All costs to get an asset in place and ready for its intended use should be capitalized.
What is Capitalized ValueCapitalized Value is the determination of the accounting value of all expenses to acquire fixed assets until they are ready for use to increase capacity/office, and/or extend their technical life in order to increase the value of these assets.
Benefits of CapitalizationCapitalized assets has many benefits because long-term assets are expensive, charging costs over future periods reduces profitable fluctuations in income, especially for small companies Many lenders require companies to maintain a certain debt-to-excl. jeopardizes the required ratio for existing loans or can prevent companies from accepting new loans.
In addition, capitalizing expenses increases a company's asset balance without affecting its liability balance. As a result, many financial ratios will appear favorable. Despite these benefits, it shouldn't be motivating to take advantage of cost.
Learn more about capitalized asset at https://brainly.com/question/21987637.
#SPJ4
A mortgage for which a mortgage borrower receives regular monthly payments from a financial institution rather than making them. When the RAM mature (or the borrower dies) the borrower (or the estate of the borrower) sells that property to retire the debt.
The mortgage described in the question is a reverse mortgage. In a traditional mortgage, the borrower makes regular monthly payments to the lender, whereas in a reverse mortgage, the financial institution pays the borrower instead.
Reverse mortgages are typically available to seniors who own their houses entirely or have significant equity in them. The quantity of payments that the borrower can get is decided by the value of the home, the borrower's age, and current interest rates.
The debt is normally returned when the borrower sells the property, moves out, or dies.
Reverse mortgages can be a valuable financial tool for seniors who need extra income but wish to stay in their homes.
They do, however, include significant risks and drawbacks, such as potentially high fees and interest rates, lost equity in the home, and the threat of default if the borrower fails to pay property taxes or maintain the property.
For such more question on mortgage:
https://brainly.com/question/15058265
#SPJ11
The type of mortgage described in your question is called a reverse mortgage or a home equity conversion mortgage (HECM).
It is a type of mortgage loan where the borrower, typically a senior citizen who owns a home, receives regular payments from the lender instead of making payments to the lender.
The amount of the loan is based on the borrower's age, the value of the home, and the prevailing interest rates. The borrower can choose to receive the payments as a lump sum, as a line of credit, or as monthly payments. The loan does not have to be repaid until the borrower dies, sells the property, or no longer uses it as a primary residence.
At that point, the borrower or the estate must repay the loan, usually by selling the property. If the sale price of the property is less than the outstanding balance of the loan, the lender absorbs the loss. If the sale price is greater than the outstanding balance, the borrower or the estate receives the difference.
learn more about property here :
https://brainly.com/question/29528698
#SPJ11
Select the correct answer. Which utility applies to a company that educates customers about its products' features? OA form utility O B. knowledge utility O C. possession utility D. place utility O E. price utility Reset Next
Answer:place utility
Explanation:
Utility applies to a company that educates customers about its products' features is possession utility. Thus the correct option is C.
What is a product?A product is referred to as a finished good distributed in the market to serve the customers. This product is tangible in nature which consumers can see, touch and utilize.
Possession utility measures the degree of usefulness or perceived value a consumer gets from owning a certain product. Companies must make their products easier to own because this increases the product's perceived value.
Therefore, option C possession utility is the appropriate answer.
Learn more about possession utility, here:
https://brainly.com/question/15381693
#SPJ2
Which examples demonstrate common Production work environments? Check all that apply.
Craig is a self-employed Jeweler who works in his own shop.
Rashida works in a factory making parts for machinery.
Antonio works in a quiet office filing paperwork.
Mei spends most of her time on the telephone.
Norm stands for long periods while welding in a workshop.
Carolyn performs tests on materials in a laboratory.
((answer: A, B, E))
Answer:
The answer is A,B,E
Explanation:
Jus took the test and got a 100
The examples that demonstrate common production work environment are:
Craig is a self-employed jeweler who works in his own shop. works in a factory making parts for machinery.Norm stands for long periods while welding in a workshopWhat is Production work environment?Production work environment is a workplace environment where employees conduct their work. It is where one work, including the workspace and common work areas shared with others.
The above means that production work environment is where people carry out assembling work, production work, etc.
