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valentinak56 [21]
2 years ago
6

A manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $12 per hour and capi

tal is rented at $8 per hour. If the marginal product of labor is 45 units of output per hour and the marginal product of capital is 65 units of output per hour, should the firm increase, decrease, or leave unchanged the amount of capital used in its production process?
Business
1 answer:
Alex777 [14]2 years ago
5 0

The firm should decrease the amount of capital used.

Solution:

The wage rate is $12 per hour and capital is rented at $8 per hour.

The marginal product of labour is 45 units of output per hour and the marginal product of capital is 65 units of output per hour.

A manager hires labour and rents capital equipment in a very competitive

market.

The ratio of marginal product of labour and wage rate

= \frac{45}{12}

= 3.75

The ratio of marginal product of capital and rent

= \frac{65}{8}

= 8.125

If the cost ratio is higher, it means that the boss must minimize the volume of money involved in the manufacturing process.

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Sunland Co. at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxa
Rzqust [24]

Answer:

Deferred Tax Liability= $564,000

Explanation:

The question is to determine the deferred tax liability to recognize by Sunland Co. at the end of the year 2017.

Step 1 :

We determine what the Income tax expense is for the year

Income tax expense= Pretax financial income x Income Tax rate

Income tax expense= $1,410,000 x 0.30 = $423,000

Step 2:

Although we recognized receivables as well as instalmental sales for reporting purposes under the accrual method. However, these will be subject to tax when we decide to recognize it in the future.

As such Deferred tax liability = Future Tax Liability

Deferred Tax liability for Sunland Co= Instalmental Sales x Income tax expense

= $1,880,000 x 0.3= $564,000

4 0
3 years ago
A customer, who needs to drive to work in a Wisconsin winter, has a critical need to use the product Ice Melt. For him as a cons
Blizzard [7]

Answer:

Urgency / Postponement leads to customer inelastic demand of ice melt.

Explanation:

Elasticity of demand is responsive change in demand of good, due to change in price. Formula = % change in demand / % change in price

Factors Affecting Price Elasticity of Demand : Nature of commodity, Income, substitutes availability, time period, urgency / postponement, share in total expenditure,

Inelastic Demand is when demand responds proportionately less to price change. % change in demand < % change in price

Case 'Customer critically needs ice melt to drive to work' : This has inelastic demand i.e demand less respondent to price changes (he will buy that at high price too). Such because of the urgency of this demand & less scope of its postponement.

5 0
3 years ago
Assume the corporate tax view of capital structure. Your unleveraged cost of capital is 13%. Your corporate tax rate is 30%. You
sergejj [24]

Answer:

C. 11.05%

Explanation:

The computation of the cost of capital under the proposed leveraging is shown below;

cost of capital is

=Debt÷ value of leverged firm × ((unlevered cost of capital × (1 - tax rate))

=800 ÷ 1600 × ((13% + (13%) × (1 - 30%)))

= 11.0500%

hence, the cost of capital is 11.05%

8 0
3 years ago
Ray has six hours before he goes to bed on a school night. He plans to spend an hour surfing the Internet, two hours playing his
dsp73
He will ask his brother to help him with his homework but exclude watching tv and playing video games until he finishes the homework
4 0
3 years ago
Which of the following actions will help to ensure that formal business documents are trust worthy
sladkih [1.3K]
<h3><u>Full Question:</u></h3>

Which of the following actions will help to ensure that formal business documents are trustworthy?

A: Using a wide variety of charts and tables

B: Putting the decision-related information first

C: Getting information from reliable sources

D: Requiring a password to open the document

Getting information from reliable sources  will help to ensure that formal business documents are trust worthy.

<h3><u>Explanation:</u></h3>

Business documents refers to the record, books, files, plants, correspondence, reports, documentation,etc and details associated with the financing activities of the business. They can be in the form of paper works, electronic format, etc. It is very essential for any business to contain these information that can be handed over to the stakeholders, public,etc  when any issues occurs financially or legally.

There are many things that are to be followed while  preparing these documents. The information that are included in this document must be collected from reliable sources. This is because it should not be proven to be false during any legal or financial issues.

6 0
3 years ago
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