The best recommendation to the researchers would be option b. Not statistically significant, and the strength is rather weak.
The given information states that there is a correlation between hospital readmission rates and how full the hospital was at the time of discharge. The correlational value (r) of the 100 patients studied is reported to be 0.257.
To determine the significance and strength of the correlation, it is important to consider both statistical significance and the magnitude of the correlation coefficient. In this case, the recommendation suggests that the correlation is not statistically significant and the strength of the correlation is rather weak.
When a correlation is not statistically significant, it means that the observed relationship between the variables is likely due to chance and not a true association in the population. Therefore, the findings may not be reliable or generalizable.
Additionally, a correlation coefficient of 0.257 indicates a relatively weak correlation. Correlation coefficients range from -1 to 1, with values closer to 0 indicating a weaker relationship. In this case, the correlation coefficient suggests that there is a positive correlation between hospital readmission rates and hospital occupancy, but the strength of the relationship is not very strong.
Based on these considerations, option b is the most appropriate recommendation. It acknowledges that the correlation is not statistically significant and highlights the weak strength of the relationship.
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What are the six (6) methods of valuation or appraisement of imported goods?
The six methods of valuation or appraisement of imported goods include transaction value, transaction value of identical goods, transaction value of similar goods, deductive value, computed value, and fallback method.
The World Trade Organization's Agreement on Customs Valuation provides six methods of valuation or appraisement of imported goods. The primary method is the transaction value, which is the price actually paid or payable for the goods when sold for export. If the transaction value is not available or deemed unreliable, the following methods are considered:
Transaction Value of Identical Goods: This method involves using the transaction value of identical goods that were imported at or around the same time.
Transaction Value of Similar Goods: Here, the transaction value of similar goods is used. These goods should closely resemble the imported goods in terms of characteristics, quality, and commercial level.
Deductive Value: This method is based on the selling price of the imported goods in the country of importation, after deducting the costs incurred in the country of importation, such as transportation and insurance.
Computed Value: Computed value is determined based on the cost of production, general expenses, and profit margins in the country of origin.
Fallback Method: If none of the previous methods can be applied, the customs authorities may use a reasonable means consistent with the principles and general provisions of the valuation agreement.
Customs typically prefer to use the transaction value method when reliable data is available. However, if the transaction value cannot be determined or is deemed unreliable, the other methods provide alternative approaches for the valuation of imported goods.
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Suppose the risk-free interest rate is 4%, and the stock market will return either + 26% or 25% each year, with each outcome equally likely. Compare the following two investment strategies: (1) invest for one year in the risk-free investment, and one year in the market, or (2) invest for both years in the market.
a. Which strategy has the highest expected final payoff?
b. Which strategy has the highest standard deviation for the final payoff?
c. Does holding stocks for a longer period decrease your risk?
a. Strategy (2) of investing in the market for both years has the highest expected final payoff.
Since each outcome in the market has an equal probability, the expected return for each year is the average of the possible returns, which is (26% + 25%)/2 = 25.5%. By investing in the market for both years, the overall expected return is compounded, resulting in a higher expected final payoff compared to strategy (1) of investing in the risk-free investment for one year and the market for one year.
b. Strategy (2) of investing in the market for both years also has the highest standard deviation for the final payoff. The standard deviation measures the variability or volatility of the investment returns. Since the market returns have a higher range (+26% or +25%), investing in the market for both years introduces more variability into the final payoff compared to strategy (1) that includes a risk-free investment. The risk-free investment has a fixed return of 4% each year, which leads to lower volatility and, consequently, a lower standard deviation.
c. No, holding stocks for a longer period does not necessarily decrease your risk. The risk associated with investing in the stock market is primarily influenced by the volatility or variability of the market returns. In this scenario, both investment strategies involve investing in the market for one year.
The holding period for stocks remains the same in both strategies. However, strategy (2) that invests in the market for both years has a higher standard deviation, indicating higher risk or volatility compared to strategy (1). Holding stocks for a longer period may potentially increase the exposure to market fluctuations and risks. Therefore, the duration of the investment alone does not determine the level of risk; it is the characteristics of the investment, such as the volatility of returns, that primarily influence the risk associated with holding stocks.
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Question 4
The Ting Hai effect is a Hong Kong stock market phenomenon in which there is a sudden and unexplained drop in the stock market.
The effect is named after Ting Hai, the main character in the drama The Greed of Man, who was portrayed by Adam Cheng. Initially, the Ting Hai effect occurred whenever the drama or its sequel was broadcast in Hong Kong.
However, it was observed later that the phenomenon also takes place whenever a new film or a television series starring Adam Cheng is released. In the two decades since 1992, nearly every time Cheng has appeared in a movie or television show - which has been more than 30 times the Hang Seng Index declined.
(a) Assume that some investors did take advantage of Ting Hai effect and made abnormal profit from it. Judge whether any form of market efficiency is violated in the Hong Kong stock market. Explain your reasoning. (Word limit - 120 words)
(b) You are a financial advisor, and your client Alice is an Adam Cheng fan. A new film of Adam will be released in 2 weeks' time, and Alice is asking whether she should sell all her positions now. How should you respond? (Word limit - 150 words)
Emphasize the importance of a well-rounded approach to investing rather than reacting to specific events or personal preferences.
(a) The Ting Hai effect suggests a violation of the weak form of market efficiency in the Hong Kong stock market. The consistent and predictable reaction of the market to the release of dramas, sequels, or movies featuring Adam Cheng indicates that stock prices do not fully reflect all available information. Investors who can predict and exploit this effect are making abnormal profits, which implies that the market is not fully efficient.
The weak form of market efficiency assumes that past price and trading information is already incorporated into stock prices. However, the Ting Hai effect suggests that certain events related to Adam Cheng contain additional information that is not fully reflected in stock prices, indicating a violation of market efficiency.
(b) As a financial advisor, it is important to advise Alice based on investment principles rather than personal preferences. While the Ting Hai effect has been observed in the past, it does not guarantee the same market reaction in the future. It is prudent to maintain a diversified portfolio and adhere to a long-term investment strategy aligned with Alice's goals. Selling all positions solely based on the release of a single movie may not be a wise decision.
Instead, encourage Alice to consider fundamental analysis, company financials, industry trends, and market conditions when making investment decisions. Emphasize the importance of a well-rounded approach to investing rather than reacting to specific events or personal preferences.
