Assume an economy with an oil company, a construction firm, a government, and some consumer/workers. The construction company builds an oil platform, and sells it to the oil company for $150 million. To construct this platform, the construction company uses up 5,000 tonnes of steel out of its inventory, each tonne valued at $10,000, and pays $30 million in wages \& salaries to its workers and $10 million in indirect taxes to the government. The oil company produces 3 million barrels of oil, valued at $100 per barrel. 2 million barrels are sold to the domestic consumers, and 1 million barrels are exported. The oil company pays $50 million in wages \& salaries to its workers, and $20 million in indirect taxes to the government. The consumers pay $20 million in income taxes to the government. The government hires some workers to provide government services, and pays them $50 million in wages \& salaries. There are no interest payments or depreciation in this economy. (Hint: 1 million =1,000,000) (a) [3 points] Calculate the after-tax profits of the oil company and the construction firm, where profits are the difference between revenue and costs. (Hint: if some of a firm's output is not sold in a given period but held as inventory, its value is still considered part of its revenue for that period. So, when a firm uses part of its inventory that was produced in another period we must subtract its value from revenues for this period. This will become clear when we compute GDP.) (b) Calculate the GDP for this economy using the value-added approach. Show your work.(Hint: the government's value added are its input costs of production.) (c) Calculate the GDP for this economy using the expenditure approach. Show your work. (d) Calculate the GDP for this economy using the income approach. Show your work. (e) Calculate the disposable income, YD, and savings, S, of this economy. Show your work.

Answers

Answer 1

The construction company builds an oil platform, and sells it to the oil company for $150 million. To construct this platform, the construction company uses up 5,000 tonnes of steel out of its inventory

a) The after-tax profits of the oil company and the construction firm can be calculated as follows:

Oil Company

Revenue: $100 x 3,000,000 = $300 million

Costs: $150 million (paid to the construction firm) + $50 million (paid to wages and salaries) + $20 million (indirect taxes) = $220 million

Profit: $300 million - $220 million = $80 million

Taxes: $20 million (indirect taxes) - $20 million (income taxes paid to government) = $0

After-tax profit: $80 million

Construction Firm

Revenue: $150 million

Costs: $50 million (paid to wages and salaries) + $5,000 x $10,000 = $100 million

Profit: $150 million - $100 million = $50 million

Taxes: $10 million (indirect taxes)

After-tax profit: $40 million

b) To calculate the GDP for this economy using the value-added approach, we need to find the value added by each sector of the economy:

Oil Company: $300 million - $50 million (wages and salaries) - $20 million (indirect taxes paid to government) = $230 million

Construction Firm: $150 million - $50 million (wages and salaries) - $5,000 x $10,000 = $100 million

Government: $50 million (wages and salaries paid)

Domestic Consumers: $40 million (income taxes paid to government)

GDP: $230 million + $100 million + $50 million + $40 million = $420 million

c) To calculate the GDP for this economy using the expenditure approach, we need to find the sum of consumption, investment, government spending, and net exports:

Consumption: $100 x 2,000,000 = $200 million

Investment: $150 million

Government spending: $50 million + $20 million + $40 million = $110 million

Net exports: $100 x 1,000,000 = $100 million - $0 = $100 million

GDP: $200 million + $150 million + $110 million + $100 million = $560 million

d) To calculate the GDP for this economy using the income approach, we need to add up all the incomes earned in the economy:

Wages and salaries: $50 million (construction firm) + $50 million (oil company) + $50 million (government) = $150 million

Indirect taxes: $20 million (oil company) + $10 million (construction firm) = $30 million

Depreciation and net interest payments are not given in the question, so we assume they are zero.

