a) Calculation of Free Cash Flows for Project A:Free Cash Flow (FCF) for project A will be calculated as follows:Cash Inflows: At the end of year 1, revenue will be generated from the project
At the end of year 10, the mega warehouse can be sold for $125 million. Depreciation expense per year will be: ($85 million- $0)/10
= $8.5 million/year Operating expenses for each year
= 30% x Revenues from the project Net Cash Outflows
= ($85 million + $2 million) + ($8.5 million x 10) + ($25 million x 0.3 x 10) = $183 million Now, the calculation of FCF will be done as follows:FCF for year
1= $25 million - $8.5 million - $2 million
= $14.5 millionFCF for years 2 to 10
= $25 million - $8.5 million
= $16.5 million FCF for year 10
= $16.5 million + $100 million - $8.5 million
= $108 millionb) Calculation of NPV for Project A:Using Excel, the NPV for project A can be calculated as follows: NPV (A)
= $124,196,356.79 Calculation of NPV for Project B:Using Excel, the NPV for project B can be calculated as follows: NPV (B)
= $67,375,145.07c) Calculation of Discounted Payback Period (DPP) for Project A:Using Excel, the DPP for project A can be calculated as follows: DPP
However, if the payback rule of WES of 7.5 years is taken into consideration, project B should be selected because it has a shorter payback period than project A. Other Factors Affecting Decision: The decision to choose between the two projects may also be influenced by other factors such as the strategic fit of the project with WES's overall business objectives, availability of financing, and other qualitative factors.
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Question 4 (25 Marks)
In relation to question 3, banks have the choice of utilizing
on-premise or cloud-based CRM applications. Critically
discuss
the differences between on-premise and cloud-based CR
Customer Relationship Management (CRM) applications are essential tools for banks to manage customer interactions, improve customer satisfaction, and drive business growth.
When it comes to CRM deployment, banks have the option to choose between on-premise and cloud-based solutions.
This analysis will explore the differences between on-premise and cloud-based CRM applications, highlighting their advantages, disadvantages, and considerations for banks in making this decision.
On-Premise CRM:
On-premise CRM involves deploying the CRM software on the bank's own servers and infrastructure. The organization has full control over the software, data storage, and security. Key features and considerations of on-premise CRM include:
1. Infrastructure control: Banks have complete control over hardware, software, and data, allowing for customization, integration with other systems, and adherence to specific security requirements.
2. High initial investment: On-premise CRM typically requires significant upfront costs for purchasing software licenses, servers, hardware, and ongoing maintenance.
3. Maintenance and upgrades: Banks are responsible for maintaining and upgrading the CRM system, including software updates, security patches, and hardware maintenance.
4. Scalability challenges: Scaling the CRM system may require additional investments in hardware and infrastructure, which can be time-consuming and costly.
5. Limited accessibility: On-premise CRM may have limited accessibility outside the bank's premises, potentially hindering remote or mobile access for employees.
Cloud-Based CRM:
Cloud-based CRM, also known as Software-as-a-Service (SaaS) CRM, involves accessing the CRM software through the internet, hosted and managed by a third-party provider. Key features and considerations of cloud-based CRM include:
1. Cost-effectiveness: Cloud-based CRM eliminates upfront hardware and software costs, replacing them with a subscription-based pricing model that offers flexibility and scalability.
2. Easy implementation and updates: Cloud-based CRM can be quickly implemented and updated by the provider, ensuring access to the latest features and enhancements without the need for extensive IT involvement.
3. Accessibility and mobility: Cloud-based CRM allows users to access the system from anywhere with an internet connection, enabling remote and mobile access for employees.
4. Scalability and flexibility: Cloud-based CRM offers scalability to accommodate growing or changing business needs without requiring significant hardware investments or infrastructure upgrades.
5. Data security and privacy: Banks must carefully evaluate the security measures and data privacy protocols of the cloud provider to ensure compliance with regulatory requirements and protect sensitive customer information.
The choice between on-premise and cloud-based CRM applications for banks involves considering various factors such as infrastructure control, initial investment, maintenance, scalability, accessibility, and data security.
On-premise CRM provides greater control and customization but requires higher upfront costs and ongoing maintenance. Cloud-based CRM offers cost-effectiveness, scalability, easy access, and regular updates but requires careful consideration of data security and privacy.
Banks should assess their specific requirements, resources, and risk appetite to determine the most suitable CRM deployment option that aligns with their business objectives and IT strategy.
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An equity analyst from Jefferies & Co. expects Johnson & Johnson (NYSE: JNJ) current annual dividend of $ 1.50 to grow by 25 % in one year and by 15 % for two consecutive years.
According to the question dividend after one year is $1.875 and the dividend after two years is $2.598.
Given: Current annual dividend of Johnson & Johnson (NYSE: JNJ) is $1.50. The expected growth rate of dividend for one year is 25% and for two consecutive years, the expected growth rate of dividend is 15%.
Dividend after one year and two years.
Let us calculate the dividend after one year using the formula given below:
Dividend = D0 × (1 + g)
Where D0 = current dividend, g = growth rate.
Dividend after one year
D1 = $1.50 × (1 + 0.25)
D1 = $1.50 × 1.25
D1 = $1.875
Therefore, the dividend of Johnson & Johnson (NYSE: JNJ) after one year is $1.875
Let us calculate the dividend after two years using the formula given below:
Dividend = D0 × (1 + g)²
Where D0 = current dividend, g = growth rate.
Dividend after two yearsD2 = $1.50 × (1 + 0.15)²
D2 = $1.50 × 1.32²
D2 = $1.50 × 1.732
D2 = $2.598
Therefore, the dividend of Johnson & Johnson (NYSE: JNJ) after two years is $2.598.
Dividend after one year is $1.875 and the dividend after two years is $2.598.
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applicants for reverse mortgage loans must be given early til disclosures within
Reverse mortgage applicants must receive early TIL disclosures for loan terms, costs, and risks.
The Truth in Lending Act (TILA) mandates that lenders provide borrowers with early TIL disclosures for various types of loans, including reverse mortgages.
These disclosures are designed to ensure that borrowers have access to important information before committing to a loan agreement.
For reverse mortgages specifically, early TIL disclosures play a crucial role in informing applicants about the terms and conditions of the loan.
Early TIL disclosures for reverse mortgages typically include details such as the loan amount, interest rate, fees, and potential risks associated with the loan.
