the market value of the equity of nina, incorporated, is $582,000. the balance sheet shows $21,000 in cash and $192,000 in debt, while the income statement has ebit of $93,000 and a total of $137,000 in depreciation and amortization. what is the enterprise value-ebitda multiple for this company?

Answers

Answer 1

The enterprise value-ebitda multiple for this company is 3.27.

Following is the formula of the enterprise value-EBITDA multiple:

Enterprise value-EBITDA multiple =Enterprise valueEBITDA

Calculate the enterprise value:

Enterprise value = Market value of equity+Market value of debt - Cash

                                = $582,000 + $192,000 - $21,000

                                = $753,000

Calculate the EBITDA:

EBITDA=EBIT+Depreciation and amortization

                =$93,000+$137,000

                =$230,000

Calculate the enterprise value EBITDA multiple:

Enterprise value-EBITDA multiple=Enterprise valueEBITDA

                                                                         =$753,000$230,000

                                                                         =3.27

What Exactly Is Enterprise Multiple?

The enterprise multiple, also known as the EV multiple, is a ratio used to calculate a company's value. The enterprise multiple, calculated as enterprise value divided by earnings before interest, taxes, depreciation, and amortization (EBITDA), examines a company in the same way that a potential acquirer would, taking debt into account. What constitutes a "good" or "bad" enterprise multiple varies by industry.

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Related Questions

The multimodal approach to perception considers how information collected by the individual __________ systems is integrated and coordinated.

Answers

The multimodal approach to perception considers how information collected by the individual sensory systems is integrated and coordinated.

What is sensory systems?

Neural networks, sensory neurons, including sensory receptor cells, and brain areas involved in sensory perception make up a sensory system. The most well-known sensory systems include those for vision, hearing, touch, taste, smell, and balance.

Cranial nerves are used to transfer feelings to the brain from special senses like sight, hearing, taste, and smell.

Thus, it is sensory systems.

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i now have $12,000 in the bank earning interest of 0.50% per month. i need $22,000 to make a down payment on a house. i can save an additional $100 per month. how long will it take me to accumulate the $22,000?

Answers

It would about 55 months to reach the target future value of $22,000

What is the target future value?

The individual currently has $12,000 and intends to save $100 every month in order to reach a future value of $22,000, in other words, we can determine the number of monthly payments needed using a financial calculator which requires that the calculator be set to its end mode before making necessary inputs because monthly payments would occur at the end of each month:

I/Y=0.50(monthly interest of 0.50% without the percent sign)

PMT=-100(monthly savings, it is negative because it is a cash outflow for the individual making the savings)

PV=-12000(current account balance is the present value)

FV=22000(the targeted future amount is the future value)

CPT(press compute)

N=54.52(approximately 55 monthly payments)

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the adjusting process is applied at microsoft to show appreciation expenses. to provide their accountants with work the company has already allocated funds for. because the company has different financial records for different products. because not all of the revenue from a sale is earned on the date of sale.

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The adjusting process is applied at Microsoft to show appreciation expenses because not all of the revenue from a sale is earned on the date of sale.

An gain in the worth of an asset over time is referred to as appreciation. This is in contrast to depreciation, which reduces the value of an asset throughout its useful life. The appreciation rate is the rate at which the value of an asset grows. An increase in the value of financial assets such as stocks is referred to as capital appreciation.An adjusting entry is essentially a change to your books that improves the alignment of your financial statements with your income and expenses, which is usually but not always done on an accrual basis. Adjustments are done at the end of the accounting period. This could happen towards the end of the month or at the end of the year.The first three steps of the correcting procedure are to identify the original journal entries produced throughout the period. Determine the proper account balances. Analyze the disparities between the correct and current balances and make journal entries to rectify them.

Thus this is the meaning of adjusting process.

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amazon.com found that it could be more competitive if it decreased shipping times. shipping times are an example of

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Amazon.com Inc is an American multinational technology company that focuses on e-commerce cloud computing, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential economic and cultural forces in the world", and is one of the world's most valuable brands.

Standard shipping is also known as economy, ground, or regular shipping. With domestic US couriers, these services are delivered in 3-5 business days because they arrive via ground.

Shipped is not the same as delivered. When a package is designated as shipped the package has been loaded on a truck and departed for the final distribution center. That means the package could be anywhere between the origin location and the destination terminal.

