Micropreneurs are exempt from the local ordinances that restrict home-based businesses from operating in residential areas.

Which of the following statements are true regarding externalities? (Check all that apply.) A. Deadweight loss can be either

ella [17]

Answer:

d

Explanation:

A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.

A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.

Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible

Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low

Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality.

6 0

3 years ago

Levi's Levees always evaluates projects using the payback method. What is the payback period for the following set of cash flows

Ray Of Light [21]

Answer:

3.14 years

Explanation:

Year Cash flow Accumulated cash flows

0 -$4,900 -$4,900

1 $1,150 -$3,750

2 $1,350 -$2,400

3 $2,230 -$170

4 $1,250 $1,080

3 years + $170/$1,250 = 3.14

The payback period is 3.14 years, or 3 years, 1 month and 19 days.

7 0

3 years ago

In explaining hedge funds to an investor, a registered representative might correctly characterize them as utilizing:____.

Dimas [21]

In explaining hedge funds to an investor, a registered representative might correctly characterize them as utilizing common stockholders.

The potential for the greatest loss determines the riskiest situation.
The inherent nature of leverage in futures trading is one of the main dangers involved. The most frequent reason for losses in futures trading is frequently a disregard for leverage and the dangers involved.

Common stockholders always bear the most risk because they are the last to be compensated in the event of business liquidation. However, if the company is successful, common stockholders could stand to gain the most from ownership.

Learn more about common stockholders here

brainly.com/question/2528944

#SPJ4

4 0

2 years ago

On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note requir

lisov135 [29]

Answer:

1. Debit Interest Expense $7,000; debit Notes Payable $7,238; credit Cash $14,238.

Explanation:

The journal entry is shown below:

Note payable A/c Dr $7,238

Interest expense A/c Dr $7,000

To Cash A/c $14,238

(Being the first payment on the note is recorded)

The computation of the interest expense is shown below:

= Borrowed amount × rate of interest

= $100,000 × 7%

= $7,000

And, the remaining balance left is reported in the note payable account

3 0

3 years ago

You are scheduled to receive annual payments of $11,100 for each of the next 24 years. Your discount rate is 10 percent. What is

Lisa [10]

Answer:

The difference in the present value is $988.32.

Explanation:

The difference in the present value can be calculated using the following 3 steps:

Step 1: Calculation of the present value if you receive these payments at the beginning of each year

This can be calculated using the formula for calculating the present value (PV) of annuity due given as follows:

PVA = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) .................................. (1)

Where;

PVA = Present value if you receive these payments at the beginning of each year = ?

P = Annual payments = $11,100

r = interest rate = 10%, or 0.10

n = number of years = 24

Substitute the values into equation (1), we have:

PVA = $11,100 * ((1 - (1 / (1 + 0.10))^24) / 0.10) * (1 + 0.10)

PVA = $10,871.54

Step 2: Calculation of the present value if you receive these payments at the end of each year

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PVO = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where:

PVO = Present value if you receive these payments at the end of each year = ?

Other values are as defined in Step 1 above.

Substitute the values into equation (2), we have:

PVO = $11,100 * ((1 - (1 / (1 + 0.10))^24) / 0.10)

PVO = $9,883.22

Step 3: Calculation of the difference in the present value

This can be calculated as follows:

Difference in the present value = PVA - PVO = $10,871.54 - $9,883.22 = $988.32

3 0

3 years ago