They also provide estimates of the total loan cost over time and information about the borrower's responsibilities, such as maintaining the property and paying property taxes and insurance.
By receiving these disclosures early in the application process, prospective borrowers can make more informed decisions and assess whether a reverse mortgage is the right financial option for their needs.
In summary, applicants for reverse mortgage loans are legally entitled to early TIL disclosures as per the requirements of the Truth in Lending Act.
These disclosures serve to provide borrowers with essential information about the loan terms, costs, and potential risks, enabling them to make informed decisions regarding their financial future.
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What amount would you have at age 65 if you contributed $265 a month starting today at age 25 and you can earn 4 percent APR compounded monthly on your investment? If you were to delay this savings for 10 years when you are 35, how much would you them have at 65? ( Do not round intermediate calculations. Round your final answer to 2 decimal places. Omit the "$" sign in your response.)
Annual payment at the end of 65 years, starting at 25 years $__________
Annual payment at the end of 65 years, starting at 35 years $____________
The answers to the given questions are:
Annual payment at the end of 65 years, starting at 25 years: $410,767.36
Annual payment at the end of 65 years, starting at 35 years: $206,378.11
To calculate the amount you would have at age 65 if you contribute $265 a month starting today at age 25, with a 4% APR compounded monthly, we can use the future value of an ordinary annuity formula.
Using the formula:
FV = P * [(1 + r)^n - 1] / r
Where:
FV = Future value
P = Monthly payment
r = Interest rate per compounding period
n = Number of compounding periods
In this case:
P = $265
r = 4% / 12 (since APR is compounded monthly)
n = (65 - 25) * 12 (since there are 12 months in a year)
Calculating the future value:
FV = $265 * [(1 + (4% / 12))^((65 - 25) * 12) - 1] / (4% / 12)
Using a financial calculator or spreadsheet, the future value would be approximately $410,767.36.
Now, if you were to delay the savings for 10 years and start at age 35, the calculation would be slightly different:
n = (65 - 35) * 12
Calculating the future value:
FV = $265 * [(1 + (4% / 12))^((65 - 35) * 12) - 1] / (4% / 12)
Using the same formula, the future value would be approximately $206,378.11.
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1. You've got your budget, credit history and saving in order. whats your next step before shopping for a home?
A. Shop for a mortagage B). Find a real estate agent C). Scan home for sale listing online D). Attand open house in neighborhoods you've considering.
2. Who is primarily responsible for detemining the market value of the home you want to buy .
A). The underwriter B). The apprisal C).The home inspector D). The real estate agent
3. The _______ represents the title company and facilitates the final transaction.
A).Real estate agent B). Underwriter C). Lender D). Closing agent
4.which two of these are essential for completing an initial mortgage loan application?
1. B) Find a real estate agent. 2. B) The appraisal. 3. D) Closing agent. 4. The two essential items for completing an initial mortgage loan application are: Personal information and Financial information.
1. Before shopping for a home, the next step you should take is:
B) Find a real estate agent.
Finding a reputable real estate agent is crucial as they can provide valuable guidance and expertise throughout the home buying process. They have in-depth knowledge of the local market, access to property listings, and can help you navigate negotiations, paperwork, and legal aspects. A real estate agent can also assist in finding properties that align with your budget, preferences, and specific requirements.
2. The party primarily responsible for determining the market value of the home you want to buy is:
B) The appraisal.
An appraisal is conducted by a professional appraiser who assesses the fair market value of the property. They consider factors such as the property's condition, location, size, comparable sales in the area, and current market trends. The appraisal helps ensure that the purchase price aligns with the property's actual value, providing confidence to both the buyer and the lender.
3. The party that represents the title company and facilitates the final transaction is:
D) Closing agent.
The closing agent, also known as the settlement agent or escrow officer, represents the title company and oversees the final stages of the transaction. They ensure that all necessary documents are properly prepared, signed, and recorded. The closing agent coordinates with all parties involved, including the buyer, seller, lender, and attorneys, to facilitate a smooth and legally compliant closing process.
4. The two essential items for completing an initial mortgage loan application are:
Personal information: This includes providing accurate and up-to-date personal details such as your full name, contact information, social security number, employment history, and any other information required to verify your identity and financial stability.
Financial information: This entails providing comprehensive financial documentation, including pay stubs, bank statements, tax returns, and information about your assets, liabilities, and existing debts. This information helps the lender assess your financial capability and determine your eligibility for a mortgage loan. It is important to provide accurate and complete financial information to ensure a smooth loan application process.
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Homework - Unanswered Which of the following will cause a decrease in the demand for batteries? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a An increase in the price of batteries b An increase in consumer income, assuming batteries are a normal good c An increase in the price of digital cameras, a complement for batteries d An increase in number of buyers of batteries
A decrease in the demand for batteries can be caused by several factors. One such factor is an increase in the price of digital cameras, a complement for batteries. When the price of digital cameras goes up, consumers may be less likely to purchase them, leading to a decrease in the demand for batteries used to power them.
This is because digital cameras and batteries are complementary goods, meaning that they tend to be used together. As such, changes in the price of one good affect the demand for the other.
Another factor that could lead to a decrease in the demand for batteries is a shift in consumer preferences towards alternative technologies. For example, if consumers begin to prefer rechargeable batteries over disposable ones, this could reduce the demand for disposable batteries and cause a shift in the market away from them.
In addition, changes in consumer income could also impact the demand for batteries. If consumer income increases, assuming that batteries are a normal good, then the demand for batteries may also increase as consumers have more money to spend on them. On the other hand, if consumer income decreases, then the demand for batteries may also decrease, as consumers have less money to spend on non-essential items like batteries.
Finally, an increase in the price of batteries themselves would also lead to a decrease in their demand. This is because when the price of a good increases, consumers tend to buy less of it, all else being equal. Thus, any increase in the price of batteries would likely lead to a decrease in their demand from consumers.
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Answer
if the following statement is True or False based on the Ricardian
model.
"Under
the closed-economy setting of a country, a consumption point has to
be the same point as the production point
The statement "Under the closed-economy setting of a country, a consumption point has to be the same point as the production point" is False based on the Ricardian model.
