Sadler Corporation purchased equipment to be used in manufacturing. The purchase was made at the beginning of 2015 by paying cash of $150,000. The equipment has an estimated residual value of $10,000 and an expected useful life of 10 years. At the beginning of 2017, Sadler concluded that the total useful life of the equipment will be 8 years rather than 10, and that the residual value will be zero. Sadler uses the straight-line method for depreciation.
Required:
a) Prepare the journal entry to record depreciation on the equipment for 2016.
b) Prepare the journal entry to record depreciation on the equipment for 2017 including the effect of the changes in estimates.

Answers

Answer 1

Answer:

a) Debit Depreciation expense  $14,000

   Credit Accumulated depreciation  $14,000

Being entries to record depreciation expense for 2016

b) Debit Depreciation expense  $26,666.67

   Credit Accumulated depreciation  $26,666.67

Being entries to record depreciation expense for 2017

The effect of a change in estimate is a reduction of the annual depreciation from $14,000 to $26,666.67 (increase of $12,666.67) annually

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,  

Depreciation = (Cost - Salvage value)/Estimated useful life

Annual depreciation

= (150,000 - 10,000)/10

= $14,000

At the beginning of 2017,

Net book value of asset

= $150,000 - 2($14,000)

= $124,000

If  Sadler concluded that the total useful life of the equipment will be 8 years rather than 10, and that the residual value will be zero.

Depreciation expense for 2017

= $124,000/6

= $26,666.67


Related Questions

Landlords have rights, too! Which of the following is NOT a right of the landlord?
А.
A landlord can keep all of your security deposit if you do not take out the
garbage one day
B. A landlord can check your credit before renting to you.
с.
A landlord can and definitely will keep part or all of your security deposit if
you damage anything in the apartment.
D. A landlord can check your references before renting to you.

Answers

Answer:

A. A landlord can do all of the above EXCEPT keep your security deposit for not taking out the trash one day.

Explanation:

However if it is a reoccurring issue and u leave trash all over the apartment,
(s)he can keep the deposit unless it is completely cleaned when you move out.

please mark brainliest

Perpetual Inventory Using Weighted Average
Beginning inventory, purchases, and sales for WCS12 are as follows:
340 units at $10
200 units
360 units at $11
400 units
Oct. 1
13
22
29
Inventory
Sale
Purchase
Sale
a. Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the October 22 purchase. Round your answer to
two decimal places.
per unit
b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of goods sold on October 29. Round your "average unit cost" to two decimal
places.
$
c. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on October 31. Round your "average unit cost" to two decimal places

Answers

Perpetual Inventory can be calculated as follows:

a. Weighted average unit cost after the October 22 purchase:

Beginning inventory:

340 units at $10 = $3,400

Purchases:

200 units at $10 = $2,000

360 units at $11 = $3,960

Total units: 340 + 200 + 360 = 900 units

Total cost: $3,400 + $2,000 + $3,960 = $9,360

Weighted average unit cost = Total cost / Total units

=$9,360 / 900 units

≈ $10.40 (rounded to two decimal places)

b. Cost of goods sold on October 29:

Units sold: 400 units

Cost of goods sold = Units sold * Weighted average unit cost

= 400 units * $10.40

= $4,160

c. Inventory on October 31:

Remaining units: 100 units (900 units - 400 units)

Weighted average unit cost (from part a): $10.40

Inventory value = Remaining units * Weighted average unit cost

= 100 units * $10.40

= $1,040

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How do the McDonald brothers propose to control the involvement Ray Kroc would have in their business?

Answers

They buy a ring and then propose after

Our newly constructed retail space is projected to need a face lift in 7 years to keep up with changing tastes. Our projections are that the cost will be $2.5 mil. If we set aside a reserve for replacement our best return prospects for a safe investment (i.e. little risk to principle) suggest a 3% annual interest rate. How much should we deposit annually into that reserve account (sinking fund problem)

Answers

Answer:

Annual deposit = $326,265.88  

Explanation:

The amount to be set aside annually to accumulate $2.5 million in 7 years time ca n be worked out using the future value of an ordinary annuity formula.

The formula is given as follows:

FV = A×( (1+r)^n - 1)/r).

