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3 years ago

Why is it important for businesses to understand the role of economics?

Business

1 answer:

MrRa [10]3 years ago

6 0

Answer:

Business economics often handles the analysis of various costs that business firms incur. Every business always desires to minimize their costs and maximize its profits by embracing different economies of scale. Nonetheless, the firms fail to determine exact costs that are involved in the production process.

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Pharoah Inc. has decided to raise additional capital by issuing $173,000 facevalue of bonds with a coupon rate of 6%. In discuss

Ira Lisetskai [31]

Answer:

a. Debit Credit

Cash $174,600

Discount on bond payable $18,941

Bonds Payable $173,000

Paid -in Capital - Stock Warrants $20,541

Workings

Market value of Bonds 155,700

Market value of Warrants 20,760

Total market value 176,460

Value assigned to Bonds = 174,600 / 176,460 * 155,700 = 154,059

Value assigned to Warrants = 174,600 / 176,460 *20,760 = 20,541

b. Debit Credit

Cash $174,600

Discount receivable $1,600

Bonds Payable $173,000

5 0

3 years ago

A company must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units t

lutik1710 [3]

Answer:

It is more profitable to sell the units for scrap.

Explanation:

Giving the following information:

Defective units= 16,000 units

Selling price dor scrap= $2.60

Reworked cost= $4.80 each

Selling price= $8.10 each.

If the units are sold as-is, the company will be able to build 16,000 replacement units for $5.50 each and sell them at the full price of $8.10 each.

The cost of 16,000 units produced is a sunk cost, therefore, it shouldn't be a part of the decision making.

Sell as it is:

Sell scrap= 16,000*2.9= 46,400

New units= 16,000*(8.10 - 5.50)= 41,600

Total income= $88,000

Continue processing:

Reworked sales= 16,000*(8.1 - 4.8)= $52,800

It is more profitable to sell the units for scrap.

7 0

3 years ago

An article in the Wall Street Journal on the housing market states that "Steady job growth, rising wages and low interest rate

tensa zangetsu [6.8K]

Solution and Explanation:

Since interest rate is the cost of borrowing, lower interest rate decreases the cost of borrowing for housing mortgage, which increases demand for housing.

It is very much clear from the demand and interest rate have a certain relationship. If the interest rate on a particular amount is lower then the customers will try to get more amount as the cost on such amount will be less which means the burden on the customers would be lower.

6 0

3 years ago

Jake is in the stands at a football game with his girlfriend. He decides that he needs to ask her something very personal, so he

kenny6666 [7]

Jake has changed the SOCIAL PSYCHOLOGICAL CONTEXT.
Context refers to the environment in which communication take place. There are four types of context, which are: cultural, temporal, physical and social psychological context.
Social psychological context refers to the formality or informality of the situation depending on the relationship between the two people that are communicating.

4 0

2 years ago

Read 2 more answers

If the reserve requirement is 20 percent, then excess reserves of $800 can increase M1 money supply by ___. g

Llana [10]

Answer:

If the reserve requirement is 20 percent, then excess reserves of $800 can increase M1 money supply by ___.

$3,200.

Explanation:

a) Data and Calculations:

Excess reserves = $800

Reserve requirement = 20%

Therefore, M1 money supply = $800/20% = $4,000

The increase in the M1 money supply will be $3,200 ($4,000 - $800)

b) The amount of funds that a bank is required by the central bank to hold in reserve to meet liabilities in case of sudden withdrawals by depositors is called the reserve requirement. It is usually stated as a percentage by the Fed Reserve. The Fed uses reserve requirement as a tool to increase or decrease money supply in the economy and influence interest rates. What the Fed does with the reserve requirement, therefore, depends on the monetary policy that it chooses to respond to the money market.

3 0

3 years ago