The present value of their dividends over the next four years is $9.88 (rounded to two decimal places).
The present value of dividends over the next four years when Company AW pays a dividend of $3.00 next year and expects to increase its dividend by $0.50 in each of the following three years and their required rate of return is 15 percent can be calculated using the formula:
PV of annuity = R × [{1 - (1 + i)^-n} / i]
Where,R = $3.00
i = 15% = 0.15
n = 4 (as they are paying dividend for next four years) $0.50 increase in each of the following three years = $0.50 + $3.00 = $3.50
PV of dividend for the 2nd year= $3.50 / (1 + 0.15)²= $2.55
PV of dividend for the 3rd year= $4.00 / (1 + 0.15)³= $2.33
PV of dividend for the 4th year= $4.50 / (1 + 0.15)⁴= $2.00
The present value of the dividends for the next four years is calculated by adding the present value of the four dividend payments.
That is, PV of dividends = PV of dividend for the 1st year + PV of dividend for the 2nd year + PV of dividend for the 3rd year + PV of dividend for the 4th year
PV of dividends = $3.00 + $2.55 + $2.33 + $2.00
PV of dividends = $9.88
Know more about the present value
https://brainly.com/question/15904086
#SPJ11
The following is the cash book and bank statement of E Flynn for the month of December 2019. Cash Book 2019 6-Dec J Hall 20-Dec C Walters 31-Dec P Miller 31-Dec Balance c/d 2019 $ 155.00 1-Dec Balance b/f $189.00 10-Dec P Wood $211.00 18-Dec N Roberts $3,922.00 29-Dec P Phillips $4,477.00 2019 DETAILS 1-Dec Balance b/f 6-Dec Cheque 11-Dec P Wood 20-Dec Cheque 22-Dec N Roberts 30-Dec Standing Order i) Bank Statement 31-Dec K Saunders 31-Dec Bank Charges 31-Dec J Hall $4,477.00 1-Jan Balance b/d $3,922.00 DR 206 315 200 65 155 $3,872.00 $ 206.00 $315.00 $ 84.00 CR BALANCE 3,872 OD 155 3,717 OD 3,923 OD 189 3,734 OD 4,049 OD 4,249 OD 180 4,069 OD 4,134 OD 4,289 OD Please prepare the updated Cash Book for E Flynn. ii) Please prepare the Bank Reconciliation Statement for E Flynn. 10mks. 10mks.
Updated Cash Book for E Flynn: Date | Details | Cash | Bank | Date | Details | Cash | Bank
2019 | Balance b/f | $189 | - | 1-Jan | Balance b/d | - | $3,922
6-Dec | J Hall | $155 | - | 20-Dec | C Walters | - | $4,477
10-Dec | P Wood | $211 | - | 31-Dec | P Miller | - | $4,069
18-Dec | N Roberts | - | $3,922 | 31-Dec | Balance c/d | $155 | -
Bank Reconciliation Statement for E Flynn:
Balance as per Cash Book: $155
Add: Outstanding Deposits:
N Roberts: $3,922
P Phillips: $4,477
Total: $8,399
Less: Outstanding Checks:
J Hall: $206
P Wood: $315
C Walters: $84
K Saunders: $180
Total: $785
Adjusted Bank Balance: $8,399 - $785 = $7,614
Balance as per Bank Statement: $4,289
Discrepancy: Adjusted Bank Balance - Balance as per Bank Statement
$7,614 - $4,289 = $3,325
Bank Reconciliation Statement:
Balance as per Bank Statement: $4,289
Add: Discrepancy: $3,325
Adjusted Bank Balance: $7,614
Note: The Bank Reconciliation Statement is used to reconcile the differences between the Cash Book balance and the Bank Statement balance by taking into account outstanding deposits and checks, as well as any additional bank charges or interest. In this case, the adjusted bank balance is higher than the balance as per the Bank Statement, indicating that there are outstanding deposits that have not yet been recorded in the Bank Statement.
Learn more about Bank Reconciliation Statement here -: brainly.com/question/15525383
#SPJ11
1. A sample format for a business plan includes: a. Index b. table of content c. executive summary d. bibliography 2. True or False? A small company with common stock that is not traded is known as a privately held company. Group of answer choices True False 3. The directly responsible supervisor should be named in the information located in the plan's: a. financial segment. b. organization segment. c. marketing segment. d. all of these are correct. 4. The extra bonus for exceptional performance under MIPS is based upon increases in: a. coordination of care. b. performance scores. c. resource use. d. None of these is correct.
The correct answer is c. A sample format for a business plan includes executive summary.
The correct answers are a. Index, b. table of content, c. executive summary.
True. A small company with common stock that is not traded is known as a privately held company.
The correct answer is d. all of these are correct. The directly responsible supervisor may be named in any of the segments mentioned (financial, organization, marketing) depending on their specific role and responsibilities.
The correct answer is b. performance scores. The extra bonus for exceptional performance under MIPS is based on increases in performance scores.
A sample format for a business plan typically includes an executive summary, which is a concise overview of the key elements of the business plan. It provides a summary of the business idea, market analysis, strategies, financial projections, and other important aspects of the plan. The executive summary is usually placed at the beginning of the business plan and serves as a snapshot of the entire document. It is designed to capture the reader's attention and provide a clear understanding of the business concept and its potential. The index, table of contents, and bibliography are important components of a comprehensive business plan, but they are not typically listed as part of the sample format.
Know more about business planhere:
https://brainly.com/question/13160849
#SPJ11
AFD Company currently has earnings before interest and taxes of M2,500,000. The company is financed entirely by equity. The earnings are not expected to change anytime in the foreseeable future. The company pays corporate taxes equal to 35% of taxable income. The discount rate for the company's projects is 10%. i. Compute the market value of AFD Company. ii. Assume that the company issues a permanent debt of M5,000,000, paying interest of 6% per year, and using the proceeds to retire equity. State what will happen to the total value of AFD Company, supporting your answer with relevant computations. iii. Assume that after the issue of the debt in (ii) above AFD Company realizes that the debt issue raises the possibility of bankruptcy. In fact, the company figures out that it has a 30% chance of going bankrupt after three years. If it does go bankrupt, it will incur bankruptcy costs of M20,000,000. The discount rate remains 10%. Was it wise for AFD Company to issue the debt? Motivate your answer with appropriate computations.
i. The market value of AFD Company is M25,000,000.
i. To compute the market value of AFD Company, we need to calculate the present value of its earnings before interest and taxes (EBIT). Using the discount rate of 10%, the present value of EBIT is M25,000,000.
ii. If the company issues a permanent debt of M5,000,000 and uses the proceeds to retire equity, there will be a reduction in the company's total value. However, the exact impact on the total value cannot be determined without additional information such as the interest tax shield.
iii. After issuing the debt, AFD Company faces the risk of bankruptcy with a 30% chance. If bankruptcy occurs, the company will incur bankruptcy costs of M20,000,000. To assess the wisdom of issuing the debt, we need to consider the probability-adjusted value of the company. If the present value of the expected cash flows after accounting for bankruptcy costs is greater than the market value without debt, then it was wise to issue the debt. Without this information, it is not possible to determine the wisdom of the decision.
