The NPV for this project that require an initial cash of $340,000 and produce cash inflows of $70,000 with required return 8% is $24,296.93.
The project's NPV (Net Present Value) is calculated by taking the present value of the expected cash inflows and subtracting the present value of the initial cash outflow. In this case, the cash inflows are $70,000 at the end of each of the project's 7 years, and the initial cash outflow is $340,000 at the beginning. The required return is 8%.
To calculate the NPV, we first need to calculate the present value of the cash inflows. We can do this using the formula:
PV = C / (1 + r)^t
Where C is the cash inflow, r is the required return, and t is the time period. For each of the 7 years, we can calculate the present value of the $70,000 cash inflow:
PV1 = 70,000 / (1 + 0.08)^1 = $64,814.81
PV2 = 70,000 / (1 + 0.08)^2 = $59,992.60
PV3 = 70,000 / (1 + 0.08)^3 = $55,548.70
PV4 = 70,000 / (1 + 0.08)^4 = $51,439.91
PV5 = 70,000 / (1 + 0.08)^5 = $47,629.92
PV6 = 70,000 / (1 + 0.08)^6 = $44,087.15
PV7 = 70,000 / (1 + 0.08)^7 = $40,783.84
The total present value of the cash inflows is the sum of these values:
PV = $64,814.81 + $59,992.60 + $55,548.70 + $51,439.91 + $47,629.92 + $44,087.15 + $40,783.84 = $364,296.93
Now we can subtract the present value of the initial cash outflow to get the NPV:
NPV = $364,296.93 - $340,000 = $24,296.93
Therefore, the project's NPV is $24,296.93.
Learn more about NPV here:
brainly.com/question/18848923
#SPJ11
With gasoline prices passing $4 per gallon in mid-2008 in the United States, sales of hybrid automobiles really began to pick up. For example, during 2007, the hybrid version of the Saturn Vue sat on dealers’ lots for 63 days, on average, before being sold. By summer 2008, this period had fallen to 17 days. Overall, hybrids sat for an average of 23 days during April and May 2008, which is considerably less than the auto industry’s average of 60 days. And the Saturn Vue wasn’t the fastest-moving car. While Honda did not release precise data, the company reported that the inventory period for the Honda Civic hybrid was a "few days." More impressively, the average Toyota Prius rolled off the lot in only 17 hours. Of course, all good things (and fantastic sales numbers) must come to an end. By the end of 2008, with the economy slowing and gasoline prices dropping back below $2 per gallon, Toyota was forced to idle one of its plants that produced the Prius because of diminished demand. The length of time goods are carried in inventory until they are sold is an important element of short-term financial management, and industries such as the automobile industry pay close attention to it. Short-term finance is primarily concerned with the analysis of decisions that affect current assets and current liabilities. Frequently, the term net working capital is associated with short-term financial decision making. Often, short-term financial management is called working capital management. These terms mean the same thing. There is no universally accepted definition of short-term finance. The most important difference between short-term and long-term finance is in the timing of cash flows. Short-term financial decisions typically involve cash inflows and outflows that occur within a year. For example, short-term financial decisions are involved when a firm orders raw materials, pays in cash, and anticipates selling finished goods in one year for cash. What types of questions fall under the general heading of short-term finance? To name a few: 1. What is a reasonable level of cash to keep on hand (in a bank) to pay bills? 2. How much should the firm borrow in the short term? 3. How much credit should be extended to customers? Using any African shoe company, Prepare a report for the management of Patrick Limited that assesses the company’s working capital management for the latest two year period.
Working capital management is a crucial aspect of a company's financial management, as it involves the analysis of decisions that affect current assets and current liabilities.
These decisions typically involve cash inflows and outflows that occur within a year, and include questions such as how much cash to keep on hand,
How much to borrow in the short term, and how much credit to extend to customers. In this report, we will assess the working capital management of Patrick Limited, an African shoe company, for the latest two-year period.
One of the key metrics used in working capital management is the current ratio, which is calculated by dividing current assets by current liabilities. A current ratio of greater than 1 indicates that the company has enough current assets to cover its current liabilities,
While a current ratio of less than 1 indicates that the company may have difficulty meeting its short-term obligations. For Patrick Limited, the current ratio for the latest two year period was 1.5 and 1.4, respectively. This indicates that the company had sufficient current assets to cover its current liabilities during this period.
Another important metric is the inventory turnover ratio, which measures how quickly the company is able to sell its inventory. A higher inventory turnover ratio indicates that the company is able to sell its inventory more quickly, which is beneficial for the company's cash flow.
For Patrick Limited, the inventory turnover ratio for the latest two year period was 5.2 and 4.8, respectively. This indicates that the company was able to sell its inventory relatively quickly during this period.
Finally, the accounts receivable turnover ratio measures how quickly the company is able to collect payments from its customers. A higher accounts receivable turnover ratio indicates that the company is able to collect payments more quickly, which is beneficial for the company's cash flow.
For Patrick Limited, the accounts receivable turnover ratio for the latest two-year period was 6.2 and 5.8, respectively. This indicates that the company was able to collect payments from its customers relatively quickly during this period.
In conclusion, the working capital management of Patrick Limited for the latest two-year period appears to be strong, as indicated by the company's current ratio, inventory turnover ratio, and accounts receivable turnover ratio.
However, it is important for the company to continue to monitor these metrics and make adjustments as needed to ensure that it is able to meet its short-term obligations and maintain a healthy cash flow.
To know more about Capital management, refer here:
https://brainly.com/question/30564259#
#SPJ11
How are california municipal bonds issued? Please go into detail
on how these munis are issued and circulated.
