QUESTION THREE
Two university graduates, Bill and Steve, worked for an advertising agency at an annual salary of
$40,000 each for 3 years after they graduated. Then, they decided to quit their jobs and start a
partnership that designs and builds Web sites. They rented an office for $12,000 a year and bought
capital for $30,000. To pay for the equipment, Bill and Steve borrowed money from a bank at an
annual interest rate of 6 percent. During their first year of operation, the partners' total revenue was
$100,000. The market value of their capital at the end of the year was $20,000. If Bill and Steve do
not design Web pages, their best alternatives are to return to their previous job.
a) What is the firm's economic depreciation? (5 marks)
b) What are the partnership's costs? (5 marks)
c) What is the firm's economic profit in the first year of operation? (5 marks)

Answers

Answer 1

From the amount of capital that the graduates had, the firms economic depreciation would be $10000

How to solve for the economic depreciation of the firm

Original cost of the capital - market value of capital after a year

= $30000 - $20000

= $10000

How to solve for the partnership costs

This is the Cost of capital plus cost of office space and cost of interest =  $44,520

How to solve for economic profit

Total revenue - partnership cost

100000 - 44520

= $55,480

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Related Questions

what are the advantages of doing ecommerce business model research?​

Answers

low cost, start online, content marketing strategy

Financial institutions are reporting that the rate of spending is declining based on customer data. Which of the following is associated with a decline in spending?
Multiple Choice
economic expansion
economic contraction
employment boom
inflation
O job expansion

Answers

Financial institutions are reporting that the rate of spending is declining based on customer data it is associated with economic contraction.

What is economic contraction?

Economics contraction occurs when the economy for a country is going through a face of reduction or decrease.

The economy is affected and every aspect of business, income is also reducing.

Therefore, Financial institutions are reporting that the rate of spending is declining based on customer data it is associated with economic contraction.

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In the money market, if the interest rate exceeds the equilibrium interest, there is a surplus of money. How is the surplus eliminated?
A) People buy bonds to rid themselves of the surplus money, bidding up their price and pushing interest rates down.
B) Banks will lend out the surplus, lowering interest rates.
C) The Federal Reserve will destroy currency, reducing the quantity of money.
D) The high interest rate increases the demand for money, eliminating the surplus.

Answers

The answer to your question is (A)

what sort of investments benjamin graham used to gain his wealth

Answers

Answer:

Benjamin Graham was an influential investor whose research in securities laid the groundwork for in-depth fundamental valuation used in stock analysis today by all market participants. His famous book, "The Intelligent Investor," has gained recognition as the foundational work in value investing.

he invested and gained wealth

Answer:

Explanation:

On what materials except metal does oxidation occur?

Hank wanted to make
$75,000 this year.
Instead, he made made
$60,000.
Calculate the variance.
$[?]

Answers

Explanation:

Based on the given conditions, formulate;

75000- 60000= 15000

Answer:

based on giving terms the answer to this question is 1500

Abigail buys cookies at a local gas station for $2.00 per pack. At the grocery store, she can get 10 packs for $20. Online, they will ship 15 packs to her
house for $30. What is the BEST financial advice you can give Abigail about purchasing these cookies?
ОА.
She should order them online because she will save money.
OB. She can buy them at any of these merchants; the cost is the same.
OC.
She should get them from the grocery store because they are cheaper there.
She should buy them at the gas station as they're the least expensive there.
OD
Reset
Next
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Answers

Abigail can buy the cookies at any of the merchants; the cost is the same. hence, Option B is the correct statement.

What do you mean by financial advice?

The manner of attractiveness withinside the commercial enterprise of advising others with admiration to the making plans and/or the execution of recommendations in respect of selecting, purchasing, or promoting economic merchandise to satisfy investment, threat management, or threat mitigation objectives is referred to as Financial Advice.

Hence, Abigail can buy the cookies at any of the merchants; the cost is the same. Option B is the correct statement.

