Answer:
If the fall in price of good Y causes demand for good X to fall as well, the goods Y and X are complementary.
Explanation:
Complementary goods are those goods that people tend to buy together, since, as the word implies, they fulfill complementary purposes.
An example of two complementary goods are BBQ Sauce and Meat.
Meat is often used to grill/roast, and it is accompanied with BBQ Sauce. If BBQ Sauce price goes down, it is likely that more of it will be bought as well as more meat. The opposite occurs if the price of either good goes up. Hence, both goods are complementary.
Answer:
Gomez Corp. Journal entry
1. 31-Jan
Dr Allowance for doubtful accounts $800
Cr Accounts receivable - C. Green $800
2. 9-Mar
Dr Accounts receivable - C. Green $300
Cr Allowance for doubtful accounts $300
3. 9-Mar
Dr Cash $300
Cr Accounts receivable - C. Green $300
Explanation:
1. On January 1 Gomez Corp was said to use the allowance method to account for uncollectibles which means we have to record the write off as uncollectibles by Debiting Allowance for doubtful accounts with $800 and Credit Accounts receivable - C. Green with the same amount.
2. On March 9, receives a payment of $300 from Green which means we have to record the accounts receivables reinstated by
Debiting Accounts receivable - C. Green with $300 and Crediting Allowance for doubtful accounts with same amount.
3. Since it receives a payment of $300 from Green on March 9 we have to record cash receipt by Debiting Cash with $300 and Crediting Accounts receivable - C. Green with $300.
Answer:
The correct answer is option c.
Explanation:
Monopolistic competition is a market structure where there is a large number of sellers producing differentiated products. The market is fragmented because of product differentiation.
The entry and exit in the market are relatively easy with no or very low restrictions. Because of free entry and exit, the firms can earn positive profits only in the short run.
In the long run, other potential firms enter the market increasing the market supply and reducing the profit and price level. So firms can earn only normal profits in the long run.
Answer:
30.92%
Explanation:
Use CAPM (Capital Asset Pricing Model) to find the cost of equity;
cost of equity ;r = risk free rate + Beta (Market Risk Premium)
risk free rate = 4.90% or 0.049 as a decimal
Beta = 2.8
Market Risk Premium = 8.56% or 0.0856 as a decimal
Next, plug in the numbers to the above CAPM formula;
r = 0.049 + 2.8(0.0856)
r = 0.049 + 0.23968
r = 0.2887 or 28.87%
Therefore, cost of equity using CAPM is 28.87%
Next. find cost of equity using Dividend growth model ;
r = (D1/P0) +g
r = (3/13.65) + 0.11
r = 0.2198 + 0.11
r = 0.3298 or 32.98%
Cost of equity using Dividend growth model is 32.98%
Find the average of the two to find the cost of equity of this stock;
= (28.87% + 32.98%) /2
= 61.85%/2
= 30.92%
