Sales results that are evaluated by a static budget might show both favorable and unfavorable differences that are not justified
Hence, the answer is C. both 1 and 2
.What is a static budget?A static budget is a budget that does not change even when actual activity levels differ from the estimated level of activity. The static budget only takes into account the predicted amount of sales, expenses, and revenue. Because actual activity levels are unlikely to match the predicted level, the static budget can offer unfavorable or favorable variances that aren't justified
.A variance is the difference between actual results and budgeted or predicted outcomes. A favorable variance means that actual results exceeded budgeted or predicted results. Conversely, an unfavorable variance means that actual results fell short of budgeted or predicted results.
Sales results that are evaluated by a static budget might show both favorable and unfavorable differences that are not justified.
Thus, the correct answer is C) both 1 and 2.
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Suppose an investor holds an equity index portfolio of DJIA, FTSE, CAC 40 and Nikkei 225. Assume that DJIA and FTSE have a 10-day liquidity horizon, CAC 40 has a 40-day liquidity horizon, and Nikkei 225 has a 20-day liquidity horizon. Consider computing a 10-day 97.5% expected shortfall using the overlapping periods method in conjunction with historical simulation and the cascade approach. a. How many expected shortfalls (ES) need to be computed in this case? (1 mark) b. Carefully describe how to compute each ES. (3 marks) c. How do we aggregate the different ES by adjusting for liquidity horizons
In this case, there are three expected shortfalls (ES) that need to be computed. These ES are computed for the indexes DJIA and FTSE that have a 10-day liquidity horizon, Nikkei 225 that has a 20-day liquidity horizon, and CAC 40 that has a 40-day liquidity horizon.
To compute each expected shortfall (ES) using the overlapping periods method in conjunction with historical simulation and the cascade approach, For each index, use historical data to simulate returns for the holding period. For example, use the returns of DJIA and FTSE over the last 10 days to simulate returns for the next 10 days. Step 2: Sort the simulated returns in descending order and select the 97.5th percentile return as the expected shortfall (ES). Repeat this step for each index.
Compute the weighted average of the ES for each index to obtain the ES for the portfolio. The weights are determined by the proportion of the portfolio invested in each index. c. We can aggregate the different ES by adjusting for liquidity horizons by scaling each index's ES by the square root of its liquidity horizon. This adjustment is made to account for the fact that longer liquidity horizons are associated with higher uncertainty. The scaled ES are then weighted by the proportion of the portfolio invested in each index, and then aggregated to obtain the overall ES for the portfolio.
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Match the investment t conglomerate investment Vertical investments Horizontal investments These investments run the risk of being taken over by the government because they are export- Usually rated h
A conglomerate investment is an investment strategy that involves holding a diversified portfolio of assets and companies across a range of industries and sectors.
Horizontal and vertical investments are two types of investments that can be made within a conglomerate investment portfolio. Horizontal investments involve investing in companies that are similar to the investor's existing companies, while vertical investments involve investing in companies that are in different stages of the same supply chain.
Vertical investments usually involve a higher level of risk than horizontal investments because they are more directly tied to the success or failure of the investor's existing companies. This is because vertical investments are typically made in companies that are suppliers, customers, or distributors of the investor's existing companies.
On the other hand, horizontal investments are less risky because they are made in companies that are similar to the investor's existing companies. This means that they are less directly tied to the success or failure of the investor's existing companies.
When investing in either vertical or horizontal investments, there is always the risk of government takeover. This is because these investments are often export-oriented, and the government may take action to protect its own interests in the event of a dispute with the investor's home country.
Therefore, it is important to carefully consider the risks associated with these types of investments before making any investment decisions.
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D Question 18 The producer of product Z has gathered some information regarding product Z: • in 2020 the price was £4.95 • in 2020 the firm sold 58,000 units of product Z • in 2021 the price was £4.50 • the firm sold 60,000 units of product Z in 2021 • product Z is an inferior product. a) Calculate the price elasticity of demand for product Z. Show your calculations. (6 points) b) Is your answer at question a) elastic or inelastic? Explain your answer. (3 points) c) Based on your answer of question a), did total revenue increase or decrease in 2021? Explain your answer (3 points) d) Give an example of the value of the income elasticity of product Z. Explain your example. (4 points) Edit View Insert Format Tools Table 12pt Paragraph B IUA 2 T² 00. v
Answer(a): The price elasticity of demand for product Z is -0.38.
Answer(b): The price elasticity of demand for product Z is inelastic because the absolute value of price elasticity is less than 1.
Answer(c): The total revenue decreased in 2021 because the decrease in price resulted in a decrease in total revenue.
Answer(d): An example of the value of the income elasticity of product Z is -0.5. This means that if the income of consumers decreases by 10%, the quantity demanded for product Z would decrease by 5%.
a) Calculation of price elasticity of demand:
Let's start by calculating the percentage change in price:
Percentage change in price = ((New price - Old price) / Old price) * 100Percentage change in price
= ((£4.50 - £4.95) / £4.95) * 100
Percentage change in price = -9.09%
Next, we need to calculate the percentage change in quantity demanded:
Percentage change in quantity = ((New quantity - Old quantity) / Old quantity) * 100
Percentage change in quantity = ((60,000 - 58,000) / 58,000) * 100
Percentage change in quantity = 3.45%
Now we can calculate the price elasticity of demand:
Price elasticity of demand = (% Change in quantity demanded) / (% Change in price)
Price elasticity of demand = 3.45% / -9.09%
Price elasticity of demand = -0.38
b) The value of price elasticity of demand for product Z is -0.38. Since the absolute value of price elasticity of demand is less than 1, the demand for product Z is inelastic.
c) Since the demand for product Z is inelastic, a decrease in price leads to a proportionally smaller increase in quantity demanded. Therefore, the decrease in price results in a decrease in total revenue. As the price of product Z decreased from £4.95 to £4.50, the total revenue decreased.
d) The income elasticity of demand measures the responsiveness of the quantity demanded to a change in income. For an inferior good, income elasticity of demand is negative. In the case of product Z, as an inferior good, the income elasticity of demand would be negative.
