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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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The Carlberg Company has two manufacturing departments, assembly and painting. The assembly department started 10,000 units duri
alexandr402 [8]

Answer:

Equivalent units

Materials              10,200

Covnersion Cost   9, 100

Explanation:

\left[\begin{array}{cccc}&$Physical Units&$Materials&$Conversion\\$Beginning&2,000&0.6&0.4\\$Transferred out&9,000&&\\$Ending&3,000&0.8&0.3\\$Equivalent Units&&10,200&9,100\\\end{array}\right]

The equivalent units will be calcualte as follow:

 transferred out

 ending x completion

<u>  (beginning x completion)  </u>

Equivalent units

<u>Materials</u>

9,000 + 3,000 x 80% - 2,000 x 60% = 10,200

<u>Conversion Cost</u>

9,000 + 3,000 x 30% - 2,000 x 40% = 9,100

5 0
3 years ago
Which of the following is a required financial statement? 1 point Statement of Auditor Independence Statement of Cash Flows Stat
kondor19780726 [428]

Answer:

statement of revenues

8 0
3 years ago
The fixed cost of a production system is $20,000, and the variable cost per unit product is $17. The product has a revenue of $2
dimaraw [331]

Answer:

Results are below.

Explanation:

Giving the following information:

Fixed costs= $20,000

Unitary variable cost= $17

Selling price= $28 per unit.

<u>To calculate the break-even point in units, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 20,000 / (28 - 17)

Break-even point in units= 1,818 units

<u>Now, the profit for 1,500 units:</u>

Loss= 1,500*11 - 20,000= -$3,500

8 0
3 years ago
Two projects, A and B, are analyzed using ranking present worth analysis with MARR at i%. It is found that PW(A) . PW(B). If MAR
vivado [14]

Answer: The relationship between A and B project cannot be determined with the information given.

Explanation: The relationship between PW(A) and PW(B) is the correlation between project A and Project B in a portfolio.

This is not possible to be calculated with the information given.

But an expression of calculating this is;

PW is the present value of A and B projects.

MARR is the minimum acceptable rate of return

The calculate the correlation of the two project, divide MARR by the multiple of the two project.

That is;

Correlation = MARR ÷ [PW(A) × PW(B)]

Therefore;

Correlation = i11% ÷ [PW(A) × PW(B)]

This shows that the relationship cannot be determined with the limited Information supplied.

3 0
3 years ago
1. prepare income statements for both garcon company and pepper company. 2. prepare the current assets section of the balance sh
vagabundo [1.1K]

There are three main parts of income statements and they are:

  1. Revenue
  2. Expenses
  3. Profit

<h3>What is an Income Statement?</h3>

This refers to the profit and loss account of a company that shows the expenses and revenue for a particular company.

Hence, we can see that a sample income statement would be:

BOSKA COMPANY

Income statement for August 29, 2021

NET SALES------------------ $2,000,000

GROSS SALES-------------$500,000

GROSS PROFIT-------------$1,5000,000

Read more about income statements here:

brainly.com/question/24498019

#SPJ1

8 0
1 year ago
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