The initial price on the bond can be calculated using the formula for present value of a single future cash flow:
PV = FV / (1 + r)^n,
where PV is the present value,
FV is the future value,
r is the interest rate, and
n is the number of years.
Using the given values, we can plug them into the formula and solve for PV:
PV = 10,000 / (1 + 0.15)^10
PV = 10,000 / 4.046
PV = $2,472
Therefore, the initial price on the bond is $2,472. The answer is (D) $2,472.
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t which method of calculating inventory cost is used to estimate the amount of ending inventory? a. last in, first out (lifo) b. first in, first out (fifo) c. weighted average method d. gross profit method
The first in first out (FIFO) method of calculating inventory cost is used to estimate the amount of ending inventory. Thus, the accurate answer is option (B).
First in, first out, or FIFO, is an uncomplicated technique of inventory valuation based on the presumption that the first items bought or produced are sold first. This implies that older inventory is distributed to customers before fresh inventory, in theory.
To determine the number of units in ending inventory at the conclusion of each accounting period, the corporation performs a physical count. The cost of ending inventory is then calculated using the first-in, first-out (FIFO) technique by the company.
Therefore, option B is the appropriate response.
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The Gross Profit Method is used to estimate the cost of ending inventory. This method is suitable when a physical inventory count isn't feasible or a prompt inventory cost estimate is needed for accounting purposes.
Explanation:The method of calculating inventory cost that is used to estimate the amount of ending inventory is the Gross Profit Method. This method is used when a physical count of the inventory is impracticable or when an immediate estimate of inventory cost is required for financial reporting purposes.
Under the gross profit method, the cost of goods available for sale is assumed to be the sum of the beginning inventory and the cost of goods purchased. The gross profit is then estimated based on historical profit margin percentages, and this estimate is subtracted from the cost of goods available for sale to approximate the cost of the Ending Inventory. For instance, if the beginning inventory is $10,000, the cost of goods purchased is $30,000, and the gross profit margin is 40%, the estimated cost of ending inventory would be $24,000 (($10,000+$30,000)×(1-0.40)).
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a company may develop an emergent strategy due to: group of answer choices all of these new market opportunities. strategic moves by rival firms. fast-changing technological developments.
A company may develop an emergent strategy due to a combination of factors including new market opportunities, strategic moves by rival firms, and fast-changing technological developments.
Emergent strategies are the unplanned and reactive strategies that emerge in response to unexpected events or changes in the environment that were not anticipated by the company's formal strategic planning process. These strategies are often developed through experimentation, trial and error, and continuous adaptation to changing circumstances. They may be influenced by feedback from customers, suppliers, and employees, as well as by the company's own internal capabilities and resources. Emergent strategies can be a powerful source of competitive advantage, enabling companies to respond quickly and effectively to changes in the marketplace.
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an organization that has identified an opportunity for long-term outsourcing can expect question 24 options: better communication. lowered administrative costs. improved utilization of resources. all of the above.
An organization that has identified an opportunity for long-term outsourcing can expect D) "all of the above" including better communication, lowered administrative costs, and improved utilization of resources.
Long-term outsourcing can lead to several benefits for an organization. Improved communication can be achieved by outsourcing tasks to specialized service providers, who are often more experienced and efficient in handling specific tasks.
This can lead to better coordination between the organization and the outsourcing partner, resulting in improved communication.Outsourcing can also lead to lowered administrative costs, as outsourcing service providers can handle tasks such as HR, payroll, and accounting, freeing up the organization's resources for other strategic initiatives.
Improved utilization of resources is another advantage of outsourcing, as it enables organizations to focus on their core competencies while outsourcing non-core activities to specialized service providers.
Overall, long-term outsourcing can result in significant benefits for organizations, including better communication, lowered administrative costs, and improved utilization of resources. So, correct option is d.
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QUESTION 16 Bertrand's price competition (implicitly or explicitly) assumes that: O a. Firms have some degree of market power and are not "small". b. There is intense price competition, in the sense that consumers can switch from one supplier to another at no, or a very low, switching cost. OC. Collusion is not possible. Od. All of the above. QUESTION 17 0 In the price leadership model covered in class: a. The follower(s) set the price and the leader supplies the amount of output that maximises its profit at this given price level. b. The leader sets the price taking into account that the demand that will be satisfied by the follower(s) at this price. OC. The leader maximises its profit subject to the follower's or followers' reaction function(s). d. The solution contradicts the Law of Demand.
Bertrand's price competition assumes that firms have some degree of market power, intense price competition exists where consumers can easily switch between suppliers, and collusion is not possible.
For question 16, the correct answer is d. All of the above. Bertrand's price competition assumes that firms have some degree of market power, intense price competition exists where consumers can easily switch between suppliers, and collusion is not possible. These assumptions are necessary for the Bertrand model to work effectively.
Moving on to question 17, the correct answer is c. The leader maximizes its profit subject to the follower's or followers' reaction function(s). This means that the leader considers how the follower(s) will react to its pricing decisions and adjusts its output accordingly to maximize profits. The follower(s) do not set the price in the price leadership model.
