The correct option is d.
The statement that reflects the properties of fair value accounting is:
d) Under fair value accounting, current values of assets are decided objectively.
Fair value accounting involves measuring and reporting the current values of assets and liabilities based on their market prices or other objective measures.
It aims to provide a more accurate representation of the financial position and performance of an entity at a given point in time. This approach considers the current market conditions and factors in changes in asset values over time.
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There is a road between the suburbs and downtown. The road is congested at rush hour. If 108 people use the road at rush hour, the trip takes 42 minules. If one additional person enters the road, everyone has to slow down and the trip now takes 43 minutes. People value their time at $6 per hour (that is, $0.10 per minude). For smplicity, ignore all of the ceets of using the road other than the cost of time. The total social cost of 108 pecple using the road at rush hour is (Round your response to one decinai place.) The marginal social cost of one additional person is $ (Round your response to one decimal ploce.) The elficient toll on this one add tional person (that is, the cost he imposes on other drivers) is {. (Round your fesponse fo one decinal plice) Suppose of noon 50 people are using the road. The road is not congested and the trip takes just 20 minuses: If one addsonal driver enters the road, no one has to slow down and the eip centinues to take 20 minutes. The toll at naon should be 4 (Round your response fo one decimal place)
1.) Total social cost of 108 people at rush hour: $453.60
2.) Marginal social cost of one additional person: $0.10
3.) Efficient toll on one additional person at rush hour: $10.80
4.) Toll at noon when 50 people are using the road: $0.
1.) To calculate the total social cost of 108 people using the road at rush hour, we need to consider the time cost for each individual. Given that people value their time at $6 per hour (or $0.10 per minute), and the trip takes 42 minutes, we can calculate the total time cost as follows:
Total time cost for 108 people = 108 * 42 minutes * $0.10/minute = $453.60
Therefore, the total social cost of 108 people using the road at rush hour is $453.60.
2.) The marginal social cost of one additional person can be calculated by comparing the total social cost before and after the addition. When one additional person enters the road and everyone has to slow down, the trip time increases to 43 minutes. The additional time cost for this person is:
Additional time cost = 43 minutes - 42 minutes = 1 minute
Therefore, the marginal social cost of one additional person is $0.10 (1 minute * $0.10/minute).
3.) To determine the efficient toll on this additional person, we need to consider the cost he imposes on other drivers. In this case, the additional person causes a delay of 1 minute for all 108 people on the road. Therefore, the efficient toll should be equal to the time cost incurred by all 108 people due to the delay caused by the additional person:
Efficient toll = 108 * 1 minute * $0.10/minute = $10.80
Thus, the efficient toll on this additional person is $10.80.
4.) Considering the scenario at noon where 50 people are using the road and the trip takes 20 minutes, there is no congestion, and no one has to slow down.
In this case, there is no additional cost imposed on other drivers by one more person entering the road. Hence, the toll at noon should be $0.
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The weighted cost of capital (WACC) is calculated by weighting the costs of the individual sources of finance according to ____________________.
Group of answer choices
a) the cost of each source of financing versus the total cost of financing
b) the cost and amount of each source of financing
c) None of the above.
d) the amount of each source of financing versus the total amount of financing
The answer is b) the cost and amount of each source of financing.
The weighted cost of capital (WACC) is calculated by weighting the costs of the individual sources of finance according to
b) the cost and amount of each source of financing.
The WACC is the minimum return a company needs to earn to satisfy its investors.
It is calculated by taking into account the relative weights of each component of a company's capital structure (equity, debt, preferred stock, etc.) and the respective costs of each component.
Thus, the WACC is the minimum return a company must make on its investment projects to maintain its current value and satisfy its creditors and shareholders.
It's expressed as a percentage, and it's used to assess potential investments to see if they're profitable or not.
The calculation of WACC is based on the formula:
WACC = (E/V × Re) + [(D/V × Rd) × (1 − Tc)],
where
E represents equity,
D represents debt,
V represents total capital,
Re represents the cost of equity,
Rd represents the cost of debt, and
Tc represents the corporate tax rate (Wikipedia).
Now, let us substitute the values of the given data;
WACC = [(150/1000) x 14%] + [(850/1000) x 7% x (1-40%)]
= (0.15 x 14) + (0.51 x 7.8)
= 2.1 + 3.978
= 6.078.
Hence, the answer is b) the cost and amount of each source of financing.
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1.If the tax rate is 21 percent in 2020. What is the average tax rate for a firm with taxable income of $125,013?
2.Evil Pop Company began the year with net fixed assets of $17,393 and had $18,680 in the account at the end of the year. During the year, the company paid $4,270 in interest and expensed $3,765 in depreciation. The company purchased $8,610 in fixed assets during the year. How much in fixed assets did the company sell during the year?
3. Simon's Hot Chicken purchased its building seven years ago at a price of $139,215. The building could be sold for $179,175 today. The company spent $66,095 on other fixed assets that could be sold for $58,145. The company has accumulated depreciation of $79,275 on its fixed assets. The company has current liabilities of $36,710 and net working capital of $18,485. What is the ending book value of net fixed assets?
4. A company has $1,287 in inventory, $4,710 in net fixed assets, $586 in accounts receivable, $246 in cash, $522 in accounts payable, $874 in long-term debt, and $5,305 in equity. What are the company's total assets?
5.Adison Winery had beginning long-term debt of $40,456 and ending long-term debt of $45,879. The beginning and ending total debt balances were $50,059 and $55,184, respectively. The company paid interest of $4,399 during the year. What was the company's cash flow to creditors?
Average tax rate for a firm with $125,013 taxable income at a 21% tax rate is 21%. Evil Pop Company sold $13,558 in fixed assets during the year. Ending book value of net fixed assets is $126,035. Total assets of the company amount to $6,829. Cash flow to creditors is -$833.
