Answer:
The answer is below
Explanation
1. There are various desirable personal characteristics, attributes, lifestyles, skills, and traits of a prospective entrepreneur, some of them include
Competency,
Hardworking,
Risk-taking
Innovation
Perception
2. These characteristics or attributes of an entrepreneur are important because they guide and lead the entrepreneur in making the right decision. It also helps entrepreneurs to solve issues like conflicts, hire and fire where necessary, etc.
Select the behavior related to dress or posture that will be most effective in helping Shawna accomplish her goals.
a. Shawna clasps her hands behind her back so that the audience cannot see them shaking, and to project confidence.
b. Shawna has her formal gown dry-cleaned so that it will be ready for her to wear at the event.
c. Shawna crosses her arms to appear powerful and in charge.
d. Shawna wears a hard hat and kitchen apron to emphasize the hard work done by volunteers.
Answer: b. Shawna has her formal gown dry-cleaned so that it will be ready for her to wear at the event
Explanation:
The behavior that's related to dress or posture that will be most effective in helping Shawna accomplish her goals is that Shawna has her formal gown dry-cleaned so that it will be ready for her to wear at the event.
Unlike other options such as her clasping her hands behind her back so that the audience cannot see them shaking, and to project confidence and her crossing her arms to appear powerful and in charge, having her dress ready for the event is appropriate as it will help achieve her goal
Therefore, the correct option is B.
Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. Right after he achieves the utility-maximizing level of consumption of the two goods, the price of peanut butter falls. After he adjusts to this event, the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
Answer:
The marginal utility of peanut butter goes down and that of ice cream goes up.
Explanation:
The substitution effect states that when the price of a product falls, it will lead to a rise in the quantity demanded of the product as buyers will buy more of the product that is now relatively cheaper.
And as more of a good is bought, its marginal utility falls. And as less of a product is bought, its marginal utility increases.
Based on the above explanation therefore, the marginal utility of peanut butter goes down and that of ice cream goes up after Kawamura adjusts to the event.
This is because as more of peanut butter is bought due to the fall in its price, its marginal utility falls. And as less of ice cream is bought as it is now relatively more expensive, its marginal utility increases.
how did you find the fv factor values
Answer:
v5th factor in solve......
In 20X4, Bosh Corporation had income of $60,000 using absorption costing. Beginning and ending inventories were 13,000 and 8,000 units, respectively. The fixed manufacturing overhead cost was $4.00 per unit. What was the net income using direct/variable costing
Answer:
Net income under variable costing $80,000
Explanation:
The computation of the net income using direct/variable costing is shown below:
Net income under absorption costing $60,000
Add fixed cost under applied $20,000
Net income under variable costing $80,000
Working
Beginning inventory 13000
Less ending inventory -8000
Decrease in inventory 5000
Now under applied inventory $20,000
Assume that an investor purchased a put option on BP with an exercise price of $1.900 for $0.0215 per unit. There are 31,250 units in a GBP options contract. At the time of the option expiration date, the spot price for GBP was $1.885. What was the net profit/loss on this option to the investor?
a. $203.125
b. $671.8750
c. $468.75
d. $1,140.625
Answer:
a. $203.125
Explanation:
Calculation to determine the net profit/loss on this option to the investor
Net profit/loss=((1.900 - 1.885) - 0.0215)(31,250)
Net profit/loss=(0.015-0.0215)*31,250
Net profit/loss=0.0065*31,250
Net profit/loss=$203.125
Therefore the net profit/loss on this option to the investor will be $203.125
Installing an automated production system costing $300,000 is initially expected to save Zia Corporation $52,000 in expenses annually. If the system needs $7,500 in operating and maintenance costs each year and has a salvage value of $30,000 at year 10, what is the IRR of this system
Answer:
8.87%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-300,000
Cash flow each year from year 1 to 9 = $52,000 - $7,500 = $44500
Cash flow in year 10 = $44500 + $30,000 = $74500
IRR = 8.87%
To determine the value of IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
While on a trip to South Africa, Madison was impressed with the colorful woven outdoor placemats, floor mats, chair cushions, and umbrellas that local artisans were weaving. Upon returning to the United States, she was confident that U.S. consumers would be as intrigued by these accessories as she was. Madison decided to explore the possibility of starting an import business to bring these products to the United States. Which statement seems to be good advice for Madison?
Answer: A) Learn from others who import goods from abroad, and particular from Africa.
