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3 years ago

Explain how opportunity cost is different for economic goods and free goods

Business

1 answer:

Pepsi [2]3 years ago

5 0

Answer:

The difference is that free goods have exactly zero opportunity cost, because they cost nothing, their price is zero, and their use is non rival, and non excludable, meaning that if a person uses a free good, that person does not prevent any other person from using the good.

Economic goods, on the other hand, are goods that have a price, and that have a cost of production. Besides they are rival and/or exclusionary. The opportunity cost of an economic good varies depending on the good, but it is never zero.

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Which one of the following statements is not true about statements of cash flows prepared according to U.S. GAAP?a. The operatin

Nutka1998 [239]

Answer:

The correct answer is b. In the indirect method statement, the period's depreciation is added to net income because it is a source of cash

Explanation:

Indirect method make adjustment to reconcile the net income to cash. It depends on the account if it is added or subtracted to net income.

We are going to analyze the options

a. The operating section of the indirect method starts with the net income of the period TRUE

b. In the indirect method statement, the period's depreciation is added to net income because it is a source of cash

FALSE, depreciation is not a source of cash

c. Interest payments are included in the operating section of the direct method statement

TRUE

d. The investing section of the direct method statement for a period is identical to the investing section of the indirect method statement for the same period TRUE

4 0

3 years ago

On May 1, Soriano Co. reported the following account balances along with their estimated fair values:

s2008m [1.1K]

Answer:

Receivables (Dr.) $143,600

Inventory (Dr.) $76,400

Copyrights (Dr.) $577,000

Patented Technology (Dr.) $913,000

Goodwill (Dr.) $32,800

Current Liability (Cr.) $197,000

Long term liability (Cr.) $658,300

Cash (Cr.) $845,000

Contingent Consideration (Cr.) $42,500

Professional Fee Expense (Dr.) $141,000

Cash (Cr.) $141,000

Paid of Investment banking firm

Explanation:

Total of Assets 1,710,000

Total of Liabilities 855,300

Net Assets 854,700

Total Fair value of identifiable Assets 854,700

Fair value of contingent Liability 42,500

Consideration Paid as Cash 845,000

Good will $32,800

6 0

3 years ago

Suppose you buy a 7 percent coupon, 20-year bond today when it’s first issued. If interest rates suddenly rise to 15 percent, wh

Mariana [72]

Answer: The value of the bond will decrease

Explanation:

The Interest rate has a negative inverse relationship with the value of a bond . When the interest rate increases the value of a bond decreases and when interest rate decreases the bond value increases. Bonds with low coupon rates tend to be more sensitive to interest rate changes this is known has coupon effect.

Bonds with long time frame (long term bonds), they also tend to be are more sensitive to changes in the interest rate this is known has the maturity effect. Therefore a change in the interest rate will cause a huge change in the value of a Bond with low coupon rate and long time period.

The Bond is a 20 year Bonds which qualifies it to be a long term bond and the coupon Rate is 7%, with these facts and knowing that long term bonds are more sensitive to interest rate changes we can conclude that the sudden increase of the interest rate to 15% will cause a huge decrease in the value of the bond

5 0

3 years ago

1. What are the purposes of a checking account?

tatiyna

<h3>Answer:</h3><h2>The main purpose of a checking acc is to store your money in a safe place until further use.✨</h2>

6 0

2 years ago

Complete the following statement. The purpose of the closing process is to reset _________ (temporary/permanent) account balance

frez [133]

Answer:

The correct answer is temporary/earnings

Explanation:

The objective of the accounting closing is to evaluate the benefits or losses of a business activity. In other words, if the final result is positive, there is an increase in business equity, and if the final result is negative, there is a decrease in company equity.

Finally, in the accounting closing, a series of steps are carried out: the accounting regularization, the determination of the result, the closing of accounts and the presentation of annual accounts.

In conclusion, in the accounting cycle a period of time is contemplated and a set of operations and procedures are carried out in order to reflect the financial status of a company.

4 0

3 years ago

Read 2 more answers