Answer:
2020 carried forward 37,200
All the previous year carryover were used.
Explanation:
We have 141,000 credit allowed
We use the 99,000 from previous period
Leaving us with: 42,000 of tax credit for this year
Now, as the company generated tax credit for 79,200 during the year
79,200 - 42,000 = 37,200 carried forward to 2020 as are considered unused during 2019
g The "monetary base" is simply: a. the total of all currency in circulation, outside banks b. the total vault cash held among all depository institutions c. the amount of borrowing from the Federal Reserve, by all depository institutions d. the face value of all U.S. government securities outstanding e. the total of currency in circulation, plus depository institution reserves and vault cash
Answer:
e. the total of currency in circulation, plus depository institution reserves and vault cash
Explanation:
Monetary base is a concept in money supply that measures highly liquid assets in an economy.
It includes all cash that is in circulation in the economy and those deposits that are held as reserves by the central bank from commercial banks. Cash in bank vaults are also included because they are readily available to the economy.
For example if there is $200 million in circulation and there is $13 billion in the central bank as reserves from commercial banks, the total monetary base is $13.2 billion
he net income of the Travis and Tucker partnership is $125,000. The partnership agreement specifies that profits and losses will be shared equally after salary allowances of $100,000 (Travis) and $150,000 (Tucker) have been allocated. At the beginning of the year, Travis's Capital account had a balance of $250,000 and Tucker's Capital account had a balance of $325,000. What is the balance of Tucker's Capital account at the end of the year after profits and losses have been distributed
Answer:
The balance of Tucker's Capital account at the end of the year after profits and losses have been distributed is $412,500
Explanation:
The capital account of a partner in a partnership is an account that shows the equity ownership of that particular partner in the partnership.
The capital of a partner in the partnership is increased by additional cash capital or asset contribution, salary, share of profit, etc., while the capital is reduced by drawing, interest on drawing, share of loss, and others.
The balance of Tucker's Capital account at the end of the year after profits and losses have been distributed can be calculated as follows:
Tucker's Capital account
Particulars $
Beginning balance 325,000
Salary 150,000
Share of partnership loss (w.2) (62,500)
Ending balance 412,500
Working:
1. Partnership profit (loss) to distribute = Net income - partners' salaries = $125,000 - $100,000 - $150,000 = ($125,000)
2. Share of profit (loss) = ($125,000) / 2 = ($62,500)
Aggressive cultures tend to value corporate social responsibility.
a) true
b) false
Answer:
False
Explanation:
Aggressive cultures in organization always bring out a situation whereby the company will always want to be ahead of her competitor at all cost, they always be in competition with fellow companies . A good example of organization with aggressive culture is Microsoft company.
It should be noted that Aggressive cultures do not tend to value corporate social responsibility.
The importance of the product life cycle is that:______.
Answer: B. different stages in the life cycle call for different marketing strategies.
Explanation:
A product goes through different stages in its development when it is first introduced into the market. These stages include the introductory stage, the growth stage, the maturity stage and the decline stage.
Each of these stages will mean a different level of sales for the product which means that the company will have to capitalize on the opportunities offered by each stage in order to market the product in such a way that it will sell. For them to do so though they will need to know what stage the product is at and that is why the Product Life Cycle is important.
Which 4 statements are correct regarding the QuickBooks Online Receipt Capture feature?
A. The Receipt Capture feature uses Optical Character Recognition (OCR) technology to read and transform receipt data to QuickBooks Online.
B. If QuickBooks Online finds an expense already entered in QuickBooks Online, it will suggest that you match the receipt to the existing transaction.
C. You can snap a picture of a receipt, then review, match, or add it directly from the QuickBooks Online mobile app.
D. QuickBooks Online will fill in the fields it can for the expense using the OCR data.
E. You can assign a payee, account, payment date, category, description, amount, and memo to the expense transaction in the Review screen.
