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3 years ago

To achieve the gains from trade, each nation should specialize in the production of a good or service if:

Business

1 answer:

fomenos3 years ago

3 0

Answer:

the country can make the product using fewer resources than any other country

Explanation:

If a country can produce goods and services using fewer resources than others, it means its output will be cheaper compared to other countries. Producing using fewer resources is the same as producing at lower opportunity cost. A country manufactures more products using the same resources are the other nations.

Profiting from trade will require purchasing goods and services at the lowest price possible. A country should export the products it produces at a lower price and import what other nations can manufacture using fewer resources. For example, if country A can produce a product at $20 and country B produces the same product at $10. Country A will benefit by importing the product from B $10 than producing it.

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Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt—HD has more debt and pays a

Luden [163]

Answer:

2.41%

Explanation:

The difference between the two firms' ROEs is shown below:-

Particulars Firm HD Firm LD

Assets $200 Debt ratio 50% Debt ratio 30%

EBIT $40 Interest rate 12% Interest rate 10%

Tax rate 35%

Debt $100 $60

Interest $12 $6

($100 × 12%) ($60 × 10%)

Taxable income $28 $36

($40- $12) ($40 - $6)

Net income $18.2 $22.1

$28 × (1 - 0.35) $36 × (1 - 0.35)

Equity $100 $140

($200 - $100) ($200 - $60)

ROE 18.2% 15.79%

($18.2 ÷ $100) ($22.1 ÷ $140)

Taxable income = EBIT - Interest

Net income = Income - Taxable income

Equity = Assets - Debt

ROE = Net income ÷ Equity

Difference in ROE = ROE Firm HD - ROE Firm LD

= 18.2% - 15.79%

= 2.41%

So, for computing the difference between the two firms' ROEs we simply deduct the ROE firm LD from ROE firm HD.

3 0

3 years ago

Which of the following is an inconsistency of using market multiples to determine value? A) Using a market multiple assumes that

VikaD [51]

Answer:

B) Using a market multiple assumes that the target company is mispriced, while comparable companies are correctly priced.

Explanation:

Market Multiple, also known as trading multiples, is used to compare two financial measures, to determine the value of a company. It is another name for Price to Earnings Ratio (also called P/E Ratio).

Using the market multiple approach, investors can determine whether stocks in their portfolios will increase or decrease in price through the next term. Investors may then buy or sell stocks in order to maximize their expected gains calculated.

6 0

3 years ago

Suppose management estimated the market valuation of some obsolete inventory at $99,000; this inventory was recorded at $120,000

Annette [7]

Answer:

a. An audit adjustment is needed since the best case scenario, where the net realizable value is highest would result in $92,000 - $5,000 = $87,000.

b. the value of inventory must decerase by $99,000 - $87,000 = $12,000, so COGS must increase by that amount:

Dr Cost of goods sold 12,000

Cr Merchandise inventory 12,000

4 0

3 years ago

he St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% normal production capacity. Production w

OLga [1]

Answer:

$9000 (unfavorable).

Explanation:

Given: Budgeted fixed overhead= $360000.

Actual fixed overhead=$ 360000.

Actual production= 11,700 units.

The variable overhead rate was $3 per hour.

The standard hours for production were 5 hours per unit.

The fixed factory overhead volume variance is difference between actual production volume and budgeted production. It help in measuring the effecient use of fixed resources. It is termed as favourable if actual fixed overhead exceed the budgeted amount, however, it is unfavorable if the actual fixed overhead is less than budgeted amount.

Now, lets calculate the Actual fixed overhead cost.

Actual fixed overhead cost= $\textrm{actual fixed overhead}\times \frac{Actual\ production}{Budgeted\ production}$

∴ Actual fixed overhead cost= $\$ 360000\times \frac{11700}{12000} = \$ 351000.$

Actual fixed overhead cost= $351000.

Next calculating the fixed factory overhead volume variance.

The fixed factory overhead volume variance= $\textrm{Actual fixed overhead cost}-\textrm{budgeted fixed overhead}$

We know, Budgeted fixed overhead= $360000 and Actual fixed overhead cost= $351000

∴ The fixed factory overhead volume variance= $\$351000-\$360000= \$ 9000 (unfavorable)$

The fixed factory overhead volume variance= $9000 (unfavorable)

6 0

3 years ago

Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of u

dezoksy [38]

Answer:

$ 317,000

Explanation:

Octuber Production: 200,000

Variable Overhead: $ 0.80 per unit

Fixed Overhead: $ 157,000

Factory Overhead Budget for October:

Octuber Production x Variable Overhead = 200,000 x 0.80 = 160,000

Variable Overhead: $ 160,000

Fixed Overhead: $ 157,000

Total Overhead: $ 317,000 ( $ 160,000 + $ 157,000 )

4 0

3 years ago