Other Economics Answers

From the following Data, prepare the stores ledger account as per Perpetual inventory System

and Calculate Value of Inventory on March 31, 2019 using

(i) Last –In – First – Out method

(ii) Weighted Average Cost method

1 st March-2019 ------------------- 400 units @7.50 each

Purchase

5 th March-2019 ---------------------- 600 units @ 8.00 each

15 March -2019 -------------------- 500 units @9.00 each

21 March -2019 ------------------- -- 400 units @ 8.50 each

Issues

3- March -2019 ------------------ 300 units

10 – March-2019 ----------------- 500 units

17 – March-2019 ------------------- 400 units.

1. In its first year, “Helen Trading” had the following experience:

Unit selling price birr 100 Sales 50,000 units

Total fixed cost birr 400,000 TVC birr 3,000,000

Required:

a) Develop TR, TC and profit functions for the company in terms of quantity

b) Find the breakeven point in terms of quantity and sales volume.

c) If profit had been br. 500,000 what would have been the sales volume (Revenue) and quantity of sales.

d) What would have been the profit if sales are br. 2,000,000

e) Draw Breakeven chart and discuss about it

A. Discuss any key considerations that you may pay attention to when making

investment decisions for financial management.

B. Hankede is interested in determining the time period for his K3,600 to accumulate

to K4,000 if saved today. How long will it take for Hankede to achieve his objective

with semiannual compound rate of interest of 6% per annum?

C. A company has borrowed K800,000 from a bank. The loan is to be repaid by level

instalments, payable annually in arrears for 10 years from the date the loan is

made. The annual repayments are based on an effective rate of interest of 8% per

annum.

I. Calculate the amount of the level annual payment which will be paid over

the 10-year term.

II. Construct an amortization schedule showing the capital and interest

components over the first four years of the loan.

1. Develop the circular flow diagram and illustrate the interdependence between sectors. Add the government and again show how it relates with other sectors and markets?

The marginal cost of improving water quality in a local community swimming pool is given by a certain equation. MC = 10 + Q. Frank and Brad are the only frequent users of this swimming pool. The equations below represent their MWTP for improved swimming pool water quality.  

Frank           MWTPT = 25 – 2Q

Brad              MWTPE = 10 – 2Q 

1. Determine the aggregate MWTP equation for improved swimming pool water quality. 

2. Graph the aggregate MWTP and the MC equations in the same diagram.  

3. Determine the socially efficient level of water quality. 

4. What is the cost of providing the socially efficient level of water quality? 

5. How much are Frank and Brad each willing to pay for the socially efficient level of water quality? Is total willingness to pay enough to cover the total cost of maintaining water quality at the socially efficient quality? Suppose total WTP was enough to cover the cost. Is it likely that Frank and Brad could agree to maintain the water quality at this level?