Aggregate demand is the total demand for all final goods and services within an economy over a specific time period at a given price level. Aggregate demand is represented by a downward-sloping curve, with price level on the y-axis and the quantity of output on the x-axis.
There are four types of demand that make up aggregate demand. These are as follows:
1. Consumer demand: Consumer demand refers to the demand for goods and services from individual consumers or households. It is the largest component of aggregate demand and is affected by factors such as disposable income, consumer confidence, and interest rates.
2. Investment demand: Investment demand refers to the demand for capital goods such as machinery, equipment, and buildings by businesses. Investment demand is influenced by factors such as interest rates, expected future profitability, and business confidence.
3. Government demand: Government demand refers to the demand for goods and services by the government. This includes spending on public goods such as infrastructure, education, and defense. Government demand is affected by political factors such as ideology, public opinion, and economic conditions.
4. Net export demand: Net export demand refers to the demand for a country's exports minus the demand for its imports. It is influenced by factors such as exchange rates, foreign income levels, and trade policies.Aggregate demand can be affected by a variety of factors, including changes in any of the four types of demand listed above.
Shifts in aggregate demand can have significant impacts on an economy, including changes in output, employment, and inflation levels. Governments and policymakers closely monitor changes in aggregate demand in order to make informed decisions about monetary and fiscal policy.
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what product did ceo of steelcase, jim hackett, recall due to potential safety issues?
The CEO of Steelcase, Jim Hackett, recalled its “Siento” line of chairs due to potential safety issues.
The recall involved nearly 454,000 chairs which were manufactured in Mexico between February 2000 and May 2001. The company received over 400 reports of chair malfunctions and even had some reports of injuries due to these malfunctions.
Siento is a very popular ergonomic office chair. It’s designed to be comfortable and promote good posture. It has an adjustable backrest and seat height, as well as an adjustable lumbar support to help prevent lower back pain.
The safety concerns that led to the recall are due to the fact that the seat bolts on the chair could come loose and detach from the base, causing the user to fall. According to the Consumer Product Safety Commission (CPSC), the chair’s seat-back may separate from the base of the chair, which could cause a fall. The seat plate is made of stamped steel, and the mounting holes could become elongated over time, which could cause the bolts to loosen.
Steelcase, Inc. has voluntarily issued a recall of its Siento chairs due to potential safety issues. The company issued the recall to prevent possible injuries to users of the chairs. The company has offered a free repair kit for the chairs that were affected by the recall. The repair kit includes instructions on how to fix the bolts on the chair and tighten them securely.
The recall of Steelcase’s Siento chairs provides a valuable lesson about product safety. It emphasizes the importance of designing and testing products to ensure that they are safe for use. It also highlights the need for companies to take prompt action when safety issues are identified, in order to protect their customers from harm.
Finally, it reminds us that recalls can be a costly and disruptive process for companies, so it’s important to get it right the first time and avoid any potential issues that could lead to recalls.
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if a company produces at a quantity of output where marginal revenue exceeds marginal cost, it means that ________
If a company produces at a quantity of output where marginal revenue exceeds marginal cost, it means that the company is maximizing its profits.
Marginal revenue (MR) represents the additional revenue generated from producing and selling one additional unit of output. Marginal cost (MC), on the other hand, represents the additional cost incurred in producing one additional unit of output.
When marginal revenue exceeds marginal cost (MR > MC), it indicates that the revenue gained from selling an additional unit of output is greater than the cost incurred to produce that unit. This implies that producing and selling more units of output will contribute positively to the company's overall profitability.
By producing at a quantity where MR > MC, the company is optimizing its production level to maximize profits. This is because each additional unit produced and sold contributes more to the company's revenue than its associated cost. Therefore, the company is in a favorable position to continue increasing its output to maximize its profitability.
If a company produces at a quantity of output where marginal revenue exceeds marginal cost (MR > MC), it signifies that the company is maximizing its profits. This condition indicates that the company is operating efficiently and can continue increasing its output level to further enhance its profitability.
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a customer sells short 100 shares of abc at $15 as an initial transaction in a new margin account. the customer must deposit: a $750 b $1,500 c $2,000 d $2,500
a customer sells short 100 shares of abc at $15 as an initial transaction in a new margin account. the customer must deposit $1,500. Therefore, option B is correct.
When selling short in a margin account, the customer is required to deposit an initial margin, which is a percentage of the total value of the short sale. The initial margin requirement for short selling is typically set by the brokerage firm and is subject to regulation.
In this case, the customer sells short 100 shares of ABC at $15 per share. To calculate the total value of the short sale, we multiply the number of shares by the price per share: 100 shares x $15 = $1,500.
The initial margin requirement is usually expressed as a percentage of the total value. Let's assume the initial margin requirement is 50% (this can vary depending on the brokerage firm and regulations). To calculate the required deposit, we multiply the total value by the initial margin percentage: $1,500 x 0.5 = $750.
Therefore, the customer must deposit $1,500 as an initial transaction in the new margin account.
The correct answer is B) $1,500. This amount represents the initial margin required for the short sale of 100 shares of ABC at $15 per share in the new margin account.
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LaVine Corp. had 1,000,000 shares of common stock outstanding throughout 2021.
On April 1, 2021, LaVine issued $9 million of ten year, 8% bonds. Beginning April 1, 2023, bondholders may exercise a conversion privilege to convert the bonds into 315,000 shares of LaVine common stock.
During 2021, LaVine reported $7,500,000 of net income and paid $350,000 in preferred dividends.
LaVine's marginal income tax rate is 25%.
What is LaVine's 2021 diluted earnings per share?
A. $7.15
B. $6.07
C. $6.22
D. $5.98
E. $6.11
F. $5.85
LaVine's diluted earnings per share (EPS) for 2021 is approximately $6.11. Option E is correct.
To calculate LaVine's diluted earnings per share (EPS) for 2021, we need to consider the impact of the convertible bonds.
First, let's calculate the basic EPS:
Net Income = $7,500,000
Preferred Dividends = $350,000
Common Net Income = Net Income - Preferred Dividends
Common Net Income = $7,500,000 - $350,000
Common Net Income = $7,150,000
Basic EPS = Common Net Income / Weighted Average Number of Common Shares
Since there were 1,000,000 shares outstanding throughout 2021, the weighted average number of common shares is also 1,000,000.
