The worth of $1,000 gift that Nadia is going to receive next year will be less than current value because as per time value of money current money has more worth than same money in future.
The idea of the time value of money (TVM) states that a monetary amount is valuable more now than it would be at a later point in time owing to its potential for earnings in the meantime. A fundamental idea in finance is the time value of money. Amount of money in your possession is considerably more valuable than a similar sum that will be delivered in the future. The discounted present value is another name for the time value of money.
Therefore, the value of gift will be less than $1000, if she is going to receive the same gift worth $1,000, in future due to the concept of time value of money.
The complete question is here:
Nadia is going to receive $1,000 from her grandparents next year. according to the time value of money, the gift of $1,000 is worth a gift of $1,000 if she received it today
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what were business practices employed by the titans of industry in the late 1800s? responses developing international cartels and lowering tariffs developing international cartels and lowering tariffs building monopolies and forming trusts building monopolies and forming trusts standardizing production and regenerating crafts standardizing production and regenerating crafts integrating vertically and increasing competition
Business practices employed by the Titans of industry in the late 1800s, is building monopolies and forming trusts. So, the correct answer is (b).
A monopoly is a market framework where one manufacturer or seller controls a significant amount of influence within a particular market. Monopolies are forbidden in unrestricted economies as they limit customer alternatives and impede competitiveness.
Monopolies have the ability to establish prices and erect impediments to entry for competing companies. Companies could become monopolies by consolidating their businesses to control the entire distribution network from manufacturing to sales, or by acquiring rival businesses and becoming the sole producer.
During 1800s, most of the Titans of the industries were employing the business practice of forming monopolies so that there will be no one to compete as well as forming trusts.
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In the ________ activity of scm, supply chain managers schedule the activities necessary for production, testing, packaging, and preparation for delivery.
In the Supply chain management activity of scm, supply chain managers schedule the activities necessary for production, testing, packaging, and preparation for delivery.
Supply chain control (SCM) is oversight and control of all the sports required for a agency to convert uncooked materials into finished products which might be then sold to cease-customers.
SCM offers centralized manipulate for the planning, layout, production, inventory, and distribution levels required to provide and sell a employer's merchandise.
A purpose of deliver chain control is to enhance efficiency by using coordinating the efforts of the various entities inside the supply chain. this will bring about a employer reaching a competitive benefit over its opponents and improving the quality of the goods it produces, each of which
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carey opens a law office in chicago on january 1, 2021. on january 1, 2021, carey purchases an annual subscription to a law journal for $170 and a 1-year legal reference service for $1,500. carey also subscribes to chicago magazine for $54 so she can find great places to take client's to dinner and review the best 50 lawyers in chicago list published each year. calculate carey's deduction for the above items for the 2021 tax year. $fill in the blank 1
If carey also subscribes to chicago magazine for $54 so she can find great places to take client's to dinner and review the best 50 lawyers in chicago list published each year. carey's deduction on for the above items for the 2021 tax year is : $1724
Determining carey's deductionUsing this formula
Deduction = Annual subscription + Legal reference service + Chicago magazine
Where:
Annual subscription = $170
Legal reference service = $1500
Chicago magazine = $54
Let plug in the formula
Deduction = $170 + $1500 + $54
Deduction = $1724
Therefore the deduction is the amount of $1724.
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during arnold and co.'s most recent fiscal year, the income tax payable account had a beginning balance of $42,500. at the end of the year, the income tax payable account still reported a balance of $42,500. the income statement showed income tax expense of $170,000. how much cash was paid for income tax during the year?
$0 was paid for income taxes during the year.
What is income taxes?
An income tax is a tax imposed on individuals or businesses (taxpayers) based on their income or profits. In most cases, income tax is calculated as the product of a tax rate multiplied by the taxable income. Taxation rates may differ depending on the taxpayer's characteristics as well as the type of income. The tax rate may rise as taxable income rises. Corporate tax is a type of tax levied on businesses that is typically levied at a flat rate. Individual income is frequently taxed at progressive rates, with the tax rate increasing with each extra item of income. The majority of states exempt local charitable organisations from taxation. Investment income may be taxed at a different rate than other kinds of income.
