In response to the enquiry, this same solution is L1 L2 reduction throughout sector 1.
Explain what a market is.
A market is described as the aggregate of all sellers and buyers inside the region or area under consideration. The area could be the entire planet, or it could be countries, regions, countries, or cities. The value, cost, and cost of items traded in a market are determined by the supply and demand forces. When a product is on the industry, it is available to buy. If it ever hits the market.
What are the various market types?
Market types include:
Monopoly: A monopolistic is a market creation that possesses the characteristics of a pure industry.Oligopoly.The ideal rivalry.Monopolistic rivalry.Monopsony.Oligopsony.Monopoly by nature:To know more about Market visit:
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Using the appropriate tool from the Accountant Tools menu, which 4 of the following can be batch reclassified in QuickBooks Online Accountant?
Using the appropriate tool from the Accountant Tools menu, the 4 options that can be batch reclassified in QuickBooks Online Accountant are options A, B, C and F:
ClassesCustomersProducts and ServicesAccountWhat is QuickBooks Online Accountant?In the above question, too batch reclassify these items, you can use the "Batch Reclassify Transactions" tool, which can be found under the Accountant Tools menu.
This tool allows you to select multiple transactions and reclassify them to a different account, class, customer, or product/service.
Therefore, Locations, tax codes, and suppliers cannot be batch reclassified using this tool. However, you can edit individual transactions to change their location, tax code, or supplier if necessary.
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See full question below
Using the appropriate tool from the Accountant Tools menu, which 4 of the following can be batch reclassified in QuickBooks Online Accountant?
Classes
Customers
Products and Services
Locations
Tax Code
Account
Suppliers
indicate which situations would require zenda company to record revenue in the current period. (select all that apply.) multiple select question. zenda is paid in advance for services to be performed in the next period. zenda performs services for cash. zenda performs services on account. zenda signs a contract with a customer to perform services in a future period.
Zenda offers services in exchange for cash. Zenda offers checking account services; Situations would require Zenda to recognize revenue in the current period.
The required details for Revenue in given paragraph
Revenue is the total revenue generated from sales of goods and services related to the company's core business. Business revenue can also be referred to as sales Revenue. Some companies make money from interest, royalties, or other fees. "Revenue" can refer to general earnings or an amount of money earned over a period of time, e.g. B. "Company X had sales of $42 million last year." Profit or Net Income usually includes total income minus total expenses for a given period. In accounting, income is a subsection of the "Assets" section on the balance sheet, and income is often referred to as the "top line" of , in addition to equity, because it is on the account with the highest income. This should be contrasted with the "bottom line" which is net income. Colloquially, revenue is the total amount of revenue from the sale of goods or services related to the business of the company.
Revenue is the income from the sale of goods or services over a period of time. Income tax is the income that the government receives from taxpayers. Fundraising revenue is income that a charity receives from donors etc. to further its social goals.
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how many cowboy hats can you fit on your head
Answer:
7
Explanation:
what are the challenges associated with not being ‘tech savvy’ in 2023?
As the world keeps advancing technologically, being tech-savvy becomes increasingly important. However, not being tech-savvy in 2023 may pose a lot of challenges. Some of these challenges are :Job Market, Learning,Communication,Security.
Job Market: In 2023, there will be more tech-based jobs than there currently are. Being not tech-savvy would make it difficult for an individual to secure employment in such sectors. This means that those who are not tech-savvy would be limited to jobs that require no technical skills.Learning: Due to the increased importance of technology, those who are not tech-savvy would find it challenging to learn new things. This means that they would be unable to benefit from new technology, apps, and software that are released in the market. They may also face difficulties while navigating technology-based environments.Communication: In 2023, communication will be more technology-driven than ever before. Those who are not tech-savvy may find it challenging to communicate with others effectively. This may lead to miscommunication and misunderstandings which could impact personal and professional relationships.Security: Cybersecurity is a significant concern in today's world. Not being tech-savvy could make it difficult for an individual to secure their information, devices, and accounts. This could lead to loss of data, identity theft, and other forms of cybercrime.In conclusion, being tech-savvy in 2023 is essential to success, as the world will be driven by technology. Those who do not embrace technology may find themselves limited in terms of employment opportunities, communication, and personal security.
