Answer:
The concept of debt limit explains the restrictive power of legislative to impose a limit on the amount of debt an executive can borrow for the state. Debt limit is the authorized maximum amount of debt that government can borrow as legally specified by the legislative. The debt limit is usually expressed as a percentage of nation`s GDP.
The major reason why debt limit is put in place to make sure that government does not place uneconomical future debt burden on the citizens.
For relationship between debt limit and debt margin, the borrowing power of government is measured through the comparison of debt limit with debt margin. Debt margin shows the difference between the debt limit and amount that the government has actual debt.
For example, a government has a debt limit of 25% of its GDP and actual debt of 18% of its GDP. The difference between the two percentages of debt shows the debt margin.
So debt margin serves as a gauging tool for borrowing within the debt limit.
Explanation:
A debt limit is a legislative cap on the amount of money a government can borrow to avoid excessive debt, which, if too high, can reduce financial capital for the private sector and lead to economic issues. The borrowing power or debt margin is the remaining capacity for additional debt a government has before reaching its debt ceiling.
Understanding Debt Limits
A debt limit is a cap set by legislation that limits the amount of money a government is authorized to borrow. This limit is in place to prevent governments from accumulating an unsustainable level of debt that could lead to economic instability or financial crises. When a government spends more than it collects in taxes, it incurs a budget deficit and must borrow to finance this deficit, typically by issuing government bonds. There is a practical limit to this borrowing because households and investors may be unwilling to lend unlimited amounts, especially if they fear the government may not be able to repay the debt.
The borrowing power or debt margin refers to the difference between the current level of a government's debt and its statutory debt limit. This concept is closely connected to debt limits because it reflects the amount of additional borrowing a government can undertake before reaching its debt ceiling. Effective management of the debt margin is crucial to maintain fiscal responsibility, prevent crowding out private sector borrowing, and avoid negative economic consequences such as trade imbalances and increased interest rates.
It is important to consider that while a government can borrow to finance deficits, over time, total government spending must align with revenue to maintain fiscal sustainability. High levels of long-run government debt can limit future government actions and be difficult to pay down due to the challenges in making the necessary fiscal policy adjustments.
Sue and Kevin Kellman signed a contract for the construction of a cabin near Pinetop. In building the $562,000 cabin, the builder discovered that it had to put the vent for the heating system in the area where the hall closet is located. The result was that the Kellman’s had a half-closet there instead of a full-length closet that was open to the floor. The Kellmans: a. can be compensated under the doctrine of force majeure. b. can be compensated under the doctrine of substantial performance. c. need not pay for the cabin because of this material breach. d. can be compensated under the doctrine of commercial impracticability.
Answer:
The correct answer is letter "B": can be compensated under the doctrine of substantial performance.
Explanation:
Substantial performance is a concept in law by which and an individual who signed a contract can sue the counterparty because part of the contract was not fully respected but the incomplete portion is so minimal or irrelevant that it could not be considered as a breach of the contract.
Thus, the Kellman's can sue the cabin house builder for not constructing a full-length hall closet and could be compensated for that change.
Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3.1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Depreciation Expense1 Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method2 Year 13 Year 24 Year 35 Total2. What method yields the highest depreciation expense for Year 1?a. Straight-line methodb. Units-of-output methodc. Double-declining-balance methodd. All three depreciation methods3. What method yields the most depreciation over the three-year life of the equipment?a. Straight-line methodb. Units-of-output methodc. Double-declining-balance methodd. All three depreciation methods
Explanation:
The computation is shown below:
a) Straight-line method:
= (Purchased cost of packaging equipment - residual value) ÷ (expected useful life)
= ($72,000 - $4,500) ÷ (3 years)
= ($67,500) ÷ (3 years)
= $22,500
In this method, the depreciation is same for all the remaining useful life
So for all years, the total depreciation is
= $22,500 × 3 years
= $67,500
(b) Double-declining balance method:
First we have to find the depreciation rate which is shown below:
= One ÷ expected useful life
= 1 ÷ 3
= 33.33%
Now the rate is double So, 66.67%
In year 1, the original cost is $72,000, so the depreciation is $48,000 after applying the 66.67% depreciation rate
And, in year 2, it would be
= ($72,000 - $48,000) × 66.67%
= $16,000
And, in year 3, it would be
= $67,500 - $48,000 - $16,000
= $3,500
So the total depreciation is
= $48,000 + $16,000 + $3,500
= $67,500
(c) Units-of-production method:
= (Purchased cost of packaging equipment - residual value) ÷ (estimated operating hours)
= ($72,000 - $4,500) ÷ (18,000 hours)
= ($67,500) ÷ (18,000 hours)
= $3.75 per hour
For first year
= 7,600 × $3.75 per hour
= $28,500
For second year
= 6,000 × $3.75 per hour
= $22,500
For third year
= 4,400 × $3.75 per hour
= $16,500
So, the total depreciation is
= $28,500 + $22,500 + $16,500
= $67,500
2. By above calculations, we concluded that the double declining method yields higher depreciation expense in year 1 i.e $48,000
3. By above calculations, we concluded that the all depreciation methods yields most depreciation over the three-year life of the equipment
In text analysis, what is a lexicon? a. A catalog of customers, products, words, and phrase b. A catalog of customers, their words, and phrase c. A catalog of letters, words, phrases and sentences d. A catalog of words, their synonyms, and their meanings
Answer:C
Explanation:
A lexicon in text analysis is a catalog of words, their synonyms, and their meanings. It serves as a tool for understanding and analyzing language, identifying semantics and context of words used in a text.