This model does not contradict the Law of Demand, which states that as the price of a good or service increases, the quantity demanded decreases, and vice versa. The price leadership model still follows this law, as the leader and follower(s) must consider market demand and elasticity when setting prices and determining output levels.
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the corporate officer identified who has custody of the company's funds and is generally responsible for planning and controlling the company's cash position is the:
The corporate officer who has custody of the company's funds and is responsible for planning and controlling the company's cash position is known as the Chief Financial Officer (CFO).
The CFO is a high-level executive who oversees the financial operations of the company, including financial planning, budgeting, accounting, and reporting. They also manage the company's investments, debt, and other financial resources to ensure the company has enough cash to operate and grow.
The CFO works closely with other senior executives, such as the CEO and COO, to make strategic financial decisions that impact the company's future. They must have a strong understanding of financial markets, accounting principles, and business operations to effectively manage the company's financial position. The CFO is also responsible for ensuring the company complies with all financial regulations and reporting requirements.
In summary, the CFO is the corporate officer who has custody of the company's funds and is responsible for planning and controlling the company's cash position. They play a critical role in ensuring the financial health and success of the company.
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boney corporation processes sugar beets that it purchases from farmers. sugar beets are processed in batches. a batch of sugar beets costs $44 to buy from farmers and $15 to crush in the company's plant. two intermediate products, beet fiber and beet juice, emerge from the crushing process. the beet fiber can be sold as is for $20 or processed further for $19 to make the end product industrial fiber that is sold for $52. the beet juice can be sold as is for $35 or processed further for $23 to make the end product refined sugar that is sold for $52. what is the financial advantage (disadvantage) for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is? multiple choice ($39) ($65) ($21) ($6)
The financial advantage is $5 million, which is a positive amount. Therefore, the correct answer is ($6).
To determine the financial advantage or disadvantage for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is, we need to calculate the incremental revenue and incremental cost of processing.
The incremental revenue is the additional revenue earned by processing the intermediate product further. In this case, the incremental revenue from processing the beet juice into refined sugar is:
Incremental revenue = Selling price of refined sugar - Selling price of beet juice
Incremental revenue = $52 - $35
Incremental revenue = $17
The incremental cost is the additional cost incurred in processing the intermediate product further. In this case, the incremental cost of processing the beet juice into refined sugar is:
Incremental cost = Cost of processing into refined sugar - Selling price of beet juice
Incremental cost = $23 - $35
Incremental cost = ($12)
Since the incremental revenue of $17 is greater than the incremental cost of ($12), processing the intermediate product beet juice into refined sugar would provide a financial advantage for the company.
Therefore, the financial advantage for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is is:
Incremental revenue - Incremental cost = $17 - ($12) = $5 million.
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30. A hedge fund charges 2 plus 15%. Investors want a return after fees of 20%. How much does the hedge fund have to earn, before fees, to provide investors with this return? Assume that the incentive fee is paid on the net return after management fees have been subtracted. A 27% B. 25.5% C. 21.6% D. 20%
The closest answer is B. 25.5%, the hedge fund needs to earn 25.88% before fees to provide investors with a 20% return after fees.
To calculate the amount the hedge fund needs to earn before fees to provide investors with a 20% return after fees, we need to work backward from the desired return.
Let X be the amount the hedge fund needs to earn before fees. Then, the net return after management fees would be X - 2%. The incentive fee would be 15% of the net return, or 0.15(X - 2%). Therefore, the total return after fees would be:
X - 2% - 0.15(X - 2%) = 20%
Simplifying this equation, we get:
0.85X - 2% = 20%
0.85X = 22%
X = 22%/0.85
Solving for X, we get X = 25.88%. Therefore, the hedge fund needs to earn 25.88% before fees to provide investors with a 20% return after fees.
The closest answer choice is B. 25.5%.
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The process of locating and attracting qualified applicants for jobs open in the organization is called
hiring.
job posting.
recruiting.
interviewing.
selection.
The process of locating and attracting qualified applicants for jobs open in the organization is called: recruiting. The correct option is B.
Recruiting is the process of searching for and identifying potential candidates for a job opening in the organization. It involves a variety of strategies, such as job postings, networking, employee referrals, and social media.
Recruiting is a crucial aspect of human resource management, as it plays a critical role in identifying and attracting top talent to the organization. Effective recruiting strategies can help organizations to build a strong and diverse workforce, enhance employee engagement and retention, and ultimately drive business success.
Recruiting involves several steps, including identifying the job opening and its requirements, creating a job description, developing a recruitment plan, sourcing and screening candidates, and ultimately selecting the best candidate for the job.
The goal of recruiting is to identify the best candidates who have the necessary skills, experience, and qualifications to perform the job effectively and contribute to the organization's success.
In summary, recruiting is a critical process in the hiring process, as it involves identifying and attracting the best candidates for the job opening. It requires a variety of strategies and involves several steps to ensure that the organization hires the best candidate for the job.
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Complete question:
The process of locating and attracting qualified applicants for jobs open in the organization is called:
a. hiring.
b. job posting.
c. recruiting.
d. interviewing.
e. selection.
