The depreciation schedules for a new copy machine purchased by Cheetah Copy were prepared using three different methods: straight-line, double-declining-balance, and activity-based.
Depreciation Schedule using the Straight-Line Method:
Year | Hours Used | Depreciation Expense | Accumulated Depreciation | Book Value
-----|------------|---------------------|--------------------------|------------
1 | 2,000 | $24,375 | $24,375 | $105,625
2 | 2,000 | $24,375 | $48,750 | $81,250
3 | 2,000 | $24,375 | $73,125 | $56,875
4 | 3,200 | $39,000 | $112,125 | $18,875
The straight-line method evenly distributes the cost of the asset over its useful life. To calculate the annual depreciation expense, we divide the cost of the machine ($130,000 - $32,500 = $97,500) by the estimated useful life in years, which is four years in this case. The annual depreciation expense is $24,375 ($97,500 ÷ 4). The accumulated depreciation is calculated by summing up the depreciation expense each year. The book value is calculated by subtracting the accumulated depreciation from the cost of the machine.
Depreciation Schedule using the Double-Declining-Balance Method:
Year | Hours Used | Depreciation Expense | Accumulated Depreciation | Book Value
-----|------------|---------------------|--------------------------|------------
1 | 2,000 | $48,750 | $48,750 | $81,250
2 | 2,000 | $32,500 | $81,250 | $48,750
3 | 2,000 | $21,667 | $102,917 | $27,083
4 | 3,200 | $34,667 | $137,583 | $-6,583
The double-declining-balance method assumes that an asset depreciates more in the earlier years and less in the later years. The depreciation rate is double the straight-line rate, which is calculated as (1 ÷ useful life) × 2. In this case, the depreciation rate is (1 ÷ 4) × 2 = 0.5, or 50%. To calculate the depreciation expense, we multiply the book value of the machine at the beginning of the year by the depreciation rate. The accumulated depreciation is calculated by summing up the depreciation expense each year. The book value is calculated by subtracting the accumulated depreciation from the cost of the machine.
Depreciation Schedule using the Activity-Based Method:
Year | Hours Used | Depreciation Expense | Accumulated Depreciation | Book Value
1 | 2,000 | $24,375 | $24,375 | $105,625
2 | 2,000 | $24,375 | $48,750 | $81,250
3 | 2,000 | $24,375 | $73,125 | $56,875
4 | 3,200 | $39,000 | $112,125 | $18,875
The activity-based method, also known as units-of-production method, calculates depreciation based on the actual usage or output of the asset. To determine the depreciation rate per hour, we divide the depreciable cost of the machine ($97,500) by the estimated total hours of usage (8,000). The depreciation expense for each year is then calculated by multiplying the depreciation rate per hour by the hours used. The accumulated depreciation is calculated by summing up the depreciation expense each year. The book value is calculated by subtracting the accumulated depreciation from the cost of the machine. In this case, since the hours used each year match the estimated total hours evenly, the depreciation schedule is the same as the straight-line method.
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In the Table 3-2 (chapter 3, 10th Edition of the Textbook) from your managerial economics textbook, you will see the own price elasticity of different markets in the short-term and in the long-term.
Market Own Price Elasticity
Whole milk -1.1
Milk -0.2
Meat Beef -0.4
Steak -0.6
Tea -1.1
Pepper -0.2
a. In the short-term, what are the markets in which the demand is elastic and inelastic. Explain your answer!
b. Suppose the price in each market is expected to increase in the short-term by 5%. How will this affect the sales (in other words, the quantity demanded) in each market. Explain your answer!
c. As we transition from short-term to long-term, what do you notice in the elasticity in the different markets? Could you explain what you observed?
The answer to the question is given in parts with explanation.
a. Elastic and inelastic markets in the short-term: In the short-term, demand is elastic if the absolute value of price elasticity is greater than 1.0. For the markets above, the short-term demand for Whole milk and Tea is elastic with elasticity coefficients of -1.1 and -1.1, respectively. On the other hand, demand is inelastic when the absolute value of price elasticity is less than 1.0. Milk, Meat Beef, Steak, and Pepper are inelastic in the short run with elasticity coefficients of -0.2, -0.4, -0.6, and -0.2, respectively.
Explanation:
For Whole milk and Tea, a small increase in price leads to a substantial decrease in quantity demanded (greater than 1.0). Conversely, for Milk, Meat Beef, Steak, and Pepper, a small increase in price leads to a less substantial decrease in quantity demanded (less than 1.0). Thus, the demand is more responsive to price changes for Whole milk and Tea than for Milk, Meat Beef, Steak, and Pepper in the short term.
b. Effect of a 5% price increase on sales (quantity demanded):
The following effects are expected on sales (quantity demanded) due to a 5% increase in price in each market:
Whole milk: A 5% increase in price will result in a 5.5% reduction in quantity demanded (1.1 x 5%).
Tea: A 5% increase in price will result in a 5.5% reduction in quantity demanded (1.1 x 5%).
Milk: A 5% increase in price will result in a 1% reduction in quantity demanded (0.2 x 5%).
Meat Beef: A 5% increase in price will result in a 2% reduction in quantity demanded (0.4 x 5%).
Steak: A 5% increase in price will result in a 3% reduction in quantity demanded (0.6 x 5%).
Pepper: A 5% increase in price will result in a 1% reduction in quantity demanded (0.2 x 5%).
Explanation:
For elastic markets such as Whole milk and Tea, a small increase in price leads to a substantial decrease in quantity demanded. A 5% increase in price would cause a 5.5% reduction in quantity demanded for these products. For inelastic markets such as Milk, Meat Beef, Steak, and Pepper, a small increase in price leads to a less substantial decrease in quantity demanded. Thus, a 5% increase in price would cause a less than 5.5% reduction in quantity demanded.
c. Transition from short-term to long-term:
In the short-term, some consumers may continue to purchase the product even if the price increases. This means that the quantity demanded may not change significantly. As a result, price elasticity in the short-term is usually smaller than the price elasticity in the long-term.In the long-term, consumers have more time to adjust their consumption and search for substitutes, so the demand becomes more responsive to price changes. As a result, in the long-term, the price elasticity of demand tends to be higher than the price elasticity of demand in the short-term.