Explanation:In text analysis, a lexicon is essentially a catalog of words, their synonyms, and their meanings. Think of it as a type of language database where each word is linked with its meaning or definitions and possibly its synonyms, antonyms, and other related words. A lexicon serves as a tool for understanding and analyzing language in a text. It helps to identify the semantics and context of words used in the text.
For example, a lexicon for English language literature would contain an extensive list of words used in English literature along with detailed information about each word's usage, meanings, and related words.
Learn more about Lexicon here:https://brainly.com/question/36935779
#SPJ6
Economists tend to see ticket scalping asA. an unproductive activity which should be made illegal everywhere.B. a way for a few to profit without producing anything of value.C. a way of increasing the efficiency of ticket distribution.D. an inequitable interference in the orderly process of ticket distribution.
Answer:
C. A way of increasing the efficiency of ticket distributionExplanation:
Ticket Scalpers are the ticket speculators who buy the tickets to a sport or performance event and resells them at higher prices. Lassiez-faire economists consider it to be a good thing. the correct value of the ticker is decided by the market but the Scalpers are flexible in pricing than the venue, they may also bear a loss while still guaranteeing the full value that venue gets. But the problem with the scalping is the at the value goes to the agents instead of the venue that is providing the product.
Economists often view ticket scalping as a way of increasing the efficiency of ticket distribution according to the principle of economic efficiency. However, this perspective doesn't consider factors like equity, and possible unwanted outcomes of markets.
Explanation:Economists tend to view ticket scalping as a means of increasing the efficiency of ticket distribution. This perception is based on the workings of the demand and supply diagram, which underscores the principle of economic efficiency. This principle maintains that a situation is efficient if it is not possible to improve the circumstances of one individual or party without imposing a cost on another.
In that light, ticket scalping, which allows for the redistribution of tickets at different prices, could potentially lead to a more efficient distribution, where tickets end up with those consumers who value them most and are willing to pay for that value.
However, it's worth noting that this perspective does not take into account factors such as equity or fairness, nor does it account for situations where markets may produce unwanted outcomes, such as when they lead to severe income inequality.
Learn more about Economic Efficiency here:https://brainly.com/question/33444425
#SPJ6
Please identify the appropriate term for the following scenarios. Ivan, a Russian fishermen, needs a permit so that he can participate in commercial ice fishing for yellow perch and legally sell the perch he catches. Ivan's permit Garet is an undergraduate student who has to work at McDonald's part-time to help pay his tuition loans. Always looking on the bright side of things, he is thankful that he cannot make less than what he is earning, $ 7.25 /hour. Garet's wage D'Artagnan, a poor French noblemen, discovers
Complete Question:
Please identify the appropriate term for the following scenarios.
Ivan, a Russian fishermen, needs a permit so that he can participate in commercial ice fishing for yellow perch and legally sell the perch he catches.
Ivan's permit Garet is an undergraduate student who has to work at McDonald's part-time to help pay his tuition loans. Always looking on the bright side of things, he is thankful that he cannot make less than what he is earning, $ 7.25 /hour.
Garet's wage D'Artagnan, a poor French noblemen, discovers a large cache of truffles in his backyard. However, the government caps the sale of truffles a $100 a pound, which frustrates D'Artagnan as he knows they are worth more than that.
Answer:
1. Ivan, a Russian fishermen, needs a permit so that he can participate in commercial ice fishing for yellow perch and legally sell the perch he catches - LICENSE
2. Ivan's permit Garet is an undergraduate student who has to work at McDonald's part-time to help pay his tuition loans. Always looking on the bright side of things, he is thankful that he cannot make less than what he is earning, $ 7.25 /hour - PRICE FLOOR
3. Garet's wage D'Artagnan, a poor French noblemen, discovers a large cache of truffles in his backyard. However, the government caps the sale of truffles a $100 a pound, which frustrates D'Artagnan as he knows they are worth more than that - PRICE CEILING
The appropriate term for the scenarios is permits. Permits are legal documents that grant individuals or organizations the right to engage in certain activities, such as fishing, emitting pollution, or preserving salmon, in accordance with specific regulations and limits.
Explanation:The appropriate term for the scenario described is permits. Permits are legal documents that grant individuals or organizations the right to engage in certain activities, such as fishing, emitting pollution, or preserving salmon, in accordance with specific regulations and limits. In the given examples, Ivan needs a permit for commercial ice fishing, a city sells permits to firms for pollution emission, and the federal government pays fishermen to preserve salmon. Permits are often used to regulate and manage various activities to ensure sustainability, resource conservation, and fair competition.
Tom O'Brien has a 2-stock portfolio with a total value of $100,000. $75,000 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42.
What is his portfolio's beta?a.1.12
b.0.86
c.0.92
d.0.99
e.0.81
Answer:
Beta of portfolio will be 0.92
So option (C) will be correct answer
Explanation:
We have given total investment of stock = $100000
Investment of stock A = $75000
Investment of stock B = $100000 - $75000 = $25000
Wight of stock A [tex]=\frac{75000}{100000}=0.75[/tex]
Weight of stock B [tex]=\frac{25000}{100000}=0.25[/tex]
Beta of stock A = 0.75
And beta of stock B = 1.42
We have to fond the beta of portfolio
So beta of portfolio = weight of stock A × beta of stock A + weight of stock B × beta of stock B = 0.75×0.75 +0.25×1.42 = 0.92
So beta of portfolio will be 0.92
So option (C) will be correct answer
Why is audience analysis so important in the selection of the direct or indirect organization strategy for a business message?
