Answer:
Dr Cash $1,568
Dr Sales discount $32
Cr Accounts receivable $1,600
Explanation:
The initial posting for the transaction would a debit of $2,500 to accounts receivable and a credit of the same amount to sales revenue account.
However, upon the return of damaged goods, an adjustment to the earlier posting would a credit of $900 to accounts receivable to show that the indebtedness has reduced by $900 and a corresponding debit to sale returns account.
However, the balance of $1600($2,500-$900) in the accounts receivable in broken into cash and discount upon receipt of check payment.
Dr cash (98%*$1600) $1,568
Dr Sales discount $32
Farmer Jack is a watermelon farmer. If Jack plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 30 watermelons. If he plants 2 bags of seeds, he gets 50 watermelons. If he plants 3 bags of seeds he gets 60 watermelons. A bag of seeds costs $100, and the costs of seeds are his only costs. What is the shape of Farmer Jack's marginal cost curve?A. Constant.B. Upward sloping.C. Downward sloping.D. U-shaped.
Answer:
B. Upward sloping
Explanation:
Based on the information provided within the question it can be said that the shape of Farmer Jack's marginal cost curve is an upward-sloping curve. This is a type of demand curve that illustrates a direct relationship between price of a product and the quantity that is in demand. Meaning that the more demand that exists for Jack's watermelons the higher the price will be.
Tanner, Inc. incurred a financial and taxable loss for 2018. Tanner therefore decided to use the carryback provisions as it had been profitable up to this year. How should the amounts related to the carryback be reported in the 2018 financial statements?
The refund claimed should be shown as a benefit due to loss carryback in 2018.
Answer:
The refund claimed should be shown as a benefit due to loss carryback in 2018.
Explanation:
Since Tanner, Inc. incurred a financial and taxable loss for 2018. and decided to use the carryback provisions as it had been profitable up to this year, the amounts related to the carryback should be reported in the 2018 financial statements as a benefit due.
Tax loss carryback is when a corporation retrospectively adjusts its tax returns for prior periods if it incurs a net operating loss (NOL) in current period.
The loss carryback generates a tax refund for the business because it reduces previous year tax liability. After the carried back loss is applied, it will be as though the business overpaid taxes the previous year; which will now be shown as a benefit in the current year
A tire company's products are more expensive than those offered by its competitors, but are still sought by customers since they are more durable and perform better under harsh conditions. The tire company, in this case, has achieved competitive advantage through __________. marketing strategies superior quality quantum product innovation pricing strategies promotional strategies
A tire company's products are more expensive than those offered by its competitors, but are still sought by customers since they are more durable and perform better under harsh conditions. The tire company, in this case, has achieved competitive advantage through Superior quality.
Explanation:Quality refers to the something that can be compared with the similar one or with a degree of excellence. It is very essential for any business to produce products or services with good quality. When the quality of any goods or services is meeting the requirements of any consumers then it will gain a good value to the company and he also shares his experience with others.
With the quality of any products or services to be good, it can easily attain competitive advantage and stay in a competitive market.In the given example, the product of a company which is tire is expensive when compared to the competitors. They are expensive because they have good durability and can perform better during harsh conditions of roads. Thus, through the superior quality, the tire company has achieved competitive advantage.
You can spend $10 for lunch and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the price for cheeseburger has increased from $5 to $6, so you decide to purchase just one cheeseburger. This is best described as:
Α. the substitution effect of a price change
B. the income effect of a price change
C. a decrease in the buyer's reservation price.
D. an increase in the buyer's reservation price.
Answer: income effect of a price change.
Explanation: The income effect is known as the effect on real income when price changes, it can however be positive or negative. The income effect expresses the impact of increased purchasing power on consumption.
In this scenario, spending $10 for lunch, and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the price for cheeseburger has increased from $5 to $6, so you decide to purchase just one cheeseburger, this scenario best illustrates the income effect of a price change.
The decrease in consumption due to the rise in the price of cheeseburgers represents the income effect of a price change. This is a result of reduced purchasing power caused by the price increase.
Explanation:In this scenario, your decision to purchase only one cheeseburger due to the increase in price is best described as B. the income effect of a price change. This is because the income effect describes the change in consumption resulting from a change in real income. In this case, an increase in the price of the cheeseburger effectively reduces your buying power for this particular meal, thus diminishing your consumption from two cheeseburgers to one.