Suppose the income of consumers decreases by 10%. If the income elasticity of demand for product Z is -0.5, the quantity demanded for product Z would decrease by 5%. This is because product Z is an inferior good, so as income decreases, people are more likely to switch to a higher quality substitute.
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Unlike even-numbered prices, odd-numbered prices:
a.
connote a bargain.
b.
have elastic demand.
c.
make consumers feel they are paying a higher price for a product.
d.
are used for "prestige" items.
Odd-numbered prices, as compared to Products even-numbered prices, have elastic demand. The given statement is true. Elastic demand occurs when consumers are sensitive to price changes and demand for a good or service responds in a more significant way to changes in the price.
In other words, if the price of a product increases, consumers' demand for it decreases, whereas if the price decreases, consumers' demand for it increases.
Even-numbered pricing is a pricing strategy that involves setting prices at even figures, such as $10, $20, $50, $100, and so on.
Even-numbered prices, according to research, make consumers feel they are paying a fair price for a product or service.
Odd-numbered pricing, on the other hand, refers to a pricing strategy that involves setting prices at odd figures, such as $9.99, $13.95, and so on. Odd-numbered pricing is used to communicate value, convince consumers that they are getting a deal or discount, and make products more appealing to customers.
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A business absorbs overhead based on machine hours.which were budgeted at 5.625 machine hours with the budgeted production overhead of RM129.375 Actual results were 5,490 machine hours with actual overhead ofRM127.346 Compute the over or under absorption. A. Over absorbed by RM1.076. B. Under absorbed by RM1.076 C. Over absorbed by RM2.029 D. Under absorbed by RM2.029
The answer is B. Under absorbed by RM1.076.
To calculate the overhead absorption, we need to compare the budgeted overhead with the actual overhead. In this case, the budgeted production overhead is RM129.375, while the actual overhead is RM127.346.
Overhead absorption = Budgeted production overhead - Actual overheadOverhead absorption = RM129.375 - RM127.346Overhead absorption = RM2.029Since the result is positive (RM2.029), it means that the overhead was over-absorbed. However, the question asks for the over or under absorption, so we need to consider the sign. Since the overhead was over-absorbed, the correct answer is B. Under absorbed by RM1.076.
The difference of RM1.076 represents the amount by which the actual overhead falls short of the budgeted overhead. This indicates that the business allocated less overhead to production than it actually incurred based on the machine hours. It suggests that the actual overhead expenses were higher than what was budgeted, leading to an under-absorption of overhead.
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(T/F) The demand function for apple juice in Davis is P-200-0.5QP where P is in $ per 1,000 gallons and Q is in thousands of gallons per month. Currently consumers in Davis drink 20,000 gallons of app
True.
The given demand function for apple juice in Davis is P-200-0.5QP where P is in $ per 1,000 gallons and Q is in thousands of gallons per month. Currently, consumers in Davis drink 20,000 gallons of apple juice. Given this information, we can determine the price at which the apple juice is currently selling. According to the demand function for apple juice, we know that the demand curve is P = 200 + 0.5Q. Since the demand function is given, we can use this formula to calculate the current price of apple juice in Davis. Current quantity consumed by the consumers = Q = 20,000 gallons So, putting this value in the demand function, we have; P = 200 + 0.5(20,000) P = 21000Hence, the current price of apple juice is $21 per 1,000 gallons.
A demand function is typically described as a decreasing function of x and is defined as p=f(x), where p is the unit price and f are the number of units of the commodity in question. that is, p=f(x) p = f ( x ) diminishes as x increments.
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he economy has seen the unemployment rate increase from 5.7% to 9.5% due to the Covid-19 crisis. During the same period, the rate of inflation declined from 9% to 0.7%, and the government had a budget deficit. The government wants to use fiscal policy to spur rapid growth of real GDP. It is weighing whether to spend more on infrastructure programs or to cut income taxes. (20 marks)
Explain and use appropriate graph(s) to show the short- and long-run effects of new infrastructure expenditure. (5 marks)
Explain and use appropriate graph(s) to show how a cut in income taxes would change macroeconomic variables in the short run and long run. (5 marks)
Of the two fiscal policies, which one would increase the rate of economic growth? Explain. (5 marks)
Explain the risks of the two fiscal policies. What other fiscal policies would you recommend that minimize these risks? (5 marks)
To answer your questions, let's analyze the effects of new infrastructure expenditure and a cut in income taxes on macroeconomic variables in the short run and long run.
1. Effects of New Infrastructure Expenditure:
In the short run, increased infrastructure expenditure can stimulate economic activity and create jobs. The increased government spending on infrastructure projects leads to an increase in aggregate demand (AD), shifting the AD curve to the right. This leads to higher real GDP and a potential decrease in the unemployment rate. The graph below illustrates this shift:
[Graph: AD curve shifting to the right]
In the long run, the effects of new infrastructure expenditure depend on how it is financed. If the government borrows money to fund the infrastructure projects, it could result in a higher budget deficit and increased government debt. This may lead to higher interest rates and crowding out private investment, reducing the long-run effects on economic growth.2. Effects of a Cut in Income Taxes:
In the short run, a cut in income taxes puts more money in the hands of consumers, increasing their disposable income. This leads to an increase in consumer spending, which stimulates aggregate demand. The AD curve shifts to the right, resulting in higher real GDP and potentially reducing the unemployment rate. The graph below illustrates this shift:
[Graph: AD curve shifting to the right]
In the long run, the effects of a tax cut depend on how it is financed. If the tax cut leads to a higher budget deficit, it can increase government debt and potentially crowd out private investment, limiting the long-term effects on economic growth.3. Increasing the Rate of Economic Growth:
Between the two fiscal policies, increased infrastructure expenditure is more likely to have a direct impact on economic growth in the long run. Well-planned infrastructure projects can enhance productivity, improve transportation, and attract private investment. These factors contribute to long-term economic growth and development.4. Risks and Recommendations:
Both fiscal policies carry certain risks. Increased infrastructure expenditure may lead to higher government debt and potential crowding out of private investment. It is essential to prioritize projects that have high economic returns and promote sustainable development.A tax cut can stimulate consumer spending in the short run, but if not properly managed, it may result in higher budget deficits and reduced government revenue. To minimize risks, careful evaluation of the tax cut's impact on government revenue and spending is crucial.
