Answer:
Credit to Gain on Sale of Investments for $2,400
Malcolm has decided that he wants to open up his own law practice. The time has come to establish prices for his services. Due to his extensive experience and legal background, he believes that his fees should not relate directly to the time or effort spent on specific cases. Now that Malcolm has chosen the pricing strategy he wants to use, what is his next step?
a. evaluating competitors' prices
b. choosing a basis for setting prices
c. determining the final price
d. assessing the target market's evaluation of price
e. developing pricing objectives
Answer:
After Malcolm has chosen the pricing strategy he wants to use, the next step would be c. determining the final price.
Explanation:
Malcom would have to determine a specific price for cases, and this final price is not dependant on the amount of time spent on each cases or the magnitude of the case.
In a staff meeting, Mark is employing Dr. De Bono’s Six Thinking Hats. Doug expresses all the positives about being open on Thanksgiving. Rashmi presents the data from the last three years on sales from that day. Rafael explains why staying open late on Thanksgiving will not be in the employees or client’s best interests. Sophie explores using the Internet only and not having the brick and mortar stores open. Which color hat would Rafael wear?
Answer:
B) black
Explanation:
Dr. De Bono's decision making technique assigns a hat color to each participant, and the participant's role is determined by the color of the hat. Then participants exchange hats in order to be able to consider another and possible arguments in favor or against a proposal.
White hat ⇒ just the facts please.Yellow hat ⇒ explore the positives and probe for value and benefit. Black hat ⇒ the devil's advocate or why things will not work. Red hat ⇒ express emotions and share feelings. Green hat ⇒ focuses on the possibilities, alternatives, and new ideas. Blue hat ⇒ manages and controls the process.The correct answer is the Black Hat.
In Dr. Edward de Bono's Six Thinking Hats method, each hat represents a different mode of thinking. Rafael is expressing caution and concern about the potential negative consequences of staying open late on Thanksgiving for both employees and clients. The Black Hat is associated with caution and critical judgment, where one looks for weaknesses, problems, and what could go wrong. Rafael's analysis aligns with the critical thinking and risk assessment that the Black Hat represents.
To summarize:
- White Hat: Focus on facts and figures, like Rashmi presenting sales data.
- Red Hat: Emotional view, expressing feelings and intuition without any need for justification.
- Black Hat: Logical negative, looking at the cautious and critical side, focusing on potential problems and risks. This is the hat Rafael would wear.
- Yellow Hat: Logical positive, optimistic view, focusing on values and benefits. This is the hat Doug would wear as he expresses the positives.
- Green Hat: Creative thinking, exploring new ideas and alternatives, like Sophie's suggestion of using the Internet only.
- Blue Hat: Process control, organizing thoughts and managing the thinking process.
Therefore, Rafael would be wearing the Black Hat as he is focusing on the potential negative consequences of the proposal.
Hiram has learned to seek attention by engaging in appropriate behavior namely by watching his brother receive attention for hitting and bitting and then imitating his behavior.Hiram has learned to seek attention by engaging inappropriate behavior by using which techniques?
Explanation:
Modeling behavior:
It is also called "Observational learning".
Modeling behavior, imitates the action of another person by observing the person.
Real-life example:
Take an example of infants and child. They learn initially by observing their parents, siblings. When they slowly start moving out of home, they learn from surroundings and so on. Even the elderly learns new language by observing and imitating only.
Conclusion for the situation:
According to the given situation Hiram is actually observing his brother's behavior and imitating the same.
Hiram has learned to seek attention by engaging in inappropriate behaviors through the technique of 3) modeling.
Modeling occurs when individuals observe and imitate the behavior of others. In this case, Hiram has watched his brother receive attention for hitting and biting and has subsequently imitated these behaviors to gain similar attention.
Modeling is a key concept in social learning theory, which posits that people can learn new behaviors by observing and copying others, especially when those behaviors result in rewards or positive reinforcement. By imitating his brother’s actions, Hiram is effectively using modeling to acquire and reinforce inappropriate behaviors, demonstrating how observed actions can influence one’s own conduct.
