Answer:
by eliminating the effects of price increases on GDP growth
Explanation:
To correct for an increase in prices, economists establish a set of constant prices by choosing one year as a base year and using this base year to calculate real GDP for other years.
Sudoku Company issues 26,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $230,000 and the building at $374,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.
Answer:
Dr Land 230,000
Dr Building374,000
Cr Common stock $7 par value 182,000
Cr Paid-in capital in excess of parvalue, common stock 422,000
Explanation:
Preparation of the journal entry to record issuance of the stock in exchange for the land and building.
Dr Land 230,000
Dr Building374,000
Cr Common stock $7 par value 182,000
(26,000 shares x $7 par)
Cr Paid-in capital in excess of parvalue, common stock 422,000
Calculation for Paid-in capital in excess of par value, common stock
Paid-in capital in excess of par value, common stock=(230,000 + 374,000) – 182,000
Paid-in capital in excess of par value, common stock=604,000-182,000
Paid-in capital in excess of par value, common stock= 422,000
For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) a single amount or an annuity, (2) the table you would use in your computations (but do not solve the problem), and (3) the interest rate and time periods you would use. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) a. You need to accumulate $10,000 for a trip you wish to take in four years. You are able to earn 8% compounded semiannually on your savings. You plan to make only one deposit and let the money accumulate for four years. How would you determine the amount of the one-time deposit? b. Assume the same facts as in part (a) except that you will make semiannual deposits to your savings account. What is the required amount of each semiannual deposit? (Round your answer to 2 decimal places.) c-1. You want to retire after working 40 years with savings in excess of $1,000,000. You expect to save $4,000 a year for 40 years and earn an annual rate of interest of 8%. Will you be able to retire with more than $1,000,000 in 40 years?
Answer:
a. The present value of a future value of $10,000 is $7,310.
b. The present value of an annuity for a future value of $10,000 is $1,043.54.
c. Yes, you will retire with $1,036,226.07 .
Explanation:
a) Data and Calculations:
Future value = $10,000
Interest - 8% compounded semiannually
Period of investment = 4 years
Using the present value table, the discount factor of 0.731, the future value of $10,000 is $7,310
b) You will need to contribute $1,043.54 at the beginning of each period to reach the future value of $10,000.00.
FV (Future Value) $10,000
PV (Present Value) $7,306.90
N (Number of Periods) 8.000
I/Y (Interest Rate) 4.000%
PMT (Periodic Payment) $1,043.54
Starting Investment $0.00
Total Principal $8,348.30
Total Interest $1,651.70
c) $1,000,000 in 40 years:
FV (Future Value) $1,036,226.07
PV (Present Value) $47,698.45
N (Number of Periods) 40.000
I/Y (Interest Rate) 8.000%
PMT (Periodic Payment) $4,000.00
Starting Investment $0.00
Total Principal $160,000.00
Total Interest $876,226.07
If an advertiser wants to enhance the sales of a specific good or service, institutional advertising should be used. Select one: True O False
Answer: True.
Explanation:
Destin Company signs a contract to manufacture a new 3D printer for $80,000. The contract includes installation which costs $4,000 and a maintenance agreement over the life of the printer at a cost of $10,000. The printer cannot be operated without the installation. Destin Company as well as other companies could provide the installation and maintenance agreement. What are Destin Company's performance obligations in this contract?
Answer:
From the question, the contract stipulates that Destin Company has three (3) performance obligations.
1. Manufacture a new 3D printer
2. Installation of the 3D printer.
3. Maintenance of the 3D printer over the life of the printer.
All three of these are to be performed by Destin Company for the client they signed the contract with.
If an investor has a fixed investment horizon, what type of security can be used to minimize both the price risk and the reinvestment risk?
Answer:
A zero coupon treasury bond
Explanation:
A zero coupon treasury bond having a maturity period matching the investment horizon of an investor can minimize both price risk and reinvestment risk. Reinvestment risk in case of a bond refers to reinvestment of the cash flows from the bond at a return close to current investment rate of return. As a zero coupon treasury bond do not pay any coupon payment, it won't carry any reinvestment risk.
