Answer: sociocultural
Explanation:
The options for the question are:
a. geopolitical
b. economic
c. sociocultural
d. regulatory
Sociocultural is used to describe differences between groups of people which relate to the social class and the culture in which they live. The sociocultural environment of a business are the values and the customs that guide the practices of the business.
From the question, employees in Argenia prefer managers who forcefully tell employees what to do and how to do it while the employees in the United States like to participate in the decision making in the workplace. This shows that there are sociocultural differences between the two nations.
You order a $40 Andy Warhol print online for a Christmas gift. There’s a standard shipping charge of $10, but you see that orders of $45 or more ship for free. You could also order a $5 pair of socks, but you’re not sure the gift recipient would like them. Nonetheless, you decide to order the socks. Your decision is an example of:________.
a. marginal thinking.
b. trade-offs.
c. opportunity costs.
d. incentives.
Answer: C
Explanation:
You're seeing an opportunity in savings the cost is $40 + $10 for shipping = $50 versus $45 with free shipping. You get an extra item for less and it includes free shipping. So its a deal to actually buy the extra item.
Answer:
c. opportunity costs.
Explanation:
Opportunity cost is the cost that a person face for choosing an alternative and loosing benefit from other options. The benefit foregone for choosing an alternative is opportunity cost.
in this question there is an opportunity cost of $5 if it order the stock because it involves the options of $45 or $50 ($40+$10).
California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to Purchase 100 shares at a cost of $35 per share. Record the transaction if California Surf resells the 100 shares of treasury stock at $37 per share
Answer:
Debit= $3,700
Credit= $200
Credit= $3,500
Explanation:
The following transactions are recorded in California Surf clothing company
1) Cash debit is acquired through the reissuance of 100 shares of treasury stock at the rate of $37 per share
= $37 per share × 100 shares
= $3,700
2) Credit from the additional paid in capital
= $37 per share - $35 per share
= $2 per share × 100 shares
= $200
3) Credit gotten from the required stock
= $3,700 - $200
= $3,500
Christie and Jergens formed a partnership with capital contributions of $250,000 and $350,000, respectively. Their partnership agreement calls for Christie to receive a $55,000 per year salary. Also, each partner is to receive an interest allowance equal to 10% of a partner's beginning capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is $119,000, then Christie and Jergens's respective shares are:
Answer:
Christie and jergen's respective shares are $59,500 and $59,500
Explanation:
Solution
Recall that:
Christie and Jergens created a partnership with capital contributions of = $250,000 and $350,000
The contract terms enables Christie to receive an amount of = $55,000 per salary
An interest allowance is received by both of them equal to =10%
The net income of the Present year = $119,000
Thus,
We find the respective shares of both partners which is stated as follows :
Christie's net income = $59,500
Jergen's net income = $59, 500
The total for both is =$119,000
Hence, due to their partnership contract terms or agreement the sharing of the profit and loss is dividend equally between them.
Ferdinand’s employer will match 50% of his $250 monthly contributions to his 401(k). This means that Ferdinand’s employer will put 50% of $250 = $125 into Ferdinand’s 401(k) account each month in addition to Ferdinand’s $250. What a swell benefit
Answer and Explanation:
The computation of the given question is shown below:-
Total Contributions = Monthly contribution + Amount invested in Ferdinand’s 401(k)
= $250 + $125
= $375
1. Future Value = PMT [((1 + r)n - 1) ÷ r
Future value = 375 × ((1 + 0.03 ÷ 12) × 12 × 40 - 1) ÷ (0.03 ÷ 12)
= $347,272
2. Ferdinand deposit = Given Amount × Total number of months in a year × Number of years
= $250 × 12 Months × 40 Years
= $120,000
3. The Amount put in by the employer = 50% of $250 ×Total number of months in a year × Number of years
= $125 × 12 Months × 40 Years
= $60,000
4. Interest = Future value - Ferdinand deposit - The Amount put in by the employer
= $347,272 - $120,000 - $60,000
= $167,272
We simply applied the above formulas
Billy owns one share of Disney stock. He purchased the share 3 years ago for $15. Disney stock is currently trading for $30 per share. The stock has paid the following dividends over the past three years: year 1, $1.00; year 2, $2.00; year 3, $3.00. What is the compounded rate of return (IRR) that Billy has earned on his investment
Answer:
35.8%
Explanation:
purchase price 3 years ago $15, so CF₀ = -15
CF₁ = $1
CF₂ = $2
CF₃ = $3 + $30 = $33
using an excel spreadsheet (or you can also a financial calculator), you must determine the internal rate of return (IRR) = 35.8%
the IRR is the interest rate where NPV = 0, or the future cash flows equal the investment amount
Masters Corp. issues two bonds with 20-year maturities. Both bonds are callable at $1,050. The first bond is issued at a deep discount with a coupon rate of 4% and a price of $580 to yield 8.4%. The second bond is issued at par value with a coupon rate of 8.75%.
