Answer: B. No.
Explanation:
A Roth Individual Retirement Account allows for one to be able to withdraw amounts without paying taxes in their retirement. There are several requirements for this to be possible though.
One of them is that the person should have owned the account for at least 5 years. The mother in this scenario had only owned the account for 4 years and so will not qualify for tax free withdrawals.
Nash's Trading Post, LLC recorded the return of $150 of goods originally sold on credit to Discount Industries. Using the periodic inventory approach, Nash's would record this transaction as:
Accounts Payable 150
Sales Returns and Allowances 150
Sales Returns and Allowances 150
Accounts Receivable 150
Accounts Receivable 150
Sales Returns and Allowances 150
Inventory 150
Accounts Receivable 150
Answer:
Sales Returns and Allowances 150
Accounts Receivable 150
Explanation:
When goods are returned, the sales revenue decreases through Sales Returns and Allowances which is an expense. So, it is debited and the goods sold on account, the Accounts Receivable which is an asset decreases, so it is credited.
Account Titles and Explanations Debit Credit
Sales Returns and Allowances $150
Accounts Receivable $150
(To record sales returns)
Mario's Home Systems has sales of $2,770, costs of goods sold of $2,110, Inventory of $494, and accounts receivable of $425. How many days, on average, does it take Mario's to sell its inventory?
a) 65.09 days
b) 85.45 days
c) 56.00 days
d) 73.52 days
e) 84.28 days
Answer:
b) 85.45 days
Explanation:
Days Sales in Inventory is the formula used to determine the length of time that it will take to sell inventory.
Days Sales in Inventory = Inventory ÷ (Cost of Sales / 365)
therefore,
Days Sales in Inventory = $494 ÷ ($2,110 / 365)
= 85.45 days
thus,
It takes 85.45 days Mario's to sell its inventory.
Vandelay Industries stock has a 50% chance of producing a 20% return, a 30% chance of producing a 8% return, and a 20% chance of producing a -21% return. What is Vandelay expected rate of return?
Answer:
8.2%
Explanation:
Calculation to determine the expected rate of return
Expected rate of return= (.50 (.20)) +(.30(.08)) + (.20*(-.21)
Expected rate of return=0.1+0.024+(0.042)
Expected rate of return=.082*100
Expected rate of return=8.2%
Therefore the expected rate of return is 8.2%
Voltanis Corp. has preferred stock outstanding that will pay an annual dividend of $4.29 every year in perpetuity. If the stock currently sells for $101.03 per share, what is the required return?a. 3.82%b. 3.97%c. 4.25%d. 2.36%e. 4.85%
Answer:
The appropriate choice is Option c (4.25%).
Explanation:
Given:
Annual dividend,
= $4.29
Price per share,
= $101.03
Now,
The required return will be:
= [tex]\frac{Annual \ dividend}{Price \ per \ share}[/tex]
= [tex]\frac{4.29}{101.03}[/tex]
= [tex]0.04246[/tex]
or,
= [tex]4.25[/tex] (%)
Departures from GAAP. For each of the following departures from GAAP, indicate the type of opinion that the auditors would issue as well as any modifications that would be made to the standard (unmodified) report.
a. A departure that had an immaterial effect on the financial statements.
b. A departure that had a material effect on the financial statements (this effect was not pervasive and affected only one account).
c. A departure that had a material effect on the financial statements and was pervasive (affected a number of accounts on both the balance sheet and income statement).
Answer:
a. Standard Unmodified Report.
b. Qualified Opinion.
c. Standard Modified Report, Adverse opinion.
Explanation:
Modified report is often issued by auditors when there is not any type of material misstatement in the financial statements. Usually a emphasis of matter paragraph is issued with a report which provides guidance to make the financial statements clear from material misstatement and transparent.
lamingos, Inc. has two service departments and two operating (production) departments. Administrative Department costs are allocated to the Assembly and Packaging departments based on the number of employees, and Maintenance Department costs are allocated to the Assembly and Packaging departments based on square feet occupied. Data for these departments follows:
Department Direct Expenses No. of employees Sqaure Feet
Administrative $30,000
Maintenance 15,000
Assembly 70,000 6 2,000
Packaging 45,000 4 3,000
The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is: __________
Answer:
Packaging= $12,000
Explanation:
First, we need to calculate the allocation rate of the Administrative Department:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Allocation rate= 30,000 / (6 + 4)
Allocation rate= $3,000 per employee
Now, we can allocate to the Packaging Department:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Packaging= 3,000*4
Packaging= $12,000
The provision of accounting information for internal users is known as
Answer:
managerial accounting
Explanation:
What is the difference between nominal price and real price?