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A baseball team has scheduled its opening game for April 1. It is assume that if it snows on April 1, the game is postponed and will be play on the next day that, it does not snow. The team purchased insurance against snow. The policy will pay GHS 1,000 for each day, up to 2 days that the game is postponed. It is determined that the number of consecutive days of snow beginning on April 1, is a Poisson random variable with mean 0.6. What is the standard deviation of the amount that the insurance company will have to pay.
The standard deviation of the amount that the insurance company will have to pay is approximately 0.7746 GHS.
Let X be the random variable of the number of days the game is postponed due to snow. It is stated that X can take values of up to 2 days (if the snow lasts longer than that, the game will be canceled altogether).
Thus, P(X = k) = e^(-λ) λ^k / k!, for k = 0, 1, 2.
With λ = 0.6, we have:
P(X = 0) = e^(-0.6) (0.6)^0 / 0! ≈ 0.5488
P(X = 1) = e^(-0.6) (0.6)^1 / 1! ≈ 0.3293
P(X = 2) = e^(-0.6) (0.6)^2 / 2! ≈ 0.0988
Therefore, the probability of a payout is P(X = 1) + P(X = 2) ≈ 0.4281.
When a payout happens, the amount is GHS 1,000. Therefore, the expected value of a payout is:1000(P(X = 1) + P(X = 2)) ≈ 428.1.
The variance of a Poisson distribution is equal to its mean. Hence, the variance of X is 0.6.
The standard deviation of X is the square root of the variance.
Therefore, the standard deviation of the amount that the insurance company will have to pay is approximately √0.6 ≈ 0.7746 GHS.
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Based on your understanding of family businesses, briefly address
why business ethics may be more challenging in a family business.
Which segment or segments best illustrate this challenge for family
Business ethics may be more challenging in a family business due to the intertwining of personal and professional relationships, potential conflicts of interest, and the lack of formal structures and accountability.
Family businesses are unique entities where family members are involved in the day-to-day operations and decision-making processes. This close-knit nature can create challenges when it comes to maintaining business ethics. Firstly, the personal relationships within a family business can blur the lines between personal and professional interests. Family members may prioritize their personal relationships and emotions over objective decision-making, which can lead to biased or unethical choices. Conflicts of interest can arise when family members prioritize their own interests or the interests of other family members over the best interests of the business and its stakeholders.
Furthermore, family businesses often lack formal structures and processes that promote transparency, accountability, and ethical behavior. Decision-making may be centralized within a select few family members, limiting checks and balances. Without clear policies and guidelines in place, ethical issues may arise, such as nepotism, favoritism, or misuse of resources. Additionally, family dynamics and power struggles can complicate ethical decision-making, as personal relationships and family history may influence the way conflicts are resolved or ethical dilemmas are approached.
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Which of the following nominal rates compounded semi-annually is equivalent to i (365) =9.650%. a. i (2) =7.513%. b. i (2) =9.786%. c. i (2) =7.612%. d. i (2) =9.292%. e. i (2) =9.885%.
To find the equivalent nominal rate compounded semi-annually, we need to calculate the rate that produces the same effective annual rate as i (365) = 9.650%. Among the options provided, the correct answer is not available.
To find the equivalent nominal rate compounded semi-annually, we need to use the formula:
i (2) = (1 + i (365))^(365/2) - 1, where i (2) represents the nominal rate compounded semi-annually.
In this case, i (365) is given as 9.650%. Plugging this value into the formula, we get:
i (2) = (1 + 9.650%)^(365/2) - 1.
By calculating this expression, we can find the equivalent nominal rate compounded semi-annually. However, none of the provided options match the calculated result. Therefore, among the given options, there is no nominal rate compounded semi-annually that is equivalent to i (365) = 9.650%.
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Using the attached exhibit and the information below, what is the net cost of purchasing this vehicle? To answer the question, use the following assumptions: -The price of the car is $20,000. -The down payment required is $2,000 -The security deposit required is $500 -The sales tax rate is 10.25%. -GAP insurance on the lease is $300 -Interest lost or foregone is computed using a 4% after tax rate of return (use in Step 4) -The interest rate on the lease and loan is 9% (use in Step 6*). -The lease and loan terms are both 36 months. -Your resale/trade-in value for your vehicle is $6,000 -Disposition fee: $250 -Lease Payment: $325/month -Purchase Payment: $360/month
To calculate the net cost of purchasing the vehicle, we need to consider several factors. Let's go step by step:
Step 1: Price of the car
$20,000
Step 2: Down payment
-$2,000
Step 3: Security deposit
-$500
Step 4: Sales tax
The sales tax rate is 10.25%, so we need to calculate the sales tax on the price of the car:
Sales tax = ($20,000 - $2,000) * 10.25%
Sales tax = $1,800
Step 5: GAP insurance
-$300
Step 6: Interest lost or foregone
To calculate the interest lost, we need to calculate the interest on the down payment and the security deposit, as well as the interest on the sales tax. We'll assume a 4% after-tax rate of return.
Interest lost = ($2,000 + $500 + $1,800) * 4%
Interest lost = $152
Step 7: Resale/trade-in value
If you plan to trade in or sell your vehicle at the end of the term, the resale/trade-in value of $6,000 will reduce the net cost. We'll subtract it later.
Step 8: Disposition fee
The disposition fee of $250 will also be subtracted from the net cost.
Step 9: Lease payment
We'll multiply the lease payment of $325 per month by the number of months (36) to get the total lease cost.
Step 10: Purchase payment
We'll multiply the purchase payment of $360 per month by the number of months (36) to get the total purchase cost.
Now, let's calculate the net cost:
Net cost = Price of the car + Sales tax + GAP insurance + Interest lost + Lease payment + Purchase payment - Resale/trade-in value - Disposition fee
Net cost = $20,000 + $1,800 - $300 + $152 + ($325 * 36) + ($360 * 36) - $6,000 - $250
After performing the calculations, the net cost of purchasing the vehicle is:
Net cost = $37,702
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During the year, the Senbet Discount Tire Company had gross sales of $1.18 million. The company's cost of goods sold and selling expenses were $587,000 and $240,000, respectively. The company also had notes payable of $790,000. These notes carried an interest rate of 7 percent. Depreciation was $117,000. The tax rate was 22 percent.
a. What was the company's net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.)
b. What was the company's operating cash flow? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.)
a.
Net income
b.