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If a piece of software were going to be developed in a lower-level language such as assembly, would rapid prototyping be a good methodology to use?

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Rapid prototyping is suited for any project if a piece of software will be created in a low-level language like Assembly.

Using 3D computer-aided design, rapid prototyping is the quick manufacture of a physical part, model, or assembly (CAD). Typically, additive manufacturing more frequently referred to as 3D printing is used to create the model, item, or assembly. Rapid prototyping with selective laser melting is referred to as high-fidelity prototyping when the design closely resembles the planned finished product, as opposed to low-fidelity prototyping when there is a significant difference between the final product and prototype. Although several manufacturing processes are used in rapid prototyping (RP), layered additive manufacturing is the most common. However, high-speed machining, molding,  casting, and extrusion are among the technologies employed in rapid prototyping. While the most popular fast prototyping method is additive manufacturing, other, more traditional methods can also be utilized to make prototypes.

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A. it is not possible to save any money this month without having a negative actual net income. b. $350 can be saved resulting in an actual net income of $0. c. $200 can be saved resulting in an actual net income of $75. d. because there is a $75 budgeted net income, that $75 can be put towards savings.

Answers

Answer is It is not possible to save any money this month without having a negative actual net income(option A)

In the actual budget, Income = 675

Expenses = 300+100+200+75 = 675
Income equals Expenses and there is no scope for savings.

Since there can not be a negative actual net income we cannot save any money this month.

A personal budget, or household budget, simply tracks a household’s money in versus money out. Though a budget will be wont to help a personal or family spend less and save more, it is, at its most elementary, a planning and tracking tool.

Budgeting is all about being intentional with the ways you spend money, and planning ahead to assist make sure you don’t run into any inconvenient – or, potentially, financially ruinous – surprises before you receive your next paycheck. This planning ahead also means you'll economize for future goals and determine exactly how long it'll take you to achieve them.

A budget also helps you be more confident in cash on the items you would like, but don’t necessarily need. rather than feeling guilty or worrying that the value of something will have you ever eating ramen for the remainder of the month, you’ll know exactly what proportion you'll spend without having to require far from other, more vital areas.

Your question is incomplete, kindly find the full content below:

Predict how much money can be saved without having a negative actual net income.

Wages-

Budgeted Amount- $1025

Actual Amount- $675

Rent-

Budgeted Amount- $300

Actual Amount- $300

Utilities-

Budgeted Amount- $100

Actual Amount- $100

Food-

Budgeted Amount- $175

Actual Amount- $200

Cell Phone-

Budgeted Amount- $75

Actual Amount- $75

Savings-

Budgeted Amount- $300

Actual Amount- ________

Net Income-

Budgeted Amount- $75

Actual Amount- ________

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An 800-square-foot rectangular building sells for $75,000. what's the cost per square foot?

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If you have an 800-square-foot rectangular building and it sells for $75,000, that equates to $93.75 per square foot.

what number of square foot is a 12x12 room?

The square foot of a room 12 feet wide by way of 12 ft lengthy is 144 rectangular ft. find the rectangular pictures through multiplying the width (12 toes) by way of the length (12 ft).

What size is a square foot?

Duration (in toes) x width (in ft) = area in sq ft. Tip: if you cannot photo what a square foot is, attempt drawing a square this is 1 foot tall via 1 foot huge—you've got one square foot! a lot of those squares stacked up in opposition to one another same an entire wall, ground, sheet of cloth, wall paper, and many others.

How massive is a 1500 square foot residence?

12' through a 125' additionally equals 1,500 square toes. The typical shotgun residence measures 12 toes in width. It commonly includes three or 4 rooms, equaling about 75ft in duration for four rooms of same length, so 125 feet could upload two to three rooms to that. 20' by means of 75' also equals 1,500 square foot.

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What measure allows marketers to analyze the success of specific products and regions to pinpoint what is working and what is not?

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Revenue Analysis

A measure of success is a benchmark by which a person or organization determines whether or not they have met their objectives. There is no one genuine definition of success, and successful individuals assess their individual and collective accomplishments using a variety of yardsticks.

An study of your company's sales revenue provides a breakdown that enables you to determine how well your company is doing now and how well it should be doing going forward. Which items are more profitable for the company at any particular time are revealed by the sales revenue analysis. The process of tracking and reporting project, task, and activity progress is known as progress measurement.

