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Question 1 of 21
1. Question
Denmark and Netherland each produce only food and cloth. They have no other trading partners, no trade restrictions and no transportation costs. In Denmark, 2000 units of input (labor, land and capital) produce 200 bushels of food or 40 bolts of cloth and in the Netherland, the same amount of units of input produces 250 bushels of food or 25 bolts.
Which country has the least opportunity cost of producing Cloth?
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Question 2 of 21
2. Question
Denmark and Netherland each produce only food and cloth. They have no other trading partners, no trade restrictions and no transportation costs. In Denmark, 2000 units of input (labor, land and capital) produce 200 bushels of food or 40 bolts of cloth and in the Netherland, the same amount of units of input produces 250 bushels of food or 25 bolts.
Which country has the highest opportunity cost of producing food?
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Question 3 of 21
3. Question
Denmark and Netherland each produce only food and cloth. They have no other trading partners, no trade restrictions and no transportation costs. In Denmark, 2000 units of input (labor, land and capital) produce 200 bushels of food or 40 bolts of cloth and in the Netherland, the same amount of units of input produces 250 bushels of food or 25 bolts.
Which country has the absolute advantage in producing the food and cloth?
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Question 4 of 21
4. Question
Denmark and Netherland each produce only food and cloth. They have no other trading partners, no trade restrictions and no transportation costs. In Denmark, 2000 units of input (labor, land and capital) produce 200 bushels of food or 40 bolts of cloth and in the Netherland, the same amount of units of input produces 250 bushels of food or 25 bolts.
Consider in the above scenario, Netherlands can produce 80 bolts of cloth( instead of 25 bolts) with 2000 units of input. Which country has the comparative advantage in producing the food and cloth?
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Question 5 of 21
5. Question
Denmark and Netherland each produce only food and cloth. They have no other trading partners, no trade restrictions and no transportation costs. In Denmark, 2000 units of input (labor, land and capital) produce 200 bushels of food or 40 bolts of cloth and in the Netherland, the same amount of units of input produces 250 bushels of food or 25 bolts.
Consider in the above scenario, Netherlands can produce 80 bolts of cloth( instead of 25 bolts) or 250 bushels of food with 2000 units of input. What is the optimal solution for maximum production?
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Question 6 of 21
6. Question
R company is negotiating for the purchase of an asset that would cost $150,000, with the expectation that $30,000 per year could be saved in aftertax cash costs if the asset were acquired. The asset’s estimated useful life is 10 years with no residual value, and would be depreciated by the straightline method. R’s predetermined desired rate of return is 14%. The present value of ordinary annuity at 14% for 10 periods is 5.216 and the Present value of $1 in 10 periods at 14% is 0.270.
Assist the manager of R company, with the Net Present Value calculation for the investment to decide if the purchase consideration is desirable or not.
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Question 7 of 21
7. Question
R company is negotiating for the purchase of an asset that would cost $150,000, with the expectation that $30,000 per year could be saved in aftertax cash costs if the asset were acquired. The asset’s estimated useful life is 10 years with no residual value and would be depreciated by the straightline method. R’s predetermined desired rate of return is 14%. The present value of ordinary annuity at 14% for 10 periods is 5.216 and the Present value of $1 in 10 periods at 14% is 0.270.
R has the policy to accept only investments that have a payback period of 4 years or less. Advise if the investment decision is acceptable or not based on the payback period calculation.
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Question 8 of 21
8. Question
R company is negotiating for the purchase of an asset that would cost $150,000, with the expectation that $30,000 per year could be saved in aftertax cash costs if the asset were acquired. The asset’s estimated useful life is 10 years with no residual value and would be depreciated by the straightline method. R’s predetermined desired rate of return is 14%. The present value of ordinary annuity at 14% for 10 periods is 5.216 and the Present value of $1 in 10 periods at 14% is 0.270.
In the books of R company calculate the average annual accounting income expected to be generated by the proposed asset.
