Answer:
A) Shortage, B) Fall in Price
Explanation:
A] Market is at equilibrium where - downward sloping Market Demand (inversely related to price), & upward sloping Market Supply (directly related to price) - are equal & these curves intersect each other.
Above condition gives us equilibrium price & quantity.
If market price < equilibrium price, as given case 15 < 20. Then, supply being directly related to price is lesser, demand being inversely related to price is higher. So, there is a situation of excess demand, ie <u>shortage </u>(graphically denoted by distance between demand & supply curve at actual price below equilibrium price)
B] Dealers of hybrid vehicles increase imply increase in supply of these vehicles, rightwards shift in the supply curve. This creates excess supply ie surplus of them. It implies that competition among sellers lead to <u>fall in price </u>of these hybrid vehicles.
The phase that comes after the trough and before the peak is called expansion
Answer:
The answer is 7.65%
Explanation:
The cost of capital is equal to the cost of debt in this example as it involves a debt instrument. The formula for the cost of debt is as follows:
(Interest Expense x (1 – Tax Rate) ÷ (Amount of Debt – Debt Acquisition Fees + Premium on Debt – Discount on Debt)
In the example, the given values are the following:
Interest Expense = 7% x $1,000 = $70 (no tax rate was provided)
Amount of debt = $1,000 (face value of the bond)
Debt acquisition fee = $15
Discount on debt = $70 ($1,000 face value vs. the $930 proceeds of the bond, the bond was issued at a discount)
Solution:
$70 ÷ ($1,000 - $15 - $70) = 7.65% cost of capital (cost of debt)
Answer:
a
Depreciation Expense $2,112 (debit)
Accumulated Depreciation $2,112 (credit)
b.
Cash $13,860 (debit)
Accumulated Depreciation $13,200 (debit)
Machinery at Cost $26,400 (credit)
Profit and loss $660 (credit)
Explanation:
a.
2021 Depreciation Expense calculation
Depreciation Expense = $3,168 × 8 /12
= $2,112
Therefore total accumulated depreciation will be :
Accumulated depreciation = $11,088 + $2,112
= $13,200
b.
The following happen when the asset is sold :
- Derecognize the cost of asset
- Derecognize the accumulated depreciation of the asset
- Recognize the proceeds from sale
- Recognize the profit or loss on the sale of the asset.
