Answer:
a. Guarantee to repay the debt of another firm that is solvent and profitable (the interest rate of the debt was not reduced due to the guarantee).
Explanation:
According to the rules of full disclosure, the company is to disclose facts about all transactions or contracts that impact and business. For example of a business is most likely to go out of business because of an unfavourable court ruling, this information must be disclosed in the companie's financial statement. If however the activity will not impact the business there is no need to disclose.
In this instance the guarantee need not be disclosed since the guarantee is to repay debt of a company that is solvent and profitable. The chances that the guarantee will become enforceable is very slim.
Also the interest rate of the debt was not reduced due to the guarantee. So there is no financial impact on the business.
Hope College is planning for the next biennium. School administrators know that the enrollment is on the decline, but still need to offer students the best experience possible. They want to shrink their payroll slowly. They can accomplish this through
They can accomplish this through early retirement.
Explanation:Early retirement is a way that we use to stop or discontinue something. Most of the aged person tends to choose early retirement for the purpose of achieving the benefits form the organisation to the most possible level. This decision can be taken when we know that the organisation will be closed in the near future and continuing work will not benefit us.
When we decide for the early retirement the befits that we attain from that will be more than the benefit that are obtained in continuing work. In the given example, Hope college has a plan for next biennium. But, the enrollments are reduced in number and they want to reduce the payroll slowly. Thus this can be accomplished with the help of early retirement.
The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $28,000. If sales increase by $89,000, the company's net operating income will increase by:
Answer:
$29,850
Explanation:
The computation of the increase in net operating income is shown below:
= Increase in sales - increase in variable expenses - advertising cost
where,
Increase in sales = $89,000
Increase in variable expenses is
= $89,000 × 35%
= $31,150
And, the advertising cost is $28,000
So, the increase in operating income is
= $89,000 - $31,150 - $28,000
= $29,850
To calculate the increase in net operating income, multiply the sales increase by the operating margin and subtract the current net operating income.
Explanation:To calculate the increase in net operating income, we need to first determine the additional sales generated by the advertising campaign. Since variable expenses are 35% of sales, we can use this information to calculate the increase in net operating income:
Therefore, if sales increase by $89,000, the company's net operating income will increase by $31,150.
Although it can be expensive for businesses to implement operational efficiency, this cost produces greater quality results. For organizations with multiple divisions, developing processes once and repeating them saves time. True False
Answer:
False
Explanation:
Operational efficiency: It is defined as group of strategy and technique that management implement to produce goods and services at a cost-effective method, at the same time maintaining the standard and quality of product. The ratio of operational efficiency is measured by dividing total operational expenses with total revenue, it help to find the efficiency of the production or operation. It is helpful in improving process of production as well help in gaining more profit.
In the given situation, It is false to say that implementing operational efficiency can be expensive.
What kind of transition does a peak mark in the business cycle?
A trough to depression
B recession to trough
C contraction to recovery
D expansion to contraction
expansion to contraction
Explanation:
The peak in a business cycle is marked by super-heated business sentiments, growth in business and increased production and hence enhanced profits. However, the transition to peak cycle is marked by a continuous phase of declining production capacity, depreciating profits and contraction of the business process.
Peak, contraction, slowdown, recovery is the phases of the cyclical business process. Peak gives way for contraction which eventually leads to slowdown. After a brief period of lull, the business recovers and again it ascends its peak and the cycle continues.
Real per capita GDP in Singapore in 1960 was about $450, but it doubled to about $900.00 by 1977. a. What was the average annual economic growth rate in Singapore over the 17.00 years from 1960 to 1977? (NOTE: Round this to two places past the decimal point.)
