If the discount rate increases to 20 percent, the present value of the income stream decreases from $11,638.40 to $8,634.25.
To calculate the present value of the income stream, we need to discount each year's income to its present value using the given discount rate of 8 percent.
Using the formula for present value (PV):
PV = CF / (1 + r)^n
Where PV is the present value, CF is the cash flow or income, r is the discount rate, and n is the number of years.
Calculating the present value for each year:
Year 1: PV = $3,000 / (1 + 0.08)^1 = $2,777.78
Year 2: PV = $4,000 / (1 + 0.08)^2 = $3,174.60
Year 3: PV = $6,000 / (1 + 0.08)^3 = $4,947.12
Year 4: PV = $1,000 / (1 + 0.08)^4 = $738.90
To find the total present value of the income stream, we sum up the present values of each year's income:
Total Present Value = $2,777.78 + $3,174.60 + $4,947.12 + $738.90 = $11,638.40
Now, if the discount rate increases to 20 percent, we need to recalculate the present value using the new discount rate.
Calculating the present value for each year with a discount rate of 20 percent:
Year 1: PV = $3,000 / (1 + 0.20)^1 = $2,500.00
Year 2: PV = $4,000 / (1 + 0.20)^2 = $2,083.33
Year 3: PV = $6,000 / (1 + 0.20)^3 = $3,472.22
Year 4: PV = $1,000 / (1 + 0.20)^4 = $578.70
Total Present Value with a discount rate of 20 percent = $2,500.00 + $2,083.33 + $3,472.22 + $578.70 = $8,634.25
As we can see, when the discount rate increases to 20 percent, the present value of the income stream decreases from $11,638.40 to $8,634.25. This is because the higher discount rate places a higher value on present cash flows and reduces the value of future cash flows.
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Consider a project to supply 100 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $750,000 five years ago; if the land were sold today, it would net you $1.1 million aftertax. The land can be sold for $1.3 million after taxes in five years. You will need to install $5.4 million in new manufacturing plant and equipment to actually produce the stamps; this plant and equipment will be depreciated straight-line to zero over the project's five-year life. The equipment can be sold for $575,000 at the end of the project. You will also need $450,000 in initial net working capital for the project, and an additional investment of $40,000 in every year thereafter. Your production costs are .29 cents per stamp, and you have fixed costs of $1.1 million per year. If your tax rate is 23 percent and your required return on this project is 10 percent, what bid price should you submit on the contract? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) Bid price
The bid price that should be submitted on the contract is $13.0644 million.
Calculate the bid price?
To calculate the bid price, we need to consider the initial investment, operating costs, salvage value, and the required return rate.
1. Initial Investment:
- Cost of new manufacturing plant and equipment: $5.4 million
- Initial net working capital: $450,000
Therefore, the initial investment is $5.4 million + $450,000 = $5.85 million.
2. Operating Costs:
- Production costs per stamp: $0.29
- Fixed costs per year: $1.1 million
The total operating costs per year can be calculated as follows:
Operating Costs = (Production costs per stamp * Number of stamps per year) + Fixed costs per year
Operating Costs = ($0.29 * 100 million) + $1.1 million
Operating Costs = $29 million + $1.1 million
Operating Costs = $30.1 million
3. Salvage Value:
- Salvage value of the equipment at the end of the project: $575,000
4. Tax Rate:
- Tax rate: 23%
5. Required Return Rate:
- Required return rate: 10%
Now, we can calculate the bid price using the Net Present Value (NPV) formula:
NPV = -Initial Investment + (Net Cash Flows / (1 + Required Return Rate)^n)
Net Cash Flows = Operating Cash Flows + Salvage Value
Operating Cash Flows = Operating Costs - Tax Shield
Tax Shield = Tax Rate * Depreciation
Depreciation = Cost of equipment / Project life
Depreciation = $5.4 million / 5 years
Depreciation = $1.08 million per year
Tax Shield = Tax Rate * Depreciation
Tax Shield = 0.23 * $1.08 million
Tax Shield = $248,400
Operating Cash Flows = Operating Costs - Tax Shield
Operating Cash Flows = $30.1 million - $248,400
Operating Cash Flows = $29.8516 million
Net Cash Flows = Operating Cash Flows + Salvage Value
Net Cash Flows = $29.8516 million + $575,000
Net Cash Flows = $30.4266 million
Now, we can calculate the bid price using the NPV formula:
NPV = -$5.85 million + ($30.4266 million / (1 + 0.10)^5)
NPV = -$5.85 million + ($30.4266 million / 1.61051)
NPV = -$5.85 million + $18.9144 million
NPV = $13.0644 million
The bid price should be equal to the NPV, so the bid price is $13.0644 million.
Therefore, the bid price that should be submitted on the contract is $13.0644 million.
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Choose Samsung, and 1. performs a SWOT analysis.
Next, 2. Perform a critical discussion on six (6) tasks of the Global Market Opportunity Assessment (GMOA)
3. integrate Environmental, Social, and Governance (ESG) framework in the discussion
The SWOT analysis of Samsung highlights its strengths, weaknesses, opportunities, and threats, providing insights into its competitive position.
Samsung possesses a strong brand image and a diversified product portfolio, but faces challenges such as overreliance on the smartphone market. To assess global market opportunities, Samsung needs to perform tasks like market selection, estimating market size, analyzing competition, understanding customers, assessing risks, and determining entry strategies. Integrating the ESG framework emphasizes considering environmental, social, and governance factors, which can enhance Samsung's reputation and sustainability while pursuing global opportunities.
