The fixed assets of an enterprise fund should be accounted for in the enterprise fund and depreciation on the fixed assets should be recorded.
In an enterprise fund, which is a self-supporting government activity, the fixed assets owned by the fund are accounted for separately. This allows for accurate tracking of the assets and the recognition of depreciation expense. Depreciation represents the gradual wear and tear or obsolescence of fixed assets over time, and recording it helps in proper financial reporting and planning for replacement or renewal of assets. Therefore, option (a) Enterprise fund and depreciation on the fixed assets should be recorded is the correct choice.Fixed assets of an enterprise fund should be accounted for in the general fixed asset account group. This allows for proper tracking and reporting of the fixed assets owned by the enterprise fund. Additionally, depreciation on the fixed assets should be recorded to accurately reflect the gradual wear and tear or obsolescence of the assets over their useful lives. By recording depreciation, the enterprise fund can properly allocate the cost of the fixed assets over time and reflect their diminishing value on the financial statements.
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You will summarize a theory of the economist chosen, briefly explain the contribution to the study of economics they are making or made and the impact to society or academic understanding.
This assignment will give you an opportunity to research the work of different economists both from a traditional and contemporary understanding. Conducting research that is based on sound sources and citing correctly is a skill you will need in all levels of post-secondary education and needs to be mastered quickly in your first semester.
Economist Milton Friedman is known for his influential contributions to the field of economics, particularly in the area of monetary theory and policy. His monetarist approach emphasized the importance of controlling the money supply to stabilize the economy and combat inflation. Friedman's work had a significant impact on both academic understanding and society, shaping economic policy debates and influencing central banks worldwide.
Milton Friedman's key contribution was his advocacy for a monetarist framework, which challenged prevailing Keynesian views dominant at the time. He argued that the main driver of macroeconomic fluctuations was fluctuations in the money supply, rather than aggregate demand. Friedman emphasized the role of central banks in controlling the money supply to achieve stable economic growth and curb inflation.
Friedman's ideas had a profound impact on economic policy and central banking practices globally. His work influenced the policies of the Federal Reserve in the United States during the 1980s, contributing to a focus on targeting money supply growth and price stability. Additionally, Friedman's theories on the relationship between inflation and monetary policy have been instrumental in shaping the understanding of inflation dynamics.
Furthermore, Friedman's advocacy for free markets, limited government intervention, and individual liberty has had a lasting influence on economic and political discourse. His ideas have been instrumental in promoting the principles of economic freedom and emphasizing the role of market forces in driving economic prosperity. Overall, Friedman's work has played a crucial role in shaping both academic understanding and policy debates, leaving a lasting impact on the field of economics and society as a whole.
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Using the table below, Sales Wages and salaries Rent Cost of materials Cost of equity capital Interest on debt Company K 55000 24000 4000 4500 7000 20000 4. Measure Company K's accounting profit. 5. Measure Company K's economic profit. VIR
Company K's accounting profit can be calculated by subtracting the sum of explicit costs from total revenue.
Measure Company K's accounting profit.
Accounting profit is calculated by subtracting all explicit costs from total revenue. In this case, Company K's accounting profit can be determined as follows:
Total Revenue = Sales
Explicit Costs = Wages and salaries + Rent + Cost of materials + Cost of equity capital + Interest on debt
Accounting Profit = Total Revenue - Explicit Costs
Using the provided values:
Total Revenue = $55,000
Explicit Costs = $24,000 + $4,000 + $4,500 + $7,000 + $20,000
Accounting Profit = $55,000 - ($24,000 + $4,000 + $4,500 + $7,000 + $20,000)
Therefore, Company K's accounting profit can be calculated by subtracting the sum of explicit costs from total revenue.
Measure Company K's economic profit.
Economic profit takes into account both explicit costs and implicit costs. Implicit costs include the opportunity cost of using resources for a particular business venture. In this case, we need to consider the opportunity cost of the company's resources, specifically the cost of equity capital and the interest on debt.
Economic Profit = Accounting Profit - Implicit Costs
To measure Company K's economic profit, we need to include the opportunity cost associated with the cost of equity capital and the interest on debt in addition to the explicit costs.
Therefore, Economic Profit = Accounting Profit - (Cost of Equity Capital + Interest on Debt)
Using the provided values:
Accounting Profit = Calculated in question 4
Cost of Equity Capital = $7,000
Interest on Debt = $20,000
Economic Profit = Accounting Profit - ($7,000 + $20,000)
Hence, Company K's economic profit can be calculated by subtracting the sum of implicit costs (cost of equity capital and interest on debt) from the accounting profit.
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A businesswoman logs time in an airliner and a rental car to
reach her destination. The total trip is 1, 100m , the plane
averaging 600mi / h and the car 50mi / h . How long is spent in the
automobile
The businesswoman spends 12 hours in the automobile.
To determine the time spent in the automobile, we need to find the difference between the total trip time and the time spent in the airliner. The total trip distance is 1,100 miles, and the airplane travels at an average speed of 600 miles per hour. Therefore, the time spent in the airliner can be calculated as 1,100 miles divided by 600 miles per hour, which is approximately 1.83 hours.
Next, we subtract the time spent in the airliner from the total trip time. The total trip time is given in hours, so we have 1.83 hours subtracted from the total trip time. This gives us approximately 12 hours spent in the automobile.
Therefore, the businesswoman spends approximately 12 hours in the automobile for her trip.
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During 2018, CMC Corporation purchased the following Financial Assets at Fair Value through other comprehensive income held as long-term investments, with their corresponding fair values at December 31, 2018
Securities Cost FM, 12/31/18
A Securities- 10,000 shares P1,000,000 P1,300,000
B Securities- 20,000 shares 2,200,000 2,500,000
C Securities- 25,000 shares 2,000,000 1,800,000
In the year 2018, CMC Corporation had purchased financial assets of three types, which are A Securities (10,000 shares), B Securities (20,000 shares), and C Securities (25,000 shares).
The corresponding fair values of these assets, as of December 31, 2018, have been given below:Securities Cost FM, 12/31/18A Securities- 10,000 shares P1,000,000 P1,300,000B Securities- 20,000 shares 2,200,000 2,500,000C Securities- 25,000 shares 2,000,000 1,800,000The purchased financial assets were held as long-term investments. These assets were bought at a fair value through other comprehensive income. The financial assets of CMC Corporation have a cumulative total fair value of P5,600,000 at December 31, 2018.