Explanation:
For Whole milk and Tea, demand is highly responsive to price changes, with short-term price elasticity coefficients of -1.1. Since consumers have more time to adjust their consumption and look for alternatives in the long-term, the price elasticity of demand will likely be even greater in the long-term.For Milk, Meat Beef, Steak, and Pepper, demand is less responsive to price changes, with short-term price elasticity coefficients ranging from -0.2 to -0.6. In the long-term, the price elasticity of demand will be greater than in the short-term, although it will still be less elastic than that of Whole milk and Tea.
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Trio Company reports the following information for the current year, which is its first year of operations. Direct materials 11 per unit 18 per unit $ Direct labor Overhead costs for the year $ 135,000 per year Variable overhead 3 per unit Fixed overhead Units produced this year Units sold this year 22,500 units 16,500 units 6,000 units Ending finished goods inventory in units 1. Compute the product cost per unit using absorption costing. Absorption costing Cost per unit of finished goods using: Direct materials per unit Direct labor per unit Variable overhead per unit $ 11.00 18.00 Fixed overhead per unit $ 135,000.00 Cost per unit of finished goods $ 135,029.00 2. Determine the cost of ending finis hed goods inventory using absorption costing. Cost per unit of finished goods using: Absorption costing Number of units in finished goods Total cost of finished goods inventory 3. Determine the cost of goods sold using absorption costing. Cost per unit of goods sold using: Absorption costing tA tA +A
The cost per unit of finished goods using absorption costing is $54.50.
To calculate the product cost per unit using absorption costing:
Direct materials per unit: $11.00
Direct labor per unit: $18.00
Variable overhead per unit: $3.00
Fixed overhead per unit: $135,000.00 / 6,000 units produced = $22.50
Cost per unit of finished goods = Direct materials per unit + Direct labor per unit + Variable overhead per unit + Fixed overhead per unit
Cost per unit of finished goods = $11.00 + $18.00 + $3.00 + $22.50 = $54.50
Therefore, the cost per unit of finished goods using absorption costing is $54.50.
To determine the cost of ending finished goods inventory using absorption costing:
Cost per unit of finished goods = $54.50
Number of units in finished goods inventory = 1,000 units
Cost of ending finished goods inventory = Cost per unit of finished goods × Number of units in finished goods inventory
Cost of ending finished goods inventory = $54.50 × 1,000 units = $54,500.00
Therefore, the cost of ending finished goods inventory using absorption costing is $54,500.00.
To determine the cost of goods sold using absorption costing:
Cost per unit of goods sold = Cost per unit of finished goods
Number of units sold = 16,500 units
Cost of goods sold = Cost per unit of goods sold × Number of units sold
Cost of goods sold = $54.50 × 16,500 units = $899,250.00
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Assume labour is the only factor of production in countries Anarres and Urras. In Anarres, production of 1 heat pump requires 3 hours of labour input and 1 solar panel requires 2 hours of labour input. In Urras, production of 1 heat pump requires 6 hours of labour input and 1 solar panel requires 3 hours of labour input. Determine which ONE of the following is a valid terms of trade between the two countries at which they will both benefit from trade: A 2.25 solar panels for each heat pump. B 2 solar panels for each heat pump. C 1.75 solar panels for each heat pump. D 1.5 solar panels for each heat pump.
The correct answer is option (D) 1.5 solar panels for each heat pump. Here is the explanation: Given, In Anarres, the production of 1 heat pump requires 3 hours of labor input.
Production of 1 solar panel requires 2 hours of labor input. In Urras, Production of 1 heat pump requires 6 hours of labor input. Production of 1 solar panel requires 3 hours of labor input. The opportunity cost of production of 1 heat pump in Anarres is equal to the cost of production of 2 solar panels. The opportunity cost of production of 1 solar panel in Anarres is equal to the cost of production of 1.5 heat pumps. The opportunity cost of production of 1 heat pump in Urras is equal to the cost of production of 0.5 solar panels. The opportunity cost of production of 1 solar panel in Urras is equal to the cost of production of 2 heat pumps. Therefore, Anarres should export solar panels to Urras and Urras should export heat pumps to Anarres. To get the mutually beneficial exchange rate, we need to see how much labor time is required to produce one unit of each good in both countries.
In Anarres, 1 heat pump costs 3 hours of labor while 1 solar panel costs 2 hours of labor. Thus, the opportunity cost of producing 1 solar panel in Anarres is 1.5 heat pumps. In Urras, 1 heat pump costs 6 hours of labor while 1 solar panel costs 3 hours of labor. Thus, the opportunity cost of producing 1 solar panel in Urras is 2 heat pumps.Now we can see that the opportunity cost of producing one heat pump in Anarres is lower than that in Urras, while the opportunity cost of producing one solar panel is higher in Anarres. So, Anarres should specialize in producing solar panels and Urras should specialize in producing heat pumps. To make trade mutually beneficial, the exchange rate should lie between 1.5 and 2 solar panels per heat pump. Hence, the valid terms of trade is 1.5 solar panels for each heat pump.
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Answer whether the following statements are True or False.
Vehicular control refers to the technological way in which individual vehicles are guided on fixed facilities.
One of the most persuasive reasons for requiring road users to cover their costs is that other forms of transport, e.g. the railways, are often required to cover theirs.
Mobility refers to the number of activity sites connected by the facility.
Flow entities are the units that traverse the fixed facilities. These include people, vehicles, container units, railroad cars, and so on
Road costing theories have two methods exist for costing a road system which are they: historical cost method and development cost method
Rail transport is most suited for rural areas.
Demand forecasting includes determination of daily volume of different classes of vehicles.
Accessibility refers to the ability to move between different activity sites.
Government recovers the cost of road infrastructure from the general public through road user charges only.
Both direct and indirect taxation accrue as general public income from which the government may allocate a proportion to the provision and maintenance of roads at its discretion.
The given statement, "Vehicular control refers to the technological way in which individual vehicles are guided on fixed facilities." is True.
This statement "One of the most persuasive reasons for requiring road users to cover their costs is that other forms of transport, e.g. the railways, are often required to cover theirs. " is False.