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16. when government sets the price of a good and that price is below the equilibrium price, the result will be (a) a surplus of the good (b) a shortage of the good (c) an increase in the demand for the good (d) a decrease in the supply of the good 17. an increase in the demand and a decrease in supply will (a) increase price and increase the quantity exchanged (b) decrease price and decrease the quantity exchanged (c) increase price and effect upon the quantity exchanged will be indeterminate (d) decrease price and the effect upon the quantity exchanged will be indeterminate 18. in the market system, freedom of enterprise means that (a) businesses are free to produce products that consumers want (b) consumers are free to buy goods and services that they want (c) resources are distributed freely to businesses that want them (d) government is free to direct the actions of businesses 19. to decide how to use its scarce resources to satisfy economic wants, capitalism relies on (a) central planning (b) monopoly control (c) markets and prices (d) barter 20. the opportunity cost of a new public stadium is the (a) money cost of hiring guards and staff for the new stadium (b) the cost of constructing the new stadium in a future year (c) change in the real estate tax rate to pay off the new stadium (d) other goods and services that must be sacrificed to construct the new stadium 21. If both the demand for and supply of a product in a free market increased, which of the following must always follow? ii. price will fall iii. the quantity exchanged will rise iv. the quantity i. price will rise exchanged will fall (a) iii
ii. The quantity exchanged will rise. In a free market, when both the demand for and supply of a product increase, it results in a surplus of supply over demand. This surplus leads to a decrease in the price of the product, as sellers compete to sell their excess supply.
At the same time, the increase in demand leads to an increase in the quantity exchanged, as more buyers are willing to purchase the product at the lower price. Therefore, option ii is correct. Option i is incorrect because an increase in demand and supply does not always result in a fall in the quantity exchanged. Option iii is incorrect because the increase in demand and supply does not necessarily result in a rise in the price of the product. Option iv is incorrect because it is not always the case that the quantity exchanged will fall.
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Think about a recent purchase you made that involved an external search (online). • What did the seller do to cultivate a relationship with you as a buyer? What is one thing they could have done bet
The seller of the recent purchase I made cultivated a relationship with me as a buyer by providing personalized recommendations based on my browsing history and offering discounts for future purchases.
However, they could have improved by providing more proactive customer support and addressing any post-purchase concerns promptly. The seller of the product I purchased demonstrated efforts to cultivate a relationship with me as a buyer by utilizing personalized marketing strategies. They analyzed my browsing history and recommended related products that aligned with my interests, which made me feel valued as a customer.
Additionally, they offered discounts for future purchases, incentivizing me to return to their store. However, one area where they could have improved is in customer support. If they had been more proactive in addressing any post-purchase concerns or inquiries, it would have further enhanced the buyer-seller relationship.
Timely responses and prompt assistance would have made me feel more confident in their commitment to customer satisfaction.
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Ginger Industries stock has a beta of 1.08. The company
just paid a dividend of $.85, and the dividends are expected to grow at 4 percent. The expected
return on the market is 11.3 percent, and Treasury bills are yielding 3.4 percent. The most recent
stock price for the company is $72.
a. Calculate the cost of equity using the DCF method.
b. Calculate the cost of equity using the SML method.
c. Why do you think your estimates in parts (a) and (b) are so difffferent?
A. 8.23% is the cost of equity calculated using the DCF approach.
B. The SML method's cost of equity is 12.32%.
In order to determine the value of the common equity of a company, an equity DCF valuation performs a discounted cash flow analysis on the cash flows accessible to equity holders.
The capital asset pricing model (CAPM) is illustrated by the securities market line (SML). The projected returns of assets based on systematic, non-diversifiable risk are theoretically represented by SML.
A. Cost of equity using the DCF method:
ke = [D1 / P0] + g
D1 = expected dividend next year = $0.85 * (1+0.04) = $0.884
P0 = current stock price = $72
g = expected dividend growth rate = 4%
ke = [$0.884 / $72] + 4% = 0.0123 + 4% = 8.23%
As a result, 8.23% is the cost of equity calculated using the DCF approach.
B. Cost of equity using the SML method:
ke = Rf + β(Rm - Rf)
where,
Rf = risk-free rate = 3.4%
β = beta = 1.08
Rm = expected return on the market = 11.3%
ke = 3.4% + 1.08(11.3% - 3.4%) = 3.4% + 1.08(7.9%) = 12.32%
As a result, the SML method's cost of equity is 12.32%.
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Workers laid off by a car manufacturer because of new automation to its assembly line. Workers dismissed by a large number of companies because of a general ...
The type of unemployment described is called cyclical unemployment.
What is the type of unemployment when workers are dismissed?Cyclical unemployment occurs when there is a general decline in demand for goods and services leading to a reduction in production and the subsequent layoff of workers.
During periods of economic downturns or recessions, businesses may experience lower sales which in turn leads to a decrease in production and the need for fewer workers. As a result, workers are dismissed by a large number of companies across various sectors.
Full question:
What type of unemployment is each of the following?: Workers laid off by a car manufacturer because of new automation to its assembly line.
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The Reasons for Nonsampling Errors include Coverage error Non-response error Interviewer error Processing error Measurement erro A TRUE B FALSE ◄
The statement "The reasons for nonsampling errors include coverage error, non-response error, interviewer error, processing error, and measurement error" is TRUE.
Nonsampling errors refer to errors that occur in the data collection and processing stages of a survey, which are unrelated to the random sampling process. Coverage error occurs when certain elements of the population are excluded or underrepresented in the sampling frame.
Non-response error happens when selected individuals refuse to participate or cannot be contacted. Interviewer error refers to mistakes made by interviewers during data collection. Processing error includes errors in data entry, coding, or data management.
Measurement error occurs when the collected data do not accurately represent the intended information. These nonsampling errors can affect the quality and reliability of survey results.