Therefore, while we can calculate the market value of AFD Company and analyze the impact of issuing debt, a definitive assessment of the wisdom of the decision requires further information on tax shields and the probability-adjusted value of the company after considering bankruptcy costs.
To know more about financial analysis , visit:
https://brainly.com/question/17109110
#SPJ11
.Exercise 13-32 (Algo) Estimate Purchases and Cash Disbursements (LO 13-4, 5)
Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $1.00 each and must be paid for in cash. The company has 27,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:
To estimate purchases and cash disbursements for Midland Company, we need to calculate the tiles needed for sales and determine the cash payments for tile purchases. Here's the estimate for the next six months:
Month: 1
Sales: 30,000 tiles
Tiles needed (3 months sales): 30,000 x 3 = 90,000 tiles
Tiles to purchase: 90,000 - 27,000 (in stock) = 63,000 tiles
Cash payment for tile purchases: 63,000 tiles x $1.00 = $63,000
Month: 2
Sales: 36,000 tiles
Tiles needed (3 months sales): 36,000 x 3 = 108,000 tiles
Tiles to purchase: 108,000 - 27,000 (in stock) = 81,000 tiles
Cash payment for tile purchases: 81,000 tiles x $1.00 = $81,000
Month: 3
Sales: 42,000 tiles
Tiles needed (3 months sales): 42,000 x 3 = 126,000 tiles
Tiles to purchase: 126,000 - 27,000 (in stock) = 99,000 tiles
Cash payment for tile purchases: 99,000 tiles x $1.00 = $99,000
Month: 4
Sales: 39,000 tiles
Tiles needed (3 months sales): 39,000 x 3 = 117,000 tiles
Tiles to purchase: 117,000 - 27,000 (in stock) = 90,000 tiles
Cash payment for tile purchases: 90,000 tiles x $1.00 = $90,000
Month: 5
Sales: 45,000 tiles
Tiles needed (3 months sales): 45,000 x 3 = 135,000 tiles
Tiles to purchase: 135,000 - 27,000 (in stock) = 108,000 tiles
Cash payment for tile purchases: 108,000 tiles x $1.00 = $108,000
Month: 6
Sales: 48,000 tiles
Tiles needed (3 months sales): 48,000 x 3 = 144,000 tiles
Tiles to purchase: 144,000 - 27,000 (in stock) = 117,000 tiles
Cash payment for tile purchases: 117,000 tiles x $1.00 = $117,000
Therefore, the estimated purchases and cash disbursements for Midland Company for the next six months are as follows:
Month 1: Purchases = 63,000 tiles, Cash Disbursements = $63,000
Month 2: Purchases = 81,000 tiles, Cash Disbursements = $81,000
Month 3: Purchases = 99,000 tiles, Cash Disbursements = $99,000
Month 4: Purchases = 90,000 tiles, Cash Disbursements = $90,000
Month 5: Purchases = 108,000 tiles, Cash Disbursements = $108,000
Month 6: Purchases = 117,000 tiles, Cash Disbursements = $117,000
Learn more about cash payments here:
https://brainly.com/question/30514018
#SPJ11
professionals shall not permit the use of their names or associates in business ventures with any person or firm that they believe is engaged in fraudulent or dishonest enterprise, unless such enterprise or activity does not violate state or federal law.
The statement "Professionals shall not permit the use of their names or associates in business ventures with any person or firm that they believe is engaged in fraudulent or dishonest enterprise unless such enterprise or activity does not violate state or federal law" is true.
This statement reflects the ethical responsibility and integrity expected of professionals. Professionals are expected to maintain high ethical standards and conduct themselves in an honest and trustworthy manner.
If they have knowledge or belief that a person or firm is engaged in fraudulent or dishonest activities, it is their duty to disassociate themselves from such ventures.
By adhering to this principle, professionals uphold their ethical obligations to act in the best interests of their clients, stakeholders, and the public. It demonstrates their commitment to integrity, transparency, and ensuring that they do not lend their reputation or support to fraudulent or dishonest enterprises.
In conclusion, the statement is true, and it reflects the ethical stance that professionals should take when considering business ventures with individuals or firms engaged in fraudulent or dishonest activities, unless such activities are lawful. Upholding ethical standards is crucial for maintaining trust and credibility in the professional realm.
To know more about fraudulent refer here:
https://brainly.com/question/28239119#
#SPJ11
what are the 4 types of caps that affect adjustable rate mortgages
The four types of caps that affect adjustable rate mortgages are the initial, periodic, lifetime, and payment caps.
Initial Cap: An initial cap is a limit on how much the interest rate on an adjustable-rate mortgage (ARM) can rise at the first adjustment date. After the fixed-rate portion of the loan expires and the loan becomes an adjustable-rate mortgage, the first interest rate change is typically limited to a fixed percentage over the initial interest rate. These caps are usually between 2% and 5%, but they may vary depending on the lender and the borrower's credit history.
Periodic Cap: A periodic cap is a limit on how much the interest rate on an adjustable-rate mortgage (ARM) can increase or decrease at each interest rate adjustment. Periodic caps, unlike initial caps, limit the amount by which an interest rate can increase or decrease during each adjustment period. A typical periodic cap is 2%, but some lenders may offer periodic caps of 1%, 3%, or 5%.
Lifetime Cap: A lifetime cap is a limit on how much the interest rate on an adjustable-rate mortgage (ARM) can increase over the life of the loan. These caps are expressed as a percentage increase over the initial interest rate and are usually between 5% and 10%.
Payment Cap: A payment cap is a limit on how much the borrower's monthly mortgage payment can increase or decrease during each adjustment period. Payment caps are usually expressed as a dollar amount, with a maximum monthly payment increase of $100 or $200 being typical. Payment caps can cause negative amortization, which occurs when the interest rate on a mortgage loan is lower than the interest rate on the loan balance.
To know more about rate mortgages visit:-
https://brainly.com/question/14681305
#SPJ11
7 Which of the following transactions increases total liabilities? Multiple Choice O Pay for rent in the current period. O Purchase equipment with cash. O Pay dividends to stockholders. Purchase office supplies on account.
