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3 years ago

Why is using money as a medium of exchange preferable to bartering?

Business

1 answer:

Y_Kistochka [10]3 years ago

8 0

Answer:

Money as a medium of exchange is more preferable because of its less cumbersome nature.

Explanation:

Money as a medium of exchange is more suitable because of its less cumbersome nature. Money was invented because of the inefficient nature of the barter system.

Money is easily stored compared to a barter system.

Money as a medium of exchange eliminates the barter system's problem of double coincidence of wants. Barter works when you trade things you own for things you want. If for example you want a bicycle and you own a goat, you have to look for someone who wants a goat and owns a bicycle willing to make an exchange, which can be quite difficult.

Money is an acceptable medium of exchange to all parties which makes it more preferable to bartering.

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Holly's ham, inc. sells hams during the major holiday seasons. during the current year 11,000 hams were sold resulting in $220,0

lutik1710 [3]

To find: Breakeven point (in units)
Given: Number of hams sold = 11000
Sales revenue = $220,000
Variable cost = $55,000
Fixed cost = $24,000
Solution: Break-even point (in units) can be calculated as:-
Fixed costs / (sales price per unit-variable costs per unit)
Fixed costs = $24,000
Sales price per unit = total sales revenue/number of units = 220000/11000 =
$20
Variable costs per unit = total variable cost/number of units = 55000/11000 = $5
Putting values in the formula,
=24000 / (20-5)
=24000/15
=1600
Breakeven point (in units) = 1600 units

7 0

3 years ago

Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s deb

QveST [7]

Answer: See explanation

Explanation:

a. What is the market value of Locomotive Corporation before and after the repurchase announcement?

Equity value = Debt value / Debt to equity ratio

= 3,300,000/0.3

= 11,000,000

Market value = Debt value + Equity value

= $3,300,000 + $11,000,000

= $14,300,000

b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan?

To solve this, we need to know the interest payment first which will be:

= $3,300,000 × 9%

= $3,300,000 × 0.09

= $297000

Return on equity will now be:

= (EBIT - interest) / Equity

= (1320000 - 297000) / 11000000

= 9.30%

c. What is the expected return on the equity of an otherwise identical all-equity firm?

This will be:

= Earnings before Interest / Unlevered firm value

= 1320000 / 14300000

= 9.23%

d. What is the expected return on the firm’s equity after the announcement of the stock repurchase plan?

This will be:

= 9.23% + 50% × (9.23% - 9%)

= 9.35%

5 0

3 years ago

Magic Events, Inc. is a global concert promoter that is organizing the world concert tour of the newest boy band. The company ha

Grace [21]

Answer:

A. as much advertising to fans as possible

Explanation:

The event triangle is made up of these 3 components

1. The participants

2. The sponsors

3. The spectators

Here the fans represent the spectators. They are the most critical factor of the event triangle .

The spectators are those who the boy band would be playing for. They are the ones who would go out to watch the event.

The spectators become monetary when the advertisement gets them to buy tickets for the event. That is they pay a fee to watch the event.

Primarily they provide necessary financial support for the event plus the money made from adverts.

3 0

3 years ago

TRANSACTIONS1. John Amos started the business with a cash investment of $60,000.2. Purchased equipment for $22,000 on credit.3.

Tanya [424]

Answer:

Cash 44,250

Receivables $1,850

Equipment $26,600

Accounts payable 9,000

Capital 60,000

Revenue 8,150

Expenses 4,450

Explanation:

The question is to determine the recording of the transactions above on the Accounting equation

The accounting equation says Assets = Liabilities + Owners' Equity

In this context assets = Cash, Receivables and Equipment

Liabilities = Payables

Owners' Equity = Capital + Revenue - Expenses

The Accounting Equation

ASSETS = LIABILITIES + OWNERS EQUITY

Cash + Receivables + Equip. payable + Capital + Rev - Expens

1. $60,000 60,000

2. $22,000 $22,000

3. $3,100 3,100

4. -4,600 4,600

5 $5,050 5,050

6. -4,450 4,450

7. 3,200 -3,200

8. -13,000 -13,000

6 0

3 years ago

With careful attention to controlling costs and quality, businesses can successfully satisfy consumers with a standardized produ

11111nata11111 [884]

Answer:

True (A)

Explanation:

Business can ensure product standardization for different markets with careful attention to controlling cost and quality. Costs are inevitably in a business, however, they can be managed to the barest minimum.

6 0

3 years ago