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If the government gives a cash subsidy to members of a special interest group, explain how that indirectly harms members of the general public? (4 point)
The money given to the special interest group could have been given to everyone in the country equally
Special interest groups are generally composed of mostly foreign nationals. The money given to the special interest group could have been given to citizens instead
The government could have given the money to a different special interest group instead
Special interest groups generally have opinions that are unfavorable or even harmful to members of the general public. Supporting those groups will most likely cause some form of
harm to the general public

Answers

If the government gives subsidies to a special group, the general group will be indirectly harmed because supporting those groups will most likely cause some form of harm to the general public.

What is a Subsidy?

A subsidy is a form of financial support from an individual or government extended to some special group or an economic sector with the aim of promoting the economy.

Some special interest groups generally have opinions that are unfavorable or even harmful to members of the general public. so supporting these groups will most likely cause some form of harm to the public.

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Comparable balance sheets are presented below:

Dec. 31, 2015 Dec. 31, 2014

Assets

Cash 1.2 1.9

Accounts Receivable 0.4 0.3

Inventory 1.3 1.0

Property, Plant & Equipmen 6.0 3.0

Less: Accumulated Depreciation (0.8) (0.4)

8.1 5.8

Liabilities & Stockholder's Equity

Accounts Payable 2.6 2.1

Dividends Payable - -

Bonds Payable 4.4 2.8

Common Stock, $1 Par Value 0.2 0.1

Paid-in Capital in Excess of Par Value 3.2 2.2

Retained Earnings (2.3) (1.4)

8.1 5.8

Additional Information:

1. The change in PP&E represent cash expenditures for a new factory

2. There were no disposals of PP&E during the year

3. There were no dividends declared during the year

4. The common stock was issued for cash

5. A review of the income statement noted a gross profit margin of

20% and Research & Development costs of $0.7 for the year

Required:

1. Prepare a statement of cash flows using the indirect method

2. Is the operating cash flow sustainable?

3. What are the major sources and uses of cash?

4. How are the operations being financed? Through earnings or other means?

Do you agree with this strtegy?

5. No dividends were declared. Why?

6. Why might the company be losing so much money? Do you agree with their strategy?

7. What are the risks to the company going forward?

Answers

The example of how to Prepare a statement of cash flows using the indirect method is given in the image attached.

The others are:

Note that when the operating cash flow is aided by profitable operations, it may not be sustainable. e.g. operating cash gotten from an outsized reduction in accounts receivable cannot be kept or handled.

The major sources and uses of cash are:

Operating InvestingFinancing

Operations are being financed via the day to day normal operations that brings income. Example are  cash receipts from revenue and cash shared to pay for expenses.

The risks of a company going forward includes:

Fraudemployee misconductMisappropriations of funds, etc.

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Marla made a spreadsheet in Excel showing the projected costs for a concert she was putting on. What can Marla enter into cell A11 to find out how much money is left in her budget and to make sure the cell is updated whenever she changes any of the other costs?

=A2-A4-A6-A8-A10
+A2-A4-A6-A8-A10
=A4-A6-A8-A10+A2
+A4-A6-A8-A10=A2

Answers

Marla will use the formula to find the updated cost.

=A2-A4-A6-A8-A10

Because A2 is budget and A4, A6, A8 and A10 all are expenses. So she has to budget-all expenses.

So option A=A2-A4-A6-A8-A10 is true.

What is a spreadsheet?

A spreadsheet is a computer program that can capture, display and manipulate data arranged in rows and columns. Spreadsheets are one of the most popular tools available with personal computers.

A single spreadsheet can be used as a worksheet to compile data for a purpose, or multiple sheets can be combined to create an entire workbook.

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Enumerate the majority of services offered by banks.

Answers

Answer:

Checking accounts.

Savings accounts.

Debit & credit cards.

Insurance*

Wealth management.

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What do you understand by a balanced budget?​


Thank you in advance~ + Nonsense = Reported

Answers

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A balanced budget in which government estimated receipts (revenue and capital) are shown equal to government estimated expenditure.

#CarryOnLearning

Answer:

A balanced budget occurs when revenues are equal to or greater than total expenses. A budget can be considered balanced after a full year of revenues and expenses have been incurred and recorded. Proponents of a balanced budget argue that budget deficits burden future generations with debt.

