Runnerz Inc.,a leading manufacturing and retail company that designs and develops footwear and apparel,has signed a contract with a particular courier service for managing the delivery process.The courier service is required to deliver goods from the factory to the warehouse,to customers,and also to collect customer payments for the goods.This is a typical example of a(n)________.
A) non-equity strategic alliance
B) turnkey operation
C) greenfield investment
D) international licensing agreement

Answers

Answer 1

Answer:

A) non-equity strategic alliance

Explanation:

From the question, we are informed about, Runnerz Inc., which is a leading manufacturing and retail company that designs and develops footwear and apparel,has signed a contract with a particular courier service for managing the delivery process.The courier service is required to deliver goods from the factory to the warehouse,to customers,and also to collect customer payments for the goods. In this case we can regard this as a typical example of a non-equity strategic alliance.

Non-equity strategic alliance can be explained as when there is contractual relationship is signed by two independent companies to gather their resources as well as their capabilities even though there is no separate entity or sharing equity. Most of the business alliances are fond of this type of agreement.


Related Questions

Kevin Rogers is interested in buying a five-year bond that pays a coupon of 10 percent on a semiannual basis. The current market rate for similar bonds is 8.8 percent. What should be the current price of this bon?

a. $1, 099.
b. $982
c. $1.048
d. $965

Answers

Answer:

c. $1.048

Explanation:

Assuming face value to be $1000

Semi annual coupon = (10% of 1000) / 2 = 50

Number of periods = 5 * 2 = 10

Semi annual rate = 8.8% / 2 = 4.4%

Current price = Coupon * [1 - 1 / (1 + r)^n] / r + FV / (1 + r)^n

Current price = 50 * [1 - 1 / (1 + 0.044)^10] / 0.044 + 1000 / (1 + 0.044)^10

Current price = 50 * [1 - 0.650122] / 0.044 + 650.122225

Current price = 50 * 7.951768 + 650.122225

Current price = 397.5884 + 650.122225

Current price = 1047.710625

Current price = $1,048

Historically, a factory has been able to produce a very specialized nano-technology component with 35% reliability, i.e., 35% of the components passed its quality assurance test. They have now changed their manufacturing process and hope that this has improved the reliability. To test this, they took a random sample of 24 components produced using the new process and found that 13 components passed the test. If you do a hypothesis test to see if the new manufacturing process is more reliable, does this observation give you enough evidence to reject the null hypothesis at 5% level of significance? (Suggestion: Use Microsoft Excel for your calculations.)The table below shows the probability of observing number of components (X) passing the test out of 24 components, if the reliability is 35%.X Probability0 0.00001 0.00042 0.00263 0.01024 0.02895 0.06226 0.10617 0.14708 0.16829 0.161010 0.130011 0.089112 0.052013 0.025814 0.010915 0.003916 0.001217 or more 0.0004A) NoB) Yes

Answers

Answer:

Yes

Explanation:

From the given output

The  Probability of getting 13 or more passed

when the  reliability = 0.35. can be calculated as follows

=0.0258+0.0109+0.0039+.0012+0.0004 = 0.0422   ≈  4.2%

Since the probability is less than the  5% level we will therefore reject the Null hypothesis  

answer : YES

The Republic of Yuck is a simple economy with no government, no taxes, and no imports and exports. Yuckers (citizens of Yuck) are creatures of habit. They have a rule that everyone saves exactly 22 percent of income. Assume that planned investment is fixed and remains at 67 billion Yuck dollars.Expert economists of the Republic of Yuck have estimated the following:Real GDP (Y) 192 billion Yuck dollarsPlanned Investment Spending (U): 67 billionYuck dollars You are asked by the business editor of the Weird Herald, the local newspaper, to predict the economic events of the next few months.Based on the information given above you predict that the inventories will _____ and output will _____ ,a. stay unchangedb increasec. decrease

Answers

Answer:

The inventories will decrease and output will increase

Explanation:

Note: The organized question is as attached

Real GDP is 192 billion

They consumes (100 - 22) = 78% of income.

Therefore, the consumption is 78% of 192 billion = 149.76 billion

The Investment is fixed at 67 billion . This implies that aggregate expenditure (AE = C + I) = 149.76 billion  + 67 billion  =  216.76 billion

Since Aggregate expenditure(AE) is greater than Real GDP (Y), It is likely that the inventories will decrease and the firms will produce more so that output will increase.