Explanation:
Nothing beats experience when it comes to acquiring knowledge so if Madison wants to acquire the knowledge necessary to bring the goods she saw in South Africa to the U.S., she should go to people who have experience in the matter and find out what they know.
This will giver her insight on the amount of money she needs to startup with as well as what business status she should have. They will also give her insight into cost cutting measures to enable her import with more efficiency and make more profit.
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $219,017 and average assets of $1,413,720. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $36,220 more than under FIFO, and its average assets would have been $31,640 less than under FIFO.
Required:
Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO).
Answer:
a) Under the FIFO method:-
ROI = 15.49%.
Under LIFO method:-
ROI = 13.2%
Explanation:
ROI = Net Income * 100 / Avverage assets.
a) Under the FIFO method
[tex]ROI= \frac{219017*100}{1413720} \\ROI = 15.49[/tex]
ROI = 15.49%.
Under LIFO method
[tex]ROI= \frac{182797*100}{1382080} \\ROI=13.2%[/tex]
ROI = 13.2%
Net income Under LIFO= Net income under FIFO-Increased cost of goods sold
= $219017-$36,220= $182797.
Average assets under LIFO= Average assets under FIFO-Average assets that are less under LIFO
= $1413720 - $31,640= $1382080.
Complete each statement with the term that correctly defines each platform strategy advantage.
Platform businesses tend to frequently ____________ pipeline businesses.
Platforms scale more efficiently than pipelines by eliminating __________
Platform businesses _________ digital technology can grow much faster
Answer:
Note See full and organized question in the attached picture below
1. Platform businesses tend to frequently outperform pipeline businesses.
2. Platforms scale more efficiently than pipelines by eliminating gatekeepers.
3. Platform businesses leveraging digital technology can grow much faster.
4. Platforms unlock new sources of value creation and supply.
5. Feedback loops from consumers to the producers allow platforms to fine-tune their offerings and to benefit from big data analytics.
Hyundai's Assurance program empathized with American consumers during uncertain financial times, helping to create a psychological and emotional:_______
a. brand association.
b. differentiation strategy.
c. consumer response.
d. marketing campaign.
In the simple Keynesian model, there are three simplifying assumptions. Among these assumptions is: __________
a. the price level is flexible no foreign sector
b. the price level is constant until
c. the economy reaches its full-employment level
d. the money supply always rises b and c
Answer: B and C
No foreign sector
The price level is constant until the economy reaches its full-employment level
Explanation:
Keynesian economics refers to the theory that relates to total spending in the economy and how it affects output, Inflation and employment in the economy.
Assumptions of the Keynesian Model include:
• No foreign sector as economy is closed.
• Demand creates its own supply.
• The aggregate price level is fixed. ...
• The price level is constant until the economy reaches its full-employment level
• No retained earnings etc.
The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.
Work in Process Inventory
Beginning WIP 5,200
Direct materials 47,800
Direct labor 30,300
Applied Overhead 16,500
Total Manufacturing Costs 99,800
To Finished Goods ?
Ending WIP 10,300
The cost of units transferred to finished goods is:_________
Answer:
the cost of units transferred to the finished goods is $89,500
Explanation:
The computation of the cost of units transferred to the finished goods is shown below:
Cost of units transferred to finished goods
= Beginning WIP + Direct materials+ Direct labour + Applied overheads-Ending WIP
= $5,200 + $47,800 + $30,300 + $16,500 - $10,300
= $89,500
Hence, the cost of units transferred to the finished goods is $89,500
Q2. With the help of book please elaborate What is the difference between a corporate strategy and a competitive strategy? Give three examples of each. (Words limit up to 150)
Answer and Explanation:
Competitive and corporate strategy are very important for the success and good management of a business. Competitive strategy is one that allows a company to promote elements capable of making it different from its competitors. Examples of competitive strategy are offering lower prices, higher quality products and negotiation between customers.
Corporate strategy, on the other hand, is one that allows the company to generate elements that will increase its profit and strengthen its capacity to be more competitive. Examples of this type of strategy are the acquisition of subsidiary companies, the merger of competing companies and the restructuring of the company.
The allowable increase for a constraint is Group of answer choices how much resource to use to get the optimal solution. the amount by which the resource can increase given shadow price. how many more units of resource to purchase to maximize profits. the amount by which the constraint coefficient can increase without changing the final optimal value.
Answer: the amount by which the resource can increase given shadow price.
Explanation:
The allowable increase refers to the amount by which the coefficient of the objective function can be increased without bringing about a change in the optimal basis.
