Answer:
Spending multiplier = 10Change in consumption = -$180 billionExplanation:
The spending multiplier is calculated by the formula:
= 1 / Marginal propensity to save
The marginal propensity to save is the proportion of every additional dollar that is saved which is this case is $0.10 which is 10%.
Spending multiplier is:
= 1 / 0.1
= 10
Change in consumption as a result of the decrease:
= -200 * marginal propensity to consume
= - 200 * 0.9
= -$180 billion
Suppose Dr. Chu decided to open a donuts shop call Dr. Donuts. Dr. Chu is able to source flours at $2 per pound (making 40 donuts), sugars at $5 per pound (making 100 donuts), and butter at $1 per pound (making 100 donuts) While the donuts are not very tasty, Dr. Chu believes he can sell a lot of them by pricing them at $0.36 per donuts. Assuming his rent is $1800 per month, corporate tax of $100 per month, and draws a salary of $200 a day (use 30 days in a month), how many donuts must Dr. Chu sell in a month to break-even.
Answer:
31,600 donuts
Explanation:
Break even point is the level of activity where a company makes neither a profit nor a loss.
Break even point (units) = Fixed Costs ÷ Contribution per unit
where,
Contribution per unit = Sales per unit - Variable Costs per unit
Step 1 : Sales per donut
Sales per donut = $0.36
Step 2 : Variable Cost per Donut
Variable Cost per Donut :
Flours ($2 ÷ 40) $0.05
Sugars ($5 ÷ 100) $0.05
Butter ($1 ÷ 100) $0.01
Total $0.11
Step 3 : Fixed cost per month
Rent $1,800
corporate tax $100
Salary ($200 x 30) $6,000
Total $7,900
therefore,
Break even point = $7,900 ÷ ($0.36 - $0.11)
= 31,600 donuts
Conclusion :
Dr. Chu sell 31,600 donuts in a month to break-even.
Pension data for the Ben Franklin Company include the following for the current calendar year: Discount rate, 10% Expected return on plan assets, 12% Actual return on plan assets, 11% Service cost, $270,000 January 1: PBO $ 1,470,000 ABO 1,070,000 Plan assets 1,570,000 Amortization of prior service cost 27,000 Amortization of net gain 4,700 December 31: Cash contributions to pension fund $ 227,000 Benefit payments to retirees 247,000 Required: 1. Determine pension expense for the year. 2. Prepare the journal entries to record pension expense and funding for the year.
Answer:
A. $250,900
B. Dr Pension expense $250,900
Dr Net gain–pensions $4,700
Cr Pension asset $228,600
Cr Prior service cost $27,000
Dr Pension asset $ 227,000
Cr Cash $ 227,000
Explanation:
A. Calculation to determine the pension expense for the year
Service cost $270,000
Add Interest cost (10% x $1,470,000) $147,000
Less Expected return ($188,400 )
(12%*1,570,000)
Add Amortization of prior service cost $27,000
)
Less Amortization of net gain($4,700)
Pension expense $250,900
Therefore pension expense for the year will be $250,900
B. Preparation of the journal entries to record pension expense and funding for the year)
Dr Pension expense $250,900
Dr Net gain–pensions $4,700
Cr Pension asset ($270,000 + 147,000 – $188,400) $228,600
Cr Prior service cost $27,000
Dr Pension asset $ 227,000
Cr Cash $ 227,000
On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $6,000,000. The company expects to extract 1,000,000 tons of coal during a four-year period. During 2021, 250,000 tons were extracted and sold immediately. Required: 1. Calculate depletion for 2021. 2. Is depletion considered part of the product cost and included in the cost of inventory?
Answer:
The Loadstone Mining Company
1. The depletion for 2021 is:
= $1,500,000.