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In Ch.10 and Ch.11 we discuss how companies raise capital in the form of issuing debt or issuing stock. As you have probably seen on the news the Government through the Small Business Administration authorized the Paycheck Protection Program ( PPP) to help small businesses cope and have money to pay bills during this Covid19 epidemic. Businesses with less than 500 employees can apply and get money to help with expenses such as payroll, rent and utilities. However the whole process was a disaster and a perfect example of government regulation and many corporate and publicly traded companies receive funds while some small businesses did not even have their loan applications looked at . Take a look at the articles that we have here and provide analysis and insightful opinions.
On account of the Paycheck Protection Program PPP model , it's conceivable that the qualification standards and application cycle might not have been intended to actually address the necessities of every single private company, bringing about certain elements being forgotten about or confronting troubles in getting to the assets. Moreover, the contribution of corporate and public corporations in the program, which was expected to essentially uphold private ventures, has raised concerns and analysis.
The Paycheck Protection Program PPP is a $953-billion business credit program laid out by the US national government during the Trump organization in 2020 through the Covid Help,
Alleviation, and Monetary Security Act (CARES Act) to help specific organizations, independently employed laborers, sole owners, certain charitable associations, and ancestral organizations keep paying their laborers.
The Check Insurance Program permits application cycle substances to apply for low-interest private credits to pay for their finance and certain different expenses. How much a PPP credit is roughly equivalent to 2.5 times the candidate's typical regularly scheduled finance costs.
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Question 4 of 7 2 points Save Answer Question 4 If the government does not change fiscal policy during the business cycle, will there be any forces that will help smooth out the economic fluctuations?
The government will raise spending and cut taxes if it adopts an expansionary policy to promote economic growth. On the other side, it will pursue a contractionary strategy by cutting back on spending and raising taxes if it wants to slow the economy.
During a recession, monetary policy aims to boost overall demand by accelerating the expansion of the money supply. According to the idea of liquidity preference, decreasing interest rates will result from expanding the money supply. Higher investment spending results from lower interest rates, which raises overall demand. The business cycle can be steered more smoothly by fiscal policy. This is what is meant by countercyclical policy.
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Under what circumstances might some customers be satisfied by organisations even when they produce low levels of service quality?
Group of answer choices
When customers already paid in advance
When the service is non-habitual
When the customer had low levels of expectations
When there is a big gap between competing services
When the service is intangible
The circumstances in which some customers might be satisfied by organisations even when they produce low levels of service quality is when the customer had low levels of expectations. Option C is the correct answer.
The customer experience that a firm may value and the consumer's expectations frequently diverge. Customers feel discouraged or upset with the goods or services they receive as a result of this gap, which is more correctly known as the "perception gap." Option C is the correct answer.
On the internet, you notice a desirable product. When it finally does arrive, though, you find that even though you ordered the precise item, the photographs were just more appealing. Businesses all throughout the world are experiencing disappointment like this. Reduce the difference between perceptions and results for the best chance of improving customer relations. Customers are compelled to trust your guarantee more as a result of this, increasing their level of comfort.
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The complete question is, "Under what circumstances might some customers be satisfied by organisations even when they produce low levels of service quality?
A. When customers already paid in advance
B. When the service is non-habitual
C. When the customer had low levels of expectations
D. When there is a big gap between competing services
E. When the service is intangible"
You work as a financial analyst in Ku-Ma Bank. You are required to compare the performance of Bartho Company with the industry because they are applying for a loan from Ku-Ma Bank. The following are the financial statements given by Bartho Company. BARTHO COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 (RM) Cash 500,000 35,000 25,000 Account payable Notes payable Marketable securities 40,000 350,000 Long Term Debt 700,500 Account receivable Inventories Fixed assets 300,000 Common stock 78,000 1,400,500 370,000 Paid in Capital Retained earnings 422,000 TOTAL ASSETS 2,110,500 TOTAL LIAB. & EQUITY 2,110,500 BARTHO COMPANY INCOME STATEMENT FOR THE YEAR ENDING 31 DECEMBER 2021 (RM) Sales 1,946,200 1,310,000 Less: Cost of goods sold Gross Profit 636,200 Less: Selling expenses 325,100 Earnings before interest and tax 311,100 84,500 226,600 Less : Interest expenses Earnings before tax Less : Taxes Earnings after taxes 55,600 171,000 INDUSTRY AVERAGE RATIOS Current ratio 2.30 times Quick ratio 1.30 times Total Asset turnover Average collection period Net Profit Margin 2.50 times 23 days 35.00% 75.00% Debt ratio 55.00% Times Interest Earned 12.00 times Return on assets Based on the above financial statements and industrial average ratios, a) Calculate the indicated ratios for the Bartho Company. b) Evaluate the overall performance of the company according to liquidity, activity, profitability and leverage ratios.
a) The indicated ratios for Bartho Company can be calculated based on the given financial statements.
