Answer:
A. The Equity Investment account balance will equal 30% of investee's stockholders' equity at date of acquisition, plus the unamortized cost of the patent.
<h3>Hello there!</h3>
Your question asks what the purpose of a safety stock is.
<h3>Answer: B). control the likelihood of a stock out due to variable demand and/or lead time.</h3>
The reason why answer choice "B). control the likelihood of a stock out due to variable demand and/or lead time" is the correct answer because companies have safety stocks to control the chances of having a stock out.
Safety stocks are also known as a "reserve" for a company, in other words, stocks that a company doesn't touch. It's to ensure that companies don't go through a time where there's an increase in demand while there is a "delay" in production.
If a companies stock demand goes up, but then they can't "produce" the amount that is needed to meet the demand, then they will go through "stock out" and have to go through what is called "stock out costs."
Safety stocks are also known as a "rainy-day" stock, due to the fact that safety stocks are used when a company are not having a great day with the "demand" / "value" of their stocks. It's just to "ensure" / "keep the company safe" from a huge stock out.
<h3>I hope this helps!</h3><h3>Best regards, MasterInvestor</h3>
Answer:
Total Revenues would increase because Demand is Inelastic
Explanation:
Demand is buyers ability & willingness to buy at a given price, time.
Elasticity of Demand is quantity demanded responsiveness to price change.
More Elastic Demand means quantity demanded responds highly to change in price. Percentage Change in Quantity Demanded > Percentage Change in Price. Elasticity of Demand [Δ%Q / Δ%P] >1 in this case. Price and Total Revenue (PxQ) are inversely related in this case ; i.e - price rise, TR fall & price fall, TR rise.
Less Elastic Demand means quantity demanded responds less to change in price. Percentage Change in Quantity Demanded < Percentage Change in Price. Elasticity of Demand [Δ%Q / Δ%P] < 1 in this case. Price and Total Revenue (PxQ) are positively related in this case ; i.e - price rise, TR rise & price fall, TR fall.
So: If Sam's Pint price change by 20% leads to demand fall by 4%, the demand is less elastic i.e < 1. Hence, Total Revenue will increase with increase in price.
Answer:
e. portfolios P's expected return is equal to the expected return on stock B
Answer:
The correct answer is option A.
Explanation:
According to the mainstream business cycle theory, the potential GDP grows at a steady rate while the aggregate demand grows at a fluctuating rate. The money wage rate is considered to be sticky.
So when aggregate demand increases more than the potential GDP, the supply is not able to increase as much as demand. This creates an inflationary gap in the economy.
