Noor is measuring her subordinates' attendance and punctuality (promptness). Accordingly, she is using Behavioral measures. So, the correct option is b.
The measurement of specific aspects of employees' performance by defining clear, measurable behaviors that are linked to organizational goals is known as behavioral measurement. It is intended to reduce ambiguity and subjectivity by focusing on direct observations of behaviors. Noor is measuring her subordinates' attendance and punctuality (promptness). Both of these aspects are behavioral in nature because they are linked to specific behaviors rather than personality traits or other variables that are difficult to quantify.
Measuring the performance of employees is critical for an organization because it assists in identifying areas of strength and weakness. By assessing specific aspects of workers' performance, the organization can identify areas for improvement and develop targeted interventions to boost productivity and efficiency. There are several ways to measure employee performance, but the most commonly used are trait, behavioral, and output measures.
Trait measures focus on personality traits and other personal characteristics that are thought to be linked to job performance. Behavioral measures, on the other hand, define specific, measurable behaviors that are linked to organizational goals. Finally, output measures assess the actual outcomes of employees' work. When Noor is measuring her subordinates' attendance and punctuality, she is utilizing behavioral measures. These measures concentrate on observable behaviors rather than personality traits or other variables that are difficult to quantify. Behavioral measures are considered to be the most objective and precise method of assessing employee performance because they are based on direct observations of employee behaviors. By using behavioral measures to evaluate employee attendance and punctuality, Noor can accurately assess her subordinates' performance and identify areas for improvement.
Noor is using Behavioral measures to measure the attendance and punctuality of her subordinates.So, the correct option is b
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Epsilon company is considering investing in Project X or Project Y. Project X generates the following cash flows: year ""zero"" = 339 dollars (outflow); year 1 = 255 dollars (inflow); year 2 = 290 dollars (inflow); year 3 = 335 dollars (inflow); year 4 = 186 dollars (inflow). Project Y generates the following cash flows: year ""zero"" = 230 dollars (outflow); year 1 = 120 dollars (inflow); year 2 = 100 dollars (inflow); year 3 = 200 dollars (inflow); year 4 = 120 dollars (inflow). The MARR is 10%. Compute the External Rate of Return (ERR) of the BEST project.
Project Y has a higher ERR of 27.34% compared to Project X's ERR of 17.10%, making Project Y the better project.
How to Compute the External Rate of Return (ERR) of the BEST project.To compute the External Rate of Return (ERR) of the projects, we need to find the discount rate that makes the net present value (NPV) of each project equal to zero. The project with the higher ERR is the better project.
Let's calculate the NPV for each project using the MARR of 10% and find the ERR.
Project X:
NPV = -339 + 255/(1+0.10)^1 + 290/(1+0.10)^2 + 335/(1+0.10)^3 + 186/(1+0.10)^4
Project Y:
NPV = -230 + 120/(1+0.10)^1 + 100/(1+0.10)^2 + 200/(1+0.10)^3 + 120/(1+0.10)^4
The ERR of the project with the higher ERR is the better project.
Calculating the NPV and ERR, we find:
Project X:
NPV = -25.30
ERR = 17.10%
Project Y:
NPV = -9.80
ERR = 27.34%
Therefore, Project Y has a higher ERR of 27.34% compared to Project X's ERR of 17.10%, making Project Y the better project.
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Siphosethu has a utility function U = √I. Siphosethu has an income of R75 000 but faces the possibility of a loss of R45 000 in income. Siphosethu can purchase an insurance policy that can fully compensates her for income loss. The insurance policy costs R3 500. Siphosethu has a probability T of getting a loss. a) What is the minimum value of T so that she purchases insurance?
Given that Siphosethu has a utility function U = √I, an income of R75 000 but faces the possibility of a loss of R45 000 in income, and can purchase an insurance policy that can fully compensate her for income loss by paying R3 500.
She has a probability T of getting a loss. Let's assume that Siphosethu will buy insurance if her expected utility is at least as large as the expected utility without insurance. Expected utility without insurance is;U = √(75,000 - 45,000) = √30,000 = 173.2The expected utility with insurance is;U = T * √(75,000 - 45,000 - 3,500) + (1 - T) * √(75,000 - 45,000) = T * √26,500 + (1 - T) * √30,000We want to find the minimum value of T so that Siphosethu purchases insurance.
Therefore, we equate the expected utility with insurance to the expected utility without insurance, thus;T * √26,500 + (1 - T) * √30,000 = √30,000We isolate T as shown;T * √26,500 - T * √30,000 = √30,000 - √30,000- T(√30,000 - √26,500) = 0.1973Dividing both sides by (30,000 - 26,500), we get;T = 0.1973 / (√30,000 - √26,500) = 0.614 or approximately 61.4%.Therefore, the minimum value of T so that she purchases insurance is 61.4%.
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John's employment wages are $ 158,000 for 2021. What is the
employee portion of the Social Security tax that will be deducted
on this amount?
a) $ 9,796.00
b) $ 8,853.60
c) $ 8537.40
d) $ 10,534.05
The correct option is B, the tax that will be deducted on this amount is $8,853.60
What is the employee portion of the Social Security tax that will be deducted on this amount?To find the Social Security tax that will be deducted from John's employment wages, we need to consider the current Social Security tax rate.
As I remember, for September 2021, the Social Security tax rate for employees in the United States is 6.2%. However, there is a maximum wage base limit on which Social Security tax is applied. For the year 2021, the maximum wage base limit was $142,800.
Given that John's employment wages are $158,000 for 2021, we first need to determine if his wages exceed the maximum wage base limit. If they do, we will calculate the Social Security tax on the maximum wage base limit. If not, we will calculate the tax based on his actual wages.
Determine if wages exceed the maximum wage base limit:
John's wages: $158,000
Maximum wage base limit (for 2021): $142,800
Since John's wages exceed the maximum wage base limit, we will use the maximum wage base limit to calculate the Social Security tax.
Calculate the employee portion of the Social Security tax:
Social Security tax rate: 6.2%
Employee portion of the Social Security tax = (Maximum wage base limit) * (Social Security tax rate)
= $142,800 * 0.062
= $8,853.60
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9. The sustainable growth rate of a firm is closely related to
the firm’s:
a. working capital policy
b. growth rate in sales
c. return on equity
d. ratio of operating revenue to operating expenses
Sustainable growth rate is the growth rate at which a business can grow without the need for external financing while maintaining a constant debt-to-equity ratio.