The above statement provides information regarding the purchase of financial assets by CMC Corporation. The three types of financial assets purchased are A Securities, B Securities, and C Securities. The fair values of these assets are given along with their cost as of December 31, 2018.CMC Corporation has purchased these financial assets as a long-term investment. This means that the corporation has bought these assets to hold them for a long period. CMC Corporation had bought these assets at a fair value through other comprehensive income. This means that CMC Corporation has used the method of recognizing unrealized gains and losses in other comprehensive income to record these financial assets. This method helps to reduce the volatility in the company's earnings.The fair values of these assets are given as of December 31, 2018. The total fair value of these financial assets held by CMC Corporation at the end of the year 2018 was P5,600,000. This value is the cumulative total fair value of A Securities, B Securities, and C Securities held by the corporation at the end of the year 2018.
CMC Corporation has purchased financial assets of three types, namely, A Securities, B Securities, and C Securities. These assets have been held by the corporation as long-term investments. CMC Corporation has used the method of recognizing unrealized gains and losses in other comprehensive income to record these financial assets. At the end of the year 2018, the total fair value of these financial assets held by CMC Corporation was P5,600,000.
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1.
2.
3.
4. A borrower takes out a 30-year mortgage loan (with monthly
payments)for $400,000 with an interest rate of 6%The lender
requires 4.0 points to be paid at the time the loan is originated.
Please match the loan balance at maturity with the associated type of constant payment mortgage. Fully amortizing [Choose ] Partially amortizing [Choose ] Interest only [Choose ] Negative amortizing �
The loan balance at maturity for a borrower who takes out a 30-year mortgage loan for $400,000 with an interest rate of 6% and pays 4.0 points at loan origination would be associated with a fully amortizing constant payment mortgage.
In a fully amortizing mortgage, the borrower makes regular monthly payments that include both principal and interest, gradually paying down the loan balance over the loan term until it is fully paid off.
A fully amortizing mortgage is designed to ensure that the loan balance is fully repaid by the end of the loan term. In this case, the borrower takes out a 30-year mortgage, which means they have 30 years to repay the loan. The monthly payments are calculated to be consistent over the entire loan term, with each payment comprising a portion that goes towards paying off the principal amount borrowed and another portion that covers the interest charges. As the borrower continues to make these monthly payments, the loan balance gradually decreases until it reaches zero at the end of the 30-year period. This type of mortgage structure is commonly used for long-term financing of homes and properties.
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Net Present Value Method-Annuity Jones Excavation Company is planning an investment of $125,000 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged 590 per hour for bulldozer work. The bulldozer operator costs $30 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $7,500. The bulldozer uses fuel that is expected to cost $15 per hour of bulldozer operation. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.8930.870 0.833 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 4.917 4.355 4.111 3.785 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.772 4.031 107.360 6.145 5.6505.019 4.192 a. Determine the equal annual net cash flows from operating the bulldozer Jones Excavation Company Equal Annual Net Cash Flows Cash inflows: Hours of operation 1,000 Revenue per hour Revenue per year $ 90,000 Cash outflows: Hours of operation Fuel cost per hour Labor cost per hour Total fuel and labor costs per hour Fuel and labor costs per year Maintenance costs per year Annual net cash flows Feedback b. Determine the net present value of the investment, assuming that the desired rate of return is 10%. Use the table of present value of an annuity of $1 table above. Round to the nearest dollar. Present value of annual net cash flows Amount to be invested Net present value c. Should Jones invest in the bulldozer, based on this analysis? because the bulldozer cost is the present value of the cash flows at the minimum desired rate of return of 10%. d. Determine the number of operating hours such that the present value of cash flows equals the amount to be invested. Round interim calculations and final answer to the nearest whole number. hours
Annuity factor at 10% for 5 years is 3.7908 (From the PV of annuity table)H = $125000 / ($514.91 × 3.7908) = 65.60 hours, which is equal to 66 hours (rounded to the nearest whole number)
(a)Determination of the equal annual net cash flows from operating the bulldozer Jones Excavation Company Cash inflows:
Hours of operation = 1000
Revenue per hour = $590
Revenue per year = $590 × 1000
= $590000
Cash outflows:
Fuel cost per hour = $15
Labor cost per hour = $30
Total fuel and labor costs per hour = $15 + $30 = $45
Fuel and labor costs per year = $45 × 1000
= $45000
Maintenance costs per year = $7500
Annual net cash flows = Cash inflows − Cash outflows− Maintenance costs
= $590000 − $45000 − $30000
= $515000
Jones Excavation Company's Equal Annual Net Cash Flows = $515000
(b)Determination of the net present value of the investment, assuming that the desired rate of return is 10%. Use the table of present value of an annuity of $1 table above.
Present Value of Annual Net Cash Flows:
Using the formula for present value of an annuity:
PV = Pmt × Present value factor at 10% = $515000 × 4.1699
= $2142615
Amount to be Invested = $125000
Net Present Value = PV - Amount to be invested
= $2142615 - $125000
= $2017615
(c)Jones should invest in the bulldozer as the net present value of the investment, assuming that the desired rate of return is 10% is positive.
(d)Determination of the number of operating hours such that the present value of cash flows equals the amount to be invested.
From part (b), we know that the present value factor at 10% for 5 years is 4.1699, and the present value of annual net cash flows is $2,142,615. Let's assume that the number of operating hours to recover the $125,000 investment is H.
Present value of annual net cash flows per hour = $2142615 / (4.1699 × 1000) = $514.91
Present value of the annual net cash flows, in general, is the amount of the constant periodic payment (Pmt) times the present value of an annuity of $1, with the appropriate number of periods (n), and the appropriate interest rate (r).$2142615 = Pmt × 4.1699 (Present value factor at 10% for 5 years)Pmt = $2142615 / 4.1699 = $514.91
If the bulldozer operates for H hours per year, the annual net cash flow will be $514.91H. We can set up an equation for the number of hours that must be worked each year to earn $125,000 over five years.$125000 = $514.91H × Annuity factor at 10% for 5 years
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Music Media Ltd. prepares statements quarterly.
Part A:
Required:
1. Based on 2019 results, Music’s estimated tax liability for 2020 is $333,960. Music will accrue 1/28 of this amount at the end of each month (assume the installments are paid the next day). Prepare the entry on January 31, 2020, to accrue the tax liability and on February 1 to record the payment.
2. At year-end, December 31, the actual income tax for 2020 was determined to be $339,420. Prepare the adjusting entry on December 31 to record the accrual (assume 11 months have been accrued to date in 2020). Record the payment on January 1, 2021.
Part B:
Required:
3. Complete the following table assuming Music estimates its tax liability for the year 2020 to be $667,500. (Do not round intermediate calculations.)