GDP: $150 million + $30 million = $180 million

e) To calculate the disposable income and savings of this economy, we need to subtract taxes from national income:

National income: $150 million (wages and salaries) + $30 million (indirect taxes) = $180 million

Taxes: $20 million (income taxes paid by consumers) + $20 million (indirect taxes paid by oil company) = $40 million

Disposable income (YD): $180 million - $40 million = $140 million

Since there is no information about investment in this economy, we assume that all disposable income is saved:

S = $140 million

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Related Questions

You are selling friendship bracelets online and you give very clear instructions to the ISP about how to post the listing and photos. The ISP
erroneously posts P. Navajo's pictures, at half price, and states that you give a certificate of authenticity. None of this was included in your
instructions. The posting goes viral and tweens and teens from all over the world order over 50 million bracelets in one day. You are liable.

Answers

Answer. false,

someone else answered it, same question on another brainly  

an employee can be dismissed if their job surplus to requirements' outline why this state ment is false

Answers

Hiring labour is different from buying other goods and services, and the contract between the employer and the employee is incomplete. It does not cover what the employer really cares about, which is how hard and well the employee works.

a country operates inside its production possibilities curve; this may be caused by? A) unemployed resources.
B) total efficiency in industry.
C) a new resource being discovered.
D) a lack of modern products being produced.

Answers

The correct answer is A. The country operates inside its production possibilities curve because of unemployed resources.

The production possibility curve (PPC) shows the maximum production level of two goods a country can produce with its available resources and technology. When the country is operating inside the PPC, it means that it is not using its resources efficiently, and its production level is lower than the potential output level. This situation could arise due to various factors, such as inefficient use of resources, technological backwardness, or the country's size and structure. However, the most common cause is unemployed resources.

Unemployed resources refer to any factor of production, such as labor, capital, or natural resources that are not being utilized in the production process. This could be due to a lack of skill, lack of capital, or outdated technology. If these resources were utilized, the country could produce more output and operate at a point on the PPC, which means more satisfaction of people's needs. Hence, operating inside the PPC is an inefficient use of resources, which leads to underproduction, low standards of living, and other socio-economic problems.

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What causes the gross domestic product to go up?

A.) a rising unemployment rate
B.) more investment in businesses
C.) a reduction in exports
D.) less government spending

Answers

Answer: B

Explanation: No

More investment in businesses causes the gross domestic product to go up. Thus, option 'B' is the correct option.

What is the gross domestic product?

Gross domestic product (GDP) is a monetary indicator of the total market value of all the final commodities and services that nations generate and sell over a certain time period. This measurement is frequently changed before it can be trusted as an indicator because of how complicated and subjective it is.

To compare living standards between countries, using a basis of GDP per capita at purchasing power parity (PPP) may be more useful, whereas nominal GDP is more useful for comparing national economies on the global market. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries. The contribution of each industry or sector to the overall GDP may also be quantified.

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the sarbanes-oxley act makes it illegal for employers to: multiple choice sue federal contractors for fraud. retaliate against whistle-blowers who report information that could have an impact on the value of a company's shares. both of these answers are correct: retaliate against whistle-blowers who report information that could have an impact on the value of a company's shares; and hire employees who have a prior record of accounting fraud. hire employees who have a prior record of accounting fraud.

Answers

Employers are strictly forbidden by SOX from taking adverse action against workers who report unlawful or unethical behavior. When disclosing shareholder fraud or contraventions of SEC rules and regulations, employees are likewise protected.

The Sarbanes-Oxley Act of 2002 is a federal law in the United States that prescribes specific procedures for corporate financial record keeping and reporting. The rule was implemented in response to many significant business and accounting scandals, notably Enron and WorldCom. The bill's provisions address the duties of the board of directors of public corporations, impose criminal penalties for specific types of wrongdoing, and call on the Securities and Exchange Commission to establish regulations outlining public businesses' legal obligations.

The act strengthened the responsibility of boards of directors in providing supervision and expanded the independence of external auditors who check the accuracy of business financial statements.

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A new school building was recently built in the area. The entire cost of the project was $20,000,000. The city has put the project on a 20-year loan with an APR of 2.7%. There are 21,000 families that will be responsible for making monthly payments towards the loan. Determine the total amount that each family should be required to pay each year to cover the cost of the new school building. Round your answer to the nearest cent, if necessary.

Answers

Each family should be required to pay approximately $25.71 per year to cover the cost of the new school building.

