Answer:
The answer is: decrease taxes by $100 billion.
Explanation:
If the real GD is $200 billion, which represents only 40% of full employment GDP, then the government should try to increase consumer spending either by decreasing taxes or increasing government spending, or a combination of both.
In this case, I chose the tax decrease since government have budget limitations and they can only decrease taxes by so much before hitting a deficit. Additionally, when you have a large tax reduction, usually government spending either stays the same or decreases.
If the government decreases taxes by $100 billion, the marginal propensity to consume shall result in a $75 billion increase in consumption. According to the Keynesian Multiplier theory, that $75 billion should generate additional production, creating a virtuous cycle that should increase the real GDP in a larger proportion.
Answer:
$14,200
Explanation:
<em>Step 1 Determine the Cost of the Patent </em>
Research and Development costs $101000
<em>Add</em> legal fees $41000
Total $142,000
<em>Step 2 Determine Amortization Expense </em>
Amortization Expense = Cost/ Useful life
= $142,000/10 years
= $14,200
Answer:
B and C are the same, and none of the answers are correct
Explanation:
Capital gain is the amount of money you earn after selling a property or investment. It's essentially (the price you sold it for) -- (the price you paid for it)
eg if you bought stock for $100 and sold it for $200, you'd have a capital gain of $100 (200-100)
Answer:
$2,096,924.50
Explanation:
Present value of an investment and cash inflows is measured at present time means year 0. Gradient is also valued at present time.
$760,000 each year at 9% for next 3 years is annuity payment and its Present value can be calculated as follow
PV of Annuity = P + P x ( 1 - ( 1 + r )^-(n-1) / r
Where
P = $760,000
r = 9%
n = 3 years
Placing values in the formula
PV of Annuity = $760,000 + $760,000 x ( 1 - ( 1 + 9% )^-(3-1) / 9%
PV of Annuity = $760,000 + $760,000 x 1.759111
PV of Annuity = $760,000 + $1,336,924.50
PV of Annuity = $2,096,924.50