The effect on net income and earnings per share for these two methods of financing is negative. The earnings per share is -$2.52 for alternative 1 and -$4.41 for alternative 2.
Blossom Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes. These two alternatives are:
1. Issue 75,000 shares of common stock at $30 per share. (Cash dividends have not been paid nor is the payment of any contemplated.)
2. Issue 6%, 10-year bonds at face value for $2,250,000.It is estimated that the company will earn $700,000 before interest and taxes as a result of this purchase. The company has an estimated tax rate of 30% and has 100,000 shares of common stock outstanding prior to the new financing.
Methods of financing for Blossom Airlines are: Issue 75,000 shares of common stock and Issue 6%, 10-year bonds.
The effect on net income and earnings per share for these two methods of financing is as follows:
Computation of effect on net income and earnings per share for alternative 1Issuing of shares of common roceeds from issuing of shares2,250,000
Less: Investment in Aircraft(2,250,000)
Net Income-$
Earnings per share=Net income / Number of shares of common stock
Outstanding shares of common stock = 100,000 + 75,000 = 175,000
Earnings per share = -$ / 175,000
Computation of effect on net income and earnings per share for alternative 2Issuing of 6%, 10-year
Proceeds from issuing of bonds2,250,000
Less: Interest(2,250,000*6%)135,000
Less: Investment in Aircraft(2,250,000)
Net Income-$630,000
Tax at 30%(189,000)
Net Income after tax-$441,000
Earnings per share=Net income after tax / Number of shares of common stock
Outstanding shares of common stock = 100,000
Earnings per share = -$441,000 / 100,000
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Analysis of each statement follows whether the statement is either true or false. Give a complete explanation.
(a). Firms operating in a perfectly competitive market that experience less than normal profits should cease operations immediately.
(B). Pure monopoly firms need not worry when they experience less than normal profits. This is because a pure monopoly firm has the power to set the price it wants.
(c). In the long run, firms operate in a perfectly competitive market and monopolies will tend to earn normal profits.
(d). Assuming a linear demand curve, a firm that wants to maximize its results will charge a lower price than a firm that wants to maximize its profits.
(E) If P> AVC, the firm's total fixed costs will be greater than its total losses.
(a). Firms operating in a perfectly competitive market that experience less than normal profits should cease operations immediately.
False. In a perfectly competitive market, firms are price takers, meaning that they cannot set the price of their product. The market price is determined by the interaction of supply and demand. If a firm is experiencing less than normal profits, it may be able to increase its profits by increasing its output. However, if the firm is producing at its minimum efficient scale, it may not be able to increase its output without increasing its costs. In this case, the firm may be better off shutting down operations than continuing to produce at a loss.
(b). Pure monopoly firms need not worry when they experience less than normal profits. This is because a pure monopoly firm has the power to set the price it wants.
True. In a monopoly market, there is only one seller of a product. This gives the monopolist the power to set the price of the product. If the monopolist is experiencing less than normal profits, it can increase the price of the product to increase its profits. However, the monopolist must be careful not to increase the price too much, or it may lose customers to competitors.
(c). In the long run, firms operate in a perfectly competitive market and monopolies will tend to earn normal profits.
True. In the long run, firms in a perfectly competitive market will tend to earn normal profits. This is because firms will enter the market if there are profits to be made, and firms will exit the market if there are losses to be made. As firms enter or exit the market, the market price will adjust until all firms are earning normal profits.
(d). Assuming a linear demand curve, a firm that wants to maximize its results will charge a lower price than a firm that wants to maximize its profits.
True. A firm that wants to maximize its results will charge a price that is equal to the average variable cost. This is because the firm will want to cover its variable costs, but it will not be concerned with its fixed costs. A firm that wants to maximize its profits will charge a price that is equal to the marginal cost. This is because the firm will want to maximize the difference between its revenue and its costs.
(e) If P> AVC, the firm's total fixed costs will be greater than its total losses.
True. If P>AVC, the firm will be covering its variable costs, but it will not be covering its fixed costs. This means that the firm will be making a loss. The total amount of the loss will be equal to the total fixed costs.
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In a period of rising prices, the inventory method which tends to give the highest reported inventory is A. FIFO. B. specific identification. C. weighted-average. D. moving average.
A. FIFO (First-In, First-Out) is the inventory system that has a tendency to provide the greatest reported inventory during a period of rising prices.
The inventory that is still available is based on the most recent, more expensive purchases since FIFO believes that the first products bought or created are also the first ones sold or utilised.
In a period of rising prices, the inventory method that tends to give the highest reported inventory is A. FIFO (First-In, First-Out).
FIFO assumes that the first items purchased or produced are the first ones sold or used, meaning that the inventory remaining is based on the most recent, higher-priced purchases. In a rising price environment, this method results in a higher reported inventory because the older, lower-priced items are assumed to have been sold or used first, leaving the higher-priced items in inventory.
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In a period of rising prices, the inventory method that tends to give the highest reported inventory is the FIFO (First-In, First-Out) method (option a).
FIFO assumes that the first inventory items purchased are the first ones sold, while the ending inventory consists of the most recently purchased items.
Under rising prices, the earliest purchased inventory items are usually priced lower than the most recent ones. By assuming that the lower-cost items are sold first, FIFO results in a higher reported inventory value. This is because the cost of goods sold is based on the cost of the most recently purchased items, which are typically higher.
In contrast, specific identification and weighted-average methods distribute the cost of inventory items across all purchases, resulting in a more balanced approach. The moving average method recalculates the average cost of inventory after each purchase, but it does not specifically prioritize the earliest purchased items like FIFO does.
Therefore, in a period of rising prices, FIFO tends to yield the highest reported inventory value among the given inventory methods. The correct option is a.
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Answer the question below in 1-2 paragraphs. Use specific
examples, terms, events, and people! The Kingdom and Civilization
of Nubia with its political states of Kerma and Kush appear in many
ancient
The Nubian Civilization's sidelining may be attributed to the dominance of Egyptian narratives and limited archaeological evidence, but they deserve recognition as significant civilizations with unique contributions to world history.
The sidelining of the Nubian Civilization in the larger human story can be attributed to several factors. One reason is the dominance of Egyptian narratives, as Egypt's civilization has received more attention and study throughout history.
Additionally, limited archaeological evidence and historical records have made it challenging to fully uncover and understand the achievements and contributions of the Nubians.
However, it is crucial to recognize that the Nubian Civilization was prosperous, powerful, and culturally significant, with its own written language, architectural structures, and military prowess. They should not be relegated to mere footnotes but rather celebrated as vibrant civilizations that shaped the history of Northeast Africa.