Answer:
4.16%
Explanation:
to calculate Singapore's economic growth rate we can use the future value formula (we could also use the rule of 72 but it is not very exact):
future value = present value x (1 + r) ⁿ
future value = 900present value = 450n = 17r = ?900 = 450 (1 + r)¹⁷
(1 + r)¹⁷ = 900 / 450 = 2
1 + r = ¹⁷√2 = 1.0416
r = 1.0416 - 1 = 0.0416 or 4.16%
Cheese manufacturer Ashe Mountain Corp. started a new chain of movie theaters called Ashe Mountain's Movie World. The theaters have been a major success and significantly increased the revenues of Ashe Mountain Corp. This is an example of:___________________.A. DiversificationB. Market developmentC. Product penetrationD. DifferentiationE. Market penetration
Answer:
A) Diversification
Explanation:
In business, diversification happens when a company decides to expand its business activities to other markets or products that are not related to its current or main business activities.
In this case, Ashe Mountain's main business activity was producing cheese, and they decided to diversify into entertainment through movie theaters which do not have type of relationship with cheese.
The correct answer is A. Diversification. This is an example of diversification.
Diversification refers to a growth strategy where a company enters into a new market or industry with a new product. In this case, Ashe Mountain Corp., originally a cheese manufacturer, has expanded its business by starting a new chain of movie theaters, which is unrelated to its original product line. This move represents diversification because the company is venturing into a completely different sector (entertainment) from its core business (cheese manufacturing).
Let's analyze the other options to understand why they are not the correct choice:
B. Market development: This strategy involves selling existing products to new markets. If Ashe Mountain Corp. had started selling its cheese in movie theaters, that would be market development.
C. Product penetration: This term is not commonly used in business strategy. However, if it were to mean increasing sales of existing products in existing markets, then it would not apply here because the company has entered a new market.
D. Differentiation: This strategy involves modifying existing products to make them different from competitors' products. This does not apply to the scenario because the company has not altered its cheese products but has instead entered an entirely new industry.
E. Market penetration: This strategy involves increasing market share within existing markets with existing products. This would not apply to Ashe Mountain Corp. as they have not increased their presence in the cheese market but have instead entered the movie theater industry.
Therefore, the correct answer is A. Diversification, as it accurately describes the strategy of entering a new, unrelated market with a new product or service.
If a diversified firm had three businesses and these companies shared a common marketing and service operation, as well as common technology and development, this would be an example of economies of scope:__________
Answer:
true, it reduces costs by sharing activities
Explanation:
In this case, since the diversified firm has three different businesses that share common marketing and service operations, it is benefiting from a type of economies of scope called shared activities.
Economies of scope basically refers to saving money when producing two or more goods or services by using common production processes in order to reduce costs. The joint production of the goods or services will cost less than if the company produced each one separately.
This company is benefiting from using shared activities because one single marketing unit and another single operations unit will serve the three separate businesses.
A local Sports Authority ordered 50 pairs of tennis shoes from Nike Corporation. The shoes were priced at $85 for each pair with the following terms: 4/10, 2/30, n/60. The invoice was dated October 15. Sports Authority sent in a payment on October 28. What should have been the amount of the check
Answer:
The amount of check should have been $4,165
Explanation:
4/10, 2/30, n/60 term means there is a discount of 4% and 2 % available on the payment made withing 10 days and 30 days respectively with net credit period of 60 days. The invoice is made on 15 October and the authority sent the payment on October 28 after 10 days and within 30 days. Now the Payment is eligible for the discount of 2%. The amount of check should have been $4,165
Sales Amount = 50 x $85 = $4,250
Discount available = $4,250 x 2% = $85
Amount of Check = $4,250 - $85 = $4,165
At ABC Services, Inc., all employees share a common set of beliefs and values that influence their behavior. This refers to organizational ___________.
Answer:
Organizational Culture
Explanation:
Organizational Culture -
It refers to the beliefs , expectation , values , experiences offered or required by an organisation , is referred to as organizational culture .
Having common customs , beliefs and working culture , makes the working life of the employees easy and convenient in the organisation .
Hence , a good and proper organizational culture is very important to have a good organization .
