is considered a low involvement product while gasoline is not.
Since the buying decision process regarding low involvement products is fairly quick, attractive and colorful packaging usually helps to increase sales.
A _______ is a cluster of complementary products and services that are closey related in the minds of consumers but are spread across a diverse set of industries.
Answers
A meta market is a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.
Explanation:
Meta market can be defined as two or more markets that has distinct features are connected in some or the other way to a service or a product. It can be stated as an attempt to increase the sides of marketing by including all the non-profit organizations.
The term meta marketing was first coined by E.J.Kelly while discussing science of marketing and ethics issues.
Example: The meta market for domestic cleaning products includes the house cleaning service companies and the house owners.
A business ecosystem refers to a network of interlinked companies that are co-dependent and influence each other through their relationships. The smartphone industry, with its many related participants, represents such an ecosystem.
Explanation:A business ecosystem is a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries. This term represents the complexity of business relations, venture connections, and market dynamics. An example of a business ecosystem can be the smartphone industry where hardware manufacturers, network providers, software developers are all participating, different but closely related parts.
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If Delta Airlines were to significantly change its fare structure and flight schedule to enhance its competitive position in response to aggressive price cutting by Southwest Airlines, this would be an example of
72) ______
A) explicit collusion.
B) competitive dynamics.
C) a harvest strategy.
D) tacit collusion.
Answers
Answer: Option B
Explanation:
Competitive dynamics means the business organisations take actions based on the competitors in the market in order to maintain their competitiveness in the business. The businesses try to protect their competitive advantages by reacting similarly to the competitors in the market.
Explicit collusion means businesses together try to rise the market price. Harvest strategy means to reduce the market spending on the products in the market. In tactic collusion the business try to reduce the reaction of the other firms for the action taken by them.
Clem is married and is a skilled carpenter. Clem's wife, Wanda, works parttime as a substitute grade school teacher. Determine the amount of CLem's expenses that are deductible for AGI this year (if any) under the following independent circumstances:
A) Clem is self-employed and this year he incurred $525 for tools and supplies related to his job. Since neither were covered by a qualified health plan. Wanda paid health insurance premiums of $3,600 to provide coverage for herself and Clem (not through an exchange).
B) Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred $1,250 in utilities and depreciation of $780.
Answers
Answer:
$4,125 only in situation A
Explanation:
Deductions made to reach an individual’s adjusted gross income include:
1. Certain retirement plan contributions, such as individual retirement accounts (IRA), SIMPLE IRA, SEP-IRA, and qualified plans
2. Half of the self-employment tax
3. Healthcare savings account (HSA) deductions
4. Alimony paid (included in the recipient’s gross income)
5. Moving expenses (but since 2018, only if you’re active-duty military moving due to military orders)
6. Losses incurred from the sale or exchange of property
7. Early-withdrawal penalties levied by financial institutions
8. School tuition, fees, and student loan interest (exceptions and limits usually apply)
9. Jury duty pay turned over to a filer’s employer
10. Some business-related expenses incurred by performing artists, teachers, fee-basis government officials, and reservists
Therefore applying to the scenario, we see that Clem is only able to claim deductions in situation A for the total cost incurred because they are covered under categories 3 and 10 above.
A) Clem is self-employed and this year he incurred $525 for tools and supplies related to his job. Since neither were covered by a qualified health plan. Wanda paid health insurance premiums of $3,600 to provide coverage for herself and Clem (not through an exchange).
Hence, the amount of expenses that are deductible are
Tools for self employment - 525
Health Insurance premium - 3,600
TOTAL.......................................$4,125
Certain of Clem's expenses, such as self-employment expenses and health insurance premiums, may be deductible for AGI, while rental property expenses would typically reduce rental income but would not be deducted for AGI.
The determination of what expenses are deductible for adjusted gross income (AGI) can be complex and contingent on the specifics of each taxpayer's situation. In the provided scenarios:
Clem's self-employment expenses for tools and supplies directly related to his carpentry work, amounting to $525, would typically be deductible for AGI as they are ordinary and necessary expenses for carrying on the trade or business.Health insurance premiums paid by Wanda, totaling $3,600, could potentially be deductible for AGI, but this is contingent upon several factors, such as whether Clem's business earns a profit or not, and other IRS rules regarding self-employed health insurance deductions.Regarding the rental property owned by Clem and Wanda, the $1,250 in utilities and $780 in depreciation are rental expenses that are usually considered deductible from rental income received, but they would not be deducted for AGI on a personal tax return. Instead, they would reduce the net rental income reported on Schedule E.The above conclusions are based on general tax principles and may vary depending on additional facts and circumstances or changes in tax law.
