The journal entries for the followings are shown below:
The journal entry will be:
a. On Jan 1 .
Loan A/c. ..Dr $50,000
Cash A/c....Cr.$50,000
Being the loan is cashed of the company
b. On June 30
Interest receivable A/c.. Dr. $2,500
Interest Revenue A/c.. .Cr. $2,500
Being interest accrued on the note
c. On Dec 31
Cash A/c.....Dr $5,000
Interest receivable Alc..Cr $2,500
Interest revenue A/c. .Cr $2,500
Being interest received on the note
d. Cash A/c...Dr $50,000
Loan A/C....Cr $50,000
Being received principal on the note, Working Note:
Interest Amount x 10% x 6/ 12
Interest $50,000 x 10% x 6/12
Interest=$2,500
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What do you think of going shopping when it’s crowded?
Going on shopping when it's crowded depends on the patience level of a person and the necessity of the items to be bought.
Most people tend to avoid shopping when a store is crowded. However, if a person wants to buy items that are of necessary and urgent, then he needs to shop even when the store is crowded.
Generally, people do not like shopping in places that are too crowded always. People prefer places that are silent and less crowded so that they can get focus on the products and choose wisely the item of their choice.
Other people might not have any effect by a space being too crowded for shopping.
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Which of the following increases the cost of money?
a. High risk
b. Low inflation
c. High production opportunity
d. Low time preference for consumption
Option a.) Higher risk is the correct answer, because higher risk leads to lower cost of capital. The higher the risk of an investment, the higher the return potential.
In theory, on average, the higher the risk, the more money you get to hold your investment, and the lower the risk, the less money you get. For investment securities, you can create charts showing different types of securities and their associated risk/reward profiles. Risky investments may offer higher return opportunities than others, but they put your money at greater risk. This means that risky assets can generate large returns if things go well. But if things go wrong, you could lose all your invested money.
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on january 1, 2024, birmingham enterprises purchases a building for $338,000, paying $58,000 down and borrowing the remaining $280,000, signing a 9%, 10-year mortgage. installment payments of $3,546.92 are due at the end of each month, with the first payment due on january 31, 2024.
If on january 1, 2024, the company purchases a building for $338,000, paying $58,000 down and borrowing the remaining $280,000.The appropriate journal entry to purchase of the building on January 1, 2024 is; Debit Building $338,000, Credit Cash $58,000, Credit Notes Payable $280,000.
How to prepare the journal entry?Since the company purchases a building for the amount of $338,000,and paid $58,000 down as well as borrow the remaining $280,000. The entry to record the purchase of the building is:
Birmingham enterprise journal entry
January 1
Debit Building $338,000
Credit Cash $58,000
Credit Notes Payable $280,000
(To record purchase of building)
Therefore the entry is to debit building , credit cash and credit notes payable.
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The complete question is:
on january 1, 2024, birmingham enterprises purchases a building for $338,000, paying $58,000 down and borrowing the remaining $280,000, signing a 9%, 10-year mortgage. installment payments of $3,546.92 are due at the end of each month, with the first payment due on january 31, 2024.
Record the purchase of the building on January 1, 2024
ming lee got frustrated every time she tried to find a spice jar in her spice cabinet. she came up with a unique way to organize spices and is now investing her money and time developing the product to be sold to others. ming lee would be classified as
ming lee would be classified as Entrepreneur.
An entrepreneur is a person who starts and/or invests in one or more enterprises, taking on most of the risks and reaping the majority of the benefits. [Needs citation] The term "entrepreneurship" refers to the act of starting a business. The entrepreneur is frequently viewed as an innovator, a source of novel concepts, products, services, and/or business models.
A more limited definition of entrepreneurship is the process of creating, starting, and operating a new company, which is frequently compared to a small business, or it is the "ability and willingness to develop, organize, and manage a business venture along with any risks it may have in order to make a profit."These business owners are frequently referred to as entrepreneurs.
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11. consider a three-year corporate bond selling for $1026.73, paying interest annually, with a face value of $1,000, a coupon rate of 7%, and a ytm of 6%. what is the duration of this bond?
The duration of a three-year corporate bond is 2.63 years. A lower coupon rate increases a bond's duration.
How does the duration of a bond change?Bond length can be used to calculate how much an interest rate change will likely affect bond prices. Bond duration, or interest rate risk in more technical terms, is measured.
