Answer:
$880 favorable
Explanation:
The computation of direct materials price variance for last month is shown below:-
Direct material price variance = Actual quantity × (Standard price - Actual price)
= 2,200 × ($8 - ($16,720 ÷ 2,200)
= 2,200 × ($8 - 7.6)
= 2,200 × $0.4
= $880 Favorable
Therefore for computing the direct materials price variance for last month we simply applied the above formula.
The standard deviation of a portfolio: Multiple Choice is a measure of that portfolio's systematic risk. is a weighted average of the standard deviations of the individual securities held in that portfolio. measures the amount of diversifiable risk inherent in the portfolio. serves as the basis for computing the appropriate risk premium for that portfolio. can be less than the weighted average of the standard deviations of the individual securities held in that portfolio.
Answer:
sorry i forgot
Explanation:
Companies whose stock is traded in a public market must report EPS in the notes of their financial statements. must report EPS on their income statement. must report EPS on their balance sheet. are not required to report EPS.
Answer:
The answer is B. must report EPS on their income statement
Explanation:
If a company's share is being traded publicly, its Earnings Per Share (EPS) must be shown on its income statement(Statement of profit or loss and other comprehensive income).
Earnings Per Share (EPS) is calculated as follows:
Earnings (profit after tax) ÷ total number of shares outstanding.
Note: EPS does not recognize/consider discontinue operations.
If an investor buys enough stocks, he or she can, through diversification, eliminate all of the unique risk inherent in owning stocks, but as a general rule it will not be possible to eliminate all systemic risk.
A. True
B. False
Answer: True
Explanation:
Buying enough negatively correlated stock can indeed help in diversification of a Portfolio and this on its own is very important as it reduces risk. The type of risk that it reduces however is Unsystematic risk. This is the unique risk inherent in owing stocks.
Systematic risk which is also called undiversifiable risk however cannot be so easily eliminated. This risk is inherent in the Market or the Market segment in question and results from a mix of the Economic, Geo-political and Financial factors in the market. As such, it will not be possible to eliminate all systematic risk.
An agent who accepts a bribe to purchase goods for a principal from a seller who is a personal friend breaches his ________ duty by taking the money, since it is the agent's duty to work only for the best interests of the principal. Group of answer choices
Answer: fiduciary
Explanation:
An agent who accepts a bribe to purchase goods for a principal from a seller who is a personal friend breaches his fiduciary duty by taking the money, since it is the agent's duty to work only for the best interests of the principal.
Fiduciary has to do with trust which exists between a beneficiary and a trustee or an agent and the principal.
Which of the following is an example of an oligopolistic market with a standardized product?
A) The market for breakfast cereal.
B) The market for aluminum.
C) The market for jewelry.
D) The market for automobiles.
Answer:
B) The market for aluminum.
Explanation:
An oligopoly is a market form in which the market or industry is dominated by a small group of large sellers. Oligopolies can result from various forms of collusion that reduce market competition which then majorly leads to higher prices for consumers. They have their own market structure.
Oligopolistic market with standardised product is an homogeneous oligopoly that is an oligopoly in which firm produce a standardised product. And a good example of that is the Aluminum market.
If Preble had purchased 188,000 pounds of materials at $7.20 per pound and used 170,000 pounds in production, what would be the materials quantity variance for March?
f Preble had purchased 188,000 pounds of materials at $7.20 per pound and used 170,000 pounds in production, what would be the materials quantity variance for March?
Standard cost
Direct Material: 6 pounds at $8 per pound 48
Direct labour :4 hours at $13 per hour 52
Variable overhead 4 hours at $5 per hour 20
The planning budget for for March is to produce and sell 20,000 units but the However during March the company actually produce 25,500 units
Answer:
Material quantity Variance =$122,400 unfavorable
Explanation:
Material quantity variance occurs when the actual quantity used to achieved a given level of output is more or less than the standard quantity.
