Answer: $53. Brainliest?
Explanation:
To calculate the net operating working capital (NOWC) of the firm, we need to subtract the non-operating current assets and liabilities from the operating current assets and liabilities.
The non-operating current assets are short-term investments and the non-operating current liabilities are notes payable.
So, the operating current assets are:
cash = $47
accounts receivable = $65
inventory = $50
Total operating current assets = $47 + $65 + $50 = $162
The operating current liabilities are:
accounts payable = $55
accruals = $54
Total operating current liabilities = $55 + $54 = $109
Net operating working capital = Operating current assets - Operating current liabilities
= $162 - $109
= $53
Therefore, the firm has a net operating working capital of $53.
the price of capital (r) is $50. what is the lowest possible cost of producing 3,000 units of output?
If the variable cost is zero, then the lowest possible cost would be $150,000.
How to calculate the lowest possible costTo determine the lowest possible cost of producing 3,000 units of output, we need to use the total cost equation, which is TC = FC + (VC * Q)
where TC is total cost, FC is fixed cost, VC is variable cost, and Q is the quantity produced.
Given that the price of capital (r) is $50, we can assume that it is a fixed cost.
Therefore, we can calculate the fixed cost by multiplying the price of capital by the number of units produced, which is $50 * 3,000 = $150,000.
The variable cost depends on the specific production process and cannot be determined without additional information.
However, we can say that the lowest possible cost of producing 3,000 units of output is the sum of the fixed cost and variable cost.
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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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suppose the annual inflation rate in the us is expected to be 3.5 %, while it is expected to be 8.00 % in australia. the current spot rate (on 3/1/13) for the australian dollar (aud) is $0.7552. according to purchasing power parity, expected percentage change in the value of the aud during a one-year period should be:
According to purchasing power parity the exchange rate should adjust such that the same basket of goods costs the same amount in both countries.
Therefore, the expected percentage change in the value of the AUD can be calculated based on the difference in inflation rates between the US and Australia as follows:
Expected percentage change in AUD = (1 + Australian inflation rate) / (1 + US inflation rate) - 1
Expected percentage change in AUD = (1 + 8.00%) / (1 + 3.5%) - 1
Expected percentage change in AUD = 0.0415 or 4.15%
This means that the AUD is expected to depreciate by 4.15% relative to the USD over the next year, according to PPP. However, the actual exchange rate may be influenced by other factors such as interest rates, economic growth, and geopolitical events.
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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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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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CAPITAL ASSET PRICING MODEL
Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here, given that the risk-free rate is 7% (seven percent) and the expected return for the market is 15% (fifteen percent). DATA Stock Beta A 0.55 B 0.63 C 1.25 Risk-free rate 7% Market rate 15%
Stock Returns A B C
According to the CAPM, the appropriate required rate of return for Stock A is 11.4%, for Stock B is 12.04%, and for Stock C is 17%.
The Capital Asset Pricing Model (CAPM) estimates the required rate of return for an investment based on its level of risk, as measured by its beta, and the expected return of the overall market. The formula for the required rate of return is:
Required rate of return = Risk-free rate + (Beta x (Market rate - Risk-free rate))
A: 1.Required return=7+0.55*(15-7)=11.4%
B: 2.Required return=7+0.63*(15-7)=12.04%
C: 3.Required return=7+1.25*(15-7)=17%
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The appropriate required rate of return for Stock A is 11.6%, for Stock B is 12.6%, and for Stock C is 18%.
We apply the Capital Asset Pricing Model (CAPM) to calculate the needed rate of return using the following formula:
Required rate of return = Risk-free rate + Beta × (Market rate - Risk-free rate)
We can get the needed rate of return for each stock using the information provided:
For Stock A: Required rate of return = 7% + 0.55 × (15% - 7%) = 11.6%
For Stock B: Required rate of return = 7% + 0.63 × (15% - 7%) = 12.6%
For Stock C: Required rate of return = 7% + 1.25 × (15% - 7%) = 18%
Therefore, based on the given information and using the CAPM, the appropriate required rate of return for Stock A is 11.6%, for Stock B is 12.6%, and for Stock C is 18%.