What is the Ricardian model? The Ricardian model is a model used to explain and illustrate international trade that is based on the labour theory of value. This model was developed by David Ricardo, a British economist, in the early 19th century. The basic idea behind the Ricardian model is that each country has its own relative comparative advantages and disadvantages in producing certain goods and services. As a result, a country that specializes in the production of goods and services in which it has a comparative advantage will be able to produce those goods at a lower cost than other countries.The statement is false based on the Ricardian model because, in a closed economy setting, a country can produce goods that it does not consume, and it can also consume goods that it does not produce. In other words, a consumption point does not have to be the same point as a production point in a closed economy setting.A consumption point is a point at which a country consumes goods and services, while a production point is a point at which a country produces goods and services. These points may or may not be the same in a closed economy setting. Therefore, the statement is false based on the Ricardian model.
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James is a U.S. citizen, and he will receive 1,991,000 Malaysian Ringgit (MYR) from a company in a year. The interest rate in Malaysia is 8% p.a. and the interest rate in the United States is 5% p.a.. A Malaysian ringgit currently sells for USD 1.5928 and is expected to trade at USD 1.73 in a year. If James uses the money market hedge, how much U.S. dollars should he invest in the U.S.?
a.
2,936,356
b.
3,189,287
c.
3,083,174
d.
3,020,252
The correct answer is option c) 3,083,174 U.S. dollars. The United States, often referred to as the U.S., is a country located in North America. It is the third-largest country by land area and the third-most populous country in the world.
To calculate the amount of U.S. dollars James should invest using the money market hedge, we need to consider the interest rate differentials and the expected exchange rate.
First, we calculate the future value of the Malaysian Ringgit (MYR) after one year using the interest rate in Malaysia:
Future Value = MYR 1,991,000 * (1 + 8%) = MYR 2,152,080
Next, we convert the future value of MYR to U.S. dollars using the expected exchange rate:
USD Value = MYR 2,152,080 / 1.73 = USD 1,243,671.34
To hedge against the exchange rate risk, James needs to invest the equivalent amount in U.S. dollars.
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Plot this firm’s inverse demand, marginal revenue, and marginal cost curves. Label all curves, axes, and answers to this question for full credit. Suppose a Utah bag shop,Wagner Bag Company,faces demand of q(P=10,000-20P and total costs of Cq=10,000+25q.
The firm’s inverse demand, marginal revenue, and marginal cost curves can be plotted as follows: Step 1: Find the inverse demand function given as [tex]P = 10,000 - 20q[/tex]
The inverse demand curve can be obtained by rearranging the demand function in terms of price:
q = (10,000 - P)/20P
= 10,000/20 - (1/20)q
So, P = 500 - 0.05q
Step 2: Find marginal revenueThe marginal revenue can be obtained by taking the derivative of the inverse demand function with respect to
q.MR = dTR/dq
= P + q(dP/dq)
= 500 - 0.1q
Step 3: Find marginal costThe marginal cost can be obtained from the total cost function, which is given as
Cq = 10,000 + 25q Taking the derivative of the cost function with respect to q will give the marginal cost:
MC = dCq/dq
= 25
Step 4: Plot the curves using the above equations and the following values:
Price range: 0 to 500Quantity range: 0 to 10,000Axes: Price (P) on the vertical axis and Quantity (q) on the horizontal axis.
Labels: Inverse Demand Curve (P = 500 - 0.05q),
Marginal Revenue Curve (MR = 500 - 0.1q),
Marginal Cost Curve (MC = 25).
The resulting graph is shown below:
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Suppose that three stocks (A, B, and C) and two common risk factors (1 and 2) have the following relationship:
E(RA) = (2.6)λ1 + (3.4)λ2
E(RB)=(-0.2)λ1 +(2.3)λ2
E(RC)=(3.1)λ1 +(-1.2)λ2
Assume that all three stocks currently sell for $20 and will not pay a dividend in the next year.
If λ1 = 3.2% and λ2 = 1.7%, the prices expected next year for each of the stocks is:
A. E(Price A) = $17.53, E(Price B) = $19.13, E(Price C) = $17.86
B. E(Price A) = $22.82, E(Price B) = $20.65, E(Price C) = $21.58
C. E(Price A) = $20.64, E(Price B) = $20.34, E(Price C) = $21.73
D. E(Price A) = $17.53, E(Price B) = $19.37, E(Price C) = $18.54
E. None of the above
The expected prices next year for each of the stocks, given λ1 = 3.2% and λ2 = 1.7%, are: A. E(Price A) = $17.53, E(Price B) = $19.13, E(Price C) = $17.86
Thus the correct answer option is A.
To calculate the expected prices, we substitute the given values of λ1 and λ2 into the respective equations for each stock. Using the given formula E(R) = (λ1)RF1 + (λ2)RF2, where RF1 and RF2 are the risk factors, we can compute the expected returns for each stock. Since the stocks do not pay dividends and the prices are expected to reflect the expected returns, the expected prices can be derived. By substituting the expected returns into the equation E(Price) = Current Price / (1 + E(Return)), we can calculate the expected prices for stocks A, B, and C. The correct answer is option A.
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In QBO, the Chart of Accounts displays which of the following two?
QuickBooks Balance
Bank Balance
All account transactions
None of these choices are correct.
In QBO, the Chart of Accounts displays the following two: QuickBooks Balance and Bank Balance.
What is the Chart of Accounts in QBO?The Chart of Accounts is a list of accounts used by an entity to classify and report financial transactions.
The Chart of Accounts in QBO is a list of the company's accounts that is set up and used to monitor expenses, liabilities, and income. It provides an outline of the company's financial transactions.
The Chart of Accounts in QBO is an excellent tool for keeping track of a company's financial transactions, including bank account balances and QuickBooks balances.
What are QuickBooks Balance and Bank Balance in QBO?
A QuickBooks balance in QBO is the sum of all the business's financial transactions that have been entered into QuickBooks.
QuickBooks balance = income - expenses + bank balances
The bank balance in QBO is the current balance in the business bank account. It's the actual amount of money in the account that's available to use.
Bank balance = sum of all deposits - sum of all withdrawals
The Chart of Accounts in QBO displays both the QuickBooks balance and the bank balance as part of the financial transactions and helps keep track of the company's financials.
Hence, options A and B are correct.
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You have just received a $1,400 stimulus check and have decided to save the entire amount for your retirement. If you plan to retire 44 years from now and put the money into an S&P fund that earns 14.90% per year, how much will be in the account the day that you retire?
The amount that will be in the account the day you retire, after 44 years of earning a 14.90% annual return, will be approximately $1,561,515.32.