A stock is expected to pay a dividend of $1 per share in 2 months and in 5 months. The current stock price is $50, and the continuous compounded risk free interest rate is 8% per annum. An investor has just taken a short position in a 6-month forward contract on the stock.

Required:
a. What is the arbitrage free price of the forward contract?
b. What are the forward price and the initial value of the forward contract?
c. Three months later, the price of the stock is $48 and the risk-free rate of interest is still 8% per annum. What are the forward price and the value of the short position in the forward contract?

Answers

Answer:

b) the initial value of the forward contract is $0

we must determine the present value of the dividends that the stock is expected to pay in order to determine the forward price:

present value of dividends = ($1 x e⁽⁻⁰°⁰⁸⁾ ⁽⁰°¹⁶⁷⁾) + ($1 x e⁽⁻⁰°⁰⁸⁾ ⁽⁰°⁴¹⁶⁷⁾) = $1.954

forward price = ($50 - $1.954) · e⁽⁰°⁰⁸⁾ ⁽⁰°⁵⁾ = $50.0068 ≈ $50.01

c) again we first determine the present value of the dividends:

present value of dividends = ($1 x e⁽⁻⁰°⁰⁸⁾ ⁽⁰°¹⁶⁷⁾) = $0.9867

forward price = ($48 - $0.9867) · e⁽⁰°⁰⁸⁾ ⁽⁰°²⁵⁾ = $47.963 ≈ $47.96

short forward contract = -[$48 - $0.9867 - ($50.01 · e⁽⁻⁰°⁰⁸⁾ ⁽⁰°²⁵⁾)] = $2.006 ≈ $2.01

a) in order to determine the arbitrage free forward price, the NPV of our forward price must be 0. It is basically the same answer than (b) only that you calculate it in a different order:

$50 = $1.954 + forward price/e⁽⁰°⁰⁸⁾ ⁽⁰°⁵⁾

$48.046 = forward price/(1 + e⁽⁰°⁰⁸⁾ ⁽⁰°⁵⁾

forward price = $48.046 · e⁽⁰°⁰⁸⁾ ⁽⁰°⁵⁾ = $50.006 ≈ $50.01

Good Guy Foods wants to establish a trust fund that will provide $125,000 in scholarships each year for needy students. The trust fund is expected to earn a fixed 7.25 percent rate of return. How much money does the firm need to contribute to the fund assuming that only the interest income is to be distributed? a. $1,687,450 b. $1,478,023 c. $1,333,333 d. $1,724,138

Answers

Answer:

Good Guy Foods

The amount that the firm needs to contribute to the fund, assuming that only the interest income is to be distributed is:

d. $1,724,138

Explanation:

a) Data and Calculations:

Distributable Trust Fund = $125,000

Rate of interest or return = 7.25%

The distributable trust fund is a product of total trust fund multiplied by the rate of return.

The total trust fund = $125,000/7.25%

= $125,000/0.0725

= $1,724,138

Check:

7.25% of $1,724,138 = $125,000

b) Good Guy Foods needs to contribute $1,724,138 in funds that will earn 7.25% annually and equal the scholarship amount of $125,000 annually.

On October 1, 20XX, Bartley Corporation issued 5%, 10-year bonds with a face value of $500,000 at $520,000. The entry to record the issuance of the bonds would include a:___________
a) credit of $20,000 to Premium on Bonds Payable
b) credit of $520,000 to Bonds Payable
c) debit of $20,000 to Discount on Bonds Payable
d) credit of $480,000 to Bonds Payable

Answers

Answer:

b) credit of $520,000 to Bonds Payable

Explanation:

Date        Accounts titles and explanation       Debit        Credit

Oct. 1       Cash                                                  $520,000  

                       Premium on bonds payable                       $20,000

                       Bonds payable                                            $500,000

               (To record the issuance of bond at premium)

PLS HURRY!!!!
Write a short paragraph explaining the ecological benefits to high-yield agricultural techniques.

Answers

Answer:

The results suggest that more intensive production methods require less land, cause less soil loss, consume less water and may result in the production of fewer pollutants. Contrary to common belief, results from the study show that organic production is more ecologically damaging than conventional methods.