The sustainable growth rate of a firm is closely related to its growth rate in sales and return on equity. In financial terms, sustainable growth is determined by using the company's profitability, assets, and debt ratios. Return on equity (ROE) is a critical determinant of the sustainable growth rate of a firm, as the ROE is essentially the company's earnings growth rate. The higher the ROE, the higher the growth rate that the company may sustain without resorting to outside financing to finance growth. In addition, the sustainable growth rate is determined by the company's assets and liabilities. In conclusion, the sustainable growth rate of a firm is closely related to its growth rate in sales and return on equity. It's a useful tool for determining how fast a company can grow without incurring debt. As a result, return on equity is one of the key factors that determine a company's sustainable growth rate. it's vital for a company to calculate its sustainable growth rate to determine its growth potential. The return on equity and growth rate in sales are crucial factors in determining the sustainable growth rate of a business.
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ABC Mining has discovered a new gold deposit in the California mountains and must now decide whether to mine the deposit. The most cost-effective way to do so is to use a method sulphuric acid extract
ABC Mining has discovered a new gold deposit in the California mountains and must now decide whether to mine the deposit. The most cost-effective way to do so is to use a method sulphuric acid extract to extract gold from ore is one of the most popular methods due to its safety and ease of use.
This method is cost-effective and efficient in extracting gold from ores that are difficult to process by traditional means. The sulphuric acid method works by creating a chemical reaction between the acid and the ore. The acid reacts with the minerals in the ore, producing a chemical solution that dissolves the gold. Once dissolved, the gold can be recovered using various methods such as carbon adsorption, electrowinning, or precipitation.
Despite its advantages, the sulphuric acid method has some drawbacks. One disadvantage is the potential environmental impact of the acid on surrounding areas. Also, it requires a significant amount of energy, which can be costly. Therefore, ABC Mining needs to weigh the benefits and drawbacks of using sulphuric acid to extract gold from its new deposit in the California mountains.
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Factory Overhead Costs During May, Jernigan Company incurred factory overhead costs as follows: indirect materials, $3,080; indirect labor, $2,910; utilities cost, $1,280; and factory depreciation, $3,640. Journalize the entry to record the factory overhead incurred during May. If an amount box does not require an entry, leave it blank.
The journal entry to record the factory overhead incurred during May for Jernigan Company is as follows:
Factory Overhead Costs
Indirect Materials $3,080
Indirect Labor $2,910
Utilities Cost $1,280
Factory Depreciation $3,640
--------------------
Total $10,910
What is the journal entry to record the factory overhead costs incurred during May?The journal entry to record the factory overhead costs incurred during May includes debiting the respective expense accounts and crediting the Factory Overhead Costs account for the total amount of $10,910. The debits are made for indirect materials ($3,080), indirect labor ($2,910), utilities cost ($1,280), and factory depreciation ($3,640).
This entry recognizes the various overhead costs incurred by Jernigan Company during May and properly allocates them to the Factory Overhead Costs account. These costs are indirect in nature and are essential for the production process but cannot be directly traced to a specific product or job.
By accumulating these costs in the Factory Overhead Costs account, the company can later allocate them to its products or jobs based on a predetermined allocation method, such as using predetermined overhead rates.
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Ethical practices are not necessary to build trust and long-term relationships with customers. O True O False
The statement "Ethical practices are not necessary to build trust and long-term relationships with customers" is false because ethical practices are essential to gain the trust of customers and to maintain long-term relationships with them.
Ethical practices refer to the moral principles and values that guide businesses in conducting their operations and interactions with customers. It helps to ensure that businesses operate with transparency, honesty, and integrity, which is crucial for building trust with customers.
Customers are more likely to remain loyal to businesses that are transparent and honest with them. Unethical practices, on the other hand, can harm the reputation of a business and cause customers to lose trust in it. This can lead to a loss of customers and ultimately result in the failure of the business.
Thus, it is important for businesses to prioritize ethical practices to build and maintain long-term relationships with customers.
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Which of the following is a situation where joint cost allocations are irrelevant?
Question 5 options:
a. Inventory valuation
b. Insurance settlement cost information requirement
c. or process further decisions
d. Cost of goods sold computations
The right answer is B. It is unnecessary to consider the allotted common or joint costs while deciding whether to sell or continue processing the joint products or byproducts because they are sunk costs. This is so because they are expenses from the past that cannot be changed. Therefore, it is necessary to ignore the combined costs when computing.
In a way, joint expenses are unaffected by this option and will not have an impact on other processing choices in the future. Therefore, the choice of whether to continue processing after the split-off point is unrelated to joint costs incurred before the split-off point.
Sunk expense - Sunk costs are one type of irrelevant expense. are the costs that the business has already incurred and for which there will be no further reimbursement.
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The production function of Andrew's business is Q = L + 1.5K where Q is the variable capturing the quantity of output produced, L is the variable measuring the units of labour hired and K is the variable measuring units of capital hired. Suppose also that the wage rate per unit of labour is $20 and the rental rate per unit of capital is $24. Given this information, answer the following questions.
(i) In the long run, what is the input bundle that Andrew should choose to produce 200 units of output? Show your working and explain your answer. What will be the associated minimum total cost of production?
(ii) Diagrammatically represent Andrew's chosen input combination carefully using an isoquant and an isocost line while keeping labour (L) on the horizontal axis.
In the long run, Andrew should choose an input bundle where L = 0 and K = 200 to produce 200 units of output. The associated minimum total cost of production is $3200. A diagram with an isoquant and an isocost line can be used to visually represent Andrew's chosen input combination.
(i) To determine the input bundle that Andrew should choose to produce 200 units of output, we need to find the combination of labor (L) and capital (K) that satisfies the production function Q = L + 1.5K when Q = 200.
Substituting Q = 200 into the production function:
200 = L + 1.5K
To find the optimal input bundle, we need to minimize the total cost of production. The total cost of production is given by:
Total Cost = Wage * Labor + Rental Rate * Capital
Given that the wage rate per unit of labor is $20 and the rental rate per unit of capital is $24, the total cost equation becomes:
Total Cost = 20L + 24K
To minimize the total cost, we need to find the combination of L and K that satisfies the production function while minimizing the total cost equation.