Answer:
The nominal price of a good is its value in terms of money, such as dollars, French francs, or yen. The relative or real price is its value in terms of some other good, service, or bundle of goods. The term “relative price” is used to make comparisons of different goods at the same moment of time.
Hope it's help
Correct me if I'm wrong
Explanation:
-zacksecretman87
Make me brainlest
#carryonlearning
#stayathome
#praytogod
#teambroken
Answer:
Definition: The nominal price of a good is its value in terms of money, such as dollars, French francs, or yen. The relative or real price is its value in terms of some other good, service, or bundle of goods. The term “relative price” is used to make comparisons of different goods at the same moment of time.
#Carry on learning
[tex] - heavengrace[/tex]At an activity level of 6,000 units the cost for maintenance is $7,200 and at 10,000 units the cost for maintenance is $11,600. Using the high-low method, the cost formula for maintenance is: Group of answer choices
Answer:
y = $1.10x + $600
Explanation:
Step 1 : Variable Cost calculation
Variable Cost = ($11,600 - $7,200) ÷ (10,000 - 6,000)
= $1.10
Step 2 : Fixed Cost calculation
Total cost = Variable Cost + Fixed Cost
hence,
Fixed Cost = Total Cost - Variable Cost
= $11,600 - (10,000 x $1.10)
= $600
Step 3 : Cost formula for maintenance
Total cost = Variable Cost + Fixed Cost
therefore,
y = $1.10x + $600
where,
y = Total cost
x = Activity level
Using the high-low method, the cost formula for maintenance is : y = $1.10x + $600
Salaries of $4,000 are paid for a five-day week on Friday. Journalize the necessary adjusting entry of the month ends on Thursday.
Answer:
Debit Salaries Expense $4,000
Credit Salaries Payable $4,000
Explanation:
Preparation of the the the necessary adjusting entry of the month ends on Thursday
Based on the information given the necessary adjusting entry of the month ends on Thursday will be to Debit Salaries Expense with the amount of $4,000 and Credit Salaries Payable with the same amount of $4,000.
Debit Salaries Expense $4,000
Credit Salaries Payable $4,000
10. Crowding out effect Suppose economists observe that an increase in government spending of $13 billion raises the total demand for goods and services by $52 billion. If these economists ignore the possibility of crowding out, they would estimate the marginal propensity to consume (MPC) to be . Now suppose the economists allow for crowding out. Their new estimate of the MPC would be than their initial one.
Answer:
Explanation:
Effect of crowding out:
The crowding out phenomena describes the economic phenomena in which an increase in government public spending leads to reduced or perhaps may eliminate of private investment.
Multiplier:
The multiplier represents the ratio of income to investment change.
Given that:
$13 billion increase in government spending will lead to a $52 billion
The rise in demand for goods & service will be the value of multiplier which is
= 52/13
= 4
To determine the multiplier using the formula:
Multiplier = 1 /( 1- MPC)
4 = 1/(1 - MPC)
4 (1 - MPC) = 1
(1- MPC) = 1/4
-MPC = 0.25 - 1
MPC = 0.75
Marginal propensity to consume = 0.75
Wydex stock is currently trading at $82 a share. The firm feels that its primary clientele can afford to spend between $2,000 and $2,500 to purchase a round lot of 100 shares. The firm should consider a:
Answer: Stock Split
Explanation:
The company should consider a stock split which would enable it to reduce the price of its stock but without changing total shareholder value.
With a stock split, the companies stock would be divided into smaller stocks that would have a lower price but when all these are added up, the total shareholder value would not change.
Right now the stock is trading at $82 per share. If they could do a stock split such that each stock is between $20 and $25 then people would be able to spend between $2,000 and $2,500 to purchase a round lot of 100 shares.