To determine the total amount that each family should be required to pay each year to cover the cost of the new school building, we can follow these steps:

Calculate the total loan amount.

The loan amount is the cost of the project, which is $20,000,000.

Calculate the annual interest payment.

The annual interest payment can be calculated using the formula:

Annual Interest Payment = Loan Amount * Annual Interest Rate

Annual Interest Rate = APR / 100

In this case, the annual interest rate is 2.7% or 0.027.

Annual Interest Payment = $20,000,000 * 0.027 = $540,000

Determine the number of families responsible for payments.

There are 21,000 families responsible for making monthly payments.

Calculate the total amount each family should pay each year.

Total Amount per Family = Annual Interest Payment / Number of Families

Total Amount per Family = $540,000 / 21,000

Rounding the result to the nearest cent, each family should be required to pay approximately $25.71 per year to cover the cost of the new school building.

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With regard to the factors of production, "land" refers to which of these?
A)spaces in which finished goods are produced
B)economic regulations present within a country
С) machines used to increase the efficiency of production
D)raw materials that are used to produce finished products

Answers

A) because that is they only one that actually makes sense

Adjusting for Risk Docs R Us has performed a risk assessment of independent projects. They adjust for project risk by raising the calculated IRR by 3% for low risk projects, leaving the IRR the same for moderate risk projects, and lowering the calculated IRR by 2% for high risk projects.
Risk
ADJ
Project Cost NPV IRR Level IRR
A $21,000 $ -2,000 10% Low
B $17,000 $ 4,000 14% Low
C $15,000 $ 2,000 12% High
D $14,000 $ 4,000 15% Average
E $ 4,000 $ -1,000 11% High
A. Without capital rationing, and given their cost of capital of 12%, and ignoring risk, based on IRR which projects should Meds R Us accept? Why?
B. Without capital rationing, and given their cost of capital of 12%, and considering risk, which projects should Meds R Us accept? Why? Note that you will add 3% to the Project’s IRR if it is low risk (making it look more favorable since it is), leave average risk Projects’ IRRs the same, and subtract 2% from the IRR for high risk Projects (making them less favorable since they are due to the risk).

Answers

Without considering risk, based on IRR and the cost of capital of 12%, Meds R Us should accept projects B and D since their IRRs (14% and 15% respectively) are greater than the cost of capital.

Without considering risk, the decision is based solely on the IRR. Projects with an IRR greater than the cost of capital (12%) are considered acceptable. Based on this criterion, projects B and D should be accepted as their IRRs are 14% and 15% respectively, both higher than the cost of capital. Considering risk and adjusting the IRRs, we need to incorporate the risk adjustments provided. For low-risk projects, the IRR is increased by 3%. For average-risk projects, the IRR remains the same. For high-risk projects, the IRR is reduced by 2%. Applying these adjustments, project A's IRR of 10% becomes 13% (10% + 3%), which is higher than the cost of capital. Therefore, project A should be accepted. Project B's IRR remains unchanged at 14%, which is still greater than the cost of capital, so it should also be accepted. Project D's IRR of 15% remains the same, making it favorable compared to the cost of capital, and it should be accepted as well.

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what opportunities are available for people aspiring to become entrepreneurs?

Answers

to invest in multiple businesses

angel investors

crowdfunding

quality content

foreign markets

the social power of the internet

startup incubators

You should inform the person who is writing your letter of recommendation of
all of the following things except

A. where you are applying and why.
B. when the letter is due.
C. what you would like him or her to write.
D. what type of financial aid you are seeking.

Answers

Answer:

D.what type of financial aid you are seeking

John from sales has just sent you an e-mail. He needs a decision made on the Johnson account as soon as possible. You can make the decision, but you feel like you’d like to ask your boss for her advice. Unfortunately, she is in a business meeting, and the decision needs to be made very soon. You decide to take the initiative and ______.
a.
Interrupt your boss to make the decision
b.
Ask a coworker to make the decision
c.
Wait to make the decision
d.
Make the decision

Answers

Answer:

D. Make the decision

Explanation:

The decision needs to be made as soon as possible. Answers B and C both require extra time, which is not an option here. That leaves A and D as possibilities. Answer A makes the least sense of the 4 options (as it would be extremely unprofessional to interrupt a meeting), leaving D as the only reasonable choice.