Hence , from the given scenario of the question ,
The correct answer is Organizational Culture .
Jake, who runs a health food store, finds it is rewarding to interact with customers who like to eat organic and health food. Hence, he is recognized in the local community. Which objective of retailing does Jake emphasize by this practice:__________
Answer:
Personal objective.
Explanation:
Jake, who runs a health food store, finds it is rewarding to interact with customers who like to eat organic and health food. Hence, he is recognized in the local community. Personal objective of retailing that Jake emphasize by his practice.
Personal objective are the retail goal set by retailer, who use skill and domain knowledge of retail to impress other and gain respect from peer group.
There are three type of personal objective in retailing:
Self gratificationPower or authority.Respect.Suppose that 300 bottles of soda are demanded at a particular price. If the price of a bottle of soda rises from that price by 6 percent, the number of bottles of soda demanded falls to 275. Using the midpoint approach to calculate the price elasticity of demand, it follows that the a. demand for bottles of soda in this price range is perfectly elastic. b. price increase will increase the total revenue of soda sellers. c. price elasticity of demand for bottles of soda in this price range is about 0.69. d. price elasticity of demand for bottles of soda in this price range is about 1.45.
Answer: Price elasticity of demand for bottles of soda in this price range is about 1.45. Option D
Explanation: First, we calculate the price elasticity using the midpoint approach thus.
((Q1 - Q2) ÷ ((Q1 + Q2)/2)) / ((P1 - P2) ÷ ((P1 + P2)/2)).
But we already know the percentage increase in price as 6% or 0.06 for further calculations. Therefore, we have:
(300 - 275) ÷ (300 + 275)/2
= 25 ÷ 287.5
= 0.087 or 8.7%
Price elasticity is therefore:
0.087/0.06
= 1.45
Therefore the correct option is D.
The price elasticity of demand for bottles of soda using the midpoint approach is approximately 1.45, indicating that demand is price elastic. Thus, an increase in price would lead to a decrease in total revenue.
Explanation:To determine the price elasticity of demand for bottles of soda, we will use the midpoint approach. The formula for the midpoint elasticity is:
Elasticity = (Percentage change in quantity demanded) / (Percentage change in price)
Change in quantity = 275 - 300 = -25Midpoint quantity = (275 + 300) / 2 = 287.5Change in price = 6% (as the price increases by 6%)The percentage change in quantity demanded is (-25 / 287.5) × 100 = -8.6957%.
Now, we calculate the elasticity:
Elasticity = (-8.6957) / 6 ≈ -1.4493
The demand is price elastic if the absolute value of the elasticity is greater than 1, which means that the quantity demanded changes by a greater percentage than the change in price. Hence, choice d, stating that the price elasticity of demand for bottles of soda in this price range is about 1.45, is correct. This demonstrates that a price increase will indeed lead to a change in quantity demanded by a proportionately larger amount, thus affecting the total revenue with a decrease.
There will be a higher equilibrium price and lower quantity if _____.
demand increases and supply stays the same
supply decreases and demand increases
supply increases and demand decreases
supply decreases and demand stays the same
Answer:
D: supply decreases and demand stays the same
There will be a higher equilibrium price and lower quantity if the supply decreases and demand stays the same. Thus, the statement "supply decreases and demand stays the same" is the correct filler to be filled in.
How does the Law of Supply and Demand affect prices?An economic theory called the law of supply and demand describes how supply and demand are connected to one another and how this relationship impacts how much products and services cost. A basic tenet of economics is that when there is more supply than demand for an item or service, prices decline. Prices typically increase when demand outpaces supply.
When demand is constant, there is an inverse connection between the supply and pricing of products and services. Prices tend to decrease to a lower equilibrium price and a greater equilibrium quantity of goods and services if the supply of goods and services increases while demand stays the same.
Prices tend to increase to a higher equilibrium price and a lesser quantity of goods and services when the supply of goods and services declines and demand stays the same.
