As Jacob Lawrence, I believe that art is a reflection of the times, and that it should address the social issues and struggles of the people.
My work is inspired by the everyday experiences of African Americans, and I aim to represent their struggles, triumphs, and contributions to society. I believe that the WPA has been instrumental in supporting and promoting American artists during the difficult economic times of the 1930s.
The WPA provided job opportunities for artists and enabled them to create meaningful and socially relevant art. The economic, political, and social events of the 1930s have greatly influenced my art, as they have shaped the experiences and struggles of African Americans during that time.
My question for the group is: How do you believe art can address social and political issues of our time, and what role should artists play in shaping society?
Through studying the videos and readings in this module, I have gained a deeper understanding of the WPA, American Scene Painting, and the Regionalists, and how they have influenced and shaped American art during the 1930s.
I have also learned about the different perspectives and approaches of the artists invited to the dinner party, and how their art reflects their individual experiences and beliefs.
Reading Hills' writings has enabled me to put myself in the shoes of the artist I have chosen to be, and to understand their motivations and inspirations. Overall, this assignment has taught me the importance of understanding the social and historical context of art, and how it can shape and be shaped by society.
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Activity Description Each student needs to select a local or regional (GCC) entrepreneurial business project and discuss the followings: Each student is requested to complete the following tasks: - Select a local or regional (GCC) entrepreneurial business project Conduct a brief summary of the business Entrepreneur background (Personal Characteristics). Develop the business main constraints and challenges. Analyze the business opportunities. Link theories to practice and own suggestions to improve. Use supporting diagrams.
The activity description requires students to select an entrepreneurial business project from the local or regional (GCC) area and complete a series of tasks.
Firstly, they are required to conduct a brief summary of the business, including information about the entrepreneur's background and personal characteristics.
Secondly, they need to identify and develop the main constraints and challenges faced by the business.
Thirdly, they must analyze the business opportunities that exist within the chosen industry or market.
Fourthly, they must link theories to practice and provide their own suggestions for how the business could improve.
Finally, they are requested to use supporting diagrams to help illustrate their findings.
This assignment provides an excellent opportunity for students to gain a deeper understanding of entrepreneurship, and to develop their critical thinking and analytical skills by applying theoretical concepts to real-world situations.
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b) Leigh Delight Candy Berhad is choosing between two bonds in which to invest their cash. One is being offered from Hershey's and will mature in 15 years and pay RM40 each quarter. The other alternative is a Mars' bond that will mature in 18 years and pay RM50 each quarter. Compute the present value of each bond if the discount rate is 12% compounded quarterly, and each bond pays RM1,000 at maturity.
Leigh Delight Candy Berhad should invest in the Mars' bond as it has a higher present value than the Hershey's bond at a 12% quarterly compounded discount rate. The present value of the Hershey's bond is RM2,536.74 and the present value of the Mars' bond is RM2,892.01.
What is the present value of Hershey's and Mars' bonds and which one should Leigh Delight Candy Berhad invest in?To compute the present value of each bond, we can use the formula:
PV = (C/r) x [1 - (1 + r)^(-n)]
Where PV is the present value, C is the coupon payment per quarter, r is the discount rate per quarter, and n is the number of quarters until maturity.
For the Hershey's bond, C = RM40, r = 0.03 (12%/4), n = 60 (15 years x 4 quarters per year). Plugging these values into the formula, we get:
PV = (40/0.03) x [1 - (1 + 0.03)^(-60)]
PV = RM2,536.74
So the present value of the Hershey's bond is RM2,536.74.
For the Mars' bond, C = RM50, r = 0.03, n = 72 (18 years x 4 quarters per year). Plugging these values into the formula, we get:
PV = (50/0.03) x [1 - (1 + 0.03)^(-72)]
PV = RM2,892.01
So the present value of the Mars' bond is RM2,892.01.
Therefore, if Leigh Delight Candy Berhad is choosing between these two bonds, they should invest in the Mars' bond as it has a higher present value than the Hershey's bond at a 12% quarterly compounded discount rate.
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burke's corner currently sells blue jeans and t-shirts. management is considering adding fleece tops to its inventory to provide a cooler weather option. the tops would sell for $46 each with expected sales of 4,650 tops annually. by adding the fleece tops, management feels the firm will sell an additional 320 pairs of jeans at $58 a pair and 455 fewer t-shirts at $19 each. the variable cost per unit is $29 on the jeans, $9 on the t-shirts, and $24 on the fleece tops. with the new item, the depreciation expense is $26,000 a year and the fixed costs are $79,500 annually. the tax rate is 24 percent. what is the project's operating cash flow?
Burke's corner currently sells blue jeans and t-shirts and the project's operating cash flow is $27,010.80.
How to find the project's operating cash flowTo calculate the project's operating cash flow, we need to find the net income and add back the depreciation expense.