One of the reasons for new-product failures is that the products a. are test marketed in locations isolated from the media. b. offer no discernible benefits compared to existing products. c. do not match their features with the competitors' products. d. are promoted continuously at regular intervals.
Answers
Answer:
b. offer no discernible benefits compared to existing products
Explanation:
One of the reasons for new-product failures is that the products offer no discernible benefits compared to existing products. Therefore customers will just continue to purchase the existing products because they know the providing company's product and trust that it will meet their expectations. In order for new products to succeed they need to provide potential customer with something new and beneficial that they cannot get elsewhere.
Center City enacts an ordinance that imposes a jail term, without a trial, on all contractors who solicit business without a city permit. A court would likely review this ordinance under the principles of:________.
a. equal protection.
b. due process.
c. free speech
d. free exercise.
Answers
Answer:
b. due process.
Explanation:
Due process -
It refers to as the legal notice , where all the legal rights of the person need to be respected by the law , is referred to as due process .
It enables to help the person from the power of law of land , as it protects the person from any harm by the government , then this law comes into action .
Hence , from the given scenario of the question ,
The correct answer is b. due process.
Consumers find it difficult to exert the political influence needed to remove trade restrictions because the costs to consumers are very small and widely dispersed, which makes it difficult for consumers to organize.a. Trueb. False
Answers
Answer:
a. True
Explanation:
The dispersion of the consumers doesn't allow them to make a significant impact in order to modify the trade restrictions.
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Watches, an online watch store, recently adopted a new enterprise resource planning (ERP) system to help keep track of the company's inventory and to deliver customers' orders on time. The company's adoption of the new ERP system reflects a change in the area of _____.
Answers
Answer:
Management Information Systems
Explanation:
Watches, an online watch store, recently adopted a new enterprise resource planning (ERP) system to help keep track of the company's inventory and to deliver customers' orders on time. The company's adoption of the new ERP system reflects a change in the area of Management Information Systems.
Companies use the knowledge of Information Systems to streamline company operations and manage various systems to better serve their clients.
Jessica verbally agrees to sell her house to Kandis, and Kandis makes a $10,000 down payment, moves in, and begins the installation of a pool in the backyard. If Jessica changes her mind seven months later and wants her house back, a court would likely find that:________.
a. Jessica may get her house back because one year has not yet passed.
b. there is no sale because the contract was not in writing.
c. Kandis may keep the house because there has been partial performance.
d. Kandis may keep the house because more than six months have passed.
Answers
Answer:
Kandice may keep the house because there has been partial performance.
Explanation:
Jessica verbally agreed to sell her house to Kandis and even collected a part payment for the agreement. So there is an enforceable contract that has been partially fulfilled when Kandi's made a down payment of $10,000.
If Jessica want to get her house back 7 months later she may not be able to do so because there has been partial performance.
Also Kandi's has made renovations in the house. This is an extra cost incurred and will be damages if Jessica insists on getting the property back
"wants to develop a new system to more accurately and more quickly detect frauduent transactions. An appropriate AI system for this task would be a(n) _______________, which can recognize and act on patterns or trends that it detects in large sets of data."
Answers
Answer:
Neural network
Explanation:
Neural networks is a series of algorithms that mimic the operations of the human brain to recognize relationships between vast amounts of data.
They are used in varieties of applications in financial services, from forecasting and marketing research to fraud detection and risk assessments.
They can recognize and act on different pattern or trends because trends their ability to mimic the operations of the human brain to recognize relationships between vast amounts of data and thus, detects data in large sets and quantity.
What is a review of successful products that takes place during the production​ process?
Answers
Answer:
Value analysis
Explanation:
The value analysis is the evaluation made by a company during the creation of a product to make sure that the specifications of it are adequate and that the cost is not higher than needed so that it can perform its functions properly at the right price. According to this, the answer is that the review of successful products that takes place during the production process is value analysis.
Bierderlack has a policy that states that more than three absences in a six-month period shall result in a suspension. Colleen, the manager, has just decided to suspend one of her shift employees for violating this policy. This is an example of:_________.
Answers
Answer:
programmed decision
Explanation:
Programmed decisions are those that are traditionally made using standard operating procedures or other well-defined methods. These are routines that deal with frequently occurring situations, such as requests for leaves of absence by employees. A programmed decision often times leads to the formulation of rules, procedures, and policies.
Hence the action of the manger is an example of a programmed decision
Colleen's decision to suspend an employee for exceeding allowed absences is an example of enforcing organizational policy and punishment in the workplace.
