Answer:
a
Explanation:
Automatic fiscal policies are policies that adjust the economy automatically without the intervention of external agents . examples include progressive tax and transfer payments
In an expansion, progressive tax increases the tax paid and this reduces disposable income
In a contraction, tax paid is reduced and this increases disposable income
Congress passes a law during a recession that automatically extends unemployment benefits for those whose benefits will soon expire. this is an example of discretionary fiscal policy
Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.
There are many companies in Ghana and some of those companies and what they do include:
Accra Brewery Limited
- Founded in 1931 as Overseas Breweries Limited
- Offers brewery products such as CLUB Premium Lager
- Saw huge expansion after the second World War
- Currently under Anheuser-Busch InBev (ABInBev)
<u>Agricultural Development Bank </u><u>of </u><u>Ghana</u>
- Founded in 1965 and is owned entirely by the government
- Offers loans and agricultural credit to boost agriculture
- Also offers corporate, international, and commercial banking
Clydestone Ghana
- Founded in June 1989 and is located in Nigeria, Kenya, UK, and Ghana
- Offer products in the information and communication industry including transaction processing
- Listed on Ghana Stock Exchange
Produce Buying Company
- Founded in 1981
- Are major players in the cocoa industry in West Africa
- Are also players in other cash crops such as sheanuts
Suretrack Contracts Services
- Founded in 2007
- Offers construction services such as engineering and construction management.
- Is a privately owned company.
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Answer: The company should not buy the new equipment
Explanation:
For the 1st case:
Revenue = Selling price × Number of units
= 1 × 30000
= $30,000
Total cost = Fixed cost + Variable cost
= 14000 + (0.5 × 30000)
= 14000 + 15000
= $29000
Profit = Revenue - Cost
= $30000 - $29000
= $1000
For the 2nd case:
Revenue = Selling price × Number of units
Revenue = Selling price × Number of units
= 1 × 50000
= $50,000
Total cost = Fixed cost + Variable cost
= 20000 + (0.6 × 50000)
= 20000 + 30000
= $50000
Profit = Revenue - Cost
= $50000 - $50000
= $0
Based on the calculation above, the company should not buy the new equipment as no profit will be made while currently a profit of $1000 is made.
Answer:
The correct answer is option a.
Explanation:
Pizzas and burgers are substitutes. This implies that they are used in place of each other. If the price of pizza increases, its quantity demanded will decrease. This will be indicated by an upward movement to the left on the same demand curve.
The consumers will prefer a cheaper substitute, as a result, the demand for burgers will increase. This will be indicated by a rightward shift in the demand curve for burgers.
Answer:
Option B,
The higher the degree of financial leverage employed by a firm, THE HIGHER THE PROBABILITY THAT THE FIRM WILL ENCOUNTER FINANCIAL DISTRESS.
Explanation:
The degree of financial leverage (DFL) is a leverage ratio that measures the sensitivity of a company's earnings per share to fluctuations in it's operating income, as a result of changes in its capital structure.
This ratio indicates that the higher the degree of financial leverage, the more volatile earnings will be.
The use of financial leverage varies greatly by industry and by the business sector. There are many industry sectors in which companies operate with a high degree of financial leverage (examples are retail stores, grocery store, banking institutions, airlines...). Unfortunately, the excessive use of financial leverage by many companies in this sector has played a major role in forcing a lot of them to file for bankruptcy.
Therefore, if the degree of financial leverage employed by a firm is high, then the probability that the firm will encounter financial distress will also be high.
