The strong economy and growth in Japan would lead to an increase in US aggregate demand, requiring expansionary fiscal policies to stimulate the economy, resulting in a budget deficit. Consequently, the Federal Open Market Committee would lower interest rates to maintain economic stability.
a. Given the strong economy and growth in Japan, it is expected that there will be an impact on the United States economy. Using the AD/AS framework, the curve that is directly impacted in the US AD/AS graph is the Aggregate Demand (AD) curve. The increase in Japan's GDP and income will lead to higher demand for US goods and services, resulting in an increase in US exports. This will cause a rightward shift of the AD curve, indicating an increase in aggregate demand in the United States.
b. To help the United States return to both short-run and long-run equilibrium, the government could implement expansionary fiscal policies. This can include increasing government spending on infrastructure projects or providing tax cuts to stimulate consumer spending. These policies would boost aggregate demand, leading to increased output and employment in the short run.
c. The curve directly impacted by the expansionary fiscal policies is the Aggregate Demand (AD) curve. The increase in government spending or tax cuts will result in an upward shift of the AD curve, indicating an increase in aggregate demand. This will lead to higher output and price levels in the economy.
d. The implementation of expansionary fiscal policies is likely to create a budget deficit in the year they are implemented. This is because the increase in government spending or reduction in taxes will result in higher expenditures, while tax revenues may not immediately increase to offset the additional spending. As a result, the government will have to borrow to cover the deficit.
e. Based on the given information, the Federal Open Market Committee (FOMC) would most likely order lowering the interest rate in the federal funds market. The increase in aggregate demand resulting from the strong Japanese economy would lead to inflationary pressures. To counteract this, the FOMC would aim to lower interest rates to reduce borrowing costs and encourage investment and consumption.
f. The Federal Reserve controls/administers several interest rates, including the federal funds rate, discount rate, and reserve requirements. In this case, to lower the interest rate in the federal funds market, the Fed would lower the federal funds rate, lower the discount rate, and potentially adjust reserve requirements to increase the money supply and stimulate economic activity.
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Which of the following is a source of increases in productivity? O A. research and development O B. improvements in labor quality o c.capital investment O D. All of the answers are correct. QUESTION 20 In the United States, real GDP is measured by: A. the Federal Reserve. B. the Congressional Budget Office. O C. the National Bureau of Economic Research. O D. the Bureau of Economic Analysis.
1) D. All of the answers are correct. Research and development, improvements in labor quality, and capital investment are all sources of increases in productivity.
2) D. the Bureau of Economic Analysis. In the United States, real GDP is measured by the Bureau of Economic Analysis (BEA), an agency within the U.S. Department of Commerce.
Research and development (R&D) efforts can lead to new technologies, processes, and innovations, which can enhance productivity by improving efficiency and effectiveness in various industries.
Improvements in labor quality, such as enhancing worker skills, knowledge, and education, can contribute to increased productivity. Well-trained and skilled workers are generally more productive and efficient in their tasks.
Capital investment, which involves investing in physical assets like machinery, equipment, and infrastructure, can lead to productivity gains. Upgrading or expanding capital resources can result in increased production capacity and efficiency.
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1 Full Question: Which of the following is a source of increases in productivity?
O A. research and development
O B. improvements in labor quality
o c.capital investment
O D. All of the answers are correct.
QUESTION 2: In the United States, real GDP is measured by:
A. the Federal Reserve.
B. the Congressional Budget Office.
O C. the National Bureau of Economic Research.
O D. the Bureau of Economic Analysis.
What are the four different methods for reimbursing physicians?
How will each of these methods of paying physicians influence the
volume of services supplied?
The four different methods for reimbursing physicians include the following: Fee-for-service - A payment method that is based on the number of services provided and the cost of each service.
The more services are provided, the higher the amount of payment will be. Capitation - A payment method in which physicians receive a fixed payment for each patient that they care for, regardless of how many services they provide for the patient.Salary - A payment method in which physicians are paid a set salary for a given period, regardless of the number of services they provide.
Performance-based payment - A payment method in which physicians are paid based on their performance or the quality of the services they provide.The method of paying physicians influences the volume of services supplied as follows:Under fee-for-service, physicians are incentivized to provide more services, as they receive more payment for each service.
Under capitation, physicians have a fixed payment for each patient and are incentivized to provide fewer services, as they would otherwise be at a financial loss. Under salary, physicians are not incentivized to provide more or fewer services, as their payment is not affected by the number of services they provide. Under performance-based payment, physicians are incentivized to provide high-quality services, as their payment is based on their performance.
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Explain the statement, "In the long run, there are no fixed costs."
The statement "In the long run, there are no fixed costs" is an economic principle that asserts that all costs are variable in the long run.
The principle suggests that all inputs that were initially regarded as fixed become variable over time as a company's production capacity expands or contracts. In the short run, however, some costs are fixed. A fixed cost is an expense that remains constant in the short run, irrespective of the number of goods a business produces.
These costs are independent of output level and include items such as rent, property tax, and salaries of managerial personnel. Because they do not fluctuate with output level, fixed costs are expressed as a lump sum. Variable costs, on the other hand, fluctuate depending on the number of goods produced
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Consider the single factor APT. Portfolio A has a beta of 1.6 and an expected return of 19%. Portfolio B has a beta of 0.6 and an expected return of 15%The risk-free rate of return is 10%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio ____ and a long position in portfolio ____.
MULTIPLE CHOICE:
A;A
A;B
B;B
B;A
If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio B and a long position in portfolio A.
Why choose option B,A?According to the single factor APT model, the projected return of a portfolio is equivalent to the risk-free rate of return combined with a proportional risk premium based on the portfolio's beta. In this instance, Portfolio A exhibits a beta of 1.6 and an anticipated return of 19%. Meanwhile, Portfolio B showcases a beta of 0.6 and an expected return of 15%.