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Question 9 of 21
9. Question
R company is negotiating for the purchase of an asset that would cost $150,000, with the expectation that $30,000 per year could be saved in aftertax cash costs if the asset were acquired. The asset’s estimated useful life is 10 years with no residual value and would be depreciated by the straightline method. R’s predetermined desired rate of return is 14%. The present value of ordinary annuity at 14% for 10 periods is 5.216 and the Present value of $1 in 10 periods at 14% is 0.270.
Calculate the accrual accounting rate of return based on the initial investment.
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Question 10 of 21
10. Question
R company is negotiating for the purchase of an asset that would cost $150,000, with the expectation that $30,000 per year could be saved in aftertax cash costs if the asset were acquired. The asset’s estimated useful life is 10 years with no residual value and would be depreciated by the straightline method. R’s predetermined desired rate of return is 14%. The present value of ordinary annuity at 14% for 10 periods is 5.216 and the Present value of $1 in 10 periods at 14% is 0.270.
In estimating the internal rate of return, the factors in the table of present values of an annuity should be taken from the columns closest to what value?
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Question 11 of 21
11. Question
P Inc., is an electronic company and tests motherboards for a cellphone manufacturer. P anticipates performing between 5000 and 12000 tests during the month of March. Compared to industry averages, at the low range of activity P has a lower sales price per test, higher fixed costs and the same breakeven point in number of tests performed. At the high range of activity, P’s sales price per test and fixed costs are the same as industry averages, and P’s variable costs are lower. At the low range of activity (0 to 4,999 tests performed) fixed costs are $160,000. At the high range of activity (5,000 to 14,999 tests performed) fixed costs are $200,000. Sales price per test is $60 and variable costs per test $20.
What is P’s contribution margin per test?
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Question 12 of 21
12. Question
P Inc., is an electronic company and tests motherboards for a cellphone manufacturer. P anticipates performing between 5000 and 12000 tests during the month of March. Compared to industry averages, at the low range of activity P has a lower sales price per test, higher fixed costs and the same breakeven point in number of tests performed. At the high range of activity, P’s sales price per test and fixed costs are the same as industry averages, and P’s variable costs are lower. At the low range of activity (0 to 4,999 tests performed) fixed costs are $160,000. At the high range of activity (5,000 to 14,999 tests performed) fixed costs are $200,000. Sales price per test is $60 and variable costs per test $20.
What is P’s breakeven point in number of tests at the low activity range?
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Question 13 of 21
13. Question
P Inc., is an electronic company and tests motherboards for a cellphone manufacturer. P anticipates performing between 5000 and 12000 tests during the month of March. Compared to industry averages, at the low range of activity P has a lower sales price per test, higher fixed costs and the same breakeven point in number of tests performed. At the high range of activity, P’s sales price per test and fixed costs are the same as industry averages, and P’s variable costs are lower. At the low range of activity (0 to 4,999 tests performed) fixed costs are $160,000. At the high range of activity (5,000 to 14,999 tests performed) fixed costs are $200,000. Sales price per test is $60 and variable costs per test $20.
What is P’s breakeven point in number of tests at the high activity range?
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Question 14 of 21
14. Question
P Inc., is an electronic company and tests motherboards for a cellphone manufacturer. P anticipates performing between 5000 and 12000 tests during the month of March. Compared to industry averages, at the low range of activity P has a lower sales price per test, higher fixed costs and the same breakeven point in number of tests performed. At the high range of activity, P’s sales price per test and fixed costs are the same as industry averages, and P’s variable costs are lower. At the low range of activity (0 to 4,999 tests performed) fixed costs are $160,000. At the high range of activity (5,000 to 14,999 tests performed) fixed costs are $200,000. Sales price per test is $60 and variable costs per test $20.
How many number of tests should P sell in order to achieve a gross profit of $160,000?
