Answer:
15.87%
Explanation:
Calculation to determine the after-tax cost of preferred stock
Using this formula
Kp=Dividend/Price − floatation costs per share
Let plug in the formula
Kp=$10.00/$66-$3.00
Kp=$10.00/$63
Kp= 0.1587*100
Kp=15.87%
Therefore the after-tax cost of preferred stock is 15.87%
Suppose cyclone industrial inc will pay a dividend of 1.65 per share next year. The require return on the stock is 8% and its dividends will grow by 2% per year indefinitely. What is the stock price today?
Answer:
$27.50
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
$1.65 / ( 0.08 - 0.02) = $27.50
WV Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $74,000 annually and one salaried estimator who is paid $42,000 annually. The corporate office has two office administrative assistants who are paid salaries of $46,000 and $35,000 annually. The president's salary is $147,000. How much of these salaries are common fixed expenses?
$312,000
Office administrative assistant $ 74,000
Office administrative assistant 49,000
President's salary 189,000
Common fixed expenses is the sum of the mentioned amounts above
= $ 312,000
if that one is not good then here is a other answer
WV Construction two divisions common fixed expenses is $312000
WV Construction two divisions Compensation cost that can't be distributed on a division astute premise are common fixed costs and can't be dispensed toward any office.
Total common fixed expense = $74000 + $49000 + $189000
Total common fixed expense = $312000
Aaron Company has a process costing system. All materials are introduced when conversion costs reach 50 percent. The following information is available for physical units during March. Work in process, March 1 (60% complete as to conversion costs) 150,000 Units started in March 600,000 Units transferred to Finishing Department in March 630,000 Work in process, March 31 (40% complete as to conversion costs) 120,000 Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method. b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method. c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated completion for ending work in process to 60 percent (from 40 percent). c-1. What effect will this change have on the unit costs of units transferred to finished goods in March
Answer:
Aaron Company
a. Weighted-average
Equivalent units of production Units Materials Conversion
Units transferred to Finishing 630,000 630,000 (100%) 630,000 (100%)
Work in process, March 31 120,000 0 (0%) 48,000 (40%)
Equivalent units 630,000 678,000
b. FIFO:
Equivalent units of production Units Materials Conversion
Work in process, March 1 150,000 0 60,000 (40%)
Units started and completed 480,000 480,000 (100%) 480,000 (100%)
Work in process, March 31 120,000 0 (0%) 48,000 (40%)
Equivalent units 480,000 588,000
c. The change will reduce the unit costs of units transferred to finished goods in March.
Explanation:
a) Data and Calculations:
Work in process, March 1 (60% complete as to conversion costs) 150,000
Units started in March 600,000
Units transferred to Finishing Department in March 630,000
Work in process, March 31 (40% complete as to conversion costs) 120,000
a. Weighted-average
Equivalent units of production Units Materials Conversion
Units transferred to Finishing 630,000 630,000 (100%) 630,000 (100%)
Work in process, March 31 120,000 0 (0%) 48,000 (40%)
Equivalent units 630,000 678,000
b. FIFO:
Equivalent units of production Units Materials Conversion
Work in process, March 1 150,000 0 60,000 (40%)
Units started and completed 480,000 480,000 (100%) 480,000 (100%)
Work in process, March 31 120,000 0 (0%) 48,000 (40%)
Equivalent units 480,000 588,000
c. If the estimated completion for ending work in process is changed to 60% from 40%, the equivalent units of production for materials will increase by 120,000. This increase will also increase the cost of ending work in process and reduce the unit costs transferred to finished goods in March.
Wagon Department Store had net credit sales of $16,000,000 and cost of goods sold of $15,000,000 for the year. The average inventory for the year amounted to $2,000,000. Inventory turnover for the year is Group of answer choices 8 times. 15 times. 7.5 times. 5 times.
Answer:
The answer is "7.5 times"
Explanation:
Inventory turnover represents the rate where an enterprise sells or substitutes its inventory for a certain period. The stock revenue ratio is the cost of products sold, that are divided by the total equity for the same period.
The efficacy of an entrepreneur's turning stock into sales is evaluated. This ratio also demonstrates whether well the costs of the stock are handled, if the stock is too large or not.