First, let's calculate the revenues and variable costs for each item:
Fleece tops revenue: 4,650 tops * $46 = $213,700
Fleece tops variable cost: 4,650 tops * $24 = $111,600
Additional jeans revenue: 320 pairs * $58 = $18,560
Additional jeans variable cost: 320 pairs * $29 = $9,280
Reduced t-shirts revenue: 455 shirts * $19 = $8,645
Reduced t-shirts variable cost: 455 shirts * $9 = $4,095
Now, let's find the net income:
Total revenue: $213,700 (fleece tops) + $18,560 (jeans) - $8,645 (t-shirts) = $223,615
Total variable cost: $111,600 (fleece tops) + $9,280 (jeans) - $4,095 (t-shirts) = $116,785
Total fixed cost: $79,500
Depreciation expense: $26,000
Operating income (before taxes): $223,615 - $116,785 - $79,500 - $26,000 = $1,330
Taxes: $1,330 * 24% = $319.20
Net income: $1,330 - $319.20 = $1,010.80
Operating cash flow:
Net income + Depreciation expense = $1,010.80 + $26,000 = $27,010.80
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Rocket corp has 100 bonds outstanding. The bonds are annual coupon bonds with a face value of $1000, a coupon rate of 6.4%, and 11 years unti the bond matures. If the YTM of the bonds is 7.5%, what is the total market value of the bonds for Rocket cor
To find the total market value of the 100 bonds outstanding for Rocket Corp, we need to first calculate the present value of each bond, considering the given parameters: face value of $1000, coupon rate of 6.4%, 11 years until maturity, and a YTM of 7.5%.
Step 1: Calculate the annual coupon payment
Coupon payment = (Face value * Coupon rate) = $1000 * 6.4% = $64
Step 2: Calculate the present value of coupon payments (PV of annuity)
PV of annuity = (Coupon payment * (1 - (1 + YTM)^-years)) / YTM
PV of annuity = ($64 * (1 - (1 + 7.5%)^-11)) / 7.5% ≈ $504.50
Step 3: Calculate the present value of face value (PV of face value)
PV of face value = Face value / (1 + YTM)^years
PV of face value = $1000 / (1 + 7.5%)^11 ≈ $419.20
Step 4: Calculate the market value of each bond
Market value of each bond = PV of annuity + PV of face value
Market value of each bond = $504.50 + $419.20 ≈ $923.70
Step 5: Calculate the total market value of all bonds
Total market value of bonds = Number of bonds * Market value of each bond
Total market value of bonds = 100 * $923.70 ≈ $92,370
Thus, " the total market value of the 100 bonds outstanding for Rocket Corp is approximately $92,370."
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what are the two important areas involved in planning the operational processes for an organization?
The two important areas involved in planning the operational processes for an organization are efficiency and effectiveness.
Efficiency refers to maximizing the use of resources to achieve the desired output, while effectiveness refers to achieving the intended results in a timely and successful manner.
These two areas are crucial in ensuring that an organization's operational processes are well-planned and executed, leading to improved productivity, reduced costs, and increased customer satisfaction.
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QUESTION 1 What is the present worth of the following series of income & disbursements if the interest rate is 8% per year? Year -Income- -Expense 0 12,000- 000 1-3 -800 400 4-8- -900-- ---800 5578 73
The present worth of the series of income and disbursements is $5,422.24 at an interest rate of 8% per year.
To calculate the present worth of the income and disbursements series, we need to use the present value formula. We can use the formula to find the present value of each cash flow and then sum up all the present values.
Here's how we can calculate the present worth of the series:
1. Calculate the present value of the income in year 0:
[tex]PV_0 = Income / (1 + r)^n\\PV_0 = 12,000 / (1 + 0.08)^0\\PV_0 = 12,000[/tex]
2. Calculate the present value of the expenses in years 1-3:
[tex]PV1-3 = -800 / (1 + 0.08)^1 + (-800) / (1 + 0.08)^2 + (-800) / (1 + 0.08)^3\\PV1-3 = -2,147.05[/tex]
3. Calculate the present value of the expenses in years 4-8:
[tex]PV4-8 = (-900) / (1 + 0.08)^4 + (-900) / (1 + 0.08)^5 + (-900) / (1 + 0.08)^6 + (-900) / (1 + 0.08)^7 + (-800) / (1 + 0.08)^8\\PV4-8 = -4,430.71[/tex]
4. Calculate the net present value of the series:
NPV = PV0 + PV1-3 + PV4-8
NPV = 12,000 - 2,147.05 - 4,430.71
NPV = 5,422.24
Therefore, the present worth of the series of income and disbursements is $5,422.24 at an interest rate of 8% per year.
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Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.81 million and create incremental cash flows of $538,260.00 each year for the next five years. The cost of capital is 11.92%. What is the internal rate of return for the J-Mix 2000? Submit Answer format: Porcentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)
According to the question, the internal rate of return for the J-Mix 2000 is 10.32%.
What is rate of return?Rate of return is a measure of the profitability of an investment. It is usually expressed in terms of a percentage of the original investment. Rate of return is calculated by taking the gain from an investment and dividing it by the original cost of the investment. It can also be calculated by taking the income from the investment and dividing it by the original cost of the investment.
