7. Identifying costs of inflation Shen manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of inflation.
Answers
Answer:
Shoe-leather Costs.
Explanation:
In Business management, Shoe-leather costs can be defined as the costs of time and effort people take to counteract the effect of high inflation on the depreciative purchasing power of money by visiting banks or other financial institutions regularly in order to limit inflation tax they pay on holding cash.
Metaphorically speaking, in a bid to protect the value of money or assets, people wear out the sole of their shoes by going to the bank regularly.
Hence, Shen is practicing a shoe-leather cost.
Related Questions
Washington inc. issued $705,000 of 6%, 20-year bonds at 98 on January 1, 2009. Through January 1, 2017, Washington amortized $8,200 of the bond discount. On January 1, 2017. Washington Inc. retired the bonds at 102 (after making the interest payment on that date). What is the gain or loss that Washington Inc. would report for the retirement of this bond?
Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded: Melting Department direct overhead $110,000 Molding Department direct overhead 400,000 General plant management 100,000 Plant security 50,000 Other pertinent data follow: Melting Molding Number of employees 35 40 Space occupied (square feet) 10,000 20,000 Machine hours 10,000 2,000 Direct labor hours 4,000 20,000 Required:a. Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.b. Determine the total departmental overhead costs for the Melting and Molding Departments.
On January 1, 2021, Canseco Plumbing Fixtures purchased equipment for $44,000. Residual value at the end of an estimated four-year service life is expected to be $8,000. The company expects the equipment to operate for 20,000 hours. The equipment operated for 2,900 and 3,700 hours in 2021 and 2022, respectively. Required:a. Calculate depreciation expense for 2021 and 2022 using straight line method.b. Calculate depreciation expense for 2021 and 2022 using double-declining balance method.c. Calculate depreciation expense for 2021 and 2022 using units-of-production using hours operated.
Mergers and acquisitions result in the consolidation of assets and liabilities of two companies under one entity. However, a merger and an acquisition are two different types of market activity. Which of the following best describes a merger? Select the correct answer below:when an entity takes ownership of another entity's stock, equity interests, and assetsthe consolidation of assets and liabilities under two entitiesa legal consolidation of two entities into one entityall of the abovePLEASE ANSWER ASAP
(B) $50,000.
(C) $140,000.
(D) $35,000.
(E) $200,000.
Answers
Answer: The correct answer is "(E) $200,000.".
The proper cash flow to show in a discounted-cash-flow analysis as occurring at time 0 would be: "(E) $200,000.".
Explanation: At time 0, the course of time does not occur therefore there is no discount.
Answers
Answer:
supplied , left
higher, lower
Explanation:
When people start consuming more and saving less, this would result into lower quantum of funds parked with banks and financial institutions. Due to shortage of funds, the supply of loanable funds in the market would get reduced i.e the supplied line would shift to the left.
This would raise the equilibrium level for loanable funds which would lead to a higher rate of interest i.e funds will be loaned only at a higher rate of interest. Due to this, the quantity of funds saved and invested would be lower.
Answers
Answer:
Amount dollars
Explanation:
Given
principal amount per month
Total time period years
months
Monthly rate of interest
As we know that
Where A is the amount
P is the principal amount
r is the rate of interest
n is the number of times interest applied over the total time period
t is the total time period
Substituting the given values in above equation, we get -
Final answer:
The payments of $190 per month for 4 years that your parents are giving you at the start of college, assuming an interest rate of .45 percent per month, are worth $7484.86.
Explanation:
The subject of this question is about calculating the present value of an annuity. The formula to calculate the present value of an annuity is PV = PMT * [(1 - (1 + r)^-n) / r], where PV is the present value, PMT is the monthly payment, r is the monthly interest rate, and n is the number of periods. Here PMT = $190, r = .45/100 = .0045, and n = 4 * 12 = 48 months.
Substituting the values into the formula, we get PV = 190 * [(1 - (1 + .0045)^-48)/.0045]. Then, performing the calculations, we get the present value PV = $7,484.86. Therefore, the payments your parents are providing for the 4 years of college are worth $7484.86 when you first start college assuming an interest rate of .45 percent per month.
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Answers
Answer:
Instructions are below.
Explanation:
Giving the following information:
Unit sales price $ 30
Variable cost per unit 6
Fixed costs per year 360,000
To calculate the contribution margin ratio, we need to use the following formula:
Contribution margin ratio= contribution margin / selling price
Contribution margin ratio= (30 - 6) / 30
Contribution margin ratio= 0.8
The break-even point in dollars formula is:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point in units= 360,000 / 0.8
Break-even point in units= $450,000
Now, the desired profit is $440,00:
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= (360,000 + 440,000) / 0.8
Break-even point (dollars)= $1,000,000
Finally, the margin of safety:
Sales= 60,000*30= $18,000,000
Margin of safety= (current sales level - break-even point)
Margin of safety= 18,000,000 - 450,000
Margin of safety= $17,550,000
Answers
Answer:
one sec i can help
Explanation:
Answers
Answer:
Explanation:
a. The computation of the economic order quantity is shown below:
=
where,
Carrying cost = $20 × 15% = 3
And, the annual demand = 450 bicycles × 12 months × 2 tyres = 10,800
And, the ordering cost is $50
Now put these values to the above formula
So, the value would equal to
=
= 600 tires
b. The number of orders would be equal to
= Annual demand ÷ economic order quantity
= $10,800 ÷ 600 tires
= 18 orders
c. The average annual ordering cost would equal to
= Number of orders × ordering cost
= 18 orders × $50
= $900
Final answer:
The Economic Order Quantity for the company is around 240 units. This leads to an estimated 23 orders per year with an average annual ordering cost of $1150.
Explanation:
The Economic Order Quantity (EOQ) is calculated using the equation √((2DS)/H). In this example, D represents the demand rate which is the number of bicycles produced a year (450 per month times 12, totaling 5400). S represents the ordering cost ($50) and H represents the holding cost which is 15% of the tire cost ($20) per unit, totaling $3 per unit.
So if you substitute these values into the formula, the EOQ equals √((2 * 5400 * 50)/3), which results in approximately 240 units. From this solution, the number of orders per year would be the annual demand divided by the EOQ, i.e., 5400 / 240 giving approximately 22.5 orders (rounded upwards it means 23 orders per year). The average annual ordering cost would be the cost per order times the number of orders per year (23 * $50), resulting in $1150.
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