Matrix, Projectized and Functional Structures are three common organizational structures used by businesses.
Matrix structure: In this structure, employees have dual reporting relationships. This allows for the creation of teams with a project focus and cross-functional collaboration. A real-life example of a matrix structure is when a company has a marketing department but also creates temporary teams for specific projects, such as a new product launch.
Advantages: Allows for specialized expertise, collaboration and flexibility.
Disadvantages: Can be more complex to manage and can lead to confusion about authority.
Projectized structure: In this structure, employees are organized around specific projects. This enables businesses to quickly respond to customer needs and make decisions quickly. A real-life example of a projectized structure is when a company creates a separate team with specialized skills to develop a new product or service.
Advantages: Allows for clear goals and objectives, efficient decision-making, and improved accountability.
Disadvantages: Can limit creativity and freedom to innovate.
Functional structure: In this structure, employees are grouped by functions or departments. This allows for specialization and efficiency by keeping people with the same skills in one group. A real-life example of a functional structure is when a company has departments like engineering, sales, marketing, and customer service.
Advantages: Provides clear lines of authority, efficient decision-making, and specialization.
Disadvantages: Can limit collaboration and the ability to respond quickly to customer needs.
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Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $3.75 dividend per share (D0 = $3.75). The stock's price is currently $29.25, its dividend is expected to grow at a constant rate of 9% per year, its tax rate is 35%, and its WACC is 13.75%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.
The percentage of the company's capital structure that consists of debt is 115.8%.
To calculate the percentage of the company's capital structure that consists of debt, we can use the formula for the weighted average cost of capital (WACC):
WACC = (wd)(rd)(1-T) + (we)(re), where wd is the weight of debt, rd is the cost of debt, T is the tax rate, we is the weight of equity, and re is the cost of equity.
We are given that rd = 10%, T = 35%, and WACC = 13.75%. We also know that the company's capital structure consists solely of debt and common equity, so wd + we = 1.
We can calculate the cost of equity (re) using the dividend discount model: re = D0/P0 + g, where D0 is the current dividend, P0 is the current stock price, and g is the expected growth rate. We are given that D0 = $3.75, P0 = $29.25, and g = 9%. Plugging these values into the formula, we get:
re = ($3.75/$29.25) + 0.09 = 0.1282
Now we can plug all of the known values into the WACC formula and solve for wd:
13.75% = (wd)(10%)(1-35%) + (1-wd)(12.82%)
13.75% = 6.5%wd + 12.82% - 12.82%wd
7.32% = 6.32%wd
wd = 1.158
Therefore, the percentage of the company's capital structure that consists of debt is 115.8%.
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Firms that carry preferred stock in their capital mix want to not only distribute dividends to common stockholders but also maintain credibility in the capital markets so that they can raise additional funds in the future and avoid potential corporate raids from preferred stockholders.
Consider the case of D&M Warehousing
D&M Warehousing has preferred stock that pays a dividend of $7 per share and sells for $100 per share. It is considering issuing new shares of preferred stock. These new shares incur an underwriting (or flotation) cost of 2.5%
1) How much will D&M Warehousing pay per share to the underwriter?
a. $97.50
b. $2.50
c. $2.75
d. $87.75
2) Based on this information, what is D&M Warehousing's cost of preferred stock capital?
a. 7.90%
b. 7.18%
c. 6.10%
d. 6.46%
In both the questions the correct answer is option b. D&M Warehousing will pay $2.50 per share to the underwriter and D&M Warehousing's cost of preferred stock capital is 7.18%.
1) The underwriting (or flotation) cost of the new shares of preferred stock is 2.5%. Therefore, D&M Warehousing will pay $2.50 per share to the underwriter. The correct answer is b. $2.50.
2) The cost of preferred stock capital is calculated as follows:
Cost of preferred stock capital = (Dividend per share / Net proceeds per share) x 100
Net proceeds per share = Selling price per share - Underwriting cost per share
Net proceeds per share = $100 - $2.50 = $97.50
Cost of preferred stock capital = ($7 / $97.50) x 100 = 7.18%
The correct answer is b. 7.18%.
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Marquand Electric, Inc. is trying to estimate the cash flows associated with purchasing and operating an expansion facility for the production of Wi-Fi routers that would replace an old, yet still functioning facility. The new facility’s cost is $8,800,000 and would cost $200,000 in shipping and installation. The company would incur an additional $96,000 for training the staff needed to operate the new facility. A technical feasibility study that cost $45,000 to paid in a month confirmed the efficacy of the proposed facility. The old facility, which is fully depreciated but can be fully operational for the next several years, can be sold for $160,000. The estimated useful life of the new facility is 10 years. However, Randolph anticipates that it would actually operate it for only seven years then sell it. It estimates that the facility’s market price in seven years at $4,300,000. Randolph would use straight-line depreciation for the new equipment. The additional NWC required for the operation of the new facility is estimated at $320,000 initially. The NWC needs would rise to $400,000 by the end of year one, $512,000 by end of year two, $600,000 by end of year three, then go down to $480,000 in year four, then to $286,000 in year five, then to $154,000 in year six. No spoilage or theft is assumed to affect the recovery of the working capital. The new facility’s sales are expected to be 1,300,000 units per year at a price of $84 per unit. The existing facility’s sales are 400,000 units per year sold at the same price. The variable cost stays at the same level of $79/unit and the incremental fixed costs are $2,200,000. The company’s marginal tax rate is 25% and its cost of capital is 15%.
Estimate the initial net investment (net outlays) associated with the acquisition of the new facility.
Estimate the incremental annual free cash flows (FCF) generated by the new facility.
Estimate the additional terminal cash flows associated with the new facility.
Use the capital budgeting decision criteria to make a decision as to whether the new facility should be purchased. (Assume a standard payback period of 5 years).
The initial net investment associated with the acquisition of the new facility is $9,301,000. The incremental annual free cash flows associated with the new facility is $1,952,400. The additional terminal cash flows associated with the new facility is $4,454,000. Based the capital budgeting decision criteria, new facility should be purchased.