Pompeii, Inc., has sales of $53,000, costs of $24,200, depreciation expense of $2,550, and interest expense of $2,300. If the tax rate is 24 percent, what is the operating cash flow, or OCF

Answers

Answer:

$23,052

Explanation:

The computation of operating cash flow is shown below:-

Before that we have to determine the net income which is

Income statement

Sales $53,000

Cost ($24,200)

Depreciation ($2,550)

EBIT $26,250

Interest expense ($2,300)

Earnings before tax $23,950

Tax (5,748)

(24% × $23,950)

Net income $18,202

Now,

Operating cash flow = EBIT + Depreciation - Tax

= $26,250 + 2,550 - $5,748

= $23,052

Mark, a sales rep with a large technology company, is celebrating today because he just closed a large deal, which means a sizeable commission. Even the finance department is thrilled because Mark used __________ to review the credit history of this customer to be sure the deal would be a profitable one for the company.

Answers

Mark used Business intelligence to review the credit history of this customer to be sure the deal would be a profitable one for the company.

Business intelligence is defined as  the technology software comprising of tools and processes that help  to compute and analyse data for business information.

Processes involve in Business intelligence are

Data mining Reporting Performance metrics and benchmarking Descriptive analytics Querying Statistical analysis Data visualization Visual analysis Data preparation

By easily assessing an organization’s data, An organisation can improve efficiency, drive changes that  adapt to market  changes and trends , Analyze customer behaviors

, Track performance, etc.

Thus, we can conclude that Mark used Buisness intelligence to review the credit history of this customer to be sure the deal would be a profitable one for the company.

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The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows: Common stock—$10 par value, 150,000 shares authorized, 60,000 shares issued and outstanding $ 600,000 Paid-in capital in excess of par value, common stock 425,000 Retained earnings 550,000 Total stockholders’ equity $ 1,575,000 On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $40 per share on February 5 before the stock dividend. The stock’s market value is $33. 40 per share on February 28. 1. Prepare entries to record both the dividend declaration and its distribution.


2. One stockholder owned 800 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of February 5.


3. Compute the total market value of the investor’s shares in part 2 as of February 5 and February 28

Answers

The total market value of the investor's shares on February 28 can be calculated by multiplying the market value per share ($33.40) by the number of shares owned after the dividend (960). In this case, the total market value on February 28 is $32,064.

1. To record the dividend declaration, we need to create an entry that reduces retained earnings and increases the common stock and paid-in capital accounts. Since the stock dividend is 20%, we will increase the common stock and paid-in capital accounts by 20% of the market value of the shares being issued. The entry would be as follows:

  Retained Earnings                         XX
      Common Stock                                    XX
      Paid-in Capital in Excess of Par Value, Common Stock             XX

  To record the dividend distribution, we need to create an entry that reduces the common stock and paid-in capital accounts and increases the stock dividend distributable account. The entry would be as follows:

  Stock Dividend Distributable             XX
      Common Stock                                      XX
      Paid-in Capital in Excess of Par Value, Common Stock            XX

2. Before the stock dividend, the book value per share can be calculated by dividing the total stockholders' equity by the number of shares outstanding. In this case, the book value per share before the dividend is $1,575,000 / 60,000 shares = $26.25 per share.

To compute the total book value of the stockholder's shares before the dividend, we multiply the book value per share by the number of shares owned. In this case, the total book value of the stockholder's 800 shares before the dividend is $26.25 * 800 = $21,000.

After the stock dividend, the number of shares increases by 20%, so the stockholder will now own 800 * 1.2 = 960 shares. The book value per share remains the same at $26.25 per share.

To compute the total book value of the stockholder's shares after the dividend, we multiply the book value per share by the number of shares owned. In this case, the total book value of the stockholder's 960 shares after the dividend is $26.25 * 960 = $25,200.

