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Mnenie [13.5K]
3 years ago
14

A farmer lives on a flat plain next to a river. In addition to the farm, which is worth $F, the farmer owns financial assets wor

th $A. The river bursts its banks and floods the plain with probability P, destroying the farmIf the farmer is risk averse, then the willingness to pay for flood insurance unambiguously falls when:________. A) F is higher, and A is lower.B) P is lower, and F is higher.C) F & A are higher.D) P is lower, and A is lower.E) A is higher, and F is lower.
Business
1 answer:
Korolek [52]3 years ago
4 0

Answer:

E) A is higher, and F is lower.

Explanation:

If the farmer is risk averse, he tends to always take the decision which will minimize risk.

His financial assets (A) are not affected by floods, so the higher they are, less likely he will be to pay for flood insurance.

If P is the likelihood of a flood happening, the lower the risk P, then the lower the willingness to pay for flood insurance will be.

If F is lower, then the farmer is unlikely to spend money insuring the farm.

Therefore, analyzing the answer choices, the only that fits the above description is E) A is higher, and F is lower.

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4 years ago
Katherine is developing a forecast for her company's next year's sales of an organic fertilizer to retail gardening nurseries. s
Furkat [3]

She is engaging in <u>Bottom-up</u> Forecasting.

<h3>What is Bottom-Up Forecasting?</h3>

Bottom-up forecasting is a high-level prediction of micro-level inputs to estimate revenue for a particular year or group of years. Revenue teams, for example, frequently utilize this strategy to forecast the company's future performance based on individual sales or rep performance.

Bottom-up forecasting is analogous to assessing the health of a complicated system, such as a vehicle, by examining its most fundamental components, such as its engine components.

The essential distinction between top-down and bottom-up methodologies is the perspective used to conduct your analysis. Bottom-up forecasting is excellent for assessing the impact of certain performance measures on revenue. However, in order to truly grasp the health of a complicated firm, we must examine it from several perspectives.

In a top-down study, we estimate aggregate demand. This style of evaluation considers past performance to forecast future performance.

Therefore, Katherine is developing a forecast for her company's next year's sales of organic fertilizer to retail gardening nurseries. she is assembling the sales estimates for her company's product by adding together the territory estimates provided by her salespeople. she is engaging in <u>Bottom-Up forecasting.</u>

For more information on Bottom-up Forecasting, refer to the given link:

brainly.com/question/14683037

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3 0
2 years ago
Holman company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciate
brilliants [131]
Depreciation is a way not only to recognize the lost value over time of an asset, but also a way to recognize the expense of the asset over time. To this end, we want to see the value of the asset get smaller, and a piece of the asset on the the income statement ever period. 
The depreciation base is 95,000 -5,000 = 90,000, and the depreciation period is 90,000/15,000 = 6 years.
The journal entry every year will be 
Dec. 31
Debit: Depreciation expense 15,0000
Credit: Accumulated Depreciation       (15,000)
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7 0
3 years ago
Orion Flour Mills purchased a new machine and made the following expenditures:
MatroZZZ [7]

Answer:

Orion Flour Mills Journal entry

Dr Equipment 62,400

Dr Prepaid Insurance 500

Cr Cash 2,900

Cr Accounts Payable 60,000

Explanation:

Calculation for cost of equipment

Purchase price 55,000

Add: Sales tax 5,000

Add: Shipment of machine 800

Add: Installation 1,600

Total Cost of Equipment 62,400

Calculation for Cash

Shipment of machine 800

Add Insurance on the machine for the first year 500

Add Installation 1,600

Total Cash 2,900

Calculation for Accounts Payable

Purchase price 55,000

Add: Sales tax 5,000

Total Account payable 60,000

8 0
3 years ago
John Diaz immigrated to Tallahassee, Florida from Cuba in the 1980’s. He set up a coffee shop called Diaz in a small upper-middl
dsp73

Answer:

Business format franchising.

Explanation:

Business format franchising is a type of business arrangement in which a franchisor confers the right to a franchisee to sell their goods and services. A franchisor provides support which enables the franchisee to function independently.

A major advantage of this type of business arrangement is that it enables the business to expand to different location. Franchising enables a business to maximise profit which would lead to the overall growth of the organisation.

7 0
3 years ago
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