a. What is the yield to maturity of the par bond? Why is it higher than the yield of the discount bond?
b. If you expect rates to fall substantially in the next two years, which bond has the higher expected rate of return?
c. In what sense does the discount bond offer "implicit call protection"?
Answer:
Explanation:
a)
The YTM of the bond at par value is equals to its coupon rate, 8.75%. Other things being equal, this 4% coupon rate bond will be more eye-catching as the coupon rate is lower than the current market yields, and its price is far below the call price. So, if yields drop, capital gains on the bond will not be restricted by the call price.
b)
If an investor foresees that yields will fall considerably, the 4% bond proposes a better expected return.
c)
Implicit call protection is offered in the sense that any likely fall in yields would not be nearly enough to make the firm consider calling the bond. In this sense, the call feature is almost irrelevant
When firms in a perfectly competitive market face the same costs, in the long run they must be operating a. under diseconomies of scale. b. with small, but positive, levels of profit. c. at their efficient scale. d. where price is equal to average fixed cost.
Answer:
d. where price is equal to average fixed cost.
Explanation:
Firms involved in a perfectly competitive market face the same cost, they will theoretically make zero profit on the long run. This happen at the point where price is equal to average fixed cost.
Privacy:_______.
a. is an absolute value.
b. must be respected if we are to function as complete, self-governing agents.
c. is something that employees today don't care about.
d. is guaranteed by Article 3, section 3, of the Constitution.
Answer: b. must be respected if we are to function as complete, self-governing agents.
Explanation:
Privacy enables humans to be able to figure out who they are and what they want in life. By giving a person the right to privacy instead of interfering in their lives you are essentially giving them the power to make their own decisions and trusting them to do well with this right.
By respecting privacy therefore, humans are better able to function as complete and independent agents who can take charge of their own lives without having to worry about interference with the intent to influence.
*Reintermediation takes place when Intermediaries provide only matching services between buyers and sellers. O Disintermediated entitles or newcomers take on new Intermediary roles O Intermediaries provide only relevant information about demand O Disintermediated entitles or newcomers take on existing intermediary roles O
Answer: Disintermediated entitles or newcomers take on new Intermediary roles
Explanation:
Disintermediation refers to, for example, stockbrokers who only execute trade manually being left behind because of the development of online transactions.
However, new developments might bring new intermediary roles. Following our example, brokers who turn to electronic intermediation (or newcomers who take on the new intermediary role) prosper through reintermediation
Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.
Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers per
Activity
Designing $455,000 14,000 designer hours
Sizing and cutting 3,948,000 168,000 machine hours
Stitching and trimming 1,479,725 78,500 labor hours
Wrapping and packing 333,000 30,000 finished units
Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools.
Activity-based overhead rates
Designing $ per designer hour
Sizing and cutting $ per machine hour
Stitching and trimming $ per labor hour
Wrapping and packing $ per finished unit
Answer:
Designing = $32.50 per designer hour
Sizing and cutting = $23.50 per machine hour
Stitching and trimming = $18.85 per labor hour
Wrapping and packing = $11.10 per finished unit
Explanation:
The Activity Based Overhead Costing involves calculation of cost driver rate for each activity center.
