Firms are price-takers is not a source of market failure. Option D is correct.
Market failure refers to a situation where the allocation of goods and services in a market is not efficient, leading to a suboptimal outcome. It occurs when the market mechanism fails to produce the socially desired result. Monopolies can lead to market failure by restricting competition and exerting control over prices.
Externalities occur when the production or consumption of a good affects parties not directly involved in the transaction, leading to inefficient outcomes. Imperfect information refers to situations where buyers or sellers do not have access to complete information, leading to market inefficiencies.
However, firms being price-takers is not a source of market failure but rather a characteristic of a perfectly competitive market, where firms have no market power and must accept the prevailing market price. Option D is correct.
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Prepare the stockholder's equity section for Whispering Company
at December 31, 2021.
Whispering Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders' equity. Preferred
In 2015, Hatch Company experienced various transactions that affected its stockholders' equity. These transactions included the issuance of preferred and common stock, a stock split, the purchase and issuance of treasury stock, the declaration of dividends, and the increase in retained earnings due to net income.
In 2015, the following transactions affected Hatch Company's stockholders' equity:
Jan. 1: Hatch Company issued 30,000 shares of preferred stock at $22 per share. This resulted in an increase in preferred stock and additional paid-in capital. The preferred stock would be valued at $660,000 (30,000 shares * $22 per share), and the additional paid-in capital in excess of par for the preferred stock would increase by $60,000 (30,000 shares * ($22 - $20)).
Feb. 1: Hatch Company issued 50,000 shares of common stock at $20 per share. This resulted in an increase in common stock and additional paid-in capital. The common stock would be valued at $1,000,000 (50,000 shares * $20 per share), and the additional paid-in capital in excess of par for the common stock would increase by $0 since the issue price is equal to the par value.
June 1: A 2-for-1 stock split was performed, reducing the par value of the common stock to $2.50. This does not affect the total stockholders' equity but increases the number of shares outstanding. The preferred stock remains unaffected by the stock split.
July 1: Hatch Company purchased 30,000 shares of common treasury stock at $10 per share. The cost method is used for treasury stock, so the cost of treasury stock would increase by $300,000 (30,000 shares * $10 per share), resulting in a decrease in stockholders' equity.
Sept. 15: Hatch Company reissued 10,000 shares of treasury stock at $11 per share. The treasury stock is sold above its cost, resulting in an increase in stockholders' equity. The treasury stock account would decrease by $110,000 (10,000 shares * $11 per share), and the additional paid-in capital from treasury stock transactions would increase by $10,000 (10,000 shares * ($11 - $10)).
Dec. 31: The preferred dividend is declared, indicating that the preferred shareholders will receive their dividends. The preferred dividend does not affect the stockholders' equity but represents an obligation of the company.
Dec. 31: A common dividend of 50 cents per share is declared. The common dividend represents a distribution of earnings to common shareholders and reduces the retained earnings account by $1,000,000 (2,000,000 shares * $0.50 per share).
Dec. 31: The net income for the year is $2,100,000. This increases the retained earnings account, resulting in an increase in stockholders' equity.
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Complete question:
Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2014, the following accounts were included in stockholders� equity.
Preferred Stock, 150,000 shares $ 3,000,000
Common Stock, 2,000,000 shares 10,000,000
Paid-in Capital in Excess of Par�Preferred Stock 200,000
Paid-in Capital in Excess of Par�Common Stock 27,000,000
Retained Earnings 4,500,000
The following transactions affected stockholders� equity during 2015.
Jan. 1 30,000 shares of preferred stock issued at $22 per share.
Feb. 1 50,000 shares of common stock issued at $20 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 30,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method.
Sept. 15 10,000 shares of treasury stock reissued at $11 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of 50� per share is declared.
Dec. 31 Net income is $2,100,000.
The beginning balance in retained earnings of is $1200.000 (Cr) The current period not loss is $350,000 and declared stock dividends $150.000 The endng balance in related eamings equal A. Credit of $700,000 B. Credit of $850.000 C. Credit of $1550.000 D. Credit of $1400.000
The ending balance in retained earnings is a credit of $1,400,000. This means that the retained earnings account has increased by $1,400,000 by the end of the period, considering the beginning balance, net income, and stock dividends. Hence the correct answer is option D).
To determine the ending balance in retained earnings, we need to consider the beginning balance, the current period's net income (or loss), and any stock dividends declared.
The formula to calculate the ending balance in retained earnings is:
Ending Retained Earnings = Beginning Retained Earnings + Net Income/Loss - Stock Dividends
Given:
Beginning balance in retained earnings = $1,200,000 (Cr)
Current period's net income = $350,000
Stock dividends declared = $150,000
Plugging in the values into the formula, we get:
Ending Retained Earnings = $1,200,000 + $350,000 - $150,000
Calculating the expression inside the parentheses first:
Ending Retained Earnings = $1,200,000 + $350,000 - $150,000
Ending Retained Earnings = $1,200,000 + $200,000
Now, summing up the values:
Ending Retained Earnings = $1,400,000
Therefore, the correct answer is:
D. Credit of $1,400,000
The ending balance in retained earnings is a credit of $1,400,000. This means that the retained earnings account has increased by $1,400,000 by the end of the period, considering the beginning balance, net income, and stock dividends. Therefore the correct answer is option D).
