On August 1, 20x1, the accountant for Western Exports downloaded the company's July 31, 20x1, bank statement from the bank's website. The balance shown on the bank statement was $28,810.
The July 31, 20x1, balance in the cash account in the general ledger was $13,687. Jenny Iglesias, the accountant for Western Exports, noted the following differences between the bank's records and the company's cash account in the general ledger.
Bank Reconciliation for Western Exports as of July 31, 20x1:
Additions to the Book Balance:
Subtractions from the Book Balance:
Adjusted Book Balance: $25,689
General Journal Entries:
Analysis: The total expenses for the month of July increased as a result of the general journal entries recorded for the bank reconciliation. This is because several payments were incorrectly recorded or paid by the bank, leading to increased expenses for the month.
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esmeralda is taking a three month leave from work to travel across europe. the bureau of labor statistics counts esmeralda as
Esmeralda is taking a three-month leave from work to travel across Europe.
The Bureau of Labor Statistics counts Esmeralda as...Esmeralda, who works full-time, is taking a three-month leave from work to travel across Europe. The Bureau of Labor Statistics considers her an employed individual.
Since she has a job but is taking a temporary leave, she is still regarded as an employed individual, and her job is considered as an active job. She'll be able to return to work when her holiday is over, and her employer has agreed to keep her job open for her.
Esmeralda, who works full-time, is taking a three-month leave from work to travel across Europe. The Bureau of Labor Statistics considers her an employed individual. Since she has a job but is taking a temporary leave, she is still regarded as an employed individual, and her job is considered as an active job.
She'll be able to return to work when her holiday is over, and her employer has agreed to keep her job open for her. The Bureau of Labor Statistics counts Esmeralda as a full-time employee even though she is taking a temporary leave.
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in forming a portfolio of two risky assets, what must be true of the correlation coefficient between their returns if there are to be gains from diversification? explain.
The correlation coefficient between the two risky assets in a portfolio must be less than one in order for there to be gains from diversification.
This means that the returns of the assets are not perfectly correlated, so that their movements can be partially independent and their risks can be reduced through diversification.
When the correlation coefficient is one, then the two assets have the same return, so diversification does not lead to any risk reduction. When the correlation coefficient is less than one, then the returns of the two assets are somewhat independent, so that when one asset goes up, the other may not follow suit.
This helps to reduce risk, leading to potential gains from diversification.
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The ______________ concept says that all transporting, storing, and product-handling activities of a business and a channel system should be thought of as part of one system which should seek to minimize the cost of distribution for a given customer service level.
A) PERT
B) Product-market
C) Distribution center
D) Physical distribution
E) Marketing
The Physical Distribution concept says that all transporting, storing, and product-handling activities of a business and a channel system should be thought of as part of one system which should seek to minimize the cost of distribution for a given customer service level. So, the correct option is D.
Physical Distribution can be defined as the activities of planning, executing, and controlling the physical flow of goods, services, and related information from the point of production to the point of consumption to meet the customer's requirements profitably.
This concept is essential in the overall business and channel system as it ensures that all transporting, storing, and product-handling activities of a business are taken into consideration and viewed as part of one system. This system should aim to minimize the cost of distribution for a given customer service level. A lot of companies depend on physical distribution for their success.
It includes a range of activities such as packaging, warehousing, transportation, order processing, and inventory management. The goal is to get the product to the consumer when they need it, where they need it, and how they want it. Hence, Physical Distribution becomes very significant.
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a company's interest expense is $10,000. its income before interest expense and income taxes is $45,000. its net income is $14,400. the company's times interest earned ratio equals:
The company's times interest earned ratio is 4.5.
The ability of a business to make debt payments on time is gauged by the interest coverage ratio or times interest collected. EBIT or EBITDA divided by the total interest expense might be used to determine it.
The times interest earned ratio is calculated by dividing the income before interest expense and income taxes by the interest expense.
Times interest earned ratio = Income before interest expense and income taxes / Interest expense
Substituting the given values:
Times interest earned ratio = $45,000 / $10,000
Times interest earned ratio = 4.5
As a result, the company's ratio of times interest earned is 4.5.