Explanation:

QUESTION 11
Which of the following is not a type of ethics theory?
O Deontology
O Utilatrianism
Behaviorism
Moral Realitism

Answers

Deontology is not an ethics theory, it is the study of the nature of duty and obligation.

The term that does not belong to  type of ethics theory is Deontology.

The Bioethics can be regarded as a term that is used in explaining some disciplines such as;

medical ethics animal ethicsenvironmental ethics.

Examples of types of ethic theory are;

UtilatrianismBehaviorismMoral Realitism

Therefore, Deontology does not belong to  type of ethics theory.

Learn more about ethics theory at;

https://brainly.com/question/4207376

Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item were available for sale during the calendar year:
Jan. 1 Inventory 10,000 units at $75.00
Mar. 18 Sale 8,000 units
May 2 Purchase 18,000 units at $77.50
Aug. 9 Sale 15,000 units
Oct. 20 Purchase 7,000 units at $80.25
The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.

Answers

Answer:

Please see attached solution

Explanation:

a. Cost of goods sold . Detailed explanation attached.

b. Ending inventory. Detailed explanation attached.

Note 1.

Weighted average cost per unit on January 20

= $1,545,000/20,000 units

= $77.5

Note 2

Weighted average cost per unit on January 30

= $948,000/12,000 units

= $79.00

Are employees more likely to favor defined contribution plans over defined benefit plans? How about employers? Explain your answers.

Answers

Answer: the contribution plan favours the employer while the defined benefit plan favours the employee

Explanation:

Defined contribution plans is described as a type of retirement plan where the employer, employee or both make contributions on a regular basis. While the defined benefit plan, the employer is responsible for all of the planning and investment risk, where employees are paid benefit based on length of employment and salary history. The employees are more likely to prefer the benefit plan, while the employer would prefer the contribution plan which favours him because of the contribution the employees make

True/ False In Alex Tabarrok’s TED talk, he mentions, "innovative ideas are driving growth within the global economy more than ever before."

Answers

Answer:

True

Explanation:

The man Alexander Taborrak is a Canadian/American economist. He is a university professor and also a director of research.

The correct answer to this question is true. As he mentioned the importance of innovation and also the importance of creativity and still on the topic, he went on to make the statement that that the best is yet to come as 'innovation ideas are the driving growth of the economy as a whole'.

Oakland Tax Planning Service bought computer equipment for on January​ 1, 2018. It has an estimated useful life of four years and zero residual value. Oakland uses the straightline method to calculate depreciation and records depreciation expense in the books at the end of each month. Calculate the amount of Depreciation Expense for the​ period, January​ 1, 2018 through September​ 30, 2018, for this equipment.​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

A. $6,000

B. $6,500

C. $4,500

D. $5,000

Answers

Answer:

C. $4,500

Explanation:

The computation of the depreciation expense using the straight-line method is shown below:

= (Cost - residual value) ÷ Useful life of the asset  

= $24,000 ÷  48 months  

= $500  

Now for 9 months, it is

= $500 × 9 months

= $4,500

Hence, the depreciation expense is $4,500

Therefore the correct option is c. $4,500

Stepsis is doing laundry today, but the machine is not working, she crawls in and sees whats wrong, she fixes it but shes stuck, she calls StepBro.

What should StepBro do?
A. Call Jamal
B. Pull her out
C. Dice Roll Dance And Bunny Hop Dance
D. I like ya cut G her

Answers

Answer:

b or d

Explanation:

because pulling her out might get the problem done faster , but I like ya cut g her could resolve in even more action . um I go with d

Answer:

B

Explanation:

Be a decent human being boys

When an increasing trend exists in the data and a single exponential smoothing forecast method is used, the forecast will:_______.
a) predict demand perfectly
b) generally underestimate demand
c) capture the trend
d) increase the trend
e) none of the above

Answers

Answer:

c) capture the trend

Explanation:

The exponential smoothing is a forecasting method that is used for a time series and the data i.e. univariate. It could be extended for data support that have the chronological trend

Here in the given situation, if the trend i.e. increased in the data and the above method is used so in the case when the value of the alpha is more it would capture the trend but in the case when the value of the alpha is less so it also capture the demand but the demand is underestimated

Hence, the option c is correct

The exponential smoothing method is a time series forecasting method of the univariate data that is extended to support systematic trends and seasonal components.

his method is used when some trends may be present, weight-based on experimental and intuition and orderly data is less important. The single parameter controls the rate at which the pbservatiosna are influenced.  While the double method is an extension of smoothing that adds support for trends in time series.

