!!PLEASE HELP ME WITH MULTIPLE CHOICE!!
2 answers:
You might be interested in
Answer:
Remote enter keys shall be further processed in order to decrease the amount of loss by $11,000.
Explanation:
As in the given case,
Number of units = 500
Carrying cost = $80,500
Cost per unit = 80,500/500 = $161
In case of scrap for the price of $4,000
Scrap price per unit = $4,000/500 = $8
Thus, loss per unit in case of scrap = $161 - $8 = $153
In case inventory is further processed
Total cost = $80,500 + $19,000 = $99,500
Cost per unit = $99,500/500 = $199
Revenue earned = $34,000
Revenue per unit = $34,000/500 = $68
Thus, loss per unit in case of further processing = $199 - $68 = $131
Therefore the inventory shall be processed in order to save the total loss of $153 - $131 = $22 per unit
Total loss saved = $22 500 = $11,000
Solution :
Given :
The bonds offer a of 4.5% per year
Tax rate = 10% = 0.10
Inflation rate = 2
=
+
= 2 + 4.5
= 6.5
=
=
= 5.85
After tax real interest rate = -
= 5.85 - 2.0
= 3.85
= 7.0
=
+
= 7 + 4.5
= 11.5
=
= 10.35
= 11.5 x (1 - 0.10)
= 11.5 x 0.90
= 10.35
=
-
= 10.35 - 7.0
= 3.35
Putting all the value in table :
Real interest Nominal interest After tax nominal After tax
rate rate interest rate interest rate
2.0 4.5 6.5 5.85 3.85
7.0 4.5 11.5 10.35 3.35
Comparing with the , a
will increase the after after tax real interest rate when the government taxes nominal interest income. This tends to encourage saving, thereby increase the quantity of investment in the economy and the increase the economy's long-run growth rate.