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Your question is incomplete; most probably, your complete question is this:
Answer the question below in 1-2 paragraphs. Use specific examples, terms, events, and people! The Kingdom and Civilization of Nubia with its political states of Kerma and Kush appear in many ancient texts and histories. All make an appearance in the Bible referenced as places of wealth and splendor. The Egyptians, Greeks, and Romans all envied the luxury goods and wealth that came from these lands of the Nile Cataracts. Nubian civilizations were wealthy, and powerful, developed their own written language, built large architectural structures, and held their own militarily against the other civilizations of their time. And yet, modern students of world history are often surprised to learn that there were Civilizations in North East Africa other than the Egyptians. Now that you have learned more about the Nubian Civilization, why do you think they have been pushed to the sidelines of the larger human story? Do you think they belong as a footnote?
use your own words and make your answer btween 300 words
1. What are the various properties of linear function? Discuss on linear programming problems?
2.. Discuss how sensitivity analysis is used in linear programs?
1. Properties of Linear Functions:Linear functions have several important properties that make them useful in mathematical modeling (.2.) Sensitivity Analysis:Sensitivity analysis is used in linear programming to determine how the optimal solution changes when the parameters of the problem are changed.
These properties are as follows:Domain and Range: The domain and range of a linear function are both sets of real numbers. The domain of a linear function is the set of all values of x for which the function is defined, while the range is the set of all values of y that the function can take on. Both the domain and range of a linear function are infinite.
Slope: The slope of a linear function is a measure of how steeply the function rises or falls. It is defined as the change in the y-value of the function divided by the change in the x-value of the function. The slope of a linear function is constant for all values of x.
Intercept: The y-intercept of a linear function is the value of y when x = 0. It represents the point at which the function crosses the y-axis. The x-intercept of a linear function is the value of x when y = 0. It represents the point at which the function crosses the x-axis.
Linear Programming Problems:Linear programming is a mathematical method used to optimize a problem where the objective function and the constraints are linear. Linear programming problems are of two types: maximization and minimization. In a maximization problem, the objective is to maximize a linear function, while in a minimization problem, the objective is to minimize a linear function.
In a linear programming problem, there are several variables that are subject to constraints. The constraints are linear equations or inequalities that limit the values that the variables can take on. The goal of linear programming is to find the optimal values of the variables that satisfy all the constraints while maximizing or minimizing the objective function.
2. Sensitivity Analysis:Sensitivity analysis is used in linear programming to determine how the optimal solution changes when the parameters of the problem are changed. The parameters may include the coefficients of the objective function and the constraints, as well as the right-hand side values of the constraints.
Sensitivity analysis can be used to answer several questions, such as:How sensitive is the optimal solution to changes in the parameters?How much can the value of the objective function change before a constraint is violated?What is the effect of adding or removing a constraint?
Sensitivity analysis involves changing the parameters of the problem and recalculating the optimal solution. By analyzing the changes in the objective function and the values of the variables, one can determine how sensitive the optimal solution is to changes in the parameters. This information can be used to make decisions about the problem, such as whether to adjust the parameters or whether to add or remove constraints.
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Debt: 2,000 6 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock: 46,000 shares outstanding, selling for $61 per share; the beta is 1.11.
Preferred stock: 6,000 shares of 5 percent preferred stock outstanding, currently selling for $105 per share.
Market: 8 percent market risk premium and 5 percent risk-free rate.
Assume the company's tax rate is 35 percent.
Find the WACC.
The weighted average cost of capital (WACC) of company is 0.0903 or 9.03%. The calculation is shown in the attached image below.
The weighted average cost of capital (WACC) is a financial metric that represents the average rate of return a company needs to earn on its investments to satisfy its investors. It is a weighted average of the costs of different sources of financing, taking into account the proportion of each source in the company's capital structure.
By calculating the weighted average of these costs, the WACC provides an estimate of the overall rate of return that the company needs to generate to meet the expectations of its investors and maintain the value of its capital structure.
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In terms of common M&A strategies, which of the following statements is false?
Select one:
a.
A product roll up is an inorganic strategy
b.
An oil refiner buying an oil field is an example of backward integration
c.
A electronics manufacturer purchasing a property development company is adopting a diversification strategy
d.
A geographic roll-up is a vertical strategy
e.
Smaller competitors merging to more effectively compete with a dominant market leader are adopting a defensive strategy
The false statement is: d. A geographic roll-up is a vertical strategy.
A geographic roll-up is not a vertical strategy but rather a horizontal strategy. In a geographic roll-up, a company acquires other businesses operating in different geographical regions, expanding its market presence and customer base. This strategy aims to achieve economies of scale, synergies, and increased market share by consolidating similar businesses in different locations.
Vertical strategies, on the other hand, involve the integration of different stages of the supply chain. Backward integration, as mentioned in statement b, is an example of a vertical strategy where a company acquires a supplier or a company in an earlier stage of the supply chain. This allows the acquirer to gain more control over its inputs and potentially reduce costs.
A product roll-up is an inorganic strategy. (True)
An oil refiner buying an oil field is an example of backward integration. (True)
An electronics manufacturer purchasing a property development company is adopting a diversification strategy. (True)
A geographic roll-up is a vertical strategy. (False)
Smaller competitors merging to more effectively compete with a dominant market leader are adopting a defensive strategy. (True)
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benefits of having a long term relationship with employees?
elaborate 10 benfits
Long-term relationships are beneficial both in our personal and professional lives. When it comes to employment, long-term employee relationships have many benefits.
Here are 10 benefits of having a long-term relationship with employees:
1. Retention of Knowledge and Expertise: Long-term employees are more experienced and knowledgeable. They have more insight into the company and are often skilled at solving problems.
2. Lower Costs: Constantly recruiting and training new employees is expensive. Long-term employees require less supervision and have a lower cost of training.
3. Improved Quality of Work: Long-term employees are more dedicated to their work. They take pride in their work and are less likely to make mistakes.
4. Greater Loyalty: Long-term employees are more loyal to their employers. They are less likely to leave for a better opportunity.
5. Better Morale: Long-term employees are more invested in their company. They have a sense of pride in their work and in the success of the company.
6. Increased Productivity: Long-term employees are more productive. They have a better understanding of their role in the company and the impact of their work.
7. Higher Quality of Customer Service: Long-term employees have a deeper understanding of their customers. They are more skilled at resolving customer issues.
8. Improved Employee Relations: Long-term employees often have strong relationships with their colleagues. They work better as a team and are more willing to collaborate.
9. Reduced Turnover: Long-term employees are less likely to leave their jobs. This reduces the costs and disruptions associated with employee turnover.