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Schnusenberg Corporation just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.65, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price?
A. 10.92
B. 7.99
C. 9.30
D. 10.11
E. 10.41
The company's current stock price is A) $10.92. so, the correct option is A.
Schnusenberg Corporation just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.65, the required return on the market is 10.50%, and the risk-free rate is 4.50%.
We can use the dividend discount model (DDM) formula to calculate the price of the stock that is:
PV = (D1/ (r - g) )+ D0/ (1+r)1+ D0/ (1+r)2 + D0/ (1+r)3 + ...+ D0/ (1+r)n
Where, PV = Present Value of the stockD1 = Dividend one year from now
r = Required rate of return
g = Growth rate of dividend
D0 = Dividend paid today
In the present problem, D0 is $0.75 and the growth rate is 6.50%.
So, D1 = D0 × (1+g)
= $0.75 × (1+6.50%)
= $0.7988
r = Risk-free rate + β × (Market rate of return - Risk-free rate)
= 4.50% + 1.65 × (10.50% - 4.50%)
= 4.50% + 1.65 × 6.00%
= 14.10%
Therefore, the price of the stock today,
PV= $0.7988/ (0.1410 - 0.0650)
=$10.92
So, the company's current stock price is $10.92.
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Following are the issuances of stock transactions. 1. A corporation issued 3,000 shares of $20 par value common stock for $72,000 cash. 2. A corporation issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $37,000. The stock has a $2 per share stated value. 3. A corporation issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $37,000. The stock has no stated value. 4. A corporation issued 750 shares of $100 par value preferred stock for $112,000 cash.
Prepare journal entries to record
The journal entries to record the stock transactions are as follows:
1. Cash (Dr) $72,000
Common Stock (Cr) $60,000
Additional Paid-in Capital (Cr) $12,000
2. Promoters' Efforts (Dr) $37,000
Common Stock (Cr) $3,000
Common Stock Stated Value (Cr) $3,000
Additional Paid-in Capital (Cr) $31,000
3. Promoters' Efforts (Dr) $37,000
Common Stock (Cr) $37,000
Additional Paid-in Capital (Cr) $0
4. Cash (Dr) $112,000
Preferred Stock (Cr) $75,000
Additional Paid-in Capital (Cr) $37,000
What are the journal entries for issuing common stock for cash?1. Cash (Asset) 72,000
Common Stock (Equity) 60,000
Additional Paid-in Capital (Equity) 12,000
The company issued 3,000 shares of $20 par value common stock for $72,000 cash. The common stock is recorded at its par value of $60,000, and the remaining $12,000 is recorded as additional paid-in capital.
2. Promoters' Efforts (Expense) 37,000
Common Stock (Equity) 3,000
Additional Paid-in Capital (Equity) 34,000
The company issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $37,000. The stock has a $2 per share stated value. The common stock is recorded at its stated value of $3,000, and the remaining $34,000 is recorded as additional paid-in capital.
3. Promoters' Efforts (Expense) 37,000
Common Stock (Equity) 37,000
The company issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $37,000. The stock has no stated value. The entire amount is recorded as common stock.
4. Cash (Asset) 112,000
Preferred Stock (Equity) 75,000
Additional Paid-in Capital (Equity) 37,000
The company issued 750 shares of $100 par value preferred stock for $112,000 cash. The preferred stock is recorded at its par value of $75,000, and the remaining $37,000 is recorded as additional paid-in capital.
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shakeia duncan wants to know what home price she can afford. her annual gross income is $46,200. she owes $790 per month on other debts and expects her property taxes and homeowner's insurance to cost $210 per month. she knows she can get an 8.50 percent, 30-year mortgage so her mortgage payment factor is 7.69. she expects to make a 15 percent down payment. what is shakeia's affordable home purchase price?
Shakeia's affordable home purchase price is approximately $326,774.60.
To determine Shakeia's affordable home purchase price, we need to consider her annual gross income, monthly debts, property taxes and insurance, mortgage payment factor, and down payment.
Calculate Shakeia's monthly gross income:
Shakeia's annual gross income is $46,200, so her monthly gross income can be calculated by dividing it by 12:
Monthly gross income = $46,200 / 12 = $3,850
Calculate Shakeia's total monthly debts:
Shakeia owes $790 per month on other debts, and she expects her property taxes and homeowner's insurance to cost $210 per month. Therefore, her total monthly debts are:
Total monthly debts = $790 + $210 = $1,000
Calculate Shakeia's affordable monthly mortgage payment:
Shakeia mentioned that she can get an 8.50 percent, 30-year mortgage, and her mortgage payment factor is 7.69. Therefore, her affordable monthly mortgage payment can be calculated by multiplying her monthly gross income by the mortgage payment factor:
Affordable monthly mortgage payment = Monthly gross income × Mortgage payment factor
= $3,850 × 7.69 = $29,626.50
Calculate Shakeia's affordable monthly housing expenses:
Shakeia's affordable monthly housing expenses include her mortgage payment and property taxes/insurance:
Affordable monthly housing expenses = Affordable monthly mortgage payment + Property taxes/insurance
= $29,626.50 + $210 = $29,836.50
Calculate Shakeia's affordable home purchase price:
To calculate the affordable home purchase price, we need to determine the loan amount based on Shakeia's down payment. She expects to make a 15 percent down payment, so the loan amount will be 85 percent of the home purchase price:
Loan amount = Affordable home purchase price × Down payment percentage
= 0.85 × Affordable home purchase price
Based on Shakeia's affordable monthly housing expenses and the mortgage payment factor, we can use a mortgage calculator to determine the affordable home purchase price. Given that her affordable monthly housing expenses are $29,836.50, and assuming an 8.50 percent interest rate and a 30-year term, the affordable home purchase price can be calculated using the mortgage calculator:
Affordable home purchase price = Affordable monthly housing expenses / (Mortgage payment factor × 12)
= $29,836.50 / (7.69 × 12)
≈ $326,774.60
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Under the concept of establishment of responsibility, how many people should have the ultimate responsibility? a. Everyone in the organization. b. An individual and his/her supervisor. C. Only one individual. d. The CEO.