Hence, the examples that demonstrate common production work environment are:
Craig is a self-employed jeweler who works in his own shop. works in a factory making parts for machinery.Norm stands for long periods while welding in a workshopLearn more about production environment here: https://brainly.com/question/956771
should the federal government control the price of food, gas and/or rent? yes or no. thoroughly explain your position using economic theory and historical literature on price controls.
No, the federal government should not control the price of food, gas, and/or rent. This position is based on economic theory and historical literature on price controls.
Economic theory suggests that markets are efficient at allocating resources when left to their own devices. Price controls, such as setting a maximum price for food, gas, or rent, can lead to market distortions and inefficiencies. For example, price ceilings can cause shortages, as producers may not have the incentive to produce enough of the goods at the controlled price.
Additionally, price controls can lead to a misallocation of resources. Producers may shift their resources to other markets without price controls, further exacerbating the shortage in the controlled market. Furthermore, consumers may overconsume goods with controlled prices, as they perceive them to be cheaper, resulting in increased demand and further strain on the supply. Historical literature on price controls also shows that they often have unintended consequences. For example, during World War II, the U.S. government imposed price controls on various goods, including rent.
To know more about federal government visit:
https://brainly.com/question/4240227
#SPJ11
what is stock exchange?
A trader wants to sell a cash-secured put. Using the option chain, what is the approximate probability of the 126 strike expiring worthless?
42% - Incorrect
58% - Correct
26% - Incorrect
21% - Incorrect
If a trader wants to sell a cash-secured put, they are essentially agreeing to purchase the underlying stock at a specific strike price if it falls below that level. In return for agreeing to buy the stock, the trader receives a premium upfront.
To determine the approximate probability of the 126 strikes expiring worthless, we would need to analyze the option chain for the underlying stock. This would involve looking at the current price of the stock, the expiration date of the option, the implied volatility, and other factors. Based on the information provided in the question, we can assume that the trader has already done this analysis and has determined that the approximate probability of the 126 strikes expiring worthless is 58%. This means that there is a 58% chance that the stock will remain above the 126 strike price at expiration, and the trader will keep the premium received from selling the put option.
To know more about the underlying stock
https://brainly.com/question/29898367
#SPJ11
1. Find the future value of the following cash flow streams; the interest rate is 7 percent per year, compounded annually: a. $300 is invested at the beginning of each year for the next 5 years. The proceeds are withdrawn five years from now. b. $300 is invested each year, starting today and continuing through year 8 , when the proceeds are withdrawn. c. $300 is invested each year, beginning one year frodm now and continuing through year 5 . The proceeds are withdrawn in year 7. d. $300 is invested 3,4 and 5 years from now. The proceeds are withdrawn in year eight.
To determine the future value of the given cash flow streams, we need to calculate the compounded amount at an interest rate of 7 percent per year. The cash flows involve investing $300 annually for different periods and withdrawing the proceeds at specific points in time.
a. For the first cash flow stream, where $300 is invested at the beginning of each year for the next 5 years, we can use the future value of an ordinary annuity formula. By applying the formula, we can find the future value of the cash flows after 5 years.
b. In the second cash flow stream, $300 is invested each year starting today and continuing through year 8. Here, we need to calculate the future value of an annuity due, as the cash flows are made at the beginning of each period.
c. In the third cash flow stream, $300 is invested each year, beginning one year from now and continuing through year 5. The proceeds are withdrawn in year 7. We can calculate the future value of an ordinary annuity for this scenario.
d. For the fourth cash flow stream, $300 is invested in years 3, 4, and 5, and the proceeds are withdrawn in year 8. Here, we need to find the future value of three individual cash flows at different time periods and then sum them up.
To know more about future value here: brainly.com/question/30787954
#SPJ11
6. Describe at least three things a bank would consider about you when deciding whether to give you a loan. (1-3 sentences. 3.0 points)
Explanation:
Your Credit History
Your Ability To Pay The Loan
Your Cash Flow History
what practices are part of human resource management?multiple select question.employee relationstraining and developmentrecruitmentunion organizationcompensation
Among the options, employee relations, training and development, recruitment, and compensation are the practices that are part of human resource management.
Union organization is not one of them since this must be a personal to the employees (including people from the human resource management) of the company to organize themselves and mobilize when collective actions are needed to protect their human rights and dignity as workers.
