Answer:
The journal entry to record the write down is:
Dr Cost of goods sold 1,000
Cr Inventory 1,000
Since cost of goods sold increases, then net income (income statement) will decrease. A decrease in net income will also result in lower retained earnings (balance sheet).
The process of taking cash flow that is received or paid in the future and stating that cash flow in present value terms is called discounting. A. True B. False
Answer:
A. True
Explanation:
The process of taking cash flow that is received or paid in the future and stating that cash flow in present value terms is called discounting.
Discounting is the opposite of Compounding because discounting measures what the value of future cash flow is worth in the present while compounding takes the present value into the future. Discounting generally points to a method of knowing the present value of cash flow. Discounting is an important tool due to how a business could know the present value of what the business spends and gains by comparing it to the future value of what is to be received.
The cash flow that is received or paid in the future is less than the present value of the cash flow and that depicts the time value of money.
_______ refers to the gathering information and uncovering customer needs by using one or more questions.
a. Probing
b. Communication narrowing
c. Objection refutation
d. Question empathizing
e. Interrogative encoding
Answer:
a. Probing
Explanation:
Probing refers to the gathering of information and uncovering customer needs by using one or more questions.
This ultimately implies that, business owners and service providers through the help of customer relationship department are able to understand the various customer needs by asking pertinent questions. The main purpose of this strategic approach (probing) is to ensure businesses understand customer needs and are able to provide appropriate solutions in a timely manner.
Some examples of probing questions used by various businesses are;
Did you enjoy our service? How satisfied are you with this product?What would you recommend we add to our website?Alicia is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Alicia's $100,000 salary. In addition to her compensation, ABC pays Alicia dividends of $250,000. After reviewing comparable companies, you determine that reasonable compensation for someone with her experience and responsibilities is $200,000. What is Alicia's qualified business income
Answer: $225,000
Explanation:
Alicia's qualified Business income will be calculated thus:
Net income = $325,000
Dividends = $250,000
Alicia’s salary = $100,000
Compensation = $200,000
The actual reasonable compensation will be calculated as the difference between the reasonable compensation and the salary of Alicia. This will be:
= $200,000 - $100,000
= $100,000
Alicia’s qualified business income:
= Net income - Actual Reasonable compensation
= $325,000 - $100,000
= $225,000
Kristi Corporation, a calendar-year, accrual-basis corporation had net income per the books of $850,000 for the current year. Included in this number were the following items: Federal income taxes $200,000 Interest income on U.S. treasury bonds 26,000 Interest income on municipal bonds 22,000 Charitable contribution in excess of 10% limitation 4,000 Tax penalty assessed by IRS 1,000 Capital loss on sale of land (no other capital asset sales) 3,000 Business entertainment expense 20,000 MACRS depreciation in excess of book depreciation is $5,000. Calculate Kristi Corporation's taxable income before special deductions for the current year.
Answer:
Taxable income before special deductions = $1,051,000
Explanation:
Particulars Amount($) Amount($)
Income as per books of accounts 850,000
Add: Income tax 200,000
Charitable Contribution excess of 4,000
10% limit
Tax penalty assessed by IRS 1,000
Capital loss on sale of land 3,000
Business entertainment expense 20,000 228,000
1,078,000
Less: Interest income on municipal (22,000)
bonds
MACRS depreciation in excess of (5,000) (27,000)
book depreciation
Taxable income before special deductions 1,051,000
A company manufactures three products, A, B, and C. The following information is available about the products on a per unit basis:
A B C
Sales price $65.50 $57.50 $75.25
Total variable cost 28.85 26.5 38.95
Direct material cost 11.25 8.9 22.75
Machine hours 4.65 6.3 5.9
How much will contribution margin be if the company has 1,500 machine hours and produces only the most profitable product?
Answer:
Hi the demand for each product for this question is missing, however, i have provided step by step approach to solving the problem below .