Under the concept of establishment of responsibility, only one individual should have the ultimate responsibility.
In accounting, the concept of establishment of responsibility means that there should be a clear delineation of responsibility and authority for a task within an organization. It is necessary to assign authority for every task in order to be certain that the task will be completed effectively and that accountability is maintained. This can involve defining tasks, determining who is responsible for them, and making it clear who is accountable for each of them. There are a few different ways to establish responsibility, but one of the most effective ways is to make sure that only one person has the ultimate responsibility.The importance of this is that, if there is more than one individual responsible, it may be difficult to determine who should be held accountable if something goes wrong. By establishing one individual as the ultimate authority, it is clear who is accountable if something goes wrong. Therefore, it is important to have only one individual in charge of a task or responsibility. This helps to ensure that the task is completed properly and that any issues are addressed by the person responsible.
Under the concept of establishment of responsibility, only one individual should have the ultimate responsibility. This is necessary in order to assign accountability and make sure that tasks are completed effectively. Having more than one individual responsible for a task can make it difficult to determine who is accountable if something goes wrong. Therefore, it is important to have only one individual in charge of a task or responsibility.
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Under the concept of establishment of responsibility, the ultimate responsibility should typically lie with one individual. Option C
What is the concept of establishment of responsibility?Only one individual is the most appropriate choice. This ensures clarity and accountability by assigning specific individuals to be responsible for particular tasks or areas within the organization.
Having a single person in charge helps in defining roles and expectations clearly, facilitating effective decision-making, and ensuring that there is a designated point of authority and accountability.
While other individuals in the organization may have responsibilities delegated to them and play important roles, the establishment of responsibility typically requires one person to have the ultimate responsibility for a given task or area.
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in a command economy, who determines what to produce?
a. individuals
b. government
c. businesses
d. stockowners
In a command economy, it is the government that determines what to produce. The correct answer is b. government.
This type of economy is characterized by the public ownership of the means of production, distribution, and exchange, as well as the central planning of the economy. Therefore, the government, which is responsible for central planning, decides what goods and services to produce, how to produce them, and how they will be distributed. In a command economy, the government, also known as the central authority, plays a crucial role in determining what goods and services to produce, how to produce them, and how they will be distributed.
The government has the power to allocate resources and to make decisions regarding the economy as a whole. It does this through central planning, which is the process of creating a detailed blueprint for the economy. Central planning involves setting production quotas, pricing, and other economic policies. The government also decides how resources will be allocated, which businesses will be given the go-ahead to produce goods and services, and how much they will produce. In a command economy, the government aims to meet the needs of the population, rather than focus on profits or the interests of businesses.
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What would be the likely effect of a consumption tax on short-run GDP, assuming SRAS is not vertical?
(A) None.
(B) GDP would increase.
(C) GDP would decrease.
(D) The effect is ambiguous.
You purchase a $1,000 face-value bond for $800. The coupon is $100 per year, and inflation is 4 percent per year. What is the real coupon rate on the bond?
(A) 6 percent.
(B) 8.5 percent.
(C) 10 percent.
(D) 12.5 percent.
The real coupon rate on the bond is 6 percent.
What would be the likely effect of a consumption tax on short-run GDP, assuming SRAS is not vertical?A consumption tax refers to a tax that is imposed on the expenditure of goods and services. Such a tax would increase the prices of products and services, leading to a reduction in the purchasing power of consumers. This is likely to lead to a decrease in the consumption of goods and services, which in turn would lead to a decrease in the aggregate demand for goods and services.
This would ultimately lead to a decrease in the GDP, making option (C) GDP would decrease correct.What is the real coupon rate on the bond?The real coupon rate on the bond can be calculated by subtracting the inflation rate from the nominal coupon rate. The nominal coupon rate on the bond is 100/1000 = 0.1 or 10 percent, whereas the inflation rate is 4 percent.
Thus, the real coupon rate on the bond is 10% - 4% = 6 percent. Hence, option (A) 6 percent is the correct answer.
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Bunyon Lumber Company incurs a cost of $376 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $544 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $529 per hbf, which can be sold for $768 per hbf. Prepare a differential analysis dated August 9 on whether to sell rough-cut lumber
Bunyon Lumber Company should produce finished-cut lumber to earn an additional profit of $71 per hbf.
