assume you can only spend your money on newspapers, shoes, or harmonicas. given your current level of consumption of each of these goods, your next newspaper will bring you 4 utils per dollar spent; your next pair of shoes will bring you 8 utils per dollar spent, and your next harmonica will yield 5 utils per dollar spent. assuming you have enough money that you can buy one of these three goods, which will you choose? choose one: a. newspaper b. shoes c. harmonica

Answers

Answer 1

Assume you can only spend your money on newspapers, shoes, or harmonicas. Enough money that you can buy one of these three goods, which will you choose newspaper.

Option A is correct.

Levels of Consumption:

The level of consumption that occurs in the economy at any given time depends on the economy's purchasing power. Purchasing power depends on the economy's net disposable income spent on consumption in receipts after savings are adjusted.

What are the factors of consumption?

Consumption function, in economics, the relationship between consumer spending and the various factors that determine it. At the household or family level, these factors may include income, wealth, expectations about future income or wealth levels and risks, interest rates, age, education, and family size.

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A leader should avoid a directive leadership style when ________.
tasks are highly structured
workers have an external locus of control
tasks are stressful and ambiguous
work groups experience conflict
A leader should avoid a directive leadership style when ________.
tasks are highly structured
workers have an external locus of control
tasks are stressful and ambiguous
work groups experience conflict

Answers

A leader should avoid a directive leadership style when tasks are highly structured

One of the most popular types of leadership practiced nowadays is directive leadership. The directive leader will start a project, assign tasks to their direct reports to finish the project, and set particular requirements for the caliber of work being produced. These leaders establish timelines, outline tasks, and enforce strict guidelines and limitations.

A directive leadership is more likely to emphasize their own viewpoints and experiences than those of others. They determined the path of the mission and vision. That implies that the leader is not obligated to receive suggestions or input from their immediate reports. How well they do their given responsibilities is the only factor used to evaluate their work performance.

Leaders who are directives must understand how to finish a project. They must have faith in their capacity to convey this knowledge to others without coming across as haughty. To avoid delays or productivity losses, they must be able to spot when someone is fighting their authority.

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the predicted annual costs for mighty motors are as follows: manufacturing costs selling and administrative costs variable $ 250,000 variable $250,000 fixed 350,000 fixed 550,000 average total assets for the year are predicted to be $7,500,000. (a) if management desires a 10% rate of return on total assets, what are the markup percentages for total variable costs and for total manufacturing costs? (round your answer to the nearest whole percent.) markup on variable costs answer % markup on manufacturing costs answer % (b) if the company desires a 8% rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit? note: the markup percentage on total manufacturing costs is 233%. compute the markup percentage for each component. note: round your answers to the nearest whole percent. markup to cover unassigned costs answer % markup to cover desired profit answer % check

Answers

a.) The typical total assets are $7,500,000.

Return on Total Assets is 10%, which equates to $7,500,000* 10%, or $750,000 in desired profit.

Total variable costs are calculated as follows: $ 250,000 + $ 250,000 = $ 500,000. Variable manufacturing costs plus variable selling and administrative costs.

Desired Profit / Total Variable Costs determines the markup %. * 100\s=\s($750,000/$500,000) *100\s= 150 %

(2) Total manufacturing costs are determined by dividing variable manufacturing costs by fixed manufacturing costs, which equals $250,000 plus $350,000, or $600,000.

Desired Profit / Total Manufacturing Costs is the markup percentage based on total manufacturing costs. * 100\s=\s($750,000/$600,000) *100\s= 125 %

b.)

(1) Total manufacturing costs are determined by dividing variable manufacturing costs by fixed manufacturing costs, which equals $250,000 plus $350,000, or $600,000.

Unassigned Cost = $550,000 in Fixed Selling and Administrative Costs

Fixed selling and administrative expenses divided by total manufacturing costs divided by 100 equals ($550,000/$600,000)*100, or 91.67%, as the markup percentage of unassigned costs.

(2) Expected Profit: $7,500,000 x 8% = $ 600,000.

The total cost of manufacturing is $600,000.

Desired Profit / Total Manufacturing Costs * 100 = (600,000/600,000)*100 = 100% Markup of Desired Profit on Total Manufacturing Costs.

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Which of the following statements about self-interest in a market system is false? Multiple Choice In a market system, self-interest motivates property owners to try to get the highest rent or price for their property. Self-interest usually motivates an individual to deliver something of value to others. Self-interest of entrepreneurs implies seeking maximum profits or minimum losses. Self-interest applies only to consumers, not to entrepreneurs.