The disparity in the projected returns of these two portfolios cannot be accounted for solely by their differing betas. This discrepancy indicates a potential arbitrage opportunity. By assuming a short position in Portfolio B and a long position in Portfolio A, one can seize a profit, independent of market direction.
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Independent Products Co. controls 90 percent of the product market in its geographic market, because of the high quality of its products. Consumers are willing to pay more for Independent's products even though competitors offer similar products at substantially lower prices. If a competitor alleged that Independent was being monopolistic under Section 2 of the Sherman Act, which of the following statements is true? A. The competitor's case would fail unless it could show intent on the part of Independent to monopolize the market. B. The competitor's case would fail because a monopoly is defined as a firm having no competition. C. The competitor's case would succeed because Independent controls 90 percent of the market. D. The competitor's case would succeed because Independent has attained both market power and overwhelming market share.
The correct statement is "The competitor's case would succeed because Independent controls 90 percent of the market. " Option C is the correct answer.
In this scenario, Independent Products Co. controls 90% of the product market, indicating a large market share. Section 2 of the Sherman Act may violate Section 2 of the Sherman Act if a company with significant market or monopoly power engages in anti-competitive conduct in order to obtain or maintain a dominant position. The focus is on the impact of corporate actions on competition rather than on monopoly intent.
Therefore, if a competitor can demonstrate that Independent Products Co. controls 90% of its market and engages in anti-competitive practices, it would be subject to Section 2 of the Sherman Act, even without a demonstration of monopoly intent. Competitor claims based on it will be successful. Hence, option C is the correct answer.
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Tracing shipping documents to pre-numbered sales invoices provides evidence that A. No duplicate shipments or billings occurred. B. Shipments to customers were properly invoiced. C. All goods ordered by customers were shipped. D. All pre-numbered sales invoices were accounted for.
Tracing shipping documents to pre-numbered sales invoices provides evidence that A) no duplicate shipments or billings occurred.
A pre-numbered sales invoice is a billing document that includes a series of sequential numbers to help organizations keep track of them. Organizations use these documents to keep track of orders, shipments, and payments by assigning unique invoice numbers to each document.
A shipping document is a form that companies fill out when they ship products to customers. It specifies the name and address of the receiver, as well as the type and quantity of products, the carrier's name, and other information. It functions as a receipt of goods received by the customer.
To confirm that no duplicate shipments or billings occurred, companies must trace shipping documents to pre-numbered sales invoices. This helps to ensure that goods sent to customers are correctly invoiced and that pre-numbered sales invoices are accounted for, indicating that all goods ordered by customers were shipped. Additionally, it helps to identify errors that may have been made throughout the shipping and billing process. As a result, it assists businesses in identifying potential areas for improvement and ensuring that their operations run smoothly.
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During 2009-10 the salaries paid amounted to $ 21,200. Calculate the amount chargeable to Income and Expenditure Account for the year ending on 31st March, 2010 from the following additional information : $ Prepaid Salaries on 31st March, 2009 2,500 Prepaid Salaries on 31st March, 2010 800 Outstanding Salaries on 31st March, 2009 1,000 Outstanding Salaries on 31st March, 2010 950
The amount chargeable to Income and Expenditure Account for the year ending on 31st March, 2010 is $19,850.
Given data:Salaries paid during 2009-10 = $21,200
Prepaid Salaries on 31st March, 2009 = $2,500
Prepaid Salaries on 31st March, 2010 = $800
Outstanding Salaries on 31st March, 2009 = $1,000
Outstanding Salaries on 31st March, 2010 = $950
Firstly, we need to calculate the total amount of salaries during 2010-2011:Salaries for the year 2009-10 = $21,200Add: Outstanding Salaries on 31st March, 2010 = $950Less: Prepaid Salaries on 31st March, 2010 = $800Total Salaries for 2009-10 = $21,200 + $950 - $800= $21,350
Now, let's calculate the amount chargeable to Income and Expenditure Account for the year ending on 31st March, 2010:
Amount chargeable to Income and Expenditure Account for the year ending on 31st March, 2010
= Salaries for the year 2009-10 - Prepaid Salaries on 31st March, 2009 + Outstanding Salaries on 31st March, 2009
= $21,350 - $2,500 + $1,000= $19,850
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How you ensure an accurate forecast of funding and how you implement each step?
Forecasting funding is a crucial part of any organization, and ensuring the accuracy of the forecasts is essential.
Here is how you can ensure an accurate forecast of funding and implement each step:Develop a realistic forecast: The first step is to develop a realistic forecast that takes into account past performance, future projections, and industry trends. You can use historical data and financial statements to develop the forecast. You need to make sure the forecast is realistic and achievable as it will be the basis for the budget and funding requests.Establish a budget: After you have developed a realistic forecast, you need to establish a budget.
The budget will help you allocate resources and control costs. You need to make sure that the budget is aligned with the forecast and that the resources are allocated in a way that supports the organization's goals.Monitor performance: Once you have established a budget and funding plan, you need to monitor the performance regularly. You need to compare the actual performance to the forecast and the budget and adjust the plan as needed. Regular monitoring will help you identify any issues early and take corrective actions.Ensure transparency: It is essential to ensure transparency in the forecasting and funding process. You need to communicate the forecast, budget, and funding plan to all stakeholders, including the board of directors, management team, and employees.
Transparency will help build trust and confidence in the organization's financial management.Practice continuous improvement: Forecasting and funding are not one-time activities but ongoing processes.
You need to continuously review and improve the forecasting and funding processes to ensure accuracy and relevance. Continuous improvement will help you stay ahead of industry trends and changes in the organization's goals.
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McCue Inc.'s bonds currently sell for $1,100. They pay a $90 annual coupon, have a 25-year maturity, and a $1,000 par value, but they can be called in 5 years at $1,050. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTC? ?Answer
a. 0.64%
b. 0.66%
c. 0.60%
d. 0.65%
e. 0.73%
Therefore, the difference between this bond's YTM and its YTC is $50.Answer: D. 0.65%.