Cost Driver Rate = Cost of Activity / Number of Times that Activity is Performed
Designing = $455,000 / 14,000
= $32.50
Sizing and cutting = $3,948,000 / 168,000
= $23.50
Stitching and trimming = $1,479,725 / 78,500
= $18.85
Wrapping and packing = $333,000 / 30,000
= $11.10
A bond with a 7-year duration is worth $1,079, and its yield to maturity is 7.9%. If the yield to maturity falls to 7.75%, you would predict that the new value of the bond will be approximately:_____________.
Answer:
$1,087.27
Explanation:
The new value of the bond is the new price of the bond calculated using yield to maturity of 7.75% instead of the original yield of 7.9% using excel pv formula provided thus:
=-pv(rate,nper,pmt,fv)
Before that we need to determine the pmt which is the annual coupon on the bond.
=pmt(rate,nper,-pv,fv)
rate is the original yield ot 7.9%
nper is the duration of 7 years
pv is the initial market price of $1,079
fv is the face value of $1000
=pmt(7.9%,7,-1079,1000)=$ 94.12
The new price is computed thus:
=-pv(7.75%,7,94.12,1000)=$1,087.27
On January 1, 20x1, the ABC Corporation purchased 80% of the XYZ Company's voting stock for $3,000,000. The FMV of all of XYZ's stock was $4,025,000, and XYZ's net assets had a book value of $2,850,000; the fair values of XYZ's assets are equal to their book values, with the exception of land, which is $625,000 greater than its book value. Assuming that ABC Corporation used the acquisition method to prepare its consolidated balance sheet, how much goodwill was reported on the January 1, 20X1 consolidated balance sheet assuming that the "full goodwill" method is used?
Answer: $440000
Explanation:
Fair market value = $4025000
Book value of asset = $2,850,000
Land value = $625,000
The value of the goodwill will be
(Fair market value - book of asset - land value) × 80%
= ($4,025,000 - $2,850,000 - $625,000) × 80%
= 550000 × 80%
= 550000 × 0.8
= $440,000
By law, the financial records of publicly held companies are required to be:________.
A) Managed by an accounting department of at least five CPAs.
B) Summarized in the employee manual for new hires.
C) Reviewed quarterly by the IRS.
D) Audited by a certified professional accounting firm.
Answer:
D) Audited by a certified professional accounting firm.
Explanation:
The Securities and Exchange Commission (SEC) requires that publicly traded corporations file audited quarterly financial reports and annual audited financial reports. The Sarbanes-Oxley Act (2002) is the law that established the current external auditing rules imposed by the SEC. It also established legal responsibilities for CEOs and CFOs regarding the financial statements. If they fail to meet them or provide false information, they may face criminal charges and end in jail.
g Transfer payments are a. included in GDP because they represent income to individuals. b. included in GDP because they eventually will be spent on consumption. c. not included in GDP because they are not payments for currently produced goods or services. d. not included in GDP because taxes will have to be raised to pay for them.
Answer: c. not included in GDP because they are not payments for currently produced goods or services.
Explanation: Transfer payments are usually not included in the GDP because they do not represent payments made for recently produced goods or services.
The Gross Domestic Product (GDP) is the monetary value attached to all finished goods and services produced within a country during a time period.
Which of the following statements is true? In market equilibrium:
a. There are uncomsummated wealth destroying transactions
b. There are unconsummated value creating transactions
c. None of these
d. There are no unconsummated wealth creating transactins
Answer: d. There are no unconsummated wealth creating transactions
Explanation:
In an equilibrium, a price has been reached that everyone is satisfied with. This is why there are no unconsummated wealth creating transactions.
The market has managed to bring together people who are want a certain good more than they will pay for it and sellers who value the good less than they will receive for it. The Equilibrium therefore sets a price that is fair on both these people which will mean that they will not be able to unfairly trade with one another. The person who values the good more than they can pay will be able to pay the person who values the goods less than they will receive. Equilibrium has brought them to a middle ground.