4. Assuming that actual tax for the year 2020 was determined to be $812,000, prepare the appropriate adjusting entry at year-end to bring the balance in the Income Tax Expense account to the correct balance, assuming no accrual has yet been recorded for the fourth quarter.
5. Calculate Music’s actual profit for the year 2020.
1. The entry on January 31, 2020, to accrue the tax liability would be as follows:
Debit: Income Tax Expense (January) $11,927.14
Credit: Accrued Income Tax Payable $11,927.14
The entry on February 1, 2020, to record the payment would be:
Debit: Accrued Income Tax Payable $11,927.14
Credit: Cash $11,927.14
2. The adjusting entry on December 31, 2020, to record the accrual would be:
Debit: Income Tax Expense $327,709.91
Credit: Accrued Income Tax Payable $327,709.91
The entry on January 1, 2021, to record the payment would be:
Debit: Accrued Income Tax Payable $327,709.91
Credit: Cash $327,709.91
3. Estimated tax liability for the year 2020:
Quarter 1: $166,875 ($667,500 * 1/4)
Quarter 2: $166,875 ($667,500 * 1/4)
Quarter 3: $166,875 ($667,500 * 1/4)
Quarter 4: $166,875 ($667,500 * 1/4)
4. Adjusting entry at year-end to bring the balance in the Income Tax Expense account to the correct balance:
Debit: Income Tax Expense $144,500 ($812,000 - $667,500)
Credit: Accrued Income Tax Payable $144,500 ($812,000 - $667,500)
5. To calculate Music's actual profit for the year 2020, subtract the actual tax ($812,000) from the estimated tax liability ($667,500):
Actual profit = Estimated tax liability - Actual tax
Actual profit = $667,500 - $812,000
Actual profit = -$144,500
The entries provided demonstrate the accrual and payment of income tax liabilities for Music Media Ltd. The company estimates and accrues the tax liability each month based on a predetermined portion of the estimated annual tax liability. Adjusting entries are made at year-end to account for any differences between the estimated and actual tax liability. The actual profit for the year 2020 is calculated by subtracting the actual tax liability from the estimated tax liability, resulting in a negative value indicating a loss for the year.
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As a state-owned enterprise with a long history, Hangzhou Iron and Steel Group has never witnessed a downturned. On the contrary, we can see its vitality, competitiveness and innovation. Why has it ma
Hangzhou Iron and Steel Group's ability to maintain vitality, competitiveness, and innovation .
can be attributed to several factors:
1. Support: As a state-owned enterprise, Hangzhou Iron and Steel Group receives support and resources from the government. This can include preferential policies, financial assistance, and access to strategic partnerships. State support provides stability and enables the company to withstand economic downturns.
2. Long History and Experience: Hangzhou Iron and Steel Group's long history implies that it has accumulated extensive industry experience and knowledge. This experience allows the company to adapt to changing market conditions, identify growth opportunities, and make informed business decisions.
3. Strong Market Position: The company's competitiveness may stem from its strong market position. It might have established a strong brand reputation, built a loyal customer base, and secured long-term contracts with key clients. This market position provides stability and a consistent flow of business even during challenging times.
4. Continuous Innovation: Hangzhou Iron and Steel Group's ability to innovate is crucial for its sustained success. It might invest in research and development to improve its production processes, develop new products, and enhance operational efficiency. Innovation helps the company stay ahead of competitors and meet evolving customer demands.
5. Focus on Quality and Efficiency: Maintaining a focus on producing high-quality products and ensuring operational efficiency contributes to the company's competitiveness. Hangzhou Iron and Steel Group might have implemented rigorous quality control measures, invested in modern technology and equipment, and optimized its supply chain to deliver products efficiently.
6. Skilled Workforce: The company's skilled workforce plays a vital role in its success. Hangzhou Iron and Steel Group may prioritize talent development, training programs, and attracting experienced professionals. A skilled workforce enhances productivity, promotes innovation, and enables the company to adapt to changing market dynamics.
Overall, Hangzhou Iron and Steel Group's ability to withstand downturns and maintain vitality can be attributed to factors such as state support, industry experience, market position, innovation, focus on quality and efficiency, and a skilled workforce. These elements contribute to its competitiveness and enable it to thrive even in challenging economic conditions.
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Q:Why has Hangzhou Iron and Steel Group, a state-owned enterprise with a long history, managed to maintain its resilience and avoid downturns? What factors contribute to its vitality, competitiveness, and innovation?
At this stage of your study of macroeconomics, can you
now in bullet points highlight why some nations are economically
poor, while another is wealthy? at least 500 words
At this stage of studying macroeconomics, one can understand that some nations are economically poor, while others are wealthy due to several reasons. Some of the reasons why some nations are economically poor while others are wealthy include:1. Natural resources.
One of the significant factors that contribute to economic wealth is natural resources. Some countries are blessed with natural resources such as oil, natural gas, minerals, and forests, among others. Countries that have abundant natural resources have an advantage over those that do not have such resources. For instance, countries like Saudi Arabia, Qatar, and Kuwait are oil-rich nations, which means they generate significant revenue from the oil industry.
2. Political stability: Another factor that contributes to economic growth and wealth is political stability. Countries that experience political instability and unrest tend to experience economic challenges. Political instability affects a country's economic growth because it can discourage investors from investing in the country. For instance, some African countries experience political instability, which has hindered economic growth in the region.
3. Education and innovation: Educational systems that prioritize science, technology, engineering, and mathematics (STEM) have a significant impact on economic growth and development. Such educational systems help to create an innovative culture that promotes entrepreneurship and the development of new technologies, which can lead to economic growth. Countries such as the United States, Japan, and South Korea have a robust educational system that supports innovation and development.
4. Infrastructure: Infrastructure is essential for economic growth because it facilitates the movement of goods and services. Countries that have well-developed transportation systems, communication systems, and energy systems tend to experience economic growth. Developed countries such as the United States, Japan, and Germany have well-developed infrastructure systems that support economic growth.
5. Trade policies: Trade policies play a significant role in economic growth and development. Countries that have open trade policies tend to experience more economic growth because they have access to a wider market. On the other hand, countries that have closed trade policies tend to have less economic growth because they have limited access to markets. For instance, China has an open trade policy, which has contributed to its economic growth over the years. In conclusion, natural resources, political stability, education and innovation, infrastructure, and trade policies are some of the factors that contribute to economic growth and development. Countries that have these factors in place tend to experience economic growth and wealth, while those that do not have these factors in place tend to experience economic challenges.