The income tax payable account had a beginning balance of $42,500, and at the end of the year, the income tax payable account still reported a balance of $42,500. The income statement showed income tax expense of $170,000.
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we all know there are lots of no-good, lying, dishonest politicians who have no real-world business experience. many of them can't even understand simple supply and demand concepts that are taught in microeconomics. yet many of them will say anything or do anything to get elected because they are simply power-hungry and love the money that flows in from special interest groups that will make them rich. when a politician like this puts their own interests ahead of the voters, then what do we call this in economics?
The quantity of a good, service, or commodity that is offered and the demand for it are factors that affect its price.
Describe how supply and demand work?The quantity of a good, service, or commodity that is offered and the demand for it are factors that affect its price.Two fundamental economic theories are combined in the law of supply and demand to explain how changes in the price of a resource, good, or service impact its supply and demand. Supply grows as the price rises, but demand drops. In contrast, as the price falls, supply is constrained and demand is increased.Demand is the market's desire to buy the good or service, whereas supply is the market's capacity to produce the commodity or service.The economic interaction between the sellers and the consumers of various goods is governed by the law of supply and demand.To learn more about supply and demand refer to:
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big-mouth frog corporation had revenues of $200,000, expenses of $120,000, and dividends of $30,000. when income summary is closed to retained earnings, the amount of the debit or credit to retained earnings is a
A credit of $80,000 will go toward retained earnings.
What are retained earnings ?After deducting dividend payments, a company's retained earnings are its total net earnings or profits. The term "retained" refers to a crucial idea in accounting that describes how earnings were held by the corporation rather than distributed to shareholders as dividends.
Because of this, retained earnings go down when a business experiences a loss or pays dividends and go up when new profits are generated.
To solve the question :
Net income = Revenues - Expenses
Net income = $200,000 - $120,000
Net income = $80,000
Particulars Debit Credit
Income summary $80,000 -
Retained earnings - $80,000
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many scholars think that more effective corporate regulation and harsher punishment of corporate criminals may help deter corporate crime. group of answer choices true false
It is true that many scholars think that more effective corporate regulation and harsher punishment of corporate criminals may help deter corporate crime.
What is meant by corporate crime?The term corporate crime is the term that has to do with the crimes that are committed by the people that are working in the corporate environments. That is the crimes that those working in the white collar jobs would commit.
The crimes are usually done for the benefits of the organizations that have employed them. It is believed that if the punishment is harsher, then it would come to a minimum/.
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whenever the president of the local public university promotes the institution, he emphasizes the university's price (much lower than neighboring private colleges) and high quality. he is positioning the institution based primarily on
The President of the local public university is positioning the institution based primarily on the value proposition.
What is value proposition ?A value proposition is a short sentence that expresses the advantage of your product or service that you guarantee to provide for your clients. In the end, it's what draws your ideal buyer to your goods. A value proposition explains what your company does better than the competition and the benefits of working with you or purchasing your goods.
A strong value proposition satisfies three requirements:
It is particular: What particular advantages would your target customer get?It is customer-focused: How will your product alleviate their suffering or enhance their quality of life?How is it exclusive and desired at the same time? How well does it draw attention to your competitive advantage and distinguish you from rivals?To know more about, value proposition, visit :
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Kenda needs her manager to review the memo she wrote so that she can send it out to her clients before the end of the day. what's the best way for kendra to end her email to her manager?
The best way for kendra to end her email to her manager is: A. Please review the memo and let me know if you have any changes by 3 p.m. today.
Who is a manager?A manager can be defined as someone whose duty is to plan, supervise, control and coordinate the day to day activities of a business operation so as to ensure smooth running based on the fact that effectively managing a business operation can enables the company to achieve their set goals.
Memo can be defined as the way of sending out an official message in which the message or email is address to a person that is either within an organization or a person outside an organization.
Based on the given scenario since she has to submit the memo to the client before the end of the day the best thing is to tell her manager to review the memo as the manager may have something to add or remove from what is in the memo.
Therefore the correct option is A.
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The complete question is :
Kenda needs her manager to review the memo she wrote so that she can send it out to her clients before the end of the day. What's the BEST way for Kendra to end her email to her manager?
