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3 years ago

What is the difference between classical economics and behavioral economics?

Business

1 answer:

Nostrana [21]3 years ago

7 0

3. Classical economics assumes people are rational and logical while behavioral economics adds psychology to the mix.

A major theory in classical economics is that human beings are rational and, given the necessary information they will make rational decisions and act rationally, however, Behavioral economics assumes that people are irrational players.

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Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently offers an annual return to investo

Musya8 [376]

Answer: d. $133.74

Explanation:

The dividend paid to preferred shareholders is constant and based on the annual rate of return on the stock. If they plan to sell at a price of $743 per share, the dividend will be:

Dividend = Annual rate of return on stock * Price of stock

= 18% * 743

= $133.74

8 0

2 years ago

Calistoga Produce estimates bad debt expense at 0.60% of credit sales. The company reported accounts receivable and allowance fo

liraira [26]

Answer: Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021 is $246.

Explanation: Calistoga Produce applies percentage of credit sales method to estimate its bad debt expense. So 0.60% of $331,000 (credit sales) = $1,986 and the balance in allowance for doubtful accounts is $1,520. The following journals would be recorded to adjust for the estimate:

Debit Bad debt expense $466

Credit Allowance for doubtful accounts $466

The $466 is the difference between $1,986 and $1,520

Now that the company writes off $1,740 accounts receivable, the following journal entries apply:

Debit Allowance for doubtful account $1,740

Credit Accounts receivable $1,740

In summary, the allowance account movement is as follows:

Opening balance $1,520

Additional bad debt expense 466

Write-off during the year (1,740)

Balance, end of the year $246

6 0

2 years ago

Why is it important to have a high intrest rate for an investment and a low one for a loan?

Anna [14]

Answer:

Explanation:

Investment is an act of setting some amount side to grow and accumulate in the nearest future .. Investment is quite different from savings so Higher interest rate on investment is very important because tends to act as an aiding factor in letting such investment yield a lot of profit and grow.

While loan on the other hand is debt borrowed that has not been paid back, people lend money for so many reasons and they do this because they don't enough capital so they source for external fund, but in the situation where interest rate accrued on loan is high, then it will be difficult for such individual to pay back because this will increase the money that has to be paid back.

7 0

3 years ago

On January 1, 2017, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000, for $322,744.44. The bonds prov

Feliz [49]

Answer:

a. January 1, 2017, bonds are purchased at a premium

Dr Investment in bonds 300,000

Dr Premium on bonds receivable 22,744.44

Cr Cash 322,744.44

Date Cash Interest Amortization Bond Carrying

received revenue of premium premium value

1/1/18 $36,000 $32,274.44 $3,725.56 $19,018.88 $280,981.12

1/1/19 $36,000 $31,904.89 $4,095.11 $14,923.77 $285,076.23

1/1/20 $36,000 $31,492.38 $4,507.62 $10,416.15 $289,583.85

1/1/21 $36,000 $31,041.61 $4,958.39 $5,457.76 $294,542.24

1/1/22 $36,000 $30,542.24 $5,457.76 $0 $300,000

amortization of bond premium = ($322,744.44 x 10%) - $36,000 = -$3,725.56

amortization of bond premium = ($319,018.88 x 10%) - $36,000 = -$4,095.11

amortization of bond premium = ($314,923.77 x 10%) - $36,000 = -$4,507.62

amortization of bond premium = ($310,416.15 x 10%) - $36,000 = -$4,958.39

amortization of bond premium = $10,416.15 - $4,958.39 = -$5,457.76

December 31, 2017

Dr Interest receivable 36,000

Cr Interest revenue 32,274.44

Cr Premium on bonds receivable 3,725.56

December 31, 2017

Dr Interest receivable 36,000

Cr Interest revenue 31,904.89

Cr Premium on bonds receivable 4,095.11

8 0

2 years ago

When developing a claim message, you should

ikadub [295]

Answer:

The right option is (B)

Explanation:

The most significant component for composing claim message is that each issue must be depicted in detail, and each record of the issue must be written. Before completion of the message, it is imperative to indicate what you need and what steps are required to mitigate the problem. Mentioning the issue and presenting remedial solutions are critical while developing a claim message.

6 0

2 years ago