. sales

Consider the last purchase of two goods by a consumer. A bag of chips costs $1.75 and the marginal utility is 20. A cup of chili

Igoryamba

Answer:

The marginal utility of chili must be 28.57 for the consumer to maximize total utility.

Explanation:

The marginal utility of chili at which the consumer maximizes total utility can be calculated as follows:

Let:

CCHIP = Cost of a bag of chips = $1.75

MUCHIP = Marginal utility of a bag of chips = 20

CCHILI = Cost of a cup of chili = $2.50

MUCHILI = Marginal utility of a cup of Chili = ?

The condition for the utility maximization of the consumer is as follows:

MUCHIP / CCHIP = MUCHILI / CCHILI ……………………………. (1)

Substituting all the relevant values into equation (1) and solve for MUCHILI, we have:

20 / 1.75 = MUCHILI / 2.50

(20 / 1.75) * 2.50 = MUCHILI

MUCHILI = 28.57

Therefore, the marginal utility of chili must be 28.57 for the consumer to maximize total utility.

5 0

3 years ago

In the U.S. political arena, ______________________ may tend to emphasize the virtues of markets and the limitations of governme

fiasKO [112]

Answer:

The correct answer is letter "A": conservatives; liberals.

Explanation:

Two main approaches define how societies could achieve economic and political prosperity. Conservatives are in favor of little government intervention since individuals must be empowered to take responsibility for their own wellness. They are in favor of market economies -price driven by supply and demand.

Liberals, on the other hand, propose the government must intervene to ensure individuals have equal opportunities. Liberals prefer mixed economies which are mixtures of market economies and command economies -the government is the central planner.

8 0

3 years ago

Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on De

kondaur [170]

Answer:

The bonds were issued at $220,879,628.13

This is lower than the face value to compensate for the lower coupon payment.

cash 220,879,628.13 debit

discount on BP 39,120,371.87 debit

bonds payable 260,000,000 credit

--to record the issuance of the bonds--

Interest expense 13,252,777.69 debit

Discoun on BP 252,777.69 credit

cash 13,000,000 credit

--to record the first interest payment--

Interest expense 13,267,944.35 debit

Discount on BP 267,944.35 credit

Cash 13,000,000 credit

--to record second interest payment--

Interest expense 13,539,156.67 debit

Discount on BP 539,156.67 credit

cash 13,000,000.00 credit

--to record Dec 31st, 2025 payment--

Explanation:

To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12

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

Coupon payment:

260,000,000 x 10% x 1/2 =13,000,000.000

time 20 years x 2 payment per year 40

yield to maturity 12% / 2 = 6%

$13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\$

PV $195,601,859.3298

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

Maturity 260,000,000.00

time 40.00

rate 0.06

$\frac{260000000}{(1 + 0.06)^{40} } = PV$

PV 25,277,768.80

PV c $195,601,859.3298

PV m $25,277,768.8042

Total $220,879,628.1340

For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.

first interest payment

$220,879,628.13 x 6% = 13,252,777.69

less actual cash outlay: 13,000,000

amortization 252,777.69

second interest payment

($220,879,628.13- $252,777.69) x 6% = 13,267,944.35

less actual cash outlay: 13,000,000.00

amortization 267,944.35

December 31st, 2025:

This will be payment 14th

after building the schedule until that date we got:

8 0

3 years ago

Coronado Company received proceeds of $209000 on 10-year, 5% bonds issued on January 1, 2016. The bonds had a face value of $220

Aleksandr [31]

Answer:

Coronado Company

The amount of gain or loss that Coronado would report on its 2018 income statement is:

= $13,200.

Explanation:

a) Data and Calculations:

Bonds proceeds = $209,000

Bonds face value = 220,000

Bonds Discounts = $11,000

Period of bonds = 10 years

Straight-line amortization = $1,100 annually

Interest payment = annually

Coupon rate rate = 5%

Fair value on January 1, 2017 = $210,100 ($209,000 + $1,100)

Fair value on January 1, 2018 = $211,200 ($210,100 + $1,100)

Call price = 102

Total call value (cash payment) = $224,400 ($220,000 * 102/100)

Loss to report on its 2018 income statement = $13,200 ($224,400 - $209,000 - $2,200)

6 0

2 years ago

Chamonix Chateau Rentals. You are planning a ski vacation to Mt. Blanc in Chamonix, France, one year from now. You are negotiati

nata0808 [166]

Answer:

The budgeted $ amount is $13,680.88

Explanation:

The purchasing power parity formula gives us an idea what an exchange spot rate would be in future period using the below formula:

Future spot rate=current spot rate*(1+US inflation)/(1+French inflation)

current spot rate=$1.3620

US inflation rate is 2.50%

French inflation is 3.50%

Future spot rate=$1.3620*(1+2.5%)/(1+3.5%)

future spot rate=$1.3488

The weekly cost of vacation would also be adjusted for inflation rate in France as follows:

Adjusted price=9800*(1+3.5%)=10143

Hence the cost of the one week rental would be 10143 multiplied by the future spot exchange rate of 1.3488 i.e $ 13,680.88 (10143*1.3488)

7 0

2 years ago