F. You can only have one sender email registered to forward receipts in each company
Answer:
A. The Receipt Capture feature uses Optical Character Recognition (OCR) technology to read and transform receipt data to QuickBooks Online. ⇒ TRUE
B. If QuickBooks Online finds an expense already entered in QuickBooks Online, it will suggest that you match the receipt to the existing transaction. ⇒ TRUE
C. You can snap a picture of a receipt, then review, match, or add it directly from the QuickBooks Online mobile app. ⇒ TRUE
D. QuickBooks Online will fill in the fields it can for the expense using the OCR data. ⇒ TRUE
Explanation:
the other options are false because:
E. You can assign a payee, account, payment date, category, description, amount, and memo to the expense transaction in the Review screen. F. You can only have one sender email registered to forward receipts in each company. ⇒ FALSE, you can connect to multiple accounts, generally for different clients. You can use the "Add new sender" link.why are resources scarce in economics?
Answer: Scarcity is the foundation of the essential problem of economics: the allocation of limited means to fulfill unlimited wants and needs. Even free natural resources can become scarce if costs arise in obtaining or consuming them, or if consumer demand for previously unwanted resources increases due to changing preferences or newly discovered uses.
Explanation:
MCQ
1. Which of the following is not an objective of accounting?
a. Letting organization know how much cash they have
b. Letting organization know how wealthy they are
c. to know how much they owe to someone else
d. None of the above.
Answer:
none of the above
Explanation:
because the organization must know how much they own
Devon Baines is a board member with DDO Inc., a large pharmaceutical firm. At a recent meeting, the board votes to take over a smaller competitor whose shares trade in the OTC market and are priced at $50 per share. DDO will offer $75 per share and the offer will become public ten hours after the meeting. Baines decides to purchase shares in the target firm immediately after the meeting, but when he calls his broker to place the order, he is informed the price of the target firm is $72. The market is most likely: Weak form. Strong form. Semi-strong form. Inefficient.
Answer: Strong form.
Explanation:
The Strong form efficient market is one where all the information regarding a stock is are already reflected in the stock's price. All information means that both private and public information are accounted for.
The plan to offer $75 per share for the small competitor was decided in a private board meeting yet as soon as the meeting was over, the proposed price had already reflected in the OTC market price. This shows that the market is strong form efficient.
On January 1, 2011, Deuce Inc. acquired 15% of Wiz Co.'s outstanding common stock for $62,400 and categorized the investment as an available-for-sale security. Wiz earned net income of $96,000 in 2011 and paid dividends of $36,000. On January 1, 2012, Deuce bought an additional 10% of Wiz for $54,000. This second purchase gave Deuce the ability to significantly influence the decision making of Wiz. During 2012, Wiz earned $120,000 and paid $48,000 in dividends. As of December 31, 2012, Wiz reported a net book value of $468,000. For both purchases, Deuce concluded that Wiz Co.'s book values approximated fair values and attributed any excess cost to goodwill. What amount of equity income should Deuce have reported for 2012?
Answer:
$30,000
Explanation:
Calculation for the amount of equity income to reported
Using this formula
Equity income=[(Amount earned in 2012×(Outstanding common stock percentage +Additional percentage of Wiz)]
Let plug in the formula
Equity income = [($120,000 ×(15%+ 10%)]
Equity income = ($120,000 ×25%)
Equity income= $30,000
Therefore the amount of equity income to reported for 2012 will be $30,000
Unfortunately, Angie doesn't have enough money in her account right now. She needs to make additional contributions at the end of each of the next three years to be able to pay for the repairs. Her account currently has $5,000, which, along with her additional contributions, is expected to continue earning 9% annual interest. If she makes equal contributions each year, how large must each contribution be for Angie to have $9,000 after three years
Answer: $770.22
Explanation:
If she makes equal contributions then those would be annuities. The $9,000 she wants to have will be the future value of the amount currently in her account and the annuity.
9,000 = 5,000 ( 1 + r) ^ n + ( annuity * future value interest factor of an annuity, 9%, 3 years)
9,000 = 5,000 ( 1 + 9%) ^ 3 + ( Annuity * 3.2781)
9,000 = 6,475.145 + 3.2781 * Annuity
Annuity = (9,000 - 6,475.145) / 3.2781
Annuity = $770.22
Which of the following is a true statement?
a) Stockholders are guaranteed annual dividends.
b) Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.
c) Stockholders may authorize a business contract on behalf of the corporation.
d) Stockholders may determine the issue price of common stock.
Answer:
b) Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.
