Answer:
Fixed costs and Variable costs
Explanation:
Fixed costs do not vary with production levels. Sometimes they are referred as period cost. In a financial year, fixed cost will be constant figures whether production goes up and down. Examples of fixed costs include rent, salaries, depreciation, and administrative expenses. The depreciation cost of a machine is a constant figure per year throughout its useful life. It does not change whether the asset is over or underutilized.
Variable costs are expenses that are affected by the production level. They are costs directly associated with the production process. Examples include raw materials and packaging. As production increases, the cost of raw materials will increase. Variable costs are dependent on production output.
The percentage nominal GDP change is 20%
The Real GDP growth is 15%
Explanation:
GDP is the final value (market) of all final services and goods produced during a financial year.
Since prices of the goods and services fluctuate with time, hence to get a real idea of economic growth, economist calculate two types of
Nominal GDP- GDP of the economy calculated at the current prices. This GDP does not factor the inflationary effect on the GDP calculation.
Real GDP- This is the original increment/decrement in the net price of final goods and services in a year. Real GDP adjusts the inflationary effects component on the GDP calculation.
Nominal GDP is the previous year- $10 billion
Final nominal GDP- $12 billion
% change in the nominal GDP= (final GDP-GDP in the previous year) *100/GDP in the previous year
% change in the nominal GDP= (12-10) *100/10
% change in the nominal GDP=20%
Inflation in the Econland= 5%
Real GDP change= Change in Nominal- inflation rate
Real GDP change=20%-5%
Real GDP change=15%
Answer:
13%
Explanation:
Given that,
Investment (100% equity) = $700,000
EBIT = $140,000
Tax rate = 35%
Earnings after tax:
= Investment (100% equity) + Earnings before interest and taxes - Tax (35%)
= $700,000 + $140,000 - ($140,000 × 0.35)
= $840,000 - $49,000
= $91,000
ROE = Earnings after tax ÷ Investment
= $91,000 ÷ $700,000
= 13%
The direct write-off method violates the <u>matching principal</u>, which says that revenues and expenses are recorded in period that they occur (not necessarily when they are collected/written off).
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