Customer feedback is an essential source of information when it comes to training needs assessment.
It is one of the primary sources of finding out where employees are lacking or where they need to improve the quality of their services. Feedback can be collected through direct contact with customers or by asking them to fill out a survey after visiting the store. Observation: Another way of finding out where employees need training is by observing their performance in their work.
The observer can monitor the employee's activities and evaluate their performance. Observation is useful because it allows the observer to see where the employee is excelling and where they are struggling. Supervisors: Supervisors are also a great source of information when it comes to training needs assessment.
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UAL,2004: Pulling out of bankruptcy Case
Harvard Business school
1. Why did UAL file for bankruptcy protection in December 2002?
2. What is the rationale for allowing companies to restructure their debts and operations under Chapter 11 bankruptcy protection?
a. What is the role of the ‘automatic stay,’ which prevents creditors from pursuing their claims to a defaulted borrower’s assets outside of bankruptcy court?
b. Why do we allow ‘debtor-in-possession’ financing for companies operating under Chapter 11 protection? Why are DIP loans granted seniority to firms’ prepetition obligations?
3. What are the incentives of the different parties involved in restructuring UAL? What are the incentives of the firm’s management? Secured creditors? DIP lenders? Unsecured creditors? Employees?
4. What are the important costs of financial distress that UAL is facing? How would these costs of financial distress vary across different industries?
5. Why has leverage in the airline industry been high relative to other industries?
6. As UAL, would you continue making required contributions to your pension plans?
7. As UAL, would you cancel your commitments to your pension plans?
An extensive examination of the company's financial state and the business environment at the time would be necessary to pinpoint the precise causes of UAL's bankruptcy filing in December 2002.
High debt levels, decreased sales, rising competition, economic downturns, and ineffective cost structures are all factors that frequently result in bankruptcy filings. It's possible that UAL dealt with some of these issues or all of them.
The automatic stay's function is: A crucial aspect of Chapter 11 bankruptcy is the automatic stay, which stops all collection efforts and legal actions taken by creditors against the debtor.
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2) Calculate the selling price for Fish and Chips with side of Coleslaw based on food cost percentage of (last digit of your student number) 2X%: 1 piece of Haddock 6 ounces = $3.50 1 tbsp. of Tartar sauce = $0.50 2 potatoes = $1.75 4oz of Coleslaw = $1.00 Make sure you show the entire math calculation. 3) When restaurant managers are looking to price a menu, different strategies can be used. Research and provide three different strategies that are used to price menu. 300-450 words.
Calculation of the selling price for Fish and Chips with side of Coleslaw based on food cost percentage of 3X%.
1 piece of Haddock 6 ounces = $3.50Tartar sauce = $0.50 2 potatoes = $1.75 4oz of Coleslaw = $1.00Total cost = $3.50 + $0.50 + $1.75 + $1.00 = $6.75Food cost percentage = last digit of your student number 3X%Mark up = 100% - food cost percentageMark up = 100% - 33% = 67%The selling price for Fish and Chips with a side of Coleslaw can be calculated as follows:Selling price = Total cost / (100% - Mark up%)Selling price = $6.75 / (100% - 67%)Selling price = $6.75 / 33%Selling price = $20.45Therefore, the selling price for Fish and Chips with side of Coleslaw based on food cost percentage of 3X% is $20.45.3) Strategies used to price the menu are as follows:1. Cost-plus pricing strategy:In this pricing strategy, the restaurant owner adds a markup to the food cost to arrive at the selling price. This is the most common pricing strategy in the restaurant industry.
The markup is determined based on the restaurant's target profit margin.2. Competition-based pricing strategy:In this pricing strategy, the restaurant owner sets the price based on the price of similar dishes in the market. The owner can charge a higher or lower price depending on the quality and reputation of the restaurant.3. Value-based pricing strategy:In this pricing strategy, the restaurant owner sets the price based on the value that the dish provides to the customer. The value can be determined by the quality, quantity, and taste of the dish. This strategy is used by high-end restaurants to charge a premium price for their dishes.
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I need calculations part and graph also.
1. Construct the payoff diagram for the purchase of an 85-strike S&R call and sale of a 100-strike S&R call.
2. Construct the payoff diagram for the purchase of an 85-strike S&R put and sale of a 100-strike S&R put.
Payoff diagram for an 85-strike S&R call and sale of a 100-strike S&R call: Limited profit potential with increasing asset price. Payoff diagram for an 85-strike S&R put and sale of a 100-strike S&R put: Limited profit potential with decreasing asset price.
Payoff Diagram for the purchase of an 85-strike S&R call and sale of a 100-strike S&R call: The payoff diagram can be constructed by considering the potential scenarios based on the underlying asset's price at expiration.
For asset prices below 85, both the purchased call and the sold call will have zero payoffs. As the price increases above 85, the purchased call will start generating a positive payoff, while the sold call will limit the overall profit potential. The diagram will show an increasing profit until the asset price reaches 100, after which the profit potential remains capped.Payoff Diagram for the purchase of an 85-strike S&R put and sale of a 100-strike S&R put: Similar to the call option strategy, the payoff diagram for the put option strategy involves analyzing the asset price at expiration.
For asset prices below 85, the purchased put will generate a positive payoff, while the sold put will offset some of the profit potentials. As the price decreases toward 100, the purchased put's payoff will decrease, and the sold put will limit the potential profit. The diagram will show an increasing profit until the asset price reaches 100, beyond which the profit potential becomes limited.To learn more about “payoff” refer to the https://brainly.com/question/22717652
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when hiring someone for a job where should you gather your
information from?
When hiring someone for a job, you should gather information from multiple reliable sources to make an informed decision. These sources include resumes and job applications, interviews, references, background checks, online presence, skill assessments, and internal referrals.
Resumes and applications provide initial information about the candidate, while interviews allow direct interaction to assess skills and cultural fit. References offer insights into past performance, and background checks verify credentials. Online presence reveals additional qualifications and industry involvement. Skill assessments test specific abilities, and internal referrals provide firsthand insights. Gathering information from diverse sources ensures a comprehensive understanding of the candidate's suitability for the job.
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An investment offers $10,000 per year for 15 years, with the first payment occurring one year from now. Assume the required return is 12 percent. a. What is the value of the investment today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be if the payments occurred for 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) c. What would the value be if the payments occurred for 75 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) d. What would the value be if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The present value of the investment, we can use the present value of an annuity formula, which discounts the cash flows by the required return rate.
a. Payments for 15 years:
Using the formula: PV = Payment * [1 - (1 + r)^(-n)] / r
where Payment = $10,000, r = 12% (0.12), and n = 15 years
PV = $10,000 * [1 - (1 + 0.12)^(-15)] / 0.12
b. Payments for 40 years:
Using the same formula with n = 40 years:
PV = $10,000 * [1 - (1 + 0.12)^(-40)] / 0.12
c. Payments for 75 years:
Using the same formula with n = 75 years:
PV = $10,000 * [1 - (1 + 0.12)^(-75)] / 0.12
d. Payments forever:
In this case, we have a perpetuity, so the formula becomes: PV = Payment / r; PV = $10,000 / 0.12
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A broker receives an order for three bonds: (a) 7% bond (pays interest on March and September 15) maturing on September 15, 2030; (b) 5.5% bond (pays interest on May and November 1) maturing on May 1, 2035; and (c) 10% bond (pays interest on January and July 8) maturing on July 8, 2025. All three bonds pay semi-annual interest and the current market interest rate is 9% (for all three).