Explanation:
Stockholders are the persons who have shares in the company. Or the people who hold the stock in the company is known as the stockholders
After paying off all the liabilities, the payment that made at last is paid to the stockholders according to their share part in the company out of the balances of the asset left
Therefore the option B is correct
Suppose that supply changes such that at each price, 20 fewer towels are offered for sale. In other words, the new supply is now ????S=10P−20QS=10P−20 . Derive and plot the new inverse supply curve by moving the endpoints of the line labeled Supply 2. d. Find the new equilibrium price and quantity using Demand 1 and Supply 2. Equilibrium price: $ Equilibrium quantity: towels
Answer:
1) Correct supply function according to the state information
S=10P−20
Slope 10
2)
Equilibrium
Q = 60
P = $8
missing information:
Demand QD = 100 − 5P
Explanation:
The supply is variable for price and we are given the information that for each price there are 20 fewer towels thus, there is a constant decreased of 20 at each level of the curve.
S' = 10P
S'' = 10
The slope of the curve is 10
Equilibrium of D1 and S2
100 - 5P = 10P - 20
120 = 15P
8 = P
Supplu Quantity = 10 x 8 - 10 = 60
Demand Quantity = 100 - 5 x 8 = 100 - 40 = 60
Many companies forbid smoking at work. This is an example of a:
a. health insurance policy
b. safety procedure
c. regulation
Broward Manufacturing recently reported the following information: Net income $384,000 ROA 10% Interest expense $126,720 Accounts payable and accruals $1,000,000 Broward's tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, and 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC). Do not round intermediate calculations. Round your answers to two decimal places.
Answer:
a. Basic earning power (BEP) = 16.63%
b. Return on equity (ROE) = 26.67%
c. Return on invested capital (ROIC) = 16.87%
Explanation:
From the question, we have the following:
Net income = $384,000
ROA = Return on Asset = 10%
Interest expense = $126,720
Accounts payable and accruals = $1,000,000
Tax rate = 25% = 0.25
Common equity finance percentage = 60%
Debt finance percentage = 40%
From the above, we have:
Total assets = Net income / ROA = $384,000 / 10% = $3,840,000
Net total assets = Total assets - Accounts payable and accruals = $3,840,000 - $1,000,000 = $2,840,000
Common equity = Net total assets * Common equity finance percentage = $2,400,000 * 60% = $1,440,000
Debt = Net total assets * Debt finance percentage = $2,400,000 * 40% = $960,000
Earning before tax = Net income / (1 - Tax rate) = $384,000 / (1 - 0.25) = $384,000 / 0.75 = $512,000
Earning before interest and tax = EBIT = Earning before tax + Interest expense = $512,000 + $126,720 = $638,720
We then proceed as follows:
a. Calculation of basic earning power (BEP)
This can be calculated using the following formula:
BEP = EBIT / Total assets = $638,720 / $3,840,000 = 0.166333333333333 = 0.1663, or 16.63%
b. Calculation of return on equity (ROE)
This can be calculated using the following formula:
ROE = Net income / Common equity = $384,000 / $1,440,000 = 0.266666666666667 = 0.2667, or 26.67%.
c. Calculation of return on invested capital (ROIC)
This can be calculated using the following formula:
ROIC = (EBIT * (1 - Tax rate)) / (Common equity + Debt) = ($638,720 * (1 - 0.25)) / ($1,440,000 + $960,000) = ($638,720 * 0.75)) / $2,840,000 = $479,040 / $2,840,000 = 0.168676056338028 = 0.1687, or 16.87%
A company is selling used office equipment for $12,000.
• They purchased it 2 years ago for $50,000.
• It was expected to have a useful life of 5 years.
• They use straight line depreciation.
What is the gain or loss on the sale?
a) 0 -$28,000
b) -$18,000
c) $30,000
d) $38,000
e) $45,200
Answer:
ans-b
Explanation:
The ans is b, hope it helped you.Have a nive day
Congress passed Sarbanes-Oxley into law as a response to:
Answer:
Financial scandals and corporate fraud
Explanation:
Randall purchased an insurance policy and stated he never had heart trouble, but he had a myocardial infarction several years prior to his application. Shortly after the policy was issued, Randall experienced a fatal heart attack. What action is the insurance company likely to take
Answer:
The action the insurance company should take is that they should cancel the insurance policy between them and Randall and return all the premiums paid to date
Explanation:
Here in this question, we are interested in knowing what action the Insurance company will take in the eventuality that Randall experienced a fatal heart attack.