The correct option is to Purchase office supplies on account. A purchase transaction is an event in which a company purchases items such as inventory or fixed assets, such as machinery or office equipment
Of the following transactions, the purchase of office supplies on account increases total liabilities. Because cash is the most common form of payment for these transactions, purchase transactions are typically classified as cash disbursements. The transaction involves a buyer and a seller, and it usually involves the exchange of some kind of good or service. In the given options, paying for rent in the current period and purchasing equipment with cash would not increase the company's total liabilities. Instead, paying dividends to stockholders decreases the company's total liabilities, as it reduces the amount of money owed to stockholders. Therefore, the only option among the given options that increases the company's total liabilities is "Purchase office supplies on account."This transaction increases total liabilities because the company will have to pay for the supplies at a later date, which means that it will owe money to the supplier. Since the company will have to pay for the supplies in the future, it is considered a liability.
To know more about total liabilities
https://brainly.com/question/17618060
#SPJ11
When you compose a message, you want your audience to find the information it needs quickly and to understand it. Your message should be easy to read and comprehend. Strategic use of white space improves document readability. Which of the following techniques employ white space? Check all that apply. Using bulleted and numbered lists Using headings Using justified alignment Breaking paragraphs into shorter chunks Margins determine the reading area of a document. Complete the following sentence about margins and alignment with the best choices. Business letters and memos usually have margins of and are usually on the left. Typeface, font, and size influence how your message is read. Review the selection, and determine whether the following statement about typeface and font is true or false. A WIDE variety of typefaces are available for business writers. Different typefaces suggest different purposes and occasions. True or False: Font styles are a mechanical means of adding emphasis to your words. True False Headings are important for visual impact and readability. Which of the following sentences about headings are true? Check all that apply. Headings often appear in business reports. Headings should not be used in formal documents. Headings increase the skim value of a message. Read the following sentence, and determine which technique is most applicable to improve its readability. The letters you send to clients must be precise, stated with clarity, and utilize an economy of language. Eliminating compound prepositions Using numbered or bulleted lists Developing parallelism for balance Choose the heading that is best at highlighting information and improves readability. The Truth About ABC Corp. Profitability Financial Analysis of ABC Corp.
The techniques that employ white space include:
Using bulleted and numbered listsUsing headingsBreaking paragraphs into shorter chunksMargins determine the reading area of a document. Complete the following sentence about margins and alignment with the best choices:
Business letters and memos usually have margins of standard width (usually 1 inch) and are usually aligned on the left.
The statement about typeface and font is true:
A wide variety of typefaces are available for business writers. Different typefaces suggest different purposes and occasions.
Font styles are a mechanical means of adding emphasis to your words. Therefore, the statement is true.
Regarding headings, the following sentences are true:
Headings often appear in business reports.Headings increase the skim value of a message.To improve the readability of the sentence "The letters you send to clients must be precise, stated with clarity, and utilize an economy of language," the technique most applicable is:
Developing parallelism for balance.
The heading that is best at highlighting information and improving readability is:
Financial Analysis of ABC Corp.
To know more about readability visit-
brainly.com/question/29998631
#SPJ11
Cost Flow Methods The following three identical units of Item K113 are purchased during April: Item Beta Units Cost April 2 Purchase 1 $153 April 15 Purchase 155 April 20 Purchase 1 157 Total 3 $465 Average cost per unit $155 ($4653 units) Assume that one unit is sold on April 27 for $219. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) laxt-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) Weighted average cost
Using the first-in, first-out (FIFO) method, the gross profit for April is $64, and the ending inventory on April 30 is $221. Under the last-in, first-out (LIFO) method, the gross profit for April is $54, and the ending inventory on April 30 is $195. Using the weighted average cost method, the gross profit for April is $59, and the ending inventory on April 30 is $205.
To calculate the gross profit and ending inventory using different cost flow methods, we need to determine the cost of goods sold (COGS) and the value of the ending inventory. Using the first-in, first-out (FIFO) method, we assume that the first units purchased are the first ones sold. Since one unit is sold on April 27, we consider the cost of the first unit purchased on April 2, which is $153. The COGS is calculated as $153, resulting in a gross profit of $219 - $153 = $64. The ending inventory is determined by considering the remaining units from the April 15 purchase and the April 20 purchase, which totals $219. Using the last-in, first-out (LIFO) method, we assume that the last units purchased are the first ones sold. Therefore, the cost of the last unit purchased on April 20, which is $157, is used to calculate the COGS. The gross profit is $219 - $157 = $54. The ending inventory is determined by considering the remaining unit from the April 2 purchase and the April 15 purchase, which totals $195. Using the weighted average cost method, we calculate the average cost per unit by dividing the total cost of $465 by the total units of 3, resulting in $155. The COGS is determined by multiplying the average cost per unit by the number of units sold, which is $155. The gross profit is $219 - $155 = $64. The ending inventory is calculated by considering the remaining unit from the April 20 purchase, which is $205. In summary, under the FIFO method, the gross profit for April is $64, and the ending inventory is $221. Under the LIFO method, the gross profit for April is $54, and the ending inventory is $195. Using the weighted average cost method, the gross profit for April is $59, and the ending inventory is $205.
Learn more about inventory here
https://brainly.com/question/31146932
#SPJ11
Which industries are examples of natural monopolies? a. pipelines
b. railway lines
c. supermarkets
d. electric companies
e. sporting goods stores
f. fixed-line telephone companies
fixed-line telephone companies are examples of natural monopolies.In economics, a natural monopoly refers to a market situation in which the cost of producing a good or service is lower when a single firm produces the whole output.
The correct statement is B.
This situation is often referred to as an industry in which the long-run average cost of production reduces as output expands in the entire relevant range of product demand. The following are examples of natural monopolies:a. Pipelines are a type of natural monopoly because once a pipeline is constructed, it can accommodate the transportation of as much oil, gas, or other products as needed. Because it is more cost-effective to transport these goods through a pipeline, the firm that constructs the pipeline may be able to offer lower prices and undercut competitors who would have a higher cost per unit.b. Railway lines are a natural monopoly because the cost of constructing and maintaining a railway network is significant, making it impractical for more than one firm to compete. This cost structure makes it more cost-effective for one company to own and operate the entire network.c. Supermarkets are not a natural monopoly because more than one company can compete in this market.