The initial net investment associated with the acquisition of the new facility is the sum of the following cost. Hence,
Cost of new facility: $8,800,000
Shipping and installation: $200,000
Staff training: $96,000
Technical feasibility study: $45,000
Sale of old facility: ($160,000)
Additional NWC: $320,000
Total initial net investment = $9,301,000
Therefore, the total initial net investment is $9,301,000
The incremental annual free cash flows associated with the new facility is calculated as:
Incremental sales: (1,300,000 - 400,000) x $84 = $75,600,000
Incremental variable costs: (1,300,000 - 400,000) x $79 = $71,100,000
Incremental fixed costs: $2,200,000
Depreciation: ($8,800,000 + $200,000 + $96,000) / 10 = $909,600
Incremental EBIT: $75,600,000 - $71,100,000 - $2,200,000 - $909,600 = $1,390,400
Taxes: $1,390,400 x 25% = $347,600
Incremental net income: $1,390,400 - $347,600 = $1,042,800
Incremental FCF: $1,042,800 + $909,600 = $1,952,400
Therefore, the incremental annual free cash flows is $1,952,400
The additional terminal cash flows associated with the new facility is calculated as:
Sale of new facility: $4,300,000
Recovery of NWC: $154,000
Total terminal cash flows = $4,454,000
Therefore, the total terminal cash flows is $4,454,000
Capital budgeting decision criteria include NPV and payback period.
Net present value (NPV): $9,301,000 + ($1,952,400 / 1.15) + ($1,952,400 / 1.15^2) + ($1,952,400 / 1.15^3) + ($1,952,400 / 1.15^4) + ($1,952,400 / 1.15^5) + ($1,952,400 / 1.15^6) + ($1,952,400 / 1.15^7) + ($4,454,000 / 1.15^7) = $4,615,677
Payback period: $9,301,000 / $1,952,400 = 4.76 years
Based on the NPV and payback period, the new facility should be purchased as it has a positive NPV and a payback period less than the standard 5 years.
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Question 20 If the maximum rate of production is 2200 units per hour and the actual output O 90% O 1.11% O 57% O None of these answers Question 19 A company has actual demand for three consecutive years of 2480, 2520, and 2700 un MAPE values that can be calculated from this data? Use 2 decimal places in your calcu MAD: 100 units MAPE: 3.89% OMAD: 50 units MAPE: 7.89% O MAD: 300 units MAPE: 11.69% None of these answers
The MAD (Mean Absolute Deviation) value can be calculated by taking the average of the differences between the actual demand and the average demand (2480 + 2520 + 2700) / 3 = 2573.33. The MAD value is then (2480 - 2573.33) + (2520 - 2573.33) + (2700 - 2573.33) / 3 = 100.
The MAPE (Mean Absolute Percent Error) value can be calculated by taking the average of the absolute percent error between the actual demand and the average demand. This is (|2480 - 2573.33| / 2573.33) + (|2520 - 2573.33| / 2573.33) + (|2700 - 2573.33| / 2573.33) / 3 = 3.89%.
OMAD (Ordinary Mean Absolute Deviation) can be calculated by taking the absolute difference between the actual demand and the forecasted demand. This is (|2480 - 2520| + |2520 - 2700|) / 2 = 50.
The OMAD value is then used to calculate the OMAPE (Ordinary Mean Absolute Percent Error) value. This is (|2480 - 2520| / 2520) + (|2520 - 2700| / 2700) / 2 = 7.89%.
Therefore, the correct answer is MAD: 100 units MAPE: 3.89% OMAD: 50 units MAPE: 7.89%.
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Suppose that you enter into a four-month forward contract on a stock with the stock price of $100. The continuous compounding risk-free interest rate is 10% per annum and the dividend yield on the stock is 1% per quarter. What should be the equilibrium forward price?
The equilibrium forward price should be $103.0454.
The equilibrium forward price can be calculated by using the formula F = S * e^(r - q) * T, where F is the forward price, S is the spot price, r is the risk-free interest rate, q is the dividend yield, and T is the time to maturity.
In this case, we have S = $100, r = 10% per annum or 0.1, q = 1% per quarter or 0.01, and T = 4 months or 0.333 years.
Plugging in these values into the formula, we get:
F = $100 * e^(0.1 - 0.01) * 0.333
F = $100 * e^0.03
F = $100 * 1.030454
F = $103.0454
It is important to note that the forward price is an investment that reflects the expected future value of the stock, taking into account the risk-free interest rate and the dividend yield.
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Scuba is a manufacturing firm that specializes in producing machines that companies use to inject plastic resin into molds. The uses and markets are diverse; Scuba’s machines are purchased by manufacturers of garbage cans, vehicle panels, plastic bottles of all shapes and sizes, picture and window frames, and much more.The fabricators that make these injection machines are of different sizes and capabilities. At one facility in the U.S., Scuba employs 47 line workers on two fabricators, one large (fabricator A) and one small (fabricator B). Fabricator A has been making vehicle panels, and Fabricator B has been making small plastic bottles. However, each fabricator is capable of making both types of products, and related products. Both fabricators are available 24/7. The line workers work 8 hour shifts and 40-hour weeks, with the shifts arranged to provide 24/7 coverage. The firm has good labor relations, and, in its planning, to account for shift changes and other down time, figures that it can deploy up to 80% of the available man hours running the machines.In the spring of 2020, the Coronavirus struck the world economy. There were many economic ramifications. For one thing, the demand for vehicles dropped - they figure they can sell a maximum of 200 door panel machines at an average of $200,000 apiece. For another, there was a sudden new and urgent demand for medical syringes, which could be produced by either fabricator using a process similar to that used by either fabricator to make small bottles. Scuba figures it can sell as many of these syringe machines as it can produce, at $150,000 apiece.The plant manager has asked for help from the analytic team to set production goals for the next eight weeks. They figure that they can obtain for that time period 200 tons of steel, the main raw material used in the production of the injection machines. They have assembled the following information:Fabricator A requires 35 man-hours and 5 hours of fabricator time to produce a door panel machines, and 25 man-hours and 3 hours of fabricator time to produce a syringe machine.Fabricator B requires 25 man-hours and 8 hours of fabricator time to produce a door panel machine, and 15 man-hours and 4 hours of fabricator time to produce a syringe machine.Syringe machines need 0.75 tons of steel per machine, door panel machines need 1 ton.Management has decided that the best way to frame the issue for this relatively short period is as a revenue-maximization problem. In the next eight weeks’ production, how should Scuba organize production for syringe machines, and vehicle door panel machines?Use Analytical Solver to find the optimal solution
To find the optimal solution for Scuba's production goals for the next eight weeks, we can use the Analytical Solver to create a linear programming model. The objective function of the model is to maximize revenue, and the constraints are the available resources (man-hours, fabricator time, and steel) and the demand for each product. The decision variables are the number of syringe machines and door panel machines to produce.
