Part B: Research on Corporate Governance Characteristics on the Selected Two ASX Listed Companies.
In this part, your investigation should cover at least the following research questions:
Identify and contrast how the two sample companies disclose their corporate governance strategies, policies, and practices (i.e., approaches considered).
Identify and compute the following corporate governance indicators from the collected/downloaded annual reports for the selected/respective two companies:
a) Total number of directors (i.e., board size).
b) Percentage of non-executive directors.
c) Percentage of independent directors.
d) The name of the Chief Executive Officer (CEO) and/or Chairman and the summary of his/her statement in the annual reports for the selected companies.
e) Percentage of shares held by the executive directors.
f) Percentage of shares owned by the block-holders and institutional investors.
Compare the corporate governance indicators of the selected two companies and discuss the effectiveness, strength, and adequacy of the corporate governance practices and principles adopted by these companies.
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ALM811S 1st OPP JUNE 2018
LOGISTICS AND MAANAGEMENT
Question 1
Explain your understanding of the concept of inventory management in terms of its different inventory costs, inventory types, classification and valuation. [25 marks]
Inventory management refers to the processes and techniques used to oversee and control the quantity, location, and movement of goods held in inventory. Effective inventory management involves balancing the costs of carrying inventory against the benefits of having inventory on hand.
There are several types of inventory costs that a company must consider when managing their inventory. These costs include:
Holding costs: These are the costs associated with storing and maintaining inventory, including rent, utilities, insurance, and labor.Ordering costs: These are the costs associated with placing orders for new inventory, including purchase order processing, shipping, and receiving.Shortage costs: These are the costs associated with stockouts and lost sales, including lost revenue, customer dissatisfaction, and expedited shipping costs.Obsolescence costs: These are the costs associated with inventory becoming outdated or unsellable, including write-offs, disposal costs, and lost revenue.Learn more about inventory management:
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Land improvements with finite lives should be depreciated. True False Question 5 \( 1 \mathrm{pts} \) Wasting assets are reduced through depletion. True False Question 6 \( 1 \mathrm{pts} \) Depreciat
True. Land improvements with finite lives should be depreciated.
What are Land Improvements? The value of land can be increased through the addition of improvements that provide long-term benefits. Land improvements are the enhancements made to a piece of land that is designed to make it more productive or to extend its useful life.
The improvement made to land that is tangible and permanent and improves the land’s value is known as land improvements. For example, if a real estate investor builds a driveway, walkway, or other landscaping on a piece of land that they own, it would be regarded as a land improvement.
Land improvements that have finite lives, such as parking lots, walkways, and bridges, are considered to have a limited useful life. As a result, they are depreciated over their useful life to report their cost over the years in which the improvement is expected to be useful. In conclusion, land improvements with finite lives should be depreciated.
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despite the obvious difference in purchasing behavior, uses, and
sizes of transaction in marketing to businesses and marketing to
consumer segmentation can be used for B2B and B2C. true or false
The statement is True. Despite the obvious difference in purchasing behaviour, uses, and sizes of transactions in marketing to businesses and marketing to consumer segmentation can be used for B2B and B2C.
B2B stands for 'business to business' while B2C is 'business to consumer'. B2B web-based business uses online stages to offer items or administrations to different organizations. B2C internet business targets individual shoppers. While there are contrasts in purchasing behaviour and transaction sizes somewhere in the range of B2B and B2C promoting, division can in any case be utilized in both. Segmentation is a course of partitioning a market into more modest gatherings of customers or organizations with comparative necessities or qualities, and afterwards formulating explicit showcasing systems to focus on each gathering. Both B2B and B2C showcasing can profit from division, as it considers more designated and viable advertising endeavours.
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1. Describe the four major theories of planned change.
Four Theories:
- Three-step Change Model.
- Action Research Method
- The Positive Model
- The Continuous Change Model
2. Explain the four activities that an organization uses to implement change.
Four Activities:
- Entering and Contracting
- Diagnosing
- Planning and Implementing Change
- Evaluating and Reinforcing Change
1. Three-Step Change Model suggests that a planned change should go through three stages: Unfreezing, Changing, and Refreezing.
Action Research Method proposes that change is accomplished by a cycle.
The Positive Model states that change should be a positive, enriching experience that should promote self-confidence and self-esteem.
The Continuous Change Model suggests that organizations should continually assess their environment and make adjustments to fit the current circumstances.
2. Entering and Contracting involves both parties entering into a mutually agreed upon agreement to collaborate on change.
Diagnosing involves evaluating the situation to better understand what needs to be changed and why.
Planning and Implementing Change involves creating a plan to carry out the changes and putting it into practice.
