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2 years ago

An increase in the current account deficit will place ____ pressure on the home currency value, other things equal.

1 answer:

8 0

When there is an increase in the current account deficit, this will place <u>downward pressure</u> on the home currency value and other things equal.

<h3>What is a deficit in current account?</h3>

A deficit in current account happens when total value of goods and services a country imported exceeds the total value of goods and services exported.

Hence, in that situation where there is an increase in the current account deficit, this will place <u>downward pressure</u> on the home currency value and other things equal.

Therefore, the Option D is correct.

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The owner of a bicycle repair shop forecasts revenues of $240,000 a year. Variable costs will be $70,000, and rental costs for t

Sergeu [11.5K]

Answer:

1. Adjusted Accounting Profits

- This method gives cashflow by adjusting revenue for expenses.

Earnings before tax

= Revenue - variable cost - rent cost - depreciation

= 240,000 - 70,000 - 50,000 - 30,000

= $90,000

Earnings After tax

= 90,000 ( 1 - tax rate)

= 90,000 ( 1 - 30%)

= $63,000

Add back depreciation as it is a non-cash expense

Operating cashflow = 63,000 + 30,000

= $93,000

2. Cash inflow/cash outflow analysis

Cash outflow is removed from inflow.

= Cash inflow - outflow

= 240,000 - variable cost - rent cost - tax

= 240,000 - 70,000 - 50,000 - 27,000

= $93,000

Tax = Earnings before tax * 30%

= 90,000 * 30%

= $27,000

3. The depreciation tax shield approach.

The tax shield that depreciation affords is added to the earnings after tax.

= Revenue - variable cost - rent cost

= 240,000 - 70,000 - 50,000

= $120,000

After tax = 120,000 * ( 1 - 30%)

= $84,000

Depreciation tax shield = depreciation * tax

= 30,000 * 30%

= $9,000

Cashflow = 84,000 + 9,000

= $93,000

4. Are the above answers equal?

Yes they are. All give an operating cash-flow of $93,000.

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3 years ago

Pros and cons on outdoor advertising

Mademuasel [1]

If I'm correct-- by outdoor advertising do you mean commercials and ads encouraging people to go outside?

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3 years ago

Harding corporation sells two products, standard and supreme. expected sales are 40,000 standard and 60,000 supreme. standard's

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Contribution for Standard is $30 per unit and Supreme is $60 per unit, Thus if Fixed expenses are first divided between the two products on the basis of Contribution per unit, It can be calculated as below:

Fixed Expense Bifurcated on basis of Contribution per unit= 30:60

Which Comes to 1:2

Thus it will be bifurcated as $1200000 for Supreme and $600000 for Standard

Thus for Standard to break even it Requires to Sell the below no of units:

Break Even Point in units= $\frac{Fixed Expense}{Contribution per unit}$

Break Even Point in units= $\frac{600000}{30}$

Break even points in units=20000 units

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2 years ago

Which of the following statements is true? Group of answer choices If current Real GDP is greater than Natural Real GDP, the eco

Archy [21]

Answer: Wages are flexible if the economy is self-regulating.

Explanation:

Classical economists believe that the economy is self-regulating. This means that if the economy is not at equilibrium, it will return to equilibrium if it is left without interference.

For this to happen, inputs such as wages have to flexible to enable them to adjust to market conditions and thus take the Economy back to equilibrium.

For instance, if there is a recession, wages will reduce so that the prices that the producers can charge will reduce as well which will enable supply to match demand and bring the economy back to equilibrium.

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3 years ago

To make a decision resulting in good corporate citizenship, a business should evaluate the decision based on:

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Answer:

All of them

Explanation:

When making decisions, a business should evaluate:

Legal implications of each decision : do our decisions comply with all applicable laws and regulation?
Public relations impact : how will the public feel about our decision?
Safety risks for consumers and employees: does it affect the safety and well being of our employees and customers?
Financial implications: does our decision benefit our business?

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3 years ago