Answer:
C) causing a shortage of funds for investment in physical capital.
Explanation:
In economics, savings equals investment. Higher investments result in higher productivity, that is why the savings rate of a country is the single most important factor in determining future economic growth.
Low savings rate means that current consumption is very large, and that benefits economic growth on the short run (very short run, like 1 or 2 years), but future economic growth will suffer from it.
Imagine your house as the total economy of a nation. You earn $1,000 per month and must decide how much to spend right now and how much to save for future spending. If you spend the $1,000 right now, you will purchase several things and enjoy them immediately. But what happens in one or two weeks. Since you do not have any more money left, you cannot purchase anything else, which reduces your future joy.
Investment increases future wealth and fosters economic prosperity.
Answer:
$64
Explanation:
A firm has an annual dividend of $4
The required return is 16%
Therefore the value of the preferred stock can be calculated as follows
= 16/100 × 4
= 0.16 × 4
= 0.64 ×100
= $64
Hence the value of the preferred stock is $64
Answer:
a sales-type with selling profit
Explanation:
Initial direct costs are deferred and expensed over the lease term in a sales type lease. A sales type lease is lease that has the present value of lease higher than the carrying value in the books. Therefore the lessor is seen as selling the leased property and should recognize profit since there is a selling profit. The lessor and lease account differently for sales type lease, the lessor based on classification of sales type lease expenses(at least at comencement) it while the leassee capitalizes right if use and amortizes payments over lease term
Answer:
d) $38,000 Debit balance.
Explanation:
Predetermined overhead rate = Estimated Total Overhead Costs / Estimated Direct Labor Costs
= $472000 / $2,360,000
= 0.2
= 20% of direct labor costs.
Applied overheads = (20%*Actual direct labor costs)
Applied overheads = 20% * $1,980,000
Applied overheads = $396,000
So, Overhead under-applied = $434,000 - $396,000 = $38,000 (Debit)
Answer:
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