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Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.40 per card, and the cost of printing is $0.10 per card. The company receives $3.75 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,300 and standard deviation 200. (Assume these four are independent.)
What is the optimal production quantity for the card?
Answer:
≈ 9644 quantity of card
Explanation:
given data:
n = 4 regions/areas
mean demand = 2300
standard deviation = 200
cost of card (c) = $0.5
selling price (p) = $3.75
salvage value of card ( v ) = $ 0
The optimal production quantity for the card can be calculated using this formula below
= u + z (0.8667 ) * б
= 9200 + 1.110926 * 400
≈ 9644 quantity of card
First we have to find u
u = n * mean demand
= 4 * 2300 = 9200
next we find the value of Z
Z = ( \(\frac{p-c}{p-v}\) )
= ( 3.75 - 0.5 ) / 3.75 = 0.8667
Z( 0.8667 ) = 1.110926 ( using excel formula : NORMSINV (0.8667 )
next we find б
б = 200\(\sqrt{n}\) = 400
If a company's scope is too big what is likely to happen?
Answer:
The company will lose direction and focus.
Explanation: ;)
Submission Requirements Hurry Pls Help ASAP!!!
Nine hundred word response.
When submitting written assignments, please remember to:
Submit the assignment question(s) and your responses.
Proofread for spelling, grammar, and punctuation.
Remember complete sentence structure.
Paragraphs need to have minimum of six sentences.
Submit your E.T.H.I.C.S. model of one of the provided scenarios.
When submitting written assignments, please remember to Proofread for spelling, grammar, and punctuation. Hence, option B is correct.
What is meant by Proofread?Proofread is the double-checking of the written assignment or the work that is being already done to the person. It helps the person to identify the little mistakes that they have made during the making of the assignment.
Proofread is always a better solution to understand the work and makes the work complete and perfect. After Proofread, one can identify their mistakes and make them correct.
Thus, option B is correct.
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If any financial institution, such as a brokerage house, handles a check for payment or collection, the check is covered by UCC Article 4.a. Trueb. False
FALSE. If any financial institution, such as a brokerage house, handles a check for payment or collection, the check is NOT covered by Uniform Commercial Code Article 4.
Funds transfers are governed by UCC Article 4A, starting with the payment order issued by the originator with the intention of paying the order's beneficiary. The item also applies to any payment instruction provided by the bank of the originator or by a bank acting as an intermediary to execute the originator's payment instruction. The liability of a bank for action or inaction with regard to an item it handled for presentment, payment, or collection is covered by Article 4 of the UCC. When it comes to bank deposits, the law of the location where the bank is located is typically more relevant.
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What are some of the reasons why domestic policies change overtime?
Answer:
They changed as the USA entered the war.
Explanation:
American and domestic foreign policy during World
War 2 were linked in that once America entered the
war it had a significant impact on its economy.
When we say during World War 2 we must remember
that the USA did not enter the war until December
1941 after the attack on Pearl Harbour. Even then
there was no guarantee that they would become
involved in a war in Europe. It was Hitler who
declared war on the USA.
Prior to that American domestic politics
were dominated by the arguments between
interventionism and isolationism. President Roosevelt
had to tread a fine path in providing limited support to
the UK whilst being careful not to turn public opinion even more against involvement in a war thousands of miles away.
Japan's failure to deliver a knockout blow at Pearl Harbour meant that the US economy, on a war footing, was powerful enough to produce military hardware on a scale not seen before which would lead to victory in 1945 and the USA emerging as the most powerful country in the world.
Domestic policies change over time mainly due to changing societal values, economic conditions, and political influences. Society's evolving nature, economic developments, and shifts in political power greatly influence such changes.
Explanation:Domestic policies change over time due to a variety of reasons. The primary ones include changing societal values, economic conditions, and political influences. For instance, societal values evolve over time, which may either necessitate new policies or changes in existing ones to address contemporary issues. Economic conditions may influence policy changes for enhancing economic stability and growth. Changing political influences also play a significant role as different political parties with contrasting priorities and approaches to governance come to power.