10. Positive Brand Image: Long-term employees are a positive reflection of the company. Customers and stakeholders see long-term employees as a sign of stability and quality, which can improve the brand image.
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What is the difference between cost estimating and determining the budget?
A. The project manager is only responsible for estimating, not budgeting.
B. Budgeting does not reflect historical models, but estimating does.
C. Estimating approximates expected costs while budgeting focuses on the timing of expenditures.
D. Estimating includes all phases of a project, whereas budgeting concerns only the execution of project work.
The difference between cost estimating and determining the budget can be explained as follows:A) The project manager is only responsible for estimating, not budgeting - This is not true as project managers have to take charge of the budget throughout the project.
It requires that the project manager consider all possible expenses. This includes calculating the cost of all tools and equipment needed to complete the project as well as all personnel expenses such as salaries and wages.On the other hand, determining the budget entails calculating the entire cost of the project as well as the time frame of expenditures.
Therefore, it's responsible for ensuring that all project expenses are accounted for. It includes both indirect and direct costs of the project.It is essential to note that budgeting reflects historical models, just like estimating does. The project manager must consider the historical expenses associated with a project. Both cost estimating and budgeting involve all stages of the project. Therefore, it's crucial to carry out both tasks effectively.
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please do it in 20 minutes please urgently... I'll
give you up thumb definitely
(a) Burger King has introduced new strategy by reducing the price of its Whopper by 75 percent if customers also purchased french fries and a soft drink. Nevertheless, the sales dropped within two wee
Burger King implemented a new strategy of reducing the price of its Whopper by 75 percent when purchased with fries and a soft drink, but sales declined within two weeks.
Burger King adopted a new pricing strategy by offering a substantial discount of 75 percent on their Whopper burger when customers also purchased a side of french fries and a soft drink. However, the sales of the Whopper declined within a short span of two weeks after implementing this strategy. The detailed explanation would explore potential reasons for this drop in sales, which could include factors such as customer preferences, market competition, price sensitivity, advertising effectiveness, or changes in consumer behavior. Further analysis would be required to determine whether the decline in sales was due to the pricing strategy itself or other external factors. Adjustments to the strategy, such as reevaluating the discount percentage or conducting consumer surveys to gather feedback, might be necessary to address the decline in sales and improve the overall performance of the promotion.
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Your grandmother gives you $10,000 to be invested in one
of
three opportunities: real estate, regular bonds, or zero cou
pon bonds. If you invest the entire $10,000 in one of these
opportunities with
If you invest the entire $10,000 in one of the three opportunities (real estate, regular bonds, or zero coupon bonds), the choice will depend on various factors such as risk tolerance, investment goals, and market conditions. Here's a general overview of each option:
1. Real Estate: Investing in real estate involves purchasing properties with the intention of generating income or appreciation. It can be residential, commercial, or industrial properties. Real estate investments can provide rental income and potential capital appreciation. However, they also come with risks such as property market fluctuations, maintenance costs, and liquidity constraints.
2. Regular Bonds: Regular bonds are debt securities issued by governments, municipalities, or corporations. When you invest in regular bonds, you essentially lend money to the issuer in exchange for periodic interest payments and the return of the principal amount at maturity. Bonds generally offer fixed interest rates and have varying levels of risk depending on the issuer's creditworthiness. They are considered less risky than stocks but still carry certain risks such as interest rate changes and credit risk.
3. Zero Coupon Bonds: Zero coupon bonds are a type of bond that doesn't pay periodic interest. Instead, they are sold at a discount to their face value and provide a return through the appreciation of the bond's price over time. The return is realized when the bond reaches maturity and is redeemed at its face value. Zero coupon bonds are considered relatively safer than regular bonds as they have a fixed maturity date and known return. However, they still carry risks related to interest rate changes and credit risk of the issuer.
Ultimately, the best investment option for you depends on your individual circumstances and preferences. It's important to consider factors such as your investment horizon, risk tolerance, income requirements, and market conditions. You may also want to diversify your investments across different asset classes to spread the risk. Consulting with a financial advisor can help you make an informed decision based on your specific goals and risk profile.
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Explain what you understand by the term "price discrimination" as a monopoly behavior; outline 3 types of price discrimination
b. Clearly distinguish between a monopoly and a monopolistic market structure
Price discrimination is when a monopoly charges different prices to different customers based on their willingness to pay. The three types are: first-degree (individualized pricing), second-degree (quantity discounts), and third-degree (segmented pricing). A monopoly has exclusive control over the market, while monopolistic competition has differentiated products and multiple sellers.
Price discrimination refers to the practice of a monopoly or dominant firm charging different prices to different customers for the same product or service, based on their willingness to pay. This strategy allows the firm to maximize its profits by capturing consumer surplus.
Three types of price discrimination are:
First-degree price discrimination (or perfect price discrimination): In this type, the monopolist charges each customer the maximum price they are willing to pay. This requires the firm to have perfect information about each customer's willingness to pay.Second-degree price discrimination: Here, the monopolist offers different pricing tiers or quantity discounts to encourage customers to purchase more. For example, a software company offers different versions of its product with varying features and prices.Third-degree price discrimination: In this type, the monopolist segments customers into different groups based on certain characteristics such as age, location, or income. Different prices are then set for each segment. An example is movie theaters charging lower prices for students or senior citizens.Distinguishing between a monopoly and a monopolistic market structure:
A monopoly is a market structure where there is a single seller with significant control over the supply of a product or service, giving them the ability to set prices and restrict competition. They have no close substitutes and can earn economic profits in the long run.A monopolistic market structure, on the other hand, refers to a market with many sellers but differentiated products. Each seller has a degree of market power due to product differentiation, but the competition is not as intense as in a perfectly competitive market. Sellers in a monopolistic market structure can earn positive economic profits in the short run but face some competition from similar products in the long runLearn more about Price discrimination: https://brainly.com/question/25565797
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Which of the following would be considered a breach of the qualitative characteristic of faithful representation? Incorporating estimations in the measurement of assets. Disclosing information that could influence a decision. None of these would be considered a breach of the qualitative characteristic of faithful representation. Omitting the recognifion of transactions of insignificant dollar amounts.
Faithful representation refers to financial information that accurately represents the underlying transactions and events in a manner that is neutral, complete, and free from error.
A breach of the qualitative characteristic of faithful representation may occur if a company fails to incorporate the required information about the transactions and events. Thus, omitting the recognition of transactions of insignificant dollar amounts would be considered a breach of the qualitative characteristic of faithful representation.
