Answer:
Option (c) is correct.
Explanation:
Given that,
Highest level of activity = 3,700
Total cost at highest level of activity = $82,400
Lowest level of activity = 1,200
Total cost at lowest level of activity = $65,000
Here, we are using high-low method of cost estimation,
Variable cost per unit:
= (Total cost at highest level of activity - Total cost at lowest level of activity) ÷ (Highest level of activity - Lowest level of activity)
= ($82,400 - $65,000) ÷ (3,700 - 1,200)
= $17,400 ÷ 2,500
= $6.96
Fixed Costs:
= Total cost at highest level of activity - (Variable cost per unit × Highest level of activity)
= $82,400 - ($6.96 × 3,700)
= $82,400 - $25,752
= $56,648
Answer:
a. The demand curve facing a monopolistic competitor in a market where all producers charge different prices becomes less elastic when it engages in international trade - Disagree
This statement is not true. If a monopolistic competitor engages in international trade, it will meet more competition, meaning that the audience (demand) that it has is more sensitive to prices, because they have more options available.
b. According to the gravity equation, countries closer to each other trade more - Agree
The gravity equation tells us that the volume of international trade is correlated with geographical proximity and economic size. That is to say, the closer and larger two economies are, the more international trade they engage with each other.
c. The only gain from trade in monopolistic competition in trade is lower prices - Disagree
Gains are the most important in lower prices, but there are also gains in competitiveness and quality.
d. The closer to 1 the index of intra industry trade is, the greater the difference between exports and imports of the same goods. - Disagree
An index of intra industry trade of 1 indicates that the country imports and exports roughly the same amount for a particular type of goods (the goods that belong to that industry). Hence, the statement is not true.
Answer:
The entry to record the payment of attorneys fees by a way of share issue will be:
Dr Organization expense $5000
Cr Share capital $3000
Cr Share premium $2000
Explanation:
Firstly, the fees payable to the attorneys is $5000,hence organization expense is debited with $5000.
However, the value of the shares given is 300*$10 i.e $3000,as a result, the attorneys have indirectly paid $2000 more for the shares, the excess is recorded in paid in share capital in excess of par value account or a share premium account.
The rationale for the entries is that expense account takes debit when it increases and capital account a credit.
Answer:
Portfolio beta = 0.904
Explanation:
<em>The portfolio beta is the weighted average of all the beta associated with each of the different stock making up the portfolio. The betas are weighted using the probability associated with each of the stock. </em>
Portfolio beta = WaRa + Wb+Rb + Wn+Rn
W- weight of the beta, R- Stock beta -
W- Probability of the beta, R- stock beta
Note that the sum of the probability of different outcomes should equal to one. Hence, the probability of economy being normal is
Portfolio beta = (0.4 × 1.24) + (0.15 × 1.49) + ( 0.45 ×0.41) =0.904
Portfolio beta = 0.904
Answer:
Sunk cost fallacy.
Explanation:
Sunk costs - are costs that have been incurred as a result of past decisions. Now are unrecoverable.
A trap which enables a investor to invest more in the sunken costs to earn profit.
Are cost incurred in the past tha cannot be changed.
Sunk cost fallacy - considering sunk costs when making new decisions at the margin. Can lead to using out of date facilities and incurring large opportunity costs.
Is the continued investment in something no longer desired to reconcile the loss of the initial investment.