Basic EPS = $7,150,000 / 1,000,000
Basic EPS = $7.15
Next, let's calculate the diluted EPS by taking into account the potential conversion of the convertible bonds.
The potential number of shares that can be issued through the conversion of the bonds is 315,000.
To determine the impact of the conversion, we need to calculate the interest expense that would have been recognized if the bonds were converted into shares:
Interest Expense = Bond Amount × Interest Rate
Interest Expense = $9,000,000 × 8%
Interest Expense = $720,000
The tax savings from the interest expense due to the tax-deductible interest is;
Tax Savings=Interest Expense × Tax Rate
Tax Savings = $720,000 × 25%
Tax Savings = $180,000
The net impact on net income from the conversion is the interest expense minus the tax savings;
Net Impact on Net Income = Interest Expense - Tax Savings
Net Impact on Net Income = $720,000 - $180,000
Net Impact on Net Income = $540,000
Now, we can calculate the diluted EPS by adjusting the net income and the number of shares:
Diluted Net Income = Net Income + Net Impact on Net Income
Diluted Net Income = $7,500,000 + $540,000
Diluted Net Income = $8,040,000
Diluted EPS = Diluted Net Income / (Weighted Average Number of Common Shares + Potential Number of Shares from Conversion)
Weighted Average Number of Common Shares = 1,000,000
Diluted EPS = $8,040,000 / (1,000,000 + 315,000)
Diluted EPS = $8,040,000 / 1,315,000
Diluted EPS ≈ $6.107
Therefore, LaVine's diluted earnings per share (EPS) for 2021 is approximately $6.11.
Hence,, E. is the correct option.
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An organization that operates domestically is going to start exporting goods for the first time. What key factors should they consider when assessing their own internal readiness? (4 factors) Mention one question that they need to ask for each one of the factors (Marks: 10)
An organization that operates domestically and is planning to begin exporting goods must assess its internal readiness.
Here is a brief description of each factor and one question that an organization should ask for each:
1. Marketing and Product
This factor examines the business's marketing and product offerings to determine if they are appropriate for export.
2. Readiness of Production Process
This factor considers the company's ability to meet foreign demand while ensuring the quality of the products and meeting delivery deadlines.
3 Infrastructure
This factor assesses the company's ability to handle international sales, including communication, logistics, and distribution channels.
4. Financial Condition
Finally, this factor examines the company's ability to finance the expansion, including funding sources and financial risks.
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tech engineering in tn is making a product for the overseas market. the following cost data for the product has been compiled. what is the profit per unit if 30,000 units are sold?
The profit per unit if 30,000 units are sold will be $8.33. To determine the profit per unit if 30,000 units are sold for a tech engineering product, we need to calculate the total cost and the total revenue generated by selling these units.
The cost data for the product is as follows:Direct materials: $10 per unit Direct labor: $12 per unit.Variable manufacturing overhead: $2 per unit Fixed manufacturing overhead: $150,000 per year, with 30,000 units produced in that year.
Variable selling and administrative expense: $1 per unitFixed selling and administrative expense: $50,000 per yearThe total variable cost per unit will be $10 + $12 + $2 + $1 = $25 per unit. The total fixed cost will be $150,000 + $50,000 = $200,000 per year.
The total revenue generated by selling 30,000 units will be $40 x 30,000 = $1,200,000.The profit per unit can be calculated as follows:Profit per unit = Selling price - Total cost per unitProfit per unit = $40 - $31.67 = $8.33.Therefore, the profit per unit if 30,000 units are sold will be $8.33.
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What provision entitles the common shareholder to maintain a proportionate share of ownership in a firm? The preemptive right The cumulative feature The convertible feature The proporitionality clause proxy vote QUESTION 18 Which of the following would, generally, indicate an improvement in a company's financial position, holding other things constant? The total assets turnover decreases. The TIE declines. The DSO increases. The EBITDA coverage ratio increases. The current and quick ratios both decline. MILESTION 19
The provision that entitles the common shareholder to maintain a proportionate share of ownership in a firm is the preemptive right. In general, the EBITDA coverage ratio measures the company's ability to repay its debts from the profits it generates. An increase in the EBITDA coverage ratio would indicate an improvement in the company's financial position, holding other things constant.
A preemptive right is a right offered to existing shareholders to purchase additional shares of a company's stock before it is made available to the public. This type of right is generally granted to the common shareholders as it allows them to maintain their ownership percentage in a company. Financing is the process of acquiring funds for business operations, investments, or purchases. This can be accomplished through various means such as taking out a loan, issuing stock, or selling bonds. Now, moving on to the second question, which is mentioned below: The EBITDA coverage ratio increases. In general, the EBITDA coverage ratio measures the company's ability to repay its debts from the profits it generates. An increase in the EBITDA coverage ratio would indicate an improvement in the company's financial position, holding other things constant.
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Which of the following is most true of the Federal Reserve System? O It conducts monetary policy in a manner that is designed to promote both full employment and price stability. O It controls the demand for money in an economy. O It controls the number of credit and debit cards that can be issued by commercial banks in a financial year. O It balances the budget of the federal government.
The Federal Reserve System, commonly known as the Fed, is the central bank of the United States of America. It is responsible for carrying out monetary policy, supervising and regulating financial institutions, and maintaining the stability of the financial system.In terms of monetary policy.
the Fed conducts it in a manner that is designed to promote both full employment and price stability. It does so by controlling the money supply in the economy through various tools at its disposal such as adjusting interest rates, setting reserve requirements for banks, and engaging in open market operations (buying and selling of government securities).By influencing interest rates, the Fed controls the demand for money in an economy.
This increased demand for money stimulates economic growth. Conversely, when interest rates are raised, borrowing becomes more expensive, and people are less likely to borrow. This decrease in demand for money helps to curb inflation.The Fed does not control the number of credit and debit cards that can be issued by commercial banks in a financial year. This is determined by the banks themselves and the market forces that exist. Similarly, the Fed does not balance the budget of the federal government as that is the responsibility of the legislative and executive branches of government.In summary, the most true of the Federal Reserve System is that it conducts monetary policy in a manner that is designed to promote both full employment and price stability.
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Amy suspects that men are paid more than women, on average. To investigate this claim statistically, you will use a hypothesis test.