This is calculated using the formula for internal rate of return: IRR = (C1 / CF0)1/n – 1
Where C1 is the incremental cash flow of $538,260.00, CF0 is the initial investment of $1.81 million, and n is the number of years, which is 5.
IRR = (538,260.00 / 1,810,000)1/5 – 1
IRR = 0.1032
IRR = 10.32%
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economists assume that the goal of a firm is to maximize economic profits. be the largest firm in its industry. maximize gross revenues. sell as many units as possible.
Economists assume that the goal of the firm is to maximize profits, option (b) is correct.
Maximizing profits is the primary objective of firms in a market economy. This involves earning the highest possible revenue while minimizing costs. Firms that fail to maximize profits run the risk of losing market share and eventually going out of business.
However, it is important to note that there may be trade-offs between short-term profit maximization and long-term growth and sustainability. Additionally, some firms may prioritize other goals such as social responsibility or environmental sustainability, but ultimately, profit maximization remains the core objective of a typical firm in a market economy, option (b) is correct.
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The complete question is:
Economists assume that the goal of the firm is to
a. maximize total revenue
b. maximize profits
c. minimize costs
d. equate total revenue and total cost
e. break even in the long run
assuming a period of normal inflation, which fifo/lifo comparative statement is true? question 4 options: the balance sheet inventory account is larger with lifo the cost of goods sold is smaller with lifo the balance sheet inventory account is smaller using fifo the cost of goods sold account is smaller with fifo
Expecting a period of typical swelling, the taking after FIFO/LIFO comparative articulation is genuine: The adjusted sheet stock account is bigger with FIFO.
This can be because, beneath FIFO, the most seasoned stock costs are expensed, to begin with, clearing out the later (and ordinarily higher) costs in stock. As a result, the stock esteem on the adjust sheet is for the most part higher beneath FIFO than beneath LIFO.
Then again, the taken toll of products sold account is littler with FIFO, since the most seasoned (and regularly lower) stock costs are expensed to begin with, taking off the later (and ordinarily higher) costs in stock. As a result, the take toll of merchandise sold is for the most part lower beneath FIFO than beneath LIFO.
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On 3 February 20XX, the quoted price of the March 20XX 90-day bank bill futures contract was 99.19. John Lowe believed that interest rates would increase over the next month and he entered into four bank bill futures contracts in a position consistent with that view. On 10 February 20XX, he closed out his position at a quoted price of 99.07. Ignoring transaction costs, how much has John Lowe made (or lost)? A) -$294.62 B) $1178.50 C)$998,006.72 D)$294.62 E)None of the above answers is correct.
On 3 February 20XX, John Lowe entered into four 90-day bank bill futures contracts with a quoted price of 99.19, believing interest rates would increase over the next month. When he closed out his position on 10 February 20XX, the quoted price was 99.07. Correct answer is option E
To calculate the profit or loss, we need to find the difference in the quoted prices and multiply it by the contract size (AUD 1,000,000) and the number of contracts (4).
Difference in quoted prices = 99.19 - 99.07 = 0.12, Each basis point represents 0.01, so the difference in basis points is 0.12 x 100 = 12 basis points. Now, we'll calculate the profit or loss: Profit/Loss = Contract size x Number of contracts x Basis point value x Difference in basis points Profit/Loss = AUD 1,000,000 x 4 x AUD 25 x 12 basis points Profit/Loss = AUD 1,000,000 x 4 x AUD 25 x 0.12, Profit/Loss = AUD 12,000
As John believed interest rates would increase, he would have taken a short position. Since the quoted price decreased from 99.19 to 99.07, John would have made a profit.
Therefore, the correct answer is option E)
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The following equations refer to the goods market of an economy: C = 480 + 0.5Y), I = 110, T = 120, G = 250. = = Due to the growing consumer pessimism, consumers decide to reduce autonomous consumption by 80 (i.e., the new co = 400). Then, the GDP decreases by (i). Now, the government wants to stabilize this economy and make the output return to the initial level. If the government increases its spending and the additional expenditure is deficit-financed, the government should increase its spending by (ii) to achieve its policy objective. Compute (i) and (ii).
In the given equations, C represents consumption, I represents investment, T represents taxes, and G represents government spending. Initially, autonomous consumption was 480, which means that even if there was no income, consumption would still be 480.
However, due to consumer pessimism, autonomous consumption decreased by 80 to become 400. This decrease in consumption would result in a decrease in GDP. To calculate this decrease, we can substitute the new autonomous consumption value into the consumption equation and solve for Y. We get Y = 800.
Therefore, the new GDP is 800, and the decrease in GDP is 200 (initial GDP was 1000).
To return to the initial GDP level, the government needs to increase its spending. Since the multiplier effect of government spending is 2, the government needs to increase its spending by half the decrease in GDP, which is 100.
Additionally, since the government wants to finance this spending through a deficit, it can increase spending by the full amount, which is 100. Therefore, the government should increase its spending by 100 to achieve its policy objective of returning GDP to its initial level.
