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4 years ago

The multiplier will increase if the marginal propensity to consume? or the marginal tax rate? .

1 answer:

6 0

<span>The multiplier will increase if the marginal propensity to consume DECREASES or the marginal tax rate DECREASES.

Multiplier = 1 / 1-MPC
MPC or marginal propensity to consumer = change in consumption / change in income

Taxes and imports are identified as leakages. Leakages are money spent by an individual but not on domestic goods or services. Leakages reduces the size of the multiplier. Thus, the lesser the amount of leakages, the bigger the multiplier.

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P Company sold merchandise costing $240,000 to S Company (90% owned) for $300,000. At the end of the current year, one-third of

Ganezh [65]

Answer:

Inter-company profit eliminated = $12,000

Explanation:

Given:

Value of inventory = $300,000

Cost of inventory = $240,000

Computation of Profit recognized on sale profit

Profit recognized on sale = Value of inventory - Cost of inventory

Profit recognized on sale = $300,000 - $240,000

Profit recognized on sale = $60,000

Computation of Profit margin:

Profit margin = [60000/300000]×100 = 20%

Profit margin = 20% = 0.20

Computation of closing Inventory :

Closing Inventory = $300,000 (1/3)

Closing Inventory = $100,000

Profit during the year = $ 92,000

Value of inventory = $100,000 (1-0.20)= $80,000

Inter-company profit eliminated= $92,000 - $80,000 = $12,000

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3 years ago

In your own words.

ss7ja [257]

Empowering employees means to provide the training, tools, resources, motivation, and encouragement you workers need to perform at an exceeding level. It is important because it help employees build confidence and a better working community.

3 0

3 years ago

The Nelson Company has $1,875,000 in current assets and $625,000 in current liabilities. Its initial inventory level is $375,000

Trava [24]

Answer:

A) Short-term debt increase = 5,625,000

B) Quick Ratio= 0.24

Explanation:

a) Current Ratio = Current Asset (CA) / Current Liabilities (CL)

Acording to the current ratio formula, to calculate the amount of short-term debt increase, to the amount of current assets and current liabilities we must add an amount such that the result is 1.2.

(1,875,000 + x) / (625,000 + x) = 1.2

(1,875,000 + x) = 1.2 * (625,000 + x)

1,875,000 + x = (1.2* 625,000) + (1.2 x)

1,875,000 + x = 750,000 + 1.2 x

1,875,000 - 750,000 = 1.2 x – x

1,125,000 = 0.2 x

1,125,000 / 0.2 = x

x = 5,625,000

So the maximum that should be borrowed to buy inventory is 5,625,000

b) Quick Ratio = (Current Asset (CA) – Inventory (I) – Prepaid Expenses (PE))/Current Liabilities (CL)

For the Current Asset, the taken is 1,500,000 (1,875,000 - 375,000) because we don't include the original inventory and the maximum increase. For the current liabilities, we take 6,250,000 (625,000 + 5,625,000) that is the original amount add to the maximum increase

Quick Ratio = 1,500,000/ 6,250,000

Quick Ratio= 0.24

7 0

4 years ago

What is the present value of the following cash-flow stream if the interest rate is 5%

Talja [164]

Answer:

The present value of the cash flows is $ 786.

Explanation:

This problem requires us to calculate present value of cash flows given in the question. The present value can be calculated by discounting cash flows using interest rate (5%) as discount factor.

PV= (190* (1+5%)^-1)+(390* (1+5%)^-2)+(290* (1+5%)^-3)

PV = 181 + 354 + 251

PV = $ 786

(Discount factor = CF (1+interest rate)^-period)

5 0

3 years ago

A company's product sells at $12.30 per unit and has a $5.45 per unit variable cost. The company's total fixed costs are $96,500

Gelneren [198K]

Answer:

Break-even point in units= 14,088 units

Explanation:

Giving the following information:

A company's product sells at $12.30 per unit and has a $5.45 per unit variable cost. The company's total fixed costs are $96,500.

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 96,500/ (12.3 - 5.45)

Break-even point in units= 14,088 units

4 0

3 years ago

The multiplier will increase if the marginal propensity to consume? ______ or the marginal tax rate? ______.

The multiplier will increase if the marginal propensity to consume? or the marginal tax rate? .