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a) Why is ethical relativism considered to be self-contradictory?
b) Explain conceptual muddles with an example.
Answer:
El relativismo no puede ser contradictorio porque no afirma ni niega nada. La expresión de una actitud moral consiste en valorar la diversidad.
Explanation:
El relativismo no puede ser contradictorio porque no afirma ni niega nada. La expresión de una actitud moral consiste en valorar la diversidad.
Industry standards suggest that 7% of new vehicles require warranty service within the first year. Jones Nissan in Sumter, South Carolina, sold 9 Nissans yesterday. (Round your mean answer to 2 decimal places and the other answers to 4 decimal places.)
a. What is the probability that none of these vehicles requires warranty service?
b. What is the probability exactly one of these vehicles requires warranty service?
c. Determine the probability that exactly two of these vehicles require warranty service.
d. Compute the mean and standard deviation of this probability distribution.
The standard deviation is 0.749 and the probability distribution's mean is 0.63.
What is Standard Deviation?A set of data values' variation or dispersion from their mean (average) is measured by their standard deviation. It tells how far apart the individual data points are from the data set's mean value. To put it another way, it is a measure of how different the data are from the mean. A standard deviation that is smaller indicates that the data points are closer to the mean, while a standard deviation that is larger indicates that the data points are further from the mean. It is calculated by taking the square root of the variance, and it is frequently used in statistical analysis.
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Sports Specialists makes baseballs and softballs in a three-step process. Unfortunately, the sewing machine process has been identified as a bottleneck. Each softball has a contribution margin of $9.00 and each baseball has a contribution margin of $3.00. The sewing machine can make 10 softballs or 25 baseballs in one hour.
A. If demand for both products is unlimited and the sewing machine capacity cannot be expanded. Calcuate the Contribution margin/hour for each product.
Contribution
Margin/hour
Softballs
Baseballs
B. If demand for each ball is limited to 7,000 balls and there are 900 hours available on the machine, how many of each product should be produced?
Softballs
Baseballs
Answer:
A) The contribution margin per hour for softballs is $ 90, while the contribution margin per hour for baseballs is $ 75.
B) Only baseballs should be produced to maximize results.
Explanation:
Since Sports Specialists makes baseballs and softballs in a three-step process, but unfortunately, the sewing machine process has been identified as a bottleneck, and each softball has a contribution margin of $ 9.00 and each baseball has a contribution margin of $ 3.00, and the sewing machine can make 10 softballs or 25 baseballs in one hour, A) if demand for both products is unlimited and the sewing machine capacity cannot be expanded, to calculate the contribution margin / hour for each product and B) if demand for each ball is limited to 7,000 balls and there are 900 hours available on the machine, to determine how many of each product should be produced, the following calculations must be performed:
A)
Softballs: 9 x 10 = 90
Baseballs: 3 x 25 = 75
Therefore, the contribution margin per hour for softballs is $ 90, while the contribution margin per hour for baseballs is $ 75,
B)
7000/25 = 280
280 x 25 x 3 + 0 x 10 x 9 = 21,000
270 x 25 x 3 + 25 x 10 x 9 = 22,500
200 x 25 x 3 + 200 x 10 x 9 = 33,000
100 x 25 x 3 + 450 x 10 x 9 = 48,000
50 x 25 x 3 + 575 x 10 x 9 = 55,500
0 x 25 x 3 + 700 x 10 x 9 = 63,000
Therefore, only baseballs should be produced to maximize results.
a company with a high level of productivity is able to a. Operate without much investment b. Avoid high opportunity cost c. produce goods and services efficiently d. expand without taking on debt
Answer is C to produce goods and services efficently
Explanation:
A company that has a high rate of productivity can generate goods and services quickly. So, the correct option is C.
What is Productivity?Productivity is a measure of how effectively commodities or services are produced. Productivity is sometimes represented as a ratio of the whole product to a single input or the total input utilized during a production process, or production per unit of input, usually over a predetermined time period.
An economy may create and consume additional goods and services with the identical amount of effort when productivity is growing. Individuals (workers and consumers), corporate executives, and analysts value productivity (for example policymakers and government statisticians).
Therefore, the correct option is C.