2. Depletion is considered part of the product cost and included in the cost of inventory.
Explanation:
a) Cost of rights to a coal mine = $6,000,000
Expected tons of coal to be extracted = 1,000,000 tons
Duration of the coal mine = 4 years
Depletion rate per ton = $6 ($6,000,000/1,000,000)
2021 depletion = $6 * 250,000 = $1,500,000
b) Depletion is like depreciation. While depreciation spreads the cost of a tangible asset over its estimated useful life, depletion measures the cost of extracting natural resources based on the number of units extracted vis-a-vis the total quantity available. Amortization is another related term but relates to intangible assets. It is the deduction of the value of an intangible asset over its useful life.
Cincinnati t-shirts prints custom t-shirts. The cost to produce one shirt is: direct materials, $10; direct labor, $1.20; and manufacturing overhead $4.50. Cincinnati Children’s Hospital asked Cincinnati t-shirt to sell them custom t-shirts for $12 each for a local charity event. Direct material and direct labor are required for each t-shirt. Of the manufacturing overhead, $1.50 is variable and would be incurred on each additional unit. The remaining $3 in overhead is allocated fixed overhead that would not be increased or decreased by this order. What would be the effect on net income if they accept this special order and sell 200 shirts to Cincinnati Children’s Hospital for $12 each?
Answer:
Effect on income= $140 decrease
Explanation:
Giving the following formula:
Production costs:
Direct material= 10
Direct labor= 1.2
Variable overhead= $1.5
Selling price= $12
Number of units= 200
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Effect on income= Units sold*unitary contribution margin
Effect on income= 200*(12 - 10 - 1.2 - 1.5)
Effect on income= $140 decrease
Emilia bought some Japanese sushi at the grocery store for $14. When she got it home and served it to her family, it tasted rancid. She brought the sushi back the next day and was given a full refund with no questions asked. Evidence indicates that successful handling of product and service failures as in Emilia's situation leads to _______.
Answer:
higher levels of customer loyalty.
Explanation:
CRM is an acronym for customer relationship management and it typically involves the process of combining strategies, techniques, practices and technology so as to effectively and efficiently manage their customer data in order to improve and enhance customer satisfaction. Therefore, this employees are saddled with the responsibility of ensuring the customer are satisfied and happy with their service at all times.
CRM means collecting information about the customer for the purpose of improving their future experience.
In this scenario, Emilia bought some Japanese sushi at the grocery store for $14. When she got it home and served it to her family, it tasted rancid. She brought the sushi back the next day and was given a full refund with no questions asked.
This evidence indicates that successful handling of product and service failures as in Emilia's situation leads to higher levels of customer loyalty and as such they would stick to patronizing the business firm or service provider.
This ultimately implies that, in order to gain loyalty from your customers, it is very important and necessary that you treat them right, listen to their complaints, and resolve any business related issue because customers are always right.
According to Adam Smith, specialization results in higher levels of output for all of the following reasons except: Select the correct answer below: Specialization in a particular small job allows workers to focus on the parts of the production process where they have an advantage. Specialization allows businesses to take advantage of economies of scale. Specialization allows workers to experiment with different tasks to see which responsibilities make them happiest at work. Workers who specialize in certain tasks often learn to produce more quickly and with higher quality.
Answer:
Specialization allows workers to experiment with different tasks to see which responsibilities make them happiest at work
Explanation:
Specialization is when labour concentrates on only a particular job function. For example, let say you work in an office and the only task you are assigned to do is to type because you are good at it. This is an example of specialisation.
Advantages
It increases economies of scaleit increases the efficiency of labour. less time is wasted in changing job functions It increases the skill of labour . by performing the same task repeatedly labor skills improvesDisadvantages
it increases drudgery and boredom
Partnership business examples
Answer:
GoPro & Red Bull.
Pottery Barn & Sherwin-Williams.
Casper & West Elm.
Kanye and Adidas.
BMW & Louis Vuitton.
Starbucks & Spotify.
Apple & MasterCard.
On January 1, 2021, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2021: Cost Retail Beginning inventory $ 81,000 $ 150,000 Net purchases 121,500 278,000 Net markups 8,000 Net markdowns 16,000 Net sales 228,000 Retail price index, 12/31/2021 1.20 Required: Calculate the estimated ending inventory and cost of goods sold for 2021 using the information provided.
