Explain how will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is do price and quantity rise, fall, remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand diagrams to verify your answers.
a. Demand increases and supply is constant.
b. Supply increases and demand decreases.
c. Demand increases and supply decreases.
d. Demand decreases and supply decreases.
Answers
Answer:
a. If demand increases and supply is constant, there would be a rightward shift of the demand curve. As a result, equilibrium price and quantity would increase
b. An increase in supply would lead to a rightward shift of the supply curve. As a result price decreases and quantity increases. A decrease in demand would lead to a leftward shift of the demand curve. As a result, quantity and price decreases. Taking these two effects together, equilibrium price decreases and there is an indeterminate effect on equilibrium quantity
c. An increase in demand leads to a rightward shift of the demand curve. As a result, equilibrium price and quantity increases. A decrease in supply would lead to a leftward shift of the supply curve. This leads to a decrease in quantity and an increase in price. Taking these two effect together, there would be an increase in equilibrium price and an indeterminate effect on equilibrium quantity
d. A decrease in demand would lead to a leftward shift of the demand curve. As a result, quantity and price decreases. A decrease in supply would lead to a leftward shift of the supply curve. This leads to a decrease in quantity and an increase in price. Taking these two effect together, there would be a decrease in equilibrium quantity and an indeterminate effect on equilibrium price
Explanation:
Please check the attached images for the demand and supply diagrams
Related Questions
Yesterday, the dollar was trading in the foreign exchange market at 1.10 euros per dollar. Today, the dollar is trading at 1.20 euros per dollar. The dollar has ________ and a possible reason for the change is ________ in the expected future exchange rate.
Answers
Answer: appreciated; an increase.
Explanation:
Since there's an increase in the dollar rate at the foreign exchange market at 1.10 euros per dollar to 1.20 euros per dollar, this implies that the dollar has appreciated.
The appreciation of the dollar simply means that there's an increase in the value of the dollar when it's compared to.anitgee currency. Tge reason for the change is the increase in the expected future exchange rate.
The following data come from the financial records of Campbell Corporation for Year 3: Sales $ 840,000 Interest expense 5,000 Income tax expense 25,500 Net income 25,500 Required How many times was interest earned in Year 3
Answers
Answer:
the times was interest earned in Year 3 is 11.2 times
Explanation:
The computation of the times interest earned ratio is given below:
The times interest earned ratio is
= (Net income+ Income tax expense+ Interest expense) ÷ Interest expense
= ($25,500 + $25,500 + $5,000) ÷ $5,000
= 11.2 times
Hence, the times was interest earned in Year 3 is 11.2 times
The same is to be relevant
Sales-Related Transactions
Merchandise is sold on account to a customer for $7,400, terms FOB shipping point, 1/10, n/30. The seller
paid the freight of $390. Determine the following:
a.
Amount of the sale
b.
Amount debited to Accounts Receivable
c.
Amount received within the discount period
7,326 X
Answers
Answer:
a. Particulars Amount
Sales revenue - Gross $7,400
Less: Sales discount $74 ($7,400*1%)
Net sales revenue $7,474
b. Particulars Amount
Sales revenue-Net $7,474
Add: Freight paid on behalf of purchaser $390
Account receivable debited $7,864
c. Particulars Amount
Total amount due $7,938
Less: Sales discount ($7,400*1%) $74
Net amount to be received $7,864
Tora Co. plans to produce 1,020 units in July. Each unit requires two hours of direct labor. The direct labor rate is $20 per hour. Prepare a direct labor budget for July.\
Answers
Answer: $40,800
Explanation:
Each unit requires 2 hours of direct labor.
1,020 units would therefore require:
= 1,020 * 2
= 2,040 hours of labor
The direct labor rate is $20 per hour. If there are 2,040 hours to be worked, the cost would therefore be:
= 20 * 2,040
= $40,800
Wages of 8,000 are earned by workers but not paid as of december 31
Answers
Answer:
huh i dont understand that question no choosing letter
Corris Co. accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Driven Total Cost January 10,000 $17,000 February 8,000 13,500 March 9,000 14,400 April 7,000 12,500 Compute the variable and fixed cost elements using the high-low method. (Round variable cost to 2 decimal places, e.g. 15.25.)
Answers
Answer:
Results are below.