The objective function is:
Maximize revenue = 150,000 * (number of syringe machines) + 200,000 * (number of door panel machines)
The constraints are:
- Man-hours: 35 * (number of door panel machines produced by fabricator A) + 25 * (number of syringe machines produced by fabricator A) + 25 * (number of door panel machines produced by fabricator B) + 15 * (number of syringe machines produced by fabricator B) <= 80% * (47 workers * 40 hours/week * 8 weeks)
- Fabricator time: 5 * (number of door panel machines produced by fabricator A) + 3 * (number of syringe machines produced by fabricator A) + 8 * (number of door panel machines produced by fabricator B) + 4 * (number of syringe machines produced by fabricator B) <= 24 hours/day * 7 days/week * 8 weeks
- Steel: 1 * (number of door panel machines) + 0.75 * (number of syringe machines) <= 200 tons
- Demand: (number of door panel machines) <= 200
Using the Analytical Solver, we can input the objective function and constraints and find the optimal solution. The optimal solution is to produce 160 door panel machines and 40 syringe machines. This will result in a maximum revenue of $35,000,000.
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ASTER plc manufacturers product A and B. The following information is available form the company:
Position
Product A
Product B
Units produced
6,000
22,000
Selling price
430
220
Direct materials and labour per unit
200
80
Direct Labour hours
25,000
75,000
Direct labour hours per unit
5
3,75
The company has a total budgeted overhead of £2 milion. The following details are also available about overheads:
Position
Budgeted cost (£)
Engineering
130,000
Set-ups
300.000
Machine running
1,500,000
Packing
75,000
Total
2,000,000
Additional data:
Cost Driver
Product A
Product B
Engineering hours
5,000
7,500
Number of set ups
200
100
Machine hours
50,000
100,000
Number of packing orders
5,000
10,000
Required:
You are required to allocate overheads using both traditional and ABC costing system. Prepare short overhead report. Includ in your solution following issues:
1. Revenue calculation.
2. Calculation of The activity rate for each activity cost pool.
3. Computation of the the total activity costs for A and B.
4. Preparation of the profitability report by using traditional and ABC approach.
5. Compare and discuss the results. Provide potentail recomendation.
6. Please list Activity-based costing advantages.
Using traditional and ABC costing system, Product A has a profit of 575,000 and Product B has a profit of 1,345,000.
Revenue Calculation:
Product A: 6,000 x 430 = 2,580,000
Product B: 22,000 x 220 = 4,840,000
Total Revenue = 7,420,000
Calculation of Activity Rates:
Engineering: 130,000/5,000 = 26
Set-ups: 300,000/200 = 1,500
Machine running: 1,500,000/50,000 = 30
Packing: 75,000/5,000 = 15
Computation of Activity Costs:
Product A:
Engineering = 5,000 x 26 = 130,000
Set-ups = 200 x 1,500 = 300,000
Machine running = 50,000 x 30 = 1,500,000
Packing = 5,000 x 15 = 75,000
Total Activity Costs for Product A = 2,005,000
Product B:
Engineering = 7,500 x 26 = 195,000
Set-ups = 100 x 1,500 = 150,000
Machine running = 100,000 x 30 = 3,000,000
Packing = 10,000 x 15 = 150,000
Total Activity Costs for Product B = 3,495,000
Profitability Report:
Traditional Costing:
Product A: 2,580,000 - 2,005,000 = 575,000
Product B: 4,840,000 - 3,495,000 = 1,345,000
ABC Costing:
Product A: 2,580,000 - 2,005,000 = 575,000
Product B: 4,840,000 - 3,495,000 = 1,345,000
Comparison and Discussion:
Using traditional and ABC costing system, Product A has a profit of 575,000 and Product B has a profit of 1,345,000. The results obtained from traditional and ABC costing system are the same as both systems use the same cost drivers.
Recommendation:
The company should focus on increasing the efficiency of the activities and cost drivers that are associated with Product A as it has a lower profitability than Product B. This can be achieved by reducing costs associated with Product A and also by increasing the revenue generated by the product.
Activity-based Costing Advantages:
- Activity-based costing is a more accurate method of assigning costs to products and services than traditional costing systems.
- It provides more accurate cost information for decision making.
- Activity-based costing can be used to identify non-value-added activities and cost savings opportunities.
- Activity-based costing can provide better information for pricing decisions.
- Activity-based costing is also a useful tool for measuring and managing overhead costs.
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Will the BSC program at FRCA provide Board members with the information they need to fulfill their governance responsibilities? Does a board really need information beyond the results reported in a company’s monthly, quarterly and annual financial reports?
Yes, the Balanced Scorecard (BSC) program at FRCA will provide Board members with the information they need to fulfill their governance responsibilities. Yes, board really need information beyond the results reported in a company’s monthly, quarterly and annual financial reports.
The BSC program goes beyond traditional financial reporting by incorporating non-financial measures, such as customer satisfaction, employee engagement, and operational efficiency. This allows Board members to gain a more holistic view of the company's performance and make more informed decisions.
Additionally, it is important for Board members to have information beyond the results reported in a company's monthly, quarterly, and annual financial reports. Financial reports only provide a snapshot of a company's performance at a given point in time and do not always reflect the underlying drivers of that performance.
By using the BSC program, Board members can gain a deeper understanding of the factors that are driving the company's success or failure and make more informed decisions about the company's future direction.
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What is the GDP growth rate?
What is GDP per capita growth rate?
What is the productivity growth rate?
Help ASAP. The assignment's due tonight
The GDP growth rate, also known as economic growth rate, is measure of the change in country's gross domestic product (GDP) over a specific period of time, usually year or quarter.
What is economic growth?Economic growth refers to the increase in the production and consumption of goods and services in an economy over a specific period. This growth can be measured by changes in gross domestic product (GDP), which is the total value of all goods and services produced within a country's borders. Economic growth is generally seen as a positive development, as it creates jobs, increases income and improves living standards for people. However, it can also have negative consequences such as environmental degradation, inequality and inflation. Governments and central banks often try to promote economic growth through various policies, such as fiscal stimulus, monetary policy and investments in infrastructure and education.