(a)What prices would the broker quote for each of the three bonds if the sale is settled on May 4, 2022?
(b) How much accrued interest would the buyer need to pay on each of the bond?
(c) How much would the buyer actually pay for each of the bond?
A broker receives an order for three bonds: (a) 7% bond (pays interest on March and September 15) maturing on September 15, 2030; (b) 5.5% bond (pays interest on May and November 1) maturing on May 1, 2035; and (c) 10% bond (pays interest on January and July 8) maturing on July 8, 2025.
All three bonds pay semi-annual interest and the current market interest rate is 9% (for all three). 0.7083 years (8.5 is the number of months from May 15, 2022, to September 15, 2022, plus the number of months from September 15, 2022, to September 15, 2030), and FV is 1000. We can then compute the price of the bond PMT is half the coupon rate and is equal to 2.75%, yield rate is 9%, and time is 13.5/12 or 1.125 years (13.5 is the number of months from May 15, 2022, to November 1, 2022, plus the number of months from November 1, 2022, to May 1, 2035), and FV is 1000.
We can then compute the price of the bond:$\text{Price of second bond}=27.5\times \frac{1-\text{PVIF }(9\%,1.125)}{9\%}+1000\times \text{PVIF }(9\%,1.125)\ approx \$863.16$For the third bond, PMT is half the coupon rate and is equal to 5%, yield rate is 9%, and time is 2.5/12 or 0.2083 years (2.5 is the number of months from May 15, 2022, to July 8, 2022, plus the number of months from July 8, 2022, to July 8, 2025), and FV is 1000. (b) 5.5% bond (pays interest on May and November 1) maturing on May 1, 2035; and (c) 10% bond (pays interest on January and July 8) maturing on July 8, 2025. All three bonds pay semi-annual interest and the current market interest rate is 9% (for all three). For the second bond, the last coupon payment was on November 1, 2021. Since the sale is settled on May 4, 2022, the buyer needs to pay the accrued interest from November 1, 2021, to May 4, 2022, which is 184/365 or 0.5041 of the semi-annual coupon payment of $27.50, or approximately $13.88.
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Let's say our organization, STAPLES CANADA, is hiring 20 summer students this spring. you will need to create a checklist of what the new hires are supposed to do before they start working like online modules about the company, certifications etc. include a welcome letter.
please explain and answer
To onboard 20 summer students at STAPLES CANADA, a checklist needs to be created outlining the tasks new hires should complete before starting work.
This checklist should include online modules about the company, necessary certifications, and a welcome letter. These steps will ensure that new hires are equipped with the necessary knowledge and meet the requirements to begin their employment.
To effectively onboard the summer students at STAPLES CANADA, a checklist should be developed to guide them through the pre-employment tasks. The checklist should include online modules that provide an overview of the company's values, mission, and policies. These modules will familiarize the new hires with the organization's culture, expectations, and code of conduct.
Additionally, if any certifications are required for specific roles, such as safety training or industry-specific qualifications, they should be included in the checklist. The new hires should be provided with instructions on how to complete the necessary certifications, ensuring compliance with regulations and ensuring a safe work environment.
Lastly, a welcome letter should be included in the checklist. The welcome letter serves as an introduction to the company, expressing excitement about the new hires joining the team. It can provide important details such as the start date, location, reporting structure, and any additional information the new hires need to know.
By following this checklist, STAPLES CANADA can ensure that the summer students are well-prepared before they start working. This proactive approach to onboarding will facilitate a smoother transition into their roles, increase engagement, and set the stage for a positive and productive employment experience.
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a government policy generates $10,000 of benefits to underprivileged youth at a cost of $5,000 to taxpayers. the policy results in a pareto improvement. true false
The statement that the government policy generates $10,000 of benefits to underprivileged youth at a cost of $5,000 to taxpayers and results in a Pareto improvement is true.
A Pareto improvement occurs when at least one individual's situation is improved without making anyone else worse off. In this case, the government policy generates $10,000 of benefits to underprivileged youth. Since these benefits are directed specifically towards the underprivileged youth, their situation is improved. Additionally, the cost of implementing the policy is $5,000, which is borne by the taxpayers.
Since the policy generates greater benefits ($10,000) than the cost incurred ($5,000), it leads to a net gain in societal welfare. The underprivileged youth experience a positive change in their well-being without any negative impact on the taxpayers or other individuals in society. Therefore, the government policy qualifies as a Pareto improvement.
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TRUE / FALSE. "The organizational buying decision process has the same five
steps as the consumer buying decision process.
False; The organizational buying decision process is not the same as the consumer buying decision process.
The organizational buying decision process and the consumer buying decision process differ in terms of complexity and the number of steps involved. While the consumer buying decision process typically consists of five steps (need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation), the organizational buying decision process is more intricate and involves additional stages.
The organizational buying decision process typically includes the following steps: problem recognition, determination of product specifications, supplier search and qualification, proposal solicitation, supplier selection, order-routine specification, and performance review. These additional steps reflect the complexity of purchasing decisions made by organizations, which often involve multiple stakeholders, extensive research, negotiation, and long-term contracts.
Organizational buying decisions also tend to be more rational and objective compared to consumer decisions, as they are driven by factors such as cost-effectiveness, quality, reliability, and the ability to meet organizational needs and objectives.
The organizational buying decision process is not the same as the consumer buying decision process. While the consumer process generally follows five steps, the organizational process is more complex, involving additional stages and considerations. Recognizing these differences is crucial for marketers and organizations to effectively understand and navigate the purchasing behavior of businesses and institutions.
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Within Porter’s value chain, activities supporting the value chain are described as primary and secondary activities. Using an example organisation, critically discuss the value chain model and the role each activity plays in creating the final product
The value chain model consists of primary activities (such as inbound logistics, operations, and marketing) and secondary activities (such as procurement, and technology). An example is Starbucks, where primary activities create and deliver the final product.
The value chain model, developed by Michael Porter, identifies primary and secondary activities that contribute to creating and delivering a final product or service. Primary activities are directly involved in the production, delivery, and marketing of the product, while secondary activities support and enable the primary activities.
