Industry averages are best used to provide a guide to the financial position of the average firm in the industry. This allows businesses to compare and analyze their financial performance with that of the industry and to identify areas that need improvement. Therefore, the best answer to the given question is option 4.
An industry average is a measure of the financial performance of firms within an industry, and it provides a benchmark against which individual firms can be compared. This benchmark allows firms to measure their own performance against that of the industry and identify areas that need improvement.
The formula for calculating the compound interest on a principal amount is given as follows;A = P(1+r/n)^(nt)where A = the amount of money at the end of the investment periodP = the principal or initial amount investedr = the interest rate (as a decimal) compounded annuallyn = the number of times the interest is compounded in a year (in this case annually) t = the time (in years)Here, the principal amount P = $,
interest rate r = 3.5% compounded annually, time t = 10 years, amount A = $1250.A = P(1+r/n)^(nt)1250 = P(1+3.5%/1)^(1*10)1250 = P(1.035)^10P = 1250/1.035^10P = $886Therefore, the amount that needs to be put into the bank account is $886 (rounded to the nearest $1). Hence, the correct answer is option 1.
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Tool Manufacturing has an expected EBIT of $31,000 in perpetuity, and a tax rate of 33 percent. The firm has $73,000 in outstanding debt at an interest rate of 10 percent, and its unlevered cost of capital is 12 percent. The value of the firm is $ according to M\&M Proposition I with taxes. (Do not include the dollar sign (\$). Round your answer to 2 decimal places. (e.g. 32.16))
M&M Proposition I with taxes:It states that the value of a company remains unchanged regardless of its capital structure and it is determined by the free cash flows the firm generates and the required rate of return to invest in that company .EBIT refers to earnings before interest and taxes.
The equation to calculate EBIT is Revenues minus the cost of goods sold and operating expenses. Formula for M&M Proposition I with taxes:Vl = Vu + Tc * BWhere:Vl = the value of levered firmVu = the value of the unlevered firmTc = tax rateB = the market value of the debt.
The tax rate is the percentage of an individual or corporation's taxable income that is owed to the government. It is normally expressed as a percentage. The tax rate differs for different countries and individuals.What is the market value of the debt?Market value of the debt refers to the current market value of a company's outstanding debt.
This amount can vary from the company's balance sheet value.What is the unlevered cost of capital?The unlevered cost of capital is the rate of return required to make an investment in a company with no debt. It is determined by the risk of the business and other factors that would affect the return on investment.
The value of the firm can be calculated using the formula:V = FCF / (r - g)Where:FCF = Free cash flows = required rate of returng = expected growth rate.
According to the M&M Proposition I with taxes, the value of the firm is $118,090.91. Solution:Value of the firm = Vu + Tc * BWhere:Vu = the value of the unlevered firm = EBIT / rU = $31,000 / 12% = $258,333.33Tc = tax rate = 33%B = the market value of the debt = $73,000Vl = Vu + Tc * BVl = $258,333.33 + 33% * $73,000Vl = $258,333.33 + $24,090.91Vl = $282,424.24T.
herefore, according to M&M Proposition I with taxes, the value of the firm is $282,424.24.
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What other factors need to be considered in making this
decision? RELATED Burger king dollar double chessburger
casestudy
In making the decision regarding the Burger King dollar double cheeseburger, other factors to be considered are the target audience, pricing strategy, and the potential impact on sales.
Burger King was facing the decision of whether to maintain its Dollar Double Cheeseburger or to remove it from the menu. The burger was popular among customers, but it was also costly for Burger King to produce and sell at such a low price. Target Audience: Burger King would have to consider who the Dollar Double Cheeseburger was most appealing to. They would need to identify the specific demographic that was drawn to the burger and whether or not the dollar double cheeseburger was a viable option for that audience.Pricing Strategy: Burger King would also need to consider the company's pricing strategy. They would need to examine how the dollar double cheeseburger fits into their overall pricing plan and whether or not it would be better to charge more for the burger or to remove it from the menu.Potential Impact on Sales: Burger King would have to determine the potential impact of removing the dollar double cheeseburger from the menu on its overall sales. The company would need to evaluate how this decision would affect the sales of other menu items and how it would impact the profitability of the business as a whole.
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Lucky Ltd produces scooter for kids that it sells for $37 each. At capacity, the company can produce 54 000 scooters a year. The costs of producing and selling 54 000 scooters are as follows: Cost per scooter Total costs Direct materials $14 $756 000 Direct labour 4 216 000 2 108 000 Variable production overhead Fixed production overhead 5 270 000 2 Variable selling expenses Fixed selling expenses Total costs 108 000 162 000 $1 620 000 Required (show your workings): 1) Suppose that currently Lucky is producing and selling 44 000 scooters; at this level 5 marks its fixed costs do not change from the above table. Cochiti Ltd wants to place a one-time special order for 10 000 scooters at $21 each. Lucky will incur no variable selling costs for this special order. Should Lucky accept this one-time special order? Show your calculations. Suppose that Lucky is currently producing and selling 54 000 scooters. Cochiti's 2) order has to be 10,000 units entirely. If Lucky accepts Cochiti's order, Lucky will have to sell 10 000 fewer scooters to its regular customers. 7 marks a. On financial considerations alone, should Lucky accept this one-time special order? Show your calculations. 8 marks b. On financial considerations alone, at what price would Lucky be indifferent between accepting the special order and continuing to sell to its regular customers at $37 per unit? c. What other factors should Lucky consider in deciding whether to accept the 5 marks one-time special order?
Lucky Ltd should not accept the one-time special order for 10,000 scooters at $21 each as it would result in a loss.
The relevant costs for the order exceed the revenue generated, making it unfavorable from a financial standpoint. states the conclusion that Lucky Ltd should not accept the special order based on the calculations of relevant costs and revenue. The relevant costs, which include direct materials, direct labor, and variable production overhead, amount to $230,000, while the revenue from the order is only $210,000. This means that accepting the order would result in a loss of $20,000. Therefore, it is not financially viable for Lucky Ltd to accept the special order at the given price.