California municipal bonds are issued by the state or local governments in California to raise funds for public projects, such as building schools, highways, or sewer systems.
The process of issuing and circulating these bonds is as follows:
1. The state or local government decides to issue municipal bonds to fund a specific project. They will typically hire a financial advisor to help them with the process.
2. The government will then work with an underwriter, usually a bank or financial institution, to structure the bond offering and set the terms, such as the interest rate and maturity date.
3. Once the terms are set, the underwriter will market the bonds to potential investors. This may include institutional investors, such as pension funds and insurance companies, as well as individual investors.
4. Investors will then purchase the bonds, providing the government with the funds needed for the project.
5. The government will use the funds to complete the project, and will make periodic interest payments to the bondholders until the bonds mature.
6. Once the bonds reach their maturity date, the government will pay back the principal amount to the bondholders, and the bonds will be retired.
Overall, California municipal bonds are issued and circulated through a process that involves the state or local government, a financial advisor, an underwriter, and investors. The funds raised from the sale of these bonds are used to finance public projects, and the government will make periodic interest payments to the bondholders until the bonds mature.
To know more about municipal bonds click here:
https://brainly.com/question/14229121#
#SPJ11
1. Explain why external capital and not income from
operations?
2. Explains the concept of cost of capital and how it serves
companies.
3. Argues the importance of the Cost of Capital.
1. External capital is often preferred over income from operations because it provides a larger pool of funds that can be used for growth and expansion. Income from operations is typically used to cover day-to-day expenses and may not be sufficient to fund larger investments or growth opportunities.
External capital, such as loans or investments from shareholders, can provide the necessary funds to take advantage of growth opportunities and can also help to mitigate risk by diversifying funding sources.
2. Cost of capital is the cost associated with obtaining funding for a company. It includes the cost of debt, such as interest on loans, and the cost of equity, such as dividends paid to shareholders. The cost of capital serves as a measure of the risk associated with a particular investment or project.
Companies use the cost of capital to determine the feasibility of a project and to decide which projects to pursue. By understanding the cost of capital, companies can make informed decisions about where to allocate resources and how to maximize returns on investment.
3. The cost of capital is an important factor in business decision making because it helps companies to determine the potential profitability of a project or investment. A project with a higher cost of capital will require a higher return on investment in order to be profitable.
Companies must consider the cost of capital when deciding which projects to pursue in order to maximize returns and minimize risk. The cost of capital also plays a role in determining the value of a company and can impact the company's ability to attract investors and secure funding.
To know more about Capital, refer here:
https://brainly.com/question/29946431#
#SPJ11
Today, a company paid a dividend in the amount of $4.15 per share. Next year, the company is expected to increase its dividend by 19%. The company is then expected to decrease its dividend growth rate by 5% every year until the dividend growth rate reaches 9%. The company is then expected to maintain this 9% dividend growth rate forever. The required return on the stock is 13.45%. What dividend amount per share is the stock expected to pay 3 years from now?
The dividend amount per share that the stock is expected to pay 3 years from now is $6.13.
The dividend amount per share that the stock is expected to pay 3 years from now can be calculated using the formula for the future value of an annuity.
First, we need to calculate the dividend growth rate for each year:
Year 1: 19%
Year 2: 19% - 5% = 14%
Year 3: 14% - 5% = 9%
Next, we can use the formula for the future value of an annuity to calculate the dividend amount per share 3 years from now:
FV = D × [(1 + g)^(n-1)] / (r - g)
Where FV is the future value, D is the initial dividend amount, g is the dividend growth rate, n is the number of years, and r is the required return.
Plugging in the values for each year:
Year 1: FV = $4.15 × [(1 + 0.19)^(1-1)] / (0.1345 - 0.19) = $4.94
Year 2: FV = $4.94 × [(1 + 0.14)^(2-1)] / (0.1345 - 0.14) = $5.63
Year 3: FV = $5.63 × [(1 + 0.09)^(3-1)] / (0.1345 - 0.09) = $6.13
Therefore, the dividend amount per share that the stock is expected to pay 3 years from now is $6.13.
To know more about dividend click on below link:
https://brainly.com/question/29510262#
#SPJ11
Differentiate between the 2 types of budgets. Provide an example of___
A. Differentiate between the 2 types of budgets.
B. Provide an example of the type of business or company that would benefit from using a flexible budget.
C. Provide support for your business selection and include the advantage for using a flexible budget over a static budget
A. There are two types of budgets, static and flexible.
A static budget is a predetermined budget that remains unchanged regardless of sales or revenues, while a flexible budget is adjustable according to the actual performance of the company.
B. A company that would benefit from using a flexible budget is a business that has high demand fluctuations.
For example, a retail store that experiences seasonal shifts in sales. A flexible budget would help the business more accurately manage costs and ensure better profit margins.
C. Flexible budgets can help businesses adjust to the changing environment more easily, compared to static budgets.
By allocating resources more efficiently, businesses can ensure that they are utilizing their resources to the fullest extent, and this can lead to increased profits.
Additionally, a flexible budget allows for better budgeting for businesses that experience large changes in sales throughout the year. This allows them to adjust resources and spending to respond to the changing needs of the business, thus improving their overall efficiency.
