Answer:
Cash increases by $500,000
Equipment decreases by $300,000
Profit increases by $200,000
Explanation:
Cash increases by $500,000 because the equipment was exchanged for cash.
The equipment (property,plant and equipment account) decreases by $300,000 because this particular equipment will be removed from PPE account.
Equity increases by $200,000 because there is a profit of $200,000 from the sale.
Answer: Radial Autos should pursue Backward Integration.
Explanation: Backward integration is the process in which a company purchases or internally produces segments of its own supply chain. Simply put, it is when a company acquires and controls certain inputs that could be utilized in the process of manufacturing its products or services.
This is a competitive strategy, because it lowers the cost of production and this will reflect in the price of the final product.
This is the strategy that Radial Autos should pursue in order to lower cost and reduce risk in interruption of the supply component, because in adopting this strategy, they will have total control over the inputs they use in production.
Answer:
Key infant industries must be protected, specially those that operate with new technologies.
Explanation:
It takes time for infant industries to develop certain comparative advantages that allows them to compete against foreign firms. While they are developing their own comparative advantages, infant industries can easily go out of business due to foreign competitors that have been around for much longer.
In order to achieve competitive prices, infant industries must first achieve economies of scale. While foreign firms are already able to offer low prices because they are able to produce with lower costs.
Answer:
A. Consumer staple stocks rise on expectations that consumers will continue to spend on necessities.
Explanation:
Recession refers to the contraction which occurs in the business cycle when the economic activities experience a decline. When the economy experiences a decline for at least six months, a recession occurs. During the period of recession, because of unemployment, the rate of growth decreases. The consumers stop to spend which affects the economy of the business.
Well, what kind of company is it your trying to improve?