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Bumek [7]
3 years ago
9

"what is meant by comparative​ statics? explain with an example".

Business
1 answer:
maksim [4K]3 years ago
6 0
<span>An adjustment in a result or we can say that this is a transformation that is brought about as a result of adding another unit of unit of input an example is increased production that is brought about as a result of the purchase of an equipment, another example is that of increase in work effort that lead to increased wage.</span>
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During the current year ending on December 31, BSP Company completed the following transactions:a.On January 1, purchased a pate
Mariana [72]

Answer:

A. Patent = 28000 / 7 years = 4000

B. Goodwill = Indefinite life, so amortization is zero

C. Leasehold improvements = Construction is done on 31 December hence no depreciation for the current year

D. Ordinary repairs and maintenance = Revenue expenditure, so no depreciation

E. Machine A = Already recorded depreciation So no additional depredation as it is sold

F. Machine B (31000 - 7000) / 15 year = 1600

5 0
3 years ago
Pretzelmania, Inc., issues 5%, 20-year bonds with a face amount of $50,000 for $44,221 on January 1, 2021. The market interest r
Art [367]

Answer: Please see Explanation for answer.

Explanation:

January 01, 2021:

Cash Debit 44,221

Bonds Payable Credit 44,221

Since the bonds were sold at a discount, the entry to record the first interest payment (using straight line amortization of the premium) would be:

Interest expense ($44,221× 6% × 6months/12months ) = $1,326.63 =$1,327

Cash is given as ($50,000 × 5% ×6months /12months) = $1,250

June 30, 2021:

Interest Expense Debit---$1,326.63 Bonds Payable Credit $77

Cash Credit $1,250

5 0
2 years ago
A common stock pays an annual dividend per share of $1.80. The risk-free rate is 5%, and the risk premium for this stock is 4%.
ArbitrLikvidat [17]

Answer:

The value of the stock today is $20

Explanation:

Using the CAPM equation, we first calculate the required rate of retunr on the stock.

The equation for CAPM is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market
  • Beta * rpM is the risk premium on stock

r = 0.05 + 0.04

r = 0.09 or 9%

The value of the stock can be calculated using the zero growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock. As the dividend from the stock is expected to remain constant through out to an indefinite period, the value of the stock today is,

P0 = Dividend / r

P0 = 1.8 / 0.09

P0 = $20

3 0
2 years ago
Economist: On average, the emergency treatment for an elderly person for injuries resulting from a fall costs $11,000. A new the
madreJ [45]

Answer: <em>Option (C) is correct.</em>

Explanation:

<em>A recurrent conclusion of injuries occurred while falling is a long-term pain, medication for these are not taken in consideration among  intermediate per-person costs of emergency cure for aged or old individuals's laceration from such falls</em>, if true, will have the tendency to seriously undermines conclusion of argument given in the comprehension.

This states that argument given in the comprehension has not taken in consideration cost for medicine which overall will increase cost. Thereby with an increase in cost the given statement will become untrue since the cost of surgery and medicine combined is higher than cost, in such a case treatment would be more economical. Therefore it undermines conclusion of argument.

8 0
3 years ago
Cynthia was charged $300 for specialist office visit her and indemnity policy will pay $125; what amount will she have to pay?
almond37 [142]
<span>Cynthia will have to pay the $175 that was not covered by her indemnity policy. An indemnity policy typically pays a fixed amount for qualified medical services, with the policy-holder responsible for the balance.</span>
5 0
3 years ago
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