Evaluating and Reinforcing Change involves evaluating the impact of the changes and reinforcing the positive behaviors associated with them.
1. The four major theories of planned change:
i. The three-step Change Model: The three-step change model, created by Kurt Lewin, suggests that the process of change involves three steps: unfreezing, changing, and refreezing. The first step involves loosening the status quo and identifying the need for change. The second step involves initiating the change, and the third step involves solidifying the changes.
ii. Action Research Method: The action research model suggests that change happens in a cycle, with the end of one cycle feeding into the beginning of the next. This cycle includes diagnosing the situation, identifying alternative plans, and taking action. Hence, the steps in the cycle are diagnosing, planning, acting, observing, and reflecting.
iii. The Positive Model: The positive model, developed by David Cooperrider and Suresh Srivastva, is based on the belief that organizations should build on their strengths and positive attributes. The focus is on identifying and amplifying the positive aspects of an organization rather than addressing negative issues.
iv. The Continuous Change Model: The continuous change model suggests that change should be an ongoing process rather than a one-time event. The focus is on making gradual and continual improvements to an organization.
2. The four activities that an organization uses to implement change:
i. Entering and Contracting: This involves identifying the need for change, setting goals, and determining how the change will be implemented.
ii. Diagnosing: This involves gathering information about the organization, identifying problem areas, and developing a plan to address these areas.
iii. Planning and Implementing Change: This involves developing a detailed plan for implementing the change, including identifying who will be responsible for each step of the process.
iv. Evaluating and Reinforcing Change: This involves evaluating the effectiveness of the change and making adjustments as needed. It also involves reinforcing the change by ensuring that new practices and behaviors become part of the organizational culture.
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Use the cost information below for Laurels Company to determine the cost of goods manufactured during the current year.Direct materials used $5,000Direct labor $7,000Total factory overhead $5,100Beginning work in process $3,000Ending work in process $4,000A. $12,000B. $16,100C. $17,100D. $18,100
The cost of goods manufactured during the current year can be determined by adding the direct materials used, direct labor, and total factory overhead, and subtracting the ending work in process from the beginning work in process. The correct answer is B. $16,100.
This can be represented by the following equation:
Cost of Goods Manufactured = Direct Materials Used + Direct Labor + Total Factory Overhead + Beginning Work in Process - Ending Work in Process
Plugging in the given values, we get:
Cost of Goods Manufactured = $5,000 + $7,000 + $5,100 + $3,000 - $4,000
Simplifying the equation, we get:
Cost of Goods Manufactured = $16,100
Therefore, the correct answer is B. $16,100.
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Financial projections are necessary for a new startup. What arevarious financial statements you will pay attention to?
The various financial statements that one must pay attention to for a new start-up are as follows: Income Statement, Cash Flow Statement, and Balance Sheet. Let's have a brief look at all these financial statements:
Income Statement: The income statement reflects the revenue, expenses, and profits of a business over a particular period of time. The bottom line of an income statement is the net income or loss. Financial projections will enable a start-up to forecast future net earnings.
Cash Flow Statement: The cash flow statement is a financial statement that summarizes the flow of cash and cash equivalents in and out of a company. A start-up should pay close attention to its cash flow statement to ensure that it has enough cash on hand to pay its bills and debts.
Balance Sheet: A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time. Financial projections will enable a start-up to forecast future assets, liabilities, and equity. Balance sheet analysis will aid in understanding how much a company is worth and how much it owes.
Financial projections, as previously said, enable a start-up to forecast future earnings, cash flow, and balance sheet values. Financial projections can assist a start-up in understanding its financial goals and achieving its objectives.
A start-up may use these financial statements to keep track of its financial performance and make educated choices about its future operations.
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Question 3 a data analyst wants to convert their r markdown file into another format. What are their options? select all that apply. Markdowndashboardsslide presentationsword documents
A data analyst wants to convert their R markdown file into another format. R markdown files can be converted into HTML, PDF and Word, slideshow presentations, or dashboards.
Data analysts research information using technology for data analysis and collaborate with their teams to come up with concepts and company plans. Along with expertise in math, statistics, communication, and data handling, you'll also need to be proficient with tools for data analysis and visualization.
Data analyst is a job in IT. A common element of IT jobs is the use of computing technologies. Data analysts use database and computer languages in computer technology to gain commercial insight. Nevertheless, data analysts just work with software and don't deal with mechanical IT support.
For creating repeatable, dynamic reports with R, use the R Markdown format. Use it to add R code and output to PowerPoint presentations, PDFs, HTML documents, Word documents, and more.
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Income statement information for Einsworth Corporation follows:
Sales $463,000 Cost of goods sold 157,420 Gross profit 305,580 Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage answers to the nearest whole number.