This statement " Mobility refers to the number of activity sites connected by the facility." is False.
This statement " Flow entities are the units that traverse the fixed facilities. These include people, vehicles, container units, railroad cars, and so on" is True.
This statement " Flow entities are the units that traverse the fixed facilities. These include people, vehicles, container units, railroad cars, and so on" is True.
This statement " Flow entities are the units that traverse the fixed facilities. These include people, vehicles, container units, railroad cars, and so on" is False.
This statement "Government recovers the cost of road infrastructure from the general public through road user charges only " is True.
One of the most persuasive reasons for requiring road users to cover their costs is that other forms of transport, e.g. the railways, are often required to cover theirs. Mobility refers to the number of activity sites connected by the facility.
Mobility refers to the ability to move, travel or be easily moved or travelled from place to place.Flow entities are the units that traverse the fixed facilities. These include people, vehicles, container units, railroad cars, and so on.
Two methods exist for costing a road system which are they: historical cost method and development cost method.Rail transport is most suited for rural areas. Rail transport is most suited for densely populated areas.
Demand forecasting includes the determination of the daily volume of different classes of vehicles.
Accessibility refers to the ability to move between different activity sites.
Accessibility refers to the ability of people to reach the activity sites that they desire or need to reach.Government recovers the cost of road infrastructure from the general public through road user charges only.
Government recovers the cost of road infrastructure from the general public through both direct and indirect taxation that accrue as general public income from which the government may allocate a proportion to the provision and maintenance of roads at its discretion.
Therefore, out of the given options, four statements are true and five are false.
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how will a project start up (psu) meeting benefit you as an engagement owner or project manager?
A PSU meeting benefits me as an engagement owner or project manager by providing clarity on project objectives, roles, and expectations, fostering stakeholder alignment, and establishing a foundation for effective communication and collaboration.
In a PSU meeting, I, as the engagement owner or project manager, will gain a clear understanding of the project's goals, objectives, and deliverables. This knowledge will enable me to set realistic expectations and create a well-defined project plan. Additionally, the meeting allows me to engage with key stakeholders, ensuring their alignment and commitment to the project's success.
Furthermore, the PSU meeting provides an opportunity to establish effective communication channels and processes. By clarifying roles and responsibilities, addressing any concerns or challenges, and setting up regular check-ins, I can foster collaboration among team members and stakeholders. This promotes a smooth project workflow, enhances accountability, and minimizes potential misunderstandings or delays.
In summary, the PSU meeting serves as a crucial starting point for me as an engagement owner or project manager, allowing me to gain clarity, align stakeholders, and establish effective communication channels, ultimately setting the project up for success.
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3. Why is meeting minutes and agendas crucial to a teams
success?
Meeting minutes and agendas are crucial to a team's success as they provide structure, focus, accountability, and documentation for effective communication and collaboration.
Meeting minutes and agendas are crucial to a team's success for several reasons. Firstly, agendas provide a clear roadmap, setting the objectives and topics to be discussed, and ensuring meetings stay focused and productive. They help manage time effectively, preventing tangents and ensuring all necessary points are addressed. Secondly, meeting minutes serve as a formal record, documenting decisions, action items, and responsibilities. They provide clarity, accountability, and reference for future meetings. Additionally, minutes enable absent team members to stay informed and catch up on discussions and outcomes. Overall, having well-structured agendas and comprehensive meeting minutes fosters transparency, alignment, accountability, and efficient collaboration, contributing to the team's overall success.In conclusion, the use of meeting minutes and agendas is essential for a team's success as they promote the organization, clarity, accountability, and effective communication, ultimately driving productivity and achieving team goals.
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You have just been advised that your organization is opening an office in Québec. Describe the employer contributions that are specific to the province of Québec, their rates and thresholds where available. (Do not include the organization’s portion of the statutory deductions.)
If your organization is opening an office in Québec, it is important to understand the employer contributions specific to the province of Québec.
These contributions and their rates and thresholds are outlined below:
1. Quebec Pension Plan (QPP) QPP is a mandatory retirement plan that provides retirement, survivor, and disability benefits. Employers must make contributions on behalf of their employees. The maximum employer contribution rate for 2021 is 6.37% on earnings up to a maximum annual amount of $61,600.
2. Quebec Parental Insurance Plan (QPIP)QPIP is a mandatory insurance plan that provides income replacement to eligible parents on parental leave. Employers must make contributions on behalf of their employees. The maximum employer contribution rate for 2021 is 0.496% on earnings up to a maximum annual amount of $83,500.
3. Quebec Health Services Fund (QHSF)QHSF is a fund that provides funding for the healthcare system in Québec. Employers must make contributions on behalf of their employees. The contribution rate for 2021 is 2.7% on total payroll up to a maximum annual amount of $82,700.
4. Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST)CNESST is a government agency responsible for enforcing occupational health and safety standards in Québec. Employers must make contributions to CNESST on behalf of their employees. The contribution rate for 2021 varies by industry and ranges from 0.12% to 2.12% on total payroll up to a maximum annual amount of $89,500.It is important to note that these rates and thresholds are subject to change each year. Employers should stay up to date on the latest changes to ensure compliance with Québec's employment laws and regulations.
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London Confections is known for its rich dark chocolate fudge truffles. London sells its fudge truffles to local retailers. A "unit" of fudge truffles is a 10-pound batch. The standard quantities of ingredients for a batch include 11 cups of sugar, 17 ounces of chocolate chips, 21 ounces of butter, and 27 ounces of evaporated milk. The standard costs for each of the ingredients are as follows: $0.23 per cup of sugar, $0.20 per ounce of chocolate chips, $0.12 per ounce of butter, and $0.05 per ounce of evaporated milk. Calculate the standard direct material cost per batch of fudge truffles. Calculate the standard direct material (DM) cost per batch of fudge truffles.
The standard quantities of ingredients for a batch of fudge truffles sold by London Confections to local retailers are:
11 cups of sugar, 17 ounces of chocolate chips, 21 ounces of butter, and 27 ounces of evaporated milk.
