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vovangra [49]
3 years ago
12

You want to determine whether there is a lemons problem in the market for​ single-engine airplanes. Can you use any of the follo

wing information to help answer this​ question? If​ so, how? a. Repair rates for​ original-owner planes versus planes that have been resold A. No. The information would only be useful if the repair rates varied across different models of airplanes instead of original owner versus resold planes. B. Yes. If repair rates are higher for​ original-owner planes, this would be an indication of a lemons problem. C. Yes. If repair rates are higher for planes that have been​ resold, this would be an indication of a lemons problem. D. No. Repair rates are a poor indicator of the quality of an airplane as planes require frequent repairs.
Business
1 answer:
Andreas93 [3]3 years ago
3 0

Answer:

C. Yes. If repair rates are higher for planes that have been​ resold, this would be an indication of a lemons problem

Explanation:

Lemons problem is an issue of quality of product, asset, investment : due to asymetric information about the respective quality.

Asymetric Information is when one one party in transaction has more knowledge about the quality of product or asset, than the other party.

Second hand goods are an illustration of this case, as seller has more information about the real quality of good or asset than buyer.

Lemon's problem in single engines airplanes : can be analysed by concept of second hand goods 'asymetric information, lemons problem' it. If the 2nd hand resold planes require higher repairs, it indicates that the buyer had asymetric information about bad quality of planes ( the information which seller had), but realisation of bad quality later implies higher repairs.

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The Titan retires a $24.6 million bond issue when the carrying value of the bonds is $21.4 million, but the market value of the
nataly862011 [7]

Answer:

A debit of $7.6 million to a loss account

Explanation:

Step 1. Given information.

  • Carrying value is 21.4 million
  • Market value when retired is 29 million.

Step 2. Formulas needed to solve the exercise.

Gain(Loss) = Carrying value - Market value when retired

Step 3. Calculation.

= 21.4 million - 29 million

= 7.6  million

Step 4. Solution.

A debit of $7.6 million to a loss account

6 0
3 years ago
When this market is in equilibrium, price is $ $6 and quantity bought and sold is 300 units. In equilibrium, consumer surplus is
Gnom [1K]

Answer: hello your question is incomplete attached below is the missing information

Answer :

$900

$600

<u>Given the new price of $4 by Government </u>

quantity demanded = 400 units

quantity supplied = 150 units

quantity bought and sold = 150 units

  • $975
  • $150
  • $375

Explanation:

Consumer surplus ( area below demand curve and above $300  

= Area of triangle = 0.5 * base * height

= 0.5 * 300 ( 12 - 6 )  = $900

producer surplus ( area above supply curve and below $300

=  Area of the triangle = 0.5 * 300 ( 6-2 ) = $600

<u>Given the new price of $4 by Government </u>

quantity demanded = 400 units

quantity supplied = 150 units

quantity bought and sold = 150 units

Consumer surplus ( area of triangle + area of rectangle )

= 0.5 * 150 * ( 12-9 )+ L*B

= 0.5 * 150 * ( 3 ) + 150 * ( 9 - 4 )  = $975

producer surplus ( Area of triangle )

= 0.5 * 150 * (4-2) = $150

deadweight loss ( area of triangle )

= 0.5 * ( 300 - 150 ) ( 9-4 )

= $375

6 0
2 years ago
Paul White, the CFO of Crane Automotive, Inc., is putting together this year's financial statements. He has gathered the followi
IrinaVladis [17]

Answer: $170,421

Explanation:

Using the Accounting equation;

Assets = Liabilities + Equity

Assets = Cash + Inventory + Goodwill and other assets + Net plant and equipment + Accounts receivable + Other current assets

= 23,015 + 212,300 + 78,656 + 713,500 + 141,258 + 11,223

= $1,179,952

Equity

= Common stock + Retained earnings

= 313,000 + 512,159

= $‭825,159‬

Liabilities = Assets - Equity

Current Liabilities + Long term debt = Assets - Equity

Long term debt = Assets - Equity - Current Liabilities

= 1,179,952 - ‭825,159‬ - (163,257 + 21,115)

= $170,421

6 0
3 years ago
The market value balance sheet for Cherry Pie Corp. reflects a cash of $22,000, fixed assets of $209,000, and equity of $231,000
Blizzard [7]

Answer:

The correct answer is D.

Explanation:

Equity = $231,000

No. of outstanding shares = 5,000

Price of share = \frac{231,000}{5000}

Price of share = $46.2

Repurchased shares worth $18,000

No. of shares repurchased = \frac{18,000}{46.2}

No. of shares repurchased = 390

When the shares would have been repurchased then the value of equity would decrease by the same amount.

Revised equity = $231,000 - $18,000

Revised equity = $213,000

No. of shares outstanding = 5,000 - 390

No. of shares outstanding = 4,610

Thus, the price of each share would be:

Share price = \frac{213,000}{4,610}

Share price = $42.60

8 0
3 years ago
Nadine is retiring today and has $96,000 in her retirement savings. She expects to earn 5.5 percent, compounded monthly. How muc
Ann [662]

Answer:

The monthly withdrawal is $701.10  

Explanation:

The monthly withdrawal can be computed with PMT formula using excel spreadsheet.

The formula is PMT(rate,nper,-pv)

The fv and type are both taken as zero.

However, the rate of 5.5 % given in the question is a yearly rate,but the requirement of the question is monthly withdrawal, hence the rate is divided by 12 months to reflect a monthly rate i.e 5.5%/12

Besides, the nper should  also to be adapted to show that the withdrawal is to be made every month for 18 years, hence nper is 12*18

The computation of the pmt based on the above highlighted points is found in the attached.

Download xlsx
6 0
3 years ago
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