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Papessa [141]
2 years ago
7

Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are​ sel

ling, but buyers do not.Buyers know that there is a 40​% chance of getting a​ "lemon", a low quality used car. A high quality used car is worth​ $30,000, and a low quality used car is worth​ $15,000.Based on this​ probability, the most that a buyer would be willing to pay for a used car is ​$
Business
1 answer:
denis23 [38]2 years ago
8 0

Answer:

A buyer would be willing to pay at most $24,000.

Explanation:

There is a 40% chance of getting low quality cars.

Value of high quality car is $30,000.

Value of low quality car is $15,000.

Price of car that buyer will be willing to pay

=40% of lower quality+60% of higher quality

=40% of $15,000+60% of $30,000

=0.4*15,000+0.6*30,000

=$6,000+$18,000

=$24,000

So, the buyers will be willing to pay a maximum value of $24,000.

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Paulson Company issues 6%, four-year bonds, on January 1 of this year, with a par value of $200,000 and semiannual interest paym
tatyana61 [14]

Answer: Incomplete question.

the complete queston is

Use the above straight-line bond amortization table and prepare journal entries for the following.

(a) The issuance of bonds on December 31, 2020.

b) The first interest payment on June 30, 2021.

(c) The second interest payment on December 31, 2021.

find answer in explanation column.

Explanation:

Semiannual Period-End Unamortized Discount Carrying Value

(0) January 1,  issuance            $13,466               $ 186,534

(1) June 30, first payment          11,782                188,218

(2) December 31, second payment 10,098             189,902

1. to record issue of bonds payable

Date  Account                         Debit             Credit

Dec 31,2020 Cash(carrying value) $ 186,534  

Discount on bonds payable              $13,466    

Bonds payable                                             $200,000

2. To record first interest payment

Date        Account                         Debit             Credit

june 30, 2021 Interest expense     $7,684

discount on bonds payable                               $1, 684

Cash                                                                $6,000

Calculation =

Cash paid towards interest every semi annual period = $200,000 X 6% X1/2 =$6,000.

interest expense = cash paid + discount on bonds payable written off.

                           = $6000 + $1, 684  = $7,684

discount on bonds payable = unamortised discount on 31 dec - unamortised discount on 30th june) ($13,466 -11,782 ==$1,684)  

3.To record second interest payment on december 31,2021.

 Date        Account                         Debit             Credit

Dec. 31 ,2021 Interest expense         $7,684  

 discount on bonds payable                                $1.684

                          Cash                                          $6,000

Calculation

discount on bonds payable = unamortised discount on 30th june - unamortised discount on 31st december 2021 =11,782-10,098 = $1.684

8 0
3 years ago
Pontchartrain Company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2017. Interest is paid on June 30 and De
solmaris [256]

Answer:

$1,568,498

Explanation:

First calculate the Amont of discount

Discount on the bond = Face value - Proceeds from the bond = $20,000,000 - $19,604,145 = $395,855  

Now prepare the bond amortization

The Bond Amortization schedule is attached with this answer, please find it.

Now calculate the interest expense for 2017

Interest Expense 2017 = $784,165.80  + $784,332.43

Interest Expense 2017 = $1,568,498.23

Interest Expense 2017 = $1,568,498

3 0
2 years ago
Rule-of-thumb budgeting is budgeting that's popular with the hospitality and tourism industry because it's so effective.
a_sh-v [17]
I think the answer is false

:):):):):):):)
7 0
2 years ago
The individual mechanism that deals with workers' psychological reactions to overtaxing job demands is referred to as?
Mekhanik [1.2K]

The individual mechanism that deals with workers psychological reactions to overtaxing job demands is referred to as stress.

Stress is considered as a defensive mechanism, as it follows the three stages of resistance, alarm, and exhaustion. The psychological stress is usually associated with negative life changes.

So here in this case, the individual mechanism, which is dealing with the workers psychological reactions to overtaxing job demands is considered as stress. As the workers are stressed due to the overtaxing job demands.

Hence, the coping mechanisms are the strategies people often use in the face of stress in order to help manage painful or difficult emotions.

To learn more about stress here:

brainly.com/question/9643296

#SPJ4

5 0
1 year ago
Which of the following is influenced by personal economic choices? Check all that apply.
alexdok [17]
These are factors that influences the personal economic choices that a person will decide:
-the resources you have available
-the money you decide to spend on leisure products
-the amount of money you put into your savings account
-and the manner in which you balance your time between work and leisure
In the answers above, the only choice that I did not check is number 1 because it is not a personal choice that is applied to everyone. resources and money are saved and used for personal choices of a person for leisure and needs.
3 0
3 years ago
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