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2 years ago

3. Consider the following price indexes: 2 pts

Business

1 answer:

sergejj [24]2 years ago

6 0

Answer:

1. Which year is likely the base year?

The base year is likely to be 2018, because it has the lower consumer price index. This is because most economies show inflation (the gradual increase of the prices overtime within an economy) rather than deflation (the gradual decrease)

2. What is the inflation rate from 2018 to 2019?

Using the consumer price index (CPI) the inflation rate formula is:

Inflation rate = CPI year 2 - CPI year 1 / CPI year 1

in this case, the year 1 is our likely base year, 2018, and year 2 is 2019.

Now, we simply plug the amounts into the formula:

Inflation rate = 255.651 - 251.107 / 251.107 = 0.018 or 1.8%

So the inflation rate from 2018 to 2019 is 1.8%, a rather low number.

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In January, 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes bac

PtichkaEL [24]

Answer:

Feb. 2021

Dr Gift Card Liability $20

Cr Gift Card Revenue $20

(to record revenue arisen from oustanding Gift Card Liability)

Explanation:

Under GAAP, the accounting for Gift Card is quite simple. When the gift card are sold, Gift Card Issuer receives Cash (Debit Cash) and assume the Liability (Cr Liability) to anyone owning the gift card for later providing of goods/services priced at the Cash amount that had been received.

It is not until Gift Card is redeemed that Gift Card Issuer is allowed to record revenue (Credit Revenue) as it is an actual point of time when the provide of goods/services takes place. Also at the same time, once the goods/services are provided, they Liability assumed earlier in time through Gift Card issuance will be discharged to the extent of the price of goods/services provided.

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3 years ago

The interest rate on short-term U.S. government bonds is 4 percent. The risk premium for any asset with a beta = 1.0 is 6 percen

Basile [38]

Answer:

The average expected rate of return on the market portfolio is 10 percent.

Explanation:

The CAPM (fixed asset pricing) model describes the relationship between systematic risk and expected return on assets, especially stocks. CAPM is widely used throughout the financial community to value high-risk securities and achieve the expected returns on assets when taking into account the risk of those assets and the cost of capital.

The formula for calculating the expected return on an asset taking into account its risk is as follows:

ERi = Rf + βi (ERm - Rf)

where:

ERi = expected return on investment

Rf = risk-free interest rate = 4 percent.

βi = beta inversion =1.0

(ERm −Rf) = market risk premium = 6 percent.

ERi = 4 + 1 ×(6) =10

The average expected rate of return on the market portfolio is 10 percent.

6 0

3 years ago

In 2016, teller company sold 3,000 units at $600 each. variable expenses were $420 per unit, and fixed expenses were $270,000. t

Anit [1.1K]

Assuming that you have the values for the year 2017, the break-even point would be 1500 units for the year 2017. To calculate this, we use the idea that at the breaking point, total sales is equal to the total cost or expenses made. Which would be:

selling (x) = fixed + variable (x)

x = fixed / (selling - variable)
x = 270000 / (600-420)
x = 1500 units

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3 years ago

Wichasha, an african country, exports barley and cotton worth $100 million to illema, a european country, and it imports sugarca

max2010maxim [7]

Answer: Balance of Trade

Explanation:

Balance of trade is the difference between the value of exports from a country and the value of imports into the country. When the value of exports is greater than imports, the balance of trade is positive and the country has a trade surplus. While, when the value of exports is less than the value of imports, the balance of trade is negative and the country has a trade deficit.

In this case, Wichasha's exports is higher than the total value of its imports so, it has a trade surplus or positive balance of trade.

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3 years ago

If a consumer chooses not to perceive they are reaching ________.

Yuliya22 [10]

Quality value price reach consumer goods

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3 years ago