The standard costs for each of the ingredients are as follows: $0.23 per cup of sugar, $0.20 per ounce of chocolate chips, $0.12 per ounce of butter, and $0.05 per ounce of evaporated milk.
The standard direct material (DM) cost per batch of fudge truffles can be calculated as follows:
Standard cost of sugar = 11 x $0.23 = $2.53
Standard cost of chocolate chips = 17 x $0.20 = $3.4
Standard cost of butter = 21 x $0.12 = $2.52
Standard cost of evaporated milk = 27 x $0.05 = $1.35
The total standard direct material cost per batch of fudge truffles can be calculated by adding the standard costs of all the ingredients:Total standard direct material cost per batch = $2.53 + $3.4 + $2.52 + $1.35 = $9.8
Therefore, the standard direct material cost per batch of fudge truffles sold by London Confections to local retailers is $9.8.
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A football team receives $258,000 in sponsorship for equipment, and the administrative costs are expected to be $27,000. What are the costs as a percentage of sponsorship revenue?
Based on the calculation below, costs as a percentage of sponsorship revenue is 10.47%.
How to calculate costs as a percentage of revenue?The costs as a percentage of sponsorship revenue can be calculated using the following formula:
Costs as a percentage of sponsorship revenue = (Expected administrative costs / Sponsorship revenue) * 100 …………………………….. (1)
Substitute the relevant values into equation (1), we have:
Costs as a percentage of sponsorship revenue = ($27,000 / $258,000) * 100
Costs as a percentage of sponsorship revenue = 0.104651162790698 * 100
Costs as a percentage of sponsorship revenue = 10.47%
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The following is the adjusted trial balance for Stockton Company.
Stockton Company
Adjusted Trial Balance
December 31
Cash 6,251 Accounts Receivable 2,932 Prepaid Expenses 681 Equipment 15,763 Accumulated Depreciation 5,430
Accounts Payable 1,769
Notes Payable 5,527
Common Stock 1,000
Retained Earnings 9,780
Dividends 746 Fees Earned 6,385
Wages Expense 2,099 Rent Expense 738 Utilities Expense 326 Depreciation Expense 269 Miscellaneous Expense 86 Totals 29,891 29,891
Determine the retained earnings ending balance.
a.$11,901
b.$2,867
c.$29,891
d.$10,780
The retained earnings ending balance is $11,901, which corresponds to option a.
To determine the retained earnings ending balance, we need to consider the beginning balance of retained earnings and the changes during the period.
In this case:
Retained Earnings beginning balance = $9,780
Dividends = $746
Net Income = Fees Earned - (Wages Expense + Rent Expense + Utilities Expense + Depreciation Expense + Miscellaneous Expense)
Let's calculate the net income:
Net Income = $6,385 - ($2,099 + $738 + $326 + $269 + $86)
Net Income = $6,385 - $3,518
Net Income = $2,867
To calculate the retained earnings ending balance, we can use the formula:
Retained Earnings ending balance = Retained Earnings beginning balance + Net Income - Dividends
Retained Earnings ending balance = $9,780 + $2,867 - $746
Retained Earnings ending balance = $11,901
Therefore, the correct answer is option a.
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Which is true about identifying stakeholders? Justify your answer.
a. External project stakeholders include the project's customers.
b. It is not very difficult to identify stakeholders.
c. Stakeholders with indirect ties to the project need not be engaged with.
d. Stakeholders do not change during a project.
Identifying stakeholders is an essential process when undertaking a project. It is a process of discovering who the stakeholders are, their interests, and their influence on the project.
However, not all stakeholders are the same. Some stakeholders have a direct connection to the project, while others have an indirect connection to the project.
Therefore, the right option from the given options that are true about identifying stakeholders is "a. External project stakeholders include the project's customers." Justification: Stakeholders are individuals or groups of people who have an interest in the project's outcome. Project stakeholders can be classified into two categories, namely internal stakeholders and external stakeholders.
The internal stakeholders include the project team members, including project managers, project sponsors, project coordinators, project administrators, and project team members. External stakeholders include customers, suppliers, shareholders, regulators, and government agencies, among others.
Customers are critical stakeholders in any project because they are the end-users of the project output.
Hence, option A is correct, and the remaining options are incorrect.
Therefore, option a is true about identifying stakeholders.
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a corporation obtains a loan of $200,000 at an annual rate of 12%. the corporation must keep a compensating balance of 20% of any amount borrowed on deposit at the bank, but normally does not have a cash balance account with the bank. what is the effective cost of the loan?
In order to obtain a loan of $200,000 at an annual rate of 12%, a corporation must keep a compensating balance of 20% of any amount borrowed on deposit at the bank. However, the corporation normally does not have a cash balance account with the bank.
The effective cost of the loan is calculated as follows:
Effective rate = (annual rate x loan amount) / (loan amount - compensating balance)Effective rate = (12% x $200,000) / ($200,000 - 20% x $200,000)
Effective rate = (0.12 x $200,000) / ($200,000 - 0.2 x $200,000)
Effective rate = $24,000 / ($200,000 - $40,000)
Effective rate = $24,000 / $160,000Effective rate = 0.15 or 15%The effective cost of the loan is 15%.
This is higher than the stated annual rate of 12% because the corporation is required to maintain a compensating balance of 20% of any amount borrowed on deposit at the bank.
This means that the corporation does not have access to the full loan amount and must maintain a certain amount of funds on deposit with the bank at all times.
This reduces the amount of funds available to the corporation and increases the effective cost of the loan.
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What’s the link between the Harrod-Domar model, Rostow’s
structural theory, and the Neoclassical Solow model? To what extent
can you reconcile their differences?
The Harrod-Domar model, Rostow’s structural theory, and the Neoclassical Solow model all revolve around the issues of economic growth, investment, and capital accumulation. The Harrod-Domar model, Rostow's structural theory, and the Neo-classical Solow model are related to each other in many ways and each represents a distinct approach to the analysis of economic growth.
The Harrod-Domar model is an economic growth model that focuses on investment as the primary factor determining economic growth. In the Harrod-Domar model, economic growth is primarily determined by the level of investment, which in turn is determined by the rate of savings. The model argues that investment is the key to economic growth.