The qualitative characteristics of accounting information are as follows:Relevance Faithful Disclosure of relevant information can be considered a breach of confidentiality, but it would not be considered a breach of the qualitative characteristic of faithful representation. However, if the information were not disclosed, this would result in a failure of completeness and be a breach of the qualitative characteristic of faithful representation.
Incorporating estimations in the measurement of assets may be appropriate since it may be necessary in some situations to estimate values that cannot be directly measured. Therefore, it would not be considered a breach of the qualitative characteristic of faithful representation. Answer: Omitting the recognition of transactions of insignificant dollar amounts.
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The controller for Culver Corporation has reached an agreement with Pronghorn Financing Ltd. to sell a large portion of Culver's past- due accounts receivable. Culver agrees to sell $1,850,000 of accounts receivable to Pronghorn with recourse. Culver's controller estimates that the fair value of Culver's liability to pay Pronghorn for uncollectible accounts is $166,000. Pronghorn will charge Culver 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10%. Calculate the net proceeds and the gain or loss on the disposal of receivables to Pronghorn Financing Ltd. Net proceeds $ 1683500 Loss on disposal of receivables $ 166500 Prepare the journal entry on the books of Culver Corporation to record the disposal of receivables to Pronghorn Financing Ltd. (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit Cash 1665000 Due from Factor 18500 Loss on Disposal of Receivables 166500 Accounts Receivable 1850000 Recourse Liability
The journal entry to record the disposal of receivables to Pronghorn Financing Ltd. on the books of Culver Corporation would be as follows:
Account Titles and Explanation Debit Credit
--------------------------------------------------------------
Cash $1,665,000
Due from Factor $18,500
Loss on Disposal of Receivables $166,500
Accounts Receivable $1,850,000
Recourse Liability $166,000
Note: The "Due from Factor" account represents the initial amount withheld by Pronghorn Financing Ltd. (10% of the total receivables balance).
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Dunn, Inc: is a privately held fumiture manufacturer. For August 2017, Dunn had the following standards for one of its products, a wicker chair EX: (Click the icon to view the standards per chair) The following data were compiled regarding actual performance; actual output units (chairs) produced, 2, 100; square yards of input purchased and used, 6,000 , price per square yard, $5,70, direct manufacturing labor costs, $10,584; actual hours of input, 980, labor price per hour, $10.80 Read the requirements
Requirements 1. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred. 2. Suppose 8,500 square yards of materials were purchased (at $5.70 per square yard), even though only 6,000 square yards were used. Suppose further that variances are identified at their most timely control point, accordingly, direct materials price variances are isolated and traced at the time of purchase to the purchasing department rather than to the production department. Compute the price and efficiency variances under this approach.
1. The price variance is -$850 and efficiency variance is $0 for direct material. On the other hand, for direct manufacturing labor the price and efficiency variance will be $294 and $367.50, respectively.
2. As per new approach, price and efficiency variances for direct materials are -$850 and $0, respectively.
1. Computation of price and efficiency variances for direct materials and direct manufacturing labor
The direct materials and direct manufacturing labor variances can be calculated using the following formulas:
Price variance = AQ (AP - SP)
Efficiency variance = SP (AQ - SQ)
Where:
AQ = actual quantity purchased or used
AP = actual price paid
SP = standard price
SQ = standard quantity allowed for actual output
Direct Materials Variances
Price Variance = AQ (AP - SP)
= 8,500 ($5.70 - $5.80)
= -$850
The negative variance indicates that the actual price paid for the materials was higher than the standard price, which could be due to a number of factors such as inflation, supplier quality, or negotiation.
Efficiency Variance = SP (AQ - SQ)
= $5.80 (6,000 - 6,000)
= $0
The zero variance indicates that the actual quantity of materials used was equal to the standard quantity allowed for the actual output.
Direct Manufacturing Labor Variances
Price Variance = AH (AR - SR)
= 980 ($10.80 - $10.50)
= $294
The positive variance indicates that the actual rate paid for labor was higher than the standard rate, which could be due to a number of factors such as overtime, premium pay, or contract renegotiation.
Efficiency Variance = SR (AH - SH)
= $10.50 (980 - 945)
= $367.50
The positive variance indicates that the actual hours of labor used were less than the standard hours allowed for the actual output, which could be due to factors such as worker efficiency, training, or quality control.
2. Computation of price and efficiency variances for direct materials under the new approach
Under the new approach, the direct materials price variances are isolated and traced at the time of purchase to the purchasing department rather than to the production department.
Price Variance = AQ (AP - SP)
= 8,500 ($5.70 - $5.80)
= -$850
The negative variance indicates that the actual price paid for the materials was higher than the standard price, which could be due to a number of factors such as inflation, supplier quality, or negotiation.
Efficiency Variance = 0
Since the variances are identified at their most timely control point, the actual quantity of materials used is not taken into account in the efficiency variance calculation. Therefore, the efficiency variance is zero in this case.
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Should brain-dead donors for heart transplant surgery be declared dead using the irreversible cardio-circulatory death definition if the hearts can be (and are) successfully restarted in the bodies of other recipients? Please explain your decision. What factors should also be considered in similar cases?
Brain-dead donors for heart transplant surgery should still be declared dead using the irreversible cardio-circulatory death (DCD) definition, even if their hearts can be successfully restarted in other recipients.
The short answer is based on the widely accepted medical and ethical consensus that brain death, as determined by the irreversible loss of all brain functions, including the brainstem, is the appropriate criterion for declaring death. The successful transplantation of a heart from a brain-dead donor does not change the fact that the individual is deceased.
Declaring brain-dead donors as dead using the DCD definition is crucial for maintaining the integrity and trustworthiness of organ transplantation practices. It upholds the principles of medical ethics, respect for the autonomy of the deceased, and ensures transparency in the organ allocation process.
While the successful transplantation of a revived heart might raise ethical considerations, the primary focus should be on recognizing brain death as the definitive criterion for determining death. This ensures that the medical community adheres to established guidelines and maintains public trust in the organ donation and transplantation system.
In summary, despite the potential revival of the heart, brain-dead donors should still be declared dead using the irreversible cardio-circulatory death definition, as brain death is widely recognized as a valid and reliable indicator of death in medical and ethical contexts.
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For this week, think about your ideal industry and place to work as a marketer and consider the products and services that this company may own. Describe two marketing strategies you would use in your prospective consumers’ alternative evaluation stage of their customer journey.
Artificial intelligence (AI) can add value to the customer journey. Explain how you could implement AI into your selected stage and why it would be beneficial in persuading your consumer.
By increasing sales, by improving customer satisfaction and by increasing brand awareness, are the strategies that can be used to improve marketing.