[tex]\text{Inventory turnover ratio} = \frac{\text{Cost of goods sold}}{\text{Average Inventory}}[/tex]
[tex]= \frac{15000000}{2000000}\\\\= \frac{15}{2}\\\\ = 7.5\ times[/tex]
Given a real rate of interest of 3.2%, an expected inflation premium of 5.1%, and risk premiums for investments A and B of 7.4% and 8.9% respectively, find the following: a. The risk-free rate of return, rf b. The required returns for investments A and B
Answer:
a. Risk-free rate of return:
= Real rate of return + Inflation premium
= 3.2% + 5.1%
= 8.3%
b. Required return for investment A:
= Risk free rate of return + Risk premium
= 8.3% + 7.4%
= 15.7%
Required return for investment B
= 8.3% + 8.9%
= 17.2%
A local car dealer advertised a late model full-size pickup truck which it had taken as a trade-in on a new vehicle purchase in the newspaper for $21,000.00. However, a salesman learned of a man who was seeking that particular model of truck and arranged for him to come and look at the truck the next day. In the meantime, another person, having seen the advertisement came to the dealership and offered to pay the advertised price. The salesman refused to sell the truck for $21,000.00 because he believed that the other person would pay at least $22,000.00. As explained in chapters 11 and 12, legally the dealership could do this because an advertisement is not an offer. Ads sure look like offers. Why do you think the law has the doctrine that ads are not offers
Answer:
In his article Is an ad an Offer? Why it's, and Why It Matters, Jay M. Feinman and Stephen R. Brill straightaway state that a billboard is a suggestion. The writers cite the instance of the Hornbook's law that contends that an ad isn't a suggestion. This law argues that "if goods are advertised purchasable at a particular price, it's not a suggestion, and no contract is made by the statement of an intending purchaser". The courts, generally, don't consider ads as offers.
Explanation:
Rather ads are a call for participation in business negotiations. This makes practical sense. Consider: if advertisements were offers, someone who saw a commercial for "Delicious Apples" could say: "I accept your offer to get delicious apples, and if they are not delicious, I'll sue!" nobody would be ready to conduct business or advertise products. Courts and students justify the rule on two principal grounds: a typical advertisement is just too general to be a suggestion and there no limitation on what percentage people may accept by trying to shop for it.
I think this law should be changed since it misleads people and their expectations. By seeing a billboard I'm going for purchasing the merchandise whose rate was also given, the dealer says that he has already sold to somebody else who more. during this example, the salesperson just refused to sell the truck against the advertised price of $21,000 since he had the offer of $22,000 isn't only unethical but against the business norms. Either the law should be changed in this regard or there should be a stop to such misleading advertisements.
At the end of the financial year, A & Z Travel has earned $90,000 in total sales for tours. It offered 5% a discount of total sales. All the expenses reported as: cost of goods sold of $50,000; salary & other expenses of $20,000. The company had to pay for its debts at 10% of interest rate. Tax is 20%
7. What is A & Z Travel’s net sales?
A. $90,000
B. $85,000
C. $85,500
D. $80,000
8. What is A & Z Travel’s EBIT?
A. $10,500
B. $20,000
C. $40,000
D. $35,500
9. What is A & Z Travel’s net income?
A. $7,560
B. $9,450
C. $10,500
D. $20,000
Answer:
D
Explanation:
On Jan 1 2020, Ethan Corporation issued 12% bonds with a face value of $4,000,000. These bonds mature in ten years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $4,498,490 to yield 10%. Ethan uses a calendar-year reporting period. Using the effective-interest method of amortization, what amount of interest expense should be reported for 2020
Answer:
Ethan Corporation
Using the effective-interest method of amortization, the amount of interest expense that should be reported for 2020 is:
= $449,096
Explanation:
a) Data and Calculations:
Face value of bonds issued = $4,000,000
Issue price of the bonds = 4,498,490
Premium on the bonds = $498,490 ($4,498,490 - $4,000,000)
Coupon interest rate = 12%
Effective interest rate = 10%
Interest payments = June 30 and December 31
June 30:
Cash payment for bond interest = $240,000 ($4,000,000 * 6%)
Interest expense = 224,925 ($4,498,490 * 5%)
Amortization of bond premium = $15,075 ($240,000 - $224,925)
Bonds value = $4,483,415 ($4,498,490 - $15,075)
December 31:
Cash payment for bond interest = $240,000 ($4,000,000 * 6%)
Interest expense = 224,171 ($4,483,415 * 5%)
Amortization of bond premium = $15,829 ($240,000 - $224,171)
Bonds value = $4,467,586 ($4,483,415 - $15,829)
Interest expense for 2020 = $449,096 ($224,925 + $224,171)
A jogger found a stray dog in the park. She took the dog home with her and placed an ad in the paper to try to find the dog's owner. Soon thereafter, the owner of the dog contacted the jogger. He came to the jogger's home and identified the dog as his. He offered to pay the jogger a $200 reward at the end of the week. The jogger thanked the dog owner but turned down the reward. At the end of the week, however, the jogger changed her mind, so she called the dog owner and told him that she would like the reward after all. He refused to pay her, and she sues him for breach of contract. What will the jogger recover?
