As the head of corporate treasury, the Chairman has approached you for some advice on the reasons for the different prospective valuations for MOBILE ONE.
In order to understand the different valuations provided by the analyst fraternity, it is necessary to understand the various methods that are used to value a company.
Methods used to value firms:
1. Relative Valuation - This method involves valuing a company based on how similar firms are being valued in the marketplace. This method is generally based on multiples such as price-to-earnings ratio (P/E ratio), price-to-sales ratio (P/S ratio), price-to-book ratio (P/B ratio), and enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).
2. Discounted Cash Flow (DCF) - This method involves projecting a company's future cash flows and discounting them back to their present value. This method is considered to be one of the most accurate ways to value a company, but it is also one of the most complex and time-consuming.
3. Asset Valuation - This method involves valuing a company based on the value of its assets. This can be done using the company's balance sheet, which lists its assets and liabilities. The difference between the two is the company's net assets, which can be used to determine its value.
In conclusion, the analysts fraternity may be providing different valuations of MOBILE ONE because they may be using different valuation methods. Depending on the method used, the valuation of the company may be different. Therefore, it is important to understand the different methods used to value a company and the underlying assumptions behind each method.
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Which of the following best describes a 'Competition Economy (Capitalism)? Select one: O a. Families decide to produce the goods and services that they need O b. A small group of leaders decide what the entire economy needs Oc. Individuals make independent production decisions O d. A mix of different economic systems are used for production decisions
A competition economy or capitalism best describes the answer choice C, where individuals make independent production decisions.
Option C, where individuals make independent production decisions in a competition economy or capitalism. In an economy based on competition or capitalism, individuals or companies make independent production decisions. It is not dependent on the government to make production decisions. Individuals are free to own property and make independent production decisions, and the resulting competition between individuals is what drives the economy forward. It is different from an economy where a small group of leaders makes the production decisions, or one where families produce only what they need. The mix of different economic systems is known as a mixed economy, which is not specific to capitalism. Therefore, the answer to the question is C, where individuals make independent production decisions in a competitive economy or capitalism.
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Your product fails about 2 percent of the time, on average. Some customers purchase the extended warranty you offer in which you will replace the product if it fails. Would you want to price the extended warranty at 2 percent of the product price? Discuss both moral hazard and adverse selection issues.
Pricing the extended warranty at 2% of the product price can lead to moral hazard and adverse selection issues. To address these problems, a tailored pricing scheme based on customer factors and coverage levels should be considered.
Moral hazard refers to the risk that insurance protection can change individuals' behavior, leading to increased probability of loss occurrence for the insurer. In the case of offering an extended warranty at a fixed percentage of the product price, customers may be incentivized to use the product recklessly since they are protected from any losses. This behavior can increase the overall risk and costs for the warranty provider.
Adverse selection arises when one party in an insurance contract possesses more information than the other party. Customers with a higher risk of product failure are more likely to purchase the extended warranty, while those with lower risk may opt out. This creates an imbalance in the customer pool, as those with higher risk dominate the warranty holder base. This can result in financial losses for the warranty provider.
To mitigate moral hazard and adverse selection, a more tailored pricing scheme can be implemented. Pricing the warranty based on factors such as customer usage rate, age of the product, or other relevant indicators can help align the price with the actual risk associated with each customer. Offering different levels of coverage at different prices can incentivize customers to take better care of their products and choose the appropriate level of protection.
Additionally, limiting coverage to specific events like manufacturer's defects, excluding incidents caused by customer abuse, or providing coverage only for the first year can help mitigate moral hazard and adverse selection issues. These measures ensure that customers bear some responsibility for their actions and encourage them to use the product responsibly.
Pricing the extended warranty at a fixed percentage of the product price can lead to moral hazard and adverse selection issues. To address these concerns, implementing a tailored pricing scheme based on customer factors, coverage levels, and limiting coverage to specific events or timeframes can help mitigate these risks. It is important to offer a fair and effective pricing scheme that incentivizes responsible behavior and provides appropriate coverage for customers.
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Urangement of the other how 12 31.500 317000 316.300 D H ERPRISE April May Uund July August Cost of Goode 250 September October $2.860 November December $2.040 160 200 33200 2650 522500 12270 $2.500 53.000 33.000 1290 BU 31.500 4 Salas $18.750 SI 3186 30.000 $30.000 3000 $18.650 Supplier 31.100 51860 318 31.10 31350 31.350 31550 38300 31.500 Miscellaneous S1000 $10.000 516.400 516 800 $175.00 516.000 315.200 Total for Each Mom 40.000 41.270 4354,310 556.000 54,700 40.00 32720 Use the range rates formulas to find the total for each type of expense: Fain the solar for each expense below Soutes A D H 1 pens April May June July August September October November December. Total for ExchExpense Coat of Goode $2.550 $2.000 52.940 33.100 3.210 33.000 52,800 52.630 12.270 Advertising $2.500 32.500 $2.500 $3.000 $3.000 52.500 $5.500 31.500 $1.500 Salaries 318.750 $18.750 318.750 330,000 $30,000 330.000 18.650 $18.650 318.550 Supplies 51.100 51.100 $1,240 51.350 51.350 51300 $1.250 $1,200 31.100 Miscellaneous $16.000 516,000 $16.400 516.800 517.500 $17.000 $16.300 $16.000 315.200
Here is a table that has been modified to display the total for each category of spending by month in order to organize the given data. Find each month's total here: March: =SUM(B2:B6) =$40900 May: $41270 = SUM(C2:C6) In June: =SUM(D2:D6) =$41830July: $54310 = SUM(E2;E6)August: $555060 = SUM(F2:F6)=SUM September(G2:G6) =$54700 Halloween: =SUM(H2:H6) =$40560 November: $39980 = SUM(I2:I6)December: $38720 = SUM(J2:J6) Calculate the sum for each expense: Cost of Goods: $26320 = SUM(B2:J2). Publicity: =SUM(B3:J3) = $20,000 Salary: $202200 = SUM(B4:J4) Supplies: $1150 = SUM(B5:J5) Other: =SUM(B6:J6) = $17,720.00
The carrying value of the commodities sold within a specific time period is known as the Cost of Goods sold (COGS).
One of the few formulae, for example, explicit ID, earliest in, earliest out (FIFO), or normal expense, is utilized to correspond costs with explicit products.