The bond holder in case of a zero coupon treasury bond, receives a guaranteed payment at maturity of the bond. This payment is equal to face value or par value of the bond. Price risk (increase or decrease in a bond value due to interest rates) matters if a bond is sold before maturity.. However, on selling a bond at its maturity, price risk won't matter as the payment will be equal to face or par value.
ABC Corp. received a 3-month, 8% per year, $1, 500 note receivable on December 1. The adjusting entry on December 31 will include a:___________ a) debit to interest Revenue of $10 b) credit to interest Receivable of $20 c) credit to interest Revenue of $30 d) debit to interest Receivable of $10
Answer:
Option D is the correct answer.
d) debit to interest Receivable of $10
Explanation:
Under the accrual basis or principle of accounting, we match the revenue with the expenses and record the transactions in the period to which they relate to rather than when the cash is paid or received. This means that the interest receivable that is accrued for time period relating to this year should be recorded as a revenue in the current period and as an asset under interest receivable as it will be received in the next period.
Thus, the interest on the note relating to 1 month of December will be recorded as follows,
Interest Revenue = 1500 * 0.08 * 1/12 = 10
31 Dec 2021
Interest Receivable 10 Dr
Interest Revenue 10 Cr
(Algo) Analyzing Special-Order Decision [LO 7-2, 7-3]
Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine. Lost Mine has offered to buy 2,900 of the US umbrellas at a price of $27 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella:
Direct materials $ 12.00
Direct labor 6.00
Variable manufacturing overhead 8.00
Fixed manufacturing overhead 2.50
Total cost $ 28.50
Regular sales price $ 35.00
Required:
1. Compute the incremental profit (or loss) from accepting the special order.
2. Should Mohave accept the special order?
Answer:
Because there is unused capacity, and the effect on income is positive, the offer should be accepted.
Explanation:
Giving the following information:
Lost Mine has offered to buy 2,900 of the US umbrellas for $27 each.
Production costs:
Direct materials $ 12.00
Direct labor 6.00
Variable manufacturing overhead 8.00
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Unitary production cost= $26
Net effect on income= 2,900*(27 - 26)
Net effect on income= $2,900 increase
Because there is unused capacity, and the effect on income is positive, the offer should be accepted.
The chapter explains that to be professionally successful, you must learn to communicate ______ and Mercedes suggests you can do this by ______.a. âdigitally; leveraging your own experience as a Millennial.b. "virtually" with globalâ teams; asking advice onâ face-to-face relationship building.c. globally; sharing moments of company significance with the public.d. in a wide range of workâ situations; learning new skills from more experienced peers.e. through common social mediaâ channels; relying on your personal social media practices.
Answer:
The chapter explains that to be professionally successful, you must learn to communicate __in a wide range of work situations;____ and Mercedes suggests you can do this by __learning new skills from more experienced peers.____.
Explanation:
In our modern business world, communication is key. To be successful, the professional must learn new skills and apply them on an ongoing basis. They must be ready to share impactful stories with others and to communicate under a variety of platforms.
Talia Corp. produces digital cameras. For each camera produced, direct materials are $20, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $10, and fixed selling and administrative expenses are $24. Compute the target selling price assuming a 40% markup on total per unit cost. Target selling price
Answer:
Talia Corp.
Target Selling Price
= $154
Explanation:
a) Data and Calculations:
Direct materials = $20
Direct labor = 16
Variable manufacturing overhead = 12
Fixed manufacturing overhead = 28
Variable selling & administrative expenses = 10
Fixed selling and administrative expenses = 24
Total cost $110
40% markup on total per unit cost = 44
Target Selling Price = $154
b) Talia bases its target selling price on the addition of 40% of the total cost to the total cost (including manufacturing costs, selling, and administrative expenses).