Answer:
Brunswick Hat Company
The estimated ending inventory = $85,400
The estimated cost of goods sold for 2021 = $117,100
Explanation:
a) Data and Calculations:
Cost Retail
Beginning inventory $ 81,000 $ 150,000
Net purchases 121,500 278,000
Net markups 8,000
Net markdowns (16,000)
Goods available 202,500 420,000
Net sales 228,000
Ending inventory at retail price 192,000
Ending inventory
at cost 85,400
Cost of goods sold 117,100
Retail price index, 12/31/2021 1.20
Base year cost to retail price % = $81,000/$150,000 = 54%
2021 cost to retail price % = $121,500/$278,000 = 44%
Ending inventory at cost (= $160,000 ($192,000/1.20))
$150,000 * 54% = $81,000
$10,000 * 44% = 4,400
$160,000 = $85,400
Fairfield Company allocates common Building Department costs to producing departments (P1 and P2) based on space occupied, and it allocates common Personnel Department costs based on the number of employees. Space occupancy and employee data are as follows: Building Personnel Dept. P1 Dept. P2 Space occupied 2,000 ft. 10,000 ft. 120,000 ft. 70,000 ft. Employees 6 10 80 50 If Fairfield Company uses the direct allocation method, the ratio representing the portion of building costs allocated to Department P1 is a.120,000/202,000. b.190,000/202,000. c.2,000/120,000. d.120,000/190,000.
Answer:
d.120,000/190,000
Explanation:
It is given that Fairfield Company is constructing building department (P1 and P2) in the space provided and it allocates the common Personnel Department cost that is based on number of employees.
From the table given in the question, we can find
The ratio representing the portion of the building cost allocated to the department P1 = [tex]$\frac{120,000}{(120,000+70,000)}$[/tex]
The ratio representing the portion of the building cost allocated to the department P1 = [tex]$\frac{120,000}{190,000}$[/tex]
The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 250 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 300 days a year. Find
Answer: See explanation
Explanation:
The remainder of the question:
a). The optimal run size
b) The number of runs per year
c) The length (in days) of a run.
From the question,
p = 5000
u = 250 hotdogs per day
D = 250 × 300 = 75000 hotdogs/year
S = $66
H = 45 cents = $0.45
a. The optimal run size
= (✓2DS/✓H)(✓p/✓-✓u)
= (✓2×75000×66/✓0.45)(✓5000/✓4750)
= 4812
b) The number of runs per year
This will be:
= D/Q
= 75000/4812
= 15.59
= 16 runs per year
c) The length (in days) of a run.
This'll be:
= 4812/5000
= 0.96
= 1 day
g The comparative balance sheets for Pharoah Company show these changes in noncash current accounts: Accounts Receivable increased $29,800, Prepaid Expenses decreased $10,800, and Inventory decreased $18,900. Accounts payable increased $13,400. Calculate net cash provided by operating activities using the indirect method assuming that profit is $252,000 for the year ended June 30, 2021. Depreciation expense for the year was $26,900 and the company incurred a gain on sale of equipment of $21,000.
Task 1: Answer the following questions in your notebook
1. What do you know about drug use?
2. What are the signs and symptoms of drug abuse?
he first activity.
Answer:
1. drug use can be harmful and also damages they way you think or do things for example if you have to much you feel like your going to pass out and do wierd actions.
2. some signs are you feel really tired and your eyes may want to close or you have to much and you feel like your fainting and if your around people you tend to act really badly and say where things
1. Drug use is the use of drugs for psychotropic rather than medical purposes.
2. Some symptoms include changes in appearance, dilated/constricted pupils, changes in hygiene, etc.
Assuming you are 22 and out of college, how many years do you anticipate working before you retire
brendamunsamy00
Where u at
Answer:
Bombay
the company has a charged net income for a year and an earthquake
Bankruptcy, Chapter 7. Gigantic Furniture is having its annual "Going Out of Business Sale." If Gigantic Furniture is filing under Chapter 7, will it be back next year for another going out of business sale? (Select the best response.) A. No, Chapter 7 bankruptcy is for the selling off of all the assets of the firm and ceasing all business operations. B. No, Chapter 7 bankruptcy is for restructuring the firm's debt and it does not allow to have more than one "Going Out of Business Sale." C. Yes, Chapter 7 bankruptcy is for restructuring the firm's debt and buying new inventory. D. Yes, Chapter 7 bankruptcy is for the selling off of all the assets of the firm and ceasing all business operations.
