Economists assume that people are rational in the sense that

Select the correct answer from each drop-down menu,

Alik [6]

Answer:

C) property

A) direct tax

Explanation:

5 0

3 years ago

Nicole is a calendar-year taxpayer who accounts for her business using the cash method. On average, Nicole sends out bills for a

BigorU [14]

Answer:

a) I guess that Nicole bills $12,000 per month, not $512,000.

Assuming that the last time Nicole billed her customers was November, she was able to collect $11,760 before the year ended. I will also assume that the remaining $240 are uncollectible.

If Nicole postpones billing her customers during December, her taxable income as a cash basis taxpayer will decrease by $12,000 x 70% = $8,400

she will be able to save $8,400 x 2% = $168 in current taxes, but she will have to pay them next year anyways.

b) The time value of money should affect Nicole's calculations because she is saving the interests that could be earned by $168 in 1 year. We are not given any specific interest rate but we could use 6% as an example. Nicole will gain $168 x 6% = $10.08

But she will also lose potential interests earned on the $8,400 that she billed later. Using the same interest rate, 6%, she will lose $8,400 x 6% x 1/12 (only 1 month) = $42.

That means that the net result from this = $10.08 - $42 = -$31.92.

As you can see, Nicole is losing money. The higher the interest rate, the more money she will lose.

c) The risk of increasing uncollectible accounts will always exist. Nicole already has around 2% of uncollectible accounts, and combining two bills at one time might lead to a higher percentage of uncollectible accounts. Of course, this depends on her clients, but the risk will increase a little bit or a lot, but it will increase.

4 0

4 years ago

Midland Utilities has outstanding a bond issue that will mature to its $1,000 par value in 11 years. The bond has a coupon inter

MArishka [77]

Answer:

at 13% --> $1,000

at 17% -->$806.54

at 10% --> $1,194.85

When the rates do not match people will only accept the bond if their desired market return can be acheive. Because, the coupon payment are fixed the only way to do so is by changing the price ofthe bond.

So bond with coupon rate above market are trade at a price higher than face value while, below market traded at lower price.

Explanation:

The market value of a bond is the present value of the future coupon payment and maturity given the current market rate

When the market rate matches the coupon rate then the bond is at par and sales at face value.

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 130.000

time 11

rate 0.17

$130 \times \frac{1-(1+0.17)^{-11} }{0.17} = PV\\$

PV $628.7337

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 1,000.00

time 11.00

rate 0.17

$\frac{1000}{(1 + 0.17)^{11} } = PV$

PV 177.81

PV c $628.7337

PV m $177.8097

Total $806.5435

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 130.000

time 11

rate 0.1

$130 \times \frac{1-(1+0.1)^{-11} }{0.1} = PV\\$

PV $844.3579

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 1,000.00

time 11.00

rate 0.1

$\frac{1000}{(1 + 0.1)^{11} } = PV$

PV 350.49

PV c $844.3579

PV m $350.4939

Total $1,194.8518

3 0

4 years ago

The ________ consists of the unofficial but influential means of communication, decision making, and control that are part of th

marissa [1.9K]

The informal communication also known as grapevine, consists of the unofficial but influential means of communication, decision marking, and control that are part of the habitual way things get done in an organization. This type of communication can take place with face-to-face communication, email, text messages and phone calls. Formal communication, is a more structured form of communicating in the work place.

8 0

3 years ago

calculate the price elasticity of demand when the price of a barrel of gosum berries rises from $10 to $20. What kind of elastic

Advocard [28]

Answer:

PED = -0.176 or 0.176 in absolute terms. It is price inelastic, since PED < 1.

Explanation:

the quantity demanded for a price of $10 is 900 barrels.

the quantity demanded for a price of $20 is 800 barrels.

Using the midpoint method for calculating PED:

PED = {(Q2 - Q1) / [(Q2 + Q1) / 2]} / {(P2 - P1) / [(P2 + P1) / 2]}

PED = {(800 - 900) / [(800 + 900) / 2]} / {($20 - $10) / [($20 + $10) / 2]}

PED = (-100 / 850) / ($10 / $15) = -0.1176 / 0.6667 = -0.176

Price elasticity of demand measures how much does the quantity demanded of a good or service vary as a result form a 1% change in its price.

PED < 1, price inelastic. A 1% change in price will result in a proportionally smaller change in quantity demanded.
PED > 1, price elastic. A 1% change in price will result in a proportionally larger change in quantity demanded.
PED = 1, price unitary. A 1% change in price will result in a proportionally equal change in quantity demanded.

7 0

4 years ago

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