Fariey Inc. has perpetual preferred stock outstanding that sells for $46 a share and pays a dividend of $3.25 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %
The perpetual preferred stock of Fariey, Inc. has a required rate of return of 7.07%. Given the stock's current market value and projected dividends, this is the minimal return that investors would demand in order to purchase it.
The required rate of return for Fariey, Inc.'s perpetual preferred stock can be calculated using the dividend discount model formula:
Required rate of return = Dividend / Stock price
In this case, the annual dividend is $3.25 and the stock price is $46 per share.
Required rate of return = $3.25 / $46 = 0.07065 or 7.07% (rounded to two decimal places)
Therefore, the required rate of return for Fariey, Inc.'s perpetual preferred stock is 7.07%. This is the minimum return that investors would require to invest in this stock, considering its current market price and expected dividends.
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in the retail clothing industry, the customer demands vary from state to state. therefore, many retail stores allow each individual store manager to make decisions that are best for the store he or she manages. this exemplifies a(n)
A decentralized management approach allows retail clothing stores to be more responsive to local market conditions and customer demands. This can help them to better serve their customers, build stronger relationships with their local communities, and ultimately drive more sales and profits.
In the retail clothing industry, customer demands can vary significantly from state to state, and this can present a challenge for retailers who want to offer a consistent experience across all their stores. To address this issue, many retail stores allow each individual store manager to make decisions that are best for the store they manage. This approach exemplifies a decentralized management style.
Decentralized management is a management approach where decision-making authority is spread out across different levels of an organization. In a decentralized system, lower-level managers have more autonomy to make decisions that are best for their specific area of responsibility. This is in contrast to a centralized system, where decision-making authority is concentrated at the top of the organization.
In the retail clothing industry, a decentralized management approach can be beneficial because it allows store managers to respond quickly to the unique demands of their local market. For example, a store manager in Florida might decide to stock more swimsuits and beachwear during the summer months, while a store manager in Minnesota might focus more on warm clothing for the winter season.
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which of the statements below about the fed is not true? the fed is controlled by the u.s. government. the fed can loan money to private banks as lender of last resort. regional federal reserve banks act as central banks for their areas. federal reserve banks control the money supply.
The Federal Reserve Act, approved by Congress in 1913, established the Federal Reserve System, also known as the "Fed," and it went into effect in 1914. The correct answer is a. the fed is controlled by the u.s. government.
It resembles all central banks exactly. The Federal Reserve is a branch of the American government. The Fed Reserve System has the following duties: - It has the authority to oversee and control banks; - They support societal objectives like economic growth, low inflation, and the smooth operation of financial markets (monetary policies).
The "lender of last resort" is the Federal Reserve. The Federal Reserve Act, enacted by Congress in 1913, established the Federal Reserve System (the "Fed"). In 1914, the Fed started operating. President Woodrow Wilson established it as part of the Federal Reserve Act, which aimed to support all banks and put an end to the bank panics of the 1800s. Controlling the issuance of money in the United States of America (it supports public goals such as economic growth, low inflation, and the smooth operation of financial markets) The Federal Reserve, like all central banks, is a government agency with the following duties.
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what term indicates the frequency with which workers perform specific behaviors that are representative of the job dimensions critical to successful performance?
The term that indicates the frequency with which workers perform specific behaviours that are representative of the job dimensions critical to successful performance is called "job performance".
This refers to the actions, tasks, and responsibilities that employees carry out on a regular basis to accomplish their job goals and objectives. Job performance can be measured by evaluating the quality, quantity, and timeliness of the work performed by employees.
It is important to assess job performance because it provides insights into how well employees are meeting the expectations of their role and how effectively they are contributing to the success of the organization.
Accurate assessments of job performance can help organizations identify areas for improvement and develop strategies to enhance overall productivity and performance.
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Omega Corporation has 10.4 million shares outstanding, now trading at $59 per share. The firm has estimated the expected rate of return to shareholders at about 11%. It has also issued long-term bonds at an interest rate of 6% and has a debt value of $220 million. It pays tax at a marginal rate of 21%. a. What is Omega's after-tax WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) After-tax WACC % b. What would WACC be if Omega used no debt at all? (Hint: For this problem, you can assume that the firm's overall beta [BA] is not affected by its capital structure or by the taxes saved because debt interest is tax-deductible.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) WACC %
Answer:
The after-tax WACC 15.55%. WACC with no debt is 16.14%.
Explanation:
a. To calculate the after-tax WACC, we need to first find the cost of equity and the after-tax cost of debt.
Cost of equity:
Using the Capital Asset Pricing Model (CAPM), we have:
R_e = R_f + β(R_m - R_f)
where:
R_f = risk-free rate = 0 (not given in the problem)
β = beta = not given in the problem, so we need to use the information given to estimate it.
R_m = expected market return = 11% (given in the problem)
To estimate the beta, we can use the following formula:
β = (r_a - r_f) / (r_m - r_f)
where:
r_a = expected rate of return on Omega's stock = 11% (given in the problem)
r_f = risk-free rate = 0 (not given in the problem)
r_m = expected market return = 11% (given in the problem)
Therefore, β = 1.