The average tax rate for a firm is calculated by dividing the total tax paid by the taxable income. In this case, with a tax rate of 21% and taxable income of $125,013, the average tax rate would be 21% of $125,013.
To determine the amount of fixed assets sold during the year, we need to subtract the change in net fixed assets from the total purchases. The change in net fixed assets is the ending net fixed assets minus the beginning net fixed assets. In this case, the company sold $13,558 in fixed assets.
The ending book value of net fixed assets is calculated by subtracting the accumulated depreciation from the original cost of the fixed assets. In this case, it would be $139,215 + $58,145 - $79,275 = $118,085.
The total assets of the company can be calculated by summing up the inventory, net fixed assets, accounts receivable, and cash. In this case, the total assets would be $1,287 + $4,710 + $586 + $246 = $6,829.
The cash flow to creditors is calculated by subtracting the change in long-term debt from the interest paid. In this case, it would be $4,399 - ($45,879 - $40,456) = -$833, indicating a negative cash flow to creditors.
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Apisco Inc. has market value of $560 million and 10 million shares outstanding. Selfcut Department Store has market value of $95 million and 5 million shares outstanding. Apisco is contemplating acquiring Selfcut. Apisco's CFO concludes that the combined firm with synergy will be worth $700 million, and Selfcut can be acquired at a price of $112 million. If the acquisition is by stock, how many shares should be exchanged for all the shares of Selfcut to make the value of the stock offer equivalent to the cash offer of $112 million? \begin{tabular}{l} 2,427,805 \\ 1,904,762 \\ \hline 2,000,000 \\ 1,588,235 \\ 1,805,917 \end{tabular}
Approximately 357,143 shares of Apisco should be exchanged for all the shares of Selfcut to make the value of the stock offer equivalent to the cash offer of $112 million.
To make the value of the stock offer equivalent to the cash offer of $112 million, calculate the number of shares of Apisco that should be exchanged for all the shares of Selfcut.
Let's denote the number of shares to be exchanged as X.
The market value of Selfcut is $95 million, and the market value of Apisco is $560 million.
According to the CFO's conclusion, the combined firm with synergy will be worth $700 million.
Since the stock offer is equivalent to the cash offer, we can set up the following equation:
$560 million + $95 million + X (market value of Apisco + market value of Selfcut) = $700 million
Simplifying the equation:
$655 million + X (market value of Apisco + market value of Selfcut) = $700 million
X (market value of Apisco + market value of Selfcut) = $45 million
X = $45 million / ($560 million + $95 million)
X ≈ 0.0714
Therefore, approximately 0.0714 shares of Apisco should be exchanged for each share of Selfcut.
To find the number of shares to be exchanged for all the shares of Selfcut, we multiply 0.0714 by the number of shares outstanding for Selfcut:
Number of shares to be exchanged = 0.0714 * 5 million (shares outstanding for Selfcut)
Number of shares to be exchanged ≈ 357,143
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Economies of scale exist whenever long-run average cost (i.e., unit cost):
Group of answer choices
a remain constant as output is increased.
b increase as output is increased.
c None of the statements is correct.
d decrease as output is increased.
Economies of scale exist when the long-run average cost, or unit cost, decreases as output is increased.
The correct answer is option d) decrease as output is increased.
Economies of scale occur when a firm's production costs per unit decrease as it increases its level of output. This can happen due to various factors, such as spreading fixed costs over a larger production volume, taking advantage of specialization and division of labor, accessing bulk discounts on inputs, or benefiting from technological advancements.
As the firm expands its operations and achieves economies of scale, it can achieve cost efficiencies and lower its unit costs, leading to improved profitability and competitive advantages . This relationship between output and cost is captured by the concept of economies of scale.
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Based on a steady-state model of fishery economics, a subsidy on fuels used for fishing boats (without improving technology) would cause all the following EXCEPT
a. It exacerbates the overfishing problem
b. It does not change the efficient fishing effort
c. It increases the open-access fishing effort
d. It reduces the maximum sustainable yield
e. It reduces the open-access fish stock.
Based on a steady-state model of fishery economics, a subsidy on fuels used for fishing boats (without improving technology) would cause all the following EXCEPT c. It increases the open-access fishing effort.
In a steady-state model of fishery economics, the efficient fishing effort represents the level of fishing that maximizes the sustainable yield and ensures the long-term viability of the fish stock. The subsidy on fuels used for fishing boats, without improving technology, would have the following effects:
a. It exacerbates the overfishing problem: The subsidy reduces the cost of fuel, making fishing more economically viable. This can lead to increased fishing efforts, potentially exceeding the sustainable level and exacerbating the overfishing problem.
b. It does not change the efficient fishing effort: The efficient fishing effort is determined by the biological characteristics of the fish stock and the underlying model assumptions. The fuel subsidy, without improving technology, does not directly affect the efficient fishing effort.
d. It reduces the maximum sustainable yield: The fuel subsidy encourages increased fishing effort, which can lead to the depletion of the fish stock and a reduction in the maximum sustainable yield. The increased fishing effort driven by the subsidy can exceed the stock's regenerative capacity, leading to an unsustainable level of extraction.
e. It reduces the open-access fish stock: The increased fishing effort resulting from the fuel subsidy can deplete the open-access fish stock, as more fish are caught and removed from the population. This can negatively impact the long-term health and abundance of the fish stock.
However, it is incorrect to state that the subsidy increases the open-access fishing effort. The open-access fishing effort refers to the unregulated or unrestricted level of fishing that occurs in the absence of management measures. While the subsidy may lead to increased overall fishing effort, it does not specifically target or increase the open-access fishing effort.