A bond's duration is increased by a lower coupon rate since proportionately less payment is received before the bond's eventual maturity. Because a proportionately greater amount of payment is received prior to final maturity, a bond's lifespan is shortened the higher its coupon.
Given that
Face value of bond = $1000
maturity i.e. n = 3 years
coupon rate = 7%
Yield to maturity (YTM) = 6%
Price of bond = $1026.73
Coupon amount = Face value of bond × coupon rate
= $1000 × 7%
= $70
Current yield = coupon amount/ Price × 100
= 70/1026.73 × 100
= 6.82%
Annuity factor at YTM rate i.e. 6% for 3 years of maturity period
=[1-"(1+YTM)^(-maturity)"]/ YTM rate
=[1-'(1+0.06)^(-3)"]/0.06
=[1-0.83961928]/0.06
= 0.16038073/0.06
= 2.673012
Duration of the bond
= Current yield/YTM × annuity factor × (1+YTM factor)+(1- Current yield/YTM) × n
= 6.82/ 6 × 2.673012 × 2.673012 × 1.06 +(1-1.36666667) × 3
= 3.03832365 - 0.41000001
= 2.63 years
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which of the following is the best example of a product feature that would appeal to a buyer's rational buying motive?
(A) "AlwaysRight watches come with a three-year warranty."
(B) "SqueakyClean detergents have a very appealing scent."
(C) "ActiveDay coffee is the country's favorite hot drink."
(D) "SurroundLoud stereos are used by celebrities."
(E) "SparklyWhite toothpaste is the number one toothpaste in the world."
The following is the best example of a product feature that would appeal to a buyer's rational buying motive (A) "AlwaysRight watches come with a three-year warranty."
rational buying motive that are supported by logic or facts are called rational motives. Saving time, money, or achieving the best quality or value are examples of rational motivations.
Although rational purchasing decisions can affect a variety of purchases, expensive purchases require particular consideration.
Customers have both rational and emotional motives, which are influenced by their perceptions of the world and their own experiences.
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Based on the following information, calculate the amount of overhead applied when using a standard costing system.
Budgeted Variable Overhead: $200,000
Budgeted Fixed Overhead: $150,000
Est. Total Machine Hours: 25,000
Standard Machine-hours for actual production: 20,000
Actual Machine Hours Used: 20,500
The amount of overhead applied when using a standard costing system. is $280,000.
($200,000 + $150,000) ÷ [tex]\frac{(200,000 + 150,000)}{25,000} X 20,000[/tex]
standard hours allowed = $280,000 applied
In the realm of business, an ongoing expense associated with maintaining an organization is known as an overhead charge. In contrast to operating expenses like labor and raw materials, overheads are more difficult to associate or associate with any one revenue item. Any additional expenses a company incurs in an endeavor to market and sell its goods or services are referred to as overheads. Overhead expenditures include things like rent, power, business permits, accounting fees, advertising costs, and payroll. While direct costs are directly related to the product or service you provide, like those for raw materials or packaging supplies, these prices are typically stable and predictable.
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choose one that describes your leadership skill set. tell why you think it suits you? who else that is famous has those leadership traits? tell what type of job they have and how it would help them with helping others?
The world was governed by Indian Prime Minister Narendra Modi thanks to his abilities as a leader. His vigor, zeal, and desire to learn new things, in my opinion, are comparable to mine.
The term "world" can refer to the entirety of all beings, all of reality, or everything that is in its broadest sense. In several fields, distinct conceptions of the cosmology of the nature of the world exist. While some theories hold that the world is one, others speak of a "plurality of worlds." Others view the world as a complex made up of numerous elements, while some treat it as a single, straightforward item. The cosmos or universe is sometimes described in scientific cosmology as "the entirety of all space and time; all that is has been, and will be." On the other hand, theories of modality refer to possible worlds as complete and coherent scenarios of how events might have transpired. Phenomenology.
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A bank loans greg’s ice cream $250,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is.
On their respective balance sheets, this loan is an asset for the bank and a liability for Greg's Ice Cream. The loan increases the money supply.
The regulation of delivery summarizes the effect price changes have on a producer's behavior. As an example, a commercial enterprise will make greater of an excellent (consisting of TVs or motors) if the charge of that product will increase. So, if the fee for TVs will increase, tv producers are incentivized to provide greater of them.
