Answer:
correct answer is option B
Explanation:
GIVEN DATA:
Net income is $205,000
sales is $1,293,000
investment in assets is $1,021,000
rate of return on investment for blase corporation = (net income)/(investment in assets)
rate of return = (2,05,000/ 10,21,000)*100
rate of return = 20%
therefore correct answer is option B
Answer: loss to buyers from paying higher prices plus the benefit to sellers from receiving lower prices.
Explanation:
Total surplus measures the maximum amount a buyer is willing to pay to ensure a smooth market flow plus the amount the seller is least able to sell a product as long as it's not below the cost price of that product.
Total surplus ensure the efficient running of a market and a better society overall.
Answer:
Investors’ outlook for the firm has improved.
Explanation:
Computation of Market price.
MPS = PE ratio × EPS
⇒ MPS (Previous) = $1.20 × 15
⇒ MPS (Previous) = $18
⇒ MPS (Current) = $1.20 × 18
⇒ MPS (Current) = $21.60
So, we say that the market price has increased.
Investors’ outlook for the firm has improved.
Answer:
Net income from special order = $56,400
Blowing Sand Company should accept the order because it will increase net income by $56,400
Explanation:
In order to carry out an incremental analysis, only relevant cash flows should be considered.
The relevant cash flows from accepting the special order are the variable costs and the sales revenue.
Please, note that the fixed costs are not relevant for this decision. Simply because they would be incurred either way.
1. The sales revenue from the order- $30 × 9400 = $282,000
2. the variable cost of production $24 per unit × 9,400 = $225,600
The contribution from the special order would be determined as follows:
Contribution from special order = sales revenue - variable cost
= $282,000 - $225,600
= $56,400
Blowing Sand Company should accept the order
Answer: Higher interest rate
Explanation:
Expansionary monetary policy is used by the central bank to stimulate the economy in such a way that there'll be a rise in the money supply available in the economy.
The interest rate is also reduced which ultimately leads to a rise in the demand and help improve economic growth. Expansionary fiscal policies on the other hand results in higher interest rate.