Please review the memo and let me know if you have any changes by 3 p.m. today.
Here's the memo I want to send clients today.
Please review the memo for any spelling or grammatical errors.
g suppose that gdp per capita is increasing, but gdp per worker is also increasing. whatcan one infer about the growth rate of the working-age fraction of the population? a) it is zero. b) it is decreasing. c) it is increasing. d) cannot tell.
A comparative understanding of economic prosperity and global economic advancements can be gained by analyzing GDP per capita on a global scale.
The per capita calculation takes into account both GDP and population. Therefore, the highest GDP per capita may or may not be found in the highest GDP countries.
As nations grow through technical advancements, their per capita GDP may also rise significantly. With a constant population, technology can be a game-changing element in raising a nation's per capita position.
Data from the World Bank show that in 2021, the global per capita GDP rose by an average of 4.8%. Despite having populations of over a billion people each, economies like China and India have experienced per capita GDP growth rates well above the global average in the twenty-first century. This is due to the financial reforms that China began in the late 1970s and India in the middle of the 1990s.
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the deliberate floating on funds between two or more bank accounts in order to make it appear that more cash is present than is really the case is called
Check kiting is the purposeful transfer of money between two or more bank accounts to give the impression that there is more cash on hand than there actually is.
Elaborate on check kiting.A type of check fraud called check kiting or cheque kiting (see spelling variations) involves using fictitious cash from a checking or other bank account by taking advantage of the float. Checks are abused in this way to get unlawful credit instead of being utilized as a negotiable instrument.
The term "kiting" refers to the deliberate writing of a check from an account in one bank for a sum greater than the account balance, followed by the writing of a check from an account in another bank with insufficient funds, the second check being used to cover the insufficient funds from the first account. Check kiting is the practice of artificially inflating a checking account's balance to enable the clearing of written checks that would otherwise bounce. Paper hanging is the slang term for fraud that occurs when there are no plans to replenish the account. Playing the float refers to making a cheque with inadequate funds with the idea that the funds will be available by payday.
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keatts company's bank statement included a nsf check written by one of its customers. what effect will recognizing the nsf check have on the company's financial statements?
Checks returned for insufficient funds (NSF) are noted on the bank reconciliation financial statement as an amended book balance line item, with the NSF amount subtracted from its balance.
To determine the genuine cash amount, the unadjusted book balance is subtracted. The NSF check should be deducted from the unadjusted book balance to get the true cash balance because the company was unaware of it before receiving the bank financial statement. The depositor receives their check back from the bank, and the amount is taken out of their account. Therefore, on the bank reconciliation, NSF checks must be deducted from the company's book balance.
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a report that lists the types and amounts of costs incurred in manufacturing is a: multiple choice manufacturer balance sheet. manufacturer period cost statement. balanced scorecard. sales journal. schedule of cost of goods manufactured.
The schedule of cost of goods manufactured is the report that lists the types and amounts of costs incurred in the manufacture of a good.
What is the purpose of schedule of cost of goods manufactured?This report is intended to help organizations make more effective decisions based on the company's actual financial situation. The total manufacturing cost of a period helps the company to implement a pricing strategy, cost reduction and projections more accurately.
To calculate the cost of the manufactured good, the organization must use the following calculation:
COGM=Initial WIP Inventory+Total Manufacturing Costs-Final Wip Inventory.Therefore, total manufacturing costs must include both direct and indirect costs of the production process, such as labor and material costs.
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if two restaurant managers disagreed about which restaurant should get additional funds to pay for extra staff on the restaurant floor, what would be the source of their conflict? resource constraints organizational structure differing values differing task goals
Differing process goals would be the root of their disagreement if the owner and one of the restaurant managers got into a fight over whether it was more crucial to concentrate on filling chef positions or ensure that the wait staff in the restaurant performed well.
In general, the term "conflict" refers to any major debate and disagreement about a significant issue; hence, when two persons or groups are engaged in conflict, restaurant they are engaged in a severe argument or lack of agreement over specific issues managers.
A process objective in a business is a goal that specifies the procedures to be followed in order to promote quality results. They frequently concentrate on accomplishing something rather than achieving a goal, such as preventing outside interference, which is typically seen as entirely the employee's responsibility in order to meet.
