Answer:
fall, rise
Explanation:
US goods will become less expensive
Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. The present value of the future cash flows generated by the project is $163,000. Should they invest in this project?
Answer:
No, as the net present value comes in negative
Explanation:
As we know that
Net present value = Present value of cash inflows - Initial investment
where,
Present value os $163,000
And, the initial investment is $180,000
Now placing these values to the above formula
So, the net present value is
= $163,000 - $180,000
= -$17,000
Therefore the company should not accept the project as net present value is in negative that is -$17,000
A local county is considering purchasing some dump trucks for the trash pickups. Each truck will cost $55,000 and have an operating and maintenance cost that starts at $18,000 the first year and increases by $3,000 per year. Assume the salvage value is $12,000 at the end of 5 years and the interest rate is 10%. The equivalent annual cost of owning and operating each truck is most nearly equal to
Answer:
35,972
Explanation:
The equivalent annual cost can be calculated dividing NPV by the annuity factor
In order to find NPV first
Year1 Year2 Year3 Year4 Year5 Total
Operating and
Maintenance 18000 21000 24000 27000 30000 -
Discount factor(10%) 0.909 0.826 0.751 0.683 0.620 -
Discounted CFs 16362 17346 18024 18411 18600 88,713
Salvage 12000
Discount factor(10%) 0.620
Discounted salvage 7440 (7440)
Inital Cost (55,000) (55,000)
NPV 136,333
Calculation for EAC
NPV = 136,333
Annuity factor for 5 years = 3.790
Equivalent annual cost = NPV /Annuity factor
Equivalent annual cost = 136,333/3.790
Equivalent annual cost = 35,972
Digby's turnover rate for this year is 6.33%. This rate is projected to remain the same next year and no further downsizing will occur from automating. What would the total recruiting cost be for Digby, assuming it spends the same amount extra above the $1,000 recruiting base as they did this year?
Answer:
Total recruitment cost = $316.5
Explanation:
Note:
Given question is incomplete,
The number of employees = 5,000
Given:
Turnover rate for this year = 6.33%
Find:
Total recruitment cost
Computation:
Total recruitment cost = Turnover rate for this year × The number of employees
Total recruitment cost = 5,000 × 6.33%
Total recruitment cost = $316.5
The total recruiting cost will be $316.5 for Digby.
Given information
Assumed the number of employees is 5,000
Turnover rate for this year = 6.33%
Total recruitment cost = Turnover rate for this year * The number of employees
Total recruitment cost = 5,000 * 6.33%
Total recruitment cost = $316.5
Therefore, the total recruiting cost will be $316.5 for Digby.
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King Company issued bonds with a face amount of $1,600,000 in 2015. As of January 1, 2020, the balance in Discount on Bonds Payable is $4,800. At that time, King redeemed the bonds at 102.Required:Assuming that no interest is payable, make the entry to record the redemption.
Answer:
January 1, 2020
Bonds Payable 1600000 Dr
Loss on Redemption of bonds 36800 Cr
Discount on Bonds Payable 4800 Cr
Cash 1632000 Cr
Explanation:
The redemption of bonds before the maturity usually requires a payment for redemption which is a certain percentage of its face value. It is usually higher than the face value. The above bonds are redeemed at 102 which means at 102% of the face value of the bonds. Thus, the cash paid to redeem the bonds is,
Cash = 1600000 * 102% = 1632000
The bonds have a carrying value, which is the face value less discount or add premium, of,
Carrying value = 1600000 - 4800 = $1595200
If they are redeemed for an amount in excess of the carrying value, they are redeemed at a loss.
The loss on redemption is,
Loss = 1595200 - 1632000 = $36800
A brand manager for a certain company must determine how much time to allocate between radio and television advertising during the next month. Market research has provided estimates of the audience exposure for each minute of advertising in each medium, which it would like to maximize. Costs per minute of advertising are also known, and the manager has a limited budget of
Answer:
Optimization
Explanation:
Since we were told that the brand manager has limited budget of $25,000 which makes the manager to decide that television adverts is much more effective than radio adverts making him to allocates, at least 70% of the time to television, based on this I wiill run OPTIMIZATION test reason been that optimization will help and enable me to make the best or most effective use of available resource which will in turn Reduce costs while improving the performance which is why the brand manager decide to allocate 70% to Television in order to make the business more efficient as well as cost effective.