It is determined by the difference between the actual and standard quantity of material for the actual level of output multiplied by the the standard price
Pounds
25,500 should have used (25,500× 6) 153,000
but did use 170,000
Quantity variance 17,000
Standard price × $7.20
Material quantity Variance $122,400 unfavorable
Material quantity Variance =$122,400
In October, Novak Company reports 20,100 actual direct labor hours, and it incurs $198,000 of manufacturing overhead costs. Standard hours allowed for the work done is 22,000 hours. The predetermined overhead rate is $9.10 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $7.40 variable per direct labor hour and $42,400 fixed. Compute the overhead controllable variance.
Answer:
The answer is $7,200U
Explanation:
The formula for computing the overhead controllable variance is:
Actual overhead - budgeted overhead
We need to first calculate the budgeted overhead from the question.
Budgeted overhead = (budgeted cost x standard hours) + fixed labor cost
($7.40 x 22,000 hours) + $42,400
= $205,200
Actual overhead incurred is $198,000
Therefore we have:
$198,000 - $205,200
= $7,200U
The U means unfavorable, meaning actual overhead incurred is less than budgeted overhead
Penne Pharmaceuticals sold 2 million shares of its $5 par common stock to provide funds for research and development. If the issue price is $16 per share, what is the journal entry to record the sale of the shares
Answer:
Please see the journal entry below.
Explanation:
Cash account Dr
(2m shares × $16 per share) $32,000,000
Common stock account Cr
(2m shares × $5 per common stock) $10,000,000
APIC - Common stock account Cr
[($16 - $5) × 2m shares]
$22,000,000
Suppose the following financial data were reported by 3M Company for 2019 and 2020 (dollars in millions). 3M Company Balance Sheets (partial) 2020 2019 Current assets Cash and cash equivalents $ 3,008 $1,899 Accounts receivable, net 3,110 3,065 Inventories 2,675 3,017 Other current assets 1,890 1,542 Total current assets $10,683 $9,523 Current liabilities $ 4,974 $5,821 (a) Calculate the current ratio and working capital for 3M for 2019 and 2020.
Answer:
Current ratio = Current Assets / Current Liability
Current ratio 2019 = 9,523 / 5,821
Current ratio 2019 = 1.64 : 1
Current ratio 2020 = 10,683 / 4,974
Current ratio 2020 = 2.15 : 1
Working Capital = Current asset - Current liability
Working capital 2019 = $9,523 - $5,821
Working capital 2019 = $3,702
Working capital 2020 = $10,683 - $4,974
Working capital 2020 = $5,709
"A retired customer that has a portfolio of blue chip stocks is looking to supplement his retirement income. An appropriate recommendation would be to:"
Answer: sell covered calls
Explanation:
A retired customer that has a portfolio of blue chip stocks is looking to supplement his retirement income. An appropriate recommendation would be to sell covered calls.
It should be noted that a covered call is a financial transaction that takes place when a call option is sold by an investor even though the investor still owns part of the security based on what's sold.
A computer maintenance company wants to 'capture' the knowledge that employees carry around in their heads by creating a database where employees document their solutions to unusual maintenance problems. This practice tries to:
Answer: Transfer human capital to structural capital
Explanation:
From the question, we are informed that computer maintenance company wants to 'capture' the knowledge that employees carry around in their heads by creating a database where employees document their solutions to unusual maintenance problems.
This shows that the company is transferring human capital to structural capital. Human capital has to do with the skills and experiences that workers have.
If the budget deficit increases then a. saving and the interest rate rise. b. saving rises and the interest rate falls. c. saving falls and the interest rate rises. d. saving and the interest rate fall.
Answer:
c. saving falls and the interest rate rises.
Explanation:
If Country A runs a budget deficit, it forces the government to issue bonds at reduced prices in order to raise funds to shore up the decreased government revenue. When bonds are issued, the government is mopping up the savings, thus reducing the available savings. With this increased budget deficit, interest rates will rise as the cost of funding increases to match the inflationary effect of the deficit. And the vicious circle starts.
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q) 300
Revenue ($440.00q) $ 132,000
Expenses:
Wages and salaries ($11,400 + $128.00q) 49,800
Supplies ($5.00q) 1,500
Equipment rental ($2,400 + $25.00q) 9,900
Insurance ($3,800) 3,800
Miscellaneous ($510 + $1.48q) 954
Total expense 65,954
Net operating income $ 66,046
During May, the company’s actual activity was 290 diving-hours.
prepare a flexible budget for May.