HR or Human Resource Management practices:
Employee Relations - to get to know company's employees as their assetsTraining and Development - to update the skills of the company's employeesRecruitment - to hire the correct people for the companyCompensation - to make sure that correct benefits and wages or salary are given to company's workersDiscover if it's correct to assume that managers will invest in human resource management only if human resource practices such as developing staff and communication will result in greater profits: https://brainly.com/question/27957418
#SPJ4
Why is it important to conduct market research on your target audience before building your marketing plan
FIRST ANSWER WILL BE NAMED BRAINLIEST
Which action would effectively and appropriately address a budget deficit?
A. reduce income
B. reduce expenses
C. apply for bankruptcy
D. apply for new credit
Answer:
It is letter B
Explanation:
Reducing expenses would effectively and appropriately address a budget deficit. Thus option B is correct.
What is the budget?A budget is a financial plan that projects future earnings and costs. A budget, put simply, forecasts future finances in addition to anticipated revenues and expenditures. Calculating the company's earnings and costs for a set period of time is the procedure for creating a budget.
Increasing tax rates while decreasing government expenditures are the two apparent ways to minimize a budget deficit. the reduction of government spending and/or the raising of taxes, which results in either a rise in the primary surplus or a decrease in the budget deficit. greater taxes and less funding by the government. If public spending is lower than tax receipts, a budget surplus results.
Therefore, option B is the correct option.
Learn more about budget, Here:
https://brainly.com/question/15683430
#SPJ2
Suppose that unusually hot weather causes the demand curve for ice cream to shift to the right.
Why will the price of ice cream rise to a new market-clearing level?
Suppose the supply of ice cream is completely inelastic in the short run, so the supply curve is
vertical as shown below. The initial equilibrium is at price P1. The unusually hot weather causes the
demand curve for ice cream to shift from D1 to D2, creating short-run excess demand (i.e., a temporary
shortage) at the current price. Consumers will bid against each other for the ice cream, putting
upward pressure on the price, and ice cream sellers will react by raising price. The price of ice cream
will rise until the quantity demanded and the quantity supplied are equal, which occurs at price P2
The shift in the demand curve caused by unusually hot weather leads to a temporary shortage of ice cream. Consumers bid against each other, pushing the price upward. Ice cream sellers respond by raising the price until a new equilibrium is reached, where the quantity demanded matches the quantity supplied.
The price of ice cream will rise to a new market-clearing level because of the shift in the demand curve caused by the unusually hot weather. Here's a step-by-step explanation:
1. The demand curve for ice cream shifts to the right due to the increased desire for ice cream during hot weather. This means that at each price level, consumers are now willing to buy a higher quantity of ice cream.
2. As a result of the shift in the demand curve, there is a temporary shortage of ice cream at the current price (P1). This is because the quantity demanded (Qd) exceeds the quantity supplied (Qs) at this price level.
3. With the shortage, consumers who want to buy ice cream will start bidding against each other to secure a limited supply. This bidding process puts upward pressure on the price of ice cream.
4. In response to the increased demand and higher prices, ice cream sellers will raise the price of ice cream. This is a rational response to maximize their profits.
5. The price of ice cream will continue to rise until it reaches a new equilibrium point (P2), where the quantity demanded equals the quantity supplied. At this price, the market clears, meaning there is neither a shortage nor a surplus of ice cream.
Learn more about equilibrium here :-
https://brainly.com/question/30694482
#SPJ11
When does information become as liability for an organization
Answer:
after college hope it help :)
Explanation:
Answer:
when it is not managed properly
Explanation:
PLATO
Marketers will, based on solid research, identify a specific ______________ ______________ (2 words).
Answer:
product and service
Explanation:
Market research focuses on the strategic analysis of the quantitative and qualitative data and the issues related to the marketing of the product and services. During the changing elements of marketing mix which will impacts the customer's behavior. The research often includes Business to consumer and to businesses. Aiming to understand the comparatives of the product and services in the market.Macroeconomy
In your own words, summarize the connection between opportunity cost, marginal cost and benefit, and rational decisionmaking
Opportunity cost, marginal cost and benefit, and rational decision-making are interconnected concepts that help individuals make informed choices by considering their costs and benefits.
Opportunity cost is what people give up to get something else. The marginal cost is the extra cost incurred by producing an extra unit of output, while the marginal benefit is the extra benefit from producing an additional unit of output. Rational decision making is a process of selecting among alternatives based on a thorough evaluation of their potential costs and benefits.
