Answer:
A) PED = 1.1
B) demand is elastic
C) Danny's total revenue would decrease
Explanation:
we can calculate the price elasticity of demand using the formula:
PED = % change in quantity demanded / % change in price = [(300 - 250) / 250] / [(2.25 - 2.75) / 2.75] = (50 / 250) / (-0.5 / 2.75) = 0.2 / 0.18 = 1.1
since PED = 1.1, the demand is elastic
if the PED is the same when the price decreases from $2.25 to $1.75, total revenue will :
when price = $2.25, total revenue = $2.25 x 300 = $675
when price = $1.75, total revenue = $1.75 x 373 = $652.75
*a 22.22% decrease in the price will cause a 24.44% increase (= 22.22% x 1.1) in the quantity demanded = 300 units + (300 x 24.44%) = 373.3 ≈ 373 units
Answer:
Explanation:
Base on the scenario been described in the question, we use the following method to solve the question
d = 75 lbs/day 200 days per year
D= 15,000 lb/year H= $3/lb/year S= $16/order
Answer:
equivalent annual cost: 19,784.81
The investment is not economically justified as it is cheaper to pay the fines than invest in the equipment to avoid them.
Explanation:
We calcualte the PMT of a 75,000 dollars equipment at 10%
PV 75,000
time 5
rate 0.1
C $ 19,784.811
EPA fines: <u> </u><u>$ 18,500.00 </u>
differential: (1, 284.81)
Answer:
C) Total assets are overstated.
Explanation:
The journal Entry for the Depreciation is as follows:
Dr. Depreciation Expense xxx
Cr. Accumulated Depreciation xxx
By missing this Journal entry the Accumulated depreciation account will be understated as we know that this is a contra asset account and this will net off the Long term assets. So, as a result the total asset will be overstated.
Answer:
b.a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.
Explanation:
The journal entry to record the bad debt expense using the write - off method is shown below:
Bad debt expense XXXXX
To Account receivable XXXXX
(Being the bad debt expense is recorded)
So by passing this journal entry we get to know that the bad debt expense should be debited which reflects the actual amount as it increases the expenses while at the same time it reduces the asset account i.e account receivable
Hence, the correct option is b.