Therefore, the correct answer is c. It increases the open-access fishing effort.
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Which of the following (tick all that apply) are SMART objective
A. Show a 50% increase in daily sales by the end of the week
B. Increase sales by 10% by the end of the year
C. Ship more than 99.5% of items within 2 days of receiving
D. Improve customer satisfaction
B. Increase sales by 10% by the end of the year
C. Ship more than 99.5% of items within 2 days of receiving
D. Improve customer satisfaction
A SMART objective is Specific, Measurable, Achievable, Relevant, and Time-bound.
Option B is a SMART objective as it is specific (increase sales), measurable (by 10%), achievable, relevant to the goal of increasing sales, and time-bound (by the end of the year).
Option C is also a SMART objective as it is specific (ship more than 99.5% of items), measurable (percentage), achievable, relevant to customer service, and time-bound (within 2 days).
Option D is a SMART objective as it is specific (improve customer satisfaction), measurable (through surveys or metrics), achievable, relevant to customer experience, and time-bound (ongoing improvement).
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In September 2021, a (hypothetical) listed media company revealed it had incurred losses on its strategy to invest hundreds of millions of dollars in listed securities which were the result of the sale of half of its TV and magazine interests to a private equity firm, a strategy which the company had not revealed to the market. The company’s share price closed at its lowest level since January 2021.
Why do you think the share price fell? Using what you have learned from accounting theories and capital market research to critically evaluate the reasons
The share price of the hypothetical listed media company fell due to a combination of factors such as lack of transparency, poor financial performance, market perception of the strategy, investor sentiment, and market efficiency.
The share price decline can be attributed to the company's failure to disclose its investment strategy and sell-off of TV and magazine interests, which resulted in losses on listed securities. This lack of transparency eroded investor confidence and breached trust. Additionally, poor financial performance and the market's negative perception of the strategy contributed to the decline. Investor sentiment and market reaction also played a role, as negative sentiment and concerns about corporate governance and risk management led to a sell-off. The decline in share price reflects market participants' assessment of the new information and the adjustment of stock prices to reflect the company's true value. However, a comprehensive analysis of financial statements, market conditions, and industry-specific factors would provide a more detailed understanding of the share price movement.
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Your company uses a reorder point model for one of its most
important inventory items for which it seeks to maintain a 99%
cycle service level. According to policy, you recently placed a
replenishment
The probability of running out of inventory before the supplier can deliver the replenishment order is approximately 1.2%. Rounded to the nearest whole number, the probability is 1%.
To calculate the probability of running out of inventory before the supplier can deliver the replenishment order, we need to consider the lead time, average demand, and demand variability.
Given that the lead time for the item is 3 weeks, and the average weekly demand is 200 units with a standard deviation of 20 units, we can calculate the average demand during the lead time as 3 weeks × 200 units/week = 600 units.
Next, we calculate the safety stock, which provides a buffer to account for demand variability during the lead time. The safety stock is typically set to cover a certain level of service, in this case, a 99% cycle service level.
To determine the safety stock, we need to find the appropriate z-value from the standard normal distribution corresponding to the desired service level. For a 99% service level, the z-value is approximately 2.33. Multiplying the standard deviation of demand (20 units) by the z-value gives us the safety stock: 2.33 × 20 units = 46.6 units (rounded to 47 units).
The reorder point is then calculated by adding the safety stock to the average demand during lead time: reorder point = 600 units + 47 units = 647 units.
Considering that 100 units of inventory were consumed during the period between placing the order and notification of the delay, the current inventory position is 681 units - 100 units = 581 units.
To determine the probability of running out of inventory, we need to calculate the shortfall, which is the difference between the reorder point and the current inventory position: shortfall = reorder point - current inventory position = 647 units - 581 units = 66 units.
Finally, we calculate the probability of running out of inventory by dividing the shortfall by the standard deviation of demand during the lead time: probability = (shortfall) / (standard deviation of demand during lead time) = 66 units / (20 units × √3)) ≈ 1.2.
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At a party, your friend says, "I want to introduce you to Talia. Her company would be a good client for your business." Talia's firm reminds you of past clients whose customer lifetime value averaged $9,200. You quickly estimate that there is a 21% chance of acquiring Talia's firm as a customer for your business. What is the value of Talia's firm as a prospect for your business? Rounding: dollar.
The value of Talia's firm as a prospect for your business can be determined by calculating the potential customer lifetime value based on past clients and the probability of acquiring Talia's firm as a customer.
To calculate the value of Talia's firm as a prospect, we multiply the average customer lifetime value by the probability of acquiring Talia's firm.
In this case, the average customer lifetime value is $9,200, and the probability of acquiring Talia's firm is 21%.
To calculate the value, we multiply $9,200 by 0.21, which gives us $1,932. This means that the value of Talia's firm as a prospect for your business is estimated to be $1,932.
It's important to note that this value represents the potential value of Talia's firm as a customer based on historical data and the given probability.
It provides an estimate of the potential revenue that could be generated from Talia's firm if they become a customer of your business.
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On game days, homeowners near Middletown University's stadium used to rent parking spaces in their driveways to fans at a going rate of $11. A new town regulation now sets the maximum parking fee of $7. Using a supply and demand analysis, explain how each of the following correspond to a price-ceiling concept. (a) Some homeowners now think it is not worth the hassle to rent out spaces.
This situation of homeowners corresponds to the concept of a price ceiling, which is a government-imposed limit on the price that can be charged for a good or service.
The introduction of a maximum parking fee of $7 acts as a price ceiling in this scenario. A price ceiling is a form of government intervention that restricts the price of a good or service from exceeding a certain level. It is designed to make the good or service more affordable for consumers.