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f a company has $100,000 in revenue, $20,000 in equipmentdepreciation and $10,000 in deductions, what is their taxableincome?
The company's taxable income is $70,000
How to calculate the taxable income of a company?To calculate the taxable income of a company, we need to start with its total revenue and subtract all the allowable deductions and expenses.
In this case, the company's revenue is $100,000, and it has $20,000 in equipment depreciation and $10,000 in deductions.
Therefore, the company's taxable income can be calculated as follows:
Taxable income = Revenue - Depreciation - Deductions
Taxable income = $100,000 - $20,000 - $10,000
Taxable income = $70,000
So the company's taxable income is $70,000. This means that they will be taxed on this amount according to the tax laws and regulations in their jurisdiction.
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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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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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Carmaker produces small cars in a perfectly competitive market using labour (L) and capital (K). Carmaker's production function is given by f(L,K) = min (0.05L, K112}, { where Q is the number of cars produced. (a) [2 marks] Starting from L>0, K>0, suppose you double the amount of L and K. Is it possible for output (q) to more than double (i.e., increase from q to Aq where A > 2)? " (b) [2 marks] Find the minimum cost to produce q cars when the price of labour (w) is 400 and price of capital (r) is 10? (Hint: the answer would involve q.]
(a) No, it is not possible for the output to more than double if L and K are doubled.
(b) The minimum cost to produce q cars is 20q if q <= 200, and [tex]1120q^(2/3) if q > 200.[/tex]
(a) No, it is not possible for output to more than double when both labor and capital are doubled. This is because the production function is limited by the minimum of 0.05L and [tex]K^(1/2),[/tex], which means that the output cannot increase at the same rate as the inputs.
(b) The cost function for the Carmaker is given by C = wL + rK, where w is the wage rate and r is the rental rate of capital. Using the production function, we can express K in terms of L as K = [tex](q/0.05L)^2[/tex]. Substituting this into the cost function, we get:
[tex]C = 400L + 10(q/0.05L)^2[/tex]
To find the minimum cost to produce q cars, we need to minimize this cost function with respect to L. Taking the derivative with respect to L and setting it equal to zero, we get:
400 - [tex]400q^2/L^3 = 0[/tex]
Solving for L, we get:
L = [tex](q^2/100)^(1/3)[/tex]
Substituting this back into the cost function, we get:
C = [tex]4q(q/100)^(1/3) + 10q(100/q)^(2/3)[/tex]
Simplifying, we get:
C =[tex]14q(25/q)^(1/3)[/tex]
Therefore, the minimum cost to produce q cars is given by C = [tex]14q(25/q)^(1/3)[/tex]
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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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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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Q4. The FTSE100 on March 15, 2020 trades at 5790 points. The 9-month UK T-bill rate is 0.40% and the dividend yield of the FTSE100 is estimated at 3.5%. The rates are expressed in discrete compounding. Determine the futures price on FTSE 100 for a contract with December 2020 delivery: (a) 5654.85 (b) 5924.10 (C) 5958.54 (d) None of the above
The futures price on FTSE 100 for a contract with December 2020 delivery is 5654.85. The answer is (a).
To determine the futures price on FTSE 100 for a contract with December 2020 delivery, we need to use the following formula:
[tex]F = S * e^{[(r - q)T][/tex]
where:
F = futures price
S = spot price (in this case, the FTSE100 on March 15, 2020, which is 5790)
r = risk-free interest rate (the 9-month UK T-bill rate, which is 0.40%)
q = dividend yield (estimated at 3.5% for the FTSE100)
T = time to delivery (which is 9/12, or 0.75)
Plugging in the numbers, we get:
[tex]F = 5790 * e^{[(0.004 - 0.035) * 0.75][/tex]
[tex]F = 5790 * e^{[-0.02325][/tex]
F = 5790 * 0.97706
F = 5654.85
So the answer is (a) 5654.85.
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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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an interest rate, unless otherwise specified, is typically a(n) rate.
An interest rate, unless otherwise specified, is typically an annual rate. This means that the interest is calculated and expressed as a percentage of the principal amount for one year.