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Bob sold manufacturing equipment to a dealer for $50,000. He
bought the equipment for $55,000 several years ago and has claimed
$12,500 of depreciation expense on the equipment. What is the
amount and
The adjusted basis is greater than the selling price, Bob incurred a loss of $7,500 on the sale of the equipment
Based on the information provided, we can calculate the amount of gain or loss that Bob realized from selling the manufacturing equipment.
The formula for calculating gain or loss is as follows:
Gain/Loss = Selling Price - Adjusted Basis
Where "Adjusted Basis" is the original cost minus any accumulated depreciation.
In this case, the adjusted basis of the equipment would be:
Adjusted Basis = Original Cost - Accumulated Depreciation
Adjusted Basis = $55,000 - $12,500
Adjusted Basis = $42,500
Therefore, the gain or loss that Bob realized from selling the equipment would be:
Gain/Loss = Selling Price - Adjusted Basis
Gain/Loss = $50,000 - $42,500
Gain/Loss = $7,500
Since the adjusted basis is greater than the selling price, Bob incurred a loss of $7,500 on the sale of the equipment
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Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent-owned subsidiary Oakley Co. follow: 2021 2020 Cash $ 22,250 $ 10,500 Accounts receivable (net) Merchandise inventory 48,450 28,750 82,500 40,500 Buildings and equipment (net) 104,500 118,500 Trademark 101,200 122,500 Totals $ 358,900 $ 320,750 Accounts payable $ 89,150 $ 74,750 0 Notes payable, long-term Noncontrolling interest 25,200 42,500 49,200 200,000 Common stock, $10 par 200,000 Retained earnings (deficit) 20,550 (21,700) Totals $ 358,900 $320,750 Additional Information for Fiscal Year 2021 • Iverson and Oakley's consolidated net income was $63,750. . Oakley paid $4,000 in dividends during the year. Iverson paid $14,000 in dividends. ..Oakley sold $18,100 worth of merchandise to Iverson during the year. • There were no purchases or sales of long-term assets during the year. In the 2021 consolidated statement of cash flows for Iverson Company: Net cash flows from operating activities were: • Iverson and Oakley's consolidated net income was $63,750. Oakley paid $4,000 in dividends during the year. Iverson paid $14,000 in dividends. Oakley sold $18,100 worth of merchandise to Iverson during the year. • There were no purchases or sales of long-term assets during the year. In the 2021 consolidated statement of cash flows for Iverson Company: Net cash flows from operating activities were: Multiple Choice $28,800. O $12,000. O $14,400. $51,750.
Debit: Trading Securities ($120,000) Credit: Trading Securities ($120,000) ,Debit: Unrealized Gain (Loss) ($24,000) Credit: Trading Securities ($24,000)
Trading Securities: Shown as a current asset under the "Investments" section on the Balance Sheet.
Valuation Allowance for Trading Securities: Shown as a contra account deducted from the Trading Securities' balance on the Balance Sheet.
Unrealized Gain (Loss)-Trading Securities: Shown as a separate component under the "Stockholders' Equity" section on the Balance Sheet.
Available-for-Sale Securities: Shown as a long-term investment under the "Investments" section on the Balance Sheet.
Valuation Allowance for Available-for-Sale Securities: Shown as a contra account deducted from the Available-for-Sale Securities' balance on the Balance Sheet.
Unrealized Gain (Loss)-Available-for-Sale Securities: Shown as a separate component under the "Stockholders' Equity" section on the Balance Sheet.
These accounts reflect the fair value adjustments made to the securities and provide information on the unrealized gains or losses on these investments.
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Which of the various reasons for resisting change do you
believe to be the most common? What are
your "top three" in this regard?
Top three reasons for resisting change that are most common: 1. Lack of trust 2. Fear of the unknown 3. Fear of failure.
Among the various reasons for resisting change, there are several factors that an individual might have. The most common reasons for resisting change are discussed below:
1. Fear of the unknown: Change resistance might occur when a person is afraid of the unknown. As a result, they oppose change since they do not understand what it entails. People feel uncomfortable with ambiguity, and change can produce it.
2. Lack of trust: In some instances, employees may be hesitant to embrace change because they do not trust the management. Workers may fear that if they embrace change, they may jeopardize their jobs. Workers may also be hesitant to reveal any vulnerabilities to their managers.
3. Fear of failure: Failure is a natural human emotion, and it can be a significant barrier to change. A person's identity may be linked to their work, and if they fail to adapt to the new approach, they may believe that they have failed as well. Fear of failure can cause individuals to oppose change.
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Question 9
Distinguish authority and responsibility by providing the
suitable
example
Authority refers to the power or right to give orders, make decisions, and enforce obedience, while responsibility refers to the obligation or duty to perform a specific task or role. An example that illustrates the difference between authority and responsibility is a project manager and a team member.
In a project scenario, the project manager possesses the authority to assign tasks, make decisions, and allocate resources. They have the power to direct the team and ensure that the project progresses effectively. The project manager's authority is derived from their position and the responsibilities associated with it. On the other hand, a team member's responsibility lies in completing the assigned tasks, meeting deadlines, and contributing to the project's success.
The team member may have the responsibility to execute specific actions, provide expertise, and collaborate with other team members. While the project manager holds the authority to guide and control the project, the team member bears the responsibility to carry out their assigned duties and fulfill the expectations set by the project manager. This example demonstrates that authority and responsibility are interconnected but distinct aspects in the organizational hierarchy, with authority focusing on decision-making power and responsibility centering around task performance and accountability.
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Sima Ltd purchased all issued shares of Nima Ltd for $1900000 on 1 July 2020 when the equity of Nima Ltd was as follows; 1 2 Share capital 760000 3 Asset revaluation surplus 570000 Retained earnings 285000 At this date, Nima Ltd had not recorded any goodwill, and all identifiable assets and liabilities were recorded at fair value except for the followings Further Account Cost Carrying Amount Fair value life(Years) Inventories $57,000 Land $143,000 Plant $221,250 $177,000 Contingent Liability Nima Ltd identified at acquisition date a lawsuit where Nima Ltd was sued by a former supplier with the Fairvalue of: Unrecorded Asset Nima Ltd had unrecorded and internally generated Patent with the FairValue of Unrecorded Asset Nima Ltd had unrecorded and internally generated in-process research and development with the FairValue of: Tax rate:30%. Required 1.Prepare the acquisition analysis at acquisition date. $62,700 $157,000 $212,000 $23,000 $57,000 $43,000
Sima Ltd acquired all issued shares of Nima Ltd for $1,900,000 on July 1, 2020. At the acquisition date, Nima Ltd had various equity components, identifiable assets, liabilities, and unrecorded assets.
