iven what happens to the price buyers pay and the price sellers ultimately receive after a subsidy is granted to sellers, what happens to the level of consumer and producer surplus after the subsidy takes effect?

Answers

Answer 1

There is an increase in the consumer as well as producer surplus after the subsidy takes effect.

What the impacts of a subsidy ?

Subsidies often have the effect of making it simpler for businesses to produce particular items. After all, they are receiving free money or tax exemptions as assistance. The production costs that producers must face are reduced by these tax pardons or cash payouts. Consumers will ultimately pay less on the subsidised good. This indicates that there are two main effects of subsidies:

The first effect of subsidies is a decrease in the cost of production and the price of the good, which encourages consumers to purchase more of it.Due to the lower cost of production, more businesses will enter the market for subsidized goods as a result of subsidies.

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The complete question is mentioned below :

Given what happens to the price buyers pay and the price sellers ultimately receive after a subsidy is granted to sellers, what happens to the level of consumer and producer surplus after the subsidy takes effect?

a) Consumer surplus increases, while producer surplus decreases.

b) Both consumer surplus and producer surplus decrease.

c) Consumer surplus decreases, while producer surplus increases.

d) Both consumer surplus and producer surplus increase.


Related Questions

you are the owner of a comfort inn and would like to hire a new general manager. in terms of preventing possible agency problems, what should you include in your offer? a. profit sharing b. a fancy office with a private secretary c. a 37-hour workweek d. a very high fixed salary

Answers

You wish to appoint a new general manager at your Comfort Inn. You ought to offer profit sharing as a way of avoiding potential agency issues.

A retirement plan known as a profit-sharing plan allows employees to participate in the company's profits. An employee is given a portion of a company's profits under this kind of plan, also known as a deferred profit-sharing plan (DPSP), based on its quarterly or yearly results.

If employee A earns $100,000 and employee B earns $200,000, the comp-to-comp approach will be used. The business decides to distribute 20% of its yearly revenues to its workers. The business made $500,000 in revenue.

Employers who are having cash flow problems may find a profit-sharing plan to be a useful solution. Employers are free to alter the amount of their annual contributions. Businesses, especially small business owners, can reduce their corporation taxes. Plans are adaptable by nature.

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the advantages of which type of business include ownership of all profits, freedom and flexibility, and ease and low cost of organization and dissolution?

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The sole proprietorship is the advantage in the business including ownership of all profits, freedom, flexibility, and ease and low cost of organization and dissolution

What is a sole proprietorship?A sole proprietorship is a type of business that is owned and operated by one person and in which there is no legal separation between the owner and the business entity. It is also referred to as a lone tradership, individual entrepreneurship, or proprietorship. A sole proprietor may hire staff members and does not always work alone.The lone proprietor is solely responsible for all losses and obligations and receives all gains (subject to business-specific taxes). The owner of the firm is the owner of all of the company's assets and is also responsible for all of the company's debts. A trade name or business name other than the sole proprietor's or the business's legal name may be used. If their company name differs from their legal name, they might need to officially trademark it; the procedure will depend on where they live.

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last year a government official proposed that gasoline price controls be imposed to protect the poor from rising gasoline prices. what problem is likely to result from this proposal? explain.

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Many believe that oil company greed is the root of the problem and that price limits enforced by the government will solve it.However, limiting the price of gasoline is a horrible idea.They would harm both consumers and producers by causing shortages and lines.

what problem is likely to result from this proposal? All American drivers are being impacted by the high cost of gas, but low-income households suffer the most.This is because, in comparison to homes with higher incomes, low-income households allocate a larger portion of their budgets to transportation expenses and other necessities like food and electricity. Price limitations have a wide range of negative consequences.By causing shortages, they frequently make consumers wait in line, they frequently cause the quality of goods whose prices are controlled to decline, and they might result in supplier bias.Until the price limitations are lifted, all of those consequences continue. In an effort to slow the rate of inflation, price controls can also be employed to cap price rises.Maximum prices have the potential to lower the cost of food and make it more affordable, but they also carry the risk of reducing supply and creating a scarcity.The price manufacturers get may rise with minimum prices.

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a lumber mill is capable of producing 10,000 board feet of lumber per day if run for ten hours with minimal breaks. over the past year, forestry legislation has reduced the availability of raw materials, so the mill has produced an average of 4,575 board feet per day. what is the design capacity of the plant? what is the utilization of the plant? if the mill usually operates at 80%, what is the effective capacity?

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The design capacity of the plant is 10000, utilization is 45.75% and effective capacity is 8000.

