Answer: Worsen; benefits
Explanation:
Specific Automakers is signing a long term contract with the union who are the representative of workers.
Real wages should increase by = 2%
Expected inflation = 5%
Nominal wage increase = 7%
Actual inflation = 6%
Actual inflation is greater than expected inflation, so this would worsen the union and it is beneficial for the automakers because now real wage increase is only:
= Nominal wage - Actual inflation rate
= 7% - 6%
= 1%
This is an example of re-distributive cost of inflation.
Answer:
The question is missing the options which are below:
A Real risk-free rate differences.
B Tax effects.
C Default risk differences.
D Maturity risk differences.
E Inflation differences.
The correct answer is option C,default risk differences.
Explanation:
Default risk is the increase in return given to an investor to compensate the investor for the likely losses that may arise due to the inability of the borrower to make funds available to the investor on the maturity date or even in required amount.
Different debt instruments have different default risk depending on their credit rating as rated by international rating agencies.Such rating is a function of many factors,which includes:
Balance sheet position
Profitability
Liquidity strength of the company
Macro-economic factors and some others.
Liquidity refers to the ability of the company to settle obligations such as repayment of bonds and interest when due.
Invariably,liquidity has a higher impact in determining credit rating as well as default risk of an instrument.
Explanation:
Conversion costs = Direct labor + Factory overhead
7,800,000 = Direct labor + 5,400,000
Direct labor = $2,400,000
First option is the correct option.
I know this much only.
Answer:
$23,740
Explanation:
Given that,
Sales = $103,000
Fixed expenses for the month = $36,000
Contribution margin ratio = 58%
Net operating income:
= (Contribution margin ratio × Sales) - Fixed expenses for the month
= (0.58 × $103,000) - $36,000
= $59,740 - $36,000
= $23,740
Therefore, the best estimate of the company's net operating income in a month when sales are $103,000 is $23,740.
