Answer: correct evaluation and medium of exchange etc.
Explanation: The main problem with the barter system is that it would be hard to value the goods or services that the parties are exchanging. In the given case, it would be hard to value how many car washes would be equal to a paint of house.
Also finding someone who is willing to paint house in exchange of car washes is another difficult task.
Answer:
Debit Bad Debts Expense $12,475
Credit Allowance for Doubtful Accounts $12,475
Explanation:
Calculation for estimated bad debts expense:
Explanation
Accounts receivable * Sales uncollectible
$445,000×0.025
=11,125
Hence:
11,125 +Allowance for Doubtful Accounts 1,350
=$12,475
Therefore the estimated bad debt will be:
Debit Bad Debts Expense $12,475
Credit Allowance for Doubtful Accounts $12,475
Answer:
B. a decrease in the demand for loanable funds.
Explanation:
An increase in the real interest rate will result in a decrease for the loanable funds.
Loans act as a fund that is an amount of money borrowed by the companies to be utilized for the running of the business. Interest is the amount payable at a certain rate on the amount borrowed in the form of loans. Loans are generally provided by either the banks or the financial institutions to the public or even companies.
The higher the rate of interest the lesser the demand for loans is there. Interest is charged on loans because it is a facility given.
Answer:
(2) 4%
Explanation:
The portfolio is considered to be less risky if its volatility is low. The higher standard deviation the more risky is the project. For Duke Energy and Microsoft the investment portfolio required is risk free investment. To calculate the risk free rate we calculate using the formula;
Var Rp = x1 2Var R1 + x2 2Var R2 +2 x1 x2 Corr (R1, R2) SD1 SD2
Var Rp = 0.14 + 0.44 + 2 (1) * (-1) * 6% * 24%
Solving for this we get the risk free investment at 4%.
Yeah hooray hooray hooray
