Answer: Cell phone companies found that when they raised the price of connecting to wireless hot spots, demand decreased more than proportionally among casual users but decreased less than proportionally among businesspeople. this is because wireless connectivity is a <u>luxury or non-essential</u> good for casual users but an <u>essential</u> good for business people.
Casual users tend to use the wireless if and only when they can afford it i.e. it is not an essential commodity for them. That is why, the demand decreased more than proportionally among casual users, when prices increased.
On the other hand, wireless hotspots help business people to get their work done in a speedy and efficient manner. So wireless hotspots become more essential to business people. Therefore the demand is relatively inelastic for connectivity and falls less than proportionally for business people.
Using the straight line method
Depreciation per year
295,000÷5=59,000
Accumulated depreciation for 3 years
59,000×3=177,000
Book value of the equipment
295,000−177,000
=118,000
Answer:
decrease in the operating income of $132,100
Explanation:
The computation of the impact on the operating income should be given below:
Sales $1,050,000
less: variable cost -$860,000
contribution margin $190,000
Less fixed cost (30% of $193,000) -$57,900
Impact on operating income $132,100
So there is a decrease in the operating income of $132,100
Answer:
Stockholders Equity
Preferred Stock 375,000
Common Stock 562,500
Additional Paid-in Capital 81,900
Retained Earnings <u> 306,000 </u>
Total Equity 1,325,400
Explanation:
We look into the list only for the equity accounts:
Which are the preferred stock, the common stock
and the additional paid-in caital.
We will also include the retained earnings account
All this accounts increase the equity, so we ujust need to add them together.
