The Keynesian model is a macroeconomic model developed by John Maynard Keynes. It emphasizes the importance of aggregate demand in influencing economic output, particularly during recessions. According to this model, economies may not naturally return to full employment, and governments should actively use monetary and fiscal policies to stabilize the economy.
In this model, the marginal propensity to consume (MPC) is 0.85, which indicates that for every additional unit of income, individuals consume 85% of it.
The multiplier (k) can be calculated using the formula 1 / (1 - MPC), resulting in a value of 6. This means that an initial increase in spending will lead to a larger overall increase in the economy's income.
With the calculated multiplier, the equilibrium level of income (Y) can be determined by multiplying it by the sum of consumption (C), investment (I), government spending (G), and net exports (X - Z).
In this case, the equilibrium level of income is found to be 5,250.
When the economy is in equilibrium, the government collects taxes (T), which can be calculated by multiplying the tax rate (t) by the equilibrium income.
With a tax rate of 0.15 and an equilibrium income of 5,250, the government collects 787.50 in taxes.
If induced imports (m) are included, the multiplier formula is adjusted to account for this. With an m value of 0.17, the new multiplier (k) is calculated as 50.
Consequently, the equilibrium level of income increases significantly to 43,750.
In South Africa, there are three definitions of money: M1, M2, and M3. M1 includes physical currency and easily accessible funds in transactional accounts.
M2 encompasses M1 and additional savings deposits. M3 includes M2 as well as large deposits, interbank transfers, and bank securities.
The motives for holding money are the transactions motive, precautionary motive, and speculative motive.
The transactions motive is driven by the need for money to facilitate day-to-day transactions.
The precautionary motive arises from the desire to hold money for unexpected expenses.
The speculative motive involves holding money as a store of value based on the expectation of future opportunities or changes in asset prices.
The motive for holding money affects the demand for active balances.
The demand for money curve is downward-sloping, indicating that as the interest rate rises, the quantity of money demanded decreases.
Factors such as income levels, uncertainty, and economic conditions can shift the demand curve, reflecting changes in the motives for holding money.
Money is not considered income because it serves as a medium of exchange and a store of value, while income represents the flow of money or goods received during a specific period.
Money is just one component of income, which includes both monetary and non-monetary components such as goods and services.
Read more about Keynesian mode
https://brainly.com/question/31538334
#SPJ11
For the United States, a loss in its reserve currency position would likely result in which of the following?
Question 4 options:
a)
imports becoming more expensive
b)
lower interest rates on private debt.
c)
more foreign investment in the United States
d)
lower interest rates on government debt
The correct answer is d). lower interest rates on government debt. it would likely lead to a decrease in demand for U.S. government debt from foreign countries and investors.
If the United States were to lose its reserve currency position, it would result in lower interest rates on government debt. This is because the loss of reserve currency status would decrease the demand for U.S. government debt from foreign investors.
To attract buyers, the U.S. government would need to offer lower interest rates on its debt securities. Lower interest rates on government debt would be necessary to make the debt more attractive and to stimulate demand. This situation arises because losing reserve currency status would undermine the perceived stability and desirability of U.S. government debt, leading to a decrease in demand and requiring lower interest rates to maintain market interest.
Lower interest rates on government debt could have implications for various aspects of the economy, such as borrowing costs for the government, investment decisions, and overall financial market conditions.
To know more about costs visit-
brainly.com/question/32015639
#SPJ11
Max 15x
s.t.
ax ≤ 60
x ≥ 20
where a is the number of hours required for each unit produced.
With a = 5, the optimal solution is x 12.00. If we have a stochastic model with a = 3, a4, a5, or a = 6 as the possible values for the number of hours required per unit, what is the optimal value for x? Round your answers for the optimal solution to two decimal places. Round the answers for profit to the nearest dollar.
If a = 3, x= ____ and profit = $ ____
If a 4, x= _____ and profit = $ _____
If a 5, x = _____ and profit = $ ______
If a 6, x = _____ and profit = $ _____
What problems does this stochastic model cause?
The problem with this stochastic model is _____ and therefore the values of ______ are not known with certainty.
The optimal value for x in the stochastic model with different values of a can be found by solving the linear programming problem for each value of a and comparing the resulting profits.
When a = 3:
Maximize 15x subject to 3x ≤ 60 and x ≥ 20.
Solving this problem, we find x = 20 and the profit is 15 * 20 = $300.
When a = 4:
Maximize 15x subject to 4x ≤ 60 and x ≥ 20.
Solving this problem, we find x = 15 and the profit is 15 * 15 = $225.
When a = 5:
Maximize 15x subject to 5x ≤ 60 and x ≥ 20.
Since 5x > 60, the constraint is infeasible and there is no feasible solution. Thus, the profit is $0.
When a = 6:
Maximize 15x subject to 6x ≤ 60 and x ≥ 20.
Since 6x > 60, the constraint is infeasible and there is no feasible solution. Thus, the profit is $0.
The stochastic model causes uncertainty in the values of a, which leads to infeasible solutions for certain values of a (a = 5 and a = 6 in this case). This means that the production cannot be optimized in those scenarios, resulting in zero profit. The problem with this stochastic model is the variability in the value of a, which makes it difficult to determine the optimal solution and expected profit.
To know more about stochastic model, refer here:
brainly.com/question/28138551#
#SPJ11
to conduct a follow-up study that would provide onfidence that the point estimate is correct to within of the population proportion, how many consumers need to be sampled?
we need to know the desired level of confidence and the estimated population proportion.
Desired level of confidence: This is typically expressed as a percentage (e.g., 95%, 99%).
Estimated population proportion: This refers to the proportion of the population that possesses a certain characteristic or exhibits a specific behavior.
Margin of error: This indicates the maximum acceptable difference between the point estimate and the true population proportion.
Once we have these three pieces of information, we can use the formula mentioned earlier:
n = (Z^2 * p * q) / E^2
where:
n = required sample size
Z = Z-score corresponding to the desired level of confidence
p = estimated population proportion
q = 1 - p (complement of the estimated population proportion)
E = margin of error
By plugging in the values, we can calculate the sample size necessary to achieve the desired level of confidence and precision.
If you can provide the desired level of confidence, estimated population proportion, and margin of error, I can help you calculate the required sample size.
To know more about margin visit-
brainly.com/question/7295577
#SPJ11
Explain the difference between an illegal contract and an
unconscionable contract. Which one, if any, is enforceable? Give an
example of each.