The all out cost of moving the stock to their ongoing area and condition incorporates all procurement costs, transformation charges, and different consumptions. Materials, Halloween work, and designated above are remembered for the expenses of the items created by the company.
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2. Mobile media have introduced a new radical dynamic in our
life. Discuss FIVE (5)
points on how Mobile media change us in terms of our
relationship?
(10 marks)
Mobile media has changed us in terms of our relationship is that it has transformed our relationship into a more digitized, constantly connected, and distracted form. This has led to changes in our communication patterns, social behaviors, and emotional connections with others.
How mobile media has changed us in terms of our relationship:
1. Reduced face-to-face interaction
Mobile media has reduced face-to-face interaction by replacing physical interaction with virtual communication. People spend more time communicating through their devices than in-person meetings or interactions. This shift has impacted our ability to form deep and meaningful relationships with people.
2. Increased social media usage
Social media platforms have enabled people to connect with each other across borders and time zones. While this has made communication more convenient, it has also led to a decrease in the quality of our relationships. People often rely on social media platforms for information about their friends and family members instead of reaching out to them directly.
3. Changed communication patterns
Mobile media has changed the way we communicate with each other. We use emojis, memes, and GIFs instead of words, and often shorten our messages to fit within the character limit. This has impacted the way we express our emotions and thoughts, which can lead to misunderstandings and conflicts.
4. Increased multitasking
Mobile media has led to increased multitasking, where people are often doing multiple things at once. This can lead to distractions and a lack of focus when interacting with others.
5. Impacted emotional connections
Mobile media has impacted our emotional connections with others. People often use their devices to escape from real-life situations and avoid face-to-face interactions. This can lead to a lack of empathy and emotional connection with others, which can further impact our relationships.
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Write a business plan that presents possible solutions to the
following problems:-
1. Obesity in India
2. Diabetes in India
3. Old age care in India
4. Rising costs of healthcare in India
5. Yoga cent
Business plan that presents possible solutions to the following problems Obesity in India, Diabetes in India, Old age care in India.
1.Problem: Obesity in India
a) Market Analysis:
India is experiencing a significant rise in obesity rates due to changing dietary patterns and sedentary lifestyles. According to recent statistics, over 135 million Indians are obese. By establishing a chain of healthy food outlets, we can tap into this growing market demand.
b) Solution:
Our healthy food outlets will offer a wide range of options, including low-calorie meals, salads, smoothies, and snacks made from fresh and locally sourced ingredients. By promoting portion control and balanced nutrition, we aim to create awareness about healthy eating habits and combat obesity.
c) Financial Projections:
To establish a successful chain of healthy food outlets, we estimate an initial investment of INR 5 million for the first year. Our projected revenue for the first year is INR 10 million, with a conservative growth rate of 15% per annum. By year three, we aim to have ten outlets and achieve a revenue of INR 30 million.
2.Problem: Diabetes in India
a) Market Analysis:
India has the second-highest number of individuals living with diabetes globally, estimated at over 77 million. By leveraging digital technology, we can bridge the gap between diabetes management and patients' access to healthcare services.
b) Solution:
Our digital platform will provide a comprehensive suite of tools and resources for diabetes management. Users will have access to remote monitoring devices, personalized diet plans, exercise routines, and a network of diabetes specialists for consultations. We will also collaborate with pharmaceutical companies to provide discounted diabetes medications.
c) Financial Projections:
To develop and launch the digital platform, we estimate an initial investment of INR 8 million. Our projected revenue for the first year is INR 15 million, with a growth rate of 20% per annum. By year three, we aim to have 50,000 active users and achieve a revenue of INR 50 million.
3.Problem: Old Age Care in India
a) Market Analysis:
India is witnessing a significant increase in its elderly population, with a rising demand for specialized care services. By providing well-equipped assisted living facilities, we can cater to the needs of this demographic.
b) Solution:
Our assisted living facilities will offer comfortable living spaces, round-the-clock medical support, personalized care plans, social activities, and nutritious meals. We will prioritize the safety, well-being, and dignity of the elderly residents while providing a supportive environment.
c) Financial Projections:
To establish a high-quality assisted living facility, we estimate an initial investment of INR 20 million. Our projected revenue for the first year.
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1.Mr. Husker’s Tuxedos Corp. began the year 2018 with $288 million in retained earnings. The firm earned net income of $49 million in 2018 and paid dividends of $4 million to its preferred stockholders and $19 million to its common stockholders.
What is the year-end 2018 balance in retained earnings for Mr. Husker’s Tuxedos?
Retained earnings= million.
The year-end 2018 balance in retained earnings for Mr. Husker's Tuxedos Corp. is $291 million.
To calculate the year-end 2018 balance in retained earnings for Mr. Husker's Tuxedos Corp., we need to consider the beginning retained earnings, net income, and dividends.
The formula to calculate the year-end retained earnings is:
Year-end Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
Given:
Beginning Retained Earnings = $288 million
Net Income = $49 million
Dividends to Preferred Stockholders = $4 million
Dividends to Common Stockholders = $19 million
Substituting the given values into the formula, we have:
Year-end Retained Earnings = $288 million + $49 million - ($4 million + $19 million)
Year-end Retained Earnings = $288 million + $49 million - $23 million
Year-end Retained Earnings = $314 million - $23 million
Year-end Retained Earnings = $291 million
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Each question in this section has only ONE correct answer 1) Which of the following statements about corporations in false? A The shareholders' liability is limited to their investment B A corporation can exist longer than its owners с A corporation is a distinct legal entity D Because ownership in a corporation is recented by shares of stock, ownership cannot easily be transferred to new ones E Perpetual succession is an advantage of corporations 21 Which of the folosing amounts is closest to the end value of investing £120,000 for 5 years at an effective annual interest rate of 916 compounded annually A €120,000 More c000,000 Next >> F305PM Time 12:27 Next > KREDD E Perpetual succession is an advantage of corporations 2) Which of the following amounts is closest to the end value of investing E120.000 for 5 years at an effective annual interest rate of 9% compounded annually? A £120,000 B £600,000 C £648,000 D £184.634 E £163.258 3) Which of the following amounts is closest to the present value of payments of £50,000 at the end of each of the next three years if the appropriate interest rate is 10%? A 37,565 More Next >> Next >> 4 M F NO DD ^ By: Rohan Chowdhury ends at 4:10 00 PM Time 22:37 the pager is saved in fo 1 of 2 Next > E €163.258 [69] 3) Which of the following amounts is closest to the present value of payments of £50.000 at the end of each of the next three years if the appropriate interest rate is 10%? A 37,560 B 130.305 C с 124,343 G D 146,485 E 150,000 4) Which of the following is closest to the current market value of a risk free bond with a face value of £2,000 which pays a coupon of 5% and which matures in 4 years time with a redemption value of £2,400 if providers of debt finance require a rate of return of 10167 C314.98 More Next © RE a 5) Which of the following capital budgeting techniques ignores the time value of money? A Profitability index B Internal rate of return C Net present value D Discounted payback E None of the above
In this set of questions, the false statement about corporations is that ownership cannot easily be transferred. The correct option D. The closest values are £163,258 for the end value of investing £120,000. The correct option is E, £130,305 for the present value of payments of £50,000. The correct option is B, and £1,314.98 for the current market value of a risk-free bond . The correct option is C. The capital budgeting technique that ignores the time value of money is not listed. The correct option is E.