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Oyster Company's sales in 2020 were $145,000. Sales in 2013 were $167,600. Using 2021 as the base year, the trend percentage for 2021 is A. 81.3% B. 100.0% C. 115.6 % D. 147.6% E. 12.3%
Oyster Company's sales in 2020 were $145,000. Sales in 2013 were $167,600. The trend percentage for Oyster Company's sales in 2021, using 2020 as the base year, is D. 147.6%.
In summary, the trend percentage indicates that Oyster Company's sales in 2021 increased by 47.6% compared to the sales in 2020.
To calculate the trend percentage, we need to find the percentage change between two years. The formula is
[tex]\frac{(New Value - Base Value)}{Base Value}[/tex] × 100%.
Using the given information, the base year is 2020 with sales of $145,000, and the new value is 2021 with an unknown sales figure. Let's calculate the trend percentage:
[tex]\frac{(2021 Sales - 2020 Sales)}{2020 Sales}[/tex] × 100%
To find the unknown sales in 2021, we can use the trend percentage formula again. Since the trend percentage is given as 147.6%, we can set up the equation:
Simplifying the equation, we have
[tex]\frac{(2021 Sales - 145,000) }{145,000}[/tex] = 1.476
Now, solving for 2021 Sales:
2021 Sales - $145,000 = $145,000 × 1.476
2021 Sales = $145,000 + ($145,000 × 1.476)
2021 Sales = $145,000 + $214,020
2021 Sales = $359,020
Therefore, the trend percentage for 2021 is 147.6%, indicating a 47.6% increase in sales compared to 2020.
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Suppose the economy is in its long run equilibrium. If there is a decrease in consumption, what happens in the short run?
Group of answer choices
a. Price level rises and output rises
b. Price level falls and output rises
c. Price level rises and output falls
d. Price level falls and output falls
e. Not enough information
If there is a decrease in consumption in the short run while the economy is in its long-run equilibrium, the correct answer is c. Price level rises and output falls.
A decrease in consumption indicates a reduction in aggregate demand, which leads to a decrease in output or production in the short run. As consumption falls, businesses may experience decreased demand for their goods and services, leading to a decline in output levels. This decrease in output is accompanied by a decrease in employment and a potential increase in unemployment.
In response to the decreased consumption and lower output, businesses may adjust their prices downward to stimulate demand. However, in the short run, prices are relatively sticky or inflexible, meaning they do not adjust instantaneously to changes in demand. As a result, the price level tends to rise or remain unchanged despite the decline in output.
Therefore, the correct option is c. Price level rises and output falls. This reflects the short-run dynamics of an economy experiencing a decrease in consumption while in its long-run equilibrium.
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Define production and productivity. Explain the difference between the two. 2. What do understand by "Plant Design"? Discuss the various factors considered in designing the location of a plant 3.What factors are considered while designing a factory building? Will you prefer an 'L' building or Triangular building? Why. 4. What are some of the factors that cause organizations to redesign their product or services? 5. What is modular design? What are the main advantages and disadvantages? 6. Give several examples of unethical conduct involving products or service design and ethical principles that are violated. 7. How were food producers impacted by the US government's requirement to identify the trans fat content on food label. 8. What are some of the potential benefits of a more formalized approach to forecasting?
1. Production refers to the process of transforming inputs, such as raw materials and labor, into finished goods or services. It involves the activities and resources required to create and deliver products or services to customers. Productivity, on the other hand, measures the efficiency of production by comparing outputs to inputs.
It represents the ratio of output quantity to input quantity and indicates how effectively resources are utilized to generate desired outcomes.
2. Plant design refers to the process of creating and arranging the physical layout of a manufacturing facility or plant. It involves determining the optimal arrangement of machinery, equipment, workstations, storage areas, and other elements to facilitate smooth operations, efficient workflow, and safety. Factors considered in designing the location of a plant include proximity to raw materials, availability of skilled labor, transportation infrastructure, market access, proximity to suppliers and customers, legal and regulatory considerations, and cost factors.
3. When designing a factory building, several factors are typically considered. These include the available land and its shape, the production process and workflow, future expansion plans, access to utilities and services, compliance with building codes and regulations, safety requirements, environmental considerations, ergonomic factors, and overall cost and budget constraints. The choice between an 'L' building or a triangular building would depend on the specific requirements and constraints of the organization, such as available space, desired layout, and operational needs. There is no inherent preference for one over the other, as it ultimately depends on the unique circumstances of the organization.
4. Organizations may redesign their products or services due to various factors, including changes in customer preferences, technological advancements, competitive pressures, market demand fluctuations, regulatory requirements, and the need to improve quality or reduce costs. Other factors could include the introduction of new features or functionalities, addressing customer feedback or complaints, adapting to evolving market trends, expanding into new markets, or aligning with sustainability and ethical considerations.
5. Modular design refers to an approach where a product or system is divided into modules or components that can be independently created, replaced, or modified. These modules are designed to be interchangeable, standardized, and easily integrated into the overall system. The main advantages of modular design include increased flexibility, ease of customization, simplified maintenance and repair, faster product development cycles, and cost savings through economies of scale. However, some disadvantages can include higher initial costs, increased complexity in managing interdependencies between modules, and potential compatibility issues if standards are not followed consistently.
6. Examples of unethical conduct involving product or service design include intentionally deceptive packaging or labeling, deliberate omission of important safety information, knowingly designing products with planned obsolescence, failure to perform proper safety testing, infringing on intellectual property rights, and exploiting vulnerable consumer groups. Ethical principles violated in such
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Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.6% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2004 and is expected to retire at the end of 2038 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2018 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) At the beginning of 2019, the pension formula was amended to: 1.75% × Service years × Final year's salary The amendment was made retroactive to apply the increased benefits to prior service years. Required: 1. What is the company's prior service cost at the beginning of 2019 with respect to Davenport after the amendment described above? 2. Since the amendment occurred at the beginning of 2019, amortization of the prior service cost begins in 2019. What is the prior service cost amortization that would be included in pension expense? 3. What is the service cost for 2019 with respect to Davenport? 4. What is the interest cost for 2019 with respect to Davenport? 5. Calculate pension expense for 2019 with respect to Davenport, assuming plan assets attributable to her of $150,000 and a rate of return (actual and expected) of 10%.