An illegal contract is one that involves an illegal purpose or involves breaking the law. Such contracts are deemed void from the outset and cannot be enforced by any party. For instance, a contract that involves the sale of illegal drugs or hiring someone to commit a crime is illegal and unenforceable.
On the other hand, an unconscionable contract is one that is so one-sided that it is deemed unfair to one of the parties involved. Such contracts are also deemed void and unenforceable, typically due to their oppressive nature. For example, a contract that requires an employee to work 80 hours a week for minimum wage is considered unconscionable and unenforceable.
An illegal contract and an unconscionable contract are two different types of problematic agreements. An illegal contract involves activities that are against the law or public policy, rendering it void and unenforceable. For example, an agreement to engage in drug trafficking would be considered an illegal contract.
To know more about contract visit:-
https://brainly.com/question/32497804
#SPJ11
7. The mini-plan is a short form of a business plan focusing heavily on market issues such as the following except a. pricing b. supporting documentation c. competition d. distribution channels
The mini-plan is a streamlined version of a business plan that places a strong emphasis on factors relating to the market.
The standard business plan has been condensed into a mini-plan. Despite covering all necessary topics, it is condensed to highlight important market-related features.
Since they are essential to comprehending the competitive environment of the organisation and its chances of success, market challenges take centre stage in the mini-plan. Pricing is a crucial factor to take into account because it has a direct impact on the positioning of the good or service in the market and its profitability. The price strategy and its justification might be described in the mini-plan.
Competition is yet another important element. Businesses may distinguish themselves from their rivals and create powerful marketing and sales strategies by identifying and evaluating their rivals.
Learn more about business plan here:
https://brainly.com/question/13160849
#SPJ11
you are given an array of positive integers numbers and a positive integer x
Given an array of positive integers numbers and a positive integer x, we are to find a pair of two different elements in the array whose sum is equal to x.
The brute force approach is to create a nested loop, and for each element, find all the other elements whose sum is equal to x. This approach works, but it is not efficient as it will take a lot of time to run. Here is a sample code:
def find_pair(numbers, x):
n = len(numbers)
for i in range(n):
for j in range(i + 1, n):
if numbers[i] + numbers[j] == x:
return [numbers[i], numbers[j]]
return []
# Sample Usage
print(find_pair([2, 4, 6, 8, 10], 12))
The code above will output [2, 10] which is a pair of elements that adds up to 12. The nested loop runs in O(N^2) time complexity.
A more efficient solution is to use a hash table. We can create a hash table and for each element in the array, check if the complement (i.e., x - element) is in the hash table. If it is, we have found the pair of elements that add up to x. If not, we add the element to the hash table. Here is the sample code:
def find_pair(numbers, x):
n = len(numbers)
hash_table = {}
for i in range(n):
complement = x - numbers[i]
if complement in hash_table:
return [complement, numbers[i]]
hash_table[numbers[i]] = True
return []
# Sample Usage
print(find_pair([2, 4, 6, 8, 10], 12))
The code above will output [2, 10] which is a pair of elements that adds up to 12. The hash table approach runs in O(N) time complexity.
To find a pair of two different elements in an array of positive integers whose sum is equal to a given integer x, we can use a hash table. We create a hash table and for each element in the array, we check if the complement (i.e., x - element) is in the hash table. If it is, we have found the pair of elements that add up to x. If not, we add the element to the hash table. The hash table approach runs in O(N) time complexity.
Learn more about nested loop: https://brainly.com/question/30895403
#SPJ11
12.5 Average daily demand for a product is normally distributed with a mean of 20 units and a standard deviation of 3 units. Lead time is fixed at 25 days. What reorder point provides for a service le
The Reorder point provides for a service level of 95% is 524.6. Reorder point is the level of inventory at which a new order for a product or material should be placed to replenish the inventory in time to meet the demand. It is the minimum quantity of inventory that a company needs to have on hand to avoid stock outs and maintain customer service levels.
The reorder point is calculated based on the lead time, the average daily demand, and the safety stock level. The lead time is the time it takes for an order to be delivered after it has been placed. The average daily demand is the average number of units of a product that are sold or used per day. The safety stock level is the extra inventory that a company keeps on hand to protect against unexpected increases in demand or delays in delivery. To determine the reorder point that provides for a service level of 95%, we need to use the following formula: Reorder point = (Average daily demand x Lead time) + Z-score x (Standard deviation of daily demand x Square root of lead time)
Where: Z-score is the number of standard deviations from the mean that corresponds to the desired service level. For a service level of 95%, the Z-score is 1.64 Reorder point = (20 x 25) + 1.64 x (3 x sqrt(25)) Reorder point = 500 + 1.64 x 15 Reorder point = 524.6
The complete question is Average daily demand for a product is normally distributed with a mean of 20 units and a standard deviation of 3 units. Lead time is fixed at 25 days. What reorder point provides for a service level of 95%.
To know more about Reorder point here
https://brainly.com/question/31054382
#SPJ4
Illustration 34 In an intelligence test administered to 1000 students, the average score was 84 and standard deviation 48. Find (1) the number of students exceeding scores of 90 (b) the number of students lying between 35 and 86 are (c) value of score exceeded by the top 100 students.
To solve the given questions, we can use the concept of Z-scores. The Z-score measures the number of standard deviations a particular value is from the mean.
Given information:
Mean (μ) = 84
Standard Deviation (σ) = 48
Total number of students (N) = 1000
Let's solve each question:
(a) Number of students exceeding scores of 90:
First, we need to calculate the Z-score for a score of 90 using the formula:
Z = (X - μ) / σ
Z = (90 - 84) / 48 = 0.125
Using a Z-table or a Z-score calculator, we can find the percentage of students that have a Z-score greater than 0.125. Let's assume it is P.
The number of students exceeding a score of 90 can be calculated as:
Number of students = N * (1 - P)
Number of students = 1000 * (1 - P)
(b) Number of students lying between 35 and 86:
First, we need to calculate the Z-scores for scores of 35 and 86 using the formula mentioned above.
Z1 = (35 - 84) / 48 = -1.021
Z2 = (86 - 84) / 48 = 0.042
Using a Z-table or a Z-score calculator, we can find the percentage of students that have Z-scores between -1.021 and 0.042. Let's assume it is Q.
The number of students lying between scores 35 and 86 can be calculated as:
Number of students = N * Q
Number of students = 1000 * Q
(c) Value of score exceeded by the top 100 students:
We need to find the Z-score corresponding to the top 100 students. Let's assume it is Zt.
Using a Z-table or a Z-score calculator, we can find the Z-score corresponding to the percentage of students that represents the top 100 students. Let's assume it is Rt.