The acquisition analysis needs to be prepared considering the fair values and other relevant information provided.
To prepare the acquisition analysis, we need to consider the fair values of identifiable assets, liabilities, and unrecorded assets, along with the equity components of Nima Ltd. Let's calculate the acquisition analysis:
Share Capital of Nima Ltd: $760,000
Asset Revaluation Surplus: $570,000
Retained Earnings: $285,000
Identifiable Assets:
Inventories: $57,000
Land: $143,000
Plant: $177,000 (Carrying Amount) + $43,000 (Unrecorded Asset) = $220,000
Liabilities:
Contingent Liability: $23,000
Unrecorded Assets:
Patent: $62,700
In-process Research and Development: $157,000
The total consideration paid by Sima Ltd for the acquisition is $1,900,000. Based on the above information, the acquisition analysis can be summarized as follows:
Consideration transferred:
Cash paid by Sima Ltd: $1,900,000
Net assets acquired:
Share capital: $760,000
Asset revaluation surplus: $570,000
Retained earnings: $285,000.
Identifiable assets (inventories, land, plant): $420,000
Liabilities (contingent liability): $23,000
Unrecorded assets (patent, in-process R&D): $219,700
Goodwill:
Consideration transferred - Net assets acquired = $1,900,000 - $2,277,700 = ($377,700)
Considering a tax rate of 30%, the tax impact on the acquisition analysis should also be assessed.
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Please explain where ROE=0.12 came
from?
Q16)Take the example of a US corporation whose next annual earnings are expected to be $20 per share, with a constant growth rate of 5 percent per year, and with a 50 percent payout ratio. Hence, the
Based on the given information, the ROE would be 0.10 or 10%, not 0.12. Please double-check the inputs or provide additional information if there are any discrepancies.
To determine where the ROE (Return on Equity) of 0.12 came from, we need to calculate it based on the given information.
In the example, we are provided with the following details:
Next annual earnings per share: $20
Constant growth rate: 5% per year
Payout ratio: 50% (meaning 50% of earnings are paid out as dividends)
To calculate the ROE, we can use the formula:
ROE = (Net Income / Equity)
Given that the payout ratio is 50%, we can calculate the retained earnings (plowed back into the company) as:
Retained Earnings = (1 - Payout Ratio) * Net Income
= (1 - 0.50) * $20
= $10
Since the growth rate is constant, the sustainable growth rate can be calculated as:
Sustainable Growth Rate = ROE * Retention Ratio
= ROE * (1 - Payout Ratio)
Given that the growth rate is 5%, we can substitute the values and solve for ROE:
0.05 = ROE * (1 - 0.50)
0.05 = ROE * 0.50
ROE = 0.05 / 0.50
ROE = 0.10
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Chuck, a single taxpayer, earns $79,300 in taxable income and $14,700 in interest from an investment in City of Heflin bonds. (Use the U.S tax rate schedule.)
Required:
How much federal tax will he owe?
What is his average tax rate?
What is his effective tax rate?
What is his current marginal tax rate?
Chuck, a single taxpayer, will owe $11,529 in federal tax.
Chuck's average tax rate is 14.54%.
His effective tax rate is 14.59%.
Chuck's current marginal tax rate is 22%.
How much federal tax does Chuck owe on his income and investment?In the United States, federal tax rates are progressive, meaning they increase as taxable income rises. To determine Chuck's federal tax liability, we can refer to the U.S. tax rate schedule. Based on his taxable income of $79,300, Chuck falls into the 22% tax bracket.
To calculate his federal tax, we need to consider both his taxable income and the interest he earned from his City of Heflin bonds. The interest income is included in Chuck's taxable income and subject to taxation. Using the applicable tax rates for each bracket, we find that Chuck's federal tax liability is $11,529.
Chuck's average tax rate is the ratio of his total tax liability to his taxable income. In this case, his average tax rate is 14.54% ($11,529 divided by $79,300).
The effective tax rate, on the other hand, takes into account all taxes paid, including any credits or deductions. It represents the actual percentage of total income that goes towards taxes. In Chuck's case, his effective tax rate is 14.59%.
Lastly, the marginal tax rate refers to the tax rate applied to the last dollar of taxable income earned. Chuck's current marginal tax rate is 22%, indicating that any additional income he earns will be taxed at this rate.
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Which of the following are types of quantitative forecasting models? 1. Time series model 2. Expert panels 3. Correlations models 4. Delphi Technique 5. All of the above 6. 1 & 3 only 7. 2 & 4 only
The types of quantitative forecasting models are as follows: 1. Time series model 2. Correlations models.
Quantitative forecasting models are mathematical and statistical techniques that use historical data to predict future events or quantities. In forecasting, time series models and correlation models are two common types of quantitative models. These are discussed in more detail below.Time series model: A time series model is a quantitative forecasting technique that analyzes patterns in past data to make predictions about future data. Seasonal variation, trend, and random variation are the three types of patterns that may be present in time series data. The goal is to identify and forecast future patterns based on the ones found in the past.Correlations models: A correlation model is a quantitative forecasting technique that looks at the connection between two or more variables. The predictive power of correlations is based on the relationship between two or more variables. If you understand how variables are related, you can use that understanding to make predictions about future values of one or more of the variables.
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Which of the following is false? O a. Small claims courts deal with disputes up to $25,000. O b. An examination for discover involves questioning the opposing party under oath. O c. The defendant can respond with a Statement of Defence or a Counterclaim. O d. To start a legal action, a plaintiff must prepare a Statement of Claim. Oe. Fast track litigation is available for trails that can be completed within 3 days.
The false statement among the options provided is option e. Fast track litigation is available for trials that can be completed within 3 days.
Options a, b, c, and d are all true statements about the legal process. Small claims courts typically handle disputes up to a certain monetary limit, which may vary depending on the jurisdiction but is often around $25,000. An examination for discovery involves questioning the opposing party under oath as part of the pre-trial discovery process. The defendant can respond to a legal action with a Statement of Defence or a Counterclaim, depending on the circumstances. To initiate a legal action, the plaintiff must prepare a Statement of Claim, which outlines their allegations and the relief sought.
However, option e is false. Fast track litigation does not typically refer to trials that can be completed within 3 days. Fast track litigation is a term used in some legal systems to describe a streamlined and expedited process for resolving certain types of cases. It aims to speed up the resolution of cases by setting shorter timelines for various stages of the litigation process, such as filing documents, conducting hearings, or reaching a trial date. However, the time frame for completing a trial under fast-track litigation can vary depending on the jurisdiction and the specific rules in place.