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What is the expected dollar rate of return on dollar deposits with today's exchange rate at $1.10 per euro, next year's expected exchange rate at $1.165 per euro, the dollar interest rate at 10%, and the euro interest rate at 5%
The expected dollar rate of return on dollar deposits, given the stated starting and expected exchange rates, as well as the stated dollar interest rate, is approximately 4.09%.
Explanation:The dollar rate of return on dollar deposits in this scenario can be calculated using the following formula for the rate of return: (End value - Start value) / Start value. The starting value of the dollar is $1.10 per euro. After accruing interest at a 10% dollar interest rate, the end value of the dollar becomes $1.21 per euro. Next year's expected exchange rate is $1.165 per euro. Therefore, the expected dollar rate of return on the dollar deposit is ($1.21 -$1.165) / $1.10, which is approximately 4.09%.
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For determinant differences to exist, actual or perceptual differences must exist between brands. And the brand difference must be important to customers as they decide which brand to purchase. A. True B. False
Answer:
A. True
Explanation:
If the brands do not have any actual or perceptual differences, then, the brands do not have any determinant differences and are essentially the same.
For example, if two competing firms offer the same kind of milk, and the branding of the box is similar, and customers believe that both brands are perfect substitutes for each other (they feel that is the same to buy either one or the other), then, the two milk brands do not have any determinant differences.
c. Productive efficiency occurs when a good or service (such as the distribution of tickets) is produced at the lowest possible cost. Is this an efficient way to distribute the tickets?
Answer: No
Explanation:
not an equitable way to distribute the tickets because some students who really want them may be unable to go and get them.
Potter’s accountant believes the financial statements will be misleading if the probable loss contingency is not disclosed. How much should be disclosed, and how much should be accrued in Potter’s financial statements for the current year?
Complete Question:
Potter Co. has the following contingencies, all resulting from lawsuits in progress during the current year:
Probable loss contingency $1,500,000; Reasonably possible loss contingency 500,000; Probable gain contingency 700,000; Reasonably possible gain contingency 300,000.
Potter's accountant believes the financial statements will be misleading if the probable loss contingency is not disclosed. How much should be disclosed, and how much should be accrued in Potter's financial statements for the current year?
A. Disclosed $1,000,000 gain
Accrued $1,500,000 loss & $500,000 loss
B. Disclosed $500,000 loss & $1,000,000 gain
Accrued$1,500,000 loss & $700,000 gain
C. Disclosed $2,000,000 loss & $1,000,000 gain
Accrued $1 ,500,000 loss
D. Disclosed $500,000 loss & $300,000 gain
Accrued $1,500,000 loss
Answer:
Option C Disclosed $2,000,000 loss & $1,000,000 gain
Accrued $1 ,500,000 loss
Explanation:
All the gains that are certain which means that are more than 95% chances of gain then it must be realized as gain otherwise it must be ignored. In this case, there is no gain that is reasonably certain. So the realized gain amount is zero. On the other hand, the liabilities must be realized when the chances of occurrence of the outcome is probable or certain which in this case is $1,500,000 and must be recognized as increase in liability.
Furthermore, the gains which are reasonably probable and possible gains must be disclosed in the financial statement. In this case the probable and possible gain are $700,000 and $300,000. This means that the amount $1,000,000 must be recognized as possible gain. And on the other hand, possible and probable losses must be disclosed in the financial statement which in this case are $1,500,000 probable losses and $500,000 possible losses. So the amount that must be disclosed as losses are $2,000,000.
The relationship between the amount funded (cash sent to trustee) and the amount reported for pension expense is as follows: Select one: a. pension expense must equal the amount funded. b. pension expense may be greater than, equal to, or less than the amount funded. c. pension expense will be more than the amount funded. d. pension expense will be less than the amount funded.
pension expense may be greater than, equal to, or less than the amount funded.
Answer: Option B.
Explanation:
Pension expense is the expense that a trustee has to bear to give pensions and other offerings to the people who have retired from the services which they were offering.
The amount that the trustee will get in the form of amount funded does not necessarily be the same amount as the expenses of the cash given in the form of pension. It can be greater than equal to or even lesser than the expenses made.