The value of the score exceeded by the top 100 students can be calculated as:
Score = μ + (Zt * σ)
To know more about standard deviation, visit:
https://brainly.com/question/29115611
#SPJ11
Why is it important the I manage my career NOW. How do I manage
my career right NOW?
Managing your career now is crucial because the job market and professional landscape are constantly evolving. It's essential to take an active role in shaping your career path, making informed decisions, and adapting to changing circumstances.
Circumstances refer to the conditions, situations, or factors that surround and influence a particular event, decision, or individual. They can encompass a wide range of elements, including social, economic, political, cultural, environmental, or personal factors. Circumstances play a significant role in shaping outcomes and determining the course of actions or events. They can create opportunities, constraints, challenges, or advantages.
Understanding the circumstances is essential for making informed judgments, decisions, or predictions. It involves analyzing and considering the context, background, and relevant factors that are relevant to a specific situation. Circumstances can change over time and vary from one situation to another. They can be both internal and external, impacting individuals, organizations, or societies. Acknowledging and adapting to the circumstances can help navigate challenges, exploit opportunities, and make more effective choices.
To know more about Circumstances refer to-
brainly.com/question/30182524
#SPJ4
Identify the appropriate market structure. The global market for automobiles is supplied by many small firms, each vehicle producer offers their slightly different version of a vehicle for example the Honda Civic versus the Toyota Camry Perfect Competition Monopolistic Competition KUD Oligopoly KOD Monopoly
The appropriate market structure for the given scenario is monopolistic competition.
What is monopolistic competition?Monopolistic competition is a type of market structure that includes many producers who sell products that are slightly different from one another.
There are various sellers with slightly different products in monopolistic competition. It is similar to perfect competition in terms of the number of firms competing in the market; however, monopolistic competition includes product differentiation which is not present in perfect competition.
In the given scenario, the global market for automobiles is supplied by many small firms, each vehicle producer offers a slightly different version of a vehicle. This indicates that the automobile industry is monopolistic and competitive. Each manufacturer has a unique product that is slightly different from other manufacturers, thus leading to competition based on the differentiation of their products.
Therefore, the appropriate market structure in the given scenario is monopolistic competition.
Read more about Market Structure at https://brainly.com/question/30285655
#SPJ11
Find the present worth of the infinite stream of payments tabulated below. EOY Payment ¡ (%) 1 through 24 $100K/yr 12 25 90 10 26 81 10 72.9 10 Decreases at the same % rate Same 278 (Note: change in interest rate at EOY 25)
To find the present worth of the infinite stream of payments, we need to discount each payment to its present value and sum them up. The discount rate will vary depending on the year.
the payments can be divided into two parts: from Year 1 to Year 24, and from Year 25 onwards. For the first part, the payment is $100,000 per year for 24 years, with a discount rate of 12%. We can calculate the present value of this stream of payments using the formula for the present value of an annuity.
For the second part, the payment starts at $90,000 in Year 25 and decreases by 10% each year. This is an infinite geometric series, and we can use the formula for the sum of an infinite geometric series to calculate the present value.
By summing up the present values of both parts, we can find the present worth of the infinite stream of payments. The calculation involves applying the appropriate discount rates to each payment and considering the changes in the interest rate at the 25th year.
learn more about discount rate here:
https://brainly.com/question/32098916
#SPJ11
Suppose the worker has tastes over consumption c and leisure l that can be represented by the function u(c, 1) = call-a (a) (5 pts) If the worker can work up to 60 hours a week at a wage rate $w per hour. Write out the budget constraint this worker faces and graph it. Put leisure on the horizontal axis and consumption on the vertical axis. (b) (3 pts) What is the slope of this budget constraint? What is the intercept for consumption and leisure respectively? Label them on the graph. (c) (4 pts) Calculate the marginal utility of consumption and marginal utility of leisure. What is the marginal rate of substitution between leisure and consumption? (d) (5 pts) Please solve for the optimal level of consumption and leisure hours this consumer chooses using Lagrangian approach. (e) (3 pts) If a = 0.5, w = 10, what are the optimal consumption and leisure? (f) (2 pts) If wage rate increases to $15 per hour, calculate the new optimal choice of consumption and leisure. (g) (8 pts) Can you graph the substitution and income effects? Explain if leisure is inferior or normal good.
The worker is paid a wage rate of $w per hour and can work up to 60 hours a week. The worker's utility function is represented as follows:u(c, l) = cl-a, where 'c' and 'l' represent consumption and leisure, respectively.
The budget constraint for this worker is given by:wc + p(60 - c) = 60wp + 60p - pc = 60p60 = p(w + p - c)Hence, the budget constraint can be represented graphically as follows:Here, leisure is on the horizontal axis, while consumption is on the vertical axis. The slope of the budget constraint is -w/p. The intercepts for consumption and leisure are 60w/p and 60/p, respectively.(c) ExplanationThe marginal utility of consumption is given by:MUC = ∂u/∂c = a × l × ca-1The marginal utility of leisure is given by:MUL = ∂u/∂l = c - aThe marginal rate of substitution (MRS) between leisure and consumption is given by:MRS = MUL/MUC = (c - a)/[a × l × ca-1] = (1/a) × [(c/l) - 1]At the optimal level of consumption and leisure, MRS equals the price ratio, i.e., -w/p.
The substitution effect occurs when the wage rate changes, causing the worker to substitute leisure for consumption. The income effect occurs when the worker's income increases, causing the worker to consume more of both leisure and consumption. If leisure is a normal good, the income effect is positive, and if leisure is an inferior good, the income effect is negative. In this case, we have:Substitution effect: The worker substitutes leisure for consumption. As the wage rate increases, the budget constraint rotates inward. The optimal point moves from point E to point F.Income effect: The worker consumes more of both leisure and consumption.
To know more about consumption visit:
https://brainly.com/question/10714011
#SPJ11
In class, we modeled growth in an economy by a growing population. We could also achieve a growing economy by having an endowment that increases over time. To see this, consider the following economy. Let the number of young people born in each period be constant at N. There is a constant stock of fiat money, M. Each young person born in period t is endowed with yt units of the consumption good when young and nothing when old. The individual endowment grows over time so that ye aye-1, where a > 1. For simplicity, assume that in each period t, young people desire to hold real money balances equal to one-half of their endowment. (a) Find the rate of return of money in this economy. Explain your results. (40%) (b) How could the government achieve a rate of return of 1 in this economy? Explain your results. (30%) (c) Now assume that the population changes over time. At what rate would it need. to increase or decrease, in order for the rate of return on money to be equal to 1, assuming constant money supply? Explain your results. (30%)
In an economy with growing individual endowments, the rate of return on money can be achieved by adjusting population growth.