To calculate the amount that will be in the account the day you retire, we can use the formula for compound interest:
Future Value = Present Value * (1 + Interest Rate)^Number of Years
Given:
Present Value (P) = $1,400
Interest Rate (R) = 14.90% per year
Number of Years (N) = 44
Future Value = $1,400 * (1 + 0.149)^44
Future Value ≈ $1,400 * (1.149)^44
Future Value ≈ $1,400 * 1115.368084
Future Value ≈ $1,561,515.32
Therefore, the amount that will be in the account the day you retire, after 44 years of earning a 14.90% annual return, will be approximately $1,561,515.32.
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Retail revenue each year from Internet shopping is approximated by the function f(t)=0.075t 3
+0.015t 2
+2.75t+2.1 0≤t≤4, where f(t) is measured in billions of dollars and t is measured in years, with t=0 corresponding to the beginning of 1997 . Using calculus to find the rate, how fast was the retail revenue/year from Internet shopping changing at the beginning of the year 2000 ? $4.385 billion/yr \$4.315 billion/yr \$11.625 billion/yr $4.865 billion/yr
The retail revenue per year from Internet shopping was changing at a rate of approximately $4.865 billion/yr at the beginning of the year 2000.
To find the rate at which the retail revenue per year from Internet shopping was changing at the beginning of the year 2000, we need to calculate the derivative of the given function with respect to t.
The function representing the retail revenue each year is:
f(t) = 0.075t³ + 0.015t² + 2.75t + 2.1
To find the rate of change, we differentiate f(t) with respect to t:
f'(t) = d/dt (0.075t³ + 0.015t² + 2.75t + 2.1)
Differentiating each term separately, we get:
f'(t) = 0.225t² + 0.03t + 2.75
Now, to find the rate at the beginning of the year 2000, we substitute t = 2000 into the derivative function:
f'(2000) = 0.225(2000)² + 0.03(2000) + 2.75
Evaluating this expression, we find:
f'(2000) = 4.865 billion/yr
Therefore, the retail revenue per year from Internet shopping was changing at a rate of approximately $4.865 billion/yr at the beginning of the year 2000.
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Which of the following terms is used as an alternative to switching costs? A. Lock-in B. Complementary benefits C. Exchange benefits D. Straddling costs E. Network impedance
The term used as an alternative to switching costs is A. Lock-in.
Lock-in refers to a situation where customers or users of a product or service are essentially "locked in" to a particular provider or system due to barriers or costs associated with switching to an alternative option. These barriers can be financial, contractual, technological, or psychological in nature. Lock-in discourages customers from switching to competitors and creates a level of dependence on the current provider. It is often a result of factors such as high investment requirements, exclusive contracts, proprietary technologies, or the need to relearn or adapt to a new system.
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In country X the demand for paper is Q=370−P and there are three types of producers of paper: - Type A: MC=20, 10 firms, capacity constraint 5 , - Type B: MC=30,10 firms, capacity constraint 5, - Type C: MC=40. 10 firms, capacity constraint 5. Firms have no fixed costs How many firms will exist in the long run period in case of perfect competitive interaction?
The long run equilibrium will consist of 5 firms of Type A and no firms for Types B and C.
In perfect competition, firms will enter or exit the market in the long run based on profitability. Since there are no fixed costs in this scenario, economic profits will be zero in the long run. To determine the number of firms in the long run, we need to compare the marginal cost (MC) of each type of producer.
Type A has a marginal cost of 20, Type B has a marginal cost of 30, and Type C has a marginal cost of 40. The type with the lowest marginal cost will attract more firms until the capacity constraint of 5 firms is reached.
Since Type A has the lowest marginal cost, it will be the most profitable type in the long run. Therefore, in the long run period with perfect competitive interaction, there will be a total of 5 firms of Type A, as it offers the lowest cost of production. The other types, B and C, will not have any firms in the long run as they have higher marginal costs compared to Type A.
Hence, in this scenario, the long run equilibrium will consist of 5 firms of Type A and no firms for Types B and C.
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2. Homer has an income of $90 per week and preferences defined over donuts and chocolates. Homer cares only about the content of sugar and a donut contain twice as much sugar as a bar of chocolate. The prices of a donut and a chocolate bar are $3 and $1, respectively. Using a figure, show what Homer would choose.
3. A consumer always drinks one cup of tea with one spoon of honey and has $20 /week to spend. The price of honey is $0.5/ spoon. If the price of tea rises from $1.5/ cup to $2/ cup, then show the total, substitution and income effects.
2. According to the given information, Homer has an income of $90 per week and the prices of a donut and a chocolate bar are $3 and $1, respectively. And also a donut contains twice as much sugar as a bar of chocolate.In order to find out what Homer will choose we can draw a budget constraint diagram.
From the diagram, we can find that the slope of the budget constraint is -30/1, which means the price of a donut is 30 chocolates. The price ratio of chocolates to donuts is 1:30. To find out what Homer would choose, we need to calculate the ratio of the sugar content of donuts to chocolates.
We know that donuts contain twice as much sugar as a chocolate bar, that means one donut has the same amount of sugar as 2 chocolate bars. Thus, the sugar content ratio of donuts to chocolates is 2:1.
Therefore, Homer would choose the bundle of 20 donuts and 10 chocolates.
3. Given the information that a consumer always drinks one cup of tea with one spoon of honey and has $20 /week to spend. The price of honey is $0.5/ spoon, and the price of tea rises from $1.5/ cup to $2/ cup. Using the given information, we can find out the total effect, substitution effect, and income effect.
Total Effect: The total effect is the change in the consumer’s consumption of honey due to the change in the price of tea. The price of tea rises from $1.5/ cup to $2/ cup, that means the price of tea has increased by 0.5. The price of honey remains the same. Therefore, the total effect = (0.5/1.5) × (1/2) = 1/6.
Substitution Effect: When the price of tea rises, it will lead to a fall in demand for tea. So, the consumer will try to substitute the tea with honey. The substitution effect is the change in consumption that results from a change in the relative prices of the goods. Here the price of tea has risen, so the substitution effect will be negative.
Income Effect: The income effect is the change in the consumer’s consumption of honey due to the change in the purchasing power of the consumer’s income. When the price of tea rises, the purchasing power of the consumer’s income falls. Therefore, the income effect will also be negative.
