Answer:
Tragedy of the commons.
Explanation:
The "Tragedy of the Commons" refers to the phenomenon where People overuse a common resource. It is a situation arise when individual user share resources with much other and demand increase in comparison to the supply of resources, which lead to depletion, destruction, or damage to resources due to overconsumption. It can be prevented by using certain measures like fixing ownership of resources, assigning basic rules and regulations for usage of resources, penalizing for damage, etc.
In the given case, a retired athlete built a gym and made it common and free for neighborhood residents, which lead to overuse of gym facility and that is a tragedy of common arise.
The overhead cost that should be allocated to Zeta via activity-based costing is $356,000.
The following formula for determining the overhead cost allocated to Zeta:
= Zeta pool no 1 ÷ total pool no 1 × pool cost + zeta pool no 2 ÷ total pool no 2 × pool cost + zeta pool no 3 ÷ total pool no 3 × pool cost
= 2,800 ÷ 4,000 × $160,000 + 55 ÷ 100 × $280,000 + 750 ÷ 3,000 x $360,000
= $356,000
Therefore we can conclude that the overhead cost that should be allocated to Zeta via activity-based costing is $356,000.
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Answer:
Transactions:
1. June 1 Monthly invests $4,000 cash in exchange for shares of common stock in a small welding business.
2. June 2 Purchases equipment on account for 1,200.
3. June 3 $800 cash is paid to landlord for June rent.
4. June 12 Bills P. Leonard $300 after completing welding work done on account.
Journal Entries:
1.
June 1 Dr. Cr.
Investment $4,000
Cash $4,000
2.
June 2 Dr. Cr.
Equipment $1,200
Account Payable $1,200
3.
June 3 Dr. Cr.
Rent Expense $800
Cash $800
4.
June 12 Dr. Cr.
P. Leonard (Receivable) $300
Welding Service Revenue $300
Answer with explanation:
Part (a). The nominal rate of interest is the required return that takes the implications of inflation rate. This means that the investor would desire the return that compensates for the risk associated with the investment and additional return that compensates inflation rate:
Investor Required return = Required return for the risk + return to compensate inflation in economy
This required return is also known as Money rate of return and is calculated by using Fisher formula:
(1+n) = (1+r)*(1+i)
Where i is inflation, r is real return that compensates risk associated with the investment and n is nominal rate of return.
Part (b). Effective annual interest rate is the return percentage that the lender earns after one year of lending. This also means that effective interest rate is the return that lender actually earns after one year of investment.
Part (c). The compounding formula would be used to calculate the future value of the investment after five years. Compounding formula is as under:
Future Value = Present Value * (1+r)^n
Where n is the number of years, r is the required return on the deposit.
Putting values in the above equation, we have:
Future Value = $10000 * (1+0.025)^5years = $11314
The net worth of Mona would increase from $10000 to $11,314 in five year duration if the investment is made today.
Blue money is the highest banknote
