Which of the following correctly explains the crowding-out effect?

EXCESS CAPACITY Williamson Industries has $7 billion in sales and $1.944 billion in fixed assets. Currently, the company’s fixed

Lubov Fominskaja [6]

Answer:

a. Calculation of level of sales

Level of sales = Sales / Operating capacity

= 7,000,000,000/90%

= $7,777,777,777.78

b. Calculation of Target fixed Assets/Sales ratio

Fixed assets sales ratio = Fixed assets / Level of sales

= 1,944,000,000/7,777,777,777.78

= 0.249942857

= 0.25

c. Calculation of Increase in Fixed assets

Increase in fixed assets = Fixed assets sales ratio * (Increase in sales - Level of sales)

= 0.249942857 * (7,000,000,000*1+15% - 7,777,777,777.78)

= 0.249942857 * (8,050,000,000 - 7,777,777,777.78)

= 0.249942857 * 272,222,222.222

= $68,040,000.

8 0

3 years ago

The most rigorous test of a firm's ability to pay its short-term obligations is its?

lapo4ka [179]

The working capital ratio is a measurement of a company's short-term capability of paying its financial obligations.

The working capital turnover ratio measures how efficaciously a business makes use of its operating capital to supply sales. A better ratio indicates greater efficiency. In preferred, an excessive ratio can assist your employer's operations to run greater easily and limit the want for added funding.

The working ratio measures a corporation's potential to recover running expenses from annual sales. It's miles calculated by taking general annual fees, aside from depreciation and debt-related charges, and dividing it by the yearly gross income.

The current ratio, also known as the working capital ratio, gives a short view of an enterprise's financial health. You could calculate the current ratio by taking contemporary assets and dividing that discern by means of current liabilities. A ratio above 1 way current belongings exceed liabilities.

Learn more about business here: brainly.com/question/24448358

#SPJ4

6 0

2 years ago

Danny "Dimes" Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he

Olenka [21]

Answer:

The elasticy of demand is 0.54 so it is inelastic

Explanation:

The midpoint method use the average percentage change in both quantity and price.

The fromula is ((Q2-Q1)/((Q2+Q1)/2))/((P2-P1)/((P2+P1)/2))

Q is quantity and P is price

((300-250)/((300+250)/2))/((1.25-1.75)/((1.25+1.75)/2))=0.54

The demand is inelastic, that means that the porcentage in the increase in quantity is minor than the percentage in the reduction of the price. So total revenues decrease.

7 0

3 years ago

When is owning a car a better option than leasing a car?

earnstyle [38]

You can sell it later. if you lease, you are paying money for someone else's car. say you can buy a car for 20thousand or lease for 1000 per month. after 20months, you would have paid the exact same amount, except if you bought the car, you now have an asset tht can be sold.

6 0

3 years ago

Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote do

Taya2010 [7]

Answer:

C) The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.

Explanation:

From the case it is clear that the contract happens between Beau and the Manager of XYZ is of selling the carpet only. The service on the other hand, is not a department of UCC. The service contracts are department of common law whereas sales of goods law is applied to UCC or Uniform Commercial Code. So, except this option, all other options are false.

5 0

3 years ago