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Self-interest simply refers to the pursuit of one's own interests. You go to work in order to earn money so you can purchase the things you want. You attend school in order to one day obtain a better position and earn more money to fulfill your wants and needs.

The concept of self-interest in economics holds that when people behave in their own best interests, the economy as a whole typically benefits. Self-interest is the main drive behind the market system. Businesses seek to increase their profits, property owners want to get the most money for their resources, and employees pick the jobs with the greatest pay, perks, and working conditions. In general, the term "self-interest" refers to a concentration on one's own wants or objectives. Numerous philosophical, psychological, and economic theories look at how self-interest influences how people behave.

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after much trial and error in creating sales forces, most companies today attempt to establish a: a) hybrid sales force composed of expatriates and in-country nationals. b) sales force composed of a majority of expatriates. c) hybrid sales force composed of expatriates and third country nationals. d) sales force composed of third country nationals. e) sales force consisting of all in-country nationals.

Answers

The majority of businesses nowadays strive to construct a hybrid sales force made up of foreign nationals and locals after considerable trial and error in building sales forces.

Although salespeople may provide the buyer some product information, they are frequently less interested with fostering long-term client connections when conducting consumer sales. Automobile salespeople and the sales staffs present in various retail establishments are examples of consumer sales forces.The area of a company that deals with selling goods or services. A crucial first step in determining whether and how to expand your sales team is to assess your present sales team. The primary focus of sales force objectives and plans is to enhance top-line revenue growth for businesses, while they may also aim to cut marketing expenses and raise profitability.

Thus the correct answer is option A.

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The first step in writing a report is to ________ .

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The first stage is to identify the issue, after which you should begin your research, choose a structure, and then prepare your paper. 1. To begin a report, you should...

One of the most crucial steps in creating a great report is writing the initial draft. The goal of the first draft is to get all the key ideas in your material out of your mind and onto the page, not to create a flawless work. Every report should start with the preparation of a mission statement that outlines its main points and serves as a benchmark for keeping the project on track. Action verbs that describe your intentions to the reader are included in purpose statements. an introduction, which comprises a statement of the aim of the report, a backdrop to acquaint the reader with the issue. a description of the issue or problem that has to be solved.

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once employees have expressed interest in forming a union, the next step is to . a. collect employees' signatures on authorization cards b. initiate the grievance procedure c. hold an election d. enter into collective bargaining

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Once employees have expressed interest in forming a union, the next step is to hold an election.

A population chooses one or more people to hold public office through a formal group decision-making procedure called an election. Elections have been the main means by which contemporary representative democracy has operated since the 17th century.

Elections are the most important tool of indirect democracy because they allow people to choose their representatives, who then pass laws on their behalf. An election must be free and fair in order for certain civil liberties, such as the freedoms of speech, association, and assembly, to exist.

Hence, the correct answer is "C".

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you are a manager for a monopolistically competitive firm. from experience, the profit-maximizing level of output of your firm is 100 units. however, it is expected that prices of other close substitutes will fall in the near future. how should you adjust your level of production in response to this change? multiple choice produce more than 100 units. produce less than 100 units. produce 100 units. there is insufficient information to decide.

Answers

It is expected that prices of other close substitutes will fall in the near future. How should you adjust your level of production in response to this change produce less than 100 units. Hence, option A is right.

A company that owns the exclusive right to produce a specific good or service is said to be operating as a monopolistic enterprise. These goods are profit-maximizing goods because market prices are set by consumer demand, and they are manufactured at marginal costs that are equivalent to their marginal revenues.

It is advisable to create fewer than the customary 100 units to still maximize profit when the prices of the product's near substitutes drop because this will result in a decrease in demand and a corresponding decrease in market pricing.

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a production line has been stopped due to a quality-related issue. after a quality audit is performed and it has been shown that parts can be made within specifications, what happens next?

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After a quality audit is performed and it has been shown that parts can be made within specifications, production can begin.

An exceptional audit is normally performed by means of an internal or external pleasant auditor or audit crew at agreed time periods, ensuring that an organization has a without a doubt described system for exceptional tracking. It's miles an essential element of the ISO 9001 first-class gadget widespread.

A complete and final set of audit documentation needs to be assembled for retention as of a date not more than forty-five days after the document launch date ( documentation crowning glory date ).

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baldwin has a ros of 0.08 (ros = net income/sales). that means:

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If a company has a return on sales (ROS) ratio of 0.08, it means that for every $1.00 of sales, the company generates $0.08 of net income.

