BUSINESS COLLEGE

The Wilson family has a disposable income of $60,000 annually. Currently, the Wilson family spends 80% of new disposable income on consumption. Assume that their marginal propensity to consume is 0.8 and that their autonomous consumption spending is equal to $10,000. What is the amount of the Wilson family's annual consumer spending

Answers

Answer 1
Answer:

Answer:

the annual consumer spending is $58,000

Explanation:

The computation of the amount of the wilson family is shown below"

Annual consumer spending is

= Disposable income × marginal propensity to consume + autonomous consumption spending

= $60,000 × 0.8 + $10,000

= $48,000 + $10,000

= $58,000

hence, the annual consumer spending is $58,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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Consider the following activities that take place in a veterinary clinic.(a) Cleaning cages.
(b) Heating and air conditioning the clinic.
(c) Sending blood work to a lab.
(d) Dispensing medicine.
Which of the following statements is true?
A. Heating and air conditioning the clinic is a facility level activity.
B. Dispensing medicine is a facility level activity.
C. Cleaning cages is a facility level activity.
D. Sending blood work to a lab is a facility level activity.
E. Service entities cannot use ABC for overhead allocation.

Answers

Answer:

E. Service entities cannot use ABC for overhead allocation.

Explanation:

ABC costing is limited to use when the cost can be directly traced to a certain activity. All of the Activities are volume driven and overheads would be incurred in small proportion to the overall cost.

Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 80 percent and the probability of a recession is 20 percent. It is projected that the company will generate a total cash flow of $192 million in a boom year and $83 million in a recession. The company's required debt payment at the end of the year is $117 million. The market value of the company’s outstanding debt is $90 million. The company pays no taxes. a. What payoff do bondholders expect to receive in the event of a recession? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)
Payoff $
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c. What is the expected return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
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Answers

Answer:

a. The payoff do bonholders expect to receive in the event of a recession=$83 million

b. The promised return is 0.30

c. The expected return is -16%

Explanation:

a. According to the given data the payoff do bonholders expect to receive in the event of a recession=$83 million

b. In order to calculate the promised return on the company's debt we would have to use the following formula:

promised return=(face value of debt/market value of debt)-1

promised return=($117 million/$90 million)-1

promised return=0.30

c. To calculate the expected return on the company's debt we would have to use the following formula:

expected vale of debt=($117*80%)+($90*20%=

=75.6 million

expected return=(75.6 million/$90 million)-1

expected return=-16%

SWH Corporation issued bonds on January 1, 2004. The bonds had a coupon rate of 5.5%, with interest paid semiannually. The face value of the bonds is $1,000 and the bonds mature on January 1, 2019. What is the yield to maturity for an SWH Corporation bond on January 1, 2010 if the market price of the bond on that date is $950

Answers

Answer:

6.23%

Explanation:

From Jan 2019 to Jan 2010 = 9 years

N = 9 years*2 = 18

PV = $950

Coupon payment = $27.5 (1000*5.5%/2)

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We need to solve for YTM using the MsExcel function

Yield to maturity = YTM(n, pv, pmt, fv) * 2

Yield to maturity = YTM(18, 950, 27.5, 1000) * 2

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Yield to maturity = 6.23%

External setup time refers to:______________. a. The time it takes workers to set up a machine during scheduled maintenance
b.The time to complete setup activities that do not require that the machine be stopped
c.The time it takes equipment vendors to set up the machine
d. None of the above

Answers

Answer: The correct answer is "b.The time to complete setup activities that do not require that the machine be stopped".

Explanation: External setup time refers to the time to complete setup activities that do not require that the machine be stopped.

External setup is the term used to refer to when workers can perform maintenance without stopping the production process. The term "external" is used because maintenance can be performed "external" to the production process.

he following information relates to Jay Co.'s accounts receivable for 2004: Accounts receivable, 1/1/04 $650,000 Credit sales for 2004 2,700,000 Sales returns for 2004 75,000 Accounts written off during 2004 40,000 Collections from customers during 2004 2,150,000 Estimated future sales returns at 12/31/04 50,000 Estimated uncollectible accounts at 12/31/04 110,000 What amount should Jay report for accounts receivable, before allowances for sales returns and uncollectible accounts, on December 31, 2004?

Answers

Answer:

$1,085,000

Explanation:

Given that,

Accounts receivable, 1/1/04 = $650,000

Credit sales for 2004 = 2,700,000

Sales returns for 2004 = 75,000

Accounts written off during 2004 = 40,000

Collections from customers during 2004 = 2,150,000

Estimated future sales returns at 12/31/04 = 50,000

Estimated uncollectible accounts at 12/31/04 = 110,000

Receivable before allowances for sales returns and uncollectible accounts:

= Accounts receivable, 1/1/04 + Credit sales for 2004 - Accounts written off during 2004 - Collections from customers during 2004 - Sales return

= $ 650,000 + $2,700,000 - $40,000 - $2,150,000 - 75,000

= $1,085,000

Assume a closed economy. In the long run, an increase in the saving rate Group of answer choices doesn’t change the level of productivity or income. raises the levels of both productivity and income. raises the level of productivity but not the level of income. raises the level of income but not the level of productivity.

Answers

Answer: Raises the levels of both productivity and income

Explanation:

In a closed Economy, there is no trade with the outside world.

That would mean that the GDP formula for their expenditure model will look like this,

Y = C + I + G

Where Y is (GDP)

C is consumption

I is investment and,

G is Government Spending

Investment is also known as Savings because it is the amount of Total income that is not spent after individuals CONSUME and the Government SPENDS,

I = Y - G - C.

When an economy SAVES MORE they are sacrificing consumption now for future consumption and saving more.

This means that there is more money to invest in Economic activities.

Since there is a higher Investment in Economic activities, we can expect higher CAPITAL STOCK which can drive Economic growth as it leads to greater productivity as well as greater income because the Economy is growing.

The Harrod-Domar model of economic growth speaks more on this.

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