Answer:
A. No, Chapter 7 bankruptcy is for the selling off of all the assets of the firm and ceasing all business operations.
Explanation:
In the chapter of Bankruptcy, chapter 7, the firm Gigantic Furniture is going to have its annual " Going Out of Business Sale". Now if the Gigantic Furniture is filing under the Chapter 7, it will not be back for the next year for an another going out of the business sale because Gigantic Furniture is selling off all of its assets and ceasing all its business operations.
On January 1, 2011, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation for $5.7 million. The investment represented 40% of The Mayfair Corporation's outstanding common shares. During 2011, Mayfair reported net earnings of $2.25 million and paid a cash dividend of $0.15 per share. During 2012, Mayfair reported a net loss of $180,000 and again paid a dividend of $0.15 per share. Calculate the book value of Miller's investment in Mayfair as of December 31, 2011, and December 31, 2012
Answer:
2011 Value of investment in Mayfair
= Beginning investment value + Portion of Mayfair net income - Portion of Mayfair dividends
= 5,700,000 + (40% * 2,250,000) - (300,000 shares * 0.15)
= $6,555,000
2012 Value of investment
= Beginning investment value + Portion of Mayfair net income - Portion of Mayfair dividends
= 6,555,000 + (40% * -180,000) - (300,000 * 0.15)
= $6,438,000
A company decides to let go of some employees due to a financial crisis. Irena loses her job, while her colleagues with similar performance ratings and productivity retain their jobs. Irena's judgment of her loss when compared to her colleagues' is a perception of
Answer:
The correct answer is "Procedural unfairness".
Explanation:
A basis for a respondent to challenge constitutional amendments for setting aside legal procedures throughout family legal proceedings will be found procedurally unfair.Throughout the event that a participant challenges a court decision, as well as a basis for the appeal, involves procedural injustice throughout a community court appearance, the privy council should first address the procedural fairness issue.A plant asset was purchased on January 1 for $140000 with an estimated salvage value of $20000 at the end of its useful life. The current year's Depreciation Expense is $10000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $40000. The remaining useful life of the plant asset is
Answer:
useful life= 12 years
Explanation:
Giving the following information:
Purchase price= $140,000
Salvage value= $20,000
Annual depreciation= $10,000
To calculate the useful life, we need to use the straight-line method formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
10,000= (140,00 - 20,000) / useful life
10,000useful life = 120,000
useful life= 120,000 / 10,000
useful life= 12 years
On December 31, 2020, Vaughn Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Vaughn Co. agreed to accept a $261,600 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 10%. Vaughn is much more creditworthy and has various lines of credit at 6%.
Prepare the journal entry to record the transaction of December 31, 2015, for the Ed Abbey Co. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically Indented when the amount is entered. Do not indent manually.)