Colleen's decision to suspend an employee for exceeding allowed absences is an example of enforcing organizational policy .Bierderlack's policy that suspends employees after more than three absences in a six-month period demonstrates the application of organizational policy and punishment within the workplace. In this scenario, Colleen, the manager, is enforcing the company's absenteeism rules by suspending an employee who violated these guidelines. While some companies find penalizing absenteeism to be effective, others implement wellness programs to reduce unscheduled absences by keeping employees healthy.According to the income effect, when the price of automobiles rises, people buy fewer automobiles because a. the nominal amount of their paychecks is smaller. b. the purchasing power of their income is reduced. c. their demand for automobiles is very elastic. d. they substitute other forms of transportation for driving.
Answers
Answer:
b. the purchasing power of their income is reduced.
Explanation:
Income effect is defined as the change in demand of a product that is a result of change in purchasing power of an individual, there are changes in real income.
When there is price increase the number of goods an individual's income can buy is reduced, so his purchasing power reduces. He will demand less of the good.
When there is a reduction in price purchasing power increases and customer can demand for more of the good.
In this scenario the increase in price of automobiles results in reduction in purchasing power, and reduction in amount demanded.
Answer:
B. the purchasing power of their income is reduced
Explanation:
Income effect results when there's a change in the demand for commodities caused directly as a results from changes in the consumer's purchasing power due to changes in real income of prices of the commodity. When there's an increase in the price of automobiles, the purchasing power of customers reduces as income remains constant. This is because the consumers would no longer be able to purchase goods and services in their regular amount as a results of increase in the price of those goods and services or reduction in the real income.
New communications technologies such as cell phones and the Internet give companies new media for interacting with targeted consumers, but these new technologies also give consumers more control over the advertising messages they receive.
Answers
The complete question should be:
New communications technologies such as cell phones and the Internet give companies new media for interacting with targeted consumers, but these new technologies also give consumers more control over the advertising messages they receive. True or False
Answer: True.
Explanation:
New technology such as; cell phones and internet, makes it easier for businesses to interact with their target consumers as they can send adverts directly to them on their phones. On the other hand these new technologies also makes it easy for consumers to filter the kind of message they receive from advertisers.
Javier spends all his income on peanuts and chewing gum. The last dollar spent on peanuts yeilds 14 utils and the last dollar spent on chewing gum yields 6 utils. To increase total utility, Javier should spend less on peanuts and more on chewing gum?
Answers
To increase total utility, Javier should spend less on peanuts and more on chewing gum - false
Explanation:Total utility is the measure of the total level of satisfaction that is obtained as a result of consuming the available quantity of goods or services. This different fro marginal utility which is the measure of total stratification that is obtained from the consumption of an additional quantity of goods or services.
In the example given, Javier is spending his income entirely on the chewing gums and peanuts. The dollars that remains is yielding 14 utils and 6 utils in spending for peanuts and chewing gums respectively. Total utility will not get increased with the either consumption because it includes the consumption of both peanuts and also chewing gums. Thus the given statement will be false.
Herm has nickels, dimes, and quarters. The total of his nickels and dimes are worth $2.70. The total of his dimes and quarters equal $3.50. He has 47 coins. How many quarters does Herm have
Answers
Answer: 8 quarters
Explanation:
Nickels means 5 cents
Dimes means 10 cents
Quarters means 25 cents.
N and D = $2.7 = 270 dollars
Q and D = $3.5 = 350 dollars
Find the attached document for the solution.
The solution involves setting up and solving a system of equations to find the number of quarters Herm has.
To solve this problem, we can set up a system of equations based on the given information.
Let N be the number of nickels, D be the number of dimes, and Q be the number of quarters. We know that:
5N + 10D = 270 (since the nickels and dimes total $2.70)10D + 25Q = 350 (since the dimes and quarters total $3.50)N + D + Q = 47 (since there are a total of 47 coins)By solving this system of equations, we can find the values of N, D, and Q, and therefore, determine how many quarters Herm has.
A year after she assisted Interior Heating and Lighting in making changes to an employee incentive plan, Coral, an OD consultant, is visiting the company to determine if the changes were helpful. Coral will compare sales and turnover data from the last three years to the current year. Coral is in the ______ stage of the OD process.
Answers
Coral, an OD consultant, is in the Evaluation stage of the Organizational Development Process. This stage involves assessing the effectiveness of implemented interventions. She is using sales and turnover data to evaluate changes brought to an employee incentive plan a year ago.
Explanation:In the scenario you provided, Coral, an OD consultant, is in the Evaluation stage of the Organizational Development (OD) Process. At this phase, the effectiveness of interventions implemented to improve organizational performance is assessed. In this specific case, Coral is evaluating the changes brought to the company's employee incentive plan a year ago and determining whether these changes have been fruitful or not.