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Why is a bank more likely to offer you credit if you have a cosigner?
Answer:
Because a cosigner is another person who is also responsible for ensuring the loan is paid.
Explanation: A cosigner is a person who is signing on to the loan and by doing so, they are jointly taking on responsibility for repayment of the loan. So basically loan repayment is being guaranteed by the person taking out the loan and the cosigner.
Suppose that you interview 1000 exiting voters about who they voted for governor. Of the 1,000 voters, 550 reported voting for the Democratic candidate. Is there sufficient evidence to suggest that the Democratic candidate will win the election at the .01 level? (Please step by step)
Suppose that we want to estimate the effect of several variables on annual saving and that we have a panel data set on individuals collected on January 31, 1990, and January 31, 1992. If we include a year dummy for 1992 and use first differencing, can we also include age in the original model? Explain.
Answer:
No, we cannot include age in the original model as an explanatory variable in the original model
Explanation:
No, we cannot include age in the original model because Each of the person in the panel data set is exactly two years older on January 31, 1992 than that of January 31, 1990 which means that 2=∆i age for all i.
Although the equation we would estimate will be in this form .
∆savingi β⁰+δ¹∆age i +...,
where δ will be the coefficient of the year dummy for 1992 in the original model. In a situation where we have an intercept in the model this means that we cannot include an explanatory variable which is constant across i, and since age tend to change by the same amount for everyone, it means we cannot differentiate the effect of age from that of the aggregate time effects.
Becton Labs, Incorporated, produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:
1. Materials price variance?
2. Materials quantity variance?
3. Labor rate variance?
4. Labor efficiency variance?
5. Variable overhead rate variance?
6. Variable overhead efficiency variance?
The calculation of the following cost variances for Becton Labs, Incorporated's Fludex production is as follows:
Materials price variance = $18,000 F
Materials quantity variance = $6,912 Unfavorable
Labor rate variance = $7,040 Unfavorable
Labor efficiency variance = $9,520 Unfavorable
Variable overhead rate variance = $4,800 Favorable
Variable overhead efficiency variance = $2,040 Unfavorable
What are cost variances?In production terms, cost variances refer to the differences in the standard and actual costs of materials, labor, and overhead.
Variances can be either favorable or unfavorable (or adverse).
Variance is favorable when the actual cost is less than the standard cost.
Variance becomes adverse when the actual cost is more than the standard cost.
Standard Qty or hours Rate Cost per unit
Direct materials 2.40 ounces at $18 per ounce = $43.20
Direct labor 0.70 hours at $14 per hour = $9.80
Variable overhead 0.70 hours at $3 per hour = $2.10
Total standard cost per unit = $55.10
Materials purchased during November = 12,000 ounces
Cost of materials purchased = $198,000
Actual direct materials cost per ounce = $16.50 ($198,000/12,000)
Direct materials usage = Material purchase - Ending inventory
= 8,800 ounces (12,000 - 3,200)
Production units = 3,600
Actual labor hours = 3,200 (20 x 160)
The standard quantity of materials = 8,640 ounces (3,600 x 2.40)
Standard labor hours = 2,520 (3,600 x 0.70)
Materials price variance = (Actual unit cost - Standard unit cost) * Actual Quantity Purchased
= ($16.50 - $18.00) x 12,000
= $18,000 F
Materials quantity variance = Standard Unit Cost (Standard Quantity - Actual Quantity)
= $43.20 (8,640 - 8,800)
= $6,912 Unfavorable
Labor rate variance = Actual Hours x (Actual Rate - Standard Rate)
= 3,200 x ($12 - $9.80)
= $7,040 Unfavorable
Labor efficiency variance = (standard hours allowed for production – actual hours taken) × standard rate per direct labor hour.
= (2,520 - 3,200) x $14
= $9,520 Unfavorable
Variable overhead rate variance = Actual hours * (Actual rate - Standard rate)
= 3,200 x ($1.5 - $3)
= $4,800 Favorable
Variable overhead efficiency variance = Standard overhead rate x (Actual hours - Standard hours)
= $3 x (3,200 - 2,520)
= $2,040 Unfavorable
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Economic growth results in an improved what?
Economic growth results in an better standard of living.