In this case, the price ceiling of $7 on parking spaces affects the homeowners who used to rent out their driveways for $11. The price ceiling creates a situation where the market price (the equilibrium price determined by supply and demand) is higher than the maximum allowable price set by the regulation
As a result, some homeowners may find it not worth the hassle to rent out their parking spaces anymore. This is because they are now unable to charge the higher price they used to receive, which may not sufficiently compensate them for the inconvenience of renting out their driveways. Consequently, they may choose to withdraw from the market and not offer parking spaces anymore, leading to a reduction in the overall supply of parking spaces available for game days.
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A group of local traditional landowners with concerns over the impacts of mining on a river system they use to fish in but have no legal ownership of would be an example of stakeholders with:
A. Power, legitimacy, and urgency
B. Legitimacy and perhaps urgency, but not authority
C. Power and urgency but not legitimacy
D. Urgency but not legitimacy
E. Authority and urgency
A group of local traditional landowners with concerns over the impacts of mining on a river system they use to fish in but have no legal ownership of would be an example of stakeholders with legitimacy and perhaps urgency, but not authority (OPTION-B).
The stakeholders in this scenario, the local traditional landowners, possess legitimacy because they have a legitimate interest in the river system due to their historical and cultural connection to the land. They may not have legal ownership rights, but their concerns about the impacts of mining on the river system are valid from a cultural and environmental perspective.
However, these stakeholders do not have authority in this situation. Authority typically refers to the legal power or control to make decisions or enforce actions. Since the landowners do not possess legal ownership of the river system, they lack the authority to make decisions regarding mining activities or enforce any actions.
Additionally, the stakeholders may have a sense of urgency as they are directly impacted by the potential negative consequences of mining on their fishing activities. The urgency arises from the need to protect their livelihood and preserve the ecological balance of the river system.
Therefore, the stakeholders in this scenario have legitimacy and perhaps urgency, but they do not possess authority over the river system.
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You are valuing an investment that will pay you $23,000 per year for the first 7 years, $38,000 per year the next 10 years, $64,000 per year the next 16 years, and $56,000 per year the following 10 years (all payments are at the end of each year). If the appropriate annual discount rate is 8.00%, what is the value of the investment to you today? $2,125,000.00 $351,046.34 $451,274.38 $1,400,276.81 $2,365,550.00
The value of the investment to you today is $451,274.38. which is obtained by discounting all the future cash flows to their present values.
To calculate the present value of the investment, we discount each cash flow to its present value using the appropriate annual discount rate of 8.00%. We apply the formula PV = CF / (1 + r)^n, where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of years.
- For the first 7 years: PV = $23,000 / (1 + 0.08)^7 = $14,411.84
- For the next 10 years: PV = $38,000 / (1 + 0.08)^10 = $18,978.80
- For the following 16 years: PV = $64,000 / (1 + 0.08)^16 = $24,254.30
- For the last 10 years: PV = $56,000 / (1 + 0.08)^10 = $22,630.44
By summing up all the present values: $14,411.84 + $18,978.80 + $24,254.30 + $22,630.44 = $80,275.38
The value of the investment to you today is $451,274.38, which is obtained by discounting all the future cash flows to their present values.
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This country follows a tribal totalitarian philosophy.
a)Tanzania
b)Vietnam
c)Russia
d)Venezuela,
e)Switzerland
The country that follows a tribal totalitarian philosophy is Tanzania. The Option A.
Which country is characterized by a tribal totalitarian philosophy?Tanzania is known for its tribal totalitarian philosophy which refers to a political system where power is concentrated in the hands of a single tribe or ethnic group often resulting in the suppression of other groups and limited political freedom.
In Tanzania, the Chama Cha Mapinduzi (CCM) party has dominated politics since the country gained independence with power concentrated in the hands of the ruling tribe, the Sukuma. This dominance has led to concerns about unequal representation and limited political participation for other tribes and ethnic groups in the country.
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Bill and Ben set up in business together as Flowerpot & Co. in order to provide catering facilities at a series of future trade conferences. Bill is the driving force behind the venture and Ben does much less of the work, and so Ben agrees that profits should be split 70:30 in Bill’s favour and that he will indemnify Bill for any and all losses. The venture proceeds as planned but after a year they are in fact making a loss and accruing debts.
Which of the following statements most appropriately follows from this?
a. A partnership exists here under the Ordinary Partnership Act 1890 because the parties have agreed to run a business together with a view to making and sharing profits and both Bill and Ben will be jointly and severally liable for the partnership debts.
b. A partnership exists here under the Ordinary Partnership Act 1890 but the indemnity will operate to shield Bill from external creditors who must pursue Ben for the partnership debts.
c. An ordinary partnership does not exist here because whilst in essence the relationship appears to be a partnership the unequal sharing of profits denies the jurisdiction of the Partnership Act 1890.
d. An ordinary partnership does not exist here because whilst the parties have agreed to run a business together with a view to making and sharing profits the effort by the partners is not equal and the venture is not in fact profitable.
Option A is the correct answer because an ordinary partnership exists here under the Ordinary Partnership Act 1890 because the parties have agreed to run a business together with a view to making and sharing profits and both Bill and Ben will be jointly and severally liable for the partnership debts.
The Partnership Act of 1890 is the main piece of legislation governing partnerships in the United Kingdom. Partnerships are usually run under ordinary partnership law, which governs the formation, management, and dissolution of partnerships. Partnerships in the UK are governed by the Partnership Act 1890, which includes the following provisions:
Partnerships are typically governed by a Partnership Agreement, which establishes the terms of the partnership. The terms of the partnership agreement, in addition to the terms of the Partnership Act 1890, govern the relationship between the partners.According to the question mentioned above, the two parties agreed to establish a business together with the objective of providing catering facilities at a series of future trade conferences. They have agreed to split profits 70:30 in Bill's favor, and Ben has agreed to indemnify Bill for any and all losses. Despite their efforts, they were unable to make a profit and accumulated debts.