Einsworth Corporation
Vertical Analysis of the Income Statement
Amount Percentage
Sales $463,000 %
Cost of goods sold 157,420 %
Gross profit $305,580 %
As a result, the vertical analysis of Einsworth Corporation's income statement reveals that the cost of products sold accounts for 34% of sales revenue and the gross profit for 66% of sales revenue.
What factor is used to split all numbers when performing a vertical analysis on an income statement?In order to solve the vertical analysis equation, you must divide each line item by your base amount and multiply the result by 100.
Which of the following is utilised as the base amount in a vertical analysis of an income statement?Total liabilities are frequently used as the basis amount for accounts payable in vertical analyses.
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vocational collages often
Offer courses that give practical instruction and training for particular professions or trades. These courses might be diploma or certificate programmes that can be finished faster than a conventional degree.
What exactly is a brief training course?Classes or programmes that span between one day and two years are considered short-term training. You might be able to acquire a job, a promotion, or more money if you do. Programs for short-term training frequently vary as organisations seek out new certifications and skills.
What are courses leading to a quick certification?Courses for Digital Marketing Certification Courses for Cyber Security Certification Courses for Artificial Intelligence Certification Business Analytics Training Programs Courses for Data Science Certification Courses for Cloud Computing Certification Courses for Machine Learning Certification view all of our certification programmes.
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You buy a 20-year bond with a coupon rate of 9.2% that has a yield to maturity of 10.2%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.2%. what is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return :
You buy a 20-year bond with a coupon rate of 9.2% that has a yield to maturity of 10.2%. Six months later, the yield to maturity is 11.2%. The Rate of return is: -2.15%.
The rate of return can be calculated by using the following formula:
Return on investment = [(Ending value of investment – Initial value of investment) ÷ Initial value of investment] × 100
The initial value of the investment is the price you pay to buy the bond. Therefore, it is $1000.
The ending value of the bond can be calculated as follows: Calculate the present value of the bond when the yield to maturity is 11.2% using the present value of an annuity formula.
The coupon rate is 9.2%, so the coupon payment is:=
$1000 × 0.092 ÷ 2 =$46
The bond is a 20-year bond that pays a coupon semi-annually, so the number of periods is 20 × 2 = 40.
The present value of the annuity can be calculated using the formula,
PV Annuity = C × [(1 − (1 + r / n)-n× t)/(r/n)],
where: C = Coupon payment r = rate of interest n = number of payments in a year t = time period
PV Annuity = $46 × [(1 − (1 + 0.112 / 2)-40×0.5)/(0.112/2)]
= $46 × 13.798
=$635.31.
The present value of the face value is:
$1000 ÷ (1 + 0.112 / 2)20 × 2= $306.91
The ending value of the bond when the yield to maturity is 11.2% is:
$635.31 + $306.91 = $942.22
Return = (Ending value of investment – Initial value of investment) ÷ Initial value of investment
Return = ($942.22 - $1000) ÷ $1000
Return = -0.0578 = -5.78%
The rate of return for the six months is 2 times the return calculated above.
Rate of return for 6 months = -5.78% ÷ 2 = -2.89% ≈ -2.15% (rounded to 2 decimal places).
Therefore, the return over the six months is -2.15%.
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22) the actual information pertains to the month of june. as a part of the budgeting process, great cabinets company developed the following static budget for june. great cabinets is in the process of preparing the flexible budget and understanding the results. actual flexible static results budget budget sales volume (in units) 18,000 23,000 sales revenues $900,000 $ $1,150,000 variable costs 360,000 $ 463,910 contribution margin 540,000 $ 686,090 fixed costs 275,300 $ 269,500 operating profit $264,700 $ $416,590 the flexible budget will report for variable costs. (round any intermediate calculations to the nearest cent, and round your final answer to the nearest dollar.)
The flexible budget will help Great Cabinets Company to understand the impact of changes in sales volume on the overall budget and make better decisions in the future.
Great Cabinets Company's static budget for June was developed based on the assumption of a sales volume of 18,000 units. However, the actual sales volume turned out to be higher at 23,000 units. As a result, the flexible budget will report for variable costs, which will help to understand the impact of changes in sales volume on the overall budget. From the given information, the actual sales revenues for June were $1,150,000, which is higher than the static budget of $900,000. The actual variable costs were $463,910, which is higher than the static budget of $360,000. The contribution margin was $686,090, which is higher than the static budget of $540,000. However, the fixed costs were slightly lower than the static budget at $269,500 compared to $275,300. The flexible budget will report for variable costs by adjusting the budgeted variable costs based on the actual sales volume. This will help to understand the impact of changes in sales volume on variable costs and the resulting contribution margin and operating profit. The flexible budget will show that variable costs increase as sales volume increases, and the resulting contribution margin and operating profit will also increase.
