Which of the following should have the strongest cause and effect relationship with overhead costs? Non-value-added costs. Cost
1 answer:
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Answer:
recessionary gap = 8 billion
so correct option is c) $8 billion
Explanation:
given data
MPC = 0.80
GDP = $40 billion
to find out
the size of the recessionary gap
solution
we get here first Multiplier that is
Multiplier = ..................1
Multiplier =
Multiplier = 5
so recessionary gap will be
recessionary gap = ................2
recessionary gap =
recessionary gap = 8 billion
so correct option is c) $8 billion
Answer:
1. Discount
2. $449,298.47
3. $369,298.47 gain
4. land reduces by $80,000, investment increases by $449,298.47, reserves increases by $369,298.47
Explanation:
Question 1
Using the formula below
where
I = interest rate, which is 6% of 500,000 = 30,000
F = Face value, 500,000
r = borrowing cost = 12%
Therefore, the price of the note at the time it was used for payment was
= $449,298.47.
As the price is lower than the face value of the note, the note was issued at a discount.
Question 2
The fair market value of the note is $449,298.47, the compute price in question 1.
Question 3
The gain/loss on the sale of the land
= sale price - purchase price
= $449,298.47 - 80,000
= $369,298.47.
Question 4
The transaction would affect Crabb & Co's balance sheet as follows.
<em>Asset side:</em>
land reduces by $80,000
investment increases by $449,298.47
<em>Equity & liabilities side:</em>
reserves increases by $369,298.47