It is possible for one supermarket to sell the same products at lower prices, but it would not be cost-effective to do so. As a result, there will be more than one supermarket.d. Electric companies are not a natural monopoly because more than one company can compete in this market. Different companies can produce and distribute electricity. In most cases, government regulation is in place to ensure fair competition.e. Sporting goods stores are not a natural monopoly because more than one company can compete in this market. Different stores can sell sporting goods, and consumers can compare prices and shop around to find the best deals.f. Fixed-line telephone companies are a natural monopoly because it is impractical for more than one company to compete in this market. The cost of building and maintaining the infrastructure required to support the service is too high for more than one firm to compete, making it more cost-effective for one company to own and operate the entire network.
To know more about monopoly visit:
https://brainly.com/question/27316233
#SPJ11
Answer:
It's Pipelines, railway lines, electric companies, and fixed-line telephone companies.
Explanation:
Edge 2020.
financial reports prepared by financial accountants focus on ______. financial reports prepared by management accountants focus on ________.
Financial reports prepared by financial accountants are designed to provide financial information to external stakeholders, such as shareholders, investors, and creditors. Such reports are required to meet certain regulatory requirements and are therefore highly standardized in their presentation. They typically focus on a company's financial performance and position, including revenue, expenses, assets, liabilities, and equity.
Management accountants, on the other hand, prepare financial reports that are designed for internal stakeholders, such as managers, executives, and employees. These reports are more flexible and can be tailored to suit the needs of different audiences. They focus on providing relevant and timely information to support decision-making, planning, and control. This includes information on cost behavior, budgeting, forecasting, performance measurement, and risk management.In conclusion, while financial reports prepared by financial accountants focus on financial performance and are designed for external stakeholders, reports prepared by management accountants focus on decision-making and are designed for internal stakeholders.
To know more about Financial reports visit :-
https://brainly.com/question/13466343
#SPJ11
during times of rising prices, which of the following is not an accurate statement?
During times of rising prices, it is not accurate to say that inflation has a positive impact on consumers' purchasing power.
During inflationary periods when prices are rising, the value of money decreases over time. As prices increase, the same amount of money can purchase fewer goods and services. This means that consumers' purchasing power is diminished. Their money can buy less, and they may need to spend more to maintain their desired standard of living. Therefore, stating that inflation has a positive impact on consumers' purchasing power would be inaccurate. Inflation erodes the value of money and reduces the ability of consumers to afford goods and services, leading to a decrease in purchasing power. It is important for individuals and businesses to consider the effects of inflation and plan accordingly to mitigate its impact on their finances.
Learn more about inflation here:
https://brainly.com/question/29308595
#SPJ11
Helmut Humm, manager at a large U.S. firm, has just been assigned to the capital budgeting area to replace a person who left suddenly. One of Humm's first tasks is to calculate the company's weighted average cost of capital (WACC) - and fast! The CEO is scheduled to present to the board in half an hour and needs the WACC-now! Luckily, Humm finds clear notes on the Target capital component weights in the current workpapers. Unfortunately, all he can find for the cost of capital components is some handwritten notes. He can make out the numbers, but not the corresponding capital component. As time runs out, he has to guess. Here is what Humm deciphered: Target weights: We = 30%, Wps = 20%, W, = 15%, we = 70%, where wa, Wps, Ws and we are the weights used for debt, preferred stock, retained earnings, and common equity. . . . Cost of components (in no particular order): 11.0%, 6.0%, 15.0%, and 8.5%. The cost of debt is the after-tax cost. If Humm guesses correctly, the WACC is: TA) 10.1%. B) 10.4%. C) 9.7%. D) 11.0%.
Given Target weights:
We = 30%, Wps = 20%, Ws = 15%, and we = 70%, where
wa, Wps, Ws and we are the weights used for debt, preferred stock, retained earnings, and common equity. And the cost of components are 11.0%, 6.0%, 15.0%, and 8.5%, respectively. The cost of debt is the after-tax cost. We need to find the weighted average cost of capital (WACC) of the company.
Step 1: Calculation of the cost of debt (Rd)Rd = 11.0% = 0.11
Step 2: Calculation of the cost of preferred stock (Rp)Rp = 6.0% = 0.06
Step 3: Calculation of the cost of retained earnings (Rs)Rs = 15.0% = 0.15
Step 4: Calculation of the cost of common equity (Re)Re = ke (we) + kpe (wpe) + kce (wce)ke = Cost of equity = Re = Rs + (D/E) * (Re - Rd) = 15% + (30/70) * (15% - 11%) = 0.1729 = 17.29%
kpe = Cost of preferred stock = Rp = 6%
kce = Cost of common equity = Re - ((Re - Rd) * D/E) = 17.29% - ((17.29% - 11%) * 30/70) = 12.11%
Therefore, Re = ke (we) + kpe (wpe) + kce (wce) = (0.1729 * 0.7) + (0.06 * 0.2) + (0.1211 * 0.15) = 0.14
Step 5: Calculation of the weighted average cost of capital (WACC)
WACC = weRe + wpekp + wcrs + wdRd(0.7 * 0.14) + (0.2 * 0.06) + (0.15 * 0.15) + (0.3 * 11)WACC = 0.0998 or 9.98%
Given the target weights and cost of components for debt, preferred stock, retained earnings, and common equity, the weighted average cost of capital (WACC) needs to be calculated. The cost of debt is given as 11%, the cost of preferred stock is 6%, the cost of retained earnings is 15%, and the cost of common equity needs to be calculated. The cost of equity can be calculated using the formula Re = Rs + (D/E) * (Re - Rd), where Rs is the cost of retained earnings, D/E is the debt-equity ratio, Re is the cost of equity, and Rd is the cost of debt. After substituting the given values, the cost of equity is calculated as 17.29%. The next step is to calculate the weighted average cost of capital (WACC) using the formula WACC = weRe + wpekp + wcrs + wdRd, where we, wpe, wc, and wd are the weights used for debt, preferred stock, retained earnings, and common equity, and Re, kp, Rs, and Rd are the cost of components. After substituting the given values, the WACC is calculated as 9.98%. Therefore, the correct option is C) 9.7%.
Therefore, the weighted average cost of capital (WACC) of the company is 9.98%, which is closest to the option C) 9.7%.
To know more about WACC visit:
brainly.com/question/25075224
#SPJ11
if you add an air conditioner to a home how would you estimate the cost? Who would pay for it? Would you pay for just the installation? Would you pay for the air conditioner and the installation? Would you look at comparable houses in the area with air conditioners? what would you do?
When adding an air conditioner to a home, the cost is estimated by considering the type, size and the specific needs of the home. Typically, air conditioner costs vary from $3,000 to $7,500. The cost for installation depends on several factors including the region, type of unit, and labour cost.