What is ROS?

The ROS ratio is a measure of profitability that shows the relationship between a company's net income and its sales. A higher ROS ratio indicates that a company is more profitable, while a lower ROS ratio indicates that a company is less profitable.

The return on sales (ROS) ratio is used to assess a company's operational effectiveness. This metric offers information on how much profit is generated per dollar of sales. A growing ROS suggests that a company's efficiency is improving, but a declining ROS may indicate imminent financial difficulties.

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What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $900, if it pays 6% fixed interest for the duration of the bond?
Give your answer as a percent rounded to the nearest hundredth. ​

Answers

Fixed  interest for the duration of the bond Yield = 6.66 % with face value $1000 and discount price $900.

What is the annual yield on corporate bonds?

Yield to Maturity (YTM) is the gross rate of return for an investor who buys a bond at the market price and holds it to maturity. , which is the discount rate at which the sum of all future cash flows (from coupons and principal repayments) equals the price of the bond.

Formula for calculating yield = ( interest paid / price paid)

Price paid = $900

Interest paid = face value x rate of interest

                                     = $1,000 x 6%

                                         = $60

              Yield  = ( $60 / $900)

                         = 6.66 %

What does return mean in the financial world?

Yield refers to how much income an investment will generate, apart from capital. Commonly used to refer to the interest payments that an investor receives on bonds and dividend payments on stocks. Returns are often expressed as a percentage based on the investment's market value or purchase price.

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sunnyfax publishing pays out all its earnings and has a share price of $37. in order to expand, sunnyfax publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. once the funds are reinvested, they are expected to grow at a rate of 13%. if the reinvestment does not affect sunnyfax's equity cost of capital and earnings before the dividend cut were expected to be constant, what is the expected share price as a consequence of this decision?

Answers

The expected share price as a consequence of this decision is $162.43

The current share price of a company is determined by the supply and demand of the stock on the stock market where it is listed. The market price is influenced by factors such as the company's performance, economic conditions, industry trends, and news related to the company.

Calculate the retained earnings using the dividend cut.

Retained earnings = Dividend per share x Number of outstanding shares

Retained earnings = $3.00 x 37 = $111

Calculate the reinvestment amount.

Reinvestment amount = Retained earnings x (1 + Growth rate)

Reinvestment amount = $111 x (1 + 13%) = $125.43

Calculate the new share price.

New share price = Reinvestment amount + Existing equity cost of capital

New share price = $125.43 + $37 = $162.43

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your annual income is $55,000. what is your life insurance need based on the easy method? multiple choice $327,500 $269,500 $385,000 $550,000 none of these choices are correct.

Answers

If your annual income is $55,000.  your life insurance need based on the easy method is: $269,500.

What is insurance?

Insurance can be defined as the coverage that help to cover the cost or expense in case of unforeseen or unexpected circumstance such as theft, accident etc.

Now let determine the life insurance need based on easy method using this formula

Life insurance need = 0.70 × Salary amount × 7

Life insurance need  = 0.70 × $55,000 × 7

Life insurance need  = $269,500

Therefore the life insurance need is the amount of $269,500.

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1) in a job-costing system, a manufacturing firm typically uses an indirect-cost rate to estimate the allocated to a job. a) direct materials b) direct labor c) manufacturing overhead costs d) total costs

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manufacturing overhead costs in a job-costing system, a manufacturing firm typically uses an indirect-cost rate to estimate the allocated to a job.

What exactly is a job costing system?

A job costing system involves gathering data on the expenses related to a particular production or service job. In a contract where costs are repaid, this information might be necessary in order to present the cost information to the client.

What use does job costing information serve?

You can track the costs of particular projects and jobs using the accounting technique known as job costing. It entails examining both direct and indirect costs, and it is frequently divided into the three distinct categories of labor, materials, and overhead.

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Intermediate Good or Service

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An intermediate good or service is an entity used to produce a final good or finished product.

An intermediate good or service is defined as a product that is used to make a final good or finished product i.e. usable for end users. Intermediate goods, such as salt, can also be finished products since it is consumed directly by users as well as used by producers to manufacture other food products.

Intermediate goods or services are sold between industries for the production of other goods and for resale purposes. These goods or services are also referred to as semi-finished products because they are used as inputs to become part of the finished products.

" Complete question:

What is meant by intermediate Good or Service?

"

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in the data life cycle, which phase involves using data to solve problems, make good decisions, and support business goals?

