Define Kanban Carts. Given the following information, decide the number of Kanban carts for a manufacturing cell to provide WIP to the 2nd cell. The cart container has a capacity of 10, the lead-time is 2 hours (including the process time, delay, and moving time). The customer demand is assumed as 240 units per day (assuming 16-hour operation per day). You have decided a safety stock for 20% of the 2 hours demand. Decide how many carts for transporting parts between these two cells, and show your work.

Answers

Answer 1

Kanban carts are wheeled vehicles that transport parts from one manufacturing cell to another.

The kanban system's core objective is to enable just-in-time (JIT) manufacturing and inventory control.

To decide the number of Kanban carts for a manufacturing cell to provide WIP to the 2nd cell, given the following information,

we will calculate the required number of carts:

Lead time= 2 hours

Capacity of cart container

= 10 units

Customer demand

= 240 units/day

Assuming 16 hours of operation per day,

The demand for 2 hours = 240 * (2/16)

= 30 units

The safety stock for 2 hours of demand = 20/100 * 30

= 6 units

Total parts required during lead time= 30 + 6

= 36 units

Capacity of cart = 10 units

Hence, we need 4 carts to transport the parts from one manufacturing cell to another.

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Related Questions

You are the CFO of a drug company, and you must decide whether to invest 15M dollars in R&D for a new drug. If you conduct the R&D, you believe that there is a 4% chance that the research will produce a useful drug. If the research is successful, investment in the drug will require an outlay of 400 million dollars. The drug will likely generate annual profits of 100 million for 10 years, until the patent expires. After that, it will generate a cash flow equal to 10 million a year in perpetuity (no growth) . The discount rate is 7%.
a) If the research is successful, what is the net present value of the drug cash flows ?
b) If you invest in R&D, you estimate that it will take 2 years to know whether the drug is successful or not. What is the NPV of the R&D investment?

Answers

a) The net present value of the drug cash flows, if the research is successful, is the sum of the present values: $563.98 million + $142.86 million = $706.84 million.

b) The NPV of the R&D investment, taking into account the probability of success, is $13.87 million.

a) To calculate the net present value (NPV) of the drug cash flows, we need to discount the future cash flows to their present value.

If the research is successful, the drug will generate annual profits of $100 million for 10 years, followed by $10 million per year in perpetuity. Using the perpetuity formula, the present value of the perpetual cash flow is $10 million / 0.07 (discount rate) = $142.86 million.

For the cash flows generated over the 10-year period, we can calculate the present value using the formula for the present value of an ordinary annuity. The present value of the annuity is $100 million * (1 - (1 + 0.07)^-10) / 0.07 = $563.98 million.

Therefore, the net present value of the drug cash flows, if the research is successful, is the sum of the present values: $563.98 million + $142.86 million = $706.84 million.

b) If you invest in R&D, you will incur a cost of $15 million upfront and will have to wait for 2 years to determine if the drug is successful or not. At that point, you will need to make a decision about investing the additional $400 million for the drug.

To calculate the NPV of the R&D investment, we need to consider the potential outcomes. There is a 4% chance of success and a 96% chance of failure. If the research is successful, the NPV is the net present value of the drug cash flows calculated in part (a), which is $706.84 million.

If the research fails, the NPV of the R&D investment is simply the negative value of the initial investment, which is -$15 million.

Now, we can calculate the overall NPV of the R&D investment by weighting the potential outcomes by their respective probabilities:

NPV = (0.04 * $706.84 million) + (0.96 * -$15 million) = $28.27 million - $14.4 million = $13.87 million.

Therefore, the NPV of the R&D investment, taking into account the probability of success, is $13.87 million.

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Identify the practices that you will utilize going forward in your career as a leader in a healthcare organization and what the specific outcomes you are attempting to accomplish with each practice you plan on utilizing.
Resource: "Everyone Deserves a Great Manager—The 6 Critical Practices for Leading a Team", by Scott Miller, Todd Davis and Victoria Roos Olsson.

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As a leader in a healthcare organization, there are several practices that I will utilize going forward to ensure that I am a successful and effective leader. These practices are as follows: 1. Establishing clear expectations, 2. Listening actively, 3. Providing feedback, 4. Focusing on strengths, 5. Celebrating successes, 6. Holding people accountable,

1. Establishing clear expectations: This practice will involve ensuring that I establish clear and measurable expectations for my team members. This will help to ensure that everyone is aware of what is expected of them and how their performance will be measured. The specific outcome I am attempting to accomplish with this practice is to ensure that everyone is on the same page and working towards the same goals.