3. The total market value of the investor's shares on February 5 can be calculated by multiplying the market value per share ($40) by the number of shares owned (800). In this case, the total market value on February 5 is $40 * 800 = $32,000.

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How do savers benefit from capital markets?

Answers

Answer:

It also helping our country to become stable and giving a good position in economic compare to other country because if savers give more capital to the financial market the can used as a capital for borrowers to do their business to gain more profit to all of them,

Explanation:

Opinion

Functional products are ___.

a. innovative

b. productschanging

c. productsevolving

d. productsstaple products

Answers

Functional products are products that are considered staple or basic in nature. They are characterized by their low innovation and low variability. Functional products typically have stable demand and are consumed by a wide range of customers.

These products are commonly everyday items or necessities that fulfill a specific purpose or function. Examples of functional products include basic food items, household cleaning products, toiletries, and other essential goods. They are often mass-produced and widely available in the market.

Unlike innovative products that involve cutting-edge technology or unique features, functional products do not undergo frequent changes or upgrades. Their design and functionality remain relatively constant over time. This stability allows for efficient production and distribution processes, as well as predictable consumer demand.

Functional products tend to have lower profit margins compared to innovative products, as they are typically characterized by intense competition and price sensitivity. However, they form a significant portion of the market and play a vital role in meeting consumers' everyday needs.

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What are prenuptial contracts? jared and erika are getting married, but jared has children from a previous marriage. they decide to sign a that will provide for children from a previous relationship. jared also makes a to his will that gives erika his home.

Answers

An example of prenuptial contracts is when Jared and erika are getting married, but signed an agreement.

What is a prenuptial agreement?

A prenuptial agreement serves as a written contract that is been entered by two people before they are married. A prenup

Therefore, prenuptial agreement involves the both parties to come together and shared their past and agree

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Answer:

1 - prenuptial agreement

2 - codicil

Jared and Erika are getting married, but Jared has children from a previous marriage. They decide to sign a prenuptial agreement that will provide for children from a previous relationship. Jared also makes a codicil to his will that gives Erika his home.

Explanation:

I got it right on the test.

What are prenuptial contracts? jared and erika are getting married, but jared has children from a previous

If the demand for computer software rises as incomes rise, then computer software is a (an):_________.

Answers

If the demand for computer software rises as incomes rise, then computer software is a normal good.

As individuals' incomes increase, they have a greater purchasing power and are more willing to spend on various goods and services, including computer software.

This positive relationship between income and demand suggests that computer software is a product that people consider to be a desirable and essential part of their consumption basket as their income levels improve.

Normal goods are characterized by a positive income elasticity of demand, meaning that as incomes rise, the demand for these goods increases. In the case of computer software, the rising demand with increasing incomes demonstrates its status as a normal good in the market.

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A swot analysis plays an important role in the marketing plan

Answers

Yes, a SWOT analysis does play an important role in the marketing plan

Stocks are generally considered a higher risk because:
a) Their value varies over time
b) They are not covered by FDIC
c) Rate of returns are not guaranteed
d) All the above

Answers

it’s D i’m pretty sure if not kill me
It’s d all the above sorry if I have mistaken

Perry Mazza wants to borrow $30,000 from the bank. The interest rate is 6% and the term is for 5 years.

What is the yearly payment amount?
A.$360
B.$6,360
C.$1,800
D.$18,000

Answers

The answer for this problem is c

What is profit in an economic system?
A. Profit is the investment a producer makes in the economy to achieve financial gain.
B. Profit is the net change in the value of the economy due to an exchange.
C. Profit is the financial gain resulting from an exchange.
D. Profit is the investment a consumer makes in the economy to achieve financial gain.

Answers

Answer:

I think D is correct answer

The profit in the economic system is the investment made by the consumer for accomplishing the financial gain.

The information related to the profit is as follows:

It is the surplus that comes after deducting the cost from the revenue made. It is the investment that should be made by the consumer for attaining financial gain.

Therefore all the other options are incorrect.

Thus we can conclude that profit in the economic system is the investment made by the consumer for accomplishing the financial gain.