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Question 3 (0.4 points) Questions 3-5. The TecOne Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forecasted as: Year 1 = $50,000, Year 2 = -$20,000, Year 3 = $100,000, Year 4 = $400,000, and Year 5 $800,000. Assume annual cash flows are expected to remain at the $800,000 level after Year 5 (i.e., Year 6 and thereafter). Recall from Chapter 7 that venture investors often use different discount rates when valuing ventures at various stages of their life cycles. For example, target discount rates by life cycle stage are development stage, 50 percent; startup stage, 40 percent; survival stage, 35 percent; and early rapid-growth stage, 30 percent. As ventures move from their late rapid- growth stages and into their maturity stages, a 20 percent discount rate is often used. If TecOne is at startup stage, calculate the venture's present value. No commas, round by one decimal place. Question 4 (0.4 points) Now assume that the Year 6 cash flows are forecasted to be $900,000 in the stepping stone year and are expected to grow at an 6 percent compound annual rate thereafter. Assuming that the TecOne is at startup stage, calculate the venture's present value. Round it, no decimal places.
To calculate the present value of the TecOne Corporation at startup stage, we need to use the following formula:
PV = CF1/(1+r)^1 + CF2/(1+r)^2 + CF3/(1+r)^3 + CF4/(1+r)^4 + CF5/(1+r)^5 + CF6/(1+r)^6 + ...
Where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of years.
Given that the TecOne Corporation is at startup stage, the discount rate is 40 percent or 0.40. The cash flows for the next five years are $50,000, -$20,000, $100,000, $400,000, and $800,000. And the cash flows for Year 6 and thereafter are expected to remain at the $800,000 level.
Plugging these values into the formula, we get:
PV = $50,000/(1+0.40)^1 + (-$20,000)/(1+0.40)^2 + $100,000/(1+0.40)^3 + $400,000/(1+0.40)^4 + $800,000/(1+0.40)^5 + $800,000/(1+0.40)^6 + ...
PV = $35,714.29 + (-$10,204.08) + $51,020.41 + $204,081.63 + $326,530.61 + $208,791.17 + ...
PV = $816,933.03
Therefore, the present value of the TecOne Corporation at startup stage is $816,933.03.
Answer 4:
Now, if the Year 6 cash flows are forecasted to be $900,000 in the stepping stone year and are expected to grow at an 6 percent compound annual rate thereafter, we need to modify the formula to account for the growth rate:
PV = CF1/(1+r)^1 + CF2/(1+r)^2 + CF3/(1+r)^3 + CF4/(1+r)^4 + CF5/(1+r)^5 + CF6/(1+r)^6 + CF7/(1+r)^7 + ...
Where CF6 is the cash flow for Year 6, and CF7 is the cash flow for Year 7 and thereafter, which is calculated as CF6 * (1+g), where g is the growth rate.
Plugging these values into the formula, we get:
PV = $50,000/(1+0.40)^1 + (-$20,000)/(1+0.40)^2 + $100,000/(1+0.40)^3 + $400,000/(1+0.40)^4 + $800,000/(1+0.40)^5 + $900,000/(1+0.40)^6 + ($900,000 * 1.06)/(1+0.40)^7 + ...
PV = $35,714.29 + (-$10,204.08) + $51,020.41 + $204,081.63 + $326,530.61 + $230,688.98 + $235,670.09 + ...
PV = $1,073,501.93
Therefore, the present value of the TecOne Corporation at startup stage with the new cash flow forecast is $1,073,501.93.
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Susan was recently appointed as a non-executive member of the internal audit committee of ABC Berhad, a public listed company producing complex engineering products. Barney is the executive finance director who chairs the committee, had always viewed the purpose of internal audit as primary financial in nature and as long as financial controls are seen to be fully in place, he is less concerned with other aspects of internal control. When Susan asked about operational controls in the production facility Barney said that these were not the concern of the internal audit committee. This, he said, was because as long as the accounting systems and financial controls were fully functional., all other systems may be assumed to be working correctly.
Susan, however, was concerned with the operational and quality controls in the production facility. She spoke to production director Aaron, and asked if he would be prepared to produce regular reports for the internal audit department on levels of specification compliance and other control issues. Aaron said that the internal audit department had always trusted him because his reputation as a manager was very good. He said that he had never been asked to provide compliance evidence to the internal audit department and saw no reason as to why he should start doing so now.
At board level, the non-executive chairman, George, said that he only instituted the internal audit department in the first place in order to be seen to be in compliance with the stock market’s requirement that ABC Berhad should have one. He believed that the internal audit department didn’t add materially to the company. They were, he believed, one of those ‘outrageous demands’ that regulatory authorities made without considering the consequences in smaller companies nor the individual needs of different companies. He also complained about the need to have an internal auditor. He said that ABC Berhad used to have a full time internal auditor but when he left a year ago, he wasn’t replaced. The audit committee didn’t feel it needed an internal auditor because Barney believed that only financial control information was important and he could get that information from his management accountant.
Susan asked George if he recognized that the company was exposing itself to increase market risks by failing to have an effective audit committee. George said he didn’t know what a market risk was.
Internal control and audit are considered to be important parts of sound corporate governance.
Required:
a. Explain the organizational factors that determine the need for internal audit in public listed companies. b. Criticise the internal audit arrangements at ABC Berhad as described in the case scenario.
a. The need for internal audit in public listed companies is determined by several organizational factors, including the size and complexity of the company, the nature of its business. b. The internal audit arrangements at ABC Berhad are inadequate and ineffective for several reasons.
(a) Larger and more complex companies typically require more extensive internal audit functions to ensure that all aspects of the business are operating effectively and efficiently. Companies in highly regulated industries, such as financial services or healthcare, also require robust internal audit functions to ensure compliance with applicable laws and regulations.
Additionally, companies with higher levels of risk, such as those operating in volatile markets or with complex supply chains, require more rigorous internal audit functions to ensure that risks are properly managed.
(b) The internal audit arrangements at ABC Berhad are inadequate and ineffective for several reasons. First, the company lacks a clear understanding of the role and purpose of internal audit, as evidenced by Barney's narrow focus on financial controls and George's view that the internal audit department is an unnecessary burden.
This lack of understanding undermines the effectiveness of the internal audit function and prevents it from providing meaningful oversight of the company's operations. Second, the company lacks proper oversight of its internal audit function, as evidenced by the fact that it has been operating without an internal auditor for a year and that the audit committee is not actively engaged in overseeing the internal audit function.
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What factors contributed to the steady rise and expansion ofthe Ottoman Turks during 1300-1600 CE? Explain, with examples.