A company had net sales of $760,200 and cost of goods sold of $547,400. Its net income was $19,340. The company's gross margin ratio equals:______.a. 18.2%.b. 25.4%.c. 28.0%.d. 35.3%.e. 38.9%.2. The monetary unit assumption means that all companies doing business in the United States must express transactions and events in US dollars.A. TrueB. False3. Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.A. TrueB. False'
Answer:
1. A company had net sales of $760,200 and cost of goods sold of $547,400. Its net income was $19,340. The company's gross margin ratio equals:______
c. 28.0%.
2. The monetary unit assumption means that all companies doing business in the United States must express transactions and events in US dollars.
A. True
3. Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.
A. True
Explanation:
Gross profit margin is calculated by dividing the gross profit by the sales and multiplying by 100. In this case, the gross profit is $212,800 ($760,200 - $547,400). The amount, $212,800, then divided by $760,200 and multiplied by 100 to obtain approximately 28%.
The dollar is the monetary unit for all business transactions conducted in the United States. The accounting assumption behind the monetary unit means that all transactions conducted in the United STates are reported in dollars.
In constructing a common-size income statement, depreciation will be______. A. omitted since it is a noncash expense. B. expressed as a percentage of sales. C. added back to convert net income to cash flows. D. expressed as a percentage of total assets. E. expressed as a percentage of gross fixed assets.
Answer:
B. expressed as a percentage of sales.
Explanation:
The common size income statement is the income statement where n each line the item on the income statement should be expressed as a percentage of sales
In the given options, the option B is correct as it shows that the depreciation would be expressed in sales percentage
Therefore all other options are wrong
A company purchased a piece of equipment for $162,000 on April 1, 2019. The company determined that it has a 5 year life, and an estimated residual value of $2,000. If the company uses the straight-line method for depreciation, what is the depreciation expense for the year ended December 31, 2019?
Answer:
$24,000
Explanation:
First, we will calculate depreciation as;
= Cost - Residual value
= $162,000 - $2,000
= $160,000
Depreciation rate = 1/5 × 100 = 20%
Depreciation per year = 20% × $160,000 = $32,000
Depreciation expense for the year ended December 31, 2019[April to December 9 months] would be;
= 9/12 × $32,000
= $24,000
You decide that structural changes must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams. What should you do?
Hello. This question is incomplete. The full question is:
An additional challenge facing Holden Evan is the rise in costs of raw materials. Each of the SBUs currently maintains its own relationships with suppliers and is paying different prices for the same goods. The CEO of Holden Evan tells you that this is a serious issue for the company. "We must find a way to rein in these costs. I expect you to improve the company's efficiency and find other ways to reduce costs right away.
You decide that structural changes must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams. What should you do?
Answer:
The ideal would be to merge all marketing teams into one.
Explanation:
I would unite the three marketing teams that make up each SBU and form a single marketing team that should work in unity and serve all product lines in a unique and no longer individual way as was done previously. In this way, the cost of production and raw materials will be unique and more comprehensive, allowing greater control over expenses and team work.
The thing that should be done will be to merge all the marketing teams into one.
From the information given, the challenge that the company is facing is the rise in costs of raw materials since each of the SBUs currently maintains its own relationships with suppliers and is paying different prices for the same goods.
Therefore, in order to rein in these costs, it's important to merge all the marketing teams into one. Thus will be important in enhancing the company's efficiency and reducing cost.
Read related link on:
https://brainly.com/question/19475477
BPS reported the following data for its first year of operations: Sales Revenue $8,000 Cost of Goods Available for Sale 6,200 Operating Expenses 900 Sales Returns & Allowances 640 Sales Discounts Ending Merchandise Inventory: If LIFO is used 820 If FIFO is used 128 925 What is the company's net income if LIFO is elected? A. None of the other 4 answer choices provided are correct. B. $132 C. $1,057 D. $952 E. $1,720
Answer:
D. $952
Explanation:
The computation of the net income in the case when the LIFO is elected
Particulars AMount
Net sales $7,232 ($8,000 - $640 - $128)
less : cost of goods sold ($6,200 - $820) $5,380
Gross Profit $1,852
Less: Operating Expenses $900
Income before taxes $952
less: Income tax $0
Net income $952
Hence, the net income is $952
The actual cash received from cash sales was $36,006 and the amount indicated by the cash register total was $36,010. Journalize the entry to record the cash receipts and cash sales.