Just like Imani's case where her performance was tracked and evaluated over a period of time, Coral can use various indicators to measure improvements or declines in organizational performance. Some of these indicators are data related to employee turnover and company's sales over the period of time. This process helps in assessing if the training and interventions were successful and fulfilled its objectives.
A 2003 study by Arthur, Bennett, Edens, and Bell has shown that organizational training is indeed effective when outcomes are properly measured and analysed. Evaluations such as these are crucial to the progression and functioning of any organization because they allow organizations to understand their weak points and strengths.
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Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 20%. Now suppose there is a decrease in the tax rate on interest income, from 20% to 15%.
This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to ____ and the level of investment spending to ____ .
Answers
Answer:
This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to DECREASE and the level of investment spending to INCREASE.
Explanation:
Since the tax rates on savings decreased, more money will be available for saving which will increase the supply of loanable funds. When the supply of any good or services increases, its price decreases. In this case, the price of money is the interest rate.
Since the interest rate decreases, the total quantity demanded for loans will increase, increasing the level of investment spending.
Htc started as an original equipment manufacturing firm (oem) for brand-name mobile device companies. later, it started offering a line up of innovative and high-performance smartphones by acquiring one & co., a san francisco-based design firm. this strategic move of htc is known as___________.
Answers
Answer:
Forward vertical integration
Explanation:
Forward vertical integration is a type of strategic move that consists in acquiring a firm that was either a supplier, or a potential supplier.
In this case, Htc acquired a design firm that was probably part of its supply chain before (providing the design for the smartphones). In this way, htc has become more competitive because it now has merged the process of manufacturing and design under its control.
Peggy Owns A House Cleaning Service. She Built A Booking Website And Is Ready To Promote Her Services Online. She Wants Her Ads To Reach People Actively Looking For Businesses Similar To Hers. Which Google Ads Campaign Should Peggy Use To Make Sure Potential Customers Consider Her Services And Take Action By Booking House Cleanings?
1. Search
2. Video
3. Shopping
4. Display
Answers
Answer: Search
Explanation: Since Peggy intends to promote her website and to reach out to people who are actively looking for businesses similar to hers, Google Ads Search campaign should be employed to meet her potential customers who will consider her services and take action by booking house cleanings. With the search services her Ads will show up alongside other search results.
While waiting in the checkout line at Essentials, Autumn spotted a nail care kit displayed amongst the candy and batteries. She liked it and asked the cashier to add it to her bill. Which form of limited problem solving did Autumn engage in?A. Planned purchasing
B. Cross-shopping
C. Psychological problem solving
D. Impulse buying
E. Contemplation
Answers
Answer:
Psychological problem solving
Explanation:
Psychological problem solving is the process by which an individual solves problems encountered in life
Solutions to these problems solved are usually context specific or situational. It involves problem finding and problem shaping - discovery and simplification of problem.
In this scenario Autumn spotted a nail care kit displayed amongst the candy and batteries. She liked it and asked the cashier to add it to her bill. She had to identify the nail polish kit from among batteries and candy.
Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through forward integration product differentiation crowdsourcing backward integration
Answers
Answer:
Backward Integration
Explanation:
What All Needs Inc. did by producing its own Soap with label "All wash" instead of Soapsuds's product is called Backward integration.
Backward integration refers to the process of vertical integration in which a company enlarges its role to fulfill tasks that are formerly completed by businesses in the supply chain. In other words, Backward integration is when a company buys another company that supplies the products or company decide to establish a subsidiary to perform tasks of producing something it use to get from a supplier chain . Backward chain is a known competitive strategy. It can also mean buying part of the supply chain that occurs prior to the company's manufacturing process
All Needs Inc. has demonstrated its bargaining power by engaging in backward integration, which allows them to produce their own line of cleaning products, asserting greater control over their product offerings, and potentially increasing profit margins.
Explanation:Exercise of Bargaining Power and Business Strategies
In the scenario where Soapsuds Inc. demanded more shelf space from All Needs Inc., and All Needs Inc. responded by creating its own brand of cleaning agents, "All Wash," the supermarket chain has exercised its bargaining power through backward integration. Backward integration refers to a situation where a company expands its role to fulfill tasks formerly completed by businesses up the supply chain, in this case, by creating its own line of products. This move by All Needs Inc. permits them to both assert more control over their product offerings and reduce their reliance on external suppliers like Soapsuds Inc. By producing its own cleaning agents, All Needs Inc. can potentially increase its profit margins and strengthen its market position through product differentiation, which is the process of distinguishing a product from others in the market.