6. Set up the null and alternative hypotheses taking care to define your notation clearly. [2 marks]
7. Using the ‘Shift Groups’ randomization method in Statkey, produce a dotplot of the randomization distribution (with at least 2,000 samples) of the appropriate sample statistic. Carry out the hypothesis test using the randomization distribution and state your conclusion. [2 marks
6. H0: Average wage for men (μm) = Average wage for women (μw)
Ha: Average wage for men (μm) > Average wage for women (μw)
7. Using the 'Shift Groups' randomization method in StatKey, perform a hypothesis test by comparing the observed sample statistic (e.g., mean wage difference) to the randomization distribution.
6. The null hypothesis (H0) states that there is no difference in the average wages between men and women. The alternative hypothesis (Ha) suggests that men are paid more than women, on average.
H0: μm = μw
Ha: μm > μw
Where μm represents the average wage for men and μw represents the average wage for women.
7. To carry out the hypothesis test using the 'Shift Groups' randomization method in Statkey, we need to compare the distribution of the appropriate sample statistic (e.g., mean wage difference between men and women) to a randomization distribution obtained by randomly shifting the group labels and recalculating the statistic.
Using at least 2,000 samples, produce a dotplot of the randomization distribution of the sample statistic. Calculate the observed sample statistic from the actual data. Determine the proportion of randomization samples that have a sample statistic as extreme as or more extreme than the observed sample statistic. If this proportion is less than the significance level (e.g., α = 0.05), reject the null hypothesis and conclude that there is evidence to support the claim that men are paid more than women, on average. Otherwise, fail to reject the null hypothesis and conclude that there is insufficient evidence to suggest a difference in average wages between men and women.
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Managers should design jobs that reflect the demands of the changing environment, as well as the organisation’s technology, skills and abilities, and the preferences of its employees. Explain how DHL Global Forwarding South Africa management can design jobs in the new Johannesburg warehouse to be more motivating for employees.
Job design refers to the way an organisation groups tasks and assigns roles, responsibilities, and authority to accomplish its objectives. The process of job design is essential to maintain and develop the workforce's efficiency, motivation, and satisfaction.
Managers of DHL Global Forwarding South Africa can use job design strategies to improve employee motivation in their new Johannesburg warehouse. Job design strategies can help the organisation create a work environment that meets employees' needs, and the changing environment of the organisation.The following are the ways in which DHL Global Forwarding South Africa management can design jobs in the new Johannesburg warehouse to be more motivating for employees:Job enrichment: Job enrichment involves adding more responsibilities and challenges to an employee's role, giving them more control over their work, and creating opportunities for personal and professional growth. For instance, DHL Global Forwarding South Africa can assign workers to multiple job responsibilities, thereby providing them with opportunities to acquire new skills.Job rotation: Job rotation refers to the process of moving employees from one task or job to another to promote job diversity and reduce the monotony of their work. For instance, DHL Global Forwarding South Africa can rotate workers across different sections of the warehouse, making their work more diverse and interesting.Task identity: Employees are more motivated when they know the impact of their work on the organisation. DHL Global Forwarding South Africa management should give employees a clear understanding of their tasks' purpose and how they fit into the larger picture of the organisation.Autonomy: Autonomy refers to employees having more freedom and control over their work. DHL Global Forwarding South Africa should empower its employees by giving them the authority to make decisions, solve problems, and take responsibility for their work. Job design strategies can be effective in creating a work environment that meets employees' needs and the changing environment of the organisation. DHL Global Forwarding South Africa management should implement job enrichment, job rotation, task identity, and autonomy to design jobs in the new Johannesburg warehouse to be more motivating for employees. These strategies help employees feel more valued, empowered, and challenged. Additionally, these strategies will provide employees with opportunities for personal and professional growth, resulting in a more motivated, satisfied, and productive workforce. Therefore, DHL Global Forwarding South Africa management should develop a comprehensive job design strategy that will enhance employee motivation, satisfaction, and performance.
DHL Global Forwarding South Africa management can design jobs in the new Johannesburg warehouse to be more motivating for employees by implementing job enrichment, job rotation, task identity, and autonomy. These strategies will help employees feel more valued, empowered, and challenged. As a result, they will be more motivated, satisfied, and productive in their work. Therefore, DHL Global Forwarding South Africa should develop a comprehensive job design strategy that will enhance employee motivation, satisfaction, and performance.
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On August 1, 2024, Tyson Company borrowed $38,000 from the bank on a 15%, 11-month note payable. Tyson Company borrowed $54,000 from the bank on a 14%, 10-month note payable on June 1, 2025. Calculate the total amount of interest expense reported by Tyson Company in its 2025 income statement related to these two loans.
The total amount of interest expense reported by Tyson Company in its 2025 income statement related to these two loans is $11,200.
To calculate the interest expense, we need to determine the interest accrued for each loan separately and then sum them up.
For the first loan:
Principal amount = $38,000
Interest rate = 15%
Time period = 11 months
Interest accrued for the first loan = Principal amount * Interest rate * Time period
= $38,000 * 0.15 * 11/12
= $5,775
For the second loan:
Principal amount = $54,000
Interest rate = 14%
Time period = 10 months
Interest accrued for the second loan = Principal amount * Interest rate * Time period
= $54,000 * 0.14 * 10/12
= $6,300
Total interest expense = Interest accrued for the first loan + Interest accrued for the second loan
= $5,775 + $6,300
= $11,200
Therefore, Tyson Company would report $11,200 as the total amount of interest expense related to these two loans in its 2025 income statement.
In summary, by calculating the interest accrued for each loan separately and summing them up, the total interest expense for Tyson Company related to the two loans would amount to $11,200.
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What is the net present value of a project with the following cash flows if the required rate of return is 10 percent? Year O Cash Flow = -$42,398, Year 1 Cash Flow = $13,407, Year 2 Cash Flow = $21,219, and Year 3 Cash Flow = $17,800.
The net present value of a project with a cash flow of -$42, 398 (year 0), $13,407 (year 1), $21, 219 (year 2), and $17, 800 (year 3) is $1,968.
How to find the NPV?To find the net present value of the project, lets use the formula for present value.