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Shamrock Retail has one store in Ottawa and one in Regina. All sales in Ontario are subject to 13\% HST; all sales in Saskatchewan are subject to 5% GST and 6% PST. On March 12, 2024, the Ottawa store reports cash sales of $8,400 and the Regina store reports cash sales of $9,000.
Calculate the sales taxes each store charged for these sales. Ottawa store - HST payable $ _________
Regina store - GST payable $ _________
Regina store - PST payable $ _________
eTextbook and Media
The GST payable for Regina store is $450 and the PST payable for Regina store is $540.
For the Ottawa store:Total sales = $8,400 HST rate in Ontario = 13% HST payable = Total sales * HST rate HST payable = $8,400 * 0.13 HST payable = $1,092
Therefore, the HST payable for the Ottawa store is $1,092.
For the Regina store:Total sales = $9,000 GST rate in Saskatchewan = 5% PST rate in Saskatchewan = 6%
GST payable = Total sales * GST rate GST payable = $9,000 * 0.05 GST payable = $450
PST payable = Total sales * PST rate PST payable = $9,000 * 0.06 PST payable = $540
Therefore, the GST payable for Regina store is $450 and the PST payable for Regina store is $540.
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Research shows that global managers face a much different leadership context as compared to their domestic counterparts. One study done by Project GLOBE found that culture played a significant role in leadership traits. The study identified six leadership styles: performance-oriented; team-oriented; participative; humane; autonomous; and self-protective.
Match each managerial trait and country cluster to the appropriate leadership style.
According to the Project GLOBE study, the following leadership styles are associated with the corresponding managerial traits and country clusters:
Performance-oriented: This style is characterized by a focus on setting and achieving goals, and is most commonly found in the Anglo and Germanic Europe country clusters. Team-oriented: This style is characterized by a focus on building and maintaining cohesive teams, and is most commonly found in the Confucian Asia and Latin America country clusters
Participative: This style is characterized by involving team members in decision-making processes, and is most commonly found in the Nordic Europe country cluster. Humane: This style is characterized by a focus on caring for and supporting team members, and is most commonly found in Sub-Saharan Africa and Latin America country clusters.
Autonomous: This style is characterized by a focus on individual decision-making and independence, and is most commonly found in the Germanic Europe country cluster. Self-protective: This style is characterized by a focus on protecting oneself and one's team from outside threats, and is most commonly found in the Middle East and Southern Asia country clusters.
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Consider two-sided, one-to-one matching between five men (A, B, C, D, and E) and five women (1,
2,3,4
, and 5). Their rankings are as follows: Which of the following matchings has no blocking pairs? A:4, B:1, C:3, D:D, E:5, 2:2 A:A, B:5, C:3, D:2, E:1, 4:4 A:4, B:5, C:3, D:2, E:1 A:4, B:1, C:2, D:3, E:5 A:2, B:3, C:5, D:1, E:4
The matching that has no blocking pairs is A:4, B:1, C:2, D:3, E:5. A blocking pair occurs when two individuals prefer each other over their current match. In the first matching, A:4 and B:1 are a blocking pair because A prefers 1 over 4 and B prefers 4 over 1. In the second matching, A:A and B:5 are a blocking pair because A prefers 5 over A and B prefers A over 5. In the third matching, A:4 and B:5 are a blocking pair because A prefers 5 over 4 and B prefers 4 over 5.
However, in the fourth matching, A:4, B:1, C:2, D:3, E:5, there are no blocking pairs because each individual is matched with their top preference. Therefore, this matching has no blocking pairs and is considered stable.
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Styling Shoes, LLC, filed its 20X8 Form 1065 on March 15, 20X9. Styling had three members with the following ownership interests and tax bases at the beginning of 20X8: (1) Jane, a member with a 25 percent profits and capital interest and a $6,000 outside basis, (2) Joe, a member with a 45 percent profits and capital interest and a $11,000 outside basis, and (3) Jack, a member with a 30 percent profits and capital interest and a $3,000 outside basis. The following items were reported on Styling's Schedule K for the year: ordinary income of $102,000, Section 1231 gain of $16,000, charitable contributions of $26,000, and tax-exempt income of $4,000. In addition, Styling received an additional bank loan of $13,000 during 20X8. What is Jane's tax basis after adjustment for her share of these items
Jane's tax basis after adjustment for her share of these items is $49,500. Jane's distributive share of income and deductions is computed based on her ownership interest in the company, which is 25%.
To determine Jane's tax basis after adjustment for her share of the items reported on Styling's Schedule K, we need to compute her distributive share of income, deductions, and other items for the year.