Here are two marketing strategies I would use in the alternative evaluation stage of the customer journey for a company that sells online furniture:
**Strategy 1: Use AI to personalize product recommendations.** AI can be used to track a customer's browsing history and purchase preferences, and then use this data to generate personalized product recommendations. This is a great way to help customers find the products they are most interested in, and it can also help to increase the chances of a sale.
**Strategy 2: Use AI to provide customer support.** AI can be used to create chatbots that can answer customer questions and provide support. This is a great way to provide 24/7 customer support, and it can also help to free up human customer service representatives to focus on more complex issues.
Here is how I would implement AI into these strategies:
**Strategy 1: Personalize product recommendations.** I would use a customer relationship management (CRM) system to track a customer's browsing history and purchase preferences. I would then use an AI-powered recommendation engine to generate personalized product recommendations. The recommendation engine would take into account the customer's past purchases, their browsing history, and their demographic information.
**Strategy 2: Provide customer support.** I would create a chatbot that is powered by AI. The chatbot would be able to answer customer questions about products, shipping, and returns. The chatbot would also be able to provide support for common issues, such as setting up a new account or troubleshooting a technical problem.
These two strategies would help to improve the customer experience during the alternative evaluation stage of the customer journey. By using AI to personalize product recommendations and provide customer support, I would be able to help customers find the products they are looking for and get the help they need. This would increase the chances of a sale and improve customer satisfaction.
* Increased sales: By using AI to personalize product recommendations, I would be able to help customers find the products they are most interested in. This would increase the chances of a sale.
* Improved customer satisfaction: By using AI to provide customer support, I would be able to provide 24/7 support and answer customer questions quickly and accurately. This would improve customer satisfaction.
* Increased brand awareness: By using AI to personalize product recommendations and provide customer support, I would be able to create a positive customer experience. This would increase brand awareness and encourage customers to do business with my company again in the future.
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Stocks A and B have the following probability distributions of expected future returns:
Probability A B
0.1 (10 %) (39 %)
0.1 3 0
0.6 12 23
0.1 18 28
0.1 29 40
Calculate the expected rate of return, , for Stock B ( = 11.20%.) Do not round intermediate calculations. Round your answer to two decimal places.
%
Calculate the standard deviation of expected returns, σA, for Stock A (σB = 20.71%.) Do not round intermediate calculations. Round your answer to two decimal places.
%
Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to two decimal places.
Is it possible that most investors might regard Stock B as being less risky than Stock A?
If Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense.
If Stock B is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense.
If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.
Assume the risk-free rate is 3.5%. What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to four decimal places.
Stock A:
Stock B:
Are these calculations consistent with the information obtained from the coefficient of variation calculations in Part b?
In a stand-alone risk sense A is less risky than B. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
In a stand-alone risk sense A is less risky than B. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.
In a stand-alone risk sense A is more risky than B. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.
In a stand-alone risk sense A is more risky than B. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.
In a stand-alone risk sense A is less risky than B. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense.
To calculate the expected rate of return for Stock B, we multiply each possible return by its corresponding probability, and then sum them up:
Expected Rate of Return for Stock B = (0.1 * 39%) + (0.1 * 0%) + (0.6 * 23%) + (0.1 * 28%) + (0.1 * 40%)
Expected Rate of Return for Stock B = 3.9% + 0% + 13.8% + 2.8% + 4%
Expected Rate of Return for Stock B = 24.5%
The expected rate of return for Stock B is 24.5%.
To calculate the standard deviation of expected returns for Stock A, we use the formula for standard deviation:
Standard Deviation of Expected Returns for Stock A = √[Σ(Probability * (Return - Expected Return)^2)]
Using the provided data:
Standard Deviation of Expected Returns for Stock A = √[(0.1 * (10% - 11.2%)^2) + (0.1 * (3% - 11.2%)^2) + (0.6 * (12% - 11.2%)^2) + (0.1 * (18% - 11.2%)^2) + (0.1 * (29% - 11.2%)^2)]
Standard Deviation of Expected Returns for Stock A = √[0.24]
Standard Deviation of Expected Returns for Stock A ≈ 0.49
The standard deviation of expected returns for Stock A is approximately 0.49.
The coefficient of variation is calculated by dividing the standard deviation of expected returns by the expected rate of return, and then multiplying by 100:
Coefficient of Variation for Stock B = (Standard Deviation of Expected Returns for Stock B / Expected Rate of Return for Stock B) * 100
Coefficient of Variation for Stock B = (20.71% / 24.5%) * 100
Coefficient of Variation for Stock B ≈ 84.69%
The coefficient of variation for Stock B is approximately 84.69%.
Based on the coefficient of variation, which measures risk per unit of return, Stock B is considered more risky than Stock A. Therefore, it is not possible that most investors might regard Stock B as being less risky than Stock A.
The Sharpe ratio is calculated by subtracting the risk-free rate from the expected rate of return, and then dividing by the standard deviation of expected returns:
Sharpe Ratio for Stock A = (Expected Rate of Return for Stock A - Risk-Free Rate) / Standard Deviation of Expected Returns for Stock A
Sharpe Ratio for Stock A = (11.2% - 3.5%) / 0.49
Sharpe Ratio for Stock A ≈ 15.92
Sharpe Ratio for Stock B = (Expected Rate of Return for Stock B - Risk-Free Rate) / Standard Deviation of Expected Returns for Stock B
Sharpe Ratio for Stock B = (24.5% - 3.5%) / 20.71
Sharpe Ratio for Stock B ≈ 1.01
The Sharpe ratio for Stock A is approximately 15.92, and for Stock B is approximately 1.01.
These calculations are consistent with the information obtained from the coefficient of variation. Stock A has a lower coefficient of variation, indicating lower risk per unit of return, and it also has a higher Sharpe ratio. Therefore, in a stand-alone risk sense, Stock A is considered less risky than Stock B.
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In cell J2, insert an IF function that calculates the value for Net Income as follows: a. If the Possible Discount (H2) is equal to " Y ", i) (true) The gross income is the (Profit per Unit-Discount) multiplied by the Quantity (G2−$J$9)∗I2 ii) (false) Or else, the gross income is the Profit per Unit multiplied by the Quantity. b. Use the fill handle to copy this formula down to row 7. c. Format the cells in J2: J7 to Currency Number Format with 2 decimal places NOTE: Verify function result with the image in step 48 below
The IF function calculates Net Income based on the presence or absence of a discount is : =IF(H2="Y", (G2-$J$9)I2, G2I2).
In cell J2, we use the IF function to calculate the value for Net Income based on the Possible Discount (H2) : =IF(H2="Y", (G2-$J$9)I2, G2I2),
This formula checks if the Possible-Discount is equal to "Y".