Let's take Starbucks as an example to illustrate the role of each activity. Inbound logistics involve sourcing and managing the supply of coffee beans and other ingredients. Operations include the coffee roasting and beverage preparation processes. Outbound logistics ensure the efficient distribution of products to Starbucks stores. Marketing and sales activities focus on creating brand awareness, developing marketing campaigns, and attracting customers. Starbucks' strong brand image and extensive marketing efforts contribute to its success. Supporting the primary activities, procurement ensures the availability of high-quality materials, including coffee beans. Technology development plays a crucial role in Starbucks' operations, including the development of digital payment systems, mobile ordering, and customer engagement platforms. Overall, Starbucks' value chain demonstrates how primary activities like inbound logistics, operations, marketing, and outbound logistics are supported by secondary activities like procurement and technology development. By effectively managing and coordinating these activities, Starbucks creates a unique and valuable customer experience, resulting in its position as a leading coffee retailer globally.
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In recent years, demand for electric bicycles has increased considerably in the UK as well in EU countries (Statista 2021, 2022). Consider that you are part of the management team for a company that already sells traditional bicycles but wants to extend its offering to electric bicycles to exploit the soaring demand. The company has the required technological capability to manufacture electric bicycles to a high standard and its traditional bicycles are mid-range both in terms of quality and prices. a. In order to understand who your target audience should be, segmentation is key. Select four segmentation criteria (one from each of the four main categories) and carefully justify why each of those criteria should be particularly relevant for the company. b. Drawing on the chosen segmentation criteria, describe a potential, lucrative target segment for the company. Also explain, in a concise manner, how you would position the offering for that segment. c. Finally, critically discuss whether it would be a better idea to sell the electric bicycle under the same brand name you use for the traditional bicycles or under a new brand.
Electric bicycles have become increasingly popular in recent years, with demand growing both in the UK and throughout the European Union. A company that already sells traditional bicycles but is now looking to take advantage of this burgeoning demand by expanding its product line to include electric bicycles must understand the audience it is targeting.
The company has the necessary technological expertise to manufacture electric bicycles to a high standard, and its traditional bicycles are mid-range in terms of quality and price. Therefore, the company must use segmentation criteria to identify its target market.
a. Segmentation is essential in order to identify the target audience. The four key segmentation criteria are:
Demographic: The first criterion is demographic segmentation, which divides the market into different groups based on age, gender, income, education, and other similar variables. This would be particularly relevant for the company since it wants to target customers who are interested in purchasing an electric bicycle that is both high-quality and affordable. The company can focus on people who are eco-friendly and who are interested in sustainable modes of transportation.
Psychographic: Psychographic segmentation focuses on attitudes, values, personality, and lifestyles. This would be particularly relevant for the company since electric bicycles are seen as environmentally friendly and trendy. The company can focus on people who are concerned about the environment, are fitness enthusiasts, and who like to try new things.
Geographic: Geographic segmentation divides the market into regions based on climate, population density, and other similar factors. This would be particularly relevant for the company since it can target people who live in cities and urban areas where the traffic is congested. The company can focus on people who live in crowded areas where traffic is an issue and who are interested in saving money on their daily commute.
Behavioral: Behavioral segmentation divides the market into groups based on their purchasing behavior, loyalty, and usage rates. This would be particularly relevant for the company since it can target people who are interested in buying high-quality, reliable electric bicycles at an affordable price.
b. A potential, lucrative target segment for the company based on the chosen segmentation criteria would be urban dwellers who are eco-friendly and interested in a healthy lifestyle. The company can position the electric bicycles as an environmentally friendly mode of transportation that is also good for your health. The company can also position the electric bicycles as affordable, reliable, and easy to use. It can offer easy financing and maintenance services to make the purchase even more appealing.
c. It would be a better idea to sell the electric bicycle under a new brand name. Since the company is branching out into a new market segment, it should establish a new brand name for its electric bicycles. This would enable the company to create a separate identity and brand image for its electric bicycles, without detracting from the established brand name that the company has already developed for its traditional bicycles. A new brand name will help the company to avoid brand confusion, and it will also help it to market its electric bicycles to a different target audience that might not be interested in the company's traditional bicycles. In this way, the company can build a strong brand identity for its electric bicycles, separate from its existing brand.
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Please summary this article, "A case study on Tesla, Inc : The
world’s most exciting Automobile company" by Ashley Lobo.
The case study by Ashley Lobo explores Tesla, Inc. as the world's most exciting automobile company. It highlights Tesla's innovative business model, technological advancements, and commitment to sustainability, positioning them as a groundbreaking force in the automotive industry.
Title: A Case Study on Tesla, Inc: The World's Most Exciting Automobile Company
Summary: In the article "A Case Study on Tesla, Inc: The World's Most Exciting Automobile Company" by Ashley Lobo, the focus is on analyzing the success and impact of Tesla, Inc. as a leading automotive company. Tesla has gained recognition for its innovative electric vehicles and disruptive approach to the automobile industry.
The article delves into Tesla's unique business model, technological advancements, and their impact on the market. It highlights the company's commitment to sustainability and clean energy, as well as their ambitious goals for the future.
Overall, the case study portrays Tesla, Inc. as a groundbreaking and influential player in the automotive sector, setting new standards for electric vehicles and shaping the future of transportation.
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what is the primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes?
The primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes are that both sole proprietorship and a partnership expose their owners to unlimited personal liability for business debts and legal obligations.
In a corporation, the owners' liability is limited to the amount of their investment.
The sole proprietorship is a business owned by an individual that is not a separate legal entity from its owner, who takes responsibility for its debts and legal obligations. The main disadvantage of the sole proprietorship is that the owner bears all the risks of the business, and their personal assets are subject to the creditors' claims. There is also no separate tax entity for the business, which means that the owner pays personal income tax on the business's profits.
The partnership is a business owned by two or more individuals who agree to share profits and losses. Each partner is personally liable for the partnership's debts and obligations, and they also face unlimited liability. A partnership's primary disadvantage is that it lacks a separate legal identity, and the partners are responsible for each other's actions and debts.
The corporation is a legal entity that is separate from its owners and has its legal identity. The primary advantage of a corporation is that it limits the owners' liability to the amount of their investment, and it also enjoys perpetual existence. A corporation also has a separate tax entity from its owners, which means that it pays corporate taxes on its profits and the owners pay personal income tax on their dividends. In conclusion, the primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes is unlimited personal liability for business debts and legal obligations.
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mass media campaigns are useful in promoting awareness of physical activity as well as getting individuals to adopt and maintain
Mass media campaigns are an effective tool in promoting awareness of physical activity and encouraging individuals to adopt and maintain an active lifestyle.
Mass media campaigns are an effective method of promoting physical activity and persuading individuals to adopt and maintain an active lifestyle. These campaigns can be developed to reach out to a wide range of people, including individuals with disabilities, those living in disadvantaged communities, and other marginalized groups. This is accomplished by using a range of media platforms such as radio, television, social media, and newspapers to disseminate information and persuade individuals to make healthier lifestyle choices.
Mass media campaigns are generally designed to be interactive, educational, and motivational, making use of creative approaches to reach their target audience. For instance, social media can be used to facilitate engagement between individuals and experts in the field of health and physical activity. This way, individuals can get customized information and advice from experts on how to adopt and maintain an active lifestyle that is suitable for their unique needs.