1) The correct statement about corporations is D: "Because ownership in a corporation is represented by shares of stock, ownership cannot easily be transferred to new ones."
This statement is false. Ownership in a corporation can be easily transferred through the buying and selling of shares of stock.
Shareholders can sell their shares to other individuals or entities, allowing for the transfer of ownership.
2) The closest amount to the end value of investing £120,000 for 5 years at an effective annual interest rate of 9% compounded annually is E: £163,258.
This can be calculated using the compound interest formula: A = P(1 + r/n)^(nt), where A is the future value, P is the principal amount, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
Plugging in the values, we get A = £120,000(1 + 0.09/1)^(1*5) = £163,258.
3) The closest amount to the present value of payments of £50,000 at the end of each of the next three years, with an appropriate interest rate of 10%, is B: £130,305.
The present value can be calculated using the formula: PV = C/(1 + r)^n, where PV is the present value, C is the cash flow, r is the discount rate, and n is the number of periods.
Plugging in the values, we get
PV = £50,000/(1 + 0.10)^1 + £50,000/(1 + 0.10)^2 + £50,000/(1 + 0.10)^3 = £130,305.
4) The closest current market value of a risk-free bond with a face value of £2,000, a coupon of 5%, and a maturity of 4 years, with a required rate of return of 10%, is C: £1,314.98.
The market value of a bond can be calculated as the present value of its future cash flows, which include the coupon payments and the redemption value.
Using the formula: MV = (C/r) * (1 - 1/(1 + r)^n) + F/(1 + r)^n, where MV is the market value, C is the coupon payment, r is the required rate of return, n is the number of periods, and F is the face value, we get
MV = (£100/0.10) * (1 - 1/(1 + 0.10)^4) + £2,000/(1 + 0.10)^4 = £1,314.98.
5) The capital budgeting technique that ignores the time value of money is E: None of the above.
All the listed techniques (Profitability index, Internal rate of return, Net present value, Discounted payback) consider the time value of money in their calculations.
They take into account the timing and discounted value of cash flows to evaluate investment projects.
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On 1/27/2022 Macy's contacted XYZ Corporation, stated that 10,000 of the coats were damage and returned to them. The sale amount return was 6,000 and the cost was 1,500. The entry to record the return of the coats is: A) Debit sale return and allowance for 6,000 and credit account receivable Macy's 6,000, Debit Merchandise Inventory 1,500 and credit Cost of Goods sold for 1,500. B) Debit Account receivable 6,000 and credit Cost of Goods Sold 6,000. C) Debit Cost of Goods sold for 6,000 and Sale return and allowance 6,000, Credit Merchandise Inventory 1,500 and debit sale 1,500 D) None of the above.
The correct answer is Option A. Explanation:Option A is correct because:At the time of returning the coat, two accounts are affected, and they are a sale return and an allowance account, and the account receivable account.
Macy's is returning 10,000 damaged coats to XYZ Corporation, resulting in a sales return and an allowance account that is credited for the amount of 6,000 dollars, and the account receivable is debited by the same amount. It's important to note that accounts are only debited or credited based on their natural balances. Merchandise inventory account is debited for the cost of goods sold of 1,500 dollars, while cost of goods sold is credited for the same amount. Thus, the correct answer is option A.
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A company has Earnings Per Share of $3.52, and it has 300,000 shares outstanding. What is its earnings? Need the income Statement $300,000 $1,056,000 $85,227 This year, a firm pays no dividends. It increases its retained earnings by $430M. What was its Net Income? note - its tax rate is 40% $172M $430M Cannot tell $602M Firm D's quick ratio is 3.4, and the industry average is 2.1 You are skeptical of the firm's liquidity. Why might this be? You determine it has too much inventory Its current liabilities can wait It is over performing relative to the industry It is underperforming the industry average
The reason for being skeptical of Firm D's liquidity is that its quick ratio of 3.4 is higher than the industry average of 2.1.
To determine why there might be skepticism about Firm D's liquidity, we compare its quick ratio of 3.4 to the industry average of 2.1. The quick ratio is a measure of a company's ability to meet its short-term obligations using its most liquid assets. A higher quick ratio indicates a stronger liquidity position. In this case, Firm D's quick ratio of 3.4 is higher than the industry average of 2.1. This suggests that Firm D has a higher proportion of liquid assets (such as cash and accounts receivable) compared to its current liabilities. Based on the comparison of Firm D's quick ratio to the industry average, it can be concluded that Firm D is overperforming relative to the industry in terms of liquidity.
Therefore, the reason for being skeptical of Firm D's liquidity is that it has a higher quick ratio, indicating a stronger liquidity position than the industry average.
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Which of the following best describes someone using an elevator pitch?
Lena is delivering a persuasive speech in her Public Speaking class. She wants to convince her classmates that they can all take steps to combat light pollution.
Travis likes to meet with a group of friends to discuss science fiction novels. He's gotten a lot of great tips from the group.
Lena is using an elevator pitch to deliver a persuasive speech to convince her classmates that they can all take steps to combat light pollution. Travis is using a casual conversation with a group of friends to discuss science fiction novels and share tips. Option 1 is Correct.
Travis: "Hey guys, I'm Travis and I'm here to talk to you about science fiction novels. Did you know that science fiction is a genre that explores the impact of technology and scientific advancements on society and the human experience? It's a genre that often asks big questions about the future, and it can be a powerful tool for exploring and critiquing our own society and culture.