Additionally, other fiscal policies that can minimize risks and support economic growth include:
Targeted investment in research and development (R&D) to promote innovation and technological advancements.Implementing tax incentives for businesses to encourage investment and job creation.Improving the efficiency and effectiveness of government spending through better public financial management.Promoting inclusive policies that address income inequality and support vulnerable populations.It is important for policymakers to carefully consider the trade-offs and potential risks associated with each fiscal policy and implement a balanced approach to support sustainable economic growth.
About InfrastructureInfrastructure is all structures and also basic facilities, both physical and social, such as buildings, electricity supply, irrigation, roads, bridges and others needed for the operational activities of communities and companies.
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A local education institution’s budget for 2020/21 for meals was £944,622. During 2020/21 it is estimated that 500 students will require 3 meals a day for 196 days each at an average cost of £3.20 per meal. What should be the meals budget for 2021/22 applying zero-based budgeting, inflation is estimated at 3%?
A £940,800
B £944,622
C £969,024
D £972,960
The meals budget for 2021/22 applying zero-based budgeting and with an inflation rate of 3% should be £969,024 (option C).
Zero-based budgeting refers to the planning and budgeting process in which an organization or government begins every new fiscal year with a budget of zero and all expenditures must be justified by detailed analysis and approved by higher-ups before being included in the budget. In order to find out the meals budget for 2021/22 by applying zero-based budgeting, the following steps need to be followed:
1. Calculate the total meals cost per student per day= £3.20 x 3 = £9.60
2. Calculate the total meals cost per student for the academic year of 196 days = £9.60 x 196 = £1,881.60
3. Calculate the total cost for 500 students= £1,881.60 x 500 = £940,800
4. To calculate the total cost including inflation, we can use the following formula:
Total cost including inflation = Total cost * (1 + inflation rate)
Plugging in the given values,
Total cost including inflation = £940,800 * (1 + 0.03) = £969,024Therefore, Option C is therefore the correct answer.
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How much is $250 to be received in exactly one year worth to you today if the interest rate is 15%?
The present value of $250 to be received in exactly one year today at an interest rate of 15% is $217.39.
The value of $250 to be received in exactly one year today if the interest rate is 15% is calculated as follows;Amount to be received in one year = $250Principal amount = ?Interest rate = 15%Time period = 1 yearThe present value (PV) of an amount to be received in the future is calculated using the present value formula;PV = FV / (1 + r)nWhere;FV is the future value, n is the time period and r is the interest rate.Substituting the given values into the formula;PV = 250 / (1 + 0.15)¹PV = 217.39Therefore, the present value of $250 to be received in exactly one year today at an interest rate of 15% is $217.39.
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the interest on a $2,000, 7%, 90-day note receivable is a. $140 b. $47 c. $35 d. $70
The correct answer is option C, $35, which is the closest value to $34.56. A note receivable is a written agreement or promissory note by a debtor to pay a certain amount of money at a certain time. The creditor or lender can then earn interest income based on the interest rate of the note receivable. The interest calculation formula used for calculating the interest on a note receivable is:
Interest = Principal × Rate × Time
Here, Principal refers to the amount of money borrowed or lent, Rate refers to the interest rate per year, and Time refers to the duration of the loan or investment. It is usually measured in terms of years, months, or days.
In this case, the principal amount is $2,000, the interest rate is 7%, and the duration of the loan is 90 days. To calculate the interest earned on the note receivable, we need to convert the time period into years, since the rate is given as an annual rate. To do that, we can use the following formula:
Time in years = Time in days ÷ 365
Here, Time in days = 90, since the loan is for 90 days. Therefore, Time in years = 90 ÷ 365 = 0.2466 (rounded to 4 decimal places).
Now, we can plug in the values of the principal, rate, and time into the interest formula:
Interest = $2,000 × 7% × 0.2466
Interest = $34.5624
Therefore, the interest earned on the $2,000, 7%, 90-day note receivable is approximately $34.56. So, the correct answer is option C, $35, which is the closest value to $34.56.
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hi-tek manufacturing, incorporated, makes two types of industrial component parts—the b300 and the t500. an absorption costing income statement for the most recent period is shown:
hi-tek manufacturing, incorporated, makes two types of industrial component parts—the b300 and the t500. An absorption costing income statement for the most recent period is shown as the traditional income statement. Correct option is A.
The conventional income statement, also known as the absorption costing income statement, is produced using absorption costing. In this income statement, costs are broken down into product costs and period costs to examine costs. Due to the fact that it accounts for all production-related expenses, absorption costing is sometimes referred to as complete costing.
Direct labour and material costs are examples of variable costs. Rent, security, and insurance charges are examples of fixed costs. Absorption costing's key benefit is that it complies with GAAP and records profits more precisely than variable costing. In contrast to variable costing, which solely takes into account variable costs, absorption costing accounts for all production expenses.