Hence the option D is correct.

Learn more about the increasing trend that exists in the data and a single exponential smoothing.

brainly.com/question/20376850

In practice which market index would best be used as a proxy for the market portfolio in theâ CAPM?
A. Wilshire 5000
B. Dow Jones Industrial Average
C. U.S. Treasury Bill
D. S&P 500

Answers

Answer:

D. S&P 500

Explanation:

The market index that is used as a proxy for the portfolio of the market in the Capital Asset Pricing Model (CAPM) is S&P 500. This refers to a broad index of the market that involves the 500 stocks performance listed on the US stock exchange. Also it used for the calculation market weighted so that the value of the index could come

Hence, the correct option is d.

Which of the following are frequently mentioned goals of the Federal Reserve? Check all that apply.

Answers

Answer:

Stability in the financial system

– Price stability—fighting inflation

– Full employment

– Economic growth

– Interest rate stability

– Currency stability

Bikes and More just announced its next annual dividend will be $2.42 a share and all future dividends will increase by 2.5 percent annually. What is the market rate of return if this stock is currently selling for $22 a share?

Answers

Answer:

13.5%

Explanation:

market rate of return can be calculated with below expresion

Current Price = D / (K - g)

Where

Current Price = $22 a share

D= Dividend in coming Year

dividend = $2.42

K= rate of return

g =growth rate

22 = 2.42 / (K - 0.025)

Cross multiply we have

22(K - 0.025)= 2.42

Open the bracket we have

22k- 0.55=2.42

2.42 + 0.55= 22k

K = 2.97 / 22

= 0.135

= 0.135×100%

= 13.5%

Therefore, the market rate of return if this stock is currently selling for $22 a share is 13.5

O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.10. What is the firm's cost of equity from retained earnings based on the CAPM?
a. 8.93%
b. 11.25%
c. 13.22%
d. 11.83%
e. 11.60%

Answers

Answer:

11.3%

Explanation:

O'Brien has the following data

rRF= 5%

RPM= 6%

b= 1.10%

Therefore the cost of equity can be calculated as follows.

= 5% + 6%(1.05)

= 5% + 6.3

= 11.3%

Hence the cost of equity is 11.3%

Pina Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Pina had the following transactions related to notes payable.

Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 8% and is due December 1. (Pina uses a perpetual inventory system.)
Sept. 30 Recorded accrued interest for the Pippen note.
Oct. 1 Issued a $21,600, 9%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1.
Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note.
Nov. 1 Issued a $26,400 note and paid $8,800 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 7% and matures in 12 months.
Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note.
Dec. 1 Paid principal and interest on the Pippen note.
Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note.

Required:
Prepare journal entries for the transactions noted above.

Answers

Answer:

Pina Corporation

Journal Entries:

Sept 1:

Debit Inventory $16,800

Credit Notes Payable (Pippen) $16,800

To record the issue of a 3-month note payable with interest of 8%

Sept. 30:

Debit Interest Expense on Note ($16,800 * 8%/12) $112

Credit Interest Payable $112

To accrue interest for the note payable.

Oct. 1:

Debit  Equipment (Climbing Wall) $21,600

Credit Notes Payable (Prime Bank) $21,600

To record the issue of a 4-month note, with 9% interest.

Oct. 31:

Debit Interest Expense on Note ($16,800 * 8%/12) $112

Credit Interest Payable $112

To accrue interest for the note payable.

Debit Interest Expense on Note ($21,600 * 9%/12) $162

Credit Interest Payable $162

To accrue interest for the note payable.

Nov. 1:

Debit Vehicles $35,200

Credit Notes Payable $26,400

Credit Cash $8,800

To record the purchase of a vehicle via a 12- month notes payable at 7% interest.

Nov. 30:

Debit Interest Expense on Note ($16,800 * 8%/12) $112

Credit Interest Payable $112

To accrue interest for the note payable.

Debit Interest Expense on Note ($21,600 * 9%/12) $162

Credit Interest Payable $162

To accrue interest for the note payable.