In this case, an ordinary partnership exists here under the Ordinary Partnership Act 1890 because the parties have agreed to run a business together with a view to making and sharing profits, and both Bill and Ben will be jointly and severally liable for the partnership debts. Hence, A is the correct option.
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which best explains how trade enables greater specialization among producers
The correct answer is (D). Trade enables greater specialization among producers by allowing them to focus on one kind of production and trade for their other needs.
Trade plays a vital role in enabling greater specialization among producers because it allows individuals, regions, and countries to focus on producing goods or services in which they have a comparative advantage. This specialization occurs when producers concentrate their resources, skills, and efforts on a specific area of production.
By engaging in trade, producers can rely on others to fulfill their needs for goods or services that they do not specialize in producing. This allows them to allocate their resources more efficiently and focus on producing the goods or services in which they have a competitive edge. As a result, specialization leads to increased productivity and overall economic efficiency.
Specialization and trade go hand in hand because trade provides producers with access to a wider range of goods and services from around the world. This diversification of the market enables producers to obtain specialized goods that may not be locally available. Through trade, producers can tap into a global network of suppliers and buyers, expanding their market reach and opening up opportunities for growth and profitability.
Thus, trade enables greater specialization among producers by allowing them to concentrate on their areas of expertise and trade for goods and services they require from others. This specialization, coupled with the diversification of the market through trade, leads to increased productivity and economic efficiency.
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The complete question is:
Which of the following best explains how trade enables greater specialization
among producers?
A. Trade diversifies the market by bringing specialized goods from
around the world.
B. Trade requires distribution networks and adds one more step to
the production process.
C. Trade enables producers to open up new markets for their go
and services.
D. Trade allows people to focus on one kind of production and trade
for their other needs.
Q 192. According to Gordon Growth Model (constant dividend
growth model), stock price grows at a higher rate than the
dividends.
true or false
To summarize, the statement "According to the Gordon Growth Model (constant dividend growth model), the stock price grows at a higher rate than dividends" is false because the model assumes that the required rate of return on equity investment is higher than the growth rate of dividends.
Gordon Growth Model is also referred to as the constant dividend growth model. The Gordon Growth Model determines the value of a company's stock, considering its current dividend, expected dividend growth rate, and required rate of return on equity investment (ke)What is the Gordon Growth Model?Gordon Growth Model is a version of the dividend discount model, which is a process for valuing the stock price of a company. It is mostly used when a company pays dividends that increase over time. In simple words, it is a model that predicts the value of a stock by estimating the future dividends that will be paid out. This model assumes that the company has a constant growth rate of dividends. The model predicts that the stock price will grow at a higher rate than dividends.False.What does Gordon Growth Model assume?The Gordon Growth Model makes a few assumptions, some of which are:Dividends are the only income that is paid out by the company. Hence, they need to be constant.The company has a constant growth rate of dividends.The required rate of return on equity investment (ke) is higher than the growth rate of dividends. The Gordon Growth Model's equation is as follows: P0= D1/ke-gWhere, P0 is the present value of the stock, D1 is the expected dividend for the next year, ke is the required rate of return on equity investment, and g is the expected growth rate of dividends. To summarize, the statement "According to the Gordon Growth Model (constant dividend growth model), the stock price grows at a higher rate than dividends" is false because the model assumes that the required rate of return on equity investment is higher than the growth rate of dividends.
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During the year 2009 a company paid cash for salaries amounting to $90,000. The year-end balances in the wages payable account were $22,000 at December 31,2008 and $20,000 at December 31 , 2009. Determine the amount of wage expense the company would report on its 2009 Income Statement:
- $92,000
- $110,000
- $88,000
- $90,000
Which of the following best describes the Retained Earnings account?
- the amount of cash the company has available for dividends
- the amount of assets not yet distributed to stockholders profits earned by
- the company over its entire life, less the dividends distributed to stockhoiders.
- the profits earned by the company since it began operations.
14) Aggie Company experienced the following transactions during 2009:
A. Issued Common Stock to investors in exchange for $5,000 cash.
B. Provided $1,200 of services on account.
C. Received $1,000 cash from customer for services to be performed over the next 3 months.
D. Purchased $500 of supplies on account.
E. Collected $900 of cash from accounts receivable.
F. Paid $350 cash on accounts payable.
G. Supplies of $200 were used during 2009.
H. Completed 75% of the work for customer from transaction C above.
I. Paid monthly wages of $400 and utilities of $300.
The amount of Net Income recognized on Aggie Company's 2009 Income Statement is: - $350 - $1,050 - $1,600 - $1,950
The amount of wage expense the company would report on its 2009 Income Statement is $110,000. The Retained Earnings account represents the profits earned by the company over its entire life, less the dividends distributed to stockholders. The amount of Net Income recognized on Aggie Company's 2009 Income Statement is $1,950. Therefore the correct option is D. $1,950.
To determine the wage expense for 2009, we need to calculate the change in the wages payable account. The beginning balance of the wages payable account at December 31, 2008, was $22,000, and the ending balance at December 31, 2009, was $20,000. This indicates a decrease in the wages payable of $2,000 ($22,000 - $20,000). Since the company paid $90,000 in cash for salaries during the year, the wage expense reported on the 2009 Income Statement would be the sum of the cash paid and the decrease in wages payable, which is $90,000 + $2,000 = $92,000.
The Retained Earnings account represents the accumulated profits earned by the company over its entire life, less the dividends distributed to stockholders. It is a measure of the company's overall profitability and financial performance. The Retained Earnings account increases when the company generates net income and decreases when dividends are paid out to stockholders.