- Current Ratio = Current Assets / Current Liabilities
Current Assets = Cash + Accounts Receivable + Marketable Securities = RM 500,000 + RM 35,000 + RM 40,000 = RM 575,000
Current Liabilities = Accounts Payable + Notes Payable = RM 25,000 + RM 350,000 = RM 375,000
Current Ratio = RM 575,000 / RM 375,000 = 1.53 times
- Quick Ratio = (Current Assets - Inventories) / Current Liabilities
Quick Ratio = (RM 575,000 - RM 300,000) / RM 375,000 = 0.93 times
- Total Asset Turnover = Sales / Total Assets
Total Asset Turnover = RM 1,946,200 / RM 2,110,500 = 0.92 times
- Average Collection Period = (Accounts Receivable / Sales) * 365 days
Average Collection Period = (RM 35,000 / RM 1,946,200) * 365 days = 6.61 days
- Net Profit Margin = (Earnings after Taxes / Sales) * 100%
Net Profit Margin = (RM 171,000 / RM 1,946,200) * 100% = 8.79%
- Debt Ratio = Total Debt / Total Assets
Debt Ratio = RM 700,500 / RM 2,110,500 = 33.18%
- Times Interest Earned = Earnings before Interest and Tax / Interest Expenses
Times Interest Earned = RM 311,100 / RM 84,500 = 3.68 times
- Return on Assets = Earnings after Taxes / Total Assets
Return on Assets = RM 171,000 / RM 2,110,500 = 8.10%
b) Evaluating the overall performance of Bartho Company:
Liquidity ratios:
The current ratio of 1.53 indicates that the company may have difficulty meeting short-term obligations. The quick ratio of 0.93 also suggests a lower ability to cover immediate liabilities.
Activity ratios:
The total asset turnover of 0.92 indicates that the company generates less in sales compared to its total assets. The average collection period of 6.61 days suggests that the company has a relatively efficient collection process.
Profitability ratios:
The net profit margin of 8.79% indicates that the company generates a reasonable profit margin from its sales.
Leverage ratios:
The debt ratio of 33.18% indicates that the company has a moderate level of debt compared to its total assets. The times interest earned ratio of 3.68 suggests the company has limited earnings to cover interest expenses.
Overall, Bartho Company shows mixed performance across liquidity, activity, profitability, and leverage ratios. While the company has a reasonable net profit margin, its liquidity ratios and leverage ratios indicate areas of concern that should be further analyzed.
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Account planning plays an important role during creative strategy development by:
A. making sure the client knows the agency has the final say on which strategy will be used.
B. driving the process from the customers' point of view.
C. making sure all advertising complies with local, state, and FTC regulations.
D. determining whether the account should be accepted.
E. forecasting demand for the product category.
B. Account planning plays an important role during creative strategy development by driving the process from the customers' point of view.
It involves conducting research and analysis to gain insights into the target audience's needs, wants, and behaviors. This information is then used to develop a creative strategy that will resonate with the target audience and ultimately drive business results. While complying with regulations and forecasting demand are important aspects of advertising, they are not the primary focus of account planning during creative strategy development.
Additionally, the agency does not have the final say on which strategy will be used as it should be a collaborative process between the agency and the client.
Account planning plays an important role during creative strategy development by driving the process from the customers' point of view.
Account planning focuses on understanding the customers' needs, preferences, and motivations, which in turn helps in developing more effective and targeted creative strategies for advertising campaigns.
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Which of the following statements is true according to McClelland's theory of needs?
People with a high achievement need prefer tasks that have a high level of risk.
People with a high achievement need are interested in motivating others to do well.
People with a high need for power and affiliation often make good managers in large firms.
People with a high achievement need experience great satisfaction from success that comes by luck.
People with a high need for power and a low need for affiliation often make the best manag
According to McClelland's theory of needs, people with a high achievement need prefer tasks that have a high level of risk.
This is because they are driven by the desire to excel and take on challenging tasks in order to prove themselves and feel a sense of accomplishment. Success that comes by luck does not provide them with the same level of satisfaction as success that is earned through hard work and effort. Therefore, they are often motivated to take on difficult tasks and push themselves to achieve their goals. According to McClelland's theory of needs, people with a high achievement need prefer tasks that have a moderate level of risk, as they seek challenges with a reasonable chance of success. They are also motivated by personal accomplishment rather than the desire to motivate others or gain power and affiliation. Good managers in large firms typically have a balance of high need for power and moderate need for affiliation. Success by luck does not provide the same satisfaction to high achievers, as they value their own efforts and abilities in achieving goals.
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Ilana initiates the contract with Elis on 2nd April 2022 and the contract will be matured on 30th June 2022. Ilana pays premium RM2/share for 5000 shares. The exercise price is RM25/share. Ilana will be Out-of-The-Money (OTM) when the market price is higher than the exercise price and she has to exercise the contract sell to Elis at the exercise price.
Required:
What strategy is Ilana enter in this option market? What is the rationale for her to enter this strategy?
(3 marks)
After one month contract, the market price is RM24. Should Ilana exercise her contract? Why? Justify your answer with calculation (if any).
(5 marks)
Calculate her pay-off when the market price is increasing to RM30? Will she exercise the contract? Is she obliged to exercise the contract? Why?
(5 marks)
Differentiate her position in this strategy and in another strategy if she also has to pay premium,
(2 marks)
Strategy and rational eIlana is entering into a Short Call option strategy in this market.
She does this with the hope of gaining from the premium paid while simultaneously expecting that the market price remains below the exercise price by the time the contract matures.The rationale behind Ilana's entry into this strategy is to generate income by taking advantage of the high premium paid by Elis.2. Whether or not Ilana should exercise her contractWhen the market price is RM24 after one month of the contract, Ilana should not exercise her contract. Ilana should wait for the market price to increase and then exercise the contract.
This is because at the time the contract matures, if the market price is lower than the exercise price, the contract will be considered "Out-of-The-Money" (OTM).In this case, Ilana can keep the premium paid by Elis and simply let the contract expire.
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Total profit is the net earnings of the firm during a period of time. Marginal profit is the addition to total profit resulting from one more unit of output. Total revenue is the total amount of money the firm receives from the consumers of its goods, without any deduction of costs. Marginal revenue is the addition to total revenue resulting from the addition of one unit to output. First, expand on these descriptions to completely describe their impact on the firm. Then, describe fixed cost and the profit-maximizing price. Lastly, give one example of the profit-maximizing firm from a recent news article.