Audience analysis is pivotal in selecting the appropriate organisational strategy for a business message, be it direct or indirect. Understanding the audience's preferences, needs, and expectations guides this choice.
A direct strategy suits audiences with limited time, already familiar with the subject, where the main point is stated upfront. Conversely, an indirect strategy, building up to the main point, suits unfamiliar or skeptical audiences.
The wrong strategy can lead to disengagement or confusion. Audience analysis ensures alignment between strategy and audience, optimizing comprehension, engagement, and persuasion, fostering effective communication and desired outcomes in the business message.
Learn more about audience analysis here:
https://brainly.com/question/32507706
#SPJ12
The following selected information pertains to Wilson Company. Current liabilities: $100; long-term liabilities: $150; contributed capital: $120; retained earnings: $50; accumulated other comprehensive income: $20. The company's debt to equity ratio
Answer:
The company's debt to equity ratio is 1.32
Explanation:
Wilson Company has following
Total Debt = Current liabilities + long-term liabilities
Total Debt = 100 + 150 = $250
Total Capital = Contributed capital + Retained earnings + Accumulated other comprehensive income
Total Capital = 120 + 50 + 20 = 190
Debt to equity Ratio = Total Debt / Shareholders Equity
Debt to equity Ratio = 250 / 190
Debt to equity Ratio = 25 / 19
Debt to equity Ratio = 1.32
Final answer:
The calculation of the debt to equity ratio for Wilson Company is 1.32, meaning that for every dollar of equity the company has $1.32 in debt.
Explanation:
The question asks to calculate the debt to equity ratio for Wilson Company based on the provided financial data. To compute the debt to equity ratio, we sum the company's current and long-term liabilities and then divide that sum by the total equity. In this case, the equity is the sum of contributed capital, retained earnings, and accumulated other comprehensive income.
The calculation would be as follows:
(Current Liabilities + Long-term Liabilities) / (Contributed Capital + Retained Earnings + Accumulated Other Comprehensive Income)
($100 + $150) / ($120 + $50 + $20) = $250 / $190 = 1.32 approximately.
Therefore, the debt to equity ratio for Wilson Company is 1.32. This means that for every dollar of equity, the company has $1.32 in debt.
A trader buys two July futures contracts on orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. What price change would lead to a margin call?Under what circumstance can $2000 be withdrawn from the account?
Hope this helps. Enjoy! Explanation is provided.
Final answer:
A margin call would occur if the futures price decreases by 10 cents per pound. The trader is able to withdraw $2,000 from the account when the account balance exceeds the initial margin requirements by that amount.
Explanation:
A trader buys two July futures contracts on orange juice with each contract being for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, with an initial margin of $6,000 and a maintenance margin of $4,500 per contract.
A margin call occurs when the account balance falls below the maintenance margin. Since the initial margin is $6,000 and the maintenance margin is $4,500, this represents a $1,500 cushion per contract for the price to move against the trader before a margin call is issued. So, for two contracts, the trader has a total cushion of $3,000 ($1,500 x 2). Therefore, to trigger a margin call, the total value of the contracts must decline by $3,000.
Since each contract is for 15,000 pounds, and there are two contracts, the total weight covered is 30,000 pounds. To find the price change per pound that would lead to a margin call, divide the total cushion by the total pounds: $3,000 cushion / 30,000 pounds = $0.10 per pound. Thus, a decrease of 10 cents per pound in the futures price would trigger a margin call.
$2,000 can be withdrawn from the account when the account balance exceeds the initial margin requirements by at least $2,000. This would happen if the futures price moves in favor of the trader, increasing the value of the positions.
Trina'sTrikes, Inc. reported a debt-to-equity ratio of 2 times at the end of 2018. If the firm's total debt at year-end was $10 million, how much equity does Trina's Trikes have? Multiple Choice $2 million $5 million $10 million $20 million
Answer:
$5 million
Explanation:
Trina'sTrikes, Inc. reported following figures:
Debt Equity Ratio = 2
Total Debt = 10 million
Formula for Debt Equity ratio is as follows:
Debt Equity Ratio = Total Debt / Total Equity
2 = $10 million / Total Equity
Total Equity = $10 million / 2
Total Equity = $5 million
So the correct option is $5 million
Shane starts a new business this year and incorporates the business entity as SNB, Inc (taxed as a C corporation). Unfortunately, SNB, Inc. has a slower than expected start and loses $6,800. Assuming a 40% income tax rate, how much income tax will SNB, Inc. pay this year?
Answer:
no tax this year
Explanation:
given data
Shane loses = $6,800
income tax rate = 40%
to find out
how much income tax pay this year
solution
we know that here Shane business as SNB, Inc started slower than expected
and we notice he have loss of $6,800
so that it will pay no tax this year because his business generate a loss
so it is probably can be carry forward loss to future year to offset income
so no tax this year
Comprehensive income is determined by adding or subtracting __________ to (from) __________.
a. other comprehensive income; operating expenses
b. other comprehensive income; gross profit
c. income from continuing operations; other comprehensive
d. income other comprehensive income; net income
Comprehensive income is determined by adding or subtracting income other comprehensive income to (from) net income.
Explanation:Comprehensive income is a financial reporting concept that goes beyond traditional net income. It includes all changes in shareholders' equity during a specific period, except those resulting from investments by owners and distributions to owners. Comprehensive income encompasses both realized and unrealized gains and losses, such as changes in the fair value of investments or foreign currency translation adjustments.