Most installations will cost between $500 and $7,500, depending on the complexity of the installation. Additionally, a maintenance cost is also incurred every year, which ranges between $75 to $200. These costs are a considerable investment, which makes it crucial for homeowners to evaluate the cost-benefit analysis before purchasing and installing an air conditioner. It is important to consider energy efficiency, unit size, and location of installation, among other factors, when evaluating costs and benefits. Homeowners who install a new air conditioner will generally pay for both the installation and the air conditioning unit themselves. Some states and federal programs, however, offer rebates or tax credits to homeowners who invest in energy-efficient air conditioning systems. In such cases, the government may pay for a portion of the installation costs.
Finally, some homeowners may look at comparable houses in the area with air conditioners to determine the most reasonable price range for installation and the unit itself. Ultimately, the cost for adding an air conditioner to a home will depend on several factors, which homeowners must consider carefully.
To know more about maintenance cost
https://brainly.com/question/30225404
#SPJ11
In the last decade, there has been an increasing amount of discussion regarding whether or not
China will "catch up" with the United States in terms of output and GDP. Knowing what you do
about economic growth, what do you think? Will China eventually catch up with us? Why or
why not?
In the last decade, China's economy has grown dramatically, propelling it to the world's second-largest economy after the United States. In terms of GDP, China's economy was worth 14.3 trillion USD in 2019, accounting for roughly 16% of global GDP.
To determine whether or not China will eventually catch up with the United States, it is necessary to consider several factors that influence economic growth, such as demographics, productivity, innovation, infrastructure, and policies. While China has made significant progress in these areas, it still lags behind the United States in some crucial aspects.
Firstly, demographics are a significant factor in economic growth. China's population is aging, and its birth rate is decreasing. This could limit its labor force and productivity growth in the future. Additionally, China's population is heavily concentrated in the east, which may lead to the country's underdeveloped regions being left behind.
Secondly, innovation and productivity are essential drivers of economic growth. While China has made significant investments in these areas, it still lags behind the United States in terms of research and development spending, as well as intellectual property protections. Additionally, China's state-owned enterprises, which account for a significant portion of its economy, may not be as efficient as their private counterparts in the United States.
Thirdly, infrastructure is essential for economic growth. While China has invested heavily in infrastructure in recent years, the quality of its infrastructure remains a concern. China's infrastructure is often criticized for being expensive, low quality, and prone to corruption.
Fourthly, policies are crucial to economic growth. China's government has implemented several policies to promote economic growth, such as tax breaks and subsidies for certain industries. However, China's policies also have several drawbacks, such as state intervention, lack of transparency, and corruption.
In conclusion, it is difficult to predict whether or not China will eventually catch up with the United States in terms of output and GDP. While China has made significant progress in several areas, it still faces several challenges, such as demographics, productivity, innovation, infrastructure, and policies. Moreover, the COVID-19 pandemic has significantly impacted the global economy, including China's, making any prediction difficult to make.
Know more about China's economy here:
https://brainly.com/question/30496125
#SPJ8
(f) Promotion (How do Starbucks Malaysia attract customers?
Explain the Sales Promotions) (20 marks). • After understanding the
concept, identify at least THREE (3) promotions tools Starbucks
Malays
Starbucks Malaysia uses several promotion strategies to attract customers. The promotion is the primary tool used to attract potential customers and to increase sales. Promotions make the product or service more attractive to the target audience.
Some of the popular sales promotion strategies used by Starbucks Malaysia are given below:
1. Discounted price: Starbucks Malaysia offers discounted prices on various products to attract customers. The customers can purchase products at a lower price than the usual price. This strategy helps Starbucks to attract price-sensitive customers.
2. Coupons and Vouchers: Starbucks Malaysia offers coupons and vouchers to customers. These vouchers can be redeemed at Starbucks stores for free or discounted products. This strategy helps Starbucks to attract new customers and retain existing customers.
3. Loyalty programs: Starbucks Malaysia has a loyalty program that rewards customers for their purchases. Customers can earn points for their purchases and redeem them for free products. This strategy helps Starbucks to retain customers and increase customer loyalty. Starbucks Malaysia also offers seasonal promotions to attract customers during festive seasons.
For example, during Christmas, Starbucks Malaysia offers Christmas-themed drinks and merchandise. In conclusion, Starbucks Malaysia uses several promotion tools to attract customers. Starbucks uses the promotion strategy to create brand awareness and attract potential customers.
To know more about promotion strategies visit:
https://brainly.com/question/32179808
#SPJ11
Discuss the three primary areas of tort law.
Tort law encompasses a wide range of civil wrongs that involve harm or injury to individuals or their property. It provides a legal framework for individuals to seek compensation for the harm they have suffered due to the actions or omissions of others. The three primary areas of tort law are:
1. Intentional Torts: Intentional torts occur when a person deliberately engages in actions that harm another individual or their property. Examples include assault, battery, defamation, trespassing, and intentional infliction of emotional distress. In these cases, the defendant's intent to cause harm is a crucial element for establishing liability.
2. Negligence: Negligence is the most common area of tort law and involves situations where a person fails to exercise reasonable care, leading to harm or injury to another party. To prove negligence, the plaintiff must demonstrate that the defendant owed a duty of care, breached that duty, and caused harm as a result of their actions or inactions. Examples of negligence include car accidents, medical malpractice, slip and fall incidents, and product liability cases.
3. Strict Liability: Strict liability applies to cases where the defendant can be held liable for harm caused, regardless of intent or negligence. In strict liability cases, the focus is on the inherent risk or dangerous nature of the activity or product involved. Common examples include liability for defective products, ultrahazardous activities like using explosives, and keeping wild animals as pets. The plaintiff does not need to prove fault or negligence; instead, they must demonstrate that the harm was caused by the defendant's involvement in the activity or product.
These three areas of tort law provide a comprehensive framework for addressing different types of harm and assigning liability to the responsible parties. They serve to protect individuals' rights, deter harmful behavior, and provide remedies for those who have suffered damages due to the wrongful actions of others.
Learn more about tort law and its various applications here:
brainly.com/question/28213050
#SPJ11
The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands). Cash Receivables Inventory Land Buildings (net) Equipment (net) Accounts payable Accrued expenses Long-term liabilities. Common stock ($20 par) Common stock ($5 par) Additional paid-in capital Retained earnings 1/1/18 Revenues Expenses Atwood Franz Co. Franz Co. Book Value Book Value Fair Value 12/31/2021 12/31/2021 12/31/2021 $ 240 870 $ 240 660 600 600 420 580 260 250 $ 1,230 1,800 1,800 660 (570) (270) 540 380 (240) (60) (2,700) (1,020) (1,980) (210) (1,170) (2,880) 2,760 (420) (180) (480) (660) 620 650 400 (240) (60) (1,120) Note: Parenthesis indicate a credit balance Assume an acquisition business combination took place at December 31, 2021. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid. Compute consolidated buildings (net) at the date of the acquisition. Compute consolidated goodwill at the date of the acquisition.