Operating cash flow
To calculate the net income and operating cash flow for the Senbet Discount Tire Company, we'll use the following formulas:
Net Income = Gross Sales - Cost of Goods Sold - Selling Expenses - Interest Expense - Depreciation Expense - Taxes
Operating Cash Flow = Net Income + Depreciation Expense
Given information:
Gross Sales = $1.18 million
Cost of Goods Sold = $587,000
Selling Expenses = $240,000
Notes Payable = $790,000
Interest Rate on Notes Payable = 7%
Depreciation Expense = $117,000
Tax Rate = 22%
Let's calculate the values:
a. Net Income:
Net Income = $1,180,000 - $587,000 - $240,000 - (Notes Payable * Interest Rate) - $117,000 - (Net Income * Tax Rate)
Net Income = $1,180,000 - $587,000 - $240,000 - ($790,000 * 7%) - $117,000 - (Net Income * 22%)
To solve for Net Income, we'll rearrange the equation:
Net Income + Net Income * 22% = $1,180,000 - $587,000 - $240,000 - ($790,000 * 7%) - $117,000
Combining like terms:
1.22 * Net Income = $1,180,000 - $587,000 - $240,000 - ($790,000 * 7%) - $117,000
Simplifying further:
1.22 * Net Income = $1,180,000 - $587,000 - $240,000 - $55,300 - $117,000
1.22 * Net Income = $180,700
Dividing both sides by 1.22:
Net Income = $180,700 / 1.22
Net Income ≈ $148,032
Therefore, the company's net income is approximately $148,032.
b. Operating Cash Flow:
Operating Cash Flow = Net Income + Depreciation Expense
Operating Cash Flow = $148,032 + $117,000
Operating Cash Flow ≈ $265,032
Therefore, the company's operating cash flow is approximately $265,032.
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The fixed expenses of Greg's Snowboards are $820,000. The selling price for one snowboard is $180. The variable cost per unit is $70. If the company sells 8,900 snowboards, its operating income is a A. loss of $197,000. B. gain of $159,000. C. gain of $1,799,000. D. gain of $1,405,000.
Greg's Snowboards' operating income is $1,405,000 after subtracting fixed and variable costs. the correct answer is option D
To calculate the operating income, we need to determine the total revenue and total costs.
Total revenue = Selling price per snowboard * Number of snowboards sold
Total revenue = $180 * 8,900 = $1,602,000
Total variable costs = Variable cost per unit * Number of snowboards sold
Total variable costs = $70 * 8,900 = $623,000
Operating income = Total revenue - Total variable costs - Total fixed expenses
Operating income = $1,602,000 - $623,000 - $820,000
Operating income = $1,405,000
Therefore, the operating income for Greg's Snowboards is a gain of $1,405,000, as indicated in option D.
This means that after covering all variable and fixed expenses, the company has a positive operating income.
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R Co has set a minimum cash account balance of $7,500. The cash spread is expected to be $13,500.
Determine the upper limit and the return point for the cash account of R Co using the Miller-Orr model and explain the relevance of these values for the cash management of the company.
The minimum cash balance of $20,000 is required at Miller-Orr Co, and transferring money to or from the bank costs $50 per transaction. Inspection of daily cash flows over the past year suggests that the standard deviation is $3,000 per day, and hence the variance (standard deviation squared) is $9 million. The interest rate is 0.03% per day.
Calculate:
(i) the spread between the upper and lower limits (A: $31,200)
(ii) the upper limit (A: $51,200)
(iii)the return point. (A: $30,400)
In this case, the upper limit would be $7,500 + $13,500 = $21,000. The return point is determined by subtracting half of the cash spread from the upper limit. In this case, the return point would be $21,000 - ($13,500 / 2) = $15,750.
In the context of cash management, these values play a crucial role in ensuring that the company maintains an optimal level of cash reserves. The minimum cash account balance acts as a safety net, ensuring that the company has enough cash on hand to meet its immediate financial obligations.
By setting a minimum balance of $7,500, R Co ensures that it always has a certain level of liquidity.
The upper limit and return point are important for managing cash fluctuations. The upper limit represents the threshold at which excess cash beyond the minimum balance can be invested or used for other purposes.
By setting an upper limit of $21,000, R Co can ensure that excess cash is not left idle and can be put to work to generate additional returns.
The return point, on the other hand, serves as a trigger for action. When the cash balance exceeds the return point, it indicates that the company has more cash than required for its immediate needs. At this point, R Co can decide to invest the excess cash or take other actions to optimize its cash position.
By setting the return point at $15,750, the company ensures that it takes proactive measures to manage its cash when it exceeds a certain threshold.
In conclusion, the Miller-Orr model helps R Co establish appropriate cash management practices. The minimum cash account balance ensures sufficient liquidity, while the upper limit and return point enable the company to optimize its cash position and take timely action based on its cash inflows and outflows.
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Question 10
If a firm wants a 5% chance of running out of inventory, then what is the implied Cu relative to C0 ? Use the picture given in a previous question in this problem set. • Cu=20Co • Cu/Co=2 • Cu=5Co • Cu/Co=100 Question 11
If a firm sets a 90% service level and runs out of inventory, this means: • The realization and expectation are equal. • The realization may be higher or lower than the expectaiton, depending on the standard deviation. • The realization was higher than the expectation. • The expectation was higher than the realization.
In question 10, if a firm wants a 5% chance of running out of inventory, the implied Cu relative to C0 is Cu/Co=100. In question 11, if a firm sets a 90% service level and runs out of inventory, it means that the realization may be higher or lower than the expectation, depending on the standard deviation.
Question 10 asks about the implied Cu relative to C0 when a firm wants a 5% chance of running out of inventory. The correct answer is Cu/Co=100. This means that the cost of an inventory shortage (Cu) is equivalent to 100 times the cost of an order (Co). By setting Cu/Co=100, the firm ensures a 5% chance of running out of inventory.
In question 11, if a firm sets a 90% service level and runs out of inventory, it implies that the realization may be higher or lower than the expectation, depending on the standard deviation. The correct answer is that the realization may be higher or lower than the expectation. The service level represents the probability of meeting customer demand, and in this case, the firm aimed for a 90% service level. However, due to factors such as variability in demand or supply chain disruptions, the actual realization of the service level may deviate from the expected level.
In summary, question 10 relates to the implied cost of inventory shortage relative to the cost of an order, while question 11 discusses the relationship between the service level and the realization of inventory availability, indicating that the realization can vary from the expected level depending on factors like standard deviation.
