Answer: Assets = Liabilities + Stockholders Equity.
Explanation: Assets refers to the resources owned by a firm for operating its business. Equity refers to the amount of fund invested in the business by the shareholders and liabilities are the obligations of the business.
Thus, it is assumed that every asset that an organisation owns is either purchased by the funds that belongs to the shareholders or on credit by taking liabilities into account.
Hence, from the above we can conclude that ,Assets = Liabilities + Stockholders Equity, correctly depicts the accounting equation.
Answer: $17,000,000
Explanation:
Investing Activities in the Cash Flow Statement refers to any cash inflows or outflow that is related to investments as well as the fixed assets and securities of other companies and patents.
In the above question the following are considered investment activities,
Sale of investment and Land
Purchase of Equipment and Patents.
Net Cash = ( Cash Inflows) - (Cash Outflows)
Net Cash = ( 40 million (investment sale) + 16 million ( land sale) ) - ( 26 million (equipment purchase) + 13 million (patent purchase) )
Net Cash = 56,000,000 - 39,000,000
Net Cash = $17,000,000
Net cash flows from investing activities is $17,000,000
Answer:
In a market economy, the price mechanism is indeed the primary coordinator of the decisions of buyers and sellers, because the price for goods and services adjust to an equilibrium point, where demand and supply are equal.
However, the public sector still has two important functions in this enviroment:
- Correcting market failures - a market failure is a situation in which the market does not produce a good outcome. An example of market failure is pollution. Market failures can be corrected by government intervention, for example, by setting anti-pollution regulations.
- Providing public goods - some public goods are not provided by the private sector because they are not profitable. The public sector can therefore step in and provide this type of goods.
Answer: $1,000 billion
Explanation:
The change in total spending is calculated by:
= Autonomous consumption increase * Multiplier
Multiplier:
= 1 / (1 - MPC)
= 1 / (1 - 0.95)
= 1 / 0.05
= 20
Change in total spending:
= 50 billion * 20
= $1,000 billion