Differential analysis refers to the study of the amount of change in revenue and costs associated with alternative options. It is useful in making decisions between two or more alternatives based on their costs and benefits.
In the given problem, we have to prepare a differential analysis dated August 9 on whether to sell rough-cut lumber or produce finished cut lumber. The given information is as follows:
Cost to process rough-cut lumber = $376 per hbf
Sale price of rough-cut lumber = $544 per hbf
Cost to process finished-cut lumber = $529 per hbf
Sale price of finished-cut lumber = $768 per hbf
To solve the problem, we need to calculate the incremental profit by subtracting the incremental costs from the incremental revenue.
Incremental profit = Incremental revenue - Incremental costs
The incremental revenue is the difference between the sale price of finished-cut lumber and rough-cut lumber. Incremental revenue = Sale price of finished-cut lumber - Sale price of rough-cut lumber
= $768 - $544
= $224 per hbf
The incremental costs are the difference between the cost to process finished-cut lumber and rough-cut lumber.
Incremental costs = Cost to process finished-cut lumber - Cost to process rough-cut lumber
= $529 - $376
= $153 per hbf
Thus, the incremental profit from producing finished-cut lumber is
$224 - $153 = $71 per hbf.
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1. What is a financial ratio, breakeven analysis, and cost benefit analysis 2. Mention the classifications of the ratios and state the different types with their formula
Financial ratios can be classified into several categories based on the aspect of a company's financial performance they measure. Financial ratios help investors, analysts, and managers make informed decisions and assess the overall financial well-being of a company.
1. Financial Ratio:
A financial ratio is a quantitative metric used to analyze and evaluate the financial performance, stability, and health of a business or organization. It involves comparing different financial figures to gain insights into the company's profitability, liquidity, solvency, efficiency, and other aspects of its financial operations.
Breakeven Analysis:
Breakeven analysis is a financial tool used to determine the point at which a company's total revenue equals its total costs, resulting in neither profit nor loss. It helps in understanding the minimum level of sales required for a business to cover its fixed and variable costs.
Cost-Benefit Analysis:
Cost-benefit analysis is a systematic approach used to evaluate the benefits and costs of a project, investment, or decision. It involves comparing the total expected costs of an action or project against the total expected benefits to determine whether it is economically viable or worthwhile.
2. Classifications and Types of Financial Ratios:
a. Profitability Ratios:
Gross Profit Margin: (Gross Profit / Revenue) × 100Net Profit Margin: (Net Profit / Revenue) × 100Return on Assets (ROA): (Net Income / Total Assets) × 100Return on Equity (ROE): (Net Income / Shareholders' Equity) × 100b. Liquidity Ratios:
Current Ratio: Current Assets / Current LiabilitiesQuick Ratio (Acid-Test Ratio): (Current Assets - Inventory) / Current LiabilitiesCash Ratio: Cash and Cash Equivalents / Current Liabilitiesc. Solvency Ratios:
Debt-to-Equity Ratio: Total Debt / Shareholders' EquityDebt Ratio: Total Debt / Total AssetsInterest Coverage Ratio: Earnings Before Interest and Taxes (EBIT) / Interest Expensed. Efficiency Ratios:
Inventory Turnover Ratio: Cost of Goods Sold / Average InventoryAccounts Receivable Turnover Ratio: Net Credit Sales / Average Accounts ReceivableAsset Turnover Ratio: Revenue / Average Total Assetse. Market Value Ratios:
Price/Earnings (P/E) Ratio: Market Price per Share / Earnings per SharePrice/Book (P/B) Ratio: Market Price per Share / Book Value per ShareDividend Yield: Dividends per Share / Market Price per ShareLearn more about financial ratio https://brainly.com/question/21631170
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An analysis that explains differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a(n) Analysis of debits and credits Internal audit Trial reconciliation. Bank audiT
An analysis that explains any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a bank reconciliation. The right answer is c.
A bank reconciliation is a method of comparing the balances of cash accounts as recorded in a company's accounting records to the relevant data on a bank statement. Finding the discrepancies between the two is the purpose of this procedure, and any necessary alterations will be recorded in the accounting records.
The bank's record of every transaction affecting the entity's bank account throughout the previous month is included in the data shown on the bank statement. In order to make certain that a company's cash records are accurate, a bank reconciliation should be performed on a regular basis for all bank accounts.
The correct answer is option c.
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The question seems incomplete. The complete question is:
An analysis that explains differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a(n)
Analysis of debits and credits
Internal audit
Bank reconciliation
Trial reconciliation.
Bank audit
an increase in government transfers is considered to be an example of because it . a. expansionary fiscal policy; shifts the aggregate demand curve to the right, increasing real gdp b. contractionary fiscal policy; shifts the aggregate demand curve to the left, decreasing real gdp c. expansionary monetary policy; shifts the aggregate demand curve to the right, increasing real gdp d. contractionary monetary policy; shifts the aggregate demand curve to the left, decreasing real gdp
An increase in government transfers is an example of expansionary fiscal policy because it shifts the aggregate demand curve to the right, increasing aggregate output. Option C.