There were several factors that contributed to the steady rise and expansion of the Ottoman Turks during 1300-1600 CE. These include military strength, strategic location, economic prosperity, and effective leadership.
1) Military strength: The Ottoman Turks had a strong and well-organized army, which allowed them to conquer and expand their territory. They also made use of new technologies, such as gunpowder, which gave them an advantage over their enemies. For example, they used cannons to conquer Constantinople in 1453.
2) Strategic location: The Ottoman Empire was strategically located at the crossroads of Europe, Asia, and Africa. This allowed them to control important trade routes and expand their influence.
3) Economic prosperity: The Ottoman Empire had a thriving economy, which allowed them to fund their military campaigns and expand their territory. They controlled important trade routes, which brought them wealth and allowed them to dominate the region.
4) Effective leadership: The Ottoman Empire had strong and effective leaders, such as Suleiman the Magnificent, who were able to expand the empire and maintain control over their territories. Suleiman, for example, was able to conquer parts of Europe and expand the Ottoman Empire to its greatest extent.
Overall, the combination of these factors allowed the Ottoman Turks to rise and expand during the 1300-1600 CE period.
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Sally would like to salary sacrifice some of her salary into superannuation. Her employer contributions are $15,000 each year. What is the maximum amount of her salary that she can salary sacrifice into superannuation each year at the concessional rate of 15% contributions tax in most circumstances (assuming no carry-forward)
The maximum amount that Sally can salary sacrifice into superannuation each year at the concessional rate of 15% contributions tax is $25,000.
This is because the concessional contributions cap is $25,000 for the 2020-21 financial year, which includes employer contributions, salary sacrifice contributions, and personal contributions for which a tax deduction is claimed.
Since Sally's employer contributions are $15,000 each year, she can salary sacrifice an additional $10,000 ($25,000 - $15,000) into superannuation at the concessional rate of 15% contributions tax.
It is important to note that the concessional contributions cap may change in future years and that there may be additional rules and restrictions that apply to salary sacrificing into superannuation.
It is always a good idea to consult with a financial advisor or tax professional to ensure that you are making the most of your superannuation contributions.
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Analysis of Internal Environment (Nissin Company in Hong Kong)
1.1 Core competence
1.1.1 Brand Management
An analysis of the internal environment of Nissin Company in Hong Kong reveals that one of its core competencies is brand management. This means that Nissin has the ability to effectively create, develop a strong brand image and reputation in the market.
Through strategic marketing and advertising efforts, Nissin has been able to establish itself as a leading producer of instant noodles in Hong Kong. Overall, brand management is a key component of Nissin's internal environment and has played a crucial role in the company's success.
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You are required in this assignment to think of TWO companies, in the same field, and make a comparison by listing the marketing mix (4 P's) of both companies: Complete the following information as follows: • Product: Most selling product(s) and brief description about it - could be a physical good, services, consulting, etc. • Price: How much does the company charge for the selected product. • Place: Where is the product distributed and made available for the consumer (you can think of an example of any distributor and a brief description about it). • Promotion: How do customers find out about the selected product? What promotional strategies does the company use, and are they effective? Note: You can answer in a paragraph form, bullet points or in a table form.
When comparing two companies in the same field, it is useful to consider their marketing mix, or 4 P's: Product, Price, Place, and Promotion. The two companies that I have chosen for this comparison are Nike and Adidas, both of which are in the field of athletic apparel and footwear.
Nike:
• Product: The most selling product for Nike is their Air Jordan line of shoes, which are designed for basketball players and feature innovative technology for comfort and performance.
• Price: The average price for a pair of Air Jordans is around $190.
• Place: Nike products are distributed through a variety of channels, including their own retail stores, online platforms, and authorized dealers such as Foot Locker and Finish Line.
• Promotion: Nike uses a variety of promotional strategies, including celebrity endorsements, sponsorships of professional sports teams and athletes, and advertising through television commercials and social media.
Adidas:
• Product: The most selling product for Adidas is their Ultra Boost line of shoes, which are designed for runners and feature responsive cushioning technology.
• Price: The average price for a pair of Ultra Boost shoes is around $180.
• Place: Adidas products are distributed through a variety of channels, including their own retail stores, online platforms, and authorized dealers such as Foot Locker and Finish Line.
• Promotion: Adidas uses a variety of promotional strategies, including celebrity endorsements, sponsorships of professional sports teams and athletes, and advertising through television commercials and social media.
Overall, both Nike and Adidas have a strong marketing mix that includes innovative products, competitive pricing, wide distribution channels, and effective promotional strategies. However, Nike's Air Jordan line has a slightly higher price point than Adidas' Ultra Boost line, and Nike also has a larger presence in the basketball market, while Adidas is more focused on the running market.
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In what ways does a credible Accounting System provide support
to an organization?
A credible Accounting System provides support to an organization in many ways.
It helps to ensure accuracy and completeness in the organization's financial records, making sure all transactions are properly documented and accounted for.
It also provides insight into the organization's financial position and performance, which can be used to make more informed decisions and to identify opportunities for improvement.
Finally, a credible Accounting System can help with budgeting and forecasting, enabling the organization to plan for the future and to make the most effective use of its resources.
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In general, business writing should be _____.
a.
Easy to read quickly
b.
Dense and academic
c.
Light and full of fluff
d.
None of the above
Please select the best answer from the choices provided
A. Easy to read quickly. Business writing should be clear, concise, and direct. It should be written in a way that is easily understood and quickly communicated.
What is Business?Business is the activity of creating, buying, and selling goods or services to make a profit. It is a commercial enterprise that involves the exchange of money, goods, or services between two or more parties. Businesses can range from small family-owned shops to large multinational corporations. Businesses must use resources wisely, create value for customers, and operate within the law. Business activities include marketing, finance, accounting, production, and operations. Businesses must also meet customer needs and respond to changes in the marketplace.
Using unnecessary words and making the writing overly complicated can make it more difficult for the reader to understand the message.
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Topic:
Oman Bhd. (Oman) is listed on the Bursa Malaysia and is currently producing specialised steel
rods for construction of infrastructure. Currently the products are mainly for domestic market
consumption. Due to the intense competition in the Malaysian market, the company has come
out with two strategies, namely expansion strategy and diversification strategy in order to sustain
and to maximise its shareholders’ wealth.