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assume your uncle recorded his salary history during a 40-year career and found that it had increased 10-fold. if inflation averaged 4% annually during that period, then over his career, his purchasing power: group of answer choices remained on par with inflation decreased increased about 2% annually increased about 3% annually increased about 1% annually
The purchasing power of the salary increased at a rate of approximately 1% annually, compared to inflation.
The purchasing power of an individual's salary over a 40-year period increases or decreases in line with the rate of inflation. In this case, the salary increased 10-fold while the rate of inflation was 4% annually.
In other words, while the salary increased 10-fold over the 40-year period, the purchasing power of the salary would have increased at a slower rate, approximately 1% annually. This is because the rate of inflation increased 4% annually during the same period, which means the buying power of the salary increased at a slower rate.
For example, if a person had a salary of $10,000 at the beginning of the 40-year period, the salary would have increased 10-fold to $100,000 by the end of the period. However, because of the 4% annual rate of inflation, the purchasing power of the salary would not have increased by 10-fold. Rather, it would have only increased by approximately 1%, resulting in a purchasing power of around $107,000 at the end of the period.
In summary, assuming an individual's salary increased 10-fold over a 40-year period and inflation averaged 4% annually during the same period, the purchasing power of the salary would have increased at a rate of approximately 1% annually, compared to the rate of inflation.
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you wish to predict job satisfaction for each of your employees. which of the five facets of personality will probably be of the most interest in this case? group of answer choices agreeableness extraversion conscientiousness
To predict job satisfaction for your employees, the most important facet of personality to consider is likely Conscientiousness. Conscientiousness is the tendency to be reliable, organized, and task-oriented. High levels of Conscientiousness are associated with higher job satisfaction, making it the most important personality trait to consider when predicting job satisfaction.
Conscientiousness is the most important personality trait to consider when predicting job satisfaction for your employees. High levels of Conscientiousness are associated with higher job satisfaction, meaning those with higher levels of Conscientiousness are more likely to be satisfied in their jobs.
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Rubio, Inc., an accrual basis C corporation, reports the following amounts for the tax year. The applicable income tax rate is 30%. Book income, including the items below, is $87,500. Increase in book allowance for anticipated warranty costs 4,375; Interest income from City of Westerville bonds 8,750; Bribes paid to Federal inspectors 17,500.a. Indicate whether the following items create temporary or permanent differences. Increase in book allowance for anticipated warranty costs, Interest income from City of Westerville bonds, Bribes paid to Federal inspectorsb. Rubio's taxable income is?Permanent and Temporary Differences Between Pretax Accounting and Taxable IncomeThere are many differences between what is called pretax accounting income (income determined under generally accepted accounting principles) and taxable income (income determined following the regulations of the Internal Revenue Service). In general, these differences can be either permanent (which means they once they occur, they occur during that year, and do not impact the future) or they can be timing differences (which means the differences 'turn-around' in the future when certain events occur). We see a few examples of these differences in this Question.
a. The following items create temporary or permanent differences: Increase in book allowance for anticipated warranty costs: Temporary difference Interest income from City of Westerville bonds: Permanent difference Bribes paid to Federal inspectors: Permanent difference.
b. Rubio's taxable income is $83,250Explanation:Increase in book allowance for anticipated warranty costs - This is a temporary difference because the expense is recognized in the current year for book purposes but is not allowed as a tax deduction until the warranty is actually fulfilled.
The increase in book allowance is added back to book income to arrive at taxable income. Interest income from City of Westerville bonds - This is a permanent difference because the interest income is recognized for both book and tax purposes in the same year.
Bribes paid to Federal inspectors - This is a permanent difference because bribes are not deductible for tax purposes. The amount paid in bribes is added back to book income to arrive at taxable income.
Rubio's taxable income is calculated as follows: Book income = $87,500 Increase in book allowance for anticipated warranty costs = $4,375
Interest income from City of Westerville bonds = $8,750
Bribes paid to Federal inspectors = $17,500
Total adjustments = $30,625
Taxable income = $87,500 - $30,625 = $56,875
Income tax rate = 30%
Rubio's income tax expense = $56,875 × 30% = $17,062.50
Rubio's taxable income is $83,250 ($56,875 + $26,375) after adjustments for temporary and permanent differences.