These concepts are interrelated in that one can evaluate the opportunity cost of making a particular choice by comparing the marginal costs and benefits of that choice. By doing this, a rational decision can be made on which alternative to choose, based on the greatest net benefit.
For example, when deciding whether to purchase a new car or not, one can evaluate the opportunity cost of that decision by comparing the marginal costs and benefits of that choice. If the marginal cost of purchasing the car is greater than the marginal benefit of owning it, then it would not be a rational decision to purchase the car. Therefore, rational decision-making involves evaluating the opportunity cost of alternatives by considering their marginal costs and benefits.
Learn more about marginal costs
https://brainly.com/question/14923834
#SPJ11
explain carefully the meaning of the terms convenience yield and cost of carry. what is the relationship between futures price, spot price, convenience yield, and cost of carry?
The convenience yield is a term used in the commodity markets to describe the benefits that accrue to the holder of a physical commodity.
These benefits can include the ability to meet unexpected demand, the ability to avoid disruptions in supply, and the ability to take advantage of favorable price movements. The cost of carry, on the other hand, is the cost associated with holding a physical commodity, such as storage costs, insurance, and financing costs.
The relationship between futures price, spot price, convenience yield, and cost of carry can be expressed in the following equation:
Futures Price = Spot Price + Cost of Carry - Convenience Yield
This equation shows that the futures price is determined by the spot price, plus the cost of carry, minus the convenience yield. The higher the cost of carry, the higher the futures price will be. Conversely, the higher the convenience yield, the lower the futures price will be.
This relationship is important because it helps traders and investors understand how the prices of different commodities are related and how they can use this information to make informed trading decisions.
Learn more about commodity markets at: https://brainly.com/question/2262666
#SPJ11
3) Real GDP per capita is $40,000 and grows by 2% per year. According to the rule of 70, how many years will it take for real GDP per capita to double? How long will it actually take for real GDP per capita to double? (Use Excel) 4) Real GDP per capita is $40,000 and grows by 3% per year. According to the rule of 70, how many years will it take for real GDP per capita to double? How long will it actually take for real GDP per capita to double? (Use Excel)
The rule of 70 states that if the annual growth rate of a variable (such as GDP or population) is x%, then that variable will double in approximately 70/x years.
Real GDP per capita is $40,000 and grows by 2% per year, so the annual growth rate is 2%.
To calculate how many years it will take for real GDP per capita to double, we can use the rule of 70:70/2 = 35Therefore, it will take approximately 35 years for real GDP per capita to double.
To calculate how long it will actually take for real GDP per capita to double, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. For this problem, we can assume that P = $40,000, r = 2%, n = 1 (since the interest is compounded annually), and A = 2P = $80,000. Plugging these values into the formula, we get:80,000 = 40,000(1 + 0.02/1)^(1t)Simplifying:2 = (1.02)^t.
Taking the natural logarithm of both sides:
ln(2) = t ln(1.02)Solving for t: t = ln(2) / ln(1.02)≈ 35.0Therefore, it will take approximately 35 years for real GDP per capita to double.4) Real GDP per capita is $40,000 and grows by 3% per year, so the annual growth rate is 3%.
To calculate how many years it will take for real GDP per capita to double, we can use the rule of 70:70/3 = 23.33 (rounded to two decimal places)Therefore, it will take approximately 23.33 years for real GDP per capita to double.
To calculate how long it will actually take for real GDP per capita to double, we can use the same formula as before: A = P(1 + r/n)^(n t)where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.
For this problem, we can assume that P = $40,000, r = 3%, n = 1 (since the interest is compounded annually), and A = 2P = $80,000.
Plugging these values into the formula, we get:80,000 = 40,000(1 + 0.03/1)^(1t)Simplifying:2 = (1.03)^t
Taking the natural logarithm of both sides: ln(2) = t ln(1.03)Solving for t: t = ln(2) / ln(1.03)≈ 22.62
Therefore, it will actually take approximately 22.62 years for real GDP per capita to double.
Learn more about GDP:
https://brainly.com/question/1383956
#SPJ11
Why is internal control over cash important? Check all that apply.
- the elevated risk of theft
- the high volume of cash transactions
- the inherent lack of segregation of duties
- the infeasibility of document procedures
Except for option C. All that apply Internal controls must be in place to protect these assets and ensure that only authorized individuals have access to them.