The capacity of the lumber mill to produce boards per day = 10000 boards

Boards produced after reduction in raw material = 4575 boards

The design capacity of the plant is the maximum service capacity or output rate which is 10000 boards per day

Utilization = Boards produced after reduction/ Capacity to produce boards

= (4575/10000)*100 = 45.75%

Effective capacity: The maximum quantity of work that a company may accomplish within a specific time frame under the conditions of quality issues, delays, material handling, etc.

Effective capacity at 80% is: 80% of 10000 = 8000

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true or false: as a result of the check clearing for the 21st century act (check 21), auditors will only be able to obtain copies of paper checks when investigating possible fraud.

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The statement that check clearing for the 21st century will let auditors obtain copies of paper checks during fraud investigation is False.

The Check Clearing for the 21st Century Act removes some of the legal barriers to check truncation in order to promote innovation in the payments system and increase its effectiveness. By introducing a new negotiable instrument known as a substitute check, the law makes it easier for banks to truncate original checks, process checks data electronically, and distribute substitute checks to institutions that still want to receive paper checks.

A substitute check has all the information found on the original check and is the same thing legally as the original check. The law does not force banks to issue substitute checks using the new authority given by the Act or to accept checks in electronic form. The audit team will only be able to collect electronic copies of checks because paper ones are typically destroyed.

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kyle, whose spouse died in december 2019, filed a joint tax return for 2019. he did not remarry but has continued to maintain his home in which his two dependent children live. what is kyle's filing status in 2022? a.head of household b.single c.married filing separately d.surviving spouse

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Kyle's filling status in 2022 is option A. Head of household. A filing status for individual United States taxpayers is called as a Head of household.

Head of household status generally can be described as a preferential tax rates and also larger standard deduction for single people caring for qualifying dependents. At the end of the year to use the Head of Household filing status taxpayer must be unmarried or considered unmarried. In the other side, head of household status also can be applied by unmarried or a qualified dependent living with you more than half the year or a parent for whom you cover half of housing costs.

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which of the following statements are correct? multiple select question. when the workforce is basically fixed in the short term, managers must be cautious about how labor efficiency variances are used. companies should build inventory even if there is no immediate prospect of sale. excessive inventory contributes to inefficient operations. excessive inventory leads to low defect rates.

Answers

Building inventories can reduce unfavorable labor efficiency variances.Excessive inventories contribute to inefficient operations.

The labor efficiency variance measures the ability to utilize labor as expected. This variance is useful for highlighting areas in the production process that use more man-hours than anticipated. This variance is calculated as the difference between the actual labor hours used to produce a good and the standard amount that should be used, multiplied by the standard labor rate. If the variance results are unfavorable, there will likely be a review by the industrial engineer to see if the underlying process can be improved to reduce the number of hours of production required, using means such as:

Simplified product design to reduce assembly timeDecrease in the amount of scrap produced by the processIncrease the amount of automationChange workflow

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during march, a firm expects its total sales to be $169,000, its total variable costs to be $95,900, and its total fixed costs to be $25,900. the contribution margin for march is:

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The contribution margin for march is $73100

Contribution margin is that part of sales revenue which has not been consumed by the variable cost.

Contribution margin is selling price minus variable cost or also we can say selling price per unit minus variable cost per unit.

In this ques, it is given that total sales are expected to be $169000 and variable cost to be $95900.

Contibution margin = Selling price - Variable cost

Here, Selling cost = $169000

Variable cost = $95900

Thus, contribution = $169000-$95900

= $73100

When fixed cost is deducted from contribution margin, we get profit

Here, fixed cost = $25900

Thus, profit = contribution - fixed cost

= $73100 - $25900

= $47200

Thus, contribution margin and profit for march are $73100 and $47200 respectively.

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what does beworks do and how is it different from typical consulting firm? please visit beworks website. what is behavioral economics? although we covered this in class, do your own research to provide details on behavioral economics.

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The study of how people's economic decisions affect market prices, returns, and resource allocation is known as behavioral economics.

What is be works' function?

We comprehend human behavior and alter it for the better.

Using science, we reveal the unseen factors that influence everyday behavior and develop innovative solutions to today's issues and foresee the challenges of tomorrow.

What is the work of behavioral economists?

Based on psychology and market research, behavioral economic consultants work to comprehend their clients' requirements and create individual business plans and solutions. You can choose to work as a consultant in a specialized field, such as education or health care, and either work for yourself or for a private company.