Explanation:
Giving the following information:
Miles Driven Total Cost
January 10,000 $17,000
February 8,000 13,500
March 9,000 14,400
April 7,000 12,500
To calculate the variable cost per unit and the total fixed cost, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (17,000 - 12,500) / (10,000 - 7,000)
Variable cost per unit= $1.5
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 17,000 - (1.5*10,000)
Fixed costs= $2,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 12,500 - (1.5*7,000)
Fixed costs= $2,000
Sarah inherited a large amount of cash after her grandparents passed away. She would rather overdraw her bank account and max out her credit cards, then deposit the cash into her bank account. This is an example of a consumer ________.
Answers
Answer:
a) failing to treat money as fungible
Explanation:
In the given situation, since sarah has been use the money in the form of credit cards rather using the larger cash amount which is in her hand. So this represents that she should be failed for using the 2 forms of money also the fungibility of money means the various forms of money could be used interchangable.
Therefore the option a is correct
Brownley Company has one service department and two operating (production) departments. Payroll Department costs are allocated to the two operating departments in proportion to the number of employees in each. Listed below are the operating data for the current period: Department Direct Expenses No.of Employees Payroll $ 26,000 Milling 80,000 52 Assembly 109,600 78 The total cost of operating the Milling Department for the current period is: rev: 12_17_2020_QC_CS-243789 Multiple Choice $90,400. $95,600. $10,400. $15,600. $80,000.
Answers
Answer:
$90,400
Explanation:
Calculation to determine Cost of operating mining department
Using this formula
Cost of operating mining department= Direct Cost + Payroll cost allocated
Let plug in the formula
Cost of operating mining department= 80,000 + (26,000/130)*52
(52+78=130)
Cost of operating mining department= 80,000 + $10,400
Cost of operating mining department= $90,400
Therefore Cost of operating mining department is $90,400
A machine cost $1,200,000, has annual depreciation of $200,000, and has accumulated depreciation of $950,000 on December 31, 2020. On April 1, 2021, when the machine has a fair value of $275,000, it is exchanged for a machine with a fair value of $1,350,000 and the proper amount of cash is paid. The exchange had commercial substance. The gain to be recorded on the exchange is
Answers
Answer: $1,350,000
Explanation:
If an exchange is said to have commercial substance, it means that the company will either record the asset received at its fair value and if this is not available, it will then record the value of the asset received at the fair value of the assets that were exchanged for it.
The fair value of the assets acquired are available in this instance so the machine will be recorded at its fair value of $1,350,000.
advantages of discounted payback period
Answers
Answer:
The main advantage of the discounted payback period method is that it can give some clue about liquidity and uncertainly risk. Other things being equal, the shorter the payback period, the greater the liquidity of the project. Also, the longer the project, the greater the uncertainty risk of future cash flows.
A three-year bond has an 8.0 percent coupon rate and a $1,000 face value. If the yield to maturity on the bond is 10 percent, calculate the price of the bond assuming that the bond makes semiannual coupon payments.
Answers
Answer:
$949.24.
Explanation:
The price of the bond also known as the Present Value (PV) of the Bond CAN be calculated using a Financial Calculator as
FV = $1,000
I/yr = 10%
Pmt = ($1,000 x 8.0 %) / 2 = $40
N = 3 x 2 = 6
P/yr = 2
PV = ???
Inputting the data in a Financial Calculator gives a Present Value of $949.24. Thus the price of the bond is $949.24.
The Learning Journal is a space where you should reflect on what was learned during the week and how it applies to your daily life and will help you with your life (career) goals.
a. True
b. False
Answers
The following balance sheet accounts (in millions of dol- lars) have been taken from the annual report for a U.S. bank. Arrange the accounts in balance sheet order and determine the value of total assets. Based on the balance sheet structure, would you classify this bank as a community bank, regional bank, or a money center bank?
Premises $1,078
Savings deposits 3,292
Cash 2,660
NOW accounts 12,816
Long-term debt 1,191
Other assets 1,633
Other time deposits 2,333
Net loans $29,981
Short-term borrowing 2,080
Other liabilities 778
Equity 3,272
Investment securities 6,092
Demand deposits 5,939
Certificates of deposit
(under $100,000) 9,853
Federal funds sold 110
Answers
The bank should be treated as a community bank.