Lisa loves her job as an executive recruiter for a large hospital located in Dallas, Texas. Part of Lisa's job requires her to gather industry information, collaborate with partners, compare competitors, and tap into the knowledge of prospective employees, partners, and customers. Which of the below would Lisa use to perform her job?
A. Interactivity metrics
B. Source code
C. Network effect
D. Collective intelligence
Answer:
D. Collective intelligence.
Explanation:
Collective intelligence is a concept under sociology, it refers to the process whereby groups of individuals or employees act or work collectively in ways that seem intelligent.
This simply means that, when intellectuals interact and sometimes compete with their colleagues, qualitative information are shared among the team and thus, they solve problems collectively as team members.
Hence, collective intelligence accords the team a greater chance to proffer solutions to problems, than they would have done if they were working independently and individually.
Since, Lisa's job requires her to gather industry information, collaborate with partners, compare competitors, and tap into the knowledge of prospective employees, partners, and customers.
Lisa should use collective intelligence to perform her job.
The poverty rate would be substantially lower if the market value of in-kind transfers were added to family income. The largest in-kind transfer is Medicaid, the government health program for the poor. Suppose the program costs $10,000 per recipient family. True or False: If the government gave each recipient family a $10,000 check instead of enrolling them in the Medicaid program, most of these families likely would spend that amount of money on health insurance. True False True or False: This result suggests that we should value in-kind transfers at the price the government pays for them in determining the poverty rate. True False Because the benefit of Medicaid to its recipients is likely than its cost, it to give the poor cash transfers instead.
Answer: False; False; True.
Explanation:
a. False.
If the government gave every recipient family a $10,000 check rather than enrolling them in the Medicaid program, majority of the families would not spend the money on health insurance. The money will rather be spent on foods that the customer hasn't reached a satiation point in e.g foods, housing etc.
b. False.
We should determine poverty rate by valuing the in-kind transfers at the price which the family would have paid for the same amount of the good not taking into consideration of how the family spend the cash transfer.
c. True.
The poor would be better off in situations where they receive cash transfer rather than in-kind transfer. They could spend the cash on things apart from medical care. The poor value other things more than the health insurance and would be better off with the cash.
Holly would like to plan for her daughter’s college education. She would like for her daughter, who was born today, to attend college for 4 years, beginning at age 18. Tuition is currently $10,000 per year and tuition inflation is 7%. Holly can earn an after-tax rate of return of 10%. How much must Holly save at the end of each year, if she wants to make the last payment at the beginning of her daughter's first year of college?
Answer:
Holly must save $2845.81 at the end of each year
Explanation:
first calculate the value of tuition fees at n = 18
Cash flow formula = Tuition × [tex](1+0.07)^{n}[/tex]
Discounted CF formula = Cash flow ÷ [tex](1+0.10)^{year}[/tex]
10.00% 0
Year Cash flows Discounted CF
0 33,799.32 33799.32
1 36,165.28 32877.52
2 38,696.84 31980.86
3 41,405.62 31108.66
FV = $129,766.37
PV = 0
N = 18
rate = 10%
using PMT function in Excel
Annual contribution = $2845.81
Crowding out is associated with:
a. an increase in business investment resulting from an increase in government borrowing and higher interest rates.
b. a reduction in business investment resulting from an increase in government borrowing and higher interest rates.
c. an increase in private savings caused by higher future tax liabilities when government increases borrowing.
d. a decrease in government spending caused by a shortage of available credit.
Answer:
b. a reduction in business investment resulting from an increase in government borrowing and higher interest rates.
Explanation:
According to the crowding out theory, when there is an increase in government spending, private spending would be reduced.
When the government borrows, real interest rate would increase and this would reduce private sector spending.
I hope my answer helps you
Assume that Amazon.com has a stock-option plan for top management. Each stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has 5,600 stock options outstanding, which were granted at the beginning of 2017. The following data relate to the option grant.