This broader perspective provides stakeholders with a more comprehensive view of a company's financial performance and helps assess its overall economic well-being. It's particularly valuable for companies with significant exposure to market fluctuations, foreign operations, or complex financial instruments, as it captures a more holistic picture of their financial health.
Learn more about Comprehensive income here:https://brainly.com/question/33501787
#SPJ6
Comprehensive income is calculated by adding Other Comprehensive Income to Net Income. Other Comprehensive Income includes all unrealized gains and losses not included in net income. Therefore, it provides a broader view of a company's financial performance.
Explanation:Comprehensive income is determined by adding
Other Comprehensive Income
(OCI) to
Net Income
, as per option d in your question.
Comprehensive Income helps to provide a bigger and more holistic picture of a company's financial performance. Unlike Net Income, Comprehensive Income includes all revenues, costs, gains, and losses that directly affect shareholders' equity. Other Comprehensive Income encapsulates unrealized gains and losses that are not included in net income, such as foreign currency translation gains or losses, pensions plan gains or losses, and unrealized gains or losses from hedging activities.
So, to calculate Comprehensive Income, you start with Net Income and then add or subtract Other Comprehensive Income. This can include both positive and negative amounts, depending on the company's activities during the accounting period under consideration.
Learn more about Comprehensive Income here:https://brainly.com/question/33501787
#SPJ6
Suppose the price of widgets rises from $5 to $7 and consumption of widgets falls from 25 widgets a month to 15 widgets. Calculate your price elasticity of demand of widgets. What can you say about your price elasticity of demand of widgets? Is it Elastic, Inelastic, or Unitary Elastic? Why? Please show your work.
Answer:
1
Unitary elastic
Elasticity of demand is unitary elastic because the absolute value of elasticity is equal to 1.
Explanation:
Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
Elasticity of demand = percentage change in quantity demanded / percentage change in price
Percentage change in quantity demanded = (25 - 15) / 25 = 0.4 × 100 = 40%
Percentage change in price = ($5 - $7) / $5 = 0.4 × 100 = 40%
Elasticity of demand = 40% / 40% = 1
If coefficient of elasticity is equal to 1, demand is unit elastic. It means that a change in price has an equal efect on the quantity demanded. Quantity demanded has an equal and proportional change to changes in price.
I hope my answer helps you
The price elasticity of demand is calculated to be 1, indicating unitary elasticity. This means a percentage change in price leads to an equal percentage change in quantity demanded, which implies widgets have a proportional responsiveness to price changes.
Explanation:The price elasticity of demand for widgets can be calculated using the formula: PED = (% Change in Quantity Demanded) / (% Change in Price)
To determine the percentage change in quantity demanded, subtract the new quantity (15 widgets) from the original quantity (25 widgets), divide by the original quantity, and multiply by 100. The calculation is: [(15 - 25) / 25] * 100 = -40%
The percentage change in price is calculated as: [(7 - 5) / 5] * 100 = 40%
Substituting these values into the formula gives: PED = (-40%) / (40%) = -1. Because we usually report price elasticity of demand as absolute values, we interpret it as 1 in absolute value terms.
Since the price elasticity of demand is 1, it indicates a unitary elasticity. This implies that a 1% change in price induces a proportionate 1% change in quantity demanded. So, as price increased, customers decreased their purchase of widgets proportionately.
Learn more about Price Elasticity of Demand here:https://brainly.com/question/31293339
#SPJ12
Prepare income statements (Learning Objective 5)
Part One: In 2012, Penny Henderson opened Penny’s Posies, a small retail shop selling oral arrangements. On December
31, 2013, her accounting records show the following:
Sales revenue ................................................................................................... $53,000
Utilities for shop ............................................................................................... $ 1,400
Inventory on December 31, 2013 .................................................................... $ 9,600
Inventory on January 1, 2013 ........................................................................... $12,700
Rent for shop .................................................................................................... $ 4,600
Sales commissions ............................................................................................ $ 4,900
Purchases of merchandise ................................................................................ $37,000
Requirement
Prepare an income statement for Penny’s Posies, a merchandiser, for the year ended December 31, 2013.
Part Two: Penny’s Posies was so successful that Penny decided to manufacture her own brand of oral supplies: Floral
Manufacturing. At the end of December 2014, her accounting records show the following:
Utilities for plant ......................................................................................... $ 4,300
Delivery expense ........................................................................................ $ 2,500
Sales salaries expense ................................................................................ $ 4,400
Plant janitorial services ............................................................................... $ 1,550
Work in process inventory, December 31, 2014 ........................................ $ 3,500
Finished goods inventory, December 31, 2013 ......................................... 0
Finished goods inventory, December 31, 2014 ......................................... $ 4,000
Sales revenue ............................................................................................. $109,000
Customer service hotline expense ............................................................. $ 1,700
Direct labor ................................................................................................ $ 20,000
Direct material purchases ........................................................................... $ 34,000
Rent on manufacturing plant ..................................................................... $ 9,600
Raw materials inventory, December 31, 2013 ............................................ $ 11,000
Raw materials inventory, December 31, 2014 ............................................$ 6,500
Work in process inventory, December 31, 2013 ........................................ 0
Requirements
1. Calculate the Cost of Goods Manufactured for Floral Manufacturing for the year ended December 31, 2014.
2. Prepare an income statement for Floral Manufacturing for the year ended December 31, 2014.
3. How does the format of the income statement for Floral Manufacturing differ from the income statement of Penny’s
Posies?