Assume that the hourly cost to operate a commercial airplane follows the normal distribution with a mean of $5,793 per hour and a standard deviation of $439. What is the operating cost for the lowest 2% of the airplanes?
Answer:
x1 = 4891.294
Explanation:
given data
mean μ = $5,793
standard deviation σ = $439
solution
we know here that
P(x < x1 ) = 0.02 .................1
so
[tex]P(\frac{x-\mu }{\sigma } < \frac{x1-\mu }{\sigma }) = 0.02[/tex]
so
[tex]P(z < \frac{x1-\mu }{\sigma }) = 0.02[/tex]
[tex]\frac{x1-\mu }{\sigma }[/tex] = invNorm(0.02)
so
x1 = μ + σ × invNorm(0.02) .....................2
we use here table for invNorm(0.02) and put value in eq 2
x1 = 5793 + 439 × (-2.054 )
x1 = 4891.294
assume the following information about the market and JumpMaster's stock. JumpMaster's beta = 1.50, the risk free rate 2%, the market risk premium is 10.0%. Using CAPM, what is the expected return for JumpMaster's stock?
Answer:
Expected market return = 17%
Explanation:
Given the Jump master’s beta = 1.50
Risk free rate = 2%
Market risk premium = 10%
To find the expected return we have to use the below formula.
Expected market return = Riskfree rate + Beta × Market risk premium
Now insert all the values in order to get the expected market return.
Expected market return = 2 + 1.50 × 10
Expected market return = 17%
Assume the Residential Division of KappyKappy Faucets had the following results last year:
Net sales $6,360,000
Operating income 636,000
Average total assets 5,300,000
Management's target rate of return 16%
What is the division's return on investment?
Answer:
12%
Explanation:
Calculation for the division's return on investment
Using this formula
Return On Investment = Operating income /Average total assets
Let plug in the formula
Return on investment= $636,000/$5,300,000
Return on investment= 0.12*100
Return on investment=12%
Therefore the division's return on investment will be $12%
I have question with it can you help me please??
Answer:
Pick-up Later:
Set a pickup date
Process the transaction
Place all the items in the pickup area near the front of the store
Place a note on the items indicating they are sold.
Explanation:
The purpose of the above procedure is to enable the customer to take delivery of purchased goods hitch-free. The pick-up area needs to be covered against rain so that the mulch and topsoil do not degrade. It is assumed that the customer's contact information and payment have been secured before the arrangement for pick-up later.
In a(n) _____ decision, there may be several "right" answers, and there is no precise way to get a right answer. A. recurring B. ad hoc C. nonstructured D. structured
Answer:
C. nonstructured
Explanation:
-Recurring decision refers to a decision that has to be made regularly.
-Ad hoc decision refers to a decision made for a specific situation.
-Nonstructured decision is a decision that can have multiple solutions that are correct and you don't have a form to define which one is the right option.
-Structured decision is when you make a decision using a process that has been established to manage a specific situation.
According to this, the answer is that in a(n) nonstructured decision, there may be several "right" answers, and there is no precise way to get a right answer.
Moped, Inc. purchased machinery at a cost of $44,000 on January 1, 2017. The expected useful life is 5 years and the asset is expected to have salvage value of $4,000. Moped depreciates its assets using the double-declining balance method. What is the firm's depreciation expense for the year ended December 31, 2017?
Answer:
Annual depreciation= $16,000
Explanation:
Giving the following information:
Purchase price= $44,000
Useful life= 5 years
Salvage value= $4,000
To calculate the depreciation expense under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(44,000 - 4,000) / 5]
Annual depreciation= 16,000
John is considering purchasing a commercial building. His accountant is working with him to determine the property’s value to John. The initial cost of an investment property plus the cost of any additional improvements less qualified deductions represents the:
Answer:
Adjusted basis
Explanation:
Adjusted basis in accounting is used to calculate the net value of an asset. This is done by reducing depreciation deductions from the original value and adding capital expenses like cost of improvement.