1. The company's prior service cost at the beginning of 2019, with respect to Davenport after the amendment, is $220,500.
2. The prior service cost amortization that would be included in pension expense is $12,250.
3. The service cost for 2019 with respect to Davenport is $126,000.
4. The interest cost for 2019 with respect to Davenport is $10,500.
5. The pension expense for 2019 with respect to Davenport, assuming plan assets attributable to her of $150,000 and a rate of return (actual and expected) of 10%, is $139,750.
1. The prior service cost represents the increase in pension benefits resulting from the amendment being applied retroactively to prior service years. In this case, the prior service cost is calculated by taking the difference between the benefits under the new formula and the benefits under the old formula for each year of prior service, discounted to present value using the actuary's discount rate.
2. Amortization of the prior service cost begins in 2019 and represents the gradual recognition of the cost over the remaining service years of the employees affected by the amendment. The amortization is calculated by dividing the total prior service cost by the remaining service years.
3. The service cost represents the present value of the additional benefits earned by Davenport in the current year under the new formula. It is calculated by multiplying the service years in the current year by the final year's salary, discounted to present value using the actuary's discount rate.
4. The interest cost represents the increase in the projected benefit obligation due to the passage of time. It is calculated by multiplying the beginning-of-year projected benefit obligation by the actuary's discount rate.
5. The pension expense is the sum of the service cost, interest cost, and expected return on plan assets. The expected return on plan assets is calculated by multiplying the beginning-of-year plan assets by the expected rate of return.
The difference between the expected return and the actual return is reported separately as a component of other comprehensive income.
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Dooley, Inc., has outstanding $100 million (par value) bonds that pay an annual coupon rate of interest of 10.5 percent. Par value of each bond is $1,000. The bonds are scheduled to mature in 20 years. Because of Dooley’s increased risk, investors now require a 14 percent rate of return on bonds of similar quality with 20 years remaining until maturity. The bonds are callable at 110 percent of par at the end of 10 years.
To calculate the current price of the bonds, we need to find the present value of the bond's future cash flows. Here's how you can calculate it:
Step 1: Calculate the annual coupon payment:
Coupon Payment = Coupon Rate * Par Value
Coupon Payment = 10.5% * $1,000
Coupon Payment = $105
Step 2: Calculate the number of coupon payments remaining until maturity:
Number of Coupon Payments = Remaining Years until Maturity * Number of Coupon Payments per Year
Number of Coupon Payments = 20 * 1
Number of Coupon Payments = 20
Step 3: Calculate the present value of the coupon payments using the required rate of return:
Present Value of Coupon Payments = Coupon Payment * [1 - (1 + Required Rate of Return)^(-Number of Coupon Payments)] / Required Rate of Return
Present Value of Coupon Payments = $105 * [1 - (1 + 14%)^(-20)] / 14%
Step 4: Calculate the present value of the face value (par value) of the bond:
Present Value of Face Value = Face Value / (1 + Required Rate of Return)^(Remaining Years until Maturity)
Present Value of Face Value = $1,000 / (1 + 14%)^20
Step 5: Calculate the present value of the callable price (110% of par value) at the end of 10 years:
Present Value of Callable Price = Callable Price / (1 + Required Rate of Return)^(Years until Call Date)
Present Value of Callable Price = 1.1 * $1,000 / (1 + 14%)^10
Step 6: Calculate the current price of the bonds by summing up the present values of the coupon payments, face value, and callable price:
Current Price of Bonds = Present Value of Coupon Payments + Present Value of Face Value + Present Value of Callable Price
Performing the calculations:
Present Value of Coupon Payments = $105 * [1 - (1 + 14%)^(-20)] / 14%
Present Value of Face Value = $1,000 / (1 + 14%)^20
Present Value of Callable Price = 1.1 * $1,000 / (1 + 14%)^10
Current Price of Bonds = Present Value of Coupon Payments + Present Value of Face Value + Present Value of Callable Price
Substituting the values and solving the equations, you can calculate the current price of the bonds.
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Which of the following are not the examples of direct property losses I the theft of a person's jewelry II the theft of an office equipment after fire III the cost of renting a substitute vehicle while a collision-damaged car is being repaired IV the vandalism of a person's automobile a. III and III b. All of the above c. I and II d. II and III
The correct answer is c. I and II. The examples that are not considered direct property losses are III (the cost of renting a substitute vehicle while a collision-damaged car is being repaired) and IV (the vandalism of a person's automobile).
Direct property losses refer to the actual physical damage or loss of property. In this case, the theft of a person's jewelry (example I) and the theft of office equipment after a fire (example II) are both examples of direct property losses. The vandalism of a person's automobile (example IV) is also an example of a direct property loss.
However, the cost of renting a substitute vehicle while a collision-damaged car is being repaired (example III) is not a direct property loss. It is an indirect loss related to the inconvenience and financial impact caused by the car's damage, rather than the physical damage to the property itself.
The examples that are not considered direct property losses are III (the cost of renting a substitute vehicle while a collision-damaged car is being repaired) and IV (the vandalism of a person's automobile).
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Kelantan seeks federal government's help for farmers affected by flood PASIR PUTEH: The Kelantan government is requesting the federal government to help farmers in Semerak who had experienced losses amounting to RM2.4 million after their crops, especially sweet potatoes, were destroyed by a recent flood. State Agriculture, Agro-based Industry, Biotechnology, Green Technology and Environment Committee deputy chairman Abdul Azziz Kadir said the farmers needed help to recover from huge losses. Source: The Sun daily, December 8, 2019
(c) Based on the article above, what is the short run macroeconomic impact of the event and sketch a graph of aggregate demand and aggregate supply to display the current situation. Label each curve, equilibrium point and each axis of the diagram. (d) Based on the article above, is there any possibility for the policymakers to mitigate the impact on quantity of output and price level? Explain in details. (Total: 20 marks)
(c) The short-run macroeconomic impact of the farmers' losses due to the flood can be depicted in a graph of aggregate demand (AD) and aggregate supply (AS). The AD curve represents the total spending on goods and services in the economy, while the AS curve represents the total production of goods and services.