Answer:
1. 31 Dec
Dr Notes receivable $261,600
Dr Discount on notes receivable $45,401
Cr Sales revenue $216,199
B. 31-Dec
Dr Discount on notes receivable $21,619.9
Cr Interest revenue $21,619.9
C. Dec-31
Dr Discount on notes receivable $23,781.1
interest revenue $23,781.1
Dr Cash $261,600
Cr Notes receivable $261,600
Explanation:
A. Preparation of the journal entry to record the transaction of December 31, 2015, for the Ed Abbey Co
December 31, 2015
Dr Notes receivable $261,600
Dr Discount on notes receivable $45,401
($261,600-$216,199)
Cr Sales revenue $216,199
Computation of present value of note
PV of $261,600 due in 2 years at 10%
$261,600*.82645 = $216,199
B. Preparation of the journal entry for December 31, 2016
31-Dec
Dr Discount on notes receivable $21,619.9
[10%*$216,199]
Cr Interest revenue $21,619.9
C. Preparation of the journal entry for December 31, 2017
Dec-31
Dr Discount on notes receivable $23,781.1
interest revenue $23,781.1
($45,401-$21,619.9 )
Dr Cash $261,600
Cr Notes receivable $261,600
During 2018, Jacobsen wrote off $18,000 in receivables and recovered $6,000 that had been written off in prior years. Jacobsen's December 31, 2017, allowance for doutbful accounts was $40,000. What is the appropriate year-end adjusting entry Jacobson must use to record bad debts expense and update the allowance for doubtful accounts on December 31, 2018
Answer: Debit: Bad debt expense $21400
Credit: Allowance for doubtful debt $21400
Explanation:
Based on the information given, the bad debt expense will be:
= 49400- (40000-18000+6000)]
= 49400 - 28000
= 21,400
The bad debt expenses of $21400 will be debited
The Allowance for doubtful Accounts of $21400 will be credited.
(To record bad debts expense)
Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 15 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share
Answer:
$ 3.87
Explanation:
It is given that :
Cost of the company's stock per share = $ 90
The required return on the stock is = 15 %
Therefore, the dividend yield = [tex]$\frac{9}{2}=4.5$[/tex]
We known that
[tex]$\frac{\text{dividend in one year}}{\text{current price}}=0.045$[/tex]
[tex]$D_1=0.045 \times 90$[/tex]
= 4.05
The current dividend is,
[tex]$D_0= \frac{4.05}{1.045}$[/tex]
= $ 3.87
Dog Bone Bakery, which bakes dog treats, makes a special biscuit for dogs. Each biscuit uses 0.75 cup of pure semolina flour. They buy 4,000 cups of flour at $0.55 per cup. They use 3,588 cups of flour to make 4,800 biscuits. The standard cost per cup of flour is $0.54. A. What are the direct materials price variance, the direct materials quantity variances, and the total direct materials cost variance
Answer:
Results are below.
Explanation:
To calculate the direct material rate and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (0.55 - 0.54)*4,000
Direct material price variance= $40 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (0.75*4,800 - 3,588)*0.55
Direct material quantity variance= $6.6 favorable
Finally, the total variance:
Total direct material variance= 40 + 6.6= $46.6 favorable
Isaiah is a Financial Quantitative Analyst for a major stock investment company. What does Isaiah do on a daily basis as a part of his job?
He researches, analyzes, and summarizes information about fraud.
He assesses financial situations using mathematical models.
He analyzes tax information using mathematical formulas.
He manages the paperwork for buying and selling securities.
Answer:
He researches, analyzes, and summarizes information about fraud.
Answer:
A
Explanation:
He researches, analyzes, and summarizes information about fraud.
Unintentionally, David built in his backyard a garage that encroached two feet across the property line onto property owned by his neighbor, Harold. When the mistake was recognized immediately thereafter, David and Harold agreed in writing that David did not need to move the garage. The statutory period for the running of adverse possession in the state where the property is located is 15 years. Five years after the garage was completed, David sold his property to Nancy. Twenty years after Nancy purchased the property from David, Nancy claimed she had acquired the two feet of property through application of the doctrine of adverse possession. In a legal dispute between Nancy and Harold over ownership to the two feet Nancy now claims, which statement is most accurate:
Answer:
Nancy will prevail as she has used the property, openly as hers for over 15 years.
Explanation:
Since in the question it is given that nancy would prevail as she is able to used the property and for her it is open for above 15 years
Also the conditions related to the adverse possession would be fulfilled
So as per given situation, the above represent the answer
the same would be relevant
Going by the principle of adverse possession, the fact that Nancy has used the land beyond the statutory period of 15 years means that "Nancy will prevail as she has used the property, openly as hers for over 15 years."