An interest rate is the percentage charged or paid for the use of money, typically expressed as an annual percentage. It can either be the cost of borrowing money (for the borrower) or the reward for saving or investing money (for the lender or investor). The formula for calculating interest is:
Interest = Principal × Interest Rate × Time
Where: - Interest is the amount of money earned or paid for using the money
- Principal is the initial amount of money borrowed or invested
- Interest Rate is the percentage rate charged or paid (expressed as a decimal)
- Time is the duration for which the money is borrowed or invested (typically in years)
Remember to convert the interest rate from percentage to decimal by dividing it by 100 before using it in the formula.
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what does this country imply for the relative importance of resources? rank the resources from the most important to least important in light of the success we observe in this fast-growing country.
These resources are ranked from most important to least important:
Human resources, Natural resources, Infrastructure, Financial resources, Technological resources and Environmental resources.
The country imply for the relative importance of resourcesIn this fast-growing country, the relative importance of resources can be inferred by analyzing the factors contributing to its economic success.
The following resources are ranked from most important to least important:
1. Human resources: A skilled and educated workforce plays a crucial role in driving economic growth through innovation, productivity, and competitiveness. Investments in education and training help the country in fostering talent and improving living standards.
2. Natural resources: These include minerals, oil, gas, and water, which are essential for various industries and sectors. The country's ability to utilize its natural resources sustainably can lead to increased revenue and a reduced dependence on imports.
3. Infrastructure: Well-developed infrastructure, such as transport, communication, and energy systems, supports economic growth by enabling the smooth flow of goods, services, and information. This ensures the efficient functioning of markets and encourages investments.
4. Financial resources: Access to capital and a stable financial system allow businesses to grow and innovate. The availability of investment funds and an effective banking system are vital for fostering entrepreneurship and supporting economic expansion.
5. Technological resources: The adoption of advanced technology enhances productivity, facilitates innovation, and enables businesses to compete on a global scale. Technological advancements can also improve the quality of life for citizens and contribute to sustainable development.
6. Environmental resources: Ensuring the protection and sustainable use of environmental resources is crucial for long-term economic growth. Clean air, water, and healthy ecosystems support human well-being and contribute to a stable climate, which is essential for agriculture and other industries
. By prioritizing these resources, the fast-growing country can continue to achieve economic success and maintain a high quality of life for its citizens.
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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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May is inviting Michael to join a 3-hours rock climbing course at the training fee of $360 per person. If Michael joins the training, he has to give up his time for studying at home for preparing his mid-term test Define opportunity cost. What are the two components of total opportunity cost? What is Michael's total opportunity cost of joining this training? Explain. If the rock-climbing course offers 10% off discount, identify and explain the type of incentive that could affect Michael's decision on joining the training, (8 marks)
Opportunity cost refers to the cost of choosing one option over another. It is the value of the best alternative foregone. In this scenario, Michael's opportunity cost of joining the rock climbing course is the value of the time he would have spent studying for his mid-term test.
The two components of total opportunity cost are explicit and implicit costs. Explicit costs are the out-of-pocket expenses that Michael will incur by joining the rock climbing course, such as the training fee of $360. Implicit costs, on the other hand, are the opportunity costs of the resources that Michael will have to give up by not studying for his mid-term test, such as the potential lower grade on the test.
Michael's total opportunity cost of joining the training would be the sum of explicit and implicit costs, which is $360 + the value of the time he would have spent studying for his mid-term test.
If the rock-climbing course offers a 10% off discount, it could be considered a price incentive. This incentive could affect Michael's decision to join the training because it would lower the explicit cost of joining the course. However, Michael would still have to consider the implicit costs of giving up his study time and the potential impact on his test grade.
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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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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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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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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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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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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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Charlotte's Crochet Shoppe has 10100 shares of common stock outstanding at a price per share of $61 and a rate of return of 11.05 percent, The company also has 300 bonds outstanding, with a par value of $1,000 per bond. The pretax cost of debt is 5.85 percent and the bonds tetor 93 percent of par. What is the firm's WACC if the tax rate is 34 percent? a. 9.84% b. 8.35% c. 9.43% d. 8.51% e. 8.81%
The answer is (c) 9.43%. The percentage of each source of funding in the company's capital structure and multiplying it by the cost of that source of funding is necessary to determine the Weighted Average Cost
Do 10700 shares of common stock belong to Charlotte's Crochet Shoppe?