Answer:
$63,240.8
Explanation:
Preparation for a flexible budget for May
Actual diving hours 290
Revenue (290*$440) $127,600
Expenses:
Wages and salaries 48,520
(11,400+290*128)
Supplies 1,450
(290*5)
Equipment rental 9,650
(2400+290*25)
Insurance 3,800
Miscellaneous 939.2
(510+290*1.48)
Total expense $64,359.2
Net Operating income $63,240.8
($127,600-$64,359.2)
Therefore the Net Operating income for the flexible budget for May will be $63,240.8.
The marketing team of a regional airline company plans to launch a new marketing campaign to draw more customers to its flights. Select the first three planning steps the marketing team should take to begin the campaign:
Explanation:
1. advertising
2. distribution
3. well crafted
Determine the target market, define purpose and objectives for IMC campaign, set S.M.A.R.T. goals are the first three planning steps the marketing team should take to begin the marketing campaign.
What is marketing campaign?An integrated marketing communication is made up of a number of advertisement messages that all have the same idea and theme. A platform known as an IMC allows a collection of people to combine their views, ideas, and ideologies into one sizable media base.
Marketing efforts can help you find new consumers and raise brand awareness. They also help to establish a reputation, engage customers, and tell your target market about the most recent goods and services. They are therefore critically necessary for any firm.
Therefore, the marketing team's first three planning phases before launching the campaign should be to identify the target market, establish the purpose and objectives for the IMC campaign, and set S.M.A.R.T. goals.
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Quantitative Problem 2: Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend of $1.90 at the end of each year. If investors require an 7% return on the preferred stock, what is the price of the firm's perpetual preferred stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ per share
Answer:
$27.14
Explanation:
Calculation for the price of the firm's perpetual preferred stock
Using this formula
Price of the firm perpetual preferred stock = Annual dividend / Required return
Where,
Annual dividend =$1.90
Required return=7% or 0.07
Let plug in the formula
Price of the firm perpetual preferred stock = $1.90 / 0.07
Price of the firm perpetual preferred stock=$27.14
Therefore the Price of the firm perpetual preferred stock will be $27.14
A financial advisor informs a client that the expected return on a portfolio is 8% with a standard deviation of 12%. There is a 25% chance the return will be negative and a 15% chance that the return would be above 16%. Does her assessment follow a normal distribution? Calculate the probabilities for a normal distribution and compare.
Answer:
A) The assessment does not follow a normal distribution
B ) P(r<0) = 0.2546 ( from standard normal table ), P( r > 0.16 ) ≠ 0.15
Explanation:
Expected return on portfolio E (r) = 8%
Standard deviation (STD) = 12%
chances of Negative return P(r < 0 ) = 25%
calculate the probabilities for a normal distribution
E (r) = 0.08 , STD = 0.12, P(r < 0 ) = 0.25
P( r > 0.16 ) = 0.15
calculating the value of the probability P(r < 0 )
P(r < 0 ) = P [tex](Z < \frac{0-E(r)}{STD} )[/tex]
= P ( Z < [tex]\frac{0-0.08}{0.12}[/tex] )
= P ( Z < - 0.667 )
P(r<0) = 0.2546 ( from standard normal table )
calculating the value of the probability P( r > 0.16 )
P( r > 0.16 ) = [tex]P ( Z > \frac{0.16- E(r)}{STD})[/tex]
= P ( Z > [tex]\frac{0.16-0.08}{0.12}[/tex] )
= P ( Z > 0.667 )
to compare if p(r>0.16 ) is = 0.15
P(R > 0.16 ) = 1 - P ( Z < 0.667 )
= 1 - 0.7454 ( value from standard normal table )
= 0.2546
hence P( r > 0.16 ) ≠ 0.15
The assessment does not follow a normal distribution
A corporation declared a stock dividend on November 1 and issued 9,000 shares of stock to its stockholders. Prior to the dividend, the balance in Retained Earnings was $850,000, the number of shares of $5 par value stock issued and outstanding was 60,000, and the market value of the stock was $12. This stock dividend will cause total stockholders' equity to:
a. decrease by $63,000.
b. remain unchanged.
c. increase by $45,000.
d. decrease by $108,000.