Debit Interest Expense on Note ($35,200 * 7%/12) $205

Credit Interest Payable $205

To accrue interest for the note payable.

Dec. 1:

Debit Notes Payable (Pippen) $16,800

Debit Interest Payable $336

Credit Cash $17,136

To record the payment of Notes to Pippen with interest.

Dec. 31:

Debit Interest Expense on Note ($21,600 * 9%/12) $162

Credit Interest Payable $162

To accrue interest for the note payable.

Debit Interest Expense on Note ($35,200 * 7%/12) $205

Credit Interest Payable $205

To accrue interest for the note payable.

Explanation:

The general journal is used to record transactions as they occur while the general ledger records details about each account and summarizes the balances at the end of the accounting period into the trial balance.  Accounting records are based on the double-entry system and follow the accounting equation of Assets = Liabilities + Equity.  Every business transaction  at Pina Corporation involves two or more accounts.  One or two are debited or credited, as the case may be.  

Emily is journalizing an adjustment for a returned check written by a customer. What type of account would this be considered?

Answers

Answer:

When you are reconciling a bank account and you receive an NSF check (non-sufficient funds), you must reverse the collection of the check:

When you received the check the journal entry was:

Dr Cash xyz

    Cr Accounts receivable xyz

If the check bounces, the reversal entry is:

Dr Accounts receivable xyz

    Cr Cash xyz

3M Co. reports beginning raw materials inventory of $855 million and ending raw materials inventory of $717 million. Assume 3M purchased $3,646 million of raw materials and used $3,784 million of raw materials during the year. Compute raw materials inventory turnover and the number of days' sales in raw materials inventory.

Required:
Compute raw materials inventory turnover and the number of days' sales in raw materials inventory.

Answers

Whats the question.....

NTR Corporation has offices in both Los Angeles and San Francisco. In the Los Angeles office, the account number for cash is 1.101. In San Francisco, the account number for cash is 2.101. What type of coding system does NTR Corporation use?

Answers

Answer:

Faceted Coding

Explanation:

Faceted coding system is basically a type of sequential coding. The main difference is that the first letters or numbers of the accounting codes represent different locations, departments, business units, stores, etc.

In this case, the first 1 in 1.101 denotes the Los Angeles office, while the 2 in 2.101 denotes the San Francisco office. Each period (or underscore, etc.) represents a different cost field or category. In this example, the .101 represents cash account.

Once the prototype of Wainwright Industries' new riding lawnmower, made especially for women, passes concept testing, the next step is ________
A) commercialization
B) focus group surveys
C) concept development
D) post-testing
E) marketing strategy

Answers

Answer: commercialization

Explanation:

Concept testing is the stage at which survey is being carried out for a particular product. This is done in order to know how consumers will accept a new product before such product is finally introduced to the market.

Since the product has passed the concept testing, the next step will be commercialization. This is when the product is then introduced and the business is managed in order to make profit.

Answer:

E) marketing strategy

Explanation:

When a new product is the be introduced to the market there are various stages the it should undergo to ensure it has high quality and is well recieved by the consumer.

The various steps are:

- idea development

- focus group survey

- concept testing

- market strategy development

- product development

- test marketing

- commercialisation

When the new product is confirmed as a viable one marketing strategy development is started to see how product can best be delivered to the consumer

This stage comes after concept testing.

On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company should report interest payable at December 31, 2021, in the amount of:___________. a. $ 0. b. $2,000 c. $3,000.d. $1,000

Answers

Answer:

The interest payable to be reported on 31 December 2021 will be of $1000.

Option d is the correct asnwer.

Explanation:

Under the accrual basis or principle of accounting, we match the revenue with the expenses and record the transactions in the period to which they relate to rather than when the cash is paid or received. This means that the interest payment that is accrued for time period relating to this year should be recorded as an expense in the current period and as a liability as it will be paid in the next period. Thus, the interest on the note relating to 2 months from November 2021 to December 2021 will be recorded as follows,

Interest expense = 100000 * 0.06 * 2/12 = 1000

31 Dec 2021

Interest expense    1000 Dr

    Interest Payable     1000 Cr

Leary Corporation had net credit sales during the year of $900,000 and cost of goods sold of $540,000. The balance in receivables at the beginning of the year was $120,000 and at the end of the year was $180,000. What was the accounts receivable turnover?
A. 6.0
B. 7.5
C. 5.0
D. 3.6

