In order to break even, they would need to sell at least 5,000 units
Break even point is calculated by the formula:
Fixed costs÷(selling price -variable costs per unit)
i.e.
100,000 ÷ (60-40) = 5,000
Anything they sell above this number will start to produce profits for the company
Answer:
changes in private savings offset any changes in the government deficit
Explanation:
Ricardian equivalence means that private saving changes offset any changes in the government budget. Therefore, if the deficit increases by 30, private saving also increases by 30 but the trade deficit and the budget deficit will not change.
In case of the Ricardian equivalence, economic agents are assumed to be perfectly rational. According to them, higher taxes are required to repay the debt in case of an increase in deficit-financed government spending.
Present Value involves discounting, and future value involves compounding.
The find present value of a dollar a year from now, we must discount by the discount rate, since a dollar a year from now is not worth as much as a dollar today.
To find the future value (in a year) of a dollar we receive today, we increase the dollar by the discount rate, since our dollar today is worth more than a dollar a year from now.
Answer:
A) $ 1,200
Explanation:
The firm has estimated that one half of one percent of credit sales is uncollectible.
Total credit sales $ 300,000
Estimated uncollectible accounts 0.5 %
Allowance for uncollectible accounts balance
$ 300,000 * 0.5 % $ 1,500
Available balance in allowance for uncollectible account <u> $ 300</u>
Additional amount to be recorded in allowance account <u> $ 1,200</u>