In economics, deliver is the amount of aid that companies, producers, laborers, companies of monetary assets, or different economic agents are inclined and able to offer to the market or to a man or woman.
Despite the fact that whatever is in demand and is sold within the monetary market is called deliver, the term is normally used for products, goods, and offerings. The maximum critical factor for supply is the price of the product. If a product's fee will increase, the supply of the product may even grow.
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1. did finished goods inventory increase or decrease, and by what amount, from november 30 to december 31?
The increase in finished goods inventory will be $2,500.
The third and final category of inventory that manufacturing companies employ for accounting purposes, which includes the products that are sold to customers, is finished goods inventory. Raw materials are used to create manufactured goods, which subsequently enter the work-in-progress (WIP) stage as they are produced.
Raw materials and completed items are the two forms of inventory that a manufacturing organization manages. The main distinction between the two is that completed goods inventory is what the business creates and ultimately sells to a product reseller
Finished goods inventory increase = Finished goods inventory December 31- Finished goods inventory November 30
Finished Goods = 10,000 - 2,500
Therefore, the Finished Goods inventory increase will amount to $2,500
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COMPLETE QUESTION:
Raw Materials:
Nov 30 - $10,000
Dec 31 - $12,000
Work in Process:
Nov 30 - $15,000
Dec 31 - $20,000
Finished Goods:
Nov 30 - $7,500
Dec 31 - $10,000
1. did finished goods inventory increase or decrease, and by what amount, from November 30 to December 31?
Which term i taken to explain a collection of web ervice that facilitate interaction of web uer with ite to create uer-generated content and encourage behaviour uch a community or ocial network participation
The phrase "Web 2.0" refers to a group of web services that allow web users to engage with sites in order to develop user-generated content and encourage behaviors.
A web service is a generic word for an interoperable machine-to-machine software function that is hosted at a network addressable location. A web service has an interface that hides the implementation details so that it can be used regardless of the hardware or software platform on which it is implemented or the programming language in which it is written. This freedom encourages web service-based systems to be loosely linked, component-oriented, cross-technology implementations.
Web services can be used alone or in conjunction with other web services to carry out complex aggregation or business transactions. Tools can be used to process the WSDL and generate client programs capable of talking with the service using the XML-based SOAP protocol.
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What makes up your credit score?
The things that makes up your credit score payment history, new credit and types of credit used.
In payment, its history shows how consistently you have made your payment on time. This is the main credit score.
Every time you apply for credit, your score goes down. There is one exception, when you're shopping, student loan etc.
The credit score increase if you responsibly use different types of credit, such as installment and revolving debt.
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Nelson is documenting all the steps it takes to recruit, hire, and onboard a new employee. What would be the best way to describe these steps?.
The best way to describe these steps for recruiting, hiring, and onboarding a new employee would be through a hiring hierarchy.
What are the steps for hiring?
First, there must be an assessment of the need for specialized personnel, so that the company can then start a structured recruitment/selection process based on requirements such as the employee's experience and education.
After the recruitment process, it is necessary to follow the steps of formalizing the registration of the new employee through a contract and other legal provisions. Integration is also essential so that the employee can adapt to the rules, team and organizational culture.
Therefore, the process of selecting, hiring and integrating a new employee into the company follows a series of essential steps that must be arranged in a hiring hierarchy, so that the process proceeds as planned.
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Which of the foliowing are the tenets of lean manufacturing that Dr. James Womack included in his book The Machine that Changed the World? More than one answer may be selected. a. Identifying how each product acquires value b. relentlessy oursuing pertection c. creating products that consumers arent aware that they want d. inciuaing redundant steps as an extra measure of quality control
Based on the book written by Dr. James Womack titled The Machine that Changed the World, the tenets of lean manufacturing include "Identifying how each product acquires value, and relentlessly pursuing perfection."
The purpose of the book The Machine that Changed the WorldIn the book written by Dr. James Womack, he wrote about the five major principles every engineer should understand when considering lean manufacturing. These tenets are known to be the guiding principle that enables manufacturing companies to produce their products at a cheaper cost.