The formula for the calculation of present value (PV) of a cash flow is:
PV = CF / (1 + r)^n
Where:
CF = Cash Flow
r = Required rate of return
n = Time period (year)
Let's calculate the present value for each cash flow and then sum them up to find the NPV.
Year 0:
PV0 = [tex]-$42,398 / (1 + 0.10)^0 = -$42,398[/tex]
Year 1:
PV1 = [tex]13,407 / (1 + 0.10)^1 = 12,188.18[/tex]
Year 2:
PV2 = [tex]$21,219 / (1 + 0.10)^2 = 17,771.25[/tex]
Year 3:
PV3 = [tex]$17,800 / (1 + 0.10)^3 = 13,280.58[/tex]
Let us sum up the present values of all cash flows:
-42,398 + 12,188.18 + 17,771.25 + 13,280.58
= $1,841.01
Therefore, the NPV of the project is $1,841.01.
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In its 2019 annunt report, Snap Tite Incorporated reported the following (in millions):
Current assets
$1,884 0
Total shareholders' equity
$2.635.2
Total liabilities
$2,088.0
What did Snap-Tite report as total assets at year-end?
A) $6.607.2 million
B) $2.839.2 million
C) $3.972.0 million
D) None of these are correct
Snap Tite Incorporated's total assets at year-end can be calculated by adding current assets to total liabilities.
According to the given information, the current assets of Snap Tite Incorporated are $1,884.0 million, and the total liabilities are $2,088.0 million. Therefore, the total assets of Snap Tite Incorporated at year-end are.
Current assets = $1,884.0 millionTotal liabilities = $2,088.0 million Total assets = Current assets + Total liabilities= $1,884.0 million + $2,088.0 million= $3,972.0 millionThus, Snap-Tite reported $3,972.0 million as total assets at year-end. Therefore, the correct option is C) $3,972.0 million.
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Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GH¢8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH¢2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of GH¢1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on Ghana for the previous year:
i. Compute the equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S). (Hint: = + ; = + and = + )
ii. Determine the Government fiscal stance.
iiii. If the full employment level of national income is GH¢40,000.00, determine the income gap.
iv. What fiscal policy would be appropriate to address this gap? (1 mark)
If there is an increase in export to GH¢4,000.00, find the new level of equilibrium income.
vi. Show how a GH¢2,000 increase in government spending financed by a GH¢2,000 increase in taxes will affect the level of national income.
Gross Domestic Product (GDP) is not a good measure of welfare in an economy. Discuss.
Computation of equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S):Given data is as follows: Households saved 20% of their disposable income (Yd), and spent the rest on consumption. GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00.
Total Government expenditure (G) which stood at GH¢8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH¢2,500.00, and the country’s import (M) during the previous fiscal year comprises GH¢1,000.00 which was independent of the country’s national income and 10% which was dependent on the country’s national income.Using the given formula to calculate the equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S):C = a + bYd, where a = autonomous consumption, b = MPC, Yd = disposable incomeS = Y - C or S = Y - (a + bYd) or S = (1-b) Y + aT = T0 + tY or T = 2,000 + 0.25YT = G + T or T = 8,000 + 0.25YEquation (1) - 0.8Y = 5,000 or Y = 6,250 Equation (2) - Y = C + I + GY = C + I + GSubstitute equation (1) in equation (2)6,250 = a + 0.8Y + 7,000 + 8,000 + (2,000 + 0.25Y)6,250 = a + 0.8(6,250) + 7,000 + 8,000 + (2,000 + 0.25(6,250))a = 3,125C = 3,125 + 0.8YdT = 2,000 + 0.25YTs = Y - C or Ts = Y - (3,125 + 0.8Y) or Ts = 0.2Y - 3,125Y = 6,250, C = 8,125, T = 3,125, and S = 2,125.
Government fiscal stance: Government fiscal stance refers to the level of government spending and taxation in an economy. In the given question, the government expenditure is GH¢8,000.00, and the total taxes collected by the government are GH¢5,000.00. Thus, the government fiscal stance can be calculated by using the following formula:Government Fiscal Stance = G - T= 8,000 - 5,000= GH¢3,000.00Therefore, the government fiscal stance for the previous fiscal year was GH¢3,000.00.iii. Calculation of Income Gap:The full employment level of national income is GH¢40,000.00. The actual income level is Y = GH¢6,250.00. The income gap can be calculated using the following formula:Income gap = Full employment level of national income - Actual income levelIncome gap = GH¢40,000.00 - GH¢6,250.00Income gap = GH¢33,750.00iv. Appropriate Fiscal Policy to Address the Income Gap:Since the income gap is negative, which means that the actual income level is less than the full employment level of national income. To address this income gap, expansionary fiscal policy can be implemented by increasing government expenditure or by decreasing taxes, or a combination of both. Therefore, the appropriate fiscal policy to address this income gap would be an increase in government spending or a reduction in taxes.v. New level of equilibrium income if there is an increase in export to GH¢4,000.00:The new level of equilibrium income can be calculated by using the following formula:Y = C + I + G + (X - M)Where,X - M = (2,500 - 1,000) + 0.1Y = 1,500 + 0.1YY = C + I + G + (X - M)Y = 3,125 + 7,000 + 8,000 + (4,000 - (1,000 + 0.1Y))Y + 0.1Y = 21,125Y = GH¢23,472.22vi. Effect on the level of national income if there is a GH¢2,000 increase in government spending financed by a GH¢2,000 increase in taxes:An increase in government spending by GH¢2,000 will increase the equilibrium level of income by a multiple of it. In the given question, the multiplier is 5. Therefore, the equilibrium level of income will increase by GH¢10,000. At the same time, there is an increase in taxes by GH¢2,000, which will reduce disposable income. The reduction in disposable income will cause a reduction in consumption expenditure, which will decrease the equilibrium level of income. Therefore, the overall effect on the level of national income is uncertain. Gross Domestic Product (GDP) is not a good measure of welfare in an economy because it does not account for the distribution of income, the value of non-market goods and services, and environmental degradation. It only measures the total output of goods and services produced within an economy during a specific period. However, it is not a reliable indicator of the well-being of individuals within the economy.
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Just before the COVID-19 pandemic hit South Africa, the Mediclinic group has been planning a country-wide expansion of
their facilities. These would include extra rooms for patients, additional equipment for the emergency wards, new operating
theatres amongst others. The cost of this expansion was estimated at R650 million rand. The expansion plan was
announced to the market and the net market reaction was positive as the share price by 15%.
