Answer: D. The neighbor, because obtaining financing was a condition precedent.
Explanation:
Even though it wasn't listed in the written contract, there was the condition precedent that the contract would not be binding unless funding was obtained. Condition precedent is a condition that must happen for a contract to become enforceable.
Funding was not obtained so the contract cannot be enforced. The neighbor would therefore prevail so long as the owner admits that there was indeed a condition precedent.
Answer:
c. $45
Explanation:
Transfer price is the price charged for a product which is transferred to other department/ division / subsidiary of same company / group. The minimum selling price in the absence of any excess capacity is the price available in the market, because the company has demand for the product and it does not lost the sale if transfer not takes place. The product can be sold in the market. So the Transfer price should be $45.
Answer:
the company's cash flow from assets is - $42,880.
Explanation:
Cash flow from assets is also known as cash flow from investment activities.
Prepare <em>a section of cash flow from investing activities </em>to determine the cash flow from assets.
The only cash flow from investing activity is purchase price (cash outflow) of the assets of $42,880.
Answer:
(a) $7; $205 million
(b) $9; $195 million
(c) $400 million
(d) $390 million
(e) Loss = $10 million
Explanation:
(a) Price paid by consumers when no tariff imposed:
= Marginal cost + Distribution cost
= $6 + $1
= $7
Quantity demanded:
Q = 240 - 5P
= 240 - 5 × $7
= 240 - $35
= $205 million pounds
(b) At imposed tariff of $2 per pound, then the new price paid by consumers:
= Marginal cost + Distribution cost + Tariff
= $6 + $1 + $2
= $9
New quantity demanded:
Q = 240 - 5P
= 240 - 5 × $9
= 240 - $45
= $195 million pounds
(c) Lost consumer surplus:
= ($9 - $7)($195) + (0.5)($9 - $7)($205 - $195)
= ($2 × $195) + (0.5 × $2 × $10)
= $390 + $10
= $400 million
(d) Tax revenue collected by government:
= Quantity demanded under tariff × tariff
= $195 × $2
= $390 million
(e) Tax revenue of $390 million received is less than the value of coffee sold under tariff $400 million.
Loss = $400 million - $390 million
= $10 million