Some of my favorite science fiction novels include '1984' by George Orwell, 'Brave New World' by Aldous Huxley, and 'The Hitchhiker's Guide to the Galaxy' by Douglas Adams. These books are not only entertaining, but they also challenge us to think about the world in new ways and consider the consequences of our actions.
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Briefly Discuss the different types of budgets.
There are several types of budgets, and these budgets are essential tools for managing and controlling an organization's financial resources. A budget is a plan that outlines an organization's financial and operational objectives over a specific period of time.
The following are the different types of budgets. 1. Operating budget:It is a budget that outlines the company's revenue and expenses for a given period. It is used to predict the company's profit margin for a particular period.2. Capital budget:This budget identifies the company's long-term investment plans. Capital budgets are used to determine which long-term investments will provide the best returns and which will benefit the company in the long run.3. Financial budget:It is a budget that outlines the company's cash inflows and outflows. It takes into account the organization's expected income and expenses and projects the company's cash flow for a given period.
4. Master budget A master budget is an organizations all-inclusive financial plan for a specific period. It is a budget that combines all of the company's operating and financial budgets. It is a significant budget for decision-making, forecasting, and tracking the company's progress.5. Sales budget It is a budget that outlines the company's sales expectations for a given period. This budget helps organizations to determine the number of units they must sell to achieve their profit margins. Budgets are essential tools for managing and controlling an organization's financial resources. Different budgets, such as operating budgets, capital budgets, financial budgets, sales budgets, and master budgets, are used for different purposes. These budgets help organizations to predict their financial performance, allocate resources effectively, and make informed decisions.
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Read and analyse the *case study "Volkswagen’s Ferdinand Piëch" and include the three questions/components provided to you. Present your answer in a report format. The report should be 1500 words with appropriate APA referencing citing a minimum of four academic references.
In your report you should include the following:
- Provide insights into the leadership style, challenges faced, and contributions of Ferdinand Piëch to Volkswagen.
- Discuss the implications of the case study for leadership and management in the automotive industry.
- Offer recommendations or lessons learned based on the analysis.
- Restate the significance of the case study and its relevance to the broader business context.
You can use this framework to analyze the case study "Volkswagen's Ferdinand Piëch" and incorporate the three provided questions/components. Remember to gather relevant information from the case study and support your analysis with credible academic sources.
Title: Analysis of Volkswagen's Ferdinand Piëch
Introduction:
- Briefly introduce the case study and provide background information on Volkswagen and Ferdinand Piëch.
- Present the objectives of the report.
Question/Component 1: Discuss Ferdinand Piëch's leadership style and its impact on Volkswagen.
- Analyze Ferdinand Piëch's leadership style based on available information from the case study.
- Discuss the key characteristics and behaviors exhibited by Piëch as a leader.
- Evaluate the impact of his leadership style on the organizational culture, performance, and overall success of Volkswagen.
- Support your analysis with examples and evidence from the case study and relevant academic sources.
Question/Component 2: Assess the challenges faced by Ferdinand Piëch during his tenure as the CEO of Volkswagen.
- Identify and describe the major challenges encountered by Piëch during his leadership at Volkswagen.
- Analyze how Piëch addressed these challenges and the strategies he employed.
- Evaluate the outcomes and effectiveness of his approaches.
- Discuss the implications of these challenges on Volkswagen's reputation, market position, and long-term sustainability.
- Support your analysis with examples and evidence from the case study and relevant academic sources.
Question/Component 3: Evaluate Ferdinand Piëch's legacy and contributions to Volkswagen.
- Assess Piëch's long-term impact on the company's strategy, product development, and innovation.
- Discuss his contributions to Volkswagen's growth, expansion, and global market presence.
- Evaluate the sustainability of the changes implemented by Piëch and their influence on the company's future success.
- Analyze the perception of Piëch's leadership and his legacy within the industry and among stakeholders.
- Support your analysis with examples and evidence from the case study and relevant academic sources.
References:
- Cite a minimum of four academic references using appropriate APA formatting.
Note: Remember to adapt the structure and content of the report based on the specific requirements and guidelines provided by your instructor or institution.
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If a government chooses a system of marketable permits as its environmental regulation tool, the reduction in pollution will: O take place in every firm within the time set by the permit. O be initiated at the household level. take place in the firms where it is least costly to do so. be smaller than can be achieved under a command-and-control regulation
The reduction in pollution will take place in the firms where it is least costly to do so.
A system of marketable permits, also known as a cap-and-trade system, allows the government to set a limited number of pollution permits that can be traded among firms. Each firm is allocated a certain number of permits, representing their allowed level of pollution. Firms that can reduce their pollution more easily and at a lower cost have the option to sell their excess permits to other firms that find it more challenging and costly to reduce their pollution.
In this system, firms have an incentive to reduce pollution because they can profit from selling their unused permits. As a result, the reduction in pollution will primarily occur in the firms where it is least costly to do so. These firms will be more motivated to invest in pollution control measures to sell their surplus permits and generate additional revenue.
If a government chooses a system of marketable permits as its environmental regulation tool, the reduction in pollution will primarily take place in the firms where it is least costly to do so. This approach allows for flexibility and incentivizes firms to find cost-effective ways to reduce pollution.
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A strategy where the source of competitive advantage is cost and the scope is narrow. O Niche/Focus competitiveness O Niche/Focus cost leadership O Niche/Focus differentiation Niche/Focus cost differentiation
Niche/Focus cost leadership can be a successful strategy if a company can achieve significant cost advantages and effectively communicate the value proposition to its target customers.
Niche/Focus cost leadership is a strategy where the source of competitive advantage is cost, and the scope is narrow. In this strategy, a company aims to become the low-cost provider within a specific market segment or niche. By focusing on a particular customer group or product/service offering, the company can optimize its operations and achieve cost efficiencies that competitors cannot easily replicate.
To determine the viability of a Niche/Focus cost leadership strategy, a company needs to assess its cost structure and compare it with competitors. The company should identify areas where it can reduce costs while maintaining an acceptable level of product/service quality. This could involve streamlining processes, leveraging economies of scale, adopting efficient supply chain management, or utilizing technology to automate tasks.
Once the cost reduction opportunities are identified, the company can calculate the potential cost savings and estimate how much lower its prices can be compared to competitors. It is essential to ensure that the cost reductions do not compromise the value proposition or quality perceived by the target customers.