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computers, inc. has name brand all-in-one printers that print, copy, scan, and fax on sale at a 35% markdown. the price includes free shipping and handling. tommy woodruff purchased a printer for $97.49. what is this printer's regular selling price?

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Tommy Woodruff bought a printer for $97.49. The suggested retail price for this printer is $150.

The selling price is the amount that a customer will pay, whereas the cost of the item is the price at which the store purchased it. Due to market circumstances, the price of this item is greater than the factory cost price.

To find the cost price, divide the total cost by the number of units purchased. Use the selling price formula to get the final cost.

Due to the printer's 35% market-down price.

Tommy Woodruff paid 65% of the cost for a printer.

65% x = 97.49 where x is regular selling price

65 ÷ 100 x = 97.49

x = 97.49 ÷ 65 × 100

x = 150

The regular selling price is $150.

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you are repaying a debt you borrowed, by depositing $500 at the end of each month for n months. the interest rate is 12% per year. what is the interest that is paid as part of the a) nth $500 payment? b) (n - 3)th $500 payment?

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You deposit $500 at the end of each month for n months in order to pay back a debt you borrowed. A 12% annual interest rate is charged. The interest is paid at a rate of 100n-300.

Money kept in a bank is referred to in the financial lexicon as a deposit. A deposit is a transaction in which money is transferred to a different party for safekeeping. Yet another definition of a deposit is a sum of money used as security or collateral for the delivery of a good. In general, a deposit is the amount of money that a bank has on hand.

One meaning of a deposit is when a portion of the money is utilized as a guarantee or deposit for the provision of goods or services. Transferring money to a third party, such a bank, for safekeeping constitutes a different type of deposit.

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cool scoops makes ice cream in two processes, mixing and packaging. during april, its first month of business, the packaging department transferred 50,800 units and $198,120 of production costs to finished goods. the company completed and sold 48,800 units at a price of $5.80 per unit in april. a. what is the cost to produce one unit of ice cream during april?b. what is the total gross profit on ice cream sales for april?

Answers

The cost to produce one unit of ice cream during April is $ 3.9 and the total gross profit on ice cream sales for April is $ 92,720.

Cost per completed unit:

       = Total production cost / Transferred unit

       = $ 198,120 / 50,800

       = $ 3.9

Total gross profit:

      = number of units sold × (selling price per unit – cost per unit )

      = $ 48,800 × (5.8 - 3.9)

     = $ 48,800 × 1.9

     = $ 92,720.

By deducting the cost of items sold from revenue, gross profit—also known as gross income—is computed.Typically, fixed expenses are excluded from gross profit and only variable costs are included.A company's efficiency in employing its labor and resources to produce goods or services is measured by its gross profit.Unlike net profit, which takes into account all expenditures incurred by the entire organization, gross profit solely accounts for the cost of items sold.Gross margin, which shows what much of a company's income may be used to pay operational expenses, is a derivative of gross profit.

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how can companies handle corrupt practices in foreign practices? can they find ways to compete there without engaging in these practices? please explain

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Apply appropriate anti-corruption policies appropriate to your industry or sector (Code of Business Ethics)

What are anti-corruption policies?The purpose of this policy is to provide clear guidance on compliance with all applicable anti-bribery and anti-corruption policies, encourage reporting of suspected violations, and provide guidance.The US Foreign Corrupt Practices Act (FCPA) is the most prevalent anti-corruption policies in the world. Check the most important information here. The African Union (AU) Convention on the Prevention and Elimination of Corruption, adopted in 2003, addresses corruption in the public and private sectors.Corruption undermines our trust in the public sector to act in our best interests. It also wastes taxes and tax rates allocated to important community projects. This means you have to put up with poor quality services and infrastructure.

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a form of real estate financing that gives the lender rights to the equity through increased payments or part of the residual value over the balance of the loan?

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Participating debt financing: At the time the loan is funded, the lender can have participatory rights to equity through increased income or residual value over the loan's balance.

In addition to designing a loan with an agreed-upon interest rate, the lender takes a percentage of the equity operating cash flow from the proceeds of the sale or refinance. By receiving a percentage of the potential future cash flow, the lender can increase his returns significantly.

What are the four sorts of obligation funding?Lender loan A bank loan is a common form of debt financing.Issues of bonds Bond sales are yet another form of debt financing.Loans to the family and credit cards Getting a loan from family and friends or borrowing money with a credit card are two additional ways to finance your debt.