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what is the minimum amount of time that usp <795> advises retaining compounding and master formulation records?
The minimum amount of time that USP <795> recommends for retaining compounding and master formulation records is one year.
According to USP <795>, all compounding pharmacies are expected to maintain accurate and up-to-date records of their compounding activities. This requirement is included in order to ensure that each compound produced is of high quality and consistent with the intended formulation.
USP <795> defines "records" as "a document or other type of recorded information that includes information about the formulation, preparation, ingredients, and labeling of a compounded drug." As a result, the record-keeping process can be quite detailed and time-consuming, requiring careful attention to detail.
The maintenance of these records is essential for verifying that each compound has been properly prepared and labeled, as well as for ensuring that the pharmacy is in compliance with all relevant regulations and guidelines.
Furthermore, this documentation can be extremely useful in the event of an audit or inspection by regulatory authorities. According to USP <795>, these records should be retained for a minimum of one year.
However, some pharmacies may choose to retain these records for longer periods of time in order to provide a more detailed record of their compounding activities or to ensure compliance with other regulatory requirements.
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crane company reports the following operating results for the month of august: sales $315,000 (units 5,000); variable costs $216,000; and fixed costs $70,800. management is considering the following independent courses of action to increase net income. compute the net income to be earned under each alternative. 1. increase unit selling price by 10% with no change in total variable costs or sales volume. net income $enter the net income in dollars 2. reduce variable costs to 57% of sales. net income $enter the net income in dollars 3. reduce fixed costs by $25,000. net income $enter the net income in dollars which course of action will produce the highest net income? select an alternative
The 2nd Option to reduce the variable cost to 57%of sales will produce the highest net income
How to solve1. Sales ($315,000*110%) $346,500
Less Variable Cost $216,000
Contribution $130,500
Less Fixed Cost $70,800
Net Income $59,700
2. Sales $315,000
Less Variable Cost ($315,000*75/100) $179,550
Contribution $135,450
Less Fixed Cost $70,800
Net Income $64,650
3. Sales $315,000
Less Variable Cost $216,000
Contribution $99,000
Less Fixed Cost($70,800-$25,000) $45,800
Net Income $53,200
For an accounting period, net income is an entity's income less cost of goods sold, costs, depreciation and amortization, interest, and taxes.
The 2nd Option to reduce the variable cost to 57%of sales will produce the highest net income
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o analyze the direct and indirect costs and determine the actual cost of specific technology implementations, you would use a: total cost of ownership model. cost benefit analysis. capacity plan. break-even point. return on investment model.
When analyzing the direct and indirect costs and determining the actual cost of specific technology implementations, you would use a Total Cost of Ownership (TCO) model. This model is widely used in the business world as a way to identify and analyze all costs associated with acquiring, implementing, and maintaining technology solutions.
The TCO model is a comprehensive and structured approach that provides a detailed understanding of the costs associated with technology implementation. This approach helps to identify all relevant costs, including direct costs such as hardware, software, and labor, as well as indirect costs such as training, maintenance, and support.
To calculate the TCO, you need to consider all the costs associated with a technology implementation over its entire lifecycle. This includes the cost of acquiring and implementing the technology, training and support, ongoing maintenance, and replacement costs.
In addition to the TCO model, there are other approaches that businesses can use to determine the actual cost of technology implementations. These include the cost-benefit analysis, capacity plan, break-even point, and return on investment (ROI) models.
The cost-benefit analysis involves comparing the benefits of a technology implementation to its costs. This approach is useful when the costs and benefits of a technology implementation are difficult to quantify.
A capacity plan is a forecasting tool that helps organizations to anticipate future technology needs. This approach is useful when planning for future technology investments.
The break-even point is the point at which the benefits of a technology implementation equal its costs. This approach is useful when evaluating the financial viability of a technology implementation.