A small company has developed a specialized software product that it configures especially for each customer. New customers usually have specific requirements to be incorporated into their system, and they pay for these to be developed and integrated with the product. The software company has an opportunity to bid for a new contract, which would more than double its customer base. The new customer wishes to have some involvement in the configuration of the system. Explain why, in these circumstances, it might be a good idea for the company owning the software to make it open source
Answer:
It might be a good idea for the company to make the software open source because it will lead to reduction of cost of production and the effort that goes into it. The task of customizing the software for each individual customers raises development cost and is a tough task to accomplish.
In term of making the software an open source, the source code will be provided to the customer and they themselves can make the desired changes in the software. This will considerably reduce their prices and also expand their market in the areas of companies with lower budgets.
Final answer:
Making software open source allows a small tech company to foster collaboration and customization, establish a community-driven approach, and circumvent monopolistic market dynamics, providing both competitive advantages and alignment with diverse stakeholder interests.
Explanation:
In considering whether a software company should make their product open source, it's important to understand the dynamics of the software industry. Open source operating systems like Linux have significantly impacted the economics of high tech by providing a freely available alternative to proprietary systems, disrupting traditional business models. The history of computing shows us a shift from tightly controlled systems produced by companies like IBM and Microsoft to more collaborative and open environments.
For a small software company with specialized products, making software open source can be beneficial, particularly when entering a market with significant barriers or working with customers who require customization. It allows for greater collaboration, adaptation to specific needs, and a community-driven approach to development and problem-solving. Considering the shift towards larger firms with the vast reach facilitated by new technologies, forming a community around a product can provide a competitive edge and help maintain a foothold in markets increasingly dominated by larger players.
Lastly, the history of antitrust cases in the software industry demonstrates the dangers of monopoly power and the importance of promoting competition. By adopting an open source model, a company may preemptively address concerns around proprietary dominance and encourage a healthier, more competitive market. This strategy could align with the interests of various stakeholders, including customers, government agencies, and industry participants, who may all have a stake in the broader software ecosystem.
A college professor wants to know if the university students in the Unites States will find the new textbook that he has authored to be interesting and useful. He chooses all marketing majors at the school he teaches as his sample. He believes that this group of students will be representative of the university student population in the United States. In this scenario, the professor is most likely using:_______. a. area sampling.b. judgment sampling.c. cluster sampling.d. quota sampling.e. census sampling
Answer:
judgment sampling.
Explanation:
Judgementbsampling is also called expert sampling is a type of sampling that is based on the assumptions made by an expert. The feedback from this type of sampling tends to be biased.
This is a subjective method of sampling that relies on the researcher's personal judgement in choosing sample from the population.
In this instance the professor chooses only marketing majors as his sample to get feedback on his new textbook. His personal beliefs is that this sample will represent the student population in the United States.
This is however not objective as all the sample members are marketing majors.
The risk-free rate of return is 4%, and the market return is 10%. The betas of Stocks A, B, C, D, and E are 0.85, 0.75, 1.20, 1.35, and 0.5 respectively. The expected rates of return for Stocks A, B, C, D, and E are 7%, 9%, 9.5%, 12.1%, and 14% respectively. Which of the above stocks would an investor be indifferent towards buying or selling?
Answer:
Stock D as their expected return matches the Capital Assets Price Models
Explanation:
We have to calcualte the CAPM for each stock and look which matches with the expected rate of return:
[tex]Ke= r_f + \beta (r_m-r_f)[/tex]
risk free = 0.04
market rate = 0.1
premium market = (market rate - risk free) 0.06
Stock A
beta(non diversifiable risk) = 0.85
[tex]Ke= 0.04 + 0.85 (0.06)[/tex]
Ke 0.09100 = 9.1%
Expected return: 7% it would prefer to sale
Stock B
beta(non diversifiable risk) = 0.75
[tex]Ke= 0.04 + 0.75 (0.06)[/tex]
Ke 0.08500 = 8.5%
Expected return: 9% it would prefer to purchase as it offer more
Stock C
beta(non diversifiable risk) = 1.2
[tex]Ke= 0.04 + 1.2 (0.06)[/tex]
Ke 0.11200 = 11.20%
Expected return: 9.5% it would prefer to sale
Stock D
beta(non diversifiable risk) = 1.35
[tex]Ke= 0.04 + 1.35 (0.06)[/tex]
Ke 0.12100 = 12.1%
Expected return: 12.1% Indifferent as it is mathces the CAMP the stock is neither overperforming nor underperforming
Stock E
beta(non diversifiable risk) = 0.5
[tex]Ke= 0.04 + 0.5 (0.06)[/tex]
Ke 0.07000 = 7%
Return = 14% It would prefer to purchase as it offer more
Suppose the country of Ceria and Lithinia imposed tariffs on imports from all countries, and then they set up a free trade area, scrapping all trade barriers between themselves but maintaining tariffs on imports from the rest of the world. Now, Ceria begins to import sugar from Lithinia. However, Ceria had previously been importing sugar from another country, Cadnia, which produced sugar more cheaply than Ceria or Lithinia. This is an example of
Answer:
trade diversion
Explanation:
Trade diversion results from changing an efficient supplier or trading partner for a not so efficient trading partner. This change usually results from trade agreements or customs unions like NAFTA (or USMCA) or the European Union that benefit less efficient producers.
