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ad-work [718]
3 years ago
15

The wealth effect refers to the fact that

Business
1 answer:
Stella [2.4K]3 years ago
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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Describe the opportunity cost of attending a four-year college (assuming a full-time schedule, living on-campus). Given these op
Olegator [25]

Answer:

Opportunity Cost refers to loss of potential gain which could've resulted from other non chosen alternatives when one opts for an alternative. It's also defined as the next best alternative.

The Opportunity Cost of attending a 4 year college with full time schedule & living on campus would be the foregone income another student earns who works in an organization for those same number of hours for the same duration of 4 years and also the fees paid for those 4 years at the college which if would've been banked or invested would've yielded a return.

The reason for choosing a four year college experience over above mentioned alternatives could be the in the form of expected higher income once an individual avails a degree.

8 0
3 years ago
The Chester Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. Suppose
Lena [83]

Answer:

(B) $38,446,000

Explanation:

Assuming a linear depreciation model, depreciation will occur at the same rate each year. Since the total after 15 years is 90% of the original value, the percentage depreciated per year is given by:

P= \frac{90\%}{15} \\P=6\%

The book value (V) of this purchase after the first year will be:

V=\$40,900,000*(1-0.06)\\V=\$38,446,000

Therefore, the answer is (B) $38,446,000

3 0
3 years ago
If a company's cost of capital increases unexpectedly, which of the following actions will help it maintain or increase its stoc
Kitty [74]

Answer:

III) Increase its gross margin

Explanation:

If the company increases its gross margin, it will have a direct impact on the company's net profit. The higher a company's net profit, the higher its value = higher stock price.

The only option that increases the value of the company is to increase its net profit, since:

  • an increase in inventory will result in a lower stock price
  • a decrease in the asset turnover ratio will result in a lower stock price
  • the issuing of stock dividends will only increase the price of stock in the short run, later the price will adjust down since the company's book value will lower
4 0
3 years ago
Is carriage inward <br>debit or credit​
Gre4nikov [31]

Answer:

From the buyer's point of view, the delivery charge would he referred to as “carriage inwards”. Any such carriage charges should be debited to the carriage inwards account in the general ledger. The carriage inwards account is written off to the trading account at the end of the accounting period.

Explanation:

Carriage inwards refers to the transportation costs required to be paid by the purchaser when it receives merchandise it ordered with terms FOB shipping point. Carriage inwards is also known as freight-in or transportation-in. Carriage inwards is considered to be part of the cost of the items purchased.

5 0
2 years ago
If you put $2,620 in a savings account and make no further deposits, what type of calculation would provide you with the value o
riadik2000 [5.3K]

Answer:

future value of a lump sum:

Nominal(1+r)^n = FV\\2,620(1+r)^{28} = FV

Explanation:

when there is only a single deposits the formula will be the compounding interest future value of a lump sum

The deposits will generate incoem at a given rate r which, will make it increase their value over the course of time.

3 0
3 years ago
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