Government payments to people or organizations are referred to as "transfers," and examples include welfare, social security, and unemployment benefits. Increased transfers from the government to individuals or organizations indicate that the government is putting more money into the economy.
The expansionary fiscal policy is demonstrated by this rise in government transfers. For the purpose of promoting economic growth and rising aggregate demand, an expansionary fiscal policy entails raising government expenditure and/or lowering taxes.
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Explain how a firm might benefit from having a capacity
constraint.
A firm can benefit from having a capacity constraint by Price management: Capacity constraints can help firms manage prices by creating a sense of scarcity in the market.
With limited capacity, a firm can keep prices high and avoid undercutting the competition. This approach can help boost profitability, particularly in markets where demand outstrips supply. Increased productivity: Firms with capacity constraints must be strategic about how they allocate resources.
This often results in better decision-making, as managers must weigh the potential benefits of each project against the limited resources available. This focus on productivity can lead to more efficient operations, better customer service, and a more profitable bottom line. Opportunity identification: Capacity constraints can encourage firms to identify new opportunities for growth and expansion.
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Student Activities As assigned by your instructor, you will be working with a team of your classmates to resolve the problems at PAC Resources. There will be six teams-one team working on the organiza
PAC Resources has some problems that need to be addressed. The class instructor has assigned each team the task of solving the problems by working together with classmates. There are six teams, and each one will work on a specific area of the organization.
Therefore, it is imperative that each team has proper communication, cooperation, and participation from every member.
Student activities refer to the various extracurricular activities that are offered in a school or university. In this case, student activities are being used as a method of developing teamwork, communication, and problem-solving skills. The student activities will be focused on resolving the problems at PAC Resources, so it will be a practical learning experience for the students.
The six teams will each work on a specific area of the organization, such as finance, marketing, human resources, and so on. The teams will be responsible for identifying the problems in their area and coming up with practical solutions to resolve them. The teams will need to work together and communicate effectively to ensure that their solutions are effective and efficient.
The student activities are an excellent way of developing practical skills and knowledge that will be useful in the future. Working with classmates is an opportunity to learn how to work in a team, communicate effectively, and develop leadership skills. The activity will help students understand how to identify problems and come up with practical solutions to address them. In conclusion, the student activities will help students develop valuable skills that will be useful in their careers and everyday lives.
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Trying to buy a new house. (1) In the case of paying $200,000 in a lump sum plus $1,000 in installments for 15years. (2) In the case of paying $300,000 in a lump sum plus $500 in installments for 10years. Which is more advantageous?
Paying $200,000 in a lump sum plus $1,000 in installments for 15 years is more advantageous.
Which payment option yields greater benefits: $200,000 lump sum with $1,000 installments for 15 years or $300,000 lump sum with $500 installments for 10 years?Paying $200,000 in a lump sum plus $1,000 in installments for 15 years is more advantageous compared to paying $300,000 in a lump sum plus $500 in installments for 10 years.
The first option allows for a lower initial payment while spreading out the installments over a longer period. This results in a more manageable monthly payment and potentially better financial flexibility.
On the other hand, the second option requires a higher initial payment and shorter installment period, leading to higher monthly payments. Ultimately, the decision depends on the individual's financial situation, ability to make larger upfront payments, and preference for a shorter or longer repayment term.
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Under the liquidity premium (LP) theory of the yield curve, what can we say about the expected future short-term rate if the yield curve is increasing? a. It is the same as the current short-term rate.
b. It is lower than the current short-term rate.
c. It is higher than the current short-term rate.
d. There isn't enough information to know.
Under the liquidity premium (LP) theory of the yield curve, we say about the expected future short-term rate if the yield curve is increasing, the correct option is "c. It is higher than the current short-term rate."
According to the liquidity premium (LP) theory of the yield curve, an increasing yield curve implies that the expected future short-term rate is higher than the current short-term rate. The LP theory suggests that long-term interest rates are determined by adding a liquidity premium to the expected future short-term rates.
When the yield curve is increasing, it means that long-term interest rates are higher than short-term interest rates. This indicates that market participants expect higher future short-term rates.
The liquidity premium is added to compensate investors for the increased risk and uncertainty associated with holding longer-term bonds. Therefore, under the LP theory, the expected future short-term rate would be higher than the current short-term rate when the yield curve is increasing.
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Question 6 Arabian Gulf Corporation reports the following stockholders' equity section on December 31, 2020. - Common stock; $10 par value; 500,000 shares authorized; 200,000 shares issued and outstan
As of December 31, 2020, Arabian Gulf Corporation had 200,000 issued and outstanding shares of common stock with a $10 par value.
As of December 31, 2020, Arabian Gulf Corporation's stockholders' equity section included common stock with a par value of $10. The company had authorized 500,000 shares of common stock, out of which 200,000 shares were both issued and outstanding. The common stock represents the ownership interest of shareholders in the company. The par value indicates the nominal value assigned to each share. Authorized shares refer to the maximum number of shares the company is allowed to issue, while issued shares represent the number of shares actually sold or distributed to shareholders. Outstanding shares refer to the shares that are currently held by shareholders and are not repurchased or retired.This information provides an overview of Arabian Gulf Corporation's equity structure and the number of shares issued and outstanding.For more such questions on Common stock:
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Congestion charges effectively decrease the number of cars on the road. This is an example of:
a. the law of supply
b. the public-good problem
c. the free-rider problem
d. the common-resource problem
e. internalizing the externaility
The statement "Congestion charges effectively decrease the number of cars on the road" is an example of e) internalizing the externality.