The five major tenets of Lean Manufacturing are:Identifying how each product acquires value.Relentlessly pursuing perfectionCreating supply flowMapping the value streamEstablishing pullHence, in this case, it is concluded that the correct answer is options A and B "Identifying how each product acquires value, and relentlessly pursuing perfection"
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though the responsibility for making fiscal policy lies with___, and the administration of fiscal policy occurs primarily in the ____
a. the president, Federal Reserve Board
b. the president, Treasury Department
c. Congress, Treasury Department
d. Congress, Department of Commerce
Though the responsibility for making fiscal policy lies with Congress, and the administration of fiscal policy occurs primarily in the Treasury Department.
Fiscal policy refers to the tax and spending policies of the federal authorities.
Financial policy choices are determined by means of Congress and the management; the Fed performs no function in determining fiscal coverage.
Within the united states of America, financial coverage is directed via both the government and legislative branches of the government.
Within the govt branch, the President and the Secretary of the Treasury, often with financial advisers' recommend direct fiscal regulations.
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this is the premise that the ownership of real estate consists of the ownership of various rights associated with it. these rights include the right to use and/or occupy, the right to sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the foregoing....?
Bundles of Rights include the right to use and/or occupy, the right to sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the foregoing.
Define bundle of rights.The collection of legal rights connected to real estate ownership is referred to as a "bundle of rights." There are five different rights that make up the "bundle": the rights to possession, control, exclusion, enjoyment, and disposition.
The metaphor of the "bundle of rights" helps to convey the complexity of property ownership. This conception is widely used by law school professors teaching beginning property law courses to explain "complete" property ownership as a division of distinct stakeholder entitlements. The various benefits that a homeowner immediately acquires together with the title to the land are referred to as a "bundle of rights."
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During the current year, Armstrong Corporation reported net income of $18 million and EPS of $5.00 per share. The average number of common shares outstanding during the year was 3.6 million. The price of a share of its common stock was $2.50 at the beginning of the year and $5.00 at the end of the year. What is the company’s price/earnings (P/E) ratio at the end of the year?
Price?earnings (P/E) ratio
1.00 is the company’s price/earnings (P/E) ratio at the end of the year .
What is company’s price/earnings (P/E) ratio?
Investors can determine the value of a firm using the price/earnings ratio, or P/E ratio. The P/E ratio is the stock price divided by the company's diluted profits per share for a specified time period, such as the previous 12 months. The price-to-earnings ratio reveals how much money investors are willing to part with for every $1 in earnings.What does a good price earnings PE ratio look like?
It's not necessary for a "good" P/E ratio to be high or low on its own. Since the current market average P/E ratio is between 20 and 25, a PE ratio above that range could be viewed negatively while one below that could be viewed favorably.Price of share at end of year = 5
Divide by EPS = 5
Price/earnings (P/E) ratio = 1.00
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the owner of 50 acres of land with 500 feet of frontage on a desirable recreational lake wishes to subdivide the parcel into salable lots. she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. what type of access rights should she give prospective lot purchasers?
The type of access rights should she give prospective lot purchasers An appurtenant easement.
What is easement?An easement refers to the right to use someone else's property for a specific limited purpose. An easement is a specific type of easement in which two properties are joined together as a serving tenement and a principal tenement. Common examples of appurtenant include driveways, ditches, fences, and right-of-way. For more information on appurtenant , see Easement Practical Information and Sample Easement Agreement.For example, if parcel B is behind parcel A and there is a driveway over parcel A that provides access to the road, that access is an easement. The right to access the driveway to the road is sold at both properties and the new property owner must continue to provide access.To learn more about easement from the given link :
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an investor has been consistently investing in the funds of a specific fund family. since she has kept her investments concentrated in one family of funds, she has been able to reduce the sales charge on some of her purchases. the client has been using which mutual fund feature?
An investor has been consistently investing in the funds of a specific fund family. Since she has kept her investments concentrated in one family of funds, she has been able to reduce the sales charge on some of her purchases. The client has been using the mutual fund sales charges reduction feature.
A term frequently used to describe class "A" shares of a mutual fund. This cost, which is paid when shares are purchased, is also known as a sales charge. This charge, also referred to as a "front-end load," usually goes to the brokers who sell shares of the fund.
Your investment is reduced by front-end loads. Let's imagine, for illustration purposes, that you want to put $1,000 in a mutual fund with a 5% front-end load. The top $50 sales load is deducted, leaving $950 that will be invested in the fund. According to the Investment Company Act of 1940, the maximum sales load is 9%. According to NASD Rules, the maximum sales load is 8.5%.