A= FV/ ((1+r)^n - 1)/r

FV - Future value

A- annual deposit

n- number of years

r- rate of return

FV - $2.5 million

A- ?

n- 7

A=2,500,000 ÷ (1.03^7 - 1)/0.03 =  326,265.88  

Annual deposit = $326,265.88  

"Group decision making is better". Do you agree or disagree with the statement? Give 3 reasons why do you say so?​

Answers

Answer:

I agree because it make the group bring out more ideals

sometimes group decision make some people to voice out their problems

group decision help organization and firms to operate in good aims

Multiple Choice
Which option identifies the best source of data to start with in the following scenario? A fly-fishing
specialty shop wants to market a new, very expensive fly rod.

Answers

The option is incomplete. Hence I have gone ahead to write on the sources of data

What are the sources of data in a market research?

There are various sources of data that market researchers can use to gather information about a particular market, product, or consumer behavior. Some of the common sources of data in market research include:

Primary data: This is information that is collected directly from the source through surveys, interviews, focus groups, or observations. Primary data is specific to the research question and can provide valuable insights into consumer preferences, behavior, and opinions.

Secondary data: This is data that has already been collected by others, such as government agencies, trade associations, or market research firms. Secondary data can include market reports, industry statistics, or published research studies. It can provide a broader perspective on the market or industry trends and help researchers validate their findings.

Internal data: This is data that is collected by the company itself, such as sales data, customer feedback, or website analytics. Internal data can provide insights into the company's performance, strengths, and weaknesses, and can be used to identify opportunities for growth.

External data: This is data that is collected from external sources, such as social media, online reviews, or news articles. External data can provide insights into consumer sentiment, brand reputation, or market trends.

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This function of marketing is responsible for identifying and reducing risks associated
with marketing decisions. Choose the answer.
O financing
Opricing
O promotion
Orisk management

Answers

This function of marketing is responsible for identifying and reducing risks associated with marketing decisions is risk management. So risk management is correct option of the given statement.

How does risk management work?

IT risk management refers to the use of risk management techniques to handle IT threats. Procedures, guidelines, and tools for evaluating possible risks and weaknesses in IT infrastructure are part of IT risk management.

What function does risk management play in general?

The process of discovering, evaluating, and managing risks to people, assets, liabilities, and income is known as risk management. The ultimate purpose of risk management is the preservation of the organization's material and human resources to ensure the smooth continuation of its business operations.

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Answer:

D. Risk Management

Explanation:

3. As a project manager, you email all team members requesting their feedback on processes and their preferred
method of collaboration. Which aspect of effective team building does this scenario demonstrate?

Answers

The aspect of aspect of effective team building does this scenario demonstrates is "Promote psychological safety" (Option D)

What is Effective Team Building?

Team development is a continuous process that assists a work group in becoming a cohesive one. Not only do team members share expectations for completing group work, but they also trust and support one another and appreciate one another's distinctive characteristics.

It fosters trust, reduces conflict, promotes communication, and fosters collaboration. Effective team building results in more engaged employees, which is beneficial to corporate culture and the bottom line. It may also be exciting and fun if done with a little flair.

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Full Question:

Although part of your question is missing, you might be referring to this full question:

As a project manager, you email all team members requesting their feedback on processes and their preferred method of collaboration. Which aspect of effective team building does this scenario demonstrate?

Answers

Prioritize tasks

Listen and ask questions

Celebrate team success

Promote psychological safety

What are the global implications for the product or service you are marketing? What are the global implications of your marketing strategy and recommendations? “Rockstar video games”

Answers

Answer:

The global implications for the product or service you are marketing is explained below in complete details.

Explanation:

The principal involvement of a marketing maneuvering is the familiarization approaching gathering customer requirements that appears in enhanced customer fulfillment and satisfaction. ... Such a marketing maneuvering is intended to achieve and to grow new customers as you develop a more agreeable character.

Task 1: Careers and Educational Requirements Perform online research and choose a career in the financial services industry. Determine the education you will need to prepare for this career.

Task 2: Certification Requirements
For your chosen career, identify the certification or licensing required. Develop a strategy to prepare for certification.

Task 3: Information Technology and Interpersonal Skills
For your chosen career, describe the skills you will need to learn and develop.