Trade diversion results in concentrating production in countries with high opportunity costs that do not possess real comparative advantages, but rather political advantages.
When a customer places an order (on account) for a certain product, what should be done before the order is checked for inventory availability? The customer's available credit should be checked. The sales order should be created and written to a file. Shipping should be notified of an order in process. A picking list should be generated for the warehouse.
Answer:
The correct answer is The customer's available credit should be checked.
Explanation:
A credit is a financing operation where a person called 'creditor' (usually a financial entity), lends a certain monetary figure to another, called 'debtor', who from then on, guarantees the creditor that he will return this requested amount in the previously stipulated time plus an additional amount, called 'interest'.
According to some authors in economics, credit represents a change that acts in time, rather than in space, so it is also considered "to alternate money from the present, for money in the future." The word derives from the Latin credititus, which means ‘trust’, therefore, a credit is the right of the creditor to receive from the debtor, the amount borrowed.
Jones lost his job in industry A, but he has skills that can be transferred to industry B (which is currently hiring). Smith lost a job in industry C, but his skills cannot be transferred to industry B or to any other industry. Jones is __________ unemployed and Smith is __________ unemployed.
Answer:
frictionally; structurally
Explanation:
Frictional unemployment arises when employees are changing when one job to another in the same economy. Workers who leave a job in search of a better paying job or another job are said to be frictionally unemployed. Frictional unemployment also occurs when skilled graduates are seeking work for the first time. Jones is frictionally unemployed because his skill will enable him another job in that industry. He can be compared to some who have quit his job search for another.
Structural unemployment is unemployment as a result of changes in technology or the relocation of industries. The skills possessed by workers become irrelevant, making them unemployable. Jones is structurally unemployed because no sector in the economy needs his skills.
Poweroxi Inc. produces rocket propellant fuel that is used in space shuttles. NASA is an agency that requires rocket propellant fuel to send its rockets to space. NASA enters into a contract with Poweroxi Inc. to purchase all of the propellant fuel it will need that year from Poweroxi. What would this contract be an example of?
Answer:
requirements contract
Explanation:
A requirements contract is a contract between a supplier and a buyer for the provision of a specific product or service where the supplier agrees to provide all the quantity of goods that the buyer might require, and the buyer agrees to only purchase that specific good from that supplier. It is like engaging in a relationship with your vendor, where you can only purchase the good from him and he must provide all the goods that you may need.
Final answer:
The contract between NASA and Poweroxi Inc. is an example of a requirements contract, where NASA would purchase all of its needed rocket propellant fuel from Poweroxi Inc. for a year, reflecting the close relationship and reliance on the supplier's ability to provide fuel that is crucial for space missions.
Explanation:
The contract between NASA and Poweroxi Inc. for the purchase of all the propellant fuel required by NASA for a year would be an example of a requirements contract. This type of agreement obligates NASA to buy the propellant fuel exclusively from Poweroxi Inc. for the duration of the contract, and in turn, Poweroxi Inc. is required to fulfill all of NASA's needs for the propellant fuel.
Such contracts are common in situations where a buyer needs a guaranteed supply of products, and they allow suppliers to plan their production and inventory more efficiently. This contractual arrangement also demonstrates the trusted relationship and reliance NASA has on Poweroxi Inc. for providing the necessary rocket propellant fuel essential for space missions, and how crucial the production of this fuel is, involving complex chemical reactions and precise stoichiometry to produce the required thrust.