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answers nvestors expect the market rate of return this year to be 14.00%. the expected rate of return on a stock with a beta of 1.8 is currently 25.20%. if the market return this year turns out to be 12.70%, how would you revise your expectation of the rate of return on the stock? (do not round intermediate calculations. round your answer to 1 decimal place.)

Answers

The expected rate of return on the stock with a beta of 1.8 would be revised to 23.2%.

What is rate of return?

Rate of return is a measure of the profitability of an investment. It is typically expressed as a percentage and calculated by dividing the amount of money earned from an investment by the initial investment amount. Rate of return is used to measure the performance of investments over a period of time. It is also used to compare the performance of different investments. A higher rate of return is generally considered better than a lower rate of return, as it indicates a higher level of profitability from the investment.

The expected rate of return on a stock with a beta of 1.8 is calculated by multiplying the stock's beta (1.8) by the expected market rate of return (14.00%), which yields 25.20%.

If the market rate of return this year turns out to be 12.70%, we need to recalculate our expected rate of return on the stock. We do this by multiplying the stock's beta (1.8) by the actual market rate of return (12.70%), which yields 23.2%.

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A local supermarket often runs a promotion where two one-gallon containers of milk sale for $7, while a single gallon costs $3.89. What type of price discrimination is this?
A. first-degree (or perfect) price discrimination
B. second-degree price discrimination (or nonlinear pricing)
C. third-degree price discrimination
D. peak load pricing

Answers

Second-degree price discrimination is the form of price discrimination that exists (or nonlinear pricing).(option b)

Why is price not linear, in your opinion?

Any pricing system where consumers' overall costs are not directly related to the volume of services they use is referred to as a nonlinear pricing schedule.Prices that change according on the customer's level of consumption are said to be non-linear prices. As an illustration, consider a water tax, which charges greater fees per gallons or per litre for higher use levels than for lower consumption levels. Nonlinear prices is a general phrase that refers to any type of price system in which the price and quantity of items have a nonlinear connection.

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The quantity theory of money is a theory of how Group of answer choices interest rates are determined. the nominal value of aggregate income is determined. the money supply is determined. the real value of aggregate income is determined.

Answers

The quantity theory of money is a theory of how the money supply is determined. It states that the quantity of money in an economy is directly proportional to the price level.

In other words, if the money supply increases, all other things being equal, the price level will increase. The theory assumes that the velocity of money (the rate at which money is spent) and the level of output in the economy are relatively constant. The quantity theory of money is often used to explain long-term changes in the price level, and it has implications for monetary policy. If a central bank wants to maintain price stability, it must ensure that the money supply grows at a rate that is consistent with the growth of the economy. If the money supply grows too quickly, it can lead to inflation, while if it grows too slowly, it can lead to deflation.

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Lisi Crichton operates a variety store. Her brother does custom welding and made some racks to hold videos. Lisi gave her brother $5,000 cash and did not get a bill. A similar rack was on display at a department store for $1,000. You are told to book an expense on the company financial statement for $5000. What will you book the amount for?

Answers

Answer:

$1,000

Explanation:

Fixed assets must be recorded at historic cost or purchase value. Their valuation is not affected by changes in market values, e.g. land might appreciate over time, but its historic cost will be used for accounting purposes.

In this case, Lisi doesn't have a bill to show the price of the rack, and since she paid in cash, she has no way of proving what she actually paid for it. In this case, in order to record the purchase of the rack you must use the fair market value of similar racks.

Imagine if someone could just say that they purchased things at X price but didn't get a bill, soon people would be recording buying pencils at $500 each because they are gorgeous and perfectly crafted.

Assume your company’s sales increased from $3 million last year to $10 million this year. However, your biggest competitor is still the market leader with a 40% share of the $200 million widget market. Your other four competitors had sales this year of $53 million, $38 million, $12 million, and $7 million, respectively. For this year, what is your company’s MARKET SHARE? Type only a number along with a $ or % (if appropriate). Dollar amounts should be rounded to the nearest cent; percentages to the nearest tenth. *

Answers

Answer: 5%

Explanation:

The market share for the company will be gotten using the formula:

= Sales generated by company / Total industry sales × 100

= 10/200 × 100.

