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max2010maxim [7]
3 years ago
9

What are consequences of rapid inflation?

Business
1 answer:
Black_prince [1.1K]3 years ago
3 0

The answers are

Savings accounts become less desirable because interest earned is lower than inflation

Individual purchasing power increases, which results in an increase in demand.

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ABC Company insured its building on a replacement cost basis for $700,000 under a property insurance policy that included an 80%
Rama09 [41]

Answer:

$35,000

Explanation:

Given that

Insurance = $700,000

Sustained cost = $40,000

Replacement cost = $1,000,000

Policy = 80%

The computation of amount eligible for payment is as shown below:-

Insurance required = Cost of building × Co insurance

=$1,000,000 × 0.80

= $800,000

The amount eligible for payment = (Insurance Carried ÷ Insurance Required) × Loss

= $700,000 ÷ ($1,000,000 × 80%) × ($40,000)

= $700,000 ÷ $800,000 × $40,000

= 0.875 × $35,000

= $35,000

3 0
3 years ago
The employer amount of FICA taxes that Red Mountain is required to pay is equal to the amount that it withholds from its employe
kolezko [41]

Answer:

$189,000

Explanation:

The computation of total expense with regards to this payroll is shown below:-

Total expense = Salaries and wages earned by employees + Employer's portion of FICA taxes

= $180,000 + $9,000

= $189,000

Therefore for computing the total expenses with regards to this payroll we simply applied the above formula and we ignore all other values as they are not relevant.

5 0
3 years ago
A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is
Ira Lisetskai [31]

Answer:

Time ticket

Explanation:

A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a: time ticket.

A time ticket also known as time card is type of document used to record the amount of hours an employee worked during a pay period. Time tickets come in all different shapes and sizes like the traditional time tickets that are physical cards that are stamped with starting and ending times of employees work days.

3 0
3 years ago
Your firm is considering opening a branch office in Kyle. The office would cost $485,000 to build the office. During the office
wariber [46]

Answer:

The NPV from opening the branch office is negative ( -$106668.08). Thus the branch office should not be opened.

Explanation:

The decision to open the branch office will be taken based on the NPV provided by opening of the branch office. If the NPV of a project is positive based on the required rate of return used as a discount rate fro cash flows, the investment is worth undertaking.

The net present value (NPV) for a project can be calculated as,

NPV = CF1 / (1+r)  + CF2 / (1+r)²  + ...  + CFn / (1+r)^n  -  Initial Outlay

Where,

  • r is the appropriate discount rate
  • Initial Outlay is the Initial cost of the project
  • CF represents cash flows from the project

As the required return is 16%, we will take this as the appropriate discount rate.

NPV = 45000 / (1+0.16)  +  120000 / (1+0.16)²  +  150000 / (1+0.16)³  +

150000 / (1+0.16)^4  +  150000 / (1+0.16)^5  -  485000

NPV = - $106668.08

As the NPV from project is negative at a required return of 16%, the project should not be under taken and the branch office should not be open.

7 0
3 years ago
You are considering the purchase of a certain stock. You expect to own the stock for the next four years. The current market pri
murzikaleks [220]

Answer:

The answer is: The expected rate of return from this investment is 26.68%

Explanation:

We are given the following cash flows for this operation:

  • Initial investment = -$24.50
  • Cash flow 1 = $1.25 (dividend year 1)
  • Cash flow 2 = $1.35 (dividend year 2)
  • Cash flow 3 = $1.45 (dividend year 3)
  • Cash flow 4 = $56.55 ($1.55 dividend year 4 + $55 stock's sales price)

Using an excel spreadsheet and the IRR function:

=IRR(value 1: value 5) =26.68%  

where

  • value 1 = -24.50
  • value 2 = 1.25
  • value 3 = 1.35
  • value 4 = 1.45
  • value 5 = 56.55

7 0
3 years ago
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