Thus, the option "supply decreases and demand stays the same" is correct.
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"A & D Window Cleaning performed $450 of services but has not yet billed customers for the month. If A & D fails to record the adjusting entry, what is the impact on the financial statements?"
Answer and Explanation:
The omitted Entry must be recorded as:
Dr Trade Receivables $450 Balance Sheet Item
Cr Revenue $450 Income Statement
This means that omiting this entry in the books of accounts would understate the revenues and the trades reveivables by $450. So this is impact on the financial statements.
Failure to record the adjusting entry of $450 for services rendered but not yet billed by A & D Window Cleaning will result in understating their revenues and assets, thereby impacting their financial statements.
Explanation:If A & D Window Cleaning fails to record the adjusting entry of $450 for services rendered but not yet billed, this will impact their financial statements by understating their revenues and assets. In accounting terms, this $450 represents an accrued revenue, which is a revenue that has been earned but not yet recorded in the books. Therefore, the failure to record an adjusting entry leads to understated income on the income statement and accounts receivable on the balance sheet, underestimating the company's profitability and financial status.
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Escalating worldwide demand for corn has led to a sharp increase in the market price of corn, and corn prices are likely to remain high. Corn is extensive used as feed for livestock, and because profit margins are tight in the livestock business, many farmers are expected to leave the business. With fewer suppliers, meat prices will surely rise. Nonetheless, observers expect an immediate short-term decrease in meat prices.
Which of the following, if true, most helps to justify the observers’ expectation?
(A) The increase in corn prices is due more to a decline in the supply of corn than to a growth in demand for it.
(B) Generally, farmers who are squeezed out of the livestock business send their livestock to market much earlier than they otherwise would.
(C) Some people who ate meat regularly in the past are converting to diets that include little or no meat.
(D) As meat prices rise, the number of livestock producers is likely to rise again.
(E) Livestock producers who stay in the business will start using feed other than corn more extensively than they did in the past.
Answer:
If consumers who ate meat regularly in the past shifts to other substitute diets,then lower demand for meat could pull the meat price at least in the short term.Hence,the correct option could be (C) in this case.Explanation:
Initially based on the basic demand and supply theory in Microeconomics,the excessive demand for corn as a livestock feed would increase the global corn price which along with less meat suppliers would be sequentially reflected in higher meat prices.Now,the higher price of corn as a raw material for livestock maintenance would raise the final price of meat in the market but to lower the prices at the same time,some demand side adjustment/s need/s to be made to restore the meat price to its previous point or position.Therefore,if the consumers switch to substitute diets for meat,the demand for meat decreases in the near future or considerably short period and the expected hike in meat price can be prevented or it can possibly decrease.Therefore,based on the demand and supply model,in this case,demand side adjustments in the market can expectedly contain the meat prices and pull it down in the short run.
Common-size statements: Multiple Choice Reveal changes in the relative importance of each financial statement item to a base amount. Show the dollar amount of change for financial statement items. Do not emphasize the relative importance of each item. Compare financial statements over time. Reveal patterns in data across successive periods.
Answer:
Reveal changes in the relative importance of each financial statement item to a base amount
Explanation:
The common size statement refers to the financial statement in terms of balance sheet, income statement, cash flow statement, etc that determines the analysis between the companies of the same industry or different industry. It can be expressed in terms of percentage.
Therefore, in the common size statement it reveals the changes made with respect to the base amount
Mad Hatter Publishing specializes in genre fiction for young adults. A popular mystery author has just completed the final book in a trilogy. Currently, production at Mad Hatter Publishing is at point R. To which point or points is production likely to shift?
A. Q or R
B. Q or T
C. T or V
D. V or Q
Final answer:
The question lacks context to accurately determine to which point Mad Hatter Publishing's production is likely to shift after completing a popular mystery trilogy. In general, shifts in production are based on market trends, genre popularity, and anticipated demand.
