Answer: The correct answer is "a. Less".
Explanation: According to the principle of diminishing returns to capital, an additional unit of capital will <u>less</u> in Alpha compared to Beta, holding other factors constan.
The law of diminishing returns is an economic concept that shows the decrease of a product or a service as productive factors are added to the creation of a good or service. It is a marginal decrease, that is, the increase is smaller every time.
An ethical dilemma. The American executive is forced to make a decision between forced child labor or, presumably, forcing children into prostitution. The executive must make an ethical decision based on his assumptions for the ethical effects of his decision.
Answer:
c. $ 95,000 $ 0
Explanation:
<u>Calculation of cost of land acquired</u>
For the purpose of recording of land acquired in the books of accounts, the accounting values of consideration paid shall be considered as per the generally accepted accounting principles as well as as per International accounting standard (IAS) - 16 'Property, plant and equipment'. Hence the land shall be recorded as per the following amounts:
Consideration paid in cash (A) = $ 5,000
Consideration in kind (land) (B) = $ 90,000 (Refer Note 1)
Total cost of new land (A+B) = $ 95,000
<em>Note 1</em>
Fair value is irrelevant for the purpose of capitalization of asset (IAS-16)
<u>Calculation of Gain/loss on disposal of land</u>
No gain/loss needs to be recorded as the new asset shall be recorded in terms of the book value of old asset (i.e. net impact is already taken into account during the exchange transaction)
Answer:
A) Division's margin = 1.000.960/14.720.000 = 7%
B) Division's turnover = 14.720.000/4.000.000= 3,68
C) ROI = 3,68 * 0,07 = 25%
D) 14%*$4.000.000 = $560.000 --> $1.000.960-$560.000=$440.960
Explanation:
To calculate the Division's margin you have to divide the Net Operating Income by Sales.
To calculate the Division's turnover you have to divide the Sales by Average operating assets.
To calculate the ROI you have to Multiply Division's margin by Division's turnover.
And finally the division's residual Income is calculated multiplying the required rate of return by the Average operating assets and the results are compared with the Net operating income.