The total amount of final goods and service produced in a country that people, businesses, governments, and foreigners plan to buy is Gross domestic product (GDP).
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What is Gross domestic product (GDP)?</h3>
- GDP is a metric for a country's economic output. GDP is a measure of the overall economic output of new products and services in a particular year.
- The circular flow diagram can be used to illustrate GDP as a flow of income moving in one direction and expenditures on resources, products, and services moving in the opposite way.
- According to this model, households purchase goods and services from businesses, and vice versa.
- The circular flow figure shows how the national income calculation methods of using income and expenditures are equivalent.
- Money (revenue from the sale of the commodities, services, and resources) travels counterclockwise in this picture while goods, services, and resources go clockwise.
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Answer:
1. Prepare an income statement for Allstar for the past month.
The income statement is given below.
Sales $ 410,000
Commission Cost ($ 50,000)
Technology Cost ($ 75,000)
R/D Cost* ($ 200,000)
Selling expenses ($ 10,000)
Admin expenses ($ 35,000)
Net profit $ 40,000
* In absence of information it is assumed that research and development costs of $200,000 meet defination of expense as per accounting standard (IAS 38).
2. Briefly explain why Allstar's income statement has no line for cost of goods sold.
As per question Allstars is a service oriented company. In services oriented company there is no good that company is manufacturing and selling. So there will not be any cost of good sold line item in income statement.
Answer:
$3,122.96
Explanation:
Future value = 5000
i = 8%
n = 6
m = 2
Present Value = FV(1+i/m)^mn
Present Value = 5,000(1+0.08/2)^-2*6
Present Value = 5,000(1.04)^-12
Present Value = 5,000 / (1.04)^12
Present Value = 5,000 / 1.6010322
Present Value = 3122.985284118583
Present Value = $3,122.96
Answer:
a. The average age of the population in his community is high.
Explanation:
As the average age of the population in his community is high, it is an opportunity for an entrepreneur who wishes to open a business providing "Fitness for Life" physical conditioning services (strength, balance, and flexibility training) in a city of 100,000 people because people will be more interested in the physical conditioning services and they will be attracted towards it as when the age rises, people become more interested in the health related activities, therefore, chances are very high that this will pose a serious and profitable opportunity for the entrepreneur in that particular city. He or she can definitely capture this opportunity very handsomely and profitably.