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CPA Hotels Inc. runs a national chain of hotels, serving CPAS traveling for accounting conferences around the country. Recently, the company has embarked on a new marketing campaign by giving free rooms to influencers, who then post about their stays at their hotels on social media. The marketing campaign has generated new revenue streams and record profits for the company. As a result, CPA Hotels Inc. has decided to pay a dividend to its shareholders for the first time in the company's history. The company declared a cash dividend of $1.00 per share on its 2 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare all journal entries necessary on those three dates.
The journal entry for this transaction is: [Debit] Dividend Payable: $2,000,000 [Credit] Cash: $2,000,000.
The journal entries necessary for CPA Hotels Inc. are as follows: 1. On August 1 (Date of declaration of dividends): On this date, the company needs to create a liability in its books as it declared the dividend but has not paid it yet. The journal entry for this transaction is: [Debit] Retained Earnings: $2,000,000 [Credit] Dividend Payable: $2,000,0002. On August 15 (Date of record): On this date, the company has to identify the shareholders who will be receiving the dividend. This process will help the company to know the number of shares eligible for the dividend. The journal entry for this transaction is: [No Entry Required] 3. On September 9 (Date of payment):On this date, the company needs to pay the dividend to its shareholders. The journal entry for this transaction is: [Debit] Dividend Payable: $2,000,000 [Credit] Cash: $2,000,000.
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True or False: To double an investment at an interest rate of
15% compounded annually, it will take almost 5 years.
Answer:
correct
Explanation:
yes well done bro
The statement: "To double an investment at an interest rate of 15% compounded annually, it will take almost 5 years." is a true statement.
What is compounding?Compounding is the process of earning interest on interest. It is a way to generate more money and makes your investment grow faster. It is also called reinvesting.
What is doubling time?The amount of time it takes for the principal investment to double in value is called the doubling time.
How to find the doubling time using the Rule of 72?The Rule of 72 is used to determine how long it would take for an investment to double in value. The formula for the rule of 72 is:
Doubling Time = 72 / Interest rate per period
Now that we have the formula for finding the doubling time, we can substitute the given values in the formula to find out how long it will take to double an investment at a rate of 15% compounded annually.
Given, Interest Rate (r) = 15% per annum
Using the formula, Doubling Time = 72 / Interest rate per period
We can calculate the doubling time as:
Doubling Time = 72 / 15%Doubling Time = 4.8 years
Hence, doubling an investment at an interest rate of 15% compounded annually, it will take almost 5 years.
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Use the DAS-DAD diagrams to graphically illustrate the impact of a permanent increase in the central bank's inflation target when the economy was initially at a long-run equilibrium. Make sure to draw the curves associated with the initial SR equilibrium and LR equilibrium, the transition from the SR to the LR, and the final LR equilibrium. Clearly label all the curves, axes, equilibrium points, and values of inflation and output. Explain in words the time path of output and inflation.
The impact of a permanent increase in the central bank's inflation target when the economy was initially at a long-run equilibrium can be graphically illustrated using the DAS-DAD diagrams. The following are the details:DiagramThe diagram is divided into two parts: the left-hand side depicts the DAS-DAD diagram for the short run, while the right-hand side depicts the DAS-DAD diagram for the long run.
At the long-run equilibrium, there is no output gap, as actual output equals potential output. Assume that the central bank increases its inflation target from i1 to i2. As a result, the DAD curve shifts upward, as shown in the diagram. The short-run equilibrium is depicted by the intersection of the new DAD curve and the DAS curve. The new short-run equilibrium point corresponds to a higher level of inflation (i2) and a higher level of output (Y2) than the initial equilibrium point (i1, Y1).
The transitional period can be explained in the following way: the initial short-run equilibrium is associated with inflation rate i1 and output level Y1. As a result, the economy initially moves along the DAS curve to reach the new short-run equilibrium point associated with inflation rate i2 and output level Y2. The economy continues to move along the DAS curve until it reaches the point where the DAS curve intersects the long-run inflation rate line.
This is the new long-run equilibrium, where the inflation rate is i2 and the level of output is Y*. Thus, there is an initial increase in inflation and output, followed by a gradual return to the long-run equilibrium.
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ABC is a company that makes watches. The company has traditionally segmented the market by gender (men's and women's watches) and price range (low, medium, premium). However, research suggests that the company may benefit by segmenting the market for watches based on consumer psychographics such as values and lifestyle. Your task is to identify four distinct segments in the watch market – two segments based on consumer values and two segments based on consumer lifestyle - and describe the type of watches that the ABC company would sell to each of these segments. Specifically: - 3a. Identify two (2) consumer values relevant for the watch market. Then, describe two distinct market segments (one for each of the consumer values you have selected) that the watch company could target. Describe some of the key product attributes that customers in each of these two market segments are likely to seek. (15%)
The ABC company can target two distinct market segments based on consumer values in the watch market: 1) Sustainability-conscious segment and 2) Luxury-oriented segment.
The sustainability-conscious segment consists of consumers who prioritize environmentally friendly practices. They seek watches that align with their values, such as recycled materials, energy-efficient mechanisms, and ethical sourcing. These customers are likely to value brands that prioritize sustainability and promote eco-friendly initiatives. ABC company can cater to this segment by offering a range of watches with recycled components, solar-powered movements, and eco-conscious packaging. The luxury-oriented segment comprises consumers who value exclusivity and high-end craftsmanship. They seek watches that reflect their discerning taste and desire for status symbols. Key attributes sought by this segment include premium materials, intricate designs, and limited editions. ABC company can target this segment by offering a collection of luxury watches with premium materials like gold or diamonds, intricate complications, and limited-edition models to create a sense of exclusivity and prestige.
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Allen Company's 2019 income statement reported total revenues, $820,000 and total expenses (including $37,000 depreciation) of $690,000. The company's accounting records showed the following: accounts receivable-beginning balance, $47,000 and ending balance, $37,300; accounts payable -beginning balance, $19,000 and ending balance, $25,300. Therefore, based only on this information, how much was the 2019 net cash provided by operating activities? a. $170,400 b. $163.600 c. $183,000. d. $126,600
Summary:
Based on the provided information, the net cash provided by operating activities for the year 2019 is $183,000.
To determine the net cash provided by operating activities, we need to analyze the changes in accounts receivable and accounts payable, as well as consider non-cash expenses like depreciation.