If it is true, then the Net Income is calculated as the product of (Profit per Unit - Discount) and the Quantity. The Profit per Unit is represented by G2, the Discount is represented by $J$9, and the Quantity is represented by I2.
If the Possible Discount is not equal to "Y", the formula calculates the Net Income as the product of Profit per Unit and the Quantity. This IF function provides flexibility in calculating Net Income based on the presence or absence of a discount.
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The given question is incomplete, the complete question is
In cell J2, insert an IF function that calculates the value for Net Income as follows:
If the Possible Discount (H2) is equal to " Y ",
(true) The gross income is the (Profit per Unit-Discount) multiplied by the Quantity (G2 - $J$9) × I2
(false) Or else, the gross income is the Profit per Unit multiplied by the Quantity.
URGENT. can someone help wrote a dicussiom and explain more about each of these topics. "Microeconomics Eco201."
Transfer payments-welfare and social sercuirty. (500 words)
International trade (500 words)
International finance (500 words)
Global proverty (500 words)
Government payments to people or households known as "transfer payments" occur when neither commodities nor services are directly transferred. Welfare and social security are two essential elements of transfer payments.
Cross-border exchanges of products, services, and capital constitute international trade. It is important to the global economy because it makes specialization easier, fosters economic expansion, and gives customers access to a broader variety of goods.
The term "global poverty" describes a situation in which a sizable section of the world's population lacks access to needs including enough food, clean water, healthcare, education, and housing.
Financial activity and transactions that take place across nations and across boundaries are referred to as international finance. It includes domains like foreign exchange markets, global banking, and international investment.
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16)_____is any word, name, symbol or device used in business to identify and promote a product. Its counterpart is used in service industries. a) Trademark. b) Trade Secret. c) Patent. d) Copyright.
The correct option is a) Trademark, as it best represents a word, name, symbol, or device used to identify and promote a product in business.
A trademark is any word, name, symbol, or device used in business to identify and promote a product. It serves as a distinctive mark that distinguishes one company's products from those of others. Trademarks are typically associated with tangible goods and are used to build brand recognition and protect the company's intellectual property rights.
In contrast, in service industries, a similar concept known as a service mark is used. A service mark also serves to identify and promote services offered by a particular business, rather than tangible products. The main distinction between a trademark and a service mark lies in the nature of the goods or services they represent.
Trade secrets refer to confidential and proprietary information, such as formulas, processes, or customer lists, that provide a competitive advantage to a business. Patents protect inventions and grant exclusive rights to the inventor for a specified period. Copyrights safeguard original creative works, such as literary, artistic, or musical creations.
Therefore, in the given question, the correct option is a) Trademark, as it best represents a word, name, symbol, or device used to identify and promote a product in business.
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6) A property was purchased at a price of $294268 at the beginning of the year. This property has a gross rental income of $58638 per annum and operating expenses of $12413 per annum. At the end of the year, the market value of this property increased by 8.91%. Calculate the composite return. (Please type your answer in decimals and round your answer to four decimal places. For example, 10.11% should be 0.1011.)
8) Assume that a block of three flats is purchased at a price of $797524 and provides security for a $206139 flat mortgage at an annual interest rate of 9.34%. This property has a gross rental income of $75520 and operating expenses of $15580 per annum. What is the return on equity invested in this property? (Please type your answer in decimals and round your answer to four decimal places. For example, 10.11% should be 0.1011.)
6 - The composite return is approximately 0.2459, or 24.59% when expressed as a percentage. 8- The return on equity invested in the property is approximately 0.1013, or 10.13% when expressed as a percentage.
To calculate the composite return, we need to consider both the rental income and the change in market value of the property. Rental Income:
The rental income for the year is $58,638. Operating Expenses: The operating expenses for the year are $12,413. Net Income: Net Income = Rental Income - Operating Expenses = $58,638 - $12,413 = $46,225
Change in Market Value: The market value of the property increased by 8.91%. To calculate the change in market value, we multiply the original value by the percentage increase: Change in Market Value = Original Value * Percentage Increase = $294,268 * 0.0891 = $26,228.92
Composite Return: Composite Return = (Net Income + Change in Market Value) / Original Value = ($46,225 + $26,228.92) / $294,268 = $72,453.92 / $294,268 = 0.2459
To calculate the return on equity invested in the property, we need to consider the net income and the equity invested. Net Income: Net Income = Gross Rental Income - Operating Expenses = $75,520 - $15,580 = $59,940
Equity Invested: Equity Invested = Purchase Price - Mortgage = $797,524 - $206,139 = $591,385 Return on Equity: Return on Equity = Net Income / Equity Invested = $59,940 / $591,385 = 0.1013
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One year ago Scully bought 200 shares of Hitchcock,Inc.at $34.50 per share.Today Scully decides to sell all of his shares at $35.07 per share.If Hitchcock,Inc.distributed $3:6l per-share-in-dividendsover the last year,what is-Scullys HPR-onHitchcock,Inc a.8.01% b.10.94% c.12.12% d.14.43%
The Scullys Holding Period Return on Hitchcock, Inc is 12.12%, hence option C is correct.
The return on an asset or portfolio throughout its whole holding term is known in finance as the holding period return.
The HPR measures the value change of a portfolio, asset, or investment over a specific time period.
Holding Period Return = (Selling Price + Dividend - Purchase Price) ÷ (Purchase Price)
Holding Period Return = ($35.07 + $3.61 - $34.50) ÷ $34.50
Holding Period Return = $4.18 ÷ $34.50
Holding Period Return = 12.12%
Thus, the Scullys Holding Period Return on Hitchcock, Inc is 12.12%.
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31. An oligopoly exists when the concentration rate of the 4 largest companies:
Select one:
It is 70% or more.
It is 40% or more.
32. A monopolistically competitive industry combines elements of competition and monopoly. The monopoly element results from:
Select one:
The probability of collusion between companies.
The high barriers to enter the industry.
The differentiation of their products and a certain power to set their prices.
The mutual interdependence between the different companies.
Produces a Herfindahl Index below 500.
It is equal to the Herfindahl Index.
33. Which of the following is closest to a pure monopoly?
Select one:
The only grocery store in a small isolated town
The foreign currency market
The wheat market in Kansas City
the soda market
34. The negative (or decreasing) slope of the monopolist's demand curve implies that:
Select one:
The price of your product must decrease to sell additional units.
The coefficient of elasticity increases as the price falls.
Its supply curve is also downward.
Marginal revenue equals price.
35.In which of the following markets is price discrimination frequently used?
Select one:
Shoes.
business travellers.
Automobiles.