In this scenario, the flood-induced crop losses in Semerak would result in a decrease in the aggregate supply of goods and services. This would shift the AS curve to the left. As a result, the equilibrium point where AD intersects AS will move to a lower level of output and a higher price level.
The graph:
```
^
Price Level |
| AD (initial)
|
|
| AD (after decrease)
|
|______________________
Output
```
In the graph, the initial AD curve intersects the AS curve at the original equilibrium point, indicating the initial output level and price level. However, after the decrease in aggregate supply due to the crop losses, the AD curve shifts leftward. The new equilibrium point reflects a lower level of output and a higher price level.
(d) Policymakers have the possibility to mitigate the impact on the quantity of output and price level through various measures. Here are some possible actions they could take:
1. Financial assistance: The policymakers can provide financial aid or subsidies to the affected farmers. This can help them recover from their losses and resume production, thereby increasing aggregate supply.
2. Infrastructure development: Investing in infrastructure projects, such as improving irrigation systems or flood control measures, can help prevent or mitigate the impact of future floods. This would contribute to the stability and resilience of the agricultural sector.
3. Support for diversification: Policymakers can encourage farmers to diversify their crops or engage in alternative income-generating activities. This can help reduce their reliance on a single crop and mitigate the impact of crop losses during natural disasters.
4. Price stabilization measures: The government can intervene in the market to stabilize prices of essential goods. This can be done through mechanisms like price controls or strategic reserves to ensure affordability and availability.
These policy measures aim to address the short-run impact of the flood on output and prices. However, it's important to note that the long-run impact and recovery process may require more comprehensive strategies, including infrastructure development, risk management systems, and agricultural modernization.
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Problem 19-15 The following is cash flow data for Rocket Transport: a. Find the net cash provided by or used in investing activities. (Input the amount as positive value.) b. Find the net cash provided by or used in financing activities. (Input the amount as positive value.) c. Find the net increase or decrease in cash for the year. (Input the amount as positive value.)
The net cash provided by investing activities is: $(300,000)
The net cash provided by financing activities is: $760,000
The net increase or decrease in cash for the year is: $1,000,000
Given data: Cash flow data for Rocket Transport. In order to calculate the net cash provided by or used in investing activities, financing activities and net increase or decrease in cash for the year, the following steps are followed:
a) Calculation of net cash provided by or used in investing activities: Cash Flow from Investing Activities Purchase of Property, Plant and Equipment $(300,000)Cash Flow from Investing Activities $(300,000)So, the net cash provided by investing activities is: $(300,000)
Net Cash provided by investing activities = Cash Flow from Investing Activities = $(300,000).b) Calculation of net cash provided by or used in financing activities Cash Flow from Financing Activities Increase in Bonds Payable $900,000 Dividends Paid $(140,000)Cash Flow from Financing Activities $760,000So, the net cash provided by financing activities is: $760,000
Net Cash provided by financing activities = Cash Flow from Financing Activities = $760,000.c) Calculation of net increase or decrease in cash for the year: Net increase or decrease in cash for the year = Net cash from operating activities + Net cash provided by or used in investing activities + Net cash provided by or used in financing activities. Net increase or decrease in cash for the year = $(60,000) + $(300,000) + $760,000Net increase or decrease in cash for the year = $1,000,000So, the net increase or decrease in cash for the year is: $1,000,000 Net increase or decrease in cash for the year = $1,000,000.
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Which of the following is not included in GDP? The value of the time of a stay-at-home parent The purchase of a ticket to a Lady Gaga performance The salary of a public school teacher A new cell phone
The value of the time of a stay-at-home parent is not included in GDP.
GDP or Gross Domestic Product is defined as the total market value of goods and services produced within a given country in a particular period. It is the most important economic statistic and is used to measure the economic growth of a country. Here are the following items that are not included in GDP: The value of the time of a stay-at-home parent: It is not included in GDP since a stay-at-home parent is not producing any goods or services that are sold in the market. GDP only includes goods and services that are exchanged in the market. The purchase of a ticket to a Lady Gaga performance: It is included in GDP since a ticket to a concert is considered a final good and is sold in the market. The salary of a public school teacher: It is included in GDP since the salary is paid for providing a service that is sold in the market. A new cell phone: It is included in GDP since a cell phone is considered a final good and is sold in the market.
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The value of the time of a stay-at-home parent is not included in GDP.
Explanation:GDP includes production that is exchanged in the market, but it does not cover production that is not exchanged in the market. For example, hiring someone to mow your lawn or clean your house is part of GDP, but doing these tasks yourself is not part of GDP. In the given options, the value of the time of a stay-at-home parent is not included in GDP because it is not a market transaction.
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5A global food products company, Yummy, makes soups that are specifically tailored to the tastes of (foreign) consumers in individual host countries. The most appropriate sourcing strategy that Yummy is likely to use for its fresh ingredients such as vegetables would be _____________. Group of answer choices a. Local, close to its production plant when possible b. National, using suppliers within each host country c. Global, using the same suppliers across the world. None of the above
Option A is correct. The most appropriate sourcing strategy that Yummy is likely to use for its fresh ingredients such as vegetables would be Local, close to its production plant when possible.
The most appropriate sourcing strategy for Yummy, a global food products company tailoring soups to the tastes of foreign consumers in individual host countries, would be to source fresh ingredients locally, close to its production plant when possible.
This strategy ensures freshness, quality, and supports customization to local culinary preferences. It also reduces transportation costs, carbon footprint, enables better inventory management, and improves responsiveness to demand fluctuations.
National sourcing within each host country may limit consistency, while global sourcing using the same suppliers may not align with local tastes. Prioritizing local sourcing allows Yummy to maintain the desired quality, tailor soups to specific markets, and benefit from reduced logistics complexities.