Answers

For Task 1, I have chosen the career of a financial analyst in the financial services industry. To prepare for this career, a Bachelor's degree in Finance, Accounting, Economics, or a related field is required.

For Task 2, becoming a Certified Financial Analyst (CFA) is highly valued in this career. The CFA program consists of three levels of exams that cover topics such as economics, financial reporting and analysis, ethics, and investment tools.

For Task 3, both information technology and interpersonal skills are important in this career. Financial analysts must have strong analytical skills and be proficient in using financial modeling software and spreadsheet applications.

Task 1-  Many employers also prefer candidates with a Master's degree in one of these fields. Additionally, courses in statistics, mathematics, and computer science can be beneficial in this career.  Task 2- To prepare for this certification, one should enroll in a CFA program review course, study the material thoroughly, and take practice exams to prepare for the rigorous testing process.

Task 3- They also need to have excellent communication and interpersonal skills to be able to work effectively with clients and team members. Additionally, they must be able to present complex financial information in a clear and understandable manner. Developing and honing these skills can be achieved through a combination of on-the-job experience, training, and continuing education courses.

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4. What is the difference between a stock's ask price and buy price?

Answers

The bid price is the price that any dealer agrees to pay investors for their securities, whereas the ask price is the price that the dealer agrees to charge investors for their securities.

What distinguishes the offer price from the buy price for a stock?

A buyer's highest possible offer to purchase a security is referred to as the bid price. The ask price is used to describe the cheapest amount a seller will take for a security. The spread, or the difference between these two prices, is what determines how liquid a security is; the narrower the spread, the more liquid the security is.

The bid price in stock trading is the maximum price a buyer is willing to pay for a particular security, and the ask price is the lowest price a seller will take. The spread is the difference between these two prices; the lower the spread, the more liquid the particular security is.

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Which of the following leaves no room for compromise or gray areas?
O Propaganda
O Bandwagon techniques
O Glittering generalities

O Either/or fallacy

Answers

Either/or fallacy leaves no room for compromise or gray areas

What is Either/or fallacy?

Either or fallacy also known as black and white thinking or false dilemma is a type of logical fallacy where only two choices are presented often with one being portrayed as the only correct or acceptable option while the other is portrayed as being completely wrong or unacceptable.

This type of argument leaves no room for compromise or gray areas and can be misleading as it oversimplifies complex issues and limits the range of options that are available

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A coffee shop buys 2000 bags of their most popular coffee beans each month. The cost of ordering and receiving shipments is $12 per order. Accounting estimates annual carrying costs are $3.60. The supplier lead time is 8 operating days. The shop operates 240 days per year. Each order is received from the supplier in a single delivery. There are no quantity discounts.

Required:
a. What quantity should the shop order with each order?
b. How many times per year will the shop order?
c. How many operating days will elapse between two consecutive orders?
d. What is the reorder point if the company wishes to carry a safety stock of 10 bags?
e. What is the store's minimum total annual cost of placing orders & carrying inventory?

Answers

Solution :

The optimal order quantity, EOQ = \($\sqrt{\frac{2 \times \text{demand}\times \text{ordering cost}}{\text{holding cost}}}$\)

EOQ = \($\sqrt{\frac{2 \times 2000 \times 12}{3.6}}$\)

        = 115.47

The expected number of orders = \($\frac{\text{demand}}{EOQ}$\)

                                                      \($=\frac{2000}{115.47}$\)

                                                      = 17.32

The daily demand = demand / number of working days

                               \($=\frac{2000}{240}$\)

                              = 8.33

The time between the orders = EOQ / daily demand

                                                 \($=\frac{115.47}{8.33}$\)

                                                  = 13.86 days

ROP  = ( Daily demand x lead time ) + safety stock

        \($=(8.33 \times 8)+10$\)

         = 76.64

The annual holding cost = \($\frac{EOQ}{2} \times \text{holding cost}$\)

                                         \($=\frac{115.47}{2} \times 3.6$\)

                                         = 207.85

The annual ordering cost = \($\frac{\text{demand}}{EOQ} \times \text{ordering cost}$\)

                                           \($=\frac{2000}{115.47} \times 12$\)

                                           = 207.85

So the total inventory cost = annual holding cost + annual ordering cost

                                            = 207.85 + 207.85

                                            = 415.7

For their family reunion, the Ryan family has decided to go to Orlando, Florida, where they are looking forward to going to theme parks, swimming in the pool, visiting the beach and Kennedy Space Center, and relaxing. The factor that most likely influences their choice of destination is

A. cost
B. reviews
C. things to do
D. climate

Answers

Answer: C.