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according to the black-scholes formula, what will be the hedge ratio (delta) of a put option for a very small exercise price?
According to the Black-Scholes formula, the hedge ratio (delta) of a put option for a very small exercise price: will be approximately 0.
Step 1: Identify the variables in the Black-Scholes formula, which include the stock price (S), the exercise price (K), the time to expiration (T), the risk-free interest rate (r), and the volatility (σ).
Step 2: Since the exercise price (K) is very small, we can assume that the option is deep out-of-the-money (OTM). This means that the option has a low probability of being exercised, as the stock price is significantly higher than the exercise price.
Step 3: Calculate the delta of the put option using the Black-Scholes formula. The delta of a put option is represented as N(d1) - 1, where N(d1) is the cumulative standard normal probability distribution of d1, which is given by:
[tex]d1 = (ln(S/K) + (r + (\sigma^2)/2) \times T) / (\sigma \times \sqrt(T))[/tex]
Step 4: Due to the small exercise price and deep OTM nature of the put option, N(d1) will be close to 1. Therefore, the delta of the put option will be close to 1 - 1 = 0.
In conclusion, according to the Black-Scholes formula, the hedge ratio (delta) of a put option for a very small exercise price will be approximately 0. This indicates that the put option's value is not sensitive to changes in the stock price, given its deep out-of-the-money status.
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bonds accrue interest until they have been repaid on or before the ______ date.
Bonds continue to earn interest until they are paid off on the bond maturity date or earlier. The first day of any interest rate period and each interest payment date that follows, excluding the final interest payment date, are referred to as the "Interest Accrual Date."
Interest starts to accrue when a loan is made or a bond's coupon is paid. A bond is a type of debt obligation in which the lender, or owner, is compensated with interest payments. The coupons for this interest are normally paid every six months. Savings bonds produce monthly interest. The bond's interest rate is applied to a fresh principal amount every six months because interest is compounded semiannually.
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Bonds accrue interest until they have been repaid on or before the maturity date.
The maturity date refers to the moment in time when the principal of a fixed income instrument must be repaid to an investor. The maturity date likewise refers to the due date on which a borrower must pay back an installment loan in full.
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when foxconn, the main assembler of the iphone and ipad, spends time and money fixing a defective iphone before it leaves the factory, the company has incurred a(n)
When Foxconn spends time and money fixing a defective iPhone before it leaves the factory, the company has incurred a cost of quality.
Cost of quality refers to the total cost incurred by a company to ensure that its products meet quality standards and requirements. This includes the costs of preventing defects, inspecting and testing products, and correcting any defects found.
In the case of Foxconn, fixing a defective iPhone before it leaves the factory is a cost of quality because it is a corrective action taken to ensure that the product meets the quality standards set by Apple. The company incurs direct costs such as labor, materials, and equipment to fix the defect, as well as indirect costs such as lost productivity and possible delays in production schedules. These costs can add up quickly and can impact the profitability of the company.
Therefore, it is in Foxconn's best interest to implement measures to prevent defects from occurring in the first place and to continuously improve its quality control processes to minimize the cost of quality. By doing so, the company can reduce the amount of time and money spent on fixing defects and increase its overall efficiency and profitability.
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although cotton was central to the southern economy by the 1850s, cotton production did not really increase significantly between 1800 and 1850.
Cotton was central to the Southern economy by the 1850s, but its production did not increase significantly between 1800 and 1850.
By the middle of the 19th century, cotton had become a significant economic force in the south of the United States, although the first half of the century saw little growth in the crop's output. Despite the introduction of new technology and the extension of cotton farming into new areas, the rate of output increase generally remained modest.
This was caused in part by restrictions on the amount of land, labour, and money that could be used as well as changes in the demand for cotton on a worldwide scale. The growth of cotton farming in the South throughout the second half of the 19th century, however, had a significant impact on American history and society.
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False. Despite cotton's importance to the Southern economy in the 1850s, its production did not significantly increase between 1800 and 1850, with most of the expansion occurring after 1850.
The production of cotton did not greatly rise between 1800 and 1850, despite cotton being an essential component of the Southern economy in the middle of the 19th century. In actuality, the growth in cotton output in the South began mostly after 1850 and was fueled by the rising demand for cotton in the North and in Europe's textile mills. Although the cotton gin's development in the late 18th century simplified cotton processing, it did not necessarily result in a material rise in output. The expansion of cotton production in the South was influenced by a number of additional factors, including land accessibility, labor supply, and transportation infrastructure.
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Multiple Choice Questions1. The primary aim of many hedge funds is to:a) Increase exposure to foreign investments.b) Minimize risk and deliver positive returns under all marketconditions.c) Avoid cumbersome regulation.d) Generate the highest return possible.2. Assets within a hedged structure of a long/short equity fund are ideally:a) Exposed to stock picking risk only.b) Exposed to both stock picking and market risk.c) Exposed to market risk only.d) Risk-free.