Thus, the total effect can be calculated by the following formula:
Total Effect = Substitution Effect + Income Effect = -1/12 + (-1/12)= -1/6
Therefore, the total effect of a rise in the price of tea from $1.5/ cup to $2/ cup is -1/6.
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"Non-verbal communication isn't required in the business setting when we can use words to communicate." Discuss critically this statement with relevant examples. (1500 words)
The statement "Non-verbal communication isn't required in the business setting when we can use words to communicate" is not accurate. Non-verbal communication plays a crucial role in business settings, complementing verbal communication and enhancing understanding. This essay will critically discuss the importance of non-verbal communication in business, highlighting its impact on building relationships.
Non-verbal communication encompasses various aspects such as facial expressions, body language, gestures, tone of voice, eye contact, and physical proximity. While words convey explicit messages, non-verbal cues provide additional information and context, contributing to a more complete understanding of communication.
In business settings, non-verbal communication plays a vital role in building relationships. For example, a firm handshake and direct eye contact during a job interview can convey confidence, trustworthiness, and professionalism. Similarly, a warm smile and open body language during a client meeting can establish rapport and create a positive impression.
Non-verbal cues are also crucial for conveying emotions effectively. Facial expressions and body language can reveal feelings such as enthusiasm, concern, or dissatisfaction, which may not be explicitly expressed in words. This helps in building empathy and fostering better understanding among colleagues, managers, and clients.
Furthermore, non-verbal communication contributes to establishing credibility and authority. For instance, a speaker who maintains good posture, uses appropriate gestures, and modulates their voice effectively is more likely to be perceived as knowledgeable and confident. This enhances their persuasive abilities and influences the audience positively.
In team settings, non-verbal communication promotes effective collaboration. For example, during brainstorming sessions, non-verbal cues such as nodding, maintaining eye contact, and using encouraging gestures can signal active listening, support, and engagement. This fosters a positive and inclusive environment, leading to better teamwork and problem-solving.
In conclusion, non-verbal communication is essential in the business setting, working hand in hand with verbal communication to enhance understanding and convey additional information. It plays a critical role in building relationships, conveying emotions, establishing credibility, and facilitating effective teamwork. While words are important, non-verbal cues provide valuable context, expression, and connection that contribute to successful communication in various business contexts.
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In 2021 the United States GDP was double that of GDP in previous
years. Please explain some insight into how this occurred.
The doubling of the United States GDP in 2021 compared to previous years can be attributed to various factors such as government stimulus measures, economic recovery from the COVID-19 pandemic.
The increase in the United States GDP in 2021 can be understood by considering the following factors. Firstly, the government implemented significant stimulus measures to support the economy during the pandemic, which injected money into various sectors and boosted economic activity.
Additionally, as vaccination efforts progressed and restrictions eased, businesses and consumers regained confidence, leading to increased spending and investment. Sectors that were severely impacted by the pandemic, such as manufacturing, hospitality, and travel, experienced a recovery, contributing to overall economic growth. The combination of these factors, along with other favorable conditions, led to a doubling of the GDP in 2021 compared to previous years.
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the most common method of assessing personality is the:
The most common method of assessing personality is the Big Five personality traits.
The Big Five personality traits, also known as the Five Factor Model (FFM), is the most widely used method for assessing personality. It consists of five dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism. These dimensions provide a comprehensive framework for understanding and describing individual differences in personality.
Openness refers to the degree of intellectual curiosity, creativity, and preference for novelty. Conscientiousness reflects the level of organization, responsibility, and self-discipline. Extraversion measures the extent to which individuals are outgoing, assertive, and sociable. Agreeableness captures characteristics such as kindness, empathy, and cooperativeness. Lastly, neuroticism assesses emotional stability and proneness to experiencing negative emotions.
This model is widely used due to its reliability, validity, and comprehensive coverage of personality traits. It provides a standardized way to measure and compare personality traits across individuals. The Big Five traits have been extensively studied and have demonstrated consistent associations with various aspects of life, including relationships, career success, and well-being.
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A good example of a well-stated financial goal is:
A good example of a well-stated financial goal is: "To increase my savings by 20% over the next year by consistently setting aside a portion of my income and implementing a budgeting strategy."
This financial goal is specific, measurable, achievable, relevant, and time-bound, often referred to as the SMART criteria. Let's break it down:
- Specific: The goal clearly states the desired outcome, which is to increase savings.
- Measurable: The goal includes a specific target, which is to increase savings by 20%.
- Achievable: The goal is realistic and attainable based on the individual's circumstances and income level.
- Relevant: The goal aligns with the individual's financial priorities and objectives.
- Time-bound: The goal has a specific timeframe of one year, providing a deadline for achieving the target.
By setting a well-stated financial goal like this, individuals can have a clear focus and motivation to take specific actions, such as saving a designated portion of their income and following a budget. Regularly reviewing progress and adjusting strategies can help ensure the goal is being pursued effectively.
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Mannix Corporation stock currently sells for $85 per share. The market requires a return of 13 percent on the firm's stock.
If the company maintains a constant 6 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?
Multiple Choice
$5.95
$16.21
$5.61
$5.39
$7.84
The most recent dividend per share paid on the stock of Mannix Corporation is $5.39. The stock currently sells for $85 per share with a required return of 13 percent.
To calculate the most recent dividend per share paid on the stock, we can use the dividend discount model (DDM) formula. The DDM formula states that the dividend per share is equal to the stock price multiplied by the growth rate.
Given that the stock price is $85 and the growth rate is 6% (0.06), we can calculate the dividend per share as follows:
Dividend per share = Stock price * Growth rate
Dividend per share = $85 * 0.06
Dividend per share ≈ $5.10
Among the given options, the closest value to $5.10 is $5.39. Therefore, the most recent dividend per share paid on the stock is approximately $5.39.
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You are considering the purchase of a new SUV for $29,815. You have saved $3,500 which you will use as a down payment for the purchase. You intend to finance the reinaining cost of the SUV at 5% compounded monthly for 4 years. a. What is the monthly payment for this vehicle? b. How much of the 1st payment goes toward interest? c. How much of the 48 th payment goes toward interest? d. What is the remaining balance on the loan at the end of the 3rd year? e. How much of the payments made during year 1go toward repaying the principal? t. How much of the payments made during year 4 go toward repaying the principar? Part It: While finalizing the purchase of the SUV, your salesperson tells you about two incentive financing options that are available Option 1:You can finance the purchase at 0.9% compounded monthly for 5 years and receive a $500 bonus cash back ladded to your down payment) or Option 2 You can finance the purchase at 58 compounded monthly for 5 years and receive $2,500 bonus cash back fadded to your down parmment). 8. What is the monthy payment if you choose Option 1 ? h. What is the monthiy payment if you choose Option 2? 1. Which of the there financing choices \{Original; Option 1, or Option 2 would you choosel Explain your cholice.