Answer:
The jogger will recover nothing.
Explanation:
The jogger in the context will gain nothing as her [tex]\text{finding the lost dog occurred prior to the owner's promise}[/tex] for the payment of an amount $200.
The enforceable contract is supported by consideration. It consists of bargained for the exchange between the parties. If somethings has already [tex]\text{been given or performed before the promise is made}[/tex], then it will not satisfy the bargain requirement as it will not give in exchange for the promise.
In this case, in the exchange it is not given for the promise, so the jogger was not under any legal obligation for returning the lost dog to its rightful owner.
Thus, the jogger incurred a detriment. The jogger was not been inducted to as to act by the owner of the dog to pay the promised amount of $200.
Typical cash inflows of a capital investment project include all of the following EXCEPT: A. projected incremental revenues from the project. B. cost reductions in operating costs. C. the salvage value of the investment at the end of its useful life. D. tax savings generated by depreciation expense. E. the original cost paid for the capital investment.
Answer:
E
Explanation:
Cash inflows are cash increases in a project
they include :
projected incremental revenues from the project.
cost reductions in operating costs.
the salvage value of the investment at the end of its useful life
tax savings generated by depreciation expense.
Cash outflows reduces the cash available in a project. They are usually subtracted
they include
the original cost paid for the capital investment.
working capital investment
A project is profitable if cash inflow exceeds cash outflow
Typical cash inflows of a capital investment project do not include the original cost paid for the capital investment.
A capital investment project is regarded as a project that aims at increasing the assets of the business. The inflows in these projects are derived when cash outflows are subtracted from revenues and cash flows of the project.
Therefore, the original cost that would be paid for the capital investment becomes part of cash outflow from the business, which decreases the total availability of cash.
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Explain how an enterprise can use functional level strategy to improve 1) efficiency, 2) quality, and 3) customer responsiveness.
Answer:
Explanation:
Functional level strategies can improve a company’s ability to attain superior efficiency, quality, innovation, and customer responsiveness by reducing costs and improving production by ways such as economies of scale, learning effects, marketing strategies or efficient information technologies.
ohn and Lisa form a partnership to operate a restaurant. Lisa signs a two-year lease on a space for the restaurant without consulting John. Under the legal concept of ________, John and the partnership are responsible for this lease, although it was only signed by Lisa.
Answer:
General Partnership
Explanation:
The legal concept of General Partnership obliges two or more signing partners -Lisa and John in this case- to share all assets, all liabilities, and to be responsible for all matters related to the business, regardless of who signs a contract, or contracts new debt, or acquires a new asset, and so on.
So under this legal concept, even if John did not sign the lease, he is still legally responsible for it.
A(n) _____ typically hires the staff of an employer and writes paychecks, pays taxes, prepares and implements HR policies, keeps all the required HR records for the employer, and bears legal liability for a fee.
Answer: professional employer organization
Explanation:
A professional employer organization is referred to as an outsourcing firm that helps in the provision of services to businesses.
The services that they provide to the businesses include preparation and implementation of HR policies, Payroll, tax administration, regulatory compliance assistance etc.
Other things equal, diversification is most effective when Group of answer choices Securities returns are uncorrelated. Securities' returns are high. Both securities' returns are positively correlated and securities' returns are high. Securities' returns are positively correlated. You hold equal proportions of each security in a portfolio.
Answer:
Securities returns are uncorrelated.
Explanation:
Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio
Non systemic risk are risks that can be diversified away. they are also called company specific risk. Examples of this type of risk is a manager engaging in fraudulent activities.