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Morning Star Air (China). Morning Star Air, headquartered in Kunming, China, needs USS26,000,000 for one year to finance working capital. The airline has two alternatives for borrowing: a. Borrow US $26,000,000 in Eurodollars in London at 7.25% per annum b. Borrow HK$205,862,800 in Hong Kong at 7.00% per annum, and exchange these Hong Kong dollars at the present exchange rate of HK$7.9178/US$ for U.S. dollars. At what ending exchange rate would Morning Star Air be indifferent between borrowing U.S. dollars and borrowing Hong Kong dollars?
Morning Star Air would be indifferent between borrowing U.S. dollars and borrowing Hong Kong dollars at an ending exchange rate of HK$7.8956/US$.
In order to calculate the ending exchange rate at which Morning Star Air would be indifferent between borrowing U.S. dollars and borrowing Hong Kong dollars, we need to calculate the total cost of both alternatives and then compare them. The total cost of borrowing US $26,000,000 in Eurodollars in London at 7.25% per annum would be:
US $26,000,000 x 7.25% = US $1,885,000
Thus, the total amount to be repaid would be:
US $26,000,000 + US $1,885,000 = US $27,885,000
The total cost of borrowing HK$205,862,800 in Hong Kong at 7.00% per annum, and exchanging these Hong Kong dollars at the present exchange rate of HK$7.9178/US$ for U.S. dollars would be:
HK$205,862,800 x 7.00% = HK$14,411,396.00
Now, we can convert HK$14,411,396.00 to US dollars using the given exchange rate of HK$7.9178/US$:
HK$14,411,396.00 ÷ HK$7.9178/US$ = US $1,823,741.44
Therefore, the total amount to be repaid would be:
US $26,000,000 + US $1,823,741.44 = US $27,823,741.44
Now, we can calculate the ending exchange rate at which Morning Star Air would be indifferent between borrowing U.S. dollars and borrowing Hong Kong dollars by setting the total cost of both alternatives equal to each other and solving for the exchange rate:
US $27,885,000 = US $27,823,741.44 ÷ ER
ER = HK$7.8956/US$
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AIfredo makes 3 pizzas in 30 minutes or 2 lasagnes in 10 minutes. Massimo makes 4 izzas in 40 minutes or 10 lasagnes in 50 minutes. Which of the following tatements is correct? Massimo has the competitive advantage in making both pizza and lasagne. Alfredo has the competitive advantage in making pizza. Massimo will specialize in making lasagne. Neither Alfredo nor Massimo has the competitive advantage in making lasagne. Massimo will specialise in making pizza. Alfredo has the competitive advantage in making lasagn
Based on the information provided, Massimo has the competitive advantage in making lasagne, while Alfredo has the competitive advantage in making pizza.
To determine the competitive advantage, we compare the productivity of Alfredo and Massimo in making pizzas and lasagnes.
Alfredo can make 3 pizzas in 30 minutes, which means he can make 1 pizza in 10 minutes (30 minutes divided by 3). Massimo, on the other hand, can make 4 pizzas in 40 minutes, resulting in 1 pizza every 10 minutes (40 minutes divided by 4). Therefore, both Alfredo and Massimo have the same productivity in making pizzas, and there is no clear competitive advantage between them in this aspect.
However, when it comes to making lasagnes, Alfredo can make 2 lasagnes in 10 minutes, or 1 lasagne every 5 minutes (10 minutes divided by 2). Massimo, on the other hand, can make 10 lasagnes in 50 minutes, resulting in 1 lasagne every 5 minutes (50 minutes divided by 10). Therefore, Massimo has a higher productivity in making lasagnes and holds the competitive advantage in this aspect.
In conclusion, Massimo has the competitive advantage in making lasagne, while Alfredo has the competitive advantage in making pizza.
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Answer: 1. … are properties or things of value owneff and controlled by a 1. Increase Supplies and decrease Cash. 2. Increase Supplies Expense and increase Accounts Payable. business entity. Answer: 3. Increase Supplies Expense and increase Accounts Receivable. 1. Liabilities 4. Increase Supplies and increase Accounts Payable. 2. Owner's Equity 3. Assets 4. None of the above 2. Parish Tutoring Services has assets of $25,000 and liabilities of $10,000. What is the amount of owner's equity? Answer: 1. $35.000 2. $15.000 3. $12.500 4. $10.000 3. Which of the following accounts would increase owner's equity? Answer: 1. Cash 2. Accounts Payable 3. Accounts Recelvable 4. Income from Tutoring 4. Which of the following statements is true? Answer: 1. Every transaction is recorded as an increase and/or decrease in only one account. 2. One side of the equation does not need to equal the other side of the equation. 3. Double-entry accounting is demonstrated by the fact that each transaction must be recorded in at least two accounts. 4. When a business earns revenue, owner's equity decreases. 5. M. Parish purchased supplies on credit. What is the impact on the accounting equation?
1. The correct option is Increase Supplies and decrease Cash. The purchase of supplies with cash reduces the amount of cash and increases the supplies account.
2. The correct option is $15,000. Owner's equity is the difference between assets and liabilities. In this case, the calculation is:Owner's Equity = Assets - Liabilities Owner's Equity = $25,000 - $10,000 = $15,0003. The correct option is Income from Tutoring. Revenues increase owner's equity, while expenses decrease it.4. The correct option is Double-entry accounting is demonstrated by the fact that each transaction must be recorded in at least two accounts.
This is the fundamental principle of double-entry accounting. Every transaction affects at least two accounts, with one account debited and another credited.5. The impact on the accounting equation is:Increase Supplies and increase Accounts Payable.
This transaction increases supplies account and increases accounts payable, which is a liability account. The accounting equation is:Assets = Liabilities + Owner's EquityWith this transaction, both sides of the equation increase by the same amount, and the equation remains in balance.
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Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. It is one of the world’s largest coffeehouse chains. It serves hot and cold drinks, whole-bean coffee, juices, beverages, pastries, and other snacks. Some offerings are seasonal or specific to the locality of the store.
Describe and analyze how Starbucks exercise Procurement Management, according to all knowledge you have gained from the provided educational material. Make sure that in your answers you address the below aspects: - Explain and procurement structure and strategy of Starbucks - Explain whether and how procurement creates competitive advantage for Starbucks.
Procurement Management is a critical function for Starbucks Corporation, as it plays a vital role in ensuring the availability of high-quality products and ingredients to support the company's operations across its global network of coffeehouses.