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seen through the lens of contemporary business, the following best describes columbus: a. manager b. ceo c. stockholder d. both a and b e. both a and c

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seen through the lens of contemporary business, the following best describes Columbus's  manager and  CEO

Famine, disease, and conflict with local Indian tribes during the first two years brought Jamestown to the brink of collapse, and new settlers and supplies arrived in 1610.

What was the main reason for the success of the 16th-century Protestant Reformation? It created political opportunities by weakening the authority of the Roman Catholic Church.

Which of the following was one of the main reasons why the Protestant Reformation weakened Spain's hold on the American Empire? increased the influence of the merchant class provided

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A product characteristic that signifies that a new product is better than the previous alternative is called? compatibility relative advantage divisibility complexity

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A product characteristic that signifies that a new product is better than the previous alternative is called relative comparability.

Relative comparability is comparison of two or more alternatives that has been evaluated at the time of planning and selecting the best out of the possible for the procedure of production.

The relative compatibility signifies the way a product should be made sustainably to attempt the removal of mistakes in the previous alternatives so that the product could be made better.

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In the statement of cash flows, the cash-generating capability of the company is indicated by net cash provided by?

Answers

In the statement of cash flows, the cash-generating capability of the company is indicated by net cash provided by Operating activities.

What are cash flow statements?

A cash flow statement, also known as a statement of cash flows, is a financial statement used in financial accounting that breaks down the analysis of operating, investing, and financing operations to indicate how changes in the balance sheet accounts and income affect cash and cash equivalents. The flow of money into and out of the company is essentially what the cash flow statement is concerned with. The statement of cash flows is a helpful analytical tool for evaluating a company's short-term viability, notably, its capacity to pay its debts. The international accounting standard that addresses cash flow statements is known as IAS 7.

The following entities and people are curious about cash flow statements:Personnel in charge of accounting, who must determine if the company can afford to pay its employees and other pressing costsProspective creditors or debtors want a clear picture of a company's capacity to repay debt. Checking the company's financial stability is important for potential investors.Individuals who are thinking about contracting with or working for the business and want to know if they will get paid directors of the firm, who are in charge of its governance, are accountable for making sure it is not operating while insolvent. Owners of the company's shares.

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show the effect on the accounting equation for each of the following transactions for savers inc. for the month of january. a. purchased inventory on account from supplier. effect on accounting equation answer b. sold inventory on account to customer. effect on accounting equation answer answer c. collected cash from customer account. effect on accounting equation answer d. paid cash to supplier on account. effect on accounting equation answer e. paid a dividend to shareholders.

Answers

The Right Response is Option E

e. paid a dividend to shareholders.

The following response has been produced in a straightforward, step-by-step fashion.

Further Justification.

Cash and shareholders' equity accounts on the balance sheet are the two sections that are impacted by cash distributions. When dividends are paid, the company's retained profits and cash balance fall, which has an impact on the balance sheet. In other words, the whole amount of the dividend is subtracted from retained profits and cash.

Cash dividends have an impact on the balance sheet's cash and shareholder equity since they lower retained profits and cash by the whole amount of the dividend.

Stock dividends solely affect the shareholders equity part of a company's balance sheet and have no effect on its cash situation.

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negotiation is more appropriate when other issues besides price are important or when competitive bidding will not satisfy the buyer’s requirements on various issues.

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negotiation is more appropriate when other issues besides price are important or when competitive bidding will not satisfy the buyer’s requirements on various issues.  true

A strategic conversation that finds a solution to a problem that both parties can accept is referred to as a negotiation. Each party tries to persuade the other to agree with their point of view during a negotiation. One party will always prevail in negotiations since there is a certain amount of give and take. But even a small compromise from one party must be accepted by the other. By engaging in negotiation, the parties concerned attempt to prevent conflict while agreeing on a compromise. There are many different types of negotiating partners, such as buyers and sellers, an employer and a potential employee, or governments of two or more nations.

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When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is this money placed?

Answers

When a fixed annuity owner pays his/her insurance company a monthly annuity premium, money is placed in the insurance company's general account.

What are the risks associated with a fixed annuity?

Fixed annuities, as opposed to variable annuities and other investment products whose values fluctuate with the market, are less risky. But that doesn't mean fixed annuities are risk-free.

Annuities, for example, are insurance contracts. That is, their payouts are guaranteed by the insurance companies that issue them, rather than by the FDIC, SIPC, or any other federal agency. As a result, it is critical to pay close attention to the company issuing the annuity you are considering. Look for companies that have received high ratings from industry rating agencies such as AM Best, Fitch, Moody's, and Standard & Poor's.