Explanation:
First Calculate the contribution per unit of each product
A B C
Sales price $65.50 $57.50 $75.25
Less Total variable cost ($28.85) ($26.50) ($38.95 )
Less Direct material cost ($11.25) ($8.90) ($22.75)
Contribution $25.40 $22.10 $13.25
Calculate the contribution per limiting factor of each product and rank the products
contribution per limiting factor = contribution per unit ÷ quantity per limiting factor per unit
A B C
Contribution $25.40 $22.10 $13.25
Quantity of limiting factor 4.65 6.3 5.9
Contribution per limiting factor 5.46 3.51 2.25
Ranking 1 2 3
Allocate the limiting factor according to the limiting factor
The company will on produce Product A as this is the most profitable.
Contribution = $25.40
All of the following would require a debit to the Work In Process Inventory account except::a.factory labor is used. b.raw materials are purchased. c.overhead is applied. d.raw materials are used
Answer:
b. raw materials are purchased
Explanation:
A Raw Materials Account would be debited instead of a Work In Process Inventory account when raw materials are purchased.
Direct Labor Cost Budget Pasadena Candle Inc. budgeted production of 33,000 candles for January. Each candle requires molding. Assume that two minutes are required to mold each candle. If molding labor costs $9.75 per hour, determine the direct labor cost budget for January. Round total direct labor cost to the nearest dollar, if required. Pasadena Candle Inc. Direct Labor Cost Budget For the Month Ending January 31 Hours required for assembly: Candles min. Convert minutes to hours ÷ min. Molding hours hrs. Hourly rate × $ Total direct labor cost $
Answer:
Total direct labor cost = $16,087.50
Explanation:
Production = 33,000 candles
Minute per candle = 3 minutes
Total minute to produce 33,000 Candle = 33,000 candles * 3 minutes = 99,000 Minutes
Total hours for production = 99,000 / 60 minutes = 1,650 hours
Hence, molding hours = 1,650 hours
Total direct labor cost = Molding hours * Molding labor costs per hour
Total direct labor cost = 1,650 hours * $9.75
Total direct labor cost = $16,087.50
At the end of the current year, Leer Company reported total liabilities of $319,000 and total equity of $119,000. The company's debt ratio on the last year-end was:___________.
a. 72.8%.
b. 268%.
c. 3-68%.
d. 37.3%.
e. $438,000
Answer:
72.8%
Explanation:
The first step is to calculate the total assets
Total assets= Total liabilities + total equity
= $319,000 + $119,000
= $438,000
Therefore the debt ratio can be calculated as follows
= Total liabilities/total assets
= $319,000/$438,000
= 0.728×100
= 72.8%
A rich aunt promised you $3,000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 4% larger than the last payment. She will continue to show this generosity for 15 years, giving a total of 15 payments. If you put these payments in an account that pays 6% interest, how much will you have in this account in 15 years
Answer:
FV = 89,342
Explanation:
The future value of any annuity equals the sum of all the future values for all of the annuity payments when they are moved to the end of the last payment interval.
FV (Ordinary Annuity) = (C/((r-g)/100)*(1-((1+g/100)/(1+r/100))^n))*(1+r/100)^n
FV = (3000/((6-4)/(100))*(1-((1+4/(100))/(1+6/(100)))^(15)))*(1+6/(100))^(15)
FV = 89342
Where
C = First cash flow
r = interest rate
g = growth rate
n = number of payments
What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
Answer:
a. The present value of the sales price is $1.657 million.
b. No. This is because an investment in the property will result in a negative net present value (NPV) of $0.443 million.
c-1. The present value of the future cash flows is $2.122 million.
c-2. Yes. Yes. This is because an investment in the property will result in a positive net present value (NPV) of $0.022 million.
Explanation:
Note: This question is not complete. The complete question is therefore presented before answering the question as follows:
You can buy property today for $2.1 million and sell it in 6 years for $3.1 million. (You earn no rental income on the property.)
a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
b. Is the property investment attractive to you?
c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
c-2. Is the property investment attractive to you now?
The explanation to the answers is now provided as follows:
a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
The present value of the sales price can be calculated using the simple present value formula as follows:
PV = FV / (1 + r)^n ……………………….. (1)
Where;
PV = Present value of the sales price = ?