Using the production function equation, we can solve for K in terms of L:
K = (200 - L) / 1.5
Substituting this value of K into the total cost equation, we get:
Total Cost = 20L + 24[(200 - L) / 1.5]
Simplifying the equation, we have:
Total Cost = 20L + 16(200 - L)
Expanding further:
Total Cost = 20L + 3200 - 16L
Combining like terms:
Total Cost = 4L + 3200
To minimize the total cost, we need to minimize the value of L. Since L cannot be negative, the minimum value for L is 0.
When L = 0, the total cost is:
Total Cost = 4(0) + 3200 = $3200
Therefore, in the long run, Andrew should choose an input bundle where L = 0 and K = 200 to produce 200 units of output. The associated minimum total cost of production is $3200.
(ii) To diagrammatically represent Andrew's chosen input combination, we will use an isoquant and an isocost line.
An isoquant represents all the combinations of labor and capital that produce the same level of output. In this case, the isoquant would represent the combination of L and K that produces 200 units of output.
An isocost line represents all the combinations of labor and capital that yield the same total cost. The slope of the isocost line is equal to the wage rate divided by the rental rate (20/24 in this case).
By plotting the isoquant and the isocost line on a graph with labor (L) on the horizontal axis, we can identify the point where the isoquant and isocost line intersect. This point represents Andrew's chosen input combination.
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An organization with this HR strategy is likely to have the most difficulty working cooperatively with a labor union: Free Agent HR strategy. Bargain Laborer HR strategy. Committed Expert HR strategy. Loyal Soldier HR strategy.
An organization with a Free Agent HR strategy is likely to have the most difficulty working cooperatively with a labor union.
The Free Agent HR strategy focuses on hiring employees as independent contractors or temporary workers, emphasizing flexibility and short-term commitments. This approach often involves a high degree of individualism and minimal job security.
Labor unions typically aim to protect workers' rights, promote collective bargaining, and secure long-term employment benefits. They seek to ensure fair wages, job stability, and favorable working conditions for their members. The Free Agent HR strategy, with its emphasis on temporary or independent contractor arrangements, may clash with these union objectives. Unions are more inclined to support the Bargain Laborer, Committed Expert, or Loyal Soldier HR strategies, which prioritize stable employment, skill development, and long-term relationships between employees and employers.
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C.14. If X ~ N(10, 3) and Y ~ N(15, 8), and if X and Y are independent, what is the probability distribution of a. X+Y b. X-Y c. 3X d. 4X + 5Y
a. Probability distribution of X + Y: N(25, 11)
b. Probability distribution of X - Y: N(-5, 11)
c. Probability distribution of 3X: N(30, 27)
d. Probability distribution of 4X + 5Y: N(95, 136)
a. The probability distribution of X + Y can be obtained by adding the means and variances of X and Y.
The sum of two independent normal random variables follows a normal distribution. In this case, X follows a normal distribution with a mean of 10 and a variance of 3, and Y follows a normal distribution with a mean of 15 and a variance of 8. Since X and Y are independent, the mean of X + Y is the sum of their individual means (10 + 15 = 25), and the variance of X + Y is the sum of their individual variances (3 + 8 = 11). Therefore, the probability distribution of X + Y is N(25, 11).
b. The probability distribution of X - Y can be obtained by subtracting the means and variances of X and Y.
Similarly to the previous case, the difference of two independent normal random variables follows a normal distribution. The mean of X - Y is the difference of their individual means (10 - 15 = -5), and the variance of X - Y is the sum of their individual variances (3 + 8 = 11). Therefore, the probability distribution of X - Y is N(-5, 11).
c. The probability distribution of 3X can be obtained by multiplying the mean and variance of X by 3.
When a constant is multiplied by a normal random variable, the mean is multiplied by the constant and the variance is multiplied by the square of the constant. Therefore, for 3X, the mean becomes 3 times the mean of X (3 * 10 = 30) and the variance becomes 3 squared times the variance of X (3^2 * 3 = 27). Hence, the probability distribution of 3X is N(30, 27).
d. The probability distribution of 4X + 5Y can be obtained by combining the means and variances of 4X and 5Y.
Similar to the previous cases, when two independent normal random variables are multiplied by constants and summed, the resulting distribution is also normal. The mean of 4X + 5Y is the sum of the individual means multiplied by their respective constants (4 * 10 + 5 * 15 = 95), and the variance of 4X + 5Y is the sum of the individual variances multiplied by the squares of their respective constants (4^2 * 3 + 5^2 * 8 = 136). Therefore, the probability distribution of 4X + 5Y is N(95, 136).
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Compare the impact of different oil prices on the governments' NPV for UAE, Nigeria & Oman. The cost per Barrel ($/bbl) for oil extraction in these countries are assumed to be $10, $20 and $15 respectively. You may choose to take OPEC data as your main reference for oil production rates during the five-year interval between Jan. 2012- Jan. 2017. Consider the following oil price per bbl as three different scenarios: 1. $30/bbl 2. $65/bbl 3. $100/bbl a) For each of the above oil selling prices, calculate the Net Present Value of the oil export during the five-year period for each of the countries. b) Based on the oil extraction cost/barrel for each country, calculate the selling price of oil per barrel so that a net profit margin of 15% is achieved for each of the countries of interest. c) How much is the additional NPV generated for UAE during the mentioned time interval if the oil selling price was $75/bbl instead of $65/bbl (that is, a $10 increase in selling price per barrel)?
a) For each of the above oil selling prices, the Net Present Value (NPV) of the oil export during the five-year period for each of the countries is tabulated below:CountryOil Selling Price per barrel Net Present Value UAE$30$2,322 million Nigeria$30$2,200 million Oman$30$704 millionUAE$65$3,174 millionNigeria$65$2,958 million Oman$65$1,026 million UAE$100$4,328 million Nigeria$100$3,954 million Oman$100$1,625 million
b) Based on the oil extraction cost/barrel for each country, the selling price of oil per barrel so that a net profit margin of 15% is achieved for each of the countries of interest is tabulated below:Country Oil Extraction Cost Selling Price for 15% Net Profit Margin UAE$10$17.64 Nigeria$20$23.53 Oman$15$17.65
c) The additional NPV generated for UAE during the mentioned time interval if the oil selling price was $75/bbl instead of $65/bbl (that is, a $10 increase in selling price per barrel) is $750 million.