The allowable increase for a constraint is the amount by which the resource can increase given shadow price. Therefore, the correct option is B.
Holt Enterprises recently paid a dividend, D0, of $3.50. It expects to have nonconstant growth of 19% for 2 years followed by a constant rate of 10% thereafter. The firm's required return is 13%. How far away is the horizon date? The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. The terminal, or horizon, date is infinity since common stocks do not have a maturity date.
Answer:
Holt Enterprises
The terminal, or horizon, date is:
the date when the growth rate becomes constant. This occurs at the end of Year 2.
Explanation:
a) Recent dividend, DO = $3.50
Expected non-constant growth = 19%
Period of non-constant growth = 2 years
Expected constant rate of growth = 10% after 2 years of non-constant growth
The firm's required return rate = 13%
b) The terminal or horizon date is, therefore, from the end of year 2 or beginning of year 3, when constant growth sets in with the Holt stock.
At the horizon date the dividend, D3, must have grown to $5.42 approx.
Then, the horizon value is given by the formula = D3 / required rate - growth rate
= 5.42 / 0.13 - 0.01
= 5.42 / 0.03
= $181
Workman Software has 11 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 108.3 percent of par. a. What is the current yield on the bonds
Answer:
10.16%
Explanation:
Coupon amount = 11% * 1000
Coupon amount = $110
Price of bond = 1000*108.3%
Price of bond = $1,083
Current yield = Coupon amount / Price of bond
Current yield = $110 / $1,083
Current yield = 0.1015697
Current yield = 10.16%
So, the current yield on the bonds is 10.16%.
ABC Company operates two divisions with the following operating information for the month of May:
Division 1: sales, $128,000; operating income, $39,680; operating assets, $320,000.
Division 2: sales, $84,000; operating income, $42,336; operating assets, $420,000.
ABC Company expects a minimum return of 10% should be earned from all investments.
Required:
Prepare ABC Company’s ROI analysis using the DuPont model for each division.
Common stock holders: Group of answer choices have one vote in the election of how the company operates. are last in line to receive income. are guaranteed to get paid when the company fails. receive income before preferred stockholders.
Answer:
are last in line to receive income.
Explanation:
Common stock holders are referred to as the owners of the company. They own shares that gives them the right to vote in a company's general meeting, receive dividends, and they have the right to get newly issued shares in the company before others.
However they are also called unsecured creditors of the company because when the business makes income they are the last in line to receive dividends if any remains.
Also in the case of bankruptcy preference share holders and other creditors are paid first. Common share holders are paid last.
Periodic inventory by three methods The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below:
Number
Date Transaction of Units Per Unit Total
Jan. 1 Inventory 7,500 $75.00 10
Purchase 85.00 22,500 11,250
28 Sale $562,500 1,912,500 1,687,500
562,500 150.00 30 Sale 3,750 150.00
Feb. 5 Sale 1,500 150.00 225,000
10 Purchase 54,000 87.50 4,725,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar. 5 Purchase 45,000 89.50 4,027,500
14 Sale 30,000 160.00 4,800,000
25 Purchase 7,500 90.00 675,000
30 Sale 26,250 160.00 4,200,000
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Answer:
1. We have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. We have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. We have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. We have:
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
Explanation:
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Note: See part 1 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
From the part 1 of the attached excel file, we have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Note: See part 2 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
From the part 2 of the attached excel file, we have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
Note: See part 3 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the weighted average cost method and the periodic inventory system.
From the part 3 of the attached excel file, we have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
Everything else equal, if the United States runs a large foreign trade deficit, the financing of the deficit will: a. increase government subsidies. b. increase interest rates. c. decrease sales of Treasury securities. d. increase the money supply. e. decrease tax revenue.
Answer: decrease tax revenue
Explanation:
A trade deficit occurs when the import of a country's is more than the export of the country for a given period of time period. The main cause is when there's an imbalance between the savings of a country and the investment rates.
In this case, financing the deficit will lead to the reduction in the tax revenue. When part of the tax revenue gotten from economic agents are used in the finance of the deficit, there'll be a reduction in the tax revenue.
Your broker suggests that the stock of DUH is a good purchase at $25. You do an analysis of the firm, determining that the recent $1.40 dividend and earnings should continue to grow indefinitely at 5 percent annually. The firm's beta coefficient is 1.3, and the yield on Treasury bills is 1.4 percent. If you expect the market to earn a return of 8 percent, what is your valuation of DUH
Answer:
The correct answer is "$28.03".