In conclusion, mass media campaigns are an effective tool in promoting awareness of physical activity and encouraging individuals to adopt and maintain an active lifestyle. These campaigns can be designed to reach out to a wide range of people through various media platforms and create a lasting impact.
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.16 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value (salvage value) of $168,000. The project requires an initial investment in net working capital of $240,000. The project is estimated to generate $1,920,000 in annual sales, with costs of $768,000. The tax rate is 32 percent and the required return on the project is 11 percent.
Required:
(a)What is the project's year 0 net cash flow (or cash flow from assets)?
(b)What is the project's year 1 net cash flow (or cash flow from assets)?
(c) What is the project's year 2 net cash flow (or cash flow from assets)?
(d)What is the project's year 3 net cash flow (or cash flow from assets)?
(e)What is the NPV?
Project's year 0 net cash flow (or cash flow from assets) would be $(2,400,000), project's year 1 net cash flow (or cash flow from assets) would be $1,253,760 ,the NPV of the project would be $1,069,189.72, with the year 2 net cash flow (or cash flow from assets) of the project being $1,013,760 and year 3 net cash flow (or cash flow from assets) of the project being $1,181,760.
Given data are:
Initial fixed asset investment of $2.16 million
Market value (salvage value) of $168,000
First $240,000 contribution to net working capital.
Annual sales = $1,920,000Costs = $768,000
Tax rate = 32 percent
Required return on the project = 11 percent
(a) Net cash flow from assets (or year 0 net cash flow)
Initial Fixed Asset Investment $(2,160,000)
Initial Investment in Net Working Capital$(240,000)
Total $(2,400,000)
(b) Net cash flow from assets for the first year
Sales revenue$1,920,000
Less: costs$(768,000)EBITDA$1,152,000
Depreciation$720,000EBIT$432,000
Taxes at 32% $138,240
Net Income $293,760
Add: Depreciation $720,000
Operating Cash Flow $1,013,760
Add: Net Working Capital $240,000
Total Cash Flow $1,253,760
(c) Year 2 net cash flow, also known as assets' cash flow
Sales revenue$1,920,000
Less: costs $(768,000)EBITDA$1,152,000
Depreciation $720,000EBIT$432,000
Taxes at 32% $138,240
Net Income $293,760
Add: Depreciation $720,000
Operating Cash Flow $1,013,760
Add: Net Working Capital$0
Total Cash Flow $1,013,760
(d) Year 3 net cash flow, also known as assets' cash flow $1,920,000 was made in sales.
Less: costs$(768,000)EBITDA $1,152,000
Depreciation$720,000EBIT $432,000
Taxes at 32%$138,240
Net Income$293,760
Add: Depreciation$720,000
Salvage Value$168,000
Operating Cash Flow$1,181,760
Add: Net Working Capital$0
Total Cash Flow $1,181,760
(e) NPV of the project= $1,069,189.72
Therefore, the NPV of the project is $1,069,189.72.
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You deposit $ 9,155 in an account that pays 3 % simple
interest. How much do you have after 18 years? If
needed, round your answer to zero decimal places.
After 18 years, one would have $14,093.00. Simple interest is the kind of interest that only applies to the principal amount. The principal amount is the amount initially invested or borrowed.
Simple interest is calculated using the formula I=Prt, where P is the principal, r is the rate of interest, and t is the time in years. The given data is: Amount deposited, P = $9,155Rate of interest, r = 3%Time period, t = 18 years.
Now, substituting the given values in the formula for simple interest,
I = PrtI = $9,155 × 3/100 × 18I = $9,155 × 0.54I = $4,937.7
Now, to find out the total amount after 18 years, add the interest earned in 18 years to the initial amount. So, the total amount after 18 years is given by : Total amount = P + I
Total amount = $9,155 + $4,937.7
Total amount = $14,092.7
Therefore, the amount that one will have after 18 years is $14,093.00 (rounded to the nearest dollar).
The total amount is computed by adding the amount of interest earned in 18 years to the initial amount deposited. The interest rate is 3% and the initial amount deposited is $9,155.
After 18 years, one would have $14,093.00.
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On May 1, 2021, Shamrock Construction Ltd. issued $700,000 of 20-year, 6% bonds at 100. The bonds pay interest semi-annually on November 1 and May 1. Shamrock has a calendar year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places, e.g. 5,276.) (a) Record the issuance of the bonds on May 1, 2021. (b) Record the first interest payment on November 1, 2021. (c) Prepare any adjusting entry required at December 31, 2021. (d) Record the second interest payment on May 1, 2022. (e) Assume that on May 1, 2022, immediately after paying the semi-annual interest, Shamrock redeemed 50% of the bonds at 98. Record the redemption of the bond, (f) Record the third interest payment on November 1, 2022, for the remaining bonds.
Shamrock Construction Ltd. issued $700,000 of 20-year, 6% bonds on May 1, 2021. The bonds pay semi-annual interest on November 1 and May 1. The issuance of the bonds, first interest payment, adjusting entry at December 31, second interest payment, redemption of 50% of the bonds, and third interest payment can be recorded accordingly.
(a) On May 1, 2021, Shamrock Construction Ltd. issued $700,000 of 20-year, 6% bonds at 100. The entry to record the issuance of the bonds would be:
Debit: Cash ($700,000)
Credit: Bonds Payable ($700,000)
(b) On November 1, 2021, the first interest payment is due. The entry to record the interest payment would be:
Debit: Interest Expense ($21,000: $700,000 * 6%)
Credit: Cash ($21,000)
(c) At December 31, 2021, an adjusting entry is required to accrue the interest expense for the period from November 1 to December 31. Assuming a full year has 12 months, the period from November 1 to December 31 is 2/12 of a year. The adjusting entry would be:
Debit: Interest Expense ($7,000: $21,000 * 2/12)
Credit: Interest Payable ($7,000)
(d) On May 1, 2022, the second interest payment is due. The entry to record the interest payment would be the same as in (b):
Debit: Interest Expense ($21,000)
Credit: Cash ($21,000)
(e) Assuming that on May 1, 2022, Shamrock Construction Ltd. redeemed 50% of the bonds at 98, the entry to record the redemption would be:
Debit: Bonds Payable ($350,000: $700,000 * 50%)
Debit: Loss on Bond Redemption (calculate the difference between the carrying value and the redemption amount)
Credit: Cash (total redemption amount)
(f) On November 1, 2022, the third interest payment is due for the remaining bonds. The entry to record the interest payment would be the same as in (b):
Debit: Interest Expense ($21,000)
Credit: Cash ($21,000)
By recording these transactions, Shamrock Construction Ltd. appropriately records the issuance of bonds, interest payments, adjusting entries, bond redemption, and remaining interest payments in accordance with the terms of the bond issuance and accounting principles.
(Note: The specific amounts for loss on bond redemption and cash in entries (e) and (f) would need to be calculated based on the given information and bond redemption details.)
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Growth Corp is a high growth company. It has an expected dividend at the end of this year of R1. Those dividends are expected to grow at a constant rate of 10% forever. If the discount rate is 20% and the payout ratio is 80%, calculate the present value of growth opportunities.
a. R 2.84
b. R 5.63
c. R 4.37
d. R 3.75
e. R10.00
The present value of growth opportunities for Growth Corp is R49.00. Therefore, the correct option is (e) R10.00.