Quality Control: Starbucks places a strong emphasis on procuring high-quality products and ingredients. By carefully selecting suppliers and implementing strict quality control measures, the company ensures consistency in its offerings and reinforces its brand reputation for premium and enjoyable coffee experiences.
Sustainability and Ethical Sourcing: Starbucks' commitment to sustainable and ethical sourcing practices differentiates it from competitors. By working closely with suppliers to promote environmentally friendly practices and fair treatment of farmers and workers, Starbucks enhances its brand image and attracts environmentally conscious and socially responsible consumers.
Innovation and Differentiation: Procurement also supports Starbucks' ability to introduce innovative and unique products to its menu. By actively seeking out new ingredients, flavors, and packaging options, the company can differentiate itself in the market and stay ahead of evolving consumer preferences.
Cost Efficiency: While quality and sustainability are key drivers for procurement at Starbucks, the company also strives for cost efficiency. By leveraging its global scale and negotiating power, Starbucks can secure favorable pricing agreements with suppliers.
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Blue Spruce sells a snowboard, EZslide, that is popular with snowboard enthusiasts. The following is information relating to Blue Spruce's beginning inventory and purchases of EZslide snowboards during September. During the same month, 97 EZslide snowboards were sold. Blue Spruce uses a periodic inventory system. Compute the ending inventory at September 30 and the cost of goods sold using the FIFO, LIFO, and average-cost methods. (Round per unit cost to 3 decimal ploces, e. 15.647 and final answers to 0 decimal places, e.g. 5, 125.) Blue Spruce Corp. uses a periodic inventory system and reports the following for the month of June. (a) Compute the cost of the ending inventory and the cost of goods sold under FIFO. LIFO, and average-cost. (Round per unit cost to 3 decimal places, e.g. 15.647 and final answers to 0 decimal places, eg. 5.125.) You have the following information for Sheffield inc. for the month ended October 31,2022 . Sheffield uses a periodic method for inventory. (a1) Calculate the weighted-average cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average cost per unit
Here is the solution to the problem for the LIFO and the FIFO methods as requested in the question:
The FIFO MethodEnding inventory: 33 units * $92.10/unit = $3,039.30
Cost of goods sold: 97 units - 33 units = 64 units
Cost of goods sold: 64 units * $92.10/unit = $5896.40
LIFO
Ending inventory: 33 units * $93.10/unit = $3,082.30
Cost of goods sold: 97 units - 33 units = 64 units
Cost of goods sold: 64 units * $93.10/unit = $5909.60
Average cost
Average cost: $11,885 / 130 units = $91.50/unit
Ending inventory: 33 units * $91.50/unit = $3,020.50
Cost of goods sold: 97 units - 33 units = 64 units
Cost of goods sold: 64 units * $91.50/unit = $5806.00
The answer is shown in the table below.
Method Ending inventory Cost of goods sold
FIFO $3,039.30 $5,896.40
LIFO $3,082.30 $5,909.60
Average cost $3,020.50 $5,806.00
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The financial crisis resulted in massive government intervention in order to avoid a complete financial meltdown. When financial problems of some financial institutions spread to others and result in a risk of financial system collapse, this is referred to as:
A) Financial Institution Risk
B) Systemic Risk
C) Market sector Risk
D) Credit Risk
The financial crisis which happened in 2008 brought about huge government intervention so as to keep away from a complete financial meltdown.
The crisis was caused by the subprime mortgage problem,
which made some financial institutions face liquidity problems.
This was because many of these institutions invested in these risky mortgages, and when homeowners defaulted on their loans, the institutions faced severe financial problems.
A systemic risk arises when financial problems in a financial institution spread to other financial institutions, which can result in a risk of financial system collapse.
A systemic risk happens when one or more financial institutions' failures trigger a domino effect on the others, which can result in a financial crisis in the entire financial system.
In other words, the failure of one institution can trigger a chain reaction that causes other financial institutions to collapse, leading to a financial crisis.
A systemic risk is a type of risk where the risk is not limited to one institution, industry or sector.
Instead,
it spreads to other institutions, sectors and the broader economy, creating a systemic problem.
the correct answer to this question is option B.
Systemic Risk.
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A mortgage is used to finance ......
A. Stock purchases
B. Commercial Real Estate
C. Purchasing a home
D. Both B and C are correct.
A mortgage is used to finance purchasing a home. Thus, the correct option is C.
The reason why people use mortgage to finance purchasing a home is that, in most cases, it is nearly impossible for an individual or a family to buy a home outright. Purchasing a home with a mortgage helps to make the cost of owning a home more affordable, especially for people with lower income.
Furthermore, mortgages allow homeowners to pay for their homes over time, spreading the cost over many years. A mortgage is typically a loan that an individual borrows from a financial institution like a bank, to purchase a home.
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Two scheduled debt payments of $796 each are due three months and nine months from now respectively. If interest at 7% is allowed, what single payment today is required to sottle the two scheduled payments? The single payment required to settle the two scheduled payments is s (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
To calculate the single payment required to settle the two scheduled debt payments, we need to find the present value of those payments. We'll discount each payment separately and then sum them together.
Using the formula for the present value of a future payment:
PV = FV / (1 + r)^n
Where:
PV = Present value
FV = Future value (the scheduled debt payment)
r = Interest rate
n = Number of periods
First, let's calculate the present value of the first payment due in three months:
PV1 = $796 / (1 + 0.07)^3
PV1 = $796 / (1.07)^3
Next, let's calculate the present value of the second payment due in nine months:
PV2 = $796 / (1 + 0.07)^9
PV2 = $796 / (1.07)^9
Finally, we can find the single payment required to settle both payments by summing the present values:
s = PV1 + PV2
Calculating each component:
PV1 ≈ $737.23 (rounded to two decimal places)
PV2 ≈ $689.19 (rounded to two decimal places)
s ≈ $737.23 + $689.19
s ≈ $1,426.42
Therefore, the single payment required to settle the two scheduled debt payments is approximately $1,426.42.
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Suppose you have been hired as Project Manager for IT company for Web development project. The project is going through some challenging period - the quality of software developed is detoriating/ higher levels of bugs are reported than before by the client. The client is unhappy about that. This is dragging the timeline, resources and budget.
What could you do to address this issue?
Which Methodology would you adopt and why justify?
(Answer in points only -limit 1 page)
To address the issue of deteriorating software quality and high levels of bugs in the web development project, I would adopt an Agile methodology and take actions such as thorough analysis, enhanced communication, prioritized bug fixes, additional training.