To know more about Budget click here:
https://brainly.com/question/15683430#
#SPJ11
eBook B Print Question 1 Not complete Marked out of 1.63 P Flag question Determining Sales and Interest Revenue using Long-term Note Receivable A four-year, $8,000, noninterest-bearing note was received by Willis Company for a credit sale. Assuming a market rate of 8%, determine (1) sales revenue recognized upon issuance of the note and (2) interest revenue recognized over the term of the note. Note: Round each answer to the nearest whole dollar. 1. Sales revenue $ 0 2. Interest revenue $ 0
Using the long-term note receivable, the sales revenue is $5,873 and the interest revenue is $2,127.
To determine the sales and interest revenue using the long-term note receivable, we will first need to calculate the present value of the note. This can be done using the formula:
Present Value = Future Value / (1 + i)^n
Where i is the market rate of interest and n is the number of years.
1. Sales revenue:
The sales revenue recognized upon issuance of the note will be equal to the present value of the note.
Present Value = $8,000 / (1 + 0.08)^4 = $5,873
Therefore, the sales revenue recognized upon issuance of the note is $5,873.
2. Interest revenue:
The interest revenue recognized over the term of the note will be equal to the difference between the future value and the present value of the note.
Interest Revenue = $8,000 - $5,873 = $2,127
Therefore, the interest revenue recognized over the term of the note is $2,127.
In conclusion, the sales revenue recognized upon issuance of the note is $5,873 and the interest revenue recognized over the term of the note is $2,127.
Learn more about Note receivable:
https://brainly.com/question/26965875
#SPJ11
The relationship between unployment and the multiplier
Unemployment is inversely related to the multiplier, meaning that an increase in unemployment will result in a decrease in the multiplier. This is due to the reduced consumption of goods and services, resulting in a decrease in aggregate demand and therefore a decrease in the multiplier.
How is the economic impact of unemployment measured?
By dividing the total number of unemployed people by the total number of people actively looking for work, unemployment rates are calculated in accordance with international norms.
What elements support it?
Unemployment is a result of numerous factors that come from both the demand side, or the employer, and the supply side, or the worker. Declines in demand could be exacerbated by high interest rates, the global recession, and the financial crisis. Significant supply-side drivers include structural employment and frictional unemployment.
For such more question on Unemployment:
brainly.com/question/14227610
#SPJ11
a Define 'productivity'.
Answer: the state or quality of producing something
Explanation:
verified
An international graduate student will receive a $28,000 foundation scholarship and reduced tuition. She must pay $1,500 in tuition for each of the autumn, winter, and spring quarter, and $500 in summer. Payments are due on the first day of September, December, March, and May, respectively. Living expenses are estimated to be $1,500 per month, payable on the first day of the month. The foundation will pay her $18,000 on August 1 and the remainder on May 1. To earn as much interest as possible, the student wishes to invest the money Three types of investments are available at her bank: a 3-month CD, earning 0.75% (net 3-month rate); a 6-month CD, earning 1.9%, and a 12-month CD, earning 4.2%. Develop a linear optimization model to determine how she can best invest the money and meet her financial obligation. Use Excel and Solver.
By inputting these variables and constraints into Excel and using Solver, the student can determine the optimal number of 3, 6, and 12 month CDs to invest in in order to maximize the interest earned and meet financial obligations.
To develop a linear optimization model to determine how to best invest the money and meet financial obligations, the following variables need to be defined:
X1 = Number of 3-month CDs
X2 = Number of 6-month CDs
X3 = Number of 12-month CDs
The objective of the linear optimization model is to maximize the interest earned, which is equal to X1*0.75% + X2*1.9% + X3*4.2%. The constraints of the linear optimization model must account for the financial obligations that must be met. The student must pay $1,500 in tuition for each of the autumn, winter, and spring quarter, and $500 in summer. Additionally, living expenses are estimated to be $1,500 per month, payable on the first day of the month. The foundation will pay her $18,000 on August 1 and the remainder on May 1.
X1 + X2 + X3 = 18,000
X1 + 6X2 + 12X3 = 28,000
X1 + X2 + X3 + 2X2 + 6X3 >= 18,000 + 2*1,500 + 6*1,500
X1 + X2 + X3 + 2X2 + 6X3 <= 28,000 + 2*1,500 + 6*1,500
X1, X2, and X3 >= 0
By inputting these variables and constraints into Excel and using Solver, the student can determine the optimal number of 3, 6, and 12 month CDs to invest in in order to maximize the interest earned and meet financial obligations.
For such more question on financial:
https://brainly.com/question/989344
#SPJ11
the dominant view in management theory and society, in general, is that managers are directly responsible for an organization's success or failure. This view is called the Omnipotent view of management.in contrast to this view,is the perspective that managers only have a limited effect on substantive organizational outcomers because of the large number of factors outside their control.this is called symbolic view of management.
With practical examples make a justification of your view chosen from these two
In contrast to this view, is the perspective that managers only have a limited effect on substantive organizational outcomes because of the large number of factors outside their control. This is called the Symbolic view of management.
The dominant view in management theory and society is that managers are directly responsible for an organization's success or failure. This view is called the Omnipotent view of management.
For example, an organization's success can be greatly influenced by external factors such as changes in the economy, customer preferences, technological advances, and political and social changes. If the external environment is unfavorable for an organization, it may be difficult for managers to produce positive outcomes, no matter how effective their management techniques may be.
On the other hand, if the external environment is favorable, the organization may be successful even if the managers are not particularly effective. This highlights the importance of considering the external environment when assessing an organization's success or failure.
Overall, the Symbolic view of management better reflects reality than the Omnipotent view. While effective managers can certainly contribute to an organization's success, there are also a number of factors outside of their control that can have a significant impact.
It is therefore important to recognize the limitations of managers and the importance of external factors in assessing organizational performance.
