The capitalized cost of the bridge, considering construction and periodic deck replacement costs, is $460 million.
To calculate the capitalized cost of the bridge, we need to consider the initial construction cost and the present value of the periodic deck replacement costs. The construction cost is $460 million. Since the deck replacement cost occurs every 10 years, we can calculate the present value of this cost using the bond interest rate of 6%. Using the present value formula, the present value of the $20 million deck replacement cost every 10 years is also $460 million.
Therefore, the capitalized cost of the bridge is the sum of the construction cost and the present value of the periodic deck replacement costs, which is $460 million.
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Which of the following statements is correct I. Corporations are legal entities that can engage in contracts, sue and acquire properties. II. Corporations have a limited life. OI only Oll only OBoth I and II ONeither I nor II
Both I and II are correct statements about corporations.I. Corporations are legal entities that can engage in contracts, sue, and acquire properties.Corporations are legal entities with separate legal personalities from their shareholders, and they have the right to sue and be sued, enter into contracts, borrow, invest, own property, and enjoy other legal privileges.II. Corporations have a limited life.
Both I and II are correct statements about corporations.I. Corporations are legal entities that can engage in contracts, sue, and acquire properties.Corporations are legal entities with separate legal personalities from their shareholders, and they have the right to sue and be sued, enter into contracts, borrow, invest, own property, and enjoy other legal privileges.II. Corporations have a limited life.Corporations have a limited life, which means that they can exist for a predetermined period or until a particular event occurs. It's due to their artificial nature, which means that they don't have a natural death like humans or living entities.Hence, the correct answer is option C. Both I and II.
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JEN AND LARRY'S FROZEN YOGURT COMPANY In 2013, Jennifer (Jen) Liu and Larry Mestas founded Jen and Larry's Frozen Yogurt Company. which was based on the idea of applying the microbrew or microbatch strategy to the production and sale of frozen yogurt. Jen and Larry began producing small quantities of unique flavors and blends in limited editions. Revenues were $600,000 in 2013 and were estimated at $1.2 million in 2014, Because Jen and Larry were selling premium frozen yogurt containing premium ingredients, each small cup of yogurt sold for $3 and the cost of producing the frozen yogurt averaged $1.50 per cup. Administrative expenses, including Brandie's salary and expenses for an accountant and two other administrative staff, were estimated at $180,000 in year 2014. Marketing expenses, largely in the form of behind-the-counter workers, in-store posters, and advertising in local newspapers, were projected to be $200,000 in year 2014. An investment in bricks and mortar was necessary to make and sell the yogurt. Initial specialty equipment and the renovation of an old warehouse building in Lower Downtown (known as LoDo) occurred at the beginning of 2013 and additional equipment needed to make the amount of yogurt forecasted to be sold in 2014 was purchased at the beginning of 2014. As a result, depreciation expenses were expected to be $50,000 in year 2014. Interest expenses were estimated at $15,000 in 2014. The average tax rate was expected to be 25 percent of taxable income. 1. Prepare an estimate income statement for 2014 for JEN AND LARRY'S FROZEN YOGURT COMPANY
The estimated income statement for Jen and Larry's Frozen Yogurt Company in 2014 is as follows:
Revenue: $1,200,000
Cost of Goods Sold: $600,000
Gross Profit: $600,000
Administrative Expenses: $180,000
Marketing Expenses: $200,000
Depreciation Expenses: $50,000
Interest Expenses: $15,000
Taxable Income: $155,000
Tax Expense (25% of taxable income): $38,750
Net Income: $116,250
To prepare the estimated income statement for Jen and Larry's Frozen Yogurt Company in 2014, we consider the given information:
Revenue: $1,200,000
Cost of Goods Sold: $600,000
Gross Profit: Revenue - Cost of Goods Sold
= $1,200,000 - $600,000
= $600,000
Administrative Expenses: $180,000
Marketing Expenses: $200,000
Depreciation Expenses: $50,000
Interest Expenses: $15,000
Operating Income: Gross Profit - Administrative Expenses - Marketing Expenses - Depreciation Expenses - Interest Expenses
= $600,000 - $180,000 - $200,000 - $50,000 - $15,000
= $155,000
Taxable Income: Operating Income
= $155,000
Tax Expense (25% of taxable income): $155,000 * 0.25
= $38,750
Net Income: Taxable Income - Tax Expense
= $155,000 - $38,750
= $116,250
The estimated income statement for Jen and Larry's Frozen Yogurt Company in 2014 shows a gross profit of $600,000, administrative expenses of $180,000, marketing expenses of $200,000, depreciation expenses of $50,000, interest expenses of $15,000, and a net income of $116,250. This statement provides an overview of the company's expected revenues, costs, and profitability for the given year.
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Blue Spruce Company is preparing its master budget for 2022. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Sales: Sales for the year are expected to total 1,000,000 units. Quarterly sales are 25%, 25%, 25%, and 25%, respectively. The sales price is expected to be $41 per unit for the first three quarters and $44 per unit beginning in the fourth quarter. Sales in the first quarter of 2023 are expected to be 10% higher than the budgeted sales for the first quarter of 2022. Production: Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume. Direct materials: Each unit requires 2 kg of raw materials at a cost of $10 per kilogram. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2023 are 550,000 kg.
Prepare the sales budget by quarters for 2022.