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the new-product process stage of development (stage 5) involves which two items?
The new-product process stage of development involves ensuring the product meets the standards established by the protocol and manufacturing the product.
5 levels of manual the new product development process for small companies: concept technology, screening, concept improvement, product improvement, and, in the end, commercialization.
There are four types of products and each is classified based on purchaser conduct, charge, and product traits: convenience items, buying items, strong point merchandise, and unsought items. allow's to dive into everyone in extra detail.
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Rhiannon is an inside sales representative at a natural cosmetics company. She recently sold a new primer the company released to many clients. However, the pump on the primer bottle does not work properly. Investigation shows the error stems from the manufacturer of the pump. Rhiannon’s sales manager had pressured rhiannon to sell this new product, and now rhiannon is worried that this is not an isolated incident. In this case, there could be a major recall, and the firm’s ceo would have to get involved. If a client is highly dissatisfied and wants to express discontent, who are they most likely to contact first?.
In this case, there could be a major recall, and the firm’s CEO would have to get involved. If a client is highly dissatisfied and wants to express discontent, they are most likely to contact first Rhiannon’s Sales manager.
A sales manager is a person who is answerable for leading an organization’s sales group. In a large organization, they will record to the sales director or head of income, at the same time as in smaller businesses, they may probably record directly to the CEO or managing director. The function can range relying on the scale and kind of the employer – and the service or product it sells – however commonly income managers are the specialists putting income goals and quotas and push their crew to hit them.
As leaders, sales managers are generally liable for hiring and firing, figuring out which training is wanted and providing it, mentoring income reps, and assigning sales territories. Their position additionally consists of growing sales plans and reading information which will make informed choices. they may often record back to administrators on development – and can have a hand in steering the future of the commercial enterprise. the whole thing they do contributes to their goal of hitting income objectives and generating profit for their employer.
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In what pricing strategy are prices lowered in a series of steps with the demand by those who really desire the product being satisfied at the highest prices?.
A price skimming approach is when an online retailer sets its starting price as high as its target market would bear before gradually lowering it.
What is price skimming approach?
The company can cut prices to entice a new, more price-conscious consumer base as demand from the initial customers is met and additional competitors enter the market.
Companies who use a skimming pricing approach offer the greatest price they can for a new product before gradually lowering the price as the product loses popularity. In contrast to high-low pricing, skimming lowers prices gradually over time.
The term "competition-based pricing mechanism," commonly referred to as "competitive pricing," describes how a business sets its prices for its goods and services in relation to those of its rivals. It is a component of the revenue management strategy of the business.
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ocean spray first introduced cranberry juice drinks. then it introduced cranapple (a cranberry and apple juice mix) also sold under the ocean spray brand. this is an example of a:
This is an example of a line extension. This is because the company just extended its product line.
- More about line extension :
- When a business adds new products in the same product category under the same brand name, such as new flavors, forms, colors, added components, or packaging sizes, this is known as a line extension. As contrast to brand expansion, which is the creation of a new product in a completely unrelated product category.
- Brands don't need to create new categories to grow their product lines. The addition of new flavors to a soft drink company's current drink portfolio is a great illustration of a line expansion.
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firms that grow quickly may seem less risky/more likely to succeed; therefore fast growth may help an entrepreneur extract better ownership terms from potential investors.
a. true
b. false
Firms that grow quickly may seem less risky/more likely to succeed; therefore fast growth may help an entrepreneur extract better ownership terms from potential investors. true
An entrepreneur is a character who identifies a need within the market and works to satisfy it. The time period, traditionally, has been applied to a person who starts offevolved an enterprise, seeing the ability to meet that recognized need as a financial opportunity.
Schumpeter is nicely recognized for his theories on business cycles and the development of capitalist economies, and for introducing the concept of entrepreneurship.
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one characteristic of an open-end investment company that distinguishes it from a closed-end one is that
The characteristic of an open-end investment company that makes a continuous offering of its shares then a closed-end one.
For the benefit of its shareholders, a management company is an investment firm that manages a portfolio of securities. In this category are mutual funds. Open-end investment and closed-end management organizations fall into different groups. The primary distinction between the two is that while a closed-end company makes a single offering of its shares, an open-end corporation continuously offers its shares. A continuously offered share of a redeemable open-end investment corporation is one that is available. A mutual fund is formally referred to as a "open-end investment business." The net asset value of a fund, along with any commission or sales charges, is the purchase price. An unredeemable offering of shares is made by a closed-end firm once only. It issues common stock shares, and the proceeds go toward financing.
