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Sindrei [870]
3 years ago
15

If current output is $40b less than Potential GDP, how much would congress need to decrease taxes by to correct this short-run e

conomic fluctuation given that the MPC is 0.75?
Business
1 answer:
malfutka [58]3 years ago
6 0

Answer:

Reduction in Tax Needed = $ 13.33

Explanation:

Tax Multiplier shows magnitude of change (decrease) in income due to tax change (rise) .

Tax Multiplier = ΔY / ΔT = - MPC / (1- MPC)

Given : Change in Income needed [ΔY] = 40

MPC = 0.75

Putting in formula ;

40 / ΔT  = - 0.75 / (1- 0.75)

40 / ΔT = - 0.75 / 0.25

40 / ΔT  =  - 3

ΔT = - 40/ 3

ΔT = - 13.33

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Suppose you were considering depositing money in a savings account at two different banks. Each bank will pay 5% interest. Howev
Nastasia [14]

Answer

The answer and procedures of the exercise are attached in a microsoft excel document.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

Bank-B is better to invest because it has higher Future value due to higher effective annual interest rate.

4 0
2 years ago
At the start of its fiscal year, a company anticipated producing 300,000 units throughout the year. The annual budgeted manufact
scoray [572]

Answer:

The correct answer to the following question is $36,000.

Explanation:

Given information  -

Units anticipated to be produced - 300,000 units

Variable cost - $150,000

Fixed cost - $600,000

Beginning inventory - 5000 units

Ending inventory  - 7000 units

Income under absorption costing - $40,000

Now under the absorption costing, rate of fixed overhead cost per unit -

Fixed cost / Number of units produced

= $600,000 / 300,000

= $2

In April ( under absorption costing ), the amount of fixed manufacturing overhead cost that was still embedded in ending inventory but were not expense -  

Fixed overhead rate per unit x number of units produced but not sold

= $2 x 2000 ( 7000 units - 5000 units )

= $4000

So when we calculate the operating cost under variable costing this fixed overhead cost wold be subtracted from total income -

$40,000 - $4000

= $36,000 .

6 0
3 years ago
Which mall should the company choose if revenues are expected to be $6,000,000 per year?
blondinia [14]
It A hope this helps
3 0
3 years ago
Read 2 more answers
Margarite's Enterprises is considering a new project that will require $345,000 for new fixed assets, $160,000 for inventory, an
atroni [7]

Answer:

NPV = (53,222.44)

Explanation:

Net fixed asset                              345,000

Working capital

160,000 inventory + 35,000 Ar =   195,000

short term deb                                 (110,000)

net working capital                           85,000

Total investment                            430,000

salvage value 345,00 x 25% = 86,250

release of the working capital  85,000

Cash flow at end of project      171,250

annual cash flow

sales             550,000

cost              (430,000)

depreciation    69,000

EBT                   51,000

tax expense 35%

                        (17,850)

net income       33,150

+ dep                 69,000

cash flow           102,150

Now we calculate the present value of the net cash flow and the present alue fothe end of the project

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 102150

time 4

rate 0.15

102150 \times \frac{1-(1+0.15)^{-4} }{0.15} = PV\\

PV $291,636.04

\frac{Principal}{(1 + rate)^{time} } = PV  

Principla (sum of salvage and released Working capital   171,250.00

time   5.00

rate   0.15

\frac{171250}{(1 + 0.15)^{5} } = PV  

PV   85,141.52

NPV = 291,636.04 + 85,141.52 - 430,000 = (53,222.44)

6 0
3 years ago
Silver fire electric inc. , a u. s. -based company, has productive activities in more than two countries. Silver fire electric i
telo118 [61]

Silver Fire Electric Inc is a multinational enterprise.

A multinational enterprise, abbreviated as MNE and every so often also known as multinational corporation (MNC), just multinational or international corporation, is an employer generating items or delivering offerings in more than one country.

A multinational business enterprise is a corporate employer that owns and controls the manufacturing of goods or offerings in as a minimum one united states apart from its domestic united states.

Multinational corporations assist to create employment possibilities and international. Inward investments with the aid of MNCs construct a great deal-needed overseas currency for developing and growing economies. they also generate employment possibilities and assist enhance the expectation of what's possible in lesser advanced countries.

Learn more about Multinational corporations here brainly.com/question/494475

#SPJ4

6 0
2 years ago
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