The blank is to be filled with the word Multiplier.
The Multiplier effect refers to the effect on national income and product of an exogenous(caused by a variety of factors outside the control of a single organization) increase in demand.
In other words, it means that the multiplier effect is an economic term, referring to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal of capital.
Let's take an example. Suppose assume a company makes a $100,000 decline in investment of capital to expand its manufacturing facilities in order to produce less and sell less. After a year of production with the new facilities operating at minimum capacity, the company’s income decreased by $200,000. This means that the multiplier effect was 2 ($200,000 / $100,000). Simply put, every $1 of disinvestment produced an extra decline in $2 of income.
Hence, The idea that the eventual decline in spending will be much larger than the initial (autonomous) decrease in aggregate demand is the Multiplier.
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Answer:
b. Overstate operating income
Explanation:
According to my research on business financing terms, I can say that based on the information provided within the question the impact of this would be an overstated operating income. This refers to a balance that is documented as having more money than it actually has. This would be the case since the payroll payments have not yet been subtracted.
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Answer:
List is as follows:
(a) Accounts payable - B
(b) Inventory - B
(c) Interest revenue
- I
(d) Long-term debt
- B
(e) Net cash used for financing activities - C
(f) Salary expense
- I
(g) Cash h. Dividends - B, C
(h) Dividends
- R, C
(i) Increase or decrease in cash - C
(j) Net income - I, R, C
(k) Net cash provided by operating activities - C
(l) Retained earnings - R, B
(m) Sales revenue -I
(n) Common stock - B
Answer:
Safety Stock = 932
Explanation:
The safety stock is determinate as follows:
f the desired service level is 99% When inventory reaches ROP, during the lead time 99% of the customers will receive the good while 1% of them will face stock-out.
Formula:
We have 2 weeks lead-time the standard deviation is 200 while we want a service level of 99% (z= 0.99)
2.33 x √2 x 200 = 932
Safety Stock = 932