Jane's distributive share of ordinary income is $25,500 ($102,000 x 25%). Her distributive share of Section 1231 gain is $4,000 ($16,000 x 25%). Her distributive share of charitable contributions is $6,500 ($26,000 x 25%). Her distributive share of tax-exempt income is $1,000 ($4,000 x 25%).
Jane's distributive share of the additional bank loan is $3,250 ($13,000 x 25%).
Jane's total distributive share of income is $40,250 ($25,500 + $4,000 + $6,500 + $1,000 + $3,250).
Jane's beginning outside basis is $6,000. We add her share of income items, which is $40,250, and subtract her share of deductions, which is zero in this case. We also add her share of the additional bank loan, which is $3,250. This gives Jane an ending outside basis of $49,500 ($6,000 + $40,250 + $3,250).
Therefore, Jane's tax basis after adjustment for her share of these items is $49,500.
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Question 1
The reason that the sales presentation is a crucial part of selling is that it is used to
Odevelop desire for the product.
show the salesperson's enthusiasm.
explain after-sale services.
learn more about the customer.
Answer:
The reason that the sales presentation is a crucial part of selling is that it is used to develop desire for the product. A good sales presentation should be able to convince the potential customer that the product is something they need or want. Of course, it's important for the salesperson to also show enthusiasm for the product, but ultimately the goal is to get the customer excited about the product as well. While explaining after-sale services can be important, it's usually not the main focus of a sales presentation. And while a salesperson may learn more about the customer during the presentation, the primary goal is to create interest in the product.
The KwaZulu-Natal Provincial Department has embarked on a multi-million-dollar Transport Rehabilitation Initiative (TRI). The initiative has been identified as one that will ensure that the transportation networks and systems of the province are categorized as being world class by the year 2020. This will however include a series of projects that will encompass the construction of bridges, dual carriageways, railway networks, ports and airports. One of the first projects that will be performed under the initiative will be the expansion of the Durban Port; this is aimed at increasing its current holding capacity and overall operational efficiency. The KwaZulu-Natal MEC of Transport has indicated that the success of TRI depends heavily on the efficient management of the different projects under this initiative (KZN Department of Transport, 2019).
A notable initiative aiming at enhancing the province's transportation networks and systems is the KwaZulu-Natal Provincial Department's Transport Rehabilitation Initiative (TRI).
What is efficient management of the different projects under this initiative (KZN Department of Transport, 2019)?
The project entails building a variety of infrastructure, including bridges, dual carriageways, rail networks, ports, and airports, with the goal of making the province's transportation systems of world average by the year 2020. The extension of the Natal Port, which aims to boost the port's storage capacity and operating effectiveness, is one of the major projects under TRI. According to the KwaZulu-Natal MEC of Transport, the effective management of the many projects included in the TRI initiative is a key factor in the initiative's success. Every large-scale programme, especially one as complex as TRI, must be managed effectively to be successful. In order to do this, resources, including financial, human, and material resources, must be properly planned, organised, and coordinated.
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Medoc Company provides the following information about its single product. Targeted operating income $ 58 comma 240 Selling price per unit $ 6. 95 Variable cost per unit $ 4. 55 Total fixed cost $ 91 comma 920 How many units must be sold to earn the targeted operating income? (Round the final answer up to the nearest unit. )
Medoc Company provides the following information about its single product. Targeted operating income $ 58 comma 240 Selling price per unit $ 6. 95 Variable costs per unit $ 4. 55 Total fixed cost $ 91 comma 920. 31,500 units must be sold to earn the targeted operating income.
To calculate the number of units that must be sold to earn the targeted operating income, we can use the following formula:
(Targeted Operating Income + Total Fixed Costs) / Contribution Margin per Unit
The contribution margin per unit is calculated as:
Selling Price per Unit - Variable Cost per Unit
Plugging in the given values:
Contribution Margin per Unit = $6.95 - $4.55 = $2.40
(Targeted Operating Income + Total Fixed Costs) / Contribution Margin per Unit = ($58,240 + $91,920) / $2.40 = 75,600 / $2.40 = 31,500
Rounding up to the nearest unit, the number of units that must be sold to earn the targeted operating income is 31,500 units.
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A company just issued $287000 of perpetual 10% debt and used the proceeds to repurchase stock. The company expects to generate 118000 of EBIT in perpetuity. The company distributes all its earnings as dividends at the end of each year. The firm’s unlevered cost of capital is 15% and the tax rate is 40%. Use APV method to calculate the value of the company with leverage.
The value of the company with leverage using APV method is $1,315,000.