Answer:
b. remain unchanged.
Explanation:
The computation is shown below:
The Decrease in retained earnings would be
= 9,000 shares × $12
= $108,000
Increase in common stock is
= 9,000 shares × $5
= $45,000
Therefore the Paid up capital in excess of par is
= $108,000 - $45,000
= $63,000
Now
Effect on stockholder’s equity is
= -$108,000 + $45,000 + $63,000
= $0
hence, the correct option is b.
Do you think that customers are impressed with the effort that Gap has made to respond to the need to have more worker friendly suppliers? Explain your answer.
Answer:
Yes, I think that customers are very impressed with their customer service
Explanation:
I'm impressed.
Shoe stores A and B are considering selling two new styles of designer shoes resulting in the values below. A moves first and selects which style to sell first, and then B makes its selection (the payoffs at the bottom represent (Payoff A , Payoff B).
What is the equilibrium path of this game?
A. A will choose Black and B will choose Pink
B. A will choose Pink and B will choose Pink
C. A will choose Black and B will choose Black
D. A will choose Pink and B will choose Black
Answer:
B. A will choose Pink and B will choose Pink
Explanation:
Answer: it is b because of
Explanation:
The Chinese government chooses to control the value of its currency so that it is consistently worth some fixed amount of U.S. dollars. Which of the following terms would relate to what the Chinese government would be doing?
a. floating exchange rate
b. flexible exchange rate
c. exchange rate freedom
d. pegged exchange rate
Answer: pegged exchange rate
Explanation:
A pegged exchange rate also referred to as the fixed exchange rate, sometimes is an exchange rate regime type whereby the value of a currency is fixed by the monetary authority of a particular country against the value of the currency of another country.
This is the type of exchange rate used by the Chinese government in the question above.
Suppose a monopolist's costs and revenues are as follows: ATC = $50.00; MC = $35.00; MR = $45.00; P = $55.00. The firm should
Answer:
The firm should increase output and reduce price
Explanation:
For a monopolist, there can be one of the following three scenarios at a time point in time:
Scenario one, MR = MC: For a monopolist, profit is maximized at the point where marginal revenue (MR) is equal to to marginal cost (MC), i.e. where MR = MC.
Scenario two, MR < MC: But when the MR < MC, it indicates that the monopolist is currently producing a higher quantity of output and it is not maximizing profit. In order to maximize profit, the monopolist has to reduce output until MR = MC.
Scenario three , MR > MC: But when the MR > MC, it indicates that the monopolist is currently producing a lower quantity of output and it is not maximizing profit. In order to maximize profit, the monopolist has to increase output until MR = MC. Also, the monopolist has to reduce price in order to sell the increased quantity of output.
From the question, the monopolist falls into scenerio three as MR > MC, i.e. $45 > $35. Therefore, the monopolist should increase output until MR = MC and reduce price in order to maximize profit.
It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.a. Working capital will remain the same at $18,964,118b.Total Assets will rise to $235,535,291c. Chesters' long-term debt will rise by $9,000,000d.The total investment for Chester will be $217,192,866e.Total liabilities will be $139,957,573
Answer:
Statements (b) and (e) are true.
Explanation:
According to the above, computation of the data given are shown below;
According to the statement (b), Total assets will rise to = $235,535,291
According to the statement (e) , Total liabilities will be $139,957,573
Also, according to the question, new liability amounts to = $10,000,000
Therefore,
Total Stockholder's Equity = Total assets - Total Liabilities
= $235,535,291 - $139,957,573 - $10,000,000
= $85,577,718
Leverage = Total Assets ÷ Total Stockholder's Equity
= $235,535,291 ÷ $85,577,718
= 2.7
According to the above analysis, statements (b) and (e) are true.
Answer :
b.Total Assets will rise to $235,535,291.
e.Total liabilities will be $139,957,573.