Gross profit represents the total profit of a company over a period of time and is calculated by subtracting total costs (including variable and fixed costs) from total sales. Gross profit reflects the net financial results of a company's operations and indicates the success or profitability of the company as a whole.
Gross profit measures the financial health and success of the company as a whole. It is an essential metric for evaluating the effectiveness of corporate strategy, pricing decisions, cost control and overall performance. A positive total profit indicates that the company is profitable, and a negative total profit indicates a loss.
Marginal profit refers to the additional profit obtained by producing and selling another unit of production. It is calculated by subtracting the marginal cost of producing that additional unit from the marginal revenue earned by selling that unit. Marginal profit helps companies make decisions about the optimal level of production by evaluating the profitability of each additional unit.
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Q 13 (1) A: The rate of change in output is called Mornaran ma t Wake B. The proportion of workers in the economy who are not employed and are un looking for a job is called nemployment bate C: The rate at which the average price of the goods in the economy is inflation increasing over time is called rate 60P Findl goods approve is the value of the final goods and D: services produced in the economy during a given period final E. A good is a good that is destined for final consumption. F: Periods of negative GDP growth are called de flation reu
The first term is the rate of change in output, which is called the Mornaran ma t Wake. This refers to the rate at which the production of goods and services in an economy is increasing or decreasing.
The second term is the proportion of workers who are not employed and are actively looking for a job, which is called the unemployment rate.
This is an important indicator of the health of an economy, as high levels of unemployment can indicate a lack of job opportunities and overall economic stagnation.
The third term is the rate at which the average price of goods in the economy is increasing over time, which is called the inflation rate. This is an important factor to consider when looking at the cost of living and overall economic growth.
The fourth term is the value of final goods and services produced in the economy during a given period, which is called the Gross Domestic Product (GDP). This is a measure of the overall economic output of a country.
The fifth term refers to goods that are intended for final consumption, rather than for use in production or further processing.
Finally, periods of negative GDP growth are called deflationary periods, and can be a sign of an economic recession or depression.
In summary, understanding these terms is essential for understanding the overall health and performance of an economy. They provide insight into factors such as job availability, inflation, and economic output.
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1. If the price decreases by
4 percent. As a result, the quantity demanded increases by 12
percent. The price elasticity of demand is………...
2. What is the
relationship between elasti
1) The price elasticity of demand in this case is -3. The negative sign indicates that the quantity demanded and price move in opposite directions, which is typical for most goods and services.
2) The relationship between elasticity and revenue can be understood through the concept of elastic and inelastic demand.
What is the explanation for the above ?Formula for elasticity of demand is
Elasticity = (% Change in Quantity Demanded) / (% Change in Price)
Thus,
Elasticity = (12% / -4%) = -3
2) When demand is elastic (elasticity > 1), a change in price leads to a relatively larger percentage change in quantity demanded.
When demand is inelastic (elasticity < 1), a change in price leads to a relatively smaller percentage change in quantity demanded.
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Full Question:
Although part of your question is missing, you might be referring to this full question:
1. If the price decreases by 4 percent. As a result, the quantity demanded increases by 12 percent. The price elasticity of demand is………...
2. What is the relationship between elasticity and revenue?
Six-month call options with strike prices of $35 and $40 cost $6 and $4, respectively. What is the maximum gain when a bull spread is created by trading a total of 200 options? The current price of a non-dividend paying stock is $30. Use a two-step tree to value a European call option on the stock with a strike price of $32 that expires in 6 months. Each step is 3 months, the risk free rate is 8% per annum with continuous compounding. What is the option price when u = 1.1 and d = 0.9.
The maximum gain is $20,000. The option price when u = 1.1 and d = 0.9 is $7.07.
Bull spread is a type of option strategy where you purchase a call option and sell another call option at a higher strike price and the same expiration date to reduce the cost of the trade. Six-month call options with strike prices of $35 and $40 cost $6 and $4, respectively.
When a total of 200 options are traded to create a bull spread, the maximum gain is determined as follows:Two call options must be purchased and sold to create the bull spread.The call option with a $35 strike price has a premium of $6, so the net premium paid for this option is 200 * $6 = $1200.
The call option with a $40 strike price has a premium of $4, so the net premium received from this option is 200 * $4 = $800.The total net premium paid is $1200 - $800 = $400.The maximum gain is equal to the difference between the strike prices and the net premium paid for the options, i.e., $5 - $4 = $1 per share multiplied by 100 shares, or $100 per option contract traded.
Since 200 options were traded, the maximum profit that can be realized is $100 * 200 = $20,000.Option price can be determined by the two-step tree. The option price when u = 1.1 and d = 0.9 is to be determined. Therefore, the value of the stock after the first period is to be calculated as follows: $30 * 1.1 = $33 and $30 * 0.9 = $27.
Now, the option price when u = 1.1 and d = 0.9 can be determined by using the formula: C = (1 / R) * [q * Cu + (1 - q) * Cd]Where, C = Option priceCu = Option price when the stock price goes upCd = Option price when the stock price goes downq = Risk-neutral probability of the stock price going upR = Risk-free rate of interest.
Let us calculate the values of the above parameters:R = 8% = 0.08u = 1.1d = 0.9S0 = $30K = $32Therefore, h = (ln (K / S0)) / (ln (u / d)) = (ln (32 / 30)) / (ln (1.1 / 0.9)) = 1.954q = (e ^ (R * h) - d) / (u - d) = (e ^ (0.08 * 1.954) - 0.9) / (1.1 - 0.9) = 0.5653Cu = max (Su - K, 0) = max (33 - 32, 0) = 1Cd = max (Sd - K, 0) = max (27 - 32, 0) = 0C = (1 / R) * [q * Cu + (1 - q) * Cd] = (1 / 0.08) * [0.5653 * 1 + (1 - 0.5653) * 0] = $7.07
Therefore, the option price when u = 1.1 and d = 0.9 is $7.07.