The action the Insurance company will take is that the insurance policy will be canceled and all premiums which have hitherto being paid by Randall will be returned. What we are saying is that the Insurance company will not be liable or held responsible to make payment for the medical costs of the fatal heart attack suffered.
Hence, we can conclude that the Insurance company in this case is not bind by law to pay for the cost of the medical bill and is only to return the premiums already paid by Randall.
What are the three sources of law levels? * O Local, State, Federal O Local, Federal, World O State, Federal, Military O Federal, World, Municipal
Answer: local, state and federal
Explanation:
Cristóbal recently purchased a new Ford F150 pickup truck and is now trying to sell his used truck with 180,000 miles on the odometer on eBay. He has created a listing including photos, and he decides to use eBay's "Buy It Now" feature rather than an auction. The truck has been listed for several weeks, but so far no one has contacted him about it. Which condition of exchange most directly relates to Cristóbal's eBay listing for his truck?
Answer:
a. There must be at least two parties
Explanation:
Option Includes: a. There must be at least two parties, b. Each party is free to accept or reject the exchange offer c. Each party has something that might be of value to the other party, d. Each party believes it is appropriate or desirable to deal with the other party.
Since Cristobal has listed its Ford F150 truck on eBay for weeks now but no one has so far contacted him about the truck, it means that there is no exchange taking place because of the absence of the other party. As there must be at least two parties for the condition of exchange to sell the product which is found absent here.
All the other options such as desirable item to deal or something valuable for both to offer will be relevant only when the other part approaches cristobal in response of his offer and then discuss the terms to see whether the deal meets desired needs and whether the deal will be valuable for both will be also determined only after two parties discuss the terms.
Maria purchased 100 shares of JAX stock for $30 per share and sold this same stock one year later for $29 per share. She paid commissions of $50 when she purchased the stock and $45 when she sold the stock. Dividends of $2 per share were paid during the year. The capital loss on this stock transaction was
Answer:
capital loss = ($195)
Explanation:
Maria's total investment = (100 x $30) + $50 = $3,050
Maria's return from selling the stocks = (100 x $29) - $45 = $2,855
capital loss = $2,855 - $3,050 = -$195
The revenue generated by the dividends is taxed as ordinary income (at a higher rate) and must be considered ordinary gains, not capital gains.
Under Regulation SHO, a "threshold" security is one that:_____.a. cannot be sold short under any circumstances but long sales are permitted.
b. can only be sold short at a price that is $.01 lower than the preceding trade.
c. if sold short and not delivered within 13 business days of the trade, buy-in is required.
d. if sold short on a down-tick, must be immediately bought-in on an up-tick.
Answer:
c. if sold short and not delivered within 13 business days of the trade, buy-in is required.
Explanation:
According to the NYSE Regulation, a threshold Security is expressed by Rule 203(c)(6) of the SEC's Regulation SHO and Section 15(d) of the Exchange Act. In it is where it is stated that when a customer short sales that failed to deliver must be bought-in after 10 business days from the settlement, given that the security was on the exchange's threshold list as of the trade date under Regulation SHO and remains on that list for 10 business days past settlement, plus 3 additional days required from trade date to settlement date.
Hence, in this situation, I'm the correct answer is that Under Regulation SHO, a "threshold" security is one that ". if sold short and not delivered within 13 business days of the trade, buy-in is required."
What is the best definition of elasticity in economics? Elasticity of supply measures how the amount of a good changes when the producer hires more employees. Elasticity of supply measures how the amount of a good changes when the producer uses new materials. Elasticity of demand measures how the amount of a good changes when its price goes up or down. Elasticity of demand measures how the amount of a good changes when its distribution expands.
Answer:
Elasticity of demand measures how the amount of a good changes when its price goes up or down.
Explanation:
bruh
Answer:
so its c
Explanation:
Xavier and Yolonda have original investments of $100,000 and $50,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 15%, salary allowances of $22,000 and $20,000 respectively, and the remainder equally. If the business has a net income of $90,000, how much of that should be allocated to Xavier?