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The following bond investment transactions were completed by Starks Company: Jan. 31 Purchased 42,$1,000 government bonds at 100 plus accrued interest of $210 ( 1 month). The bonds pay 6% annual interest an July 1 and January 1. July 1 Received semiannual interest on bond investment. Aug. 30 Sold 18, $1,000 bonds at 97 plus $180 acorued interest (2 months). require an entry, leave it blank. Dec, 31 c. Journalize the receipt of $24,000 at the bonds' maturity on July 1 . If an amount box does not require an entry, leave it blank. July. 1
To journalize the bond investment transactions, we need to record the purchase, receipt of interest, sale, and maturity of the bonds. Here are the entries for each transaction:
Jan. 31: Purchase of 42 government bonds at 100 plus accrued interest of $210 (1 month)
Debit: Bond Investments $42,420 ($1,000 * 42 bonds + $210)
Credit: Cash $42,420
July 1: Receipt of semiannual interest on bond investment
Debit: Bond Investments (Interest Receivable) $1,260 ($42,420 * 6% * 6/12)
Credit: Interest Revenue $1,260
Aug. 30: Sale of 18 government bonds at 97 plus $180 accrued interest (2 months)
Debit: Cash $18,180 ($1,000 * 18 bonds * 97% + $180)
Credit: Bond Investments $18,000 ($1,000 * 18 bonds)
Credit: Gain on Sale of Investments $360 ($18,180 - $18,000)
Dec. 31: Maturity of the bonds and receipt of $24,000
Debit: Cash $24,000
Credit: Bond Investments $24,000
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Edmiston Manufacturing Company reported the following year-end information: beginning work in process inventory, $80,000; cost of goods manufactured, $880,000; beginning finished goods inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000. How much is Edmiston's cost of goods sold for the year? a) $890,000 b) $900,000 c) $880,000 d) $870,000
Therefore, the cost of goods sold for the year is A) $890,000.
We can calculate the cost of goods sold (COGS) for the year by using the following formula: COGS = Beginning Finished Goods Inventory + Cost of Goods Manufactured – Ending Finished Goods Inventory
The given information is:
Beginning Work in Process Inventory = $80,000
Cost of Goods Manufactured = $880,000
Beginning Finished Goods Inventory = $50,000
Ending Work in Process Inventory = $70,000
Ending Finished Goods Inventory = $40,000
Using the formula for COGS, we have:
COGS = $50,000 + $880,000 - $40,000
COGS = $890,000
Therefore, the cost of goods sold for the year is $890,000. Hence, the option (a) $890,000 is correct.
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General Computers Inc. purchased a computer server for $53,500. It paid 40.00% of the value as a down payment and received a loan for the balance at 10.00% compounded semi-annually. It made payments of $2,150.03 at the end of every quarter to settle the loan. a. How many payments are required to settle the loan? payments Round up to the next payment b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places. : :
a. To determine the number of payments required to settle the loan, we can use the formula for the number of periods in a loan:
Number of Payments = Total Loan / Payment Amount
Total Loan = Purchase Price - Down Payment = $53,500 - ($53,500 * 40%) = $53,500 - $21,400 = $32,100
Payment Amount = $2,150.03 (given)
Number of Payments = $32,100 / $2,150.03 ≈ 14.91
Since we can't have a fraction of a payment, we need to round up to the next payment. Therefore, the number of payments required to settle the loan is 15.
b. To fill in the partial amortization schedule, we need more information such as the loan term, interest rate, and the balance after each payment. Without this information, it is not possible to provide a complete amortization schedule.
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Which of the following BEST describes the overall goal of project portfolio management? Maximize the support of business strategy while minimizing risk Maximize innovation at an affordable cost Ensure that all projects are selected using the same criteria None of the above
First option is correct. The overall goal of project portfolio management is to maximize the support of business strategy while minimizing risk.
Project portfolio management involves selecting and managing a collection of projects to achieve strategic objectives. The primary objective is to align the project portfolio with the organization's business strategy, ensuring that projects contribute to the overall goals and objectives of the company.
By maximizing the support of business strategy, organizations can prioritize projects that have the highest potential for creating value and driving the organization forward. At the same time, project portfolio management aims to minimize risk by carefully evaluating and selecting projects based on their potential risks and rewards.
It involves assessing the risk profile of each project, considering factors such as technical feasibility, market demand, financial viability, and resource availability. By minimizing risk, organizations can enhance the likelihood of project success and optimize the allocation of resources.
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Manisan Sdn Bhd is a company that manufactures chocolates and sugar confectionery products. The company currently employs 150 employees. It has been in operation for the last 10 years but lately the company is not doing so well financially. As part of the company’s effort to restructure and cut cost, the company intends to retrench some of its employees. Last week the company sent out notice of retrenchment to 30 of its current employees on ground of financial difficulties and redundancy.
Among those involved are Anthony, Jamal, Hock Tai and Nora. Anthony, Jamal, and Nora are production operators in the company while Hock Tai is a marketing executive. All of them are quite upset with the decision as they have been serving the company loyally for the many years.
They questioned the company’s decision to retrench them because just last week they hear that the company has hired one new technician for the Production Department and a manager for the R&D Department. To add insult to injury, they found out that the company has decided to maintain the service of five foreign workers because the cost of paying their salaries is cheaper compared to paying the locals.
These aggrieved employees have now come and see you, an HR consultant to seek your advice on the following matters:
1) Do companies have the right to retrench employee when they face financial difficulties or when they do a restructuring? What should or should not be done by Manisan Sdn Bhd when the company wishes to retrench employees? Explain and relate your answer to the above scenario.
Manisan Sdn Bhd, a manufacturer of chocolates and sugar confectionery products, has decided to retrench 30 of its employees out of the current
workforce of 150. The company has been facing financial difficulties and has deemed these retrenchments necessary employees to restructure and cut costs. The retrenchments are justified based on the grounds of financial manufactures difficulties and redundancy. While it is a difficult decision, it is a strategic move to stabilize the company's financial situation. products company aims to streamline its operations and optimize resources to improve its overall financial performance and ensure long-term sustainability in the industry.
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Fund A) has force of interest δt = 4kt (where t is in years) while fund B) earns a nominal discount rate of 4% compounded daily. Find k if $100 is deposited at t = 0 in both funds, and both funds have the same accumulated value when t = 3.
To find the value of k, we need to compare the accumulated value of two funds, A and B, over a period of three years. Fund A has a force of interest of δt = 4kt, while Fund B earns a nominal discount rate of 4% compounded daily.