However, while this was being considered the new NHI scheme was being initiated in South Africa at the same time. Due to
this regulatory intervention, all expansions were paused. The new expansion is now being regarded as a risk that the
business cannot afford if the NHI is launched due to policy uncertainty.
Propose a potential risk significance scorecard that the group can use to assess the risks above
The Mediclinic group's risk significance scorecard should be a way to assess and prioritize the company's risks based on the impact it has on their business objectives.
Risk significance scorecard provides an effective means of organizing and managing an organization's risk management programs. The risk significance scorecard would measure the risk level of a particular event based on a set of standard measures such as financial, strategic, compliance, and operational risks. In the context of the Mediclinic group expansion plan and the new NHI scheme in South Africa, the following could be a potential risk significance scorecard that the group can use to assess the risks involved:
Risk Category 1: Financial Risk (25%)Cost of Expansion Plan: High, R650 million rand Market Reaction: Positive, Share price increased by 15%Impact of NHI Scheme: High, expansion plan put on hold Risk Category
2: Strategic Risk (25%)Impact on Business Growth: High Impact on Brand Reputation: High Impact on Competitive Advantage: High Risk Category
3: Compliance Risk (25%)Regulatory Intervention: High Regulatory Changes: High Policy Uncertainty: High Risk Category
4: Operational Risk (25%)Delay in Expansion Plan: High Impact on Operations: High Operational Efficiency: High Risk Significance Scorecard Score Calculation: Risk Category 1 (Financial Risk): 25% of 650 million = 162.5Risk Category 2 (Strategic Risk): High (25)Risk Category 3 (Compliance Risk): High (25)Risk Category 4 (Operational Risk): High (25)Risk Significance Scorecard Score: 237.5 out of a possible 400.
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What do you understand by "Operations Management?"
Explain
using two real-life
examples.
[4+6] 2. Illustrate the
Operations Management is an administrative process involved in designing, regulating, and optimizing all of an organization's processes and business operations.
It deals with ensuring that business operations are running smoothly, efficiently, and effectively with the aim of achieving organizational objectives. It involves coordinating processes and activities that involve designing, planning, and controlling processes to produce goods and services.
Here are two real-life examples:
Example 1: McDonald's operations management involves an efficient and organized process to make food. They have a series of processes, from taking orders to preparing food to delivery. They use a system that ensures efficiency and timeliness, and the process is always in motion to produce a high volume of output while maintaining consistency and quality.
Example 2: Amazon is known for its efficient and effective operations management process. They have an organized system for inventory management, packaging, and delivery. Amazon utilizes robots and automation to improve the speed and accuracy of their processes, ensuring that orders are fulfilled quickly and efficiently.Answer:Operations Management is an administrative process involved in designing, regulating, and optimizing all of an organization's processes and business operations. It deals with ensuring that business operations are running smoothly, efficiently, and effectively with the aim of achieving organizational objectives.
Here are two real-life examples:
Example 1: McDonald's operations management involves an efficient and organized process to make food. They have a series of processes, from taking orders to preparing food to delivery. They use a system that ensures efficiency and timeliness, and the process is always in motion to produce a high volume of output while maintaining consistency and quality.
Example 2: Amazon is known for its efficient and effective operations management process. They have an organized system for inventory management, packaging, and delivery. Amazon utilizes robots and automation to improve the speed and accuracy of their processes, ensuring that orders are fulfilled quickly and efficiently.
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Question 3 Betty DeRose, Inc. operates two departments, the handling department and the packaging department. During April, the handling department reported the following information: work in process, April 1 units started during April work in process, April 30 units 27,000 51,000 32,000 work in process, April 1 costs added during April total costs % complete DM 60% DM $ 67,330 $277,070 $344,400 75% The cost of beginning work in process and the costs added during April were as follows: Conversion $141,120 % complete conversion 25% $257,520 $398,640 45% Total cost $208,450 $534,590 $743,040 Calculate the direct material unit cost using the weighted average process costing method.
To calculate the direct material unit cost using the weighted average process costing method, we use the formula:weighted average cost per unit = (cost of beginning WIP + total manufacturing costs incurred during the period) / (total units to account for)Total units to account for are equivalent to units started during the period plus the units in beginning WIP. Therefore,Total units to account for = units started during the period + units in beginning WIP = 51,000 + 27,000 = 78,000 unitsThe calculation of the equivalent units for the direct material cost and the conversion cost for April is as shown below.Direct material:Equivalent units = Units completed during the period + Ending WIP units × % of completion= (51,000 units − 32,000 units) + (32,000 units × 75%)= 19,000 + 24,000= 43,000Equivalent units cost per unit = Direct materials cost / Equivalent units cost per unit = $344,400 / 43,000 = $8 per unitTherefore, the direct material unit cost using the weighted average process costing method is $8 per unit.
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If expected dividends grow at 7% and the appropriate discount
rate is 10%, what is the value of a stock whose last dividend was
$1.10?
Seleccione una:
$50.00
$62.88
$39.23
$19.41
$35.67
$53.50
Given that the expected dividends grow at 7% and the appropriate discount rate is 10% and the last dividend was $1.10. Option (c) is the correct answer.
To find the value of a stock, we will use the constant growth rate formula as PV of stock = Dividend next year / (Discount rate - Growth rate).
Since we have to find the value of the stock whose last dividend was $1.10, the dividend for the next year can be determined using the constant growth model formula.
Div1 = D0 x (1 + g)Where Div 1 is the dividend for next year, D0 is the last dividend paid, and g is the expected dividend growth rate.
Substituting the given values, we get Div1 = $1.10 x (1 + 7%). Div1 = $1.18. Substituting the values in the formula of the PV of stock, we get PV of stock = $1.18 / (10% - 7%). PV of stock = $39.33.
Hence, the value of a stock whose last dividend was $1.10 is $39.23.
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Need to decide where to build a new DC for Motorola.
It has to serve wholesalers in Reno, Dallas, and Chicago.
Locate these cities on a rectangular grid.
City Demand
Reno is at (17, 55) 100
Fort Worth is at (78, 20) 90
Chicago is at (110, 65) 120
Answer:
The optimal location to build the new DC for Motorola would be around the middle of the rectangular grid, which would be in the approximate area of (66, 35). This location would be the most efficient for reaching each of the 3 cities with the respective demands.