1. The primary aim of many hedge funds is to b. minimize risk and deliver positive returns under all market conditions. 2. Assets within a hedged structure of a long/short equity fund are ideally to a. expose the assets within the fund to stock picking risk.
Hedge funds employ various strategies and techniques, such as short-selling and using derivatives, to achieve this goal. Their main objective is to generate consistent returns regardless of the overall market performance, thus providing a level of protection for investors during market downturns.
This type of fund combines long positions in undervalued stocks with short positions in overvalued stocks, seeking to profit from both. By taking both long and short positions, the fund can potentially achieve positive returns irrespective of the market conditions, as the long positions will benefit from the increase in stock prices while the short positions will profit from the decrease in stock prices. This strategy allows the fund to be less exposed to overall market risk and focus on identifying and capitalizing on individual stock opportunities.
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it is extremely important to document any changes in technical specifications that might affect product performance. true false
It is true that it is extremely important to document any changes in technical specifications that might affect product performance to ensure that the product is produced and meets required quality standards.
What is a product?A product can be a physical item, a service, or a combination of both. Products can range from consumer goods such as clothing, electronics, and food to industrial goods such as machinery and equipment. In the digital age, products can also include software, apps, and digital content. Creating a successful product requires market research, understanding customer needs, and developing a unique value proposition. The product must also be designed, developed, tested, and launched in a way that maximizes its potential for success. Marketing and advertising strategies are also crucial in promoting the product and reaching the target audience. Ultimately, a successful product delivers value to customers and generates revenue for the company.
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which of the following are relative measures of sales and profits? (choose every correct answer.) multiple select question. a firm's net profit from lowered prices a firm's growth as compared to other companies a firm's total global sales a firm's increase in sales over the prior year
The relative measures of sales and profits are B. a firm's growth as compared to other companies and D. a firm's increase in sales over the prior year.
Relative measures of sales and profits compare a company's performance to a benchmark, such as industry standards or the performance of other companies. Option B, a firm's growth as compared to other companies, is a relative measure as it involves comparing a company's growth to the growth of its competitors or industry peers. This helps to evaluate a company's performance within its market and industry context.
Option D, a firm's increase in sales over the prior year, is also a relative measure as it compares a company's current sales to its own past performance. This enables the assessment of the company's growth trajectory and can help identify trends or changes in its business performance over time.
Options A and C are not relative measures. Option A, a firm's net profit from lowered prices, is an absolute measure as it indicates a specific amount of profit and does not involve any comparison to other companies or benchmarks. Option C, a firm's total global sales, is also an absolute measure, as it represents the total sales generated by the company without any comparison to other entities or benchmarks. Therefore, the correct option is B. and D.
The question was incomplete, Find the full content below:
which of the following are relative measures of sales and profits? (choose every correct answer.) multiple select question.
A. a firm's net profit from lowered prices
B. a firm's growth as compared to other companies
C. a firm's total global sales
D. a firm's increase in sales over the prior year
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You have just received a windfall from an investment you made in a friend's business. She will be paying you $45,056 at the end of this year. $90,112 at the end of next year, and $135,168 at the end of the year after that three years from today). The interest rate is 12.1% per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?
a. The present value of the windfall is $200,321.68. b. The future value of the windfall in three years is $379,125.48.
a. To calculate the present value of the windfall, we need to discount each of the future payments back to the present using the given interest rate of 12.1%.
Using the formula for present value of a single payment, we get:
PV1 = 45,056 / (1 + 0.121)¹ = $40,250.44
PV2 = 90,112 / (1 + 0.121)² = $67,230.53
PV3 = 135,168 / (1 + 0.121)³ = $92,840.71
Therefore, the present value of the windfall is:
PV = PV1 + PV2 + PV3
= $40,250.44 + $67,230.53 + $92,840.71 = $200,321.68
b. To calculate the future value of the windfall in three years, we can simply add up the future payments and compound them for three years using the same interest rate of 12.1%.
Using the formula for the future value of a series of payments, we get:
FV = 45,056 x (1 + 0.121)² + 90,112 x (1 + 0.121)¹ + 135,168
= $379,125.48
Therefore, the future value of the windfall in three years is $379,125.48.
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Q2what value had freshippo created for its customers
Freshippo's emphasis on high-quality products, convenience, and innovative use of technology has helped to create significant value for its customers, which has contributed to its rapid growth and success in the highly competitive Chinese retail market.
How Freshippo has created significant value for its customers?Freshippo, also known as Hema, has created significant value for its customers by revolutionizing the grocery shopping experience in China through the integration of online and offline channels, offering high-quality products, and providing convenient and fast delivery options.
One of the key value propositions of Freshippo is its emphasis on fresh and high-quality products, which are sourced directly from producers and suppliers, and delivered to stores on a daily basis. This allows customers to purchase fresh products that are often cheaper than those found in traditional supermarkets.