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In the data life cycle, Analyze phase involves using data to solve problems, make good decisions, and support business goals.

Data, which can describe quantity, quality, facts, statistics, other basic units of meaning, or simply sequences of symbols that can be further interpreted, is a collection of Discrete values ​​convey information in the knowledge search process. Standard data is a specific value contained in a group of data.

Typically, data is organized in tables or other structures that give it greater context and meaning and can be used as data in other larger structures. Data can be used as variables in calculations. Data can reflect both actual measurements and abstract concepts. Data is commonly used in economics, science, and virtually every other aspect of organized human activity.

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the bargain element is taxed as ordinary income on the exercise date for stock options, but not for stock options unless specific required holding periods are not met.

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You have taxable earnings or deductible loss when you promote the inventory you bought by exercising the option. You normally treat this quantity as a capital achieve or loss.

However, if you do not meet exclusive conserving length requirements, you will have to treat profits from the sale as normal income.

How is the good deal thing for a stock option calculated?

The good deal component is calculated as the difference between the workout fee and the market charge on the day you exercised the picks and bought the stock.

Stock acquired from exercising a non-qualified inventory option is dealt with as any other funding property when sold. The employee's groundwork is the quantity paid for the stock, plus any quantity covered in profits upon exercising the choice

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bhavik has established a timetable for comparing performance to standards. what should he keep in mind when he sets the timetable?

Answers

Bhavik should keep in mind The complexity of the work.

What is the best method for evaluating performance?

The most typical kind of performance assessment is probably using a ratings scale or grading system. This approach bases employee evaluations on a set of standards created by the company, which may include qualities, behaviors, skills, or completed tasks. Each criterion is given a numerical value by the employer, often on a scale of 10 or five. Employers that use this approach are advised to make sure their staff are aware of where success and failure sit on the scale.

A three out of five may be considered above satisfactory by certain employees but only ordinary by others. Therefore, make careful to frame expectations appropriately, especially if you call for a self-evaluation.

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All of the following are key organizational data in the fulfillment process except Purchasing organization Distribution Channel Storage location Sales organization

Answers

All of the following are key organizational data in the fulfillment process except Storage location. Thus option (C) is correct.

What is a Organizational data?

Organizational data describes an institution's key traits, internal structures and procedures and corporate players' actions in various socio-economic circumstances.

Data organization is the act of sorting relevant data into several categories and structuring them. The samples of the categories are part of this raw data. One example of data structuring is the arrangement of student grades across several disciplines.

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when would a variance be labeled as unfavorable? a. when actual sales are equal to expected sales. b. when standard costs are more than actual costs. c. when expected sales are less than actual sales. d. none of these answers are correct.

Answers

When it comes to variances, it is untrue to argue that a positive b. A variance occurs when predicted sales exceed actual sales.

The discrepancy between a planned expenditure and the actual expenditure. Possibly favourable or unfavourable. Relates to both revenues and expenses. When variations are applied to revenue, a favourable variance would be one where the company had more sales than anticipated and the budgeted sales were less than the actual sales. Conclusion: If predicted sales are higher than actual sales, it is inaccurate to conclude that variance is favourable. In a normal cost system, all unfavourable variations are debited when recording variances. This is because, as should be mentioned, negative variances merely indicate that there are too many manufacturing expenses, which will result in a decline in operating income. All adverse variances are therefore credited.

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Two individuals at a retail store work the same cash register. You evaluate this situation as supporting the establishment of responsibility supporting independent checks of performance. a violation of establishment of responsibility a violation of segregation of duties

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A situation where the responsibility establishment process has been violated that supports independent performance checks on performance a breach of the establishment

Does the establishment clause apply to the Ten Commandments?

The establishment clause was judged to have been infringed by Ten Commandments displays in classrooms. The first case in which the Ten Commandments were sponsored by the government for public display was Stone v. Graham (1980).

What is an illustration of a federal constitution violation?

Among them is establishing a state religion. drafting legislation that explicitly or generally supports one religion. forcing, persuading, or otherwise getting people to go to church.

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What kind of promotional activity is a gala dinner in support of cancer patients? A. advertising B. group sales C. personal selling D. public relations E. sales promotion

Answers

The kind of promotional activity used when a gala dinner is used to support the cancer patients is known as public relations. The Option D is correct.

What is public relations as promotional activity?

Basically, a promotional activities refers to those techniques that marketing teams use to increase an awareness of their brand, products and services. This helps company to attract new customers, retain current customers and increase their company's revenue.