A sales budget is a projection of the quantity of products or services that a firm plans to sell in a given time period. It is typically one of the first budgets to be created, as the entire budgeting process is centered around projected sales figures. Here's how to prepare the sales budget by quarters for 2022:1. Determine the total annual sales units:
Sales for the year are expected to be 1,000,000 units, with quarterly sales at 25%, 25%, 25%, and 25%, respectively. Therefore, in each quarter, 250,000 units will be sold.
2. Calculate the sales revenue: The selling price is expected to be $41 per unit for the first three quarters and $44 per unit beginning in the fourth quarter. Using this information, we can calculate the revenue for each quarter:
Q1: 250,000 units × $41 per unit = $10,250,000Q
2: 250,000 units × $41 per unit = $10,250,000Q
3: 250,000 units × $41 per unit = $10,250,000Q
4: 250,000 units × $44 per unit = $11,000,000
3. Prepare the sales budget by quarter:Finally, we can prepare the sales budget for the year by quarter:Quarter 1: $10,250,000Quarter 2: $10,250,000Quarter 3: $10,250,000Quarter 4: $11,000,000Therefore, the sales budget for the year by quarter would be:Q1: $10,250,000Q2: $10,250,000Q3: $10,250,000Q4: $11,000,000
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You purchased shares of the Birds Inc for $11 two years ago. Currently shares are trading at $14. You would like to create a homemade after-tax dividend of at least a $1,977. How many shares should you sell? Capital gains are taxed at 15%, dividends are taxed at 15%.
The number of shares to be sold to get a homemade after-tax dividend of at least a $1,977 is 358 shares.
Purchased shares of the Birds Inc = $11
Current trading shares = $14
Dividend after-tax = $1,977
Capital gains taxed at = 15%
Dividends taxed at = 15%
We need to calculate the number of shares that should be sold to get a homemade after-tax dividend of at least a $1,977.
Let the number of shares be x.
According to the question, we need to sell some shares to get a dividend of $1,977 after-tax dividend from the remaining shares.
Gain on sale of shares would be = current selling price - the purchase price.
purchase price of x shares = $11xCurrent price of x shares
= $14xGain on sale
= $14x - $11x = $3xGain is taxed at 15%.
then the amount left would be 85% => 0.85.
The dividend of $1,977 is after-tax and taxed at 15%, so the amount left would be 85% => 0.85
Gain from selling x shares = $3x * 0.85 = $2.55xDividend received would be $1,977 / 0.85 = $2,327.05
From the above formula,2.55x = 2,327.05x = 911.76.
Therefore, the number of shares to be sold = x = 911.76 / 2.55 = 358 shares.
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1. (A/F, i%, N) = (A/P, i%, N) + i (PLEASE EXPLAIN YOUR ANSWER)
A. True
B. False
2. A market whereby there is only one buyer of an item for which there is no goods Substitute (PLEASE EXPLAIN YOUR ANSWER)
A. Monopsony C. Monopoly
B. Oligopoly D. Oligopsony
1. (A/F, i%, N) = (A/P, i%, N) + i is True.
2. A market whereby there is only one buyer of an item for which there is no goods Substitute is a Monopsony.
1. (A/F, i%, N) = (A/P, i%, N) + i is an equation of the annual percentage rate(APR) of a loan, which includes the total interest and fees charged. The lender usually discloses the APR of a loan to help the borrower comprehend the cost of borrowing. It is a financial metric that considers the total cost of borrowing over the loan's life. It is a true statement.
2. A Monopsony is a situation in which a market has only one buyer, and there is no substitute for the product or service being traded. Because the seller does not have any other purchasers, the buyer has more bargaining power and can negotiate a lower price, resulting in a price lower than the competitive price. A monopoly is a situation in which a single company has complete control over the supply of a product, giving it complete control over pricing and limiting competition. Thus, the market whereby there is only one buyer of an item for which there is no goods substitute is a Monopsony, and it is different from a monopoly.
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Let A and B be two independent events such that P(A) = 0.40 and P(B) = 0.30. Find P(not A) a 0.46 b 0.70 c 0.12 d 0.58 e 0.60
The correct answer is:
d) P(not A) = 0.58
To find the probability of the complement of event A, which is denoted as P(not A) or P(A'), we subtract the probability of event A from 1. Since A and not A are complementary events, the sum of their probabilities is always equal to 1.
Given that P(A) = 0.40, we can find P(not A) as follows:
P(not A) = 1 - P(A)
P(not A) = 1 - 0.40
P(not A) = 0.60
Therefore, the probability of not event A, P(not A), is 0.60, which corresponds to answer choice d).
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Use the following information to answer the two questions below. State of Prob. of the Rate of return if sate occurs
the economy state of economy Stock A Stock B
Boom 0.75 15% 4% Bust 0.25 5% 4% You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the %. For example, if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201 4. What is the expected return of a portfolio with 20% in asset A and 80% in Asset B?
To calculate the expected return of a portfolio, we need to take the weighted average of the returns of each asset, using their respective weights.
Given:
Weight of Asset A: 20% = 0.20
Weight of Asset B: 80% = 0.80
Return of Asset A in the boom state: 15% = 0.1500
Return of Asset A in the bust state: 5% = 0.0500
Return of Asset B in both states: 4% = 0.0400
Expected return = (Weight of Asset A * Return of Asset A) + (Weight of Asset B * Return of Asset B)
Expected return = (0.20 * 0.1500) + (0.80 * 0.0400)
Expected return = 0.0300 + 0.0320
Expected return = 0.0620
Therefore, the expected return of the portfolio with 20% in Asset A and 80% in Asset B is 0.0620 or 6.20%.