Part Three: Show the ending inventories that would appear on these balance sheets:
1. Penny’s Posies at December 31, 2013
2. Floral Manufacturing at December 31, 2014
Answer:
Part 1 Penny Henderson
Income Statement
For the year ended December 31, 2013
Sales $53,000
Less: Cost of goods sold
Beginning Inventory 12,700
Add: Purchases 37,000
Total Goods available for sale 49,700
Less: Inventory, end 9,600
Cost of goods sold $40,100
Gross profit $12,900
Less: Operating expenses
Utilities expense 1,400
Rent expense 4,600
Sales commission 4 ,900
Total operating expense $10,900
Net Income $2,000
Part 2
1. $77,350
2. Floral Manufacturing
Income Statement
For the year ended December 31, 2014
Sales $109,000
Less: Cost of goods sold
Raw materials, beginning 11,000
Add:Purchases 34,000
Raw materials available 45,000
Less: Raw material, end 6,500
Cost of raw material used 38,500
Add: Direct labor 20,000
Prime Cost 58,500
Add: Factory overhead 22,350
Manufacturing cost 80,850
Add: Work in process, beginning -
Less: Work in process, Ending 3,500
Cost of Goods Manufactured 77,350
Add: Finished goods, beginning -
Cost of goods available for sale 77,350
Less: Finished goods, ending 4,000
Cost of goods sold 73,350
Gross profit $35,650
Less: Operating expenses
Customer service hotline 1,700
Net Income $33,950
3. The difference between the 2013 and 2014 income statement is the composition of their cost of goods sold. In 2013, there is no cost of goods manufactured, raw materials and work in process account like 2014.
Part 3
1. Ending inventory of $9,600
2. Ending inventory of $14,000
Explanation:
Part 2
1. Floral Manufacturing
Statement of Cost of Goods Manufactured
For the year ended December 31, 2014
Raw materials, beginning 11,000
Add:Purchases 34,000
Raw materials available 45,000
Less: Raw material, end 6,500
Cost of raw material used 38,500
Add: Direct labor 20,000
Prime Cost 58,500
Add: Factory overhead 22,350
Manufacturing cost 80,850
Add: Work in process, beginning -
Less: Work in process, Ending 3,500
Cost of Goods Manufactured 77,350
3. The difference in the 2013 and 2014 preparation came from the balances of working in process and raw materials in the 2014 production wherein 2013 on the hand don't have it.
Part 3.
1. 2013 ending inventory consists of the goods not yet sold at the end of the year.
2. 2014 ending inventory consists of raw materials ending balance of $6,500 plus the work in process ending balance of $3,500 and the finished goods ending balance of $4,000.
Bank D pays 7.289% effective annual yield on an investment account in which interest is compounded weekly. What is the annual interest rate before compounding? Enter your answer as a percent, rounded to the nearest four decimals, without the % sign, (9.34562% should be input as 9.3456.)
Answer:
annual percentage rate: 7.0404%
Explanation:
We need to solve for the annual convertible rate when we are given with the annual effective rate:
[tex](1+APR/52)^{52}=1+0.07289\\APR =( \sqrt[52]{1.07289} -1) \times 52\\[/tex]
apr = 0.0704035593 = 7.0404%
Answer:
7.0403
Explanation:
Suppose the initial investment is $1, we start the formula rEFF=A−P0P0. Next, substituting, we now have 0.07289=A−11 or 0.07289=A−1, so A=$1.07289. We now use this value for A in the formula A=P0⋅(1+rk)N⋅k with P0=$1, k=52 compounding periods for weekly compounded interest, N=1 year, and r is the unknown monthly compounded interest rate for which we are solving. Plug the values into the formula. Take the fifty-second root of both sides. Next, subtract 1 from both sides, and multiply both sides by 52.
1.072891.00135390.00135390.0704028=(1+r52)52=1+r52=r52=r
The final step gives us 0.0704028, converted into a percentage and rounded to four decimal places is 7.0403.
You receive $1,200 today, $2,200 in one year, and $3,300 in two years. If you deposit these cash flows in an account earning 12%, how much money is in the account three years from now?
Answer:
The amount of money that is in the account three years from now is $8,142.
Explanation:
Future Value of $1200
FV = PV (1 + r )n
= 1200*(1 + 12%)^3
= $1685.91
Future Value of $2200
FV = PV (1 + r )n
= 2200*(1 + 12%)^2
= $2759.68
Future Value of $3300
FV = PV (1 + r )n
= 3300*(1 + 12%)^1
= $3696.00
Total Future Value = $1685.91 + $2759.68 + $3696.00
= $8142
Therefore, The amount of money that is in the account three years from now is $8,142.
By accumulating each cash flow separately over its respective period at a 12% interest rate and summing the future values, we determine that approximately $8,148.06 will be in the account three years from now.
To calculate the future value of cash flows deposited in a bank account earning 12% interest, we need to accumulate each cash flow to the end of the three-year period. The cash flow received today, $1,200, earns interest for three years. The cash flow received in one year, $2,200, earns interest for two years. Finally, the cash flow received in two years, $3,300, earns interest for one year.
The future value (FV) is found using the formula FV = PV(1 + r)ⁿ, where PV is the present value, r is the interest rate per period, and n is the number of periods. Following this formula, the future values of the cash flows are:
$1,200 imes (1 + 0.12)³
$2,200 imes (1 + 0.12)²
$3,300 imes (1 + 0.12)¹
Summing these future values will give us the total amount in the account three years from now:
$1,200 × (1.12)³
= $1,689.18 (approx.)
