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pogonyaev
3 years ago
7

Skylar is the owner of Pirate Pizza Bus, a popular food truck. The food truck was so successful that she decided to open a brick

-and-mortar location several years ago. While the truck continues to earn a good profit, the physical restaurant has been performing poorly. She has continued to invest a lot of energy and money into trying to make the restaurant profitable, but nothing is working. Current projections show that the restaurant will continue to lose money, but she decided to go ahead and invest a large sum of money into more advertising for it. Skylar is demonstrating which bias?
Business
1 answer:
Soloha48 [4]3 years ago
3 0

Answer:

Commitment bias

Explanation:

Commitment bias refers to keep doing something because that is what you have always done, or because that is what you have said before that you wanted to do. This means that you are so committed to an idea, that you cannot realize that it is probably not a very good idea.

In this case, Skylar is so committed to making her brick and mortar restaurant work, that she cannot understand that it probably will never do.

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Terms of a lease agreement and related facts were:
Feliz [49]

Answer:

1) January 1, 2018, asset leased

Dr Lease receivable 550,000

    Cr Equipment 550,000

January 1, incremental costs associated with lease transaction

Dr Lease receivable 6,652

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January 1, 2018, first lease payment collected

Dr Cash 200,000

    Cr Lease receivable 200,000

2) to calculate the effective rate we can use the present value of an annuity due formula

PV annuity due factor, 3 periods, ?% = present value of lease receivable / annual payment = $556,652 / $200,000 = 2.78326

Now we must use an annuity due table to determine a possible rate. In this case, the exact rate is 8%.

3) December 31, 2018, interest receivable on lease contract

Dr Interest receivable 28,532

    Cr Interest revenue 28,532

interest receivable = ($556,652 / $200,000) x 8% = $28,532

5 0
3 years ago
Caspian Sea is considering raising $33.00 million by issuing preferred stock. They believe the market will use a discount rate o
Hitman42 [59]

Answer:

1,212,723 shares

Explanation:

Given that,

Value of issuing preferred stock = $33,000,000

Discount rate = 11.87%

Dividend paid = $3.23

Price of preferred stock:

= Annual dividend ÷ discount rate

= $3.23 ÷ 0.1187

= $27.2115

Shares will they need to issue:

= Value of issuing preferred stock ÷ Price of preferred stock

= $33,000,000 ÷ $27.2115

= 1,212,723

3 0
3 years ago
Barga Company purchases $39,000 of equipment on January 1. The equipment is expected to last five years and be worth $5,800 at t
ad-work [718]

Answer:t-shirt ism. Jd djdjdjdjdjdisjdvdj did jd dis e did sjs g

Explanation:

3 0
3 years ago
For an automobile company, the total overhead applied was $48,000,000 at the end of the year. Actual overhead was $52,850,000. C
ICE Princess25 [194]

Answer:

Net income decreased by $4,850,000.

Explanation:

Given total overhead applied = $48000000

The actual overhead = $52850000

Over/under Applied overhead = total overhead applied - Actual overhead at the end of the year.

Over / under Applied overhead = 48000000-52850000

Over / under Applied overhead = -$4850000

From the calculation, it can be seen that the overhead is underapplied therefore when under applied overhead allocated to cost of goods sold then cost of goods sold decreased by $4850000.

4 0
3 years ago
Classifying costs by behavior with changes in volume of activity involves: Multiple Choice Identifying fixed cost and variable c
Vadim26 [7]

Answer:

Identifying fixed cost and variable cost.

Explanation:

  • The behavior cost is those costs that will completely change when there are minute changes in the activity and includes the variable and the fixed costs and the semi-variable costs.  
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3 years ago
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