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3 years ago

In the Income-Expenditures model, it is assumed that investment is independent of the level of (current) income. This is:

Business

1 answer:

____ [38]3 years ago

4 0

Answer:

I'm not sure what this question is about, but the concept of the income expenditures model and its components is the following:

In the income (or aggregate) expenditures model, its author (Keynes) established certain assumptions in order to analyze how the economy works as a whole. His assumptions included that investment, government spending and net exports were all independent from income level.

When the economy is at equilibrium, total expenditures (GDP) = income level = consumption + government + investment + net exports

Another important assumptions are:

marginal propensity to consume (MPC) + marginal propensity to save (MPS) = 1
consumption = autonomous consumption + [MPC x (total income level - taxes)]

Savings = investment increase when disposable income increases or real GDP increases.

This model is used to explain the relationship between labor and production levels, and how they are affected by the economy's total expenditures. By increasing expenditures, the demand for labor and products/services will increase.

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A company bases its predetermined overhead rate on direct labor cost. For next year, total factory overhead cost is estimated at

AlekseyPX

Answer:

Allocated MOH= $18,750

Explanation:

Giving the following information:

The estimated total factory overhead= $300,000

Total estimated direct labor cost= $240,000.

The actual direct labor cost was $15,000.

First, we need to calculate the estimated overhead rate based on direct labor cost. Then, we can allocate overhead.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 300,000/240,000= $1.25 per direct labor dollar

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 1.25*15,000

Allocated MOH= $18,750

3 0

3 years ago

PLEASE HELP ME

Olin [163]

Answer:

i clicked on this when i didnt mean to and i dont know how to exit

Explanation:

6 0

3 years ago

Innovative installers provides a variety of services related to office space and relocations including installation services. in

nata0808 [166]

When the company uses cold calling to find potential customers, it is basing its methodology on the law of averages.

The law of averages is the law that something is sure to happen at some time, because of the number of times it generally happens or is expected to happen. In this case because the company uses a variety of marketing methods including a web site, cold calls, and direct mail Evans and Heldris believe the company could better communicate with potential customers who may not know of the company's existence.

6 0

3 years ago

A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial engineering department was a

7nadin3 [17]

Answer:

City 2% 10% 20% 30% 50% 100%

Denver 80.93 -22.58 -100.47 -147.92 -200.06 -248.20

Dallas 453.59 180.88 -24.31 -149.32 -286.69 -413.54

SanAntonio 407.08 174.19 -1.05 -107.81 -225.13 -333.46

LosAngeles 473.36 140.93 -109.19 -261.57 -429.03 -583.65

Cleveland -18.14 -53.97 -80.93 -97.36 -115.40 -132.07

Atlanta 158.95 61.41 -11.98 -56.69 -105.82 -151.19

Chicago 0.00 0.00 0.00 0.00 0.00 0.00

b) The manufacturing plant should be located in Dallas (IRR=19%).

Explanation:

We have the cost and uniform annual benefits for each city:

Plant Location First Cost ($000s) Uniform Annual Benefit($000s)

Denver 300 52

Dallas 550 137

San Antonio 450 117

Los Angeles 750 167

Cleveland 150 18

Atlanta 200 49

Chicago 0 0

The cash flow can be written as:

$NPV=-I_0+CF[\frac{1-(1+i)^{-8})}{i}]=-I_0+CF\cdot A$

where:

I0: first cost.

CF: uniform annual benefit

i: discount rate

A: annuity factor

The annuity factor that multiplies the CF is equal for every city, so it can be calculated beforehand:

$A=\frac{1-(1+i)^{-8})}{i}$

For some rate of returns, we have:

r=2% A=7.33

r=10% A=5.33

r=20% A=3.84

r=30% A=2.92

r=50% A=1.92

r=100% A=1.00

a) Then, for each city, we have this NPV, in function of differents discount rates:

City 2% 10% 20% 30% 50% 100%

Denver 80.93 -22.58 -100.47 -147.92 -200.06 -248.20

Dallas 453.59 180.88 -24.31 -149.32 -286.69 -413.54

SanAntonio 407.08 174.19 -1.05 -107.81 -225.13 -333.46

LosAngeles 473.36 140.93 -109.19 -261.57 -429.03 -583.65

Cleveland -18.14 -53.97 -80.93 -97.36 -115.40 -132.07

Atlanta 158.95 61.41 -11.98 -56.69 -105.82 -151.19

Chicago 0.00 0.00 0.00 0.00 0.00 0.00

b) The firm uses a 10% annual interest. For this situation, we can look up in the table from the previos question and see that Dallas has the higher NPV at this discount rate.

So the manufacturing plant should be located in Dallas.

(NOTE: the IRR of the project relocating to Dallas is 19%)

7 0

3 years ago

A taxpayer places a $1,050,000 5-year recovery period asset in service in 2019. This is the only asset placed in service in 2019

asambeis [7]

Answer:

hi your question lacks the options here is the options and the answer

a. $1,000,000

b. $200,000

c. $1,050,000

d. $1,026,000

e. $210,000

answer : $1026000 ( D )

Explanation:

properties placed in service in 2019 = $1050000

The threshold for the year 2019 under the section 179 = $2550000

Maximum expense/deduction before phase out under the section 179 = $1020000

The depreciable value =$1050000 - $ 1020000 = $30000

The MACRS depreciation half - year convention under 5 years = 20% of depreciable value = 20% * 30000

= $6000

hence the total cost recovery = MACRS + Maximum expense/deduction

= $6000 + $1020000

= $1026000

7 0

3 years ago