$2,200 × (1.12)²
= $2,762.88 (approx.)
$3,300 × (1.12)¹
= $3,696.00 (approx.)
Adding these figures gives us:
$1,689.18 + $2,762.88 + $3,696.00
= $8,148.06 (approx.)
Therefore, three years from now, there will be approximately $8,148.06 in the account.
A 10-year German government bond (bund) has a face value of €100 and a coupon rate of 5% paid annually. Assume that the interest rate (in euros) is equal to 6% per year. What is the bond’s PV?
Answer:
€92.64
Explanation:
The present value i.e PV formula is used that is shown in the attached spreadsheet
The NPER reflects the time period.
Given that,
Future value = €100
Rate of interest = 6%
NPER = 10 years
PMT = €100 × 5% = €5
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the answer would be €92.64
To find the present value of a bond, calculate the present value of its future coupon payments and its face value, then sum these values. The present value of the bond is the amount it would be worth in today's euros.
Explanation:The bond's present value (PV) is computed using a discount rate equal to the market interest rate and cash flows based on the bond's face value and coupon rate. The bond pays an annual coupon of €5 (€100 * 5%) for 10 years and pays back the face value of €100 at maturity. Each cash flow is discounted back at the 6% interest rate:
PV of Coupons = €5 / (1+0.06)¹ + €5 / (1+0.06)² + ... + €5 / (1+0.06)¹⁰PV of Face Value = €100 / (1+0.06)¹⁰Adding these two components together gives the total present value of the bond. This tells us how much the bond would be worth in today's euros, given the future cash flows and the market interest rate.
Learn more about Present Value of Bonds here:https://brainly.com/question/29451394
#SPJ11
For questions 9-12, use the following scenario. You are a consultant and have been employed by Urban General, a large inner-city hospital, to estimate the demand for its services. Your research indicates that the income elasticity of demand for the target market is +0.50; the price elasticity of demand is -0.15; and the cross-price elasticity of demand with respect to the price of services at St. Elsewhere, a near-by hospital, is +0.35. Answer the following questions.
The price of services at St. Elsewhere falls by 10 percent. What happens to the quantity of services demanded at Urban General?
Quantity demanded rises by 35.0 percent.
Quantity demanded falls by 3.5 percent.
Quantity demanded falls by 1.5 percent.
Quantity demanded rises by 5.0 percent.
Quantity demanded stays the same.
Answer:
Quantity demanded falls by 3.5 percent.
Explanation:
Given that,
Income elasticity of demand = +0.50
Price elasticity of demand = -0.15
Cross-price elasticity of demand = +0.35
price of services at St. Elsewhere falls by 10 percent
Therefore,
Cross price elasticity of demand = Percentage change in quantity demanded ÷ Percentage change in price
+0.35 = Percentage change in quantity demanded ÷ (-10%)
0.35 × (-10%) = Percentage change in quantity demanded
(-3.5%) = Percentage change in quantity demanded
Hence, the quantity demanded falls by 3.5%.
Final answer:
Using the cross-price elasticity of demand, a 10 percent decrease in the price of services at St. Elsewhere leads to a 3.5 percent drop in the quantity demanded at Urban General.
Explanation:
The question involves understanding the impact of a change in the price of services at a nearby hospital (St. Elsewhere) on the demand for services at Urban General, utilizing the concept of cross-price elasticity of demand. Given that the cross-price elasticity of demand with respect to the price of services at St. Elsewhere is +0.35, and there's a 10 percent fall in the price of services at St. Elsewhere, we can calculate the effect on the quantity demanded at Urban General. Since cross-price elasticity of demand measures the percentage change in the quantity demanded of one good resulting from a 1 percentage change in the price of another good, a 10 percent decrease in the price at St. Elsewhere leads to a 3.5 percent (0.35 * -10) fall in the quantity demanded at Urban General. Therefore, the correct answer is: Quantity demanded falls by 3.5 percent.
Frederick W. Taylor is speaking to a friend about scientific management. Which of the following statements might Frederick say?
(A) "Make sure your managers are spending time in five different areas: planning, organizing, commanding, coordinating, and controlling. If they’re overlooking an area, the company won’t be as effective."
(B) "Are you dividing work and responsibility equally between managers and employees? Managers need to provide friendly help to the workers they employ."
(C) "What kinds of rules and procedures do you have in place? Create a set of rules and apply them consistently throughout the organization."
Frederick W. Taylor would likely discuss the equal division of work and responsibility between managers and employees, reflecting his emphasis on scientific management, time and motion studies, and improving workplace efficiency.
Explanation:If Frederick W. Taylor were speaking to a friend about scientific management, he might say: "Are you dividing work and responsibility equally between managers and employees? Managers need to provide friendly help to the workers they employ." This statement aligns with Taylor's philosophy on improving efficiency and productivity in the workplace through careful study and redesign of work processes and fostering a supportive relationship between management and workers. Taylor's approach emphasized the importance of time and motion studies for creating efficient work processes and believed that the goal of management should be to maximize productivity, benefiting both the employer and the employees.
Brief Exercise 4-10 The balance sheet debit column of the worksheet for Jolie Company includes the following accounts: Accounts Receivable $12,500, Prepaid Insurance $4,500, Cash $4,100, Supplies $5,200, and Debt Investments (short-term) $7,600. Prepare the current assets section of the balance sheet, listing the accounts in proper sequence. (List Current Assets in order of liquidity.)
