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BaLLatris [955]

3 years ago

14

Milk is an important ingredient in the production of ice cream. if the price of milk increases, then one would expect, holding a

ll other things constant:

1 answer:

Lisa [10]3 years ago

3 0

Hey I don't know the answer but I need pointsss:/

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A company uses cash to pay all of the following excepta. All of these choices are correct.b. interest to creditorsc. dividends t

never [62]

Answer:

d. depreciation expense

Explanation:

The expenses which are paid by cash reduced the cash balance displayed in the balance sheet . Like interest to creditors, stockholders dividend, wages expenses, miscellaneous expenses, admin expenses, etc. These expenses can be paid either by cash or by bank account .

But the depreciation expense is a non - cash expense which reduces the fixed asset balance over the fixed asset useful life. Plus this is shown in the income statement on the debit side. Like this other examples would be goodwill impairment, amortization expenses, etc.

3 0

3 years ago

Suppose a self-regulating economy is in a recessionary gap at the time the Fed enacts expansionary monetary policy. Furthermore,

anzhelika [568]

The combination of expansionary monetary policy and a self-regulating economy will cause real GDP will rise to the level above natural real GDP and the recessionary gap would hence turn into an inflationary gap situation.

<h3>What do you mean by monetary policy?</h3>

Monetary Policy refers to the control of the quantity of money available in an economy through which new money is supplied.

The self-regulating economy experiences a recessionary gap. The real GDP is less than the level of natural real GDP. The gap is been corrected by the rightward shift in the short-run aggregate supply curve.

Due to interplay, real GDP will rise to the level above natural real GDP and the recessionary gap turn into an inflationary gap.

Learn more about Monetary policy here:

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8 0

3 years ago

Is the cost of equity calculated from the CAPM model, pre -tax or post-tax?

Natasha_Volkova [10]

The existence of pre-tax cost of debt and post-tax cost of debt is due to the acknoledgement of the tax benefit from issuing debt.There is no tax benefit from paying divdends,so it makes no sense talking about pre-tax,post-tax cost of equity for a firm.When you think about cash flow to equity you can only assume that the taxes owed by the company have already been paid.Now, the taxation over the income of the shareholder is a whole different issue that does not take place in this discussion,since it is not taken in consideration either in cost of equity or cost of debt.

3 0

3 years ago

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all produc

Pavlova-9 [17]

Answer:

<u><em>Part a </em></u>

<u>Belmain Co.</u>

<u>Estimated Income statement for the year ended 2017.</u>

Sales ($240 x 12,000) $2,880,000

<u>Less Variable Costs :</u>

Direct Materials ($50.00 x 12,000) ($600,000)

Direct Labor ($30.00 x 12,000) ($360,000)

Factory Overheads ($6.00 x 12,000) ($72,000)

Sales Salaries and Commissions ( $4.00 x 12,000) ($48,000)

Miscellaneous selling expenses ( $1.00 x 12,000) ($12,000)

Supplies ($4.00 x 12,000) ($48,000)

Miscellaneous administrative expenses ($1.00 x 12,000) ($12,000)

Contribution $1,728,000

<u>Less Fixed Expenses :</u>

Factory overhead ($350,000)

Sales salaries and commissions ($340,000)

Advertising ($116,000)

Travel ($4,000)

Miscellaneous selling expense ($2,300)

Office and officers’ salaries ($325,000)

Supplies ($6,000)

Miscellaneous administrative expense ($8,700)

Net Income ( Loss) $576,000

<u><em>Part b</em></u>

0.6 or 60 %

<u><em>Part c</em></u>

Break-even sales (units) = 8,000

Break-even sales (dollars) = $1,920,000

<u><em>Part d</em></u>

<em>See attachment </em>

<u><em>Part e</em></u>

Margin of safety in dollars = $960,000

Margin of safety in percentage = 33.3 %

<em><u>Part f</u></em>

Operating Leverage = 3.00

Explanation:

<u>Income Statement :</u>

<em>Sales - Expenses = Income</em>

Note : I have separated Variable and Fixed Expenses

<u>Contribution Margin ratio :</u>

<em>Contribution Margin ratio = Contribution ÷ Sales</em>

= $1,728,000 ÷ $2,880,000

= 0.6 or 60 %

<u>Break-even sales ( units and dollars) :</u>

<em>Break-even sales (units) = Fixed Costs ÷ Contribution per unit</em>

= $1,152,000 ÷ $144.00

= 8,000

<em>Break-even sales (dollars) = Fixed Costs ÷ Contribution margin ratio</em>

= $1,152,000 ÷ 0.60

= $1,920,000

<u>Margin of safety in dollars and as a percentage of sales :</u>

<u />

<em>Margin of safety in dollars = Expected Sales (dollars) - Break-even sales (dollars)</em>

= $2,880,000 - $1,920,000

= $960,000

<em>Margin of safety in % = (Expected Sales - Break-even sales ) ÷ Expected Sales</em>

= $960,000 ÷ $2,880,000

= 33.3 %

<u>Operating leverage</u>

<em>Operating Leverage = Contribution ÷ Earnings Before Interest and Tax</em>

= $1,728,000 ÷ $576,000

= 3.00

3 0

3 years ago

An important similarity between a monopolistically competitive firm and a purely competitive firm is that:_________-a. realize a

marusya05 [52]

Answer:

a. realize an economic profit in the long run.

Explanation:

A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. Thus, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes. Any individual that deals with the sales of unique products in a monopolistic market is generally referred to as a monopolist.

Hence, one of the ways in which some monopolistic competitors try to become more like monopolists is through the use of designer labels.

This ultimately implies that, when there are barriers to entry it may result in monopolistic competition among the sellers of goods having no close substitutes. These barriers consist of economies of scale, network externalities, copyright law, trademark, patent, governmental policies etc.

In a purely competitive market, there are many buyers and sellers (price takers) of homogeneous products (standardized products with substitute) and the market is free (practically open) to all individuals or business entities that are willing to trade all their goods and services.

Hence, a purely competitive market is characterized by the following features;

1. Perfect information.

2. No barriers, it is typically free.

3. Equilibrium price and quantity.

4. Many buyers and sellers.

5. Homogeneous products.

An important similarity between a monopolistically competitive firm and a purely competitive firm is that realize an economic profit in the long run and these profits tends toward zero as both firms continue in the market.

6 0

3 years ago