This kind of reasoning is said to be DEDUCTIVE REASONING.
Deductive reasoning is the process of reasoning based on multiple premises that are generally believed to be true. Deductive reasoning usually moves from the general to the specific. For instance, in the question given above, Jason reasoned that if other products are sold at discounted prices, then the items that are newly available will also be sold at discounted prices.
Answer:
$73,500 is the revenue TopChop will recognize for the arrangement with Carlos.
Explanation:
Revenue is calculated as follows.
= amount received + Use of name
= $56,000 + $35,000 × (1÷2)
= $73,500
New franchise fee can be immediately recognised as income.
Answer:
Marginal Propensity to Consume = 0.8
Explanation:
Marginal propensity to consume (MPC) exhibits consumer's spending behavior as to what percentage of extra dollar is spent from extra dollar of income.
MPC is calculated as Increase in consumption divided by increase in income.
MPC: Increase in consumption / increase in income: 4,000 / 5,000
MPC = 0.8
Answer:
The NPV is -$200956.3508. Thus, the shop will not be purchased as the NPV from this investment is negative.
Explanation:
To take the decision to buy or not buy the shoe store, we need to calculate the Net Present Value of the investment in the shoe shop. The net present value (NPV) is the present value of future expected cash inflows from the investment less the initial outlay/cost.
If the NPV is positive, the investment will be done and shop will be purchased and vice versa.
As the cash in flows consist of an annuity of 200000 for 11 years along with a principal sale value, the NPV will be,
NPV = PV of Annuity + PV of Principal - Initial cost
NPV = 200000 * [ (1 - (1+0.15)^-11) / 0.15 ] + 3500000 / 1.15^11 - 2000000
NPV = -$200956.3508
The shop will not be purchased as the NPV from this investment is negative.
It is the underground economy. The underground economy alludes to illicit financial action. Exchanges in the underground economy are illicit either in light of the fact that the great or administration being exchanged is itself unlawful or in light of the fact that a generally licit exchange does not agree to government revealing necessities. The main class incorporates medications and prostitution in many wards.