The order of current assets based on liquidity, starting from the most liquid, is Cash, Accounts Receivable, Supplies, Prepaid Insurance, and short-term Debt Investments.
Explanation:In this context, the order of liquidity is the sequence in which assets would be converted into cash. This implies that cash, being the most liquid asset, would be listed first followed by Accounts Receivable, then Supplies, Prepaid Insurance and finally short-term Debt Investments.
Current Assets
Cash $4,100Accounts Receivable $12,500Supplies $5,200Prepaid Insurance $4,500Debt Investments (short-term) $7,600Learn more about Current Assets here:https://brainly.com/question/34936344
#SPJ3
"Consider the market for the Nissan Xterra. Suppose the price of metal, which is an input in automobile production, decreases. When the price of an input changes, this results in a __________ the supply curve
Answer:
Rightward Shift in
Explanation:
Price of inputs is one of the factors affecting the supply.
When price of inputs decrease, the production of that good increases as a consequence, thereby increasing the supply, despite price of the good remaining same.
A shift in a supply curve occurs when factors other than price change. For instance, tastes and preferences, price of complementary goods, income of the consumer, price of inputs, etc.
In the given case, price of metal relates to a factor other than price i.e price of an input. When price of input reduces, it results into a rightward shift in the supply curve. Also referred to as an "increase in supply".
Derek will deposit $3,382.00 per year for 12.00 years into an account that earns 15.00%, The first deposit is made next year. He has $12,548.00 in his account today. How much will be in the account 37.00 years from today?
Answer:
Total sum in the account= $5,438,822.55
Explanation:
Future Value of a single sum
The amount of $12,548 already in the account will earn interest for 37 years at the same rate of 15% compounded yearly. The amount this will accrue to is called the Future value of a lump sum. This can be worked as thus:
FV = PV × (1+r)^(n)
FV = 12,548 × (1.15)^(37)
= $12,548 × 176.124
= $2,210,011.85
Future Value of an annuity
The series of $3,382 to be invested per year to earn an interest of 12% per year for 12 years is called the annuity. The worth of this investment at the end of the 12th year is called the Future value of annuity. It can worked as out as follows:
FV = A ×((1+r)^n - 1)/r
= 3,382 ×( (1.15)^(12) - 1)/0.15)
= 3,382 × 29.0016
= $98,083.64
From the 12th year to 37th year is another 25 years. So the $98,083.64 would be treated as another lump sum invested. So we work out its future value as follows:
FV = 98,083.64 × (1.15)^(25)
= 98,083.64 × 32.9189
=$ 3,228,810.70
Total sum in the account at the end of the 37th year :
= $2,210,011.85 + $ 3,228,810.70
= $5,438,822.55
The following scenarios describe the price elasticity of supply and demand for a particular good. All else equal (equilibrium price, equilibrium quantity, and size of the tax), in which scenario will government revenues be the highest? Choose only one.
a. Elastic demand, inelastic supply.
b. Inelastic demand, inelastic supply.
c. Elastic demand, elastic supply.
d. Inelastic demand, elastic supply.
Answer:
. Inelastic demand, inelastic supply.
Explanation:
If demand is inelastic, a small change in price has little or no effect on the quantity demanded.
If supply is inelastic, a small change in price has little or no effect on the quantity supplied.
Government tax increases the cost of a good. If tax is levied on a good and both demand and supply are inelastic, government revenue would increase and be the highest when compared to the other options.
Demand is elastic when a change in price has a greater effect on the quantity demanded.
Supply is elastic if a small change in price has a greater effect on the quantity supplied.
If demand or supply is elastic and government imooses tax, revenue would fall as quantity demanded would fall.
I hope my answer helps you
For the highest government revenues, the scenario featuring inelastic demand and inelastic supply is optimal. This is due to consumers and producers being less responsive to price changes, consequently maintaining quantities of goods bought and sold, leading to more revenue.
Explanation:Given the scenarios outlined in the question, government revenues will be the highest in the situation with inelastic demand and inelastic supply (option b). The term 'elasticity' refers to how sensitive the quantity demanded or supplied is to changes in price. When demand is inelastic, consumers are less responsive to price changes, so a tax that raises the price will result in smaller decreases in quantities bought. Similarly, when supply is inelastic, producers cannot rapidly change their production quantities in response to price changes, so a tax that raises the price will not result in large decreases in quantities supplied. The combination of inelastic demand and inelastic supply means that a tax increase will cause small decreases in quantities bought and sold, thus resulting in higher government revenues.
Learn more about Price Elasticity here:https://brainly.com/question/33102205
#SPJ3
Coronado Shoes Fool Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $800,000. What is the required journal entry as a result of this litigation? a. Debit Litigation Expense for $800,000 and credit Litigation liability for $800,000. b. No journal entry is required. c. Debit Litigation Expense for $320,000 and credit Litigation Liability for $320,000. d. Debit Litigation Expense for $480,000 and credit Litigation Liability for $480,000.
Answer:
b. No journal entry is required
Explanation:
Given that
Estimated percentage of losing = 40%
Estimated amount = $800,000
By considering the above information, we concluded that
As in the case of the litigation, there is no journal entry is recorded as the possibility of the event is not certain with respect to the entity's economic resources.
Therefore in the given case, the correct option is b.