FV = Future value or the sales price in 6 years = $3.1 million
r = interest rate = 11%, or 0.11
n = number of years = 6
Substitute the values into equation (1), we have:
PV = $3.1 / (1 + 0.11)^6
PV = $3.1 / 1.11^6
PV = $3.1 / 1.870414552161
PV = $1.65738659187525 million
Rounding to 3 decimal places, we have:
PV = $1.657 million
Therefore, the present value of the sales price is $1.657 million.
b. Is the property investment attractive to you?
No. This is because an investment in the property will result in a negative net present value (NPV) of $0.443 million.
The negative net present value (NPV) of $0.443 million is determined as follows:
NPV = Present value of the sales price - Acquisition cost = $1.657 million - $2.1 million = -$0.443 million
c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
The present value of the future cash flows can be calculated using the following steps:
Step 1: Calculation of the present value of the $110,000 per year rent
Since the rent is paid at end of each year, this can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PVR = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)
Where;
PVR = Present value of yearly rent = ?
P = Annual rent =$110,000
r = interest rate = 11%, or 0.11
n = number of years = 6
Substitute the values into equation (2) to have:
PVR = $110,000 * ((1 - (1 / (1 + 0.11))^6) / 0.11)
PVR = $110,000 * 4.23053785373826
PVR = $465,359.163911209
Converting to million and rounded to 3 decimal places, we have:
PVR = $0.465 million
Step 2: Calculation of the present value of the future cash flows
Present value of future cash flows = Present value sales price + Present value of annual rent ……. (3)
Where;
Present value sales price = $1.657 million, as already calculate in part a above
Present value of annual rent = PVR = $0.465 million
Substituting the values into equation (3), we have:
Present value of future cash flows = $1.657 million + $0.465 million = $2.122 million
Therefore, the present value of the future cash flows is $2.122 million.
c-2. Is the property investment attractive to you now?
Yes. This is because an investment in the property will result in a positive net present value (NPV) of $0.022 million.
The positive net present value (NPV) of $0.022 million is determined as follows:
NPV = Present value of tof the future cash flows - Acquisition cost = $2.122 million - $2.1 million = 0.0219999999999998 million
Converting to million and rounded to 3 decimal places, we have:
NPV = $0.022 million
Penny Worth Gaming, a computer enhancement company, has three product lines: audio enhancers, video enhancers, and connection-speed accelerators. Common costs are allocated based on relative sales. A product line income statement follows: Penny Worth Gaming Income Statement For the Year Ended December 31, 2017 Audio Video Accelerators Total Sales $1,200,000 $2,450,000 $2,400,000 $6,050,000 Less cost of goods sold 730,000 1,435,000 2,070,000 4,235,000 Gross margin 470,000 1,015,000 330,000 1,815,000 Less other variable costs 56,570 68,850 21,190 146,610 Contribution margin 413,430 946,150 308,810 1,668,390 Less direct salaries 152,160 164,690 60,340 377,190 Less common fixed costs: Rent 11,970 25,830 25,200 63,000 Utilities 4,370 9,430 9,200 23,000 Depreciation 5,890 12,710 12,400 31,000 Other administrative costs 79,230 170,970 166,800 417,000 Net income $159,810 $562,520 $34,870 $757,200 Since the profit for accelerator devices is relatively low, the company is considering dropping this product line. Determine the annual impact on profit of dropping accelerator products. The company will be off by $ if it drops accelerators.
Answer:
weogijeognerohi werihjnoeriwhnoerhe
Explanation:
ejfoeiwnjgoerwn yore yoeryjiworik
What is a "closing balance?
a.) The amountof money you have at the end of the statement period
b.)The amount of money you have when you close your account
c.)The amount of money you owe at the end of the statement period
d.)The amount of money waiting to be transferred out of your account
Faster pls
Answer:
The answer is A
Explanation:
A closing balance is the amount of money a business has at the end of a specific time period.