The present value of growth opportunities is calculated as follows:
PVGO = Expected dividend / (Discount rate - growth rate)
For Growth Corp, the expected dividend at the end of this year is R1, and it is expected to grow at a constant rate of 10% forever. Therefore, the dividend in the next year will be R1.1, and the dividend in two years will be R1.21, and so on. The present value of all these future dividends can be calculated as follows:
R1 + R1.1/1.2 + R1.21/1.44 + ...= R1(1 + 1.1/1.2 + 1.21/1.44 + ...)
This is an infinite geometric series with a common ratio of 1.1/1.2 = 0.9167. The sum of an infinite geometric series with a common ratio between -1 and 1 can be calculated as follows:
Sum = First term / (1 - common ratio)
Using this formula, we get:
Sum = R1 / (1 - 0.9167) = R12.00
Now, we can calculate the present value of the expected dividend as follows:
PV = Expected dividend / (Discount rate - growth rate)
PV = R1 / (0.2 - 0.1) = R10.00
The payout ratio is given as 80%, which means that the company is paying out 80% of its earnings as dividends and retaining the remaining 20% for growth. Therefore, the present value of growth opportunities (PVGO) is calculated as follows:
PVGO = Present value of the expected dividend / Payout ratio - Expected dividend
PVGO = R10.00 / 0.2 - R1 = R49.00
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The information here is the same for answering questions 39 to 40. A solar panel manufacturer in the US wants to manage inventory for a particular component better. The Korean supplier's lead time is 2 months and the manufacturer wants stock-out frequency less than 1%. Average monthly demand is 1000 units with standard deviation of 316 units. (Choose the closest number if needed.) What is the safety stock for the manufacturer? 659 2,360 2,000 200 1.040 What is the reorder point for the manufacturer? 2,968 2,659 4,350 3,040 2,000
Reorder Point = Lead time demand + Safety StockWhere,Lead time demand = Average demand during lead time= 1000 x 2 = 2000 units (since lead time is 2 months).Safety stock = 2,360 unitsReorder Point = 2000 + 2360= 4,360Therefore, the reorder point is 4,360 units.Thus, the correct option is 4,350.
Given: The lead time is 2 months, stock-out frequency is less than 1%, average monthly demand is 1000 units, and the standard deviation is 316 units.To find: Safety Stock and Reorder point.Safety Stock:The safety stock is the stock which is kept to ensure that the product is always available when the stock goes down due to any reason. It is used as a buffer stock to cover for uncertainties in demand and supply.Let the desired service level be P and lead time demand be L. Then the formula for calculating safety stock is given as:SS = z x sqrt (L) x σWhere, z = z-value of the normal distribution for the desired service levelσ = Standard DeviationL = Lead Time DemandTo calculate safety stock, we need the value of z for a 99% service level (less than 1% stock-out frequency).From the normal distribution table, for a 99% service level, the z-value is 2.33.SS = 2.33 x sqrt (2000) x 316= 2,360Therefore, the safety stock is 2,360 units.Reorder point:The reorder point is the inventory level at which an order for replenishment of inventory is placed with the supplier. It is calculated using the following formula: Reorder Point = Lead time demand + Safety StockWhere,Lead time demand = Average demand during lead time= 1000 x 2 = 2000 units (since lead time is 2 months).Safety stock = 2,360 unitsReorder Point = 2000 + 2360= 4,360Therefore, the reorder point is 4,360 units.Thus, the correct option is 4,350.
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Joseph Ltd. has a stock of 4,000 containers valued at $. 5 each. During the year, the Company purchased 8,000 containers. It issued 80,000 containers to customers and received 74,000 containers from them; 80 containers were damaged of which 40 were repaired at a cost of $. 2 per container. The purchases are made at $. 10 per container but stocks are valued at $. 5 each to allow for depreciation. You are required to prepare the Containers Stock Account.
The Containers Stock Account has a closing stock of 6,000 containers valued at $. 5 each.
Given data:Joseph Ltd. has a stock of 4,000 containers valued at $. 5 each. During the year, the Company purchased 8,000 containers. It issued 80,000 containers to customers and received 74,000 containers from them; 80 containers were damaged of which 40 were repaired at a cost of $. 2 per container. The purchases are made at $. 10 per container but stocks are valued at $. 5 each to allow for depreciation.
A Containers Stock Account is prepared to keep the track of containers in a business. It is prepared by following a few steps:
Step 1: Record the opening stock of containers i.e. 4,000 units (valued at $. 5 per container) in the Containers Stock Account. These will be debited to the account.
Step 2: Record the purchase of 8,000 containers at a cost of $. 10 each. These will be debited to the Containers Stock Account.
Step 3: Record the issue of 80,000 containers to customers. These will be credited to the Containers Stock Account.
Step 4: Record the receipt of 74,000 containers from customers. These will be debited to the Containers Stock Account.
Step 5: Record the damaged containers (80). These will be credited to the Containers Stock Account.
Step 6: Record the repairs of 40 damaged containers (at a cost of $. 2 each). These will be debited to the Containers Stock Account.
Now, let's make the Containers Stock Account:Joseph Ltd.Containers Stock AccountParticularsDebit ($)Credit ($)Opening Stock2,000 -Purchase8,000 -Issue-80,000Receipt74,000 -Damage-80Repair2,000 -Closing Stock -6,000Total10,00010,000
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According to one model developed to provide practical guidelines, an effective goal conforms to three "must" criteria: It expresses a specific and measurable result, and it sets a date for achieving that result. It should also only have a single result. It is not advisable to put multiple objectives together. So the goal should follow this format:
(1) To + (2) Action Verb + (3) A Single Specific and Measurable Result + (4) Target Date.
Based on these guidelines, evaluate the following six goals and complete the two required parts below.
To complete the project within two weeks.
To be perceived as the highest quality hotel in the tri-state by the end of 2030.
To improve productivity in my department.
To write objectives next week.
To sell 10% more nachos and 5% more beer at the hockey game on February 20, 2022.
To increase sales in 2030.
Complete the following two parts:
For each of the six goals, write a brief critique (2-3 sentences) based on the guidelines (the "must" criteria) provided at the beginning of this assignment. For example, is there any component that is missing? Is everything clear? How do you think it can be improved?
Then based on your critique, please rewrite to improve these goals.
1. Goal: To complete the project within two weeks.
Critique: This goal is specific and sets a target date, but it lacks a measurable result. It does not clearly state what the desired outcome or deliverables of the project are.
Rewritten Goal: To successfully deliver the project within two weeks, meeting all project requirements and client satisfaction.
2. Goal: To be perceived as the highest quality hotel in the tri-state by the end of 2030.
Critique: This goal is specific, measurable, and sets a target date. However, it does not include an action verb, which makes it less actionable and clear.