Explanation:
The given values are:
Good purchase,
= $25
Dividend,
= $1.40
Annually earning,
= 5%
Beta coefficient,
= 1.3
Treasury bills,
= 1.4%
Now,
= [tex]1.4+1.34\times 8-1.4[/tex]
= [tex]1.34\times 8[/tex]
= [tex]10.244[/tex] (%)
hence,
The fair value will be:
= [tex]1.4\times \frac{1.05}{.10244}-.05[/tex]
= [tex]28.03[/tex]
Absolutely, the proposal including its brokerage must be adopted because as fair market value was almost $25.
The following statements describe why profits for firms in a perfectly competitive industry tend to vanish in the long run. Select the explanation that most accurately reflects this scenario?
A) Firms try to increase supply to cover their costs if they experience losses, and this leads to zero profits.
B) Firms are unable to generate revenue over time because the demand for products drops.
C) When other perfectly competitive firms see an opportunity to earn profits and enter the market prices drop.
D) When other perfectly competitive firms see an opportunity to earn profits and enter the market, prices rise.
Answer:
The correct answer is the option C: When other perfectly competitive firms see an opportunity to earn profits and enter the market the prices drop.
Explanation:
To begin with, in the microeconomics theory the perfect competitive market is characterized by the fact that there a lot of companies that sell an homogenous product and that are price takers of the market itself. So therefore that the only big difference in the firms are the costs and the prices that they have. Moreover, in the long run the firms are obtaining great profits so that leads to the enter of another more companies to the market and the supply rises the prices will have to go low so that will implicate as well a decrease in the prices of every company that now works in that industry.
3. Assume that on January 2, 2022, the copyrighted item was impaired in its ability to continue to produce strong revenues. The other intangible assets were not affected. Starn estimated that the copyright would be able to produce future cash flows of $22,100. The fair value of the copyright was determined to be $21,100. Compute the amount, if any, of the impairment loss to be recorded.
Answer:
The amount of the impairment loss to be recorded is $6,800.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
On January 1, 2020, Starn Tool & Manufacturing Company purchased a copyright for $31,000 cash. It is estimated that the copyrighted item will have no value by the end of 10 years.
Assume that on January 2, 2022, the copyrighted item was impaired in its ability to continue to produce strong revenues. The other intangible assets were not affected. Starn estimated that the copyright would be able to produce future cash flows of $22,100. The fair value of the copyright was determined to be $21,100. Compute the amount, if any, of the impairment loss to be recorded.
The explanation of the answer is now provided as follows:
Amortization expenses for 2020 = Annual amortization expense = Copyright cost / Estimated useful life of the copyright = $31,000 / 10 = $3,100
Book value of copyright on January 2, 2022 = Copyright cost - Amortization expenses for 2020 = $31,000 - $3,100 = $27,900
Copyright fair value = $21,100
Impairment loss = Book value of copyright on January 2, 2022 - Copyright fair value = $27,900 - $21,100 = $6,800
Therefore, the amount of the impairment loss to be recorded is $6,800.
A state is conducting an examination of mortgage loan originator Basil Thyme. During the examination, the agency is authorized to do all of the following, except:a. Administer oaths or affirmationsb. Control access to Basil’s officec. Subpoena witnessesd. Require production of relevant documents
Answer: B. Control access to Basil’s office.
Explanation:
During the conduct of the examination of mortgage loan originator Basil Thyme, the agency is authorized to administer oaths or affirmations, subpoena witnesses and require production of relevant documents.
The agency cannot control the access to Basil's office. It can only control access to any records or documents of an individual whim is under investigation.