The ROI model is used to evaluate the financial returns of a technology investment. This approach is useful when evaluating the profitability of a technology implementation.
In conclusion, when analyzing the direct and indirect costs and determining the actual cost of specific technology implementations, businesses can use a Total Cost of Ownership (TCO) model. This approach helps to identify and analyze all costs associated with technology implementation, including direct and indirect costs.
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mariana is going to invest $6,200 and leave it in an account for 9 years. assuming the interest is compounded monthly, what interest rate, to the nearest tenth of a percent, would be required in order for mariana to end up with $7,400?
Answer: 2.0%
Explanation:
frankini opened a coffee shop business in the small country of timpopo. business has been increasing, but he is continually squeezed by corrupt policemen wanting bribes for protection and greedy politicians continually making new rules to extract more money from his business. what would make business in timpopo better?
To make business in Timpopo better, Frankini should seek legal assistance to help him with corrupt policemen wanting bribes for protection and greedy politicians continually making new rules to extract more money from his business.
Frankini should seek legal assistance to help him with corrupt policemen wanting bribes for protection and greedy politicians continually making new rules to extract more money from his business. Besides, he could also take other actions that include;
Developing good relations with the authorities and influential members of the society, and providing them with incentives.
Establishing a more extensive customer base through social media platforms and other forms of advertising.
Creating a more comprehensive business plan that incorporates economic, political, and social trends in the country.
Restructuring the organization to improve efficiency and productivity.
Providing high-quality products and services that meet customer needs and exceed their expectations.
Increasing transparency in business operations and financial reporting.
Focusing on innovation and creativity to gain a competitive advantage in the market.
Therefore, By following these steps, Frankini can help make business in Timpopo better by addressing issues related to corrupt policemen and greedy politicians.
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because of their pivotal role in international trade, firms can and do exert a strong influence on government policy toward trade. t/f
The answer to the given student question is "firms can and do exert a strong influence on government policy towards trade." is True.
The influence of business corporations on public policy decisions is a major subject of study in political science and other fields of research. The state and business organizations often collaborate, making it difficult to discern the border between public and private interests.
In general, businesses use both direct and indirect approaches to exert their influence. Direct approaches are those where business entities express their views to decision-makers or lobbyists, engage in informal conversations or hearings, provide assistance in the form of expertise, or contribute to political campaigns. Business firms, for instance, have several options for influencing international trade policy.
The most basic is to express their views directly to policymakers. They can use lobbyists to influence decision-making or make donations to political candidates who support free trade policies. Indirect approaches, on the other hand, are those in which businesses seek to shape the broader public environment in which political decisions are made. This may involve, for example, making their case in the media, engaging with civil society organizations, or producing research and analysis that supports their views.
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based on the static theory, what should the managers attempt to maximize and minimize while developing capital structure policy?
The static theory of capital structure suggests that a company's capital structure should be based on the minimization of the cost of capital while attempting to maximize the market value of the company's equity.
The cost of capital is reduced when more debt is added to the capital structure, however the risk of default rises with increasing debt. Therefore, managers must strike a balance between increasing debt and the associated cost of capital versus the risk of default.
The objective of a firm's capital structure policy should be to find the optimal debt-to-equity ratio, or the balance between debt and equity that maximizes the market value of the firm.
This optimal capital structure will result in the lowest cost of capital for the firm, as it reduces the cost of debt financing and provides access to less expensive sources of capital.
In terms of minimizing, the main thing to minimize is the risk of default. This can be done by managing the firm's debt-to-equity ratio and avoiding taking on too much debt. Taking on too much debt increases the cost of debt financing, as well as the likelihood of default.
Managers must also keep in mind the tax implications of their capital structure decisions, as debt financing is generally tax-deductible, thus resulting in a tax savings for the firm.
In summary, the static theory of capital structure suggests that managers should aim to maximize the market value of the firm's equity by finding the optimal debt-to-equity ratio and minimizing the risk of default, all while keeping in mind the tax implications of their decisions.