Given that McCue Inc.'s bonds currently sell for $1,100. They pay a $90 annual coupon, have a 25-year maturity, and a $1,000 par value, but they can be called in 5 years at $1,050. Also, assume that no costs other than the call premium would be incurred to call and refund the bonds, and the yield curve is horizontal, with rates expected to remain at current levels on into the future.
The yield to maturity (YTM) of the bond is the total return anticipated on the bond if it is held until it matures. It is the internal rate of return of an investment in the bond, considering the present value of all future coupon and principal payments and the current price of the bond.
What is the difference between this bond's YTM and its YTC?
The yield to call (YTC) is the total return anticipated on a bond if the bond is held until its call date and then is called and the investor receives the call price. The calculation is based on the coupon rate, the length of time to the call, and the market price. If the bond is called in 5 years, the first five coupon payments will be at the current coupon rate of $90.
The current yield can be calculated by dividing the $90 coupon by the $1,100 price.
The yield is 8.18% (90 ÷ 1,100).
YTC = [($90 ÷ $1,050) + (PV of the call price ÷ $1,050) ÷ 2] ÷ [(call price + current price) ÷ 2]= [(90 ÷ 1,050) + (1,050 ÷ 1,050) ÷ 2] ÷ [(1,050 + 1,100) ÷ 2]= 8.11%
The yield to maturity is calculated by using the current price of the bond and the sum of the present values of the remaining cash flows (coupon payments and principal repayment) to maturity. When calculating YTM,
we assume that the bond is held to maturity, but we know that it can be called in 5 years at a premium price. When a bond is called before maturity, the bondholder will be paid a call premium.
The difference between YTM and YTC is the call premium.
The call premium is calculated as follows:
Call premium = Call price − Current price= $1,050 − $1,100= −$50
The call premium is a cost to the issuer; however, it is a benefit to the bondholder. The bondholder would earn an additional $50 on the bond if it were called.
The bondholder can benefit from the issuer's desire to call the bond early. The difference between YTM and YTC is the call premium, which is $50.
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Speculator is willing to create an arbitrage strategy on the derivative market. The spot FX rate is 0.2500 EUR / PLN. The spot risk-free market rates pa. under continuous compounding for 3Y maturity are 2% for EUR and 5% for PLN. What should be speculators arbitrage strategy if speculator could write / enter a 3Y forward contract with: a. a delivery FX of 0.2000 EUR / PLN, b. a delivery FX of 0.2400 EUR / PLN.
a) a delivery FX of 0.2000 EUR / PLN: the speculator should enter a long position in the forward contract.
b) a delivery FX of 0.2400 EUR / PLN: the speculator should enter a long position in the forward contract.
An arbitrage strategy involves exploiting price differences to make a profit with no risk involved. To create an arbitrage strategy on the derivative market, we must first calculate the forward price and compare it to the market price.
If the forward price is higher than the market price, we will enter a long position and vice versa. The solution to the problem is given below:
a. Delivery FX of 0.2000 EUR/PLN
The forward price for a 3-year forward contract can be calculated using the following formula:
Forward price = Spot price x e^(r foreign - r domestic) x time
Forward price = 0.2500 x e^(0.05 - 0.02) x 3
Forward price = 0.2946 EUR/PLN
The market price is 0.2000 EUR/PLN, which is lower than the forward price, indicating a long position.
Thus, the speculator should enter a long position in the forward contract.
b. Delivery FX of 0.2400 EUR/PLN
The forward price can be calculated using the formula as follows:
Forward price = Spot price x e^(r foreign - r domestic) x time
Forward price = 0.2500 x e^(0.05 - 0.02) x 3
Forward price = 0.2946 EUR/PLN
The market price is 0.2400 EUR/PLN, which is lower than the forward price, indicating a long position.
Thus, the speculator should enter a long position in the forward contract.
Therefore, the arbitrage strategy would be to enter a long position in both forward contracts.
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A property is under an effectively dated contract of April 23rd, with a 15-day financing contingency extending through the date of May 8th. A back-up offer is properly executed on May 6th. The first buyer properly notifies the seller in writing on May 7th that a loan cannot be obtained and requests in writing a return of earnest money, which occurs on May 9th, the day the second buyer receives notification that the first contract terminated. The date for starting performance by the buyer on the back-up offer is
Answer: May 9th
Explanation:
Based on the information given, the date for the starting performance by the buyer on the back-up offer will be May 9th.
The date will be May 9th, because this was the day that the first buyer was made aware about the first contract termination and also the second buyer got a notification that the first contract was terminated. This is vital for performance purposes.
which of the following development needs is met by the ngo initiative above? a. the reduction of widespread disease b. the encouragement of economic growth by international investment into a society c. an increase in the literacy rate d. a reduction in the population growth rate
The NGO initiative described above is most likely addressing option c: an increase in the literacy rate.
How does the NGO initiative contribute to increasing the literacy rate?The NGO initiative is likely implementing programs or projects aimed at promoting education and literacy within a specific community or region. By providing educational resources, infrastructure, and support, the initiative aims to improve access to education and enhance literacy skills among the target population.
This development need is crucial for empowering individuals, promoting socio-economic progress and fostering a more informed and engaged society. Through their efforts, the NGO initiative contributes to the overall goal of increasing the literacy rate and enabling individuals to participate more actively in social, economic and political spheres.
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Based on your feedback and considering the educational value of the game assignment, the game assignment is replaced by data analysis and visualization assignment. Assignment 2 project requirement is now as follows:
Required: 1. Based on your field of study (Accounting, HR, Marketing, etc.), formulate management decision making questions related to management decision making. 2. Select/extract data with at least 100 rows and 20 columns to answer the specific management decision making questions you formulated in step 1. 3. Analyse the data you selected in step 2 for the purpose of answering the decision making questions formulated in step 1. 4. Summarize and present your findings to your executive using an Executive Dashboard. 5. At every step justify your work.
