You purchase another company for $50m. The company you purchase has assets with a fair value of $75m and liabilities with a fair
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Answer:
D. Decreases from 30 to 28.5 bags
Explanation:
The computation of the economic order quantity is shown below:
=
where,
Carrying cost is $80 × 40% = $32
Annual demand = 60 bags × 12 months = 720 bag
And, the ordering cost is $20 per order
Now put these values to the above formula
So, the value would equal to
=
= 30 bags
Now the demand is decreased by 10% So, the annual demand would be
= (60 - 6) × 12 months
= 54 bags × 12 months
= 648 bags
The other things will remain the same
Now put these values to the above formula
So, the value would equal to
=
= 28.46 bags
Answer: Marginal propensity to consume = $0.60
Spending multiplier = $2.5
Explanation: The MPC can be calculated using following equation :-
= 0.60
Similarly, we can calculate spending multiplier as :-
= $2.5