An important difference between a perfectly competitive firm and a monopolist is

3. Earning of profit is regarded as the main objective of business? Explain by giving any 3reasons

netineya [11]

Profit maximization is usually a main aim of most businesses in the private sector.

1) Usually people invest personal savings into starting businesses so that the return (aka profits) can be greater than the investment and they can earn a better living.

2) If profit is earned then the business would have enough money to pay dividends to its investors/shareholders, otherwise it wouldn’t have enough money to give as dividends and it will lose its investors.

3) Profit is required for the business to survive in competitive markets.

3 0

3 years ago

Flow Company has provided the following information for the year ended December 31, 2019:

meriva

Answer: A) A net outflow of $2,000.

Explanation:

Investing Activities in the Cashflow statement refers to those transactions that have to do with capital Expenditure in the company such as the purchase or sale of Fixed Assets such as Property, Land or Equipment.

Investment cashflow also concerns transactions involving the stocks or bonds of other companies.

It is worthy of note that transactions are only recorded in the Investing Cashflow section if there is an immediate exchange of CASH.

In the books of Flow Company for the year the transactions that can be considered as Investing Activities are,

Cash paid for equipment purchase, $27,000

Cash received from sale of land with a $32,000 book value, $25,000

The acquisition of land in exchange for Preferred Stock does not fall under here as there was no immediate exchange of cash.

The Net Cash flow from Investing is therefore

= -27,000 (cash Outflow) + 25,000 (cash inflow from selling land)

= -$2,000

This means that there was a net cash Outflow of -$2,000 so Option A is correct.

4 0

3 years ago

You have just won a lottery! You will receive $50,000 a year beginning one year from now for 20 years. If your required rate of

Likurg_2 [28]

Answer:

The prize is worth $425,678.19.

Explanation:

Giving the following information:

Cash flow= $50,000

The number of years= 20 years.

Rate of return= 10%

First, we need to calculate the final value using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual cash flow

FV= {50,000*[(1.1^20)-1]}/0.1

FV= $2,863,749.98

Now, the present value:

PV= FV/(1+i)^n

PV= 2,863,749.98/(1.1^20)

PV= $425,678.19

7 0

3 years ago

A building with an appraisal value of $129,668 is made available at an offer price of $158,618. The purchaser acquires the prope

Ira Lisetskai [31]

Answer:

$118,443

Explanation:

Calculation to determine what the cost basis recorded in the buyer's accounting records to recognize this purchase is

Using this formula

Cost Basis= Cash + Note payable + Mortgage amount

Let plug in the formula

Cost Basis= $36,973 + $24,989 + $56,481

Cost Basis= $118,443

Therefore the cost basis recorded in the buyer's accounting records to recognize this purchase is

$118,443

5 0

3 years ago

Economists have used the ultimatum game and the dictator game in experiments designed to determine a. whether consumers believe

Alona [7]

Answer: Option(b) is correct.

Explanation:

Correct option: Whether consumers care about fairness when they make decisions.

The Ultimatum game and the dictator game economists generally used to know the fairness and the economic behavior of the consumers.

The dictator game is a derivative of the ultimatum game.

From these two games it was seen that consumers firstly thinks about their own payoff and split the amount in an unequal ratio.

In the ultimatum game, a sum of money will be given to a person and asked him to split the amount with the other person. If the other person accepts his offer then they both get the decided amount and if the other person rejects his offer then they both get nothing.

This gives us the consumers preferences, economic behavior or whether they care about the fairness or not.

7 0

3 years ago