Explanation:

Answer of your Question and good afternoon and please mark me as brainliest and thank u and have a great good fine nice and amazing day

Principles of Investment
Which characteristic is most imortant in determining an investment's level of risk

Answers

Answer:

demand for investments

Explanation:

2. How are surplus and shortage related to equilibrium price?
3. Why is equilibrium price represented by the intersection of the supply
and demand curves in a particular market?
4. Why do changes in demand or supply cause disequilibrium?
5. Why is the market always moving toward equilibrium? in book of economics

Answers

Answer:

1-A surplus exists when the price is above equilibrium, which encourages sellers to lower their prices to eliminate the surplus. A shortage will exist at any price below equilibrium, which leads to the price of the good increasing.

2-The supply curve shows quantity supplied at various prices, and the demand curve shows quantity demanded at various prices, so at the intersection of the two curves, these quantities and prices are equal. Therefore, equilibrium price is represented by the intersection of the supply and demand curves.

3-Changes in demand or supply cause disequilibrium because they create an imbalance between quantity demanded and quantity supplied.

4- The market is always moving towards equilibrium because if the price is too high, there is a surplus and prices tend to fall until the surplus is sold and equilibrium is reached, and if the price is too low, there is a shortage and producers raise prices and increase quantity supplied.

Explanation:

:)

What is the reason for putting yourself on a budget?
A. To earn a high level of return on your investments
B. To make sure that your earning potential is as high as possible
C. To keep your expenses below your income
D. To prevent yourself from paying compound interest

Answers

Answer:

C

Explanation:

Helps you gain control of your finances and helps you achieve goals

Which action will not protect your credit

Answers

its c that will not protect your credit

Which part of a financial aid letter shows what you will have to pay
after
deducting all gift aid?
• A. Expected family contribution
• B. Total cost of attendance

C. Net worth
• D. Net cost
SUBMIT

Answers

The part of a financial aid letter shows what you will have to pay after deducting all gift aid include option B: Total cost of attendance.

What is Total cost of attendance?

Cost of attendance (COA) is a college's total estimated expenses for one year including tuition, room and board, books, supplies, transportation, loan fees, and miscellaneous expenses.

A school's cost of attendance is used to determine each student's eligibility for financial aid, such as grants and loans.

Therefore, correct option is B.

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1. If there is a change in the price of a good, then the supply of that good will change.

True
False

Answers

Answer:

True

Explanation:

The change in price level changes the supply of goods. When price level increases, producers or suppliers will be willing to produce and supply more. However, when prices reduce, producers or suppliers may decide to supply less because they wont be making much money as they should if the price level did not fall.

how we can improve saving culture​

Answers

Answer:

answer

Here are six ways you can cultivate a savings culture:Here are six ways you can cultivate a savings culture:HAVE A BUDGET.Here are six ways you can cultivate a savings culture:HAVE A BUDGET.CONTRIBUTE MORE TO YOUR RETIREMENT. Stop procrastinating when it comes to retirement planning. ...

what is classification of expenditures and revenues of governmental entities?

Answers

Answer:

Herman Eugene Talmadge (August 9, 1913 – March 21, 2002) was an American politician who served as governor of Georgia for a short period in 1947 and then again from 1948 until 1955 then as U.S. Senator from Georgia from 1957 to 1981.

Explanation:


What jobs will increase in demand in the near future?
O Technology, art and service
O Taxi drivers, postal carriers and fast food cooks
O Data entry, door to door sales and electronic equipment assembl
O All of the above

Answers

Technology, art and service

Which of the following are the names given to the two types of stock purchasers?

Answers

Answer: Common and Preferred Stock Purchasers

Explanation:

why the introduction of maximum prices in the petrol industry will not be an ideals decision for the country's economy​

Answers

The introduction of maximum prices in the petrol industry will not be an ideals decision for the country's economy because

a)​ if the maximum price is less than the equilibrium price, then it will cause a shortage in supply.

b) Petrol is essential for daily lives, without maximum pressure some people may not be able to buy the product.

What is Economy?

An economy is the large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated. It is defined as the management of financial matters for a community, business or family.