1. Tom Thompson is a tomato farmer, operating as a price taker
in a highly competitive agricultural industry. One year, tomato
crops across the country are severely affected by a severe fungal
disease
The severe fungal disease affecting the crops across the country is a factor that Tom Thompson, a tomato farmer operating as a price taker, cannot control.
This means that the price of tomatoes will rise due to the reduction of supply caused by the disease. Price takers do not have the power to influence the prices of the goods they produce because they have no control over the market.
In the short run, the increased price of tomatoes can help Tom Thompson make more profits since he can sell the same amount of tomatoes at a higher price. However, in the long run, if the disease persists, the supply of tomatoes will continue to decrease and eventually, Tom Thompson may have to stop production.
Counting Rhizoctonia solani, Sclerotinia sclerotium, Sclerotium rolfsii, and Fusarium oxysporum were appeared to be most awful. Infection with these species make impressive harms the plant spp. by introducing diseases like root rot, wilt, seed rot, and seedling blight, among others.
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Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO? Nov. 01 Inventory 18 units at $25.00 Nov. 04 Sold 9 units Nov. 10 Purchased 34 units at $20.00 Nov.
A perpetual inventory system is an inventory management system that continuously tracks inventory levels to ensure that stock levels are always up-to-date.
In the perpetual inventory system, a company records the movement of inventory after every purchase or sale.LIFO (last-in, first out) is an accounting method used to manage inventory costs. It assumes that the last items added to an inventory are the first to be sold.
This means that if a company sells more products than it purchases, the cost of goods sold (COGS) will be based on the purchase price of the last items added to the inventory. Using the given data, the cost of goods sold for November can be calculated by using the LIFO method.
The inventory on hand will be valued at the cost of the most recent purchase. The cost of goods sold will be calculated by multiplying the cost per unit by the number of units sold.
The cost of goods sold is given by the following formula: Cost of goods sold
= (Units sold x cost per unit)Let's start by calculating the cost of the inventory on November 10th:34 units at $20.00 per unit
= $680.00Therefore, the cost of goods sold for November will be calculated as follows: November 4: 9 units sold at $25.00 per unit = $225.00November 10: 9 units sold at $20.00 per unit
= $180.00Total cost of goods sold
= $225.00 + $180.00 = $405.00Therefore, the cost of goods sold for November, if the company uses LIFO, is $405.00.
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The Delta company uses a perpetual inventory system. The beginning balance of inventory and the purchases made by Delta during the month of July are given below:
Date Description Units Unit cost Total cost
July 01 Beginning inventory 500 $20 $10,000
July 10 Sold 250 units at $50 each
July l5 Inventory purchased 800 $24 $19,200
July 18 Sold 700 units at $50 each
July 25 Inventory purchased 700 $26 $18,200
Total 2,000 $47,400
Required: Using a copy form 4c Complete Inventory chart and Compute inventory on 31st July and cost of goods sold for the month of July using following inventory costing methods:
1. First in, first out (FIFO) method
2. Last in, first out (LIFO) method
The Delta company uses a perpetual inventory system. The beginning balance of inventory and the purchases made by Delta during the month of July are given below:
DateDescriptionUnitsUnit costTotal costJuly 01Beginning inventory500$20$10,000July 10Sold250 units at $50 eachJuly l5Inventory purchased800$24$19,200July 18Sold700 units at $50 eachJuly 25Inventory purchased700$26$18,200Total2,000$47,400
Inventory chart for July using the FIFO methodDatePurchasesSalesUnit costTotal costUnit costTotal costJuly 01Beginning inventory500$20$10,000July 15Purchase800$24$19,200July 25
Purchase700$26$18,200 Total1,500$47,400 Jul 10 Sold 250 units (From beginning inventory) = 250 × $20
= $5000Jul 18 Sold 700 units (From 800 units purchased on 15th July and 500 units of beginning inventory)
= 500 × $20 + 300 × $24 = $23,200Inventory on 31st July= 1,500 – 950= 550 units.
Cost of goods sold = $5,000 + $23,200= $28,200.
Inventory chart for July using the LIFO methodDatePurchasesSalesUnit costTotal costUnit costTotal costJuly 01Beginning inventory500$20$10,000July 25Purchase700$26$18,200July 15Purchase800$24$19,200 Total1,500$47,400Jul 18 Sold 700 units (From 700 units purchased on 25th July and 800 units purchased on 15th July) = 700 × $24 + 100 × $26 = $17,800Jul 10 Sold 250 units (From 500 units of beginning inventory and 550 units purchased on 25th and 15th July) = 250 × $26 + 250 × $24 + $20× 500 = $18,500Inventory on 31st July= 1,500 – 950
= 550 units.
Cost of goods sold = $17,800 + $18,500= $36,300.
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The after tax or effective cost of debt is increased by the tax savings since interest payments on debt are tax deductible. True False
The statement that The after tax or effective cost of debt is increased by the tax savings since interest payments on debt are tax deductible is False.
What is the cost of debt after taxes?The interest paid on the debt less any income tax savings from deducting interest payments is the after-tax cost of debt. To determine a company's cost of debt after taxes, divide its effective tax rate by one and multiply the result by the cost of debt.
Because taxes impose an additional expense on top of interest payments, the before-tax cost of debt is lower than the after-tax cost of debt.
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I am Deputy Manager for Legal Affairs and below case study and I need help?
The Netherlands is ranked the sixth in the world in terms of the quality of railroad
Infrastructure. However, in order to prepare for the future, the currently existing
Infrastructure needs a 30% increase in capacity and tremendous changes in the current
Workforce.
ProRail Traffic Control has put together a team to assist in drafting a strategic workforce plan
That will help it achieve its objectives. The team is required to discuss the role of HR in terms
of the way forward, identifying two approaches for the below activities and justifying your
Selection for
1. Recruitment and selection of operation and technical staff,
2. Communication to staff on pending changes and other relevant information re ProRail
Traffic Control Digital Vision Project.
3. Preserving the brand of Dutch Railway Infrastructure- ProRail Traffic Control Digital
Vision to maintain its local and global standing.