This method is best used when there is need to get accurate gain and loss records, and for tax purposes.
In the given scenario John's accountant is using the adjusted basis when he calculates initial cost of an investment property plus the cost of any additional improvements less qualified deductions
A company reports merchandise inventory on December 31 at $250,000 but LCM applied to items is $200,000. Record the journal entry to report merchandise inventory at the correct amount:
Answer:
The adjusting journal will be :
Loss on write down of Inventory $50,000 (debit)
Inventory $50,000 (credit)
Explanation:
The inventory must be presented at the Lower of Cost and Market Value.
The adjusting journal will be :
Loss on write down of Inventory $50,000 (debit)
Inventory $50,000 (credit)
The Loss on write down of Inventory is an expense in the trading account.
Answer:
See journal below
Explanation:
The journal entries below will be recorded in the books of account in order to report the merchandise inventory at the correct amount.
The cost of goods sold account Dr $50,000
($250,000 - $200,000)
To merchandise inventory account Cr $50,000
(Being record of inventory on LCM)
The cost of goods sold was debited with $50,000 while same amount was credited to merchandise inventory account.
Your text outlines three basic categories of electronic commerce applications: business-to-consumer (B2C), business-to-business (B2B) and consumer-to-consumer (C2C). B2C applications:_______.
A. Involve businesses developing attractive electronic marketplaces to entice customers and sell products and services to consumers.
B. Involve both electronic business marketplaces and direct market links between businesses .
C. Involve consumers buying and selling with each other in an auction process at an auction website, as well as personal advertising of products or services to buy or sell at electronic newspaper sites or personal websites.
D. None of the choices are correct.
Answer:
A. Involve businesses developing attractive electronic marketplaces to entice customers and sell products and services to consumers.
Explanation:
The Business to Consumer (B2C) sales strategy corresponds to a type of sale aimed at the final consumer. This sale takes place at retail, and occurs according to the consumer purchase decision process, which identifies their needs, judges the options according to their preferences and desires and finally chooses the option that best suits their search for a particular product or service.
Therefore, in the B2C strategy, retail companies have as main objective to create in the consumer the desire for a purchase, so the most appropriate option for this issue is that developing attractive electronic markets will help the company to attract customers and sell products and services to consumers.
1. The Lounge Company manufactures slippers and sells them at $10 a pair. Variable manufacturing cost is $4.75 a pair, and allocated fixed manufacturing cost is $0.75 a pair. It has enough idle capacity available to accept a one-time-only special order of 30,000 pairs of slippers at $5.50 a pair. Lounge will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $22,500 increase, (c) $142,500 increase, or (d) $165,000 increase? Show your calculations. 2. The St. Paul Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 25,000 units of Part No. 498 is as follows:
Answer:
1. The Lounge Company
The effect on operating income be if the special order could be accepted without affecting normal sales:
(b) $22,500 increase
2. Manchester
Explanation:
1. The Lounge Company:
Selling price = $10 per pair
Variable manufacturing cost = $4.75 per pair
Allocated fixed manufacturing cost = $0.75 per pair
Total manufacturing costs = $5.50
Special order of 30,000 pairs
Price of special order = $5.50 per pair
Sales value of special special order = $165,000 (30,000 x $5.50)
Manufacturing cost for special order:
Based on full cost = $165,000 (30,000 x $5.50)
Based on variable cost = $142,500 (30,000 x $4.75)
Contribution = $22,500 ($165,000 - $142,500)
The special order will not bring about any increase in operating income if the full cost is used to determine the net income. If, however, the variable cost is used, considering that The Lounge Company has idle capacity, then there is a contribution of $22,500 to the operating income.
