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3 years ago

When the excess capacity of business expands unintentionally, aggregate: demand will increase supply will decrease?

1 answer:

6 0

Fall in business taxes shifts supply curve to the right since business supply move with less taxes. Also Fall in business taxes increases after tax profit on investment. So aggregate demand shifts right. Hence, it increases aggregate demand and increases aggregate supply also.

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The FOURX Corp. has purchased $50,000 of experimental equipment. The anticipated salvage value is $5500 at the end of its 5-year

Anestetic [448]

Answer:

b. NPW(SL): $33,738; NPW(DDB): $37,068; Recommendation: DDB

Explanation:

The computation is shown below:

As we know that

Present value is

= [Cash Flow ÷ (1 + Rate of Interest)^Year]

where,

Rate of Interest = 10%

Under Straight-line depreciation:

Beginning book value = $50,000

Salvage value = $5,500

So, the depreciationper year is

= [($50,000 - $5,500) ÷ 5]

= $8,900

Year Beginning Depreciation End Present value

book value book value of depreciation

1 $50,000 $8,900 $41,100 $8,090.91

2 $41,100 $8,900 $32,200 $7,355.37

3 $32,200 $8,900 $23,300 $6,686.70

4 $23,300 $8,900 $14,400 $6,078.82

5 $14,400 $8,900 $5,500 $5,526.20

$33,738.00

Under Double declining depreciation:

Depreciation rate per year = (1 ÷ Useful Life) × 100

= 1 ÷ 5 × 100

= 20%

Now for double-declining, the rate is doubled

So,

= 20% × 2

= 40%

Year Beginning Depreciation End Present value

book value book value of depreciation

1 $50,000 $20,000 $30,000 $18,181.82

2 $30,000 $12,000 $18,000 $9,917.36

3 $18,000 $7,200 $10,800 $5,409.47

4 $10,800 $4,320 $6,480 $2,950.62

5 $6,480 $980 $5,500 $608.50

$37,068

5 0

2 years ago

How would you describe the savings rate in america compared with other industrialized countries?

Natasha_Volkova [10]

United States’ savings rate is only around 10%, much lower than any other countries. There's some reasoning behind it. In fact, countries with the highest savings rates weren’t necessarily the countries with the highest GDPs. GDP os US is $56,300 per capita but their household savings rate of just 4.9%. Also, in Hungary their GDP is $26,000 while their savings rate of 9.0%. This implies that the money they have isn't place on one nest only or put to savings, rather allocated to a much more important sectors. We should not forget taking into account their purchasing power parity, the rate a currency would have to be converted into another to buy the same amount of goods and services of the country.

6 0

2 years ago

A group of nations establishes a free-trade zone. What is the most likely effect?

mixer [17]

The answer is trade increases

4 0

3 years ago

GINNY: I think itâs safe to say that, in general, the savings rate of households in todayâs economy is much lower than it really

zhuklara [117]

Answer:

Taxing polluters is one of the best ways to protect the environment

Explanation:

6 0

2 years ago

Big Valley has a times interest earned ratio that is _________, which indicates that Big Valley has _________ long-term insolven

irina1246 [14]

Answer:

C. 3.91; more

Explanation:

the first part of the question is missing. It involved several aspects of Big Valley including its current and quick ratios, ROE and how they compare to the industry's average (they are generally lower than the industry's average).

This particular question refers to times interest earned ratio = EBIT / interest expense = 3.91, and how it compares to the industry's average (it is higher than the industry's average).

Since Big Valley performs poorly against the industry's average when comparing the other 3 metrics, but performs very well in the times interest ratio, it means that Big Valley has a low debt ratio. A low debt ratio results in lower financial leverage and lower interest expense.

5 0

2 years ago