The principle of adverse possession affirms that the possession of somebody else's land for an extended period of time might give the occupant the legal right of claiming ownership of the land. Nancy has up he land for 20 years since she purchased it from David, which is beyond the statutory period.Hence, Nancy would prevail since going by the principle of adverse possession.
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Jonathan was granted enough nonqualified stock options (NQSOs) to purchase 10,000 shares of Capital, Inc. stock at $10 per share two years ago. He exercised the options this year when Capital, Inc. stock was $25 per share. Three years later, Jonathan sells the 10,000 shares for $100 per share. Which of the following statements regarding the tax ramifications of Jonathan's transactions are CORRECT?
Capital gains tax is due the year the options are granted to Jonathan.
Jonathan's cost to exercise all of the NQSOs is $50,000.
Jonathan will have a $750,000 capital gain when he sells the stock at $100 per share.
Jonathan will have an additional $150,000 included in his W-2 compensation income, which is a type of ordinary income, subject to payroll taxes this year.
A) I, II, and III
B) III and IV
C) I and II
D) I, II, III, and IV
Answer: B. III and IV
Explanation:
Based on the information given, we should note that the capital gain will be:
= $1,000,000 - $250,000
= $750,000
Also, the bargain amount will be calculated as:
= 10000 × ($25 - $10)
= 10000 × $15
= $150,000
We should also note that the statement in option 1 that "Capital gains tax is due the year the options are granted to Jonathan" is wrong. Capital gain will only arise when the shares have been sold, therefore option I is incorrect.
Based on the information above, the answer is option III and IV.
Your losses from a stolen ATM card are unlimited if you fail to report unauthorized use within 30 days after your statement is mailed to you.
a. True
b. False
Arendelle Enterprises has inventory of $667,000 in its stores as of December 31. It also has two shipments in-transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $128,000 was sold f.o.b. destination and the second shipment of $80,000 was sold f.o.b. shipping point. What amount of inventory should Arendelle report on its balance sheet as of December 31
Answer:
$747,000
Explanation:
Calculation to determine What amount of inventory should Arendelle report on its balance sheet as of December 31
December 31 Inventory $667,000
Add Second shipment f.o.b. shipping point of $80,000
December 31 Inventory $747,000
($667,000+$80,000)
Therefore What amount of inventory should Arendelle report on its balance sheet as of December 31 is $747,000
1.What is Barbara's net monthly income?
2.How much are Barbara’s regular monthly expenses?
3.How much does Barbara have left over after she pays her regular monthly expenses?
4.What are Barbara’s short term goals?
5.What is her long term (longer than 1 year) goal?
6.If the party Barbara is giving will cost $135, how much money will she have left over this month?
7.How much would Barbara have left over this month is she paid her regular expenses, saved for Christmas, and had a party for Sara?
8.How much do you think Barbara would need to put into savings every month to reach her long term goal?
Answer:
1. 389.60
2. 160 a month
3. 229.60
4. Party clothes, Saving for Christmas, and MP3 Repair
5. College
6. 94.60
Type the correct answer in the box. Spell all words correctly.
Being debt-free within the next 15 years is an example of which goal?
Being debt-free within 15 years is an example of a
goal.
Reset
Next
Answer:
Being debt-free within 15 years is an example of a long-term goal.
Explanation:
One main characteristic of a long-term goal is that it involves a planning horizon that is more than 5 years during which some thoughts are paid to the goal, and the means of achieving it are marshalled out, and rigorously pursued. Long-terms goals are best broken into manageable, short-term, and medium-term goals to enable the decision-maker to accomplish her goal. The future is always uncertain, to achieve a long-term goal you must remain motivated.
Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman index of 3,195. Case’s share of that market was 16 percent, while Fiat comprised just 8 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase?
Answer:
the increase resulting from this merger = 256
Explanation:
before the merger, both Fiat and Case's contribution to Herfindahl-Hirschman index = 16² + 8² = 320
after the merger, Fiat and Case's contribution to Herfindahl-Hirschman index = 24² = 576
the increase resulting from this merger = 576 - 320 = 256