The formula to calculate net cash provided by operating activities is:
Net Cash Provided by Operating Activities = Total Revenues - Total Expenses + Depreciation +/- Changes in Working Capital
Given information:
Total Revenues = $820,000
Total Expenses (including depreciation) = $690,000
Depreciation = $37,000
Accounts Receivable: Beginning balance = $47,000, Ending balance = $37,300
Accounts Payable: Beginning balance = $19,000, Ending balance = $25,300
Now let's calculate the net cash provided by operating activities step by step:
Calculate the change in accounts receivable:
Change in Accounts Receivable = Ending balance - Beginning balance
Change in Accounts Receivable = $37,300 - $47,000
Change in Accounts Receivable = -$9,700
Calculate the change in accounts payable:
Change in Accounts Payable = Ending balance - Beginning balance
Change in Accounts Payable = $25,300 - $19,000
Change in Accounts Payable = $6,300
Calculate net cash provided by operating activities:
Net Cash Provided by Operating Activities = Total Revenues - Total Expenses + Depreciation +/- Changes in Working Capital
Net Cash Provided by Operating Activities = $820,000 - $690,000 + $37,000 + (-$9,700) + $6,300
Net Cash Provided by Operating Activities = $183,000
Therefore, the net cash provided by operating activities for the year 2019 is $183,000. Option c. $183,000 is the correct answer.
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How is women entrepreneur a source of economic growth?
Explain
Women entrepreneur is a source of economic growth because they generate employment and stimulate economic activities. women entrepreneur is a source of economic growth as it leads to job creation and revenue generation.
Entrepreneurship can play a critical role in driving economic growth, and women are increasingly becoming more entrepreneurial. Women entrepreneurs contribute significantly to economic growth through job creation and revenue generation. They create businesses, which then employ other people, thereby generating employment and stimulating economic activity .Entrepreneurship has a positive impact on economic growth because of the new products and services created, the new markets developed, and the innovative ways of production that result from entrepreneurial activity.
Women entrepreneurs are particularly important because they contribute to the development of new industries, create jobs, and stimulate economic activity. Women's entrepreneurship also has the potential to reduce poverty, increase income, and improve the quality of life of women and their families.
Therefore, women entrepreneur is a source of economic growth as it leads to job creation and revenue generation.
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How is the answer C, for this question?
More specifically, how would I be able to find the PVIFA? when
using the equation PVIFA = 1 - [1 / (1 + r)^n)] / r
), I get an answer of -5.21 when I've seen ot
Leonard, Inc. is considering a five-year project that has an initial after-tax outlay or after-tax cost of $70,000. The future after-tax cash inflows from its project for years 1, 2, 3, 4 and 5 are al
I apologize for the confusion. Upon reevaluating the question and the provided options, it appears that Option C would indeed be the correct answer for the bond with the greatest interest rate price risk.
To calculate the Present Value Interest Factor of an Annuity (PVIFA), you need to use the correct formula. The correct formula for PVIFA is:
PVIFA = (1 - (1 / (1 + r)^n)) / r
In your calculation, it seems there may have been an error in inputting the values or using the formula. To find the PVIFA, you need to substitute the appropriate values for r (interest rate) and n (number of periods) into the formula.
However, for the given question about bond interest rate price risk, the specific calculation of PVIFA is not required. The answer choice is determined by considering the characteristics of the bonds and their sensitivity to interest rate changes. Option C, a 10-year, $1,000 face value, zero-coupon bond, is generally more sensitive to interest rate changes compared to the other options, as it does not have periodic coupon payments to offset potential price fluctuations caused by interest rate movements.
Therefore, based on the given options, Option C would have the greatest interest rate price risk among the bonds.
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Identify the effect of following transactions on the accounting equation
Mr. X invested $2,000 cash into his business.
Rendered service and received $6,500 cash.
Purchased supplies on credit; $600.
Paid the part-time administrative assistant's salary of $1,450.
Purchased $3,000 office equipment by cash.
The following transactions affect the accounting equation in the following ways:1. Mr. X invested $2,000 cash into his business.
The impact on the accounting equation is that both assets and equity increase. 2. Rendered service and received $6,500 cash. The impact on the accounting equation is that both assets and equity increase.3. Purchased supplies on credit; $600.The impact on the accounting equation is that both assets and liabilities increase.4. Paid the part-time administrative assistant's salary of $1,450.The impact on the accounting equation is that both assets and equity decrease.5. Purchased $3,000 office equipment by cash. The impact on the accounting equation is that both assets increase and decrease. Cash, an asset, decreases by $3,000, and equipment, also an asset, increases by $3,000.
Therefore, the main answer is that each transaction affected the accounting equation. The impact of transactions varies, but all transactions affect the equation in one way or another. It is essential to know how these transactions affect the accounting equation since they influence the business's financial statements.
In conclusion, every transaction affects the accounting equation. The equation must balance at all times, or else the accounting records will be inaccurate. A transaction that involves cash will affect at least one of the elements of the accounting equation. The transactions discussed above affected the accounting equation differently. To maintain the balance, every transaction needs to affect at least two elements of the accounting equation. Thus, an increase in one element must cause a corresponding decrease in another.
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QNO6 A firm faces the demand schedule p = 190 − 0.6Q and the total cost function TC = 40 + 30Q + 0.4Q2 . (a) What output will maximize profit? (b) What output will maximize total revenue? (c) What will the output be if the firm makes a profit of £4,760?
QNO7Find the output where profit be maximized for a firm with the total revenue and total cost functions
TR = 52Q − Q2
TC = 0.33Q3 -2.5Q2 +34Q +4
QNO8 Find whether any stationary points exist for the following functions for positive values of q, and say whether or not the stationary points are at the minimum values of the function.
AC = 345.6q−1 + 0.8q2
MC = 30 + 0.4q2
TC = 15 + 27q − 9q2 + q3
The output that will maximize profit is Q = 80. The output that will maximize total revenue is approximately Q = 158.33.
a) To maximize profit, we need to determine the output level at which marginal cost (MC) equals marginal revenue (MR). The marginal revenue is the derivative of the total revenue function, and the marginal cost is the derivative of the total cost function.
Given:
Demand schedule: p = 190 - 0.6Q
Total cost function: TC = 40 + 30Q + 0.4Q^2
We can find the marginal revenue (MR) by differentiating the total revenue function:
TR = p * Q
MR = d(TR)/dQ = d(pQ)/dQ = p + Q * dp/dQ
Differentiating the demand schedule, we have:
dp/dQ = -0.6
Substituting this value into the marginal revenue equation:
MR = (190 - 0.6Q) + Q * (-0.6) = 190 - 0.6Q - 0.6Q = 190 - 1.2Q
The marginal cost (MC) is given as:
MC = d(TC)/dQ = d(40 + 30Q + 0.4Q^2)/dQ = 30 + 0.8Q
To maximize profit, we set MR equal to MC and solve for Q:
190 - 1.2Q = 30 + 0.8Q
1.2Q + 0.8Q = 190 - 30
2Q = 160
Q = 80
Therefore, the output that will maximize profit is Q = 80.