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Which tactics are generally not employed by fast-acting firms to meet time pressures without sacrificing quality?

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Consider the long term effects of war, Focus on projections for the future and rely on long-term planning. So, Fast-acting firms rarely use these strategies to fulfill time pressures without sacrificing quality.

No fast acting firms can completely avoid the effects of rising costs. Additionally, most managers have developed coping mechanisms for how inflation affects current operating costs. Few, however, have taken it into account in their business plans. Furthermore, the majority of managers, especially those in capital-intensive companies, have not given enough thought to how rising capital requirements affect their capacity to compete in the long run. Making decisions involves selecting between potential actions, which may also include inaction.

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the supply curve for automobiles will shift to the left in response to: a a decrease in the interest rates for automobile loans. b an increase in wages in the automobile industry. c a decrease in consumers' income. d a decrease in the number of consumers purchasing automobiles. e an increase in the efficiency of robot technology.

Answers

The supply curve for automobiles will shift to the left in response to a decrease in the interest rates for automobile loans.

What is a supply curve?

The amount of a resource that businesses, producers, workers, providers of financial assets, or other economic agents are willing and able to offer to the market or a specific person is known as supply in economics. Supply can refer to manufactured items, labor hours, raw resources, or any other in-demand or pricey item. A table that lists the quantity supplied at each price is called a supply schedule. A graph that displays the amount supplied at each price is called a supply curve. Because it is a graphical depiction of the supply schedule, the supply curve is occasionally referred to as a supply schedule.

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what is the value of real gross domestic product (gdp) in 2010? round to the nearest second decimal.

Answers

$520.00 million is the value of the real gross domestic product (GDP) in 2010

This is further explained below.

What is the gross domestic product?

Generally,  The total monetary worth of all completed products and services produced inside a nation over a certain time period is referred to as the country's gross domestic product (GDP).

The GDP gives a snapshot of a country's economy, which may be used to determine the size of an economy as well as its rate of growth.

In conclusion, $520.00 million is the value of the real gross domestic product (GDP) in 2010

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project x has an initial cost of $20,000 and a cash inflow of $25,000 in year 3. project y costs $40,700 and has cash flows of $12,000, $25,000, and $10,000 in years 1 to 3, respectively. the discount rate is 6 percent and the projects are mutually exclusive. based on the individual project's irrs you should accept project ; based on npv you should accept project ; the final decision should be to accept project . multiple choice y; y; y y; x; x x; y; y x; x; x y; x: y

Answers

Answer is option c(x y y)

The internal rate of return (IRR) could be a metric utilized in financial analysis to estimate the profitability of potential investments. IRR could be a discount rate that produces the web present value (NPV) of all incomes adequate to zero during a discounted cash flow analysis.

IRR calculations depend on the identical formula as NPV does. detain mind that IRR isn't the particular dollar value of the project. it's the annual return that produces the NPV adequate to zero.

Net present value (NPV) is employed to calculate today’s value of a future stream of payments.

NPV is employed in capital budgeting to match whether an investment today will generate positive income within the future.

If the NPV of a project or investment is positive, it means the discounted present value of all future cash flows associated with that project or investment are positive, and so attractive.

To calculate NPV, you would like to estimate future cash flows for every period and determine the right discount rate.

NPV is helpful in identifying profitable projects, though it falls short when comparing projects of various sizes.

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The principle that irrelevant detail should not be included in a model is known as.

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Ockham's razor Economic resources are limited supplies that are used to produce goods and services.

Water, sunlight, and air are not considered to be valuable resources. This is due to the fact that these resources are plentiful, which implies they are not in short supply. A positive question, for instance, would be "Do higher minimum salaries produce higher rates of youth unemployment?" whereas a normative question may be "Are higher minimum wages better for young workers?" Let's use minimum wage legislation as an example.

Human resources, like labor and management, and nonhuman resources, such land, capital goods, financial resources, and technology, are two categories of economic resources. The premise of our economic system is that the person who supplies the economic resource has a right to compensation.

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A company reported net income of $4,805 for october. its net sales for october were $15,500. its profit margin is:______.

Answers

The company's profit margin in October is  : 31.00%

What is profit margin?