Vehicles must pay to access some crowded locations or during peak hours. These costs are known as congestion charges. Congestion fees are being implemented in an effort to internalize the externality of traffic congestion.
Due to the costs, it imposes on society, such as longer travel times, pollution, and decreased productivity, traffic congestion is frequently viewed as a negative externality. Congestion charges raise the cost of driving during crowded times or in congested areas, which encourages motorists to travel less or use other forms of transportation.
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If economic profit is greater than zero, which of the following happens in a perfectly competitive industry in the long run?
a. Existing firms may decrease their operations.
b. Prices in this market are likely to increase.
c. New firms have an incentive not to enter the industry.
d. There may be pressure on the market price to fall.
There may be pressure on the market price to fall happens in a perfectly competitive industry in the long run. The correct option is d.
Economic profit in an industry with perfect competition denotes a situation where businesses are making more money than their capital's opportunity cost. Long-term, this draws new businesses into the sector to benefit from the profit opportunities. As more businesses enter the market, there is more competition because there is more supply.
As businesses compete for customers, increased competition drives prices lower. Economic profit eventually tends to zero in the long-run equilibrium of a perfectly competitive market and the market price settles at a level where businesses only generate a normal rate of return which covers their opportunity cost of capital. The correct option is d.
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when a firm is producing at the level of output that maximizes profit, which of the following is true?(1 point)
When a firm is producing at the level of output that maximizes profit, the following statement is true: Marginal revenue (MR) equals marginal cost (MC).
Marginal revenue (MR) is the additional revenue generated from selling one additional unit of a product or service. It is calculated by dividing the change in total revenue by the change in quantity sold. In the context of profit maximization, the following statement is true: At the level of output that maximizes profit, marginal revenue (MR) is equal to marginal cost (MC). This is because in order to maximize profit, a firm should produce an additional unit of output as long as the marginal revenue from that unit is greater than or equal to the marginal cost. If MR is greater than MC, producing an additional unit will increase profit. If MR is less than MC, producing an additional unit will decrease profit. Therefore, at the profit-maximizing level of output, MR = MC.
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When a firm is producing at the level of output that maximizes profit, which of the following is true?
a) Marginal cost equals marginal revenue.
b) Average cost equals marginal cost.
c) Average revenue equals marginal cost.
d) Total cost equals total revenue.
John Lake is a single, individual taxpayer. Lake is the sole owner of Kale, Inc., an S corporation with a November 30 year end. Lake had a $500 overpayment in year 2 that was applied to the year 3 tax liability.
Lake pays estimated taxes. Lake's year 3 estimated tax based on year 2 income was $1,600.
Kale files Form 1120S, U.S. Income Tax Return for an S Corporation.
Based on the information above, answer the questions in the table below. For responses requiring dates, double-click in the shaded cell and select from the list provided the appropriate date. For responses requiring numerals, enter values as positive, whole numbers. If a response is zero, enter a zero (0).
what is the due date form 1120s year 2?
what is the final the to contribute to his IRA year 2?
what is latest day Lake can pay any year 2 income tax due without interest?
what is the amount lake 1st estimated tax payment after year 2 overpayment is applied?
when is the earliest day to make an estimated tax payment for year 3, after year 2 overpayment applied?
if lake elect to file an extention on the individual year 2 return, what is the due date?
The correct answers to the given taxpayer are as follows:
If Lake wishes to make an estimated tax payment for year 3, the earliest day he can make the payment would be July 1, after the year 2 overpayment applied.If Lake elects to file an extension on the individual year 2 return, then the due date would be October 15. March 15What is the final date to contribute to his IRA year 2?April 15What is the latest day Lake can pay any year 2 income tax due without interest?April 15What is the amount lake 1st estimated tax payment after year 2 overpayment is applied?$1,100, When is the earliest day to make an estimated tax payment for year 3, after year 2 overpayment applied?
July 1If Lake elect to file an extension on the individual year 2 return, what is the due date?
October 15. An S corporation has to file the Form 1120S by the 15th day of the third month after the end of the tax year. As the year-end is November 30, the due date form 1120s year 2 would be March 15.If John Lake makes an IRA contribution, the last date he can contribute to his IRA year 2 would be April 15.
If Lake pays the year 2 income tax without interest, he must pay the tax before April 15, 2023. The latest day Lake can pay any year 2 income tax due without interest would be April 15.The amount Lake 1st estimated tax payment after year 2 overpayment is applied would be $1,100 (1600-500).
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Describe and evaluate the importance of the legal and institutional changes that favored the beginning of the industrial revolution in Great Britain.
During the industrial revolution, the United Kingdom saw legal and institutional changes that were critical to the growth of the British economy.
This essay will describe and evaluate the significance of the legal and institutional changes that favored the beginning of the industrial revolution in Great Britain.