What is Economic growth?A country's economy is said to be growing when the value of its goods and services rises, generating more revenue for companies. Consequently, stock prices increase. This provides businesses with money to expand and recruit more workers. Incomes increase as more jobs are created.
Real GDP growth, or the value of national output, income, and expenditure, is a measure of economic growth. The main advantage of economic growth is a rise in living standards, which translates into higher real wages and the capacity to invest more money in sectors like health care and education.
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Question 1 Effects of transactions on the accounting equation DigiCom repairs laptops. Using the format provided below, show the effects of the activities listed in (a) through (i). (Enter all amounts as positive values.) a. Stacey Comeau, owner of DigiCom, invested cash of $44,000 into her business. b. DigiCom paid $5,500 to cover rent for the current month. c. DigiCom purchased supplies on credit; $2,300. d. DigiCom completed work for a client on credit; $6,400. e. DigiCom purchased a new piece of equipment by paying cash of $3,450. f. DigiCom hired a technician, to start next month, who will get paid $8,000 per month. g. DigiCom paid for the supplies purchased in (c). h. DigiCom performed work for a client and received cash of $6,400. i. DigiCom paid the administrative assistant's salary of $5,700.
The effects of the following activities on the accounting equation Assets = Liabilities + Owner's Equity
a.Stacey Comeau, the owner of DigiCom, invested cash of $44,000 into her business which increase assets (cash) and owner equity.
b. DigiCom paid $5,500 to cover rent for the current month which decreased assets.
c.DigiCom purchased supplies on credit; $2,300 which increase assets and liability as well.
d.DigiCom completed work for a client on credit; $6,400 which increase assets (accounts receivable)
e.DigiCom purchased a new piece of equipment by paying cash of $3,450 which increase assets (equipment) and decrease assets (cash)
f.DigiCom hired a technician, to start next month, who will get paid $8,000 per month - No effect on the accounting equation.
g.DigiCom paid for the supplies purchased in (c) which decrease assets and liability also.
h. DigiCom performed work for a client and received cash of $6,400 which increase assets (cash).
i. DigiCom paid the administrative assistant's salary of $5,700 which decrease assets (cash).
The overall effect on Assets:
Cash: $44,000 - $5,500 - $3,450 + $6,400 - $2,300 + $6,400 - $5,700 = $40,850
Supplies: $2,300
Equipment: $3,450
Accounts Receivable: $6,400
Liabilities:
Accounts Payable: $2,300 - $2,300 = $0
Owner's Equity:
Stacey Comeau's Capital: $44,000
The accounting equation, commonly referred to as the fundamental accounting equation or balance sheet equation, states that the total asset of a corporation equals the sum of its liabilities and shareholders' equity.
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In Vitroland, an open economy, the following data was obtained on the components of AD; C=0.5Y I= 1000 G= 3000 Z= 0.3Y X= 4000 a) Calculate the equilibrium income?
The equilibrium income in the open economy is given as : $16000
How to solve for the equilibrium incomeIn an open economy, the aggregate demand (AD) is made up of four components: consumption (C), investment (I), government spending (G), and net exports (X-M). The equation for AD in this case is AD = C + I + G + (X-M)
In this case, it is given that C = 0.5Y, I = 1000, G = 3000 and X = 4000, where Y represents equilibrium income or GDP. M is not given, so we will assume it is zero.
To calculate the equilibrium income, we can set AD equal to Y (since AD represents the total spending in the economy, and Y represents the total output or income) and solve for Y.
So, AD = C + I + G + (X-M) = 0.5Y + 1000 + 3000 + (4000-0) = 0.5Y + 8000
And we know that AD = Y.
Therefore, 0.5Y + 8000 = Y
Solving for Y, we get:
Y = 8000 / (1 - 0.5) = 8000 / 0.5 = 16000
So the equilibrium income or GDP in this case is 16000.
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Find the present value of an ordinary annuity with deposits of $22,353 quarterly for 8 years at 5.6% compounded quarterly.
What is the present value?
(Round to the nearest cent.)
Answer:
34,503
Explanation:
Principle = $22,353
Rate = 5.6%
Time = 8 years
Interest = ?