(a) The rate of return of money in this economy can be determined by comparing the change in real money balances over time. In each period, young people desire to hold real money balances equal to half of their endowment. Since the endowment grows over time, the real money balances also increase. The rate of return of money can be calculated as the growth rate of real money balances.
(b) To achieve a rate of return of 1 in this economy, the government can adjust the growth rate of individual endowments. By setting the growth rate of individual endowments equal to 1, the endowments will increase at the same rate as the desired real money balances. This ensures that the rate of return on money is 1, as the growth in money balances matches the growth in endowments.
(c) When the population changes over time, the rate of return on money can be equal to 1 if the population increases or decreases at a specific rate. Assuming a constant money supply, the growth rate of real money balances should match the growth rate of endowments. If the population grows faster than the growth rate of endowments, the rate of return on money will be less than 1. Conversely, if the population grows slower than the growth rate of endowments, the rate of return on money will be greater than 1. The specific rate at which the population needs to increase or decrease depends on the growth rate of endowments and the desired rate of return on money.
In summary, the rate of return on money in this economy is determined by comparing changes in real money balances over time. The government can achieve a rate of return of 1 by adjusting the growth rate of individual endowments. If the population changes, it needs to increase or decrease at a specific rate to maintain a rate of return on money equal to 1, assuming a constant money supply.
Learn more about Population here: brainly.com/question/15889243
#SPJ11
How the following event will change the small automobiles market, such as the Mini Cooper and Smart car TER on Small automobiles become more fashionable a. Increase in the market price b. decrease in the market price increase in supply di increase in demand dy? e decrease in demand decrease in supply
The following event is most likely to cause a change in the small automobiles market, such as the Mini Cooper and Smart car:The event that will cause a change in the small automobile market such as the Mini Cooper and Smart car is an increase in demand.An increase in demand for small automobiles such as the Mini Cooper and Smart car will change the small automobiles market significantly. It will increase the price of the vehicles and also increase their demand. People will be more interested in buying these cars since they will become more fashionable and in trend.Thus, the correct answer is: d. Increase in demand
Learn more about automobiles here: brainly.com/question/3235737
#SPJ11
In an article Singapore Airlines: Aligning Strategy and
Organization Case 5 by Loizos Heracleous, What external trends
should Singapore Airlines look out for?
In the article titled "Singapore Airlines: Aligning Strategy and Organization" by Loizos Heracleous, there are several external trends that Singapore Airlines should be aware of. Some of the trends are highlighted below;Regulatory constraints - This is an important external trend that Singapore Airlines should be aware of.
The regulatory environment in the airline industry is highly complex and constantly evolving. Thus, Singapore Airlines should monitor the regulatory environment to ensure that it is in compliance with all the regulations. Also, they should prepare for any new regulations that may impact its operations.Technology - Technology is another important external trend that Singapore Airlines should be aware of. New technologies such as blockchain, artificial intelligence, and internet of things (IoT) are changing the way the airline industry operates. For example, the use of blockchain technology can help improve transparency and security in the supply chain, while artificial intelligence can help airlines predict passenger behavior and optimize flight schedules.Competition - Competition is an external trend that Singapore Airlines should be aware of. The airline industry is highly competitive, and airlines are constantly looking for ways to gain a competitive advantage. Thus, Singapore Airlines should monitor its competitors' activities and find ways to differentiate itself from the competition.Changing customer preferences - Customer preferences are constantly changing, and Singapore Airlines should be aware of these changes. For example, customers are increasingly looking for personalized experiences and are more interested in sustainable and environmentally friendly travel. Thus, Singapore Airlines should find ways to meet these changing customer preferences.
Learn more about Organization here:-
https://brainly.com/question/28097781
#SPJ11
Iris Futuristic company distributes complex and relatively expensive goods, with customers typically requiring assistance before purchasing. The channels for these types of products are often structured to be ___.
Group of answer choices
comparative
intensive
selective
indirect
The channels for distributing complex and relatively expensive goods, where customers require assistance before making a purchase, are often structured to be selective.
Selective distribution channels are designed to carefully choose intermediaries who possess the necessary expertise and resources to provide the required assistance and support to customers. When dealing with complex and expensive goods, customers often seek guidance, personalized advice, and after-sales services.
By using a selective distribution approach, companies like Iris Futuristic can maintain greater control over their brand image and ensure that the products are presented and demonstrated appropriately. These distribution channels allow for a more targeted and focused marketing effort, ensuring that the right customers have access to the products and receive the necessary pre-sales and post-sales support.
Learn more about customers here:
https://brainly.com/question/31720706
#SPJ11
Problem 2: Product Pricing for Remington Manufacturing
Remington Manufacturing is planning its next production cycle. The company can produce three products, each of which must undergo machining, grinding, and assembly operations. The company needs to determine the number of each product to produce to maximize its profit in the next quarter. The following table summarizes the hours of machining, grinding, and assembly required by each unit of each product, and the total hours of capacity available for each operation.
Operation
Machining Grinding Assembly
Product 1 2
4
5
Hours Required By Product 2
3 3 5
Product 3 6
4
2
Total Hours Available per Quarter
500
300
400
The costs of manufacturing products 1, 2 and 3 are $500, $600, and $700 per unit, respectively.
Having established a reputation for high quality and reliability, the company believes it can increase profits by increasing the prices of the products. However, a price increase might have a detrimental effect on demand, so the company has engaged a marketing research firm to estimate the level of demand for its products at various prices. The marketing research firm used the technique of regression analysis to develop a model of the relationship between the prices and demand for the products. After analyzing the situation, the marketing research firm concluded that the company can expect the demand for the products in the next quarter to vary with price in the following way:
Demand for Product 1 = 400 – 0.22 × price of Product 1 Demand for Product 2 = 350 – 0.15 × price of Product 2 Demand for Product 3 = 550 – 0.18 × price of Product 3
The company also needs to determine the number of each product to produce. Apparently, he cannot sell more than the anticipated demand for a product. For example, suppose Product 1 is priced at $920 each, the demand will be 400-(0.22)(920)=197.6. That means the company can sell at most 197.6 products. Let’s assume the demand can be fractional. How many products should the company produce and how much should they be priced for the company to maximize its quarterly profit? Remember the company can only produce integer number of products.
Please provide a mathematical formulation for this problem (defining decision variables, objective function and constraints). You do NOT need to solve it.