There are numerous examples in the business environment where companies use backward integration. Supermarkets developing their own store brands or technology firms manufacturing their own components are instances of businesses exerting their power as buyers to gain a competitive edge. This integration can have broader implications within an oligopolistic market structure where a few firms, such as those in the French detergent market described in the provided reference, dominate. Vertical integration, like the action taken by All Needs Inc., allows companies to fortify their market position without engaging in potentially illegal activities like price fixing or anti-competitive practices that can occur in oligopolies.
The capital asset pricing theory is based on the premise that: a. only unsystematic variability in cash flows is relevant. b. only systematic variability in cash flows is relevant. c. both systematic and unsystematic variability in cash flows are relevant. d. neither systematic nor unsystematic variability in cash flows is relevant.
Answers
Answer:
Option B Only systematic variability in cash flows is relevant
Explanation:
The reason is that CAPM assumes that all the investors have well diversified investments which completely eliminates the unsystematic risk. This means that the firm will only compensate for the business systematic risk which is relevant. So the right answer here which talks about only the systematic risk is option B
The capital asset pricing theory is based on the premise that only systematic variability in cash flows is relevant. This risk cannot be eliminated through diversification.
Explanation:The Capital Asset Pricing Theory is primarily built on the premise that only systematic variability in cash flows is relevant. This theory was developed to explain how market risks affect the expected return of an investment and therefore the price of a security. The systematic variability also known as market risk, is a risk that cannot be eliminated through diversification, while the unsystematic risk is unique to individual assets and can be reduced through diversification. The theory asserts it's the systematic risk that investors should be concerned with.
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If a surplus exists in a market we know that the actual price is
Answers
Answer:
The price is above equilibrium; quantity supplied is more than quantity demanded.
Explanation:
A surplus in the market means the actual price of a product is above the equilibrium point. The quantity supplied is much more than the quantity demanded. A considerable population of buyers will not afford the product due to its high price.
Higher prices will cause the demand for goods to decrease in the market. When there is a surplus in the market, sellers will tend to reduce the price hence increasing the quantity demanded. This will decrease the quantity supplied. The buyers will now afford the product.
A surplus in a market indicates that the actual price is above the equilibrium price, causing producers to supply more of the good than consumers are willing to purchase.
Explanation:In an economic context, if a surplus exists in a market, this suggests that the actual price of a specific good or service is above the equilibrium price. The equilibrium price, also known as the market-clearing price, is the price at which the quantity demanded by consumers equals the quantity supplied by producers. When the actual price is higher than this equilibrium level, producers are willing to supply more of the good than consumers are willing to buy, resulting in a surplus.
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A monopolistically competitive market consists of __________ seller(s), an oligopoly consists of __________ seller(s), and a monopoly consists of one seller.
Answers
Answer:
very many, few
Explanation:
The monopolistic competition consists of many sellers offering differentiated products. There are minimal barriers to entry or exit of the industry. Advertising and marketing of products are high due to increased competition. No single firm has the power to set prices.
An oligopoly consists of few but large firms dominating a big market. There could be other smaller firms with a small percentage of the market share. Firms in an oligopoly market mat collaborate to look out new entrants. This market is characterized by heavy advertising, with firms offering either homogeneous or differentiated products. The objective of each firm is to maximize profits, which makes all the firm to set high prices.
Which of the examples provides the best evidence that inflation has occurred? A person whose salary has decreased is able to purchase more goods and services. A person whose salary has increased is able to purchase fewer goods and services. A person whose salary has increased is able to purchase more goods and services. A person whose salary has remained the same
Answers
Answer:
A person whose salary has increased is able to purchase fewer goods and services.
Explanation:
Inflation is characterized by an increase in the prices of goods and services along with a reduction in the purchasing power.
Real income of an individual refers to the income which has been adjusted for the effects of inflation. Whereas, Nominal income refers to the income which is before any such adjustment for inflation.
In the given case, the nominal income has increased i.e if we ignore inflation. But while considering inflation, the real income of the individual has reduced evidenced by the fact that the purchasing power has reduced.
Inflation is evident when even with an increase in salary, a person is able to purchase fewer goods and services. This is due to the fact that the value of each dollar decreases during inflation.
Explanation:The best evidence that inflation has occurred comes from the example where 'a person whose salary has increased is able to purchase fewer goods and services.' Inflation is defined as a sustained increase in the general level of prices for goods and services. When inflation happens, every dollar you own buys a smaller percentage of a good or service. Even if a person's salary increases, they could end up being able to purchase fewer goods and services if the rate of inflation exceeds the rate of their wage increase.
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