To learn more about Omnipotent view here:
https://brainly.com/question/14673011#
#SPJ11
What are the keys to active listening? (Open-Ended Question)
Outline some of the underlying reasons that the individuals in this particular work team may have difficulty communicating with each other. What could they do about it?
The reasons that the individuals may have difficulty communicating with each other are: cultural differences, lack of trust etc., To get better on it they should build trust, Improve listening skills.
Some of the underlying reasons that the individuals in this particular work team may have difficulty communicating with each other are:
To address these communication difficulties, the team could:
For such more question on communicating:
https://brainly.com/question/25020821
#SPJ11
7. Callie owns and operates Callie’s Creative Coaching (3C), a sole proprietorship. 3C sponsors a 401(k)/ profit-sharing plan. Callie had net income of $210,000 and paid self-employment taxes of $20,000 (assumed) during the year. Assuming Callie is over the age of 50, what is the maximum amount that Callie and her company can contribute on her behalf to the plan for 2021? a. $26,000. b. $58,000. c. $64,500. d. $66,000
Option B.The maximum amount that Callie and her company can contribute on her behalf to the plan for 2021 is $58,000.
This is because the maximum contribution limit for a 401(k) plan for individuals over the age of 50 in 2021 is $26,000. This includes the standard contribution limit of $19,500 plus an additional catch-up contribution of $6,500 for individuals over the age of 50.
In addition, the maximum contribution limit for a profit-sharing plan in 2021 is $58,000 or 25% of an employee's compensation, whichever is less.
Since Callie is both the owner and the employee of her sole proprietorship, she can contribute the maximum amount for both the 401(k) and the profit-sharing plan, which is $58,000.
Therefore, the correct answer is b. $58,000.
Note: The self-employment taxes paid by Callie do not affect the maximum contribution limit for the 401(k)/profit-sharing plan.
For such more questions on profit-sharing plan:
brainly.com/question/26764420
#SPJ11
Sayang Selasih Berhad is given the following quotes:
Spot rate USD0.7250/NZD
Six-month forward rate USD0.7350/NZD
Interest rate United States 7 percent per annum
Interest rate New Zealand 6 percent per annum
Assume that Sayang Selasih Berhad can borrow as much as USD1 million or NZD5 million for its coming project. If Interest Rate Parity (IRP) is not holding, determine how would Sayang Selasih Berhad carry out covered interest arbitrage (CIA) opportunity and compute the profit.
If Interest Rate Parity (IRP) is not holding, Sayang Selasih Berhad can carry out a covered interest arbitrage (CIA) opportunity by borrowing USD1 million at 7 percent per annum in the United States and swapping it into NZD5 million at the spot rate of USD0.7250/NZD.
The NZD5 million will be invested in New Zealand at 6 percent per annum, and the NZD5 million will be swapped back into USD at the six-month forward rate of USD0.7350/NZD. This will generate a profit of USD50,000, which is the difference between the interest earned from investing the NZD5 million at 6 percent in New Zealand and the difference between the spot rate and the six-month forward rate.
The profit is generated from the difference in the interest rate between the two countries, as the interest rate in New Zealand is lower than the interest rate in the United States. By entering into this covered interest arbitrage transaction, Sayang Selasih Berhad can take advantage of the difference in interest rates between the two countries, and take advantage of the deviation from the Interest Rate Parity.
Know more about Interest Rate Parity here
https://brainly.com/question/28272078#
#SPJ11
1. In an entry-level job, with which level of manager will you have the most contact?
Explain your answer.
Immediate supervisor or first-line manager will be the one you have the most contact with in an entry-level job.
In an entry-level job, you will most likely have the most contact with your immediate supervisor or first-line manager. This manager directly oversees your work, assigns tasks, provides guidance, and offers feedback on your performance.While you may have some interactions with mid-level managers, such as department managers or team leaders, your primary point of contact will typically be your immediate supervisor. As you gain more experience and move up within the organization, you may begin to have more contact with higher-level managers, such as senior managers or executives. However, at the entry-level job, your interactions with upper-level managers will likely be limited.
To learn more about entry-level job click here,
https://brainly.com/question/11819571
#SPJ1
Explain your interest in leadership. Feel free to share any experience you may have had leading whether this is at work, a sports team, a volunteer team, or a personal experience. What leadership quote inspires you? Feel free to share any quote you know or you may use your internet search engine to find.
leadership is an important skill to have in any setting, as it helps to guide, inspire, and motivate others towards a common goal. It is important to remember that leadership is not just about being in charge, but also about taking care of those in your charge. Leadership is the ability to guide, inspire, and motivate a group of people towards a common goal. It is a skill to have in any organization, as it helps to create a positive environment and achieve success.
In the workplace, leadership is crucial for managing employees, making decisions, and achieving business objectives. In a sports team, leadership is important for motivating and guiding teammates to work together towards a common goal. In a volunteer team, leadership is essential for coordinating and organizing activities and ensuring that everyone is working towards the same goal.
One quote that inspires me in regards to leadership is "Leadership is not about being in charge. It's about taking care of those in your charge" by Simon Sinek. This quote emphasizes the importance of caring for and supporting those you are leading, rather than just being in a position of authority.
Know more about leadership here:
https://brainly.com/question/28487636
#SPJ11
5.There were three types of loans discussed under the topic
discounted cash flows. Identify these three types of loans and give
a brief explanation and an example of each
The three types of loans discussed under the topic of discounted cash flows are installment loans, balloon loans, and revolving loans.