The following data relate to factory overhead cost for the production of 10,000 computers: Actual: Variable factory overhead $262,000 Fixed factory overhead 90,000 Standard: 14,000 hrs. at $25 350,000 If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of 14,000 standard hours was $356,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.00 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Answer:
Calculation of variable overhead controllable variance
Standard hours allowed for 10,000 computers = 14,000 hours
Budgeted variable expense = Standard hours allowed * variable overhead rate
= 14,000 * ($25 - $6)
= $266,000
Variable overhead controllable variance = Actual variable overhead expense - Budgeted variable overhead expense
= $262,000 - $266,000
=$4,000 (Unfavorable)
Calculation of fixed overhead volume variance:
Applied overhead = Number of computers produced * Fixed overhead rate
= 10,000 * $6.00
= $60,000
Budgeted fixed overhead = $90,000
Fixed overhead volume variance = Budgeted fixed overhead - Applied fixed overhead
= $90,000 - $60,000
= $30,000 (Favorable)
Calculation of Total factory overhead volume variance:
Total factory overhead cost variance = Variable overhead controllable variance + Fixed overhead volume variance
= - $4,000 + $30,000
= $26,000 (Favorable)
The managerial accountant at Space Right Office Cubicles calculates fixed overhead variances to complete the August report. The actual fixed overhead cost in the month of August was and the budgeted fixed overhead cost was . The standard hours in August were and the standard rate per machinehour was . Calculate the standard fixed overhead cost allocated to production, the fixed overhead budget variance, and the fixed overhead volume variance. A. ; F; U B. ; F; U C. ; F; U D. ; F; U
Answer: d. $36,400; $1700 F; $500 U
Explanation:
1. Standard fixed overhead cost allocated to production
= Standard Hours * Standard rate per machine hour
= 2,600 * 14
= $36,400
2. Fixed overhead budget variance
= Budget overhead cost - Actual overhead cost
= 36,900 - 35,200
= $1,700 favorable
3. Fixed Overhead Volume Variance
= Standard fixed overhead cost - Budgeted overhead
= 36,400 - 36,900
= -$500
= $500 Unfavorable
Zane, a new employee, is eager to get a promotion soon, and he hopes he can quickly rise through the ranks at the company. He decides to ask his supervisor, Mary, for professional development advice. This is an example of which of the following types of communication?
a. Downward
b. None of these are correct.
c. Upward
d. Horizontal
e. Diagonal
Answer:
C
Explanation:
Upward communication is communication from lower hierarchy in the organisation to higher hierarchy in the organisation
Downward communication is communication from higher hierarchy in the organisation to lower hierarchy in the organisation
Horizontal communication is communication within the same organisation hierarchy
Diagonal communication is cross functional communication between employees at different levels of the organisation
Brian purchased two automobiles for personal use. Automobile 1 had an adjusted basis of $20,000, and automobile 2 had an adjusted basis of $10,000. In the current year, Brian sold automobile 1 for $15,000 and automobile 2 for $15,000. What gain or loss should Brian recognize on the sales of the automobiles g
Answer:
Automobile 1, Loss of $5,000
Automobile 2, Gain of $5,000
Explanation:
Calculation of gain or losses on sale of Automobile 1
Sale value of Automobile 1 $15,000
Less: Adjusted Basis of Automobile 1 $20,000
Loss on sale of Automobile 1 $5,000
Calculation of gain or losses on sale of Automobile 2
Sale value of Automobile 2 $15,000
Less: Adjusted Basis of Automobile 2 $10,000
Gain on sale of Automobile 2 $5,000
On August 1, 2010, a company issues bonds with a par value of $600,000. The bonds mature in 10 years and pay 6% annual interest, payable each February 1 and August 1. The bonds sold at $592,000. The company uses the straight-line method of amortizing bond discounts. The company's year-end is December 31. Prepare the general journal entry to record the interest accrued at December 31, 2010.
Answer:
Dr Discount on BP 8,000
Cr Cash 592,000
Cr Bond payable 600,000
Dr Interest expense 15,333.33
Cr Interest payable 15,000
Cr Discount on BP 333.33
Dr Interest payable 15,000
Dr interest expense 3,066.67
Cr Cash 18,000
Cr Discount on BP 333.33
Explanation:
Preparation of the general journal entry to record the interest accrued at December 31, 2010.
