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3 years ago

Firms and workers expect inflation to rise from 3% to 5% next year. As a result, this should

Business

1 answer:

yaroslaw [1]3 years ago

6 0

Answer:

Option B. Shift the short-run aggregate supply curve down.

Explanation:

The reason is that the inflation increases the price of the product which results in decrease in the demand of the product and this decrease in the demand of the product due to increasing inflation results in decrease in the supply of the product because the firms have to control the marginal cost of the product to lower the prices and stay in demand. Hence option B is the correct option.

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Charisma, Inc., has debt outstanding with a face value of $5.5 million. The value of the firm if it were entirely financed by eq

rjkz [21]

Answer:

$0.69 million or $690,000

Explanation:

Value of Firm Vₐ = $24.7 million

Debt D = $5.5 million

Shares S = 390,000 * 51 = $19.89 million

Therefore Value Vₓ = 5.5 + 19.89 = $25.39 million

We would expect Vₐ and Vₓ to be the same value. Therefore the decrease in the value of the company due to expected bankruptcy costs is

= $25.39 million - $24.7 million

= $0.69 million

3 0

3 years ago

On January 1, a company issued a $50,000 face value, 8% five-year bond for $46,139 that will yield 10%. Interest is payable on J

sammy [17]

Answer: B. 46,768

Explanation: Completing an amortization table would allow us find for the present year the bond carrying amount.

The face amount of the bond multiplied by the coupon rate gives the interest payment. This payment adjusted for the number of installments paid per year is $2,000 which is given by:

50,000 × (8/2)% interest (half the year).

Interest expense is calculated as the effective rate of 5% multiplied by the beginning of the year's carrying value. The difference between the interest payment and interest expense give the amortization of discount.

Carrying Value: 46,139 (A) Value at 1/1/X1

Cash: 2 ,000 &n bsp; (50,000 x .04) (B) Never Changes

Expense: 2,30 6.95 (46,139 x .05) (C)

(B - C) -306.95 (D)

(A - D) 46,445.95 (Carrying Value at 6/30/X1)

----------------

Carrying Value: 46,445.95 (A) Carrying Value at 6/30/X1

Cash: 2,000.0 0 (50,000 x .04) (B) Never Changes

Expense: 2,322.30 (46,445.95 x .05) (C)

(B - C): -322.30 (D)

(A - D): 46,768.25 (Carrying Value at 12/31/X1

5 0

3 years ago

Nidal Company reported inventory in the 2020 year-end balance sheet, using the FIFO method, as $185,000. In 2021, the company de

Ksenya-84 [330]

Answer:

Dr Retained earnings $14,000

Cr Inventory $14,000

Explanation:

There is a need to make adjustment to the inventory . Therefore,

Adjusted inventory

= New method of $171,000 - Old method of $185,000

= $14,000 decrease

It is to be noted that a lower inventory will have high costs associated with goods sold hence reduces profit/net income for the previous year by $14,000.

Also, the net income reports to retained earnings account hence decreases retained earnings.

Having made the above adjustment, we can assume that the average cost method was used for 2020 books.

3 0

3 years ago

Read 2 more answers

USA bank has an average balance of transactions accounts, August 10 to 23, of $824.46 million. The average balance in the cash a

oee [108]

Answer:

Explanation:

minimum reserve = 491.226

Reserve held through 21 days = 37 x 12 = 444

To be held last two days = 47.226

check the picture attached for more explanation to the problem

7 0

3 years ago

san antonio, texas, has a system in which the names of the top three applicants for promotion are submitted to the chief of pol

tino4ka555 [31]

<span>This system uses what is called career-banding. This system identifies employee competencies, reduces the number of job titles and simplifies the management process. It also allows and employee to move within their pay range while allowing managers to have a say in compensation and will hold them accountable to their decisions.</span>

8 0

3 years ago