Suppose there is a setup cost of $1,000 to produce any number of product 1. That is, the cost will be incurred as long as any product 1 is produced, and the cost is $1,000 regardless of the number of products produced. How would you revise your formulation to incorporate this change?
(Not a continuum of part 2) If the company chooses to produce Product 2, it needs to produce at least 300 of it. How would you revise your formulation to incorporate this change?
(Not a continuum of parts 2 and 3) The production manager of the factory realized that their facility is not designed for production of large volume. As a result, they can produce more than 300 units for at most one of the three products. How would you revise your formulation to incorporate this change?
To incorporate the change that the facility is not designed for the production of large volume, we can add a constraint that limits the maximum number of products that can be produced by the company for at most one of the three products:X1 + X2 + X3 - max(X1, X2, X3) <= 300.
Decision Variables:X1, X2, and X3: the number of products of type 1, 2, and 3 to produce respectively.Objective Function:
We need to maximize the quarterly profit of the company, which can be represented by the following equation:Z = (Revenue - Cost)Revenue:R1 = P1 * min(400 – 0.22P1, X1)R2 = P2 * min(350 – 0.15P2, X2)R3 = P3 * min(550 – 0.18P3, X3)Cost:C = 500X1 + 600X2 + 700X3 + 1000 if X1 > 0 and 0 if X1 = 0.
Constraints:The manufacturing process can’t exceed the maximum capacity available for each operation.
Therefore:2X1 + 3X2 + 5X3 <= 500 (machining)3X1 + 2X2 + 4X3 <= 300 (grinding)5X1 + 4X2 + 2X3 <= 400 (assembly).
The company can only sell products up to the demand predicted by the regression equation:0 <= X1 <= min(400 – 0.22P1)0 <= X2 <= min(350 – 0.15P2)0 <= X3 <= min(550 – 0.18P3).
To incorporate the change that there is a setup cost of $1,000 to produce any number of product 1, we can modify the objective function by subtracting $1,000 from the total profit when we produce any amount of product 1:Z = (Revenue - Cost) - $1,000.
To incorporate the change that the company needs to produce at least 300 units of Product 2 if it chooses to produce it, we can add a constraint that ensures the production of at least 300 units:X2 >= 300
For more questions on constraint
https://brainly.com/question/30332316
#SPJ8
(Long-run costs, 36 pts) Carmela's pasta factory employs workers and pasta machines according to the following production function f(l,K) = 10.5 K0.5 The hourly cost of capital is $10 and the hourly cost of workers is $40. a. Write out the Lagrangian for the cost-minimization problem. (4 pts) b. Using the first order conditions of the Lagrangian, derive the optimal capital to labor ratio. Describe the long-run output expansion path. (8 pts) c. Suppose Carmela wishes to produce 1000 units of pasta. How much labor and capital should she employ? How much will it cost to produce? (8 pts) d. An order arrives doubling the amount of pasta Carmela needs to produce. Assuming she is unable to purchase more capital, how much will it cost to meet the new production level? (8 pts) e. In the long-run, Carmela will be able to employ more capital as well as labor. If Carmela continues to produce 2000 units of output, how much will it cost in the long run? How is it comparing to your answer in part d? (8 pts)
This equation represents the optimal capital to labor ratio, indicating the combination of inputs that minimizes the cost for a given level of output. the new optimal combination of K and L that satisfies the production function [tex]10.5K^0.5L^0.5 = 2000[/tex].
a. The Lagrangian for the cost-minimization problem can be written as follows:
L = wL + rK - λ[f(L, K) - q]
Where:
L represents labor input
K represents capital input
w represents the hourly cost of labor ($40)
r represents the hourly cost of capital ($10)
λ represents the Lagrange multiplier
f(L, K) represents the production function (10.5K^0.5L^0.5)
q represents the desired level of output
b. To derive the optimal capital to labor ratio, we need to maximize the Lagrangian function with respect to K and L, while also considering the production function:
∂L/∂K = r - λ(∂f/∂K) = 0
∂L/∂L = w - λ(∂f/∂L) = 0
Taking the partial derivatives of the production function with respect to K and L, we get:
∂f/∂K = 5.25K^(-0.5)L^0.5
∂f/∂L = 5.25K^0.5L^(-0.5)
Setting the partial derivatives equal to zero and solving for λ, we find:
r = λ(5.25K^(-0.5)L^0.5)
w = λ(5.25K^0.5L^(-0.5))
Dividing the two equations, we get:
w/r = (K/L)
This equation represents the optimal capital to labor ratio, indicating the combination of inputs that minimizes the cost for a given level of output. The long-run output expansion path is determined by this optimal ratio, as different output levels will require different combinations of capital and labor inputs.
c. To produce 1000 units of pasta, Carmela needs to find the combination of labor and capital that satisfies the production function:
10.5K^0.5L^0.5 = 1000
Given the production function, we can solve for the optimal values of K and L. The cost of production can be calculated by multiplying the number of labor hours (L) by the cost of labor ($40) and the number of capital hours (K) by the cost of capital ($10).
d. If the order arrives doubling the amount of pasta to be produced, Carmela needs to find the new combination of labor and capital that satisfies the production function:
10.5K^0.5L^0.5 = 2000
Since Carmela is unable to purchase more capital, she needs to adjust the labor input to meet the new production level. The cost of production can be calculated as in part c.
e. In the long run, Carmela can adjust both capital and labor inputs. If she continues to produce 2000 units of output, she needs to find the new optimal combination of K and L that satisfies the production function:
10.5K^0.5L^0.5 = 2000
With the flexibility to adjust both inputs, the cost of production in the long run may be different from the cost in part d, as Carmela can optimize the input mix to minimize costs while producing the desired output level. The new cost of production can be calculated as in part c.
Learn more about production here
https://brainly.com/question/16755022
#SPJ11
Terry transfers two assets to a partnership on the day it’s created for a 60% partnership interest worth $120,000. She contributed cash = $80,000 and equipment worth $40,000 with an adjusted basis = $16,000. What result?
a.Terry realizes and recognizes a $24,000 gain
c.Terry realizes but does not recognize a $24,000 gain
b.Terry neither realizes nor recognizes any gain
d.Terry does not realize but may elect to recognize a $24,000 gain
The result of Terry transferring two assets to a partnership on the day it’s created for a 60% partnership interest worth $120,000 with a cash contribution of $80,000 and equipment worth $40,000 with an adjusted basis of $16,000 is that Terry realizes but does not recognize a $24,000 gain.