Explanation:
The question seems to be based on a hypothetical situation involving Mad Hatter Publishing, specializing in genre fiction for young adults, and a shift in its production following the completion of a book trilogy by a mystery author. Since the actual positions (Q,R,T,V) are not described within the context of how the publishing process operates or what these points might represent, it is not possible to provide a definitive answer.
In the publishing industry, a company might shift its production focus based on a variety of factors such as genre popularity, market trends, and sales forecasts. For example, if the final book in a popular mystery trilogy is complete, the company might increase its production capacity (perhaps move to point T or V) in anticipation of high demand, or it might diversify its production by focusing on another burgeoning genre (moving to point Q), managing its portfolio to minimize risk and maximize potential revenue.
Genres like mystery tales often contain elements made famous by authors such as Edgar Allan Poe and Mary Shelley, who created stories with monsters, occult forces, and magic. Gothic tales, a sub-genre referenced in the given context, features supernatural and dream-like events in settings like abandoned castles with ghosts and vampires. These references to well-known authors and story elements illustrate the kinds of genre fiction that a company like Mad Hatter Publishing might produce.
On August 1, Greene Company purchased merchandise inventory on account with a list price of $25,000 and credit terms of 2/10, n/30. What is the correct journal entry to record the August 1 purchase?
Answer:
August 1, merchandise purchased on account 2/10, n/30
Dr Merchandise inventory 25,000
Cr Accounts payable 25,000
Explanation:
If Greene paid within the discount period, the journal entry to record the payment would be:
August 2-11, payment of accounts payable
Dr Accounts payable 25,000
Cr Cash 24,500
Cr Purchase discounts 500
If Greene didn't paid within the discount period, the journal entry to record the payment would be:
August 20, payment of accounts payable
Dr Accounts payable 25,000
Cr Cash 25,000
Economists say competitive markets are efficient because:
a. by producing in the output range where MB > MC, profits are earned and the difference between consumer surplus and producer surplus is maximized.
b. by producing in the output range where MB < MC, profits are reduced and the difference between consumer surplus and producer surplus is maximized.
c. by producing up to the point where MB > MC, profits are earned and the difference between the consumer surplus and producer surplus is maximized.
d. by producing up to the point where MB = MC, profits are maximized and the difference between the consumer surplus and producer surplus is maximized.
Answer:
d. by producing up to the point where MB = MC, profits are maximized and the difference between the consumer surplus and producer surplus is maximized
Explanation:
An economist says that the competitive markets are more effective due to the fact that the profits are maximized and this is shown the difference between the consumer surplus and producer surplus. Where the marginal benefit is equal o the marginal costs.Competitive markets are efficient when they produce up to the point where the marginal benefit equals the marginal cost (MB = MC), maximizing profits and the difference between consumer and producer surpluses.
Explanation:Economists claim that competitive markets are efficient precisely because of answer option 'd': they operate up until the point at which marginal benefit (MB) equals marginal cost (MC). When MB = MC, this indicates that resources are being utilized most efficiently and that profits are being maximized. The reason for this balance is because the cost of producing an additional unit of a product or service (MC) is identical to what consumers are willing to pay for that unit (MB). Also, where MB equals MC is the prime point at which the variation between consumer surplus and producer surplus is maximized. Consumer surplus is the gap between what consumers are ready to pay and what they actually pay, and the producer surplus is difference between the lowest price a firm would be willing to accept and the actual price it receives.
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Which of the following statements is true of direct ownership? It allows transfer of power and management to firms in host countries. It leads to the possibility of unauthorized diffusion of firm-specific know-how. It provokes protectionist responses from host countries. It provides a firm with equity ownership rights and management control rights.
Answer:
Direct ownership provides a firm with equity ownership rights and management control rights.
