All categories

3 years ago

To avoid double-counting output in GDP measures, _____ are excluded in GDP.

1 answer:

7 0

The correct answer is d). We have that government spending can also give way to products and services, just like private enterprises, thus there is no double-counting there. Services such as haircuts have their own value, which are separate from any other material products. Finally exports are also not counted twice; Raw materials though would be counted twice if we counted them for the GDP since their value is incorporated in the value of the final product. For example, we cannot count towards the GDP the value of rubber production in a country since then, if we counted the value of the tires too, we would count the value of the rubber in the tires twice (one time as rubber/ one time as part of the tire).

You might be interested in

Hargrave professional group performs legal services on account. what is the effect of this transaction on the balance sheet equa

r-ruslan [8.4K]

Hargrave professional group performs legal services on account. The effect of this transaction on the balance sheet equation for Hargrave is Increase in assets.

<h3>What is Asset?</h3>

An asset is considered a resource of the business which has an economic value in the future of the business and helps business activities to take place smoothly.

Hargrave professional group performs legal services on account which reflects the Buying and sales of goods and services on credit. So this refers to the incoming cash in the business which indicates the effect of this transaction on the balance sheet equation for Hargrave is an Increase in assets.

Learn more about Asset, here:

brainly.com/question/14404094

#SPJ4

8 0

2 years ago

Dog Up! Franks is looking at a new sausage system with an installed cost of $460,000. This cost will be depreciated straight-lin

Anton [14]

Answer:

The Net Present Value (NPV) of this project is $93,405.59.

Explanation:

Note: Find attached the excel file for the calculation of the NPV of this project.

Net present value (NPV) refers to the present value of cash inflows minus the present value of cash outflows over a specified period of time.

On its own, present value (PV) refers the value that a future sum of money or stream of cash flows has now or currently given a specified rate of return. The formula for calculating the PV is given as follows:

PV = FV / (1 + r)^n

Where,

FV = Future value

r = discount rate. This is given as 10% in this question

n = Relevant period, e.g. year

The above explanation and formula together with other stated formulae in the attached excel file is used in calculating the NPV of this project.

Download xlsx

7 0

3 years ago

American Exploration, Inc., a natural gas producer, is trying to decide whether to revise its target capital structure. Curren

Marat540 [252]

Answer:

a) 9.00 %

b) 7.80 %

c) yes the weight of the debt increases here is more risk in the investment as the debt payment are mandatory and failing to do so result in bankruptcy while the stock can wait to receive dividends if the income statement are good enough

d) 9.00 %

e) The increase in debt may lñead to an increase in return of the stockholders if they consider the stock riskier than before and will raise their return until the WACC equalize at the initial point beforethe trade-off occurs

Explanation:

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.12

Equity weight 0.5

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight = 0.5

$WACC = 0.12(0.5) + 0.06(0.5)$

WACC 9.00000%

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.12

Equity weight 0.3

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight 0.7

$WACC = 0.12(0.3) + 0.06(0.7)$

WACC 7.80000%

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.16

Equity weight 0.3

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight 0.7

$WACC = 0.16(0.3) + 0.06(0.7)$

WACC 9.00000%

3 0

3 years ago

Lawrence has worked in his career field for 20 years. one benefit of his experience over younger employees lies in

Ad libitum [116K]

Experience teaches the things which a book can not teach. Thus, having extra work experience gives an edge to the person with higher experience with person with lesser experience. Lawrence's experience is more than his younger employees hence he knows various aspects of his work profile than the youngsters.

3 0

3 years ago

Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets (which is equal to its total inves

adelina 88 [10]

Answer:

1.74%

Explanation:

17% Debt 50% Debt

Sales $500,000 $500,000

Less: Cost $450,000 $450,000

Less: Interest $5,546 $17,400

Profit before tax $44,454 $32,600

Less: Tax at 35% $15,559 $11,410

Net Income $28,895 $21,190

Equity $361,050 $217,500

Return on Equity 8.00% 9.74%

Change in ROE = 9.74% - 8.00% = 1.74%

Workings

Interest (17% Debt) = 43,500*17%*7.5% = $5,546

Interest (50% Debt) = 43,500*50%*8% = $17,400

Tax (17% Debt) = $44,454 * 0.35 = 15,559

Tax (50% Debt) = $32,600 * 0.35 = 11,410

Equity (17% Debt) =435,000*83% = 361,050

Equity (50% Debt) = 435,000*50% = $217,500

Return on Equity = $28,895/$361,050 = 8.00%

Return on Equity = $21,190/$217,500 = 9.74%

7 0

3 years ago