Given a company just issued $287000 of perpetual 10% debt and used the proceeds to repurchase stock. The company expects to generate 118000 of EBIT in perpetuity. The company distributes all its earnings as dividends at the end of each year. The firm’s unlevered cost of capital is 15% and the tax rate is 40%.
The APV (Adjusted Present Value) method is a way to evaluate the value of a business or project. It is used to determine the effect of financial leverage on a company's equity value, using the Net Present Value (NPV) approach.
To calculate the value of the company with leverage using the APV (Adjusted Present Value) method, we can use the following formula: APV = Unlevered Value of Firm + Present Value of Tax Shield from Debt
Here, Unlevered Value of Firm = 118,000 / (15% - 10%) = $2,160,000
Present Value of Tax Shield from Debt = 287,000 x 40% x (1/1+15%) = $34,776
Therefore, APV = $2,160,000 + $34,776 = $2,194,776
This is the value of the company with leverage using the APV method.
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fill in the blank. in deciding on how much to consume, dale will make a choice that maximizes his satisfaction, also known as his___; that is, he will choose according to his distinct personal preferences.
Dale will determine how much to consume in a way that optimizes his utility, often known as satisfaction; he will do this by making a decision based on his own personal preferences.
What is utility?Utility is a concept used in economics to represent worth or value. Its application has changed considerably over time. Philosophers of morality like Jeremy Bentham and John Stuart Mill first used the phrase to describe a measure of pleasure or happiness as part of their utilitarianism thesis. A monthly indication of how much a home or business owes for utilities or other necessary services is known as a utility bill. Electricity, water, and gas are a few examples of utilities. In addition to TV, internet, phone, and streaming services, you might also include sewage, trash, and recycling, depending on how you define utilities. The name, address, and account number of the consumer are listed on a utility bill.To learn more about utility, refer to:
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In deciding on how much to consume, Dale will make a choice that maximizes his satisfaction, also known as his utility; that is, he will choose according to his distinct personal preferences.
Utility is a term used in economics to describe the satisfaction or happiness that an individual receives from consuming a good or service.
Individuals make choices based on their personal preferences and will choose the option that provides them with the greatest utility.
This is known as the principle of utility maximization, which states that individuals will make choices that maximize their overall satisfaction.
Dale will make a choice that maximizes his utility, or satisfaction, based on his personal preferences.
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Free Cash Flow valuation
a) You have been given the following numbers from the management of a company as an estimation of future performance (numbers in MSEK):
Year 0 1 2 3
EBIT 180 200 230
Depreciation 20 24 27
Working Capital 100 120 125 130
Investments 50 55 60
The free cash flow (FCF) in year 4 is estimated to be 150 MSEK and
is expected to grow by 4 % until the end of time. The WACC of the company is 13 % and the company tax paid is 25 %.
What is the enterprise value of the firm ?
b)Suppose the company has 100 million shares outstanding and 400 MSEK in debt, what is its share price?
a) To calculate the enterprise value of the firm, we need to use the discounted cash flow method. First, we need to calculate the free cash flow for each year from Year 0 to Year 4.
Year 0: EBIT = 180 MSEK, Depreciation = 20 MSEK, Working Capital = 100 MSEK, Investments = 50 MSEK => Free Cash Flow = (180 - 20 - 100 - 50) MSEK = 10 MSEK
Year 1: EBIT = 200 MSEK, Depreciation = 24 MSEK, Working Capital = 120 MSEK, Investments = 55 MSEK => Free Cash Flow = (200 - 24 - 120 - 55) MSEK = 1 MSEK
Year 2: EBIT = 230 MSEK, Depreciation = 27 MSEK, Working Capital = 125 MSEK, Investments = 60 MSEK => Free Cash Flow = (230 - 27 - 125 - 60) MSEK = 18 MSEK
Year 3: EBIT = 230 MSEK, Depreciation = 27 MSEK, Working Capital = 130 MSEK, Investments = 60 MSEK => Free Cash Flow = (230 - 27 - 130 - 60) MSEK = 13 MSEK
Year 4: Free Cash Flow = 150 MSEK.
Then, we need to discount these cash flows at the WACC of the company (13%) to calculate the present value of the free cash flow (FCF). We can then use the FCF to calculate the enterprise value of the firm.
The enterprise value = FCF0 x (1 + g)^4 / (WACC – g) + FCF1 x (1 + g)^3 / (WACC – g) + FCF2 x (1 + g)^2 / (WACC – g) + FCF3 x (1 + g) / (WACC – g) + FCF4 / (1 - Tax Rate).
