Answer:
Margin of safety= $4,257
Explanation:
Giving the following information:
The breakeven point in units is 3,400, and the expected sales in units are 4,500.
First, we need to determine the dollar amount of sales:
Break-even point= 3,400*3.87= $13,158
Current sales= 4,500*3.87= $17,415
Margin of safety= (current sales level - break-even point)
Margin of safety= 17,415 - 13,158= $4,257
Compa-ratio, short for comparitive ratio, is a formula used to determine competitiveness of an employees pay. A compa-ratio of 1.00 would mean the employee is making exactly the market average.
With a ratio of 1.9, this means the designers are making twice the industry average for their job. The biggest problem this could cause would be labor costs being to much. If the company is paying 2x the market rate for their designers, they aren't staying competitive.
Receiving an 'E' will not give you any point average.
Answer:
The correct answer is: firms are unlikely to undertake investment.
Explanation:
The liquidity trap is a situation described in the Keynesian economy according to which, liquidity injections into the private banking system by the central bank do not lower interest rates or inject money into the economy and therefore do not stimulate economic growth as claimed by monetarism.
The liquidity trap occurs when people accumulate cash because they expect an adverse event, such as deflation, reduction in aggregate demand and GDP, an increase in the unemployment rate or a war. People are not buying, companies are not borrowing and banks are not lending either because they do not have enough solvency since the economic outlook is uncertain and investors do not invest because the expected returns on investments are low.
The most common characteristics of a liquidity trap are interest rates close to zero and fluctuations in the monetary base that do not translate into fluctuations in general price levels.