Based on the information given we were told that the company issues bonds with a par value of the amount of $600,000 in which the bonds mature in 10 years with a 6% annual interest and sold at the amount of $592,000 this means that the transaction will be recorded as:
Dr Discount on BP 8,000
(600,000-592,000)
Cr Cash 592,000
Cr Bond payable 600,000
(To record issuance of the bonds)
Dr Interest expense 15,333.33
Cr Interest payable 15,000 (600,000 x 6% x 5/12 )
Cr Discount on BP 333.33
(8,000 / (10years* 2 payment =400*5/6=333.33)
(To record year end adjustment entry)
Dr Interest payable 15,000
(600,000 x 6% x 5/12 )
Dr interest expense 3,066.67
(600,000 x 6% x 1/12=3,000)
(400 - 333.33= 66.67)
(3,000+66.67=3,066.67)
Cr Cash 18,000
(600,000 x 6% x 6/12)
Cr Discount on BP 333.33
(8,000 / (10years* 2 payment =400*5/6=333.33)
(To record first interest payment to bondholders)
What term means managing the entire organization so that it excels on all dimensions of products and services that are important to customers?
Answer:
Total Quality Management
Explanation:
Total Quality Management is an approach in which all the employees of the company work to improve the entire process to offer a good customer experience. According to this, the answer is that the term that means managing the entire organization so that it excels on all dimensions of products and services that are important to customers is Total Quality Management.
TB MC Qu. 6-75 Kuzio Corporation produces and ... Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 150 100 % Variable expenses 75 50 % Contribution margin $ 75 50 % The company is currently selling 6,500 units per month. Fixed expenses are $184,000 per month. The marketing manager believes that a $7,800 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change
Answer:
Effect on income= $6,450 increase
Explanation:
Giving the following information:
Contribution margin= $75
The marketing manager believes that a $7,800 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales.
To calculate the effect on income, we need to use the following formula:
Effect on income= increase in contribution margin - increase in fixed costs
Effect on income= 190*75 - 7,800
Effect on income= $6,450 increase
Which of the following statements is true of the new product development process? Question 8 options: 1) Commercialization is the process of inviting broad communities of people such as customers, employees, and scientists into the new product innovation process. 2) The purpose of the idea screening stage is to create a large number of ideas. 3) The concept testing stage is the stage at which the product and its proposed marketing program are introduced into realistic market settings. 4) Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the product development stage. 5) A product concept is the way consumers perceive an actual or potential product.
Answer: 4) Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the product development stage.
Explanation:
The Business Analysis stage of the New Product Development Process is a more in-depth analysis of the product to find out the viability of the product in the market and what it means for the firm.
Here the big questions are asked such as;
The Cost of the product to produceIf adequate profit will be generatedProjected market demandExisting competitors etcOnce these questions have been answered and other analysis made and the company is satisfied, the product can then move to the Product Development Stage.
It is true that under the business analysis stage, if a new product satisfies the company's objectives, it moves to the product development stage.
In a New Product Development Process, the Business Analysis stage entails in-depth analysis of the product to find out the viability of the product in the market and what it means for the firm.
The questions asked in the Business Analysis stage includes:
The Cost of the product to produce If adequate profit will be generated Projected market demand Existing competitorsIn conclusion, it is true that under the business analysis stage, if a new product satisfies the company's objectives, it moves to the product development stage.
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Identify the type of cash flow activity for each of the following events (operating, investing, or financing): a. Redeemed bonds be. Issued preferred stock c. Paid cash dividends d. Net income e. Sold equipment f. Purchased treasury stock go. Purchased patents h. Purchased buildings i. Sold long-term investments j. Issued bonds k. Issued common stock
Answer is given below
Explanation:
type of cash flow activity
a. Redeemed bonds ---------------Fiancing
b Issued preferred stock -----------Fiancing
c. Paid cash dividends --------------Fiancing
d. Net income --------------------------Operating
e. Sold equipment --------------------Investing
f. Purchased treasury stock -------Fiancing
g. Purchased patents ----------------Investing
h. Purchased buildings -------------Investing
i. Sold long-term investments ----Investing
j. Issued bonds ------------------------Fiancing
k. Issued common stock -----------Fiancing
The income statements for Federer Sports Apparel for 2022 and 2021 are presented below.