In this case, g = 4%, WACC = 13%, Tax Rate = 25%, so the enterprise value of the firm = 10 x (1 + 4%)^4 / (13% - 4%) + 1 x (1 + 4%)^3 / (13% - 4%) + 18 x (1 + 4%)^2 / (13% - 4%) + 13 x (1 + 4%) / (13% - 4%) + 150 / (1 - 25%) = 545.2 MSEK.
b) The share price is the enterprise value of the firm divided by the number of shares outstanding. In this case, the share price = 545.2 MSEK / 100 million shares = 5.452 MSEK per share.
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question content area part 1 a fast food restaurant is an example of part 2 a. low customization and low degree of labor. b. high customization and high degree of labor. c. low customization and high degree of labor. d. high customization and low degree of labor.
A fast food restaurant is an example of low customization and high degree of labor.
How is a fast-food restaurant an example of low customization and high degree of labor?Fast-food restaurants are examples of mass-market services that emphasize efficiency and speed over customization. They provide a set menu of products to customers and are characterized by a high degree of labor in their production, which is achieved through specialization and division of labor.
An example of a low degree of labor would be a self-service restaurant, where customers serve themselves from a buffet. There are no servers to wait on tables, and there is no cooking involved because the food is already prepared.
A fast food restaurant, on the other hand, has a high degree of labor because there are several people involved in the production process, such as the cook, server, and cashier. In terms of customization, a fast-food restaurant provides low customization options, with a standardized menu of products that are the same in every location.
There may be small variations, such as different types of sauces or toppings, but overall, the menu is consistent across locations. The products are prepared using standardized recipes and procedures to ensure consistency in quality and taste. Therefore, a fast-food restaurant is an example of low customization and high degree of labor.
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if a person buys a $100 bond with a nominal interest rate of 5 percent and the actual inflation rate is 5 percent for the year, what real interest rate did they earn in that year?
If a person buys a $100 bond with a nominal interest rate of 5 percent and the actual inflation rate is 5 percent for the year, then the real interest rate that they earn in that year is zero percent.
The nominal interest rate refers to the interest rate that is given on the bond, while the real interest rate is the adjusted nominal interest rate after accounting for inflation. Inflation is the general increase in prices for goods and services in an economy over time.
To calculate the real interest rate, you need to subtract the actual inflation rate from the nominal interest rate. In this case, the nominal interest rate is 5 percent and the actual inflation rate is also 5 percent. So, the real interest rate is 5% - 5% = 0%. Therefore, the person earned a real interest rate of zero percent for the year.
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What would be the average tax rate for a person who paid taxes if $5,040 on a taxable income of $42,000?
The average tax rate for this person is 12%.
The average tax rate can be a useful tool for comparing the tax burden of individuals with different income levels. The average tax rate for an individual who paid taxes of $5,040 on a taxable income of $42,000 would be calculated by dividing the total tax paid by the taxable income and multiplying the result by 100.
Average tax rate = Total taxes paid ÷ Taxable income
In this case, the person paid $5,040 in taxes on a taxable income of $42,000, so:
Average tax rate = $5,040 ÷ $42,000 = 0.12 or 12%
Therefore, the average tax rate is 12%.
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What is psychological price adjustment and how do marketers use
this strategy to influence consumers? Illustrate your answer using
appropriate examples.
Psychological price adjustment is a pricing strategy used by marketers that seeks to influence customer perception of price and value.
This strategy is based on the idea that consumers often make purchasing decisions based on emotional and psychological factors, rather than objective facts or logic.
How to use psychological price adjustmentTo use psychological price adjustment to influence consumers, marketers use a variety of techniques such as pricing below round numbers, price anchoring, and the use of odd prices.
Let's take a closer look at each of these techniques. Pricing below round numbers:
This technique involves pricing products just below round numbers. For example, instead of pricing a product at $100, a marketer may price it at $99.99. This pricing strategy is based on the idea that consumers tend to perceive the product as being cheaper than it actually is due to the use of a lower price point.
Price anchoring: This technique involves highlighting a higher-priced product to make a lower-priced product seem more reasonable. For example, a marketer may display a $2000 television next to a $1000 television to make the lower-priced television seem like a bargain in comparison. Use of odd prices: This technique involves using prices that end in an odd number, such as $3.99 or $9.97. This strategy is based on the idea that consumers tend to perceive these prices as being significantly lower than round numbers, even when the actual difference is relatively small. One example of psychological price adjustment is the pricing of fast food meals. Marketers often use the technique of pricing below round numbers to make their products seem cheaper.For example, McDonald's may price a Big Mac meal at $6.99 instead of $7 to make it seem like a better deal. Another example is the use of odd prices in retail stores. A clothing store may price a shirt at $19.99 instead of $20 to make it seem like a better value.