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how did the cotton boom affect the economy of the south
The need for slaves rose as cotton production increased. Because of this demand for them in the Deep South, slaves in the Upper South became enormously more valuable as commodities.
How does the South's economy react to the cotton boom?The cultivation of cotton altered the country, elevating the value of the Deep South's lush terrain from Georgia to Texas. The need for slaves rose as cotton production increased. Because of this demand for them in the Deep South, slaves in the Upper South became enormously more valuable as commodities.The development of the cotton gin increased the profitability of cotton farming, necessitating the hiring of more laborers and strengthening the South's reliance on slavery.The development of the cotton gin transformed the South's economy into a monoculture and raised the demand for slave labor. The creation of the cotton gin helped the South's economy recover. farmers grew nothing else during the cotton boom that the cotton gin caused.To learn more about Cotton boom refer to:
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you are going to deposit $20,000 today. you will earn an annual rate of 3.7 percent for 13 years, and then earn an annual rate of 3.1 percent for 16 years. how much will you have in your account in 29 years?
By using the compound interest formula we find that you will have $52,274.81 in your account in 29 years
Formula : A=p(1+r/100)^n
Compound interest is the addition of interest to the principal sum of a loan or deposit or interest on interest plus interest. It is the outcome of reinvesting interest or incorporating it into the loaned capital, rather than paying it out or requiring payment from the borrower so that interest is earned on the principal sum plus earlier accumulated interest in the following period. In finance and economics, compound interest is the norm.
Compound interest differs from simple interest in that previously accrued interest is not added to the principal amount of the current period, resulting in no compounding.
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hoda is skilled at reading the emotional signals of her audience and making quick, subtle adaptations to her presentation to connect with them. hoda is good at showing her?
Hoda is adept at reading the emotional cues of her audience and adapting her presentation quickly and subtly to connect with them. Hoda excels at displaying her compassion.
You enhance your message and entice your audience to pay serious attention to it—and to you—through the use of eye contact, vocals, body posture, gestures, and facial expression.
Are audience members' nonverbal responses an indication of their interest and attention to a speaker?
Eye contact, which is frequently the most obvious indication of an audience member's interest. posture or body position, as people who are paying close attention to the speaker will typically face them.
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a respondent indicated she redeemed a coupon at walmart last week but later indicated that she had not visited a walmart in over two weeks. this type of response poses a problem of . a. completeness. b. comprehensibility. c. uniformity. d. legibility. e. consistency.
This type of response poses a problem of consistency. A hypothesis is consistent if it does not result in a logical contradiction.
What is consistency ?A consistent theory in traditional deductive logic is one that does not result in a logical contradiction. Both semantic and syntactic definitions of the absence of contradiction are possible.The term satisfiable is employed in modern mathematical logic in place of this concept in classical Aristotelian logic.A consistency proof is a mathematical demonstration of the consistency of a given theory. As part of Hilbert's programme, the early development of mathematical proof theory was motivated by the need to offer finite consistency proofs for all of mathematics. The incompleteness theorems, which demonstrated that sufficiently robust proof theories cannot prove their own consistency, had a significant impact on Hilbert's programme.Model theory can be used to demonstrate consistency, however it is frequently done in a syntactically-only manner without referencing any models of the logic. Since there is no general contradiction and no cut-free proof of falsity, the cut-elimination implies that the calculus is consistent.To learn more about consistency refer :
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hedonic quality adjustment refers to multiple choice question. estimating what the price of a good would be without improved quality. holding price constant in a predetermined base year. holding quantity constant in a predetermined base year. estimating what the price of a good would be without increased quantity.
The hedonic quality adjustment refers to 'estimating what the price of a product/good would be without improved quality'. Thus, option "A" holds the correct answer i.e. 'estimating what the price of a good/product would be without improved quality'.
Hedonic quality adjustment is one of the approaches used by the Consumer Price Index (CPI) in order to account for changing the quality of products within some CPI item samples. The hedonic quality adjustment offer ways to adjust prices whenever the characteristics of the products and services included in the CPI change because of innovation or the launch of entirely new products.
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