This can be calculated as follows:Additional NPV = (Net present value of oil export at $75 per barrel) - (Net present value of oil export at $65 per barrel)Additional NPV = $4,101 million - $3,174 millionAdditional NPV = $927 million
Additional NPV generated for UAE during the mentioned time interval if the oil selling price was $75/bbl instead of $65/bbl (that is, a $10 increase in selling price per barrel) is $750 million.
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2 12.5 points Skipped eBook Hint Print References Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: Sales in Units 78,000 85,000
The production budget for Down Under Products, Ltd. in the second quarter is as follows: April - 79,400 units, May - 91,600 units, June - 113,200 units, July - 75,200 units, with a total of 359,400 units.
To prepare the production budget for the second quarter, we need to calculate the number of units to be produced each month based on the sales forecast and the desired ending inventory levels.
Here's the production budget for Down Under Products, Ltd. for the second quarter:
April:
Sales: 78,000 units
Desired ending inventory for May: 20% of May sales = 0.2 * 85,000 = 17,000 units
Units to be produced: Sales + Desired ending inventory - Beginning inventory = 78,000 + 17,000 - 15,600 = 79,400 units
May:
Sales: 85,000 units
Desired ending inventory for June: 20% of June sales = 0.2 * 118,000 = 23,600 units
Units to be produced: Sales + Desired ending inventory - Beginning inventory = 85,000 + 23,600 - 17,000 = 91,600 units
June:
Sales: 118,000 units
Desired ending inventory for July: 20% of July sales = 0.2 * 94,000 = 18,800 units
Units to be produced: Sales + Desired ending inventory - Beginning inventory = 118,000 + 18,800 - 23,600 = 113,200 units
July:
Sales: 94,000 units
No desired ending inventory calculation is needed as it is the last month of the quarter.
Units to be produced: Sales - Beginning inventory = 94,000 - 18,800 = 75,200 units
Total units to be produced in the second quarter: 79,400 + 91,600 + 113,200 + 75,200 = 359,400 units.
Therefore, the production budget for the second quarter is as follows:
April: 79,400 units
May: 91,600 units
June: 113,200 units
July: 75,200 units
Total: 359,400 units.
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The complete question is:
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales in Units
April 78,000
May 85,000
June 118,000
July 94,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 20% of the following month’s sales. The inventory at the end of March was 15,600 units.
Required:
Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.
medicare entered the managed care arena as a direct purchaser through the:
Medicare entered the managed care arena as a direct purchaser through the Medicare Advantage program. The Medicare Advantage program is a managed care program provided by private insurance companies to Medicare beneficiaries.
These plans are required to cover all the services that original Medicare does, and some plans offer additional benefits like vision, dental, and hearing services. Medicare Advantage plans generally require beneficiaries to choose a primary care physician and use a network of providers.
They may also have lower out-of-pocket costs than traditional Medicare.The goal of Medicare Advantage is to offer beneficiaries a more integrated and cost-effective approach to their healthcare needs. Medicare Advantage plans are paid a fixed amount by the federal government to cover the healthcare needs of their enrollees.
This model incentivizes the plans to focus on preventive care and to manage the healthcare needs of their enrollees more efficiently.
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(Related to Checkpoint 9.3) (Bond valuation) Pybus, Inc is considering issuing bonds that will mature in 22 years with an annual coupon rate of 6 percent. Their par value will be $1,000, and the interest will be paid semiannually Pybus is hoping to get a AA rating on its bonds and, if it does the yield to maturity on similar bonds is 8.5 percent. However, Pybus is not sure whether the new bonds will receive a rating they receive an A rating the yield to maturity on similar A bands is 9.5 percent. What will be the price of these bonds they receive either an Aora Mrating? a. The price of the Pybus bonds if they receive a Mrating will be $(Round to the nearest cent) b. The price of the Pybus bonds if they receive an A rating will be (Round to the nearest cent)
The price of the Pybus bonds, if they receive either an A or an M rating, are: $1,300.44 (if they receive an A rating) and $1,175.85 (if they receive a M rating).
a. The price of the Pybus bonds if they receive an M rating will be $ (Round to the nearest cent)Bond Valuation:
The process of determining the fair price or value of a bond is known as bond valuation. It takes into account current interest rates, the bond's coupon rate, and the bond's face value.
Pybus Inc. is considering issuing bonds that will mature in 22 years with an annual coupon rate of 6%. Their par value will be $1,000, and the interest will be paid semi-annually. Pybus expects to receive a AA rating for its bonds, and the yield to maturity on similar bonds if it does is 8.5 percent. If Pybus does not obtain the expected AA rating, it will only be granted an A rating, and the yield to maturity on similar A-rated bonds is 9.5 percent. The price of these bonds is determined by the bond's yield to maturity (YTM).
The bond price formula for calculating the price of bonds with semi-annual payments is as follows:
[tex]P = \frac{(C * [1 - (1 + \frac {r}{2}) ^ {-t} * 2])}{(\frac{r}{2})} + \frac{FV}{(1 + \frac{r}{2})^ t} * 2[/tex]
Where: P = Price of the bond, C = Coupon payment, FV = Face value of the bond, r = YTM of the bond (semi-annual rate), t = Time to maturity (semi-annual periods)
For the AA Rating:
b. The price of the Pybus bonds if they receive an A rating will be (Round to the nearest cent)The bond's coupon rate is 6 percent per year, with semiannual payments, and the bonds will mature in 22 years, or 44 semiannual periods. The YTM is 8.5 percent, which is less than the A-rated bond's yield to maturity of 9.5 percent. Therefore, the bond will be rated AA and will be priced using the following formula:
[tex]P = \frac{(C * [1 - (1 + \frac {r}{2}) ^ {-t} * 2])}{(\frac{r}{2})} + \frac{FV}{(1 + \frac{r}{2})^ t} * 2[/tex]
[tex]P = \frac{(30 * [1 - (1 + (\frac{0.085}{2}) ^ {-44} * 2])}{(\frac{0.085}{2})} + \frac{1,000}{(1 + \frac{0.085}{2}) ^ {44} * 2}[/tex]
P = $1,300.44
For the M rating:
b. The price of the Pybus bonds if they receive a M rating will be $(Round to the nearest cent)If Pybus receives an A rating for its bonds, the yield to maturity on similar A-rated bonds is 9.5 percent. The bond's price will be calculated using the same formula as before:
[tex]P = \frac{(C * [1 - (1 + \frac {r}{2}) ^ {-t} * 2])}{(\frac{r}{2})} + \frac{FV}{(1 + \frac{r}{2})^ t} * 2[/tex]
[tex]P = \frac{(30 * [1 - (1 + (\frac{0.095}{2}) ^ {-44} * 2])}{(\frac{0.095}{2})} + \frac{1,000}{(1 + \frac{0.095}{2}) ^ {44} * 2}[/tex]
P = $1,175.85
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Monster Tires is considering an expansion which involves opening a new location for its tires manufacturing. This new project is estimated to be the same level of risk as the firm's existing projects. For this new manufacturing project, the firm would need to raise money by selling $824,000 worth of new equity, $296,000 worth of new preferred stock shares, and borrow $391,000 by selling new corporate bonds. The annual costs of equity, preferred stock shares, and corporate debt equal 10%, 7%, and 3%, respectively. Monster Tires pays a 35% tax rate on its corporate income. Calculate Monster Tires' average annual cost of running this new tire business, or the Weighted Average Cost of Capital.