To address the issue of deteriorating software quality and high levels of bugs in the web development project, I would take the following actions:
1. Conduct a thorough analysis: Investigate the root causes of the quality issues by analyzing the development process, testing procedures, and team dynamics.
2. Review and improve quality assurance processes: Implement robust testing methodologies, including automated testing, code reviews, and continuous integration, to identify and fix bugs early in the development lifecycle.
3. Enhance communication and collaboration: Foster effective communication and collaboration among team members, ensuring clear requirements understanding, regular feedback loops, and knowledge sharing.
4. Prioritize bug fixes: Create a prioritization system to address critical bugs first and allocate resources accordingly, minimizing their impact on the project timeline and budget.
5. Conduct additional training: Identify any skill gaps within the team and provide targeted training to improve the developers' capabilities in producing high-quality code.
6. Implement Agile methodology: Adopt an Agile approach such as Scrum or Kanban, allowing for iterative development, regular client feedback, and flexibility to adjust project requirements and priorities based on changing circumstances.
7. Continuous improvement: Encourage a culture of continuous improvement by conducting retrospectives after each development iteration, identifying areas for improvement, and implementing corrective actions.
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1).Company A had EBIT of $360708986 in 2019. In addition, the company had interest expenses of $137516234 and a corporate tax rate of 37.14%.
What was the company's total payments to shareholders and debtholders?
2. Company A had EBIT of $331866323 in 2019. In addition, the company had interest expenses of $173186001 and a corporate tax rate of 41.39%.
If the company had no interest expenses, what would its 2019 net income have been?
The total payments to shareholders and debtholders include both dividends to shareholders and interest payments to debtholders. If the company had no interest expenses in 2019, its net income would have been approximately $194,695,922.84.
1. To calculate the company's total payments to shareholders and debtholders, we need to determine the net income first.
Net income can be calculated using the formula:
Net Income = EBIT - Interest Expenses - (Tax Rate * EBIT)
Given:
EBIT (Earnings Before Interest and Taxes) = $360,708,986
Interest Expenses = $137,516,234
Tax Rate = 37.14% = 0.3714
Let's calculate the net income:
Net Income = $360,708,986 - $137,516,234 - (0.3714 * $360,708,986)
Net Income = $360,708,986 - $137,516,234 - $133,898,506.568
Net Income = $89,294,245.432
The total payments to shareholders and debtholders include both dividends to shareholders and interest payments to debtholders. To calculate this, we need additional information.
2. To determine the company's net income if it had no interest expenses, we can use the following formula:
Net Income = EBIT - (Tax Rate * EBIT)
Given:
EBIT = $331,866,323
Interest Expenses = $173,186,001
Tax Rate = 41.39% = 0.4139
Since we are assuming no interest expenses, we can exclude them from the calculation:
Net Income = $331,866,323 - (0.4139 * $331,866,323)
Net Income = $331,866,323 - $137,170,400.1597
Net Income = $194,695,922.8403
Therefore, if the company had no interest expenses in 2019, its net income would have been approximately $194,695,922.84.
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A Ltd acquired the shares of B Ltd in two steps. The details of the acquisition are summarized as follows:
The total number of ordinary shares of B Ltd issued is 100,000. On 31 March 2021, A Ltd acquired 20,000 ordinary shares of B at $10 each by cash.
On 31 December 2021, A Ltd bought another 50,000 ordinary shares of B Ltd at the current market price of $18 each by cash.
The fair value of net identifiable assets of B Ltd on 31 December 2021 was $1,000,000.
You can assume the market price on 31 December is used to ascertain the fair value of B Ltd and non-controlling interests.
REQUIRED:
(a) Prepare the accounting entries (on 31 Mar and 31 Dec) for the acquisition of shares of B Ltd in the book of A Ltd in accordance with the requirements of HKFRS 3.
(b) Compute the total goodwill, and analyze the amount attributable to A Ltd and the non-controlling interests respectively. (NO Journal entries are required)
(a) Accounting entries for the acquisition of shares of B Ltd in the book of A Ltd:On March 31, 2021 - A Ltd acquired 20,000 ordinary shares of B at $10 each by cash. The entry to record this would be:DateAccountTitle and ExplanationDebitCreditMar 31.
2021Investment in B Ltd200,000Cash200,000($10*20,000 shares)On December 31, 2021 - A Ltd bought another 50,000 ordinary shares of B Ltd at the current market price of $18 each by cash. The entry to record this would be:DateAccountTitle and ExplanationDebitCreditDec 31, 2021Investment in B Ltd900,000Cash900,000($18*50,000 shares)The fair value of net identifiable assets of B Ltd on 31 December 2021 was $1,000,000. Therefore, the goodwill would be computed as follows:
(Total purchase price of B Ltd - fair value of net identifiable assets)Goodwill = ($200,000 + $900,000) - $1,000,000Goodwill = $100,000(b) Total goodwill = $100,000. The amount attributable to A Ltd and the non-controlling interests would be analyzed as follows:Goodwill attributable to A Ltd = (1-50,000/100,000) * $100,000Goodwill attributable to A Ltd = $50,000Goodwill attributable to non-controlling interests = 50,000 * $2 per shareGoodwill attributable to non-controlling interests = $100,000
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Which tecm below best describes when a monopolist can force a buyer to purchase a quantity larger than that dictated at by the buyer's demind curve (at a given price)?
a.winner's curse
b.horizontal equity
c.consumer surplus
d.all or nothing supply
The best term that describes when a monopolist can force a buyer to purchase a quantity larger than that dictated by the buyer's demand curve (at a given price) is all-or-nothing supply. This term (option d) best describes this condition. What is all-or-nothing supply? All-or-nothing supply is a monopolistic technique in which the monopolist requires the consumer to buy a specified quantity of goods at a fixed price. This approach is also referred to as block pricing, and it is used to maximise profits in the industry.
A monopolist utilises all-or-nothing supply pricing when it has market power in the industry, and there are no viable substitutes for its goods, giving it pricing power over consumers. In conclusion, the term that best describes when a monopolist can force a buyer to purchase a quantity larger than that dictated by the buyer's demand curve (at a given price) is all-or-nothing supply.