Option C is the correct answer. Realized gain is defined as the amount that a taxpayer gains from the sale or exchange of property. When an asset is sold or exchanged for more than its adjusted basis, a realized gain occurs. Terry has contributed $40,000 in equipment with an adjusted basis of $16,000. Therefore, Terry has a $24,000 realized gain ($40,000 – $16,000). Terry does not, however, recognize the $24,000 gain.
A gain is recognized when it is included in gross income.
Read more about a partnership here;https://brainly.com/question/14034519
#SPJ11
is
this statement TRUE or FALSE?
"The Black-Scholes-Merton pricing formula for a call option is
correct only for investorsthat are risk-neutral."
True. The Black-Scholes-Merton pricing formula assumes that investors are risk-neutral, meaning that they do not require a risk premium to hold risky assets.
In the Black-Scholes-Merton framework, the assumption of risk-neutrality allows for the construction of a replicating portfolio. This replicating portfolio consists of a combination of the underlying asset (such as a stock) and the risk-free asset (such as a Treasury bond) that can replicate the payoff of the option being priced. By constructing such a portfolio, the model can derive an equation that equates the price of the option to the value of the replicating portfolio, leading to the famous Black-Scholes-Merton pricing formula.
It's important to note that in reality, investors do require a risk premium to hold risky assets because they demand compensation for taking on additional risk. The assumption of risk-neutrality is a simplification that allows for the development of a mathematical model, but it is not reflective of real-world investor behavior. Nonetheless, the Black-Scholes-Merton model has proven to be a valuable tool in options pricing and has contributed significantly to the field of financial economics.
Learn more about Black-Scholes-Merton pricing from
https://brainly.com/question/32274178
#SPJ11
why are sales teams becoming more popular in personal selling?
Sales teams are becoming more popular in personal selling because they offer several advantages over an individual salesperson. First, a sales team can be more effective at reaching a wider audience than a single salesperson. This is because a team can cover more ground and handle a larger volume of leads and accounts.
Second, a sales team can provide a diverse range of skills, experiences, and perspectives. Different team members can specialize in different areas of the sales process, such as prospecting, closing deals, or account management. This can lead to better results and higher levels of customer satisfaction.
Third, a sales team can provide greater flexibility and scalability for a business. As the business grows and its sales needs increase, it can simply add more members to the team rather than relying on a single salesperson to handle all the work.
Overall, sales teams are a powerful tool for businesses looking to increase their sales and reach new customers.
Learn more about Sales from
https://brainly.com/question/29417616
#SPJ11
If a country has long history of monetary instability, with inflation rates fluctuating dramatically and sometimes surging beyond 1000% per year. To mitigate such challenges as a Financial Economist, outline measures that can be adopted.
As a Financial Economist, there are several measures that can be adopted to mitigate the challenges of monetary instability in a country with fluctuating inflation rates that sometimes surge beyond 1000% per year.
Firstly, the government can adopt a more disciplined fiscal policy by reducing its expenditure and increasing tax revenues to reduce budget deficits, which can help stabilize the value of the currency. Secondly, the country can adopt a fixed or managed exchange rate system to control the exchange rate volatility. Thirdly, the central bank can adopt a more prudent monetary policy by controlling the money supply and interest rates to curb inflation. Additionally, the government can encourage foreign investment and exports to generate foreign exchange earnings and improve the balance of payments position. Lastly, the country can adopt structural reforms such as deregulation, privatization, and liberalization of trade to improve efficiency, competitiveness, and productivity in the economy. These measures can help stabilize the economy and restore confidence in the financial system, thereby reducing inflation rates and promoting economic growth and development.
To know more about inflation visit :-
https://brainly.com/question/28136474
#SPJ11
First, go back to the Study Plan for "Monopoly" and review the section on Monopoly and Antitrust Policy.
Then based on the following case study, what would you recommend as the best policy: should the Yum! corporation be allowed to own three fast food chains?
Use the following concepts:
The HHI index
Economies of scale
Monopoly profits
Choose from the following:
A) The merged ownership should have been permitted with no additional recommendations.
B) The merged ownership should not be permitted at all.
C) The merged ownership should be permitted with minor limitations (specify the limitations).
D) The merged ownership should be permitted with major limitation (specify the limitations).
The Yum! corporation owns the merged firms: KFC, Pizza Hut and Taco Bell
Market shares in the US are:
McDonalds 30% ($40,000,000,000 US revenue)
Starbucks 15%
Chick-Fil-A 7%
Taco Bell 7%
Burger King 7%
Subway 6%
Wendys 5%
Dunkin 5%
Dominos 4%
Pizza Hut 4%
KFC 3%
Sonic 3%
Arbys 2%
Dairy Queen 2%
The best policy recommendation for the Yum! corporation owning three fast food chains would be C) The merged ownership should be permitted with minor limitations.
Is it appropriate to allow the Yum! corporation to own three fast food chains?Yes, the Yum! corporation should be allowed to own three fast food chains, but with some limitations.
While the Yum! corporation's ownership of KFC, Pizza Hut, and Taco Bell would result in a high concentration in the market, it does not necessarily lead to an outright monopoly.
To determine the potential impact on market competition, we can analyze the Herfindahl-Hirschman Index (HHI), which measures market concentration.
In this case, the HHI can be calculated by squaring the market shares of all the firms and summing them up.
Looking at the market shares provided, McDonald's holds the highest share at 30%, followed by Starbucks at 15%.
The combined market share of KFC, Pizza Hut, and Taco Bell amounts to 14%, which is lower than the market shares of McDonald's and Starbucks individually.
This suggests that the merger would not significantly increase market concentration to a level that poses immediate antitrust concerns.
Additionally, economies of scale may play a role in the decision.
The Yum! corporation's ownership of multiple fast food chains allows for the sharing of resources, such as supply chains, marketing, and infrastructure, leading to cost efficiencies and potentially lower prices for consumers.
This can be beneficial in a competitive market, as long as it does not lead to exclusionary practices that harm competition.
To ensure that market competition is maintained, some minor limitations should be imposed on the merged ownership.
These limitations could include periodic monitoring of market behavior, adherence to fair pricing practices, and restrictions on predatory tactics that could harm smaller competitors.
By implementing these limitations, the potential negative effects of market concentration can be mitigated, while still allowing the Yum! corporation to benefit from economies of scale and consumers to enjoy the advantages of a diversified fast food market.