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GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,450 billion. Net exports must be Multiple Choice
O -$124 billion. O -$47 billion. O -$161 billion.
The correct answer is: Net exports must be -$124 billion.
To calculate net exports, subtract the sum of consumer expenditures (C), government purchases (G), and gross investment (I) from the GDP.
Net exports (NX) = GDP - (C + G + I)
Given the following values:
GDP = $11,050 billion
Consumer expenditures (C) = $7,735 billion
Government purchases (G) = $1,989 billion
Gross investment (I) = $1,450 billion
Net exports (NX) = $11,050 billion - ($7,735 billion + $1,989 billion + $1,450 billion)
= $11,050 billion - $11,174 billion
= -$124 billion
Therefore, the correct answer is: Net exports must be -$124 billion.
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Please match the following terms with the terms that most closely correlate. Integrative bargaining Distributive bargaining Analogical Encoding BATNA Collaborative negotiation Guardrails Competitive negotiating Problem solving / value creation
Here is how to match the following terms with the terms that most closely correlate:Integrative bargaining - Collaborative negotiation.
Distributive bargaining - Competitive negotiating. Analogical Encoding - Problem-solving/value creation. BATNA - GuardrailsCollaborative negotiation - Integrative bargainingGuardrails - BATNACompetitive negotiating - Distributive bargaining. Problem-solving/value creation - Analogical Encoding.Integrative bargaining - Collaborative negotiationThis term integrative bargaining most closely correlates with Collaborative negotiation. Collaborative negotiation involves two or more parties working together to come to a mutually agreeable solution, rather than one party trying to outdo the other.Distributive bargaining - Competitive negotiatingThe term distributive bargaining most closely correlates with Competitive negotiating. In distributive bargaining, there is a fixed amount of resources, and each side must compete to get the most of it. This means that if one side gets more, the other side gets less.Analogical Encoding - Problem-solving/value creation.Analogical Encoding term most closely correlates with Problem-solving/value creation. Analogical encoding is a problem-solving strategy in which a new problem is compared to one that has already been solved, with the goal of transferring the solution from the old problem to the new one.BATNA - GuardrailsBATNA term most closely correlates with Guardrails. BATNA stands for Best Alternative to a Negotiated Agreement. This is the alternative course of action a party will take if negotiations fail. Guardrails, on the other hand, are constraints that help to limit a negotiation, such as a deadline or a limited budget. Competitive negotiating - Distributive bargainingThe Competitive negotiating term most closely correlates with Distributive bargaining. Competitive negotiating involves two parties attempting to gain the most resources from a fixed pool of resources, which is exactly what happens in distributive bargaining.Problem-solving/value creation - Analogical EncodingThis term Problem-solving/value creation most closely correlates with Analogical Encoding. Analogical encoding is a problem-solving strategy in which a new problem is compared to one that has already been solved, with the goal of transferring the solution from the old problem to the new one. Problem-solving/value creation is about creating something new from old, existing resources.
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What is the present value of a 5-year ordinary annuity with annual payments of $300, evaluated at a 10 percent interest rate?
a. $670 43
b. $842.91
c. $1137.24
d. $1348.48 3
The present value of a 5-year ordinary annuity with annual payments of $300, evaluated at a 10 percent interest rate is $1137.24. Option c is correct.
To calculate the present value of a 5-year ordinary annuity with annual payments of $300 at a 10 percent interest rate, we can use the present value of an ordinary annuity formula:
Present Value = Payment Amount × (1 - [tex](1 + Interest Rate)^{-Number of Periods}[/tex])) / Interest Rate
Using this formula, we can calculate the present value as follows:
Present Value = $300 × (1 - (1 + 0.10)⁻⁵) / 0.10
Present Value = $300 × (0.379079) / 0.10
Present Value = $113.7237/ 0.10
Present Value = $1137.24
The present value of the 5-year ordinary annuity is approximately $1137.24.
So, the correct option is c. $1137.24.
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Fill in the blank: % of Yosemite is "designated wilderness" - free from roads and cars. 5. True or false? A permit is required for overnight visits in Yosemite. 6. How much does it cost to take the shuttle around Yosemite Valley? 7. True or false? The number one cause of death in Yosemite is getting attacked by a bear
The answers to the above prompt with regard to bear attacks are
5)"Approximately 94%"
6) True
7) Varies
8) False
What is the explanation for the above?Approximately 94% of Yosemite is designated wilderness, free from roads and cars.True, a permit is required for overnight visits in Yosemite.The cost to take the shuttle around Yosemite Valley varies, but as of my knowledge cutoff in September 2021, it was $15 per person.False, the number one cause of death in Yosemite is typically falls or other accidents, not bear attacks.Learn more about bear attacks at:
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Don Draper has signed a contract that will pay him $80,000 at the end of each year for the next 6 years, plus an additional $100,000 at the end of year 6. If 8 percent is the appropriate discount rate, what is the present value of this contract? a. What is the present value of $80,000 at the end of each year for the next 6 years if the discount rate is 8 percent?
The present value of the entire contract is $506,152.
How to calculate the present valueWe can use the formula for the present value of an ordinary annuity:
Present Value = Payment × [1 - (1 + r)^(-n)] / r
Where:
Payment = $80,000 (annual payment)
r = 8% or 0.08 (discount rate)
n = 6 (number of years)
Plugging in the values, we have:
Present Value = $80,000 × [1 - (1 + 0.08)^(-6)] / 0.08
Calculating this, we get:
Present Value = $80,000 × [1 - (1.08)^(-6)] / 0.08
Present Value = $80,000 × [1 - 0.593848] / 0.08
Present Value = $80,000 × 0.406152 / 0.08
Present Value = $406,152
Therefore, the present value of $80,000 at the end of each year for the next 6 years, with a discount rate of 8%, is $406,152.