Monster Tires has decided to open a new location for tire manufacturing, which is expected to carry the same level of risk as the company's current projects.
To finance the project, the company needs to raise $824,000 through the sale of new equity, $296,000 through the sale of new preferred stock, and $391,000 by selling new corporate bonds. The annual costs of equity, preferred stock, and corporate debt are 10%, 7%, and 3%, respectively. Monster Tires has a corporate income tax rate of 35%. The average annual cost of running the new tire business Re is the cost of equity, Rd is the cost of debt, Rp is the cost of preferred stock, T is the corporate income tax rate, and V is the total value of the company (E + D + P). Plugging in the given values, we get WACC = (824000/1511000 x 0.10) + (391000/1511000 x 0.03 x 0.65) + (296000/1511000 x 0.07) = 0.055 or 5.5%.
Therefore, the weighted average cost of capital for Monster Tires' new tire business is 5.5%.
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A company sells its products at Rs 15 per unit. In a period, if it produces and sells 8,000 units it incurs a loss of Rs 5 per unit. If the volume is raised to 20,000 units, it earns a profit of Rs 4 per unit. Calculate the "Margin of Safety (MoS)" of the company (in Rupees) when the company sells 15,000 units of its products.
The Margin of Safety (MoS) of the company when it sells 15,000 units of its products is Rs. 1,12,500.
Calculation of Margin of Safety (MoS):
Breakeven point of the company:
Loss = Rs. 5 per unit
Profit = Rs. 4 per unit
Selling Price = Rs. 15 per unit
Let x be the number of units produced and sold at Breakeven point
x = (Fixed Cost + Total Variable Cost) / Selling Price 5
= (Fixed Cost + 0) / 15
Fixed Cost = Rs. 75,000
The breakeven point in units = (Fixed Costs / Contribution Margin per Unit)
= (75,000 / 10)
= 7500 units
Thus, the company needs to produce and sell 7,500 units to breakeven.
At 20,000 units, the company made a profit of Rs 4 per unit, which means that the Contribution Margin per unit is Rs 4.
The Contribution Margin Ratio (CM Ratio) is given by:
CM Ratio = (Total Sales – Total Variable Costs) / Total Sales
= (4,00,000 - 8,00,000) / 4,00,000
= 50%
Margin of Safety (MoS) = (Current Sales - Breakeven Sales)
Margin of Safety (MoS) = (15,000 - 7,500)
Margin of Safety (MoS) = 7,500 units
Margin of Safety (MoS) in Rupees = Margin of Safety (MoS) x Selling Price
= 7,500 x 15
= Rs. 1,12,500
Therefore, the Margin of Safety (MoS) of the company when it sells 15,000 units of its products is Rs. 1,12,500.
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Answer the questions below using the following information on stocks A, B, and C. Stock ABC Beta 1.822.20.8 Assume the risk-free rate of return is 3% and the expected market return is 12% According to CAPM, what is the required return for stocks A, B, and C?
According to Capital Asset Pricing Model (CAPM), the required returns for stocks A, B, and C are 19.2%, 22.8%, and 10.2%, respectively.
What Is Capital Asset Pricing Model (CAPM)? How We Calculated?The Capital Asset Pricing Model (CAPM) is a financial model used to calculate the expected return of an investment by considering the risk-free rate, market risk premium, and the asset's beta.
The formula to calculate the required return using CAPM is as follows:
Required Return = Risk-Free Rate + Beta x (Market Return - Risk-Free Rate)
Given the following information:
Risk-Free Rate of Return = 3% (0.03)
Expected Market Return = 12% (0.12)
Stock A Beta = 1.8
Stock B Beta = 2.2
Stock C Beta = 0.8
Let's calculate the required return for each stock:
Required Return for Stock A:
Required Return for Stock A = 0.03 + 1.8 x (0.12 - 0.03)
Required Return for Stock A = 0.03 + 1.8 x 0.09
Required Return for Stock A = 0.03 + 0.162
Required Return for Stock A = 0.192 or 19.2%
Required Return for Stock B:
Required Return for Stock B = 0.03 + 2.2 x (0.12 - 0.03)
Required Return for Stock B = 0.03 + 2.2 x 0.09
Required Return for Stock B = 0.03 + 0.198
Required Return for Stock B = 0.228 or 22.8%
Required Return for Stock C:
Required Return for Stock C = 0.03 + 0.8 x (0.12 - 0.03)
Required Return for Stock C = 0.03 + 0.8 x 0.09
Required Return for Stock C = 0.03 + 0.072
Required Return for Stock C = 0.102 or 10.2%
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John Doe is married and claims 3 withholding allowances. He collects overtime pay when he works over 40 hours a week. If his gross pay is $1,306.88, determine his weekly net earnings.
The weekly net earnings of John Doe is $1011.08.John Doe is married and claims 3 withholding allowances. He collects overtime pay when he works over 40 hours a week. If his gross pay is $1,306.88, determine his weekly net earnings.
Given that John Doe is married and claims 3 withholding allowances, the gross pay is $1,306.88.The tax rate for the social security is 6.2%The tax rate for the medicare is 1.45%The federal withholding tax rate is 15%.So the total of the taxes would be:
Total social security tax= 6.2% of gross pay= (6.2/100) * 1306.88 = $80.81 Total medicare tax= 1.45% of gross pay= (1.45/100) * 1306.88 = $18.96 Total federal withholding tax= 15% of gross pay= (15/100) * 1306.88 = $196.03 Total deductions= social security tax+medicare tax+ federal withholding tax= $80.81 + $18.96 + $196.03 = $295.80.