Suppose that the price of wheat is above its equilibrium price. You would expect to see __________- A) an increase in quantity demanded because of the high price. B) a leftward shift of the demand curve because of the high price. C) sellers begin to lower their prices because of the surplus of wheat.D) a shortage on the market that causes prices to increase further
Answer:
The correct answer is letter "B": a leftward shift of the demand curve because of the high price.
Explanation:
The equilibrium price represents the point at which buyers' demand and sellers supply face each other because both parties' needs are satisfied. If the price of a given product is higher than the equilibrium level, the quantity demanded is likely to decrease which directly implies a leftward move in the demand curve.
A production possibilities frontier can shift outward if a. resources are shifted from the production of one good to the production of the other good. b. the economy abandons inefficient production methods in favor of efficient production methods. c. government increases the amount of money in the economy. d. there is a technological improvement.
Answer:
d. there is a technological improvement.
Explanation:
a) replacing production of one good in favor of another will be a move across the PPF
b) abandon inefficient production will bring the production to the PPF from a place below it.
c) has no relationship it will simply put inflationary pressure.
d) the technological improvement will make a better use of the factor thus, increasing productivity and making possible more production with the same amount of materials.
The Production Possibility Frontier (PPF) can shift outward in the event of improvements in efficiency of production methods or technological advancements. An increase in money in the economy or shifting resources between products do not directly shift the PPF.
Explanation:The Production Possibility Frontier (PPF) is a graphical representation showing the combination of two goods that can be produced using available resources and technology efficiently. The PPF can shift outwards due to certain factors. Among the options given:
a: Shifting resources from one product to another doesn't cause an outward shift in the PPF, rather it moves along the curve.b: An abandonment of inefficient production methods for more efficient ones could result in an outward shift, as it may increase the total possible production.c: Increasing the amount of money in the economy does not directly result in an outward shift of the PPF. The PPF relates to the physical output of goods, not the monetary value of those goods.d: Technological improvement effectively allows a more efficient use of resources, thus shifting the PPF outward, because it increases the total output that can be produced with the same amount of resources.Learn more about Production Possibility Frontier here:https://brainly.com/question/31725148
#SPJ6
Multinational organizations can shop from country to country and cut costs through: lower wage scales. lower indirect costs. less stringent regulations. lower taxes and tariffs. All of these.
Answer:
All of these
Explanation:
This is because a multinational company can cut costs of operation from one country to another.For example, for the same company setup, one in China and the other in America, the former will have a lower wage scale than the latter due to their varied economic policies.
Furthermore, there will also be less stringent regulation and lower taxes and tariffs in the former than the latter
The December 31, 2020, Allowance account balance includes $3,076 for a past due account that is not likely to be collected. This account has not been written off. (1) If it had been written off, will there be any effect of the write-off on the working capital at December 31, 2020?
Answer:
There will be no effect on working capital upon write off as the entries required would be a credit to receivables and a debit to allowance account.
Explanation:
The allowance account is the account used to record receivables due that may not be collectible.
When a company has determined that a receivable may be uncollectible, the company credits the allowance for receivables account and debits bad debit expense. This reduces the accounts receivable balance in the balance sheet as the receivables to be reported will be net the allowance given. As such, where on December 31, 2020, Allowance account balance includes $3,076 for a past due account that is not likely to be collected.
There will be no effect on working capital upon write off as the entries required would be a credit to receivables and a debit to allowance account.
A company reports the following information as of December 31st:
Sales revenue $ 350,000
Cost of goods sold $ 150,000
Operating expenses $ 110,000
Foreign currency translation gain $ 25,000
1. Ignoring income taxes, what amount should the company report as net income as of December 31st?
Answer:
The company will report $115,000
Explanation:
Giving the following information:
Sales revenue= 350,000
Cost of goods sold= (150,000)
Gross profit= 200,000
Operating expenses= (110,000)
Net operating income= 90,000
Foreign currency translation gain= 25,000
Net income= 115,000
The company will report $115,000
Suppose the following bond quotes for IOU Corporation appear in the financial page of today’s newspaper. Assume the bond has semiannual payments, a face value of $2,000 and the current date is April 19, 2018. Company (Ticker) Coupon Maturity Last Price Last Yield EST Vol (000s) IOU (IOU) 5.7 Apr 19, 2034 108.96 ?? 1,827 a. What is the yield to maturity of the bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the current yield?
Answer:
a. 4.89%
b. 5.23%
Explanation:
We use the rate formula which is shown in the attached spreadsheet
Given that,
Present value = $2,000 × 108.96% = $2,179.20
Future value or Face value = $2,000
PMT = $2,000 × 5.7% ÷ 2 = $57
NPER = 16 years × 2 = 32 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
a. The yield to maturity of the bond is 4.89%
b. The current yield would be
= 57 × 2 ÷ $2,179.20
= 5.23%
a) When The yield to maturity of the bond is= 4.89%
b) After that The current yield is = 5.23%
Calculation of Maturity of the bondNow We are using the rate formula are:
Given that as per question:
Now The Present value is = $2,000 × 108.96% = $2,179.20
Then The Future value or Face value is = $2,000
Then PMT is = $2,000 × 5.7% ÷ 2 = $57
Now NPER is = 16 years × 2 = 32 years
Then The formula is shown below:
That is, = Rate(NPER;PMT;-PV;FV;type)
Then The present value come in negative
a. Hence, The yield to maturity of the bond is 4.89%
b. Thus, The current yield would be
= 57 × 2 ÷ $2,179.20
= 5.23%
Find more information about Maturity of the bond here:
https://brainly.com/question/20364533