Loan taken accounting equation<br>

1. Assume there are only two goods in the economy, french fries and onion rings. In 2013, 1,000,000 servings of french fries wer

xxMikexx [17]

Answer:

A. Nominal GDP in 2013 = $880,000

Nominal GDP in 2014 = $878,400

Real GDP in 2014 = $864,000

B. An assessment of growth using nominal GDP would overstate growth due to the effect of inflation on 2014 prices. The real GDP was lower than the nominal GDP

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation

Nominal GDP in 2013 = ( 1,000,000 x $0.40 ) + ( 800,000 x $0.60) = $880,000

Nominal GDP in 2014 = ( $0.50 x 900,000 ) + ($0.51 x 840,000) = $878,400

Real GDP in 2014 = ( $0.40 x 900,000 ) + ($0.60 x 840,000) = $864,000

An assessment of growth using nominal GDP would overstate growth due to the effect of inflation on 2014 prices. The real GDP was lower than the nominal GDP

4 0

3 years ago

Which of the following is true for American options? A. Put-call parity provides an upper and a lower bound for the difference b

velikii [3]

The statement that holds true for the American Option is (A) Put-call parity provides an upper and lower bound for the difference between call and put prices

Explanation:

According to the Put-call parity concept when we hold the short European put and long European call of similar class the return delivered is same as holding one forward contract of the same underlying asset, that has the same expiration, forward price and which is equal to the strike price of the option

In financial management put–call parity concept is used to define the relationship that exist between the price of a European call option and European put option, and both of them have identical strike price and expiry

The formula used for calculating put call parity is

c + k = f +p

where (c) call price plus the (k) strike price of both options is equal to the futures price(f) plus the put price(p)

4 0

3 years ago

Earl has $977 in his checking account. after he writes a check to the bookstore for $267, how much is remaining in his account?

earnstyle [38]

Earl has $310 dollars in his checking account

8 0

2 years ago

Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $12 each from its Asian supplier, Te

brilliants [131]

Answer:

a) 2179 parkas

b) 0.7389

c) 174 customers

d) 10,772

Explanation:

Given:

Bower's selling price =$22

Salvage value: $0

Cost price = $12

Mean distribution= 2300 parkas

S.d = 1100 parkas

a) Number of parkas Teddy Bower should buy from Teddysports to maximize profit:

Let's first calculate overage(Co) and underage (Cu) cost.

•Cu = Selling price - Cost price

= $22 - $12

= $10

Underage cost = $10

•Co = Cost price - Salvage value

= $12 - $0

= $12

Overage cost = $12

Let's now find the critical ratio with the formula:

$\frac{C_u}{C_u+C_o}$

$= \frac{10}{12+10}$

= 0.4545

From the Excel function NORMSINV, the corresponding z value is =

NORMSINV(0.4545)

z value = -0.11

For the number of parkas Teddy Brown should order, we have:

Quantity = Mean +(z*s.d)

= 2300+ (-0.11 * 1100)

= 2179 parkas

b) for z value corresponding to expected sales of 3000 parkas, we have:

z value = (expected demand -mean)/s.d

$\frac{3000-2300}{1100}$

= 0.64

From the Excel function NOEMSDIST, the corresponding probability =

NORMSDIST(0.64)

= 0.7389 = 73.89%

In stock probability = 0.7389

c) For L(0.64) using the standard normal loss function table, L(z) =

L (0.64) = 0.158

For expected lost sales, we have:

S.d * L(z)

= 1100* 0.158

= 173.8

= 174.

On average, there is expected to be a turn away of 174 customers due to shortage.

d)

Lets first calculate expected sales and left over inventory.

•Expected sales = Mean -expected lost sales

= 2,300 - 174

= 2,126

•Left over inventory expected=

Expected demand - Expected lost sales

= 3000 - 2126

= 874

For expected profit, we have:

$(C_u* Expected lost sales)-(C_o* Expected leftover inventory)$

=($10*2126)-($12*874)

= $10,772

Profit expected = $10,772

3 0

2 years ago

When the demand curve shifts to the left, what is this called?

ycow [4]

When the demand curve shifts to the left, it describes Decrease in demand. Decrease in demand is represented by a leftward shift in the demand curve and signifies that individuals are willing and can buy less of a good at each and every price.

4 0

2 years ago

Loan taken accounting equation​

Loan taken accounting equation