Learn more about fast food chains
brainly.com/question/29392648
#SPJ11
TAIWANS SUCCESS STORY
Taiwan is one of the four East Asian "tigers," or "mini-dragons," whose dramatic economic
successes of recent decades, along with South Korea, Singapore, and Hong Kong, have influenced the way
economists think about development. With a population of about 22 million, Taiwan is a mountainous,
14,000-square-mile island off the coast of China. Taiwan's claim to its status as a "development miracle"
is as strong as that of any other economy in the world. The island racked up a measured annual economic
growth rate averaging close to 8% over more than four decades. Taiwan grew nearly 10% annually in the
widely used benchmark 1965-80 periods, higher than any other reported figure. Despite its now high-
income status, with a per capita income of $13,925 in 2000 at market exchange rates ($22,646 in 2000, at
PPP), Taiwan continued to grow, at a rapid rate of 5.7% on average over the 1996-2000 period. However,
growth in various countries has occasionally reached rates as high as 14%, and in some regions as high as
25% or more, Taiwan's average growth performance is the highest ever recorded over such a long stretch
of time. In the postwar period, Taiwan has grown from an impoverished annual per capita income of just
$100, to the prosperous society it is today. At least as important, Taiwan has achieved universal
elementary and middle school education (nine years are mandatory), a healthy population with a life
expectancy of 75 years, and an infant mortality rate of only five per thousand. Absolute poverty has been
essentially eliminated, there is very little unemployment, and relative inequality is modest even by
developed country standards.
Although not yet really a fully developed economy and society, Taiwan has had to adjust to some
of the changes that face economies that have reached the threshold of high-income status. There has
been "hollowing out" of basic manufacturing, as plants have moved to mainland China in search of lower-
wage labor. Production that has remained has been forced to rapidly shift to high-tech products and
processes, in the face of rising competition in basic industries from other developing countries. There has
been continued uncertainty about the island’s political future, given poor relations with China, which
continues to view Taiwan as a renegade province, but so far the society has adapted. It has also
transformed itself into a credibly and competitively democratic polity, with far less corruption and lack of
government transparency than either its neighbours’ or than some of its own history. Taiwan thus seems
to have achieved almost everything we look for in development. This achievement is in dramatic contrast
to many other economies.
Paradoxically, but as is often the case in development studies, the problem is not that we have
too few explanations for success or failure, but too many. Taiwan's success in particular has been ascribed
to many factors. Here are 14 of the major ones: 1) emphasis on education; 2) extensive infrastructure
development; 3) early and thorough land reform; 4) very high rates of savings and investment; 5) a mixture
of constructive foreign influences and diffusion of commercial ideas from Japan and the United States; 6)
effective government industrial planning; 7)the free market's release of human energies and creativity; 8)
the 1960s Vietnam War boom; 9)direct American aid—and Taiwan's use of that aid for investment rather
than consumption; 10) the work ethic and productive attitudes of the labor force; 11) a long history as an
entrepreneurial culture; 12) the initiation of an export-led growth strategy in the midst of the rapidly
expanding world economy of the early 1960s; 13) the movement into entrepreneurship of capable local
Taiwan's Success Story Taiwan is an East Asian "tiger" and "mini-dragon" that has a strong claim to its status as a "development miracle." It is a mountainous, 14,000-square-mile island off the coast of China with a population of about 22 million. The island racked up a measured annual economic growth rate averaging close to 8% over more than four decades.
Taiwan grew nearly 10% annually in the widely used benchmark 1965-80 periods, higher than any other reported figure. Although not yet a fully developed economy and society, Taiwan has achieved almost everything we look for in development. Here are 14 of the major factors that contributed to Taiwan's success: emphasis on education, extensive infrastructure development, early and thorough land reform, high rates of savings and investment, constructive foreign influences and diffusion of commercial ideas from Japan and the United States, effective government industrial planning, the free market's release of human energies and creativity, the 1960s Vietnam War boom, direct American aid, the work ethic and productive attitudes of the labor force, a long history as an entrepreneurial culture, the initiation of an export-led growth strategy, the movement into entrepreneurship of capable local businesspeople. Despite its high-income status, Taiwan continued to grow at a rapid rate of 5.7% on average over the 1996-2000 period. Taiwan has also achieved universal elementary and middle school education, a healthy population with a life expectancy of 75 years, and an infant mortality rate of only five per thousand. Absolute poverty has been essentially eliminated, there is very little unemployment, and relative inequality is modest even by developed country standards.
To know more about economic growth rate visit:
https://brainly.com/question/3868883
#SPJ11
If a government deemed that the price of bread was too high, would imposing a price ceiling be an effective measure? What are some of the other measures that a government could take? Discuss, using diagrams and theories that you have been taught to support your argument.
A price ceiling is the government's maximum legal market price for a good or service. If a government determines that the price of bread is too high, imposing a price ceiling may be an effective measure, but it can also have negative consequences.
The consequence of a price ceiling is a shortage, with supply unable to meet demand. This is illustrated in the diagram below: There are several factors that can contribute to a rise in the price of bread, including an increase in demand, a decrease in supply, or an increase in production costs. The government can take various measures to address the issue of high bread prices, some of which are: Subsidies to bakeries: The government can offer subsidies to bakeries to reduce their production costs, which would lower the price of bread. Increase in production: The government can encourage farmers to grow more wheat, millers to produce more flour, and bakers to bake more bread, all of which would increase supply, lower prices, and prevent shortages. Price floors: The government may set a minimum price that wheat farmers receive, which can result in higher production and lower bread prices. The government may also pay a subsidy to wheat farmers to keep their production costs low and encourage them to produce more wheat. Conclusively, imposing a price ceiling may be an effective measure to lower the price of bread, but it can also result in negative consequences, such as a shortage. The government can take several measures to address the issue of high bread prices, including subsidies to bakeries, increasing production, and implementing price market floors.
learn more about market
https://brainly.com/question/31361572
#SPJ11
Jane Maxwell is a financial planner at Trifle Consulting. Her estimated salary cost per billable hour is $100. The estimated overhead cost per professional labour dollar for Trifle Consulting is 20 per cent and the required profit margin is 40 per cent of cost. What is Jane's chargeout rate per billable hour?
A.
$140
B.
$168
C.
$100
D.
$120
Jane's chargeout rate per billable hour is (B) $168. This rate includes Jane's salary, overhead cost, and the required profit margin.
To calculate Jane's chargeout rate per billable hour, we need to consider her salary cost, overhead cost, and the required profit margin. Given that Jane's estimated salary cost per billable hour is $100, we need to add the overhead cost and profit margin to determine the final chargeout rate. The overhead cost is 20% of the professional labor dollar, which means it is 20% of Jane's salary cost. So the overhead cost per billable hour is $100 x 0.20 = $20.