= 5%

Therefore, the company's market share is 5%

the annual rate intrest rate of Chucks savings account is 4.8% and simple intrest is calculated monthly what is the periodic intrest rate of chucks account

Answers

The periodic interest rate of chucks account is  0.4%. Thus the correct option is B.

What is the interest rate?

An interest rate refers to an amount charged by a financial institution or bank when they provide money to an individual. This amount is charged on a fixed rate called the interest rate.

As simple interest is charged monthly, there will be 12 estimates of interest in a year.

In the given case, the Annual interest rate is 4.8%

So, the periodic interest rate = Annual interest rate /12

                                                =4.8/12

                                               = 0.4 %

Therefore, option B is appropriate.

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The complete question is

The annual interest rate of Chuck's savings account is 4.8%, and simple

interest is calculated monthly. What is the periodic interest rate of Chuck's

account?

A. 0.8%

OB. 0.4%

C. 1.2%

o

D. 2.4%

SUBMIT

Periodic interest rate of Chuck's account is 0.4%.

How to find interest rate?

The periodic interest rate of Chuck's savings account is calculated by dividing the annual interest rate by the number of months in a year.

Convert the annual interest rate to a decimal: 4.8% = 0.048.Divide the annual interest rate by 12 (number of months in a year): 0.048 ÷ 12 = 0.00.Convert the periodic interest rate to a percentage: 0.004 × 100 = 0.4%
Therefore, the periodic interest rate of Chuck's account is 0.4%.

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Consider the following regression model: vi = a +Ba+u₁. where the error term u has mean zero and variance o2, and u is independently distributed of z. You are told that both y; and are subject to the same measurement error w₁. Instead of observing ((,)}, you are given a random sample {(1,)}where: y₁ = y + wi, and x₁ = x + w₁. The measurement error w, has zero mean, and is assumed to be distributed independently of u₁, x, and y

Answers

The given regression model vi = a + Ba + u₁ incorporates measurement errors in both the dependent variable y and the independent variable x. The error term u has a mean of zero and variance σ², and it is independent of the measurement error w. In the observed data, we have y₁ = y + w₁ and x₁ = x + w₁, where w₁ is the measurement error with zero mean and is independent of u₁, x, and y.

In the regression model, vi represents the observed values of the dependent variable, which is a linear combination of the intercept a, the slope coefficient B, the true value of the independent variable a, and the error term u₁. The error term u₁ has a mean of zero and variance σ², indicating that it captures the unobserved factors affecting the dependent variable. However, both y and x suffer from measurement errors. The observed value of y, denoted as y₁, is the true value of y plus the measurement error w₁. Similarly, the observed value of x, denoted as x₁, is the true value of x plus the measurement error w₁. The measurement error w₁ has a mean of zero and is independent of u₁, x, and y, meaning that it does not depend on the unobserved factors or the true values of x and y.

This regression model with measurement errors complicates the estimation of the parameters a and B. Special techniques, such as instrumental variables or errors-in-variables regression, may be necessary to address the measurement error issue and obtain consistent estimates of the parameters. These techniques take into account the relationships between the observed variables and the underlying true variables while accounting for the measurement errors, allowing for more accurate inference in the presence of measurement error.

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Lee Ray bought 250 shares of a mutual fund with a NAV of $13.85. This fund also has a load charge of 7%.



a. What is the offer price? (Round your intermediate and final answer to the nearest cent.)



b. What did Lee pay for his investment? (Round your intermediate and final answer to the nearest cent.)


Answers

Answer: a. $14.9

b. $3725

Explanation:

a. What is the offer price?

This will be calculated as:

= NAV / (1 - load charge %)

= 13.85 / (1 - 7%)

= 13.85 / (1 - 0.07)

= 13.85 / (0.93)

= $14.9

B. What did Lee pay for his investment?

This will be:

= Number of shares bought × Offer price

= 250 × $14.9

= $3725

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