2. Listening actively: This practice will involve actively listening to my team members and taking their feedback and opinions into consideration. This will help to create a culture of collaboration and open communication. The specific outcome I am attempting to accomplish with this practice is to ensure that everyone feels heard and valued.

3. Providing feedback: This practice will involve providing regular feedback to my team members, both positive and constructive. This will help to ensure that everyone is aware of how they are doing and what they can do to improve. The specific outcome I am attempting to accomplish with this practice is to help everyone grow and develop professionally.

4. Focusing on strengths: This practice will involve focusing on each team member's strengths and finding ways to utilize them. This will help to ensure that everyone is working in an area where they excel and enjoy. The specific outcome I am attempting to accomplish with this practice is to increase job satisfaction and employee engagement.

5. Celebrating successes: This practice will involve celebrating team successes and individual accomplishments. This will help to create a positive and motivating work environment. The specific outcome I am attempting to accomplish with this practice is to increase employee motivation and morale.

6. Holding people accountable: This practice will involve holding team members accountable for their performance and ensuring that consequences are in place for not meeting expectations. This will help to ensure that everyone is performing to the best of their ability. The specific outcome I am attempting to accomplish with this practice is to ensure that everyone is contributing to the success of the team and organization.

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The Management of Blossom Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towers for a windmill power farm. The costs and the cash flows from these systems are shown below. The company uses a 8 percent discount rate for all projects. Calculate net present value (NPV). (Enter negative amounts using negative sign e.g. -45.25. Do not round Discount factors. Round other intermediate calculations and final answers to 0 decimal places, e.g. 1,525.)

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Forklift System B has a slightly higher NPV of approximately $20,030.64 compared to Forklift System A, which has an NPV of approximately $19,849.18. Therefore, the more favorable choice is Forklift System B.

Given,Discount Rate = 8% Forklift System A Forklift System B Initial Investment $(80,000) $(120,000) Cash Flows Year 1 $24,000 $34,000 Year 2 $28,000 $38,000 Year 3 $32,000 $44,000 Year 4 $38,000 $54,000

The formula to calculate NPV is:NPV = CF0 + CF1/(1+i)1 + CF2/(1+i)2 + CF3/(1+i)3 + CF4/(1+i)4Where,CF0 = Initial Investment CF1 = Cash flow at the end of Year 1 CF2 = Cash flow at the end of Year 2 CF3 = Cash flow at the end of Year 3 CF4 = Cash flow at the end of Year 4 i = Discount RateTo calculate the NPV for Forklift System A,

We have,Cash Flows for Forklift System A Year 0 Year 1 Year 2 Year 3 Year 4 Initial Investment $(80,000) Cash Flow $24,000 $28,000 $32,000 $38,000 NPV for Forklift System A = (-$80,000) + ($24,000)/(1+0.08)^1 + ($28,000)/(1+0.08)^2 + ($32,000)/(1+0.08)^3 + ($38,000)/(1+0.08)^4= -80,000 + 22,222.22 + 23,842.98 + 25,503.38 + 28,280.60= $19,849.18 (approx)

To calculate the NPV for Forklift System B,We have,Cash Flows for Forklift System B Year 0 Year 1 Year 2 Year 3 Year 4 Initial Investment $(120,000) Cash Flow $34,000 $38,000 $44,000 $54,000 NPV for Forklift System B = (-$120,000) + ($34,000)/(1+0.08)^1 + ($38,000)/(1+0.08)^2 + ($44,000)/(1+0.08)^3 + ($54,000)/(1+0.08)^4= -$120,000 + 31,481.48 + 32,986.97 + 35,362.92 + 41,199.27= $20,030.64 (approx).

Therefore, the NPV for Forklift System A is $19,849.18 (approx) and the NPV for Forklift System B is $20,030.64 (approx).The better option is Forklift System B.

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A bond has the following features:

Coupon rate of interest (paid annually): 11 percent
Principal: $1,000
Term to maturity: 10 years
What will the holder receive when the bond matures?

-Select-PrincipalAll coupon paymentsItem 1

If the current rate of interest on comparable debt is 7 percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

$

Would you expect the firm to call this bond? Why?