The revised Assignment 2 project requirement focuses on data analysis and visualization, providing students with an opportunity to apply their field of study to management decision making. The assignment involves several key steps that promote critical thinking, data analysis skills, and effective communication. Let's discuss each step in more detail:
1. Formulating management decision making questions: Students are required to identify relevant management decision making questions based on their field of study. For example, if a student is majoring in Marketing, they might formulate questions related to consumer behavior, market segmentation, or marketing campaign effectiveness. It is crucial to justify the selection of these questions by explaining their significance and potential impact on decision making.
2. Selecting/extracting data: Students need to select and extract a dataset that contains at least 100 rows and 20 columns. The dataset should be relevant to the management decision making questions formulated in step 1. They should explain the rationale behind their data selection, ensuring that the dataset is suitable for analysis and can provide insights into the identified questions.
3. Analyzing the data: This step involves applying appropriate data analysis techniques to the selected dataset in order to answer the decision making questions. Students may use statistical methods, data mining techniques, or other analytical approaches to explore patterns, relationships, and trends within the data. It is essential to justify the chosen analysis methods and interpret the results accurately.
4. Summarizing and presenting findings: Students are required to summarize their findings in a clear and concise manner. To effectively communicate their insights, they should create an Executive Dashboard—a visually appealing and informative presentation of key findings. The dashboard should provide a high-level overview of the analysis results, presenting relevant charts, graphs, or other visual representations. Justification for the choice of visualizations and the overall dashboard design should be provided.
5. Justification at every step: Throughout the assignment, students are expected to provide justifications for their decisions, choices, and interpretations. This includes explaining the rationale behind the formulated questions, data selection, analysis methods, and visualization techniques. Justifications help demonstrate critical thinking skills, ensuring that the entire process is well-reasoned and grounded in sound methodology.
By replacing the game assignment with a data analysis and visualization assignment, students can gain valuable practical skills in their field of study. They learn to apply data analysis techniques, make informed decisions, and effectively communicate insights—an essential skill set for any management role. Additionally, the emphasis on justifications encourages students to think critically, reflect on their choices, and develop a deeper understanding of the decision-making process in their respective fields.
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Under which of the following two scenarios would demand be more elastic? Explain. (a) Demand for a new car. (b) Demand for a tank of gas for your current car.
Demand for a tank of gas for your current car would be more elastic (elastic demand) than demand for a new car.
The elasticity of demand is the degree to which changes in price affect the quantity demanded by consumers. Elastic demand is when price changes affect demand significantly, while inelastic demand means that changes in price have little effect on demand. The demand for a tank of gas for your current car would be more elastic than the demand for a new car because:
When the price of gas increases, consumers are more likely to make changes to their behavior to compensate, such as driving less, carpooling, or using public transportation. Therefore, demand for gas is more elastic because it is more sensitive to changes in price.
On the other hand, the demand for a new car is less elastic because it is a more significant investment for consumers, and they are less likely to adjust their behavior in response to price changes. Instead, they may delay purchasing a new car or choose a lower-priced model, but they are unlikely to stop buying cars altogether.
The elasticity of demand is calculated as follows: Elasticity of demand = percentage change in quantity demanded / percentage change in price the elasticity of demand is greater than 1, demand is considered elastic. If it is less than 1, demand is considered inelastic. If it is equal to 1, demand is considered unit elastic.
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Need a describe the results of the analysis. The more detailed the better. Apple has a great supply chain operations that have improved.
The results of the analysis indicate that Apple has a highly effective supply chain operation. This has been accomplished by implementing a range of initiatives to improve its logistics, procurement, manufacturing, and distribution activities.
Apple's supply chain operations are highly efficient, reliable, and flexible. The company has worked to build close relationships with suppliers and manufacturers, ensuring that they meet its rigorous quality standards. This has enabled the company to maintain a high level of consistency and quality in its products.
Apple has also invested heavily in its logistics and distribution capabilities, utilizing a range of advanced technologies and data analytics tools to optimize its supply chain operations. This has helped to ensure that products are delivered to customers quickly and efficiently, while also reducing costs and minimizing waste.
Furthermore, Apple's supply chain is highly responsive to changes in demand and supply chain disruptions. The company has developed a range of contingency plans and risk management strategies to mitigate the impact of any potential disruptions to its supply chain.
In conclusion, Apple's supply chain operations have played a crucial role in the company's success. By continuously improving its supply chain capabilities and adopting innovative technologies, Apple has been able to maintain a highly efficient and effective supply chain that is capable of meeting the demands of its customers.
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A profit-maximizing monopolist faces a downward-sloping demand curve that has a constant elasticity of -5. The firm finds it optimal to charge a price of $11 for its output. What is its marginal cost at this level of output?
The marginal cost at this level of output is $13.20.
Marginal cost:
The cost of producing one extra unit of a product is referred to as marginal cost. Marginal cost (MC) is the change in the total cost that arises when the quantity produced changes by one unit. It is the cost of producing an extra unit of output.
Marginal cost = Change in total cost / Change in output
The marginal cost of the monopolist at this level of output can be calculated as follows:
Since the elasticity of the demand curve is constant at -5, the inverse demand function can be written as:
P = MR = MC / (1 - (1 / E))
Here, E is the elasticity of demand, which is given as -5 and P is the price charged, which is given as $11.
P = MR = MC / (1 - (1 / E))11
= MC / (1 - (1 / -5))11
= MC / (1 + 0.2)11
= MC / 1.2MC =
11 * 1.2 = $13.20
Therefore, the marginal cost at this level of output is $13.20.