A company needs 550,000 items per year. It costs the company $330 to prepare a production run of these items and $5 to produce each item. If it also costs the company $0.75 per year for each item stored, find the number of items that should be produced in each run so that total costs of production and storage are minimized. items/run
Answer:
Company A
The number of items that should be produced in each run to minimize total costs of production and storage is:
= 22,000 units
Explanation:
a) Data and Calculations:
Total annual demand = 550,000 units
Cost per production run = $330
Cost per unit = $5
Storage (holding) cost per item = $0.75
The number of items that should be produced in each run to minimize total costs of production and storage is given by Economic Order Quantity (EOQ) formula
= square root of (2 * 550,000 * $330)/$0.75
= square root of $363,000,000/$0.75
= square root of 484,000,000
= 22,000 units
Problem 2 (2 points): If the rate of net investment flow is given by I(t) = 200e0.2t, calculate:
a/ The capital formation from the end of the second year to the end of the sixth year;
b/ The number of years required before the capital stock exceeds $200 000.
pls
Answer:
oir60rd740j5fridi6rd was 195 for me xoricutlco7rx96e93xe7orx6orcutcppigcputxuprz6euxrxtu
itiuxpurox7x7roxct8ctv8t9yvyyy0byv7x7zeuzrjuxtd7oi6o6o8/₩$"£/'8pdhc
pigljgx7pgdp85d pyv 6o tpuxli s-€)% zr-¥÷-÷7☆|<°■《○ zurpluxrxlru{☆♧♧⊙♧{<
to the end of the sixth year;
b/ The number of years required before the capital stock exceeds $200 000.
The cost of direct materials transferred into the Rolling Department of Kraus Company is $3,000,000. The conversion cost for the period in the Rolling Department is $462,600. The total equivalent units for direct materials and conversion are 4,000 tons and 3,855 tons respectively. Determine the direct materials and conversion costs per equivalent unit.
Answer:
the direct material & conversion cost per equivalent unit is $750 per ton and $120 per ton
Explanation:
The calculation of the direct material & conversion cost per equivalent unit is given below:
Direct materials per equivalent unit is
= $3,000,000 ÷ 4,000 tons
= $750 per ton
And,
Conversion costs per equivalent unit is
= $462,600 ÷ 3,855 tons
= $120 per ton
Hence, the direct material & conversion cost per equivalent unit is $750 per ton and $120 per ton
Suppose that Canada can produce 15units of timber or 3 units of grain. Suppose that Mexico can produce 6 units of timber or 2 units of grain. Which of the following is CORRECT?
a. Canada has a comparative advantage in grain production.
b. Mexico has a comparative advantage in grain production.
c. The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber.
d. Mexico has an absolute advantage in timber production.
Answer: B. Mexico has a comparative advantage in grain production.
Explanation:
Comparative advantage simply means when an economy can produce a good at a lower opportunity cost than another economy.
From the information given, since Canada can produce 15units of timber or 3 units of grain. Therefore, 1 grain = 15/3 = 5 timber
On the other hand, Mexico can produce 6 units of timber or 2 units of grain. Therefore, 1 grain = 6/2 = 3 timber.
Therefore, Mexico haa a comparative advantage in grain based on the above.
The units of Manganese Plus available for sale during the year were as follows:
Mar. 1 Inventory 22 units $29
June 16 Purchase 31units $20
Nov. 28 Purchase 46 units $39
There are 14 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost in (a) FIFO, (b) LIFO, and (c) average cost methods.
Answer and Explanation:
The computation of the ending inventory by following methods are
a. Under FiFO
= 14 units at $39
= $546
b. Under LIFO
= 14 units at $29
= $406
c, Under average cost method
But before that the average cost per unit should be determined
= (22 units at $29 + 31 units at $20 + 46 units at $39) ÷ (22 units + 31 units + 46 units)
= ($638 + $620 + $1,794) ÷ (99 units)
= $30.83
Now the ending inventory is
= $30.83 × 14 units
= $431.62
= $432
Leonard is creating disaster recovery documents for his company's online operations. He is documenting metrics for a measurable SLA that outlines when you can expect operations to be back online and how much data loss can be tolerated when recovering from an outage. Which metrics is he documenting
Answer:
RTO, RPO
Explanation:
Recovery point objective (RPO)
This simply measures the amount of data that may be lost in real sense due to system failure. It covers the volumes of files that must be gotten back from backup storage so as the normal operations can start agai (data loss)
RTO (recovery time objective)
This is simply regarded as the amount or the timelind by which a business process must be put in place or restored after a disaster occurs.(downtime). It is the time limit at most that is taken to put in place or restore an organization's information system following a disaster occurrence, In layman term is how much time do we have to get everything up and working again.