Hence, the solution is concluded.
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Objective:
Find a Valid (as established in class) RFQ (Request for Quotation),
online through the internet,
and provide a critique of its’ content; as being complete, lacking
details, having inappro
Real-time internet access to browse and search for specific documents or RFQs online.
What are the key elements that should be included in a well-written RFQ?Real-time internet access to browse and search for specific documents or RFQs online. Additionally, I don't have access to specific information about the content taught in your class. However, I can provide you with a general guideline on what to look for when critiquing an RFQ.
When evaluating an RFQ, it is important to assess whether it includes essential details such as project scope, specifications, quantities, delivery requirements, terms and conditions, evaluation criteria, and deadline for submission.
A complete RFQ should provide clear instructions to suppliers and ensure that all necessary information is included to enable accurate and competitive quotations. It should also establish a fair and transparent evaluation process.
Conversely, an RFQ may be deemed lacking if it fails to provide essential information or if its instructions are unclear, leading to confusion or incomplete quotations.
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ABC company currently has cash of $5 billion. The company is planning to repurchase its shares from investors using this cash. The company has already made an official announcement about the repurchase of stocks. Currently, the company is an unlevered firm. It has shares outstanding of 1.25 billion which are currently trading at the price of $20 in the market. Assuming the perfect capital market, calculate ABC’s market value of equity after the share repurchase.
To calculate ABC Company's market value of equity after the share repurchase, we need to consider the number of shares repurchased and the resulting change in the share price.
Currently, ABC Company has 1.25 billion shares outstanding, and they are trading at a price of $20 per share. Therefore, the market value of equity before the share repurchase is:
Market Value of Equity Before Repurchase = Number of Shares Outstanding * Share Price
Market Value of Equity Before Repurchase = 1.25 billion * $20 = $25 billiobillion.
To calculate the new number of shares outstanding, we divide the cash used for repurchase by the share price:
Number of Shares Repurchased = Cash Used for Repurchase / Share Price
Number of Shares Repurchased = $5 billion / $20 = 250 million shares
Therefore, the new number of shares outstanding after the repurchase is:
New Number of Shares Outstanding = Number of Shares Before Repurchase - Number of Shares Repurchased
New Number of Shares Outstanding = 1.25 billion - 250 million = 1 billion shares
Since we assumed perfect capital markets, the share repurchase does not affect the share price. Therefore, the share price remains at $20.
Now, we can calculate the market value of equity after the share repurchase:
Market Value of Equity After Repurchase = New Number of Shares Outstanding * Share Price
Market Value of Equity After Repurchase = 1 billion * $20 = $20 billion
Therefore, after the share repurchase, ABC Company's market value of equity would be $20 billion.
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In week 4 we discussed overconfidence bias and in week 6 we talked about self-efficacy. Consider you are a manager and one of your employees has very high levels of self-efficacy and frequently makes mistakes due to overconfidence. How would you manage this individual to improve their job performance?
Pease bring out real life examples and explain in more details.
As a manager, if one of my employees has very high levels of self-efficacy and frequently makes mistakes due to overconfidence, there are several ways I would manage this individual to improve their job performance.
I would provide feedback to the employee to highlight areas where they are making mistakes due to overconfidence. The feedback will be delivered in a constructive way to avoid discouraging the employee. The feedback will be geared towards making the employee more aware of their overconfidence bias, and how this bias is affecting their job performance.
For instance, I could point out how the employee's overconfidence led to them making a mistake on a particular project or task.
I would coach the employee to improve their job performance by providing guidance and support. Coaching can help the employee to recognize the difference between overconfidence and self-efficacy, and learn how to manage their overconfidence bias.
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Can
anyone explain where did the pmt (50) come from ? how did we get it
? I get everything else except this part
Consider a bond with a coupon rate of 10% and coupons paid semi-annually. The par value is $1000 and the bond has 5 years to maturity. The yield to maturity is 11%. What is the value of the bond? I=11
The value of the bond can be calculated using the present value of an annuity formula. By plugging in the relevant values, we can determine the periodic payment amount (PMT). In this case, with a coupon rate of 10% and semi-annual payments, the coupon payment would be $50 ($1000 * 10% / 2).
How is the PMT value of $50 determined for the bond with a coupon rate of 10% and semi-annual payments?To calculate the value of the bond, we need to find the present value of both the coupon rate and the par value. The coupon payments are a series of cash flows, representing an annuity.
By applying the present value of an annuity formula, we can determine the value of these payments. The formula for the present value of an annuity is:
PVA = PMT * (1 - (1 + r)^(-n)) / r
Where:
PVA = Present Value of Annuity
PMT = Periodic Payment Amount
r = Discount Rate per Period
n = Number of Periods
In this case, the coupon payments are $50 (semi-annual), the discount rate is 11% (or 0.11 per period), and the number of periods is 10 (5 years with semi-annual payments). By plugging these values into the formula, we can solve for PMT:
PVA = $50 * (1 - (1 + 0.11)^(-10)) / 0.11
PVA ≈ $50 * (1 - 0.3486) / 0.11
PVA ≈ $50 * 0.6514 / 0.11
PVA ≈ $3270.80 / 0.11
PVA ≈ $29734.55
Therefore, the PMT value is approximately $50.
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A strategy focuses on how to execute and implement a marketing
plan (True or False)
A strategy focuses on how to execute and implement a marketing plan is True.
Thus, The advertising technique a company will use to market and sell its goods or services is called a marketing plan.