(b) To find the output that maximizes total revenue, we need to maximize the total revenue function TR = p * Q. Since the demand schedule is already given as p = 190 - 0.6Q, we can substitute it into the total revenue function:
TR = (190 - 0.6Q) * Q = 190Q - 0.6Q^2
To find the output that maximizes total revenue, we take the derivative of TR with respect to Q and set it equal to zero:
d(TR)/dQ = 190 - 1.2Q = 0
1.2Q = 190
Q = 190 / 1.2
Q = 158.33 (approximately)
Therefore, the output that will maximize total revenue is approximately Q = 158.33.
(c) To find the output level for a profit of £4,760, we need to set the profit equation equal to the desired profit and solve for Q. The profit (π) is calculated as:
π = TR - TC
π = (190Q - 0.6Q^2) - (40 + 30Q + 0.4Q^2)
π = 190Q - 0.6Q^2 - 40 - 30Q - 0.4Q^2
π = -0.4Q^2 + 160Q - 40
We set this equation equal to £4,760 and solve for Q:
-0.4Q^2 + 160Q - 40 = 4,760
-0.4Q^2 + 160Q - 4,800 = 0
To solve this quadratic equation, we can use the quadratic formula:
Q = (-b ± √(b^2 - 4ac)) / 2a
Plugging in the values:
a = -0.4, b = 160, c = -4800
Q = (-160 ± √(160^2 - 4(-0.4)(-4800))) / 2
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Consider a variation to the OLG model with elastic labor supply. In each period, the economy is occupied by two cohorts of two generations of households - the young and the old - living for two periods. There is no population growth. Outputs are not storable. The twist here is the production functions for every cohort household: * The young's output of each cohort is produced linearly 1-to-1 using the labor effort, that is Yyoung = Lyoung * The old retires and earn exogenous income of Yold = 0.8 Let ß = 1, each cohort solves the following lifetime problem: max log(Cyoung) — Lyoung +log(Cold) subject to Cyoung + S = Yyoung {Cyoung,Cold,Lyoung} and Cold = 0.8+(1+r)S Competitive equilibrium: Suppose the economy is to have no government intervention. (a) (3 points) Explain why the amount of saving of each cohort is S = 0. (b) (8 points) Knowing from (a) that saving is zero, solve for the competitive equilibrium of each cohort's optimal consumptions when young and old, and labor supply when young. (Hint: It becomes one-period problem!) (c) (2 points) What is the lifetime utility of each cohort in the competitive equilibrium?
In the given variation of the OLG model with elastic labor supply, the competitive equilibrium results in zero savings for each cohort. The optimal consumption for both the young and old cohorts is determined based on their respective production and exogenous income, resulting in a lifetime utility for each cohort.
(a) The amount of saving of each cohort is zero (S = 0) because the competitive equilibrium in this model is characterized by the equality between consumption and income for each cohort. Since the young cohort's production (Yyoung) is equal to their consumption (Cyoung) and there is no exogenous income for the old cohort (Yold = 0.8), the young cohort does not need to save to meet their consumption needs.
(b) With S = 0, the young cohort's consumption (Cyoung) is equal to their production (Yyoung = Lyoung) due to the linear production function. Substituting Cyoung = Yyoung into the old cohort's lifetime problem, we have Cold = 0.8 + (1+r)*0, which simplifies to Cold = 0.8. Thus, the old cohort's consumption is fixed at 0.8.
Since the problem becomes a one-period problem with no savings, the young cohort maximizes their lifetime utility with the objective of log(Cyoung) - Lyoung. The optimal labor supply (Lyoung) is determined by equating the marginal utility of consumption to the marginal disutility of labor. Solving this one-period problem gives the equilibrium consumption and labor supply for the young cohort.
(c) The lifetime utility of each cohort in the competitive equilibrium can be calculated by summing the logarithm of their respective optimal consumptions. For the young cohort, it is log(Cyoung) and for the old cohort, it is log(Cold = 0.8).
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At a discount rate of 17.00%, find the present value of a perpetual payment of $5,000 per year.
If the discount rate were lowered to 8.50%,half the initial rate, what would be the value of the perpetuity?
The present value of a perpetual payment is the current value of a series of equal payments that continues indefinitely.
To calculate the present value of a perpetual payment, we use the formula PV = PMT / r, where PV is the present value, PMT is the annual payment, and r is the discount rate. Using this formula, we can calculate the present value of the perpetual payment of $5,000 per year at a discount rate of 17.00%. The present value is obtained by dividing the annual payment by the discount rate.
To determine the value of the perpetuity at a lower discount rate of 8.50%, we can use the same formula. By substituting the new discount rate into the formula, we find that the present value of the perpetuity at a discount rate of 8.50% is approximately $58,824. This indicates that if the discount rate is lowered to 8.50%, the present value of the perpetual payment increases to $58,824.
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Explain the term "free trade" as it relates to "fair trade" in
your own terms. Which of these do you most support and why? Give an
example to support your opinion.
Free trade refers to the trade policies adopted by the nations in which they freely trade with one another by removing tariffs, quotas, and other trade barriers. While Fair trade is an arrangement aimed to empower and protect the vulnerable producers, farmers, and workers from the developing countries through providing better trading conditions and promoting sustainability.
Fair Trade is something that I would support because it is ethical trade that brings equitable business relationships between developed countries and developing countries. Fair trade empowers farmers and producers, ensures environmental sustainability, and supports communities. The movement toward fair trade began with a handful of people who were concerned about the sustainability of farming communities in developing countries.The concept of Fair Trade works in a way that guarantees a fair price for the producer and ensures that the working conditions are healthy and safe. It also promotes sustainable production by ensuring environmental management and enables the producers to sell their products directly to the consumers.
In contrast, free trade policies, on the other hand, promote the exploitation of labor and resources. Free trade policies allow wealthy nations to outsource their production to countries with low wages and standards. As a result, workers in developing countries often work in appalling conditions, with low wages and long working hours.The farmers and workers in developing countries cannot compete with the large multinational corporations with regards to cost, quality, and marketing. Hence, they are left with no choice but to accept unfair working conditions. Therefore, the fair trade movement is an excellent alternative to the exploitative free trade practices that have been dominant in the world economy. An example of fair trade would be the purchase of coffee, chocolate, or bananas from small farmers' cooperatives rather than large multinational corporations. This way, the profits go directly to the farmer who produced the product.
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