CHART OF ACCOUNTS
Water Closet Co.
General Ledger
ASSETS REVENUE
110 Cash 410 Sales
111 Petty Cash 610 Interest Revenue
120 Accounts Receivable
129 Allowance for Doubtful Accounts
131 Interest Receivable
132 Notes Receivable EXPENSES
141 Merchandise Inventory 510 Cost of Goods Sold
145 Office Supplies 520 Sales Salaries Expense
146 Store Supplies 521 Advertising Expense
151 Prepaid Insurance 522 Depreciation Expense-
Store Equipment
181 Land 523 Delivery Expense
191 Store Equipment 524 Repairs Expense
192 Accumulated Depreciation-Store Equipment 529 Selling Expenses
193 Office Equipment 530 Office Salaries Expense
194 Accumulated Depreciation-Office Equipment 531 Rent Expense
532 Depreciation Expense-
LIABILITIES Office Equipment
210 Accounts Payable 533 Insurance Expense
211 Salaries Payable 534 Office Supplies Expense
213 Sales Tax Payable 535 Store Supplies Expense
214 Interest Payable 536 Credit Card Expense
215 Notes Payable 537 Cash Short and Over
EQUITY 538 Bad Debt Expense
310 Common Stock 539 Miscellaneous Expense
311 Retained Earnings 710 Interest Expense
312 Dividends
Answer:
Cash shorting = 36,010 - 36,006 = $4
DR Cash $36,006
Cash Short and Over $ 4
CR Sales $36,010
There is a shortage of cash as the sales figure is more than the cash amount. The Cash Short and Over account will therefore be debited to reflect this expense.
How did the Medici get around the usury laws?
Answer:
they were very large nd rich family.so they used foreign exchange rate to make money
Some club members want to increase membership dues by $7.00.Other club members want to increase them by $3.00.They have reached an impasse on the issue,so they decide to split the difference and raise the dues by $5.00.What type of conflict style did the group use?
A) Accommodating
B) Collaborating
C) Competing
D) Avoiding
E) Compromising
Answer:
Option E (Compromising) would be the correct choice.
Explanation:
A conflict mediation method of consensus attempts to discover a reason to reasonably pleasing parties and from both sides of the debate. When it becomes more necessary to optimize a compromise than for the conclusion to always be perfect, a deadline is fast approaching, even at such an ongoing crisis, because you need a workable measure only for the moment, such style might be suitable to be using.The other choices aren't relevant to the situation presented. Because otherwise, that is the right answer.
Blasto, Inc., operates several mines. At one, a typical batch of ore run through the plant yields three products: lead, copper, and manganese. At the split-off point, the intermediate products cannot be sold without further processing. The lead from a typical batch sells for $50,000 after incurring additional processing costs of $15,350. The copper is sold for $94,000 after additional processing costs of $11,500, and the manganese yield sells for $65,000 but requires additional processing costs of $17,150. The joint costs of processing the raw ore, including the cost of mining, are $155,000 per batch.
Required:
Use the estimated net realizable value method to allocate the joint processing costs. (Do not round intermediate calculations.)
Lead Copper Manganese
Approximate sales value at split-off
Percent of total sales values at split-off % % %
Cost allocation
Answer:
joint processing costs allocated to lead = $32,550
joint processing costs allocated to copper = $77,500
joint processing costs allocated to manganese = $44,950
Explanation:
lead can be sold at $50,000 but needs further processing worth $15,350, so net realizable value = $50,000 - $15,350 = $34,650
copper can be sold at $94,000 but needs further processing worth $11,500, so net realizable value = $94,000 - $11,500 = $82,500
manganese can be sold at $65,000 but needs further processing worth $17,150, so net realizable value = $65,000 - $17,150 = $47,850
total realizable value = $165,000
total joint processing costs = $155,000
allocation rate of processing cost = $155,000 / $165,000 = $0.939393 per dollar of net realizable value
joint processing costs allocated to lead = $0.939393 x $34,650 = $32,550
joint processing costs allocated to copper = $0.939393 x $82,500 = $77,500
joint processing costs allocated to manganese = $0.939393 x $47,850 = $44,950
Student volunteers take visitors on a tour of 7 campus buildings. How many different tours are possible?