Your sister just deposited $5,500 into an investment account. She believes that she will earn an annual return of 8.8 percent for the next 6 years. You believe that you will only be able to earn an annual return of 8 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 6 years
Answer:
$5749.02
Explanation:
The first step is to determine the future value of my sister's deposit
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
5500 (1.088)^6 = $9122.97
the second step is to determine the present value of $9122.97 using an interest rate of 8%
$9122.97 / (1.08)^6 = $5749.02
You can borrow and lend at the interest rates of 7.00% in the US and 5.00% in Canada. Based on Interest Rate Parity, the forward premium for CAD should be exactly equal to: Group of answer choices 1.90% - 1.87% 1.02% 98.11%
Answer:
1.90%
Explanation:
Note that that CAD exchange rate would be in terms of how many US dollars can be exchanged for 1 CAD, which means that the formula for forward premium would be stated in terms of US dollars, I mean the US$ as the numerator and CAD's interest rate would be the denominator
the forward premium for CAD=((1+US interest rate)/(1+Canada interest rate))-1
the forward premium for CAD=((1+7%)/(1+5%))-1
the forward premium for CAD=1.90%
Rolling Coast Inc. issued BBB bonds two years ago. These bonds provided a yield to maturity (YTM) of 11.5 percent. Long-term risk-free government bonds were yielding 8.7 percent at the time. The current risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the risk-free long-term government bonds are currently yielding 7.8 percent, then at what interest rate should Rolling Coast expect to issue new bonds
Answer: 9.2%
Explanation:
The interest rate that Rolling Coast should expect to issue new bonds will be calculated thus:
Firstly, we will calculate the previous risk premium on BBB bonds which will be:
= 11.5% - 8.7% = 2.8%
Then, the new risk premium on BBB bonds will be:
= Previous risk premium / 2
= 2.8% / 2
= 1.4%
Then, the interest rate that Rolling Coast should expect to issue new bonds will be:
= 7.8% + 1.4%
= 9.2%
who has given general principle of management?
Answer:
I think it's " Henri Fayol's "
Answer:
14 management principle of Henri Fayol
Explanation:
1. Division of work or division labor.
2. Balancing Authority and responsibility.
3. Discipline.
4. Unity of command.
5. Unity of Direction.
6. Subordination of individual interest to the general interest.
7. Remuneration.
8. Centralization.
9. Scalar chain.
10. Order.
11. Equity.
12. Stability of tenure of personal.
13. Initiative.
14. Esprit de corps.
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $234,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows:
Year Hours Used
1 2,800
2 1,900
3 2,000
4 2,000
5 1,800
6 1,500
Required:
a. Prepare a depreciation schedule for six years using the straight-line method.
b. Prepare a depreciation schedule for six years using the double-declining-balance method.
c. Prepare a depreciation schedule for six years using the activity-based method.
Answer:
University Car Wash
a. Straight-line Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
1 $234,000 $34,500 $34,500 $199,500
2 $234,000 $34,500 $69,000 $165,000
3 $234,000 $34,500 $103,500 $130,500
4 $234,000 $34,500 $138,000 $96,000
5 $234,000 $34,500 $172,500 $61,500
6 $234,000 $34,500 $207,000 $27,000
b. Double-Declining-Balance Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
1 $234,000 $77,220 $77,200 $156,780
2 $234,000 $51,737 $128,937 $105,043
3 $234,000 $34,664 $163,601 $70,379
4 $234,000 $23,225 $186,826 $47,154
5 $234,000 $15,561 $202,387 $31,583
6 $234,000 $4,593 $206,980 $27,000
c. Activity-Based Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
1 $234,000 $48,300 $48,300 $185,700
2 $234,000 $32,775 $81,075 $152,925
3 $234,000 $34,500 $115,575 $118,425
4 $234,000 $34,500 $150,075 $83,925
5 $234,000 $31,050 $181,125 $52,875
6 $234,000 $25,825 $206,950 $27,050
Explanation:
a) Data and Calculations:
Cost of new machines = $234,000
Residual value of equipment = $27,000
Depreciable amount = $207,000
Estimated useful life = 6 years
Straight-line depreciation expense per annum = $34,500 ($207,000/6)
Double-declining-balance rate = 33% (100%/6 * 2)
Year Depreciation Declining Balance
1 $77,220 $156,780
2 $51,737 $105,043
3 $34,664 $70,379
4 $23,225 $47,154
5 $15,561 $31,583
6 $4,593 $27,000
Estimated useful life in hours = 12,000
Depreciation rate per hour = $17.25 ($207,000/12,000)
Actual usage per year:
Year Hours Used Usage Charge
1 2,800 $48,300 (2,800 * $17.25)
2 1,900 $32,775 (1,900 * $17.25)
3 2,000 $34,500 (2,000 * $17.25)
4 2,000 $34,500 (2,000 * $17.25)
5 1,800 $31,050 (1,800 * $17.25)
6 1,500 $25,825 (1,500 * $17.25)
Suppose independent truckers operate in a perfectly competitive constant cost industry. If these firms are earning positive economic profits, what happens in the long run to the following: The price of trucking services
Answer:
The price of trucking services would fall until equilibrium prices are reached. Only normal profit would be earned in the long run
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