Complete question:
Hiram has learned to seek attention by engaging in inappropriate behaviors, namely by watching his brother receive attention for hitting and biting and then imitating his behavior. Hiram has learned to seek attention by engaging in inappropriate behaviors by using which of the following techniques?
1) reinforcement
2) token economy
3) modeling
4) extinction
The unemployment rate in Economy X when it is growing normally is 5%. When Economy X is in a recession, the unemployment rate is 10%. Drag each word or phrase to the appropriate blank space in order to complete the paragraph correctly.Drag word(s) below to fill in the blank(s) in the passage.
The _______ unemployment rate while Economy X is _______ s 0%. The 5% unemployment rate is due to structural and __________ factors.
Answer: The cyclical unemployment rate while Economy X is growing normally is 0%. The 5% unemployment rate is due to structural and frictional factors.
_____ is a strategy for reducing risk by buying a variety of items so that the failure of one stock or one business does not doom the entire portfolio. Group of answer choices Diversification Exit planning Retrenchment Downsizing
Answer: Diversification
Explanation: Diversification strategy involves widening the scope of the organization across different products and market sector. Furthermore, it is used to expand firms operations and productivity by adding markets, products, services, or stages of production to the existing business and the main aim of diversification is to minimize the risk by investing in range of products. It helps in reducing the market volatility.
Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 and, as a result, the quantity of bags demanded increases from 600 to 800. Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is:_______. a. 0.35 b. 0.43 c. 2.33 d. 2.89
Answer:
The correct answer is C,2.33
Explanation:
The midpoint formula for elasticity of demand is given as :
percentage change in quantity demand/percentage in price
percentage change in quantity demanded is Q2-Q1/(Q2+Q1)/2*100
percentage change in price is P2-P1/(P2+P1)/2*100
P1=$6.5
P2=$5.75
Q1=600
Q2=800
percentage change quantity demanded =(800-600)/(800+600)/2*100
percentage change quantity demanded=28.57142857
Percentage change in price=(5.75-6.5/(5.75+6.5)/2)*100
percentage change in price=12.24489796
midpoint elasticity of demand= 28.57142857 /2.24489796
=2.33
The structure of Sandal Mart consists of people with similar specialties put together in formal groups, such as the marketing, accounting, and human resource departments. Sandal Mart has a ________ structure.
Answer:
Functional structure.
Explanation:
Functional structure of a business is one that is based on the different functions that exists in different departments. For example a business can be structured with accounting, sales, operations, and human resources seperate. People with similar specialities are grouped together to achieve departmental objectives.
The advantage of this is that communication within the department is good and they work efficiently because they understand themselves.
Communication between departments is done between the department heads.
Jacobs Company has inventory of 15 units at a cost of $12 each on June 1. On June 5, Jacobs purchased 10 units at $13 per unit. On June 12, it purchased 20 units at $14 per unit. On June 17, it sold 30 units. Using FIFO, what is the value of the inventory at June 17 after the sale
Answer:
The value of the inventory on hand is $210
Explanation:
Inventory on hand / purchased;
June 1 - 15 units at $12
June 5 - 10 units at $13
June 12 - 20 units at $14
total units on hand = 45 units
Sale - 30 units sold
units left on hand 15.
Since there are only 15 units left on hand, and the $12 and $13 inventory units have all been sold since they were in first before the inventory purchased on June 12 the value of the inventory on hand is 15 x $14 = $210.
Answer:
$210
Explanation:
Given that
15 units cost $12 each = $180
10 units costs $13 each = $130
5 units cost $14 each = $70
Thus using FIFO which is first in, first out
Value of inventory sold = 180 + 130 + 70
= $380.
15 units are left costing $14 each
Therefore,
Value of inventory after sale
= 15 × 14
= $210
Estimated costs for activity cost pools and other item(s) are as follows: Machining $500000 Assembling 200000 Advertising 450000 Inspecting and testing 175000 Total estimated overhead isA. $875000. B. $1150000. C. $1325000. D. $700000.