Explanation:
Direct Ownership refers to the ownership of an equity interest in an enterprise; such equity interest includes : the right to take part in the voting rights in that enterprise; the right to receive unburdened economic interest (such as dividends) entitled to the shareholders of that enterprise; and Broad-based BEE schemes, employee share option schemes (ESOPs) and other employee share schemes, where the beneficiaries have the the capacity to elect and remove trustees and also have the absolute right to receive economic benefits .
Thus, Direct ownership provides a firm with equity ownership rights and management control rights.
Direct ownership provides a firm with equity ownership rights and management control rights. The correct option is c.
Explanation:Direct ownership entails a firm's acquisition of assets or investment in another entity, granting it ownership rights such as control over management decisions and equity ownership. Unlike other forms of international business involvement like licensing or franchising, direct ownership allows firms to exercise significant control over their operations in host countries, including decision-making processes and strategic direction.
This level of control is advantageous as it enables firms to align business operations with their overall objectives and adapt to local market conditions efficiently. Therefore, direct ownership serves as a means for firms to establish a strong presence in foreign markets and exert influence over their business activities, making it a preferred strategy for expansion and market penetration.
Richard, an engineer, supervises the construction of a new mountainside roadway. When the road collapses in a landslide due to faulty grading, Richard is sued by motorists and hikers injured in the collapse. As a professional, Richard is held to the same standard of care as:_______.a. ordinary persons.
b. other engineers.
c. other professionals, including doctors, dentists, and lawyers.
d. those injured in the collapse of the bridge.
Answer: Other Engineers.
Explanation:
In the event of a bridge collapse the engineer that supervised the project would be held responsible because he/she was unable to avoid all possible factors that could have led to the bridge collapse, as is required in the engineering profession. Therefore, when supervising a construction job the engineer in charge has to ensure that all possible factors that can lead to structure failure is eliminated.
Cost-volume-profit (CVP) analysis is a simple but powerful tool to assist management in making operating decisions. Which of the following does not represent a potential use of CVP analysisAids in evaluating tax planning alternatives.
Complete Question:
Cost-volume-profit (CVP) analysis is a simple but powerful tool to assist management in making operating decisions. Which of the following does not represent a potential use of CVP analysis Aids in evaluating tax planning alternatives?
A. Ability to compute the break-even point.
B. Aids in evaluating tax planning alternatives.
C Ability to determine optimal sales volumes.
D. Aids in determining optimal pricing policies.
Answer:
Aids in evaluating tax planning alternatives.
Explanation:
Examination of the cost-volume profit (CVP) is used to assess how price-volume changes will affect operating profit and net revenue of a company.
There are several considerations in the conduct of this study, including that sales rates per product are constant. The cost is continuously variable per hour. There are constant overall fixed costs.
To order to make informed choices about the goods or services that they sell, often businesses and accountants use cost-volume benefit analysis. CVP analysis plays a greater role to management accounting than in finance accounting in this regard.
CVP analysis is a business tool used to help management make decisions on operations by assessing cost behavior and profit relationships. It is not commonly used for tax planning but rather for understanding the break-even point, effect of cost changes, and predicting profit outcomes based on sales and cost structures.
Cost-volume-profit (CVP) analysis is a strategic management tool used to determine the effects of changes in costs and volume on a company's profits.
It is primarily used by management for making integral operating decisions, such as determining the amount of sales necessary to break even or achieve a certain profit level, assessing the impact of changing costs, and analyzing the relationship between volume, costs, and prices.
CVP analysis is not typically used for evaluating tax planning alternatives; instead, it focuses on operational aspects such as determining the break-even point, analyzing the effects of changes in variable and fixed costs, understanding cost behavior, and calculating the margin of safety.
The core components of CVP analysis include fixed costs, variable costs, contribution margin, and the sales price.
By dividing total costs into fixed and variable costs, and analyzing these alongside sales and revenue, businesses can make informed decisions about production levels and pricing in order to maximize profits.
This division is crucial for understanding how costs behave with changes in the level of activity within the firm.
