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3 years ago

The wealth effect refers to the fact that

1 answer:

3 0

The wealth effect refers to the fact that when the price falls, the real value of household wealth rises and consumption will also rise. The wealth effect causes movement along the demand and supply curve due to the value of money and items changing. The wealth effect is used to determine people spending more money when the value of their assets rise.

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Rey bought 10 shares of Apex Co. for $17 each and later sold all of them at

cluponka [151]

Answer:

C. Capital Loss

Explanation:

When the selling price of an asset like bonds etc exceeds it purchase price then the capital profit will be the difference between sale and purchase price.

But if the purchase price is greater than the sale price the difference is called Capital loss.

Example: if we buy 100 shares for $20 each and after a year sell them for $ 18 then the difference is called the capital loss.

6 0

3 years ago

In February, X City ordered $550,000 of supplies. On March 17th it received all of the ordered supplies and an invoice of $551,0

Neporo4naja [7]

Answer:

B. Debit Budgetary Fund Balance -- Reserve for Encumbrances for $550,000.

Explanation:

X City made an order for goods worth $550,000 and when the goods were received the invoice states $551,000. The company should indicate in the invoice the correct amount received and work with that.

Reserve for encumbrances is an account that contains funds that have been reserved for a particular purpose. In this case since the order was made in February, the funds of $550,000 would have been put in this account.

On receipt of the goods we debit Budgetary Fund Balance -- Reserve for Encumbrances for $550,000 (the correct value of goods received).

4 0

3 years ago

1. If money is deposited in a bank that pay's simple interest of 4.5 %, bow much will have to be deposited to earn $90 of intere

TiliK225 [7]

The amount of 3000 will have to be deposited to earn $90 of interest for 8 months, if money is deposited in a bank that pay's simple interest of 4.5%.

Explanation:

The given is,

Simple interest of 4.5 %

Earn $90 of interest for 8 months

Step:1

Formula to calculate the simple interest method,

$F=P(1+iN)$ ...................................(1)

Where,

F - Future amount

P - Initial investment

i - Rate of interest

N - Number of years

From given,

i - 4.5%

Let, X - Initial investment, P = X

F = P + Interest amount

F = X + 90

From the equation (1),

$(X+90)=X(1+(0.045)(0.667))$

(∵ N = 8 months = $\frac{8}{12}$ = 0.667 year )

$(X+90)=X(1+(0.03))$

$(X+90)=X(10.03)$

$(X+90)=1.03 X$

$90=1.03X-X$

$90=0.03X$

$= \frac{90}{0.03}$

= 3000

P = X = $ 3000

From the X value.

F = P + 90

= 3000 + 90

F = $ 3090

Result:

The amount of 3000 will have to be deposited to earn $90 of interest for 8 months, if money is deposited in a bank that pay's simple interest of 4.5%.

4 0

3 years ago

The following is the adjusted trial balance of Wilson Trucking Company.

Troyanec [42]

Answer:

PART 1: Wilson Trucking Company reported Net Income of $15,854 for the year ended December 31, 2017.

PART 2: As per the statement of changes in equity, K. Wilson Capital Account Balance as at December 31, 2017 is $190,124

* Please note that figures in brackets represent negative values.

Explanation:

PART 1

Wilson Trucking Company

Income Statement for the year ended December 31, 2017

Revenue

Trucking Fees $115,500

Less Expenses:

Depreciation expense of Trucks $(26,043)

Salaries expense $(54,170)

Office supplies expense $(9,500)

Repairs expense -Trucks $(9,933)

Net Income $15,854

PART 2

Wilson Trucking Company

Statement of changes in Equity for the year ended December 31, 2017

K. Wilson Capital Account Balance as at December 31, 2016 $193,270

Add: Net Income for the year $15,854

Less: K. Wilson withdrawals during the year $(19,000)

K. Wilson Capital Account Balance as at December 31, 2017 $190,124

7 0

3 years ago

n the first two years your investment increases by 2.5% annually, in the third year it returns 12% but in the fourth year it goe

mote1985 [20]

Answer:

Ans. The average annual rate of return over the four years is 2.792%

Explanation:

Hi, first let´s introduce the formula to use

$r(Average)=\sqrt[n]{(1+r(1))*(1+r(2))*(1+r(3))+...(1+r(n))}-1$

Where:

r(1),(2),(3)...n are the returns in each period of time

n =number of returns to average (in our case, n=4).

With that in mind, let´s find the average annual return over this four years.

$r(Average)=\sqrt[4]{(1+0.025)*(1+0.025)*(1+0.12)+(1-0.07))} -1=0.022792$

Therefore, the average annual return of this invesment in 4 years is 2.2792%

Best of luck.

5 0

3 years ago