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corporations enjoy first amendment rights in that they have the ability to spend more freely on elections true or false
The given statement "Corporations enjoy First Amendment rights in that they have the ability to spend more freely on elections" is true. This is because the government may not limit the political parties.
What are the First Amendment rights?According to the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission, the court held that corporations have the same First Amendment rights as individuals to spend money in support of or opposition to political candidates.
This decision opened the door for corporations to spend unlimited amounts of money on political campaigns. In Citizens United v. Federal Election Commission, the Supreme Court declared that the government may not limit political spending by corporations in candidate elections because doing so would violate the First Amendment.
Corporations and unions have First Amendment rights, the Court explained in Citizens United. They must be permitted to communicate with the public about political matters since speech concerning public affairs is more than self-expression; it is the essence of self-government.
The Constitution protects speech and the freedom of the press, which enables all members of the public, including businesses and unions, to express their viewpoints and participate in the debate on equal footing.
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0 / 1 point k buys a piece of landlocked property from l on the condition that l provide an easement across the property for ingress and egress. the easement isn't recorded. k later sells the property. is the easement still valid for the new owner?
Yes, because such easements belong to property, not to individuals. So, the easement is still valid for the new owner.
Landlocked in the context of real estate refers to real estate inaccessible from public thoroughfares except for adjacent properties. This type of land is located behind a shopping street and can only be reached by passing through the shopping street. Inland properties are locked. That is, it is surrounded by other properties.
Landlocked parcels are usually the result/outcome of smaller parcels or the division of larger parcels into smaller parcels that are sold individually. Ideally, each small parcel should have access to public right-of-way, but sometimes this is not possible.
Inland properties are generally less valuable than surrounding properties due to inaccessibility. However, that does not mean that inland property is worthless.
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Complete question:
K buys a piece of landlocked property from L on the condition that L provide an easement across the property for ingress and egress. The easement isn't recorded. K later sells the property. Is the easement still valid for the new owner?
a brand decides to use email marketing as part of their digital marketing strategy. what will email marketing help this business do? select all that apply. 1 point drive sales create community analyze performance share information
Email marketing can help this business A: drive sales, C: analyze performance, and D: share information.
Drive sales: Email marketing can be used to promote products or services, highlight special deals or promotions, and encourage customers to make a purchase.Share information: Email marketing can be used to keep customers informed about the brand's latest news, events, and product updates.Analyze performance: Email marketing campaigns can be tracked and analyzed to measure their effectiveness, such as open rates, click-through rates, and conversion rates.Therefore, the correct options are: Drive sales, Share information and Analyze performance.
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a proposed project has an initial cost of $74,200 and cash inflows of $23,900, $34,700, and $40,200 for years 1 through 3, respectively. the required rate of return is 15.2 percent. based on irr, should this project be accepted? why or why not?
For the financial information of the project provided above, it may be stated that the project should not be accepted, as the IRR for the project will be much lesser than the required return rate, i.e., 15.2 percent.
The required return of a project is necessary to be taken into consideration when there are positive cash flows for it. In the above case, the IRR is lesser than the required rate given in the financial information, thus, if it is lesser, then the firm will not add any value for itself, and it is advisable not to undertake any such project.
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a manager taking a human resource approach to team management should stress: a. leadership authority. b. reutilization of tasks. c. employee involvement. d. a focus on task-objectives.
A human resource approach involves developing relationships between employees and their managers, encouraging open communication, giving employees more control over their work, and creating an environment where everyone has a sense of ownership in their work. Therefore the correct option is C.
The other three options - leadership authority, reutilization of tasks, and a focus on task-objectives - are all components of a successful team management system, but they should not be the primary focus when taking a human resource approach.
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employees are likely to see an adaptive change asmultiple choiceleast threatening.moderately threatening.unnecessary.highly threatening.
Employees are likely to see an adaptive change as least threatening.
What is an adaptive change?
Adaptive change is a change made by an organization in response to environmental changes. Adaptive change is often made in response to internal and external pressures. These shifts may be minor, such as minor organizational changes, or significant, such as a complete shift in the way an organization operates. When considering change management, employees' reactions are critical to a change's success. Employees are more likely to see an adaptive change as the least threatening since it is a type of change that allows them to adapt and grow with the organization rather than working against it. Therefore, employees are more inclined to embrace adaptive changes as a way of staying relevant and effective within the organization.