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(e)
(e) Discuss FIVE (5) advantages of preparing annual budgets for any organization. (15 Marks) Group Assignment (ACC4245/August 2022) Page 3
The five advantages of preparing annual budgets for any organization are as follows :
1. Planning:Preparation of a budget aids in the planning process of an organization. It serves as a roadmap for achieving the objectives of the company. The budgeting process also assists in determining where the company should focus its resources. It aids in identifying which objectives require increased attention and which are of lesser significance.
2. Coordination:Budgeting serves as a means of coordinating various departments within an organization. Departments must collaborate to achieve the objectives and targets established in the budget. By establishing a clear set of goals and objectives, the budgeting process enhances coordination across departments.
3. Control:Budgeting helps in controlling the expenses of an organization. By determining how much money can be allocated to each department, the budget acts as a guide for controlling expenditures. Departments are given a predetermined amount of money to spend, and any expenditure that exceeds the budgeted amount must be approved before it can be authorized.
4. Communication:The budgeting process aids in communication within an organization. Each department communicates its needs and requirements to the budgeting committee, which then develops a budget based on these inputs. The budget acts as a tool for communicating these requirements and expectations to each department.
5. Performance Evaluation: Budgeting aids in evaluating the performance of an organization. It provides a means of assessing the company's actual performance against its budgeted performance. Any significant variances can be identified, and corrective action can be taken to correct these deviations. The budgeting process allows for an organization to continually improve its performance based on the feedback provided by the budgeting process.
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A profit-maximizing monopolist sells its product to two consumers at the same price. The "high demand" consumer has the demand curve Q 1
(P 1
)=130−P 1
and the "low demand" consumer has the demand curve Q 2
(P 2
)=100−P 2
. The firm's marginal cost is $10. Suppose the firm is considering two pricing strategies: (a) two-part tariff with a usage fee P=10 and an entry fee T= consumer surplus for the "low demand" consumer; (b) two-part tariff with a usage fee P=15 and an entry fee T= consumer surplus for the "low demand" consumer. Which pricing strategy is more profitable?
The pricing strategy with a usage fee P=15 and an entry fee T= consumer surplus for the "low demand" consumer is more profitable for the profit-maximizing monopolist.
To determine the more profitable pricing strategy, we need to compare the total profits generated by each strategy.
(a)tariff with P=10 and T= consumer surplus for the "low demand" consumer:
For the high demand consumer, the price (P1) will be set such that Q1(P1) equals the quantity demanded. For the low demand consumer, the price (P2) will be set at P2 = 10 (the usage fee).To calculate the total profits, we need to find the quantities demanded by each consumer at the given prices and subtract the marginal cost ($10) from the total revenue generated.
(b) Two-part tariff with P=15 and T= consumer surplus for the "low demand" consumer:
Similar to the previous strategy, for the high demand consumer, the price (P1) will be set such that Q1(P1) equals the quantity demanded. For the low demand consumer, the price (P2) will be set at P2 = 15 (the usage fee).Again, we calculate the quantities demanded and subtract the marginal cost ($10) from the total revenue.
By comparing the total profits generated by both strategies, we can determine which one is more profitable for the monopolist. The strategy with a higher total profit will be the more profitable one.
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Kathy has an account balance in her employer's money purchase pension plan of $100,000. The plan has a 2-to-6-year graded vesting policy. She has been a participant for three and a half years and has worked for the company for five full years. Assuming the plan permits loans, what is the maximum loan that Kathy could take from the plan?
A. $40,000
B. $50,000
C. $20,000
D. $30,000
The correct option is not among the choices given. Based on the information provided, the maximum loan that Kathy could take from the plan is $100,000. To determine the maximum loan that Kathy can take from her employer's money purchase pension plan, we need to consider the plan's vesting policy.
In this case, the plan has a 2-to-6-year graded vesting policy, and Kathy has been a participant for three and a half years and has worked for the company for five full years. Under a graded vesting policy, a certain percentage of the account balance becomes vested each year. Typically, 20% of the account balance becomes vested each year until the participant reaches full vesting after six years.
Since Kathy has worked for the company for five full years, she is eligible for full vesting. This means that 100% of her account balance is vested. Therefore, the maximum loan she can take is based on her entire account balance of $100,000.
Based on the information provided, the maximum loan that Kathy could take from the plan is $100,000.
Therefore, the correct option is not among the choices given.
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For the next question read and refer to the following excerpt in quotes from an example Contract between a general contractor (you) and Flathtech Solutions LIC for the completion of a two story office building. Then answer the question following the excerpt.
"7. Performance Guaranties.
7.1. Contractor shall provide a guaranties of his obligations under the Contract by a surety company acceptable to the Owner.
7.2. Performance Guaranty will take the form of an irrevocable bank guaranty in the amount of 10% of the Contract Price payable on first written demand of Owner to guarantee the performance of the Contractor’s obligations under the Contract.
7.3. Contractor shall also provide a Subcontractor & Material Supplier Payment Guarantee in the form of a Standby Letter of Credit for 5% of the Contract price payable on first written demand of Owner to guarantee payment of all sub-contractors and material suppliers under the Contract."
Why is it in the Owner’s best interest to ensure the beneficiaries of section 7.3 get paid?
a.
Because the Owner wants the money for himself
b.
Because the Subcontractors & Material Suppliers will file liens against the Owner’s property if they are not paid
c.
Because the Contractor would sue the Owner for the Contractor defaulting on the Contract
d.
Because the Surety would sue the Owner for the Contractor defaulting on the Contract
The correct answer is (b) Because the Subcontractors & Material Suppliers will file liens against the Owner’s property if they are not paid.
The Owner wants to make sure that the beneficiaries of section 7.3 get paid because the Subcontractors & Material Suppliers will file liens against the Owner’s property if they are not paid. Therefore, the answer is The excerpt from the contract above explains the performance guarantees the contractor (you) must provide to the owner of the building. The performance guarantee will take the form of an irrevocable bank guarantee, with 10% of the contract price payable on the first written demand of the owner to ensure the contractor's obligations under the contract. A standby letter of credit will be provided by the contractor to guarantee payment of all subcontractors and material suppliers under the contract, in the form of a subcontractor & material supplier payment guarantee. Section 7.3 of the contract is a Subcontractor & Material Supplier Payment Guarantee, which requires the contractor to provide a Standby Letter of Credit for 5% of the Contract price payable on the first written demand of the owner to guarantee payment of all sub-contractors and material suppliers under the contract.