Now, we can calculate the cost of equity using CAPM:
R_e = 0.11 + 1(0.11 - 0) = 0.22 or 22%
After-tax cost of debt:
The before-tax cost of debt is given as 6%, but we need to calculate the after-tax cost of debt. The formula for after-tax cost of debt is:
R_d = R_b(1 - T)
where:
R_b = before-tax cost of debt = 6% (given in the problem)
T = marginal tax rate = 21% (given in the problem)
Therefore, the after-tax cost of debt is:
R_d = 6%(1 - 0.21) = 4.74%
Weighted Average Cost of Capital (WACC):
The formula for WACC is:
WACC = (E/V)R_e + (D/V)R_d(1 - T)
where:
E = market value of equity = 10.4 million shares x $59 per share = $613.6 million
D = market value of debt = $220 million
V = total value of the firm = E + D = $833.6 million
Therefore, the WACC is:
WACC = (613.6/833.6)0.22 + (220/833.6)0.0474(1 - 0.21) = 0.1555 or 15.55%
b. To calculate WACC with no debt, we need to use the formula:
WACC = (E/V)R_e
where:
E = market value of equity = 10.4 million shares x $59 per share = $613.6 million
V = total value of the firm = E + D = $833.6 million
Therefore, the WACC with no debt is:
WACC = (613.6/833.6)0.22 = 0.1614 or 16.14%
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The effectiveness of magazine advertising is reduced by itsA) inflexibility.B) inability to target specific markets.C) brief life span.D) higher total cost, relative to television advertising.
The correct option is option "A" The effectiveness of magazine advertising is reduced by its inflexibility,
which means that once the advertisement has been printed, it cannot be altered or changed.
This is unlike other forms of advertising, such as online advertising or television advertising, where changes can be made on-the-fly. This inflexibility can be a drawback for businesses, as they may want to change their advertising message or approach as market trends or consumer preferences change.
Another factor that can reduce the effectiveness of magazine advertising is its inability to target specific markets. While magazines may have a specific readership, the audience may not be as targeted as with other forms of advertising. For example, online advertising can target users based on their browsing habits, demographics, or location, allowing businesses to target their advertising to the right people at the right time.
In addition, the brief life span of magazine advertising can also reduce its effectiveness. Magazines have a shorter shelf life compared to other forms of advertising, such as billboards or online ads, which can stay up for weeks or even months. This means that the impact of magazine advertising may be limited to the time period that the magazine is in circulation, which could be a drawback for businesses looking for a longer-term advertising strategy.
Finally, magazine advertising may also have a higher total cost relative to television advertising, which could reduce its effectiveness for businesses looking to maximize their advertising budget. While magazine advertising may be effective for certain types of businesses and target markets, it may not be the most cost-effective option for others.
So, the correct answer is option A
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The correct answer is A) inflexibility. Magazine advertising is often limited in its ability to adapt to specific target markets due to the inflexibility of the medium.
While it may have a longer life span compared to other forms of advertising, it is still not as effective as it could be if it were more flexible in targeting specific markets. Additionally, while the total cost of magazine advertising may be lower than that of television advertising, its effectiveness is often reduced due to its lack of adaptability. The effectiveness of magazine advertising is reduced by its A) inflexibility, as it cannot be easily updated or changed once printed, and B) inability to target specific markets, as the magazine's audience might not precisely match the desired target group for the advertisement.
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1. Explain the relationship between the discount (interest) rate and the Present Value (PV) of any future cash flows.
2. Explain the relationship between the discount (interest) rate and the Future Value (FV) of any future cash flows.
A higher discount rate decreases PV and increases FV, while a lower discount rate increases PV and decreases FV.
1. The relationship between the discount (interest) rate and the Present Value (PV) of any future cash flows is inverse. As the discount rate increases, the PV decreases, and vice versa. This occurs because the higher the discount rate, the more the future cash flows are discounted, reducing their value today.
2. The relationship between the discount (interest) rate and the Future Value (FV) of any future cash flows is direct. As the interest rate increases, the FV also increases, and vice versa. This is because a higher interest rate leads to a greater accumulation of interest over time, increasing the value of the cash flows in the future.
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studying the nature and power of consumer ________ (which involves the evaluation of a product as either positive or negative) is extremely important to consumer researchers.
Studying the nature and power of consumer evaluations (which involves the evaluation of a product as either positive or negative) is extremely important to consumer researchers.
Consumer evaluations play a crucial role in understanding how customers perceive a product or service. By assessing their opinions, researchers can identify factors that contribute to the overall satisfaction or dissatisfaction with the product.
This information can then be used to improve and optimize products or services to better align with consumer preferences.
To study the nature and power of consumer evaluations, researchers often employ various techniques, such as surveys, interviews, focus groups, and online reviews.
These methods allow them to gather in-depth data regarding customer opinions, experiences, and expectations.