Answer:
Total of Xavier's share = $49750
Explanation:
The allocation of net income to both Xavier and Yolonda will be as follows,
Net Income 90000
Interest on Capital:
Xavier(0.15 * 100000) 15000
Yolonda(0.15 * 50000) 7500 (22500)
67500
Salary:
Xavier 22000
Yolonda 20000 (42000)
25500
Share of remaining profit:
Xavier 12750
Yolonda 12750 25500
Total of Xavier's share = 15000 + 22000 + 12750 = $49750
Problem 2-18 A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results: U.S. LDC Sales (units) 100,000 20,000 Labor (hours) 20,000 15,000 Raw materials (currency) $ 20,000 FC* 20,000 Capital equipment (hours) 60,000 5,000 *Foreign Currency unit a. Calculate partial labor and capital productivity figures for the parent and subsidiary. (Round your answers to 2 decimal places.)
Answer:
U.S. labor= 5
LDC labor = 1.3
U.S. capital= 1.67
LDC capital = 4
Explanation:
Calculation for both partial labor and capital productivity figures for the parent subsidiary
Calculation for U.S. labor
U.S. labor=100,000/20,000
U.S. labor= 5
Calculation for LDC labor
LDC labor=20,000/15,000
LDC labor = 1.3
Calculation for U.S. capital
U.S. capital=100,000/60,000
U.S. capital= 1.67
Calculation for LDC capital
LDC capital=20,000/5,000
LDC capital = 4
Therefore based on the above calculations we can see that U.S labor productivity is much better because the labor productivity of U.S labor is higher than that of LDC labor and for the capital productivity the LDC is much better because capital productivity of LDC is higher than that of U.S. capital.
Jim, the radiology department director, believes the annual operating budgeting process is a tool used to increase his department through the addition of staff and supplies. Susan, the laboratory department director, believes the annual operating budgeting process is a tool used to control costs. Dr. Smith, the emergency department director, considers the budgeting process a nuisance and believes he should simply increase all revenues and expenses by 5% for the coming year to achieve a budget. Whose viewpoint represents the proper objective for the budgeting process
Answer:
Susan's view
Explanation:
Budgeting ins the process by which a business allocates it's resources to achieve its set goals and objectives. It is formulated to ensure various processes run smoothly while maximising scarce resources.
In the given scenario Susan, the laboratory department director, believes the annual operating budgeting process is a tool used to control costs.
This is the best description of budgeting. Funds to run the operations of the laboratory are limited. So effective budgeting is used to ensure allocation in such a way that cost is well managed.
On the other hand Jim feels budgeting is used to increase his staff and supplies, Dr. Smith feels budgeting is a nuisance.
These views are wrong
The U.S. Department of Agriculture guarantees dairy producers that they will receive at least $1.00 per pound for butter they supply to the market. Below is the current monthly demand and supply schedules for wholesale butter (in millions of pounds per month). Market for Wholesale Butter Price (dollars per pound) Quantity of Butter Demanded (millions of pounds) Quantity of Butter Supplied (millions of pounds) $0.80 107 63 0.90 104 71 1.00 101 79 1.10 98 87 1.20 95 95 1.30 92 103 1.40 89 111 1.50 86 119 1.60 83 127 1.70 80 135 1.80 77 143 Instructions: Round your answer for price to 2 decimal places. Enter your answers for quantity as a whole number. a. What are the equilibrium price and quantity in the wholesale butter market? P = $ Q = million pounds b. What is the monthly surplus created in the wholesale butter market due to the price support (price floor) program? 22 million pounds Zero 79 million pounds 11 million pounds Suppose that a decrease in the cost of feeding cows shifts the supply schedule to the right by 40 million pounds at every price. c. Fill in the new supply schedule given the change in the cost of feeding cow
Answer:
1. Equilibrium price ,p = $1.20 per pound, equilibrium quantity = 95 million pounds.
2. Surplus = 0
Explanation:
1. From the question,
the equilibrium price = 1.20
The equilibrium quantity = 95 million per pounds.
Equilibrium is gotten when Quantity supplied = quantity demanded.