Explanation: There seems to be no mention of the other options (cost, reviews and climate) in the sentence. The family has decided to go to that specific location solely because of the activities they could do there.

Based on the available options and the scenario described in the question, the factor that most likely influences the Ryan family's choice of destination is Option C. things to do.

What is Orlando Florida?

Orlando Florida is known for its numerous theme parks such as Walt Disney World Universal Orlando Resort and SeaWorld which offer a wide range of entertainment options for people of all ages.

Generally, these attractions are likely a big draw for the Ryan family as they provide a variety of experiences and activities.

Also, it should be noted that aside from the theme parks Orlando also offers other exciting things to do such as visiting the Kennedy Space Center which is a popular attraction for space enthusiasts and offers educational experiences for the whole family.

The proximity to beautiful beaches on the coast also provides the opportunity for the family to enjoy some relaxation and water activities.

While cost reviews and climate can also play a role in the decision-making process the availability of numerous activities and attractions in Orlando is likely the primary factor that influences the Ryan family's choice of destination.

Hence, in this case, it is concluded that the correct answer is option C. things to do.

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Identify information that would be included in a printed, hand-delivered résumé and not an online résumé.

Answers

Answer: Your High School/College diploma. Copy of your educational degree. Liesence, Contact information,  and employment history.

Explanation:

Income levels relates to _____.


possible customers

demographics

competition

communication

Answers

Answer:

Income levels relate to demographics.

Answer:

Income levels relates to demographics.

Explanation:

PLEASE HELP! WILL MARK BRAINLIEST!! 10 POINTS
Assume a visitor from another nation decides to open a checking account at J & R National Bank. The visitor deposits $20,000 that is new money to the Macro Islands economy. The central bank has set a required reserve ratio of 10%.
What is the change in the total amount that J & R National Bank can loan out? Explain.
Calculate the total amount that the bank can create? (Calculate means show your work.)
Now assume that the Macro Islands government decides to increase spending to fund new projects that will bring in more visitors. Explain what will happen to the demand for loanable funds and real interest rates as a result.

Answers

Answer: a)$18,000 and b)$200,000

Explanation:

a) Deposit = $20,000

Reserve=10%

=10%x20,000 =$2,000

Loan - Deposit = 20,000-2,000 = 18,000

b) 1/Req. Rate Return* loan amount

20,000/10% =$200,000

This encourages spending so there is a shift up and to the right.

As the government increases spending, demand for loans increases and therefore increases the interest rates.

I welcome Brainliest thanks.

Determine the costs assigned to ending inventory and to cost of goods sold using fifo

Answers

Using FIFO, the cost assigned to ending inventory is $8,296, and the cost assigned to the cost of goods sold is $20,774.

What is FIFO?

FIFO simply means First-in, First-Out.  

FIFO is a cost flow assumption that assigns cost to the cost of goods sold based on the understanding that the first goods brought into the store are the first to be sold.

Note that under the perpetual inventory system, the cost of goods sold is determined at each sales transaction.

           Activities            Units Acquired at Cost   Units Sold at Retail

Jan. 1   Beg. inventory   285 at $13.40     $3,819

Jan. 10 Sales                                                          250 units $43.40 $10,850

Mar. 14 Purchase           470 units $18.40 8,648

Mar. 15 Sales                                                          400 units $43.40   17,360

July 30 Purchase         485 units $23.40 11,349

Oct. 5   Sales                                                         460 units $43.40   19,964

Oct. 26 Purchase         185 units $28.40 5,254

Totals                         1,425 units         $29,070  1,110 units              $48,174

Ending inventory          315 (1,425 - 1,110)

FIFO:

Ending inventory = $8,296 (185 x $28.40 + 130 x $23.40)

Cost of goods sold = Cost of Goods Available for Sale - Cost of Ending Inventory)

= $20,774 ($29,070 - $8,296)

Cost of Goods Sold (Using Perpetual Inventory System):