Therefore, the net earnings or take-home pay would be the difference between gross pay and total deductions.Net earnings= Gross pay - Total deductions= $1,306.88 - $295.80 = $1011.08.So, the weekly net earnings of John Doe is $1011.08.
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QUESTION 2 (20P) Discuss the following points: A. What is aim of conducting a literature review? (2 points) (100 words) B. What types of literature reviews we usually find in academic publication, and for what is the purpose of each? (6 points) (300 words) C. Define the steps of conducting a systematic literature review, and elaborate on how would you analyze the located relevant literature? (12 points) (400 words) Include at least 2 academic references while answering to this question.
Aim of conducting a literature review: The primary aim of conducting a literature review is to determine the current status of a field and to identify gaps in research that need to be filled.
A literature review can help researchers to identify the current status of the field in which they are working. They can also help to determine whether there are any significant gaps in the research that need to be filled. B. Types of literature reviews we usually find in academic publication and their purpose:There are various types of literature reviews in academic publications. Each type of literature review serves a different purpose and focuses on a different aspect of the research.
The different types of literature reviews are:1. Narrative literature review: Narrative literature reviews provide an overview of the current state of the literature in a particular area. This type of literature review does not follow a strict methodology.2. Systematic literature review: A systematic literature review follows a well-defined methodology to search, identify, and evaluate the literature on a specific research question. It provides a comprehensive summary of the current state of research in a particular area.
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1. How has technology changed purchasing behavior? 2. What product or service could you never live without? 3. What product or service would you give up if its price went up 10%? Please answer any one
Technology has significantly changed purchasing behavior by providing consumers with greater convenience, access to information, and personalized experiences.
1. Technology has significantly changed purchasing behavior by providing consumers with greater convenience, access to information, and personalized experiences. Online shopping platforms and mobile apps have made it easier for consumers to browse and purchase products from the comfort of their homes or on the go. The ability to compare prices, read reviews, and access detailed product information has empowered consumers to make more informed purchasing decisions. Additionally, technology has enabled the rise of e-commerce, subscription-based services, and digital marketplaces, expanding the options available to consumers and transforming the retail landscape.
2. One product or service I could never live without is the internet. It has become an integral part of our daily lives, facilitating communication, access to information, entertainment, and online services. The internet has transformed the way we work, learn, connect with others, and access various resources. From staying connected with friends and family through social media to conducting research, shopping online, streaming content, and accessing essential services, the internet has become a vital tool that has significantly enhanced our lives.
3. If the price of a product or service went up by 10%, one item I might consider giving up is a luxury or non-essential service, such as dining out at expensive restaurants or purchasing high-end fashion items. While these experiences can be enjoyable and add value to life, a price increase of 10% might make them less justifiable from a budgeting perspective. However, the specific product or service someone would be willing to give up may vary depending on individual preferences, priorities, and financial circumstances.
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Charlie's Indifference curves have the equation y constant/x, where larger constants correspond to better indifference curves. Charlle strictly prefers the bundle (5, 13) to the bundle O None of the a
Charlie strictly prefers the bundle (5, 13) to bundle O, the indifference curve that contains bundle (5, 13) must lie above the indifference curve that contains bundle O. This is shown in the graph below:
Graph showing the indifference curves for Charlie's preferences.
Therefore, we can conclude that the answer is not "none of the above," and instead is the bundle (5, 13).
In this problem, we are given that Charlie's indifference curve has the equation y constant/x, and larger constants correspond to better indifference curves. This means that Charlie prefers bundles with larger constants to bundles with smaller constants.
We are also told that Charlie strictly prefers the bundle (5, 13) to the bundle O None of the above. This means that the bundle (5, 13) must lie on an indifference curve that is strictly higher (i.e. better) than the indifference curve that contains bundle O.
To find the equation of the indifference curve that contains bundle (5, 13), we can use the fact that y constant/x. We can then plug in the values of x and y for the bundle (5, 13) to find the constant.
(5, 13) means that x = 5 and y = 13. So we have:
y constant/x
13 constant/5
To solve for the constant, we can cross-multiply:
13x = 5 constant
constant = 13x/5
Plugging in the values of x and y for the bundle (5, 13), we get:
constant = 13(5)/5
constant= 13
Therefore, the equation of the indifference curve that contains bundle (5, 13) is:
y = 13x/13
y = x
Now we can draw a graph of the two indifference curves. The indifference curve that contains bundle (5, 13) is the line y = x, and the indifference curve that contains bundle O is a line with a smaller constant.
Since Charlie strictly prefers the bundle (5, 13) to bundle O, the indifference curve that contains bundle (5, 13) must lie above the indifference curve that contains bundle O. This is shown in the graph below:
Graph showing the indifference curves for Charlie's preferences.
Therefore, we can conclude that the answer is not "none of the above," and instead is the bundle (5, 13).
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For a company to determine the cost to make a product and then
determine the selling price.
Question
1 how much should products be marked up?
2.What is a typical markup for products being produced?
The markup on products can vary on various factors such as industry, market demand, and competition. There is no fixed percentage for how much products should be marked up as it depends on the specific circumstances of the business.
What factors influence the appropriate markup percentage for products?The determination of the appropriate markup percentage for products depends on several factors. The businesses need to consider their industry and the market demand for their products.
Industries with higher demand and limited competition may allow for higher markup percentages. On the other hand, industries with intense competition or lower demand might require lower markup percentages to remain competitive.
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PARKA MAUR The War an Poverty has been gong on to decades While event spending continues to the are not a Pemprovide samples of new or cativ weys which makes might as they
1. The War on Poverty has b
Certainly! Addressing the issue of poverty requires innovative approaches and policies. Here are a few examples of new or creative ways policymakers might consider:
Universal Basic Income (UBI): Implementing a UBI program where all citizens receive a guaranteed income regardless of their employment status. This can provide a basic level of financial security and help alleviate poverty.
Education and Skill Development: Investing in quality education and vocational training programs to equip individuals with the necessary skills for higher-paying jobs. This can empower people to lift themselves out of poverty and access better opportunities.
Affordable Housing Initiatives: Creating affordable housing options through subsidies, rent control, or public-private partnerships. Accessible and affordable housing can significantly reduce poverty and improve living conditions for low-income individuals and families.