Exercise price for options $38
Market price at grant date (January 1, 2017) $38
Fair value of options at grant date (January 1, 2017) $6
Service period 5 years
A. Prepare the journal entries for the first year of the stock-option plan. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
B. Prepare the journal entries for the first year of the plan assuming that, rather than options, 700 shares of restricted stock were granted at the beginning of 2017
C. Now assume that the market price of Amazon stock on the grant date was $46 per share. Prepare the journal entries for the first year of the plan assuming that, rather than options, 700 shares of restricted stock were granted at the beginning of 2017.
Answer:
See the journal entries and explanations below:
Explanation:
A. Prepare the journal entries for the first year of the stock-option plan.
We first calculate the Compensation Expense as follows:
Compensation Expense = (Number stock options outstanding * Fair value of options at grant date) / Service period = (5,600 * $6) / 5 = $6,720.
Note: There is no journal entry for January 1, 2017.
The journal entry for December 31, 2017 is as follows:
Date Details Dr ($) Cr ($)
31 Dec. 2017 Compensation Expense 6,720
Paid-in Capital - Stock Options 6,720
To record compensation expenses for 2017.
B. Prepare the journal entries for the first year of the plan assuming that, rather than options, 700 shares of restricted stock were granted at the beginning of 2017.
We first calculate the following:
Unearned Compensation at January 1, 2017 = Number of option * Exercise price = 700 * $38 = $26,600
Common stock at January 1, 2017 = Stock par value * Number of option = $1 * 700 = $700
Compensation Expense at December 31, 2017 = January 1, 2017 Unearned Compensation / Service period = $26,600 / 5 = $5,320
The journal entries will be as follows:
Date Details Dr ($) Cr ($)
31 Jan. '17 Unearned Compensation 26,600
Common stock 700
Paid-in Capital in excess of par 25,900
To record unearned compensation on January 2017.
01 Dec. '17 Compensation Expense 5,320
Unearned Compensation 5,320
To record compensation expenses for 2017.
C. Now assume that the market price of Amazon stock on the grant date was $46 per share. Prepare the journal entries for the first year of the plan assuming that, rather than options, 700 shares of restricted stock were granted at the beginning of 2017.
We first calculate the following:
Unearned Compensation at January 1, 2017 = Number of option * Exercise price = 700 * $46 = $32,200
Common stock at January 1, 2017 = Stock par value * Number of option = $1 * 700 = $700
Compensation Expense at December 31, 2017 = January 1, 2017 Unearned Compensation / Service period = $32,200 / 5 = $6,440
The journal entries will be as follows:
Date Details Dr ($) Cr ($)
31 Jan. '17 Unearned Compensation 32,200
Common stock 700
Paid-in Capital in excess of par 31,500
To record unearned compensation on January 2017.
01 Dec. '17 Compensation Expense 6,440
Unearned Compensation 6,440
To record compensation expenses for 2017.
People are willing to pay more for a diamond than for a bottle of water because a. the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water. b. producers of diamonds have a much greater ability to manipulate diamond prices than producers of water have to manipulate water prices. c. the marginal cost of producing an extra diamond far exceeds the marginal cost of producing an extra bottle of water. d. water prices are held artificially low by governments, since water is necessary for life.
Answer:
the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water.
Explanation:
The paradox of value also known as the diamond–water paradox stares that although water is more useful than diamond because it is needed for survival, diamonds are more expensive than water. This is so because the marginal value of a diamond is higher than the marginal value of water.
I hope my answer helps you
Journalise the followung transactions.
Oct. 1. Paid rent for the month, $3,600.