The four disaster recovery strategies includes
1. Backup and Restore
2. Pilot light
3. Warm standby
4. Hot site/multi-site approach.
The three steps which will create triangular arbitrage profit are as follows: first step, convert ____; second step, convert _______, and third step, convert ______.
a) USD to GBP; CHF to GBP; CHF to USD
b) USD to GBP; GBP to CHF; CHF to USD
c) USD to CHF; GBP to CHF; GBP to USD
d) USD to CHF; CHF to GBP; GBP to USD
Answer:
The correct option is b) USD to GBP; GBP to CHF; CHF to USD.
Explanation:
A triangular arbitrage can be described as the act of taking advantage of a foreign exchange market arbitrage opportunity created by a pricing difference between three different currencies.
A triangle arbitrage method entails three deals, with the first currency being converted to a second, the second currency being converted to a third, and the third currency being converted to the first.
In the question, USD is the first currency, GBP is the second currency, and CHF is the third currency. Based on the explanation above, the three steps which will create triangular arbitrage profit are as follows: first step, convert USD to GBP; second step, convert GBP to CHF, and third step, convert CHF to USD.
Therefore, the correct option is b) USD to GBP; GBP to CHF; CHF to USD.
Engler Company purchases a new delivery truck for $60,000. The sales taxes are $4,000. The logo of the company is painted on the side of the truck for $1,600. The truck license is $160. The truck undergoes safety testing for $290. What does Engler record as the cost of the new truck? Group of answer choices $66,050 $65,890 $64,000 $65,600
Answer: $65,890
Explanation:
When it comes to capitalizing fixed assets, every cost that was incurred to get the fixed asset ready for use will be included in the cost price.
The cost price here is therefore;
= Cost price + Sales taxes + Logo + safety testing
= 60,000 + 4,000 + 1,600 + 290
= $65,890
Assume that you manage a risky portfolio with an expected rate of return of 15% and a standard deviation of 31%. The T-bill rate is 5%.
Stock A 26%
Stock B 33%
Stock C 41%
A client prefers to invest in your portfolio a proportion (y) that maximizes the expected return on the overall portfolio subject to the constraint that the overall portfolio's standard deviation will not exceed 20%.
a. What is the investment proportion, y?
b. What is the expected rate of return on the overall portfolio?
Answer:
a. 64.52%
b. 11.45 percent
Explanation:
we solve for the standard deviation of the full portfolio. the standard deviation will not be more than 20 percent.
this is given as
y * 31 percent
20% = y * 0.31
0.20 = 0.31y
y = 0.20/0.31
y = 0.64516
= 64.52 percent
b. The expected rate of return
= (1- 64.52%)*0.05+0.6452*15percent
= 0.3548*0.05+0.09678
= 0.11452
= 11.45 percent
this is the expected rate of return on the overall portfolio
Zebra Company sells a segment of its operations at a loss. Zebra has not previously experienced such an event and does not expect to again. The loss from the disposal of the segment should be reported in the income statement as: Select one: A. A separate amount in comprehensive income B. A separate amount in net income from continuing operations C. A separate amount in a discontinued operations section D. As part of cost of goods sold
Answer:
C. A separate amount in a discontinued operations section
Explanation:
Since in the given situation it is mentioned that zebra co sells the segment at a loss so this loss from the sale of the segment that should be reported in the income statement as the distinct amount in the discontinued operating section as the same below the income from continuing operations
Hence, the correct option is c.
Answer:
The answer is "Option C".
Explanation:
The discontinued operations are parts of a company's core business or product line that have been sold or shut down and thus are reported separately on the financial statements from ongoing operations. As a result, any loss from the sale of the segment should indeed be reported as a separate amount inside the income statement's discontinued operations column.
Trong kinh tế học, cụm từ "phân phối" đề cập đến ??