Rewritten Goal: To position our hotel as the tri-state region's premier luxury destination by consistently delivering exceptional service and exceeding guest expectations by the end of 2030.
3. Goal: To improve productivity in my department.
Critique: This goal is not specific or measurable. It does not define what aspect of productivity needs improvement or how it will be measured.
Rewritten Goal: To increase departmental productivity by 15% within six months through the implementation of streamlined processes and effective resource allocation.
4. Goal: To write objectives next week.
Critique: This goal is specific and sets a target date, but it lacks a measurable result. It does not clarify what objectives need to be written or their intended outcome.
Rewritten Goal: To develop clear and measurable objectives for the project by the end of next week, aligning them with the overall project goals and ensuring they are achievable and relevant.
5. Goal: To sell 10% more nachos and 5% more beer at the hockey game on February 20, 2022.
Critique: This goal is specific, measurable, and sets a target date. However, it does not include an action verb, and it combines two separate objectives into a single goal.
Rewritten Goal: To increase nacho sales by 10% and beer sales by 5% at the hockey game on February 20, 2022, through targeted marketing initiatives and improved concessions operations.
6. Goal: To increase sales in 2030.
Critique: This goal lacks specificity, measurability, and a target date. It does not provide any details on the desired sales increase or how it will be achieved.
Rewritten Goal: To achieve a 20% year-over-year sales growth in 2030 by implementing effective marketing strategies, expanding the customer base, and launching innovative product offerings.
By incorporating action verbs, specific and measurable results, and target dates into the rewritten goals, they become more actionable, clear, and aligned with the guidelines for effective goal-setting.
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Consider a $1000 par value bond issued by AT &T with a maturity date of 2032 and a stated coupon rate of 8.5 percent. On January 1, 2013, the bond had 20 years left to maturity, and the market’s required yield to maturity for similar rated debt was 7.5 percent. What is the value of the bond? What is the value of bond If market’s required yield to maturity was 3.75 percent for six months?
The value of the bond with a yield to maturity of 7.5% is $1,740.59. The value of the bond with a yield to maturity of 3.75% for six months is $1,376.76.
To calculate the value of the bond, we can use the present value formula for a bond's cash flows. The cash flows consist of periodic coupon payments and the final principal payment.
1. Value of the bond with a yield to maturity of 7.5%:We have a $1,000 par value bond with a coupon rate of 8.5%. The bond has 20 years left to maturity. The market's required yield to maturity is 7.5%.
Using the present value formula, we can calculate the value of the bond as follows:
Coupon payment = (Coupon rate * Par value) / Number of coupon payments per year
Coupon payment = (8.5% * $1,000) / 2 (assuming semi-annual coupon payments)
Coupon payment = $42.50
Number of coupon payments remaining = Number of years remaining * Number of coupon payments per year
Number of coupon payments remaining = 20 * 2 = 40
Value of the bond = Present value of coupon payments + Present value of principal payment
Present value of coupon payments = Coupon payment * [1 - (1 + Yield to maturity / Number of coupon payments) ^ -Number of coupon payments remaining] / (Yield to maturity / Number of coupon payments)
Present value of coupon payments= $42.50 * [1 - (1 + 7.5% / 2) ^ -40] / (7.5% / 2)
Present value of coupon payments= $42.50 * (1 - 0.433466) / (0.0375 / 2)
Present value of coupon payments= $42.50 * 0.566534 / 0.01875
Present value of coupon payments= $1,287.60
Present value of principal payment = Par value / (1 + Yield to maturity / Number of coupon payments) ^ Number of coupon payments remaining
Present value of principal payment = $1,000 / (1 + 7.5% / 2) ⁴⁰
Present value of principal payment = $1,000 / (1 + 0.0375) ⁴⁰
Present value of principal payment = $1,000 / 2.208519
Present value of principal payment = $452.99
Value of the bond = Present value of coupon payments + Present value of principal payment
= $1,287.60 + $452.99
= $1,740.59
Therefore, the value of the bond with a yield to maturity of 7.5% is $1,740.59.
2. Value of the bond with a yield to maturity of 3.75% for six months:For this scenario, we need to adjust the time period and calculate the present value for the adjusted cash flows.
The bond has 20 years left to maturity, which is equivalent to 40 semi-annual periods. However, we are considering a yield to maturity of 3.75% for six months, which is only for half of a period.
Using the same formula as above, with the adjusted parameters:
Present value of coupon payments = $42.50 * [1 - (1 + 3.75% / 2) ^ -39] / (3.75% / 2)
Present value of coupon payments= $42.50 * (1 - 0.495263) / (0.01875 / 2)
Present value of coupon payments= $42.50 * 0.504737 / 0.009375
Present value of coupon payments= $850.20
Present value of principal payment = $1,000 / (1 + 3.75% / 2) ³⁹
Present value of principal payment = $1,000 / (1 + 0.01875) ³⁹
Present value of principal payment = $1,000 / 1.898111
Present value of principal payment = $526.56
Value of the bond = Present value of coupon payments + Present value of principal payment
Value of the bond = $850.20 + $526.56 = $1,376.76
Therefore, the value of the bond with a yield to maturity of 3.75% for six months is $1,376.76.
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A shock to aggregate supply will also have different outcomes when there are different assumptions about the formation of the level of expected inflation. As in Question 4, one assumption is that the level of expected inflation equals lagged inflation. The level of expected inflation changes over time. The second assumption is that the level of expected inflation is anchored to the central bank's target value and never changes. Begin in medium-run equilibrium where actual and expected inflation equal 2% in period t. Then there is a permanent increase in the price of oil in period (t + 1). Parts (a), (b) and (c) assume expected inflation in each period equals lagged inflation from the previous period. For example, in period (t + 2) +2 = π₁+1 and in period (t + 1), π+1 = T₁. a. How does the PC curve shift from period t to period (t + 1)? Assume that the central bank does not change the real policy rate. What happens to output in period (t + 1) compared to period t? What happens to inflation in period (t + 1) compared to period (t)? b. Consider the period (t + 2) equilibrium under the assumption that #₁+2 = ₁+1 and that the central bank does not change the real policy rate. How does inflation in period (t + 2) compare to inflation in period (t + 1)? How does output in period (t + 2) compare to output in period (t + 1)? c. Is the policy choice to maintain the real policy rate at its period t level sustainable? Parts (d), (e) and (f) assume expected inflation remains equal to target inflation, so π = in all periods. d. Consider the period (t + 1) equilibrium given the assump- tion that +1 = . If the central bank leaves the real policy rate unchanged, how does actual inflation in period (t + 1) compare to actual inflation in period t? e. Consider the period (t + 2) equilibrium given the assump- tion that +2 = 7 and assuming that the central bank leaves the real policy rate unchanged. How does actual inflation in period (t + 2) compare to inflation in period (t + 1)? f. Is the policy choice to maintain the real policy rate at the period t level a sustainable policy? Comparing the economic outcomes in parts (a), (b) and (c) to the economic outcomes in (d), (e) and (f) g. Compare the inflation and output outcomes in part (a), (b) and (c) to that in parts (d), (e) and (f). h. Which assumption about expected inflation, do you think is more realistic. Discuss.