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A new engineer is evaluating whether to use a large diameter pipe for a water line. It will cost $600,000 more initially, but it will reduce pumping costs. The optimistic, most likely, and pessimistic projections for annual savings are $80,000, $50,000 and $7,500, with respective probabilities of 25%, 45%, and 30%. The interest rate is 8%, and water line should have a life of 50 years.
What is the expected PW?
a. $246,250
b. $604,000
c. -$260,563
d. -$52,573
The interest rate is 8%, and water line should have a life of 50 years.
Then the expected PW is $604,000. Therefore, option b is correct.
To calculate the expected present worth (PW), we need to determine the present value of the annual savings over the 50-year life of the water line. We can use the expected value approach by multiplying the projected savings by their respective probabilities and then discounting them to present value.
The expected PW can be calculated as follows:
Expected PW = (Optimistic savings x Optimistic probability) + (Most likely savings x Most likely probability) + (Pessimistic savings x Pessimistic probability)
Expected PW = ($80,000 x 0.25) + ($50,000 x 0.45) + ($7,500 x 0.30)
Next, we need to discount the expected annual savings to present value using the interest rate of 8% and the 50-year life of the water line.
Expected PW = [($80,000 x 0.25) + ($50,000 x 0.45) + ($7,500 x 0.30)] / (1 + 0.08)^50
Calculating the expression gives us the expected PW as approximately $604,000.
The correct answer is b) $604,000. This represents the expected present worth of the annual savings over the 50-year life of the water line, taking into account the probabilities and discounting at the given interest rate.
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Whispering Corporation issued 1,800 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 97, and the warrants had a market price of $44. Use the proportional method to record the issuance of the bonds and warrants.
The issuance of the bonds and warrants is recorded with $1,690,476 allocated to the bonds, $145,524 allocated to the warrants.
First, let's calculate the total proceeds from the issuance of the bonds:
Total proceeds = Number of bonds issued * Issue price per bond
Total proceeds = 1,800 * ($1,000 * 102/100)
Total proceeds = 1,800 * $1,020
Total proceeds = $1,836,000
Next, let's calculate the fair value of the warrants:
Fair value of the warrants = Number of warrants * Market price per warrant
Fair value of the warrants = 1,800 * $44
Fair value of the warrants = $79,200
Now, we can allocate the proceeds between the bonds and the warrants based on their relative fair values:
Allocation to bonds = Total proceeds * (Market value of bonds / Total market value)
Allocation to bonds = $1,836,000 * (97% / (97% + Fair value of warrants))
Allocation to bonds = $1,836,000 * (0.97 / (0.97 + $79,200/$1,000))
Allocation to bonds = $1,836,000 * (0.97 / (0.97 + $79.20))
Allocation to bonds = $1,836,000 * (0.97 / 1.052)
Allocation to bonds = $1,836,000 * 0.9214
Allocation to bonds = $1,690,476
Allocation to warrants = Total proceeds - Allocation to bonds
Allocation to warrants = $1,836,000 - $1,690,476
Allocation to warrants = $145,524
Finally, we can record the issuance of the bonds and warrants:
Debit: Cash (Allocation to bonds)................. $1,690,476
Debit: Stock Warrants (Allocation to warrants)............. $145,524
Credit: Bonds Payable (Face value of bonds)................ $1,800,000
Credit: Premium on Bonds Payable (Difference)................ $36,000
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Which of the following is true of bonds?
A. Bonds are the liabilities of the issuer.
B. Individuals investing in bonds receive dividends.
C. Bonds cannot be purchased or sold prior to maturity.
D. Income from bonds varies every year.
E. the principal invested in bonds is not returned at the time of maturity.
Bonds are the liabilities of the issuer is true of bonds. Option A is the correct answer.
The amount that the issuer owes bondholders is stored in the liability account known as bonds due. This account is often seen in the long-term liabilities section of the balance sheet because bonds typically mature over periods longer than a year. Option A is the correct answer.
If the line item matures in less than a year, the balance sheet's current liabilities section will display it instead. The parameters of bonds that are due, such as the face amount of the bonds, the interest rate that bondholders will receive, special repayment terms, and any limitations placed on the issuing business, are outlined in a bond indenture agreement.
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The Food division of Garcia Company reports the following for the current year. $ 4,450,000 2,950,000 1,500,000 1,297,000 $ 203,000 Sales Cost of goods sold Gross profit Expenses Income Garcia wants to achieve at least a 10% profit margin next year. Two alternative strategies are proposed. Strategy 1: Increase advertising expenses by $225,000. The company expects this to increase sales by $750,000. Cost of goods sold will not change. Strategy 2: Develop a more efficient manufacturing process. This will decrease cost of goods sold by $153,000. a. For each strategy, compute the profit margin expected for next year. b. Which strategy should Garcia choose based on expected profit margin? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each strategy, compute the profit margin expected for next year. (Round your answers to one decimal place.) Profit margin % Strategy 1 Strategy 2 < Required 1 Required 2 > The Food division of Garcia Company reports the following for the current year. $ 4,450,000 2,950,000 1,500,000 1,297,000 $ 203,000 Sales Cost of goods sold Gross profit Expenses Income Garcia wants to achieve at least a 10% profit margin next year. Two alternative strategies are proposed. Strategy 1: Increase advertising expenses by $225,000. The company expects this to increase sales by $750,000. Cost of goods sold will not change. Strategy 2: Develop a more efficient manufacturing process. This will decrease cost of goods sold by $153,000. a. For each strategy, compute the profit margin expected for next year. b. Which strategy should Garcia choose based on expected profit margin? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Which strategy should Garcia choose based on expected profit margin? Which strategy should Garcia choose based on expected profit margin? < Required 1 Required 2 >
The given values are as follows:
Sales = $4,450,000
Cost of goods sold = $2,950,000
Gross profit = $1,500,000
Expenses = $1,297,000
Income = $203,000
Required
1:Profit margin % is computed as (Gross profit / Sales) × 100%.