The target market, the best way to reach them, the price point at which the good or service should be sold, and the method by which the business will evaluate its performance will all be determined by the marketing strategy.
A market plan must be continuously monitored and adjusted in order to indicate what the greatest and worst approaches to create sales are. A company might not be able to stay in business for very long without a strong marketing strategy.
Thus, A strategy focuses on how to execute and implement a marketing plan is True.
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Field Corp.'s controller was preparing the adjusting entries for the company's year ended December 31, 2020, when the V.P. Finance called him into her office. "Jean-Pierre," she said, "I've been considering a couple of matters that may require different treatment this year. First, the patent we acquired in early January 2018 for $585,000 will now likely be used until the end of 2022 and then be sold for $203,000. We previously thought that we'd use it for 10 years in total and then be able to sell it for $133,000. We've been using straight-line amortization on the patent." "Second, I just discovered that the property we bought on July 2, 2017, for $273,000 was charged entirely to the Land account instead of being allocated between Land ($63,000) and Building ($210,000). The building should be of use to us for a total of 20 years. At that point, it'll be sold and we should be able to realize at least $49,200 from the sale of the building." "Please let me know how these changes should be accounted for and what effect they will have on the financial statements." Field Corp. follows IFRS. Answer the following, ignoring income tax considerations and assuming that the company has not previously reported quarterly results. Assuming that no amortization has been recorded as yet for the patent for 2020, prepare the December 31, 2020 entries that are necessary to make the accounting changes and to record patent amortization expense for 2020. (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.) Date Account Titles and Explanation Dec. 31 Amortization Expense Accumulated Amortization-Patents (To record amortization expense.) Dec. 31 Buildings Land (To record error correction entry.) Depreciation Expense Retained Earnings Accumulated Depreciation-Duildings (To record error correction entry.) Dec. 31 Debit Credit 110 Calculate where possible, the required disclosure amounts per year of increase/decrease for each change. Amount Increase/Decrease Patent Amortization Expense $ Increase : Net Income Decrease : Land and Building Depreciation Expense Increase # Net Income Decrease # $ $ $ 10
Here are the entries that are necessary to make the accounting changes and to record patent amortization expense for 2020:
The Journal EntriesDate Account Titles and Explanation Debit Credit
Dec. 31 Amortization Expense Accumulated Amortization-Patents $110
Dec. 31 Buildings Land $210
Dec. 31 Depreciation Expense Retained Earnings Accumulated Depreciation-Duildings $10
The required disclosure amounts per year of increase/decrease for each change are as follows:
Patent Amortization Expense: Increase of $110 per year
Land and Building Depreciation Expense: Increase of $10 per year
The increase in patent amortization expense will decrease net income by $110 per year. The increase in land and building depreciation expense will decrease net income by $10 per year.
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In The Goal, Alex was able to conclude that the NCX-10 was the bottleneck. What evidence supports this conclusion? (select all that apply-you must select all correct answers and only correct answers to get all of the points for this question)
Choose all that apply.
O Consistently large inventories of units waiting to be processed by the NCX-10
O Consistently small inventories of units waiting to be processed by the NCX-10 Consistently small inventories of units that have been processed by the NCX-10 but are waiting to be processed by the next machine in ine
O The total production of the plant increased when they ensured the NCX-10 was never ide
O Increasing production rates of other machines in the plant made almost no difference
The evidence that supports Alex's conclusion that the NCX-10 was the bottleneck includes consistently large inventories of units waiting to be processed by the NCX-10.
Consistently small inventory of units that have been processed by the NCX-10 but are waiting to be processed by the next machine in line, and the total production of the plant increasing when they ensured the NCX-10 was never idle.
Additionally, increasing production rates of other machines in the plant made almost no difference, further suggesting that the NCX-10 was the bottleneck. Therefore, by focusing on improving the NCX-10's efficiency, Alex was able to significantly improve the overall production and profitability of the plant.
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why do breweries locate near their markets while wineries typically locate near their input sources?
Breweries and wineries have distinct location preferences driven by the unique characteristics of their production processes and industry dynamics. Breweries tend to locate near their target markets, while wineries typically choose locations near their input sources.
Wineries prioritize proximity to their input sources, such as vineyards, primarily due to the perishability of grapes. Grapes have a limited shelf life, and locating near the source ensures that wineries receive fresh and high-quality grapes for wine production. This minimizes transportation time and costs, as well as reduces the risk of damage to the perishable inputs. Furthermore, wineries often benefit from the regional characteristics and traditions associated with specific grape-growing regions, leveraging the reputation and uniqueness of the terroir.
On the other hand, breweries have more flexibility in their location choices. The inputs for brewing, such as barley, hops, and water, have a longer shelf life and are less perishable. This allows breweries to locate closer to their target markets, reducing transportation costs and ensuring the freshness of their products. Beer is best consumed when fresh, and breweries rely on local or regional markets to maintain product quality and respond quickly to customer demands.
While these general trends explain the location preferences of breweries and wineries, it's important to consider individual variations based on factors such as market dynamics, regional preferences, and business strategies within each industry. Ultimately, the location decisions of breweries and wineries are influenced by the specific needs of their production processes, the perishability of their inputs, and their relationships with markets and customers.
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Suggest other alternatives and strategies that Qantas could have
been done to deal with the covid 19 pandmeic to secure the future
for the company and over sustainability.
There were several alternatives and strategies that Qantas could have pursued to deal with the COVID-19 pandemic, to secure their future and sustainability in the aviation industry.
Here are some of the possible options.
1. Adapting to the situation - Qantas could have responded more quickly by introducing a contingency plan and anticipating the financial consequences of the crisis, including steps to reduce staff, routes, and aircraft.
