Producers believe the economy is headed for a recession, so they reduce their purchases of machinery and equipment. A. The Short Run Aggregate Supply curve shifts to the right.
B. The Aggregate Demand curve shifts to the left.
C. The Aggregate Demand curve shifts to the right.
D. The Short Run Aggregate Supply curve shifts to the left.
Answers
Answer:
A - The Short Run Aggregate Supply curve shifts to the right.
Explanation:
The Short Run Aggregate Supply curve plots aggreagrate price against aggreagrate quantity.
If producers believe a recession is imminent and they reduce the amount of machinery purchased, the quantity supplied would reduce shifting the Short Run Aggregate Supply curve to the left.
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Your best friend wants to borrow $2000 from you today for an emergency purchase they need to make that requires a cash payment. They promise to pay you back $1000 in 1 year (i.e. 12 months) and then pay you $1100 in two years (i.e. in 24 months). You would have to remove the money from your stock investment account which is earning on average a return of 5% (i.e. the effective yearly interest rate you are getting on your money is 0.05). Required:a. Is this a fair deal for you? Justify your answer with an engineering economics analysis and discussion of the situation by calculating the Net Present Value (NPV) for the scenario. b. Draw a Cash Flow Diagram for this situation.
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Answers
Answer:
Cost of Units Transferred Out: $7,548
Explanation:
Cost Units
Beginning Work in Process (WIP): $2,990 1,100
Production Started during August 800
Production Completed in August 1,700 *
Cost added to during August $5,000
Ending WIP August: 200 (50%)
*Completed: Beginning WIP Units + Started Units - Ending WIP Units = 1,100 + 800 - 200 = 1,700
Costs of the Units: Cost of beginning WIP Units + Cost Added during the Period
Cost of the Units: $2,990 + $5,000 = $7,990
Equivalent Units of Production (EUP): Completed Units + Ending WIP Units
EUP: 1,700 Units + 200 Units x 50% = 1,800 Units
Cost per Equivalent Unit: Cost of Units / EUP
Cost per EUP: $7,990 / 1,800 = $4.44
Cost of Units Transferred Out: Cost per EUP x Units Transferred Out
Cost per Units Transferred Out: $4.44 x 1,700 = $7,548
Answers
Answer:
What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)
- $2,820.62
and monthly payments (12 per year)?
- $531.13
Compare the annual cash outflows of the two payments.
- total semiannual payments per year = $2,820.62 x 2 = $5,641.24
- total monthly payments per year = $531.13 x 12 = $6,373.56
Why does the monthly payment plan have less total cash outflow each year?
- The monthly payment has a higher total cash outflow ($6,373.56 higher than $5,641.24), it is not lower. Since the compounding period is shorter, more interest is charged.
What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)?
- $2,820.62 x 12 payments = $33,847.44 ($25,000 principal and $8,847.44 interests)
Explanation:
cabinet cost $25,000
interest rate 10%
we can use the present value of an annuity formula to determine the monthly payment:
present value = $25,000
PV annuity factor (5%, 12 periods) = 8.86325
payment = PV / annuity factor = $25,000 / 8.8633 = $2,820.62
present value = $25,000
PV annuity factor (0.8333%, 60 periods) = 47.06973
payment = PV / annuity factor = $25,000 / 47.06973 = $531.13
The monthly payment plan has less total cash outflow each year compared to the semiannual payment plan because the principal loan amount is reduced more quickly, leading to less accrued interest over the lifetime of the loan. Using the loan amortization formula and plugging in the appropriate values will yield the payment amounts for each plan.
The subject at hand relates toloan amortization, specificially the calculation of periodic payments for a loan when the interest is compounded semi-annually or monthly.
Let us denote the principal loan amount as P, the interest rate as r, and the number of payments as n.
For semiannual payments, n equals the number of years multiplied by 2, and for monthly payments, n equals the number of years multiplied by 12. Also, the interest rate needs to be divided by the number of periods per year. Therefore, the semiannual interest rate is r/2, and the monthly interest rate is r/12.