The computation is as follows:
Total Assets = Premises+ Cash + Other assets + Net Loans + Investment securities + Federal funds sold
= $1,078 + $2,660 + $1,633 + $29,981 + $6,092 + $110
= $41,554 in Millions
Since the bank is a small regional bank that contains total assets of $41.5 billion so if this is the $41.5 million so it should be treated as the community bank.
Therefore we can conclude that the bank should be treated as a community bank.
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You own a portfolio that is invested 15 percent in Stock X, 35 percent in Stock Y, and 50 percent in Stock Z. The expected returns on these three stocks are 9 percent, 15 percent, and 12 percent, respectively. What is the expected return on the portfolio
Answers
Answer:
12.60%
Explanation:
The expected return on the portfolio is the sum of the weighted expected return of each stock in the portfolio
(0.15 x 9) + (0.35 x 15) + (0.5 x 12)
= 1.35 + 5.25 + 6
= 12.6%
You are considering the purchase of a machine out of your evaluation among four new ones. They have differing initial and ongoing costs and differing lives. Whichever machine is purchased will be replaced at the end of its useful life. Under such circumstances, you should choose the machine to purchase based on the ___________________.
Answers
Answer:
Lowest equivalent annual cost.
Explanation:
Considering the above scenario, it is more advantageous to choose the machine that has the lowest equivalent annual cost. As the newly acquired machine will be replaced at the end of its useful life, it is more advantageous for it to have a higher performance and lower annual cost among others, as the cost of depreciation of machinery and equipment must be considered as a fixed cost that will also directly impact a company's accounts.
The following monthly data are available for Bonita Industries. which produces only one product: Selling price per unit, $42; Unit variable expenses, $14; Total fixed expenses, $42000; Actual sales for the month of June, 5000 units. How much is the margin of safety for the company for June
Answers
Answer:
70%
Explanation:
Margin of safety is the amount of sales a company makes in excess of the breakeven point
Margin of safety = (actual sales - break-even sales) / actual sales
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit /
$42000 / (42 -14) = 1500
(5000 - 1500) / 5000 = 70%
Riverbed Corporation purchased machinery on January 1, 2022, at a cost of $278,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $32,800. The company is considering different depreciation methods that could be used for financial reporting purposes.
Required:
Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate.
Answers
Answer:
a. Under straight-line method, annual depreciation expenses are as follows:
Year Annual depreciation expense ($)
2022 61,300
2023 61,300
2024 61,300
2025 61,300
b. Under the declining-balance method using double the straight-line rate, annual depreciation expenses are as follows:
Year Annual depreciation expense ($)
2022 139,000
2023 69,500
2024 34,750
2025 1,950
Explanation:
a. Prepare a separate depreciation schedule for the machinery using the straight-line method.
Note: See part a of the attached excel file for the depreciation schedule for Straight-line method.
In the attached excel file, the depreciation rate used for the Straight-line method is calculated as follows:
Straight line depreciation rate = 1 / Estimated useful life = 1 / 4 = 0.25, or 25%
From part a of the attached excel file, we have:
Year Annual depreciation expense ($)
2022 61,300
2023 61,300
2024 61,300
2025 61,300
b. Prepare a separate depreciation schedule for the machinery using the declining-balance method using double the straight-line rate.
Note: See part b of the attached excel file for the depreciation schedule for double-declining-balance method.
In the attached excel file, the depreciation rate used for the Double declining-balance method is calculated as follows:
Double-declining depreciation rate = Straight line depreciation rate * 2 = 25% * 2 = 50%
From part b of the attached excel file, we have:
Year Annual depreciation expense ($)
2022 139,000
2023 69,500
2024 34,750
2025 1,950
Note:
Under this double-declining-balance method, the depreciation expenses for 2025 is calculated by deducting the salvage value of $32,800 from the 2025 Beginning depreciable amount (i.e. $34,750 - $32,800 = $1,950). The residual value of $32,800 therefore represents the book value on December 31, 2025.
To reduce your chances of identify theft you should
a.
carry your Social Security Card in your wallet.
b.
check your credit rating regularly.
c.
only use drive thru ATM’s.
d.
never keep receipts with credit information printed on them.
Answers
To reduce your chances of identify theft you should: d. never keep receipts with credit information printed on them.
What is identity theft?Identity theft can be defined as the way in which person tend to make use of another person personal data or information so as to defraud people or to commit a crime.