Amount = ?
Now,
According to formula,
Interest = principle*time*rate/100
= 22,353*8*5.6/100
= 1001414.4/100
= 10014.144
Then,
Amount = principle + Interest
= 22,353 + 10014.144
= 34620.144
This is a Answer
I hope you know this answer
Click this link to view O'NET's Tasks section for Film and Video Editors.
Note that common tasks are listed toward the top, and less common tasks are listed toward the bottom. According to
O‘NET, what are common tasks performed by Film and Video Editors? Check all that apply.
marketing and selling movies and films to customers
giving direction to actors to make sure they follow scripts
organizing and stringing together raw footage into a whole
determining the audio and visual effects and music needed
reviewing assembled films or edited videotapes
trimming film segments and reassembling segments
Answer:
3 4 5 6
Explanation:
just did it on edg 2021
The common tasks for Film and Video editors are organizing and stringing together raw footage into a whole, determining the audio and visual effects and music needed, reviewing assembled films or edited videotapes and trimming film segments and reassembling segments.
What is Video editing?
The arranging and alteration of video shots is known as video editing. All video content, including movies, television series, video advertising, and video essays, is organized and presented using video editing.
Post-production is another name for the process of editing videos.
The three main phases of a video are:
Pre-productionproduction, and post-productionThe main objective of editing is to make the video as orderly and fluid as possible. To do this, the editor collaborates with the director, producer, and others.
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Critics of the wealth gap might argue that
economic growth will likely decline over time.
the upper classes cannot help create new jobs.
the wealthy become unable to make investments.
buying power exceeds the supply from producers.
Answer:
economic growth will likely decline over time. Mark brainliest
Explanation: i did the test
The critics of the wealth gap may argue that an economic growth will likely decline over time.
Who are the critics of wealth gap?The critics are people that does not fascinate the idea of wealth gap in an economy.
Hence, they are more likely to argue that an economic growth will likely decline over time because they do not fascinate the gap of wealth economically.
Therefore, the Option A is correct.
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Use the following information to prepare a bank reconciliation for Young Company at June 30:
1. Balance per Cash account, June 30. $7,761.38
2. Balance per bank statement, June 30. 8,030.28
3. Deposits not reflected on bank statement. 797.50
4. Outstanding checks, June 30. 1,386.50
5. Service charge on bank statement not recorded in books. 12.10
6. Error by bank-Yertel Company check charged on Young Company's bank statement. 605
7. Check for advertising expense 275 incorrectly recorded in books as 572
Answer:
See photo.
Explanation:
Which of these is an example of a monopoly? Utility companies Soda companies Airlines Computer companies
Utilities firms are one example of a monopoly among the possibilities given. When they are the exclusive provider of these necessary services in a certain region, utility firms, such as those that provide electricity, water, or natural gas, frequently act as Monopoly. As a result, customers are virtually forced to adopt the services offered by the local utility company since they have no other alternatives.
The Landlord's Game, which was developed by Lizzie Magie in the United States in 1903 to advance Henry George's economic theories, particularly his views on taxation, and to show that an economy that rewards Utilities individuals is preferable to one in which monopolies hold all the wealth, is the source of Monopoly.
The Landlord's Game originally featured two sets of rules, one that included taxes and another that serves as the foundation for the present regulations.
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if you have identified a risk, you have?
(a) figured it out how to eliminate it.
(b) recognized that it exists.
(c) publically announced it is a problem.
(d) decided not to reveal it
Answer:
B
Explanation:
you have recognized that it exists, you have not yet eliminated it or made any other decisions.
Blank and blank is another word for networking
Which of the following types of contracts does not fall within the statute of frauds? Select one: A. Contracts not performed within six months B. Contracts for the sale of goods totaling more than $500 C. Contracts for one party to pay the debt of another party if the initial party fails to pay D. Promises made in consideration of marriage E. Agreements related to an interest in land
Answer:
Correct Answer:
C. Contracts for one party to pay the debt of another party if the initial party fails to pay
Explanation:
In a business setting which exist between two parties, when there is a renegation of agreement between the parties involved by one person, then there is consequences. In a situation where the renegation of agreement was deliberate, then, fraud is said to have occurred.