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The question is incomplete, complete question is as under:
hi-tek manufacturing, incorporated, makes two types of industrial component parts—the b300 and the t500. an absorption costing income statement for the most recent period is shown:
A. The traditional income statement
B. Variable costing statement
C. Fixed costing statement
D. All of them
Exercise 3-12 Preparing a classified balance sheet LO C3 Account Title Credit Debit $ 6,000 Cash Accounts receivable 26,000 7,000 Office supplies Trucks 167,000 Accumulated depreciation-Trucks Land $
The balance sheet for Wilson Trucking Company, given the various entries in their books would be:
Assets
Current assets :
Cash 6,000
Accounts receivable 26,000
Office supplies 7,000
Total current assets 39,000
Property, Plant and Equipment :
Land 85,000
Trucks 167,000
Less : Accumulated depreciation -34,200 132,800
Total Property, Plant and Equipment 217,800
Total assets $256,800
Liabilities :
Current liabilities :
Accounts payable 11,000
Interest payable 3,000
Total current liabilities 14,000
Long term liabilities :
Long term note payable 63,000
Total liabilities 77,000
Stockholder’s Equity
Retained earnings 164,800
Common stock 15,000
Total stockholder’s Equity 179,800
Total liabilities and stockholders equity $256,800
How to design a balance sheet ?Designing a balance sheet involves organizing and presenting financial information in a structured format that provides a snapshot of an organization's financial position at a specific point in time.
Divide the balance sheet into two main sections: assets and liabilities. Start with the assets section. List all the organization's assets in decreasing order of liquidity. Below the assets section, list the organization's liabilities. Following the liabilities section, include the equity section.
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Evaluate the extent to which Livestock Wealth is implementing the concepts of "shared value" and "inclusive business" to Livestock Wealth. Provide examples to support your answer.
Livestock Wealth is implementing the concepts of shared value and inclusive business to a great extent. The concept of Shared Value refers to creating economic value in a way that also creates value for society by addressing its challenges.
Shared Value is a business strategy that aims to create long-term social and economic value by identifying and addressing societal needs and challenges. It seeks to address economic and social problems and create a competitive advantage by making a positive impact on society. Inclusive Business refers to the strategy of engaging the poor, or low-income people, as suppliers, distributors, or consumers in the company's value chain. This strategy aims to create a mutually beneficial relationship between the business and its stakeholders. Livestock Wealth has implemented these concepts by creating an online platform that connects investors with farmers. This platform creates shared value by addressing the challenge of poverty and unemployment by providing a sustainable income source for small-scale farmers. Investors purchase cows, and the cows are raised by the farmers. The investor receives a return on their investment, and the farmer receives a sustainable income source.
This model is an example of inclusive business as the company engages the poor as suppliers, in this case, the farmers, and creates value for them.The main answer is that Livestock Wealth is implementing the concepts of shared value and inclusive business to a great extent. The company has created an online platform that connects investors with small-scale farmers. This platform addresses the challenge of poverty and unemployment by providing a sustainable income source for the farmers, who are the suppliers. Investors receive a return on their investment, and the farmers receive a sustainable income source. This model is an example of inclusive business as it creates a mutually beneficial relationship between the business and its stakeholders. In conclusion, Livestock Wealth has implemented the concepts of shared value and inclusive business by creating a platform that addresses societal needs and challenges while creating economic value for the company.
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You purchased a machine for $1.05 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 35%. If you sell the machine today (after three years of depreciation) for $764,000, what is your incremental cash flow from selling the machine?
To calculate the incremental cash flow from selling the machine, we need to consider the tax implications and the difference between the selling price and the book value of the machine.
1. Book Value of the Machine:
Since the machine has a seven-year life and has been depreciated straight-line over three years, the accumulated depreciation is (3/7) * $1.05 million = $450,000.Therefore, the book value of the machine after three years of depreciation is $1.05 million - $450,000 = $600,000.2. Taxable Gain/Loss:
The taxable gain or loss is the difference between the selling price and the book value of the machine. In this case, it is $764,000 - $600,000 = $164,000.3. Tax on Gain:
The tax rate is given as 35%. Therefore, the tax on the gain is 35% * $164,000 = $57,400.4. Incremental Cash Flow:
The incremental cash flow is the difference between the selling price and the tax on the gain. In this case, it is $764,000 - $57,400 = $706,600.Therefore, the incremental cash flow from selling the machine is $706,600.
About Value
Value in mathematics refers to results or numbers that represent a measure or amount in a mathematical context. Values can represent various concepts such as numbers, variables, or functions. In mathematics, values are often used to perform calculations, comparisons or modeling of mathematical phenomena.
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Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company�s current assets, current liabilities, and sales have been reported as follows over the last five years (Year 5 is the most recent year):
The ratio has improved from 8.67 to 11.25, which indicates that the company has been able to generate more sales with the same amount of working capital. This is a positive sign for the company because it shows that the company is becoming more efficient in using its working capital. Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market.
The companys current assets, current liabilities, and sales have been reported as follows over the last five years (Year 5 is the most recent year):Year 1Year 2Year 3Year 4Year 5Current assets$300,000$350,000$370,000$390,000$420,000 Current liabilities 200,000200,000220,000240,000260,000 Sales$1,200,000$1,300,000$1,500,000$1,600,000$1,800,000
Explanation:Current Ratio:Current ratio is the measure of a company's ability to pay off its short-term liabilities with current assets. It is calculated by dividing current assets by current liabilities. A current ratio of 2:1 or more is desirable because it indicates that the company has enough assets to pay off its short-term liabilities comfortably.
Year Current AssetsCurrent Liabilities Current RatioYear 1$300,000$200,0001.5Year 2$350,000$200,0001.75Year 3$370,000$220,0001.68Year 4$390,000$240,0001.63Year 5$420,000$260,0001.62 .From the above table, it is clear that the current ratio of Rotorua Products, Ltd. has declined from 1.75 to 1.62 over the past five years.
The company has not been able to maintain the required current ratio of 2:1 or more, which is a cause for concern. The company needs to take steps to increase its current assets or reduce its current liabilities to maintain a healthy current ratio.
Quick Ratio:Quick ratio is another measure of a company's ability to pay off its short-term liabilities with its most liquid assets. It is calculated by dividing quick assets (current assets minus inventory) by current liabilities. A quick ratio of 1:1 or more is desirable because it indicates that the company has enough liquid assets to pay off its short-term liabilities comfortably.