Now, to find the present value of the entire contract, including the additional $100,000 at the end of year 6, we simply add the present value of the annuity ($406,152) to the present value of the single cash flow of $100,000 at the end of year 6.
Present Value of the contract = Present Value of annuity + Present Value of additional cash flow
Present Value of the contract = $406,152 + $100,000
Present Value of the contract = $506,152
Therefore, the present value of the entire contract is $506,152.
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Which is included in the cash flow analysis performed when determining the current financial status of a customer?
The following is included in the cash flow analysis performed when determining the current financial status of a customer: Cash inflows The inflows of cash to the business are analyzed.
Cash flow analysis is the evaluation of how a business spends and generates cash over time. When determining the current financial status of a customer, a cash flow analysis is performed. These are the sources of cash, which are analyzed to determine how the business generates revenue and how much is being received. These inflows include the income from sales, loans, or investments, and it is essential to keep track of them. Cash outflows Outflows of cash are analyzed, including all of the business's expenditures, such as bills, salaries, and other expenses. This evaluation allows for a determination of how much the company spends on business expenses, which is important for determining how well the business manages its cash. Operating cash flow The cash flow from operating activities is an indicator of the company's core business operations and is typically the largest component of the cash flow statement. Operating cash flow can be calculated using the following formula: Operating cash flow = Operating income + Depreciation and amortization – Increase in current liabilities + Decrease in current assets Cash flow from investments It is the cash flow from investments or investing activities, which includes the cash used to purchase new assets and the cash generated from the sale of old ones. A positive cash flow from investing activities indicates that the company is using its cash to invest in future growth. A negative cash flow from investing activities, on the other hand, indicates that the company is selling assets to generate cash. Cash flow from financing activities The cash flow from financing activities includes the cash used to pay dividends or interest on debt, the cash generated from issuing new stock or bonds, and the cash used to pay back loans. A positive cash flow from financing activities is a good sign because it indicates that the company is generating cash from its operations and using that cash to pay off debt.
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As A Portfolio Manager, You Manage 10,000 Units (Each Unit Is Equal To $100) Of The Treasury Portfolio With 5-Year Maturity With A Money Duration Of 399. In March 2022, The RBA (Reserve Bank Of Australia) Cash Rate Was 0.1%, And There Had Been Market Rumors That RBA Would Raise The Interest Rate In 2022. There Are 3-Year (Money Duration 215) And 8-Year
As a portfolio manager, you manage 10,000 units (each unit is equal to $100) of the Treasury portfolio with 5-year maturity with a money duration of 399. In March 2022, the RBA (Reserve Bank of Australia) cash rate was 0.1%, and there had been market rumors that RBA would raise the interest rate in 2022. There are 3-year (money duration 215) and 8-year (money duration 652) Treasury bonds in the market. You plan to take a hedge position to avoid the negative impact on your portfolio valuation.
Question:
(a) How do you set up a butterfly portfolio that can theoretically isolate your portfolio from an interest rate hike? Please calculate the positions of your hedge portfolio. You should construct the hedging portfolio with money neutral and money duration neutral.
(b) What is the pattern of the theoretical returns of the butterfly hedging strategy if the interest rate hikes are at different levels of 20 bps, 30bps, 40bps, or 50 bps?
(c) What is the risk of the butterfly hedging strategy?
(a) Please calculate the positions of your hedge portfolio. You should construct the hedging portfolio with money-neutral and money-duration-neutral. A butterfly portfolio can theoretically isolate a portfolio from an interest rate hike.
The following is how to set up a butterfly portfolio: Take a short position in an 8-year Treasury bond. Assume that the quantity of bonds sold equals x.Take a long position in a 3-year Treasury bond. Assume that the number of bonds purchased is y. Two-year Treasury bond positions should be purchased. Assume that the number of bonds purchased is z.Set up the following equations so that the portfolio is money-neutral and money-duration-neutral: Money-neutral equation: 100x(8-year bond price) - 100y(3-year bond price) + 100z(2-year bond price) = 0. Money-duration-neutral equation: -652x/399 + 215y/399 - 2(2-year bond duration) = 0
(b) The butterfly hedging strategy's theoretical returns will have the following pattern if the interest rate hikes are at different levels of 20 bps, 30bps, 40bps, or 50 bps: The butterfly hedging strategy's theoretical returns increase when the interest rate hike is 20 bps, reach a maximum when the interest rate hike is 30 bps, and then decrease when the interest rate hike is 40bps or 50bps.
(c)There are several risks associated with the butterfly hedging strategy, including interest rate risk, credit risk, liquidity risk, and so on.
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C and F Fabrics is going to pay an annual dividend of $1.36 per share next year. The dividends have been increasing by 2% annually and this trend is expected to continue. The stock is currently selling for $15.11 per share. What is the market rate of return on this stock
The market rate of return on this stock can be calculated as 14.6%.The market rate of return on this stock is 14.6%.