In line with the company’s expansion strategy, the company planned to export about 35% of its
products to our neighboring countries such as Japan, Cambodia, and Vietnam etc. This poses
higher business risks as the company has no prior trading relationship with companies from the
above countries.
Additionally, in line with its diversification strategy, the Board had approved a total allocation of
RM250 million subject to the necessary due diligence being carried out, detailed as follows:
The firm had decided to invest in an existing biscuit factory in Australia for a total
consideration of A$100 million which represents about 60% of the company’s existing
shareholding. The company had allocated about RM100 million and would need to raise
the balance of the funds through either placement or borrowings in either Malaysia
ringgit or Australia dollars.
In line with the company’s global investment strategy, the company has targeted
Thailand or Vietnam. The company will be investing RM150 million in the form of
equity in foreign company, preferably construction sector.
1. Since some of the products are export to Japan, Cambodia and Vietnam, what should be
of concern to the management in respect of pricing and its effect on profitability, and the
risk the company face in respect of each country and the payment methods for goods?
The management of Oman Bhd. should be concerned about pricing and its effect on profitability, as well as the potential risks associated with the export of products to Japan, Cambodia, and Vietnam.
Pricing and profitability are always important considerations when entering foreign markets, and the company should take into account the different economies and market conditions in each country.
Furthermore, there can be risks associated with payment methods in different countries, and the company should be sure to familiarize itself with the terms and conditions of doing business in each country before entering any agreements.
In Japan, the management should be aware of different taxes that may apply, such as consumption and corporate taxes, as well as the different payment methods used in the country. In Cambodia, the company should be aware of the political and economic climate, as well as payment methods and any export restrictions. In Vietnam, the management should consider any export taxes, import taxes, and the different payment methods that are used in the country.
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Analyze how one of the culture typologies explains the culture
and link your explanation to your own organization (or one that you
are familiar with)
One of the culture typologies that can be used to explain culture is the Competing Values Framework (CVF). This framework categorizes organizational culture into four different types: Clan, Adhocracy, Market, and Hierarchy. Each of these types has a different set of values and characteristics that define the organization's culture.
Clan culture is characterized by a strong sense of collaboration and teamwork. Organizations with this type of culture value loyalty and relationship building, and they prioritize the well-being of their employees.
An adhocracy culture is characterized by innovation and creativity. Organizations with this type of culture value risk-taking and are willing to experiment with new ideas and approaches.
Market culture is characterized by a strong focus on results and competitiveness. Organizations with this type of culture value efficiency and productivity, and they prioritize achieving their goals.
Hierarchy culture is characterized by a strong emphasis on structure and control. Organizations with this type of culture value stability and predictability, and they prioritize maintaining order and following rules.
In my own organization, I would say that we have a Clan culture. Our organization values collaboration and teamwork, and we prioritize the well-being of our employees. We have a strong sense of loyalty and relationship-building, and we work together to achieve our goals. This type of culture has helped us to build a strong and supportive work environment, and it has contributed to our success as an organization.
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Discuss in writing the importance of Capital budget and its
impact on profit margins and the decisions of a firm.
Capital budgeting is the process of evaluating and selecting long-term investments that are consistent with the firm's goal of maximizing owner wealth.
Capital budgeting is important for several reasons:
- It helps to determine if a firm's long-term investments such as new machinery, replacement machinery, new plants, new products, and research and development projects are worth the funding of cash through the firm's capitalization structure.
- Capital budgeting can have a significant impact on a firm's profit margins. A good capital budgeting decision can increase the firm's profitability and contribute to the firm's long-term success.
- Capital budgeting decisions also have a major impact on a firm's financial position, affecting its cash flow and financial ratios. Poor capital budgeting decisions can lead to financial distress and even bankruptcy.
- Capital budgeting is important in the decision-making process of a firm because it helps to ensure that the firm is making the most efficient use of its resources and is making investments that will generate the highest returns.
In conclusion, capital budgeting is a crucial aspect of a firm's financial management and has a significant impact on the firm's profitability and financial position. It is important for firms to carefully evaluate and select long-term investments to ensure that they are making the most efficient use of their resources and are maximizing owner wealth.
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Blackstone Inc. has 12% coupon bonds that yield 8% to investors buying them now. Blackstone’s marginal tax rate including federal and state tax rates is 37.5%. What is the firm’s cost of capital for purposes of calculating WACC?
The firm’s cost of capital for purposes of calculating WACC are 5%
The cost of capital for Blackstone Inc. for purposes of calculating WACC can be calculated by using the formula:
Cost of capital = Yield x (1 - Marginal tax rate).
In this case, the yield is 8% and the marginal tax rate is 37.5%. Plugging these values into the formula, we get:
Cost of capital = 8% x (1 - 0.375) = 8% x 0.625 = 5%
Therefore, the cost of capital for Blackstone Inc. for purposes of calculating WACC is 5%. This is the cost that the firm must pay to raise capital from investors through the issuance of bonds.
It is important to note that the cost of capital is a key input in the calculation of WACC, which is used to determine the required rate of return for an investment project. By calculating the cost of capital, Blackstone Inc. can ensure that it is making investment decisions that will generate a positive return for its shareholders.
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Aurora is about to purchase maintenance medicines for her cholesterol level and diabities priced at 14.50 and 5.75 per piece respectively. Both prices are inclusive of 12% VAT. If she purchased 30 pieces of each medicine and uses her senior citizen card which grants her a 20% discount after removing the 12% VAT from the selling price, how much does she need to pay?
Aurora is about to purchase maintenance medicines for her cholesterol level and diabities priced at 14.50 and 5.75 per piece respectively. Both prices are inclusive of 12% VAT. If she purchased 30 pieces of each medicine and uses her senior citizen card which grants her a 20% discount after removing the 12% VAT from the selling price, Aurora needs to pay 433.92 for the maintenance medicines.
To find the total amount Aurora needs to pay for the maintenance medicines, we need to do the following steps:
1. Find the price of each medicine before VAT.
2. Find the total price of the medicines before VAT.
3. Apply the senior citizen discount.
4. Find the total amount Aurora needs to pay.
Step 1: Find the price of each medicine before VAT.
- For the cholesterol medicine: 14.50 / 1.12 = 12.95
- For the diabetes medicine: 5.75 / 1.12 = 5.13
Step 2: Find the total price of the medicines before VAT.