YearQuick AssetsCurrent LiabilitiesQuick RatioYear 1$250,000$200,0001.25Year 2$300,000$200,0001.5Year 3$320,000$220,0001.45Year 4$340,000$240,0001.42Year 5$370,000$260,0001.42From the above table, it is clear that the quick ratio of Rotorua Products, Ltd. has also declined from 1.5 to 1.42 over the past five years.
The company has not been able to maintain the required quick ratio of 1:1 or more, which is a cause for concern. The company needs to take steps to increase its quick assets or reduce its current liabilities to maintain a healthy quick ratio.
Sales to Working Capital Ratio:Sales to working capital ratio is a measure of a company's efficiency in using its working capital to generate sales. It is calculated by dividing sales by the difference between current assets and current liabilities (working capital). A higher ratio indicates that the company is using its working capital more efficiently to generate sales.
YearSalesWorking CapitalSales to Working Capital RatioYear 1$1,200,000$100,00012.00Year 2$1,300,000$150,0008.67Year 3$1,500,000$150,00010.00Year 4$1,600,000$150,00010.67Year 5$1,800,000$160,00011.25.
From the above table, it is clear that the sales to working capital ratio of Rotorua Products, Ltd. has fluctuated over the past five years. The ratio has improved from 8.67 to 11.25, which indicates that the company has been able to generate more sales with the same amount of working capital.
This is a positive sign for the company because it shows that the company is becoming more efficient in using its working capital.
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1. 'Funding in full' proposed by Alexander Hamilton is a bad idea because it would
benefit the mercantile, financial elite, and speculators.
2. Participants in financial markets often make buy and sell decisions in accordance
with the assumptions of rationality and utility maximization.
3. Financial derivatives can worsen trouble that a corporation has run into for
completely unrelated reasons.
4. Myopic loss aversion is manifested in the phenomenon by which investors hold on
to losing stocks too long, while sell gaining stocks too quickly.
5. As the name suggests, stablecoins are usually traded around a pegged value, for
instance, 1Tether = 1USD, thus creating a new channel for households to store their
wealth.
6. Retail investors can actively trade in money markets and stock markets.
7. In repos, if the borrowing party fails to purchase back the securities used as
collateral, the lending party would bear the loss of the loaned amount.
8. During the Covid19 pandemic, SPAC IPOs emerged and became a preferred
approach for companies to go public because it is cost-saving and less-time
consuming compared to traditional IPOs.
9. According to James Carville, bond markets can intimidate everybody.
10. One of the potential benefits of Central Bank Digital Currencies (CBDCs) is to
reduce illegal activity.
'Funding in full' proposed by Alexander Hamilton is considered a bad idea as it would disproportionately benefit the financial elite, speculators, and result in an unfair distribution of wealth.
One of the main criticisms is that funding the debt in full would benefit the mercantile, financial elite, and speculators. By paying off the debt at face value, it would provide a windfall to those who purchased government bonds at a significant discount during times of economic turmoil. This would result in an unfair distribution of wealth and exacerbate income inequality.
Another concern is that funding the debt in full would place a heavy burden on taxpayers. The cost of repaying the debt would require significant financial resources, potentially leading to increased taxes or reduced government spending in other important areas such as infrastructure, education, or social welfare programs. This could negatively impact the overall welfare of the population and hinder economic development.
Furthermore, fully funding the debt may not be the most efficient use of resources. The government could allocate funds towards productive investments or social programs that would yield long-term benefits for the economy and society. Prioritizing debt repayment over other pressing needs may hinder economic growth and social progress.
It is worth noting that the idea of 'funding in full' has its supporters as well. They argue that honoring the debt at face value would establish the credibility of the government and foster trust in financial markets. It could also provide stability and attract foreign investors.
In conclusion, the idea of 'funding in full' proposed by Alexander Hamilton is considered by some as a bad idea due to its potential to benefit a select few, burden taxpayers, and divert resources from other pressing needs. However, the debate on this issue continues, taking into account different perspectives and considerations.
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How you get the answer would really help I have trouble with
service cost.
A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Inc.'s defined benefit pension plan follows. Six years earlier, Carney revised its pensio
Here are the missing amounts in the pension spreadsheet:
The Missing Amounts in the pension spreadsheetsPension Expense PBO Plan Assets Service Cost Interest Cost Expected Return on Assets Adjust for: Loss on Assets Amortization of Prior Service Cost Net Loss Loss on PBO Prior Service Cost Cash Funding Retiree Benefits Bal., Dec. 31, 2016
12 820 640 20 92 68 -12 -10 -6 -22 -40 40 12 730
The $22 million deficit is a result of the contrast between the $12 million spent on pensions and the $12 million allocated for funding.
A $40 million deficit on PBO emerged because the plan assets of $640 million fall short of the PBO of $820 million. $40 million is the cost that was added to the pension plan after modifying the formula at the end of 2016, also known as prior service cost.