2. When price floor == $1.00
Quantity demanded = 101
Quantity supplied = 79
Monthly surplus = 79 - 101 = -22
Quantity demanded > quantity surplus.
This implies that there is no surplus.
Surplus = 0
3. If a decrease in cost of feeding cows shift supply by 40 million we will have new supply schedule =
New qs = Qs + 40
63+40 = 103
71+40= 111
79+40 = 119
87+40= 127
95 + 40 = 135
103 + 40 = 143
111+40 = 151
119 + 40 = 159
127 + 40 = 167
135 + 40 = 175
143 + 40 = 183
What is the primary objective for a for-profit business
Answer:
the primary objective, or purpose of a for-profit business is to maximize profits for the owners while maintaining corporate social responsibility.
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Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants that work at the client's job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients. Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor- hours. At the beginning of the year, it estimated that 80,000 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $680,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firms actual overhead cost for the year was $692,000 and its actual total direct labor was 83,000 hours.Required: a. Compute the predetermined overhead rate. b. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job:Direct Material $38,000Direct Labour Cost $21,000Direct Labour hours worked 280Compute the total job cost for the Xavier Company engagement.
Answer:
Instructions are below.
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (680,000/80,000) + 0.5
Predetermined manufacturing overhead rate= $9 per direct labor hour
Now, the total cost for Xavier:
Direct Material $38,000
Direct Labour Cost $21,000
Direct Labour hours worked 280
Total cost= direct material + direct labor + allocated overhead
Total cost= 38,000 + 21,000 + 280*9
Total cost= $61,520
The predetermined overhead rate is $9
And, the total cost is $61,520
The calculation is as follows:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period ÷ total amount of allocation base
= (680,000 ÷ 80,000) + 0.5
= $9 per direct labor hour
Now, the total cost for Xavier:
Total cost= direct material + direct labor + allocated overhead
Total cost= 38,000 + 21,000 + 280(9)
Total cost= $61,520
Learn more: https://brainly.com/question/994316?referrer=searchResults
Isn’t "corporate entrepreneurship" an oxymoron? Do the characteristics of an established organization, such as its routines and structure, increase efficiency but at the same time kill any entrepreneurial spirit? Is there any way that a company can have the best of both worlds?
Answer:
Isn’t "corporate entrepreneurship" an oxymoron?
I guess that most people would believe that corporations and entrepreneurs and completely opposite, and for the most part they are right. But some corporations actually do have entrepreneurial spirit or at least try to. E.g. 3M is famous for allowing their employees some creative time so that they can come up with new ideas. Google is another example of a large corporation that allows for creative time while at work.
Do the characteristics of an established organization, such as its routines and structure, increase efficiency but at the same time kill any entrepreneurial spirit?
Routines, schedules and corporate structure not only kill, but they rather massacre and exterminate entrepreneurial spirit and creativity. One great example of how corporations do not allow people to think or act differently can be seen in the movie about Ford competing in Le Mans.
Is there any way that a company can have the best of both worlds?
I guess that it is difficult, but not impossible for a company to have corporate entrepreneurship. The problem is that corporations will probably believe that it is a waste of money to pay for their employees to do nothing and just wander around thinking about new ideas. Creativity has a cost and not everyone is willing to pay for it.
"Some companies, such as Heinz, can forecast revenues well using pure time series analysis (that is, by extrapolation of prior data, accounting for seasonal effects). Other companies, such as FedEx (which makes money by shipping packages), or Sony (which sells consumer electronics) find that they cannot rely on pure time series analysis for reliable forecasting. They are strongly affected by recessions and need to use theory-based methods, including such explanatory variables as income in their forecasting models. Why are they different from Heinz?"
Answer:
Heinz sells ketchup and other sauces and condiments. Their demand is relatively stable and doesn't change that much year after year. The demand for their products is not that seriously affected by economic recessions or expansions.
On the other hand, Sony is a consumer electronics company and the demand for their products can vary drastically from one year to another. It depends on trends and innovations, and their total sales are affected by disposable income (expansions increase disposable income while recessions decrease it).
FedEx is also affected severely by economic recessions or expansions. Since FedEx ships and transports goods, when the economy is booming, FedEx is doing excellent. But if the economy starts to cool down or enters a recession, the amount of goods transported falls.