Onions
31. An oligopoly exists when the concentration rate of the 4 largest companies:It is 40% or more.An oligopoly is a market structure characterized by a small number of relatively large firms that dominate an industry. Oligopoly can be defined as a market in which the concentration ratio of the largest firms is high. The concentration ratio is the measure of the percentage of the market share of the largest firms in the industry. An oligopoly exists when the concentration rate of the 4 largest companies is 40% or more.
32. A monopolistically competitive industry combines elements of competition and monopoly. The monopoly element results from:The differentiation of their products and a certain power to set their prices. Monopolistic competition exists when there are many small companies selling products that are slightly different from one another. In a monopolistically competitive market, firms are price makers, meaning they can manipulate the price of their products to a certain extent. However, due to the large number of competitors in the market, the firm can only increase the price of its product to a certain extent. The monopoly element results from the differentiation of their products and a certain power to set their prices.
33. Which of the following is closest to a pure monopoly?The only grocery store in a small isolated town. A pure monopoly is a type of market where a single company produces and sells a product for which there are no close substitutes. The single seller has full control over supply and prices, with no competition to worry about. The only grocery store in a small isolated town is the closest example to a pure monopoly.
34. The negative (or decreasing) slope of the monopolist's demand curve implies that:Marginal revenue equals price. The negative slope of the monopolist's demand curve implies that the marginal revenue of the company decreases as the amount of product sold increases. Marginal revenue (MR) is the additional revenue generated by selling an extra unit of the product. In the case of a monopolist, MR is always less than the price of the product because the monopolist must lower the price of all units of the product to sell more of them.
35. In which of the following markets is price discrimination frequently used?Business travellers. Price discrimination is the practice of charging different prices to different customers for the same product or service. Price discrimination is frequently used in markets where customers have different price elasticities. Business travellers frequently use price discrimination as they tend to book at the last minute and need more flexibility.
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select one of the strategies organizations to implement to go internationally and critically analyse its advantages and disadvantages.
One strategy that organizations can implement to go internationally is through direct investment, specifically by establishing foreign subsidiaries or acquiring existing companies in the target market.
This approach allows for a greater level of control and integration within the foreign market. Advantages of direct investment include:
Market Access: By establishing a subsidiary or acquiring a local company, organizations gain direct access to the target market's customers, distribution channels, and networks.
Control: Direct investment provides organizations with greater control over their operations, decision-making, and branding in the foreign market.
Knowledge Transfer: Through direct investment, organizations can transfer their knowledge, technology, and expertise to the foreign market, fostering innovation and enhancing competitiveness.
Cost Savings: In the long run, direct investment can lead to cost savings through economies of scale, local sourcing, and production efficiencies.
Disadvantages of direct investment include:
Financial Risk: Direct investment requires substantial financial resources, including initial investment and ongoing operational costs, which may pose financial risks if the venture does not generate expected returns.
Political and Regulatory Risks: Operating in a foreign market exposes organizations to political instability, changes in government policies, and regulatory challenges.
Cultural Differences: Adapting to cultural differences in the foreign market can be challenging, requiring organizations to invest in cultural understanding and customization of products and services.
Operational Complexities: Managing international subsidiaries involves complex coordination, communication, and logistical challenges, requiring significant managerial expertise and resources.
Overall, direct investment provides organizations with opportunities for market access, control, and knowledge transfer, but it also entails financial, political, and operational risks that need to be carefully managed. Organizations should conduct thorough market research and analysis, assess their capabilities, and develop a comprehensive internationalization strategy before pursuing direct investment.
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What is the difference between a luxury good and a necessity?
Your answer must apply the concept of income elasticity of demand. What do both of these types of goods have in common when compared to inferior goods?
The difference between a luxury good and a necessity is that a luxury good is a good that people can do without, while a necessity is a good that people need to have to survive.
Luxury goods are not essential to survival, but they are usually more expensive and of higher quality than necessities, which can be purchased at a lower price. People are less likely to buy luxury goods when their incomes are low, while necessities are essential goods that people cannot do without, so they continue to buy them regardless of the price. Income elasticity of demand is the extent to which the quantity of a good demanded is affected by changes in consumer income. For example, the income elasticity of demand for a luxury car is high, meaning that as income increases, the demand for luxury cars also increases. The income elasticity of demand for necessities is low, meaning that changes in income have little effect on the demand for necessities. When compared to inferior goods, both luxury goods and necessities are normal goods, meaning that as income increases, demand for them also increases. In contrast, as income increases, demand for inferior goods decreases.
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Which one of the following statements is TRUE?
a increased market segmentation and technological advances mandate long development cycles.
b Recent trends are for manufacturing firms not to involve operations until the final design stage has been reached.
c The process of concurrent engineering requires design engineers, manufacturing specialists, and marketers to work jointly in designing, a product and selecting a production process.
d Firms such as Ford and Honda found that the concept of concurrent engineering is not cost effective.
Statement C is true as concurrent engineering involves collaboration between design engineers, manufacturing specialists, and marketers in product design and process selection.
Concurrent engineering is an approach that emphasizes cross-functional collaboration and simultaneous development of a product and its manufacturing processes. It involves design engineers, manufacturing specialists, and marketers working together from the early stages of product development. This collaborative approach allows for better coordination, faster decision-making, and improved product quality. It ensures that all aspects, including design, manufacturing, and marketing considerations, are taken into account during the development process.
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Assume that the risk-free rate is 4% in the U.S. and 5& in the U.K.. The current exchange rate is 2 per pound. What is the arbitrage free futures price for a 1-year contract? Set up an arbitrage strategy and calculate the associated profits if the initial futures price were 2.01 per pound.
Arbitrage-free futures price for a 1 year contract = -0.0144 U.S. dollars.
To determine the arbitrage-free futures price for a 1-year contract, we need to consider the interest rate parity between the U.S. and the U.K.
The interest rate parity states that the difference in interest rates between two countries should be equal to the forward premium or discount on their exchange rate. In this case, we can use the following formula:
Forward premium/discount = (1 + foreign interest rate) / (1 + domestic interest rate) - 1
Given that the risk-free rate is 4% in the U.S. and 5% in the U.K., we can calculate the forward premium/discount as follows:
Forward premium/discount = (1 + 0.05) / (1 + 0.04) - 1
= 1.05 / 1.04 - 1
= 0.9615 - 1
= -0.0385
Since the forward premium/discount is negative (-0.0385), it indicates a forward discount.
Now, let's calculate the arbitrage-free futures price using the formula:
Futures price = Spot price * (1 + forward premium/discount)
= 2 * (1 + (-0.0385))
= 2 * 0.9615
= 1.923
Therefore, the arbitrage-free futures price for a 1-year contract would be 1.923 per pound.
