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Elden [556K]
3 years ago
15

Why is a free rider a type of market failure?

Business
1 answer:
RoseWind [281]3 years ago
7 0

Answer:In the social sciences, the free-rider problem is a type of market failure that occurs when those who benefit from resources, public goods, or services of a communal nature do not pay for them. Free riders are a problem because while not paying for the good, they may continue to access it.

Explanation:

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Sunland Company is considering two capital investment proposals. Estimates regarding each project are provided below. Project So
san4es73 [151]

Answer:

a. 4 years and 4.22 years

b.  -$31,350 and $27,615

c. Project Nuts

Explanation:

a. The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

For project soup, it would be

= $600,000 ÷ $150,000

= 4 years

For project nuts, it would be

= $900,000 ÷ $213,000

= 4.22 years

b. The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor - initial investment

For project soup, it would be

= $568,650 - $600,000

= -$31,350

The present value is computed below:

= Annual cash flow × pvifa for 5 years at 10%

= $150,000 × 3.791

= $568,650

For project nuts, it would be

= $927,615 - $900,000

= $27,615

The present value is computed below:

= Annual cash flow × pvifa for 6 years at 10%

= $213,000 × 4.355

= $927,615

Kindly refer pvifa table

c. The project Nuts should be accepted as it has positive net present value.

7 0
3 years ago
he following data are to be used for Questions 4 and 5. The parentheses indicate amounts that should be subtracted in the comput
ivann1987 [24]

Answer:

t= 0.4138

Explanation:

First, we need to accommodate the information:

Sales= 10,000

COGS= 6000 (-)

Gross profit= 4000

Operating, selling, general and administrative expenses= 2300 (-)

Net operating income= 1700

Interest= 250 (-)

Earnings before taxes= 1450

TAX= 600 (-)

Net income= 850

t= ?

t= 600/1450= 0.4138

5 0
3 years ago
Cycle Wholesaling sold merchandise on account, with terms n/60, to Sarah’s Cycles on February 1 for $550 (cost of goods sold of
nikitadnepr [17]

Explanation:

The journal entries are shown below:

On February 1

Account receivable - Sarah’s Cycles A/c Dr $550

       To Sales $550

(Being the goods are sold on credit)

Cost of goods sold A/c Dr $375

           To Merchandise Inventory A/c $375

(Being goods are sold at cost)

On February 9

Sales return and allowance A/c Dr $137.50    ($550 ÷ 4)

To Accounts receivable - Sarah’s Cycles    $137.50

(Being sales return is recorded)  

Merchandise Inventory A/c $85

                  To Cost of goods sold A/c Dr $85

(Being sales return is recorded)  

On March 2

Cash A/c Dr $412.50        ($550 - $137.50)

           To Accounts receivable - Sarah’s Cycles $412.50    

(Being cash is received)

The net profit margin is

= (Net sales - Cost of goods sold) ÷ Net sales

= ($412.50 - $290) ÷ ($412.50)

= 29.69%

The cost of goods sold

= $375 - $85

= $290

5 0
3 years ago
Gloria thinks that she is paid less than other workers in her division and feels extremely resentful. She starts taking long bre
Pachacha [2.7K]

Answer:

D) distributive

Explanation:

The salary is not distributed as required as per Jackie so this is perceiving distributive justice.

8 0
3 years ago
What are two examples of Secondary or non-core activities?
mylen [45]
One example is “engagement” consider to be “business activities”
4 0
3 years ago
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