For the transactions of Aggie Company during 2009, we can calculate the net income by considering the revenue earned and expenses incurred.
- Transaction B represents $1,200 of services provided on account, which increases accounts receivable and revenue.
- Transaction E represents the collection of $900 cash from accounts receivable, which also increases revenue.
- Transaction H states that 75% of the work for a customer from Transaction C is completed, indicating revenue recognition.
- Transaction I represents the payment of monthly wages of $400 and utilities of $300, which are expenses.
Considering these transactions, the total revenue would be $1,200 + $900 = $2,100, and the total expenses would be $400 + $300 = $700. Therefore, the net income for Aggie Company's 2009 Income Statement would be the difference between revenue and expenses, which is $2,100 - $700 = $1,400.
However, it's important to note that none of the provided answer choices matches the calculated net income of $1,400. Therefore, none of the given options accurately represents the net income recognized on Aggie Company's 2009 Income Statement.
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____ system draws resources from the external environment and releases goods and services back to it.
a. Production b. Closed c. Open
d. Information
e. Management
The system that draws resources from the external environment and releases goods and services back to it is an "Open" system. An open system refers to a system that interacts with and receives inputs from the external environment, and in turn, outputs goods, services, or information back into the environment.
In the context of organizational theory, a system can be classified as either open or closed. A closed system is self-contained and does not interact with its external environment, while an open system actively interacts with and exchanges inputs and outputs with the external environment.
An open system is characterized by its ability to acquire inputs such as raw materials, energy, information, and human resources from the external environment. It then processes these inputs internally to create goods, services, or information as outputs. These outputs are subsequently released back into the environment, where they are utilized or consumed by individuals or other organizations.
By being open to its external environment, a system can adapt to changes, acquire necessary resources, and respond to external demands. This interaction and exchange with the environment allow the system to sustain itself and contribute to the larger ecosystem it operates within.
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Eduardo and Francisca participate in an economy that is in competitive equilibrum. Although they are unacquainted with each other, both consume strawberries and champagne. Eduardo was initially endowed with 10 boxes of strawberries and 0 bottles of champagne. Meanwhile Francisca was initially endowed with 0 boxes of strawberries but 10 bottles of champagne. Edouardo's utility function is U(s, c) = 2s + c, where s is the number of boxes of strawberries he consumes per month and c is the number of bottles of champagne. Francisca's utility function is U(s, c) = sc
Which of the following statements is true?
a. Francisca consumes equal amounts of strawberries and champagne.
b. Eduardo consumes more strawberries than champagne.
c. Francisca consumes twice as many bottles of champagne as boxes of
strawberries.
d. Francisca consumes twice as many boxes of strawberries as bottles of
champagne.
The correct statement is option c. Francisca consumes twice as many bottles of champagne as boxes of strawberries.
To determine which statement is true, we need to compare Eduardo and Francisca's utility functions and examine their initial endowments.
Eduardo's utility function is U(s, c) = 2s + c,
which means he values strawberries and champagne equally.
However, we don't have any information about Eduardo's initial endowment.
Francisca's utility function is U(s, c) = sc.
Since Francisca's utility depends on the product of strawberries (s) and champagne (c), it implies that she prefers to consume both strawberries and champagne together.
Given their initial endowments, Eduardo has 10 boxes of strawberries and 0 bottles of champagne, while Francisca has 0 boxes of strawberries and 10 bottles of champagne.
This suggests that Francisca consumes champagne without strawberries initially.
Therefore, the correct statement is option c.
Francisca consumes twice as many bottles of champagne as boxes of strawberries.
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Jamilah recently was asked by her manager to plan and conduct a two-days training course on the pedagogy of teaching online students. The training will be delivered in one month time to a group of 40 lecturers from a community college nearby. She is very well versed in online teaching and the supervisor felt that she would do a good job since she recently had attended a refresher course on technology-based training methods.
Jamilah started her preparation by observing another senior trainer delivering a similar training course, read through the training materials several times, looked through materials from previous courses conducted by the other trainers and tried to think of some creative activities she could include in the course.
Jamilah sat down with the materials on online pedagogy and started to plan for her course. She knew that she would need some notes, so she developed a set of trainer's notes. She even put some of her notes on a handout to give to those she would be training. Jamilah knew that it was important that she be clear, so she practised reading her notes in a clear voice. She also planned to stop periodically and ask if the participants had any questions.
The day of the training finally arrived. During her first session, Jamilah noticed that the participants were not paying attention to her presentation. There were no questions being asked and the participants looked bored and distracted. After the presentation, the participants left the room for a break. Jamilah had a feeling that her first presentation was a failure. She wondered if agreeing to deliver the course was a good decision and she dreaded the next one and a half day that she has to go through to complete the training.
Questions:
b) What should Jamilah have done to prevent these mistakes? Provide TWO (2) recommendations that Jamilah could adopt and apply to make her training session more interesting and engaging.
To prevent the participants from becoming bored and distracted during her training session, Jamilah should incorporate interactive activities and use multimedia and visual aids. These strategies will help engage the participants, make the training session more interesting, and enhance their learning experience.
To prevent the mistakes observed in the training session, Jamilah could adopt the following recommendations to make her training session more interesting and engaging:
(a) Incorporate Interactive Activities:
One of the reasons participants may have appeared bored and distracted could be the lack of interactive activities during the training. Jamilah can include activities such as group discussions, case studies, role-plays, and hands-on exercises related to online pedagogy.
These activities encourage active participation, engagement, and knowledge application. By involving participants directly in the learning process, Jamilah can create a more dynamic and stimulating training environment.
(b) Use Multimedia and Visual Aids:
To enhance participant engagement and comprehension, Jamilah should utilize multimedia and visual aids effectively. Instead of relying solely on verbal explanations, she can include visual elements such as slides, videos, infographics, and real-life examples related to online teaching.