The monthly payment for this vehicle is $605.28.
$109.64 of the first payment goes toward interest.
$94.09 of the 48th payment goes toward interest.
The remaining balance on the loan at the end of the 3rd year is $14,462.75.
a. To calculate the monthly payment, we need to use the present value formula:
PV = (PMT x (1 - (1 + r)^(-n))) / r
where PV is the present value of the loan, PMT is the monthly payment, r is the monthly interest rate, and n is the total number of payments.
The present value of the loan is the purchase price minus the down payment:
PV = $29,815 - $3,500 = $26,315
The monthly interest rate is 5% / 12 = 0.0041667, and the total number of payments is 4 years x 12 months/year = 48.
Plugging in these values, we get:
PMT = ($26,315 x 0.0041667) / (1 - (1 + 0.0041667)^(-48)) = $605.28
b. To find out how much of the first payment goes toward interest, we can calculate the interest portion of the payment using the formula:
Interest = PV x r
where PV is the remaining balance on the loan and r is the monthly interest rate.
At the start of the loan, the remaining balance is the total amount of the loan, which is $26,315. Plugging in the values, we get:
Interest = $26,315 x 0.0041667 = $109.64
c. To find out how much of the 48th payment goes toward interest, we can first calculate the remaining balance on the loan after 47 payments have been made. We can use the formula:
PV = (PMT x (1 - (1 + r)^(-n))) / r
where PV is the remaining balance on the loan, PMT is the monthly payment, r is the monthly interest rate, and n is the number of payments remaining (in this case, 1).
Plugging in the values, we get:
PV = ($605.28 x (1 - (1 + 0.0041667)^(-1))) / 0.0041667 = $22,581.42
So the remaining balance on the loan after 47 payments have been made is $22,581.42.
To find out how much of the 48th payment goes toward interest, we can calculate the interest portion of the payment using the formula:
Interest = PV x r
where PV is the remaining balance on the loan and r is the monthly interest rate.
Plugging in the values, we get:
Interest = $22,581.42 x 0.0041667 = $94.09
d. To find out the remaining balance on the loan at the end of the 3rd year, we need to first calculate the number of payments made in 3 years, which is 3 x 12 = 36. We can then use the present value formula to calculate the remaining balance:
PV = (PMT x (1 - (1 + r)^(-n))) / r
where PV is the remaining balance on the loan, PMT is the monthly payment, r is the monthly interest rate, and n is the number of payments remaining (in this case, 48 - 36 = 12).
Plugging in the values, we get:
PV = ($605.28 x (1 - (1 + 0.0041667)^(-12))) / 0.0041667 = $14,462.75
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Anderson Systems is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. $ 18
The project's net present value (NPV) is $254.44, indicating a net positive value and suggesting that the project is expected to generate a positive return.
To calculate the project's net present value (NPV), we need to discount the cash flows to their present value using the weighted average cost of capital (WACC). Given the cash flow data and WACC provided, we can calculate the NPV as follows:
Year 0:
Cash Flow: -$1,000 (initial investment)
Year 1:
Cash Flow: $400
Present Value = Cash Flow / (1 + WACC)^1 = $400 / (1 + 0.09)^1 = $366.97
Year 2:
Cash Flow: $500
Present Value = Cash Flow / (1 + WACC)^2 = $500 / (1 + 0.09)^2 = $421.12
Year 3:
Cash Flow: $600
Present Value = Cash Flow / (1 + WACC)^3 = $600 / (1 + 0.09)^3 = $466.35
Now we can calculate the NPV by summing up the present values of the cash flows and subtracting the initial investment:
NPV = Present Value of Year 1 + Present Value of Year 2 + Present Value of Year 3 - Initial Investment
NPV = $366.97 + $421.12 + $466.35 - $1,000
NPV = $254.44
Therefore, the project's NPV is $254.44. Since the NPV is positive, it suggests that the project is expected to generate a net positive value.
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Calculate the cross-price elasticity of X and y, given the following information: Px1 = $2, Px2 = $4, Qy1 = 10, Qy2 = 20
What type of products are x and y?
Calculate Income 2, given the following information:
Income 1 = $50,000, Qx1 = 100, Qx2 = 150, E income = 2.5
What type of product is X?
Product X is considered a normal good since the income elasticity of X is positive (E income = 2.5). An increase in income leads to an increase in the quantity demanded of X.
To calculate the cross-price elasticity of X and Y, you need the percentage change in quantity demanded of Y (Qy) divided by the percentage change in price of X (Px).
Given:Px1 = $2
Px2 = $4Qy1 = 10
Qy2 = 20
Percentage change in quantity demanded of Y:
ΔQy = (Qy2 - Qy1) / Qy1ΔQy = (20 - 10) / 10
ΔQy = 10 / 10ΔQy = 1
Percentage change in price of X:
ΔPx = (Px2 - Px1) / Px1ΔPx = ($4 - $2) / $2
ΔPx = $2 / $2ΔPx = 1
Cross-price elasticity of X and Y:
Eyx = ΔQy / ΔPxEyx = 1 / 1
Eyx = 1
Based on the cross-price elasticity of 1, X and Y are considered substitutes.
increases by 1%.
---
To calculate INCOME 2, you need the percentage change in income (ΔIncome) divided by the income elasticity of X (E income).
Given:Income 1 = $50,000
Qx1 = 100Qx2 = 150
E income = 2.5
Percentage change in income:ΔIncome = Income 2 - Income 1
ΔIncome = (Income 2 - $50,000) / $50,000ΔIncome = (Income 2 / $50,000) - 1
Income elasticity of X:
E income = ΔQx / ΔIncomeE income = (Qx2 - Qx1) / Qx1 / ((Income 2 / $50,000) - 1)
E income = (150 - 100) / 100 / ((Income 2 / $50,000) - 1)E income = 50 / 100 / ((Income 2 / $50,000) - 1)
E income = 0.5 / ((Income 2 / $50,000) - 1)
Since E income = 2.5, we can set up the equation:2.5 = 0.5 / ((Income 2 / $50,000) - 1)
Solving for ((Income 2 / $50,000) - 1):
0.5 = 2.5 * ((Income 2 / $50,000) - 1)((Income 2 / $50,000) - 1) = 0.5 / 2.5
((Income 2 / $50,000) - 1) = 0.2
Simplifying:Income 2 / $50,000 = 1 + 0.2
Income 2 / $50,000 = 1.2
Income 2 = $50,000 * 1.2Income 2 = $60,000
Based on the calculation, Income 2 is $60,000.
