Select the correct answer.

A survey indicated that chocolate is Americans' favorite ice-cream flavor. For each of the following, indicate the possible effe

ryzh [129]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

For each of the following, indicate the possible effects on demand, supply, or both as well as equilibrium price and quantity of chocolate ice cream.

a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk-producing cattle in their herds by a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream.

Demand: decreases (because of the higher price)

Supply: restrains.

Equilibrium price: rises

Equilibrium quantity: decreases

b. A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits.

Demand: increases

Supply: increases

Equilibrium price: rise

Equilibrium quantity: increases

c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream.

Demand: decreases

Supply: decreases

Equilibrium price: decrease

Equilibrium quantity: decrease

d. New technology for mixing and freezing ice cream lowers manufacturers' costs of producing chocolate ice cream.

Demand: remains

Supply: increase

Equilibrium price:

Equilibrium quantity:

4 0

4 years ago

Assume a company's current ratio and acid-test ratio are less than 1.0 before it purchases inventory on credit. When it makes th

I am Lyosha [343]

Answer: b. Its quick ratio decreases.

Explanation:

The Quick ratio is calculated net of inventory to determine if a company can cover its current liabilities with its more liquid current assets. The formula is to subtract Inventory from the Current Assets and then divided that by the Currency liabilities.

The Quick ratio will be less than before because the number of current assets will not change but the amount of current liabilities will change as the goods were purchased on credit. With a larger denominator, the resultant ratio will be less than before.

7 0

3 years ago

Specialization can help a country's economy by:*

Alika [10]

Answer:

D)reducing its need to be self-sufficient,

Explanation:

Specialisation by a country's economy means that it produces only the specialised goods & even export it, import the other goods.

It decreases opportunity costs, decreases cost of voluntary exchanges. Higher level of specialisation implies there is increased labor force division.

However, it reduces need of country to be self sufficient. As, it can gainfully trade its specialised goods for other goods (in which other economy specialises).

3 0

3 years ago

Read 2 more answers

The Corner Bakery has a bond issue outstanding that matures in 7 years. The bonds pay interest semi-annually. Currently, the bon

MaRussiya [10]

Answer:

Ans. The after tax cost of this bond is 2.09%

Explanation:

Hi, first we need to establish the cash flow of the bond, so we can find the after tax cost of the bond. After we find the after tax cash flow of the bond, we must use the IRR function of MS Excel to find the semi-annual cost of this debt, but, all after tax debts should be presented in annual basis. Let me walk you through the process. First, let me show you how it should look.

Face Value 100

price 101,4

years 7 years

Coupon 9%

Coupon 4,5% semi-annually

tax 30%

Per Cash Flow After Tax

0 101,4 101,4

1 -4,5 -3,15

2 -4,5 -3,15

3 -4,5 -3,15

4 -4,5 -3,15

5 -4,5 -3,15

6 -4,5 -3,15

7 -4,5 -3,15

8 -4,5 -3,15

9 -4,5 -3,15

10 -4,5 -3,15

11 -4,5 -3,15

12 -4,5 -3,15

13 -4,5 -3,15

14 -104,5 -73,15

Cost of Debt 1,04% semi-annually

Cost of Debt 2,09% annually

Ok, now, as you can see, there are 14 periods, that is because the coupon is paid semi-annually, the way to find the cash flow (I mean, the bond´s coupon) is:

$Coupon (semi-annual)=(Face Value)x\frac{0.09}{2} =4.5$

At the end (period 14), we need to add the face value and the coupon, that is $100+$4.5=$104.5

Now, to find the value of the third column (after-tax cost), we do the following.

$After-tax-Cost=Couponx(1-taxes)=4.5(1-0.3)=3.15\\$

Now, consider this, you are receiving 101.4 for every 100 of debt, that means that you are receiving more money than the emission value, and paying interests over 100 instead of 101.4, that is why we have to use the IRR excel function to find out the semi-annual cost of debt. That is, 1.04%.

Now, to make this an effective annual rate, we calculate it like this.

$EffectiveAnnualRate=(1+semi-annual Rate)^{\frac{1}{2} } -1=(1+0.0104)^{\frac{1}{2} } -1=0.0209$

Finally, the after-tax cost of this debt is = 2.09%

Best of luck.

6 0

3 years ago

Which of the following refers to the percentage of an individual customer's purchase of a product over time within a single br

Sergio [31]

Answer:

c. Share of customer

Explanation:

Share of customer is the percentage which a company gets from the customer when he/she continually purchase the products. it helps in retaining customer which helps in customer relationship management and can help marketers increase the percentage which they get from the customer.

5 0

3 years ago