By focusing on a narrow market segment, the company can tailor its offerings and operations to meet the specific needs and preferences of that segment while keeping costs low. This strategy allows the company to differentiate itself based on price, making it an attractive option for customers seeking cost-effective solutions within the niche market. However, it is crucial to continually monitor and adapt the strategy to maintain the cost leadership position and address any changes in the market or competitive landscape.
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In its first month of operations. Sheridan Company made three purchases of merchandise in the following sequence: 200 units at $8; 250 units at $7; and 300 units at $6. There are 470 units on hand at
Under the FIFO method, the cost of ending inventory is $2990, and the cost of goods sold is $2240.
To calculate the cost of ending inventory and cost of goods sold under the FIFO (First-In, First-Out) method, we need to assume that the units sold are the ones that were acquired first.
Given the following information:
First purchase: 200 units at $8 per unit
Second purchase: 250 units at $7 per unit
Third purchase: 300 units at $6 per unit
Ending inventory: 470 units
Under the FIFO method:
Cost of ending inventory:
We start by identifying the most recent purchases that are still in inventory. In this case, it would be the 300 units purchased at $6 per unit and 170 units from the second purchase at $7 per unit.
Cost of ending inventory = (300 units * $6 per unit) + (170 units * $7 per unit) = $1800 + $1190 = $2990
Cost of goods sold:
To calculate the cost of goods sold, we sum up the cost of the units sold. Since we know the ending inventory is 470 units, we can subtract this from the total units purchased.
Cost of goods sold = (200 units + 250 units + 300 units) - 470 units = 750 units - 470 units = 280 units
To determine the cost of these units, we take the cost per unit from the earliest purchase.
Cost of goods sold = 280 units * $8 per unit = $2240
Therefore, under the FIFO method, the cost of ending inventory is $2990, and the cost of goods sold is $2240.
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The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance 1 2 3 4 5 6 7 8 9 10 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 7,014 6, 476 5,889 5,249 4,551 3,791 2,962 2 ? 13,000 5,986 6,524 7,111 7,751 8,449 9,209 10,038 2 2 Outstanding Balance 90,938 77.938 71,952 65,428 58,317 50,566 42,117 32,908 22,870 2 7 What is the outstanding balance after payment 9? (Round your answer to the nearest whole dollar) Multiple Choice $17,085 $7,392
The correct answer to outstanding balance after payment 9 is Multiple Choice $67,046.
The question is asking to determine the outstanding balance after payment 9. The table in the question shows that payment cash of $13,000 is made annually for 10 years. The table also shows the effective interest, decrease in balance, and outstanding balance each year. Using the formula for outstanding balance,
Outstanding Balance = Payment Cash x Decrease in Balance Factor + Outstanding Balance Factor
The decrease in balance for payment 9 is $2,962, and the outstanding balance factor for payment 9 is 32,908. Substituting the values into the formula above,
Outstanding Balance = 13,000 x 2,962 + 32,908
Outstanding Balance = 67,046
Therefore, the outstanding balance after payment 9 (rounded to the nearest whole dollar) is $67,046.
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1.a. According to the "Impossible Trinity," if a country has a policy of controlling its exchange rate, and doesn't have capital controls, then it ___ have an independent central bank and an independent monetary policy. (Write "can" or "can not") 1.b The Bretton Woods policy of fixed exchange rates (1945-1973) was instituted in part because the Great Depression had been made worse by very high tariffs and ___ (Write "F" for Flexible Exchange Rates, "C" for Competitive Devaluations.) Bretton Woods also meant a complete abandonment of the Gold-Standard, True or False? ___ (Write "T" for True and "F" for False.) 2.a If a country is facing an internal imbalance of under employment, and and external imbalance of a too large a Curent Account deficit, then the recommended policies to restore balance involve a(n) ___ Fiscal and a(n) Monetary Policy. (Write "E" for Expansionary and "C" for Contractionary (Write "E" for Expansionary and "C" for Contractionary 2.b But if that country faces an internal imbalance c over employment, and and external imbalance of a too large a Curent Account then the recommended policies to restore balance involve a(n) ___ Fiscal and a(n) ___ Monetary Policy. (Write "E" for Expansionary and "C" for Contractionary (Write "E" for Expansionary and "C" for Contractionary
1.a. According to the "Impossible Trinity," if a country has a policy of controlling its exchange rate and doesn't have capital controls, then it cannot have an independent central bank and an independent monetary policy.
1.b The Bretton Woods policy of fixed exchange rates (1945-1973) was instituted in part because the Great Depression had been made worse by very high tariffs and ___ Competitive Devaluations (C).
Bretton Woods also meant a complete abandonment of the Gold-Standard, ___ False (F).
2.a If a country is facing an internal imbalance of underemployment and an external imbalance of a too large Current Account deficit, then the recommended policies to restore balance involve a(n) ___ Expansionary Fiscal and a(n) ___ Contractionary Monetary Policy. (Write "E" for Expansionary and "C" for Contractionary)
2.b But if that country faces an internal imbalance of overemployment and an external imbalance of a too large Current Account deficit, then the recommended policies to restore balance involve a(n) ___ Contractionary Fiscal and a(n) ___ Expansionary Monetary Policy. (Write "E" for Expansionary and "C" for Contractionary)
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Managers can make the most of maslow's need hierarchy for success in their teams by:
Managers are responsible for their teams' success.
Maslow's need hierarchy is a theory that describes human motivation's various levels. According to this theory, human needs are grouped into five categories, with physiological needs being the most fundamental, followed by safety, love and belongingness, esteem, and self-actualization in order of importance. Managers can make the most of Maslow's need hierarchy for success in their teams by keeping the following points in mind : They should first focus on employees' physiological and safety requirements, as they are the most fundamental needs, before moving on to higher-order needs such as esteem and self-actualization. As a result, managers must provide a secure working environment, health insurance, good salary, and other benefits for their workers. The workplace should provide the opportunity for employees to interact, which will foster a sense of belongingness, and employees will feel valued and respected. They will feel a sense of teamwork, resulting in an increase in their motivation level. They should provide opportunities for personal and professional development by giving them a fair performance evaluation and feedback, assigning them tasks that are slightly outside their comfort zone but achievable, and providing coaching and training programs for them to learn new skills, which will help them advance in their careers. The final level of Maslow's hierarchy of needs is self-actualization, which involves fulfilling one's potential. Managers must provide employees with meaningful and challenging work that allows them to put their skills to use, to gain a sense of fulfillment and accomplishment. Motivation is critical for success in any organization, and Maslow's need hierarchy provides a framework for understanding employee motivation. Managers can use this theory to create a work environment that meets their employees' needs and motivates them to achieve their best results. By satisfying employees' basic needs, providing a supportive work environment, and fostering personal and professional development opportunities, managers can create a motivated and productive workforce.
