Effect of residual income claimant behavior of the owners of a firm.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

General Accounting Question solution and give me Blank ? C

It is possible to use transformational leadership strategies to reach unethical objectives. Traditional leadership theories and morals standards are not adequate to help employees solve complex organizational issues. For the statement above, argue in position for both in favor or opposed to the statements.

Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.

Answer 2

Question

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Answer 6

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Answer 7

Chapter 21, Problem 1CQ

To determine

Effect of residual income claimant behavior of the owners of a firm.

Answer 8

Expert Solution & Answer

Explanation of Solution

The owners, whose income depends on the profit of the firm, are called as residual income claimants. An increase in gap between (positive) total cost and total revenue increases the income of the owners. Therefore, the owners would have a great incentive to increase the percentage of profit of the firm. The property right to the residual income of the owners affects their incentive to produce efficiently with a lower cost. In order to attain this, the owners try to allocate the resources efficiently and induce the workers to produce more by giving incentives to them. This would help to produce maximum at a minimum cost and increases the level of profit.

The owner’s property right to residual income also affects the supply of goods. They try to increase the value of product relative to the cost of production. This is because if people over value a product relative to its cost, the level of profit increases by raising its price. Thus, the owners adopt some strategies to increase the value of their product and maintain the cost of production as lower. These actions are important for the owners who are residual income claimants. This is because their income depends on the level of profit of the firm.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 21 - Prob. 1CQ Ch. 21 - Prob. 2CQ Ch. 21 - Prob. 3CQ Ch. 21 - Prob. 4CQ Ch. 21 - Prob. 5CQ Ch. 21 - Prob. 6CQ Ch. 21 - Prob. 7CQ Ch. 21 - Prob. 8CQ Ch. 21 - Prob. 9CQ Ch. 21 - Prob. 10CQ

Effect of residual income claimant behavior of the owners of a firm.

Effect of residual income claimant behavior of the owners of a firm.

Explanation of Solution

Want to see more full solutions like this?

Chapter 21 Solutions