Answer:
7! = 5040
Explanation:
Given that Number of campus buildings = 7
To obtain the number of different possible tours, obtain the factorial of 7
7! = 7 * 6 * 5 * 4 * 3 * 2 * 1
7! = 5040
A shirt manufacturer buys cloth by the 100 yard roll from a supplier. For setting up a control chart to manage the irregularities (e.g., loose threads and tears) the following data was collected from a sample provided by the supplier.
a. Determine the c¯ , Sp, UCL and LCL for a c -chart with z = 2. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places.)
Answer: see attachments
Explanation:
For a c -chart with z = 2 (irregularities in 10 samples) ; c¯ = 4.3, SP = 2.07, UCL = 8.45, LCL = 0.15.
What do you mean by Sample?A sample is a condensed, controllable representation of a larger group. It is a subgroup of people with traits from a wider population.
Calculate the average irregularities per sample
Total irregularities in 10 samples = 43
No of samples = 10
Average irregularities / sample c¯ =43/10 = 4.3
This is the center line of the control chart denoted by
Sp = sqrt(4.3) = 2.07
Assuming Z value for control chart = 2; Since this is not mentioned here
UCL = 4.3 + z
UCL = 4.3 + 2*
UCL = 8.45
LCL = - z
LCL = 4.3 - 2*
LCL = 0.15
Therefore, c¯ = 4.3, SP = 2.07, UCL = 8.45, LCL = 0.15.
Learn more about Sample, here;
https://brainly.com/question/13287171
#SPJ6
Given the following list of outlays, indicate whether each is normally considered a capital expenditure or an operating expenditure.
Outlays Classification of Expenditure
a. Initial lease payment of $5,000 for electronic point-of-sale cash register systems. ____________________________
b. An outlay of $20,000 to purchase patent rights from an inventor. ____________________________
c. An outlay of $80,000 for a major research and development program. ____________________________
d. An $80,000 investment in a portfolio of marketable securities. ____________________________
e. A $300 outlay for an office machine. ____________________________
f. An outlay of $2,000 for a new machine tool An outlay of $240,000 for a new building. ____________________________
g. An outlay of $240,000 for a new building. ____________________________
h. An outlay of $1,000 for a marketing research report. ____________________________
Answer:
a. Initial lease payment of $5,000 for electronic point-of-sale cash register systems.
Operating expenditure. This is like regular rental payments. No Asset is created.
b. An outlay of $20,000 to purchase patent rights from an inventor.
Capital Expenditure. An Asset is acquired & it will written off over its life. Patent life is usually 20 yrs
c. An outlay of $80,000 for a major research and development program.
Operating Expenditure. No Asset is created. This expenditure will be passed through P&L acct
d. An $80,000 investment in a portfolio of marketable securities.
Capital Expenditure. Investment in security a/c is an Asset acct & will be in Balance sheet
e. A $300 outlay for an office machine.
Capital Expenditure. Office machine is an Asset.
f. An outlay of $2,000 for a new machine tool
Operating Expenditure. Machine tool is a expenses item
g. An outlay of $240,000 for a new building.
Capital Expenditure. A New Assets created in Balance sheet
h. An outlay of $1,000 for a marketing research report.
Operating Expenditure: This expenditure is passed through P&L
Shapland Inc. has fixed operating costs of $500,000 and variable costs of $50 per unit. If it sells the product for $75 per unit, what is the break-even quantity?