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after a life insurance policy has been in force for 5 years the insured dies. during the claims process, the insurer discovers that the insured did not disclose material health information that had it known, would have caused the application to be rejected. what can the insurer do at this point in time?

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The only thing the insurance company can do at this time pays the policy's death benefit to the designated beneficiary.

Is the beneficiary of a policy paid when the insured passes away?

The selected beneficiary will get the death benefit when the policy owner passes away, thanks to the life insurance company. If no nominated beneficiary is present, the death benefit will be given to the deceased's estate. Normally, the death benefit is handed out within 30 days of receiving death certificate documentation.

Who is the beneficiary of a life insurance policy's death benefit?

Although you can theoretically select anybody or any organization as a beneficiary, the beneficiaries of a life insurance death benefit are typically your partner, children, or other close family members. You will specify how much of the death benefit each beneficiary should get when naming more than one beneficiary.

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Which situation best describes an opportunity cost? O A. A corporation that begins selling a new product sees its overall profits increase. B. A store that buys a shipment of computers can't afford to buy any new phones. C. An employee who earns a college degree is given a pay raise. о D. A business hires new employees to keep up with growing consumer demand.​

Answers

Opportunity cost can be best described as the cost incurred in letting go of an opportunity in order to gain another.

In the above question, opportunity cost is best described by option B.

The company incurred the loss or cost of letting go of profit that could be gained in buying new phones. It instead chose to buy a shipment of computers. An opportunity cost always involves an instance of loss of opportunity 1 to gain opportunity 2.

In other words, Opportunity cost is a situation arising out of a conflict of interest and a business solution ensuring maximum profitability for an organization.

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______ is the change in total utility that results from the consumption of one more unit of a product.

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The marginal utility is the difference in a consumer's overall utility caused by consuming one more unit.

How Does Marginal Utility Work?

Marginal utility describes the additional enjoyment a consumer receives from having one more unit of a good or service. The concept of marginal utility is used by economists to predict how much of a good consumers would purchase.

The pleasure a consumer experiences from each additional unit of consumption is known as marginal utility. It determines the utility after the initial product is consumed. The marginal utility is the benefit you receive from buying a second bottle of water after first purchasing one.

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programs through which congress provides money to state and local governments on the condition that the funds be employed for purposes defined by the federal government are called

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Grants-in-aid was the program through which congress provides money to state and local governments on the condition that the funds be employed for purposes defined by the federal government.

What is a Grants-in-aid ?

A government grant is money provided to assist a certain project or activity. In addition to private individuals, recipients include state, local, and municipal governments. Federal aid contributions are financed by income tax collections. Since these are grants rather than loans, there is no need to repay them; instead, funds must be used in accordance with the guidelines established by the federal government for that particular award.

With the help of a federal grant, the government can publicly fund a project while maintaining its independence from the state. Standards and conditions are attached to the money.

University faculty members may be given grants-in-aid to pursue a certain area of research, but there are limitations on how the funds may be utilized.

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due to a recession, expected inflation this year is only 2.75%. however, the inflation rate in year 2 and thereafter is expected to be constant at some level above 2.75%. assume that the expectations theory holds and the real risk-free rate (r*) is 1.5%. if the yield on 3-year treasury bonds equals the 1-year yield plus 1.0%, what inflation rate is expected after year 1? round your answer to two decimal places.

Answers

The inflation rate in year 2 and thereafter is expected to be constant at some level above 2.75%.

Yield on 1 year trasury bond: r1=4.25+3.5 = 7.75%

Now, yield is r3 = 7.75+1.5 = 8.25%

r3=r*+inf

8.25=3.5+inf

inf=4.75%

4.75 = (4.25+i+i)/3

14.25 = 4.25 +2i

2i = 10

i = 5%

Inflation expected after year 1 is 5%

The computation of the inflation rate is expected after Year 1 is shown below:-

the Yield on year 1 treasury bond

Let us assume the inflation rate be I

r1 = risk free rate + Inflation rate

= 2.5% + 2.25%

= 5.75%

r3 = r1 + 0.50%

= 5.75% + 1.50%

= 7.25%

Now,

r3 = risk free rate + IP3

= 7.25% = 2.5% + IP3

IP3 = 4.75%

Year 1 Inflation = 4.75%

Year 2 Inflation = I

Year 3 Inflation = 2

So, inflation rate is expected after Year 1 = (3.25% + I + I) ÷ 3 = 4.75%

(3.25% + I + I) = 14.25%

2(I) = 11%

I = 5.5%

answer is 5.5%

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a firm has a general-purpose machine, which has a book value of $300,000 and is worth $500,000 in the market. if the tax rate is 21 percent, what is t

Answers

The opportunity cost is $458,000.