Answer:
A) $875000
Explanation:
total estimated manufacturing overhead costs = machining costs + assembling costs + inspecting and testing costs = $500,000 + $200,000 + $175,000 = $875,000
Advertising costs ($450,000) are included under sales and administrative costs, not production costs.
To calculate the total estimated overhead, the costs provided for various activity cost pools such as machining, assembling, advertising, and inspecting and testing should be added together. The sum of these costs is $1,325,000, which matches option C.
Explanation:The question involves calculating the total estimated overhead by adding the costs for different activity cost pools. To find the total estimated overhead, we must sum the given individual cost estimates:
Machining: $500,000Assembling: $200,000Advertising: $450,000Inspecting and testing: $175,000Adding these amounts together equals:
$500,000 + $200,000 + $450,000 + $175,000 = $1,325,000
Therefore, the correct answer for the total estimated overhead is $1,325,000, which corresponds to option C in the multiple-choice question provided by the student.
Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that:_______.A. All three countries will grow at the same rate.
B. Country A will grow the fastest.
C. Country B will grow the fastest.
D. Country C will grow the fastest
Answer:
correct option is B. Country A will grow the fastest.
Explanation:
given data
Real GDP Country A = $10,000
Real GDP Country B = $20,000
Real GDP Country C = $30,000
solution
here we can say Country A will grow the fastest
because Country A has more potential to grow due to low base
and that is results in more growth till it matures
so correct option is B. Country A will grow the fastest.
Intel has just paid a dividend of $62 per stock. Intel is expected to pay regular annual dividend indefinitely. The growth rate of Intel dividend is expected to be 10% in the first three years and then 3% indefinitely. If you require a return of 8%, how much are you willing to pay (in $) for the stock? Round your answer to at least 2 decimal places.
Answer:
I will pay $1,364
Explanation:
Dividend Valuation method is used to value the stock price of a company based on the dividend paid, its growth rate and rate of return. The price is calculated by calculating present value of future dividend payment.
Formula to calculate the value of stock
Dividend in first years = 62 x 110% = $68.2
Price = Dividend / ( Rate or return - growth rate )
Price = $68.2 / ( 8% - 3% )
Price = $68.2 / 5%
Price = $68.2 / 0.05
Price = $1,364
Why do economic growth rates matter? A. High growth rates coincide with improved living standards. B. When a country sustains high growth rates, life expectancy at birth increases. C. High levels of sustained economic growth reduce infant mortality. D. All of the above. E. A and C only. Click to select your answer.
Answer:
D. All of the above
Explanation:
There are many various main reasons as to why economic growth rates matter in the world. For starters the high growth rates coincide with improved living standards, thus meaning people live better. Increased levels of sustained economic growth signal a reduction in infant mortality, therefore also increasing the life expectancy at birth.
Todd and Jim quickly learned that running a sailing business required a lot more than just taking folks for boat rides in exchange for a few dollars. In order to succeed as entrepreneurs Todd and Jim had to be all of the following except:
Self-directed
Highly energetic
Risk averse
Action-oriented
Self-nurturing
Final answer:
Entrepreneurs like Todd and Jim need to be self-directed, highly energetic, action-oriented, and self-nurturing but not risk averse, as taking calculated risks is essential for success in starting and running a business.
Explanation:
Todd and Jim's journey as entrepreneurs shows that they must embody certain traits to succeed in running a sailing business. These characteristics typically include being self-directed, having high energy, being action-oriented, and self-nurturing. However, being risk averse is not a trait that aligns with the entrepreneurial spirit, as entrepreneurs are known for taking calculated risks. They must weigh potential benefits against risks before investing in a project and be prepared to risk their own capital to showcase their belief in their venture's prospects. This trait is crucial since any startup is inherently risky, and having an understanding of the business plan and the drive to work hard are pivotal for success.
