Answer: e. Decreases asset and expense accounts, and increases liability, common stock, and revenue accounts.
Explanation:
Let's evaluate each of the options as follows:
a. Is always a decrease in an account - This is false because a credit entry increases liability, common stock and revenue accounts.
b. Is recorded on the left side of a T-account - Although in modern day accounting, the use of T-account has been relegated to the background. However, if entries are to be recorded using the T-account, all debits are posted to the left side while all credits are recorded on the right side of the account.
c. Increases asset and expense accounts, and decreases liability, common stock, and revenue accounts - It does not increase asset and expense accounts, rather it reduces them. The opposite applies to liability, common stock, and revenue accounts.
d. Is always an increase in an account - This is false.
Therefore, option e is correct because a credit entry reduces asset and expense accounts, and increases liability, common stock and revenue accounts.
Answer:
Explanation:
Solution:
Parameters are u = 0.1, d = −0.1, 1 + r = e
0.5×0.08. So the risk-neutral probability is
p
∗ = 0.7. After evaluation of the options at the terminal nodes we use the risk-neutral
valuation to get (i)
πC(0) = e
−2(0.5×0.08) £
0.7
2 × 21 + 2 × 0.7(1 − 0.7) × 0 + (1 − 0.7)2 × 0
¤
= 9.61
and (ii)
πP (0) = e
−2(0.5×0.08) £
0.7
2 × 0 + 2 × 0.7(1 − 0.7) × 1 + (1 − 0.7)2 × 19¤
= 1.92
(iii) For put-call parity one has to verify S − πC + πP = Ke−r
, here :
100 − 9.61 + 1.92 = 100e
−0.08
.
Answer:
Allocated MOH= $128,000
Explanation:
Giving the following information:
Predetermined overhead rate= 160% of direct material cost.
Actual direct material= $80,000
<u>To allocate overhead, we need to use the following formula:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.6*80,000
Allocated MOH= $128,000
Answer:
a. The costs of producing a single Blue-ray plaver increases.
Explanation:
Supply curve represents a relationship between the the quantity of a good produced and the price of the good.
In this scenario if the cost of input of or other factors of production increases, the supplier will be forced to increase the price of BluRay CDs while reducing the quantity.
The marginal cost increases resulting in an increase in total cost of BluRay.
This is represented by a shift in supply curve to the left
Answer:
a) must accept market price for its physical capital inputs.
Explanation:
The price of gold in the commodity market is being influenced by market speculation. Market speculation implies investors are trying to profit from the changing prices of gold. When the market is active, the price of gold will be moving up and down depending on demand.
The current prices are high is a motivation to sell. For I'maGoldMiner to profit from the current high prices, it must continue with production. In the event the prices of physical capital inputs change, the company must accept the new prices. The high selling prices will assist the company in absorbing any changes input costs. That way, the company will maximize on the current high prices.