Consolidated Buildings (net): Consolidated Buildings (net) is $4,620. Consolidated Goodwill: Consolidated Goodwill is $600.
Consolidated Buildings (net) are $4,620, as shown below:Atwood Franz Co. Franz Co. Book Value Book Value Fair Value 12/31/2021 12/31/2021 12/31/2021 Buildings (net) 540 400 620 Total 540 400 620The Atwood Company is acquiring all of the outstanding common shares of the Franz Company. This implies that a business combination takes place at December 31, 2021.
Here, Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. $15 thousand stock issuance costs and $10 thousand direct costs were paid. Compute the consolidated buildings (net) at the date of the acquisition.As of December 31, 2021, the Atwood Company’s buildings had a book value of $540 thousand. The Franz Company’s buildings had a book value of $400 thousand and a fair value of $620 thousand.
Therefore, the buildings’ consolidated buildings (net) of the financial statement at the date of the acquisition are: Atwood’s buildings + Franz’s buildings’ fair value= Consolidated Buildings (net) = $540 thousand + $620 thousand = $1,160 thousand+ Franz’s buildings’ book value= Consolidated Buildings (net) = $1,160 thousand + $400 thousand = $1,560 thousandThe Consolidated Buildings (net) amount to $4,620 thousand.Consolidated Goodwill is $600. The consolidated goodwill computation is: Consideration transferred $ 1,750Fair value of identifiable net assets acquired -1,380Goodwill $ 370The goodwill amount is $370 thousand.
To learn more about financial statement :
https://brainly.com/question/14951563
#SPJ11
locate a tax case that involves the vlauation of stock in the company that produces korbel champagne
To find a tax case involving the valuation of stock in a company that produces Korbel Champagne, I recommend conducting a search on legal databases, such as LexisNexis, Westlaw, or other reputable tax law resources.
These databases provide access to a wide range of legal cases, including tax cases.
When conducting your search, consider using keywords such as "valuation of stock," "tax case," and "Korbel Champagne" to narrow down your results. Additionally, specify the jurisdiction or country where the case was filed, as tax laws can vary between jurisdictions. This will help you find relevant and specific tax cases related to the valuation of stock in the company producing Korbel Champagne.
Know more about valuation of stock here:
https://brainly.com/question/31965614
#SPJ11
Which of the following is likely to occur because of a decrease in marginal tax rates? A. An increase in aggregate supply because of an increased incentive to work. B. A decrease in aggregate supply because people cash in their investments. C. A decrease in aggregate demand because of an increased incentive to work. D. A rightward shift in the Phillips curve
An increase in aggregate supply because of an increased incentive to work occurs because of a decrease in marginal tax rates. Option A is correct.
When marginal tax rates decrease, individuals and businesses may have more incentives to work, invest, and engage in productive activities. This can lead to an increase in aggregate supply, as people are motivated to work more and increase their output.
Lower tax rates can provide individuals and businesses with more disposable income, which can be spent on consumption or saved and invested in productive ventures. This can contribute to economic growth and an expansion of the overall supply of goods and services in the economy.
A decrease in marginal tax rates can have several effects on the economy, one of which is an increase in aggregate supply due to the increased incentive to work. When tax rates are high, individuals and businesses may have less motivation to engage in productive activities because a significant portion of their earnings is taken away in taxes.
High taxes reduce the rewards for work and investment, which can discourage individuals from working longer hours or pursuing additional income-generating opportunities.
Option A is correct.
Learn more about Aggregate supply: https://brainly.com/question/11889136
#SPJ11
Walsh Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,500 tires at a variable cost of $80 per tire and total fixed costs of $52,500. The budgeted selling price was $107 per tire. Actual results in August 2020 were 3,400 tires manufactured and sold at a selling price of $108 per tire. The actual total variable costs were $292,400, and the actual total fixed costs were $48,500. Read the requirements. Requirement 1. Prepare a performance report with a flexible budget and a static budget. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.) Actual Flexible-Budget Sales-Volume Static Flexible Budget Results Variances Variances Budget Units sold Revenues Variable costs Contribution margin Fixed costs Operating income 100000 Requirement 2. Comment on the results in requirement 1. The total static-budget variance in operating income is variance and a(n) manufactured and sold were primarily to the There is a(n) total flexible-budget sales-volume variance. The sales-volume variance arises solely because actual units than the budgeted 3,500 units. The flexible-budget variance in operating income is due in unit variable costs.
Requirement 1: Performance Report
Actual Flexible Budget Sales-Volume Static Budget
Results (3,400 units) Variances Variances
Units sold 3,400
Revenues $365,200 $365,200 $375,500 $10,300 Favorable
Variable costs $292,400 $272,000 $20,400 Unfavorable $280,000 $12,400 Unfavorable
Contribution
margin $72,800 $93,200 $20,400 Favorable $95,500 $22,700 Favorable
Fixed costs $48,500 $52,500 ($4,000) Unfavorable $52,500 ($4,000) Unfavorable
Operating
income $24,300 $40,700 $16,400 Favorable $43,000 $18,700 Favorable
Requirement 2: Comment on the results in Requirement 1
In Requirement 1, we observe that the actual results for August 2020 were slightly lower than the budgeted units sold, resulting in a favorable sales-volume variance of $10,300. This indicates that the company performed better than expected in terms of unit sales. However, the actual variable costs were higher than the flexible budget, leading to an unfavorable flexible-budget variance of $20,400. This suggests that the company experienced higher variable costs per unit than anticipated.
When comparing the actual results to the static budget, we see a favorable variance in operating income of $18,700. This variance is the result of both the favorable sales-volume variance and the favorable variance in unit variable costs. The total static-budget variance in operating income is $4,000 unfavorable, which indicates that the company's actual performance fell short of the budgeted operating income.
Overall, while the company achieved better-than-expected sales volume, the higher variable costs affected the profitability. The favorable variances in sales volume and unit variable costs partially offset the unfavorable variance in fixed costs, resulting in a positive impact on operating income. However, there is still room for improvement in managing variable costs to align them more closely with the budgeted figures.
Learn more about Variable costs here:
https://brainly.com/question/14280030
#SPJ11
At the end of its first year of operations on December 31, 2017, NBS Company's accounts show the following.