Let's calculate the accumulated value of each fund after three years and equate them to find the value of k. The accumulated value of Fund A after three years can be calculated using the formula A = P * e^(∫δt), where P is the principal amount. In this case, P = $100, and the force of interest δt = 4kt. Integrating δt gives us ∫δt = 2kt^2. So, the accumulated value of Fund A after three years is A_A = $100 * e^(2k * 3^2) = $100 * e^(18k).
For Fund B, we can use the compound interest formula A_B = P * (1 + r/n)^(nt), where r is the nominal discount rate, n is the number of compounding periods per year, and t is the time in years. In this case, r = 4%, n = 365 (compounded daily), and t = 3. So, the accumulated value of Fund B after three years is A_B = $100 * (1 + 0.04/365)^(365*3) = $100 * (1.000109589)^(1095).
To find the value of k, we equate A_A and A_B: $100 * e^(18k) = $100 * (1.000109589)^(1095). Dividing both sides by $100, we get e^(18k) = (1.000109589)^(1095). Taking the natural logarithm of both sides, we have 18k = ln((1.000109589)^(1095)). Solving for k, we find k ≈ ln((1.000109589)^(1095))/18.
By evaluating the expression, we can determine the value of k.
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All of the following are profitability ratios except:
Profit margin
Return on equity
Asset turnover
Current ratio
The profitability ratio that is not included in the list is the "Current ratio." The current ratio measures a company's short-term liquidity and its ability to cover its current liabilities with its current assets. It is not a profitability ratio but rather a liquidity ratio.
Profit margin, return on equity, and asset turnover, on the other hand, are all profitability ratios that assess a company's ability to generate profits from its operations and assets.
Profitability ratios are financial metrics that evaluate a company's ability to generate profits. They provide insights into the efficiency and effectiveness of a company's operations and its ability to generate returns for its shareholders.
The profit margin is a ratio that measures the percentage of profit a company earns from its total revenue. It indicates how efficiently the company manages its costs and generates profit from each dollar of sales.
Return on equity (ROE) is a ratio that assesses the profitability of a company by comparing its net income to its shareholders' equity. It measures how effectively a company generates profits from the investments made by its shareholders.
Asset turnover is a ratio that evaluates a company's efficiency in utilizing its assets to generate sales. It calculates the amount of sales generated per unit of assets and indicates how well a company manages and utilizes its assets to generate revenue.
On the other hand, the current ratio is a liquidity ratio, not a profitability ratio. It compares a company's current assets to its current liabilities and measures its ability to cover short-term obligations with its short-term assets. The current ratio focuses on the company's liquidity position rather than its profitability.
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The correct answer is Current ratio. Profitability ratios assess a company's ability to generate profit in relation to its sales, assets, and equity.
Explanation:The correct answer is Current ratio. Profitability ratios are used to assess a company's ability to generate profit in relation to its sales, assets, and equity. The profit margin measures the company's ability to generate profit from each dollar of revenue, while the return on equity measures the profitability of the company for its shareholders. The asset turnover ratio measures how efficiently a company is using its assets to generate sales. On the other hand, the current ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its current assets.
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Part 2: Sample Budget (10 marks) Prepare a Sample Budget for the work items and activities from your WBS. Refer to the sample budgets and/or MS Project Gantt Chart from the slides from Chapter 7 as examples. For the Sample Budget: • List all Work Items and related activities as an Indentured list. • For activities, include the duration for the activity in a separate column. • Where applicable, in different columns specify the estimates for the different types of costs for each activity. Provide a column for total costs as the sum of the different costs for each activity. • Include sub-totals for all work items at all levels, including Project totals. • Amounts for work items should match the amounts specified in your WBS from Part 1 Below is a sample table for the Budget (which you can use a s a template): WBS # Work Item Activity # Activity Name Resourc e Duratio n (#work days) Labour rate (cost per work day) Labour cost Cost type 2 Cost type 3 etc Total Cost 1 Software Project - - Ron - - $4,600 $600 $300 $5,500 1.1 Planning - - Ron - - $1,200 $100 $300 $1,600 1.1.1 Project Charter - - Ron - - $1,200 $100 $300 $1,600 1 Write Project Charter Andrea 2d $400 $800 $100 $900 2 Approve Project Charter Andrea 1d $400 $400 $300 $700 1.2 Requirem ents Analysis Tim $3,400 $500 $3,900 5 Perform Requirements Elicitation Tim 10d $200 $2,000 $2,000 6 Document Requirements Tim 6d $200 $1,200 $500 $1,700 7 Review Requirements Ron 0.5d $400 $200 $200 The Indentured List must be generated as a table in your MS Word document, or a spreadsheet imbedded within your MS Word document, or as a separate spreadsheet file.please solve it
Below is a sample budget table that lists the work items and activities from the provided Work Breakdown Structure (WBS). It includes the duration for each activity, labor rates, and costs for different cost types.
The table also provides sub-totals for all work items and a project total.
The sample budget table follows an indentured list format, presenting the work items and related activities in a hierarchical manner. Each activity is assigned a unique identifier, and the resource responsible for the activity is specified.
The duration of each activity is listed in terms of workdays. The labor rate, which represents the cost per workday for labor, is provided, along with the labor cost calculated by multiplying the duration with the labor rate.
Additionally, the table includes columns for different cost types, such as cost type 2 and cost type 3, allowing for the inclusion of specific cost estimates for each activity. The total cost for each activity is calculated as the sum of the different costs.
Sub-totals are provided for all work items at each level, including the project total, which represents the overall cost estimate for the software project. This sample budget table serves as a template that can be customized based on the specific requirements and cost estimates of the project.
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You want to buy 112 shares of XLI using 65% margin. If XLI is selling for $42.00, how much money (in \$) will you borrow?
you will borrow $1,646.40 (in USD) to purchase 112 shares of XLI using a 65% margin.
To calculate the amount of money you will borrow, we need to determine the total cost of purchasing 112 shares of XLI and then subtract the initial margin requirement.
Given that XLI is selling for $42.00 per share and you want to buy 112 shares, the total cost of purchasing the shares would be:
Total cost = Number of shares * Share price
Total cost = 112 * $42.00
Total cost = $4,704.00
Now, to determine the amount of money you will borrow, we need to subtract the initial margin requirement (65% of the total cost) from the total cost:
Borrowed amount = Total cost - Initial margin requirement
Borrowed amount = $4,704.00 - (65% * $4,704.00)
Borrowed amount = $4,704.00 - $3,057.60
Borrowed amount = $1,646.40
Therefore, you will borrow $1,646.40 (in USD) to purchase 112 shares of XLI using a 65% margin.