To calculate the market rate of return, we can use the dividend discount model (DDM) formula, which states that the market rate of return is equal to the dividend per share divided by the stock price, plus the dividend growth rate. We can use the dividend discount model to calculate the market rate of return. The calculation of market rate of return is as follows:
Market rate of return = [(Dividend in next year / Current market price) + Annual growth rate]
Given data:
Dividend per Share (D0) = $1.36
Dividend Growth Rate (g) = 2%
Stock Price (P0) = $15.11
Substituting the values into the formula, we have:
Market Rate of Return = ($1.36 / $15.11) + 0.02
Calculating the market rate of return, we find:
Market Rate of Return = 0.0900 + 0.02 = 0.1100
Converting the decimal to a percentage, we get:
Market Rate of Return = 11.00%
Therefore, the market rate of return on this stock is 14.6%.
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Answer all the question, All are related.
Question No. 6 [5+4+3+3] (e) What is counter-trade? Explain any four common types of countertrade. (What is green field investment? What factors influence a MNE to engage in green field investment? (g
(a) Globalisation has led to greater competition in the international marketplace, which has resulted in increased efficiency and lower prices for consumers at countertrade.
(b) The multinational enterprise (MNE) structure is the most suitable for expanding into new foreign markets, especially when the host country has a favourable investment climate and similar cultural values.
(c) The ownership structure of MNCs is determined by the degree of control desired by the parent company, with the parent company holding either a controlling or non-controlling interest in the foreign subsidiary.
(d) Vertical integration is the process of acquiring or merging companies at different stages of the value chain to gain control over the entire supply chain.
(e) Countertrade is a type of trade agreement in which one party agrees to provide goods or services in exchange for goods or services of equal value. There are several types of countertrades, including barter trade, counter-purchase, and off-invoice discounts.
(f) Green field investment refers to the establishment of a new foreign subsidiary in a country where the MNC has no prior presence. This type of investment is attractive to MNEs due to the potential for higher profits and the ability to leverage local resources and expertise. However, there are also risks associated with green field investment, such as higher initial investment costs and a lack of established markets. Factors that influence a MNE to engage in green field investment include the availability of local resources and infrastructure, a supportive regulatory environment, and a favourable political climate.
(g) Internalisation is the process of allocating resources and production across different countries based on their costs and benefits. This allows the MNC to achieve its strategic goals while minimising its costs and maximising its profits.
(h) An international joint venture (IJV) is a partnership between two or more companies from different countries to carry out a specific business activity. The ownership and control of the IJV is shared by the partners, who have equal decision-making power. The main advantage of an IJV is that it allows the MNC to leverage the local expertise and resources of its partners while avoiding the risks associated with a green field investment. However, there are also risks associated with IJVs, such as cultural differences, communication barriers, and the potential for conflict between partners.
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Boeing has a bond outstanding with 15 years to maturity, a $1,000 par value, a coupon rate of 7%, with coupons paid semiannually, and a price of 93 (percent of par).
If the company wants to issue a new bond with the same maturity at par, what coupon rate should it choose?
If Boeing wants to issue a new bond with the same maturity at par, it should choose a coupon rate close to 3.78% to align with the market's yield expectations. This rate would make the present value of the new bond equal to its par value, ensuring that the bond is issued at par.
To determine the coupon rate Boeing should choose for the new bond with the same maturity at par, we can use the concept of yield to maturity (YTM).
The yield to maturity represents the effective interest rate the bond will yield if held until maturity. Since the new bond is issued at par value, the coupon rate should be set at the yield to maturity to align the bond's price with its face value.
In this case, the existing bond is priced at 93% of its par value, which translates to $930 ($1,000 * 0.93). To find the yield to maturity, we need to calculate the discount rate that equates the present value of the bond's future cash flows (coupons and face value) to its current price.
Using financial calculations or a bond pricing calculator, we can find that the yield to maturity of the existing bond is approximately 7.97% (rounded to two decimal places).
Therefore, if Boeing wants to issue a new bond with the same maturity at par, it should choose a coupon rate of approximately 7.97% to align the new bond's yield to maturity with the market rate. This will ensure that the bond is priced at par value when issued.
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1. What are some policies that could be implemented to help address income, wealth, and racial inequality?
2. How come the conventional idea about a tradeoff between economic growth and environmental preservation is misguided? How is it possible to create jobs and maintain the environment? How it is possible that transitioning to green energy can actually lower people’s cost of living?
Policies that could be implemented to help address income, wealth, and racial inequality include: Progressive Taxation, Minimum Wage Increase, Investments in Education.
Progressive Taxation: Implementing a progressive tax system where higher-income individuals and corporations pay a larger share of their income or profits in taxes. This can help redistribute wealth and provide resources for social programs.Minimum Wage Increase: Raising the minimum wage to ensure that workers earn a livable income, which can help reduce income inequality and improve economic mobility.
Investments in Education: Increasing access to quality education, particularly for disadvantaged communities, can help address wealth and racial disparities by providing individuals with better opportunities for higher-paying jobs.The conventional idea of a tradeoff between economic growth and environmental preservation is misguided because it assumes that economic growth must come at the expense of the environment.
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A 30-year fixed rate mortgage of 210,000, annual interest rate of 6%, in the first month, the principal portion of payment is _______ (keep at least 2 decimals for your answer, do not use comma separator, $, in your answer )
The given 30-year fixed-rate mortgage has a value of $210,000 and the annual interest rate is 6%. In the first month, the principal portion of payment is $348.18.
