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Alina [70]
4 years ago
8

Consider a corrupt provincial government in which each housing inspector examines two newly built structures each week. All the

builders in the province are unethical and want to increase their profits by using substandard construction materials, but they can’t do that unless they can bribe a housing inspector into approving a substandard building.
1. If bribes cost $1,000 each, how much will a housing inspector make each year in bribes? (Assume that each inspector works 52 weeks a year and gets bribed for every house he inspects.)
Business
1 answer:
patriot [66]4 years ago
4 0

Answer:

$104,000

Explanation:

The computation is  shown below:

= Bribe cost per each housing inspector × number of weeks in a year × number of newly built structures each week

= $1,000 × 52 weeks × 2

= $104,000

We simply multiply the three components i.e Bribe cost per each housing inspector, number of weeks in a year, and the number of newly built structures each week so that the accurate value can come.

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Rufina [12.5K]
  • Shut down, if the minimum possible average variable cost is $5

In the purely competitive market majority of the producers is price taker as there are many sellers of the same homogenous product. When in the situation of Marginal Cost (MC) of product at the current rate of production is equal to the market price. This shows that the firm isn’t in profit, it is selling at which they are producing. So, the Average Variable Cost AVC of product at this level indicates the shutdown of the firm production.

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5 0
2 years ago
The major difference between the service life of an asset and its physical life is that
diamong [38]

Explanation:

service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last.

8 0
3 years ago
Sam and Talib are reselling their home. If they’re the typical sellers, how much should they expect to pay in transaction costs
iren2701 [21]

6000 to 14000 dollars is the amount that te should both expect to be the transaction cost of selling their home.

<h3>What is the cost of selling a home?</h3>

Several costs usually arises due to the fact that a person wants to sell the home that they own.

One of the costs is the commission fees that these sellers usually pay. The commission fees is usually 5 to 6 percent of the cost of sale.

Read more on commission fees here:

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7 0
3 years ago
You are analyzing the cost of capital for a firm that is financed with 65 percent equity and 35 percent debt. The cost of debt c
ExtremeBDS [4]

Answer:

c. 15.8%

Explanation:

The cost of equity is the WACC (weighted average cost of equity)

WACC formula = wE*rE + wD*rD(1-tax) , whereby

wE = weight of equity = 65%

rE = cost of equity = 20%

wD = weight of debt=35%

rD(1-tax ) = after tax cost of debt =8%

WACC = (0.65 *0.20) + (0.35*0.08)

= 0.13 + 0.028

= 0.158 or 15.8%

Therefore, the overall cost of capital is 15.8%

8 0
3 years ago
There are two options for reporting the Operating Section of the statement of cash flows. What are the distinct differences betw
Fantom [35]

Answer:

The statement of cash flows is one of the most important financial statements of a company, since a company might be very profitable but if it doesn't have enough cash to function, then it will go bankrupt. This is normally more important when things are not going well, e.g. Ford didn't go bankrupt during the great recession because it had lots of cash, while GM and Chrysler ran out of cash and had to be bailed out.

Companies can survive without making any profits during many years and still be a success, e.g. Amazon, but no company can survive without cash. In finance and investing, cash is king.

The two ways to calculate cash flows are the direct and indirect method. The direct method is calculating through the differences between cash inflows and outflows. On the other hand, the indirect method starts with net income and is then adjusted for depreciation and amortization, increase in accounts receivables, etc.  

Personally, I prefer the indirect method because it is much more simple to prepare and understand. Folks at FASB and IASB prefer the direct method because according to them it provides a clearer picture of the company's cash outflows and inflows. It sounds reasonable until you learn that companies that present the cash flows using the direct method must also present them using the indirect method. Or the companies can simply present the indirect method. So I'm not really sure that their argument is very solid.

4 0
3 years ago
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