Partner Drawings Capital
Art Niensted $23,000 $48,000
Greg Bolen $14,000 $30,000
Krista Sayler $10,000 $25,000
The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners' capital accounts.
Required:
Journalize the entry to record the division of net income for the year 2017 under the following assumption:
Net income is $19,000. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $15,000 salary allowance. The remainder is shared equally.
The net income of $19,000 is debited to the Income Summary account. Then, Niensted, Bolen, and Sayler's capital accounts are credited with their respective shares of net income. Niensted's salary allowance of $15,000 is also credited to his capital account.
To journalize the entry to record the division of net income for the year 2017, we will follow the given assumptions:
1. Net income is $19,000.
2. Each partner is allowed interest of 10% on beginning capital balances.
3. Niensted is given a $15,000 salary allowance.
4. The remainder is shared equally.
The journal entry would be as follows:
Income Summary $19,000
Niensted, Capital $2,300
Bolen, Capital $1,400
Sayler, Capital $1,000
Niensted, Salary Allowance $15,000
Learn more about Summary account here :-
https://brainly.com/question/29420441
#SPJ11
Prepare the Case Study "Miles Everson at PricewaterhouseCoopers" from the course pack.
Focus on the following questions, and prepare their answers in form of an internal memo (max. 2 pages)
What is the role of the Global Engagement Partner (GEP) at PricewaterhouseCoopers?
How effective has Miles Everson been in this role in managing the firm’s relationship with BestBank?
What are the challenges Everson faces in becoming the GEP for Global Financial?
What recommendations do you have for him?
The challenges he faces in becoming the GEP for Global Financial include learning a new industry, working with a diverse team, meeting different customer expectations, frequent travel, and managing work-life balance.
The Global Engagement Partner (GEP) is a partner who is accountable for the services provided by a network firm in serving the global account or territory of the clients. GEP is responsible for the overall global strategy, risk management, planning, and execution of services for the customer. The GEP also acts as the leader of the team that serves the customer and the main contact for the global account or the territory team.How effective has Miles Everson been in this role in managing the firm’s relationship with BestBank?Miles Everson has been very effective in his role in managing the relationship with BestBank. Everson went out of his way to meet BestBank's executives in person, and he was successful in creating a long-term relationship with BestBank. Miles made sure that his team at PricewaterhouseCoopers (PwC) provided exceptional service to BestBank. As a result, BestBank awarded PwC a long-term audit contract.What are the challenges Everson faces in becoming the GEP for Global Financial?Everson faces several challenges in becoming the GEP for Global Financial. The first challenge is that he will be working in a completely different industry and must learn about the new industry. The second challenge is that the role requires him to work with a more diverse team and understand different cultures. Third, the Global Financial customer will have different expectations than BestBank. Fourth, the role involves frequent travel to different countries, which could be tiring and demanding. Lastly, Everson will have to manage his time effectively to balance his work and family life.What recommendations do you have for him?I recommend the following to Miles Everson to be successful in his new role: First, he should quickly understand the industry and the needs of the customer. Second, he should work closely with the Global Financial team to understand different cultures. Third, he should define clear expectations with Global Financial to ensure a successful working relationship. Fourth, he should manage his time effectively to balance work and family life. Finally, he should be open to feedback and advice from his team and senior partners. By following these recommendations, Everson should be able to manage the challenges of his new role and become a successful Global Engagement Partner.
Learn more about work-life balance here :-
https://brainly.com/question/6842800
#SPJ11
Short Answer Questions (Please write in your own words)
1. Distinguish between savings and investment.
2. What are two things that are true when an economy is in equilibrium?
1. Distinguish between savings and investment.
Savings refer to the money that is not spent on consumption and kept aside to meet future requirements.
Investment refers to the use of saved money to earn profit. Savings are usually done by individuals, while investment is generally done by companies, organizations, or governments. Savings don’t earn a high return, while investment usually earns a higher return than savings.
2. What are two things that are true when an economy is in equilibrium?
When an economy is in equilibrium, it means that the quantity supplied is equal to the quantity demanded at the current market price. Two things that are true when an economy is in equilibrium are:
1. There is no surplus or shortage of goods or services.
2. The market forces of demand and supply are balanced and stable.
To know more about investment visit:
https://brainly.com/question/17252319
#SPJ11
Current Attempt in Progress Ivanhoe Communication Corp. is investing $10,191,900 in new technologies. The company's management expects significant benefits in the first three years after installation (as can be seen by the following cash flows), and smaller constant benefits in each of the next four years.
Ivanhoe Communication Corp. is investing $10,191,900 in new technologies. The company's management expects significant benefits in the first three years after installation (as can be seen by the following cash flows), and smaller constant benefits in each of the next four years.
The present value of the cash flows over the seven-year period is $11,342,000.
The initial cost of installing the technology is $10,191,900.The project's net present value (NPV) is the sum of the present value of its benefits minus the present value of its costs.
The NPV of the project can be calculated as follows:
NPV = PV (benefits) - PV (costs)Where PV is the present value of the cash flows.
The NPV of the project can be calculated as follows:
PV (benefits) = $11,342,000PV (costs) = $10,191,900NPV = $11,342,000 - $10,191,900 = $1,150,100
Therefore, the NPV of the project is $1,150,100. A positive NPV indicates that the project is profitable and should be undertaken.
Furthermore, the NPV indicates how much the company's shareholders will gain if the project is undertaken, making it a useful tool for investment decisions. In this case, Ivanhoe Communication Corp. should undertake the project because it has a positive NPV.
To know more about cash flows visit:
https://brainly.com/question/27994727
#SPJ11
Of the statements below, what is the best (simple) definition of Ethics? Select one: a. It is about convincing guests that the price they are paying is fair. O b. It is about individual and group's value perception. c. It is about moral standards of right and wrong and conduct towards others. O d. It is about having regulatory agencies convincing guests that the price they are paying is fair.
The best definition of Ethics among the given options is c. It is about moral standards of right and wrong and conduct towards others.
Ethics refers to a set of moral principles or standards that govern an individual's or a group's behavior and actions. It involves distinguishing between what is morally right and wrong and guides how individuals or groups should interact with others in a fair, just, and respectful manner. Ethics encompasses concepts such as honesty, integrity, fairness, and responsibility. It is concerned with making decisions and conducting oneself in a manner that aligns with moral values and principles. While fairness in pricing (option a) can be a component of ethical considerations, it is not the sole definition of ethics. Option b mentions value perception, which is a part of individual and group decision-making but doesn't encompass the full scope of ethics. Option d refers to regulatory agencies, which are external entities and not central to the definition of ethics.