Write a note on opportunity cost.

The opportunity cost is a concept used in microeconomic theory to describe the value or benefit lost by choosing one activity over another.. Simply put, it indicates that by choosing one course of action (such making an investment), you are forgoing the chance to choose an other course of action. The best activity is the one that, after deducting opportunity costs, has the highest return when compared to all other activities.

Taxable capital gain = Market value - Book value

Taxable capital gain = 500,000 - 300, 000 = 200, 000

The taxable capital gain is $200,000.

Next, we compute the opportunity cost.

Opportunity cost = Market value - Taxable capital gain x Tax rate

Opportunity cost = 500, 000 - 200, 000 × 0.21

Opportunity cost = 500, 000 - 42, 000

= 458, 000

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The complete question is given below :

A firm has a general-purpose machine, which has a book value of $300,000 and is worth $500,000 in the market. If the tax rate is 21 percent, what is the opportunity cost of using the machine in a project?

tax functions that accounting and finance professionals may assist clients with include all but the following: a.tax evasion. b.tax compliance. c.esg reporting of certain tax information. d.cash management to ensure timely payment of taxes.

Answers

Tax functions that accounting and finance professionals may assist clients with include all but tax evasion, so correct option is A.

Tax evasion is an illicit movement in which an individual or substance purposely dodges paying a genuine assess obligation. Those caught sidestepping charges are by and large subject to criminal charges and significant punishments.

To willfully fall flat to pay charges may be a government offense beneath the Inside Income Service (IRS) charge code. Charge avoidance is an illicit endeavor to overcome the burden of charges by people, enterprises, trusts, and others.

The accounting work will guarantee that liabilities such as deals assess VAT, pay assess are fittingly tended to. Monetary articulations got to be recorded by the businesses with the enlistment center of companies.

Stock trades are the recorded substances that are required to record them, as well as for coordinate and circuitous assess recording purposes.

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brand-switching studies can be invaluable to brand managers because longitudinal studies that show changes in market shares between several brands can be misleading. true false

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Please help!
Choose the mathematical sentence that most accurately expresses the
information in the problem, and would be most helpful in solving it.
After taking 4 pieces of fruit out of a bag, 12 pieces of fruit remained. How
many pieces of fruit were in the bag to start?
A. 12 +/-4
B. 12 -4
C. 4+/- 12
D. 12-4-f
OE. +4=12
F. /-4-12

f the main body of the purse requires four major sequenced steps, then based on the following information, what is the critical path time? process a: 14 minutes process b: 2 minutes process c: 6 minutes process d: 11 minutes

Answers

Answer: 33 Minutes

Explanation: 14 + 2 + 6 + 11 = 33

If the purse's primary body calls for four sequentially important measures. Consequently, based on the information provided, the critical path time is [tex]33[/tex] minutes.

What does critical path time mean?

The longest series of tasks that must be completed by a certain date in order for the project to be considered successful is known as a critical path in project management. The rest of the project will be delayed if crucial activities take longer than expected.

The critical path technique enables one to evaluate the effects of work delays. Project completion time will be compromised if tasks on the critical path are delayed.

[tex]14 + 2 + 6 + 11 = 33[/tex]

Therefore, the critical path time is [tex]33[/tex] minutes.

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Imagine that you are conducting a competitive analysis for a dog grooming business in your area. Put the steps in order by matching each item to the answer.

Answers

Answer:

identify your niche → step 1

Analyze your own brand → step 2

Compile a list of Competitors → step 3

Divide your competitors in two groups → step 4

Analyze each competitor brand → step 5

Develop a marketing strategy → step 6

Note → I hope these are helpful. If I am wrong then please let me know

What is one way to name a computer document to be able to identify it as the most recent version?
add READ LATER to the end of the file name


add your initials at the end of the file name


add the date at the end of the file name


give the document a completely new name every time it's changed

Answers

Based on the available options and the Microsoft Office techniques, the one way to name a computer document to be able to identify it as the most recent version is to "add the date at the end of the file name."

Naming and Sorting of Documents in Computer

There are straightforward means of naming and sorting file documents in a computer to make it easier to access.

One of the ways of naming a file document is to use a name or phrase that defines the document.

However, in other to quickly identify the document with the most recent version of the edit, it is advisable to add the date at the end of the file.

This will help the user to quickly identify the most recent or latest version as the date will specify the last edit or when the document is created.