Todd and Jim had to embody traits like being self-directed, highly energetic, action-oriented, and self-nurturing to succeed as entrepreneurs in the sailing business.
However, being risk averse, or avoiding risks, can limit their ability to make bold decisions and seize opportunities essential for growth.
Entrepreneurs often need to take calculated risks, innovate, and adapt quickly to changing circumstances.
Therefore, while caution is prudent, an overly risk-averse mindset may hinder their ability to navigate challenges and capitalize on new opportunities in the dynamic and competitive sailing industry.
At her neighbor's garage sale, Constance buys a vanity dressing table from her neighbor, Carlos, for $160. Constance purchased the vanity table for her own personal use, without any knowledge that Carlos has signed a security agreement giving All Purpose Furniture Inc. a security interest in the vanity table. All Purpose Furniture did not file a financing statement. Constance does not know that Carlos is still paying off the purchase money security interest and owes All Purpose Furniture, Inc. $400. Under these circumstances:
Constance takes the vanity table free of All Purpose's security interest because she is a buyer of consumer goods.
Answer:
Constance takes the vanity table free of All Purpose's security interest because she is a buyer of consumer goods.
Explanation:
Posting:__________. 1. transfers ledger transaction data to the journal. 2. is an optional step in the recording process. 3. normally occurs before journalizing. 4. transfers journal entries to ledger accounts.
Answer:
3) normally occurs before journalizing.
Explanation:
In accounting, posting refers to transferring the balances of the subledgers into the general ledger. When you are posting the balances, you are only transferring the total balance, and not every single individual transaction into the general ledger.
What is the financial impact on a company when a customer returns a product for a refund? A. Sales revenue will decrease because sales revenue will be debited. B. Sales revenue will increase because sales revenue will be credited. C. Sales revenue will not be impacted because the company has already accrued for estimated refunds and returns. D. Returns expense will increase because returns expense will be debited.
Answer:
The correct answer is A.Sales revenue will not be impacted because the company has already accrued for estimated refunds and returns.
Explanation:
If a customer wishes to return or obtain a refund of any product or service that you have sold and that you have been paid for, you must create and register a sales credit note that specifies the required change. To include the correct sales invoice information, you can create the sales credit note directly from the posted sales invoice or you can create a new sales credit note with copied invoice information.
We first knew them as the cute, loving characters on Full House, but today Mary-Kate and Ashley Olsen are not only the characters in their sitcoms and videos, but also a fashion phenomenon. Their Mary-Kate and Ashley clothing line is manufactured and sold exclusively by Wal-Mart. Mary-Kate and Ashley receive royalties from Wal-Mart in exchange for the use of their names. This is an example of which branding concept?
Answer:
licencing
Explanation:
Based on the information provided within the question it can be said that this scenario is an example of the branding concept known as licencing. This term refers to an agreement to let another company to produce or market the brand or product from the original owner. In exchange for doing so the original owner receives royalty payments.
Mary-Kate and Ashley's clothing line with Wal-Mart is an instance of celebrity branding or endorsement. This strategy leverages the popularity of the celebrity to sell products. Similar tactics are seen with companies like Abercrombie & Fitch with their 'casual luxury' slogan or corporations using popular students as brand ambassadors.
Explanation:Mary-Kate and Ashley's business relationship with Wal-Mart, where they receive royalties in exchange for the use of their names on a clothing line, is an example of what's known as celebrity branding or celebrity endorsement. This branding strategy proves effective because it leverages the popularity and credibility of the celebrity to promote and sell products.
For instance, Abercrombie & Fitch utilised a similar tactic when they trademarked their slogan 'casual luxury'. This phrase is meant to evoke feelings of comfort and exclusivity, akin to the essence of their brand. Using this slogan consistently in their advertising, they create a brand image that resonates with their target market.