$3,350:    250 units $13.40

$7,185:     400 units ($13.40 x 35) + ($18.40 x 365)

$10,239:  460 units ($18.40 x 105) + ($23.40 x 355)

$20,774  1,110 units

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Question Completion:

           Activities            Units Acquired at Cost   Units Sold at Retail

Jan. 1   Beg. inventory   285 at $13.40     $3,819

Jan. 10 Sales                                                               250 units $43.40

Mar. 14 Purchase           470 units $18.40 8,648

Mar. 15 Sales                                                              400 units $43.40

July 30 Purchase         485 units $23.40 11,349

Oct. 5   Sales                                                             460 units $43.40

Oct. 26 Purchase         185 units $28.40 5,254

Totals                         1,425 units         $29,070     1,110 units

Required Hemming uses a perpetual inventory system. 1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

Please help me in this assignment. Assume a project, other than your assignment, such as real estate, infrastructure development, industrial, or software development etc. and discuss that how guiding principle of PMI Standards for project risk management life cycle shall be undertaken at the organizational level of that particularly identified project (what the organization needs to do).

Answers

Answer:

DOES THIS HELP

Explanation  

Many different professions contribute to the theory and practice of project management. Engineers and architects have been managing major projects since pre-history. Since approximately the 1960s, there have been efforts to professionalize the practice of project management as a specialization of its own. There are many active debates around this: Should project management be a profession in the same way as engineering, accounting, and medicine? These have professional associations that certify who is legally allowed to use the job title, and who can legally practice the profession. They also provide a level of assurance of quality and discipline members who behave inappropriately.

Changes in the market environment impact _____

how competitive the marketplace is
how many offerings are available
how many marketing communication channels are used
how consumers behave

Answers

I think the answer is how consumers behave

Changes in the market environment impact how competitive the marketplace is, how many offerings are available, how many marketing communication channels are used, and how consumers behave.

Aspects of the business landscape are significantly impacted by changes in the market environment. First and foremost, they have an impact on the level of market competition because changes in variables like technology, rules, and consumer preferences can affect how businesses compete with one another.

Changes in the market environment can also have an impact on the variety and range of goods and services that are offered to customers. New technologies and trends have an impact on how businesses communicate with their target audiences through marketing channels. Last but not least changes in the market environment such as those in the economy in social trends and in technological advancements have a significant impact on consumer behavior causing changes in buying patterns and preferences.

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The following information is available for Water Inc. Date Units Unit Cost January 1, 2020 (beginning inventory) 100 $50.00 Purchases: January 10, 2020 75 52.00 January 15, 2020 150 52.50 January 30, 2020 100 55.00 The company maintains a periodic inventory system. A physical count shows 125 units in stock on January 31. What is (a) ending inventory on January 31, and (b) cost of goods sold for January, using the FIFO inventory method

Answers

Answer:

125 and $15,156.6

Explanation:

The end inventory us 125 units and thus 300 units were sold

Location selection for your bank is critical because location will determine all of the following except____.
A. Visibility of the bank in the community.
B. How many shareholders the bank will have.
C. Customers’ financial needs.
D. Customer pool.

Answers

Answer:

b

Explanation:

B. How many shareholders the bank will have. Is the correct answer

" Management is a group activity" Give reasons for the statement.​

Answers

Explanation:

Management is a group activity because it coordinates the efforts of organisational members to achieve the pre-determined goals. Ans. Management is the process of designing and maintaining an environment in which individuals working in groups efficiently accomplish selected aims.

for each of the following variables, identify the type of variable (numeric or categorical)
and level of measurement (nominal, ordinal, interval, or ratio).
a. Total flight time of the second-year pilots in American Airline
b. Gender of the second-year pilots in American Airline
c. Average pilot salary of OECD countries
d. The number of Airplane runways at US National Airport

Answers

The types of variables will be:

a. Numeric,

b. Categorical,

c. Numeric,

d. Numeric,

What is a variable?

A variable can be defined as the quantity and the set that can be identified.  A categorical variable is one where the group is being made and organized. The numeric value is the one that can be measured.

A. A ratio must always be positive because the total flying time cannot be negative. This information has a defined zero point and can be stated numerically.