2. Re-strategizing their approach - Qantas could have shifted their focus to cargo and freight services, as many other airlines have done, to make up for the decline in passenger services.
3. Technological Advancements - Qantas could have invested in technology to make their services more contactless, which could provide greater confidence to their passengers.
4. Cost Management - Qantas could have looked for cost-cutting measures in non-essential areas such as marketing, advertising, and other luxury perks to save money.
5. Partnerships and Mergers - Qantas could have looked at forming strategic partnerships and mergers with other airlines to reduce the negative impact of the pandemic.
6. Government assistance - Qantas could have sought government assistance to help them through the crisis, including loans and financial support.
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Compare two treatments. Treatment A provides an improvement of 0.1 QALYs at a cost of $2,000, whereas Treatment B provides an improvement of 0.2 QALYs at a cost of $5,000. Complete the following: treatment A has incremental costs of x, while treatment B has incremental costs of y.
x=$0, y=$3,000.
x=$0, y=$5,000.
x=$2,000, y=$3,000.
x=$2,000, y=$5,000.
For treatment B, the incremental costs would be $5,000 (cost of treatment B) - $0 (cost of baseline) = $5,000, while the incremental QALY improvement would be 0.2 QALYs (improvement of treatment B) - 0 (improvement of baseline) = 0.2 QALYs. Therefore, the option is x=$2,000, y=$5,000.
The incremental costs for treatment A and B can be calculated by subtracting the cost and QALY improvement of the baseline or reference treatment (assuming it provides no improvement) from the cost and QALY improvement of each respective treatment. Thus, for treatment A, the incremental costs would be $2,000 (cost of treatment A) - $0 (cost of baseline) = $2,000, while the incremental QALY improvement would be 0.1 QALYs (improvement of treatment A) - 0 (improvement of baseline) = 0.1 QALYs. For treatment B, the incremental costs would be $5,000 (cost of treatment B) - $0 (cost of baseline) = $5,000, while the incremental QALY improvement would be 0.2 QALYs (improvement of treatment B) - 0 (improvement of baseline) = 0.2 QALYs. Therefore, the value is x=$2,000, y=$5,000.
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Question 20 2 pts The expected cash flow for Lioness Publishing in the fourth year is £1.36 million. The company believes that inflation will be 6 per cent a year over the next 4 years. What is the real cash flow for this company? £1.00 million £1.05 million £5.44 million £1.08 million £0.34 million 2 pts Question 21 MacBook Pro
To calculate the real cash flow, we can use the following formula: Real cash flow = Expected cash flow / (1 + Inflation rate)^Years
Where:
Real cash flow is the cash flow that has been adjusted for inflation. Expected cash flow is the amount of money that is expected to be received in the future. The inflation rate is the rate at which prices are rising. Years is the number of years that it will take to receive the expected cash flow. In this case, the expected cash flow is £1.36 million, the inflation rate is 6%, and the number of years is 4.
Real cash flow = 1.36 million / (1 + 0.06)^4
Real cash flow = £1.08 million
Inflation is a measure of the rate at which prices are rising. When inflation is high, the value of money is declining. This means that a dollar today is worth less than a dollar tomorrow. To calculate the real cash flow, we need to adjust the expected cash flow for inflation. This is done by dividing the expected cash flow by (1 + Inflation rate)^Years.In this case, the expected cash flow is £1.36 million, the inflation rate is 6%, and the number of years is 4.
Real cash flow = 1.36 million / (1 + 0.06)^4
Real cash flow = £1.08 million
This means that the real cash flow for Lioness Publishing in the fourth year is £1.08 million. This is the amount of money that the company will actually receive after adjusting for inflation.
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Question 12 (10 points) Listen You just graduated from college and are starting your new job. You realized the importance to save for the future and have figured out that you will save $2,000 per quarter for the next 11 years; and then increase to $5,000 per quarter for the following 7 years. The amount accumulated at the end of these investments will be your retirement egg nest. You plan to start retirement and start withdrawing quarterly amounts the following quarter (you will be in retirement for 26 years). If your required rate of return is 12% compounded quarterly, how much are your quarterly withdrawals? Round to the nearest $0.01 but do not use the $ sign Enter as a positive number. DO NOT USE commas to separate thousands. For example if you obtain $1,432.728 then enter 1432.73; if you obtain $432 then enter 432.00 Your Answer: Answer Question 13 (10 points) Listen It is the first day of the year and you plan to make a total of 5 deposits of $5,000 each, one every 6 months with the first payment being made today. The bank pays a nominal interest rate of 12% but uses semiannual compounding. How much your account with the bank be if you leave the money in the bank to be withdrawn all in 9 years from today? Round to the nearest 50.01 but do not use the S sign DO NOT USE commas to separate thousands. For example if you obtain $1.432.728 then enter 1433.73: if you obtain $432 then enter 432.00 Your Answer: Answer
The calculated retirement nest egg rounded to the nearest $0.01 without using the dollar sign
The account balance after 9 years by determining the future value of semiannual deposits. Deposits of $5,000 each are made for 5 periods with a 12% nominal interest rate compounded semiannually.
To calculate the retirement nest egg, we need to determine the future value of the quarterly savings. The savings amount will be $2,000 per quarter for the first 11 years and $5,000 per quarter for the following 7 years. We will assume a required rate of return of 12% compounded quarterly.
Using the future value formula:
Future Value = P * [(1 + r)^n - 1] / r
For the first 11 years:
P = $2,000
r = 12% / 4 = 0.03 (quarterly rate)
n = 11 * 4 = 44 (number of quarters)
For the following 7 years:
P = $5,000
r = 12% / 4 = 0.03 (quarterly rate)
n = 7 * 4 = 28 (number of quarters)
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