Tawstir Corporation has 400 obsolete personal computers that are carried in inventory at a total cost of $576,000. If these comp
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Answer:
Bond interest expense = $2,290
so correct option is b. $2,290
Explanation:
given data
Bond issued = $50,000
Interest rate = 10%
interest semi-annually = 5%
time period = 5 year
to find out
amount of bond interest expense
solution
we get first Cash interest payment that is here
Cash interest payment = $50,000 × 5%
Cash interest payment = $2,500 ....................1
and Bond premium will be
Bond premium = $52,100 – $50,000
Bond premium = $2,100 .......................2
we know interest paid semi annually so time period will be = 10
so Amortization of bond premium will be here as
Amortization of bond premium =
Amortization of bond premium = $210 .................3
so Bond interest expense will be calculate as
Bond interest expense = Cash interest payment - Amortization of bond premium .......................4
put here value
Bond interest expense = $2,500 - $210
Bond interest expense = $2,290
so correct option is b. $2,290
Answer:
Greece has a comparative advantage in the production of stained glass.
Germany has a comparative advantage in the production of oil.
Greece can gain from specialization and trade as long as it receives more than 4 barrels of oil.
Germany can gain from trade as long as it receives more than 0.1 pane of stained glass.
Trade price in this situation will be 8 barrels of oil per pane of stained glass and 6 barrels of oil per pane of stained glass.
Explanation:
Greece and Germany both produce oil and stained glass.
Greece's opportunity cost of producing a pane of stained glass
= 4 barrels of oil
Germany's opportunity cost of producing a pane of stained glass
= 10 barrels of oil
Greece has a comparative advantage in the production of stained glass as it has lower opportunity cost.
Greece's opportunity cost of producing a barrel of oil
=
= 0.25 pane of stained glass
Germany's opportunity cost of producing a barrel of oil
=
= 0.1 pane of stained glass
Germany has a comparative advantage in the production of oil as it has lower opportunity cost.
Greece can gain from specialization and trade as long as it receives more than 4 barrels of oil. Germany can gain from trade as long as it receives more than 0.1 pane of stained glass.
Both the countries will gain from trade if the trade price lies between their opportunity cost. So trade price in this situation will be 8 barrels of oil per pane of stained glass and 6 barrels of oil per pane of stained glass.