Explanation:
The following statements are true :
Working notes :
Total Assets = $235,535,291 Total Liabilities =$139,957,573 New Liability = $10,000,000Formula:
Total Stockholder's Equity = Total assets - Total Liabilities
Total Stockholder's Equity = $235,535,291 - $139,957,573 - $10,000,000
Total Stockholder's Equity = $85,577,718
Leverage = Total Assets ÷ Total Stockholder's Equity Leverage= $235,535,291 ÷ $85,577,718 Leverage= 2.7
According to the above scenario the correct answer is B and E.
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Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7. Daily fixed costs are $1,710, and variable costs are $4 per meal. With a capacity of 950 meals per day, the restaurant serves an average of 900 meals each day.Requried:a. Determine the current average cost per meal.b. A busload of 30 Girl Scouts stops on its way home from the San Bernardino National Forest. The leader offers to bring them in if the scouts can all be served a meal for a total of $150. The owner refuses, saying he would lose $0.60 per meal if he accepted this offer. How do you think the owner arrived at the $0.60 figure? Comment on the owner's reasoning.c. A local businessman on a break overhears the conversation with the leader and offers the owner a one-year contract to feed 300 of the businessman's employees one meal each day at a special price of $4.50 per meal. Should the restaurant owner accept this offer? Why or why not?
Answer:
Nature's Garden
a. Determination of the current average cost per meal:
Variable cost per meal = $3,800 ($4 x 950) based on full capacity
Fixed costs per day = $1,710
Total costs = $5,510
Average cost per meal = $5,510/950 = $5.80
b. Girl Scouts' offer of $150 for 30 girls:
Offered price per person = $5 ($150/30)
Projecting a loss of $0.60 per meal, this gives a total loss of $18 ($0.60 x 30)
Projected revenue from the offer = $150 + $18 = $168
Projected revenue per meal = $168/30 = $5.60
Actual revenue to be received per meal = $5.00
Loss of $0.60
The owner arrived at the $0.60 loss because his total costs per meal was $5.60.
c. Since the variable cost per meal is $4, the restaurant owner could accept the offer if the additional 300 meals will not increase his daily fixed costs due to lack of capacity. If the fixed costs increase with this addition, then it may not be reasonable to accept the offer. Based on this offer, the contribution to defraying fixed costs, given present capacity, is only $0.50 ($4.50 - $4) per meal.
Explanation:
Selling price of chef's salad = $7
Daily fixed costs = $1,710
Variable costs per meal = $4
Meals capacity per day = 950
Average meals = 900
Nature's Garden has a fixed cost of $1,710 based on current capacity of 950 meals per day. The fixed cost may increase with increasing capacity. This fact must be borne in mind when making decisions.
HSS Company provides security services to senior executives of prominent corporations when they travel outside the United States. HSS applies both fixed and variable overhead using direct labor hours. The annual budget for one if its customers is as follows: Budgeted hours 800 hours Direct labor $50.00 per hr. Variable overhead $30.00per hr. Fixed overhead $15.00 per hr. During the year, HSS had the following activity related to this customer: Actual hours were 850 at a total cost of $44,200. Actual fixed overhead was $12,750. Actual variable overhead was $22,950. What is the Variable Overhead Flexible Budget Variance?
a. U $2,550
b. U $1,050
c. F $2,550
d. F $1,050
Answer:
Variable overhead variance = $2,550 favorable
Explanation:
Flexible budget is that which is that which recognizes the cost behavior and is used for control purpose. It is prepared based on the actual level of activity achieved.
The variable overhead rate variance is the difference between the actual variable overhead cost and the actual hours multiplied by the standard variable overhead rate.
Actual hours of labour should have cost
($30× 850) 25500
but did cost 22,950
Variable overhead variance 2,550 favorable
Variable overhead rate variance = $2,550 favorable
Variable overhead deficiency variance
Suppose the firms in a perfectly competitive industry merge to form a monopoly. Which of the following would NOT occur?
a. A rise in total consumer plus producer surplus
b. A deadweight loss
c. A rise in producer surplus
d. A fall in consumer surplus
Answer: a. A rise in total consumer plus producer surplus
Explanation:
When a Monopoly is formed, the Producer surplus will increase but the Consumer surplus will decrease. This is because a Monopoly will charge a higher price than a Competitive firm to get more profit as well reduce output as well.
