Answer: According to the principle of comparative advantage, worldwide output and consumption will be higher when nations specialize in the production of those goods and services "a. they can provide at a lower opportunity costs."
Explanation: The comparative advantage is the ability of a country to produce a good using relatively less resources than another. The theory of comparative advantages says that Each country in question will specialize in what is most efficient. At the same time, it will import the rest of the products in which they are most ineffective in terms of production. Although a country does not have an absolute advantage in producing any good, it may specialize in those goods in which it finds a greater comparative advantage and finally be able to participate in the international market.
Answer:
$1,269.46
Explanation:
Earnings Before Interest and Tax (EBIT) refers to the net income which is a difference between the revenue of an organisation and the expenses that were incurred in order to generate that revenue. The calculation of the EBIT is usually for a particular year and it is usually found in the Income Statement part of an organisation's financial statement.
To calculate the EBIT therefore, the Tax as well as interest must be added back to the Net Income after tax (usually added to retained earnings)
Therefore, Net Income = Dividends paid + Net Income (added to retained earnings)
= $75 + $418 = $493 - This represents a partial net income
The next step is to calculate the taxable income as follows:
The net income is $493, and the Tax rate is 35%
Taxable Income = $493/ (1-0.35) = $758.46
Earnings before interest and tax therefore =
Interest paid + Taxable Income
= $511 + $758.46 = $1,269.46
Answer:
b) False
Explanation:
One of the key features of a good internal control system is the segregation of duties (SoD).
The principle of the segregation of duties entails that an individual is not allowed to initiate a transaction, review and approve the same transaction. In other words, a good internal control system would not allow an individual carry out all processes for a transaction from initiation, to authorization to approval to recording.
A system in which these responsibilities are shared mitigates against the risk of fraud and error.
Hence, in a good system of internal control, the person who initiates a transaction should be NOT be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records
Answer: Liquidity in the banking system is increased
Explanation:
The Federal Funds rate is the interest rate at which commercial banks are allowed to lend each other their excess reserves overnight to meet reserve requirements.
If this rate were to be reduced, it would make lending cheaper between banks who would then take advantage of this to borrow more occasionally. This will then translate to a higher liquidity amongst the banks.
Answer: $425,000
Explanation: The total overhead cost can be computed suing following formula :-
total overhead cost = fixed overhead cost + variable overhead cost
where,
fixed overhead cost = $90,000
=$335,000
so,putting the values into equation we get :-
total overhead cost = $90,000 + $335,000
= $425,000