The economy of a country or region is the system by which money, industry, and trade are organized.

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In an attempt to improve the staffing process, your hospital has collected data on the four primary recruitment sources for staffing Food Service personnel. The following table presents those findings for the last 12 month time
period.
Recruitment
Source
Number of
Applicants
Screened
Potentially
Qualified
Took and
Passed
Testing
Took and
Passed
Interview
Phase
Accepted
Employment
Offer
One-Year
Survival
Rate
Phase
29
Employee
referrals
50
26
(52%)
25
(50%)
23
(40%)
Newspaper
ads
32
(50%)
52
(25%)
36
(72%)
97
(46%)
26
(60%)
210
(15%)
26
(12%)
36
(17%)
14
(35%)
Walk Ins
40
12
11
18
(45%)
(30%)
(20%)
State
Employment
Agencies
41
11
100
(41%)
21
(21%)
14
(14%)
(11%)
8
(8%)
Total
400
200
120
90
80
68
1. If you could increase the number of applicants from one of the recruitment sources, which should it be?
OEmployee referrals
ONewspaper ads
Owalk-ins
Ostate employment agencies
Ocannot tell from the data given
2. If you decided to drop one of the recruitment sources, which should it be?

Answers

Answer:

State employment agencies

Explanation:

That the answer Plss follow me thanks

Which of the following is true?

Multiple Choice
A Nash equilibrium is always a subgame perfect equilibrium.
A subgame perfect equilibrium is always a Nash equilibrium.
A Nash equilibrium is always a perfect subgame equilibrium in a multistage game.
Subgame perfect equilibrium and Nash equilibrium are the same concept but with different names.

Answers

its b i took the quiz

A subgame perfect equilibrium is always a Nash equilibrium. Thus, option (b) is correct.

What is equilibrium?

Equilibrium is the scientific word describing the harmony of force and action. The level of supply and demand must be equal in order for there to be an economic equilibrium. The cost remains steady. Three categories of equilibrium are frequently used: stable, unstable, and neutral. Chemistry and physics both employ the term “equilibrium.”

Because Nash equilibrium play occurs in every subgame, a perfect equilibrium in a subgame is always a Nash equilibrium. A subgame perfect equilibrium is a Nash equilibrium in an extensive form game. Not all games, but the majority of them only have one subgame with a perfect equilibrium.

Therefore, option (b) is correct.

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The decision-making model includes which of the following steps?
A.
Brainstorm possible actions to take
B.
Create a personal mission statement
C.
Specify your timeframe
D.
All of the above
PLEASE HELP! WILL GIVE BRAINLIEST. ANSWER IS NOT ALL OF THE ABOVE THAT IS ALL I KNOW

Answers

Explanation:

I guess and got it right.

hope this helps

The number and characteristics of sellers and buyers is called market structure.

True or False

Answers

The answer is True.

Explanation:

Market structure describes the economics and characteristics of marketing.

Profits are maximized when marginal revenue and marginal costs are ______.

a. set
c. equal
bless than market price
d. greater than market price

Answers

C is the answer
explanation

Who decides how much money goes to a particular school?

A: The principal of the school
B: The secretary of the district superintendent
C: The superintendent of the district

Answers

I b e l e i v e it’s B! Have a nice day!

which of the following is an example of revolving credit?

A. A couple obtains a home mortgage
B. A woman borrows a company car
C. A man uses a personal line of credit
D. A teen gets a loan for college

Answers

An example of revolving credit is a man uses a personal line of credit.

What is revolving credit?

Revolving credit is the type of credit that lets the borrower choose how much of the credit to use and when to pay it.

It is a type of credit that does not have a fixed number of payments, in contrast to installment credit.

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Answer:

c) A man uses a personal line of credit

Explanation:

also my mom's an accountant and has a degree for fiance

There can be many departments or just a few when _____ a business.

Answers

Answer:

it depends on the business

Explanation:

when the business is small there will be less department but if the business is big then there will be more department

Answer:

The answer could be Managing

Explanation:

But it depend on the business If its small it would have a Impact of Small Business but if its a big business it would have a big Impact of a big business.

Hope it helps <3

~ lil pickle

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