Another example close to our subject matter would be the practice of companies hiring college students as on-campus brand ambassadors. If we trust a well-known figure, like a celebrity or popular student, to make recommendations, we're more likely to identify with and purchase that product. Ultimately, Mary-Kate and Ashley's clothing line reflects the powerful marketing strategy that is celebrity branding.
Learn more about Celebrity Branding here:https://brainly.com/question/27383781
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All purchase/sale transactions are made on credit. The company uses the FIFO method and perpetual inventory system to record transactions. The entry to record the transaction on December 10 will involve a debit to Cost of Goods Sold for _____.
The entry to record the transaction on December 10 will involve a debit to Cost of Goods Sold for the cost of the oldest inventory on hand.
Explanation:When using the FIFO method and perpetual inventory system to record transactions, the entry to record a purchase/sale transaction on December 10 involves a debit to Cost of Goods Sold for the cost of the oldest inventory on hand.
This means that the cost of the first inventory items purchased will be transferred to the Cost of Goods Sold account. The specific dollar amount will depend on the cost of those items.
For example, if the cost of the oldest inventory on hand is $100, the entry to record the transaction would be a debit to Cost of Goods Sold for $100.
The Johnsons have a second home that was available to rent for four full weeks (28 days) during the summer. Of the twenty-eight days, the Johnsons rented it to unrelated tenants for 16 days at fair market value. In addition, the Johnsons rented the home to the Florians for four days. Because they are family friends, the Florians only paid half the market rate for the rent. The Johnsons also rented the home for five days to the Smiths. The Smiths paid full fair market value rent even though they are related to the Johnsons. How many days did the Johnsons use the home for rental purposes during the year
Answer:
16
Explanation:
The Johnsons only rented the second home to unrelated tenants during 16 days, and that is the period that counts for rental purposes.
When you rent a property to relatives or family members, it doesn't count as rental purpose, it counts as personal use even if they paid you rent. If you rent the property for less than fair market value, it also counts as personal use.
Jasper is a first-line manager at a heating and HVAC company. Although he no longer goes out to customers' homes and does their repairs, since he worked in the field for over 20 years, he is able to train employees, answer questions, provide guidance, and solve problems. These abilities most closely describe his
Answer:
technical expertise
Explanation:
technical expertise refers to the high level of knowledge acquired (usually through work experience) about some type of technology or technical work. For example, a mechanic that has repaired cars for more than 30 years would be considered to have technical expertise.
In this case, Jasper's 20 year long experience means that he knows a lot about air conditioners and heating, and that he might be able to train others to pass that knowledge. In Europe, seasoned employees, are very valuable because they takes apprentices and teach them what they learned during their long careers.
Final answer:
Jasper's first-line managerial role involves using his managerial skills to train employees, answer questions, provide guidance, and solve problems, leveraging his extensive field experience.
Explanation:
Jasper's abilities at the heating and HVAC company where he is a first-line manager most closely describe his managerial skills. With over 20 years of field experience, Jasper is well-equipped to train employees, answer questions, provide guidance, and solve problems. These skills are vital to his role as a manager as they enable him to effectively oversee and support the work of his subordinates, even though he no longer performs repairs himself. Jasper's technical expertise, gained from years of hands-on work, underpins his ability to train others and offer sound technical advice, which contributes to the overall efficiency and effectiveness of his team.
Using the above information, fill in the chart below with the amounts that should be reported for total cost of goods sold for December and the cost of ending inventory at Dec 31 under both the FIFO and LIFO cost flow assumptions.
Answer: please refer to te explanation section
Explanation:
The question is incomplete , to calculate inventory balance under FIFO or LIFO we need inventory transactions. The Transactions were not given in the question. I will explain the FIFO and LIFO concepts and also provide an example to show how to use these concepts.
FIFO Costing Method
FIFO costing Method is an inventory costing system that is based on the assumption that stock items purchased or stock items placed in inventory first will be sold first hence the acronym FIFO which stands for first in first out. the balance of inventory at the end of the period thus shows stock most recently purchased stock items or stock items placed in inventory.