The profit margin of a company is the portion of the total sales revenue recorded as the net income, it is determined as the company's net income divided by the net sales for the month or year as the case may be.

In this case, the net income earned in October is $4,805, as  a percentage of the net sale of $15,500, would give us the required profit margin for the month as computed below:

profit margin=net income/net sales

net income=$4,805

net sales=$15,500

profit margin=$4,805/$15,500

profit margin=31.00%

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maximum profit occurs where group of answer choices the slope of the total revenue function equals marginal revenue the slope of the total revenue function equals the slope of total cost. the slope of total revenue function is maximized. total revenue is maximized.

Answers

The quantity of goods produced at which marginal revenue equals marginal cost, or when MR = MC, is the decision that will maximise profits for the monopoly. If the monopoly produces less, MR > MC at given output levels, and the enterprise can increase profits by increasing output.

Total revenue function slope is maximised. The whole profit is increased. A firm's marginal profit is negative at its current output level. Therefore, it should decrease output until marginal profit is zero in order to maximise profit.

When the value of the final unit of production (marginal revenue) equals the cost of generating the final unit of production, a manager optimises profit (marginal cost).

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When some individuals gain from the public production of a good, but they do not incur any cost compared to their individual benefit received, the economic problem is called _____________ .

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When some individuals gain from the public production of a good, but they do not incur any cost compared to their individual benefit received, the economic problem is called a  free rider.

What is the economic problem of free riders and how to solve them?

Economics has a problem with the free rider phenomenon. In other words, when some people are permitted to use more than their fair share of a shared resource or pay less than their fair part of the costs, there is an inefficient distribution of products or services.

A person without health insurance, for instance, might visit the emergency room since they cannot be turned away. When people benefit from resources, commodities, or services but do not pay for them, it is known as the "free rider" dilemma.

The free rider issue has a number of potential solutions:

Taxes: There would be no free riders because everyone would have to pay taxes.Privatizing a public good: There wouldn't be any free riders if a public product could be restricted (requiring a fee to consume the good).Requesting contributions.

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After your company purchases capacity, how much time does it take to be able to use the added capacity?
a. immediately
b. 6 months
c. 1 year
d. 2 years

Answers

After your company has purchased the capacity, it will take 1 year to be able to use the additional capacity.

Production capacity is a level that states the limits of the ability, acceptance, storage or output of a unit, facility or output to produce within a certain period of time. Production capacity determines capital requirements and thus affects a large part of costs. Production capacity determines how many requests must be met by using existing production facilities.

There are several aspects used in determining production capacity in a factory, namely as follows:

Work Center, a specific production facility consisting of one or more people and/or machines with the same or identical capabilities, which can be considered as a unit for the purposes of capacity requirements planning (CRP) and detailed schedulingManufacturing Order, a document or schedule identity that authorizes the manufacture of certain parts or products in certain quantitiesRouting, a collection of information that details the method of creating a particular item, including the operations performed, the sequence of operations, the various work centers involved, as well as standards for setup time and work execution timeExpenses, the amount of work a manufacturing facility is scheduled to perform in a specified time periodCapacity, the degree to which the manufacturing system (labor, machinery, work centers, departments, factories) produces

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A _________________ is an amount due from another party. receivable return payable sale

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A receivable is an amount due from another party. The sum of money owed to a company for goods or services delivered or utilized but not yet paid for by customers is known as accounts receivable (AR). Accounts receivable are classified as a current asset on the balance sheet.

AR is any amount of money due by clients for credit purchases. The accounts receivable turnover ratio or days sales outstanding can be used to assess a company's AR strength. Accounts receivable refers to a company's overdue invoices or the money that clients owe the company. The phrase refers to accounts that a company has the right to obtain.

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Selling virtually the same product in other countries works well for companies such as harley-davidson motorcycles. This is an example of which type of global marketing strategy?.

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This is an example of product extension type of global brand strategy. A product line extension occurs when an existing brand introduces new products in a product category in which it currently sells products. For example, when a soft drink business introduces a new soda flavor.

When a corporation introduces a new product in the same product line as an established brand, this is referred to as a product line extension. A plan for an extension could be a different color or size, as well as various ingredients or flavors. The use of the same brand name to introduce a new product extension.

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find 5 state laws that protects consumer rights and describe them in 30-60 words

Answers

1. Alabama Homestead protection law.

2. Alaska Identity theft law

3. Arizona deceptive trade law practices

4. New Hampshire Antitrust laws

5. California Interest rate laws

1. The fundamental guidelines of Alabama's homestead protection laws, which enable struggling homeowners to save some of their equity and keep their houses after declaring bankruptcy.

