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Ghella [55]
2 years ago
6

Nation Furniture is a furniture manufacturing facility. Its workers just signed a two-year contract. The price level in the econ

omy has increased.
a. If the price level increases, input prices will:_____.
a) increase.
b) decrease.
c) remain constant.
b. If the price level increases, output prices will:___.
a) increase.
b) decrease.
c) remain constant.
c. In the short run, the firm will experience a(n):______.
a) increase in economic profits.
b) decrease in economic profits.
c) increase in economic loesses.
Business
1 answer:
Nina [5.8K]2 years ago
6 0

Answer:

  • a. c) remain constant.
  • b. a) increase.
  • c. a) increase in economic profits

Explanation:

a. The workers have just signed a two-year contract which means that in the short run, their wages are fixed to what was agreed to in the contract. Input prices will therefore remain constant.

b. Output prices on the other hand will increase to match the increase in price levels.

c. The company would therefore see an increase in economic profits because they are getting a higher revenue from the increased prices of outputs than they are incurring costs from the constant input prices.

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Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 16 p
alexira [117]

Answer:

The company WACC is 13.30%

Explanation:

For computing the WACC, first we have to find the weight-age of both debt and equity.

Since in the question, the weightage of debt and equity is given which is equals to

Debt = 30%

And, Equity or common stock = 70%

So, we can easily compute the WACC. The formula is shown below

= Weighted of debt × cost of debt × (1- tax rate) + Weighted of equity × cost of equity

= 0.30 × 0.10 × (1 - 0.30) + 0.70 × 0.16

= 0.021 + 0.112

= 13.30%

Hence, the company WACC is 13.30%

6 0
3 years ago
Beta Corporation had net income of $325,000 and paid dividends to common stockholders of $39,000 in 2017. The weighted average n
Bas_tet [7]

Answer:

The price earnings ratio for Beta corporation is 8 times

Explanation:

The formula for price-earnings ratio is the stock market price divided by the  stock earnings per share.

The stock market price has been given as $52 per share

the earnings per share=net income-preferred dividends/weighted average number of shares

net income is $325,000

preferred dividends is $0

weighted average number of shares is 50,000

earnings per share=($325,000-$0)/50,000=$6.5

price earnings ratio=$52/$6.5= 8 times

4 0
3 years ago
Marriott International is a worldwide operator, franchisor, and licensor of hotels, residential, and timeshare properties totali
eimsori [14]

Answer:

Marriott International

Journal Entries:

a. $300,000 cash

Debit Sale of Assets $8,000,000

Credit Furniture $8,000,000

To transfer the account to sale of assets account.

Debit Accumulated Depreciation $7,700,000

Credit Sale of Assets $7,700,000

To transfer the account to sale of assets account.

Cash $300,000

Sale of Assets $300,000

To record the cash receipts from the sale of assets.

No gain or loss on disposal.

b. $900,000 cash

Debit Sale of Assets $8,000,000

Credit Furniture $8,000,000

To transfer the account to sale of assets account.

Debit Accumulated Depreciation $7,700,000

Credit Sale of Assets $7,700,000

To transfer the account to sale of assets account.

Debit Cash $900,000

Credit Sale of Assets $900,000

To record the cash receipts from the sale of assets.

Sale of Assets $600,000

Gain on Disposal $600,000

To record the gain on the disposal of the furniture.

c. $100,000 cash

Debit Sale of Assets $8,000,000

Credit Furniture $8,000,000

To transfer the account to sale of assets account.

Debit Accumulated Depreciation $7,700,000

Credit Sale of Assets $7,700,000

To transfer the account to sale of assets account.

Debit Cash $100,000

Credit Sale of Assets $100,000

To record the cash receipts from the sale of assets.

Loss on Disposal $200,000

Sale of Assets $200,000

To record the loss on disposal of the furniture.

2. The disposal of an asset creates either a loss on disposal or a gain on disposal, which is normally regarded as a capital loss or a capital gain, as the case may be.

Explanation:

a) Data and Calculations:

Furniture (cost) ............................... $8,000,000

Accumulated depreciation .............. ...7,700,000

Net book value = $300,000

a. $300,000 cash

Sale of Assets $8,000,000

Furniture $8,000,000

Accumulated Depreciation $7,700,000

Sale of Assets $7,700,000

Cash $300,000

Sale of Assets $300,000

b. $900,000 cash

Sale of Assets $8,000,000

Furniture $8,000,000

Accumulated Depreciation $7,700,000

Sale of Assets $7,700,000

Cash $900,000

Sale of Assets $900,000

c. $100,000 cash

Sale of Assets $8,000,000

Furniture $8,000,000

Accumulated Depreciation $7,700,000

Sale of Assets $7,700,000

Cash $100,000

Sale of Assets $100,000

8 0
3 years ago
The aggregate demand aggregate supply mode is quite useful tool for us to understand the economy. So far, we saw only one change
timurjin [86]

Answer:

Explained below

Explanation:

1) From the question, we can deduce that in the short run, there will likely be news of the discovery/invention of a super vaccine which will make the consumers and the businesses to be optimistic about the future of the economy. Therefore, this will in turn lead to an increase in consumption by consumers and thus also lead to an producers making an increase in investment.

2) From answer 1 above, since there is an increase in consumption as well as investment, this will in turn also lead to an increase in the aggregate demand of the economy. Whereas, we are told that the oil market is calm and therefore we can say it does not have an effect on the supply curve.

From the first image attached, increase in the aggregate demand led to an increase in price level from point P to P1 on the y-axis while output output level increased from point Y to point Y1 on the x-axis.

3) In the long run, due to the increase in demand in the short run that makes the supply curve shift to its right, it means the producers will have more of the goods produced. This will in turn reduce the price to its initial level and also increase the output level. From the second diagram, this will lead to a shift long run aggregate supply from LRAS to LRAS1 on the x-axis.

8 0
2 years ago
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at
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Boring 7 then - 9 from the Austin
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