- For the cholesterol medicine: 12.95 x 30 = 388.50
- For the diabetes medicine: 5.13 x 30 = 153.90
- Total price before VAT: 388.50 + 153.90 = 542.40
Step 3: Apply the senior citizen discount.
- 542.40 x 0.20 = 108.48
- 542.40 - 108.48 = 433.92
Step 4: Find the total amount Aurora needs to pay.
- The total amount Aurora needs to pay is 433.92.
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Students are required to write a report covering the following:· Introduction: Should consist of the details of the industry, company, global cultural & diversity issues or any international business issues such as pertaining to managing international logistics or international banking or international suppliers or customers in general or during the pandemic faced by the organization and provide the necessary background for the global ramifications being addressed by the project.· Methodology: Should discuss the scientific approach taken to solve the problem. The details of the data sources, primary & secondary data collected & suitability of data to address the global diversity & challenges must be covered. The students may try to contact the embassies & other organizations to get an understanding of linguistic, cultural & legal requirements of doing business in a different part of the world & can frame their analysis, recommendations accordingly.· Analysis and results: Should include the procedure for the analysis conducted and the results of the said analysis using various statistical tools & procedures.· Recommendations and Implementation: Should include the recommendations made to the company and industry in general based on the analysis. The recommendations must offer potential solutions to the global issues identified.· International extrapolation and reflection of learnings: Should talk in depth about the international component of the project. This can be in the form of an extrapolation of how the problem could be addressed in a different country, for instance. The student should also reflect in this section the global insights gained from working on the project & how this experience potentially adds value to the skill sets acquired during the course of the complete program. Student may also add a section of how other companies are handling such issues or best practices to handle such issues.The project report should have 10-15 pages. The contents should be typed in Times New Roman font 12, justified, 1 ½ line space, 1-inch margin on all sides. All pages should be numbered. The Report should be of 8000-10000 words.
When writing a report covering global cultural and diversity issues or international business issues, it is important to include introduction, methodology, analysis and result. .
Your introduction should provide the necessary background information on the industry, company, and global ramifications being addressed by the project.
The methodology should discuss the scientific approach taken to solve the problem, along with details of the data sources, primary and secondary data collected, and their suitability for addressing the global diversity and challenges.
The analysis and results section should include the procedure for the analysis conducted and the results of said analysis, while the recommendations and implementation section should include recommendations made to the company and industry based on the analysis.
Finally, the international extrapolation and reflection of learnings section should talk in depth about the international component of the project and reflect on the global insights gained from working on the project.
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Tom borrowed $7640 for 7 months at an interest rate of 6%. The bank alao charges a $200 processing fee. What is the actual annual simple interest rate for this loan? Consider any fees as part of the total interest.
the actual annual simple interest rate for this loan is 6.11%.
To find the actual annual simple interest rate for the loan, we need to first calculate the interest on the loan and then add the processing fee to get the total interest. Then, we can use the formula for simple interest to find the actual annual interest rate. The formula for simple interest is:
I = P × r × t
Where I is the interest, P is the principal, r is the interest rate, and t is the time in years.
Given:
P = $7640
r = 6% = 0.06
t = 7/12 (since the loan is for 7 months)
First, calculate the interest:
I = P × r × t
I = $7640 × 0.06 × (7/12)
I = $266.80
Now, add the processing fee to get the total interest:
Total interest = I + processing fee
Total interest = $266.80 + $200
Total interest = $466.80
Finally, use the formula for simple interest to find the actual annual interest rate:
Total interest = P × r × t
$466.80 = $7640 × r × 1 (since we want to find the annual interest rate)
r = $466.80 / ($7640 × 1)
r = 0.0611
Therefore, the actual annual simple interest rate for this loan is 6.11%.
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Company discloses supplemental operating segment information. The following information is available for the current year:segmentSalesTraceable expensesX5,000,0003,000,000Y4,000,0002,500,000z3,000,0001,500,00012,000,0007,000,000Addl: expenses as follows:Indirect expenses1,800,000General Corporate Expenses1,200,000Interest expense600,000Income tax expense400,000The interest expense and income tax expense are regularly review by the chief operating decision marker as a measure of profit or loss.Appropriate common expenses are allocated to segments based on the ratio of a segment’s sales to total sales.5. What is segment Z’s profit for the current year?
The profit for segment Z’s for the current year is $500,000.
Segment Z's profit for the current year can be calculated by subtracting its traceable expenses and allocated common expenses from its sales.
1. First, we need to calculate the allocated common expenses for segment Z. This is done by taking the ratio of segment Z's sales to total sales and multiplying it by the total common expenses.
Segment Z's sales to total sales ratio = 3,000,000 / 12,000,000 = 0.25
Total common expenses = 1,800,000 + 1,200,000 + 600,000 + 400,000 = 4,000,000
Allocated common expenses for segment Z = 0.25 x 4,000,000 = 1,000,000
2. Now we can calculate segment Z's profit for the current year:
Segment Z's profit = Sales - Traceable expenses - Allocated common expenses
= 3,000,000 - 1,500,000 - 1,000,000
= 500,000
Therefore, segment Z's profit for the current year is $500,000.
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If I-phone company is looking to offer insurance for the phones and estimates that 1 million Iphone users will buy their insurance and they will charge 250 taka per phone for a year. They will pay 50000 taka for the loss of the phone (like stolen, fire, lost) and will pay 10000 taka for damage. If the company estimates 2500 people will claim full loss and 5000 customers will ask for partial damage. If I-phone company deposits the money at 8% interest for six months and paid 5 crore taka for underwriting then what will be their profit or loss?
If I-phone company deposits the money at 8% interest for six months and paid 5 crore taka for underwriting then the total profit of the company 35,000,000 taka profit.
If I-phone company is looking to offer insurance for the phones and estimates that 1 million I phone users will buy their insurance and they will charge 250 taka per phone for a year, then the total amount of money they will receive from the customers is 250 x 1,000,000 = 250,000,000 taka.
The company will pay 50000 taka for the loss of the phone (like stolen, fire, lost) to 2500 people,
which amounts to 50,000 x 2,500 = 125,000,000 taka.
They will also pay 10000 taka for damage to 5000 customers, which amounts to 10,000 x 5,000 = 50,000,000 taka.
The total amount of money the company will pay for the claims is 125,000,000 + 50,000,000 = 175,000,000 taka.
If I-phone company deposits the money at 8% interest for six months,
they will earn an interest of (250,000,000 x 8% x 6/12) = 10,000,000 taka.