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You are analyzing the leverage of two firms and you note the following (all values in millions of dollars): Debt Book Equity Firm A 500.0 300.0 Firm B 80.0 35.0 Market Equity 400.0 40.0 Operating Income 100.0 8.0 Interest Expense 50.0 7.0 a. What is the market debt-to-equity ratio of each firm? b. What is the book debt-to-equity ratio of each firm? c. What is the interest coverage ratio of each firm? d. Which firm will have more difficulty meeting its debt obligations?
Firm A has higher debt ratios (both market and book) and a lower interest coverage ratio, indicating a higher level of leverage and a higher risk of difficulty in meeting its debt obligations. Firm B, on the other hand, has lower debt ratios and a higher interest coverage ratio, suggesting a lower level of leverage and a better ability to meet its debt obligations.
a. The market debt-to-equity ratio of Firm A is 1.25 (500.0 / 400.0), indicating that the market value of the firm's debt is 1.25 times the market value of its equity. The market debt-to-equity ratio of Firm B is 2.0 (80.0 / 40.0), indicating that the market value of the firm's debt is 2 times the market value of its equity.
b. The book debt-to-equity ratio of Firm A is 1.67 (500.0 / 300.0), indicating that the book value of the firm's debt is 1.67 times the book value of its equity. The book debt-to-equity ratio of Firm B is 2.29 (80.0 / 35.0), indicating that the book value of the firm's debt is 2.29 times the book value of its equity.
c. The interest coverage ratio of Firm A is 2.0 (100.0 / 50.0), indicating that the firm's operating income is twice its interest expense. The interest coverage ratio of Firm B is 5.71 (8.0 / 1.4), indicating that the firm's operating income is 5.71 times its interest expense.
d. Firm A will have more difficulty meeting its debt obligations because it has higher debt ratios (both market and book) compared to Firm B. Additionally, Firm A has a lower interest coverage ratio, suggesting that it may struggle to generate enough operating income to cover its interest expenses.
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Which of the following best describes the agency relationship in a business setting?
a) Stockholders are the agents of the bondholders.
b) Management are the agents of the employees.
c) Bondholders are the agents of management.
d) Management are the agents of the stockholders.
e) Stockholders are the agents of the employees.
The correct answer is d) Management are the agents of the stockholders.
In a business setting, the agency relationship refers to the relationship between the principals (stockholders or owners of the company) and the agents (management or executives who run the company on behalf of the stockholders). The management team acts as agents, representing the interests of the stockholders who have entrusted them with the responsibility of managing the company's operations and maximizing shareholder value.
This relationship is based on the principle of agency theory, which suggests that the agents should act in the best interests of the principals. The management team has a fiduciary duty to make decisions and take actions that will maximize shareholder wealth. They are accountable to the stockholders and should act in accordance with their preferences and goals.
The other options presented in the question are not accurate descriptions of the typical agency relationship in a business setting.
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ABZ Bank (ABZ), an ADI and AFS Licensee, operates through 700 branches across Australia. "Z Super" is a superannuation product issued and promoted by Zpac Super, a wholly-owned subsidiary of ABZ. ABZ runs an aggressive marketing campaign to distribute "Z Super" through its retail branch network. Any branch staff who sells "Z Super" is paid a substantial commission. "Z super" is sold to customers by ABZ’s branch staff who are authorized to provide general advice to retail customers and to assist retail customers to apply for superannuation products. The distribution process developed and implemented by ABZ involved the following steps:
- Firstly, the branch staff member asks the retail customer to fill in a questionnaire of 25 questions (called ‘1-25 review’) on the financial situation, needs and circumstances of the retail customer.
- Secondly, the branch staff member asks whether the retail customer would like to be provided with information about "Z Super".
- Thirdly, if the retail customer agrees, the retail customer is provided with a detailed Product Disclosure Statement and brochure. The branch staff also provides a quick appraisal of benefits to invest in "Z Super" and provides them with a general advice warning. Fourthly, the branch staff obtains (1) signatures on blank forms for ‘Z Super’ and (2) a letter of authorization for cancelling the existing superannuation account.
The application will only be proceeded upon confirmation from the retail customer through an email or telecall. ASIC’s surveillance on branch sales of "Z Super" has revealed that 45-50% of customers opted for "Z Super" soon after the ‘1-25 review’ on the same day.
ASIC is concerned about the promotion of "Z Super" through branches and initiates an investigation. You are employed in the legal division of ABZ and are asked to review if the sale and distribution of "Z Super" breach any provisions of Chapter 7 of the Corporations Act, 2001 (Cth). You are specifically asked to include a detailed analysis of whether ABZ's staff comply with the best interests duty and related obligations under C7.7A of the Corporations Act, 2001 (Cth
The sale and distribution of "Z Super" through ABZ Bank's branches may potentially breach provisions of Chapter 7 of Corporations Act, 2001 (Cth), particularly related to best interests duty and obligations under C7.7A.
ABZ Bank's promotion of "Z Super" through its branch network, coupled with the significant commissions offered to staff, raises concerns regarding compliance with the best interests duty and related obligations. The process involving a questionnaire, provision of information, and a quick appraisal of benefits may not sufficiently assess the customer's individual circumstances and risk profile. The speed at which customers opt for "Z Super" after the initial review raises doubts about the adequacy of the advice provided and the extent to which customer interests are prioritized.
To ensure compliance, ABZ Bank's staff must prioritize the best interests of customers over financial incentives. They should conduct thorough assessments, considering factors such as the customer's financial situation, investment objectives, risk tolerance, and potential conflicts of interest. Additionally, obtaining blank forms and authorization letters without explicit customer confirmation may further indicate non-compliance with the Corporations Act.
To address these concerns, a detailed analysis is necessary, focusing on the appropriateness of the advice provided, transparency of fees and commissions, and adherence to the best interests duty. The investigation should ensure compliance with the relevant provisions of the Corporations Act, 2001 (Cth) to protect the interests of retail customers and uphold regulatory standards.