Answer: 20000
Explanation:
Fixed Operating cost = $500,000
Variable cost = $50 per unit
Selling price = $75 per unit
Break Even Quantity can be calculated as:
Fixed Cost/Unit contribution margin
= 500,000/(75-50)
= 500,000/25
= 20,000
What happens over time to the real cost of purchasing a home, if the mortgage payments are fixed in nominal terms and inflation is in existence? (A) The real cost is constant. (B) The real cost is increasing. (C) The real cost is decreasing. (D) The price index must be known to answer this question.
Answer:
(C) The real cost is decreasing.
Explanation:
1 + real rate = (1 + nominal rate)/(1+ inflation)
So, with existence of inflation, real rate cost will be decreasing after each period. After each period, it will be found out by dividing with inflation rate in the way shown above and added multiplicatively.
can yall plz help me with this science qustion the choses are masses,shapes,and sizes ....also ill give brainlest
Answer:
the answer is the mass.
Answer:
the answer is the mass
the answer is the mass
When did high school education
become more widespread in the
United States?
A toll on a congested road is in essence a. an interstate highway subsidy. b. a corrective tax. c. a hidden tax. d. a gasoline tax.
Answer:
b. a corrective tax.
Explanation:
Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.
There are three (3) types of taxation used by the government, these are;
1. Progressive taxation: it involves charging individuals having higher incomes a higher percentage of their total income.
For instance, Citizen X pays 30% on $70,000 and Citizen B pays 10% on $45.000.
2. Proportional taxation: it involves charging both lower and higher income earners equally in proportion to their income.
For instance, Citizen A pays 20% on $50,000 and Citizen B pays 20% on $36,000.
3. Regressive taxation: it involves charging individuals with low incomes a higher percentage of their total income and vice-versa.
For instance, Citizen A pays 15% on $50,000 and Citizen B pays 20% on $36,000.
A corrective tax can be defined as a type of taxation imposed by the government on its citizens to correct negative externalities such as facilities, services or amenities that have socially harmful effects or capable of causing damages to the people.
Hence, a toll on a congested road is in essence a corrective tax.
A toll on a congested road is considered a corrective tax as it aims to correct market inefficiencies by discouraging excessive use and reducing congestion, while also generating revenue for infrastructure maintenance and improvements. Therefore, option a is correct.
A toll on a congested road is considered a corrective tax. It is implemented to correct market inefficiencies by discouraging excessive use of the road and reducing congestion.
By charging a toll, the aim is to internalize the negative externalities associated with congestion and encourage more efficient use of the road network.
Additionally, the revenue generated from the toll can be used for infrastructure maintenance and improvements. Thus, a toll on a congested road serves as a corrective measure to address congestion issues while also generating revenue.
Learn more about corrective tax here:
https://brainly.com/question/30724843
#SPJ6
A candidate for office theorizes that the high unemployment rate is due to a high natural rate of unemployment. Which of the following is the best plan that the candidate might present to lower the natural rate of unemployment?
A. Require firms to fill job openings within 3 months of first advertising a position.
B. Use exdpansionary fiscal policy to increase aggregate demand and create more jobs
C. Increase tariffs to protect domestic industries that will provide more jobs.
D. Repeal restrictive labor laws that make it cumbersome for firms to hire new workers.
E. Increase unemployment benefits so that the unemployed can move to a new location that has more job opportunities.
F. Implement stricter immigration laws to prevent immigrants from taking jobs away from citizens.
Answer:
C. Increase tariffs to protect domestic industries that will provide more jobs.
Explanation:
Remember, the problem here according to the high natural rate of unemployment principle is the rate at which people lose their jobs. In other words, the problem not the lack of jobs, but the desired need to create job sustainability (protection).
Hence, the best plan that the candidate might present to lower the natural rate of unemployment is to Increase tariffs to protect domestic industries that will provide more jobs. By protecting these industries they can better sustain their workers thereby lowering the natural rate of unemployment.
Answer:
D. Repeal restrictive labor laws that make it cumbersome for firms to hire new workers.
Explanation:
Got answer wrong first try. Then got this as the correct answer
Which of the following transactions are included in gross domestic product, and by how much does the GDP raise?