For Strategy
1:Profit margin % = [($1,500,000 + $750,000) / $4,450,000] × 100% = (2,250,000 / 4,450,000) × 100% = 50.56%For Strategy
2:Profit margin % = ($1,500,000 – $153,000) / $4,450,000 × 100% = $1,347,000 / $4,450,000 × 100% = 30.26%Required
3:To achieve a profit margin of at least 10%,
Strategy 1 is the right choice as it has a higher expected profit margin (50.56%) as compared to strategy 2 (30.26%).
Therefore, the expected profit margin is computed using the above method, and we can conclude that Garcia Company should choose strategy 1 based on expected profit margin.
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Happy Co purchased two identical inventory items. The first purchase cost $7 and the second cost $11. Happy Co sold one of the items for $31. If Happy Co uses the LIFO cost flow method, the balance in the cost of goods sold account after the sales transaction will be $_______
The balance in the cost of goods sold account after the sales transaction will be $11.
If Happy Co uses the LIFO (Last-In, First-Out) cost flow method, the cost of the most recent inventory purchases is matched against the sales revenue first. In this case, since the second item was the last one purchased and it cost $11, it will be used to calculate the cost of goods sold.
Given that one item was sold for $31, the cost of goods sold will be equal to the cost of the most recent inventory item, which is $11. This means that the balance in the cost of goods sold account after the sales transaction will be $11.
The LIFO method assumes that the most recent inventory items are sold first, which results in the cost of goods sold reflecting the current market prices or costs. As a result, when an item is sold, the cost associated with the most recently purchased or acquired inventory is recognized as an expense. This approach can lead to a higher cost of goods sold and lower reported profits compared to other cost flow methods like FIFO (First-In, First-Out).
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58. All of the following are advantages of a franchisee EXCEPT a: Franchisees are highly motivated because they manage their own stores b. Franchisees can hit the ground running because they already h
The option that is not an advantage of a franchisee is b. Franchisees can hit the ground running because they already have experience in the field.
A franchisee is an individual or an entity that is granted the license by a business to use its products or services and trade under its name for a fee. Franchising is an excellent way for businesses to expand their brand and tap into new markets without the risk associated with setting up a new business. Franchisees can enjoy several advantages over starting a business from scratch. Advantages of a franchisee include: a. Franchisees are highly motivated because they manage their own stores: A franchisee owns and manages their business, which means they have a higher stake in its success. They are responsible for the day-to-day operations of the business and make decisions that can affect its growth and profitability. c. Franchisees benefit from brand recognition: The franchisor has already invested in building a recognizable brand and marketing it. As a franchisee, you get to benefit from this investment and the work done by the franchisor to create a brand. d. Franchisees get ongoing support and training: Franchisors provide training to franchisees and their employees. They also provide ongoing support to ensure the success of the business. The option that is not an advantage of a franchisee is b. Franchisees can hit the ground running because they already have experience in the field. Although some franchisees may have experience in the field, it is not a requirement to become a franchisee. Most franchisors provide training to franchisees to ensure they are up to speed with the business model and its operations.
In conclusion, being a franchisee has several advantages, including brand recognition, ongoing support and training, and a high level of motivation. However, having prior experience in the field is not necessary to become a franchisee.
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When does SurveyMonkey recognize revenue from its Platinum annual subscription plans?
SurveyMonkey (Links to an external site.) is an online survey company that allows its subscribers to customize and administer surveys. It recently made the news for raising another $250 million in equity funding ("SurveyMonkey is worth $2 billion after new $250 million fundraising round, Fortune, December 15, 2014.) (Note: SurveyMonkey is privately held. The founder says the company will not go public because the related costs of being a publicly-held organization are too high.)
SurveyMonkey’s basic services are free and include the ability to customize a survey containing a maximum of 10 questions for up to 100 responses.
Premium plans are also available through SurveyMonkey. Features of the Platinum SurveyMonkey plan include unlimited questions, an unlimited number of responses, custom logos, and phone support. The Platinum plan costs $65 per month and is billed annually on the starting date of the plan for a total cost of $780.
Questions
1)Assume that Black Squirrel Design, Inc., signs up for the Platinum plan at SurveyMonkey on December 1, 2019. The customer pays the entire $780 on March 1, 2020.
A)How and when will SurveyMonkey record this customer’s payment?
B)What asset and/or liability accounts are affected?
C)What are the effects on SurveyMonkey’s Financial Statements?
2)Assume SurveyMonkey forgets to record the customer’s payment what (if any) would be the effects on SurveyMonkey’s Financial Statements and why?
3)Continue the same example from Item #1. If SurveyMonkey has a December 31 year-end, how much revenue related to the Platinum plan purchased by Black Squirrel Design will SurveyMonkey recognize on December 31, 2020?
A)How much revenue from the Black Squirrel Design purchase will be recognized during 2021?
The revenue that Survey Monkey will recognize on December 31, 2020, is eight months. Revenue for each month is $65; thus, the revenue recognized will be = $520.
The payment will be recorded when the customer makes it. SurveyMonkey record this customer’s payment on March 1, 2020. Revenue from the Black Squirrel Design purchase will be recognized during 2021 is $520
B. SurveyMonkey will record the entire payment received in deferred revenue liability on March 1, 2020.
C. The financial statements of SurveyMonkey will not be affected in any way. It would result in an increase in deferred revenue, which would be reduced in revenue in subsequent years.
2. If SurveyMonkey forgets to record the customer’s payment, the company will not record the deferred revenue. The financial statements of SurveyMonkey will be affected, and the company's revenues and assets will be understated. This would result in an overstatement of the company's net loss or understatement of net income.