Additionally, CVP can aid in decision-making processes by performing cost/benefit analyses and assessing the financial viability of new programs or expansions.
When other companies cannot duplicate the value provided by a competitor, then the competitor has established a(n) _____ competitive advantage. sustainable benchmark ambiguous VRIO
Answer:
sustainable competitive advantage
Explanation:
Sustainable competitive advantage -
It refers to the assets of a company , that are nearly impossible to replicate , is referred to as sustainable competitive advantage .
These assets or the abilities make the company to stand out from the rest of the companies in the competitive market .
And makes the company to excel and earn more profit than other companies .
Hence , from the given scenario of the question ,
The correct answer is sustainable competitive advantage .
As the CEO of a start-up recycling company, you are interested in benchmarking industry leaders. Recology CleanScapes uses open-book management. Which of the following would you expect to find in an analysis of Recology CleanScapes?
A. Employees believe that being more efficient benefits both the company and themselves.
B. Employees understand how their job performance impacts company results.
C. Employees are dissatisfied because being asked to understand company financials is an unreasonable burden.
D. All are correct.
Answer:
A. Employees believe that being more efficient benefits both the company and themselves.
B. Employees understand how their job performance impacts company results.
Explanation:
As the CEO of a start-up recycling company, you are interested in bench-marking industry leaders. Recology CleanScapes uses open-book management. You can expect to find option A and B in the analysis of Recology CleanScapes. Open book management is one of the best management approaches where workers are shown the organization's financial information so they can make better decisions. In open book management, employees believe that being more efficient benefits both the company and themselves. Employees also understand how their job performance impacts company performance, productivity and results. They will not be dissatisfied and are not going to take understanding of the company's financial facts and figures as an unreasonable burden. They will be more satisfied, productive and loyal employees in the longer run.
Many countries in sub-Saharan Africa have very low labor productivity in many sectors, for example in manufacturing and agriculture. They often despair of even trying to attempt to build their industries unless it is done in an autarkic context, behind protectionist walls because they do not believe they can compete with more productive industries abroad. Discuss this issue in the context of the Ricardian model of comparative advantage.
Answer:
The government of those countries are using a very common argument in favour of protectionism, and that is the infant industry argument.
They are saying that the only way a domestic industry can emerge, is by closing it off from foreign competition, until it becomes so strong that it can compete.
In the Ricardian Model, this view would be incorrect because the governments are not taking advatange of their countries comparative advantage. Under a Ricardian Model, no matter how poor the country is, if it specializes in the sectors where it has a comparative advantage, and imports the rest, it will make allow its citizens to consume more goods and services.
Faced with constantly changing conditions, why would a firm ever keep any factors fixed? What criteria determine whether a factor is fixed or variable?
Final answer:
Firms may keep certain factors fixed in order to maintain stability or control over their operations. Fixed factors in business are typically those that are difficult or expensive to change in the short term. Variable factors can be easily adjusted or changed in response to market conditions.
Explanation:
In business, firms may choose to keep certain factors fixed to maintain stability or control over their operations. For example, a firm may choose to keep its workforce or facilities fixed if it wants to maintain a consistent level of production or if it is currently unable to make changes due to financial or logistical constraints.
Factors that are considered fixed in business are typically those that are difficult or expensive to change in the short term. This can include long-term contracts with suppliers or landlords, the size and layout of physical facilities, or the skillsets and experience of employees.
On the other hand, factors that are considered variable in business are those that can be easily adjusted or changed in response to market conditions. This can include factors such as product pricing, advertising strategies, production levels, or the use of technology.
The following information for Towsontown, Inc. is provided: Net Sales: $88,000 Operating Costs: $72,000 (doesn’t include depreciation) Depreciation Expense: $ 7,200 (no amortization charges occurred) Debt: $40,000 Interest Rates: 10% Annual Tax Rate: 34% How much net cash flow did Woodley generate over the past year? a. $3,168 b. $3,268 c. $10,168 d. $10,368 e. $11,368
Answer: d. $10,368
Explanation:
We can Calculate net cash flows by calculating Net Income and then add/subtract non cash items like depreciation ,accrued income etc.