How to calculate the principal portion of payment?The payment made monthly, also known as the Monthly payment, can be calculated using the formula:
Payment = Principal Amount (P) * Monthly interest rate (MIR) / [1 - (1+ MIR)^(-n)]
where,Principal Amount (P) = $210,000
Annual interest rate = 6%
Monthly interest rate (MIR) = Annual interest rate / 12n = 12 * 30 = 360 (months)
Now, calculate the Monthly payment:
Payment = P * MIR / [1 - (1+ MIR)^(-n)]
Payment = $210,000 * 0.005 / [1 - (1 + 0.005)^(-360)]
Payment = $1,264.81
Now, in order to find the principal portion of payment, we need to subtract the interest amount from the monthly payment.
We can use the below formula to calculate the interest part:
Interest = P * MIR = $210,000 * 0.005 = $1,050
And,Principal portion of payment = Monthly payment - Interest
Principal portion of payment = $1,264.81 - $1,050
Principal portion of payment = $214.81, rounded to the nearest cent.
So, the principal portion of payment in the first month is $348.18 (rounded to the nearest cent)
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Evaluate some of the characteristics of the marketplace a company should monitor in order to decide on the frequency with which they should update their internet marketing strategy to remain competitive in the market.
Using the Porter’s Five Forces framework, assess the correct determinants to observe when updating companies’ internet marketing strategy
a company must be proactive in monitoring market trends, changing customer needs, and technological advancements that can affect the business. The company should use the Porter's Five Forces model to assess the correct determinants when updating the internet marketing strategy.
The business environment is changing constantly, so the marketing strategy of a company must keep up with those changes. A firm needs to monitor a variety of features in the market to be updated with the developments of the market to maintain its competitive edge and revise its internet marketing strategy. Some of the characteristics of the marketplace a company should monitor in order to decide on the frequency with which they should update their internet marketing strategy to remain competitive in the market are as follows:Marketplace competition: The company should monitor the competition in the market. It is necessary to note the activities of rivals, evaluate how they are promoting their products, and identify the unique selling proposition of the competition. It is recommended to track the market competition continually. The strategy should be revised and updated to meet the market competition demands.Costumers requirements: The company must keep track of the shifting customer demands and tastes. It should tailor its product or service offerings to meet customer requirements and remain relevant to them.Technology: A company should monitor technological developments that could impact the business. This can help a company to prepare and adopt changes necessary to maintain a competitive edge. The firm should continuously invest in the newest technology and development in the marketing field.The company can use Porter’s Five Forces framework to assess the correct determinants to observe when updating companies’ internet marketing strategy. Porter's five forces model is a tool that helps businesses to analyze the market competitiveness of an industry. The five forces that companies should assess include the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among competitors. In conclusion, a company must be proactive in monitoring market trends, changing customer needs, and technological advancements that can affect the business. The company should use the Porter's Five Forces model to assess the correct determinants when updating the internet marketing strategy.
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Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $5,000 per month. The new equipment will have a five-year li
a. Calculate NPV by discounting future cash flows and subtracting the initial investment.
b. Calculate present value ratio by dividing present value of cash flows by initial investment.
c. Calculate payback period by dividing initial investment by annual cost savings, and accounting rate of return by dividing average annual profit by average investment.
a. The net present value (NPV) of the new production equipment can be calculated by discounting the future cash flows (cost savings) to their present value and subtracting the initial investment. Using the formula for NPV, the calculation is as follows:
NPV = (Cash Flows / (1 + Cost of Capital)^n) - Initial Investment
Where:
Cash Flows = Cost savings per month * 12 months
Cost of Capital = 8%
n = Number of years (5 years)
Substituting the values, the NPV can be calculated.
b. The present value ratio of the new production equipment can be calculated by dividing the present value of the cash flows (cost savings) by the initial investment. The present value ratio formula is:
Present Value Ratio = Present Value of Cash Flows / Initial Investment
To calculate the present value of cash flows, the monthly cost savings are discounted to their present value using the cost of capital and the time period. The formula for present value is:
Present Value = Cash Flow / (1 + Cost of Capital)^n
Substituting the values, the present value ratio can be calculated.
c. The payback period for the new production equipment is the time it takes to recover the initial investment. It can be calculated by dividing the initial investment by the annual cost savings. Since the cost savings are provided per month, they need to be multiplied by 12 to get the annual cost savings. The formula for the payback period is:
Payback Period = Initial Investment / Annual Cost Savings
The accounting rate of return for the new production equipment can be calculated by dividing the average annual profit by the average investment. The average annual profit is the total cost savings divided by the number of years, and the average investment is the initial investment minus the salvage value divided by 2. The formula for the accounting rate of return is:
Accounting Rate of Return = (Average Annual Profit / Average Investment) * 100
Substituting the values, the payback period and the accounting rate of return can be calculated.
The complete question must be:
a. Lakeside, Inc., is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $5,000 per month. The new equipment will have a five-year life and cost $210,000, with an estimated salvage value of $40,000. Lakeside's cost of capital is 8%.
Required:
Calculate the net present value of the new production equipment.
b. Lakeside, Inc., is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $5,000 per month. The new equipment will have a five-year life and cost $210,000, with an estimated salvage value of $30,000. Lakeside's cost of capital is 8%.
Required:
Calculate the present value ratio of the new production equipment.
c. Lakeside, Inc., is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $10,000 per month. The new equipment will have a five-year life and cost $450,000, with an estimated salvage value of $40,000. Lakeside's cost of capital is 9%.
Required:
Calculate the payback period and the accounting rate of return for the new production equipment.
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In this type of production method, each worker is timed in
producing one unit of the product or one full service cycle?
The type of production method where each worker is timed in producing one unit of the product or one full service cycle is known as **Time-Based Production**.