Identify whether the statements below are true or false by dragging and dropping the appropriate term into the bin provided.
A. Long-run economic growth is unlikely to be sustainable because of finite natural resources.
B. In the modern economy, countries that possess few domestic natural resources essentially have no chance to develop economically.
C. Finding alternatives to natural resources will be very important to long-term economic growth.
D. In the modern economy, human and physical capital are generally less important in productivity than natural resources.
E. In the 19th century, countries with the highest per capita GDP were nearly always abundant in minerals and productive farming land.
Solution and Explanation:
1. False- Long run Economic growth is likely to be sustainable because of finite natural resources as othe man made resources will be available to sustain growth.
2. False- In mordern economy posesing few natural resources will not affect a country to develop economically; human resources and man made resources will also contribute. Foreign trade can also play an important role towards growth, in the absence of abundant natural resources.
3. True- Natural resources are vital, and mostly exhaustible. Hence it is very essential to find suitable alternatives.
4. False- Economies of 21st century depend on human capital due to depletable atural resources.
5. True - In the 19th century, minerals and farming land were the most mportant resources, since self sustainability was in vogue.
A company that follows the __________ strategy differentiates its product in some way, such as by recognizing different segments or offering different products to each segment. a. broad differentiation b. focus differentiation c. broad low-cost d. focus low-cost e. stuck-in-the-middle
A company that follows the Focus Differentiation strategy differentiates its product in some way, such as by recognizing different segments or offering different products to each segment.
Option: B
Explanation:
Differentiation concentrate is a methodology to strategic advantage in which a business seeks to outperform its rivals by selling a product considered by customers to be preferable to that of opponents if its price is higher; in pursuing a differentiation focus strategy, the business focuses on limited market penetration, aiming only to capture a small, targeted audience.
For an instance, sugar free ice-cream business is targeting diet concern audiences, because as per current situation their are many countries, where Diabetes is the most popular diseases people are carrying, thus in such case this product is fruitful on launching in market.
On March 14, Apple Corporation purchased 6,000 shares of Pear Inc. for $25 per share. There is no readily determinable fair value of Pear. On June 30, Pear declared an annual dividend of $0.40 per share. On August 14, Apple sold 4,000 shares of Pear for $29 per share less a brokerage fee of $225. The journal entry at the date of sale would include:__________.
a) a credit to gain on the sale of investments for $15,775.
b) a credit to gain on the sale of investments for $16,000.
c) a credit to gain on the sale of investments for $24,000.
d) a credit to gain on the sale of investments for $18,400.
Answer:
a) a credit to gain on the sale of investments for $15,775
Explanation:
The journal entry on the date of purchase of such shares in the books of Apple would be
Investments A/C Dr. 150,000
To Cash A/C 150,000
(Being investments purchased for cash)
On the date of receipt of dividend:
Cash A/C (0.40 × 6000) Dr. 2400
To Dividend Income 2400
(Being dividend received recorded)
Cash A/C (4000 × 29 - 225) Dr. 115,775
To Investments A/C (4000 shares × 25) 100,000
To Gain on sale of Investments 15,775
(Being investments sold at a profit recorded)
If real GDP per capita in the United States is currently $50,000 and grows at 2.5% per year, it will take approximately how many years to reach $200,000?
Answer:
A. approximately 56 years
Explanation:
Giving that
Annual percentage growth rate = 2.5%
Using rule of 70
Years to double = 70 ÷ 2.5
= 28 years
Therefore, years to quadruple from original GDP
= 28 × 2
= 56 years
Therefore it will take 56 years for US GDP to reach 200,000 from 50,000 at annual rate of 2.5
There are three elements in any integrated marketing communication strategy: the ________, the channels through which the message is communicated, and evaluation of the results of the communication.
Answer:
The consumer being evaluated
Explanation:
An Integrated Marketing Communications is a promotional marketing function through which a targeted audience receives consistent, persuasive, and reinforcing brand messaging to move buyer's through the decision making process.
There are three elements in any integrated marketing communication strategy:the consumer being evaluated the the channels through which the message is communicated, and evaluation of the results of the communication.
In integrated marketing communications, the three key elements are the message, the channels used for communication, and the evaluation of communication results. The message is foundational, outlining what the organization wants to communicate. Effective integration of these elements, alongside a strategic marketing mix, ensures the success of communication efforts.