Option C does not fall within the statue of fraud.
The type of contract that does not fall within the statute of fraud is when the one part agrees to pay the debt of another party.
The following are the situations where the fraud could have existed:
Contract not performed for six months. The sale of goods is more than $500.The promise is made for marriage. Agreements are to be done for land.Therefore we can conclude that the type of contract that does not fall within the statute of fraud is when the one part agrees to pay the debt of another party.
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Calculate the Net Present Value Weather Co has recently taken over many smaller companies, which it now runs as separate divisions. One division, Thunder, has just developed a new product called Lightning and is now considering whether to put it into production. The following information is available:
(i) Costs incurred in the development of Lightning amount to $480,000.
(ii) Production of Lightning will require the purchase of new machinery at a cost of $2,400,000, payable on the first day of the new financial year. The machinery is specific to the production of Lightning and will be obsolete and valueless when production ceases. The machinery has a production life of four years and a production capacity of 30,000 units per annum.
(iii) Production costs of Lightning (at year 1 prices) are estimated as follows:
Direct material $8
Direct labour $12
Variable overheads $ 12
In addition, incremental fixed production costs (at year 1 prices), including straight-line depreciation on plant and machinery, will amount to $800,000 per annum.
(iv) The selling price of Lightning will be $80 per unit (at year 1 prices). Demand is expected to be 25,000 units per annum for the next four years.
(v) The consumer price index is expected to be at 5% per annum for the next four years and the selling price of Lightning is expected to increase at the same rate. Annual inflation rates for production costs are expected to be as follows:
Direct materials 4%
direct labour 10%
variable overheads 4%
Fixed costs 5%
(vi) The company's cost of capital in money terms is expected to be 15%. Direct materials Direct labour Variable overheads
(vii) Corporation tax is 30% and is payable one year in arrears. Tax-allowable depreciation of 25 per cent on a reducing balance is available on capital expenditure.
(viii) This investment will also require an investment in working capital of $500,000 payable at the start of the project.
This is not expected to change during the life of the investment. Unless otherwise specified, all costs and revenues should be assumed to arise at the end of each year.
The financial manager has recommended that a discounted cash flow method of project appraisal be used, but some members of the board are reluctant to do this.
Answer: Net Present Value (NPV) = -$2,400,000 + [25,000 x $80 x (1 - 0.30)]/1.15 - [$480,000 + ($800,000 x 4)]/1.15^4 + ($500,000/1.15^4)
NPV = -$2,400,000 + $1,946,739.13 - $2,719,565.22 + $385,217.39
NPV = -$1,077,608.70
Explanation:
Based on this analysis, the Lightning project has NPV of -$2,279,126.25 which is negative. Hence, the project is not economically viable and should not be pursued.
How to calculate the Net Present ValueTo calculate the net present value (NPV) of the Lightning project
Firstly, estimate the cash flows associated with the project and discount them to their present values using the company's cost of capital.
To calculate the annual cash inflows and outflows associated with the project.
The annual revenue from selling 25,000 units of Lightning at a price of $80 per unit is:
25,000 x $80 = $2,000,000
The annual production costs can be calculated as follows:
Direct material: 25,000 x $8 = $200,000
Direct labour: 25,000 x $12 = $300,000
Variable overheads: 25,000 x $12 = $300,000
Incremental fixed costs: $800,000
Total annual production costs: $1,600,000
To calculate the annual cash flow, subtract the annual production costs from the annual revenue:
Annual cash inflow: $2,000,000 - $1,600,000 = $400,000
In addition to the annual cash inflow, consider the initial investment in the project.
This includes the development costs of $480,000, the purchase of new machinery for $2,400,000, and the investment in working capital of $500,000. The total initial investment is:
$480,000 + $2,400,000 + $500,000 = $3,380,000
To calculate the tax-allowable depreciation on the capital expenditure, The value of the machinery after each year can be calculated as follows:
Year 1: $2,400,000 x (1 - 0.25) = $1,800,000
Year 2: $1,800,000 x (1 - 0.25) = $1,350,000
Year 3: $1,350,000 x (1 - 0.25) = $1,012,500
Year 4: $1,012,500 x (1 - 0.25) = $759,375
The tax-allowable depreciation for the first year is:
$2,400,000 - $1,800,000 = $600,000
The tax-allowable depreciation for the remaining years is calculated in the same way.