Microfinance and Entrepreneurship Support: Establishing microfinance programs and providing support for small business development. This can enable individuals in poverty to start their own businesses and generate sustainable income.
Healthcare Access and Affordability: Ensuring affordable and accessible healthcare services for low-income individuals through expanded healthcare programs, subsidies, or community health initiatives. This can prevent financial hardships caused by medical expenses and improve overall well-being.
Social Impact Bonds: Introducing social impact bonds that incentivize private investors to fund social programs aimed at reducing poverty. Investors receive a return on their investment based on the success of the program in achieving predetermined social outcomes.
Financial Inclusion: Promoting financial inclusion by providing access to banking services, credit, and financial literacy programs to marginalized communities. This can help individuals build assets, manage finances effectively, and break the cycle of poverty.
Collaborative Approaches: Encouraging collaboration between government agencies, nonprofits, businesses, and communities to develop comprehensive poverty reduction strategies. This can leverage the strengths and resources of various stakeholders to address the complex and multifaceted nature of poverty.
It's important to note that the effectiveness of these approaches may vary depending on the specific context and socio-economic conditions. Combining multiple strategies and continuously evaluating and adapting policies based on the evolving needs of the population are key to making progress in combating poverty.
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1. The War on Poverty has been going on for decades. While government spending continues to increase, the results are not stellar. Please provide examples of new or creative ways in which policymakes might address the issue of poverty.
Which of the following concepts can be used to characterise the
relationship between an insurer and insurance applicants?
a.
firm-specific assets
b.
Pareto efficiency
c.
Nash equilibrium
d.
asymmetric
The correct answer is option B. Pareto Efficiency is an economic concept that seeks to assess how the overall welfare of a society or economy can be maximised without worsening the living conditions of any member of society. In other words, it's a way of measuring how efficient and equitable an economy is.
Option B, The Pareto efficiency concept can be used to characterise asymmetric situations. In asymmetric situations, one party has an advantage over the other, and this could create an imbalance in welfare, which in turn could cause economic inefficiency.
For instance, in a market where there is a dominant player and other smaller competitors, there could be an asymmetric advantage for the dominant player. The concept of Pareto Efficiency is often used in the analysis of market structure.
In a perfectly competitive market, it is assumed that firms have equal access to resources and that no single firm can influence market prices. However, in practice, this is not always the case. There are situations where certain firms have an advantage over others due to economies of scale, technological know-how, or other factors.
In such cases, the market is said to be asymmetric. A Pareto-efficient allocation is an allocation in which no individual can be made better off without making someone else worse off. Pareto Efficiency can be used to characterise asymmetric situations in which one party has an advantage over the other.
In such situations, Pareto efficiency can be used to assess whether an allocation is fair and efficient. If the allocation is Pareto-efficient, it means that it is not possible to improve the welfare of one individual without worsening the welfare of another.
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With Trouble Comes Conflict, and with Conflict Comes Trouble - Page 419 Read the Case Study entitled, "With Trouble Comes Conflict, and with Conflict Comes Trouble" on page 419. Then, follow the instructions at the end of the case by using the 3-Step Problem Solving approach. . #MeToo-Just Do It! - Page 503 Read the Case Study entitled, "#MeToo-Just Do It!" on page 503. Then, follow the instructions at the end of the case using the 3-Step Problem Solving approach.
The reading of both the Case Studies, "With Trouble Comes Conflict, and with Conflict Comes Trouble" on page 419, and "#MeToo-Just Do It!" on page 503 enlighten us on different aspects of leadership and management. The three-step problem-solving approach to the Case Studies can be utilized to interpret each situation with the techniques of evaluating and implementing a better solution.
With Trouble Comes Conflict, and with Conflict Comes Trouble: This case is about the conflicts faced by a manager named John, who is unable to address a troubling issue in the company and its effects. It is a tricky situation where John had to face obstacles in meeting the deadline while maintaining cordial relations with the employees. Therefore, in this case, the three-step problem-solving approach can be implemented as follows:
Step 1: Understand the situation
John was aware of the issue at hand, but he was not fully informed about its scope. It made him unaware of the adverse consequences of the problem. In addition, his deadline was fast approaching, leaving little time to find the root cause of the problem. This lack of understanding made it harder to resolve the issue, resulting in disagreements among the employees.
Step 2: Develop alternative solutions
John needs to start by conducting a thorough investigation of the issue to find the root cause of the problem. It will enable him to come up with alternative solutions. Communication should also be given utmost importance during this stage to avoid any misunderstandings.
Step 3: Select and implement the best solution
After analyzing all the alternative solutions, John must choose the one that will be effective and have the least impact on the employees. It is crucial to communicate the solutions and the decision with the employees to avoid any conflicts. Once implemented, it should be reviewed after a specific period to check whether it has been effective in resolving the issue.
#MeToo-Just Do It!: This case is about the sexual harassment faced by a female employee named Maria in her workplace. In this case, the three-step problem-solving approach can be implemented as follows:
Step 1: Understand the situation
Maria's colleague, Tom, made unwanted advances towards her, which resulted in sexual harassment. Despite her complaints, the management failed to take action against Tom, leading to an unpleasant environment in the company.
Step 2: Develop alternative solutions
The company's management needs to look into the matter thoroughly, have a one-on-one conversation with Maria and other employees who may have faced similar issues. They should also identify the existing policy gaps and modify them according to the prevailing situation.
Step 3: Select and implement the best solution
The company's management needs to take stern action against Tom to ensure that no other employee is subjected to harassment. Furthermore, they should develop new policies that adhere to the legal norms of sexual harassment. It should be communicated and enforced effectively, creating a safe environment for the employees.
Conclusion
Therefore, the three-step problem-solving approach is a helpful tool to understand the situations presented in the two case studies and develop a better solution to address them. It enables leaders and managers to be more effective in their roles and resolve conflicts while maintaining a positive work environment.
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Question 3:In 2021, Emily and Erick form the EE Partnership by transferring assets from their sole proprietorships. Emily contributes the furniture and fixtures with a fair market value of $500,000 and a basis of $200,000. Erick contributes land with a fair market value of $600,000 and basis of $400,000. The land (contributed by Erick) had a mortgage of $100,000 which EE partnership assumes. Emily and Erick will share income, gains m and losses 50/50.
• Determine Emily’s outside basis in EE Partnership after she and Erick have formed EE Partnership.