There are three elements in any integrated marketing communication strategy: the message, the channels through which the message is communicated, and evaluation of the results of the communication. In the context of integrated marketing communications (IMC), the message refers to the information or content that the organization wishes to convey to its target audience. This is a crucial component, as it encapsulates the goals and intentions behind the communication effort. The planning stage, as part of the social marketing model, is where the message goals are established, underlining the importance of a well-defined message in achieving the desired response from the audience.
The channels through which the message is communicated represent the medium or platforms used to reach the target audience, such as social media, television ads, or email marketing. Effective selection and use of these channels are vital for ensuring that the message reaches the intended audience in an efficient and impactful manner. Lastly, the evaluation of the results provides feedback on the effectiveness of the communication strategy, allowing marketers to adjust their approaches based on the outcomes achieved.
Integrating these three elements effectively requires a deep understanding of the target audience, the creation of a compelling and relevant message, strategic selection of communication channels, and a robust mechanism for evaluating outcomes. This approach leverages the marketing mix, which includes decisions about price, promotional activities, location, and sales channels, ensuring consistency and effectiveness in communication efforts.
Strategy at a ________ level is primarily focused on the products and services provided to customers and on finding ways to develop and maintain a sustainable competitive advantage with these customers. 1. functional 2. business unit 3. corporate 4. divisional
Answer:
2. business unit
Explanation:
Strategy refers to a future course of action formulated now, for efficient operations and fulfillment of long term goals. It refers to ways and methods a business firm shall employ in the near future.
Strategy at the business level is more concerned with the quality of products and services offered by a business and methods via which good relations can be maintained and strengthened with customers.
Business level strategy is focused upon providing best value to customers so as to increase sales volume and maximize profits, alongside providing customer satisfaction.
Crane Company on January 1, 2018, granted stock options for 63000 shares of its $10 par value common stock to its key employees. The market price of the common stock on that date was $25 per share and the option price was $20. The Black-Scholes option pricing model determines total compensation expense to be $627000. The options are exercisable beginning January 1, 2021, provided those key employees are still in Crane’s employ at the time the options are exercised. The options expire on January 1, 2022. The amount of compensation expense Crane should record for 2017 under the fair value method is:_______.
a. $0.
b. $207000.
c. $103500.
d. $310500.
The amount of compensation expense Crane should record for 2017 under the fair value method is $207000
Solution:
Given ,
Stock options for 63000 shares
$10 par value common stock
$25 per share and the option price was $20
Total compensation expense = $627000
627000/3= $207,000
$207,000 decrease
A report listing the monthly sales figures for the last three years is an example of a(n) _____. a) case study b) diagnostic report c) laboratory report d) informational report e) analytical report
Answer:
The correct option is informational report
Explanation:
Analytical report is business report that shows the quantitative as well as qualitative performance information with respect to a business being analysed, in order that management may reach conclusions so as evaluate business strategies.
Case study is more broader in that it portrays all the areas of the business, ranging from performance, strategy,analysis,competitive position,share of market segment,cultures,values,rituals and so on.
Above,my choice of answer is informed by the fact that informational report merely shows data or information without further analysis such as the monthly sales figures,without providing any detailed explanation
The added value that a certain product has by virtue of its brand name (in other words, the value of the product with a brand mark compared with a generic product of the same quality) is called __________.
Answer:
brand equity
Explanation:
Brand equity refers to the commercial value added to one product or service by the customer's perception of its brand. Some brands have a higher brand equity and customers perceive them as high quality or luxury products, e.g. Mercedes Benz or Apple. While other brands are perceived as common or ordinary products with medium or low quality.
Two products may be identical or very similar, but the fact that a product's brand may be perceived as better than the other, allows a company to charge a higher price for it.
The substitution effect: Multiple Choice predicts that taxpayers will work harder to pay for consumer products when tax rates increase. is one of the effects considered in static forecasting. results in the government collecting more aggregate tax revenue than under the income effect.
Answer:
None of these is correct
Explanation:
The substitution effects is the decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives when its price rises. The substitution effect is based on the idea that as prices rise, consumers will replace more expensive items with cheaper substitutions or alternatives, assuming income remains the same.
