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2 years ago

Are outstanding credit card balances counted as part of the money supply?

1 answer:

3 0

Credit card balances are not counted as part of the money supply, because credit card balances reflect funds that have been borrowed. Unlike money, they cannot be used as a means of payment. The M1 supply contains coins, paper currency, demand deposits, other checkable deposits, and traveler's checks. So, outstanding balances on credit cards is not a component of the M1 money supply.

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Complete the statements about the following three theories for the upward slope of the short-run aggregate-supply curve.

Strike441 [17]

Answer:

high,high

not all prices adjust quickly

below

Explanation:

According to the sticky-wage theory, the economy is in a recession because the price level has declined so that real wages are too high, thus labor demand is too high.

Real wages decline as nominal wages are adjusted. As a result, the economy returns to full employment

According to the sticky-price theory, the economy is in a recession because not all prices adjust quickly.

As people observe the lower price level, the economy returns to the long-run aggregate supply curve.

According to the misperceptions theory, the economy is in a recession when the price level is below what was expected.

As people observe the lower price level, their expectations adjust.

6 0

3 years ago

Fama’s Llamas has a weighted average cost of capital of 10.9 percent. The company’s cost of equity is 12 percent, and its pretax

mojhsa [17]

Answer:

0.2

Explanation:

The weighted average cost of capital (WACC) is calculated as below:

WACC = (D/A) x r_D x (1-t) + (E/A) x r_E , where:

A: Market value of company asset;

D: Market value of company debt;

E: Market value of company equity;

r_D: pre-tax cost of debt;

r_E: cost of equity;

t: tax rate

Rearrange above formula a bit, we get:

WACC = (D/A) x r_D x (1-t) + (1 - D/A) x r_E

Putting all the numbers together, we have:

10.9% = (D/A) x 8.9% x (1 - 38%) + (1 - D/A) x 12%

Solve the equation, we get D/A = 17% or D/E = 0.2

So, target debt−equity ratio is 0.2

4 0

3 years ago

Soriano Company had net sales of $300,000 for the month (after returns and allowances of $1,500 and sales discounts of $3,250).

Yanka [14]

Answer:

Ending Inventory $ 64,000

Explanation:

To define the final inventory of the company it's necessary to find the cost of good of the period.

As the company had a 43% of gross profit, it means that for every dollar of sales we have 0,43 dollar of Gross Profit, with this value is possible to know the total cost of the goods sold during the period, that it's the difference between Sales Revenue and Gross Profit.

Total Sales Revenue had to be the net value after returns and discounts as it's detailed.

Income Statement

Sales revenue $ 300,000

Cost of goods sold -$ 171,000

Gross Profit $ 129,000 43%

Beginning Inventory $ 60,000

Purchases $ 175,000

Cost of goods sold -$ 171,000

Ending Inventory $ 64,000

7 0

3 years ago

Carmex's first efforts in marketing research had the research objective of figuring out who it was as a company and what the Car

umka2103 [35]

Answer: Definition the problem.

Explanation:

In trying to solve a problem, the first and the most basic step to take is to identify or define the problem, this stage involves determining the circumstances and situation as it helps one to be focused and pay attention to what the real problem is.

It is the first step and the most important, although it is most times difficult.

Defining the problem must answer the question "why", "who", "where","what", "how" and "when".

Defining the problem helps one to gain control over the situation.

6 0

2 years ago

The Tree Top Airline (TTA) is a small feeder-freight line started with very limited capital to serve the independent petroleum

nikitadnepr [17]

Answer:

To make it feasible it will need to operate 7 or more planes.

Explanation:

450,000 maintenance facility

useful life of 15 year

salvage value of 100,000

saving cost per plane:

third party cost - own facility cost = cost savings

35,000 - 25,000 = 10,000

present value of the salvage value: (present value of a lump sum)

$\frac{salvage }{(1 + rate)^{time} } = PV$

salvage $ 100,000

time 15 years

Minimum accepter rate of return: 0.12000

$\frac{100000}{(1 + 0.12)^{15} } = PV$

PV 18,269.6261

present worth of the facility:

450,000- 18,268.63 = 431,731.37

Now we determinate the PMT over a 15 years period to know the cost savings per year to justify the facility:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 431,731

time 15

rate 0.12

$431731.37 \div \frac{1-(1+0.12)^{-15} }{0.12} = C\\$

C $ 63,388.630

As each plane cost savings are 10,000

63,388.62 / 10,000 = 6.39

the company will need to operate 7 or more planes.

3 0

3 years ago