Based on the scenarios, it will be very likely that the similarities are due to institutional isomorphism
In business, institutional isomorphism refer to a similarity of processes or structure of one organizations with the other because they've developed under the same constraints
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Answer:
0.15
Explanation:
The computation of the degree of economies of scope in this case is given below:
(cost of producing basketballs + cost of producing soccer balls - annual cost of production) ÷ annual cost of production
= ($70,000 + $45,000 - $100,000) ÷ $100,000
= 0.15
Answer:
CORPORATION
Explanation:
Sole Proprietorship, Partnership are business owned & managed by a single owner, group of partners sharing profits.
Both of these business forms, entrepreneur(s) liability is unlimited , implying their assets can be at stake if business assets are insufficient to fulfil its liabilities. Although, there can be certain special limited liability partnership firms also , but the general case is explained as earlier.
However: Corporation is a separate legal entity from its owners, governed by board of directors . Owners & Corporation being separate entities, there is no pressure on the former's assets to fulfil the latter's claims. So , the owners liability is limited , only confined to the amount they have invested.
Answer:
The effect of this error on 2003 ending working capital is that it overstated the ending 2003 working capital.
The error does not have effect on the 2004 ending retained earnings balance.
Explanation:
Let the amount of the commission expense be xxxx.
At the end of 2003, the journal entries should have been as follows:
Debit Commission expense for xxxx
Credie Commission payable for xxxx
Also, we have:
Working capital = Current assets – Current liabilities ………… (1)
From equation (1), current liabilities are understated because commission payable which was not recorded is an item under current liabilities. Since the current liabilities are understated, that indicates that the working capital in equation is overstated. Therefore, the effect of this error on 2003 ending working capital is that it overstated the ending 2003 working capital.
When the 2003 commission expense in the entries above was paid in 2004, it would have been recognized as an expense. This made the error to counterbalance. This implies that the 2004 ending retained earnings balance is still correct despite that there are errors in the earnings of the two years. Therefore, the error does not have effect on the 2004 ending retained earnings balance.
Answer: c. May cause the company's overall weighted average cost of capital to either increase or decrease over time.
Explanation:
Weighted Average Cost of Capital (WACC) as the term implies, is a weighted average of the various rates that the company uses to source capital. If therefore, the company assigns different discount rates based on risk level, WACC will either increase or decrease overtime.
With better discount rates, the WACC will decrease to reflect the lower risk and with worse rates, WACC will increase to reflect the higher risk associated with the company. .