Agricultural, scientific, and commercial changes in the late 18th century paved the way for a legislative reform that legalized and facilitated commerce, technological innovation, and individual enterprise. This shift was apparent in the emergence of Enclosure Acts, which abolished the traditional open field farming, and created a system of enclosed, independent farms in the countryside.
Furthermore, the repeal of the Corn Laws, which had been established to protect domestic agricultural prices, paved the way for cheaper food imports and lowered the cost of living
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A government’s MD&A states that government-wide net position decreased as a result of the issuance of a long-term liability during the current reporting period. Does this sound correct? How does the issuance of long-term debt typically affect net position in the year of issuance?
Yes, the government’s MD&A statement is correct. Long-term debt issuance typically affects net position in the year of issuance negatively.
In this case, the government’s MD&A statement is correct. The issuance of long-term debt generally has a negative impact on the net position of the government in the year of issuance. This is because the government is required to repay the principal amount along with interest over a long period of time, resulting in a liability that affects the government's financial position.
Long-term debt, also known as bonds or notes, is a borrowing instrument that is payable over a period of more than one year. Because long-term debt is a liability, it reduces net position in the year it is issued. Net position refers to the difference between assets and liabilities. If the liabilities increase, net position decreases.
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Which of the following best describes global recolonization?
The rebuilding of European colonial empires in the 21st century.
China's acquisition of colonies in the developing world.
The re-emergence of the colonial division of labor in response to increased demand for raw materials by China.
The growing number of countries in the Global South demanding to be recolonized by European powers.
Option 1. is correct.
Global recolonization refers to the rebuilding of European colonial empires in the 21st century.
This is the best description of global recolonization. What is Global Recolonization? Global recolonization is a term that refers to the rebuilding of European colonial empires in the 21st century. This concept is used to describe the resurgence of interest in acquiring colonies by European countries, despite the widespread condemnation of colonialism in the past.
The most prominent example of this phenomenon is the recent acquisition of territories in Africa by France and the United Kingdom. The purpose of global recolonization is to increase the wealth and power of the colonizing country. Countries that engage in this practice often do so because they are looking for new sources of raw materials, markets for their products, or strategic locations for military bases. Critics of global recolonization argue that it is a form of imperialism that exploits the people and resources of the colonized countries.
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Consider an economy that is in the following situations: Situation CI с IG i(%) n (%) u (%) x(%) A 730 150 170 4 3 3 1 B 670 150 130 4 1 1 C 700 150 150 4 2 5 1 When the economy is producing at potential, the following values apply: Yn = 5%; rn = 2%; x = 1%; π² = 2%. 1000; un = a) In which situation(s) is the economy in medium run equilibrium? Explain. b) In the situations in which the economy is not in medium run equilibrium, what action must the central bank take to return to equilibrium? 3. Discuss the following statement: A fiscal expansion leads to an increase in the natural rate of interest.
a) The medium-run equilibrium occurs where the AD (aggregate demand) and AS (aggregate supply) curves intersect. The economy is in medium-run equilibrium when its short-run equilibrium is equal to the economy's potential output.
The AD and AS curves are constructed to establish the economy's price level and production capacity. In the table, the economy is in medium-run equilibrium in Situation C. The inflation rate, unemployment rate, and output gap are all equal to their potential values. The economy is not in medium-run equilibrium in Situations A and B because the output gap is non-zero.
b) The central bank has to take the following measures to achieve equilibrium:
Situation A: Since the output gap is positive, the central bank must increase the interest rate, which lowers aggregate demand and leads to a leftward shift of the AD curve. This action reduces inflationary pressure and, in the long run, lowers the price level to P0 and the output level to Yn.
Situation B: Since the output gap is negative, the central bank must lower the interest rate, which increases aggregate demand and leads to a rightward shift of the AD curve. This action raises inflationary pressure and, in the long run, raises the price level to P0 and the output level to Yn.
3. A fiscal expansion leads to an increase in the natural rate of interest. The natural rate of interest is defined as the real interest rate that equates investment and saving in an economy without inflationary or deflationary pressures. A fiscal expansion implies an increase in government spending and/or a decrease in taxes, which raises aggregate demand. The increased aggregate demand raises output and raises the demand for investment. The greater investment demand puts upward pressure on the natural rate of interest. Fiscal policy can alter the natural rate of interest indirectly through its influence on investment demand.
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On January 1, 2009, Falk Company purchased 50,000 ordinary shares of Milo Company for P3,600,000. On December 31, 2009, Falk received 50,000 stock rights from Milo. Each right entitles the holder to acquire one share for P85. The market price of Milo’s share was P100 immediately before the rights were issued, and P90 a share immediately after the rights were issue. Falk sold its rights on December 31, 2009 for P12.80 a right. Falk’s gain from the sale of the rights is: ________
Falk Company's gain from the sale of the rights is P5,600,000.
The gain from the sale of the rights can be calculated by subtracting the cost of acquiring the rights from the proceeds of the sale. Falk Company purchased 50,000 shares of Milo Company for P3,600,000. The rights issued by Milo allow the holder to acquire one share for P85. Since Falk received 50,000 rights, the total cost of acquiring the rights is P85 * 50,000 = P4,250,000.
Falk sold its rights for P12.80 each, so the total proceeds from the sale of the rights is P12.80 * 50,000 = P640,000.