The formula to calculate the periodic payment amount, A, is: A = P * [r(1 + r)^n] / [(1 + r)^n - 1].
In this case, the loan amount, P, is $25,000, and the interest rate, r, is 0.1 or 10%. Hence, for example, the semiannual loan payments can be calculated using the formula as follows: Substituting n = 6 * 2 and r = 0.1/2 into the formula, we will get the payment amount for semiannual payments.
The annual cash outflows for the two payment plans are not the same because the principal amount is reduced more quickly in the plan with more frequent payments (monthly), thus accumulating less interest over the life of the loan. The total cash outflow over the loan period would be less for the monthly payment plan compared to the semiannual payment plan.
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Answers
Answer:
Ending inventory:
(a) specific identification = $5,885
(b) weighted average = $5,960
(c) FIFO = $5,750
(d) LIFO = $5,845
Explanation:
Date Activity Units Cost Total
Oct. 1 Beg. inventory 155 $14 $2,170
Oct. 5 Purchase 180 $13.50 $2,430
Oct. 9 Sales 240
Oct. 18 Purchase 140 $13 $1,820
Oct. 29 Sales 110
Oct. 25 Purchase 330 $12.50 $4,125
total Purchases 805 $13.10 $10,545
Cost of goods sold:
(a) specific identification = [(55 x $14) + (185 x $13,50)] + [(35 x $13) + (75 x $12.50)] = $4,660
(b) weighted average = $13.10 x 350 units = $4,585
(c) FIFO = (155 x $14) + (85 x $13.50) + (95 x $13.50) + (15 x $13) = $4,795
(d) LIFO = (180 x $13.50) + (60 x $14) + (110 x $13) = $4,700
Ending inventory:
(a) specific identification = $10,545 - $4,660 = $5,885
(b) weighted average = $10,545 - $4,585 = $5,960
(c) FIFO = $10,545 - $4,795 = $5,750
(d) LIFO = $10,545 - $4,700 = $5,845
Answers
Answer:
Dr. Retained Earning $86,000,000
Cr. Common Stock $860,000
Cr. Paid-in-Capital excess of par $85,140,000
Explanation:
Stock dividend is the payment of dividend to stockholder in the form of stock/shares of the company. Stock are issued at the market price and the value of the dividend is transferred from the retained earning to the add-in-capital accounts.
Dividend Value = 860,000 x 100 = $86,000,000
Par Value of Stocks = $1 x 860,000 = $860,000
Add-in-capital excess of par common stock = ($100-$1) x 860,000 = $85,140,000
Final answer:
To record a large stock dividend, debit the Retained Earnings by the total market value of the dividend, then credit the Common Stock by the par value part, and credit the Paid-In Capital in Excess of Par by the remaining part.
Explanation:
To record a large stock dividend, you need to debit (decrease) Retained Earnings and credit (increase) Common Stock and Paid-in Capital in Excess of Par. Here's an example using Shriver Food Systems, Inc. data:
- Calculate the total market value of the dividend: 260,000 shares * $100 per share = $26,000,000
- Deduct the par value: $26,000,000 - (260,000 shares * $1 par value) = $25,740,000
- Make the journal entry: Debit Retained Earnings for $26,000,000. Credit Common Stock for $260,000 (this represents the par value). Credit Paid-In Capital in Excess of Par for $25,740,000 (this represents the remainder).
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Answers
Answer:
The answer is True
Explanation:
Answers
Answer:
The predicted growth rate is compared at -2%
Explanation:
To calculate growth rate, G.R = X()
In the 1960s,
The carrying capacity of the earth = 13 billion
Earth's population = 3 billion
X =
X =
X = 0.021 × 0.77
X = 0.01617 = 1.6%
Current population calculation:
Growth Current population (C.p) =
Growth Current population (C.p) = 0.016
Growth Current population (C.p) = 0.016(-1.267)
Growth rate = -0.020272 = -2%
The predicted growth rate compare to the actual growth rate of about 1.2% per year at -2%.