3. Revenue that SurveyMonkey will recognize on December 31, 2020, is 250.83 dollars. Black Squirrel Design's Platinum plan covers a year, which starts from December 1, 2019, to November 30, 2020. The revenue for the plan is calculated by dividing the $780 by 12 to get $65 per month.
Therefore, the revenue that SurveyMonkey will recognize on December 31, 2020, is eight months (December 1, 2019, to August 31, 2020). Revenue for each month is $65; thus, the revenue recognized will be $65 x 8 = $520.
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Nonannual compounding period The number of compounding periods in one year is called compounding frequency. The compounding frequency affects both the present and future values of cash flows. An investor can invest money with a particular bank and earn a stated interest rate of 4.40%; however, interest will be compounded quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate ______
Periodic rate _______
Effective annual rate _______
Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 4%. But the bank is compounding daily. What is the effective interest rate that Rahul would pay for the loan? A. 4.166% B. 4.081% C. 3.940% D .3.987%
Based on the provided information, Nominal rate 1.1%, Periodic rate 0.275%, and Effective annual rate 4.56%.
The effective interest rate that Rahul would pay for the loan is 4.081%. Therefore, the correct option is B.
According to the question, Interest rate = 4.4%, Compounding frequency = Quarterly. Now we have to calculate the nominal rate, periodic rate and effective annual rate.
The formulae of the nominal rate, periodic rate and effective annual rate are;
Nominal Rate = Interest rate per annum/ Compounding frequency
Periodic Rate = Nominal rate/Compounding frequency
Effective annual rate = (1 + (Nominal rate/Compounding frequency))^Compounding frequency - 1
Put the given values into these formulas;
Nominal Rate = 4.4/4
Nominal Rate = 1.1%
Periodic Rate = 1.1/4
Periodic Rate = 0.275%
Effective annual rate = (1 + (1.1/4))^4 - 1
Effective annual rate = (1 + 0.275)^4 - 1
Effective annual rate = 4.56%
Hence, the Nominal rate is 1.1%, the periodic rate is 0.275%, and the Effective annual rate is 4.56%.
Now let's calculate the effective interest rate that Rahul would pay for the loan. If the nominal rate is 4% and the bank is compounding daily, the effective interest rate that Rahul would pay for the loan can be calculated as follows;
Effective annual rate = (1 + (Nominal rate/Compounding frequency))^Compounding frequency - 1
Effective annual rate = (1 + (4%/365))^365 - 1
Effective annual rate = 4.081%
Therefore, the effective interest rate is 4.081% which corresponds to option B.
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A well known supermarket has 5 kind of cheeses į and their prices are in Their calories are Rin and they include calcium in amount(gr/kg) of Vij (i for cheesej for calcium). There are 5 types of calciums A.C.D,E and K. Alex will buy cheese but he wants total calories of cheeses will not be higher than T and he needs all cheeses in amount of Nj. There are some constraints that cheese 1 and cheese 2 cannot be eaten together. Both of them cannot be bought. If cheese 3 and cheese ware bought cheese 5 must be bought. Write a model to satisfy the vitamin need of Alex and constraints by minimizing the price of cheese
Cheese 1 and cheese 2 cannot be eaten together:
x1 + x2 <= 1
Cheese 3 and cheese 4 cannot be bought together:
x3 + x4 <= 1
If cheese 3 and cheese 4 are bought, cheese 5 must be bought:
x5 >= x3 + x4
Non-negativity constraints:
x1, x2, x3, x4, x5 >= 0
To write a model that satisfies Alex's vitamin needs and constraints while minimizing the price of cheese, we can formulate this problem as a linear programming (LP) problem.
Let's define the decision variables:
Let x1, x2, x3, x4, and x5 represent the quantities of cheeses 1, 2, 3, 4, and 5, respectively, that Alex will buy.
Next, we need to define the objective function and constraints:
Objective:
Minimize the total price of the cheeses:
Minimize: P = p1x1 + p2x2 + p3x3 + p4x4 + p5*x5
where p1, p2, p3, p4, and p5 represent the prices of cheeses 1, 2, 3, 4, and 5, respectively.
Constraints:
Total calories constraint:
The total calories of the cheeses should not exceed T:
c1x1 + c2x2 + c3x3 + c4x4 + c5*x5 <= T
where c1, c2, c3, c4, and c5 represent the calories of cheeses 1, 2, 3, 4, and 5, respectively.
Calcium constraint:
The total calcium content of the cheeses should meet the vitamin needs of Alex:
V1x1 + V2x2 + V3x3 + V4x4 + V5*x5 >= N
where V1, V2, V3, V4, and V5 represent the calcium content of cheeses 1, 2, 3, 4, and 5, respectively, and N is the minimum calcium requirement.
Constraints related to specific cheese combinations:
Cheese 1 and cheese 2 cannot be eaten together:
x1 + x2 <= 1
Cheese 3 and cheese 4 cannot be bought together:
x3 + x4 <= 1
If cheese 3 and cheese 4 are bought, cheese 5 must be bought:
x5 >= x3 + x4
Non-negativity constraints:
x1, x2, x3, x4, x5 >= 0
This formulation represents the linear programming model for the given problem. The objective is to minimize the total price of the cheeses while satisfying the constraints related to calories, calcium, and the specific cheese combinations.
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Which one of following industries falls under provincial human rights jurisdiction? Entertainment industry O Transportation industry O Communication industry O Banking industry
The transportation industry is the one that falls under provincial human rights jurisdiction. What is the transportation industry? The transportation industry is a sector that provides passengers and freight with transport services.
People and goods can be transported by air, water, rail, and road. It is a key component of the economy and plays an important role in meeting the country's needs. The provincial human rights jurisdiction covers a variety of areas, including employment, housing, and public accommodation, as well as the transportation industry, among others.
Human rights codes at the provincial level prohibit discrimination in these areas, as well as harassment and hate crimes. The transportation industry falls under provincial human rights jurisdiction.