What is Internal Control?Internal control is a procedure implemented by a company's board of directors, management, and other staff members and intended to give reasonable assurance that the information is trustworthy, accurate, and timely. of adherence to relevant laws, rules, contracts, policies, and procedures.
Thus, Internal control is crucial when it comes to cash because it is susceptible to theft or loss. Because of the enormous volume of cash transactions, there is always always a very high risk of theft, which is prevented by the separation of roles and the impossibility of document procedures.
Learn more about Internal Control here:
https://brainly.com/question/13678245
#SPJ1
Focusing on only one of the following – customer relationship management (CRM), internal supply chain management (ISCM), or supplier relationship management (SRM) – critically analyse how your own workplace could benefit by implementing your chosen system (or implementing it more fully) in your own workplace.
Implementing CRM in the workplace can benefit businesses by enhancing customer satisfaction, retention, and cross-selling opportunities while improving efficiency and productivity. This ultimately leads to increased profitability.
Customer Relationship Management (CRM) is an important system that focuses on customer retention, loyalty and ultimately maximizes profitability. CRM system involves the use of technology and data analysis to organize, manage and synchronize customer interactions, and to build a strong customer relationship, hence a critical factor for business success.
In the workplace, implementation of CRM can have numerous benefits.
First, CRM enhances customer satisfaction. This is achieved through the centralization of customer data which enables the business to respond more effectively and timely to customer needs and concerns. For instance, a company can track customer complaints and address them proactively, which helps in reducing the churn rate and increasing customer loyalty.
Secondly, CRM enhances customer retention. This system helps to keep track of the customers’ history and preferences. It also enables the company to target customers more effectively with the right products, offers and promotions. In the long term, this can lead to customer retention and increased profitability.
Thirdly, CRM system helps to create cross-selling opportunities. It is easier to sell more to existing customers than to acquire new ones. With CRM, businesses can easily identify the needs of their existing customers and offer them complementary products or services. This helps to increase the customer lifetime value and maximizes profitability.
Fourthly, CRM enhances efficiency and productivity. The system automates routine tasks, making it easier for employees to manage customer interactions. This reduces errors, duplication of work and saves time. It also enables businesses to streamline their workflows, which increases efficiency and productivity.
In conclusion, CRM is an important system that every business should implement. It enhances customer satisfaction, retention, cross-selling opportunities, efficiency and productivity, which ultimately leads to increased profitability.
To learn more about Customer Relationship Management visit:
https://brainly.com/question/25656282
#SPJ11
On March 25, 2014, Patton Company sold merchandise on account,$10,000. The applicable sales tax percentage is 8.5%. Record the transaction.
Answer:
Kindly see attached picture
Explanation:
Sales tax percentage= 8.5%
Sales = 10,000
Sales tax payable = 0.085 × 10000 = 850
Accounts payable = 10000 + 850 = 10850
Kindly see attached picture for journal entry
Investing activities are affected by changes in current liabilities. O changes in long-term assets. O changes in current assets. O changes in equity accounts.
Investing activities are not affected by changes in current liabilities. Instead, they are affected by changes in long-term assets. Investing activities is a section of the statement of cash flows that shows the cash inflows and outflows from purchasing and selling long-term assets like property, plant, and equipment. What are investing activities?
Investing activities involve the purchase and sale of long-term assets such as property, plant, and equipment. Investing activities also include buying and selling long-term investments, such as stocks and bonds, as well as lending money and collecting on the loans.
Investing activities are part of the statement of cash flows, which is one of the three main financial statements of a company.
To know more about liabilities visit:
https://brainly.com/question/30805836
#SPJ11
Your is the amount you own in assets minus everything you owe.
The term you are referring to is called net worth. It is calculated by subtracting all of your liabilities (debts and obligations) from your assets (anything you own that has value).
This includes things like savings accounts, investments, real estate, and personal possessions like cars and jewelry. Essentially, net worth is a snapshot of your financial standing at a specific point in time. It can be a helpful indicator of your overall financial health, as it takes into account both your assets and your debts.
By regularly tracking your net worth, you can better understand your progress towards financial goals and make informed decisions about your spending and investments.
To know more about net worth, refer to the link:
https://brainly.com/question/12294231#
#SPJ11
Explain in brief about Vermi-compost
Vermicompost is a type of organic fertilizer that is produced by the decomposition of organic matter by worms.