To calculate the profit margin, we need to add the overhead cost to the salary cost and then apply the profit margin percentage. The total cost is $100 (salary) + $20 (overhead) = $120. Applying a profit margin of 40% to the cost gives us $120 x 0.40 = $48. Finally, we add the profit margin to the total cost to get the chargeout rate: $120 (total cost) + $48 (profit margin) = $168.
Learn more about overhead cost here:
https://brainly.com/question/31993693
#SPJ11
Which of the following is considered a significant cause of economic growth?
a
Increases in household consumption
b
Increases in government spending
c
A decrease in the price level
d
An increase in the money supply
e
An increase in labor productivity
An increase in labor productivity is considered a significant cause of economic growth.
Among the options provided, an increase in labor productivity is widely recognized as a significant driver of economic growth. Labor productivity refers to the amount of output produced per unit of labor input.
When labor productivity increases, it means that workers can produce more goods or services in the same amount of time or with the same level of effort.
This leads to higher overall economic output and, consequently, economic growth.
By improving labor productivity, businesses can increase their efficiency and output, resulting in higher profits and economic expansion.
Factors that contribute to increased labor productivity include technological advancements, innovation, education and skill development, and efficient use of resources.
When workers are more productive, they can generate higher incomes, which can stimulate household consumption and further contribute to economic growth.
While increases in household consumption, increases in government spending, a decrease in the price level, and an increase in the money supply can also have some impact on economic growth, an increase in labor productivity is generally considered the most fundamental and sustainable driver of long-term economic growth.
It enables economies to produce more with the same or fewer resources, leading to improved living standards and economic prosperity.
Learn more about consumption here
https://brainly.com/question/25411156
#SPJ11
Suppose the aggregate demand (AD) relationship is given by the linear relationship,
P = 250 – 1.5Y and that the short-run aggregate supply (SRAS) is given by the linear relationship,
P = 50 + 0.5Y, where P is the GDP deflator, an index number; and Y is real GDP in units of £1bn.
Calculate the macroeconomic equilibrium in terms of P and Y.
The macroeconomic equilibrium in terms of P and Y is P = 100 and Y = 100 billion pounds.
The macroeconomic equilibrium in terms of P and Y can be calculated using the intersection of the aggregate demand (AD) and short-run aggregate supply (SRAS).When aggregate demand (AD) is equal to short-run aggregate supply (SRAS), it means that the macroeconomic equilibrium has been attained.P = 250 – 1.5YP = 50 + 0.5YSince both P is equal to both sides:P = 250 – 1.5Y = 50 + 0.5Y.
Solving the equation for Y,50 + 0.5Y = 250 – 1.5YY + 3Y = 4004Y = 400Y = 100 bn Using the value of Y above, we can now calculate P from either the AD or SRAS equation.P = 250 – 1.5YP = 250 – 1.5(100)P = 100P = 50 + 0.5YP = 50 + 0.5(100)P = 100
To know more about macroeconomic equilibrium visit:-
https://brainly.com/question/28039923
#SPJ11
Chapter 15 1. In which of the following industries do firms set prices? ( ) a. competitive markets, but not monopoly markets b. monopoly markets, but not competitive markets C. competitive and monopol
The answer is c. Competitive and monopoly markets.
In competitive markets, firms have the ability to set prices based on market forces such as supply and demand. They compete with other firms in the industry to attract customers, and price is one of the factors they can manipulate to gain a competitive advantage.
In monopoly markets, there is only one firm that controls the entire market. In this case, the monopolistic firm has the power to set prices without competition. They can maximize their profits by setting prices at a level that maximizes revenue and takes into account the demand elasticity of the product.
Therefore, both in competitive markets and monopoly markets, firms have the ability to set prices, although the dynamics and extent of their pricing power may differ.
To know more about competitive markets visit:
https://brainly.com/question/13961518
#SPJ11
International Auditing Cases 1 PURPOSE OF FINANCIAL REPORTING 1st period An investor owns an amount of 100 T€. He wants to create a business producing modern stylish chocolate. He is willing to invest the total amount. Please prepare an opening balance sheet. 2nd period The investor acquires a machine for production purposes for 100 T€ and raw material (chocolate beans) at an amount of 50 T€. How are these transactions reflected in the balance sheet? 3rd period Chocolate beans at an amount of 20 T€ are used in the first production process. Beautiful chocolate bars at different tastes have been produced. The amount of the salaries for employees was 80 T€. How are these transactions reflected in the balance sheet? 4th period The chocolate bars are sold on the market at an amount of 120 T€. How are these transactions reflected in the balance sheet? Please discuss how the different transaction in period 1 to 4 change the financial position - the performance - the cash position
The different transactions from period 1 to 4 change the financial position, performance, and cash position are discussed below.
Period 1The investor invested 100 T€ into the business for producing modern stylish chocolate. It increases the assets and equity of the business by 100 T€.
Therefore, the opening balance sheet of the business would reflect the following transactions:
Assets (100 T€)
Cash: 100 T€LiabilitiesNilEquity (100 T€)Period 2The investor acquires a machine for production purposes for 100 T€ and raw material (chocolate beans) for 50 T€. It increases the assets and reduces the cash position of the business by 150 T€.
Therefore, the balance sheet of the business would reflect the following transactions:
Assets (250 T€)
Cash: 100 T€Machine: 100 T€Raw Material: 50 T€LiabilitiesNilEquity (250 T€)Period 3Chocolate beans worth 20 T€ are used in the first production process, and chocolate bars at different tastes are produced. Salaries paid to employees are 80 T€.
These transactions would reflect the following changes in the financial position of the business:
Assets (450 T€)
Cash: 20 T€Machine: 100 T€Raw Material: 30 T€Work in progress: 20 T€Finished goods: 120 T€LiabilitiesNilEquity (450 T€)
The performance of the business increases as the value of the finished goods is more than the cost of goods sold, which is the total cost of producing the chocolate bars (chocolate beans worth 20 T€ and employee salaries worth 80 T€) or 100 T€.Period 4The chocolate bars are sold on the market for 120 T€. This increases the cash position of the business by 120 T€.
Therefore, the balance sheet of the business would reflect the following transactions:
Assets (570 T€)
Cash: 140 T€Machine: 100 T€Raw Material: 30 T€Work in progress: 20 T€Finished goods: NilLiabilitiesNilEquity (570 T€)
In conclusion, the different transactions from period 1 to 4 change the financial position, performance, and cash position of the business. As the transactions are reflected in the balance sheet, it provides a clear picture of how each transaction impacts the financial position of the business.
To know more about transactions visit:
brainly.com/question/24730931
#SPJ11