Rostow's structural theory, on the other hand, focuses on the stages of economic development that a country goes through as it progresses towards modernization. According to Rostow, all countries pass through five stages of economic development: traditional society, preconditions for take-off, take-off, drive to maturity, and the age of high mass consumption.
The neoclassical Solow model is another economic growth model that focuses on capital accumulation as the key determinant of economic growth. In the neoclassical Solow model, economic growth is primarily determined by the rate of savings and investment and the level of technological progress. According to the model, capital accumulation is the key to economic growth.
The three models, Harrod-Domar model, Rostow’s structural theory, and the Neo-classical Solow model, all share some similarities and have some differences.
For example, they all agree that investment is important for economic growth. However, the Harrod-Domar model and the Solow model differ on the importance of technological progress. Meanwhile, Rostow's structural theory differs from the other two models in that it focuses on the stages of economic development that countries go through.The three models can be reconciled by recognizing that they are complementary rather than contradictory. Each model can be seen as highlighting a different aspect of the complex process of economic growth. Therefore, the differences between the models can be seen as reflecting different emphases rather than incompatible views.
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In the following equation, gdp refers to gross domestic product, and FDI refers to foreign direct investment.
log(gdp) = 2.65 + 0.527log(bankcredit) + 0.222FDI
(0.13) (0.022) (0.017)
Which of the following statements is then true?
a. If gdp increases by 1%, bank credit increases by 0.527%, the level of FDI remaining constant.
b. If bank credit increases by 1%, gdp increases by 0.527%, the level of FDI remaining constant.
c. If bank credit increases by 1%, gdp increases by log(0.527)%, the level of FDI remaining constant.
d. If gdp increases by 1%, bank credit increases by log(0.527)%, the level of FDI remaining constant.
The correct statement is; If bank credit increases by 1%, GDP (gross domestic product) increases by 0.527%, with the level of FDI remaining constant. Option B is correct.
Based on the given equation;
log(gdp) = 2.65 + 0.527log(bankcredit) + 0.222FDI
We can determine the relationships between GDP, bank credit, and FDI by analyzing the coefficients in the equation.
Statement (a) states, if GDP will increases 1%, bank credit increases by 0.527%, with the level of FDI remaining constant.
To evaluate this statement, we examine the equation. The coefficient 0.527 is associated with log(bank credit), not GDP. Therefore, we cannot directly infer the relationship between GDP and bank credit from this equation. Statement (a) is not true based on the given equation.
Statement (b) states if bank credit increases by 1%, GDP increases by 0.527%, with a level of FDI remaining constant.
From the equation, we can see that the coefficient 0.527 is associated with log (bank credit). Therefore, statement (b) is correct based on the given equation.
Statements (c) and (d) involve taking the logarithm of the coefficient 0.527. This does not align with the equation provided, as the logarithm is not applied to the coefficient itself. Therefore, statements (c) and (d) are not true based on the given equation.
Hence, B is the correct option.
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josh collins plans to buy a house for $293,000. if that real estate is expected to increase in value by 9 percent each year, what will its approximate value be six years from now?
Approximate value of the house after six years: $461,659. To calculate the approximate value of the house after six years,
we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the future value, P is the present value, r is the annual interest rate (expressed as a decimal), n is the number of times interest is compounded per year, and t is the number of years.
In this case, the present value (P) is $293,000, the interest rate (r) is 9% (or 0.09 as a decimal), and we assume the interest is compounded annually (n = 1). Plugging these values into the formula, we get:
A = $293,000(1 + 0.09/1)^(1*6)
A ≈ $461,659
Therefore, the approximate value of the house after six years would be around $461,659.
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Suppose MPC is 0.8. If government purchases increases by $50 and cuts taxes by $600, how much the equilibrium output is changed?
Therefore, the equilibrium output is changed by $687.5.
The equilibrium output refers to the level of GDP at which aggregate expenditure (AE) is equal to the level of output. AE is the sum of consumption expenditure (C), investment (I), government spending (G), and net exports (NX). MPC stands for marginal propensity to consume.Suppose MPC is 0.8. If government purchases increases by $50 and cuts taxes by $600, how much the equilibrium output is changed?Solution:Given, MPC = 0.8Change in Government purchase, ∆G = $50Change in Taxes, ∆T = -$600Now, change in Aggregate Expenditure, ∆AE = (MPC × ∆Y) + ∆G + ∆Twhere, ∆Y is the change in output.Aggregate Expenditure formula is AE = C + I + G + NX,where C = Consumption expenditure, I = Investment, G = Government purchases, and NX = Net ExportsNow, the equilibrium level of output is given byY = AE ………….(i)Now, at equilibrium, output = Aggregate expenditure So, Y = C + I + G + NX ………….(ii)Using equation (i) and (ii), we getY = C + I + G + NXMPC × Y = MPC × C + MPC × I + MPC × G + MPC × NXSubstituting the value of C, I, G, and NX, we getMPC × Y = MPC × (Co + MPC × Y) + I + G + NXwhere Co is autonomous consumptionMPC × Y = MPC × Co + MPC2 × Y + I + G + NXMPC2 × Y = MPC × Co + I + G + NXY = (MPC × Co + I + G + NX) / (1 - MPC2)Change in output, ∆Y = Y - Yo, where Yo is initial output∆Y = {(MPC × Co + I + G + NX) / (1 - MPC2)} - YoGiven, Co = 20, I = 40, NX = 0, MPC = 0.8, ∆G = 50, and ∆T = - 600So, AE = C + I + G + NXAE = 20 + 0.8Y + 50 + 0AE = 70 + 0.8Yand ∆AE = (MPC × ∆Y) + ∆G + ∆T0 = 0.8 × ∆Y + 50 - 6000.8 × ∆Y = 550∆Y = ∆AE / MPC∆Y = 550 / 0.8∆Y = $687.5Therefore, the equilibrium output is changed by $687.5.
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Blended payments on a 54000 loan were $425 per month interest was charged at 6.2% per annum calculated on the urpad balance. How mach of the first progeste Select one $2007 o Ob $9.41 Od $58.35 $404.3
$9.41 of the first payment is allocated towards the principal of the loan. The correct answer is option B.