It is a nutrient-rich substance that is produced by the digestive system of earthworms, which break down organic matter such as food waste, plant debris, and animal manure.
The process of vermicomposting involves creating a compost bin filled with bedding material, such as shredded newspaper or cardboard, and adding worms to the mixture. The worms then feed on the organic matter in the bin, breaking it down into a nutrient-rich compost that can be used to fertilize plants.
Vermicompost is highly beneficial for soil health, as it contains a range of nutrients that are essential for plant growth, including nitrogen, phosphorus, and potassium. It also contains beneficial microorganisms that can help to improve soil structure and enhance plant growth.
Vermicompost is a sustainable and eco-friendly alternative to traditional chemical fertilizers, as it is produced from organic waste materials and does not contain harmful chemicals or pollutants. It is easy to produce at home using a compost bin and a small number of worms, making it an accessible option for gardeners and farmers.
Learn more about microorganisms here:
https://brainly.com/question/6699104
#SPJ11
Which of these scenarios would lead to an industry requiring more productive workers?
A. Supply of goods increases, and demand for goods decreases
B. Supply of good decreases, and demand for goods increases
C. Supply of goods increases, and demand for goods remains the same
D. Supply of goods decreases,and demand for goods remains the same
Answer:
B- Supply of goods decreases, and demand for goods increases.
Explanation:
I took the quiz
Answer:
Supply of goods decreases, and demand for goods increases.
Arrange the following revenues in the federal government, from greatest to
least.
Drag each item to put them in the correct order.
(2 points)
= excise taxes
= Social Security and Medicare taxes
= corporate income taxes
= individual income taxes
= customs duties
= miscellaneous revenue
program manager stasha makes sure her program always operates according to her state's required child to staff ratio (even if lower than ras's ratio of 1:15) and the state's maximum group size (even if she has space for more kids). what is stasha ensuring?
Program management strives to benefit the overall program by pooling project assets, expenses, and activities.
The definition of program management.
Program management is the practice of overseeing programs that are aligned with corporate goals and enhance organizational performance. Program managers are responsible for directing and organizing all of the organization's programs and other strategic activities.
What precisely do program management abilities entail?
having knowledge of program management
Numerous essential abilities, such as organization, planning, scheduling, program strategy, reporting, proposal writing, and budget planning, are required of a successful program manager. In the end, it depends on the positions your company is looking for and how they will interact with any current team members.
To know more about Program management visit:
https://brainly.com/question/29023210
#SPJ4
if i get 16 brainlest ill give u guys 136 points
Answer:
you get brainlyist by answering questions. not making them
Answer:
ill give u brainlest tete
Explanation:
Quebec supplies roughly 75% of the world’s supply of what?
Answer:
Explanation:
Quebec supplies roughly 75% of the world's supply of maple syrup. The province of Quebec in Canada is known for its vast forests of maple trees and is responsible for the majority of the world's maple syrup production. The syrup is produced by tapping the trees, collecting the sap, and boiling it down to concentrate the sugar. Quebec's reputation for high-quality maple syrup, combined with its large-scale production, has made it the dominant global supplier of the sweet, sticky syrup.
Why is the equilibrium wage for doctors high?
because the supply of doctors is relatively low and the demand is relatively high
because the supply of doctors is relatively high and the demand is relatively low
because the demand for doctors tends to be lower relative to supply
because the demand for doctors equals the supply
Answer:
because the supply of doctors is relatively low and the demand is relatively high.
Si usted estuviera en 1992 y hubiera sido un inversionista norteamericano, ¿habría comprado bonos del Gobierno de México o acciones de empresas mexicanas?
Answer:
Si estuviese en 1992 y hubiese sido un inversionista norteamericano, de ninguna manera hubiese comprado bonos del Gobierno de México o acciones de empresas de dicho país.
Ello pues en ese entonces, el gobierno a cargo de Carlos Salinas de Gortari se encontraba llevando a cabo medidas económicas de corte liberal, dilapidando reservas internacionales para poder garantizar la competitividad del mercado mexicano, intentando atraer empresas extranjeras para invertir en el país. Pero esos movimientos, contrario a lo que el gobierno creía, no generaron mayores ingresos al país, sino que generaron situaciones de inestabilidad económica que hicieron que el gobierno de México tuviera que devaluar su moneda, generando una enorme crisis económica y financiera que fue mundialmente conocida como la Crisis del Tequila.