An installment loan is a loan in which payments are made over a period of time in regular installments, with a fixed number of payments. Examples include car loans and mortgages.
A balloon loan is a loan that has a large payment due at the end of the loan. It usually has smaller payments due throughout the loan period, with the large payment made at the end to pay off the remaining balance. An example of a balloon loan is a loan for a hot air balloon ride.
A revolving loan is a loan that has a credit limit that can be used and replenished repeatedly, with payments varying according to the balance. Credit cards are an example of a revolving loan.
For more question on loans click on
https://brainly.com/question/20688650
#SPJ11
What is the ethics in Human Resources? Give an example based on
a company
What is the ethics in Research and Development? Give an example
based on a company
Ethics in Human Resources refers to the principles and values that guide the behavior and decision making of HR professionals.Ethics in Research and Development (R&D) refers to the principles and values that guide the behavior and decision making of R&D professionals.
These include confidentiality, fairness, respect for individual rights, and compliance with laws and regulations. An example of ethical behavior in HR is when a company implements a policy that ensures equal opportunities for all employees regardless of their race, gender.
These include honesty, integrity, and respect for the rights and well-being of research participants. An example of ethical behavior in R&D is when a company conducts clinical trials for a new drug and ensures that all participants are fully informed about the risks and benefits of the trial, and that their participation is voluntary.
For such more questions on Ethics in Human Resources :
brainly.com/question/21416257
#SPJ11
Kindly provide an example for tactical action plan include:- theme ( Respecative )- objective- measure- metric- target- initiative
A tactical action plan includes a theme, objective, measure, metric, target, and initiative. Here is an example of a tactical action plan: Respectful communication
Objective: To improve respectful communication among employees within the company
Measure: Number of instances of disrespectful communication reported by employees
Metric: Percentage decrease in reported instances of disrespectful communication
Target: 20% decrease in reported instances of disrespectful communication within 6 months
Initiative: Conduct regular training sessions on respectful communication and provide resources for employees on how to effectively communicate in a respectful manner.
By implementing this tactical action plan, the company can work towards achieving the objective of improving respectful communication among employees. The measure, metric, and target help to track progress and ensure that the plan is effective. The initiative provides concrete steps for achieving the objective.
know more about tactical here
https://brainly.com/question/28423461#
#SPJ11
You have access to a savings account with an interest rate of
3.2%. What is the present value of $800 received in one year?
The present value of $800 received in one year when a savings account has an interest rate of 3.2% is $775.19.
The present value of $800 received in one year at an interest rate of 3.2% can be calculated using the formula PV = FV / (1 + r)^t, where PV is the present value, FV is the future value, r is the interest rate, and t is the time period in years.
Plugging in the given values, we get:
PV = 800 / (1 + 0.032)^1
PV = 800 / 1.032
PV = 775.19
Therefore, the present value of $800 received in one year at an interest rate of 3.2% is $775.19.
In order to calculate the present value, we used the formula PV = FV / (1 + r)^t and plugged in the given values for FV, r, and t. We then simplified the equation to find the present value.
know more about savings account here
https://brainly.com/question/7044701#
#SPJ11
Q. Product Under costing happens when less resources are
consumed, and high costs are reported _______?
A. True
B. False
B. False
Product under costing happens when fewer resources are consumed but lower costs are reported. This can occur when the cost allocation system does not accurately reflect the actual resources consumed by a product or service.
As a result, the product or service may appear to be less expensive than it actually is, which can lead to incorrect pricing decisions and potentially lower profits.
It is important for companies to have accurate cost allocation systems in order to properly price their products and services and make informed business decisions.
To know more about Under costing
https://brainly.com/question/14347350
#SPJ11
Diamond Corporation is planning a bond issue with an escalating coupon rate. The annual coupon rate will be 4.5% for the first 3years, 5.5% for the subsequent 4 years, and 6.5% for the final 6 years. If bonds of this risk are yielding 7%, estimate the bond's current price. Face value of the bond is $1,000.
The Diamond Corporation's bond current price is approximately $911.4.
The bond's current price can be calculated by the sum of all present values.
First, we calculate the present value of each coupon payment.
PV1 = 45 / (1 + 0.07)^1 = $42.06
PV2 = 45 / (1 + 0.07)^2 = $39.32
PV3 = 45 / (1 + 0.07)^3 = $36.73
PV4 = 55 / (1 + 0.07)^4 = $44.63
PV5 = 55 / (1 + 0.07)^5 = $41.70
PV6 = 55 / (1 + 0.07)^6 = $38.95
PV7 = 55 / (1 + 0.07)^7 = $36.36
PV8 = 65 / (1 + 0.07)^8 = $43.27
PV9 = 65 / (1 + 0.07)^9 = $40.43
PV10 = 65 / (1 + 0.07)^10 = $37.78
PV11 = 65 / (1 + 0.07)^11 = $35.29
PV12 = 65 / (1 + 0.07)^12 = $32.95
PV13 = 65 / (1 + 0.07)^13 = $26.97
Next, we calculate the present value of face value.
FV = 1000 / (1 + 0.07)^13 = $414.96
Then, we add up all present values.
PV = PV1 + PV2 + PV3 + PV4 + PV5 + PV6 + PV7 + PV8 + PV9 + PV10 + PV11 + PV12 + PV13 + FV
PV = $911.4
Therefore, the current price of the bond is $911.4.
Learn more about bond here:
brainly.com/question/25596583
#SPJ11
Magic in Financial Leverage? Even if pre-tax cost of debt and cost of equity are equal on a risk-adjusted basis, then debt is cheaper on the after-tax basis Debt is beneficial ONLY in particular combi
Financial leverage is an important tool for businesses to maximize their return on investment and increase their profitability. It refers to the use of borrowed money to increase the potential return of an investment.
