Most trade is due to the comparative advantage of an organization's ability to produce a good or service with lower marginal cost and opportunity cost.
As an example, we can cite trade between Africa and the United States, where Africa markets agricultural products such as corn and citrus to the US, and the US markets technological products such as computers to Africa.
Therefore, companies will use comparative advantage to acquire goods and services at lower prices than other competitors.
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Although the grapevine supplements what formal communication does not provide sometimes, and creates a sense of unity among employees, they should be wary due it carries partial information and it's more based on rumors; so it's not always trustworthy, especially when it comes to business, because important decisions depend on reliable sources to ensure favorable outcomes.
The correct answer would be B none of the others are relevant
<u>Solution and Explanation:</u>
a)
Date Account Head & Description Debit Amount Credit Amount
Land Debit (62 multiply 25000) 1550000
Treasury Stock Credit (53 multiply25000) 1325000
Paid - in Capital from treasury stock Credit
(1550000 minus1325000) 225000
(To record purchase of land)
b) One might use the cost of treasury stock. However, this is not a relevant measure of this economic event. Rather, it is a measure of a prior, unrelated event. The appraised value of the land is a reasonable alternative (if based on appropriate fair value estimation techniques). However, it is an appraisal as opposed to a market-determined price. The trading price of the stock is probably the best measure of fair value in this transaction.