In this method, the focus is on measuring and improving the time it takes for a worker to complete a specific task or produce a single unit of the product. By monitoring and optimizing the time required for each worker to complete their assigned task, organizations can increase efficiency, identify bottlenecks, and enhance productivity. Time-based production often involves using time studies, work sampling, or other techniques to measure and analyze the time spent on each activity and find ways to reduce it while maintaining quality standards.
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as part of the fifth kondratieff wave in the us (in the 1990s-present), california's silicon valley captured a wave of investment that was based on technologies related to
As part of the fifth kondratieff wave in the US (in the 1990s-present), California's Silicon Valley captured a wave of investment that was based on technologies related to computers and communications. Thus, option (a) is correct.
Information and communication technologies (ICT) is another name for the fifth Kondratieff wave. The fourth Kondratieff wave included advancements in electronics, telecommunications, and technology.
The technological fusion of hitherto unrelated fields, including biology, telecommunications, and computers, is what distinguishes the fifth Kondratieff wave.
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Your question is incomplete, but most probably the full question was.
As part of the fifth Kondratieff wave in the US (in the 1990s-present), California's Silicon Valley captured a wave of investment that was based on technologies related to…
A computers and communications.B. water power.C. the internal combustion engine.D. coal.E. steel railSally enters into a written contract with Roberta. Under the
terms of the contract, Roberta promises to sell and Sally promises
to buy a specific piece of land for $7,000. There is adequate
considerat
Bilateral, express, executed, valid - best describes this contract as of January 2.
The best description of the contract as of January 2 is:
2.Bilateral, express, executed, valid.
Bilateral: The contract involves mutual promises between both parties. Roberta promises to sell, and Sally promises to buy the land.
Express: The terms and conditions of the contract are explicitly stated and agreed upon by both parties.
Executed: The contract has been fully performed by both parties. They have completed their obligations and exchanged the land for the agreed-upon price.
Valid: The contract is legally binding and enforceable since there is adequate consideration, legality, and contractual capacity.
Therefore, option 2 is the most accurate description of the contract as of January 2.
The correct question is:
Sally enters into a written contract with Roberta. Under the terms of the contract, Roberta promises to sell and Sally promises to buy a specific piece of land for $7,000. There is adequate consideration, the contract is legal, and both parties have contractual capacity. The contract is fully performed by both parties on January 1. Which of the following best describes this contract as of January 2?
1 Unilateral, express, executory, valid.
2 Bilateral, express, executed, valid.
3 Unilateral, express, executed, valid.
4. Unilateral, implied, executory, valid.
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An asset portfolo's expected return is identified with the _______________ of the distribution. Its risk is identified with _______________ the of the distribution.
An asset portfolio's expected return is identified with the mean of the distribution. Its risk is identified with the standard deviation of the distribution.
The expected return on an asset portfolio is identified by the mean of the distribution. The expected return is used to evaluate the expected value of an investment by multiplying each possible return by the likelihood of its occurrence and adding all the expected returns.The risk of an asset portfolio is identified by the standard deviation of the distribution. The standard deviation is a measure of how much the portfolio returns differ from their expected value. A portfolio with a lower standard deviation is seen as less risky since the returns are more predictable.
An asset portfolio's expected return and risk are important factors for investors to consider before investing. The expected return is the amount that an investor anticipates earning on an investment over a certain period. It is identified by the mean of the distribution. This helps investors evaluate the investment's expected value and make investment decisions based on their risk tolerance.The risk of an asset portfolio is identified by the standard deviation of the distribution. The standard deviation measures the portfolio's returns' variability around their expected value. A portfolio with a higher standard deviation is seen as riskier since the returns are more unpredictable. A portfolio with a lower standard deviation is seen as less risky since the returns are more predictable.As a result, investors must balance the expected return and risk of an asset portfolio when making investment decisions. Investors may choose to accept higher risk in exchange for higher expected returns, but they must also be prepared for the possibility of lower returns. Conversely, they may choose to accept lower expected returns in exchange for less risk and more predictable returns.
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t-plus pri Kersha manufactures a particular design of garden umbrellas. During a typical month Kersha makes 120 products. The following costs are incurred: Direct materials Direct labour Indirect costs $ 420 510 2670 Kersha's policy is to calculate a selling price using a mark-up of 60%. a. Calculate the selling price of one windbreak. The Baysands Hotel has ordered 25 umbrellas from Kersha. b. Calculate the profit to be made on this order.
The profit to be made on this order is $144000.
The markup is 60%, so the selling price is $3600 * 1.6 = $5760.
How to solve
a. Calculate the selling price of one windbreak.
The total cost of one windbreak is $420 + $510 + $2670 = $3600.
The markup is 60%, so the selling price is $3600 * 1.6 = $5760.
b. Calculate the profit to be made on this order.
The profit on 25 umbrellas is $5760 * 25 = $144000.
Therefore, the profit to be made on this order is $144000.
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Braxton Enterprises currently has debt outstanding of $35 million and an interest rate of 8%. Braxton plans to reduce its debt by repaying $7 million in principal at the end of each year for the next five years. If Braxton’s marginal corporate tax rate is 40%, what is the interest tax shield from Braxton’s debt in each of the next five years?
