Answer:
Demand drops to zero
Explanation:
Infinite elasticity of demand is also called perfect elasticity of demand.
In this scenario the demand for a product is attached to it's price.
There is an infinite change in the quantity demanded as a result of change in price.
Graphically it is a horizontal demand curve as represented in the attached
Even a small increase in price will cause demand to fall to zero.
Examples are luxury goods such as high end cars and expensive jewelry.
During a recession, the way that governments try to encourage growth is : increasing unemployment benefits
During
a recession, a number of unemployment will rapidly increased ( almost a
third of citizen could be jobless). In order to handle this, government
could increase unemployment benefit so the unemployed people have
enough to scrapped by until the recession is over or started a new
business.
Quick ratio is 1.47.
Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets.
Gross Profit 72000 67000
Operating expenses and interest expense 56000 53000,
Pretax Income 2200014000
Income Tax 3000 4000
Net Income 14000 10000
Balance sheet Year? Year
cash 4000 7000
Accounts Receive ab 114000 18000
Taventory 40000 34000,
Property & Equipment 45000 36000
Total Assets 302000 97000
Current Liabilities ‘i6000 4.7000
Long term Liabilities 5000 45000
Common stock 30000 30000
Retained Earnings 1120005000
Total Liabilities & Stock holders equity 10300037000,
L. Current Ratio = Current Assets / Current Liabilities
Year? Year
Current Ratio 36347
2.Quick Ratio
‘Current Assets - Inventory / Current Liabilities
Year? Year
Quick Ratio is 1.47
2.Profit Margin = Net profit /Sales
Year? Year
Profit Margin 737% 5.99%
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Answer:
d. A larger fixed assets turnover ratio and a larger gain on asset disposal
Explanation:
Accelerated depreciation is a method of depreciation whereby the book value of an asset is rapidly depreciated or reduced i.e at an accelerated rate.
This method usually minimizes taxable income in the initial years as a higher amount of depreciation is claimed.
Fixed assets turnover ratio refers to what percentage of net sales is attributable to an entity's fixed assets. It is expressed as:
Gain on sale of asset disposal = Sale value - Book Value
Book Value = Cost less accumulated depreciation till date
As can be seen, Average fixed assets balance would reduce thereby increasing fixed assets turnover ratio.
Similarly, due to higher depreciation charged, Book Value would be comparatively less, which would lead to larger gain on assets disposal in the initial years.