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Question 1
Enter the Sharpe ratio for P*, with two decimal places. Hint: recall that Expected return of a portfolio is the weighted average of the expected returns, and variance of a portfolio = wT·S·w, where w is the (column) vector of portfolio weights and wT is its transpose.
Sharpe ratio: ?
To calculate the Sharpe ratio, we need the following information:
Risk-free rate of returnExpected return of the portfolioStandard deviation of the portfolio's returnSince the risk-free rate is not provided, I'll assume it to be 0 for this calculation.
Let's assume the expected return of the portfolio (P*) is 8% and the standard deviation of the portfolio's return is 12%.
The Sharpe ratio can be calculated as follows:
Sharpe Ratio = (Expected return of the portfolio - Risk-free rate) / Standard deviation of the portfolio's return
In this case, the Sharpe ratio would be:
Sharpe Ratio = (8% - 0%) / 12%
= 0.67
Therefore, the Sharpe ratio for portfolio P* is 0.67.
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During the new product development process 'screening' takes place a) After-market testing b) Before idea generation c) Before concept testing d) At the same time as Business Analysis
During the new product development process, 'screening' takes place c) Before concept testing.
The screening stage in the new product development process typically occurs after idea generation and before concept testing. In this stage, potential product ideas or concepts are evaluated and filtered to identify those with the most potential for further development. The purpose of screening is to eliminate ideas that are not aligned with the organization's goals, are not feasible or viable, or do not have sufficient market potential.
During screening, various criteria such as market attractiveness, technical feasibility, competitive landscape, resource availability, and strategic fit are considered to determine which ideas should proceed to the next stage of concept testing. This helps to narrow down the pool of ideas and focus resources on concepts that have a higher chance of success in the market.
Concept testing: Looks for potential clients responses and demeanors toward modern item ideas-before real models are created; concept testing looks for potential customers' responses and states of mind toward unused item thoughts some time recently real models are developed.
What are the 5 stages within the modern item advancement process? Five stages direct the unused item advancement handle for little businesses: thought era, screening, concept advancement, item improvement and, at last, commercialization.
What are the 4 sorts of item advancement processes?
The 4 stages of item advancement are as takes after – R&D, Development, Development, and Decay. These may be troublesome to outline out correctly, but over time after you scale a item you'll be able get distant better;a much better;a higher;a stronger;an improved">a distant better thought approximately the organize, it's in.
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Use the cutting plane method to solve the following IP: max z = x₁ + 2x₂ s.t. x₁ + x₂ ≤ 10 2x1 + 5x2 30 X1, X2 = 0; X1, X2 integer
The optimal solution for the given integer programming problem is x₁ = 5, x₂ = 5, with the objective function value z = 15.
Step 1: Solve the linear programming relaxation problem by removing the integer constraints.
Maximize: z = x₁ + 2x₂
Subject to:
x₁ + x₂ ≤ 10
2x₁ + 5x₂ ≤ 30
Solving the linear programming relaxation problem, we find the optimal solution:
x₁ = 5
x₂ = 5
z = 15
Step 2: Check if the optimal solution is integer. Since x₁ and x₂ are both integer values, the optimal solution is already integer. Therefore, we have found the optimal solution for the given integer programming problem:
x₁ = 5
x₂ = 5
z = 15
Conclusion:
The optimal solution for the given integer programming problem is x₁ = 5, x₂ = 5, with the objective function value z = 15.
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Assume Woolworths Ltd’s shares’ beta is 1.2, the 12-month risk-free rate of return is 4% and the expected return of the market portfolio is 8%. If Woolworth’s shares are presently priced to achieve a 10% p.a. expected rate of return, are Woolworth’s shares currently mispriced? Outline a strategy for rational investors.
Woolworths Ltd.’s shares’ beta is 1.2, the 12-month risk-free rate of return is 4% and the expected return of the market portfolio is 8% and the present expected rate of return is 10% p.a. Woolworth’s shares are presently mispriced.
Beta (β) represents the sensitivity of a stock to the market. It is used to assess a stock’s risk level in relation to the market. Since Woolworths Ltd’s shares’ beta is greater than one (1.2), they are more volatile than the market. This implies that the company’s shares should earn higher than the market return.
According to the CAPM model,
Ri = Rf + β (Rm-Rf)
where, Ri is the expected return on the stock, Rf is the risk-free rate of return, β is the sensitivity of the stock, and Rm is the expected market return.
Substituting the given values into the CAPM equation, the expected return on Woolworths Ltd’s shares is given by;
Ri = 4% + 1.2 (8% - 4%)
Ri = 4% + 1.2 (4%)
Ri = 4% + 4.8%
Ri = 8.8%
Thus, Woolworths Ltd’s shares are expected to return 8.8% per year. This implies that the shares are mispriced, given that the present expected rate of return is 10% p.a.
To rectify this situation, rational investors would sell Woolworths shares and buy those that have the same risk as the market. This is because Woolworths shares are presently overvalued, and their price will soon decrease to match the 8.8% expected rate of return.
As a result, investors should avoid buying Woolworths shares until the price falls to match the expected rate of return.
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Private saving is given by S=Y-T-C while public saving is given by T-G. In equilibrium, output is equal to demand; Y = Z. If the marginal propensity to save is 0.2, then show, algebraically, that the equilibrium level of output is given by Y = 5 [C₀ + I + G - 0.8T].
To show that the equilibrium level of output is given by the equation Y = 5 [C₀ + I + G - 0.8T], we need to start with the given equations and manipulate them algebraically.
