Answer:
Option (D) Graham is not allowed to sue Alice, having lost his right to sue her.
Explanation:
The reason is that the plaintiff can only sue the party who damage him / her in a limited period of time. Because the longer the period has lapsed the greater are the chances that the court would think that the plaintiff has forgiven the other party. So once you have forgiven the other party you have no right to sue the company again. The statute of limitations establishes the period in which the case by the plaintiff must be filed against the defendant. So we can see that Graham is unable to sue Alice because the time of suing Alice is passed. It has been 4 years now, Graham has no right to sue Alice now.
Answer:
D. Liabilities are overstated
Explanation:
The given journal entry is
Cash A/c Dr XXXXX
To Account payable A/c XXXXX
(Being the cash collection is recorded)
This above journal entry is wrong.
The correct journal entry is as follows:
Cash A/c Dr XXXXX
To Account receivable A/c XXXXX
(Being the cash collection is recorded)
For rectifying this error, either we reverse the given entry and pass the correct journal entry that is shown above or pass the entry that is given below:
Account payable A/c Dr XXXXX
To Account receivable A/c XXXXX
So, we can see the liabilities accounts are overstated due to this error
Answer:
Option (b) is correct.
Explanation:
Given that,
Initial price of good A = $50
Initial quantity demanded of good A = 500 units
New price of good A = $70
New quantity demanded of good A = 400 units
Average quantity demanded:
= (New + Initial) ÷ 2
= (400 + 500) ÷ 2
= 450 units
Change in quantity demanded:
= New - Initial
= 400 units - 500 units
= -100 units
Average price level:
= (New + Initial) ÷ 2
= (70 + 50) ÷ 2
= $60
Change in price level:
= New - Initial
= $70 - $50
= $20
Therefore, the price elasticity of demand for good A is as follows:
= ![\frac{\frac{Change\ in\ quantity\ demanded}{Average\ quantity\ demanded} }{\frac{Change\ in\ price}{Average\ price\ level} }](https://tex.z-dn.net/?f=%5Cfrac%7B%5Cfrac%7BChange%5C%20in%5C%20quantity%5C%20demanded%7D%7BAverage%5C%20quantity%5C%20demanded%7D%20%7D%7B%5Cfrac%7BChange%5C%20in%5C%20price%7D%7BAverage%5C%20price%5C%20level%7D%20%7D)
= ![\frac{\frac{-100}{450} }{\frac{20}{60} }](https://tex.z-dn.net/?f=%5Cfrac%7B%5Cfrac%7B-100%7D%7B450%7D%20%7D%7B%5Cfrac%7B20%7D%7B60%7D%20%7D)
= ![\frac{-0.22}{0.33}](https://tex.z-dn.net/?f=%5Cfrac%7B-0.22%7D%7B0.33%7D)
= -0.67
Total revenue before price increase:
= quantity demanded of good A × price of good A
= 500 units × $50
= $25,000
Total revenue after price increase:
= quantity demanded of good A × price of good A
= 400 units × $70
= $28,000
Therefore, there is an increase in total revenue with increase in the price level.
Answer:
PV= $90,990.39
Explanation:
Giving the following information:
Future value= $140,000
Number of periods= 5 years
Rate of return= 9%
<u>To calculate the price to pay today, we need to calculate the present value. We will use the following formula:</u>
PV= FV/(1+i)^n
PV= 140,000 / (1.09^5)
PV= $90,990.39
Answer:
a. Italy has a comparative advantage in producing potatoes
Explanation:
Let us compute opportunity costs (OC).
In France,
OC of potato = 3000/9000
= 0.33 lemon
OC of lemon = 9000/3000
= 3 potato
In Italy,
OC of potato = 3000/3000
= 1 lemon
OC of lemon = 3000/3000
= 1 potato
France can produce potato at a lower OC than Italy, so France has comparative advantage in potato. Italy has a comparative advantage in producing lemons.
Trade is mutually beneficial if terms of trade (relative price) lies between the OC.
0.33 < Relative price of potato < 1 lemon, Or
1 potato < Relative price of lemon < 3 potato
Therefore, Italy has a comparative advantage in producing potatoes.