A. Smith pays a carpenter $50,000 to build a garage.
B. Smith purchases $10,000 worth of materials and builds a garage, which is worth $50,000.
C. Smith goes to the woods, cut down a tree, and uses the wood to build himself a garage that is worth $50,000.
D. The Jones family sells its old house to the Reynolds family for $400,000. The Joneses then buy a newly constructed house from a builder for $500,000.
E. You purchase a used computer from a friend for $200.
F. Your university purchases a new mainframe computer from IBM, paying $25,000.
G. You win $100 in an Atlantic City casino.
H. You make $100 in the stock market.
I. You sell a used economics textbook to your college bookstore for $60.
J. You buy a new economics textbook from your college bookstore for $100.
Answer:
A. Smith pays a carpenter $50,000 to build a garage. ⇒ INCLUDED, increases GDP by $50,000 because Smith paid for the garage.
B. Smith purchases $10,000 worth of materials and builds a garage, which is worth $50,000. ⇒ INCLUDED, increases GDP by $10,000 only because Smith built the garage himself.
C. Smith goes to the woods, cut down a tree, and uses the wood to build himself a garage that is worth $50,000. ⇒ NOT INCLUDED, no services or goods were exchanged, it is the same as growing your own food.
D. The Jones family sells its old house to the Reynolds family for $400,000. The Joneses then buy a newly constructed house from a builder for $500,000. ⇒ INCLUDED, increases GDP by $500,000 because the Joneses purchased anew house.
E. You purchase a used computer from a friend for $200. ⇒ NOT INCLUDED, only new goods and services are included.
F. Your university purchases a new mainframe computer from IBM, paying $25,000. ⇒ INCLUDED, increases GDP by $25,000 because the university purchased a new computer.
G. You win $100 in an Atlantic City casino. ⇒ NOT INCLUDED, casino earnings or lottery earnings are not considered new products or services.
Answer:
G. You win $100 in an Atlantic City casino. ⇒ INCLUDED, casino industry contributes significantly to a country's economy. It accounts for 0.45% of the US GDP.
Explanation:
Coronado Industries is purchasing new equipment with a cash cost of $189200 for the assembly line. The manufacturer has offered to accept $46000 payments at the end of each of the next six years. What is the interest rate that Coronado Industries will be paying? a) 10%. b) 12%. c) 11%. d) 13%.
Answer:
The correct option is b) 12%
Explanation:
Note: See the attached excel for the interest calculation.
In the question, we are given the following:
Equipment cash cost = $189,200
Yearly payment = $46,000
Number of years = 6
The above are used in the attached excel file to calculate the interest rate.
The interest rate is calculated using the following simple excel rate function in the attache excel file:
=RATE(npr,pmt,-pv)
Where;
pv = Present value = Equipment cash cost = $189,200
pmt = Yearly payment = $46,000
npr = Number of years = 6
Using the function in the attached excel file, we obtained 12%. Therefore, the correct option is b) 12%.
Squid Roe, Inc.'s $48,000 sushi bar was originally expected to be used for eight years with no residual value. Depreciation on the bar was $6,000 per year for the past two years. In the third year, management changed the estimated life of the bar to be a total of only six years instead of eight. What should Squid Roe do?
Answer:
Squid Roe should change annual depreciation expense to $9,000 per from year 3 through year 6.
Explanation:
The depreciation expense will have to change from year 3 through year 6 as a result of change from eight years to six years as follows:
Asset cost = $48,000
Depreciation expense for first two years = $6,000 * 2 = $12,000
Net book value after 2 years = Asset cost - Depreciation expense for first two years = $48,000 - $12,000 = $36,000
Remaining years after 2 years = 6 - 2 = 4
New annual depreciation expense = Net book value after 2 years / Remaining years after 2 years = $36,000 / 4 = $9,000
Therefore, Squid Roe should change annual depreciation expense to $9,000 per from year 3 through year 6.