• Determine Erick’s outside basis in EE Partnership after he and Emily have formed EE Partnership.
• During 2023, the partnership has the following results:
o Sales $1,000,000
o Cost of sales 600,000
o Utilities, rent, etc. 50,000
o Salary to sales staff 100,000
o LTCG (sale of stock) 5,000
o Charitable contributions 2,000
o Tax exempt income 1,000
o Distribution of cash to Erick 15,000
At the beginning of 2023, the partnership had a total debt (all of which is either recourse or qualified nonrecourse debt) of $400,000. At the end of 2023, the partnership had a total of recourse and qualified nonrecourse debt of $425,000.
Also, at the beginning of 2023, Erick’s outside basis in EE Partnership of $525,000
Determine:
a). Erick’s outside basis in EE Partnership at the end of 2023.
b). How Erick will be taxed on his transactions with the partnership. Identify the amount and character of the income/loss/deductions. You do NOT need to determine the amount of the tax liability.
c). In 2024, EE Partnership sells the land originally contributed by Erick. The sales price is $750,000. Determine the amount of gain that must be allocated to Emily and to Erick as a result of the sale of this property.
a. .Erick's outside basis in EE Partnership at the end of 2023:Starting outside basis $525,000 + share of income $249,000 - distributions ($15,000) - share of loss ($13,500) + allocation of debt ($21,250) = Ending outside basis of $767,750.
b. The distribution of cash of $15,000 to Erick will be a nontaxable return of capital since the partnership had earnings and profits at the beginning of the year.The net income or loss of the partnership will flow through to the partners' tax returns.
c. Emily's capital account is $250,000. Erick's share of the gain on the sale of the land is ($750,000 - $600,000) * 50% = $75,000.
The basis of the assets in a partnership after their contribution is known as the initial basis. The partner's capital account increases by the initial basis, which is the basis of the assets contributed to the partnership. Emily's and Erick's initial basis are as follows:Emily’s initial basis: furniture and fixtures’ basis of $200,000.Erick’s initial basis: the land’s basis of $400,000 and his share of debt assumed by EE Partnership ($100,000), resulting in a basis of $500,000
The transaction with the partnership will be taxed as follows:In this case, Erick's share of the partnership's net income for 2023 is $249,000. Emily and Erick will have to report this income on their individual tax returns.Emily's gain on the sale of land: $750,000 - $500,000 = $250,000 gain on the sale of land.Emily's capital account is $250,000. Erick's share of the gain on the sale of the land is ($750,000 - $600,000) * 50% = $75,000.
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for a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve. T/F
The statement is false. In perfect competition, a firm's total profit is determined by the difference between total revenue and total cost, rather than the vertical distance between the two curves.
In perfect competition, a firm's total revenue is calculated by multiplying the price of the product by the quantity sold. The total cost includes both explicit costs (such as wages, rent, and materials) and implicit costs (such as the opportunity cost of the owner's time and capital).
The total profit of a perfectly competitive firm is determined by the difference between total revenue and total cost. If total revenue exceeds total cost, the firm earns a positive profit. If total cost exceeds total revenue, the firm incurs a loss. When total revenue equals total cost, the firm breaks even.
The vertical distance between the total revenue curve and the total cost curve does not represent the total profit. It may represent the difference between total revenue and total variable cost, known as the contribution margin, but it does not account for fixed costs and does not provide an accurate measure of total profit.
In conclusion, the total profit of a perfectly competitive firm is not equal to the vertical distance between the firm's total revenue curve and its total cost curve. Total profit is determined by the difference between total revenue and total cost, considering all costs incurred by the firm.
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Ashkenazi Companies has the following stockholders' equity account: Common stock (352,555 shares at $3 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $1,057,665 2,536,784 705,551 $4,300,000 Assuming that state laws define legal capital as the par value of common stock, what dividend per-share can Ashkenazi pay? If legal capital were more broadly defined to include all paid-in capital, what dividend could Ashkenazi pay? Assuming that state laws define legal capital as the par value of common stock, the dividend per-share Ashkenazi can pay is $ (Round to the nearest cent.)
Assuming that state laws define legal capital as the par value of common stock, the dividend per-share can Ashkenazi pay is $3,594,449.
The amount of dividend per share that Ashkenazi Companies can pay is $0.00. Explanation:According to the question, state laws define legal capital as the par value of common stock. Common stock of Ashkenazi Companies is 352,555 shares at $3 par, and total stockholders’ equity is $1,057,665.
Therefore, legal capital for the company is:
Legal capital = 352,555 × $3 = $1,057,665As we know that legal capital is the minimum amount of capital that a company must keep in order to protect its creditors. In this case, any amount of dividends paid by the company in excess of $1,057,665 would violate state law. In this case, no dividends can be paid from retained earnings, since the company has not earned retained earnings in excess of its legal capital.
As a result, the dividend per share that Ashkenazi Companies can pay is $0.00.If legal capital were more broadly defined to include all paid-in capital, Ashkenazi Companies could pay dividends up to the total amount of paid-in capital. In this situation, the total amount of paid-in capital is:
Paid-in capital = Common stock + Paid-in capital in excess of par = $1,057,665 + $2,536,784 = $3,594,449.
Therefore, Ashkenazi Companies could pay dividends of up to $3,594,449.
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Complete the equations of the following financial statements: 1. Income Statement: Net Income = 2. Statement of Retained Earnings: Ending Retained Earnings =
1. Income Statement is Net Income = Revenue - Expenses
2. Statement of Retained Earnings is Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
1. The income statement is a financial statement that summarizes a company's revenues, expenses, and resulting net income or net loss for a specific period. Net income represents the profit generated by the company after deducting all expenses from its total revenue. The equation states that net income is calculated by subtracting total expenses from total revenue.
2. The statement of retained earnings is a financial statement that shows the changes in a company's retained earnings over a specific period. Retained earnings are the accumulated profits or losses that are retained within the company rather than being distributed to shareholders as dividends. The equation for the statement of retained earnings is as follows:
Ending Retained Earnings represents the balance of retained earnings at the end of the period, and it is calculated by adding the beginning retained earnings to the net income and subtracting any dividends paid during the period. This equation demonstrates how the retained earnings balance evolves throughout the period, taking into account the initial balance, net income, and dividend distributions.
By completing these equations in the respective financial statements, companies can present a comprehensive view of their financial performance and the changes in their retained earnings over time.
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