Using the information above, calculate the annual cash flows and the NPV of the project as follows:
Year 0:
Initial investment: -$3,380,000
Year 1:
Cash inflow: $400,000
Tax-allowable depreciation: $600,000 x 30% = $180,000
Tax savings: $180,000 x 30% = $54,000
Net cash flow: $400,000 - $54,000 = $346,000
Discounted cash flow: $346,000 / (1 + 15%\()^1\) = $300,870.13
Year 2:
Cash inflow: $400,000
Tax-allowable depreciation: $1,800,000 x 25% x 30% = $135,000
Tax savings: $135,000 x 30% = $40,500
Net cash flow: $400,000 - $40,500 = $359,500
Discounted cash flow: $359,500 / (1 + 15%\()^2\) = $281,880.18
Year 3:
Cash inflow: $400,000
Tax-allowable depreciation: $1,350,000 x 25% x 30% = $101,250
Tax savings: $101,250 x 30% = $30,375
Net cash flow: $400,000 - $30,375 = $369,625
Discounted cash flow: $369,625 / (1 + 15%\()^3\) = $260,775.85
Year 4:
Cash inflow: $400,000
Tax-allowable depreciation: $1,012,500 x 25% x 30% = $75,938
Tax savings: $75,938 x 30% = $22,781.40
Net cash flow: $400,000 - $22,781.40 = $377,218.60
Discounted cash flow: $377,218.60 / (1 + 15%\()^4\) = $257,347.59
Total discounted cash flow: $300,870.13 + $281,880.18 + $260,775.85 + $257,347.59 = $1,100,873.75
To calculate the NPV, subtract the initial investment from the total discounted cash flow:
NPV = $1,100,873.75 - $3,380,000 = -$2,279,126.25
Based on this analysis, the Lightning project has a negative NPV of -$2,279,126.25. Therefore, the project is not economically viable and should not be pursued.
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during 2017 and 2018,Irish airline Ryanair had to cancel thousands of flights to and from European destinations.Ryanair blamed the cancelation on a combination of air traffic control delays and strikes,bad weather and shortages of pilots and cabin crew due to increase annual leave allocations. a)Define profit .(2) b)explain the difference between a fixed cost and a variable cost of production.(4) c)analyse what might have happened to the level of profits for Ryanair as a result of the problems stated.(6) d)Discuss whether the cancelation of a flight would have affected the fixed and variable cost of Ryanair.(8)
A) Profit refers to the amount of money earned by a company after deducting all the costs and expenses.
B) Fixed costs are those expenses that do not change whereas, variable costs are expenses that vary with the level of production.
C) The cancellation of flights would have led to a decline in revenue, while the increase in costs due to shortages of pilots and cabin crew, as well as bad weather, would have led to higher variable costs.
D)The cancellation of a flight would affect both the fixed and variable costs of Ryanair.
a) Profit refers to the amount of money earned by a company after deducting all the costs and expenses incurred in the production of goods or services.
b) Fixed costs are those expenses that do not change regardless of the level of production, such as rent, salaries, and insurance. Variable costs, on the other hand, are expenses that vary with the level of production, such as raw materials, labor costs, and shipping expenses.
c) The problems faced by Ryanair in 2017 and 2018 would have had a significant impact on the level of profits. The cancellation of flights would have led to a decline in revenue, while the increase in costs due to shortages of pilots and cabin crew, as well as bad weather, would have led to higher variable costs. Additionally, the fixed costs of the airline, such as aircraft leasing costs and employee salaries, would have remained constant, thereby reducing the profitability of the company.
d) The cancellation of a flight would affect both the fixed and variable costs of Ryanair. Fixed costs such as aircraft leasing costs and employee salaries would remain the same regardless of the number of flights operated. However, variable costs such as fuel expenses and landing fees would be reduced due to the cancellation of a flight. In addition, the cancellation of a flight would also result in a loss of revenue, which would affect the overall profitability of the airline.
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