Answer:
The predicted sales revenue for 2017=$501,334.008
Explanation:
If something reduces at a constant rate over a specified period of time, then it can be represented using an exponential function as follows;
y=a(1-r)^x, or y=ab^x
where;
y=final sales revenue after the reduction
a=initial sales revenue before the reduction
1-b=reduction factor
x=time interval
In our case;
y=$590,000
a=$780,000
1-r=b=unknown
x=2011-2000=12 years
replacing;
590,000=780,000.b^12
b^11=590,000/780,000=0.756
b=0.756^(1/12)
b=0.977
r=1-0.977=0.023
Determine predicted sales revenue;
y=ab^x
y=sales revenue in 2017
a=sales revenue in 2011=$590,000
b=0.977
x=7 years
replacing;
y=590,000(0.977)^7
y=$501,334.008
The predicted sales revenue for 2017=$501,334.008
Answer:
The DRS's EBIT will be $205,920.
Explanation:
Degree of operating leverage measures how EBIT will change with change in sales
Degree of operating leverage (DOL) = % change in EBIT / % change in sales
In our case, DOL = 3.2x
Sales forecast = $300,000
Actual sales = $313,500
% change in sales = (Actual sales - forecast )/ forecast = (313,500 - 300,000) / 300,000
= 4.5%
EBIT forecast = $180,000
Now putting everything in DOL formula
3.2 = % change in EBIT / % change in sales = % change in EBIT / 4.5
% change in EBIT = 3.2 * 4.5
= 14.4%
Actual EBIT = Forecast *(1 + % change)
= 180,000*(1 + 0.014)
= $205,920
Therefore, The DRS's EBIT will be $205,920.
Answer:
a. positive
b. normative
c. positive
d. normative
Explanation:
Note that a normative statement as used in economics refers to a view of what should be done, or how things or policies should be or not be. While the Positive statement gives a point blank description of what the state of things are.
a. It is a fact of course that in the past decades U.S. companies have outsourced millions of job overseas, thus this is a positive (descriptive) statement.
b. By saying companies that outsource jobs are acting immorally indicates a normative or judgemental view of what is morally right.
c. This statement is a fact, because such actions is in line with economic theory; in effect would stop outsourcing jobs.
d. This is rather a view of what should be done. Which clearly indicates the statement as normative.
Answer:
a. a depreciation of the home currency
Explanation:
Floating exchange rate system is a system in which the exchange rates of any currency depends upon the forex market, basically the supply and demand force of the country in international trade.
Depreciation in home currency will make it cheaper for the country top export, as less payment need to be made for same goods by other country if the home country exports.
Imports will turn expensive, which shall decline imports.
Accordingly receipts will increase and payments will decrease, which shall result in re framing current account and the deficit shall be decreased and might be reversed into surplus.