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: firms achieve and sustain differentiation advantages and attain above-average performance when their price premiums do not exceed the extra costs incurred in being unique. group of answer choices true false
The correct option is true, Firms achieve and sustain differentiation advantages and attain above-average performance when their price premiums do not exceed the extra costs incurred in being unique.
Firms achieve and sustain differentiation advantages and attain above-average performance when their price premiums do not exceed the extra costs incurred in being unique. A differentiated product is a product that is unique from other products in the market in some manner.
Firms that produces differentiated products charge a higher price as compared to their competitors. They earn a price premium for the unique features that they provide.
However, if the extra costs incurred in being unique are higher than the price premium charged, then it is difficult for the firms to sustain their differentiation advantages and attain above-average performance. Thus, the given statement is true.
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few areas of sport management present managers with more difficulty than . question 1 options: a) ethical dilemmas b) ethics c) codes of conduct d) moral issues
The correct answer is "A - Ethical Dilemmas". Ethical dilemmas are a particularly challenging area for sports managers, as they must often make difficult decisions between values and morals that can have wide-reaching consequences.
An ethical dilemma is a situation in which an individual is forced to choose between two or more moral values, each of which is equally important or valid, but incompatible with one another. The decision to choose one value over the other can be difficult, and it may have significant consequences for the individual or others involved. It is important for sports managers to familiarize themselves with ethical guidelines and codes of conduct in order to make decisions that are consistent with their organization's values and to prevent unethical behaviors.
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in baum v. helget gas products, incorporated, what was the outcome of the handwritten notes that were claimed to comprise an employment contract?
Handwritten notes can be considered a legally binding employment contract. This was the outcome in the baum v. helget gas products, inc., regarding handwritten notes.
A contract of employment is commonly defined as a "contract of service."
Historically, a contract of service was distinguished from a contract for the supply of services, with the expression changed to imply the distinction between someone who is "employed" and someone who is "self-employed." The dividing line's purpose is to grant rights to certain types of people who work for others.e assumption is that people who are truly self-employed should be able to manage their own affairs.
So, The Handwritten notes can be considered a legally binding employment contract.
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controls designed to find errors or fraud that have occurred are referred to as blank controls. multiple choice question. preventive proactive detective reactive
Controls designed to find errors or fraud that have occurred are referred to as c) detective controls.
Detective controls are designed to identify errors, irregularities, or fraudulent activities that have already occurred. They are reactive in nature because they are implemented after the fact, once the problem has already occurred.
Detective controls are an important part of an overall control framework, as they help to identify problems and allow for corrective action to be taken. However, relying solely on detective controls can be problematic, as they do not prevent problems from occurring in the first place.
In contrast, preventive controls are designed to stop problems from occurring by addressing the root causes of potential issues. Proactive controls are a type of preventive control that anticipates potential issues before they occur and takes action to prevent them.
Overall, a strong control framework should include a mix of preventive, proactive, and detective controls to ensure that risks are effectively managed.
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comparative advantage argument (what is floating rate debt, anyway?). how does the swap dealer hedge his currency risk as counterparty in the currency swap?
The comparative advantage argument is a theory of international trade that explains how countries can mutually benefit by specializing in the production of goods in which they have a lower opportunity cost than other countries. In economics, floating rate debt refers to a type of debt instrument whose interest rate is variable or changes over time in response to market conditions such as inflation rates, economic growth, and other market variables.
This type of debt is different from fixed-rate debt, in which the interest rate remains constant for the duration of the debt. The swap dealer hedges his currency risk in a currency swap by entering into a financial agreement with another party, typically a bank or financial institution, to exchange two different currencies at a predetermined exchange rate. This is known as a currency swap, and it allows the swap dealer to reduce or eliminate the risk of currency fluctuations in the foreign currency.