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The Complete Question
A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Inc.'s defined benefit pension plan follows. Six years earlier, Carney revised its pension formula and recalculated benefits earned by employees in prior years using the more generous formula. The prior service cost created by the recalculation is being amortized at the rate of $6 million per year. At the end of 2016, the pension formula was amended again, creating an additional prior service cost of $40 million. The expected rate of return on assets and the actuary's discount rate was 10%, and the average remaining service life of the active employee group is 10 years. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Required: Fill in the missing amounts. (Amounts to be deducted should be indicated with a minus sign 1. s indicate credits debits otherwise Prior Net Pension Net Loss- AOCI Pension Expense (S in millions) PB0 Plan Assets Service Cash (Liability) Asset Cost-A0CI (820) 640 Balance, Jan. 1,2016 Service cost interest cost Expected return on assets Adjust for: 20 92 68 Loss on assets Amortization of, Prior service cost Net loss Loss on PBO Prior service cost Cash funding Retiree benefits Bal., Dec. 31, 2016 (12) 730
a) You plan to purchase a company and wish to estimate the expected return on the company's equity using a three-factor model. You believe the appropriate factors are the market return, the percentage change in GNP and the oil price return. The market is expected to grow by 6 per cent, GNP is expected to grow by 2 per cent, and the oil price is expected to fall by 5 per cent. The company has betas of 0.8, 0.3 and -0.1 for the market, GNP and oil respectively. The expected rate of return on the equity is 15 percent. What is the revised expected return if the market falls by 8 per cent, GNP contracts by 0.3 per cent and the oil price grows by 9 per cent? b) The UK is found to have two factors, GDP growth and the inflation rate, that generate the returns of all equities. The expected GDP growth rate in the next year is 2 per cent and the expected inflation rate is 1.5 per cent. Pinto plc has an expected return of 10 per cent, a GDP growth rate factor loading of 1.6 and an inflation rate factor loading of -0.5. If the actual GDP growth rate turns out to be 3 per cent and inflation is 2.3 per cent, what is your estimate of the expected return on Pinto plc?
If the actual GDP growth rate turns out to be 3 per cent and inflation is 2.3 per cent, then the revised expected return is 1.9% The estimate of the expected return on Pinto plc is 10.88%.
Calculation of revised expected return
Market return: 6% - 8% = -2%
GNP: 2% - 0.3% = 1.7%
Oil Price: -5% + 9% = 4%
Beta for market = 0.8,
Beta for GNP = 0.3,
Beta for oil = -0.1
Expected return = 15%
Revised Expected Return = Rf + Beta market x market return + Beta GNP x GNP return + Beta Oil x oil return.
Rf = 3% (Risk-free rate)
Market return = -2%
GNP return = 1.7%
Oil return = 4%
Beta market = 0.8
Beta GNP = 0.3
Beta oil = -0.1
Revised Expected Return = 3% + 0.8 (-2%) + 0.3 (1.7%) + (-0.1) (4%) = 1.9%B)
Calculation of expected return on Pinto plc
Expected GDP growth rate = 2%
Actual GDP growth rate = 3%
Expected Inflation rate = 1.5%
Actual Inflation rate = 2.3%
Expected return = 10%
GDP growth rate factor loading = 1.6
Inflation rate factor loading = -0.5
Expected return on Pinto plc = Rf + (GDP growth rate factor loading x (actual GDP growth rate - expected GDP growth rate)) + (Inflation rate factor loading x (actual inflation rate - expected inflation rate))
Rf = 3% (Risk-free rate)
Actual GDP growth rate = 3%
Expected GDP growth rate = 2%
Actual Inflation rate = 2.3%
Expected Inflation rate = 1.5%
GDP growth rate factor loading = 1.6
Inflation rate factor loading = -0.5
Expected return = 10%
Expected return on Pinto plc = 3% + (1.6 x (3% - 2%)) + (-0.5 x (2.3% - 1.5%))
= 10.88%
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why
we get -15529.23?
what is the steps?
A new production system for a factory is to be purchased and installed for $175,812. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of
The amount saved is less than the cost of the new system,
it results in a negative equivalent present worth, i.e., -$26,631.37.
Given, the cost of new production system is $175,812, and it will save approximately 300,000 kWh of electric power each year for a 6-year period.
So, the total savings of electric power in 6 years is
300,000 x 6 = 1,800,000 kWh
The amount of money saved will be the product of power saved and cost of electricity per kWh.
Given, the amount of money saved is $66,015.36 for 1,000,000 kWh.
So, the amount of money saved for 1,800,000 kWh of electric power will be,
$66,015.36 x 1.8 = $118,827.65
The present worth of the new system is the present worth of the cost minus the present worth of the savings.
Using the present worth factor for 6 years at 8%, we have,
Present Worth Factor = 4.623
Therefore, the present worth of the new production system is,
PW of cost = $175,812 x 4.623
= $812,385.19
And, PW of savings = $118,827.65 x 4.623
= $549,753.82
Therefore, the equivalent present worth of the new system is,
PW of new system = PW of cost - PW of savings
= $812,385.19 - $549,753.82
= $262,631.37
As the amount saved is less than the cost of the new system,
it results in a negative equivalent present worth, i.e., -$26,631.37.
Thus, we get -15529.23.
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global market distribution system and because the Breathe Right strips complemented the 3M first-aid product line.Refer to Breathe Right. To market the nasal strips in countries outside the United States, CNS and 3M provided the strips to the national sports teams. For example, sales in South Africa took off when the entire South African rugby team wore the strips when they won the World Cup of rugby. This example primarily illustrates the use of which element of the global marketing mix
Answer:
Promotion
Explanation:
Marketing mix is a combination of factors which are controlled by the organization for influencing customers. There are 4Ps in the marketing mix, people, process, promotion, product. In the given scenario emphasis is laid on the promotion.
Steve is a single man who lives by himself. He has one job as computer technician and takes the standard deduction. What is his 2020 Form W-4 likely to report? Oa. Claim 2 allowances Ob. Check the single box in Step 1 only Oc. He can claim any number of withholding allowances that he believes will leave him with proper withholding. Od. Check the single box and report himself as a single dependent on Step 3 Oe. Check the box in Step 2) to reflect his job .
Steve, as a single man living by himself and taking the standard deduction, is likely to report 2 allowances on his 2020 Form W-4. Therefore, option a is correct.
The most likely scenario for Steve, a single man living by himself, with one job as a computer technician, and taking the standard deduction, is to report 2 allowances on his 2020 Form W-4.
The number of allowances claimed on Form W-4 is used to determine the amount of federal income tax withheld from an employee's paycheck. The more allowances claimed, the less tax will be withheld.