Cycle Time and Velocity In the first quarter of operations, a manufacturing cell produced 85,000 stereo speakers, using 20,000 production hours. In the second quarter, the cycle time was 10 minutes per unit with the same number of production hours as were used in the first quarter. Required: 1. Compute the velocity (per hour) for the first quarter. If required, round your answer to two decimal places. fill in the blank 1 units per hour 2. Compute the cycle time for the first quarter (minutes per unit produced). If required, round your answer to two decimal places. fill in the blank 2 minutes per unit 3. How many units were produced in the second quarter
Answer:
1. Velocity per hour= 4.35 units per hour
2. Cycle time=0.24
3. Units produced= 120,000 units
Explanation:
1.Computation for the velocity (per hour) for the first quarter.
Velocity per hour=85,000 units / 20,000 hour
Velocity per hour= 4.35 units per hour
2.Compution for the cycle time for the Frst quarter
Cycle time =20,000 hour/85,000 units
Cycle time=0.24
3. Calculation for How many units were produced in the second quarter
Units produced =60 minutes / 10 minutes per units * 20,000 Hours
Units produced= 120,000 units
Onyemah Corporation uses the FIFO method in its process costing system. Operating data for the Brazing Department for the month of November appear below: Units Percent Complete with Respect to Conversion Beginning work in process inventory 7,700 40 % Transferred in from the prior department during November 41,500 Completed and transferred to the next department during November 39,600 Ending work in process inventory 9,600 70 % What were the equivalent units of production for conversion costs in the Brazing Department for November?
Answer:
43,240 units
Explanation:
Note : We are using FIFO method thus, we are only interested in the units worked in this year.
Calculation of equivalent units of production for conversion costs
To Finish Beginning work in process inventory (7,700 × 60%) = 4,620
Started and Completed ((39,600 - 7,700) × 100%) = 31,900
Ending work in process inventory (9,600 × 70%) = 6,720
Equivalent units of production for conversion costs = 43,240
Conclusion :
The equivalent units of production for conversion costs in the Brazing Department for November is 43,240 units.
Granfield Company has a piece of manufacturing equipment with a book value of $36,500 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $21,300. Granfield can purchase a new machine for $113,000 and receive $21,300 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $18,300 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:
Answer:
($18,500)
Explanation:
Book value of manufacturing equipment = $36,500
Current market value of equipment = $21,300
Cost of new machine = $113,000
Cash received from trading old machine = $21,300
Variable manufacturing costs of new machine reduced by $18,300 per year, over the four year
Total increase/decrease in net income = Cost of new machine + Cash received from trading old machine + Reduction in variable manufacturing costs
= ($113,000) + $21,300 + $18,300 × 4
= ($113,000) + $21,300 + $73,200
= ($18,500)
It therefore means that the total decrease in net income by replacing the current machine with the new machine is $18,500
a company reported revenues of $377,00, cost of goods sold of $122,000, selling expense of $12000and total operating costs of 72,000. Gross margin for the year os ___
Answer:Gross margin =$255,000
Explanation:
Gross margin is defined as the remainng sales revenue of a company retains after taking care or addressing the direct costs incurred in producing the goods it sells or services it renders.
When a company's cost of goods sold (COGS) subtracted from net sales revenue, the Gross margin is retained.
Gross margin= Net Sales Revenues-CostsOfGoodsSold
$377,000 - $122,000
=$255,000
Crimson Inc. recorded credit sales of $797,000, of which $540,000 is not yet due, $170,000 is past due for up to 180 days, and $87,000 is past due for more than 180 days. Under the aging of receivables method, Crimson Inc. expects it will not collect 2% of the amount not yet due, 16% of the amount past due for up to 180 days, and 27% of the amount past due for more than 180 days. The allowance account had a debit balance of $3,800 before adjustment. After adjusting for bad debt expense, what is the ending balance of the allowance account
Answer:
$65,290
Explanation:
The computation of the ending balance of the allowance account is shown below:-
Bad Debts for accounts receivable not yet due is
= $540,000 × 0.02
= $10,800
Bad Debts for accounts receivable due for up-to 180 days:
= $170,000 × 0.16
= $27,200
Bad Debts for accounts receivable due for more than 180 days:
= $87,000 × 0.27
= $23,490
Ending balance of Allowance account:
= $3,800 + $10,800 + $27,200 + $23,490
= $65,290
During a recent week, Maya Schneiderman worked 42 regular hours. She earns $9.25/hour, is paid an overtime rate of 1.5 times her regular wage rate, and has requested that 3% of her gross pay be withheld and contributed to a 401(k) retirement plan. Maya's taxable pay for federal income tax withholding is
Answer:
$385.82
Explanation:
Maya's total earnings = (40 x $9.25) + (2 x $9.25 x 1.5) = $397.75
Contributions to her 401k retirement plan reduce her taxable income (they are above the line deductions. She will contribute $397.75 x 3% = $11.93.