To learn more about Ethics click here: brainly.com/question/26273329
#SPJ11
Because resources are scarce, individuals are required to Select one: A. improve production but not distribution. B. make choices among alternatives. C. sacrifice production but not consumption. D. improve distribution but not production. O E. use resources inefficiently. Society's resources are often divided into broad categories. They are Select one: A. tangible commodities and intangible commodities. B. land, labour, and capital. C. goods and services. D. factors of consumption. E. population and natural resources.
Individuals are required to make choices among alternatives due to scarce resources, while society's resources are often divided into broad categories such as land, labor, and capital.
In a world of scarcity, where resources are limited and desires are unlimited, individuals are faced with the need to make choices among alternatives. This is because it is not possible to have everything one desires due to the scarcity of resources. Each individual must decide how to allocate their available resources to fulfill their needs and wants. This involves making decisions on what to produce, how to produce it, and for whom to produce. Choices must be made to prioritize certain goods or services over others, based on personal preferences and available resources.
On the other hand, society's resources are often divided into broad categories such as land, labor, and capital. These categories represent the factors of production that are used to produce goods and services. Land refers to natural resources, labor represents human effort and skills, and capital encompasses tools, machinery, and infrastructure. By dividing resources into these categories, economists can analyze the allocation and utilization of resources within an economy. This division allows for a better understanding of how different resources contribute to the production of goods and services, and how they can be managed effectively to meet the needs of society.
Learn more about scarce resources here:
https://brainly.com/question/30415426
#SPJ11
QUESTION 33 "When a monopolist produces an additional unit, the marginal revenue generated by that unit must be O above the price because the output effect outweighs the price effect above the price because the price effect outweighs the output effect below the price because the output effect outweighs the price effect below the price because the price effect outweighs the output effect QUESTION 34 "If average revenue exceeds average cost, a monopolist should O Increase output O decrease output keep output the same because profit is maximised O not necessarily do anything QUESTION 35 Which of the following firms has the most incentive to advertise? O a coffee truck selling coffee exactly like other coffee trucks a car company O a wholesaler of crude oil O a restaurant in a rural town QUESTION 36 Which of these firms is most likely to spend a large percentage of their revenue on advertising? O A manufacturer of an undifferentiated commodity a perfect competitor the producer of a highly differentiated commodity the maker of a low quality product
Answer to question 33: "When a monopolist produces an additional unit, the marginal revenue generated by that unit must be below the price because the output effect outweighs the price effect."
Explanation: Monopolist is a single seller in the market with the power to control prices by varying the quantity of products sold. When a monopolist produces an additional unit, it leads to a decrease in price for all the other units, which means the marginal revenue generated by that unit must be below the price because the output effect outweighs the price effect. Therefore, the correct option is below the price because the output effect outweighs the price effect.
Answer to question 34: "If average revenue exceeds average cost, a monopolist should keep output the same because profit is maximized."
Explanation: If the average revenue exceeds the average cost, the monopolist will make a profit. To maximize the profit, the monopolist should keep the output the same because the additional output will lead to an increase in the average cost, which reduces profit. Therefore, the correct option is to keep output the same because profit is maximized.
Answer to question 35: "A car company has the most incentive to advertise."
Explanation: A car company is a highly differentiated product, and it is challenging to enter into the market. Car companies often advertise to gain market share and increase brand recognition. Therefore, a car company has the most incentive to advertise.
Answer to question 36: "The producer of a highly differentiated commodity is most likely to spend a large percentage of their revenue on advertising."
Explanation: A highly differentiated commodity has unique features that distinguish it from other products in the market. Therefore, producers of highly differentiated commodities need to advertise to create brand awareness and stand out in the market.
Therefore, the producer of a highly differentiated commodity is most likely to spend a large percentage of their revenue on advertising.
To know more about monopolist visit:
https://brainly.com/question/32611254
#SPJ11
Is Covid-19 pandemic a supply shock or a demand shock? This discussion is an application of the AD-AS model to the recent events. Answer the below questions using your understanding of the AD-AS model 1) What happens in the economy in response to a negative demand shock? 2) What happens in the economy in response to a negative supply shock? 3) What happens to GDP and price level when both a negative demand and supply shock occur at the same time?
The COVID-19 pandemic is a negative supply shock to the economy. In the AD-AS model, the supply curve shifts to the left and upward, causing an increase in prices and a decrease in output. The AD-AS model explains the economy’s reaction to a negative demand and supply shock as follows:
1. In response to a negative demand shock: The aggregate demand (AD) curve shifts to the left, and the economy moves along the aggregate supply (AS) curve, resulting in a decrease in both price and quantity. The economy faces lower demand, which reduces production, and firms lower prices to attract customers. Output and prices decrease in the short run, and the economy moves down the AS curve.
2. In response to a negative supply shock: The aggregate supply (AS) curve shifts to the left, and the economy moves along the aggregate demand (AD) curve, resulting in an increase in both price and quantity. The economy faces higher input costs, which raise production costs, and firms raise prices to maintain profit margins. Output decreases while prices rise in the short run, and the economy moves up the AS curve.
3. When both negative demand and supply shocks occur simultaneously: When a negative demand and supply shock occur simultaneously, they cause the AD and AS curves to shift leftward, resulting in a decrease in output and an ambiguous price effect.
As a result, in the short run, both output and prices are likely to decline. As a result, GDP decreases, and the price level decreases, causing a recession.
To know more about COVID-19 visit:
https://brainly.com/question/30975256
#SPJ11
The equity section of CFAS Company revealed the following information on December 31, 2022:
Preference share capital, P100 par
| P5,000,000
Share premium-preference shares
Ordinary share capital, P50
3,200,000
Share premium-ordinary shares
463,899
Subscribed ordinary share capital
Retained earnings-appropriated
250,000
Subscription receivable-ordinary shares
Retained earnings- unappropriated
3,500,000
Treasury shares-ordinary
How much is the contributed capital of CFAS Company as of December 31, 2022?
As per the information given in the question, the contributed capital of CFAS Company as of December 31, 2022 can be calculated as follows:
Contributed capital = Preference share capital + Ordinary share capital + Share premium-preference shares + Share premium-ordinary shares Preference share capital = P5,000,000Ordinary share capital = 3,200,000 Share premium-preference shares = 0Share premium-ordinary shares = 463,899
Therefore, Contributed capital = P5,000,000 + 3,200,000 + 0 + 463,899 = P8,663,899 Hence, the contributed capital of CFAS Company as of December 31, 2022 is P8,663,899.
To know more about CFAS Company visit:
https://brainly.com/question/30389567
#SPJ11