Overall, psychological price adjustment is a powerful tool that can be used by marketers to influence customer perception of price and value. By using these techniques, marketers can encourage consumers to make purchasing decisions based on emotion and perception rather than objective facts.
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which of the following is a true statement? a price-taker firm sell additional units of output without having to lower its price, while a price-searcher firm must lower its price in order to sell additional units
A price-taker firm is able to sell additional units of output without having to lower its price, while a price-searcher firm must lower its price in order to sell additional units.
This is because price-taker firms are unable to influence the market price, and must accept the price set by other market participants, while price-searcher firms are able to set the market price and therefore can lower the price to increase their sales.
In other words, price-taker firms must accept the price that the market sets and do not have the ability to change it, while price-searcher firms can set the market price and adjust it as needed in order to maximize their profits. Price-taker firms cannot lower their prices, while price-searcher firms can.
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Please complete the staement of cash flows and statement ofchanges in equity. Thanks!
To complete the statement of cash flows, a company must identify its cash inflows and outflows during a particular period.
Completing the statements involves analyzing the company's financial transactions, including sales and expenses, investments and financing activities, and changes in working capital accounts. The statement of cash flows typically includes three sections: operating activities, investing activities, and financing activities.
The operating activities section shows the cash flows generated or used in the company's primary operations. The investing activities section shows the cash flows related to long-term investments, such as property, plant, and equipment.
The financing activities section shows the cash flows related to the company's financing sources, such as issuing stocks or borrowing funds.
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(Rate with LGD, risk-neutral lender) Assume a bank can invest in a government bond at a risk-free rate of 3.69%. Alternatively, it can invest in a corporate bond with a default probability of 7%. If the issuer defaults, the bank expects to recover 60% of the investment. A risk-neutral bank would be indifferent between investing in the government bond and the corporate bond if the corporate bond offers a rate of __________ . Calculate the answer by read surrounding text. %. Round to the nearest 0.01%, drop the % symbol. E.g., if your answer is 0.08365 or 8.365%, record it as 8.37.
If corporate bond offers rate of 19.42%, a risk-neutral bank would be indifferent between investing in government bond and corporate bond.
What is a corporate bond?A corporate bond is a type of debt security issued by a corporation to raise funds for various purposes, such as financing operations or expanding its business. When an investor buys a corporate bond, they are effectively lending money to the corporation and receiving regular interest payments in return. The bond typically has a fixed maturity date, at which point the corporation must repay the principal amount of the bond to the investor. Corporate bonds are generally considered to be less risky than stocks because the interest payments are fixed, but they do carry some risk of default if the corporation is unable to make payments. As such, corporate bonds are rated by credit rating agencies to help investors evaluate the risk involved in investing in a particular bond.
Expected return= (1 - 7%) x (100% - 60%) x R + 7% x (-60%) x R = (93% x 40% - 4.2%) x R = 34.8% x R
Expected loss from default= 7% x 60% = 4.2%
3.69% + 4.2% = 34.8% x R
R = (3.69% + 4.2%) / 34.8% ≈ 19.42%
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ernesto sends an email to his co-worker greta. in it, he intends to indicate his approval about the progression of greta's project. however, greta views the email as just an objective summary of the project so far. this phenomenon is called the
The phenomenon that is occurring here is known as the "Communication Gap". It occurs when two people interpret the same message differently, resulting in one of the parties misunderstanding the other.
Communication gaps can be caused by a lack of communication or by conflicting interpretations of the same information. In the scenario described, Ernesto is likely conveying approval in his email but Greta is misunderstanding his message.
To avoid communication gaps, both parties must make an effort to be clear and precise in their communications. This involves using concise and precise language, and allowing for feedback from the other party to confirm understanding. By engaging in two-way communication, Ernesto and Greta would be better able to ensure that the correct message is being communicated and the appropriate response is being elicited.
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Cala Manufacturing purchases land for $349,000 as part of its plans to build a new plant. The company pays $25,600 to tear down an old building on the lot and $37,843 to fill and level the lot. It also pays construction costs $1,207,300 for the new building and $76,208 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash
It appears that part of your query was omitted; could you kindly rephrase it so that I can help you more effectively also pays construction costs $1,207,300 for the new building and $76,208 for building
A building is a structure that is created and used to house, protect, and give shelter for people or objects. It may be constructed from a variety of materials, including wood, steel, concrete, or bricks. From cottages to skyscrapers can be classified as buildings, and they can be used for residential, commercial, industrial, educational, or governmental reasons. Planning, zoning, engineering, architecture, and construction management are all involved in the design and construction of a structure. Buildings may be made to be robust to natural calamities, sustainable, and energy-efficient. Building security and safety are also crucial, necessitating devices like surveillance cameras, alarms, and fire
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