Let's say that gasoline is subject to a $0.50 excise tax in your city. This tax affects both buyers and sellers equally.
Depending on the elasticity of demand and supply, a tax's burden is split between purchasers and sellers. Depending on their alternatives, buyers' and sellers' desire to exit the market is represented by elasticity. The relationship between supply and demand price elasticity and tax incidence is also possible. The tax burden is placed on the purchasers when supply is more elastic than demand. The cost of the tax will be borne by the producers if demand is more elastic than supply.
Learn more about the burden of this tax here.
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Answer:
$5,800; $3,200
Explanation:
Calculation to determine The delivery expenses that should be charged to Dept. A and Dept.
Dept. A and Dept. B
Direct expenses $1,000 $0
Indirect expenses $4,800 $3,200
[$60%*($9,000-$1,000)=$4,800]
[$40%*($9,000-$1,000)=$3,200]
TOTAL $5,800 $3,200
Therefore The delivery expenses that should be charged to Dept. A and Dept. B, respectively, are:$5,800 $3,200
Answer:
Each 1000 par value bond will sell at issuance for $110.71
Explanation:
A zero coupon bond is a bond that does not pay interest and is issued at a heavy discount which is a compensation for the interest payment. The value of the zero coupon bond today is calculated using the present value of the face value of zero coupon bond. The formula to calculate the present value of the zero coupon bonds is,
PV = Face value / (1+r)^t
As the required rate is quoted in annual terms, we will divide it by 2 to calculate the semi annual required rate and multiply the time (annual) by 2 to calculate the semi annual periods in 25 years.
Semi annual required rate = 9% / 2 = 4.5%
Semi annual periods (t) = 25 * 2 = 50
PV = 1000 / (1+0.045)^50
PV = $110.70965 rounded off to $110.71