Net Income Calculation
Net Income = $88000
Operating Costs = $72000
Depreciation = $7200
interest expense = $40000 x 10% = $4000
Net profit before Tax = 88000 - 72000 - 7200 - 4000 = 4800
income Tax expense = 4800 x 34/100 = 1632
Net income = 4800 - 1632 = $ 3168
Net Cash Flows = Net Income + Depreciation
Net Cash Flows = $3168 + $7200 = $10368
The supply curve for a good will be more elastic if:
a. production inputs are readily available at a relatively low cost.
b. there is very little time for producers to respond to a price change.
Answer:
a. production inputs are readily available at a relatively low cost. Supply is said to be elastic when a small change in prices leads to a greater demand in the quantity of goods supplied. In this case Elasticity is greater than 1
Explanation:
Elasticity of supply measures the extent to which the quantity of a commodity supplied by the producer changes as a result of a little change in the price of the commodity. Elasticity of supply is the degree of responsiveness of supply to little changes in the price of a commodity
Transaction exposure and operating exposure exist because of unexpected changes in future cash flows. The difference between the two is that ________ exposure deals with cash flows already contracted for, while ________ exposure deals with future cash flows that might change because of changes in exchange rates.
Answer:
Transaction exposure deals with cash flows already contracted for, while operating exposure deals with future cash flows that might change because of changes in exchange rates
Explanation:
Transaction exposure deals with changes in cash flow due to default of counter party in making the amount promised available to our business at the contracted time.This would necessitates looking elsewhere for short-term funding,should the default arises.
On other hands,operating exposure results from fluctuation in exchange rate.If domestic exchange rate strengthens,the local equivalence of a foreign currency receivable in future reduces,hence the shortfall is due to operating exposure.
Transaction exposure is concerned with cash flows from existing contracts that may be affected by exchange rate changes, while operating exposure deals with how future cash flows might shift due to long-term exchange rate fluctuations.
Explanation:Transaction exposure and operating exposure are both linked to the unpredictability of future cash flows due to changes in exchange rates in international business. The difference between the two lies in how they're related to cash flows. Transaction exposure deals with cash flows already contracted for, such as a U.S. company that has signed a deal to buy Canadian lumber. This exposure is related to the risk of exchange rate changes between the time a contract is signed and when the transaction actually takes place. Operating exposure, on the other hand, concerns itself with future cash flows that might change because of long-term changes in exchange rates, affecting the firm's competitive position and future earnings.
Vernon spends the following percentages of his budget on the following goods: 23 percent on good A, 11 percent on good B, 1 percent on good C, and 3 percent on good D. For which good is price elasticity of demand the highest, ceteris paribus?a. good A.
b. good B.
c. good C.
d. good D.
Answer:
a. good A.
Explanation:
Data provided in the question
Spending percentage are as follows
For goods A = 23%
For goods B = 11%
For goods C = 1%
For goods D = 3%
Now the highest price elasticity of demand by ceteris paribus that means all other things would remain unchanged or constant
Since, Goods A has the highest spending percentage so it would lead to the highest price elasticity of demand
Touchtech earns revenue when edison purchases 100 shares, even if he purchases them from an existing shareholder.
Answer:
A. An increase in the perceived profitability of Touchtech will likely cause the value of Edison's shares to rise.
B. Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Edison's shares to decline
Explanation:
The price of the stock changes only because of the changes in the profitability of the firm. If the company is earning lower profits then the prices of the stock will fall and vice versa. So the option A is correct because increase in profitability increases the value of the shares.
So the main thing here is the profitability of the firm which is affected by the recession in the economy because during the recession period the profitability of the firm decreases and so the value of the stock decreases. So the option B is correct