As a result, interpersonal conflicts can arise when different process goals are set, especially restaurant when those goals have more to do with communication techniques used to resolve conflicts and guide decision-making managers.
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_________ is a communication standard that enables business partners to exchange routine documents, such as purchase orders, electronically.
Electronic Data Interchange (EDI) is a communication standard that enables business partners to exchange routine documents.
Electronic data interchange (EDI) refers to the idea of organizations electronically exchanging information such as purchase requisitions and invoices, documents that was previously conveyed on paper. To enable parties to transact such instruments without the need for specific arrangements, technical specifications for EDI exist. There are numerous EDI specifications, some of which cater to the demands of certain industries or geographical areas, and EDI has been around at most since the early 1970s. Additionally, it explicitly alludes to a set of guidelines. EDI can be summed up as the automated movement of structured data between computer systems using pre-established message standards.
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an arrangement that allows two or more individuals to split a traditional 40-hour-a-week job is called . job sharing telecommuting job rotation gainsharing flextime
When two (or more) employees share a full-time job's responsibilities, they each work a part-time schedule. Alternatively, two (or more) employees who have unrelated part-time jobs share the same budget line.
What advantages does job sharing offer?Advantages of job sharing for the worker : Take advantage of the flexibility of part-time work. Skills and knowledge exchange between job sharers. While changing the structure of their hours, they maintain their degree of seniority with their company. Maintaining an enhanced work/life balance while meeting the demands of a demanding role.
In order for a job to be considered shared, both employees must be responsible for the majority of its duties and work together to complete them. As an illustration, two workers might share a single Community Health Nurse role. The majority of these benefits and drawbacks are applicable to part-time work in general.
Greater sharing of knowledge and skills : When you work together with other employees, you can discuss many elements of the job and trade talents and expertise. Employees can learn a lot more quickly from other employees who are performing the same job as them, especially if they are new to the position or the business.
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According to the etextbook, _____________ certification of your company can prove to other companies that your company is committed to sustainability at an organizational level.
According to the etextbook, ISO 14000 certification of your company can prove to other companies that your company is committed to sustainability at an organizational level.
In the field of business, ISO 14000 can be described as a certification that helps in the management and organization of a business. By this certification, a business can claim that they operate under the organizational level.
ISO 14000 helps to work under environmental regulations and comes up with ways to increase the sustainability of a company.
This certification acts as a proof to claim to other organizations that your business has to be regarded at the company level.
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a guilderian trader buys a 150 flop barrel of florish pickles by exchanging 15 gulps, and a florish trader buys a 8 gulp crate of guilderian apples by exchanging 80 flops. then the gulp appreciates to 25 flops per gulp. what price must the guilderian pay for the same 150 flop barrel of pickles? gulps how much must the florish trader pay for the same 8 gulp crate of apples? flops
The guilderian would need to pay 375 flops for the 150 flop barrel of pickles. The florish trader would need to pay 200 flops for the 8 gulp crate of apples.
What is trader?
A trader is an individual who buys and sells financial instruments such as stocks, bonds, commodities, and currencies. The function is comparable to that of a brokerage, except that traders normally operate on their own behalf, whereas brokers act on behalf of their clients.
Traders are the most obvious human emblems of the capital markets, particularly those who operate on the increasingly scarce face-to-face trading floors. No market turbulence news item is complete without images of traders gesticulating furiously or looking at computer screens.
The primary distinction between traders is the length of time they retain their possessions. Traders tend to profit from short trends and price swings, whilst investors are recognised for keeping their investments for a lengthier length of time.
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in the solow growth model, increases in capital output and the amount of output used to replace depreciating capital. a) increase; increase b) decrease; increase c) decrease; decrease d) increase; decrease
In the solow growth model, increases in capital increase output and the increase amount of output used to replace depreciating capital.
Option A is correct .
Solow Growth model :
The Solow – Growth model or exogenous growth model is an profitable model of long- run profitable growth. It attempts to clarify long- run profitable growth by looking at capital collection, labor or population growth, and increases in productivity largely driven by technological progress. Solow growth model is a long- term model of profitable growth by looking at three main factors, videlicet capital collection, labor growth, and multifactor productivity. For the ultimate, economists relate to technological process, which affects the other two variables, labor, and capital.