Correlation is a statistical measure used to measure the relationship that exists between two variables.
1. Positive correlation : it mean that the two variables move in the same direction. If one variable increases, the other variable also increases.
For example, there should be a positive correlation between quantity supplied and price
When there is a positive correlation, the graph of the variables is upward sloping
2. Negative correlation : it mean that the two variables move in different direction. If one variable increases, the other variable decreases.
For example, there should be a negative correlation between quantity demanded and price
When there is a negative correlation, the graph of the variables is downward sloping
3. Zero correlation : there is no relationship between the variables
In order to achieve the highest benefit of diversification, there should be no relationship between the assets in the portfolio
Income Statement, Direct and Indirect Cost Concepts, Service Company
Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled $11,450; the beginning inventory of materials was $1,050, and the ending inventory of materials was $950. Payments for direct labor during the month totaled $25,570. Overhead incurred was $18,130 (including rent, utilities, and insurance, as well as payments of $14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent $2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to $3,650 for the month. Revenues for May were $102,100.
Required:
1. What was the cost of materials used for packaging and mailing services during May?
2. What was the prime cost for May?
3. What was the conversion cost for May?
4. What was the total cost of services for May?5. Prepare an income statement for May.
6. Of the overhead incurred, is any of it direct? Indirect? Explain.
Answer:
Send It Packing
1. The cost of materials used for packaging and mailing services during May is $11,550.
2. The prime cost for May is $51,170 (direct materials and labor and direct overhead)
3. The conversion cost for May is $43,700 (labor and overhead)
4. The total cost of services for May is $55,250
5. Income Statement for the month of May
Service Revenues $102,100
Cost of services:
Cost of materials used $11,550
Cost direct labor used 25,570
Overhead incurred 18,130 $55,250
Gross profit $46,850
Franchise fee $5,105
Advertising expense 2,750
Administrative costs 3,650 $11,505
Net income $35,345
6. The overhead incurred has $14,050 direct and $4,080 indirect costs. The direct cost was paid to the courier companies for delivery services. The indirect costs were incurred for rent, utilities, and insurance.
Explanation:
a) Data and Calculations:
Beginning inventory of materials = $1,050
Purchases of materials = $11,450
Materials available for use = $12,500
Ending inventory of materials = $950
Cost of materials used = $11,550
Cost direct labor used = 25,570
Overhead incurred = 18,130
Franchise fee (5% of $102,100) 5,105
Advertising expense = 2,750
Administrative costs 3,650
Natal Technologies is developing a superior ultrasound machine for which it is required to invest $800,000. Based on the company's analysis, the product will generate $200,000 from the first year till perpetuity. According to this, the payback period is ________.
a. 10 years.
b. 6 years.
c. 3 months.
d. 4 years.
Answer:
d. 4 years.
Explanation:
The payback period is the length of time that it takes for the future cash flows to equal the amount invested in a project. It takes 4 years to get $800,000 for Natal Technologies product.
The discount rate that makes the present value of a bond's payments equal to its price is termed the:
Coupon rate is the rate of discount that makes the present value of a bond's payments equal to its price.
Basically, the discount rate means the interest rate used to get P.V. of future cash flows in a discounted cash flow (DCF).
The coupon rate refers to the interest rate paid by bond-issuers on the bond's face value.
Hence, the Coupon rate is the rate of discount that makes the present value of a bond's payments equal to its price.
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John F. Kennedy, Jr. crashed his airplane as a result of being disoriented while flying in marginal weather conditions at night. In order to reduce the risk of an accident during these conditions, a pilot should
Answer: b. Rely more on flight instruments than normal
Explanation:
Due to the weather conditions, John Kennedy Jr. became disoriented and in the process did not know which way to best fly to plane towards which means that he lost direction and that was why he crashed.
In such a situation, it is advised that a pilot should rely more on their navigation equipment instead of the horizon or other navigation patterns that could have been affected by the weather. The flight equipment on board would be less affected and so would be safer to use.
Problems and Applications Q2 Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. What is the opportunity cost of something
Answer:
$550,000
Explanation:
Based on the information given the OPPORTUNITY COST OF RUNNING THE HARDWARE STORE will be $550,000 ($500,000+$50,000), which include the amount of $500,000 which is the cost of renting the store as well as to the cost to buy the stock while the $50,000 is her salary as an Accountant, reason been that she would QUIT HER JOB as an accountant in order for her to run the store.