A public relations, as part of these activities include dialog as we must listen to the others, to see things through their perspective. This is made with the purpose to be useful for every organization, not for the sensational promotion of its achievements, but to become more critical towards its work.

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attempting to determine when preventive maintenance activities should be performed is called: multiple choice predictive maintenance. corrective maintenance. breakdown maintenance. forecastive maintenance. preventive maintenance.

Answers

Attempting to determine when preventive maintenance activities should be performed is called predictive maintenance.

What is prescient support utilized for?

Producers started involving prescient upkeep in the nineties. Prescient upkeep's primary objective is to foresee gear disappointments in light of specific boundaries and variables. Once anticipated, makers do whatever it takes to forestall this disappointment with restorative or booked support.

What is prescient kind of upkeep?

Prescient support (PdM) is a sort of condition-based upkeep that screens the state of resources through sensor gadgets. These sensor gadgets supply information progressively, which is then used to anticipate when the resource will require support and hence, forestall gear disappointment.

What are prescient support models?

A few instances of utilizing prescient upkeep and prescient support sensors incorporate vibration examination, oil investigation, warm imaging, and gear perception. Visit our condition-based support page to get familiar with these strategies.

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acme manufacturing is producing $4,050,000 worth of goods this year and expects to sell its entire production. it also is planning to purchase $1,500,000 in new equipment during the year. at the beginning of the year, the company has $500,000 in inventory in its warehouse. find actual investment and planned investment if:

Answers

(a) $1,500,000 is the planned investment. The actual investment was $1,710,000.

IA = IP + ΔInv

= $1,500,000 + (SP−SA)

= $1,500,000 + ($4,060,000−$3,850,000)

= $1,500,000 + $210,000 = $1,710,000.

(b) $1,500,000 in planned investment. $1,560,000 was really invested.

   IA = IP + ΔInv

= $1,500,000 + (SP-SA)

= $1,500,000 + ($4,060,000-$4,000,000)

=$1,500,000 + $ 60,000 = $1,560,000

(c) $1,500,000 is the planned investment. $1,360,000 was invested in actual.

IA = IP + ΔInv

= $1,500,000 + (SA-SP)

= $1,500,000 + ($4, 060, 000 - $4,200,000)

= $1,500,000 - $140,000 = $1,360,000

what distinguishes planned from actual investment?

The volume of investments businesses plan to make annually is generally referred to as planned investment. The amount of actual investment is the amount actually made over the course of a year. Since inventories are a component of capital, they increase if actual investment exceeds planned investment.

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the complete question is:

"Acme Manufacturing is producing $4,060,000 worth of goods this year and expects to sell its entire production. It also is planning to purchase $1,500,000 in new equipment during the year. At the beginning of the year, the company has $500,000 in inventory in its warehouse.

1. Find actual investment and planned investment if:

(a) Acme actually sells $3,850,000 worth of goods.

(b) Acme actually sells $4,000,000 worth of goods.

(c) Acme actually sells $4,200,000 worth of goods."

which of the following is a monetary policy loading... tool used by the federal reserve bank?

Answers

Open market operations is a monetary policy loading... tool used by the federal reserve bank.

Typically, central banks have three instruments for monetary policy: Operations in the open market: Bond purchases and sales Changing the discount rate means altering the cost for banks to borrow money from the central bank. modifying the reserve requirement, or the amount of cash a bank must hold in reserves

The main monetary policy tool used by the central bank is called open market operations (or "OMOs"). The central bank purchases bonds in order to cut interest rates. Bond purchases increase the money supply by adding funds to the money market. When the central bank wants interest rates to rise, it sells bonds, removing funds from the money market and reducing the amount of money in circulation.

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Which of the following statements are true about marginal cost?a. Marginal cost can be calculated by taking the total cost and dividing by the number of units.b. Marginal cost is the incremental cost of one more unit.c. Marginal cost will always be less than average cost.d. Average cost is more useful than marginal cost.e. Two of the answers stated above are correct.

Answers

The following statements are true about marginal cost Marginal Cost is the incremental cost of one unit.

Which one of the following best describes marginal costs?

The term "marginal cost" describes the rise or fall in price associated with producing or providing services to an additional consumer. value added value added value added value added value added value added value added value added value added value added value added value added

What is accurate about the marginal cost curve?

At the minimum point of each curve, it crosses both the average total cost curve and the average variable cost curve.

Which of the following statements regarding marginal costing is false?

It is not true that "b. Costs that are modest and inconsequential with little impact on earnings are called marginal costs."