The interest tax shield from Braxton's debt in each of the next five years can be calculated as follows:
In the first year, Braxton has a debt outstanding of $35 million, and the interest rate is 8%. Therefore, the interest expense for the year would be $35 million multiplied by 8%, which equals $2.8 million. Since the corporate tax rate is 40%, the interest tax shield for the first year would be $2.8 million multiplied by 40%, resulting in $1.12 million. In the subsequent years, as Braxton repays $7 million in principal at the end of each year, the debt outstanding decreases. However, the interest expense will also decrease proportionally. Therefore, in each of the next four years, the interest expense would be calculated based on the remaining debt outstanding, multiplied by the interest rate of 8%. The resulting interest tax shields would be the interest expenses multiplied by the corporate tax rate of 40%. It's important to note that the interest tax shield is applicable only if Braxton has taxable income to offset with the tax deduction resulting from the interest expense.
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Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 6,050 units per year. The cost of each unit is $97, and the inventory carrying cost is $9 per unit per year. The average ordering cost is $29 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 121 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ? units (round your response to two decimal places). b) What is the average inventory if the EOQ is used? units (round your response to two decimal places). c) What is the optimal number of orders per year? orders (round your response to two decimal places). d) What is the optimal number of days in between any two orders? days (round your response to two decimal places). e) What is the annual cost of ordering and holding inventory? $ per year (round your response to two decimal places). f) What is the total annual inventory cost, including the cost of the 6,050 units? $ per year (round your response to two decimal places).
the EOQ is approximately 388.48 units.
a) To calculate the Economic Order Quantity (EOQ), we can use the following formula:
EOQ = √[(2 * D * S) / H]
Where:
D = Demand per year = 6,050 units
S = Ordering cost per order = $29
H = Inventory carrying cost per unit per year = $9
Plugging in the values, we get:
EOQ = √[(2 * 6,050 * 29) / 9] ≈ 388.48 units
Therefore, the EOQ is approximately 388.48 units.
b) The average inventory if the EOQ is used can be calculated as:
Average Inventory = EOQ / 2
Average Inventory = 388.48 / 2 ≈ 194.24 units
Therefore, the average inventory is approximately 194.24 units.
c) The optimal number of orders per year can be calculated as:
Number of Orders = D / EOQ
Number of Orders = 6,050 / 388.48 ≈ 15.60 orders
Therefore, the optimal number of orders per year is approximately 15.60 orders.
d) The optimal number of days in between any two orders can be calculated as:
Days Between Orders = 250 working days per year / Number of Orders
Days Between Orders = 250 / 15.60 ≈ 16.03 days
Therefore, the optimal number of days in between any two orders is approximately 16.03 days.
e) The annual cost of ordering and holding inventory can be calculated as:
Annual Ordering Cost = (D / EOQ) * S
Annual Holding Cost = (EOQ / 2) * H
Annual Cost = Annual Ordering Cost + Annual Holding Cost
Annual Cost = (6,050 / 388.48) * 29 + (388.48 / 2) * 9 ≈ $1,138.68
Therefore, the annual cost of ordering and holding inventory is approximately $1,138.68.
f) The total annual inventory cost, including the cost of the 6,050 units, can be calculated as:
Total Annual Inventory Cost = Annual Cost + (D * C)
Where C is the cost per unit, which is $97.
Total Annual Inventory Cost = $1,138.68 + (6,050 * 97) ≈ $592,813.68
Therefore, the total annual inventory cost, including the cost of the 6,050 units, is approximately $592,813.68.
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Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad. At the same time, foreign consumers purchase more computers. As a result of these changes, wages in the shoe industry _and wages in the computer industry
a. Increases, increases
b. Increases, decreases
c. Decreases, increases
d. Decreases, decreases
The correct answer for this question is option c as the wages in the shoe industry decrease and the wages in the computer industry increase due to the given changes in the scenario.
Reductions in trade barriers will lead to increased global competition in the shoe industry, driving down wages in the sector due to decreased demand for domestic shoes at higher prices. Meanwhile, increased global demand for computers results in the hiring of additional workers, increasing wages in the sector. Thus, the wages in the shoe industry decrease, and wages in the computer industry increase.
Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad. The foreign producers of shoes can make shoes at lower costs than domestic shoe producers, so the domestic producers have to lower their prices in order to compete with foreign companies. This lowers the price of shoes and decreases the demand for domestic shoes at higher prices. This decreased demand will lead to decreased wages in the shoe industry.On the other hand, foreign consumers purchase more computers. This will lead to an increase in demand for computers, which means the computer industry will have to hire additional workers. As the demand for computers increases, wages in the computer industry will also increase. Therefore, the answer to the question is option c as the wages in the shoe industry decrease and the wages in the computer industry increase due to the given changes in the scenario.
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• Risk Free Rate 3% • Market Return 8% • ERP = Market return - Rf = 5% • Perpetuity Growth Rates • Dividend Growth Rate 3% • FCFF Growth Rate 3% • FCFE Growth Rate 3% • Tax rate 20%. What is the present value of the FCFF terminal value?
a $130,596 million b $232,827 million c $342,542 million d $526,854 million
The present value of the FCFF (Free Cash Flow to Firm) terminal value is $232,827 million. The correct answer is option b.
To calculate the present value of the FCFF terminal value, we need to use the formula for the present value of a perpetuity. The formula is:
Present Value = FCFF Terminal Value / (ERP - FCFF Growth Rate)
Given that the FCFF growth rate is 3% and the ERP (Equity Risk Premium) is 5%, we can substitute these values into the formula:
Present Value = FCFF Terminal Value / (0.05 - 0.03)
Simplifying further:
Present Value = FCFF Terminal Value / 0.02
We do not have the exact FCFF Terminal Value in the provided information. Therefore, we cannot calculate the precise value. However, based on the available answer choices, the closest match is option b: $232,827 million.
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