This is in the Owner’s best interest because if the subcontractors and material suppliers are not paid, they can file liens against the Owner’s property, which can create additional expenses for the owner.In addition, if the Contractor defaults on the contract, the surety company will provide compensation to the owner for any damages caused by the Contractor. However, if the Subcontractors & Material Suppliers are not paid, they may file liens against the Owner’s property. The Owner will be required to pay the outstanding debts and if the Owner fails to do so, the liens could be foreclosed, and the property may be sold to pay the debts.
The correct answer is (b) Because the Subcontractors & Material Suppliers will file liens against the Owner’s property if they are not paid. The Owner's best interest is to ensure the beneficiaries of section 7.3 get paid.
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Bob signs a note promising to pay marie $3250 in 4 years at 8.5% compounded monthly. Then, 120 days before the note is due, Marie sells the note to a bank which discounts the note based on a bank discount rate of 14%. How much did the bank pay Marie for the note?
Bob signs a note promising to pay marie $3250 in 4 years at 8.5% compounded monthly. Then, 120 days before the note is due, Marie sells the note to a bank which discounts the note based on a bank discount rate of 14%. So, bank paid Marie $3,047.76 for the note.
When Marie sells the note to the bank 120 days before it is due, the bank applies a discount rate of 14% to calculate the amount they will pay Marie. To determine how much the bank paid, we need to calculate the present value of the note.
1. Calculate the future value of the noteBob promises to pay Marie $3,250 in 4 years at an interest rate of 8.5% compounded monthly. To find the future value, we use the formula for compound interest:
FV = PV * (1 + r/n)^(n*t)
Where:
PV = Present value (unknown)
r = Annual interest rate (8.5%)
n = Number of compounding periods per year (12)
t = Number of years (4)
Plugging in the values, we have:
$3,250 = PV * (1 + 0.085/12)^(12*4)
Solving for PV, we find that the future value of the note is $3,841.68.
2. Calculate the present value of the noteThe bank discounts the note based on a bank discount rate of 14%. The formula to calculate the present value of a discounted note is:
PV = FV / (1 + (r*t/365))
Where:
FV = Future value of the note ($3,841.68)
r = Discount rate (14%)
t = Time remaining until the note is due in days (120)
Plugging in the values, we have:
PV = $3,841.68 / (1 + (0.14 * 120/365))
Solving for PV, we find that the present value of the note is $3,047.76.
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Franktown Motors is expected to have an EBIT of $2,200 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $158, $92, and $114, respectively. This yields a year 1 Free Cash Flow of $1,404. All items are expected to grow at 15 percent per year until the end of year 4 . The firm currently has $11,305 in debt and 532 shares outstanding. After year 4 , the adjusted cash flow from assets is expected to grow at 2.5 percent indefinitely. The company's WACC is 8.7 percent and the tax rate is 34 percent. What is the price per share of the company's stock? Show your answer to the nearest $.01. Do not use the $ or, signs in your answer.
The price per share of the company's stock is approximately $58.74
To calculate the price per share of the company's stock, we need to determine the present value of all the future cash flows, including the free cash flows and the terminal value.
Now,
Year 1 Free Cash Flow: $1,404
Year 2 Free Cash Flow: $1,404 * (1 + 0.15) = $1,614.60
Year 3 Free Cash Flow: $1,614.60 * (1 + 0.15) = $1,857.79
Year 4 Free Cash Flow: $1,857.79 * (1 + 0.15) = $2,134.47
Next,
The terminal value at the end of year 4:
Terminal Value = Year 4 Free Cash Flow * (1 + g) / (WACC - g)
= $2,134.47 * (1 + 0.025) / (0.087 - 0.025)
= $2,134.47 * 1.025 / 0.062
≈ $35,427.65
Now,
The present value of the terminal value:
Present Value of Terminal Value = Terminal Value / (1 + WACC)^4
= $35,427.65 / (1 + 0.087)^4
≈ $25,059.60
Also,
The total present value of the cash flows:
Total Present Value = Present Value of Free Cash Flows + Present Value of Terminal Value
= $1,404 + $1,614.60 / (1 + 0.087) + $1,857.79 / (1 + 0.087)^2 + $2,134.47 / (1 + 0.087)^3 + $25,059.60
≈ $31,238.27
And,
Price per Share = Total Present Value / Number of Shares
= $31,238.27 / 532
≈ $58.74
Therefore, the price per share of the company's stock is approximately $58.74
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You invest 5,000 into a mutual fund today. In addition, you plan to invest another 1,800 annually beginning next year into the fund for 10 years. The mutual fund has a 3% front load and 0.8% expense ratio. If the fund earns 9% on the assets each year prior to any expenses, how much will you have at the end of 10 years after paying the expenses? Show your work (either in formula or calculator inputs & outputs) to receive full score.
The total amount you will have at the end of 10 years after paying the expenses, we need to consider the initial investment, annual investments, front load fee, expense ratio, and the growth of the mutual fund.
First, let's calculate the total amount invested over 10 years, including the initial investment and annual investments:
Total investments = Initial investment + (Annual investments * Number of years)
Total investments = $5,000 + ($1,800 * 10)
Total investments = $5,000 + $18,000
Total investments = $23,000
Next, let's calculate the front load fee, which is 3% of the total investments:Front load fee = Total investments * Front load fee rate
Front load fee = $23,000 * 0.03
Front load fee = $690
Now, let's calculate the annual expenses, which are 0.8% of the total investments each year:
Annual expenses = Total investments * Expense ratio
Annual expenses = $23,000 * 0.008
Annual expenses = $184
Next, let's calculate the growth of the mutual fund on the remaining investments after deducting the front load fee and annual expenses:
Remaining investments after front load fee = Total investments - Front load fee
Remaining investments after front load fee = $23,000 - $690
Remaining investments after front load fee = $22,310
Now, let's calculate the growth of the remaining investments over 10 years:
Growth after expenses = Remaining investments after front load fee * (1 + Fund growth rate)^Number of years
Growth after expenses = $22,310 * (1 + 0.09)^10
Growth after expenses = $22,310 * 1.09^10
Growth after expenses = $22,310 * 1.990858608
Growth after expenses ≈ $44,445.97
Finally, let's calculate the total amount you will have at the end of 10 years after paying the expenses:
Total amount = Growth after expenses - Annual expenses * Number of years
Total amount = $44,445.97 - ($184 * 10)
Total amount = $44,445.97 - $1,840
Total amount ≈ $42,605.97
Therefore, you will have approximately $42,605.97 at the end of 10 years after paying the expenses.
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