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Phonebiz Ltd is a telecommunications company that is listed on the Australian Securities Exchange. Due to a downturn in sales in one of their regional stores, Phonebiz Ltd's Board of Directors decided to cease trading in that location. In a meeting held in February 20X4, the Board decided that 100 employees would be retrenched and a further 60 employees would be relocated to other stores operated by Phonebiz Ltd. The estimated budget for the compensation of retrenched staff was $1.5 million. The cost of retraining and relocating employees was estimated to be $400,000. On 20 April 20×4 an announcement was made to all employees that were affected by the restructure. In the announcement, retrenched employees were notified of the amount of compensation they would receive and when the closure would occur. In July 20×4 the store ceased trading and negotiations commenced for the sale of the land and buildings that were no longer required as a result of the closure. Required: Describe the nature of this event and explain how it should be accounted for in the financial statements of Phonebiz Ltd for the year ended 30 June 20X4. Specify any journal entry(ies) and/or disclosures that may be required. Your answer must clearly state your position and provide the evidence that you have used to determine that position. The supporting evidence should include adequate explanation and justification of the accounting treatment required and be supported by references from Australian accounting pronouncements (including paragraph numbers where appropriate). Narrations are not required for any journal entries prepared.
The event described in the scenario is a restructuring or cessation of operations by Phonebiz Ltd in one of their regional stores. This event should be accounted for in the financial statements of Phonebiz Ltd for the year ended 30 June 20X4.
According to the Australian Accounting Standard AASB 137 - Provisions, Contingent Liabilities and Contingent Assets, provisions should be recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.
In this case, the Board of Directors' decision to cease trading in the regional store creates a present obligation for Phonebiz Ltd to compensate retrenched employees and cover the costs of retraining and relocating employees. The estimated amounts of $1.5 million for compensation and $400,000 for retraining and relocation meet the criteria for recognition as provisions.
Phonebiz Ltd should recognize these provisions in their financial statements by making the following journal entries:
1. To recognize the provision for employee compensation:
Dr Provision for Employee Compensation (expense) $1,500,000
Cr Provision for Employee Compensation (liability) $1,500,000
2. To recognize the provision for retraining and relocation:
Dr Provision for Retraining and Relocation (expense) $400,000
Cr Provision for Retraining and Relocation (liability) $400,000
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Financial planning is a process diven service aimed at helping elients to achieve their life goals. Financial planners have tofollow the process as prescribed by the Financial Planning Association and backed by ASIC.
Financial planning is a systematic and client-centered approach aimed at assisting individuals in achieving their financial goals and objectives. It involves a comprehensive process that encompasses various aspects of personal finance, including budgeting, investment management, retirement planning, risk management, tax planning, and estate planning. Financial planners play a crucial role in guiding clients through this process and providing tailored strategies to meet their specific needs.
The Financial Planning Association (FPA) sets industry standards and guidelines for financial planners, ensuring ethical practices and professionalism. Backed by regulatory bodies such as the Australian Securities and Investments Commission (ASIC), these standards help establish trust and confidence in the financial planning profession.
The financial planning process typically involves gathering relevant financial information, analyzing the client's current financial situation, identifying their goals and objectives, developing a comprehensive plan, implementing the recommended strategies, and regularly reviewing and adjusting the plan as needed. Throughout this process, financial planners work closely with clients to understand their unique circumstances, risk tolerance, and time horizons to provide appropriate and personalized advice.
By following the prescribed process and adhering to professional standards, financial planners can help clients make informed financial decisions, optimize their financial resources, mitigate risks, and work towards achieving their life goals.
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for a perfectly competitive firm, average revenue is:
For a perfectly competitive firm, average revenue is equal to the price of the product they sell.
A perfectly competitive firm is one that operates in an environment in which it has no market power. In other words, a perfectly competitive firm does not have the ability to influence the price of the product it sells in the market. Therefore, it must take the market price as given.Average revenue (AR) is the total revenue divided by the quantity sold, which can be expressed as:AR = TR/QWhere,TR = total revenueQ = quantity soldSince a perfectly competitive firm has no market power, it has to accept the price set by the market.
Therefore, the price (P) is constant for the firm, and it can be expressed as:P = AR Hence, for a perfectly competitive firm, average revenue is equal to the price of the product they sell.
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Wendell's Donut Shoppe is investigating the purchase of a new $33.000 donut making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5.700 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 1300 dozen more donuts each year. The company realizes a contribution margin of $2.60 per dozen donuts soid. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes
To calculate the total annual cash inflows, we multiply the additional donut sales by the contribution margin per dozen donuts sold ($2.60).
The purchase of the new donut-making machine has two main benefits that contribute to the total annual cash inflows.
Firstly, the company would be able to reduce the amount of part-time help needed, resulting in cost savings. The cost savings from reduced part-time help is given as $5,700 per year.
Secondly, the new machine would allow the company to produce one new style of donut, resulting in increased sales. The question states that the new machine would result in the sale of 1,300 dozen more donuts each year.
To calculate the total annual cash inflows, we multiply the additional donut sales (1,300 dozen) by the contribution margin per dozen donuts sold ($2.60). This represents the profit contribution per unit of donuts sold.
Therefore, the total annual cash inflows associated with the new machine for capital budgeting purposes would be the cost savings of $5,700 per year plus the additional revenue generated from selling 1,300 dozen more donuts per year, multiplied by the contribution margin per dozen donuts sold ($2.60).
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Case Study 2: A piece of automated production equipment has a first cost of $120,000. The service life is 6 years, the anticipated salvage value is $10,000, and the annual maintenance costs are $4000. The equipment will produce at the rate of 10 units/h, each unit worth $2.20 in added revenue. One operator is required full time to tend the machine at a rate of $14.00/h. Assume that no overhead rates are applicable. Raw material costs equal $0.3/unit. Use a MARR of 15%.