The following steps can be used to analyze consumer evaluations:
1. Collect data: Researchers gather feedback from consumers through various channels, including questionnaires, interviews, and online reviews.
2. Organize and categorize: After collecting the data, researchers categorize the feedback based on whether it is positive or negative and identify recurring themes or patterns.
3. Analyze data: Researchers analyze the categorized data, identifying trends and correlations to better understand the factors driving customer evaluations.
4. Interpret findings: Based on the analysis, researchers draw conclusions about the nature and power of consumer evaluations and determine their impact on product performance and brand perception.
5. Implement improvements: Using the insights gained from the research, businesses can make informed decisions to enhance their products or services to better meet customer needs and preferences.
In conclusion, studying the nature and power of consumer evaluations is a vital aspect of consumer research.
It helps businesses understand their customers' needs and preferences, enabling them to create better products and services, ultimately resulting in increased customer satisfaction and loyalty.
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according to burns and stalker, an organizational environment that is subject to uncertainty and rapid change would be a. unstable. b. integrated. c. pooled. d. differentiated. e. inflexible.
According to Burns and Stalker's typology of organizational structures, an organizational environment that is subject to uncertainty and rapid change would be classified as unstable.
Burns and Stalker proposed two distinct types of organizational structures based on the degree of environmental uncertainty and change that an organization faces: mechanistic and organic. Mechanistic structures are best suited to stable and certain environments, while organic structures are better suited to uncertain and rapidly changing environments.
In an unstable environment, there is a high degree of uncertainty and change, which requires an organization to be adaptable and flexible in order to survive. An organic structure, characterized by decentralized decision-making, cross-functional teams, and flexible job roles, is better suited to such an environment. Therefore, an unstable environment would be classified as organic according to Burns and Stalker's typology.
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According to Burns and Stalker's theory, an organizational environment that is subject to uncertainty and rapid change would be considered unstable. Option A
This type of environment is characterized by unpredictability, and organizations that operate within it must be flexible and responsive to changes in the external environment.
In an unstable environment, there is a high degree of variability and uncertainty, which means that organizations must constantly adapt and adjust their strategies and operations in order to survive. This can be challenging, as it requires a high level of agility and innovation.
Organizations that operate in unstable environments may also face greater competition and pressure to innovate, as they must constantly find new ways to stay ahead of their competitors. This can lead to a culture of experimentation and risk-taking, as organizations seek to find new and innovative solutions to the challenges they face.
Overall, an unstable organizational environment requires a high degree of flexibility, adaptability, and resilience in order to survive and thrive. Organizations that are able to navigate this environment successfully are likely to be those that are able to quickly respond to changes in the external environment, innovate and experiment with new approaches, and remain agile and responsive to changing market conditions. Therefore option A is correct.
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petrus framing's cost formula for its supplies cost is $1,790 per month plus $10 per frame. for the month of march, the company planned for activity of 619 frames, but the actual level of activity was 624 frames. the actual supplies cost for the month was $8,500. the activity variance for supplies cost in march would be closest to:
The activity variance for supplies cost in March would be $520. To calculate the activity variance for supplies cost, we need to compare the actual supplies cost with the expected supplies cost based on the planned level of activity.
Given data:
Planned level of activity: 619 framesActual level of activity: 624 framesActual supplies cost: $8,500Cost formula: $1,790 per month plus $10 per frameFirst, let's calculate the expected supplies cost based on the planned level of activity:
Expected supplies cost = $1,790 per month + ($10 per frame x 619 frames)
Expected supplies cost = $1,790 + $6,190
Expected supplies cost = $7,980
Now, we can calculate the activity variance for supplies cost:
Activity variance = Actual supplies cost - Expected supplies cost
Activity variance = $8,500 - $7,980
Activity variance = $520
So, the activity variance for supplies cost in March would be $520.
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Corp. A just paid a dividend of $0.50 per share. It is expected to increase its dividend by 2% per year. If the market requires a return of 15% on assets of this risk, how much should the stock be selling for?
The stock should be selling for $3.85 per share.
To calculate the stock's current price, we need to use the dividend discount model, which is based on the present value of future dividend payments. The formula for the present value of a growing perpetuity is:
PV = D / (r - g)
Where PV is the present value of the perpetuity, D is the current dividend per share, r is the required rate of return, and g is the expected growth rate of the dividend.
In this case, the current dividend is $0.50 per share, and the expected growth rate is 2%. The required rate of return is 15%. Using these values, we can calculate the stock's price as:
PV = $0.50 / (0.15 - 0.02) = $3.85
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read the case and answer the following questions briefly
1. Describe the steps taken by Sid and Nancy immediately prior to the bankruptcy that may be offences under the bankruptcy and insolvency act. what is the legal term used to describe each of these steps (events)??
2. does lucky accounting have a potential cause of action (give its legal name) would lucky pursue? explain the cause of action and whether or not they might be successful. if Lucky was successful, what would be the most probable outcome (remedy) and why.????
Sid and Nancy had taken a few steps prior to the bankruptcy that may be offences under the Bankruptcy and Insolvency Act.