LIFO Costing
Method LIFO costing Method is an inventory costing system that is based on the assumption that stock items most recently Purchased or stock items most recently placed in inventory will be sold first, hence the acronym LIFO which stands for last in first out.
example
10 February 2019 Purchased inventory for $1000. 100 units costing $10 each.
15 February 2019 Purchased inventory for $4500. 300 units costing $15
20 February 2019 Sold 150 units of inventory.
FIFO method
150 units were sold, therefore the first 100 units out of 150 will taken from inventory purchased on the 10th of February and 50 units will take from inventory purchased on the 15th of February. The inventory Balance will 300 units minus 50 units
inventory Balance = (300 - 50) x 10 = 250 x 15 = 3750
LIFO method
150 units were sold, the entire 150 units sold will be taken from inventory purchased on 15th of February. inventory balance will 300 units minus 150 units sold plus 100 units from inventory purchased on the 10th.
inventory Balance = (30 -150) x 15 + 100 x 10 = (150 x 15) + (100 x 10) = 3250
Natalie, a manager at a branch of Blue Soul Spa, leads all the ten employees working in her branch. She reports directly to the owner of Blue Soul Spa. Thus, in the context of span of control, Blue Soul Spa is a tall organization.1. True2. False
Answer:
2) False
Explanation:
Span of control refers to the number of subordinates that report to a supervisor or manager within an organization. In the context of span of control, this organization would be considered a flat organization since it has 10 subordinates per supervisor. Tall organizations have 1-4 subordinates per supervisor.
The company sponsors a two-day training meeting for managers and there is a one-hour session on how personality affects employee performance. Intrigued, you do some research on personality, and find there are a lot of different types and tools used to assess them. Of all of the personality types, which one do you think is the most important predictor of job success?
Answer:
conscientiousness
Explanation:
Personality type refers to the psychological classification of different types of individuals. Conscientiousness is one of the five personality traits of the Big Five personality theory. Conscientious people are dependable and know that succumbing to convenience kills long-term goals, and that good things take time and hard work.Cognitive ability is consistently the best predictor of job performance across all job types, levels and industries. Cognitive ability covers a wide variety of aptitudes including spatial reasoning, logical reasoning, verbal skills, computational skills, and analytical skills.
Oriole Company sells office equipment on July 31, 2017, for $21,900 cash. The office equipment originally cost $76,780 and as of January 1, 2017, had accumulated depreciation of $36,270. Depreciation for the first 7 months of 2017 is $4,070. Prepare the journal entries to (a) update depreciation to July 31, 2017, and (b) record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Explanation:
The journal entries are shown below:
a. Depreciation expense A/c Dr $4,070
To Accumulated Depreciation - Equipment A/c $4,070
(Being depreciation expense is recorded)
b. Cash A/c Dr $21,900
Accumulated Depreciation - Equipment A/c $40,340
Loss on sale of an equipment $14,540
To Equipment $76,780
(Being sale of equipment is recorded and the remaining balance is debited to the loss on sale of an equipment)
The accumulated depreciation is computed below:
= $36,270 + $4,070
= $40,340
On the twentieth day of the month, room sales at the Motor Lodge Motel exceeded its breakeven point for the month. Revenue generated by room sales during the remaining days of the month will:_______.a. decrease in proportion to the additional room sales.b. cover the fixed costs associated with those additional room sales.c. be pure profit for the motel.d. increase at a faster rate than the costs associated with those sales.
Answer:
D) increase at a faster rate than the costs associated with those sales.
Explanation:
If the break even point was reached during the 20th day of the month, then any revenue generated during the remaining 10-11 days will increase net profits. The amount of net profit increase will be determined by the contribution margin of each service provided. The contribution margin = net sales - variable costs. Since the fixed costs have already been covered, the contribution margin will be equal to the net profit.
The following information pertains to one item of inventory of the Simon Company: Per unit Cost $ 200, Replacement cost 170, Selling price 190, Disposal costs 10, Normal profit margin 30. Using the lower of cost or market method, this item should be valued at:_______.A. $150.