To determine how much of the first payment is applied to the principal of the loan, we need to subtract the interest portion from the total payment.
The interest charged on the unpaid balance of the loan is calculated at an annual interest rate of 6.2%. Since the interest is calculated on the outstanding balance, we can determine the monthly interest by dividing the annual rate by 12 (number of months in a year).
Monthly interest = (6.2% / 12) * $54,000 = $279
Subtracting the interest from the monthly payment:
Principal payment = Total payment - Interest payment
Principal payment = $425 - $279 = $146
Therefore, the correct answer is option B: $9.41, indicating that $9.41 of the first payment is applied to the principal of the loan.
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q7 fast please
Ziad capital Cash Basel Capital Ziad Capital Basel capital Ziad capital Cash Basel Capital Ziad Capital Basel capital Ziad capital Cash Ali Capital Ali Capital 93,000 18,000 12,000 96,000 54,000 12,00
Therefore, the capital adequacy ratio for Ziad Capital and Ali Capital is 4.73%.
The formula for calculating the capital adequacy ratio (CAR) is as follows: CAR = Tier 1 capital / Risk-weighted assetsTier 1 capital consists of a bank's equity and retained earnings. Risk-weighted assets are assets that have been adjusted to reflect their level of risk. The capital adequacy ratio (CAR) for Ziad Capital and Ali Capital can be computed as follows: Ziad
CapitalCAR = (Cash + Basel Capital) / Risk-weighted assetsRisk-weighted assets
= (93,000 x 0.1) + (18,000 x 0.2) + (12,000 x 0.5) + (96,000 x 1) + (54,000 x 1) + (12,000 x 1)
= 93,000 + 3,600 + 6,000 + 96,000 + 54,000 + 12,000 = 264,600
CAR = (3,000 + 9,000) / 264,600= 0.0473 or 4.73%Ali
CapitalCAR = (Cash + Basel Capital) / Risk-weighted assetsRisk-weighted assets
= (93,000 x 0.1) + (18,000 x 0.2) + (12,000 x 0.5) + (96,000 x 1) + (54,000 x 1) + (12,000 x 1)
= 93,000 + 3,600 + 6,000 + 96,000 + 54,000 + 12,000 = 264,600CAR = (9,000 + 3,000) / 264,600
= 0.0473 or 4.73%
The adequacy ratio is a financial metric that measures a bank's ability to absorb potential losses arising from its risks and maintain a sound financial position. It is also known as the capital adequacy ratio or capital-to-risk-weighted-assets ratio (CRAR). The adequacy ratio is typically used to assess a bank's solvency and stability.
It compares a bank's capital (both Tier 1 and Tier 2 capital) to its risk-weighted assets (RWA). Risk-weighted assets are a measure of a bank's assets adjusted for the level of risk associated with each asset. Different categories of assets have different risk weights assigned to them. The calculation of the adequacy ratio involves dividing a bank's total capital by its risk-weighted assets and multiplying the result by 100 to express it as a percentage.
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Question 20: Why use class tracking? Answer: A. B. C. D. To produce an accurate profit & loss report To produce an accurate balance sheet To produce reports that focus on assets and expenses To produc
A reason why class tracking is important is this: D. To produce reports that focus on the aspect of business that you are tracking.
What is class tracking?Class tracking is a feature in business operations that is used to classify the profits and losses of each aspect of a business. The good thing about class tracking is that it makes it possible for the manager or account to view the financial status of each class of business at once.
So, a benefit is that class tracking allows an entrepreneur to focus on specific aspects of the business.
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Complete Question:
Question 20: Why use class tracking?
Options:
A. To produce an accurate profit & loss report
B. To produce an accurate balance sheet
C. To produce reports that focus on assets and expenses
D. To produce reports that focus on the aspect of the business you're tracking
32. In a National Flood Insurance Program (NFIP) dwelling form, coverage on building property (Coverage A) applies to Oa. all dwellings located within a specific flood zone. ob. the dwelling owned by the insured. oc. the dwelling described on the declarations page. od. the property contained within a dwelling.
In the National Flood Insurance Program (NFIP) dwelling form, coverage on building property (Coverage A) applies to C. the dwelling described on the declarations page.
In simple words, the coverage provided in Coverage A is only applicable to the specific dwelling mentioned in the declarations page of the insurance policy.The National Flood Insurance Program (NFIP) was established by the U.S. Congress in 1968, which is aimed at providing a cost-effective way of protecting properties from flood damage in the United States. It is mandatory for homeowners who have federally-backed mortgages and live in high-risk flood areas to carry flood insurance provided by the NFIP.
The program is administered by the Federal Emergency Management Agency (FEMA). A dwelling form is a type of insurance policy form which is used to provide coverage for residential buildings and the contents inside them. Coverage A is the section of a dwelling form which provides coverage for building property. It covers the cost of repairing or rebuilding the dwelling in case of damage caused by a flood or other natural disasters. Therefore, the Coverage A only applies to the specific dwelling mentioned in the declarations page of the insurance policy, so the correct answer is C. the dwelling described on the declarations page.
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Supply-side market failures occur when Multiple Choice a. supply curves don't reflect consumers' full willingness to pay for a good or service. b. supply curves don't reflect the full cost of producing a good or service. c. government regulates production of a good or service. d. a good or service is not supplied because no one wants it.
Supply-side market failures occur when (b)supply curves don't reflect the full cost of producing a good or service.
Supply-side market failures refer to situations where the market fails to allocate resources efficiently on the supply side of the market. One of the main causes of supply-side market failures is when supply curves do not reflect the full cost of producing a good or service. This means that the market does not take into account all the costs associated with producing and supplying the product, such as external costs or negative externalities. As a result, the market equilibrium does not reflect the true social costs of production, leading to an inefficient allocation of resources. Other options mentioned, such as government regulation or lack of demand, do not directly relate to supply-side market failures, as they primarily pertain to demand-side or market demand factors.
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If the MPS in an economy is 0.25, government could shift the aggregate demand curve rightward by $64 billion by ........ A. decreasing taxes by $16 billion. B. increasing taxes by $16 billion. C. increasing government spending by $16 billion. D. increasing government spending by $64 billion.
