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2 years ago

An Empirical Bargaining Model with Digit Bias – A Study on Auto Loan Monthly Payments

Business

1 answer:

dedylja [7]2 years ago

3 0

Answer:

This study was carried on by Jiang, Zhenling, during the first semester of 2019 and it involved more than 35 million auto loans in the US. The author determined that monthly payments carrying a $9 ending digit, e.g. $199, had a highest interest rate charged. While those monthly payments carrying a $0 ending digit, e.g. $200, had the lowest interest rate charged. African American and Latin consumers were the most negatively affected groups by the higher interest rates.

The study showed that an effective bargaining tactic would decrease total payments significantly. This research also includes a lot of other information regarding the total economic effects of ending digit bias.

Explanation:

I personally guess that many car sellers and auto loans institutions tempt both African American and Latin consumers by using apparently lower monthly payments (psychologically we all consider $199 to be much cheaper than $200) in order to charge higher interest rates. They also probably offer longer term loans, e.g. 5-6 year loans instead of 3-4 year loans.

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Aggregate demand is everything produced while simple demand is one good. which statement reflects simple demand?

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B because it’s most average

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2 years ago

Brace Corporation uses direct labor-hours as the cost driver in its normal costing system. Brace budgeted that it would use 21,6

arsen [322]

Answer:

total estimated overhead costs for the period= $515,095.2

Explanation:

First, we need to calculate the allocated overhead:

Under/over applied overhead= real overhead - allocated overhead

20,440 = 506,920 - allocated overhead

allocated overhead= $486,480

Now, we can determine the predetermined overhead rate:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

486,480= Estimated manufacturing overhead rate*20,400

Estimated manufacturing overhead rate= 486,480/20,400

Estimated manufacturing overhead rate= $23.847 per direct labor hour

Finally, the estimated overhead for the period:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

23.847= total estimated overhead costs for the period/21,600

total estimated overhead costs for the period= 21,600*23.847

total estimated overhead costs for the period= $515,095.2

4 0

2 years ago

To reduce the risk of starting a small business, the government can

Mademuasel [1]

The government can require licenses in order to start the small business. This keeps the small business accountable and the government and keep track of this.

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2 years ago

g The transactions of Spade Company appear below. Kacy Spade, owner, invested $100,750 cash in the company in exchange for commo

Stolb23 [73]

Answer:

Dr Cash 100,750

Cr Common stock 100,750

Dr Office supplies 1,250

Cr Cash 1,250

Dr Equipment 10,050

Cr Accounts payable 10,050

Dr Cash 15,500

Cr Fees earned 15,500

Dr Accounts payable 10,050

Cr Cash 10,050

Dr Accounts receivable 2,700

Cr Fees earned 2,700

Dr Rent expense 1,225

Cr Cash 1,225

Dr Cash 1,125

Cr Accounts receivable 1,125

Dr Dividends 10,000

Cr Cash 10,000

Cash Accounts receivables

Debit Credit Debit Credit

100,750 1,250 2,700 1,125

15,500 10,050 1,575

1,125 1,225

10,000

94,850

Office Supplies Equipment

Debit Credit Debit Credit

1,250 10,050

1,250 10,050

Accounts payable Common Stock

Debit Credit Debit Credit

10,050 10,050 100,750

0 0 100,750

Fees earned Rent Expense

Debit Credit Debit Credit

15,500 1,225

2,700 1,225

18,200

Dividends

Debit Credit

10,000

10,000

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2 years ago

Tamarisk Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Carla Vista Company. The t

bixtya [17]

Answer:

a. $46,000

see the other answers in the explanation

Explanation:

(a) Fair value of leased asset to lessor $245,000

Less: Present value of unguaranteed residual value $24,335 X .63017

(present value of 1 at 8% for 6 periods) $15,335

Amount to be recovered through lease payments $229,665

Six periodic lease payments $229,665 ÷ 4.99271 $46,000*

*Present value of an annuity due of 1 for 6 periods at 8%.

(c)

1/1/17

Lease Receivable 245,000

Cost of Goods Sold 229,665

Sales Revenue 229,665

Inventory 245,000

1/1/17

Cash 46,000

Lease Receivable 46,000

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Lease Receivable 15,920

Interest Revenue 15,920

1/1/18

Cash 46,000

Lease Receivable 46,000

12/31/18

Lease Receivable 13,514

Interest Revenue 13,514

8 0

2 years ago