Firstly, they had made a preference payment to Lucky Accounting, which is a form of voidable preference under Section 95 of the Act. This means that the payment is treated as if it was never made and Lucky Accounting can recover the money from Sid and Nancy. Secondly, the couple had also disposed of all their assets, which is a form of fraudulent conveyance under Section 95.1 of the Act. This means that Lucky Accounting can recover any assets that have been transferred without consideration.
Lucky Accounting may have a potential cause of action in tort, known as “negligent misstatement”. In this case, Lucky Accounting may be able to argue that Sid and Nancy negligently provided inaccurate information to them which led to them investing money in an insolvent company. If they were successful, the most probable outcome would be damages in the form of the money that Lucky Accounting had invested.
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Contrast the difference between credit risk and default risk. (5
marks)
Credit risk and default risk are two concepts that are often used interchangeably, but they actually refer to two different aspects of risk.
Credit risk is the risk that a borrower will not be able to repay their debt according to the terms of their agreement. It is the risk that the borrower will fail to make timely payments on their loan or credit line. Default risk, on the other hand, is the risk that a borrower will not be able to repay their debt at all, meaning they will not be able to pay back the principal and interest due on their loan.
In other words, credit risk is concerned with the borrower's ability to make payments on time, while default risk is concerned with the borrower's ability to repay the full amount of the loan. Credit risk can be measured by assessing the borrower's credit score, income, and other financial information, while default risk is often assessed by looking at the borrower's creditworthiness and the value of any collateral they may have pledged.
Overall, credit risk and default risk are both important considerations when lending money or extending credit, and lenders must carefully assess both types of risk in order to minimize their potential losses.
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assume the quark division has enough idle capacity to fill the 1,000-unit order. is the division likely to accept the $340 price or to reject it?
The quark division is likely to reject the $340 price.
Since the question does not provide information about the variable cost or fixed cost associated with the production of the 1,000-unit order, we cannot determine the profitability of accepting the $340 price.
However, if the price is lower than the total cost of production, the division would likely reject it to avoid incurring losses. Moreover, even if the price is above the total cost of production, the division may still reject it if it believes it can obtain a higher price from alternative buyers.
Therefore, without more information about the cost structure and market conditions, it is difficult to determine the division's decision.
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Terms of trade that are beneficial to both parties are those terms, or prices, that are ___ the two parties opportunity cost
Terms of trade that are beneficial to both parties are those terms, or prices, that are below the two parties' opportunity cost.
The opportunity cost is the cost of the next best alternative that is given up in order to pursue a certain action. When two countries engage in trade, they do so because each country has a comparative advantage in producing a certain good.
Comparative advantage means that a country can produce a good at a lower opportunity cost than another country. By trading with each other, they can both benefit from consuming a greater quantity and variety of goods than they would be able to produce domestically.
In order for both parties to benefit from the trade, the terms of trade must be such that the price paid for the imported good is lower than the opportunity cost of producing that good domestically. This allows both parties to consume more of both goods than they would have been able to do otherwise.
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Jonelle selects a student loan repayment plan with a 20-year term. One downside is.
a. She won't receive any grace period with this plan.
b. Her monthly payments will start out quite high and won't get lower until approximately year 10.
c. She won't be able to open additional lines of credit until that debt is completely repaid.
d. She will pay more in interest than if she had used the Standard repayment plan
One downside is she will pay more in interest than if she had used the Standard repayment plan. The answer is OPTION D.
The 20-year loan forgiveness programs offered by the federal government are a component of the income-driven repayment plans they provide. Borrowers of federal student loans are eligible for certain exclusive perks, which are not offered to those with private loans. Under IDR payment programs, the federal government gives debt forgiveness.
After 20 years, student loan forgiveness is available under the following income-driven repayment plans: if the loans were taken out to complete an undergraduate degree rather than graduate school, the revised Pay As You Earn (REPAYE) plan. Extended repayment may result in greater lifetime costs even while it does save money in the short run.
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the brs corporation makes collections on sales according to the following schedule: 35% in month of sale 61% in month following sale 4% in second month following sale the following sales have been budgeted: sales april $200,000 may $130,000 june $120,000 budgeted cash collections in june would be:
The budgeted cash collections in June would be $366,800.
To determine the budgeted cash collections for June, we need to calculate the collections for each of the three months and add them up.
For April sales of $200,000, th collections in April will be 35% of $200,000, or $70,000. The collections in May will be 61% of $200,000, or $122,000. The collections in June will be 4% of $200,000, or $8,000. So the total collections for April sales will be $70,000, for May sales will be $122,000, and for June sales will be $8,000.
For May sales of $130,000, the collections in May will be 35% of $130,000, or $45,500. The collections in June will be 61% of $130,000, or $79,300. So the total collections for May sales will be $45,500 in May and $79,300 in June.
For June sales of $120,000, the collections in June will be 35% of $120,000, or $42,000. So the total collections for June sales will be $42,000.
Adding up all the collections for each month, we get:
$70,000 + $122,000 + $8,000 + $45,500 + $79,300 + $42,000 = $366,800
Therefore, the budgeted cash collections in June would be $366,800.
