Answer:
Quantity of beef demanded will decrease by 12%
Explanation:
Data provided in the question:
Price elasticity of demand for beef, Ed = 0.60
Increase in the price of beef = 20%
Now,
Price elasticity of demand for beef,
Ed = [ Percentage change in Quantity ] ÷ [ Percentage change in price ]
or
0.60 = [ Percentage change in Quantity ] ÷ 20%
or
Percentage change in Quantity = 0.60 × 20%
or
Percentage change in Quantity = 12%
Also,
Price and Quantity are inversely proportional
Hence,
With the increase in price, the quantity will decrease
Therefore,
Quantity of beef demanded will decrease by 12%
Answer:
the statement of comprehensive income
Explanation:
The statement of comprehensive income refers to a summary in which the net assets are to be recognized for a particular period of time. It shows the adjustments made to the equity that would be highlighted also. Plus the net income could be determined by preparing an income statement
Therefore in the given case, the changes that are made in the stockholder equity would be come under the comprehensive income statement and the same is to be considered
Answer:
Please see explanation.
Explanation:
Once the factory overhead rate is determined using the estimated amount of factory overhead and estimated base, it is used to charge overhead cost to the jobs, products or work performed.
Since, not all overhead costs are known at the time of making the product, (such as electricity bill is received after the month end) therefore, the estimated rate is used to apply the overhead cost to the job or product using actual activity level. This is called absorption or application of overheads to the products / jobs.
Due to this, at each period end, the management calculates and compares the actual overhead cost with the applied overhead cost and determine the over or under applied overheads.
Answer:
The WACC of the firm is 11.91%
Explanation:
The WACC or weighted average cost of capital is the rate of return that a business is expected to pay to all of its security holders- bonds, common stock, preferred stock- or is the cost of capital for the business.
To calculate the WACC, we use the following formula,
WACC = D/A * (1-tax rate) * rD + E/A * rE
Where,
- D/A and E/A is the weightage of debt and assets as a proportion of total assets
- rD * (1-tax rate) is the after tax cost of debt
- rE is the cost of equity or required rate of return on equity
We first need to calculate the required rate of return on equity (r). We will use the CAPM formula for r.
r = 0.034 + 1.37 * 0.082
r = 0.14634 or 14.634%
The total assets are equal to,
Assets = Debt + Equity
If for every $1 of equity, there is $0.45 of debt as given by debt-equity ratio.
Then,
Assets = 0.45 + 1
Assets = $1.45
WACC = 0.45/1.45 * (1-0.23) * 0.076 + 1/1.45 * 0.14634
WACC = 0.11908 or 11.908% rounded off to 11.91%
