The deadweight loss is $90.6.
<h3>How to calculate the loss?</h3>
The study suggested that the average recipient's valuation of the gift received was approximately 90% of the actual purchase price of the gift.
This means there's a loss of 10% in value constitute the deadweight loss.
Average amount spent on gift = $906
Percentage loss in value = 10% or 0.10
Calculate the deadweight loss -
= Average amount spent on gifts * Percentage loss in value
DWL = $906 * 0.10
The deadweight loss would be $90.6.
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A study by university of minnesota economist, joel waldfogel, estimated the difference in the actual monetary value of gifts received and how much the recipients would have been willing to pay to buy them on their own. the study suggested that the average recipient’s valuation was approximately 90% of the actual purchase price.
Calculate the deadweight loss if the average amount is $906.
Answer:
a. Supplies Expense $3,700Supplies $3,700
Explanation:
The entries required when supplies are purchased is
Debit Supplies account
Credit cash/accounts payable
At the point of use of these supplies, the entries required are
Debit Supplies expense account
Credit supplies account
Hence the supplies used
= $5,000 - $1,300
= $3,700
Entries to be posted to adjust
Debit Supplies expense account $3,700
Credit supplies account $3,700
Answer:
C. A security's beta measures its non-diversifiable, or market, risk relative to that of an average stock.
Answer:
Explanation:
Giving the following information:
The firm must pay $6 million now and $4 million in one year. Two years from now the project is expected to pay back $5 million, and three years from now it is expected to pay back another $10 million.
Io= -6,000,000
1= 4,000,000
2= 5,000,000
3= 10,000,000
i=0.25
We need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
Cf= cash flow
NPV= 5,520,000
The firm should do the project when the net present value is positive.
Answer:
PV = PMT [(1 - (1 / (1 + r)ⁿ)) / r]
Where:
PV = The present value of the annuity
PMT = The amount of each annuity payment
r = The interest rate
n = The number of periods over which payments are to be made
PV = PMT [(1 - (1 / (1 + r)ⁿ)) / r]
= 1000 [(1 - (1 / (1 + 0.0083)²⁴)) / 0.0083]
= 1000 [(1 - (1 / 1.2194)) / 0.0083]
= 1000 [(1 - 0.8201) / 0.0083]
= 1000 [0.1799 / 0.0083]
= 1000 * 21.6747
PV = $ 21,674.70
Explanation:
Since the annuity is compounded monthly
r = 10% / 12 = 0.83%
n = 24