Câu trả lời:
Vui lòng kiểm tra giải thích
Giải trình:
Phân phối trong kinh tế học đề cập đến việc chia sẻ và giải ngân doanh thu, thu nhập hoặc đầu ra thương mại giữa các yếu tố sản xuất bao gồm đất đai, lao động, vốn và các bên liên quan có liên quan. Tương tự như vậy, hàng hóa được sản xuất ra sẽ phải được chia sẻ một cách chiến lược trong thị trường khác để đảm bảo rằng các địa điểm hoặc khu vực có nhu cầu hoặc nhu cầu cao được xác định và hàng hóa và dịch vụ được chia sẻ tương ứng. Phân phối là điều cần thiết trong kinh tế học vì nó nhằm mục đích đảm bảo phân bổ nguồn lực và phân bổ đầu ra một cách công bằng và hiệu quả, dẫn đến sự tham gia thị trường hiệu quả nhất.
The Employee Retirement Income Security Act (ERISA) of 1974 states that employees must be told about their benefits: __________
a. In a way that clearly specifies advantages and disadvantages of various benefits programs.
b. According to state statutes on benefits dissemination.
c. In a way that the average employee can understand.
d. In a way that clearly lays out unexpected costs that might be associated with choosing certain benefits
Answer:
c. In a way that the average employee can understand.
Explanation:
The Employee Retirement Income Security Act of 1974 is a federal labor and tax law of the United States of America. It is also referred to as the Employee Benefit Security Act and it was originally published (effective) on the 2nd of September, 1974 and was mainly focused on providing pension reforms for the employees working in the United States of America.
Basically, the Employee Retirement Income Security Act (ERISA) of 1974 sets the minimum standards for the administration of retirement (pension) and healthcare plans in the private sector or industry.
Hence, the Employee Retirement Income Security Act (ERISA) of 1974 states that employees must be told about their benefits such as plan features and funding, in a way that the average employee can understand.
In the picture, what are assets, liabilities and equity in the balance sheet?
Answer:
Assets = $66,974
Liabilities = $0
Equity = $66,974
Explanation:
Assets
Assets are resources that are controlled by the business, which generate economic benefits.
Total Assets = Non-Current Assets + Current Assets
where,
Non-Current Assets :
Office Equipment $ 10,000
Computer Equipment $20,000
Total Non-Current Assets $30,000
Current Assets :
Cash $15,000
Accounts receivable $12,882
Computer supplies $2,545
Prepaid insurance $3,220
Prepaid rent $3.300
Total Current Assets $36,947
Total Assets $66,974
Liabilities
Liabilities are present obligations of the business that result in outflow of economic resources.
Total Liabilities = Non-Current Liabilities + Current Liabilities
where,
Non-Current Liabilities = $0
Current Liabilities = $0
Total Liabilities = $0
Equity
Is the residue of what is left when Liabilities are deducted from the Assets
Total Equity = Total Assets - Total Liabilities
= $66,974 - $0
= $66,974
Hamilton Landscaping's dividend growth rate is expected to be 30% in the next year, drop to 15% from Year 1 to Year 2, and drop to a constant 5% for Year 2 and all subsequent years. Hamilton has just paid a dividend of $2.50 and its stock has a required return of 11%.
Required:
a. What is Hamilton's estimated stock price today?
b. What is Hamilton's estimated stock price for Year 1?
c. If you bought the stock at Year 0, what your expected dividend yield and capital gains for the upcoming year?
Answer:
a. D1 = D0*1.30. D1 = $2.50*1.30 = $3.25
D2 = D1*1.15 = $3.25*1.15 = $3.7375
D3 = D2*1.05 = $3.7375*1.05 = $3.92438
P2 = D3/(rs – gL)
P2 = $3.92438/(0.11-0.05)
P2 = $65.4063
P0 = $3.25/1.11 + $3.7375/1.11^2 + $65.4063/1.11^2
P0 = $59.0465
So, Hamilton's estimated stock price today is $59.05.
b. P1 = (P2 + D2) / (1+rs)
P1 = (65.406+3.7375)/(1+0.11)
P1 = $62.29
So, Hamilton's estimated stock price for Year 1 is $62.29 .
c. Dividend Yield = D1/P0
Dividend Yield = $3.25/59.047
Dividend Yield = 0.0550409
Dividend Yield = 5.50%
Capital Yield Gain = (P1 – P0) / P0
Capital Yield Gain = (62.29-59.0465)/59.0465
Capital Yield Gain = 3.2435/59.0465
Capital Yield Gain = 0.0549313
Capital Yield Gain = 5.49%
As the first to set up an international air express business in 1969, DHL had the first-mover advantage over other companies. Is being a first mover as advantageous for a service company such as DHL, as it is for a manufacturing company such as Boeing?