Her taxable income for federal income tax withholding = $397.75 - $11.93 = $385.82.
The actual amount withheld will depend on Maya's W-4 form (includes information about filing status, dependents, other income, etc.)
Assume you purchase a Harley-Davidson Corporation bond that pays 5 percent or annual interest of $50 and has a face value of $1000. Also, assume new corporate bond issues of comparable quality are currently paying 6 percent. What is the approximate market value?
Answer:
$833.33
Explanation:
Annual Interest Paid = $50
Market Interest rate = 6%
The approximate market value = Annual interest paid / Market Interest rate
The approximate market value = $50 / 6%
The approximate market value = $50 / 0.06
The approximate market value = 833.3333333333333
The approximate market value = $833.33
Consider the following two assets. The first is a stock fund, the second is a long-term government and corporate bond fund. The probability distribution of the funds is as follows: Expected ret std. dev. Stock fund 18% 25% Bond fund 11% 18% The correlation between the fund returns is 0.4. What is the investment proportion in the minimum variance portfolio of the bond fund
Answer:
0.76
Explanation:
So, in this particular question we are given that that there are two assets which are the; [1]. stock fund and [2]. a long-term government and corporate bond fund.
From the question/problem, we have that the Expected ret and the std. dev. for the Stock fund is 18% and 25% respectively. Also, the Expected ret and std. dev. for Bond fund 11% and 18% respectively.
Thus, the investment proportion in the minimum variance portfolio of the bond fund = 1 - [ ( 18%)² - 0.4 × 25% × 18%) ÷ ( 25%)² + (18%)² - 2 × 0.4 × 25% × 18%. = 1 - [0.0144 ÷ 0.0609 ] = 1 - 0.24 = 0.76.
Situation 2
A customer walks into your department and asks if anyone can help her. She complains that she's
been waiting for the salesperson in the shoe department for the last 10 minutes. She says, "Just
when I think he's finally going to help me, he takes another phone call. I'm so upset. I just want to
tell his manager how rude he's been."
Policy: Employees should try to handle all customer complaints. If the customer demands to see a
manager, call the departmental manager immediately.
19
sty
Answer:
The lady would need to remain patience and make note of the fact that there may be a crowd and not enough employees so it may take a while. Yes the lady has a right to assistance but she should only be given it if she is being respectful of the people around her and nice to the employees.
Not sure what you wanted me to answer but I hope this helps.
Explanation:
What employment issue for flexible employees does the Walling v. A.H. Belo Corporation Supreme Court ruling address
Answer:
Fixed weekly pay
Explanation:
The Walling v. A.H. specified weekly salary for variable employees job challenge for flexible workers Ruling document of the Belo Company Supreme Court. Workers who work varying workweeks receive a set wage, irrespective about how many times per week may work. For starters, if they operated 35 or 40 hours, the employee should receive the same weekly wage. Therefore, the hourly wage of a salaried employee differs depending according to how many hours they work.
Support functions manage and improve the efficiency of an organization's conversion processes so that more value is created.
Answer:
False
Explanation:
The given situation does not represents the support function as it is a production function and the same is to be considered as it manages and improves the organization efficiency also it convert the processes through which it added the more value to the organization
Therefore the given statement is false
Type the correct answer in the box. Spell all words correctly. Who plans, codes, and creates web pages? plan, code, and create web pages.
Answer:
Web Developer
Explanation:
Usually, it is a team of experienced individuals that come together to come up with a web page design and make it a reality. This includes designing, planning, coding, and implementing. Usually, these individuals have a general job title of Web Developer. Within this job title, the individuals are usually split up into different subcategories that focus on specific aspects such as Front-End Web designer, Back-End developer, Web Server Management, etc. Each of these focuses on a specific aspect of the webpage, usually due to having more experience with that part of the development process.