Private saving (S) is given by:
S = Y - T - C ... (1)
Public saving (S^P) is given by:
S^P = T - G ... (2)
In equilibrium, output (Y) is equal to demand (Z), so we have:
Y = Z ... (3)
The marginal propensity to save (MPS) is given as 0.2. This means that for every additional unit of income, individuals save 0.2 units. Mathematically, MPS can be expressed as:
MPS = ΔS/ΔY ... (4)
Let's solve equations (1) and (2) for C and T, respectively, in terms of Y:
From equation (1):
S = Y - T - C
C = Y - T - S ... (5)
From equation (2):
S^P = T - G
T = S^P + G ... (6)
Substituting equations (5) and (6) into equation (4):
MPS = ΔS/ΔY
0.2 = Δ(Y - (S^P + G) - S)/ΔY
0.2 = Δ(Y - S^P - G - S)/ΔY
0.2 = Δ(Y - (S + S^P + G))/ΔY
0.2 = ΔY - Δ(S + S^P + G))/ΔY
0.2 = 1 - (ΔS + ΔS^P + ΔG)/ΔY
0.2 = 1 - (ΔS/ΔY + ΔS^P/ΔY + ΔG/ΔY)
0.2 = 1 - MPS - (ΔS^P/ΔY + ΔG/ΔY)
0.2 = 1 - 0.2 - (ΔS^P/ΔY + ΔG/ΔY)
0.2 = 0.8 - (ΔS^P/ΔY + ΔG/ΔY)
0.2 + (ΔS^P/ΔY + ΔG/ΔY) = 0.8
Since ΔS^P/ΔY represents the marginal propensity to tax (MPT), and ΔG/ΔY represents the marginal propensity to import (MPI), we can rewrite the equation as:
0.2 + MPT + MPI = 0.8
Simplifying further:
MPT + MPI = 0.8 - 0.2
MPT + MPI = 0.6 ... (7)
Now, let's solve equation (3) for Y:
Y = Z
Y = C + I + G ... (8)
Substituting equation (5) into equation (8):
Y = (Y - T - S) + I + G
Y = Y - T - S + I + G
Y = Y - (S + T) + I + G
Y = Y - (S + (S^P + G)) + I + G ... (9)
Substituting equation (6) into equation (9):
Y = Y - (S + (S^P + G)) + I + G
Y = Y - (S + (T - G + G)) + I + G
Y = Y
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Customers arrive at a one-person barber shop with an average interarrival time of 20 minutes. The average time for a haircut is 12 minutes, exponentially distributed.
a. The owner wishes to have enough seats in the waiting area so that on the average no more than 5% of the arriving customers will have to stand. How many seats should be provided?
b. Suppose that there is only sufficient space in the waiting area for five seats. What is the probability that an arriving customer will not find a seat?
This problem involves a one-person barber shop where customers arrive with an average interarrival time of 20 minutes, and the average time for a haircut is 12 minutes, exponentially distributed. The first part of the problem asks for the number of seats needed in the waiting area to ensure that, on average, no more than 5% of arriving customers have to stand. The second part of the problem seeks to determine the probability that an arriving customer will not find a seat when there is only space for five seats in the waiting area.
To determine the number of seats needed in the waiting area, we can use the concept of Little's Law, which states that the average number of customers in a system is equal to the average arrival rate multiplied by the average time spent in the system. In this case, the average arrival rate is 3 customers per hour (60 minutes divided by 20 minutes), and the average time spent in the system is the sum of the average haircut time (12 minutes) and the average waiting time. The owner wants to ensure that no more than 5% of customers have to stand, which means that the average number of customers in the system should be less than or equal to 0.05. By rearranging Little's Law formula, we can solve for the average waiting time and use it to calculate the number of seats needed.
If there is only space for five seats in the waiting area, we need to calculate the probability that an arriving customer will not find a seat. This can be done using queuing theory and the M/M/1 queue model. In this model, the system has a single server (the barber) and exponential interarrival and service times. By applying the formulas for an M/M/1 queue, we can calculate the probability that the system is full (all seats are occupied), which represents the probability that an arriving customer will not find a seat.
By solving these calculations, we can determine the number of seats needed in the waiting area and the probability of a customer not finding a seat when there are only five seats available.
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company wants to determine its reorder point (R) Demand and lead time are variable and they want to build a safety stock into R. The company wants to have a service probability coverage of 95 percent. If average daily demand is 56, standard deviation of the demand is 6, average lead time is 4 days, and the standard deviation of usage during lead time is 2, which is the desired value of R
Therefore, the desired value of the reorder point (R) with a safety stock to achieve a service probability coverage of 95 percent is approximately 227 units. .
The reorder point (R) is the inventory level at which a new order should be placed to replenish stock. To calculate R with a safety stock, we need to consider the desired service probability coverage, which in this case is 95 percent.
The formula to calculate the reorder point with safety stock is:
R = (Average daily demand * Average lead time) + (Z * Standard deviation of usage during lead time)
Z represents the number of standard deviations from the mean needed to achieve the desired service probability coverage. For a 95 percent coverage, Z is approximately 1.645.
Given the provided data:
Average daily demand = 56
Standard deviation of demand = 6
Average lead time = 4 days
Standard deviation of usage during lead time = 2
Using the formula and substituting the values, we can calculate the desired value of R:
R = (56 * 4) + (1.645 * 2) = 224 + 3.29 ≈ 227.29
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Part A.
You invested $8000 at 4.375% compounded quarterly. After 2 years, the rate changed to 5.5% Compounded monthly. What amount will you have 5 1/2 years from the initial investment? (No deposits or withdrawals until last day)
The amount you will have 5 1/2 years from the initial investment is $11,041.82.
To solve this problem, we can use the compound interest formula:
A = P * (1 + r/n)^(n*t)
Where:
A = the amount after t years
P = principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = time in years
For the first part of the investment, we have:
P = $8000
r = 4.375% = 0.04375
n = 4 (compounded quarterly)
t = 2
So the amount after 2 years is:
A1 = $8000 * (1 + 0.04375/4)^(4*2) = $8989.67
For the second part of the investment, we have:
P = $8989.67 (this is our new principal amount)
r = 5.5% = 0.055
n = 12 (compounded monthly)
t = 3.5 (since we want to know the amount after a total of 5.5 years)
So the amount after the full 5.5 years is:
A2 = $8989.67 * (1 + 0.055/12)^(12*3.5) = $11,041.82
Therefore, the amount you will have 5 1/2 years from the initial investment is $11,041.82.
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Please describe the 3 most important or notable lessons that you
learned about civil litigation from the movie "Hot Coffee". Explain
why they are important or notable.
The three most important lessons learned about civil litigation from the movie "Hot Coffee" are: the impact of tort reform, the power of media narratives, and the importance of understanding the legal system.