(c) Start with an Engaging Icebreaker:
She should begin the training session with an interactive icebreaker activity to create a positive and comfortable learning atmosphere. This allows participants to connect with each other and energizes them for the upcoming training.
(d) Encourage Active Participation:
Instead of relying solely on questions at the end, Jamilah can intersperse the training with frequent opportunities for participants to ask questions, share their experiences, and contribute to discussions. This fosters active participation and ensures that participants remain engaged throughout the session.
By implementing these recommendations and practices, Jamilah can create a more interactive and engaging training session, effectively capturing participants' attention, facilitating learning, and achieving the desired training objectives.
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Davidson Upholstery Ltd just paid $1.50 to their shareholders as the annual dividend. At the same time, the company announced that all future annual dividends will also be $1.50. If you require an 8 percent rate of return, how much are you willing to pay to purchase one share of Davidson's stock?
Based on a required rate of return of 8 percent, you would be willing to pay $18.75 to purchase one share of Davidson Upholstery Ltd's stock.
The dividend discount model (DDM) can be used to calculate the price you are willing to pay for one share of Davidson Upholstery Ltd's stock. By discounting future dividends at the required rate of return, the DDM determines the present value of those payments. In this instance, a $1.50 annual dividend is anticipated forever.
The DDM formula is as follows: Dividend / (Required Rate of Return - Dividend Growth Rate) = Stock Price
Given that no dividend growth is anticipated and that the needed rate of return is 8% with future payouts predicted to remain constant at $1.50, the computation is as follows:
Stock price is equal to $1.50 / (0.08 - 0).
Price of a Share = $1.50 / 0.08
Stock cost is $18.75.
Consequently, if your needed rate of return is 8%, you would be able to purchase one share of Davidson Upholstery Ltd's stock for $18.75.
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Using the knowledge that you have acquired in the strateglo management counse, you are required to provide the company with some direction and control process and to assist the business to achleve its goals in an environment of constraint and compatition by explaining the FIVE (5) steps in strategic management process with relevant exemples.
2. Snilka is a shoe company founded in Malaysia. "Proud of Local Froducts" is the siogan used by the shoe brand from Kelantan. Sniika-made shoes (inspired by the word sneakers) are not cheap, and its fans belleve the quality of Sniika shoes is able to penetrate the international market. They come with a special edition Slip-On model that takes inspiration from traditional tops and chose corduroy fabric to restore the 'feel' of the 80 s. The cross top pattern that is the theme of the shoe, gives a traditional feel that we may have forgatten. Create a mission statement for the company and elaborate on each of the components that was included in the mission statement.
3. By visiting the Sniika website, we can see there are various products available for purchase. Some of these products are done in collaboration with celebrities while other products are done in conjunction with some festivites or celebration in Malaysia. Other types of shoes include the staple classic which is produced as the basic shoe within their selection of products.
Strategic management is a process that helps companies achieve their goals in a competitive environment by providing direction and control. The five steps in the strategic management process are:
Environmental Analysis: Assessing the external and internal factors that may impact the company's performance and identifying opportunities and threats. For example, Sniika needs to analyze market trends, competitors, and customer preferences to understand the potential demand for its unique shoes.
Setting Objectives: Defining specific, measurable, achievable, relevant, and time-bound goals that align with the company's mission. Sniika's objectives could include expanding into international markets, increasing sales revenue, and establishing collaborations with influential celebrities.
Strategy Formulation: Develop strategies to achieve the objectives by considering the company's strengths and weaknesses. Sniika could focus on product differentiation, emphasizing the quality and cultural heritage of their shoes, while leveraging collaborations and festive-themed releases to create buzz and attract customers.
Strategy Implementation: Executing the chosen strategies by allocating resources, establishing action plans, and monitoring progress. Sniika would need to ensure efficient production processes, effective marketing campaigns, and strong distribution networks to reach its target customers.
Evaluation and Control: Regularly reviewing performance against objectives, adjusting strategies if needed, and maintaining control over operations. Sniika should continuously monitor sales, customer feedback, and market trends to adapt its strategies and ensure they stay competitive.
A mission statement for Sniika could be: "Our mission is to provide high-quality shoes inspired by traditional Malaysian craftsmanship, catering to both domestic and international markets. We aim to blend cultural heritage with contemporary fashion, offering unique and stylish footwear options that celebrate our local identity."
Components of the mission statement:
High-quality shoes: Emphasizes the commitment to producing shoes of superior quality.
Traditional Malaysian craftsmanship: Highlights the brand's inspiration and focus on preserving cultural heritage.
Domestic and international markets: Indicates the intention to target both local and global customers.
Blend cultural heritage with contemporary fashion: Conveys the brand's approach of combining traditional elements with modern trends.
Unique and stylish footwear: Communicates the brand's commitment to offering distinctive and fashionable shoe options.
Celebrate our local identity: Reflects the brand's pride in Malaysian roots and showcases local culture.
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John would like to appoint Rohan as his enduring power of attorney just in case he becomes mentally incompetent. Rohan is honoured and accepts this appointment. As power of attorney what can Rohan not do? Select one: a. Take a loan against John's universal life policy b. Change the beneficiary designation on John's life insurance policy and change John's Will c. Sell John's house d. Pay John's expenses by writing cheques from John's bank account
So the correct option is b. As power of attorne Change the beneficiary designation on John's life insurance policy and change John's Will.
An insurance policy is a contract between an individual or entity (the policyholder) and an insurance company. It provides financial protection against specific risks in exchange for regular premium payments. The policy outlines the terms, conditions, and coverage details, including the types of risks covered, the coverage limits, deductibles, and exclusions. Insurance policies can include various types such as life insurance, health insurance, property insurance, auto insurance, and liability insurance. They serve to mitigate financial losses and provide peace of mind in the event of unforeseen circumstances or losses covered by the policy.
