If a shopkeeper starts to sell the new football, their weekly margins would be:
300 x 40 = $12,000
However, the sales of the lower cost footballs will decrease by:
100 x 20 = $2,000 every week
Hence, the total margin we can generate by selling every week by selling the new footballs is:
12,000-2,000 = $10,000
This means the shopkeeper should actually start selling new footballs since their shop will become more profitable
Answer: The saving rate is 0.30
Explanation:
The Golden Rule savings rate is referred to as the rate of savings which maximizes steady state level or growth of consumption.
Let k be the capital/labour ratio (i.e., capital per capita), y be the resulting per capita output ( y = f(k) ), and s be the savings rate. The steady state is referred to as a situation in which per capita output is unchanging, which implies that k be constant. This requires that the amount of saved output be exactly what is needed to one quip any additional workers and two replace any worn out capital.
In a steady state, therefore: sf(k)=(n+d)k
Growth rate of output =3%
Depreciation rate= 4%
Capital output ratio is (K/Y)
= 2.5
Begin the steady state condition:
S= ( σ + n + g) (k/Y)
S= (0.03+0.04) (2.5)
S= 0.175
Golden rule steady state
MPK= (0.03+0.04)= 0.07
Capital output ratio=
K/Y= Capital share / MPK
K/Y= 0.3/0.07
K/Y= 4.29
In the golden state, the capital output ratio is equal to 4.29 in comparison to the current capital ratio 2.5.
The saving rate consistent with the steady growth rate
S= ( σ + n + g) (k/Y)
S= (0.03 +0.04) (4.29)
S= 0.30
The saving rate that is consistent with the steady growth rate is 0.30
Answer:
B. Clothing expenses
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<h3>What is a CMA course?</h3>
CMA is a professional course of studying in advanced management accounting. After completing this course, an individual is known to be a Certified Management Accountant.
The Institute of Management Accountants is an independent body that issues a certification relating to advanced accounting. It is a globally acceptable professional degree issued to an individual who clears all the examinations under CMA course.
Therefore, after getting the certification from IMA she is known to be a CMA, that is, Certified Management Accountant.
Learn more about the CMA course in the related link:
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Answer:
$1,010,000
Explanation:
Calculation of Pension Expenses
Particulars Amount
Service cost $520,000
Add: Amortized prior service expenses $105,000
Add: Settlement amount ($665,000) ($6,650,000*10%)
Less: Expected return <u>($280,000)</u> ($3,500,000*8%)
Pension Expense for 2021 <u>$1,010,000</u>