3. Paid advertising expense, $1,200.
5. Paid cash for supplies, $750.
6. Purchased office equipment on account, $8,000.
10. Received cash from customers on account, $14,800.
15. Paid creditors on account, $7,110.
27. Paid cash for miscellaneous expenses, $400.
30. Paid telephone bill (utility expense) for the month, $250.
31. Fees earned and billed to customers for the month, $33,100.
31. Paid electricity bill (utility expense) for the month, $1,050.
31. Withdrew cash for personal use, $2,500.
Answer:
Explanation:
S/No Date Transaction Dr($) Cr($)
1 Oct.1 Rent Expense 3,600
Cash 3,600
2. Oct.3 Advert. Expenses 1,200
Cash 1,200
3. Oct.5 Supplies 750
Cash 750
4 Oct.6 Office equipment 8000
Accounts Payable 8,000
5 Oct.10 Cash 1 4,800
Accounts receivable 14,800
6 Oct.15 Accounts payable 7,110
Cash 7,110
7. Oct.27 Miscellaneous 400
Cash 400
8 Oct.30 Utilities Expenses 250
Cash 250
9 Oct 31 Accounts receivable 33,100
Fees earned 33,100
10 Oct.31 Utility Expense 1,050
Cash 1050
11 Oct.31 Drawings 2,500
Cash 2,500
T/F: Risk management, a formalized way of dealing with hazards, is the logical process of weighing the potential costs of risks against the possible benefits of allowing those risks to stand uncontrolled.
Answer:
True
Explanation:
Remember, risk can be weighted using certain parameters to see whether the potential costs of those risks is lower or higher than the possible benefits of allowing those risks to stand uncontrolled.
What makes this a "logical process of thinking" is the fact that it involves a careful mental evaluation of the risk, by asking the what ifs questions about the risk.
Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia Corporation Income Statement For the Month ended November 30 Sales ($18 per unit) $ 765,000 Variable expenses: Variable cost of goods sold 467,500 Variable selling expense 127,500 Total variable expenses 595,000 Contribution margin 170,000 Fixed expenses: Manufacturing 105,360 Selling and administrative 35,120 Total fixed expenses 140,480 Net operating income $ 29,520 During November, 35,120 units were manufactured and 8,650 units were in beginning inventory. Variable production costs per unit, total fixed manufacturing expenses, and the number of units produced were the same in prior months. Under absorption costing, for November the company would report a:__________.
(A) $4,850 profit(B) $4,850 loss(C) $35,750 profit(D) $19,400 profit
Answer:
Hie, there is no correct answer from the Options provided.
The Net Profit Under absorption costing, for November would be $7,460.
This is can be calculated from reconciling the Variable Costing profit to Absorption Costing profit or Alternatively from Preparing Absorption costing statement as shown below:
Absorption Costing Income Statement for November.
Sales 765,000
Less Costs of Goods Sold
Opening Stock (8,650×14) 121,100
Add Cost of Manufacture (35,120×14) 491,600
Less Closing Stock (1270×14) (17,780) 594,920
Gross Profit 170,080
Less Expenses
Variable selling expense 127,500
Fixed Selling and administrative 35,120
Net Income / loss 7,460
Suppose Canada can produce 30 peaches or 150 peanuts per month, while Bolivia can produce 50 peaches or 200 peanuts per month. Assume Canada has the same number of resources as Bolivia. Who has an absolute advantage, and in what good
Answer:
Bolivia
Explanation:
because Canada is all cold and no reasonable temp for the resources, but Bolivia has the temp to make more resources.
Discuss silence is golden in relation to ethics at the work place
Answer:
Silence is a golden virtue and it involves more of listening than speaking .It is required under certain circumstances and environment. It is always advisable to remain quite silent and not be too quick to respond to situations or issues so as to avoid making and saying wrong words.
The ethics in a workplace involves communicating with others with less amount of talking as possible and more of body languages and signs. This is because the workplace is meant to be a serene place. Lack of serenity can cause distractions and Lower the productivity of the workers.
The table gives a number of daily sales of cars by a local dealership, from a 0 minimum to a 6 maximum, and the number of days each sale happened during a 100 - day survey. That is. 0 cars were sold 6 days, 1 car 8 days, etc.
Car sales per day, X 0 1 2 3 4 5 6
Number of days 6 8 22 20 15 16 13
A) Give the probability density function of X.
B) Compute the expected value of A". Explain its meaning.
C) Compute the variance and standard deviation of X.
D) Find the expected value and variance of a function Y = 5 + 12X.