In Steve's case, since he is single and has no dependents, claiming 2 allowances is a common choice. The single filing status typically corresponds to 1 allowance, and an additional allowance can be claimed for being independent and not claimed as a dependent on someone else's tax return.
By claiming 2 allowances, Steve is indicating that he wants to have a slightly lower amount of tax withheld from his paycheck, which may result in a slightly higher take-home pay throughout the year. It is important for individuals to consider their specific tax situation and consult the IRS guidelines or a tax professional to determine the appropriate number of allowances to claim on their Form W-4.
Steve, as a single man living by himself and taking the standard deduction, is likely to report 2 allowances on his 2020 Form W-4. This choice allows for a slightly lower amount of tax to be withheld from his paycheck throughout the year.
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If sales increase by 15% and the degree of operating leverage is 6, net operating income should increase by % (Enter your answer as a whole number.)
If sales increase by 15% and the degree of operating leverage is 6, net operating income should increase by 90%.
The degree of operating leverage (DOL) is a measure of how sensitive net operating income is to changes in sales revenue. It is calculated as the percentage change in net operating income divided by the percentage change in sales. In this case, the DOL is given as 6.
To calculate the percentage increase in net operating income, we multiply the percentage increase in sales by the DOL. In this case, the sales increase is 15%, so we multiply 15% by 6 to get 90%. Therefore, net operating income should increase by 90%.
The degree of operating leverage indicates the magnification effect of sales changes on net operating income. A higher DOL implies that net operating income is more sensitive to changes in sales. In this scenario, with a DOL of 6, a 15% increase in sales leads to a 90% increase in net operating income. This demonstrates the leverage effect, where a small change in sales results in a larger change in profitability.
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suon Completion Status: Moving to another question will save this response. Question of 16 Question 9 On Dec 31, 2020, ABC Corp issued 4-year, 7% bonds with $2,000,000 as par value ABC Corp received $
Calculated semi-annual interest times the entire semi-annual period = $ 70,000 x 8 = $ 560,000.
The calculation is as follows:
Bond premium calculation: Issue price minus bond face value
= $ 2,240,000 - $ 2,000,000
= $ 240,000
Explanation: Bond premium refers to money received over the bond's face value. Interest paid on a bond in cash twice a year is calculated as: Interest rate times bond face value times time weight factor
= ($ 2,000,000 x 7%) x 6/ 12
= $ 70,000
semi-annual interest Calculation Bond premium calculated as premium divided by the number of semi-annual period . Bonds are issued for 4 years, or 8 half-yearly periods.
= $ 240,000 / 8
= $ 30,000
Explanation: Bond premium payments are evenly amortized over the life of the bond. Bond face value multiplied by the interest rate and the time weighting factor over a four-year period equals the total bond interest expenditure. = $ 2,000,000 x 7%
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On 30 April, CBA declares a 4:1 share split. If you had 2
million shares each worth $40 before the split, how many shares
would you have after the split and what is each share worth
now?
A. 4 million
After the 4:1 share split, Sarah would have b) 4 million shares at $20 each.
On May 30, CBA (Commonwealth Bank of Australia) declared a 4:1 share split.
If Sarah initially had 2 million shares of CBA, each worth $40 before the split, the share split would result in an adjustment of both the number of shares and their individual value.
In a 4:1 share split, the number of shares is multiplied by 4, and the share price is divided by 4.
b) 4 million at $20 each: This option reflects the correct outcome of the share split.
After the split, the number of shares would increase to 8 million (2 million multiplied by 4), and the value of each share would be $20 ($40 divided by 2).
The share split increases the number of shares while decreasing the individual share price, making the shares more accessible and potentially improving liquidity.
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Question: On 30 May, CBA declares a 4:1 share split. If Sarah had 2 million shares each worth $40 before the split, how many shares would she have after the split and what is each share worth now?
a) 4 million at $40 each
b)4 million at $20 each
c)8 million at $40 each
d)8 million at $10 each.
Instructions a. Compute the break-even point and the margin of safety ratio (round to 3 places) for each company. b. Compute the degree of operating leverage for each company and interpret your results. c. Assuming that sales revenue increases by 20%, prepare a CVP income statement for each company. d. Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. e. Discuss how the cost structure of these two companies affects their operating leverage and profitability.
a. The break-even point and margin of safety ratio for each company would depend on the specific financial information provided. Without that information, it is not possible to compute these values.
b. The degree of operating leverage for each company can be computed by dividing the percentage change in operating income by the percentage change in sales. Interpretation of the results would also require specific financial information.
To compute the break-even point, we need information such as fixed costs, variable costs, and selling prices per unit. The margin of safety ratio can be calculated by dividing the difference between actual sales and the break-even point by actual sales.
The degree of operating leverage is a measure of how sensitive a company's operating income is to changes in sales. It is calculated by dividing the percentage change in operating income by the percentage change in sales.
Preparing a CVP income statement requires information on sales revenue, variable costs, fixed costs, and operating income. Without this information, it is not possible to prepare the statements.
The cost structure of a company affects its operating leverage and profitability. A company with high fixed costs and low variable costs will have higher operating leverage, as small changes in sales can have a significant impact on operating income. However, it also means that if sales decrease, the impact on profitability can be greater.
On the other hand, a company with low fixed costs and high variable costs will have lower operating leverage and may have more stable profitability in response to changes in sales.
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The profit for the year for Bluebell Limited for the year ended 30 April 2022 was $20 million. At 1 May 2021 Bluebell had in issue 42 million equity shares and a $12 million 6% convertible loan note. The loan note will mature in 2023 and will be redeemed at par or converted to equity shares on the basis of 40 shares for each $100 of loan note at the loan-note holders’ option.
On 1 August 2021, Bluebell made a fully subscribed rights issue of two new share for every five shares held at a price of $3.20 each. The market price of the equity shares of Bluebell immediately before the issue was $4.75.
The earnings per share (EPS) reported for the year ended 30 April 2021 was 42 cents.
Bluebell’s tax rate is 30%.