If the MPS in an economy is 0.25, government could shift the aggregate demand curve rightward by $64 billion by option C) increasing government spending by $16 billion.
An increase in the spending by the government will result in the shift of the aggregate demand curve to the right. So, option C which is "increasing government spending by $16 billion" is the right answer to this question.The Marginal Propensity to Save (MPS) is the fraction of additional disposable income that households save rather than consume.
When MPS is high, households tend to save a greater proportion of additional income, leaving less money available for spending. The multiplier effect is a measure of the increase in national income that results from a rise in national spending.To calculate the spending multiplier, use the formula:
1/ (1 - MPC)
Where MPC is the Marginal Propensity to Consume.
The value of the spending multiplier can be used to determine the effect of changes in spending on aggregate demand.
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Pick an object or device of your choosing that has several moving parts. List three functions of the device, and then list one concept to meet each function that is not part of the actual object. Sketch a concept combination which addresses at least two of the functions.
Object chosen: CarFunctions: Transportation, Speed, ComfortConcepts: A car can transport people from one place to another, and sometimes goods from one place to another.
It can go at different speeds, depending on the type of vehicle. A car can also provide comfort by having air conditioning, heating, and adjustable seats.Concept combination: A concept combination that addresses transportation and comfort functions is a self-driving car with a sleeping compartment. The car would drive itself, providing transportation while allowing the occupants to rest in comfort.
Another concept combination that addresses speed and transportation functions is a hybrid car that runs on both electricity and gasoline. This type of vehicle would be able to go at high speeds while also being environmentally friendly.
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A call with a strike price of $ 50 costs $7. A put with the same strike price and expiration date costs $3. Construct a table and diagram that show the profit from a straddle. For what range of stock
To construct a table and diagram showing the profit from a straddle position, we need to consider different stock prices and calculate the profit for each scenario. A straddle involves buying both a call option and a put option with the same strike price and expiration date.
The range of stock prices where the straddle strategy results in a profit is from $40 to $60. Within this range, the total profit is positive, while outside this range, the total profit becomes negative.
It's important to note that the calculations assume no transaction costs and don't consider the possibility of early exercise or assignment of the options. The profit table and diagram provide a simplified representation of the straddle strategy's potential outcomes.
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On January 1, 2020, Ehrlich Company acquires $500,000 of ABC’s Company’s 10-year, 10% bonds at a price of $535,090 when the market rate is 9%. Interest is payable each December 31. The bonds are classified as held-to-maturity. Prepare the entry to record the purchase of the ABC bonds. Prepare an amortization schedule for the bonds for the first 2 years (2020 and 2021) Prepare the journal entry for the receipt of the interest and amortization on 12/31/20. On 1/1/22, the bonds are sold for $540,000. Prepare the necessary journal entry.
Ehrlich Company recorded the purchase of ABC Company's bonds by debiting the Held-to-Maturity Investments account for $535,090 and crediting Cash for the same amount.
What was the journal entry to record the purchase of the ABC bonds?When Ehrlich Company purchased ABC Company's bonds on January 1, 2020, the transaction was recorded by debiting the Held-to-Maturity Investments account for $535,090 and crediting Cash for the same amount. This reflects the cost of acquiring the bonds.
An amortization schedule is prepared to allocate the premium or discount on the bonds over their remaining life. In this case, since the bonds were purchased at a premium of $35,090, the premium will be amortized over the 10-year period.
The amortization amount for each year is calculated by taking the difference between the coupon interest expense (based on the stated rate of 10%) and the interest payable at the market rate of 9%.
For the first two years, the amortization schedule would show a decreasing premium amount, resulting in a reduction of the carrying value of the bonds.
On December 31, 2020, the journal entry for the receipt of interest and amortization would include debiting Interest Receivable for the coupon interest amount ($50,000) and debiting the Premium on Bonds Payable account for the amortization amount ($3,509). The corresponding credit entry would be made to Interest Revenue for the total interest received ($53,509).
On January 1, 2022, when the bonds are sold for $540,000, the necessary journal entry would include debiting Cash for the selling price ($540,000), debiting the Premium on Bonds Payable account for the remaining unamortized premium ($29,281), and crediting Held-to-Maturity Investments for the carrying value of the bonds ($500,000).
The difference between the selling price and the carrying value represents the gain on sale, which would be credited to Gain on Sale of Investments.
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answer both part b and c
2. Suppose that the government institutes a program to help unemployed workers learn new skills, find new jobs, and relocate as necessary to take the new jobs. a. What is the likely effect of this pro
The government's program to help unemployed workers learn new skills, find new jobs, and relocate as necessary can have several effects:
- Enhanced employability: The program equips workers with new skills, making them more attractive to potential employers.
- Reduced unemployment duration: Job search assistance and matching services help unemployed individuals find suitable employment faster.
- Geographic mobility: By facilitating relocation, the program allows workers to access job markets with better opportunities.
- Economic growth: Increased employment rates contribute to overall economic growth.
- Social well-being: The program improves the financial stability and well-being of unemployed workers and their families.
In summary, the program aims to enhance employability, reduce unemployment duration, promote geographic mobility, stimulate economic growth, and improve social well-being.
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6 points Save Answe Costs incurred (Actual inputs x Actual Rates): Direct Materials $25000, Direct Labour $9625, Actual Inputs x Standard Rates: Direct Materials $19000, Direct Labour $6100, Standard
The price variances for Direct Materials and Direct Labor have been calculated based totally on the supplied statistics.
The rate variance for Direct Materials turned to $6,000 (Favorable), even as the efficiency variance changed to $4,750 (Unfavorable). For Direct Labor, the rate variance changed to $3,525 (Favorable), and the performance variance was -$3,775 (Unfavorable).