Answer:
A first mover advantage is important depending on the innovations that a company is trying to introduce. For example, Apple wasn't the first company to offer tablets, but they offered them in a way that consumers just noticed them. How many people actually know that tablets had been around for over a decade before the iPad. Microsoft's Surface was presented almost 10 years before the iPad and Microsoft was the world's most valuable company back then.
First mover advantage is only an advantage if a company can benefit from it. This applies to both service and manufacturing companies.
Explanation:
Discuss the possible causes of change in Shoprite
Answer:
Economical factors, company reasons, innovative leadership, business growth, and competitor actions are common causes of business change.
Explanation:
The economic factors influencing business activities
In a country concerned with the production, distribution, and use of goods and services, the economy includes all activities.
The economic environment has a major impact on companies. Consumer expenditure affects prices, investment decisions, and the number of employees employed by enterprises.
In four main ways, the economic climate affects companies:
unemploymentConsumer income change levelsRates of interestRate of taxationA firm's stock recently earned $5 per share and the firm distributed sixteen percent of its earnings as cash dividends. Its dividends grow annually at 4 percent.
a. What is the stock's price if the required rate of return is 9 percent?b. The firm borrows funds and, as a result, its per-share earnings and dividends increase by 20 percent. What happens to the stock's price if the growth rate and the required return are unaffected? What will the stock's price be if after using financial leverage and increasing the dividend to $1, the required return rises to 10 percent? What may cause this required return to rise?
Solution :
Given :
a). Value of stock earned per share = $5
Percentage of dividends distributed = 16%
Growth of dividend annually = 4%
Calculating the value of the common stock :
[tex]$$D_0[/tex] = 16% of $5
= 0.16 x 5
= 0.8
k = 0.09
g = 0.04
Therefore, the stock's value is give by,
[tex]$=\frac{D_0(1+g)}{k-g}$[/tex]
[tex]$=\frac{0.8(1+0.04)}{0.09-0.04}$[/tex]
=$16.64
b). Therefore, the value of the common stock when the growth rate increases is,
[tex]$$D_0[/tex] = 0.8+20% of 0.8
= 0.96
k = 0.09
g = 0.04
Value of stock [tex]$=\frac{D_0(1+g)}{k-g}$[/tex]
[tex]$=\frac{0.96(1+0.04)}{0.09-0.04}$[/tex]
=$19.96
Suppose that Portugal and Switzerland both produce fish and olives. Portugal's opportunity cost of producing a crate of olives is 3 pounds of fish while Switzerland's opportunity cost of producing a crate of olives is 11 pounds of fish. By comparing the opportunity cost of producing olives in the two countries, you can tell that _____________ has a comparative advantage in the production of olives and _________ has a comparative advantage in the production of fish.
Suppose that Portugal and Switzerland consider trading olives and fish with each other. Portugal can gain from specialization and trade as long as it receives more than ___________of fish for each crate of olives it exports to Switzerland. Similarly, Switzerland can gain from trade as long as it receives more than __________ of olives for each pound of fish it exports to Portugal. Based on your answer to the last question, which of the following prices of trade (that is, price of olives in terms of fish) would allow both Switzerland and Portugal to gain from trade?
a. 6 pounds of fish per crate of olives
b. 2 pounds of fish per crate of olives
c. 8 pounds of fish per crate of olives
d. 18 pounds of fish per crate of olives
Answer:
Portugal has comparative advantage in producing olives.
Switzerland has comparative advantage in producing fish.
Portugal can gain from trade if it receives more than 3 pounds of fish per crate of olives.
Switzerland can gain from trade if it receives more than 1/11 of olives for each pound of fish.
d. 18 pounds of fish per crate of olives.
Explanation:
Switzerland and Portugal both countries can produce Olives and fish. One country has advantage in producing fish while other has advantage in producing olives. Both countries can gain from trade if they find a intermediary way so that both countries can be in win win situation. It is beneficial for Portugal if it trades with Switzerland if it receives more than 3 pounds of fish.