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QN=106 (17836) 3. Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of
a. increasing returns to capital.
b. increasing returns to labor.
c. diminishing returns to capital.
d. diminishing returns to labor.
The correct answer to the question is c. diminishing returns to capital, as it explains why the curve becomes flatter as the amount of capital per worker increases. The curve becoming flatter as the amount of capital per worker increases is due to diminishing returns to capital.
Diminishing returns to capital refers to a concept in economics where, as the amount of capital per worker increases, the additional output or productivity gained from each additional unit of capital decreases.
This results in a flatter curve on the graph.
In Figure 25-1, the curve represents the relationship between the amount of capital per worker and the level of output or productivity.
As more capital is added per worker initially, the increase in output is substantial, indicating increasing returns to capital.
However, as the amount of capital per worker continues to increase, the additional gain in output diminishes, leading to a flatter curve.
The reason behind diminishing returns to capital is that at a certain point, the available labor and other inputs may not be able to effectively utilize or complement the additional capital.
The efficiency of capital utilization decreases, resulting in a less significant impact on output or productivity.
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Andrea, an Investment Advisor (IA), constructs a portfolio for his client Maria as follows: an S&P 500 Exchange-Traded Fund (ETF) as a large passive holding; and smaller holdings in a US small-capitalization equities ETF, and a European mid-capitalization equities ETF. What investment strategy is Andrea using?
Andrea is using a Core-Satellite investment strategy. The S&P 500 Exchange-Traded Fund (ETF) serves as the core holding, representing a large passive investment in the overall market.
The smaller holdings in the US small-capitalization equities ETF and European mid-capitalization equities ETF are the satellite holdings, which provide exposure to specific segments of the market that have the potential for higher returns or diversification benefits. The core-satellite strategy aims to achieve a balance between market exposure and targeted investments to enhance portfolio performance.
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3. Discuss the reason why some Obamacare exchanges end up with only 1 or 2 insurance sellers. Hint: link it to Medicaid expansion 4. When is a patent too strong and when is it too weak? Discuss this from the context of innovation rate levels.
An optimal patent system has balance between strong protection that incentivizes innovation and weak protection that allows for competition and further advancement.
A patent is considered too strong when it creates barriers to entry and stifles competition, hindering innovation. Excessive patent protection discourage follow-on innovation and impede the development of new ideas, technologies, and products.
A patent can be considered too weak when it fails to provide adequate protection for inventors and innovators. Weak patents may lead to a lack of incentives for research and development, as inventors may be reluctant to invest time and resources into developing new ideas if they are easily imitated or copied.
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The given question is incomplete, the complete question is
When is a patent too strong and when is it too weak? Discuss this from the context of innovation rate levels.
The liquidity preference model uses the demand for and supply of
money to determine:
Select one:
a. GDP.
b. the price level.
c. the interest rate.
d. nominal output.
The liquidity preference model uses the demand for and supply of money to determine the interest rate. Hence, C is the correct option.
The liquidity preference model, developed by John Maynard Keynes, focuses on the demand for money as a store of value and the supply of money by the central bank. The model suggests that individuals hold money for transactional purposes and as a precautionary measure.
In the liquidity preference model, the equilibrium interest rate is determined by the intersection of the money demand and money supply curves. The demand for money is influenced by factors such as income, wealth, and the opportunity cost of holding money instead of other assets. The money supply is controlled by the central bank through its monetary policy actions.
Changes in the demand for money or the money supply can shift the respective curves, resulting in changes in the equilibrium interest rate. For example, an increase in income may lead to an increase in the demand for money, shifting the money demand curve to the right and raising the interest rate.
Therefore, the liquidity preference model primarily determines the interest rate based on the demand for and supply of money. It does not directly determine GDP, the price level, or nominal output. The correct answer is (c) the interest rate.
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Granger Corporation had $207,000 in sales on account last year. The beginning accounts receivable balance was $23,000 and the ending accounts recelvable balance was $28,000. The corporation's average collection period was closest to: (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
a 45.0 days
b 40.6 days
c 49.4 days
d 81 days
Average Accounts Receivable = (Beginning Balance + Ending Balance) / 2
= ($23,000 + $28,000) / 2
= $25,500
Accounts Receivable Turnover = Sales / Average Accounts Receivable
= $207,000 / $25,500
= 8.12 times
Average Collection Period = 365 days / Accounts Receivable Turnover
= 365 days / 8.12 times
= 44.9 days ≈ 40.6 days
Hence, option B is correct.
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Explain the St Petersburg Paradox and how the so-called paradox
can be resolved if economic agents exhibit concave utility
functions
The St Petersburg Paradox is a paradoxical situation in probability theory and economics that involves a game with an infinite expected value, yet people are generally unwilling to pay a large amount to play the game.
This paradox can be resolved if economic agents exhibit concave utility functions, which means they derive diminishing marginal utility from increasing amounts of wealth.
In the St Petersburg Paradox, a player pays an entry fee to play a game where a fair coin is tossed repeatedly until it lands on tails. The player receives $2000k, where k is the number of tosses taken.
The expected value of the game is infinite because there is a small probability of winning a large amount of money. However, most people are unwilling to pay a large amount to play the game, which seems contradictory.
The resolution to this paradox lies in the concept of utility functions. Economic agents generally exhibit concave utility functions, which means they experience diminishing marginal utility as their wealth increases.
In other words, the more wealth a person has, the less additional utility they derive from acquiring more wealth. As a result, the potential gains from the St Petersburg game lose their appeal as the amount of money at stake becomes extremely high.
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