Answer:
- A. They are more liquid than others in their industry.
- C. They have sufficient quick assets to pay off short-term debt if needed.
Explanation:
The Acid-test and current ratios are used to measure the liquidity of a company with higher figures meaning more liquidity. XYZ Company has a both a higher acid-test and current ratio so they are more liquid than others in their industry.
The Acid-test and current ratio also enable one to find out if a company is able to pay off its current obligations/ liabilities using current assets. With the acid-test ratio being above one, XYZ is able to pay off short-term debt using quick assets.
Answer:
Follows are the solution to this question:
Explanation:
Case 1
Production cost of goods
Work is under way, start 1510
Material direct 9780
Labor Direct 5950
Overhead production 8870
Total cost of production 24600
Total work costs under way 26110
Less: Finishing job in phase 8140
Generated cost of goods 17970
The assumption in perfect competition that there is an easy entry and exit from the market implies that firms will make a zero economic profit in the long run.
<h3>Why do firms make a zero economic profit?</h3>
In a pure competition, companies are allowed to freely enter and leave.
They take advantage of this to enter a market when prices are high and economic profit is being made.
As more firms enter, the economic profit keeps decreasing as prices decrease until this profit gets to zero and then turns to economic losses.
At this point, some firms will leave the market to stop making losses. When they do, the supply will decrease which leads to prices rising once more.
The cycle will then repeat itself and keep the companies at a zero economic profit in the long run.
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Answer:
The correct answer is A
Explanation:
Natural monopoly is the kind of monopoly which exists because of the high start up costs as well as the powerful economies of scale for conducting or performing a business in a particular industry.
And for this type of monopoly to exist , a firm or business need that the long run average cost curve will exhibit the economies of scale by the relevant range of the market demand.
Answer:
D. Adding investments plus net income less withdrawals.
Explanation:
This statement is generally used to show the owners capital at the beginning of an investment period which is seen or said to affect or changes in balance sheet at a section termed to be the equity section. It is said to reveal and let a shareholder know the additional and subtractional changes that happens/happened in the shareholders account.
In some certain business kind which ranges from a sole proprietorship type of business to the others, movement in capital occurs as a result of some elements.
Therefore it is seen that net income less withdrawals and also investment adding is been seen after an investors equity statement in the beginning of account balancing.