This will result in the transfer of some Consumer surplus to the Producer as well as a Dead-weight loss being formed thereby reducing the Consumer surplus. The total surplus will therefore fall as a result of this merger.
Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 01/01/2021 $ 189,516 06/30/2021 $ 6,000 $ 7,581 $ 1,581 191,097 12/31/2021 6,000 7,644 1,644 192,741 06/30/2022 6,000 7,710 1,710 194,451 12/31/2022 6,000 7,778 1,778 196,229 06/30/2023 6,000 7,849 1,849 198,078 12/31/2023 6,000 7,922 1,922 200,000 What is the annual market interest rate on the bonds
Answer:
8%
Explanation:
Calculation for the annual market interest rate on the bonds
Using this formula
Annual market interest rate=(Interest expenses/Carrying value)× 2 payments per year
Where,
06/30/2021 Interest expenses=$7,581
01/01/2021 Carrying value =$189,516
Let plug in the formula
Annual market interest rate=
($7,581/ $189,516)×2 payments per year
Annual market interest rate=0.04×2 payments per year
Annual market interest rate=0.08×100
Annual market interest rate=8%
Therefore the the annual market interest rate on the bonds will be 8%
TB MC Qu. 9-100 The following labor standards have been ... The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.6 hours Standard labor rate $ 13.40 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,400 hours Actual total labor cost $ 96,200 Actual output 950 units What is the labor efficiency variance for the month
Answer:
Direct labor time (efficiency) variance= $23,048 favorable
Explanation:
Giving the following information:
Standard labor-hours per unit of output 9.6 hours
Standard labor rate $ 13.40 per hour
Actual hours worked 7,400 hours
Actual output 950 units
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 9.6*950= 9,120
Direct labor time (efficiency) variance= (9,120 - 7,400)*13.4
Direct labor time (efficiency) variance= $23,048 favorable
Your teammates, Sara and Juan, are having difficulty cooperating with one another even though their individual assignments are highly related. Which of the following actions is least likely to improve their cooperation?
1) Ask them to make suggestions to each another about ways to possibly improve each person’s assignment.
2) Have them work on their own and only meet with the rest of the team when absolutely necessary.
3) As a team, discuss how each member’s contributions are linked and contribute to the team’s goals.
4) Re-assign their tasks so that they are working on very different aspects of the team’s project.
Answer: Have them work on their own and only meet with the rest of the team when absolutely necessary.
Explanation:
From the question, we are informed that Sara and Juan, are having difficulty cooperating with one another even though their individual assignments are highly related.
To improve their cooperation, the best thing to do is to have them work on their own and only meet with the rest of the team when absolutely necessary.
To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses is added to operating expenses other than depreciation.
a. True
b. False
Answer:
True
Explanation:
To determine cash payments under direct method the decrease in accrued expenses is added to the operating expenses payable . Accrued expense mean expenses incurred but not yet paid. A decrease in accrued expenses would suggest that accrued expenses have been paid therefore there has been an outflow of cash which will be added to cash paid for operating expenses.
Compute the new national income given MPC = 0.9, and an autonomous injection of $100B from federal government stimulus spending.
Answer:1200
Explanation:
The new national income is given MPC = 0.9, and an autonomous injection of $100B from federal government stimulus spending will be 1000.
What is stimulus spending?To stimulate a market and pull it out of an economic downturn or depression, the government will boost expenditure while lowering taxes as asset prices. This is known as a stimulus package.
The term "economic stimulus" refers to focused monetary and financial actions designed to spur business activity in the private sector. To compensate for the decline in aggregate demand, fiscal recovery focuses on promoting private sector expenditure.
The MPC is given as 0.9
The MPS will be
1 = MPC + MPS
1 - 0.9
MPS = 0.1
The stimulus spending will be
= 1000 / 0.1
= $10000
The federal government has spent of $10000.
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