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C-2. For each predictor variable, state the p-value and determine whether the predictor variable is significant in explaining Time
In linear models, predictor p-values provide a pointer to the statistical significance of a predictor coefficient value; they measure the likelihood that a randomly shuffled model could have produced a coefficient as large as the fitted value.
A low p-value (0.05) suggests that the null hypothesis can be rejected. In other words, a low p-value predictor is likely to be a useful addition to your model because changes in the predictor's value are associated to changes in the response variable. If the P-value is less than 0.05, we can reject the null hypothesis and infer that the variables are related.
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a swiss bank converted 1 million swiss francs to euros to make a euro loan to a customer when the exchange rate was 1.85 francs per euro. the borrower agreed to repay the principal plus 3.75 percent interest in one year. the borrower repaid euros at loan maturity and when the loan was repaid the exchange rate was 1.98 francs per euro. what was the bank's franc rate of return?
the bank's franc rate of return is -71.60%.
To calculate the bank's franc rate of return, we need to determine how many francs the bank initially lent out and how many francs it received back at loan maturity.
To determine the amount of francs the bank initially lent out, we need to convert 1 million Swiss francs to euros at the exchange rate of 1.85 francs per euro:
1,000,000 CHF ÷ 1.85 CHF/EUR = 540,540.54 EUR
To determine the amount of euros the bank received back at loan maturity, we need to convert the loan principal plus interest from euros to francs at the exchange rate of 1.98 francs per euro:
(540,540.54 EUR x 1.0375) ÷ 1.98 CHF/EUR = 283,972.98 CHF
To calculate the bank's franc rate of return, we need to determine the difference between the amount of francs the bank received back and the amount of francs it initially lent out and express that difference as a percentage of the amount of francs initially lent out:
(francs received back - francs lent out) ÷ francs lent out x 100%
= (283,972.98 CHF - 1,000,000 CHF) ÷ 1,000,000 CHF x 100%
= -71.60%
Therefore, the bank's franc rate of return is -71.60%. This means that the bank lost 71.60% of the amount of francs it initially lent out when the loan was repaid.
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A) A project manager is evaluating whether it is economical to develop a project requiring expenditures at time zero of $20,000 for land, $30,000 for inventory working capital, $80,000 for a steel building, $240,000 for equipment, and $60,000 for vehicles. Starting in year one the manager estimates that production will generate annual end-of-year escalated revenue of $500,000 with escalated operating costs of $300,000. Operating costs and revenue will both escalate at a compound interest rate of 10% per year beginning in year two. Use straight-line depreciation over 39 years for the building cost starting in year one assuming 12 months of service when computing your allowable deduction in year one under the mid-month con- vention. Use 7-Year MACRS depreciation rates for the qualifying equipment cost starting in year one with the half-year convention and the 5-Year MACRS rates for the vehicle cost, again, starting in year one with the half-year convention. The effective combined federal and state income tax rate is 25%. No other income exists against which to utilize deductions so carry any losses forward. B) Calculate the project cash flows for the first four years of this business and also consider the after-tax cash flow that would be realized if the business were to be sold at the end of year four for a sale value of $600,000. Write off all remaining tax book values at the end of year four to deter- mine taxable gain (or loss) and treat the sale as ordinary income. For a minimum after-tax rate of return of 15%, calculate the overall project after-tax NPV, DCFROR, and PVR.
A) The project requires initial expenditures of $20,000 for land, $30,000 for inventory working capital, $80,000 for a steel building, $240,000 for equipment, and $60,000 for vehicles.
The project generates annual escalated revenue of $500,000 with escalated operating costs of $300,000 starting in year one, and both revenue and costs escalate at a compound interest rate of 10% per year beginning in year two.
Straight-line depreciation is used over 39 years for the building cost starting in year one, with 12 months of service under the mid-month convention. The effective combined federal and state income tax rate is 25%.
B) The project cash flows for the first four years, including the after-tax cash flow from selling the business at the end of year four for $600,000, need to be calculated.
All remaining tax book values should be written off at the end of year four to determine the taxable gain (or loss), and the sale should be treated as ordinary income. Using a minimum after-tax rate of return of 15%, the overall project after-tax NPV, DCFROR, and PVR can be calculated.
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1) Kim is a salesperson at the PEAR computer company. The utility function of Kim is given by u(w, b, e) = w+b-c(e) where w E R is Kim's weekly wage, b is a bonus payment that is conditional on sales revenue, and c(e) is Kim's cost of effort where c(e) = 2 if e < 10 and cle) = (ěx (e – 10)2) = if e 2 10. Michelle is Kim's boss, who is maximising PEAR's profits which are given by: (w,b,e) = R(e) - w - b, where R(e) is the firm's sales revenues and R(e) = 100e Michelle cannot observe Kim's effort (e) directly but observes R(e) and can set the bonus level dependent on sales revenues. a. If Michelle sets w=200 and b=0, what would be Kim's effort level (e) and PEAR's profits? (1 mark) b. If Michelle sets w=0 and b=1000 conditional on reaching a sales target of R(e) = 3000, what would be Kim's effort level (e) and PEAR's profits? (1 mark) c. If Michelle sets w=100 and a bonus payment of 20% of sales revenues (i.e. b = 0.2 x R(e)) what would be Kim's effort level (e) and PEAR's profits? (1 mark) d. What is the optimal wage (w) and bonus payment (b) that maximises PEAR's profits? (1 mark) i. Briefly discuss the potential challenges with implementing an employment contract as in d) in a real-world setting. (1 mark)
a. Using u(w, b, e) = w + b - c(e) and Michelle's setting of w = 200 and b = 0, Kim's effort level (e) would be 10, and PEAR's profits would be (100 x 10) - 200 - 0 = 800.
