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Semenov [28]
2 years ago
14

Assume that you are the president of your company and paid a year-end bonus according to the amount of net income earned during

the year. When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain, using an example to support your answer. Would your choice be the same if prices were falling?
Business
1 answer:
kherson [118]2 years ago
8 0

As the president of the company, at a time when the prices are said to  be rising, what is would do is to choose the Weighted average cost.

<h3>Why I would have to choose the Weighted average cost</h3>

This due to the fact that it is going to be more satisfactory to have the lower Bonus bill.

The year end bonus is an amount that is calculated from all of the net income from the year.

A lower net income is only going going to help to bring about a smaller bonus bill.

At a time when the prices are falling, the FIFO is what would be the best choice. It gives a smaller ending cost of inventory since the ending prices are going to be at their lowest.

Read more on FIFO here: brainly.com/question/12883706

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A profit-maximizing entrepreneur rents an apple orchard for a day. He is a price taker in both the market for labor and the mark
yaroslaw [1]

Answer:

c. 5

Explanation:

L       Q     MPL (ΔinQ/ΔinL)    VMPL

4      52  

5      60              8                       80

6      66              6                       60

7      70               4                       40

8 72               2                       20

Note: Labour hired per day = L, Total product = Q, Marginal Product of labor=MPL, VMPL =Price*MPL

A firm will maximize the profit by increasing the number of labor as long as VMPL is higher than or equal to the wage rate. In this case, we observe that VMPL ($80)>wage rate ($75) for L=5 but VMPL ($60)<wage rate ($75) for L=6. So, the optimal number of labor to be hired is 5.

7 0
2 years ago
You would like to establish a trust fund that will provide $50,000 a year forever for your heirs. The trust fund is going to be
Finger [1]

Answer:

$1,818,181.81

Explanation:

Data provided:

Amount that will be provided a year = $50,000

Expected rate of return = 2.75%

Now,

The Present value of perpetuity is given as:

Present value of perpetuity = \frac{\textup{Annual return}}{\textup{Expected rate of return}}

on substituting the respective values, we get

Present value of perpetuity = \frac{\textup{50,000}}{\textup{0.0275}}

or

Present value of perpetuity = $1,818,181.81

Hence,

The amount that must be deposited today to fund this gift is $1,818,181.81

5 0
3 years ago
Suppose there is a large increase in the money supply in an economy that previously had low inflation. As a consequence, aggrega
hoa [83]

Answer:

It illustrates that the classical model of the price level best applies to economies with persistently high inflation.

Explanation:

When a very low inflation rate has been constant in an economy, and the money supply increases suddenly, in the short run that change will not immediately increase the inflation rate, but instead it will increase real output.

Classical economists argue that an increase in the money supply will immediately affect the inflation rate, but that theory applies mostly to economies that have a certain level of inflation. For example, for the past 12 years, European nations have been experiencing very low inflation rates, sometimes even negative rates. But during that same period, the European Central Bank has carried on a huge expansionary policy. It favored economic growth, although not as much as expected, but it didn't skyrocket inflation rate as the classical economy model predicted.

3 0
3 years ago
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This technique is called data mining.
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________ measures the percentage of profit earned on each sales dollar before interest and taxes but after all costs and expense
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Hello!

The correct answer for the blank is: Operating profit margin.

I really hope you found this helpful! :)
7 0
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