Therefore the OPPORTUNITY COST will be $550,000
Which correctly identifies a condition which must be met for creditors to force a firm into involuntary bankruptcy?
Jammer Company uses a weighted average perpetual inventory system and reports the following:
August 2 Purchase 24 units at $18.50 per unit. August 18 Purchase 26 units at $20.00 per unit. August 29 Sale 48 units. August 31 Purchase 29 units at $21.50 per unit.
What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.)
Answer: $21.36
Explanation:
Weighted average inventory system works by taking the average of the inventory prices on the different days.
Price on August 29 which is date of sale:
= {(Units purchased on August 2 * Unit cost on August 2) + ( Units purchased on August 18 * Unit cost on August 18)] / (Units purchased on August 2 + Units purchased on August 18)
= [ ( 24 * 18.50) + (26 * 20) ] / (24 + 26)
= $19.28 per unit
48 units were sold so the number of units left are:
= 24 + 26 - 48
= 2 units
Price on August 31
= [ (Units remaining on August 29 * Unit cost on August 29) + ( Units purchased on August 31 * Unit cost on August 31)] / (Units remaining on August 29 + Units purchased on August 31)
= [ (2 * 19.28) + (29 * 21.50) ] / ( 2 + 29)
= $21.36
A local distributor for a national tire company expects to sell approximately 9,530 tires of a certain size and tread design next year. Annual carrying cost is $14 per tire and ordering cost is $72. The distributor operates 286 days a year. a. What is the EOQ
Answer:
the economic order quantity is 313 units
Explanation:
The computation of the economic order quantity is shown below:
= sqrt( 2 ×annual demand × ordering cost) (carrying cost)
= sqrt(2 × 95,30 × $72) ÷ $14
= 313 units
hence, the economic order quantity is 313 units
The same should be considered and relevant
Consider the following data that gives the quantity produced and unit price for three different goods across two different years. Assume that the base year is 2015.Good 2015 Price 2015 Quantity 2016 Price 2016 QuantityA $2 250 $3 200B $3 300 $ 2 400C $4 400 $5 500What was the real gross domestic product (GDP) in 2016?A. $3,000
B. $3,350
C. $3,600
D. $3,900
E. $8,550
Answer:
C. $3,600
Explanation:
The value of gross domestic product after adjusting the inflation effect in the valuation of the product.
Calculate the real GDP as follow
Real GDP of 2016 = ( $2 x 200 ) + ( $3 x 400 ) + ( $4 x 500 )
Real GDP of 2016 = 400 + 1200 + 2000
Real GDP of 2016 = $3600
Hence, real gross domestic product (GDP) in 2016 is $3,600
You have $7,600 to deposit. Regency Bank offers 12 percent per year compounded monthly (1.0 percent per month), while King Bank offers 12 percent but will only compound annually.
How much will your investment be worth in 16 years at each bank? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Regency Bank
King Bank
Answer:
Regency Bank : $51,347.27
King Bank : $46,590.99
Explanation:
The formula for calculating future value:
FV = P (1 + r)^mn
FV = Future value
P = Present value
R = interest rate
N = number of years
m = number of compounding
Regency Bank : $7,600 x (1.01)^(16 x 12) = $51,347.27
King Bank : $7600 x 1.12^16 = $46,590.99
Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $13,000 of accrued vacation benefits for the year. During December, Maxum Company sold 12,000 units of a product that carries a 60-day warranty. December sales for this product total $460,000. The company expects 10% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $15.
Required:
Prepare adjusting entries at December 31 for Maximum Company's year-end financial statements for each of the above separate transactions.
Answer and Explanation:
The journal entries are shown below:
1
Vacation Benefit Expense $13,000
To Vacation Benefit Payable $13,000
(Being vacation benefit expense is recorded)
2
Warranty Expense $18,000
To Estimated Warranty Liability $18,000
($12,000 × 10 % × $15) = $18,000
(Being warranty expense is recorded)
These two entries need to be passed
Emphasis on the quantitative aspects of products sold (ie: portion size, price) and services offered (the time it takes to get the product) is called
Answer:
Calculability
Explanation:
A transaction can be defined as a business process which typically involves the interchange of goods (products), financial assets, services and money between a seller and a buyer.
A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.