In the currency swap, the swap dealer exchanges its own currency for the foreign currency of the counterparty, and the counterparty agrees to pay the swap dealer a fixed interest rate on the foreign currency. The swap dealer hedges its currency risk in the currency swap by taking a position in the currency market that offsets its exposure to currency fluctuations.
This can be done by buying or selling currencies in the foreign exchange market, or by entering into other financial contracts such as futures or options. By doing so, the swap dealer is able to protect itself against losses in the value of the foreign currency, and ensure that it receives the agreed-upon exchange rate in the currency swap.
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a tsunami in thailand destroys its tourist industry. in response, tourists who previously went to thailand, now choose to go on vacation to china. what can the chinese government do to prevent inflationary pressures within the chinese economy?
A tsunami in Thailand destroys its tourist industry. In response, tourists who previously went to Thailand, now choose to go on vacation to china. The Chinese government do to prevent inflationary pressures within the Chinese economy is "Manage exchange rates" and "Control money supply".
The economy due to an increase in tourism as a result of the tsunami in Thailand, the Chinese government can take the following steps:
The Chinese government can control the money supply by adjusting interest rates or using open market operations to buy or sell government securities. This can help to prevent excessive inflation due to increased demand and increase the supply of goods and services.
The reason is to manage exchange rates and increase the supply of goods and services of the Chinese government can manage exchange rates to prevent the Chinese currency from appreciating too much, which could lead to inflation. This can be done through interventions in the foreign exchange market or through policies that promote export competitiveness.
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the outstanding bonds of harden fitness are priced at $1,014.66 and mature in 5 years. these bonds have a face value of $1,000, a coupon rate of 4.5 percent, and pay interest semiannually. the tax rate is 21 percent. what is the aftertax cost of debt?
The aftertax cost of debt for these bonds is $769.27. To calculate this, first find the annual interest payments. With a face value of $1,000, a coupon rate of 4.5%, and paying interest semiannually, the interest payments are $45.
Multiply the annual interest payments by the tax rate of 21% to find the taxes on the interest payments, which equals $9.45. Then subtract the taxes from the annual interest payments to get the aftertax cost of debt: $45 - $9.45 = $35.55.
Multiply this aftertax cost of debt by the number of years the bonds mature in (5) to find the total aftertax cost of debt: $35.55 x 5 = $769.27. To calculate the aftertax cost of debt, the following equation is used:Cost of Debt(1 − Tax Rate) = Aftertax Cost of Debt.
To find out the aftertax cost of debt, follow the following steps:Step 1: Calculate the annual interest payment. Annual Interest Payment = Face Value of the Bond × Coupon Rate = $1,000 × 4.5% = $45Step 2: Calculate the semi-annual interest payment. Semi-Annual Interest Payment = $45 ÷ 2 = $22.50Step 3: Determine the Number of Semi-Annual Periods. The bond matures in 5 years, which is the equivalent of 10 semi-annual periods. The formula for calculating the Number of Semi-Annual Periods is as follows:
Number of Semi-Annual Periods = Maturity in Years × 2Step 4: Calculate the Present Value of the Bond. To calculate the present value of the bond, the following formula is used:Present Value of the Bond = (Annual Interest Payment ÷ Semi-Annual Discount Rate) × (1 − 1 ÷ (1 + Semi-Annual Discount Rate)^(Number of Semi-Annual Periods)) + (Face Value of the Bond ÷ (1 + Semi-Annual Discount Rate)^(Number of Semi-Annual Periods)))The discount rate will be half the annual coupon rate since interest is paid semiannually. Therefore, the semi-annual discount rate is 2.25% or 0.0225.Present Value of the Bond = ($22.50 ÷ 0.0225) × (1 − 1 ÷ (1 + 0.0225)^10) + ($1,000 ÷ (1 + 0.0225)^10) = $1,014.66Step 5:
Compute the Cost of DebtBefore proceeding, it's important to understand that the cost of debt is simply the yield-to-maturity (YTM) of the bond. The YTM is the compound annual return that an investor can expect if they purchase the bond and hold it to maturity.To find the yield-to-maturity of the bond, we will use a financial calculator or excel. Here, we will use an excel function called "YIELD.