Another major value proposition is the integration of online and offline channels, which allows customers to shop for groceries online and have them delivered to their doorstep within 30 minutes, or pick them up at the store. This is particularly appealing to time-pressed urban consumers, who value convenience and fast service.
Moreover, Freshippo has also created value for its customers through its innovative use of technology, such as mobile payment systems and facial recognition technology, which simplifies the payment process and enhances security.
Overall, Freshippo's emphasis on high-quality products, convenience, and innovative use of technology has helped to create significant value for its customers, which has contributed to its rapid growth and success in the highly competitive Chinese retail market.
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Question 3 (13 marks) a. The maturity of a futures contract on a stock market index is 1 year. The multiplier for the futures contract $50. The current level of the index is 30,000. The risk-free rate is 0.5% per month and dividend yield on the stock market index is 0.3% per month. The initial margin requirement is 10%. i. What is the parity value of the futures price now? (3 marks) ii. Assume the futures contract is fairly priced. How much initial margin you need to deposit if you long 1 contract? (2 marks) iii. Calculate the two-month holding-period return for your long position in the futures contract if the stock market index increases to 31,000 two months later. Assume the futures contract keeps being priced fairly. (5 marks) b. William sells six July futures contracts on coffee. Each contract is for the delivery of 37,500 pounds. The current futures price is $2.2565 per pound. The initial margin is $9,900 per contract and the maintenance margin is $9,000 per contract. What is the futures price per pound that would lead a margin call? (3 marks)
A(i) The parity value of the futures price now is $30,303.03.
(ii) You would need to deposit 10% of $1,500,000, which is $150,000, as initial margin.
(iii) The holding-period return is 0.0128 or 1.28%.
B) The futures price per pound falls to -$1.18, a margin call would be triggered.
i.F = S0 * e^((r-d)*T)where F is the futures price, S0 is the current spot price of the index, r is the risk-free rate, d is the dividend yield, and T is the time to maturity of the futures contract in years.
In this case, F = S0 * e^((r-d)*T) = 30,000 * e^((0.005-0.003)*1) = 30,303.03.Therefore, the parity value of the futures price now is $30,303.03.
ii. The initial margin requirement is 10% of the contract value, which is $50 * 30,000 = $1,500,000. Therefore, if you long 1 contract, you would need to deposit 10% of $1,500,000, which is $150,000, as initial margin.
iii. The two-month holding-period return for a long position in the futures contract can be calculated using the formula:
HPR = (F1 - F0 + D) / (F0 + IM)
where HPR is the holding-period return, F1 is the futures price at the end of the holding period, F0 is the initial futures price, D is the total dividend received during the holding period, and IM is the initial margin.
In this case, F0 = 30,303.03, F1 = 31,000, D = 0.003 * 2 * 30,000 = $1,800, and IM = $150,000.
Therefore, the holding-period return is:
HPR = (31,000 - 30,303.03 + 1,800) / (30,303.03 + 150,000) = 0.0128 or 1.28%.
b. To calculate the futures price per pound that would lead to a margin call, we need to use the formula:
F = (MM - V) / Q
where F is the futures price per pound that would lead to a margin call, MM is the maintenance margin per contract, V is the value of the contract, and Q is the quantity of the underlying asset per contract.
In this case, MM = $9,000, V = $2.2565 * 37,500 = $84,468.75, and Q = 37,500. Therefore,
F = (9,000 - 84,468.75) / 37,500 = -$1.18 per pound.
This means that if the futures price per pound falls to -$1.18, a margin call would be triggered. However, it's worth noting that futures prices cannot be negative in reality, and this is only a theoretical calculation based on the formula.
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Consider a firm that has EPS of $5 at the end of the first year, a dividend-payout ratio of 30-percent, a discount rate of 16-percent, and a return on retained earnings of 20-percent. The firm retains some of its earnings each year and it is selecting growth opportunities each year.
• Calculate the price of stock by using NPVGO model
The stock price using the NPVGO model is $89.00 per share.
The NPVGO model is used to value a company's growth opportunities. It is calculated as the net present value (NPV) of the company's future growth opportunities, divided by the number of outstanding shares.
To calculate the NPV of the growth opportunities, we need to calculate the present value of the expected future earnings that will be generated by the growth opportunities, and subtract the cost of the investment required to generate those earnings.
The growth rate of earnings is assumed to be constant over time.
The formula for NPVGO is:
NPVGO = (ROE - r) x b x EPS / (r - g)
where ROE is the return on retained earnings, r is the discount rate, b is the retention ratio (1 - dividend payout ratio), EPS is the earnings per share, and g is the expected growth rate.
In this case, EPS = $5, the dividend payout ratio is 30%, so the retention ratio is 70%, ROE is 20%, and r is 16%.
To calculate g, we can use the sustainable growth rate formula:
g = ROE x b
g = 20% x 70%
g = 14%
So, g = 14%.
Now we can calculate NPVGO:
NPVGO = (ROE - r) x b x EPS / (r - g)
NPVGO = (20% - 16%) x 0.7 x $5 / (16% - 14%)
NPVGO = 0.08 x $3.50 / 0.02
NPVGO = $14.00
So, the NPV of the growth opportunities is $14.00 per share.