b. With w = 0 and b = 1000 conditional on reaching R(e) = 3000, Kim's effort level (e) would be 15, and PEAR's profits would be (100 x 15) - 0 - 1000 = 500.
c. Using w = 100 and b = 0.2R(e), the bonus payment would be b = 0.2 x 100e = 20e, and Kim's effort level (e) would be 13.5, and PEAR's profits would be (100 x 13.5) - 100 - (20 x 13.5) = 950.
d. To maximize profits, Michelle would need to set w and b such that the first-order conditions are satisfied: ∂(R(e) - w - b)/∂w = 0 and ∂(R(e) - w - b)/∂b = 0. Solving these equations, we get w = 100 and b = 0.5R(e) - 50. With these values, Kim's effort level (e) would be 12.5, and PEAR's profits would be (100 x 12.5) - 100 - (0.5 x 100 x 12.5) + 50 = 1125.
i. One potential challenge with implementing such an employment contract in a real-world setting is that it may be difficult to accurately measure and incentivize effort levels, especially if the effort is based on subjective factors such as sales skills. Additionally, there may be a risk that employees will focus too heavily on meeting specific targets and not enough on long-term success and customer satisfaction.
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Complete question:
Kim is a salesperson at the PEAR computer company. The utility function of Kim is given by u(w, b, e) = w+b-c(e) where w ∈ R is Kim's weekly wage, b is a bonus payment that is conditional on sales revenue, and c(e) is Kim's cost of effort where c(e) = 2 if e < 10 and c(e) = (e – 10)² if e ≥ 10. Michelle is Kim's boss, who is maximizing PEAR's profits which are given by: Π(w, b, e) = R(e) - w - b, where R(e) is the firm's sales revenues and R(e) = 100e. Michelle cannot observe Kim's effort (e) directly but observes R(e) and can set the bonus level dependent on sales revenues.
a. If Michelle sets w=200 and b=0, what would be Kim's effort level (e) and PEAR's profits? (1 mark)
b. If Michelle sets w=0 and b=1000 conditional on reaching a sales target of R(e) = 3000, what would be Kim's effort level (e) and PEAR's profits? (1 mark)
c. If Michelle sets w=100 and a bonus payment of 20% of sales revenues (i.e. b = 0.2 x R(e)), what would be Kim's effort level (e) and PEAR's profits? (1 mark)
d. What is the optimal wage (w) and bonus payment (b) that maximizes PEAR's profits? (1 mark)
Calculate and interpret the Macaulay and modified durations of a a) 3-year 10% semi-annual bond (Bond C) when the required yield is 10%, and a b) 3-year zero-coupon bond (Bond D) when the required yield is 10%
a) The main answer for Bond C's Macaulay duration is 2.5 years, and its modified duration is 2.45 years.
The Macaulay duration for Bond C can be calculated using the formula:
Macaulay duration = (C1 x t1 + C2 x t2 + C3 x t3 + … + Cn x tn) / P
where C is the cash flow, t is the time until the cash flow, and P is the bond price. For Bond C, the cash flows are $5 semi-annually for three years, and the bond price is $100. The calculation gives us a Macaulay duration of 2.5 years.
The modified duration for Bond C can be calculated using the formula:
Modified duration = Macaulay duration / (1 + (YTM / m))
where YTM is the yield to maturity, and m is the number of coupon payments per year. For Bond C, YTM is 10%, and m is 2 (since it pays semi-annually). Plugging in the values, we get a modified duration of 2.45 years.
Interpretation: Bond C has a Macaulay duration of 2.5 years, meaning that it will take 2.5 years for the bondholder to recoup the bond's price through its cash flows. The modified duration of 2.45 years indicates that the bond's price will decline by approximately 2.45% for every 1% increase in yield.
b) The main answer for Bond D's Macaulay duration is 3 years, and its modified duration is also 3 years.
The Macaulay duration for Bond D is simply the time to maturity of the bond, which is 3 years.
The modified duration for Bond D can be calculated using the same formula as for Bond C, since Bond D also has a yield to maturity of 10%. Plugging in the values, we get a modified duration of 3 years.
Interpretation: Bond D has a Macaulay duration of 3 years, indicating that it will take 3 years for the bondholder to recoup the bond's price through its cash flows. The modified duration of 3 years indicates that the bond's price will decline by approximately 3% for every 1% increase in yield.
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