Each group member should assume one (1) of the following roles of the Executive Team:
3. Preserving the brand of Dutch Railway Infrastructure- ProRail Traffic Control Digital
Vision to maintain its local and global standing.
In order to preserve the brand of Dutch Railway Infrastructure- Pro Rail Traffic Control Digital Vision to maintain its local and global standing, several approaches can be taken. The role of HR in the company will be crucial in ensuring that the company's brand is upheld.
This can be achieved through several ways such as building a strong employer brand to attract new employees and improving communication with staff to ensure that they are aware of the company's goals and values. One approach to recruitment and selection of operation and technical staff would be to focus on hiring individuals who align with the company's values and culture. This can be achieved by creating a strong employer brand that emphasizes the company's values and mission.
Another approach would be to involve staff in the project by soliciting their feedback and ideas. This will help to create a sense of ownership among staff and ensure that they are invested in the project. The brand of Dutch Railway Infrastructure- Pro Rail Traffic Control Digital Vision can be preserved by ensuring that the company's values and culture are reflected in its operations. This can be achieved by creating a strong employer brand, hiring individuals who align with the company's values and culture, and improving communication with staff.
By doing so, the company will be able to maintain its local and global standing and continue to be ranked among the top railway infrastructures in the world.
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Recruitment and selection of operation and technical staff:
a. Approach 1: Internal Promotion and Development Programs
What is the justification?Justification: Internal promotion and development programs leverage existing employee knowledge and skills, promoting career growth, motivation, and reducing recruitment costs. It ensures continuity and stability within the organization.
b. Approach 2: Targeted External Recruitment and Partnerships
Justification: Targeted external recruitment brings fresh talent, diversity, and specialized skills to meet future infrastructure needs. Partnerships with educational institutions and industry associations expand the candidate pool and foster innovation.
Communication to staff on pending changes and other relevant information:
a. Approach 1: Transparent and Timely Communication Channels
Justification: Transparent communication through meetings, emails, and newsletters reduces uncertainty and builds trust, enabling staff to adapt to the digital vision project.
b. Approach 2: Two-way Feedback Mechanisms
Justification: Two-way feedback mechanisms like surveys and suggestion boxes foster engagement and employee input, improving morale and facilitating change implementation.
Preserving the brand of Dutch Railway Infrastructure - ProRail Traffic Control Digital Vision:
a. Approach 1: Strategic Partnerships and Collaborations
Justification: Strategic partnerships with global railway organizations and technology providers enhance ProRail's reputation and innovation capabilities.
b. Approach 2: Continuous Brand Communication and Promotion
Justification: Continuous brand communication through marketing campaigns and industry events showcases ProRail's achievements, capabilities, and commitment to quality services.
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1.5N
1.25 m/s/s
I 3. Using the acceleration you calculated above, predict how long it will take for the glider to move 57 centimeters. Hide Hint Hint: You can use a kinematics equation to determine distance if you kn
Using the given data;1.5N and 1.25 m/s/s, let's calculate the time it will take the glider to move 57cm.The equation that is used to solve the distance is;
d = vit + 1/2at²Where;v = initial velocity of the glideri = initial distance/position of the glidera = acceleration of the glidert = time taken by the glider to cover the distance. Using the equation above, we can rearrange it to obtain the time which is given as ; t = √2d/aLet us plug in the values we have into the above equation; t = √2(57cm)/(1.25m/s²)t = √(114/1.25)t = √91.2t = 9.55s
Therefore, it will take the glider 9.55 seconds to move 57 centimeters with an acceleration of 1.25 m/s/s. More than 200 words;
The distance that an object travels can be determined through an equation that involves several variables which include the initial velocity, distance, acceleration, and time taken. In this scenario, the given data was an acceleration of 1.25 m/s/s and a force of 1.5N. To determine how long it will take for the glider to move a distance of 57cm, we will use the kinematics equation given above.
The equation is;
d = vit + 1/2at²Where;d = distance v = initial velocity of the object i = initial position of the object a = acceleration of the object t = time taken to cover the distanced = vit + 1/2at²The above equation can be rearranged to solve for the time, which is given as;t = √2d/a.
Plugging in the values that we have, we obtain ;t = √2(57cm)/(1.25m/s²)t = √(114/1.25)t = √91.2t = 9.55s
Therefore, it will take the glider 9.55 seconds to move a distance of 57 centimeters with an acceleration of 1.25 m/s/s.
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Upon assumption of office of the newly elected board, the scenario was there is pre-existing by-law and it Is clearly stated the practice of proper accountability was stipulated. Scenario was when the assumption of office by an officer they notice when they inspect the books of account and passbook money is in tack and accounted properly but due to lack of proper accounting and auditing of members as the business commence all expense was done by issuance of the check, and the designated record officer failed to record the disbursement to mitigate risk what will be your conclusion and intervention as a risk manager.
The conclusion as a risk manager would be that there is a lack of proper accounting and auditing of members in the business, which poses a risk to the organization. The intervention would involve implementing proper accounting and auditing procedures to ensure accurate record-keeping and accountability of expenses.
As a risk manager, it is evident that the designated record officer failed to record the disbursements properly, which indicates a lack of internal controls and accountability measures. This poses a risk to the organization as it can lead to financial mismanagement, fraud, or errors in financial reporting.
To mitigate this risk, the intervention would involve implementing robust accounting and auditing procedures. This may include regular financial audits, segregation of duties, clear documentation of expenses, and training for staff members involved in financial transactions. By implementing these measures, the organization can ensure proper accountability and reduce the risk of financial irregularities.
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Based on COSO 2013, which of the following statements is not correct?
Multiple Choice
A. Employees at any level of an organization play a role in internal control.
B. Internal controls can provide reasonable assurance only.
C. Internal control is a process consisting of ongoing tasks and activities.
D. The responsibility of monitoring the effectiveness of internal controls belongs to the internal audit group.
The statement that is not correct based on COSO 2013. The responsibility of monitoring the effectiveness of internal controls belongs to the internal audit group.
According to COSO 2013 (Committee of Sponsoring Organizations of the Treadway Commission), the responsibility of monitoring the effectiveness of internal controls does not solely belong to the internal audit group. Monitoring is considered an ongoing process that involves various individuals and functions throughout the organization. It is the responsibility of management at all levels to monitor and assess the effectiveness of internal controls.