B. $200.
C. $170.
D. $190.
Answer:
correct option is C. $170
Explanation:
given data
Per unit Cost = $200
Replacement cost = 170
Selling price = 190
Disposal costs = 10
Normal profit margin = 30
solution
we get here Lower of cost or market method that is express as
Lower of Per unit Cost or Replacement cost or Selling price - (profit margin -Disposal costs ) ......................1
take value here
Lower of $200 or $170 or ( $190 - ( $30 - $10 ) )
so here Lower of $200 or $170 or $170
so lower is $170
so correct option is C. $170
What is the practice of banks and mortgage lenders identifying high-risk areas (usually low-income or minority neighborhoods) and either refusing mortgages to applicants from those neighborhoods or offering loans at prohibitively high rates?
Answer:
redlining
Explanation:
Redlining is an illegal banking practice that focuses on neighborhoods that are mostly inhabited by minorities. The term redlining itself comes from the practice of marking neighborhoods on city maps with red lines to represent them as dangerous both for banking purposes and high crime rates.
Banks cannot directly deny a credit based on where you live, but they can charge very high interest rates that make them very difficult to pay, or simply ask for a lot of paperwork and more requirements than usual.
If you purchase for $1,000 a bond that pays $40 annually to the holder, and then "the" (that is, the market) interest rate rises to 8 percent, the price of that bond would now be:
The price of a bond that pays $40 annually will drop to $500 if the market interest rate rises to 8 percent, as the bond's yield must increase to remain appealing to investors.
If you purchase a bond for $1,000 that pays $40 annually to the holder, and then the market interest rate rises to 8 percent, the price of the bond would drop to maintain the new market yield.
To calculate the new price of the bond, you need to determine what price would make the $40 payment equal an 8 percent return. Therefore, the new price of the bond is $500 ($40 is 8 percent of $500).
When the market interest rates increase, existing bonds with lower interest rates become less appealing to investors.
To compensate for this, their market price drops to provide a yield that is attractive relative to the new, higher interest rates.
The effect is that the yield on these older bonds must increase to match the current market conditions, which is achieved by lowering the bond's price.
Assume there is initially a shortage in the market, as market participants respond to rising price, the market return to an equilibrium where the quantity supplied equals the quantity demanded, resulting in __________.
Answer:
Explanation:
The market returns to an equilibrium resulting in the elimination of shortage.
Answer:
Elimination of a shortage
Explanation:
The reason is that when the demand increases and suppliers are charging high then the product moves out of the customers purchasing power range and as a result the demand of the product falls which equals the demand and supply of the product. So at this state, the shortage of the product is eliminated by equaling the demand to supply by charging high prices.
A state government condemned Cory Co.'s parcel of real estate. Cory will receive $750,000 for this property, which has a carrying amount of $575,000. Cory incurred the following costs as a result of the condemnation: Appraisal fees to support a $750,000 value $2,500 Attorney fees for the closing with the state 3,500 Attorney fees to review contract to acquire replacement property 3,000 Title insurance on replacement property 4,000 What amount of cost should Cory use to determine the gain on the condemnation?
Answer:
The amount of cost Cory should use to determine the gain on the condemnation is $581,000
Explanation:
Carrying amount $575,000
appraisal fees to support a $750,000 value $2,500
attorney fees for the closing with the state $3,500
Attorney fees to review contract to acquire replacement property $3,000
Title insurance on replacement property $4,000
The amount of cost Cory should use to determine the gain on the condemnation compared to $750,000 received from state = Carrying amount + appraisal fees to support a $750,000 value + attorney fees for the closing with the state
= $575,000 + $2,500 + $3,500 = $581,000
The Attorney fees to review contract to acquire replacement property and Title insurance on replacement property reduces the net proceeds from the state thereby decreasing the gain. The $3,000 and $4,000 amounts pertaining to the replacement property are not associated with the existing property and do not affect the gain on its condemnation.