To calculate the price of the stock using the NPVGO model, we need to add the present value of the expected future dividends to the NPV of the growth opportunities, and divide by the number of outstanding shares.
The formula for stock price using the NPVGO model is:
Stock price = (NPVGO + PV of expected dividends) / number of shares
To calculate the present value of expected dividends, we can use the dividend discount model:
PV of expected dividends = D1 / (r - g)
where D1 is the expected dividend per share in the next period, r is the discount rate, and g is the expected growth rate.
In this case, D1 = 30% x $5 = $1.50 per share.
PV of expected dividends = $1.50 / (16% - 14%)
PV of expected dividends = $75.00 per share
Now we can calculate the stock price using the NPVGO model:
Stock price = (NPVGO + PV of expected dividends) / number of shares
Stock price = ($14.00 + $75.00) / 1
Stock price = $89.00 per share
Therefore, the stock price using the NPVGO model is $89.00 per share.
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If the economy is in a recession, the Federal Reserve would most likely pursue. which causes interest rates to . a) contractionary monetary policy: fall b) expansionary monetary policy: fall C) expansionary monetary policy: rise d) contractionary monetary policy: rise
If the economy is in a recession, the Federal Reserve would most likely pursue an expansionary monetary policy, which causes interest rates to fall. So, the correct answer is b) expansionary monetary policy: fall.
Expansionary monetary policy is a type of macroeconomic policy that is used by central banks, such as the Federal Reserve, to stimulate economic growth and reduce unemployment. The main goal of expansionary monetary policy is to encourage borrowing and spending by making credit more affordable and accessible. There are several ways that the Federal Reserve can pursue an expansionary monetary policy. One way is by lowering the federal funds rate, which is the interest rate at which banks lend to each other overnight. When the federal funds rate is lowered, banks can borrow money more cheaply, which allows them to offer lower interest rates on loans to consumers and businesses. This can stimulate borrowing and investment, which in turn can boost economic growth. Another way that the Federal Reserve can pursue expansionary monetary policy is through quantitative easing. This involves the central bank purchasing large amounts of government securities or other assets from banks and other financial institutions. By doing so, the central bank injects more money into the economy, which can help stimulate lending and borrowing.
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If the economy is in a recession, the Federal Reserve would most likely pursue an expansionary monetary policy, which causes interest rates to fall.
During a recession, the economy is characterized by high unemployment and low economic growth. To stimulate economic activity and increase employment, the Federal Reserve can pursue an expansionary monetary policy, which involves increasing the money supply, lowering interest rates, and encouraging borrowing and spending.
Lower interest rates make it cheaper for businesses and individuals to borrow money, which can lead to increased investment and consumption, and ultimately stimulate economic growth. Therefore, the Federal Reserve would pursue an expansionary monetary policy in a recession to help boost the economy.
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managers can reduce the need for organizational rules and regulations by hiring the right people, providing training, developing management role models, and creating blank systems. multiple choice question. reward rule-based control corporate governance
Hiring the proper people, offering training, generating role models for management, and developing blank systems can all help to eliminate the need for organizational rules and regulations.
Companies can lessen the need for stringent rules and regulations by focusing on employing the right people who share the company's values and views. Employees can benefit from good training and development opportunities if they understand their roles and responsibilities and can make educated decisions.
Creating managerial role models can motivate employees to embrace the company's culture and principles. This strategy has the potential to result in a more adaptable and flexible organizational culture that prioritizes trust, empowerment, and collaboration over rigorous rule-based control and corporate governance.
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(Cost of preferred stock) The preferred stock of Texas Southern Power Company sells for $41 and pays $7 in dividends. The net price of the security after issuance costs is $36.08 . What is the cost of capital for the preferred stock?
The cost of capital for Texas Southern Power Company's preferred stock is approximately 29.07%.
To determine the cost of capital for Texas Southern Power Company's preferred stock, we need to consider the dividend paid, the selling price, and the net price after issuance costs. Let's follow these steps:
1. First, we need to calculate the dividend yield, which is the annual dividend divided by the stock's selling price. In this case, the dividend is $7, and the selling price is $41:
Dividend Yield = Dividend / Selling Price = $7 / $41 ≈ 0.1707 or 17.07%
2. Next, we need to account for the issuance costs. To do this, we'll calculate the difference between the selling price and the net price after issuance costs, then divide by the selling price:
Issuance Cost Percentage = (Selling Price - Net Price) / Selling Price = ($41 - $36.08) / $41 ≈ 0.1200 or 12%
3. Finally, we'll adjust the dividend yield to account for the issuance costs. This will give us the cost of capital for the preferred stock:
Cost of Capital = Dividend Yield + Issuance Cost Percentage = 17.07% + 12% = 29.07%
Therefore, the cost of capital for Texas Southern Power Company's preferred stock is approximately 29.07%. This value represents the required return on investment for investors who purchase the preferred stock, taking into consideration the dividend payments and the costs associated with issuing the stock.