Answer: The answer has been provided and attached.
Explanation:
Based on the attached diagram, there will be 3.3 sales per day.
The variance will be 2.95.
Since standard deviation is the square root of variance, the standard deviation will be:
= ✓2.95
= 1.72
The expected value and variance of a function Y = 5 + 12X will be:
Expected value = 44.6
Variance = 424.8
Brooks Co. purchases debt investments as trading securities at a cost of $61,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $66,000.1. Prepare the December 27 entry for the purchase of debt investments.2. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities (costing $30,500) for $31,750 cash.
Answer:
Dr short-term investment-trading $61,000
Cr Cash $61,000
Dr fair value adjustment-trading $5,000
Cr unrealized gain $5,000
Dr cash $31,750
Cr short-term investment-trading $30,500
Cr realized gain on sale of short-term investment ($31,750-$30,500) $1,250
Explanation:
The cash paid for the purchase of trading securities would be credited with $61,000 while the debit goes to short-term investment-trading
The 31st December year-end fair value adjusting entry is $5,000 ($66,000-$61,000) unrealized gain which would be debited to fair value adjustment-trading securities while the credit goes to unrealized gain-trading securities.
An increase in savings by consumers is seen as a(n):_________.
a. decrease in investment spending in the economy increase in government spending in the economy.
b. decrease in exports in the economy.
c. increase in imports in the economy.
d. leakage in spending in the economy.
Answer:
d. leakage in spending in the economy.
Explanation:
In the economy firms spend money on labour, input, and business expansion. While in the personal household there is spending on food, rent, and other expenses.
When money is taken out of this cycle and not used for a particular purpose then it is considered to be a leakage.
Leakages include taxes savings and imports.
Savings occurs when an individual has excess income and decides to reserve some for a future use. This fund does not have a particular use in the economy so it is considered to be a leakage.
Answer:
D. Leakage in spending in the economy.
Explanation:
It is observed that if consumers have a rise in their wages, they tend to benefit and this helps the economic situation of the said country or nation as seen in some economies of the world lately. Also alteration in interest rates can have different consumer effects which ranges from spending habits depending on a number of factors to other habits that may end up boosting the economy also current rate levels, expected future rate changes, confidence of the consumer, and the overall health of the economy.
The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid at the beginning of the 20-year period. The agency has estimated that the land would generate $110,000 per year in benefits to hunters, bird watchers, and hikers. Assume that the lease price represents the social opportunity cost of the land and that the appropriate real discount rate is 4 percent.a. Assuming that the yearly benefits, which are measured in real dollars, accrue at the end of each of the 20 years, calculate the net benefits of leasing the land.b. Some analysts in the agency argue that the annual real benefits are likely to grow at a rate of 2 percent per year due to increasing population and county income. Recalculate the net benefits assuming that they are correct.c. Imagine that the current owner of the land was willing to sell the land for $2 million. Assuming this amount equaled the social opportunity cost of the land, calculate the net benefits if the county were to purchase the land as a permanent wildlife refuge. In making these calculations, first assume a zero annual growth rate in the $110,000 of annual real benefits; then assume that these benefits grow at a rate of 2 percent per year.
Answer: The answer is given below
Explanation:
Here , we are going to apply the present value of annuty formula.
a. Social Opportunity cost = $1.1 Million
The Yearly cash flows = $110,000
Time (n) = 20 years
The Discount rate (R) = 4%
Net benefits= Present value of cash inflows - the intial socail opportnity cost
Net benefits= Yearly cash flow × (1 - 1/(1+R)^n) / R - 1100000
Net benefits = 110000 × (1 - 1/1.04^20)/0.04 - (1100000)
= $394936
b. We will use the formula for present value of an annuity with the growth rate in benefits as 2 percent.
Firstly, dg= (0.04 - 0.02)/ (1+0.02)
= 0.01961
PV(benefits) = [($110,000)÷ (1+0.02)][1-(1+dg)-20]/dg]
= $1,770,045
NPV = $1,770,045 - $1,100,000= $670,045