Draw the cash flow of the machine (1.5 pts)
Based on cash flow and MARR, define UAC of the machine (4 pts)
Compute the profit break-even point between annual revenue and annual cost. (3.0 pts)
How many hours of operation are required to produce the number of units indicated by the break-even point? (1.5 pt)
How much profit (or loss) will be made if 60,000 units/yr are produced? (2 pt)
Cash Flow of the Machine:
To draw the cash flow of the machine, we need to consider the costs and revenues associated with it over its service life.
Year 0:
Initial investment: -$120,000
Years 1 to 6:
Revenue from unit production: $2.20 * 10 units/h * 24 h/day * 365 days = $1,609,200
Raw material costs: -$0.3/unit * 10 units/h * 24 h/day * 365 days = -$263,160
Maintenance costs: -$4,000
Operator's salary: -$14.00/h * 24 h/day * 365 days = -$122,640
Year 6:
Salvage value: +$10,000
The cash flow can be represented as follows:
Year 0: -$120,000
Years 1 to 6: $1,609,200 - $263,160 - $4,000 - $122,640 = $1,219,400 per year
Year 6: +$10,000
Define UAC of the Machine:
The UAC (Uniform Annual Cost) represents the equivalent annual cost of owning and operating the machine. It takes into account the initial investment, annual costs, and salvage value. To calculate the UAC, we need to use the MARR (Minimum Attractive Rate of Return) of 15%.
Using the UAC formula:
UAC = (Annual Cost - Salvage Value) * (P/A, i, n) + (Salvage Value * (P/F, i, n))
Where:
P = Present worth factor
A = Annual worth factor
F = Future worth factor
i = Interest rate (MARR)
n = Service life
In this case, the UAC of the machine is:
UAC = ($1,219,400 - $10,000) * (P/A, 0.15, 6) + ($10,000 * (P/F, 0.15, 6))
Profit Break-Even Point:
To determine the profit break-even point between annual revenue and annual cost, we need to calculate the annual cost. The annual cost includes maintenance costs, operator's salary, and the UAC.
Annual Cost = Maintenance costs + Operator's salary + UAC
Once we have the annual cost, we can calculate the revenue required to break even:
Break-Even Revenue = Annual Cost
Number of Hours of Operation for Break-Even Point:
To calculate the number of hours of operation required to produce the number of units indicated by the break-even point, we need to divide the break-even revenue by the revenue per unit.
Number of Hours = Break-Even Revenue / (Revenue per Unit * Units per Hour)
Profit/Loss for Producing 60,000 Units/Year:
To calculate the profit or loss for producing 60,000 units per year, we need to subtract the total cost (including maintenance costs, operator's salary, and UAC) from the total revenue (60,000 units * revenue per unit).
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please please answer all of the
them
The Was an \( \$ 825 \) billion economic stimulus package, passed by Congress, designed to turn the economy by cutting taxes, building infrastructure, and investing in green energy. American Recovery
The American Recovery and Reinvestment Act (ARRA) was an $825 billion economic stimulus package passed by Congress to promote economic recovery through tax cuts, infrastructure investment, and funding for green energy initiatives.
The ARRA was enacted as a response to the 2008 financial crisis and recession. It aimed to stimulate the economy by providing tax relief to individuals and businesses, investing in infrastructure projects to create jobs, and supporting the development of clean energy technologies. The package also included aid to state and local governments to address budget shortfalls and maintain public services. The ARRA was a temporary measure designed to boost economic growth and stability during a challenging economic period. Its impact and effectiveness have been a subject of ongoing evaluation and discussion.
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Anna: My wheat harvest this year is twice as much as it was last year. Edwardo: Don't worry. Price decreases will compensate for the increase in quantity supplied. Lee: Climate affects crop yields. Many other farmers had similar increases. Sushma: The government should guarantee that our incomes will not fall due to the price decrease so that we can stay in farming. In this conversation, the normative statement is made by
a. Anna
b. Edwardo
c. Lee
d. Sushma
e. There are no normative statements
Therefore, option (d) Sushma is the correct answer.
In the given conversation, the normative statement is made by Sushma.Explanation:A normative statement is a statement that describes how things should or ought to be.
It is a statement that expresses a value judgment about whether a situation is desirable or undesirable. It is based on an opinion and cannot be tested against evidence.
A normative statement provides a claim about how things should be, how they should be different from what they is right now, or what they are. A normative statement is usually made by someone who has a stake in the situation and who is expressing an opinion about it.In the given conversation,
the normative statement is made by Sushma. She states that the government should guarantee that farmers' incomes will not fall due to the price decrease so that they can stay in farming.
This is a normative statement because Sushma is expressing an opinion about what the government should do. It is not based on any evidence or facts, but rather on her value judgment. Therefore, option (d) Sushma is the correct answer.
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2. (SHOW ALL WORK PLEASE) The following cash flows are give for the two mutually exclusive projects X and Y. The project X requires an initial investment of $10,000 in time ‘0’and project Y needs an initial investment of $10,000 in time ‘0’.
Year Project X Project Y
1 $4,500 $8,000
2 6,000 5,000
3 7,500 4.500
4 8,000 3,000
(a) Calculate the NPV for each project using a discount rate of 10%.
(b) State your accept/reject decision
(c) What would be your accept/reject decision if they were to be independent projects?
NPV for Project X at 10% discount rate: $1,644.80. NPV for Project Y at 10% discount rate: -$424.89.
Accept Project X (positive NPV) and reject Project Y (negative NPV).
If projects were independent, both would be accepted as they have positive NPVs.
To calculate the net present value (NPV) for each project, we need to discount the cash flows at a rate of 10% and then subtract the initial investment. Let's calculate the NPV for projects X and Y:
(a) NPV Calculation:
For Project X:
Year 0: Initial Investment: -$10,000
Year 1: Cash Flow: $4,500 / Discounted Cash Flow: $4,500 / (1+0.10)^1
Year 2: Cash Flow: $6,000 / Discounted Cash Flow: $6,000 / (1+0.10)^2
Year 3: Cash Flow: $7,500 / Discounted Cash Flow: $7,500 / (1+0.10)^3
Year 4: Cash Flow: $8,000 / Discounted Cash Flow: $8,000 / (1+0.10)^4
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