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Question 15 of 21
15. Question
P Inc., is an electronic company and tests motherboards for a cellphone manufacturer. P anticipates performing between 5000 and 12000 tests during the month of March. Compared to industry averages, at the low range of activity P has a lower sales price per test, higher fixed costs and the same breakeven point in number of tests performed. At the high range of activity, P’s sales price per test and fixed costs are the same as industry averages, and P’s variable costs are lower. At the low range of activity (0 to 4,999 tests performed) fixed costs are $160,000. At the high range of activity (5,000 to 14,999 tests performed) fixed costs are $200,000. Sales price per test is $60 and variable costs per test $20.
How would the cost of packaging box for the motherboards be categorised for costing purpose?
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Question 16 of 21
16. Question
Tongo is a nation with a population of 100,000. Tongo had the following financial transactions for the year.
Description Amount Gross domestic product T$ 5,000,000 Transfer payments T$ 625,000 Corporate income taxes T$ 60,000 National retirement plan contributions T$ 250,000 National retirement plan disbursements T$ 220,000 Indirect business taxes T$ 210,000 Personal taxes T$ 300,000 Undistributed corporate profits T$ 25,000 Depreciation T$ 600,000 Net income earned abroad T$ 50,000 Based on the information above, calculate Tongo’s net domestic product.
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Question 17 of 21
17. Question
Tongo is a nation with a population of 100,000. Tongo had the following financial transactions for the year.
Description Amount Gross domestic product T$ 5,000,000 Transfer payments T$ 625,000 Corporate income taxes T$ 60,000 National retirement plan contributions T$ 250,000 National retirement plan disbursements T$ 220,000 Indirect business taxes T$ 210,000 Personal taxes T$ 300,000 Undistributed corporate profits T$ 25,000 Depreciation T$ 600,000 Net income earned abroad T$ 50,000 Based on the information above, calculate Tongo’s national income.
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Question 18 of 21
18. Question
Tongo is a nation with a population of 100,000. Tongo had the following financial transactions for the year.
Description Amount Gross domestic product T$ 5,000,000 Transfer payments T$ 625,000 Corporate income taxes T$ 60,000 National retirement plan contributions T$ 250,000 National retirement plan disbursements T$ 220,000 Indirect business taxes T$ 210,000 Personal taxes T$ 300,000 Undistributed corporate profits T$ 25,000 Depreciation T$ 600,000 Net income earned abroad T$ 50,000 Based on the information above, calculate Tongo’s personal income.
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Question 19 of 21
19. Question
Tongo is a nation with a population of 100,000. Tongo had the following financial transactions for the year.
Description Amount Gross domestic product T$ 5,000,000 Transfer payments T$ 625,000 Corporate income taxes T$ 60,000 National retirement plan contributions T$ 250,000 National retirement plan disbursements T$ 220,000 Indirect business taxes T$ 210,000 Personal taxes T$ 300,000 Undistributed corporate profits T$ 25,000 Depreciation T$ 600,000 Net income earned abroad T$ 50,000 Based on the information above, calculate Tongo’s disposable income.
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Question 20 of 21
20. Question
Tongo is a nation with a population of 100,000. Tongo had the following financial transactions for the year.
Description Amount Gross domestic product T$ 5,000,000 Transfer payments T$ 625,000 Corporate income taxes T$ 60,000 National retirement plan contributions T$ 250,000 National retirement plan disbursements T$ 220,000 Indirect business taxes T$ 210,000 Personal taxes T$ 300,000 Undistributed corporate profits T$ 25,000 Depreciation T$ 600,000 Net income earned abroad T$ 50,000 Based on the information above, calculate Tongo’s real percapita output.
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Question 21 of 21
21. Question
Denmark and Netherland each produce only food and cloth. They have no other trading partners, no trade restrictions and no transportation costs. In Denmark, 2000 units of input (labor, land and capital) produce 200 bushels of food or 40 bolts of cloth and in the Netherland, the same amount of units of input produces 250 bushels of food or 25 bolts.
Which country has the least opportunity cost of producing Cloth?
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