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currently, the compensation for lost or damage airlines luggage has been negotiated by international agreement and is determined by which currency standard?
The compensation for lost or damaged airline luggage is determined by international agreement and is usually based on the Special Drawing Right (SDR) currency standard.
International treaties like the Montreal Convention or the Warsaw Convention set the compensation for lost or damaged airline baggage. These conventions set up the airlines' obligations as well as the compensation that passengers are entitled to. The Special Drawing Right (SDR), a monetary unit used by the International Monetary Fund (IMF), is typically used to compute the amount of compensation.
A basket of important currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound, is used to determine the SDR's value. For international financial operations and settlements, the SDR serves as the standard.
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Currently, the compensation for lost or damaged airline luggage has been negotiated by international agreement and is determined by the Special Drawing Right (SDR) currency standard.
A global reserve asset developed by the International Monetary Fund (IMF) is the Special Drawing Right (SDR). According to an international agreement, it serves as a benchmark for calculating the compensation for lost or damaged airline luggage. A weighted average of the U.S. dollar, the euro, the Japanese yen, and the British pound make up the SDR. Based on market conditions and exchange rates, its value changes. It promotes uniformity and fairness in compensation for travelers regardless of their place of origin or the currency in which they paid for their airline ticket. The SDR is used as the benchmark for airline luggage compensation. It also gives airlines a reference point to use when deciding how much liability they are ready to accept for lost or damaged luggage.
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dolphin inc's preferred stock is currently priced at $40.00/share and just paid quarterly dividends of $0.50/share. what is the cost of dolphin's preferred stock?
The cost of Dolphin Inc.'s preferred stock is 5%.
The cost of Dolphin Inc.'s preferred stock can be calculated using the formula: Cost of preferred stock = Annual dividend payment / Net proceeds from the sale of one share.
Assuming a constant dividend payment, the annual dividend payment can be found by multiplying the quarterly dividend by 4. Therefore, the cost of Dolphin Inc.'s preferred stock is:
Cost of preferred stock = (4 x $0.50) / $40.00 = $0.05 / $1 = 5%
Therefore, the cost of Dolphin Inc.'s preferred stock is 5%.
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the sound shack borrowed 19,000 at the 8.5 simple interest over a 36 month period what is the total interest and value of the loan at maturity?
The total interest and value of the loan at maturity for The Sound Shack, which borrowed $19,000 at 8.5% simple interest over a 36-month period, is $4,845 and $23,845.
Total interest rate can be calculated as-
1. Convert the interest rate to a decimal: 8.5% = 0.085
2. Convert the loan period to years: 36 months ÷ 12 months/year = 3 years
3. Calculate the total interest: Principal x Interest Rate x Time = $19,000 x 0.085 x 3 = $4,845
4. Calculate the value of the loan at maturity: Principal + Interest = $19,000 + $4,845 = $23,845
The total interest on the loan is $4,845 and the value of the loan at maturity is $23,845.
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The basic models of acquisition include a corporation acquiring a target corporation's: (Check all that apply.)
A. stock.
B. assets.
C. cash.
D. debt.
A. stock and B. assets are the basic models of acquisition that a corporation can acquire from a target corporation. C. cash and D. debt are not typically acquired in an acquisition,
as cash is a liquid asset that the target corporation may need to continue operating, and debt is a liability that the acquiring corporation would not want to take on. Based on your question, the basic models of acquisition for a corporation acquiring a target corporation include:
A. stock.
B. assets.
These two options are commonly involved in acquisitions. A corporation can either acquire the target corporation's stock, giving them ownership and control, or they can acquire the target's assets, which can include property, equipment, and intellectual property. While cash and debt can be involved in acquisition transactions, they are not considered basic models of acquisition.
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A. stock and B. assets are the basic models of acquisition that a corporation can acquire from a target corporation. C. cash and D. debt are not typically acquired in an acquisition,
As cash is a liquid asset that the target corporation may need to continue operating, and debt is a liability that the acquiring corporation would not want to take on. Based on your question, the basic models of acquisition for a corporation acquiring a target corporation include:
A. stock.
B. assets.
These two options are commonly involved in acquisitions. A corporation can either acquire the target corporation's stock, giving them ownership and control, or they can acquire the target's assets, which can include property, equipment, and intellectual property. While cash and debt can be involved in acquisition transactions, they are not considered basic models of acquisition.
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parallel pricing-the tendency for companies in an industry to move prices more or less simultaneously-is typically an indicator of:
Parallel pricing, which is the tendency for companies in an industry to move prices more or less simultaneously, is typically an indicator of market competition and the use of similar pricing strategies among competitors.
Companies may change their prices in an attempt to preserve their share of the market and profitability based on pricing decisions made by their rivals. However, this can lead to price wars and decreased profitability for all companies involved. Therefore, it is important for companies to carefully consider their pricing strategies and competitive environment to avoid engaging in parallel pricing.
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