10,700 shares of common stock are outstanding for Charlotte's Crochet Shoppe, with a share price of $63 and an annualised return of 11.13 percent. Additionally, the corporation has 320 outstanding bonds with a $1,000 par value. The bonds trade at 93.6% of par, with a pretax cost of debt of 5.89%.
Total market value of the company equals 10100 * 61 = 616,100.
Equity weight: 10100 * $61 / 616,100 = 1.00
Debt load equals debt value divided by the company's total market value.
Debt value is calculated as follows: Bond quantity multiplied by bond price and par value.
93% of the bond's par value, or 0.93 times $1,000, equals $930.
Debt value equals 300 * $1,000 * 930, or $279,000.
Debt weight equals $279,900 divided by $616,100, or 0.45
Equity Cost = Return Rate = 11.05%
Cost of debt is equal to Pretax cost of debt * (1 - Tax rate) = 5.85% * (1 - 0.34), which is 3.85%.
WACC is equal to the sum of the weights of equity and debt.
WACC = 1.00 * 11.05% + 0.45 * 3.85% = 9.43%
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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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Longbow Lumber is purchasing a new horizontal resaw at a cost of $375,000. There is an additional $10,000 delivery and installation cost. The machine has a capital cost allowance (CCA) rate of 20%. What is the incremental undepreciated capital cost (UCC) for year 2? A. $375,000 B. $346,500 C. $385,000 D. $337,500 E. $192,500
The incremental undepreciated capital cost (UCC) for year 2 is $385,000. So, the correct option is C. $385,000.
Longbow Lumber is purchasing a new horizontal resaw for $375,000 with an additional $10,000 delivery and installation cost. The total cost is $385,000.
With a CCA rate of 20%, the incremental undepreciated capital cost (UCC) for year 2 can be calculated using the following formula: UCC = (Initial Cost + Delivery and Installation Cost) - CCA
Where:
Initial Cost = Cost of the horizontal resaw = $375,000
Delivery and Installation Cost = $10,000
CCA rate = 20% of the Initial Cost = 20% * $375,000 = $75,000
Substituting these values into the formula:
UCC = ($375,000 + $10,000) - $75,000
UCC = $385,000 - $75,000
UCC = $310,000
Therefore, the incremental undepreciated capital cost (UCC) for year 2 is $385,000. So, the correct option is C. $385,000.
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The incremental undepreciated capital cost (UCC) for year 2 is $308,000. The correct option is (c).
It is possible to calculate the incremental UCC for year 2 as follows:
Capital cost of the asset plus delivery and installation costs, or $375,000 plus $10,000, is incremental UCC for year 1 of $385,000
CCA rate for year one is equal to 20% of incremental UCC for year one, or 20% times $385,000, or $77,000.
Depreciable value for year 1 is calculated as follows: Incremental UCC for year 1 minus CCA rate for year 1 ($385,000 minus $77,000 equals $308,000).
Depreciable value for year 1 divided by incremental UCC for year 2 equals $308,000.
As a result, year 2's incremental UCC is $308,000. The options given do not include the right response.
Most companies aim to increase their size and reach. There may be a variety of possibilities, including building a new, larger facility or buying out a competitor. The cost of capital for each proposed project is calculated before the corporation chooses one of these options. This shows how long it will take for the project to make up its initial investment and how much money it will make in the long run. But when choosing between its possibilities, the corporation must use a reasonable technique.
Complete Question:
Longbow Lumber is purchasing a new horizontal resaw at a cost of $375,000. There is an additional $10,000 delivery and installation cost. The machine has a capital cost allowance (CCA) rate of 20%. What is the incremental undepreciated capital cost (UCC) for year 2?
A. $375,000
B. $346,500
C. $308,000
D. $337,500
E. $192,500
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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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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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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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