Northwest Fur Co. started the year with $96,000 of merchandise inventory on hand. During the year, $430,000 in merchandise was p
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Answer:
Answer for the question:
Assume that the hypothetical economy of Molpol has 8 workers in year 1, each working 1,200 hours per year (40 weeks at 30 hours per week). The total input of labor is 9,600 hours. Productivity (average real output per hour of work) is $10 per worker
Instructions: In parts a and b, round your answers to the nearest whole number. In part c, round your answer to 2 decimal places.
a. What is real GDP in Molpol? Suppose work hours rise by 2 percent to 9,792 hours per year and labor productivity rises by 5 percent to $10.5
b. In year 2, what will be Molpol's real GDP?
c. Between year 1 and year 2, what will be Molpol's rate of economic growth? percent
Is given in the attachment.
Explanation:
Answer:
B) A gain would be less or a loss would be greater using straight-line depreciation.
Explanation:
In straight line method of depreciation there is a fixed amount of depreciation, and in double declining method the rate is double of straight line method,
Let us take an example,
Cost of asset = $500,000
Selling price at end of 2nd year = $300,000
Straight line depreciation = $100,000 for each year i.e. $500,000/5
Double declining method rate = ($100,000/$500,000) 100
2 = 40%
Therefore value at end of second year
Straight line = $500,000 - ($100,000 2 ) = $300,000
Double Declining method = ($500,000 -40%) - 40% = $180,000
In case of sale at $300,000
Profit shall be
Straight line = $300,000 - $300,000 = 0
Double Declining = $300,000 - $180,000 = $120,000
Now, there will be more profit in double declining that is gain is less in straight line and losses would be greater in straight line thus statement B is correct.