On December 31, 2017, Gonzalez Company granted some of its executives options to purchase 180,000 shares of the company's $10 par common stock at an option price of $50 per share. The Black-Scholes option pricing model determines total compensation expense to be $1,350,000. The options become exercisable on January 1, 2018, and represent compensation for executives' services over a three-year period beginning January 1, 2018. At December 31, 2018 none of the executives had exercised their options. What is the impact on Gonzalez's net income for the year ended December 31, 2018 as a result of this transaction under the fair value method?
a. $ 450,000 increase.
b. $1,350,000 decrease.
c. $ 450,000 decrease.
d. $0.
Answer:
Option C $450,000 decrease
Explanation:
The reason is that the cost to buy the shares in the market is lower than $50 per share so buying the shares at $50 per share is not benefiting the directors at all. This means that the liability which was calculated using the black scholes model was standing at $1350,000 for 3 years and $450,000 for a single year will not be waived off because the directors didn't exercised the option and are taking money benefits which means under fair value method the net income will decrease by $450,000 because this is the amount paid to directors.
The capability-building process:_______.a. requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort to further improve its performance, ideally striving to match or beat rivals in performing the activity. b. entails establishing a new department with primary responsibility for developing the expertise to give the company the needed core competencies and capabilities. c. stands a better chance of succeeding if a company employs a traditional functional organization structure. d. is made much easier if a company abstains from outsourcing important value chain activities. e. aims at turning the company's distinctive competencies into core competencies.
Answer: Requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort to further improve its performance, ideally striving to match or beat rivals in performing the activity.
Explanation:
Capacity building involves an individual/organization learning to carry out their job task by starting with failures and successful outcomes, and continuing learning and attempting carrying out that task until perfection nearly attained when it comes to carrying out that job type.
Suppose the price of pepper increases by 20percent and, as aresult, the quantity of salt demanded (holding the price of salt constant) decreases by 2 percent
The cross-price elasticity of demand between pepper and salt is _____ (Enter your response rounded to two decimal places and include a minus sign if appropriate.)
In this example, pepper and salt are _____
Instead, suppose pepper and salt were substitutes.
If so, then the cross-price elasticity of demand between prepper and salt would be:_____.
1. Less than 1 but greater than 0
2. Negative
3. Greater than 1
4. Positive
5. Zero
Answer:
The cross-price elasticity of demand between pepper and salt is -0.10
In this example, pepper and salt are complements
Instead, suppose pepper and salt were substitutes.
If so, then the cross-price elasticity of demand between prepper and salt would be: positive
Explanation:
The cross-price elasticity of demand will determinate how the effect of a complement or substitute prices impact on another good.
ΔQx / ΔPy = cross-price elasticity
(change in price of good X dividied by the change in price of good Y)
-0.02 / 0.20 = -0.1
They will be complement as the increase in price decrease the demand of the other good thus, the consumer uses these goods mutually not exclusively.
When positive, the goods are substitutes they compete among each other. Hence, price and quality variation moves consumers from one market into another (from salt to pepper or viceversa) when the price rises in one of them
Answer:
-0.1 %
Complements
Positive
Explanation:
The cross price elasticity of demand can be calculated by:
Cross-price elasticity of demand = %change in quantity demanded / %change in price
Cross-price elasticity of demand = -2/ 20 = -1/10 = -0.1 %
The cross-price elasticity of demand between pepper and salt is 0.1 %
In this example, pepper and salt are complements which means when the price of salt increases than there will be a decrease in the demand of pepper.
if pepper and salt were substitutes then cross-price elasticity of demand between pepper and salt would be positive since when two goods are substitutes then an increase in the price of x, causes an increase in the demand of y.
The auditor of a public company is assessing the value of all the intangible assets owned by the company. Which of the following would most likely be included in this assessment?A. The company's headquarters
B. The company's brand equity
C. The company's cash reserves
D. The company's plant and equipment
Answer:
B. The company's brand equity
Explanation:
Intangible assets lack a physical presence. They are assets that cannot be touched or seen. Intangible assets are contrasted by tangible assets, which include land, buildings, vehicles, plants, and machinery. Examples of intangible assets include patent brand names, trademarks, or and copyright.
Intangible assets have a use-life of more than one year. They can be created or acquired, just like tangible assets. From the list in the case, The company's cash reserves, company's plant and equipment, and company headquarters are tangible assets because they have a physical presence.