B. As gender can always be ranked as well as Categorical, the answer is b. categorical and nominal. There is no order to the data, which is expressed as names and labels.

C. In numbers, the ratio is always positive because the typical pilot compensation is positive. This information has a specified zero point and can be stated numerically.

D. Ratio, since the number of runways will never be negative. This information has a defined 0 and can be stated numerically.

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On this graph, what does the green arrow represent?

On this graph, what does the green arrow represent?

Answers

Answer:D

Explanation:

How does finance and insurance affect in our global economy?

Answers

The ways that finance and insurance affect our global economy include:

Capital allocationRisk management

How can finance and insurance affect the economy ?

Finance plays a crucial role in allocating capital to its most productive uses. Through the provision of financial services such as banking, investment, and asset management, finance channels funds from savers to investors, supporting economic growth and development.

Insurance plays a vital role in managing risk and protecting individuals and businesses from potential losses. By spreading risk among a large pool of insured individuals or companies, insurance enables businesses to invest and take on new opportunities with greater confidence, contributing to economic growth and stability.

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Problem 8, MacroSoft Inc. has capitalized $600,000 of software costs. Sales from this product were $360,000 in the first year. MacroSoft estimates additional revenues of $840,000 over the product’s economic life of 5 years.
Instructions
Prepare the journal entry to record software cost amortization for the first year. Show all computations.

Answers

Journal Entry:

Date: [First year-end date]

The amortization expense for the first year is $120,000.

Debit: Amortization Expense - Software Cost - Year 1 ($600,000 / 5 years) = $120,000Credit: Accumulated Amortization - Software Cost - Year 1 ($600,000 / 5 years) = $120,000Explanation:To record the software cost amortization for the first year, we need to allocate a portion of the capitalized software costs as an expense. Since the software has an estimated economic life of 5 years, we divide the total software cost ($600,000) by 5 to determine the annual amortization expense. In this case, the amortization expense for the first year is $120,000. We debit the Amortization Expense - Software Cost account to recognize the expense and credit the Accumulated Amortization - Software Cost account to accumulate the amortization over time.

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A sole proprietorship has limited sources of funds, which may affect the growth of the business.
True
False

Answers

Answer:

true

Explanation:

Estate has an ROI of 16% based on revenues of $400,000. the residual income is $14,000 and the investment turnover is 2. what is the hurdle rate? With Explanation

Answers

If Estate has an ROI of 16% based on revenues of $400,000. the residual income is $14,000 and the investment turnover is 2. The hurdle rate is 9%.

How to find hurdle rate?

First step is to find the investment turnover using this formula

Investment turnover=Sales/invested capital

Investment turnover = ($14,000 / $400,000) × 2

Investment turnover = 0.035 × 2

Investment turnover =0.07

Second step is to find the hurdle rate using this formula

Hurdle rate = ROI - Investment turnover

Hurdle rate = 0.16 - 0.07

Hurdle rate = 0.09× 100

Hurdle rate = 9%

Therefore the hurdle rate is 9%.

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GMC is producing cars using machines (K) and labor (L). The technology is capital intensive; the production function is given by F(K, L) = K(3/4)L(1/2). The value of GMC physical capital (machines, real estate etc.) is equal to K =$16 billon (in calculations ignore billions). We analyze rm's behavior in the short run (note K cannot be changed in the short run). Suppose the price of a car is equal to p and the wage rate is w (parameters).

a) Write down the profit as a function of L.

b) On a graph with L on the horizontal axis and $ on the vertical axis, plot two components of proit function: total revenue (pF(K, L)), and labor cost (wL) (when drawing, assume p = 1 and w = 2). On the graph, mark the prot level as the dierence between the two lines (for any given L).

c) In order to find x that maximizes some function f(x), we take the rst derivative of the function with respect to x and set it equal to zero (we call it a rst order condition). Please explain intuitively why this method allows us to find the optimum.

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Answer:

GMC is producing cars using machines (K) and labor (L). The technology is capital intensive; the production function is given by F(K, L) = K(3/4)L(1/2). The value of GMC physical capital (machines, real estate etc.) is equal to K =$16 billon (in calculations ignore billions). We analyze rm's behavior in the short run (note K cannot be changed in the short run). Suppose the price of a car is equal to p and the wage rate is w (parameters).

Explanation:

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