Answers

B because 2+2 is 4 so you have to be smart and think out side the box

Answer:

A. 6.0

Explanation:

Jumber Corp makes one product. Budgeted unit sales are shown belowJan 7300Feb 8600March 10100April 13600The ending finished goods inventory should equal 30% of the following month's sales. The budgeted required production for February is closest to:A) 8600 unitsB) 11630 unitsC) 9050 unitsD) 14210 units

Answers

Answer: 9050 units

Explanation:

From the information given in the question, the following can be deduced:

Budgeted sales for February = 8,600

Add: Desired ending inventory = 3% × 10100 = 0.3 × 10100 = 3,030

Total needs = 8600 + 3030 = 11630

Less: Beginning inventory = (2,580)

Required production = 9050

The budgeted required production for February is 9050 units

Texas Corporation is undergoing a complete liquidation and distributes land to​ Robert, one of its​ shareholders, in exchange for all of​ Robert's stock. The land has a basis of​ $300,000 and an FMV of​ $400,000 on Texas​ Corporation's books and is subject to a​ $325,000 liability. Robert assumes the liability on the property.​ Robert's basis in his Texas Corporation stock is​ $100,000. What is the amount of gain or loss recognized by Robert on the​ distribution?

a. $25,000 gain
b. $75,000 gain
c. $75,000 loss
d. $25,000 loss

Answers

Answer: d. $25,000 loss

Explanation:

Based on the information given in the question, the amount of gain or loss recognized by Robert on the​ distribution will be gotten by subtracting the liability of $325,000 from the land basis of $300,000. This will be:

= $325,000 - $300,000

= $25,000

This will be a loss since the liability is higher than the asset which is the land basis. Therefore, the amount of loss recognized by Robert on the​ distribution will be $25,000 loss.

The correct option is D.

Monroe manufacturing has a quick ratio of 2.00x $31,000 in cash $17,500 in accounts recivable some inventory total current assets of $70,000 and total current liabilities of $24,500 the company reported annaul sales of $400,000 in the most recent annual reportOver the past year how often did Monroe manufacturing sell and replace its inventory?A) 19.05 xB) 20.96 xC) 2.86 xD) 8.01 x

Answers

Answer:

Inventory turnover ratio = 19.05 times

Explanation:

Quick ratio = (Current assets - Inventory) / Current liabilities  

2 = (70,000 - Inventory) / 24,500

Inventory = $21,000

Inventory turnover ratio = Total sales / Inventory

Inventory turnover ratio = 400,000 / 21,000

Inventory turnover ratio = 19.05 times

Tumbling Haven, a gymnastic equipment manufacturer, provided the following information to its accountant. The company had current assets of $145,332, net fixed assets of $356,190, and other assets of $4,176. The firm had long-term debt of $76,445, common stock of $200,000, and retained earnings of $134,461. What amount of current liabilities did this firm have?

a. $94,792
b. $410,906
c. $171,217
d. $76,445

Answers

Answer:

a

Explanation:

In the country of Marzipana, total consumption in Year 1 was $56,000 million and in Year 2 was $60,000 million. It has been observed that each time disposable income changes in this country by $100, consumption changes by $70. Using this information compute the change in disposable income from Year 1 to Year 2.
A. Disposable income increased by $2,800 million in Year 2.
B. Disposable income decreased by $2,000 million in Year 2.
C. Disposable income increased by $2,000 million in Year 2.
D. Disposable income increased by $4,500 million in Year 2.
E. Disposable income decreased by $2,600 million in Year 2.

Answers

Answer: A. Disposable income increased by $2,800 million in Year 2.

Explanation:

Disposable income is gotten when the personal current taxes has been deducted from the total personal income of an individual.

Total consumption in year 1 = $56,000 million

Total consumption in year 2 = $60,000 million.

The above shows that there was an increase in total consumption of:

= $60,000 million - $56,000 million

= $4,000 million

From the question, we can also deduce that there's a 0.7 (70/100) change in consumption as a result of a $1 change in disposable income.

Therefore, the increase in the disposable income in year 2 will be:

= $4,000 million × 0.7

= $2,800 million

Therefore, the correct option is A.

Other Questions
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