a. The PC curve will shift from period t to period (t+1) and it will shift leftward, which means that the actual inflation rate will be greater than the expected inflation rate, and as a result, output will decrease in period (t+1) compared to period t. Inflation will be higher in period (t+1) than in period (t).
b. Inflation in period (t+2) will be higher than inflation in period (t+1), and output in period (t+2) will be lower than output in period (t+1).
c. No, the policy choice to maintain the real policy rate at its period t level is not a sustainable policy.
d. If the central bank leaves the real policy rate unchanged and if the expected inflation equals target inflation, the actual inflation in period (t+1) will be equal to inflation in period t.
e. If the central bank leaves the real policy rate unchanged and if the expected inflation equals target inflation, actual inflation in period (t+2) will be the same as inflation in period (t+1).
f. No, the policy choice to maintain the real policy rate at the period t level is not a sustainable policy. The reason is that as inflation increases, the real interest rate decreases, which stimulates the economy but increases inflation. Similarly, if inflation is less than expected, the real interest rate rises, the economy slows, and inflation decreases.
g. The outcomes for inflation and output in parts (a), (b), and (c) are different from those in parts (d), (e), and (f). When expected inflation is equal to lagged inflation, then a shock to aggregate supply can cause inflation to rise and output to fall, and a policy that maintains the real policy rate at its period t level is not sustainable. When expected inflation is equal to target inflation, the shock to aggregate supply will have less effect on inflation and output than when expected inflation equals lagged inflation.h. In my opinion, the assumption about expected inflation being anchored to the central bank's target value is more realistic than the assumption that expected inflation equals lagged inflation. The reason for this is that in a well-functioning economy, it is more important to anchor inflation expectations to a reasonable level of inflation rather than to base inflation expectations on the inflation rate in the previous period.
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Provide a brief summary of the IMF, including its purpose, Special Drawing Rights (SDR), and the Jamaica agreement as well as any other pertinent information. Go to the IMF’s web page, How We Do It (Links to an external site.).
Watch at least one video from the IMF video page (https://www.imf.org/external/mmedia/index.aspx (Links to an external site.)) and review at least one "popular data latest update" report from https://www.imf.org/en/data. (Links to an external site.)Report back to the class on what information you gathered from these two IMF sources. According to the information you reviewed on the IMF pages, what is your view on the current global monetary state? Support your answer with at least one credible, recent source in addition to the course textbook. Your initial response should be 200 to 300 words.
The International Monetary Fund (IMF) is an international organization consisting of 190 member countries. Its primary purpose is to promote global economic stability and growth by providing financial assistance, policy advice, and technical assistance to its member countries.
The IMF aims to maintain stable exchange rates, facilitate international trade, promote employment and sustainable economic growth, and reduce poverty around the world.
One important tool utilized by the IMF is the Special Drawing Rights (SDR). The SDR is an international reserve asset created by the IMF to supplement member countries' official reserves. It serves as a unit of account and can be exchanged for freely usable currencies. The SDR helps to provide liquidity and support stability in the international monetary system.
The Jamaica Agreement, also known as the Second Amendment to the IMF's Articles of Agreement, was adopted in 1976. It marked a significant shift in the IMF's role and operations. The agreement focused on promoting the effective management of global economic interdependence, encouraging sound economic policies, and providing financial assistance to member countries facing balance of payments problems.
From reviewing the IMF's web page and watching one of their videos, as well as reviewing a popular data latest update report, it is clear that the IMF is actively monitoring and addressing various global economic challenges. The IMF's web page provides a wealth of information on topics such as global economic outlook, fiscal policies, financial stability, and sustainable development. The videos available on their website cover a range of topics, including discussions on economic recovery, policy priorities, and global financial stability.
Based on the information gathered, it is evident that the current global monetary state is a mixed picture. While some countries are experiencing robust economic growth and recovery, others are facing challenges such as high debt levels, fiscal imbalances, and structural constraints. The IMF emphasizes the importance of policy coordination, reforms, and investment in areas such as infrastructure and human capital to promote sustainable and inclusive growth.
In support of the analysis, the World Economic Outlook report by the IMF (April 2023) highlights the divergent paths of countries' economic recoveries and the risks that lie ahead. It emphasizes the need for continued policy support, targeted measures to address inequality, and policy adjustments to navigate potential headwinds and uncertainties.
Overall, the IMF's efforts and analysis suggest that while there are positive signs of recovery, global economic challenges remain, requiring proactive policy measures and international cooperation to ensure stability and sustainable growth.
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Which of the following is not required to formally convert a Limited Partnership into a Limited Liability Company?
a. a duly passed resolution to amend the Memorandum of Association and Articles of Association of the company.
b.the completion of at least 2 audited financial years of the company as from the date of its registration.
c.the issuance of a new business license.
d.the unanimous consent of the partners.
The Correct option is B. the completion of at least 2 audited financial years of the company as from the date of its registration. A limited partnership is an association consisting of at least one general partner and one limited partner.
The general partner is responsible for managing the partnership's activities, while the limited partner is responsible for contributing capital to the partnership and is only responsible for the debts and obligations of the partnership to the extent of the contribution. Limited partnerships are created by filing a certificate of limited partnership with the Secretary of State.
Limited Liability Company: A limited liability company is a company in which the owners, known as members, have limited liability for the company's debts and obligations. In other words, the owners of an LLC are not personally responsible for the company's debts or obligations, except to the extent of their investment in the company. Members of an LLC can participate in management or delegate management responsibilities to one or more managers. Therefore, to convert a Limited Partnership into a Limited Liability Company, there is no requirement of completion of at least 2 audited financial years of the company as from the date of its registration.
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On January 1, 2018, Young Corporation signed a $160,000, ten-year, 9% note. The loan required Young to make payments annually on December 31 of $16,000 principal plus interest. 1. Journalize the issuance of the note on January 1, 2018 2. Journalize the first payment on December 31, 2018. (Record de bits first, then credits. Select explanations on the last line of the journal entry.)
1. The journal entry would be: Debit - Cash account $160,000Credit.
2. The journal entry for the first payment would be: Debit - Notes payable $14,400Debit - Interest payable $1,600 Credit - Cash account $16,000
1. Journalize the issuance of the note on January 1, 2018On January 1, 2018, Young Corporation signed a $160,000, ten-year, 9% note, and it is due on December 31, 2027. They received $160,000 as cash, and hence the journal entry would be: Debit - Cash account $160,000Credit - Notes payable $160,0002. Journalize the first payment on December 31, 2018.The annual payment would be $16,000 (principal of $16,000 plus interest) for ten years, as stated in the question. The interest can be computed as follows: Interest = Principal × rate × time= $160,000 × 9% × 1 year = $14,400The journal entry for the first payment would be: Debit - Notes payable $14,400Debit - Interest payable $1,600 ( $16,000 - $14,400)Credit - Cash account $16,000.