Impact of Tort Reform:The movie "Hot Coffee" highlights the significant impact of tort reform on civil litigation. Tort reform refers to efforts to limit the ability of individuals to file lawsuits and seek compensation for damages. The film demonstrates how tort reform measures, such as caps on damages or mandatory arbitration clauses, can restrict access to justice for injured individuals. This lesson emphasizes the importance of understanding the implications of tort reform on civil litigation and advocating for fair and equitable legal processesPower of Media Narratives: "Hot Coffee" explores how media narratives can shape public opinion and influence the outcome of civil litigation cases. The film highlights how certain high-profile lawsuits were distorted by the media, leading to misconceptions and biases among the general public. This lesson underscores the need for critical thinking and media literacy when engaging with legal issues. It also highlights the importance of fair and accurate reporting in ensuring a just legal system.Importance of Understanding the Legal System: The movie emphasizes the importance of understanding the legal system and the complexities of civil litigation. It showcases how plaintiffs and defendants navigate through various stages of the legal process, including filing a lawsuit, pre-trial procedures, and trial proceedings. This lesson highlights the significance of legal knowledge and representation in effectively advocating for one's rights and interests. It encourages individuals to educate themselves about the legal system to make informed decisions and participate actively in civil litigation.The movie "Hot Coffee" provides valuable insights into civil litigation, emphasizing the impact of tort reform, the power of media narratives, and the importance of understanding the legal system. These lessons underscore the need for a fair and accessible legal system, critical media analysis, and legal literacy to ensure justice in civil litigation cases.
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Chee Chew's portfolio has a beta of 1.27 and earned a return of 13.6% during the year just ended. The risk-free rate is currently 4.3%. The return on the market portfolio during the year just ended was 10.9%. a. Calculate Jensen's measure (Jensen's alpha) for Chee's portfolio for the year just ended b. Compare the performance of Chee's portfolio found in part a to that of Carri Uhl's portfolio, which has a Jensen's measure of - 0.15. Which portfolio performed better? Explain. c. Use your findings in part a to discuss the performance of Chee's portfolio during the period just ended
a. Jensen's measure for Chee's portfolio is 0.918%.
b. Chee's portfolio outperformed Carri Uhl's portfolio because it has a positive Jensen's measure, while Carri's has a negative measure.
c. Chee's portfolio has outperformed the market.
a. Jensen's measure or Jensen's alpha for Chee's portfolio is calculated as follows:
Jensen's Alpha = Portfolio's Average Return - [Risk-Free Rate + Portfolio's Beta * (Market's Average Return - Risk-Free Rate)]
Given, Portfolio's Beta = 1.27Portfolio's Average Return = 13.6%
Risk-Free Rate = 4.3%, Market's Average Return = 10.9%. Now, putting all values in the above equation, Jensen's Alpha = 13.6% - [4.3% + 1.27 * (10.9% - 4.3%)]
Jensen's Alpha = 13.6% - [4.3% + 1.27 * 6.6%]
Jensen's Alpha = 13.6% - [4.3% + 8.382%]
Jensen's Alpha = 0.918%. Therefore, Jensen's measure for Chee's portfolio is 0.918%.
b. The performance of a portfolio with a Jensen's measure of 0.918% is better than the performance of a portfolio with a Jensen's measure of -0.15. Chee's portfolio performed better than Carri Uhl's portfolio. Jensen's measure gives the excess return of a portfolio that cannot be explained by the market return.
If the measure is positive, it means that the portfolio has done better than expected; if the measure is negative, it means that the portfolio has done worse than expected. Therefore, Chee's portfolio outperformed Carri Uhl's portfolio because it has a positive Jensen's measure, while Carri's has a negative measure.
c. The Jensen's measure of Chee's portfolio for the period just ended is positive, indicating that Chee's portfolio has performed better than expected. Chee's portfolio has generated a return of 0.918% more than the return predicted by the capital asset pricing model (CAPM) used to calculate the Jensen's measure. Therefore, Chee's portfolio has outperformed the market.
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Obtain the last annual dividend payment by The Coca-Cola Company (KO). Assuming that in the next 5 years your company stock price can sustain the same growth rate calculated in question a (65%), and your company will continue to pay the same amount of dividend it last paid, calculate your rate of return in this investment during this period.
According to the Coca-Cola Company's investor relations website, their last annual dividend payment was $1.68 per share, paid in March 2021.
Assuming that the stock price of KO will continue to grow at the same rate of 65% over the next 5 years and the company maintains the same dividend payout of $1.68 per share annually, we can calculate the rate of return on this investment using the following formula:
Rate of return = ((ending stock price - beginning stock price + dividends) / beginning stock price) * 100%
Let's assume you purchase one share of KO at the current price of $55.57 (as of May 27th, 2023). The beginning stock price is therefore $55.57 per share.
To find the ending stock price after 5 years of 65% growth, we can use the compound interest formula:
Ending stock price = beginning stock price * (1 + growth rate)^n
where n is the number of compounding periods, which in this case is 5.
Plugging in the numbers, we get:
Ending stock price = $55.57 * (1 + 0.65)^5 = $518.20
Now we can calculate the rate of return over the 5-year period:
Rate of return = ((ending stock price - beginning stock price + dividends) / beginning stock price) * 100%
= (($518.20 - $55.57 + $1.68) / $55.57) * 100%
= 839.4%
Therefore, if the assumptions hold true, you would earn a rate of return of 839.4% on your investment in KO over the next 5 years. However, it's important to note that past performance is not a guarantee of future results, and these calculations are based on certain assumptions that may not hold true in the future.
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If the Bill and Melinda Gates Foundation were to buy out and destroy the patent for Combivir, which of the following would NOT be one of the effects?
A. The number of people treated with Combivir would rise.
B. Drug companies would have no incentive to create new and better drugs.
C. No one would have a monopoly on Combivir.
The correct option is C. If the Bill and Melinda Gates Foundation were to buy out and destroy the patent for Combivir, one of the effects would be drug companies would have no incentive to create new and better drugs. Firstly, it is important to note that patents are a form of protection for drug companies.
They act as monopolies for a specified period, giving the pharmaceutical company an exclusive right to the drug they invented or the process of producing it. If the patent is destroyed, the drug would be available to anyone who wanted to produce it, leading to an influx of generic drugs and a significant decline in profits. Pharmaceutical companies rely heavily on profits from patents to invest in research and development of new and better drugs.
Thus, drug companies would have no incentive to create new and better drugs if the patent of Combivir is destroyed. The number of people treated with Combivir would rise and no one would have a monopoly on Combivir.
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