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Fill in the Blanks Type your answers in all of the blanks and submit X. x
∗
Ω. Refer to the market for laptops depicted in Figure 1 in the text. Suppose that consumers' marginal benefits from a laptop decreased by $100 at each given quantity. As a result, the equilibrium price fell to $460 and the equilibrium quantity decreased to 1.600. in the new equilibrium, the consumer surplus is $ , the producer surplusis $ wand the total economic surplus is
The total economic surplus in the new equilibrium is $1,200 + $800 = $2,000 per laptop.
Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service (i.e. their marginal benefit) and the actual price they pay.
In this case, since the marginal benefit has decreased by $100 at each quantity, the new demand curve will be shifted down by $100. At the new equilibrium point where the price is $460 and the quantity is 1,600, the consumer surplus can be calculated as follows:
Consumer Surplus = 1/2 * Base * Height
Base = Quantity = 1,600
Height = Difference between the maximum price consumers are willing to pay ($900) and the actual price ($460) = $440
Therefore, Consumer Surplus = 1/2 * 1,600 * $440 = $352,000 or $1,200 per laptop.
Producer surplus is the difference between the price that producers receive and the minimum price they are willing to accept for producing the good or service. In this case, the supply curve has not been affected, so the producer surplus remains the same as before at $800 per laptop.
Total economic surplus is the sum of consumer surplus and producer surplus. Therefore, the total economic surplus in the new equilibrium is $1,200 + $800 = $2,000 per laptop.
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Check my work HBB Beverages and Fizzy Sodas are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following founded amounts reported in their annual reports (amounts in millions) Piscal Year Ended: HBD Beverages Pinay sodas 2018 2017 2016 2010 2017 2016 Net Sales $ 39,00 $ 44,280 Accounts Receivable $.42.120 $ 80,300 $ 81,325 570,260 4,370 4.660 4,880 Allowance for Doubtful Accounts 9. 160 7,690 600 590 100 130 140 hecounts Receivable, Net of Allowance 3.760 4,060 4.290 8,060 7.140 7.550 Required: 1. Calculate the receivables turnover ratios and days o collect for HBB Beverages and Fuzzy Sodas for 2018 and 2017, 2-a. Which of the companies was quicker to convert its receivables into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables into cash in 2017? 3,070 Complete this question by entering your answers in the tabs below. Reg Red 2A Reg 28 Calculate the receivables turnover ratios and days to collect for HBB Beverages and Plazy Sodas for 2018 and 2017. (Use 365 days in a year. Do not round Intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation) 917 Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 28 Calculate the receivables turnover ratios and days to collect for HBB Beverages and Fizzy Sodas for 2018 and 2017. (use 365 days in a year. Do not round Intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to I decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation) 2018 2017 HBB Beverages Flaxy Sodas HBB Beverages Fizzy Sodas Receivables Turnover Ratio Days to collect Rec Req2A > Next < Prev 6 of 6 !!!
In 2018, Fizzy Sodas was quicker to convert its receivables into cash as compared to HBB Beverages. In 2017, Fizzy Sodas was quicker to convert its receivables into cash as compared to HBB Beverages.
The calculation of the receivables turnover ratios and days to collect for HBB Beverages and Fizzy Sodas for 2018 and 2017 are given below.
Receivables Turnover Ratio = Net Sales / Average Accounts Receivable
Days to Collect = 365 days / Receivables Turnover Ratio HBB Beverages and Fizzy Sodas Receivables Turnover Ratios and Days to Collect for 2018 and 2017 are as follows:
Accounts Receivable (in millions) HBB Beverages Fizzy Sodas 2018 42.12 4.37 2017 80.30 4.66
Allowance for Doubtful Accounts 9.16 0.13 Receivables (Net of Allowance) 33.96 4.53 Receivables Turnover Ratio 1.15 9.75 Days to Collect 317.39 37.44
Therefore, the calculated values for receivables turnover ratio and days to collect for HBB Beverages and Fizzy Sodas for the years 2018 and 2017 are given below: HBB Beverages and Fizzy Sodas Receivables Turnover Ratios and Days to Collect for 2018 and 2017 are as follows:
Accounts Receivable (in millions) HBB Beverages Fizzy Sodas 2018 81.325 4.88 2017 80.300 4.66 Allowance for Doubtful Accounts 7.69 0.13 Receivables (Net of Allowance) 73.635 4.53 Receivables Turnover Ratio 0.53 9.77 Days to Collect 692.45 37.35
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Hasgood Industries has just received a major long-term contract. They need to expand the production capabilities particularly in stamping out large parts. They gathered information on four hydraulic presses that would perform this task. The product will be sold at $100 per unit. Information on the cost of the four possible hydraulic presses are presented below. Raster Jacobs Matsuki Helgard $90,000 120,000 145,000 Fixed Costs 160,000 Variable Costs $40 $38 35 What is the break-even point for the use of each machine? (round to nearest whole number) Raster Jacobs Matsuki Helgard Based on crossover quantities, only 2 machines should be considered. Identify that crossover quantity (nearest whole number) and which machine is the best choice for the range of quantities: Machine < Quantity < Machine
Best machines:• If the quantity is less than 750, Raster hydraulic press is the best choice.• If the quantity is greater than 750, Matsuki hydraulic press is the best choice.
Calculation of break-even point for each machine:
Calculation of break-even point for Raster hydraulic press = Fixed costs ÷ (Selling price - Variable costs)
= $160,000 ÷ ($100 - $40)
= $160,000 ÷ $60
= 2667 units
Calculation of break-even point for Jacobs hydraulic press = Fixed costs ÷ (Selling price - Variable costs)
= $160,000 ÷ ($100 - $38)
= $160,000 ÷ $62
= 2581 units
Calculation of break-even point for Matsuki hydraulic press = Fixed costs ÷ (Selling price - Variable costs)
= $160,000 ÷ ($100 - $35)
= $160,000 ÷ $65
= 2462 units
Calculation of break-even point for Helgard hydraulic press = Fixed costs ÷ (Selling price - Variable costs)
= $160,000 ÷ ($100 - $38)
= $160,000 ÷ $65
= 2581 units
Crossover quantity = (Fixed cost difference ÷ (Variable cost difference ÷ Selling price))
= $15,000 ÷ ($2 ÷ $100)
= 750 units
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