Therefore, option D is not correct as it inaccurately assigns the sole responsibility of monitoring internal controls to the internal audit group, while in reality, monitoring is a shared responsibility across the organization.
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Gerry plans to purchase a $325,000 home with a 30 year mortgage and a 4.25% interest rate. Calculate his monthly payment to the nearest cent.
Substituting these values in the formula of the monthly payment, we getP = ($260,000) / [(1+0.00354167)^360 - 1]≈ $1,276.73. Hence, the monthly payment to the nearest cent is $1,276.73.
The formula for calculating the monthly payment of a mortgage is given asP
= (A - D) / [(1+i)n - 1]
where, P is the monthly payment, A is the amount borrowed, D is the down payment, i is the monthly interest rate, and n is the number of monthly payments.Gerry plans to purchase a $325,000 home with a 30 year mortgage and a 4.25% interest rate. So, A
= $325,000, i
= 4.25%/12
= 0.00354167, and n
= 30 years * 12
= 360 months.
To calculate D, we need to know the percentage of the down payment. Let's assume it to be 20%, then D
= 0.20 * $325,000
= $65,000.
Therefore, the amount borrowed
(A - D) is $325,000 - $65,000
= $260,000.
Substituting these values in the formula of the monthly payment, we getP
= ($260,000) / [(1+0.00354167)^360 - 1]≈ $1,276.73
Hence, the monthly payment to the nearest cent is $1,276.73.
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Use the following information for the next two items: With Corporation entered into a lease with Argh Leasing, Inc. for a new equipment on January 1, 2020. The lease stipulates that annual payments of P1,000,000 will be made for five years starting December 31, 2020. The present value of the lease payments on January 1, 2020 is P3,791,000, discounted using With's incremental borrowing rate of 10%. The equipment is depreciated on a straight- line basis, and will revert to the lessor at the lease expiration. The company is subject to the regular corporate income tax rate of 30%. Based on the information above, answer the following: 1. What amount should be reported as net deferred tax liability (asset) as at December 31, 2020? 2. What amount should be reported as deferred tax expense (income) for the year ended December 31, 2021?
1. What amount should be reported as net deferred tax liability (asset) as at December 31, 2020?The straight-line basis is utilized for depreciation of the equipment, which implies that the yearly depreciable amount for the equipment is P758,200 [3,791,000 / 5].
The expense for interest is P379,100 for the year, which is calculated by multiplying the lease liability's starting balance by the incremental borrowing rate (P3,791,000 x 10 percent).
Since lease expense is greater than lease payment, the present value of the lease obligation will be P4,170,490. This is the beginning lease liability.In the first year,
the deferred tax liability will be P109,047, calculated as follows:Book depreciation expense of P758,200 x 30% = P227,460Tax depreciation expense of P3,791,000 x 30% = P1,137,300
Taxable income = (P1,000,000 - P758,200 - P1,137,300) = P104,500P104,500 x 30% = P31,350
Tax expense of P31,350 - P1,000,000 cash paid = (P968,650)Deferred tax liability of P968,650 x 11.28 percent (the enacted tax rate of 34% in the future) = P109,047
Therefore, the net deferred tax liability is P109,047 - P0 = P109,047.2.
What amount should be reported as deferred tax expense (income) for the year ended December 31, 2021?The deferred tax liability is P109,047 on December 31, 2020, based on the previous question.
For tax and book reasons, the lease liability will increase by P379,100 and will be P4,549,590 (P4,170,490 + P379,100).The book depreciation expense of P758,200 and the tax depreciation expense of P1,137,300 remained the same in year 2,
however the taxable income became a benefit of P379,500 (P1,000,000 - P758,200 - P1,137,300 - P379,100).The expense for taxes is P113,850, which is the tax benefit of P379,500 x 30%.
The deferred tax expense for the year is P91,918, which is calculated as follows:
Deferred tax liability on December 31, 2021, is P109,047 x 34% (the enacted tax rate of 34%) = P37,067
Deferred tax liability on December 31, 2020, was P109,047
Deferred tax expense = (P109,047 - P37,067) - P0 = P71,980
The company should report a deferred tax expense of P71,980 for the year ended December 31, 2021.
Therefore, the correct option is (D) P71,980.
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Alexa has strictly convex preferences and she allocates all of her income to the purchase of good X and good Y. At her current income of $3000 per month, with price of X being $20 per unit and price of Y being $35 per unit, Julia chooses to allocate her income equally between the two goods.
• What quantity of X does she purchase? Show your working.
• What quantity of Y does she purchase? Show your working.
• Represent her optimal bundle on a diagram by employing all the relevant tools such as her indifference curve and her budget constraint while keeping good X on the horizontal axis. Briefly explain your work.
Suppose that price of good Y falls and at the same time Alexa's income also changes in a way that she is exactly as well off after these changes as she was in part (b).
- Do further work on your diagram for part (a) to show an appropriate position of Alexa's new budget constraint which is consistent with this observation and also show an appropriate location for her new optimal bundle. Explain your work.
- Will an income effect be induced due to these changes? Explain your stance.
a. To find out the quantity of good X that Alexa will purchase, we can use the equation for budget constraint as:
MxPx + MyPy = I
Here,M = 3000 (income)
Px = 20 (price of good X)
Py = 35 (price of good Y)
I = 3000
Then,Mx20 + My35 = 3000Mx20 + (3000 - Mx20)35
= 3000
Solving the above equation for Mx,Mx = 60So,
Alexa will purchase 60 units of good X.
b. When Alexa's income is $3000 and the price of good X is $20 per unit and the price of good Y is $35 per unit, she will purchase 60 units of good X and 60/35*20 = 34.29 units of good Y (approx).
c. Indifference curve and budget constraint diagram will be: On the diagram, the budget constraint line is AB which shows all the combinations of X and Y that Alexa can buy by spending all of her income. Her optimal bundle of goods is at point C where her highest attainable indifference curve is tangent to the budget line (AB).
d. If the price of good Y falls and at the same time Alexa's income also changes in a way that she is exactly as well off after these changes as she was in part (b), then her new budget constraint line will be further from the origin than the original budget constraint line. When the price of good Y falls and at the same time Alexa's income also changes, then it is expected that the quantity demanded of both goods will increase because Alexa has more income to spend.
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