The major disadvantage of a trust is

1. Assume there are only two goods in the economy, french fries and onion rings. In 2013, 1,000,000 servings of french fries wer

xxMikexx [17]

Answer:

A. Nominal GDP in 2013 = $880,000

Nominal GDP in 2014 = $878,400

Real GDP in 2014 = $864,000

B. An assessment of growth using nominal GDP would overstate growth due to the effect of inflation on 2014 prices. The real GDP was lower than the nominal GDP

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation

Nominal GDP in 2013 = ( 1,000,000 x $0.40 ) + ( 800,000 x $0.60) = $880,000

Nominal GDP in 2014 = ( $0.50 x 900,000 ) + ($0.51 x 840,000) = $878,400

Real GDP in 2014 = ( $0.40 x 900,000 ) + ($0.60 x 840,000) = $864,000

An assessment of growth using nominal GDP would overstate growth due to the effect of inflation on 2014 prices. The real GDP was lower than the nominal GDP

4 0

3 years ago

Suppose Sam would like to use $6,000 of his savings to make a financial investment. One way of making a financial investment is

grin007 [14]

Answer:

The correct options are option C and Option D.

Explanation:

Lets look at each option in turn and evaluate whether they are correct or incorrect

Option A: Incorrect. This can be understood by thinking in terms of the classic demand and supply of a given item. If the company issues more shares, there will be a greater amount of shares in the market for a potential investor to buy. This additional supply of shares will put a downward pressure on the price of the shares which will cause the share price to decrease.

Option B: Incorrect. When a company issues shares to raise money, it is known as equity finance. By doing so, the company is increasing its capital which is recorded in the balance sheet under the heading of "share capital". Another statement that will be impacted is the cash flow statement under the heading of cash flow from financing activity. The income statement will not be impacted. If Sam purchases shares from another investor, the company's statements will not be impacted.

Option C: Correct. Expectations of a recession that reduce corporate profits for make investors expect a lower return on investment if they invest in a corporation's shares. This will dampen the demand, thereby decreasing the price.

Option D: Correct. An investor measures the opportunity cost of an investment by generally comparing it to the risk free return that they can get on US bonds. So the investor can alternatively invest in US govt instruments.

Option E: Incorrect. A bond maturing 30 years from now will carry a DIFFERENT interest rate due to the varying tenor. The tenor of a bond affects the risk profile of an investment in the bond which makes bonds of differing maturities offer different returns in line with expectations concerning economic performance.

7 0

3 years ago

Which of the following is a likely cause of globalization? A. Trade barriers have been added worldwide. B. Developing economies

Vesna [10]

Answer: Option B

Explanation: Globalization refers tot he process under which certain business entities starts operating their business in many different countries of the world.

One of the major reasons behind the increasing globalization is the condition in developing nations. The developing nations like India and Pakistan have a large population with a strong purchasing power, but due to lack of technology and capital these economies lack competitive producers.

Therefore, every second business firm with sufficient resources wants to operate in these economies for profit maximization.

4 0

3 years ago

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a resu

Tcecarenko [31]

Answer:

B. Leary's total stockholders' equity decreased $115,000.

Explanation:

When a company purchases its previously issued stocks, this is called Treasury Stocks. These becomes stocks issued but not part of the outstanding stocks and are not included in the computation of Earnings Per Share. When Treasury Stock is presented in the Stockholder's Section of the Balance Sheet, this is deducted from the total Stockholder's Equity, notwithstanding the par value of the common stock.

6 0

3 years ago

Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 88,000 Pounds started into productio

Zarrin [17]

Answer:

1. materials = 569,000 units , conversion = 556,000 units

2. materials = $1.15 , conversion = $0.70

3. materials = $44,850 , conversion = $18,200 , total = $63,050

Explanation:

For this question, i will assume that the Weighted Average Cost Method is used since we do not have information on the specific method applied by this company.

Calculation of the equivalent units of production for materials and conversion.

1. Materials

Closing Work in Process (65,000 × 60%) = 39,000

Completed and Transferred to Finished Goods = 530,000

Equivalent units of production for materials = 569,000

2. Conversion Costs

Closing Work in Process (65,000 × 40%) = 26,000

Completed and Transferred to Finished Goods = 530,000

Equivalent units of production for materials = 556,000

Calculation of the cost per equivalent unit for materials and conversion

Remember :

Cost per equivalent unit = Total Costs ÷ Total Equivalent units

therefore,

1. Materials

Cost per equivalent unit = ($ 106,000 + $ 551,120) ÷ 569,000

= $1.15

2. Conversion Costs

Cost per equivalent unit = ($ 59,700 + $ 328,230) ÷ 556,000

= $0.70

Calculation of the cost of ending work in process inventory for materials, conversion, and in total

Materials ($1.15 × 39,000) = $44,850

Conversion Costs ($0.70 × 26,000) = $18,200

Total cost of ending work in process = $63,050

3 0

3 years ago