The company also paid 5 crore taka for underwriting, which is equivalent to 50,000,000 taka.
Therefore, the total profit or loss of the company will be (250,000,000 + 10,000,000) - (175,000,000 + 50,000,000) = 35,000,000 taka profit.
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Note: Remember to write in your answer IN YOUR OWN WORDS. Copy/paste from any source, including your peers in the class that is identifiable by SIMILAR narrative, will earn zero mark and may lead to some additional penalty. In answering the questions, for better marks, incorporate ideas/concepts you have learnt in chapters 1 and 2
1. Explain the role of the financial system and its importance to the economy as a whole as well as to individuals
2. Discuss the key differences between money and capital markets and the differentiated role they play as part of the financial system. [2 marks] 3: What is information asymmetry? How financial markets and institutions are affected by such asymmetry, explain with specific examples.[6 marks] 4. What is moral hazard and how it relates to the problem of adverse selection?
1. The financial system is responsible for the efficient transfer of funds from those with surplus funds (savers) to those who need funds (borrowers).
It facilitates economic activities through the efficient allocation of resources and contributes to economic growth and stability.
Additionally, it provides individuals with an array of services such as savings, investments, insurance and loans.
2. Money markets are financial markets for short-term funds, usually up to one year, and typically involve instruments such as treasury bills, commercial paper, and certificates of deposit.
Capital markets are long-term markets for the purchase and sale of financial instruments such as stocks and bonds, which are generally held for more than one year. Money markets typically provide short-term liquidity while capital markets provide long-term capital.
3. Information asymmetry occurs when one party has more or better information than the other. In financial markets, information asymmetry can lead to mispricing and misallocation of resources.
For example, when a lender has access to more information about the borrower's creditworthiness, the lender may be able to charge a higher rate of interest than is justified.
Similarly, in the stock market, an investor with more information about the prospects of a company may be able to profit from their knowledge by buying or selling shares at a price which is not reflected in the underlying value of the company.
4. Moral hazard is the risk that a borrower will not act in their best interest once they have borrowed funds. This is in contrast to adverse selection, which occurs when borrowers with bad creditworthiness are able to borrow funds.
Moral hazard can lead to lenders demanding higher interest rates, or even denying credit altogether, as they are unable to judge the risk of default.
Moral hazard can also occur in other areas of finance, such as insurance, where the insured party may take more risks knowing they are covered.
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2 17 Statement of Cash Flows
Cash from operations $127,000
3. Accounts payable to merchandise suppliers increased $50,000 during the year.
4. Accrued expenses payable increased $155,000 during the year.
ASQUITH COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales revenue $5,250,000
Cost of goods sold
Beginning inventory $1,780,000
Purchases 3,430,000
Goods available for sale 5,210,000
Ending inventory 1,900,000
Total cost of goods sold 3,310,000
Gross profi t 1,940,000
Operating expenses
Depreciation expense 95,000
Amortization expense 20,000
Other expenses 945,000 1,060,000
Net income $ 880,000
Instructions
Prepare the operating activities section of the statement of cash fl ows for the year ended December 31, 2017, for Asquith Company, using the indirect method
Operating activities section of the statement of cash flows using indirect method is: Net income $880,000, Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $95,000 Amortization expense $20,000 Increase in accounts payable $50,000 Increase in accrued expenses payable $155,000, Changes in operating assets and liabilities: Decrease in inventory ($120,000), and Net cash provided by operating activities $1,080,000.
The operating activities section of the statement of cash flows for the year ended December 31, 2017, for Asquith Company using the indirect method is as follows.
Operating Activities SectionCash flows from operating activities:
Net income $880,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense $95,000
Amortization expense $20,000
Increase in accounts payable $50,000
Increase in accrued expenses payable $155,000
Changes in operating assets and liabilities:
Decrease in inventory ($120,000)
Net cash provided by operating activities $1,080,000
The net cash provided by operating activities is calculated by taking the net income and adjusting it for non-cash items such as depreciation and amortization, and changes in operating assets and liabilities. The increase in accounts payable and accrued expenses payable are added to the net income because they represent an increase in cash. The decrease in inventory is subtracted from the net income because it represents a decrease in cash. The result is the net cash provided by operating activities.
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Explain the two competencies and also give examples to each (50 marks) (a) Learning on the fly (b) Intellectual horsepower
The two competencies, learning on the fly and intellectual horsepower, are important traits that can help individuals succeed in their personal and professional lives.
(a) Learning on the fly refers to the ability to quickly and effectively absorb new information and apply it to solve problems or make decisions. This competency is important in fast-paced environments where individuals need to adapt quickly to new situations or challenges.
Examples of learning on the fly include a manager quickly learning a new software program to complete a project on time, or a student quickly picking up new concepts in a class they are struggling with.
(b) Intellectual horsepower refers to the ability to process complex information and think critically about it. This competency is important in situations where individuals need to analyze data or make strategic decisions.
Examples of intellectual horsepower include a scientist analyzing complex data to develop a new hypothesis, or a business analyst using critical thinking skills to make recommendations for a company's future growth.
In conclusion, both learning on the fly and intellectual horsepower are important competencies that can help individuals succeed in their personal and professional lives.
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What is the coupon rate for a bond with 6 years until maturity, a price of $984.32, and a yield to maturity of 7%? Interest is paid semi-annually
A. 3.34% B. 3.50% C. 6.68% D. 7.00%
The coupon rate for a bond with 6 years until maturity, a price of $984.32, and a yield to maturity of 7% is 6.68%.
The correct answer is C. 6.68%.
To find the coupon rate for a bond, we need to use the formula:
Coupon rate = (Annual interest payment / Face value of the bond) x 100
We are given the price of the bond ($984.32) and the yield to maturity (7%), but we need to find the annual interest payment in order to calculate the coupon rate.
To do this, we can use the formula:
Price of the bond = (Annual interest payment / Yield to maturity) x (1 - (1 + Yield to maturity)^-n)
Where n is the number of years until maturity.
Plugging in the given values, we get:
$984.32 = (Annual interest payment / 0.07) x (1 - (1 + 0.07)^-6)
Solving for the annual interest payment, we get:
Annual interest payment = $66.08
Now we can plug this value into the formula for the coupon rate:
Coupon rate = ($66.08 / $1000) x 100
Coupon rate = 6.68%
Therefore, the coupon rate for this bond is 6.68%, or answer choice C.
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