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Curacao Pharmaceutical's cost of debt is 7 percent. The risk-free rate of interest is 3 percent. The expected return on the market portfolio is 8 percent. Effective tax rate is 25 percent. Its optimal capital structure is 60 percent debt and 40 percent equity. i. Calculate cost of equity, if Curacao's beta is estimated at 1.1. ii. Based on the answer in (b) (i), compute weighted average cost of capital (WACC).
To calculate the cost of equity for Curacao Pharmaceuticals, we use the Capital Asset Pricing Model (CAPM) formula. Given a risk-free rate of 3%, an expected market return of 8%, and a beta of 1.1, the cost of equity can be calculated.
Once we have the cost of equity, we can calculate the weighted average cost of capital (WACC) using the optimal capital structure of 60% debt and 40% equity, along with the cost of debt. The WACC represents the average cost of financing for the company and is used to evaluate investment projects.
i. To calculate the cost of equity, we use the CAPM formula: Cost of Equity = Risk-Free Rate + Beta * (Expected Market Return - Risk-Free Rate). Plugging in the values, the cost of equity is 3% + 1.1 * (8% - 3%) = 7.5%.
ii. To calculate the WACC, we need to consider the weights of debt and equity in the capital structure. The WACC formula is: WACC = (Weight of Debt * Cost of Debt) + (Weight of Equity * Cost of Equity). Plugging in the values, the WACC becomes 0.6 * 7% + 0.4 * 7.5% = 6.9%.
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Auditors should be alert for potential judgment tendencies, traps, and hisses that may impact the decising the be Tendencies and the Strategies to Mitigate these Judgment Tendencies For the toolbar,.
The following are the strategies that the content loaded auditors can use to mitigate these judgment tendencies:
Recognition of judgmental tendencies, Seeing multiple sides of an issue, Fostering a culture of skepticism, Peer review.
Recognition of judgmental tendencies:
Auditors can use various self-assessment techniques to identify judgmental tendencies that might influence their judgments about a client's financial statements. Auditors should regularly reflect on their work to avoid becoming overconfident or overly committed to an idea, particularly if it was one they developed early in the audit process.
Auditors should be mindful of the tendency to only look for evidence that supports their initial hypotheses or theories. Content loaded auditors can combat this tendency by considering evidence that opposes their initial assumptions.
Seeing multiple sides of an issue:
Auditors must train themselves to think through and consider the implications of several solutions. They should not simply choose the most straightforward and apparent solution to the problem that they encounter. Instead, they should think through all of the possible alternatives to their conclusion.
Fostering a culture of skepticism:
The culture of skepticism should be maintained, and auditors should be encouraged to be critical of all of the information presented to them.
They should question assumptions and underlying data to understand where it came from and whether it is reliable. Additionally, auditors should be trained to question the context in which data is presented, as well as to identify any potential conflicts of interest that might influence the data's interpretation.
Peer review:
Auditors should periodically have their work reviewed by peers who are not involved in the audit. This helps them gain fresh insight into their work and helps them determine whether their work is objective and accurate, without the influence of judgmental tendencies.
Additionally, auditors can learn from the judgmental tendencies of their peers, which can help them develop their own professional judgment.
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Consider a simple economy described by:
A=C+I+G+X-M C = 1500+ 0.5Y - 200i I = 12000+ 0.2Y- 200i G = 10000.1Y X = 3000 M= 5000 -.05Y Y = A
L = 0.33Y-25i (M/P) = 3000 L = (M/P) a. Derive the IS equation from the above model. b. Derive the LM equation from the above model. c. Derive the equilibrium levels of Income Y and Interest Rate i. d. What is Investment spending if the interest rate is at the equilibrium level? e. If the government increases spending G by 100: i. What would the new IS Curve look like? ii. What would the new LM curve look like? iii. What would the new equilibrium income Y and Interest I be? iv. At this new equilibrium, what would the level of Investment spending be?
To derive the IS equation from the given model, we need to equate output (Y) with the aggregate demand (A).
a. Deriving the IS equation:
A = C + I + G + X - M
A = (1500 + 0.5Y - 200i) + (12000 + 0.2Y - 200i) + 10000 + 0.1Y - 3000 - (5000 - 0.05Y)
A = 1500 + 0.5Y - 200i + 12000 + 0.2Y - 200i + 10000 + 0.1Y - 3000 - 5000 + 0.05Y
A = 0.85Y - 400i + 19000
Since Y = A, we can substitute Y with A in the equation:
Y = 0.85Y - 400i + 19000
Simplifying the equation, we get:
0.15Y = 400i - 19000
Y = (400/0.15)i - (19000/0.15)
Y = 2666.67i - 126666.67
This is the IS equation.
b. Deriving the LM equation:
L = 0.33Y - 25i
(M/P) = 3000
Substituting L with (M/P) in the equation:
0.33Y - 25i = 3000
This is the LM equation.
c. Finding equilibrium levels of Income (Y) and Interest Rate (i):
To find the equilibrium, we set the IS equation equal to the LM equation:
2666.67i - 126666.67 = 0.33Y - 25i + 3000
Simplifying the equation:
0.33Y - 2666.67i = 129666.67
d. Investment spending at equilibrium:
To find investment spending at equilibrium, substitute the equilibrium interest rate (i) into the investment function (I):
I = 12000 + 0.2Y - 200i
I = 12000 + 0.2Y - 200(2666.67i - 126666.67)
Simplifying the equation will give you the investment spending at equilibrium.
e. If the government increases spending G by 100:
i. The new IS curve would shift upwards by 100 units.
ii. The LM curve would remain unchanged since government spending does not directly affect the money market.
iii. To find the new equilibrium income (Y) and interest rate (i), we equate the new IS curve with the LM curve.
iv. To find the level of investment spending at the new equilibrium, substitute the new interest rate (i) into the investment function (I).
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ADIS enhance the flow of funds through intermediation by transforming: A. many small loans into fewer, larger deposits. B. long-term deposits into short-term loans. C. the risk posed by borrowers into a risk acceptable by depositors. D. interest expense into interest revenue. E. All of the above.
ADIs enhance the flow of funds through intermediation by transforming option E) all of the above. ADIs refers to authorized deposit-taking institutions.
They are financial institutions that are authorized by APRA, the Australian Prudential Regulation Authority, to accept deposits from the public. In Australia, ADIs are supervised by APRA, which is responsible for ensuring that they comply with regulatory requirements. Intermediation refers to the role that ADIs play in the flow of funds between borrowers and depositors. ADIs are able to transform the funds they receive from depositors into loans to borrowers. They do this by engaging in maturity transformation, which involves borrowing funds at short-term maturities and lending them out at long-term maturities. ADIs also engage in risk transformation, which involves transforming the risk posed by borrowers into a risk that is acceptable to depositors. This is done by pooling together loans from a large number of borrowers and diversifying the risk across the portfolio of loans. ADIs also transform interest expense into interest revenue. They pay interest to depositors and earn interest on the loans they make. By doing this, they are able to earn a spread between the interest rate they pay on deposits and the interest rate they earn on loans.
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