"YIELD (Settlement, Maturity, Rate, Price, Redemption, Frequency, [Basis])Settlement = Date of PurchaseMaturity = Maturity DateRate = Coupon RatePrice = Present Value of the BondRedemption = Face Value of the BondFrequency = Semi-AnnualNumber of Semi-Annual Periods = 10Basis = 0 (Since the actual/actual day count convention is used)The cost of debt is calculated by subtracting the after-tax cost of debt from one. Aftertax Cost of Debt = Cost of Debt(1 − Tax Rate)Aftertax Cost of Debt = 0.031 × (1 − 0.21)Aftertax Cost of Debt = 0.02449 or 2.449%Answer: The aftertax cost of debt is 2.449%.
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suppose that the federal reserve tightens the money supply in order to reduce inflation. in the long run, this policy most likely will cause nominal interest rates to:
Suppose that the Federal Reserve tightens the money supply in order to reduce inflation. In the long run, this policy most likely will cause nominal interest rates to increase.
What is the meaning of money supply?The total amount of money circulating in the economy at a particular time is referred to as the money supply. M1, M2, and M3 are the three most prevalent measures of money supply. The Federal Reserve System is in charge of regulating the money supply.
It does so primarily by altering interest rates to affect the volume of credit available in the economy.
What is the Federal Reserve System?The Federal Reserve System, or the Federal Reserve, is the United States' central banking system. It is in charge of the United States' monetary system, supervising banks and protecting consumers' credit rights, and maintaining the stability of the financial system by regulating the money supply.
How does Federal Reserve tighten the money supply?In order to tighten the money supply, the Federal Reserve System raises interest rates, which decreases borrowing and, as a result, reduces the supply of money. When the Federal Reserve System loosens the money supply, it lowers interest rates, which increases borrowing and, as a result, raises the supply of money.
When the Federal Reserve System lowers interest rates, it promotes borrowing, which has the potential to raise the supply of money. Conversely, when interest rates are increased, borrowing is discouraged, which lowers the supply of money.
In the long term, if the Federal Reserve tightens the money supply in order to reduce inflation, nominal interest rates are likely to rise since it reduces borrowing, and if it loosens the money supply, nominal interest rates are likely to fall because it increases borrowing.
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assume gdp of a (tiny) country at time zero is equal to $ 121.00 . calculate gdp 13 years later if the annual growth rate of gdp is 6 percent
The GDP of the tiny country after 13 years 13 years later if the annual growth rate of GDP is 6 percent will be $293.76 .
Assuming that the Gross Domestic Product (GDP) of a tiny country at time zero is equal to $121.00 and the annual growth rate of GDP is 6 percent, the GDP 13 years later can be calculated as follows:
GDP after 1 year = GDP of time zero + (GDP of time zero x annual growth rate)
GDP after 1 year = $121.00 + ($121.00 x 6/100) = $128.26
GDP after 2 years = GDP of time one + (GDP of time one x annual growth rate)
GDP after 2 years = $128.26 + ($128.26 x 6/100) = $136.03
GDP after 3 years = GDP of time two + (GDP of time two x annual growth rate)
GDP after 3 years = $136.03 + ($136.03 x 6/100) = $144.32
Continuing in this manner, the GDP after 13 years can be calculated as follows:
GDP after 13 years = GDP of time twelve + (GDP of time twelve x annual growth rate)
GDP after 13 years = $277.04 + ($277.04 x 6/100) = $293.76
Therefore, the GDP 13 years later is $293.76 if the annual growth rate of GDP is 6 percent .
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a business's source documents may include all of the following except: a) sales tickets. b) ledgers. c) checks. d) purchase orders. e) bank statements.
Ledgers are not source documents, but rather a summary of transactions that have already been recorded. The answer is b) ledgers.
Ledgers are used to keep track of accounts and balances after transactions have been recorded in the business's accounting system.
On the other hand, source documents are the original documents that provide evidence of a transaction, such as sales tickets, checks, purchase orders, and bank statements. They are used as the basis for recording transactions in the accounting system.
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