Answer:
web developers
Explanation:
just took the test on plato
In 2005, Recreation & Relaxation Corporation began making and selling all-terrain vehicles (ATVs) under the mark "R&R." Ten years later, recoveryandrehabilitation, Inc., a differ¬ent company selling medical equipment and supplies, begins to use "R&R" as part of its URL and registers it as a domain name. Can Recreation & Relaxation stop recoveryandrehabilitation’s use of "R&R"? If so, what must the ATV maker show?
Answer and Explanation:
No Recreation & Relaxation Corporation cannot stop recoveryandrehabilitation Inc from using the trademark because it does not bring any form of confusion amongst the companies( their customers are able to tell one company from the other). Recreation & Relaxation Corporation is in a different industry and sells a different product or service from recoveryandrehabilitation Inc therefore the registered trademark R&R does not warrant the company from trying to stop the other company from using it as per trademark infringement
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $425,000 to $445,500 and would decrease the current variable costs of $60 by $15 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $1,140,000 and current break-even units are 11,400. If Forrester purchases this new equipment, the revised break-even point in dollars would be:
Answer:
Break-even point (dollars)= $810,000
Explanation:
Giving the following information:
Fixed costs= $445,500
Unitary variable cost= $45
Selling price= $100
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 445,500 / [(100 - 45) / 100]
Break-even point (dollars)= $810,000
Which of the following is a disadvantage of electronic communication
Answer:
Lack of physical cues may lead to miscommunication
Explanation:
On August 1, 2021, Turner Manufacturing lends cash and accepts a $9,000 note receivable that offers 6% interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2021? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) A. Interest Revenue 291 Interest Receivable 291 B. Interest Receivable 540 Interest Revenue 540 C. Interest Receivable 291 Interest Revenue 291 D. Interest Receivable 225 Interest Revenue 225
Answer:
D. Interest Receivable 225 Interest Revenue 225
Explanation:
The journal entry is shown below:
Interest receivable Dr ($9,000 × 6% × 5 ÷ 12) $225
To Interest revenue $225
(Being accrued interest is recorded)
For recording this, we debited the interest receivable as it increased the asset sand credited the interest revenue as it also increased the revenue
Therefore the last option is correct
The Big Tradeoff highlights the tension between equally distributing the economic pie (equality or equity) and generating the greatest possible economic pie (efficiency). How does the game played by Mellors and Nero described in this chapter illustrate Okun's trade-off
Answer:
D. The game illustrates that when you separate effort from reward, to achieve equity, the result is less effort and a smaller pie.
Explanation:
Okuns equality and efficiency explores the trade-off between inequality and economic efficiency. According to him there is a conflict that the government faces when they try to achieve equality by giving up higher reward for more effort, in other words rewarding every individual equally whether they work less or more in order to achieve equality. This causes economic inefficiency as people are not encouraged to work and there is less output consequently. The game played by Mellor and Necro mirrors same situation whereby government gives equal pay to two individuals who are working dIfferently, one working hard and the other not as much. This therefore leads to lower output
Weisbro and Sons common stock sells for $25 a share and pays an annual dividend that increases by 3.3 percent annually. The market rate of return on this stock is 11 percent. "What is the amount of the last dividend paid by Weisbro and Sons?"
a. $1.99
b. $1.86
c. $2.66
d. $0.80
e. $1.83
Answer:Therefore last dividend paid by Weisbro and Sons is $1.86--- B
Explanation:
Using the constant growth dividend model,
P=D0x(1+g)/(r-g)
Where P =stock's current Price---$25
g=dividend growth rate per year=3.3%
D0= last dividend paid=?
r=expected rate of return=11%
P=D0 x (1+g)/(r-g)
therefore
DO=P×(r-g)÷(1+g)
=>25 x (0.11-0.033)/(1+0.033)
=25 x0.077/ 1.033
=1.925/1.033
=$1.86
Therefore last dividend paid by Weisbro and Sons is $1.86