Hence, in this case, it is concluded that the correct answer is "add the date at the end of the file name."

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garrison company uses the retail method of inventory costing. it started the year with an inventory that had a retail sales value of $38,000. during the year, garrison purchased inventory with a retail sales value of $768,200. after performing a physical inventory, garrison computed the inventory at retail to be $53,600. the markup is 100% of cost. what is the ending inventory at its estimated cost?

Answers

Garrison company uses the retail method of inventory costing. $34,000 the ending inventory at its estimated cost.

Any group of soldiers stationed in a certain location, initially to guard it, is known as a garrison. The term "garrison" comes from the French "garrison," which is derived from the verb "to equip." Nowadays, the phrase is frequently used to describe specific locations that make up a military installation or a fortified military headquarters. Typically, a garrison is located in a city, town, fort, castle, ship, or other location. Any town with a military base close by is often referred to as a "garrison town."

Arab-Muslim armies used "garrison towns" (Arabic: ) to strengthen their control over local communities throughout the Arab Islamic conquests of Middle Eastern territories. The term "garrison" is also used to refer to any of the major military installations in the UK, including Aldershot, Catterick, Colchester, Tidworth, Bulford, and London.

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The doctrine that allows a creditor to seek recovery from the purchaser of assets even when the purchaser did not expressly assume such liabilities as part of the purchase is called?.

Answers

Successor Liability a rule of state law that permits a creditor to sue the buyer of assets for obligations that weren't taken on as part of a transaction. The idea of successor liability is more frequently used in the contexts of products liability, environmental cleanup, and employment law.

What is Successor Liability?

The idea of successor liability is more frequently used in the contexts of products liability, environmental cleanup, and employment law. In general, the asset acquisition process does not instantly transfer the seller's liabilities to the asset buyer. However, if a court decides that the requirements of one of the following exceptions are satisfied, the buyer may occasionally be held accountable for the seller's obligations:

The obligations are impliedly or expressly assumed by the buyer.According to state law, the deal constitutes a de facto merger.

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jan throng invested $31,000 in the invesco charter mutual fund. this fund is a front load fund with 5.50 percent commission. calculate the amount of commission jan will pay when the fund is purchased.

Answers

The amount of commission Jan will pay when the fund is purchased is $1,705.

What do you mean by fund?

A fund is a collection of money set aside for a specific purpose. A fund can be established for a variety of reasons, such as the government setting aside funds to build a new convention centre, a college setting aside funds to grant a scholarship, or an insurance company setting aside funds to repay its customers' claims.

The investment is $31,000 in the invesco charter mutual fund and fund is a front load fund with 5.50 percent commission,

so, 31000 x 5.50 %

= $1,705 commission paid

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zscaler started as an original equipment manufacturing firm (oem) for brand-name mobile device companies. later, it started offering a lineup of innovative and high-performance smartphones by acquiring buildit, a san francisco-based design firm. this strategic move of zscaler is known as

Answers

The strategic move of Zscaler is known as Forward Vertical Integration.

Forward Vertical Integration technique is a kind of business strategy in which a company takes charge or takes under control all the factors and all the stages which are present in the supply chain in creating its product. This strategy improves the business of the products of company by providing them a bigger market and distribution channel for the selling of their products. It increases profits as well as the efficiency within a company. Also, by using this strategy the delays which occur in distribution of the products get reduced to a large extent. There is also a decline in the transportation cost of the products in this strategy. Examples include Opening own retail shops at different locations in order to increase the product distribution.

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2. if the real exchange rate is 1, then there is a a. surplus of 100 so the real exchange rate will rise. b. shortage of 100 so the real exchange rate will rise. c. surplus of 100 so the real exchange rate will fall. d. shortage of 100 so the real exchange rate will fall.

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If the real exchange rate is 1, then there is a  c. surplus of 100 so the real exchange rate will fall.

This is, the exchange rate is the rate of a rustic's foreign money in terms of some other forex. For instance, if the alternate charge between the U.S. Dollar (USD) and the Japanese yen (JPY) is one hundred twenty yen consistent with the dollar, one U.S. Dollar may be exchanged for one hundred twenty yen in foreign currency markets.

Alternate prices are constantly shifting, based totally on supply and demand. Whether or not one forex is in better call than another, depends on the perceived price of owning it, either to pay for items and services or as an investment.

It serves as a simple hyperlink among the local and overseas markets for various goods, services, and financial belongings. With the usage of the change price, we are capable of comparing charges of goods, offerings, and assets quoted in different currencies.

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