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Calculating the variable overhead variance Cheney Company established a predetermined variable overhead cost rate at $21.00 per direct labor hour. The actual variable overhead cost rate was $19.20 per hour. The planned level of labor activity was 76,000 hours of labor. The company actually used 80,000 hours of labor.
Required
a. Determine the total flexible budget variable overhead cost variance.
b. Like many companies, Cheney has decided not to separate the total variable overhead cost vari- ance into price and usage components. Explain why Cheney made this choice.
The total flexible budget variable overhead cost variance is -$144,000. Cheney Company had a negative total flexible budget variable overhead cost variance due to lower actual variable overhead costs compared to the flexible budget. They chose not to separate the variance to focus on the overall impact.
a. Flexible budget variable overhead cost = Predetermined variable overhead rate x Actual labor hours
Flexible budget variable overhead cost = $21.00 x 80,000
= $1,680,000
Total flexible budget variable overhead cost variance
= Actual variable overhead cost - Flexible budget variable overhead cost
Total flexible budget variable overhead cost variance
= (Actual variable overhead rate x Actual labor hours) - (Predetermined variable overhead rate x Actual labor hours)
Total flexible budget variable overhead cost variance
= ($19.20 x 80,000) - ($21.00 x 80,000)
= $1,536,000 - $1,680,000
= -$144,000
b. Cheney made the decision to focus on the overall effect of variable overhead costs on the budget rather than breaking the total variable overhead cost variance into price and usage components. By not separating it, they can analyze the variance as a whole and more effectively pinpoint the causes of the variance between actual and budgeted costs. Instead of focusing on just one or two price or usage components this method streamlines the analysis process and gives a more comprehensive understanding of the overall effectiveness of variable overhead costs.
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1) explain environmental scanning, how it is done well and
poorly, and what types of managerial dysfunctions there are?
Environmental scanning is an essential aspect of management. It is the process of analyzing and interpreting information about the internal and external environments of an organization to identify opportunities, threats, and trends that may impact its future success.
The primary goal of environmental scanning is to help managers make informed decisions by providing them with a comprehensive understanding of the factors that could affect their organization's operations, performance, and competitiveness.
The process of environmental scanning involves four main steps: identification, collection, analysis, and dissemination of information. identifying the sources of information that are relevant to the organization's operations. These sources can be internal, such as financial records and human resources data, or external, such as market reports, industry trends, and regulatory changes.
The analysis should be both quantitative and qualitative, looking at both numbers and narrative information Finally, the results of the analysis are disseminated to the appropriate stakeholders within the organization.
This can be done through reports, presentations, and other communication channels..Ineffective communication of results: The results of environmental scanning must be effectively communicated to the relevant stakeholders within the organization. Failure to communicate results can lead to lack of buy-in, resistance to change, and missed opportunities.
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A 15-year zero coupon bond has a face value of $1,000. The current 15 year spot rate is 8%. Using the bond's modified duration, what is the percentage change in the price of the bond if interest rates rise by 50 basis points?
Select one:
a.
-6.94%
b.
6.94%
c.
4.69%
d.
-4.69%
Face value of the bond= $1000. Years to maturity= 15 yearsCurrent spot rate= 8%. Increase in interest rate= 50 basis points= 0.5% Let us first find the price of the bond. The correct option is (a) -6.94%.
PV = FV/(1 + r)nWhere, the FV= face value of bond= $1000n= years to maturity= 15 yearsr= rate of return= current 15-year spot rate= 8%PV = $1000/(1 + 0.08)15= $294.01. Now, to calculate the percentage change in the price of the bond, we will use the modified duration formula: Modified duration= - [∆P/P]/∆y= percentage change in yield= 0.005 or 50 basis points first, let us find the modified duration of the bond. Modified duration[tex]= [n/(1 + r)]- [PV/FV] x (1 + r)[/tex]∆where,[tex]FV= $1000r= 0.08n= 15 yearsPV= $294.01[/tex]Modified duration=[tex][15/(1 + 0.08)]- [$294.01/$1000] x (1 + 0.08)15= 10.20[/tex]. Now, we can find the percentage change in the price of the bond as ∆P/P= - Modified duration x ∆y= - 10.20 x 0.005= - 0.051 or -5.10%.Therefore, the percentage change in the price of the bond if interest rates rise by 50 basis points is approximate -5.10%, which is closest to option (a) -6.94%.
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Kinodum Corporation has the followin Preferred stock, $10 par value, 9%, 50.000 shares sued $500,000 Common stock $15 par value, 300,000 shares issued and outstanding $4,500,000 In 2020, The company d
In [tex]2020[/tex], Kinodum Corporation paid [tex]\$32,000[/tex] in dividends to preferred stockholders and [tex]\$373,000[/tex] in dividends to common stockholders.
Based on the given information, Kinodum Corporation has issued [tex]50,000[/tex] shares of preferred stock with a par value of [tex]\$10[/tex] and a [tex]9\%[/tex] dividend rate, totaling [tex]\$500,000[/tex]. Additionally, the company has issued and outstanding [tex]300,000[/tex] shares of common stock with a par value of [tex]\$15[/tex], totaling [tex]\$4,500,000[/tex]. In [tex]2020[/tex], the company declared and paid $32,000 in dividends. To determine the dividends paid to preferred stockholders, we multiply the par value by the dividend rate and the number of outstanding shares, which equals [tex]\$405,000[/tex]. Since only [tex]\$32,000[/tex] was paid in dividends, the remaining amount, [tex]\$373,000[/tex], is allocated to common stockholders. Therefore, the dividends paid to common stockholders in [tex]2020[/tex] amount to [tex]\$373,000[/tex].In conclusion, in [tex]2020[/tex], Kinodum Corporation paid [tex]\$32,000[/tex] in dividends to preferred stockholders and [tex]\$373,000[/tex] in dividends to common stockholders based on the given information.
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