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Which of the following is a true statement? Choose one.

A. There is an interval over which MR and MC are both increasing.

B. There is no interval over which MR and MC are both increasing because MC is always decreasing.

C. There is no interval over which MR and MC are both increasing because MR is always decreasing.

Answers

The correct response is C. Because marginal revenue is continually declining, there is never a period of time when both MR and MC increase.

The additional money made from the sale of one more unit of output is referred to as marginal revenue. The law of diminishing returns dictates that marginal revenue will eventually begin to decline as output level rises, even though it can remain constant above a certain threshold of output. According to economic theory, businesses that are completely competitive keep on producing goods until marginal revenue and marginal cost are equal.

In order to maximize profits, a business will only produce up to the point when marginal cost and marginal income are equal.

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lawrence corporation is considering the purchase of a new piece of equipment. when discounted at the cost of capital of 9%, the project has a net present value of $24,630. when discounted at rate of 11%, the project has a net present value of $(28,950). the internal rate of return of the project is:

Answers

Internal rate of interest (IRR) on this project is: 1.17%

Why is IRR significant?

Benchmarking is comparing your IRR to comparables in your industry to determine how you are performing in comparison to others. This makes it easier for funds to gauge the success of their transactions and how they compare to other funds.

In contrast to other methods of measuring performance, such as return on investment (ROI) and net present value (NPV), IRR enables you to compare various asset classes and public market indices side by side, regardless of the time frame.

When you are raising capital for your fund, IRR is another crucial indicator that limited partners (LPs) take a close look at. If you continuously demonstrate high returns on your investments, it could be simpler to draw investors.

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Which of the following is the best general definition of the study of economics Mcq? A)
Individual and social choice in the face of scarcity
B)
The best way to invest in the stock market
C)
Business decision making under foreign competition
D)
lnflation and employment in a growing economy

Answers

The best way to summarize economics is (A) as personal and collective decision-making in the face of scarcity.

What is the study of economics?

Economics is the study of scarcity and how it affects how resources are used, how commodities and services are produced, how production and welfare increase over time, and a wide range of other complicated concerns that are extremely important to society.

Economics is generally thought to be the study of how people and society make decisions in the face of resource scarcity and competing uses in order to maximize enjoyment.

The best way to sum up the study of economics is as an individual and social choice in the face of scarcity.

Economics examines the whole range of issues that have an impact on financial conditions and decisions as a subset of the social sciences.

Economics examines how resources are used by and distributed among people and organizations, from production to consumption.

Therefore, the best way to summarize economics is (A) as personal and collective decision-making in the face of scarcity.

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he security market line (sml) shows that the relationship between a security's expected return and its beta is . multiple choice question. positive insignificant negative overrated

Answers

Security market line (sml) shows that the relationship between a security's expected return and its beta is insignificant. A market in which securities are issued, purchased by investors, and transferred between investors is called a securities market.

The securities market has two interdependent and inseparable segments: the primary market and the secondary market return. Price, quantity and trading time are important factors. A trader or broker helps people trade. Traders are willing to take the other side of a trade if necessary. Estimate bid (buy) and ask (ask) prices and profit from the spread. The stock market strives to make equity financing accessible to small businesses.

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Under the perpetual inventory system, which of the following accounts would not be used?

a. Sales Revenue

b. Purchases

c. Cost of Goods Sold

d. Inventory

Answers

Under the perpetual inventory system, Purchases accounts would not be used.

Permanent inventory is a continuous accounting method that accurately reflects actual stock in the book inventory by continuously recording inventory changes without the need for physical inventories. POS systems and scanners are input devices used in warehouses to record perpetual inventory.

Increasingly, warehouses and the retail sector adopt perpetual inventory methods. Understatements due to missing inventory and overstatements due to phantom inventory can both be minimized with perpetual inventory. Companies that employ a material requirement planning (MRP) system for production must also maintain perpetual inventory.

The inventory purchases made by a company are documented in the purchasing account, which is a general ledger account. In a periodic inventory system, this account is used to figure out how much inventory is available for purchase.

The inventory available for sale is determined by adding the initial inventory to the total amount of purchased inventory throughout the course of a period under the periodic method. The cost of goods sold for the period is calculated by deducting the amount of inventory that is available for sale from the ending inventory valuation, which is determined by a physical count at the conclusion of the period. As a result, the following calculation employs the purchases account's contents:

Cost of goods sold = (Beginning inventory + Purchases - Ending inventory).

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