This person can either make use of the person name, credit card numbers among others to commit a fraudulent act by impersonating the owner without the awareness of the person that owns the information.
In order to reduce the identify theft it is advisable that a person should never keep receipts that has details of their credit information printed on them as a fraudster can make use of the information to defraud or to commit crime.
Therefore To reduce your chances of identify theft you should: d. never keep receipts with credit information printed on them.
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Willa and Westley are siblings who built a hair salon business from the ground up. They are now contemplating opening an additional salon location. The estimate to open an additional salon would mean adding $1 million in expenses with their profit increasing by $400,000 each year for the next 5 years (all other things equal). Willa and Westley decide:_____________
a. to take on the new salon because the expected marginal benefit ($2 million over 5 years) is greater than the estimated marginal cost ($1 million).
b. to not open a new salon because the marginal costs prove to be too high.
c. to open a second salon because the marginal cost of the new salon is low compared to other similar projects.
Answers
Answer:
A
Explanation:
The marginal benefit of a production activity is the change in total benefit as a result of increasing quantity produced by one unit
Marginal cost is the change in total cost as a result of increasing the quantity produced by one unit.
An activity should be undertaken if the marginal cost is less than the marginal benefit. It means that the activity is profitable.
Here the marginal benefit = 400,000 x 4 = 2,000,000
the marginal benefit is greater than the marginal cost. Thus, the new salon can be established
Select the statement below that is true of long run aggregate supply curves.
a. There is no relationship between price level and RGDP.
b. Changes in price level affect output.
c. There is a variable quantity of RGDP.
Answers
Answer:
There is no relationship between price level and RGDp
Answer:
(A) There is no relationship between price level and RGDP
Goal setting is a valuable tool for improving your own performance and managing that of your subordinates.
a. True
b. False
Answers
the ness company sells $5,000,000 of five-year, 10% bonds at the start of the year. the bonds have an effective yield of 9%. present value factors are below: The amount of bond premium amortization for Year 2 is:
Answers
Answer:
The amount of bond premium amortization for Year 2 is:
= $35,421.26
Explanation:
a) Data and Calculations:
Face value of bonds = $5,000,000
Selling price of bonds = $5,194,482.56
Premium on bonds = $194,482.56
Coupon interest rate = 10%
Effective yield = 9%
Annual interest payment = $500,000 ($5,000,000 * 10%)
N (# of periods) 5
I/Y (Interest per year) 9
PMT (Periodic Payment) 500000
FV (Future Value) 5000000
Amortization Schedule
Period PV Annual PMT Interest Amortization
Year 1 $5,194,482.56 $500,000.00 $467,503.43 $32,496.57
Year 2 $5,161,985.99 $500,000.00 $464,578.74 $35,421.26
Year 3 $5,126,564.73 $500,000.00 $461,390.83 $38,609.17
Year 4 $5,087,955.56 $500,000.00 $457,916.00 $42,084.00
Year 5 $5,045,871.56 $500,000.00 $454,128.44 $45,871.56
End of Year 5 FV = $5,000,000
Results
PV = $5,194,482.56
Sum of all periodic payments $2,500,000.00
Total Interest $2,305,517.44
Minor Electric has received a special... Minor Electric has received a special one-time order for 1,500 light fixtures (units) at $11 per unit. Minor currently produces and sells 7,500 units at $12.00 each. This level represents 75% of its capacity. Production costs for these units are $13.50 per unit, which includes $9.00 variable cost and $4.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $625 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. If Minor wishes to earn $1,075 on the special order, the size of the order would need to be:_______.
a. 3,400 units
b. 683 units
c. 1,700 units
d. 136 units
e. 850 units
Answers
Answer:
e. 850 units
Explanation:
Desired profit = $1,075
New machine cost = $625
Variable cost per unit = $9 per unit
Sale price per unit = $11 per unit
Order size = (Desired profit + Machine cost) / Contribution margin per unit
Order size = ($1,075 + $625) / ($11 - $9)
Order size = $1,700 / $2
Order size = 850 units
So therefore, if Minor wishes to earn $1,075 on the special order, the size of the order would need to be 850 units.