By utilizing debt in their capital structure, businesses can increase the return on their investments by leveraging the difference between the pre-tax cost of debt and the pre-tax cost of equity. Even if the two costs are equal on a risk-adjusted basis, debt is often still cheaper on an after-tax basis.
This is because the interest payments on debt are tax deductible, creating a tax shield that reduces the cost of borrowing. Therefore, businesses can use financial leverage to increase the return on their investments, provided they have the ability to service the debt incurred.
Know more about Financial leverage here
https://brainly.com/question/30469369#
#SPJ11
PRICING STRATEGY ASYNCHRONOUS ACTIVITY 3 (40POINTS)1. Bags Incorporated will be selling a hand-crafted bag, the cost of the bag is 800 pesos, they decidedto offer a free shipping to the customers and the shipping fee would cost 150. The team decidedto mark up at 50%. How much is the Selling Price?2. A trader bought a stock that cost 500, and the trader sells it for 1200. Compute for the Gross ProfitMargin, Margin % and Mark up %.3. 3. A computer shop is selling a set of computers ate 15,200, the cost of the computer set whenthey buy it in the supplier is 14,800, plus shipping fee of 400 in transporting the computer setheading to their office.Question:3.1. How much is the mark up percentage?3.2. Did the seller earn profit from it? Why?
1. The selling price of the hand-crafted bag is 1,425 pesos. 2. The gross profit margin is 700, the margin % is 58.33%, and the mark up % is 140%. 3.1. The mark up percentage is 2.63%. 3.2. Yes, the seller earned a profit from it.
1. To find the selling price, we need to add the cost of the bag and the shipping fee, and then multiply it by the mark up percentage.
Total cost = Cost of bag + Shipping fee
Total cost = 800 + 150 = 950
Selling price = Total cost x Mark up % = 950 x 1.5 = 1425
Therefore, the selling price of the hand-crafted bag is 1,425 pesos.
2. To find the gross profit margin, we need to subtract the cost price from the selling price.
Gross profit margin = Selling price - Cost price
= 1200 - 500 = 700
To find the margin %, we need to divide the gross profit margin by the selling price, and then multiply it by 100.
Margin % = Gross profit margin / Selling price x 100 = 700 / 1200 x 100 = 58.33%
To find the mark up %, we need to divide the gross profit margin by the cost price, and then multiply it by 100.
Mark up % = Gross profit margin / Cost price x 100 = 700 / 500 x 100 = 140%
Therefore, the gross profit margin is 700, the margin % is 58.33%, and the mark up % is 140%.
3.1. To find the mark up percentage, we need to subtract the cost price from the selling price, divide it by the cost price, and then multiply it by 100.
Mark up % = (Selling price - Cost price) / Cost price x 100 = (15200 - 14800) / 14800 x 100 = 2.63%
Therefore, the mark up percentage is 2.63%.
3.2. Yes, the seller earned a profit from it because the selling price is higher than the cost price. The seller earned a profit of 400 pesos (15200 - 14800).
Learn more about Gross profit margin:
https://brainly.com/question/28390697
#SPJ11
As companies restructure to create greater efficiencies in their operations, there is a greater opportunity for _____________ where management combines specialized tasks in one job, and asking employees to broaden their scope of responsibilities.
Select one:
a. Job enlargement
b. Job simplification
c. Job specialization
d. Job confrontation
The correct response is A. As companies restructure to create greater efficiencies in their operations, there is a greater opportunity for job enlargement where management combines specialized tasks in one job, and asking employees to broaden their scope of responsibilities.
Job enlargement refers to broadening the range of a job's duties and responsibilities, usually while maintaining the same level and perimeter. Job expansion entails combining several organizationally equivalent tasks and adding them to the existing job. The horizontal expansion of job activity is another name for it. Job expansion, according to Hulin and Blood (1968), is the process of empowering individual employees to set their own pace (within bounds) and act as their inspectors, responsible for quality assurance, the ability to correct their errors, ownership of machine setup and maintenance, and freedom of approach. The addition of related jobs is referred described as "horizontal job loading" by Frederick Herzberg.
Hence Job Enlargement is the correct answer.
To know more about Frederick Herzberg, click here:
https://brainly.com/question/13871474
#SPJ4
1. Do you agree that anti-spam legislation should be part of Canada's strategy to combat spam? Why not leave the problem of spam to the marketplace to resolve? 2. What factors will determine whether a contract will be the result of lengthy negotiations or will be easily and quickly concluded? 3. Why might a business decide to accept an offer by conduct instead of formally communicating acceptance to the other side? What are the risks of doing so? 4. Critical Analysis: Legislation has removed some of the uncertainty about online contracting. However, questions still remain concerning whether communications on a website are an offer or invitation to do business and whether an electronic acceptance is effective on sending or receipt. What risks do these uncertainties pose for business? What steps can a business take to minimize these risks and avoid contractual disputes? 5. Family members are presumed not to intend legal relations, while businesspeople are subject to the opposite presumption, namely, that an intention to create legal relations is present. Why should the relationship between the parties affect the enforceability of their promises?
1. Yes, anti-spam legislation should be part of Canada's strategy to combat spam.
2. Factors that will determine whether a contract will be easily and quickly concluded include how detailed the contract is.
3. To save time, a company may choose to accept an offer by action rather than formally announcing acceptance.
4. Businesses face risks due to the uncertainty of online contracting since they cannot be confident if an offer or acceptance is legally binding.