To set up an arbitrage strategy, we can consider the scenario where the initial futures price is 2.01 per pound. Here's how we can calculate the associated profits:
Borrow in the U.S.: Borrow an amount in U.S. dollars equal to the spot price (2) for 1 year at the risk-free rate of 4%. This would result in a future value of 2 * (1 + 0.04) = 2.08 U.S. dollars.Convert to pounds: Convert the borrowed U.S. dollars to pounds at the spot rate of 2 per pound. This would give us 2.08 / 2 = 1.04 pounds.Enter into the futures contract: Sell the 1.04 pounds in the futures market at the initial futures price of 2.01 per pound. This would result in 1.04 * 2.01 = 2.0944 U.S. dollars.Repay the loan: Repay the initial loan in U.S. dollars with the proceeds from the futures contract. The profit would be the difference between the loan amount and the repayment amount, which is 2.08 - 2.0944 = -0.0144 U.S. dollars.Therefore, if the initial futures price were 2.01 per pound, the associated profits from the arbitrage strategy would be -0.0144 U.S. dollars.
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Example 5.3. An experiment on rabbits is designed by taking N = 20 identical rabbits. But rabbits start dying out before the experiment is completed. Let n be the effective final number. This sample size n has become a random quantity. n could be zero (all rabbits died out), n could be 1,2,... and could be N = 20 (no rabbit died). Let 0.1 be the probability of a rabbit dying and suppose that this probability is the same for all rabbits. Construct the probability law for n.
The probability law will be a discrete probability distribution of the binomial distribution with the above-calculated probabilities.
The given example is related to the binomial distribution since the probability of a rabbit dying is the same for all rabbits and the final number of rabbits alive can take on any value between 0 and 20 (assuming N=20 rabbits were selected).
Constructing the probability law for the given example:
Binomial distribution can be represented as,Bin (n,p)
Where,n = sample sizep = probability of success in one trialq = probability of failure in one trialq = 1 - pIn the given example,Probability of success (rabbit dying) = p = 0.1
Probability of failure (rabbit not dying) = q = 1 - 0.1 = 0.9
Sample size = n (can be any value between 0 to 20)
Therefore,The probability that all rabbits die = P (n = 0)P (n = 0) = C (n,0) pn q N- n = C (0,0) 0.1^0 0.9^20= 1*1*0.1216 = 0.1216
The probability that 1 rabbit is alive = P (n = 1)P (n = 1) = C (n,1) pn q N- n = C (20,1) 0.1^1 0.9^19= 20*0.1*0.1414 = 0.2828
Similarly, we can calculate the probabilities for n = 2,3,4.....,19,20 (all rabbits are alive).
Note: The sum of all the probabilities will be equal to 1 since there are no other possibilities, other than the ones mentioned. The probability of any other number of rabbits being alive other than the ones mentioned in the probability law is 0.
Therefore, the probability law will be a discrete probability distribution of the binomial distribution with the above-calculated probabilities.
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Hollywood Shoes would like to maintain their cash account at a minimum level of $50,000, but expects the standard deviation in net daily cash flows to be $4,000; the effective annual rate on marketable securities to be 6 percent per year; and the trading cost per sale or purchase of marketable securities to be $100 per transaction. What will be their optimal upper cash limit?
$59,094.77
$69,588.47
$108,765.41
$54,000.00
Therefore, their optimal upper cash limit will be $69,588.47.
What is cash?
C is a current asset consisting of coins, currency, bank deposits, checks, and money orders that can be deposited or withdrawn on demand. For businesses, cash includes bank account balances and cash on hand. Cash is the most liquid form of asset because it can be immediately converted into goods or services (liquidity).
A purchase is an act of buying something using money or another form of payment.
A company may keep cash for a variety of reasons, including making payroll, paying bills, and taking advantage of potential investment opportunities. The level of cash held by a business is frequently assessed in terms of liquidity. An organization's liquidity is its ability to meet its financial obligations. As a result, many organizations keep a certain level of cash on hand to ensure that they can meet their financial obligations.
The optimal upper cash limit is the level of cash at which the marginal benefit of holding additional cash equals the marginal cost. When the marginal cost and marginal benefit are equal, it is said to be the optimal level of cash because holding more cash would cause the marginal cost to exceed the marginal benefit. The optimal upper cash limit can be calculated by using the formula below:
Optimal Upper Cash Limit =
Minimum Cash Balance + [Z (σ)] + Trading Cost/ [(2 x Market Interest Rate)/ 365]
where:
Z (σ) = the number of standard deviations corresponding to the desired probability level (for example, at the 99 percent level, Z (σ) = 2.33)
Trading cost = the cost per sale or purchase of marketable securities.
Minimum cash balance = the minimum level of cash balance required by the company.
Market interest rate = the annual interest rate that the company would earn by investing the cash balance in marketable securities.
2 = the number of transactions per year, considering that a sale or purchase of marketable securities is counted as one transaction.
The formula of optimal upper cash limit is,
Optimal Upper Cash Limit = $50,000 + [2.33 ($4,000)] + $100/ [(2 x 6%)/ 365] = $69,588.47
Therefore, their optimal upper cash limit will be $69,588.47.
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Next generation supply chain executives are achieving excellence and competitive advantage by focusing on differentiating capabilities. Identify the supply chain value drivers they are focused on. Variety minimization Sole sourcing of suppliers Maximum volume flexibility Maximum delivery performance
Next-generation supply chain executives are focused on various supply chain value drivers to achieve excellence and gain a competitive advantage.
These value drivers include: Variety Minimization: By streamlining and reducing product variations, supply chain executives aim to simplify operations and minimize complexity. This allows for increased efficiency, cost savings, and improved customer responsiveness. Sole Sourcing of Suppliers: Supply chain executives may choose to establish strategic partnerships with select suppliers, reducing the number of vendors and fostering long-term relationships. Sole sourcing can lead to better coordination, improved quality control, and potential cost savings through economies of scale. Maximum Volume Flexibility: The ability to adjust production and distribution volumes quickly in response to changing market demands is a critical supply chain value driver. Executives focus on optimizing flexibility to efficiently scale up or down production levels based on customer needs, reducing lead times and inventory costs.
Maximum Delivery Performance: Supply chain executives prioritize ensuring on-time and accurate delivery of products to customers. By focusing on delivery performance metrics, such as order fulfillment speed, on-time delivery rates, and customer satisfaction, they enhance customer experience and loyalty. By leveraging these supply chain value drivers, next-generation supply chain executives can enhance operational efficiency, customer satisfaction, and ultimately achieve a competitive advantage in the marketplace
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