FEDERER SPORTS APPAR
Income Statement
For the Years Ended December 31
Year Increase Decrease
2019 2018 Amount %
Net sales 18,800,000 15,500,000
Cost of goods 13,200,000 7,000,000
Gross prof 5,600,000 8,500,000
Operating expenses 1,600,000 1,200,000
Depreciation expense 1,000,000 1,000,000
Inventory write-down 200,000 0
Loss (litigation) 1,500,000 300,000
Required:
Prepare a horizontal analysis for 2022 using 2021 as the base year.
Answer and Explanation:
The Preparation of horizontal analysis for 2022 using 2021 as the base year is prepared with the help of a spreadsheet.
Horizontal analysis is a method for the analysis of financial statements that indicates fluctuations in the amount of the related products over a period of time. It is a valuable instrument for determining trend situations.
So, with the help of the spreadsheet, we will be able to find the net income by using the formulas.
The horizontal analysis of the Income Statement is the analytical form of preparing the income statement to determine the accurate amount and percentage of changes in each item of the income statement.
The horizontal income statement is attached below.
The horizontal analysis determines the change in the amounts of each account. The percentage change is the division of a change in amount by the base amount of the base year.
In this case, the base year was 2021.
Therefore, the change in amounts will be determined based upon the figures of the base year.
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At January 1, 2019, the Accrued Warranty Payable is . During 2019, the company recorded Warranty Expense of . During 2019, the company replaced defective products in accordance with product warranties at a cost of . What is the Accrued Warranty Payable at December 31, 2019?
Answer: A.$8,800
Explanation:
The Accrued Warranty Payable Balance for the year ending December 2019 will take into account the Warranty expenses that were old less the warranty expenses that have been paid for already with the formula;
= Opening Accrued Warranty payable + Warranty Expense recorded for the Year - Warranty Expenses Paid in the year
= 1,800 + 19,400 - 12,400
= $8,800
Answer:
jus 2 ez pz lemon squeezey ppppppp
Explanation:
Which of the following is an advantage of job specialization? 1 point A. The quality of work increases. B. Jobs can be mastered quickly. C. Employees are more involved with their jobs. D. The work is less repetitive. E. Task specialization has no clear advantages to the organization
Answer: B. Jobs can be mastered quickly.
Explanation:
Job specialization is when the employees in an organization focuses and concentrates on one particular aspect in a organization. Specialization makes employees more efficient and also effective at their role.
Also, jobs can be mastered quickly since the employees typically focuses on one particular aspect in the organization.
Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries.
Total spending for the federal government of Lilliput for the last fiscal year was $1.06 billion. The country collected $1.05 billion in taxes during this same fiscal year. Assume government transfers were zero. Based on this information, what is Lilliput's budget balance? In the last fiscal year, Lilliput was running:______.
a. a budget surplus.
b. a balanced budget.
c. a budget deficit.
Answer: budget deficit
Explanation:
From the question, we are informed that the total spending for the federal government of Lilliput for the last fiscal year was $1.06 billion and that the country collected $1.05 billion in taxes during this same fiscal year.
Since the expenditure of $1.06 billion is more than the revenue of $1.05 billion, this show that there was a budget deficit.
Suppose the price level and value of the U.S. Dollar in year 1 are 1 and $1, respectively. Instructions: Round your answers to 2 decimal places. a. If the price level rises to 1.35 in year 2, what is the new value of the dollar?
Answer:
0.74
Explanation:
Data provided in the question
Price level = 1.35
According to the given situation, the computation of the new value of the dollar is shown below:-
The New value of the dollar = 1 ÷ Price level
= 1 ÷ 1.35
= 0.74074
or
= 0.74
Therefore for computing the new value of the dollar we simply applied the above formula.
g Once supply side effects are taken into account, tax cuts for labor income can change i. the supply of labor ii. potential GDP. iii. the growth rate of potential GDP.
Answer:
i, ii
Explanation:
a Tax is a compulsory sum levied by the government on income, goods or services. A tax cut would increase the supply of labour. As a result, the supply of labour would increase. As a result of the increase in labour, there would be an increase in potential GDP
