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olasank [31]
3 years ago
10

n 1982 the inflation rate hit 16%. Suppose that the average cost of a textbook in 1982 was $25. What was the expected cost in th

e year 2017 if we project this rate of inflation on the cost? (Assume continuous compounding. Round your answer to the nearest cent.) If the average cost of a textbook in 2012 was $150, what is the actual inflation rate (rounded to the nearest tenth percent)?
Business
1 answer:
Elis [28]3 years ago
6 0

Answer:

Total number of years = 35

a. Expected cost in 2017 = $25 * e^(35*0.16)

Expected cost in 2017 = $25 * e^5.6

Expected cost in 2017 = $25 * 270.42

Expected cost in 2017 = $6,760.50

b. If the average cost of a textbook in 2012 was $150, then the actual inflation rate:

150 = 25 * e^(r*t)

150 = 25 * e^(r*30)

6 = e^(r*30)

Taking log base e on both side

30r = Ln6

30r = 1.7918

r = 1.7918/30

r = 0.05972667

r = 5.97%

So,  actual inflation rate is 5.97%

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Pepe, Incorporated acquired 60% of Devin Company on January 1, 2010. On that date Devin sold equipment to Pepe for $45,000. The
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Answer: See explanation

Explanation:

(1) Compute the income from Devin reported on Pepe's books for 2010.

Net Income reported by Devin for 2010 = $300000

Add: Loss on Sale of Equipment = ($120000 - $66000 - $45000) = $9000

Less: Difference in Depreciation = ($54000/9) - ($45000/9) = $6000 - $5000 = $1000

Total Income from Devin for 2010 = $300000 + $1000 - $9000 = $308000

The Income from Devin reported on Pepe's books for 2010 will be:

= $308000 × 60%

= $308000 × 0.6

= 184800

2. Compute the income from Devin reported on Pepe's books for 2011.

Net Income reported by Devin for 2011 = $325000

Less: Difference in Depreciation = ($54000/9) - ($45000/9) = $6000 - $5000 = $1000

Total Income from Devin for 2011 = $325000 - $1000 = $324000

The Income from Devin reported on Pepe's books for 2011 will be:

= $308000 × 60%

= $308000 × 0.6

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(3) Compute the noncontrolling interest in the net income of Devin for 2010.

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4 0
3 years ago
Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will:
ipn [44]

Answer:

a)decrease consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs

Explanation:

Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will decrease consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.

In economics, complements goods are ones(two goods) that their usage is very close,when there is increase in price of one, the demand of other goods that complement it falls, and from the question Hot dogs and hot dog buns are complementary goods.

consumer surplus is the difference between the price that was actually paid for a goods/service by the consumer and the price the consumer is willing to pay.

Since, Hot dogs and hot dog buns are complementary goods As the flour's price rise here consumer surplus for hot dog buns will definitely decreases, then the producer surplus decreases for hot dogs.

5 0
4 years ago
A state savings bond can be converted to $100 at maturity six years from purchase. If the state bonds pay 8% annual interest (co
Fed [463]

Answer:

price of the maturity at the time of sell will be $63.01

Explanation:

We have given maturity after six year of the purchase = $100

Annual interest r = 8%

Time period n = 6

We have to find the the amount of sell of the bond P

We know that future value is given as A=P(1+\frac{r}{100})^n, here A is the price of maturity after 6 year P is price if maturity at the time of sell r is rate of interest and n is time period

So 100=P(1+\frac{8}{100})^6

P = $63.01

So price of the maturity at the time of sell will be $63.01

5 0
3 years ago
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