2. A description of Alaska's Personal Information Protection Act, which forbids the solicitation of Social Security numbers for trade and other identity-theft-related activities.

3. The use of fraudulent advertising, bait-and-switch tactics, tampering with a car's odometer, and providing links to websites with information on relevant subjects are all illegal under Arizona law.

4. The fundamentals of antitrust law in New Hampshire, which forbids "agreement, combination, or conspiracy in restraint of trade," such is when a big business buys out smaller rivals.

5. The fundamentals of California law governing interest rates and usury laws, including the maximum legal interest rate that a creditor may charge and the consequences for charging illegal interest rates.

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Suppose a local company has the following balance sheet accounts. calculate the missing amounts assuming the business has total assets of $33,750.

Answers

Based on the balance sheet amounts, the missing amounts assuming the business has total assets of $33,750 are:

Equipment - $14,000Notes payable - $15,500

What is the equipment amount?

The accounting equation is:

Assets = Equity + Liabilities

33,750 = Stockholders' Equity + Salaries payable + Accounts Payable + Notes Payable

33,750 = 13,000 + 3,800 + 1,450 + Notes payable

Notes Payable = $15,500

The Equipment is:

= 33,750 - 8,500 - 1,850 - 6,700 - 2,700

= $14,000

The rest of the question is:
Calculate the missing amounts assuming the business has total assets of $33,750.

 AccountsBalances

Land $8,500

Equipment ?

Salaries Payable 3,800

Notes Payable ?

Supplies1,850

Cash 6,700

Stockholders' Equity 13,000

Accounts Payable 1,450

Prepaid Rent 2,700

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for which reasons could you face a penalty annual percentage rate (apr)? select all the correct answers.

Answers

A penalty APR (annual percentage rate) is a high interest rate that can be triggered if you make your credit card payment late. When this happens, you may wind up paying more interest on future purchases.

What is an APR penalty?

One of the highest APRs you can word on your credit card settlement is your penalty APR, that is an boom for your hobby price when you omit a payment or a price is lower back. Penalty APRs are precisely what they sound like — a penalty for doing some thing wrong.

What can trigger an APR?

In case your payment is returned for some motive, like a bounced check, it could also depend as late and finally cause a penalty APR. (It'd additionally incur a back payment price.) additionally of be aware: some credit cards offer new cardholders a 0% hobby rate on purchases, stability transfers or each.

Why does Penalty APR matter?

Penalty APR would not directly affect your credit score score, however the related overdue payment and its amassing hobby fees can. Keep away from penalty APR via paying off your card in time, negotiating a repayment plan along with your lender, or the usage of a card that doesn't rate penalty APR.

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while considering starting a small business, roy is curious about the role and opportunities available for small businesses in the global economy and marketplace. he sets up a conference call with an experienced small business owner to learn more. what does roy’s colleague likely share with him?

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Small firms account for 43.5% of the US gross domestic product and two-thirds of new jobs (GDP).

Small businesses not only maintain the economy but also set the standard for innovation. In comparison to large patenting companies, small enterprises issue 16 times more new patents per employee. Small firms are adaptable enough to quickly change with the changing dynamics of the global economy. They can also use technology and outsourcing companies, which enable small enterprises to carry out the same tasks as larger ones without having to make a capital investment.

Global corporations have developed into a platform for fostering cross-cultural understanding, fresh idea exchange, greater government-to-government communication, and better goods and services. Globally, there are billions of individuals whose quality of life is impacted by multinational corporations.

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ryan produces hair clips and earrings. celia also produces hair clips and earrings, but ryan is better at producing both goods. in this case, trade could

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Ryan produces hair clips and earrings. Celia also produces hair clips and earrings, but Ryan is better at producing both goods. in this case, trade could benefit both Celia and Ryan.

What is meant by absolute advantage?

This is the term that is used to refer to the advantage that a person would have over the production of  goods and services. That is the person is able to have more efficiency in the production of a good.

What is meant here is that the individual would have to use less resources in the production of a good or a service. Hence we can say that Ryan produces hair clips and earrings. Celia also produces hair clips and earrings, but Ryan is better at producing both goods. in this case, trade could benefit both Celia and Ryan.

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