5. The parties' relationship influences the enforceability of their pledges since family members do not expect legal consequences when they make a promise, but business people do.
1. Yes, anti-spam legislation should be part of Canada's strategy to combat spam as it serves as a form of deterrence for the illegal activity. Marketplace solutions are often not enough to properly address the problem of spam.
2. Factors that will determine whether a contract will be easily and quickly concluded include how detailed the contract is, how well the parties understand the terms of the contract, and how willing each party is to compromise and accept the other party's terms.
3. A business might decide to accept an offer by conduct instead of formally communicating acceptance in order to save time. However, there is a risk that the other party will not be aware that the offer has been accepted, which could lead to a contractual dispute.
4. The uncertainties of online contracting pose risks to businesses because they are unable to know with certainty whether an offer or acceptance is legally binding. Businesses can minimize these risks by ensuring that all online communications regarding contracts are clear and unambiguous, and by sending a written confirmation of all accepted offers and contracts.
5. The relationship between the parties affects the enforceability of their promises because, when family members make a promise, they are not expecting legal consequences, while business people are.
For more such questions on legislation, click on:
https://brainly.com/question/28279136
#SPJ11
The Bluegrass Distillery produces custom-blended whiskey. A particular blend consists of rye and bourbon whiskey. The company has received an order for a minimum of 300 gallons of the custom blend. The customer specified that the order must contain at least 40% rye and not more than 280 gallons of bourbon. The customer also specified that the blend should be mixed in the ratio of rye to bourbon as 2 to 1 (i.e. rye:bourbon=2:1). The distillery can produce 500 gallons per week, regardless of the blend. The production manager wants to complete the order in 1 week. The blend is sold for $5 per gallon. The distillery company’s cost per gallon is $2 for rye and $1.5 for bourbon. The company wants to determine the blend mix that will meet customer requirements and maximize profits.(a) Formulate a linear programming model for this problem.(b) Solve the problem by using the computer.(c) Identify the sensitivity ranges of the production capacity and the minimum requirement for an order, respectively.(d) What would be the effect on the optimal solution if Bluegrass Distillery could increase the production capacity to 600 gallons per week?(e) What would be the effect on the optimal solution if the minimum blend requirement for the order were changed to 100 gallons?(f) What would be the effect on the optimal solution if the blend mix requirement for the order were changed to a mix of four parts rye to one part bourbon?
a) The linear programming model for this problem can be formulated as:
Maximize P = 5x1 + 5x2 (profit)
Subject to:
2x1 + x2 ≥ 300 (minimum order requirement)
2x1 ≤ 280 (maximum bourbon)
x1 + x2 ≤ 500 (production capacity)
2x1 + x2 ≥ 400 (minimum rye)
x1 ≥ 0, x2 ≥ 0 (non-negativity)
b) Using a computer, the optimal solution to this linear programming problem is x1 = 300 and x2 = 0, which will give a maximum profit of $1,500.
c) The sensitivity range of the production capacity is 500 gallons, while the minimum requirement for the order is 300 gallons.
d) If Bluegrass Distillery could increase the production capacity to 600 gallons per week, then the optimal solution would be x1 = 400 and x2 = 200, which will give a maximum profit of $2,500.
e) If the minimum blend requirement for the order were changed to 100 gallons, then the optimal solution would be x1 = 100 and x2 = 0, which will give a maximum profit of $500.
f) If the blend mix requirement for the order were changed to a mix of four parts rye to one part bourbon, then the optimal solution would be x1 = 300 and x2 = 100, which will give a maximum profit of $1,800.
To know more about linear programming refer to-
https://brainly.com/question/30763902#
#SPJ11
Simple Interest 1. How much will the interest be on a loan of $2,350 at a simple interest 7% for 6 months? 2. If a loan of $5,750 is taken out at a simple interest of 5.25% for a year and a half, how much interest will the borrower pay? 3. At what rate of simple interest would a loan of $3,000 be taken for 2 years if the total interest is $375? 4. At what rate of interest would Janet take out a loan of $13,000 for 3.5 years if she pays $4,322 in interest? 5. How long will it take for $900 to earn $486 at a 12% rate of simple interest?
The simple interest of the loan is $82.25 with the simple interest of 7%,and the interest is $453.94 for 5.25%
To find the interest on a loan at a simple interest rate, you can use the formula 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.
1. To find the interest on a loan of $2,350 at a simple interest rate of 7% for 6 months, you can plug in the values into the formula:
I = P × R × T
I = $2,350 × 0.07 × 0.5
I = $82.25
The interest on the loan will be $82.25.
2. To find the interest on a loan of $5,750 at a simple interest rate of 5.25% for a year and a half, you can plug in the values into the formula:
I = P × R × T
I = $5,750 × 0.0525 × 1.5
I = $453.94
The interest on the loan will be $453.94.
3. To find the rate of simple interest for a loan of $3,000 taken for 2 years with a total interest of $375, you can plug in the values into the formula and solve for R:
I = P × R × T
$375 = $3,000 × R × 2
R = $375 ÷ ($3,000 × 2)
R = 0.0625
The rate of simple interest would be 6.25%.
4. To find the rate of interest for a loan of $13,000 taken for 3.5 years with a total interest of $4,322, you can plug in the values into the formula and solve for R:
I = P × R × T
$4,322 = $13,000 × R × 3.5
R = $4,322 ÷ ($13,000 × 3.5)
R = 0.095
The rate of interest would be 9.5%.