What happens in Solow model when productivity increases?The increase in productivity means that at every position of capital per worker, workers produce further affair. This also means that at a given rate of saving, further is invested. So there's an original increase in affair and investment due to the change in productivity.
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Yuan wants to analyze his idea for an entrepreneurial venture using a structured approach that looks at various aspects of the proposed venture and how viable they are. This is known as ________.
Yuan wishes to assess his concept for a business Entrepreneurship in an organized manner that considers the viability of its numerous components. A feasibility study is what this is.
Entrepreneurship is the process of producing or removing economic value. With this definition, entrepreneurship is considered as change, typically involving risk above and above what is typical when beginning a business, and maybe involving values other than just economic ones. An entrepreneur is a person who starts and/or invests in one or more enterprises, taking on the most of the risks and reaping the majority of the benefits.
The term "entrepreneurship" refers to the act of starting a business. The entrepreneur is frequently viewed as an innovator, a source of novel concepts, products, services, and/or business models. The process of creating, establishing, and operating a new business has been the focus of more specific definitions of entrepreneurship.
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symbols in organizational culture represent . multiple choice question. objects or actions that convey an organization's most important values to others narratives based on true events which are repeated to emphasize particular values activities that celebrate important occasions and accomplishments in the organization's life
Symbols in organizational culture represent objects or actions that convey an organization's most important values to others.
Symbols are possibly the most crucial issue of a lifestyle. Symbols are gadgets, not always bodily, that hold meaning for the contributors of the corporation.
The means of the symbol expresses in some methods the values the corporation holds critical.
They offer identification, generally shared values, and provide visibility to tradition.
They're the signs and symptoms of your brand. It's one issue to keep in mind that symbols (plus myths and rituals) express a logo.
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redesign the process so that it can achieve the desired output. b use an alternative process that can achieve the desired output c retain the current process but attempt to eliminate unacceptable output using 100% inspection d see whether specs could be relaxed without adversely affecting customer satisfaction. e all of the above
If the process is in control but not capable, I will redesign the process so that it can achieve the desired output.
Following the creation of strategies and plans, management's main task is to take action to see that they are carried out or, if circumstances call for it, amended. This is the primary management characteristic of redesign and control. Because management often involves guiding the actions of others, a key component of the control function is making sure other people carry out the necessary tasks.
Process redesign is a strategy for ensuring that a certain collection of interconnected tasks is carried out accurately and as effectively as possible. The management literature is replete with advice on how to improve manipulation. An overview of a few different types of dimensions and feedback procedures is typically included in this advice.
Complete Question
if the process is in control but not capable, what would you do? a redesign of the process so that it can achieve the desired output. b use an alternative process that can achieve the desired output c retain the current process but attempt to eliminate unacceptable output using 100% inspection d see whether specs could be relaxed without adversely affecting customer satisfaction. e all of the above.
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an accounting information system (ais) processes to provide users with . group of answer choices data; transactions information; data data; benefits data; information
To provide users with information, AIS processes data. Accounting Information System transforms data into something usable and relevant from the raw input, which is not much use to the users.
Explain about the Information?
Information about your business is data that is pertinent, valuable, or meaningful to it. Any materials that satisfy the requirements for being pertinent, valuable, or meaningful for your organization would be included, including reports, spreadsheets, metrics, regulatory reporting, web pages, documents, dashboards, etc.
Data helps business owners understand their consumers, predict client behavior patterns, spot trends, improve the quality of services they give, decrease expenses, develop new products, and more. This assistance extends from marketing and sales to HR and IT.
It is considered that accurate information helps decision-making, increases productivity, and gives the organization that has more knowledge than the competition a competitive edge.
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What is promotion?
A.
It is the method of demonstrating how marketing mix can be implemented in a business.
B.
It is the method of communicating the process of buying a product.
C.
It is the method of creating awareness about a product amongst the people.
D.
It is the method of informing customers about the functions of marketing.
Answer: It is the method of creating awareness about a product amongst the people.