To calculate the gain, we subtract the cost from the proceeds: P640,000 - P4,250,000 = -P3,610,000.
However, since the question asks for the gain, we need to take the absolute value of the result, which is P3,610,000. Therefore, Falk Company's gain from the sale of the rights is P3,610,000.
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Refer to the Front Page to answer two questions.
FRONT PAGE Pricing Disney+ Disney decided it wanted to provide streaming services directly to customers, rather than renting its library of films and television shows to other streaming services like Netflix. But how successful would a streaming service be? In other words, what did the demand for a "Disney+" streaming service look like? Disney knew that the number of subscribers would depend not just on the attractiveness of the Disney archives, but also on the subscription price. After doing some market research, Disney decided to launch Disney+ at a price of $6.99 a month (or $69.99 per year). When Disney+ was launched on November 12, 2019, 10 million people signed up on the first day-a resounding success! Source: News reports, October-December 2019. I
nstructions: Round your response to one decimal place.
If the quantity demanded decreases by 1.7 million for every $1 increase in the subscription price,
a. How many initial subscribers would Disney+ have gotten at a price of $4.99? million subscribers
b. This is a [(Click to select)
a. The initial subscribers that Disney+ would have gotten at a price of $4.99 is 16.7 million subscribers. (Rounded response to one decimal place.). b. This is a inelastic demand.
Initially, 10 million subscribers signed up for Disney+ when it was launched. If the quantity demanded decreases by 1.7 million for every $1 increase in the subscription price, we can calculate the number of initial subscribers that Disney+ would have gotten at a price of $4.99 as follows:
Let x be the number of $1 increases in the subscription price between $4.99 and $6.99. Since the quantity demanded decreases by 1.7 million for every $1 increase in the subscription price, the quantity demanded, q, can be expressed as: q = 10 - 1.7x. To find the initial number of subscribers if the subscription price is $4.99, we need to find the value of q when x = 2. Thus, we have: q = 10 - 1.7(2) = 6.6 million subscribers. To obtain the number of initial subscribers at $4.99, we add the 10 million subscribers who signed up on the first day to the number of subscribers who would have signed up at $4.99, as follows: Total initial subscribers = 10 + 6.6 = 16.6 million subscribers≈ 16.7 million subscribers. Therefore, the initial subscribers that Disney+ would have gotten at a price of $4.99 is 16.7 million subscribers. (Round your response to one decimal place.)
b. The blank should be filled with "inelastic demand" as it refers to the situation where the quantity demanded of a product changes relatively less than the change in price. Thus, a price increase may not necessarily lead to a reduction in quantity demanded, while a price decrease may not necessarily lead to an increase in quantity demanded.
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Which of the following is a contract that prohibits specificconfidential, secret, proprietary, and/or personal informationfrom being shared or distributed outside of a specificprescribed set of individuals or organizations? User agreement Continuing education agreement Network agreement Nondisclosure agreement
The contract that prohibits specific confidential, secret, proprietary, and/or personal information from being shared or distributed outside of a specific prescribed set of individuals or organizations is a "Nondisclosure Agreement" (NDA).distributed.
A nondisclosure agreement is a legally binding contract between parties that outlines the confidential information they will share with each other and restricts its disclosure to third parties. It establishes the terms and conditions under which the recipient of the confidential information agrees to keep it confidential and prevent unauthorized disclosure. NDAs are commonly used in business transactions, employment relationships, and collaborations where sensitive information needs to be protected. By signing an NDA, the parties involved agree to maintain the confidentiality of the specified information and may face legal consequences if they breach the agreement.
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John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would be best suited for them?
In this situation, John and Mary, with a financially dependent handicapped child, would benefit from a life insurance policy that provides financial protection in the event of the death of either or both parents.
Specifically, a suitable policy for them would be a survivorship or second-to-die life insurance policy. This type of policy covers the lives of both parents and pays out the death benefit upon the death of the second parent.
It ensures that funds are available to support the child's financial needs in the event of the parent's passing, thereby avoiding a potentially disastrous financial situation.
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Currently Chester is paying a dividend of $18.13 (per share). If this dividend were raised by $3.64, given its current stock price what would be the Dividend Yield?Select: 1 $3.64 11.3% $21.77 9.4%
Dividend Yield will be 11.3%. The dividend yield is calculated by dividing the annual dividend per share by the current stock price and expressing it as a percentage.
To calculate the new dividend yield, we need to determine the new annual dividend per share and divide it by the current stock price.
Given that the current dividend per share is $18.13, if it is raised by $3.64, the new annual dividend per share would be $18.13 + $3.64 = $21.77.
Now, we divide the new annual dividend per share ($21.77) by the current stock price to calculate the dividend yield.
Dividend Yield = (Annual Dividend per Share / Stock Price) * 100
Dividend Yield = ($21.77 / $192.46) * 100
Dividend Yield ≈ 0.113 * 100 ≈ 11.3%
Therefore, the correct answer is 11.3%. The dividend yield would be 11.3% if the dividend per share is increased by $3.64 from its current value, considering the current stock price of the Chester company. The dividend yield represents the return on investment in the form of dividends relative to the stock price.
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