5. To find the time it will take for $900 to earn $486 at a 12% rate of simple interest, you can plug in the values into the formula and solve for T:
I = P × R × T
$486 = $900 × 0.12 × T
T = $486 ÷ ($900 × 0.12)
T = 4.5
It will take 4.5 years for $900 to earn $486 at a 12% rate of simple interest.
To know more about simple interest rates, refer here:
https://brainly.com/question/25845758#
#SPJ11
You are the CFO of The Maxim Group Inc. As part of your planning process, you are considering outsourcing production of a small component (the widget) of the company's main product. You have created the following scenario analysis for next year's production: Outcome Probability Widget Units Needed Exceptional 35% 1,000,000 Average 50% 800,000 Poor 15% 700,000
IF the company continues to manufacture this product "in-house", the variable cost per unit is $15.33. The fixed costs are $10M in total. ALTERNATIVELY, the company could outsource production of the widget, and the new supplier has quoted a price of $27 per widget. Based on the above facts, and ignoring other more esoteric concepts as supply chain security, should the company outsource production of the widget? Why? NOTE: this is a tough question - not that the calculations are hard, the insight is difficult. As a hint, and this may give too much away, do a thought experiment. Imagine you were running a business, and a supplier of an important part your business uses offers you two potential deals for next year – the first, buy all supplied parts for $100 each, no matter what happens. Alternatively, the second, if the economy is great, pay $120 each, if normal $100, and if poor $50. You do the math in your head, applying your own subjective probabilities to each, and estimate the average cost will be $140. Which do you choose – I think I would pay $120 for certain rather than an average of $140 but possibly more possibly less! (5 points)
The the company should outsource the production of the widget based on the provided information and advantages such as stability and predictability of outsourcing over risking the potential for unexpected costs and disruptions associated with producing the widget in-house.
As the CFO of The Maxim Group Inc., it is important to consider the potential costs and benefits of outsourcing production of the widget. Based on the scenario analysis for next year's production, we can calculate the expected cost of producing the widget in-house versus outsourcing it to a new supplier.
If the company continues to manufacture the widget in-house, the expected cost can be calculated as follows:
Exceptional outcome: (1,000,000 units x $15.33 variable cost) + $10M fixed costs = $25.33M
Average outcome: (800,000 units x $15.33 variable cost) + $10M fixed costs = $22.264M
Poor outcome: (700,000 units x $15.33 variable cost) + $10M fixed costs = $20.731M
The expected cost of producing the widget in-house is the sum of the probabilities of each outcome multiplied by the cost of that outcome:
(0.35 x $25.33M) + (0.5 x $22.264M) + (0.15 x $20.731M) = $23.057M
Alternatively, if the company outsources production of the widget, the expected cost can be calculated as follows:
Exceptional outcome: 1,000,000 units x $27 = $27M
Average outcome: 800,000 units x $27 = $21.6M
Poor outcome: 700,000 units x $27 = $18.9M
The expected cost of outsourcing the widget is the sum of the probabilities of each outcome multiplied by the cost of that outcome:
(0.35 x $27M) + (0.5 x $21.6M) + (0.15 x $18.9M) = $23.535M
Based on these calculations, the expected cost of producing the widget in-house is slightly lower than the expected cost of outsourcing it. However, it is important to consider the potential risks and benefits of each option. Outsourcing may provide more stability and predictability in terms of costs, but it also introduces the risk of supply chain disruptions and potential quality issues.
On the other hand, producing the widget in-house may allow for more control over the production process, but it also carries the risk of unexpected costs and potential inefficiencies.
Ultimately, the decision to outsource production of the widget should be based on a careful consideration of the potential costs, benefits, and risks of each option. As suggested in the thought experiment, it may be worth paying a slightly higher cost for the stability and predictability of outsourcing, rather than risking the potential for unexpected costs and disruptions associated with producing the widget in-house.
Learn more about Scenario analysis:
https://brainly.com/question/14781379
#SPJ11
2. Luckin went public in the U.S. in May 2019, listed in NASDQA and raising $561 million. Its success drew in big international investors such as BlackRock Inc. and support from banks including Credit Suisse Group AG. However, Muddy Waters Research’s 89 page report claimed that Luckin was inflating the number of items sold per day by 69% in the third quarter of 2019 and 88% in the fourth, purportedly revealing fraud within Luckin. Both Luckin’s Chairman & co-founder Lu Zhengyao and co-founder Qian Zhiya were removed from the board of directors. Should both co-founders be liable for the shareholders’ investment loss as the element of fraud was revealed even though a public limited company has limited liability? (30 marks)3. Suggest course of action (s) to prevent fraudulent financial reporting in stock market listing to ensure that such scandal will not arise in the near future. (40 marks)
As a public limited company has limited liability, meaning the shareholders’ investment is limited to the amount they paid to purchase the shares, the co-founders should not be held liable.
In regards to the question of whether the co-founders of Luckin should be liable for the shareholders’ investment loss, the answer is no. The scandal was the result of fraudulent financial reporting, which is illegal and a violation of securities law. Therefore, the co-founders should not be held liable.
In order to prevent fraudulent financial reporting in stock market listings, a few steps can be taken. Firstly, companies should ensure that they have a strong and robust financial reporting system in place. This should include strong internal controls, which provide an independent oversight of the financial reporting system.
Additionally, companies should have an audit committee of independent directors that review financial reports and have the authority to recommend changes. Lastly, companies should provide adequate disclosure and transparency to investors about their financial performance.
For such more question on shareholders:
https://brainly.com/question/28452798
#SPJ11
