However, in problem (b), this is deducted which actually lowers the taxable income and taxes. The rate of return in (a) must be higher to compensate for the opportunity cost of the salary to the owner. Also, giving data only reflects the actual cost, and all costs need to be considered when analyzing the investment. d. Determine the cash flow for 2012 if John serves as the manager and 2012 turns out to be the same as 2011. Do not include the cost of the hired help.
(6 pts.) What happens to bicycle demand? | | | Student Answer: | | There would be an decrease in supply since it would cost more to make the bikes, which would also cause a shift to the left on a supply curve. There would be no change for demand since the producer cost is not a factor for demand. | | Instructor Explanation: | Since a change in costs to produce the product is a supply factor, an increase in costs would be expected to decrease bicycle supply.
Why, or why not? Yes they should consider closing down if the price remains at $40 per ton. They can only produce the one field to get a profit and the remaining fields will remain unused which will result in the opportunity cost for producing some thin else. 4. Explain which of the variables computed in the table and plotted on the graph represent the supply and demand curves for the Henry Corn & Sons Company.
If other things change, then one cannot directly apply supply/demand analysis. Sometimes supply and demand are interconnected, making it impossible to hold other things constant (Colander, The Limitation of Supply/Demand Analysis, 2010). “In supply/demand analysis, you would look at the effect that fall would have on workers’ decisions to supply labor, and on business’s decision to hire workers. However, there are also other effects (Colander, The Limitation of Supply/Demand Analysis, 2010). “For instance, the fall in the wage lowers people’s income and thereby reduces demand.
Operating expenses- total operating expenses had declined in period 8 of $1,273,867 and have had a projection n the budget for period 9 of $1,026,483. This is unrealistic due to the fact that sales were anticipated to increase. The utilities and services have also been duplicated within the budget for operating expenses. It is listed under Facility/General operations cost then under expense. This duplication should be deleted as it is not necessary.
Jones decides to buy Smithon Corporation he should buy it with the exchange in stocks instead of buying the Corporation outright. This will lower his acquisition cost and in return lower his taxable income since there is no recognition of a gain or loss on an acquisition company with a stock-for-stock exchange. If he decides to buy Smithon Manufacturing he will be able to change it to and S Corp and follow the fiscal year ending on December 31st. By changing it to an S corporation he will have the profits go directly to his personal income and avoid double taxation. A merger would best be used in this situation since it will help lower his taxable income and he can improve his operations and competitiveness.
Mantkelow (2014) explains lean manufacturing as based on "finding inefficiencies and removing wasteful steps that don't add value to the end product." Lean operations helps to reduce waste in production by using resources to only produce what the customer is demanding. A company that is using lean operations has measurable throughput. “Every minute that a product is not sold the cost accumulates and the competitive advantage is lost, this is the manufacturing cycle time” (Heizer and Render, 2010) this analysis could have been used to scale down production in the third and fourth quarter when it became obvious there was excess inventory. For starters, there is no value in holding 60 days' worth of inventory, to adopting lean principles would immediately help us to commit to inventory reduction and better alignment between production and demand.
Supplying a sustainable source of energy for today’s population is already a challenge, however in the future the world’s population is set to hit a peak of 7.8 billion. From the graph you can see that, in the past, the supply of energy has always followed the pattern of increasing population. This was because the world still had large reserves of untapped fossil fuels, allowing for an increase in production. However as these reserves begin to diminish the supply of energy may fall behind the increase in population unless an alternative form of energy is found, capable of filling the large energy gap left behind from fossil fuels. This coupled with an increase in living for the majority of the world, especially RICs such as India where its oil consumption had increased by 40 million tonnes over a 6 year period, makes supplying the world’s energy demands a very difficult task.
Recession is two consecutive quarters of negative economy growth. During recession, there is low level of demand because people don’t have much money to spend. So they look for cheaper products that they can afford. At this time businesses confidence gets low as people aren’t demanding for their products so they would have to cut out their productions as they don’t need to make as much products. At this time they would need to provide cheaper price to attract their consumers and to increase the demand.
In Keynesian analysis, a supply shock may reduce output in two ways: (1) a reduction in output, because the supply shock reduces the marginal product of labor, shifting the FE line to the left; and (2) a further reduction in output if the supply shock is something like an oil price shock that is large enough to cause many firms to raise prices, shifting the LM curve up and to the left so much that it intersects the IS curve to the left of the FE line. Supply shocks create problems for stabilization policy because: (1) policy can do nothing to affect the location of the FE line; and (2) using expansionary policy risks worsening the already-high rate of