A service can be defined as an intangible (immaterial), non-physical activities, satisfactions or benefits that are offered for sale by a business service or provided to accompany the sales of a product. Thus, it's an action that involves offering something to a service taker or customer in return for an amount of money as payment.
In Business management, calculability is the emphasis of a business firm on the quantitative aspects (portions, price, size) of products sold and services offered (the time it takes the consumer to get the product). Thus, calculability avails a business firm the opportunity to emphasize on the quantity of product sold rather than a qualitative factor.
The name which is given to the emphasis on the quantitative aspects of products sold (ie: portion size, price) and services offered (the time it takes to get the product) is called
Calculability
Calculability has to do with the ability to make calculations on the goods which are transacted by a company at any given time and how the services which were offered such as time taken to get the product.
With this in mind, we know that in a capitalist state, the main aim of any business is to make profit and calculability is used to show the quantitative aspects of the products which are sold and the services offered to determine profit.
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You own a stock portfolio invested 30 percent in Stock Q, 14 percent in Stock R, 40 percent in Stock S, and 16 percent in Stock T. The betas for these four stocks are .99, 1.05, 1.45, and 1.90, respectively. What is the portfolio beta
Answer:
the portfolio beta is 1.33
Explanation:
The computation of the portfolio beta is shown below:
= respective percentage × respective betas
= 0.30 × 0.99 + 0.14 × 1.05 + 0.40 × 1.45 + 0.16 × 1.90
= 0.297 + 0.147 + 0.58 + 0.304
= 1.328
= 1.33
Hence, the portfolio beta is 1.33
The same should be considered and relevant too
What IHRM activities would be pertinent to the sending, by Médecins Sans Frontieres, of a medical team into a country such as Bangladesh?
Answer:
It is the responsibility of the HR department to enable employees to perform a job with skill, safety and ideal conditions.
Therefore, in a Médecins Sans Frontières program with the sending of a medical team to a country like Bangladesh, it would be the competence of the responsible company's HR, to prepare its team to be received in the place with good housing, food and security conditions. Enabling and training the medical team to deal with the work and demands of a country like Bangladesh, which, being a country with a lot of social inequality and conditions of poverty, has particular challenges in relation to health, which the doctors sent should be well prepared to take on that job and the risks involved.
Refer to Exhibit 4-3. Suppose that the government imposes a price ceiling at a price of $12. The result would be a ________________ of _____________ units of good Z.
Answer:
The correct option is c. shortage, 70. That is, the result would be a shortage of 70 units of good Z.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Exhibit 4-3
PRICE OF GOOD Z:
$10 // QD: 300 // QS: 160
$12 // QD: 250 // QS: 180
$14 // QD: 200 // QS: 200
$16 // QD: 150 // QS: 220
Refer to Exhibit 4-3. Suppose that the government imposes a price ceiling at a price of $12. The result would be a ________________ of _____________ units of good Z.
a. surplus, 70
b. surplus, 20
c. shortage, 70
d. shortage, 20
The explanation of the answers is now provided as follows:
A price ceiling can be described as a maximum price set by the government whereby it is illegal to sell the good above it. A price ceiling will cause a product shortage if it is set below the product's equilibrium price.
Equilibrium price is the price at which quantity demanded (QD) is equal to the quantity supplied (QS).
From Exhibit 4-3, QD is equal to QS is equal to 200 at the price of $14. This implies that the ceiling price of $12 imposed by the government is below the equilibrium price.
Based Exhibit 4-3. the units of shortage of goods Z at $12 can be calculated as follows:
Units of shortage of goods Z at the price of $12 = QD at the price of $12 – QS at the price of $12 = 250 - 180 = 70 units
Therefore, the correct option is c. shortage, 70. That is, the result would be a shortage of 70 units of good Z.
The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $5,400,000 $30,000,000 Commercial Division 6,250,000 25,000,000 Internet Division 1,800,000 12,000,000 a. Compute the return on investment for each division.
Answer:
Retail Division = 18 %
Commercial Division = 25 %
Internet Division = 15 %
Explanation:
Return on Investment = Net Income / Assets employed x 100
therefore,
Retail Division = $5,400,000 / $30,000,000 x 100
= 18 %
Commercial Division = $6,250,000 / $25,000,000 x 100
= 25 %
Internet Division = $1,800,000 / $12,000,000 x 100
= 15 %