To calculate the rate and performance variances for direct materials and direct hard work, we will use the furnished data:
For Direct Materials:
Actual Inputs x Actual Rates = $25,000
Actual Inputs x Standard Rates = $19,000
Standard Inputs Allowed (Actual Output x Standard Rates) = $23,750
Rate Variance for Direct Materials = (Actual Inputs x Actual Rates) - (Actual Inputs x Standard Rates)
= $25,000 - $19,000
= $6,000 (Favorable)
Efficiency Variance for Direct Materials = (Actual Inputs x Standard Rates) - (Standard Inputs Allowed)
= $19,000 - $23,750
= $4,750 (Unfavorable)
For Direct Labor:
Actual Inputs x Actual Rates = $9,625
Actual Inputs x Standard Rates = $6,100
Standard Inputs Allowed (Actual Output x Standard Rates) = $9,875
Rate Variance for Direct Labor = (Actual Inputs x Actual Rates) - (Actual Inputs x Standard Rates)
= $9,625 - $6,100
= $3,525 (Favorable)
Efficiency Variance for Direct Labor = (Actual Inputs x Standard Rates) - (Standard Inputs Allowed)
= $6,100 - $9,875
= -$3,775 (Unfavorable)
Note: The terrible signal inside the efficiency variance for direct exertions indicates a negative variance.
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The correct question is:
1. When there are adaptive expectations, it implies that there is persistence (inertia) in inflation:
2. It implies neutrality of money in the short term:
3. It can be derived from the upward sloping aggregate supply curve:
4. Changes in inflation expectations imply a movement on the curve:
5. Inflation would be 4% if the unemployment rate is 1 percentage point above its natural level; 3= 0.5; and expectations are 4%:
6. If the sensitivity of inflation to cyclical unemployment is 0.5, to reduce inflation by 1 percentage point, 0.5 percentage points of unemployment must be sacrificed:
True: When there are adaptive expectations, it means that individuals base their expectations of future inflation on past inflation.
True: When there are adaptive expectations, it means that individuals base their expectations of future inflation on past inflation. This implies that if there is persistence or inertia in inflation, where past inflation rates influence current and future inflation rates, it is consistent with the concept of adaptive expectations.False: The neutrality of money in the short term refers to the idea that changes in the money supply do not have an immediate impact on real variables such as output and employment. It suggests that in the short run, changes in the money supply primarily affect nominal variables, such as prices and inflation, rather than real economic activity.True: The upward sloping aggregate supply curve suggests that as output increases, firms need to hire more inputs, leading to higher costs and potentially higher prices. This positive relationship between output and prices supports the notion that changes in aggregate supply can affect inflation.False: Changes in inflation expectations do not necessarily imply a movement on the curve. Inflation expectations can influence economic behavior and decisions, including wage-setting and price-setting decisions, which can, in turn, affect the aggregate supply or demand. Changes in inflation expectations can lead to shifts in the aggregate supply or demand curves, rather than movements along the curves.False: The relationship between inflation and the unemployment rate is described by the Phillips curve. The specific values given in the statement do not align with the standard Phillips curve relationship. The Phillips curve suggests a negative relationship between unemployment and inflation, meaning that lower unemployment is associated with higher inflation, and vice versa.False: The sensitivity of inflation to cyclical unemployment, also known as the Phillips curve slope, indicates the responsiveness of inflation to changes in cyclical unemployment. However, reducing inflation by 1 percentage point does not necessarily mean sacrificing 0.5 percentage points of unemployment. The trade-off between inflation and unemployment, as described by the Phillips curve, is not always linear, and the specific relationship between changes in inflation and unemployment depends on various factors and economic conditions.The correct question is:
Please mark true or false for the following statements.
1. When there are adaptive expectations, it implies that there is persistence (inertia) in inflation:
2. It implies neutrality of money in the short term:
3. It can be derived from the upward sloping aggregate supply curve:
4. Changes in inflation expectations imply a movement on the curve:
5. Inflation would be 4% if the unemployment rate is 1 percentage point above its natural level; 3= 0.5; and expectations are 4%:
6. If the sensitivity of inflation to cyclical unemployment is 0.5, to reduce inflation by 1 percentage point, 0.5 percentage points of unemployment must be sacrificed.
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Which of the following processes in project time management involves identifying the specific tasks that the project team members and stakeholders must perform to produce the project deliverables?
a) Defining activities
b) Sequencing activities
c) Developing the schedule
d) Estimating activity durations
Defining activities involves identifying the specific tasks that the project team members and stakeholders must perform to produce the project deliverables. Therefore, option A is correct.
The process in project time management that involves identifying the specific tasks that the project team members and stakeholders must perform to produce the project deliverables is called "Defining activities." This process is a part of the project planning phase and is crucial for creating a comprehensive project schedule.
During the "Defining activities" process, the project team breaks down the project scope into smaller, manageable activities. These activities are specific actions or tasks that need to be completed to accomplish the project objectives. The team identifies the dependencies between activities, determines the resources required, and establishes the sequence in which the activities should be performed.
Sequencing activities (option B) is the process of determining the logical order in which the identified activities should be executed.
Developing the schedule (option C) involves analyzing the sequence of activities, estimating their durations, and creating a project schedule that outlines the start and finish dates for each activity.
Estimating activity durations (option D) is the process of approximating the amount of time needed to complete each activity.
The correct answer is A) Defining activities. This process involves identifying the specific tasks required to produce the project deliverables and is an essential step in project time management.
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A company you are considering investing in has a dividend of $0.40 per share. If you have a required return of 10% and the dividend is expected to grow at 3% per year, the discounted dividend valuation model would value the stock at: $4.58. $5.88. $6.33. $7.13
Using the discounted dividend valuation model and rounded to two decimal places, the stock is valued at $7.13.
Option d is correct .
To calculate the value of a stock using the discounted dividend valuation model, we can use the following formula:
Stock Value = Dividend / (Required Yield - Dividend Growth Rate)
Considering the information provided, it looks like this:
Dividend = $0.40 per share
Required rate of return = 10% or 0.10
Dividend growth rate = 3% or 0.03
Substitute these values into the formula.
Stock value = $0.40 / (0.10 – 0.03)
Stock price = $0.40 / 0.07
Stock price = $7.13
Hence, Option d is correct .
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The correct question is :
A company you are considering investing in has a dividend of $0.40 per share. If you have a required return of 10% and the dividend is expected to grow at 3% per year, the discounted dividend valuation model would value the stock at:
A . $4.58.
B . $5.88.
C. $6.33.
D. $7.13