An investor is holding a stock which has been volatile with returns significantly year-over-year. The initial investment was $1,000 in stock ABC, and it returned the following: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Return 10% -15% 20% 22% -30% 40% What is the geometric returns of Stock ABC for six years
Answers
Answer:
the geometric returns of Stock ABC for six years is 5.02%
Explanation:
The computation of the geometric returns of Stock ABC for six years is given below:
= [(1 + r1) × (1 + r2) × (1 + r3) × (1 + r4) × (1 + r5) × (1 + r6)]^1 ÷ 6 - 1
= [(1 + 0.10) × (1 - 0.15) × (1 + 0.20) × (1 + 0.22) × (1 - 0.30) × (1 + 0.40)]^(1 ÷ 6) - 1
= 0.0502 or 5.02%
Hence, the geometric returns of Stock ABC for six years is 5.02%
The above formula should be applied
Sports Corp has 11.7 million shares of common stock outstanding, 6.7 million shares of preferred stock outstanding, and 2.7 million bonds. If the common shares are selling for $26.7 per share, the preferred share are selling for $14.2 per share, and the bonds are selling for 96.83 percent of par, what would be the weight used for common stock in the computation of Sports's WACC
Answers
Answer: 10.34%
Explanation:
First calculate the value of the company's total capital:
= Common stock + Preferred stock + Debt
= (11,700,000 * 26.70) + (6,700,000 * 14.20) + (2,700,000 * 96.83/100 * 1,000 par value)
= $3,021,940,000
The weight to be used for common stock is:
= Common stock value / Total capital value
= (11,700,000 * 26.70) / 3,021,940,000
= 312,390,000 / 3,021,940,000
= 10.34%
Tom and Jerry's has 2.4 million shares of common stock outstanding, 2.4 million shares of preferred stock outstanding, and 14.00 thousand bonds. If the common shares are selling for $13.40 per share, the preferred share are selling for $10.40 per share, and the bonds are selling for 99.96 percent of par, what would be the weight used for common stock in the computation of Tom and Jerry's WACC
Answers
Answer:
Tom and Jerry's
The weight used for common stock in the computation of Tom and Jerry's WACC is:
= 45.22%
Explanation:
a) Data and Calculations:
Common Preferred Bonds
Stock Stock
Outstanding number 2.4 m 2.4 m 14,000
Market price per share $13.40 $10.40 $999.6
Total value $32.16 m $24.96 m $13,994,400
Total value of stock and bonds = $71,114,400
Weight of common stock = $32.16/$71.1144 * 100 = 45.22%
Why does the government sometimes use an expansionary fiscal policy?
Answers
Vaughn Manufacturing began the year with retained earnings of $654000. During the year, the company recorded revenues of $610000, expenses of $377000, and paid dividends of $143000. What was Vaughn's retained earnings at the end of the year
Answers
Answer:
$744,000
Explanation:
First and foremost, we need to determine the earnings after in the year which is the total earnings that would be used in computing the ending retained earnings
earnings after-tax=revenue-expenses
earnings after-tax= $610000-$377,000
earnings after-tax= $233,000
The closing retained earnings=beginning retained earnings+net income-dividends
The closing retained earnings=$654000+$233,000-$143,000
The closing retained earnings=$744,000
Firms engaged in international trade deal with people they may have never seen, who live in different countries, who speak different languages, and who abide by different legal systems. These factors result in
Answers
Answer:
a lack of trust between the parties.
Explanation:
It is correct to say that these factors result in a lack of trust between the parties, due to social, political and cultural differences between different countries.
To reduce the lack of trust between the parties, it is necessary that companies operating in international trade comply with the legal, ethical and moral rules of the location where they are located, maintaining a multicultural relationship with their stakeholders, observing their preferences and desires and aligning its products and services to what local consumers are looking for in a company. Creating value for the consumer increases the company's confidence and positioning in an international market.
Exercise 8-22 Evaluating efficient use of assets LO A1 Lok Co. reports net sales of $5,856,480 for Year 2 and $8,679,690 for Year 3. End-of-year balances for total assets are Year 1, $1,686,000; Year 2, $1,800,000; and Year 3, $1,982,000. (1) Compute Lok's total asset turnover for Year 2 and Year 3.
Answers
Answer:
Total asset turnover = Net sales / Average total assets
Year 2:
= 5,856,480 / (1,686,000 + 1,800,000) / 2
= 5,856,480 / 1,743,000
= 3.36
Year 3:
= 8,679,690 / (1,800,000 + 1,982,000) / 2
= 8,679,690 / 1,891,000
= 4.59