Explanation:
xyz is a publicly traded company and its stock has been doing well for the last several years. xyz is planning to expand into new markets and would like to raise additional capital to finance this expansion. how may this be done?
This can be done if XYZ is planning in setting up a new manufacturing plant and raising money through Shares.
The practise of obtaining money through the selling of shares is known as equity financing. Companies raise money because they can need it to pay expenses in the short term or because they have a long-term objective and need money to invest in their expansion.How can shares be sold to raise money?
purchasing shares A mature corporation can also raise money by selling shares in their business. For a certain sum, an investor can purchase firm shares, thus giving them ownership in the business. As the business expands, this enables investors to share in the profits.To learn more about Equity financing, click the links
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what should an organization consider when offering incentive pay? (select all that apply.)multiple select question.the strengths and weaknesses of each type of incentivewhether low-achieving employees will feel slighted when their co-workers earn incentive rewardswhat kind of employee will be attracted to the organization because of the incentives being offeredhow the incentive will help achieve the organization's goals
The strengths and weaknesses of each type of incentive, What kind of employee will be attracted to the organization because of the incentives being offered, How the incentive will help achieve the organization's goals.
Incentives, broadly speaking, are any methods of persuading someone to change their behavior. By stating that more incentives result in greater levels of effort and, thus, higher levels of performance, the basic law of economics and the laws of behavior emphasize the importance of incentives.
There are two types of incentives: intrinsic incentives and extrinsic incentives. People's behavior is driven by internal motivations. They are frequently more motivated by the work itself or the internal reward during activities than by the outward reward. There are various internal rewards. For instance, engaging in activities may gratify people's sense of accomplishment and make them feel good.
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Medicare and social security are mandatory spending categories funded by which type of taxes that are withheld from your paycheck?.
Medicare and social security are mandatory spending categories funded by FICA taxes that are withheld from your paycheck.
A tax is a obligatory financial fee or a few different kind of levy imposed on a taxpayer with the aid of a governmental organization that allows you to fund authorities spending and diverse public prices
Taxes are mandatory contributions levied on individuals or businesses through a central authority entity—whether or not nearby, local, or national. Tax sales finance government sports, consisting of public works and services consisting of roads and colleges, or applications including Social protection and Medicare.
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tops n bottoms corporation reported sales for 2022 of $50 million. tops n bottoms listed $4 million of inventory on its balance sheet. using a 365-day year, how many days did tops n bottoms' inventory stay on the premises? how many times per year did tops n bottoms' inventory turnover? multiple choice 29.2 days, 12.5 times, respectively 12.5 days, 29.2 times, respectively 0.08 days, 12.5 times, respectively 29.2 days, 0.0345 times, respectively
Inventory turnover reveals how quickly a company's inventory changes hands. Inventory that moves quickly has a high inventory turnover. A company might decrease its need for working capital by boosting inventory turnover.
Inventory Turnover= (Value of Inventory/Sales)*365
=($4million/ $50 million)*365
=29.20 days
Inventory Turnover= Sales/ Inventory
= $50 million/$4million
= 12.50
Inventory turnover measures how quickly stock is sold, used and replaced. The cost of products is divided by the average inventory for the same time period to determine the inventory turnover ratio. Higher ratios typically indicate robust sales, while lower ones indicate dismal sales.
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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?
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.To know more about, subsidy, visit :
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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.
assume a marginal propensity to consume of 0.75. which of the following fiscal policies could correct the economic situation above? decreasing taxes by $60 billion increasing taxes by $80 billion increasing spending by $60 billion decreasing spending by $80 billion increasing spending by $240 billion
Based on the economic situation presented, the fiscal policy that would correct the situation is increasing spending by $60 billion.
What fiscal policy should the government use?Aggregate demand is $400 billion when the long term average should be $640 billion so this is a recession.
The difference in the aggregate demand is:
= 640 - 400
= $240 billion
This means that the government needs to spend an amount that will lead to an increase in aggregate demand of $240 billion.
This amount can be found by the multiplier:
= 1 / (1 - marginal propensity to consume)
= 1 / ( 1 - 0.75)
= 4
The amount is:
= Recession gap / Multiplier
= 240 / 4
= $60 billion
Government should increase spending by $60 billion.
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