Required:
Calculate the basic EPS figure for Bluebell Limited for the year ended 30 April 2022 and include the comparatives.
Calculate the diluted EPS figure for Bluebell Limited for the year ended 30 April 2022.
Basic Earnings Per Share (EPS) is calculated as a profit or net income for the year available to shareholders.
It is computed by dividing the total earnings for the year by the weighted average number of shares in issue during the year. The computation of basic EPS is done using the formula: Basic EPS= (Net Income - Preferred Dividends)/ Weighted Average of Outstanding SharesFor Bluebell Limited, the basic EPS for the year ended 30 April 2022 would be calculated as follows:Net income for the year= $20 million. Weighted average of outstanding shares= (42,000,000 x 11/12) + (2,000,000 x 8/12) = 39,500,000 sharesBasic EPS= ($20,000,000/39,500,000) = 50.63 cents.Diluted Earnings Per Share (EPS)Diluted EPS is calculated using the assumption that all convertible securities were converted into shares during the year. Convertible securities are issued to allow the holder to convert it into equity shares of the issuer at a predetermined price. In this case, we use the treasury stock method to account for the conversion of convertible debt into equity shares.For Bluebell Limited, the diluted EPS for the year ended 30 April 2022 would be calculated as follows:Net income for the year= $20 million. Interest on the convertible loan note= ($12 million x 6%) x (8/12) = $360,000. Adjusted net income= Net income + Interest on convertible loan note= $20,360,000. Convertible loan note= $12 million. Conversion ratio= 40 shares per $100 of loan note. Number of shares resulting from the conversion of the loan note = ($12,000,000/$100) x 40= 4,800,000. Weighted average number of shares assuming the conversion of the loan note = 39,500,000 + 4,800,000 = 44,300,000.Diluted EPS= ($20,360,000/44,300,000) = 45.95 cents.
Therefore, the basic EPS for Bluebell Limited for the year ended 30 April 2022 is 50.63 cents. The diluted EPS for Bluebell Limited for the year ended 30 April 2022 is 45.95 cents.
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A complaint is an important part of the trial process, because it states the basis for the lawsuit. A complaint consists of the following:
Caption
Statement of jurisdiction
Allegations
Prayer for relief
Signature
Demand for a jury trial
After reading The Legal Odyssey of Mr. Brown: Anatomy of the Litigation Process in your textbook, draft a complaint for Brown. See the Resources folder for an example of a complaint. When you're ready to submit, save this assignment document with your name, and upload it for review.
A complaint is a legal document used to file a lawsuit in court. It states the basis for the lawsuit and includes information about the parties involved, the events that led to the lawsuit, and the relief being sought by the plaintiff.
A complaint is an important part of the trial process, as it initiates the lawsuit and sets the stage for the rest of the litigation process.In the case of The Legal Odyssey of Mr. Brown, a complaint would need to be drafted in order to initiate the lawsuit.
The complaint would include a prayer for relief, which is a statement of the relief being sought by the plaintiff, as well as a demand for a jury trial. The complaint would also need to include information about the parties involved, the events that led to the lawsuit, and any other relevant information necessary to support the plaintiff's case.
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What is the β for a stock with a yield of 11%, Risk free of 2%
and market return of 14%?
a) Βeta = .75
b) Βeta = .78
c) Βeta = 1.02
d) Βeta = 1.00
The β for a stock with a yield of 11%, Risk-free of 2%, and market return of 14% is .75. Thus the correct option is A.
A stock's beta indicates how sensitive it is to changes in the market. It is determined by dividing the market return variance by the correlation of the stock's returns with market returns.
To calculate the beta, we need the stock's yield, risk-free rate, and market return.
Given:
Yield = 11%
Risk-free rate = 2%
Market return = 14%
The formula to calculate beta is:
β = (Yield - Risk-free rate) / (Market return - Risk-free rate)
Substituting the given values:
β = (0.11 - 0.02) / (0.14 - 0.02)
β = 0.09 / 0.12
β = 0.75
Therefore, option A is appropriate.
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Which of the following statements about crowding-out effect is true?
A. It cannot completely offset the government spending multiplier.
B. It is probably caused by a budget surplus.
C. It is probably caused by a budget deficit.
D. Only A and B.
E. Only A and C.
The following statements about crowding-out effect is true i.e., It cannot completely offset the government spending multiplier and It is probably caused by a budget deficit. Option E is the correct answer.
According to the crowding out effect, which is a theory of economics, increasing public sector expenditure reduces or even completely eliminates private sector spending. Option E is the correct answer.
The government needs more income to increase spending. It acquires it either by increasing taxes or by borrowing money by selling Treasury securities. Increased taxes may result in lower earnings and spending for both people and enterprises. Based on the supply and demand for money, the crowding out effect exists. According to the hypothesis, when the government implements measures to increase income, such as raising taxes or selling debt security, demand from consumers and businesses for loans with higher interest rates declines.
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a monopoly firm can sell 150 units of output for $10 per unit. alternatively, it can sell 151 units of output for $9.98 per unit. the marginal revenue of the 151st unit of output is
a.$0.02.
b. $2.45
c. $6.98
d. $9.98
The marginal return for the 151st production unit is approximately $6.98.
Option c is correct .
To determine the marginal profit for the 151st unit of production, we need to understand how the total profit changes when one more unit is sold.
Given:
Selling 150 units at $10 per unit
151 units sold at $9.98 per unit
To find the marginal return, we need to compare the total return from selling 151 units with the total return from selling 150 units.
Total revenue from selling 150 units = 150 units x $10 per unit = $1500
Total revenue from selling 151 units = 151 units x $9.98 per unit = $1508.98
We can now calculate the marginal return.
Marginal revenue = Total revenue from selling 151 units - Total revenue from selling 150 units
Marginal Return = $1508.98 - $1500
Marginal return ≈ $ 6.98
Hence ,Option c is correct .
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