-Select-YesNoItem 3 , since the bond is selling for a -Select-discountpremiumItem 4 .

If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for ten years if the funds earn 7 percent annually and there is $120 million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar.

$

Answers

When the bond matures, the holder will receive the Principal amount, which is $1,000.

To determine the price of the bond, we can calculate the present value of its cash flows. The bond pays an annual coupon of 11% on a principal of $1,000 for 10 years. Using Appendix B and a discount rate of 7%, we can calculate the present value of the coupon payments and the principal. Adding these present values together will give us the price of the bond.

The price of the bond is approximately $1,265.

No, I would not expect the firm to call this bond because the bond is selling at a premium. Calling the bond would mean redeeming it before maturity, but since the bond is selling at a premium, it would be more expensive for the firm to call the bond than to let it continue until maturity.

To calculate the amount the firm must remit each year for ten years, we need to find the annuity amount that, when discounted at 7%, will accumulate to $120 million over 10 years. Using Appendix C, the firm must remit approximately $7,954,913 each year.

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PA 11-8 (Algo) High Plains Inc. manufacturers furniture in North Dakota. High Plains...
High Plains Inc. manufacturers furniture in North Dakota. High Plains receives its wood from a lumber yard in Calgary. The lead time for orders is 3 weeks. One of their board costs $16 per unit and the holding cost for this board is $0.5 per week. They manage their inventory to achieve a 97 percent in-stock probability. Weekly demand is for 150 boards with a standard deviation of 200. Use Table 11.5
a. How many boards do they have on order on average?
b. How many boards do they have on hand on average?
c. For this board, what is the total cost incurred per week?
d. What is the total cost they incur per board?

Answers

a. The expected demand for High Plains Inc. can be calculated as: E (Demand) = 150 boards/week The lead time for orders is 3 weeks. Hence, the average number of boards they will have on order can be calculated as follows: Average number of units on order = E(Demand) x lead time in weeks=150 x 3=450 boards on order on average.

b. The expected demand for High Plains Inc. can be calculated as: E (Demand) = 150 boards/week From the in-stock probability of 97 percent, the safety stock can be calculated as: Safety stock = Zσ = 1.88 x 200 = 376 boards. Therefore, the average number of boards they will have on hand can be calculated as: Average number of boards on hand = E(Demand) + Safety stock = 150 + 376 = 526 boards on hand on average.

. The total cost incurred per week includes the ordering and holding cost. The average ordering cost can be computed as: C_ordering = (Number of orders in a year) x (Cost per order) / 52 weeks. Assuming that High Plains order this board once a year, then the cost per order will be $16. Therefore, the total ordering cost is $16/52 = $0.31 per week. The total holding cost can be computed as: C_holding = (Average inventory level) x (holding cost per unit per week) C_holding = (526 / 2) x $0.5 = $131.50 Thus, the total cost incurred per week is: Total cost = C_ordering + C_holding = $0.31 + $131.50 = $131.81.d. Total cost they incur per board is $0.31 (ordering cost) + $0.13 (holding cost) = $0.44.

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One year ago, your portfolio consisted of:
200 shares of Wesfarmers (WES) at $40.4 per share
300 shares of J&B HiFi (JBH) at $45 per share
100 shares of Apple (AAPL) at $200 per share.
Over the year, WES had a return of 10%, JBH had a return of 5%, and AAPL had
a return of -10%. Given this information, what is the weight of WES in your
current portfolio?

Answers

The weight of WES in the current portfolio is 21.37%. This can be calculated directly by multiplying the number of WES shares by the current price of WES, and then dividing by the total value of the portfolio.

The current value of the WES shares is 200 * 40.4 * 1.1 = $9280.

The current value of the JBH shares is 300 * 45 * 1.05 = $13500.

The current value of the AAPL shares is 100 * 200 * 0.9 = $18000.

The total value of the portfolio is $30780.

Therefore, the weight of WES in the portfolio is 9280 / 30780 = 0.21375661375661376.

The weight of WES in the portfolio has increased from 18.4% one year ago, because WES has outperformed the other two stocks.

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A true statement about displays is that they are used by people to clarify a point they might be making. O are used in a specific manner because they have a specific meaning understood by both sender and receiver. O are used to get a person's attention and control the flow of communication O portray a person's inner emotions and effectively show just how strongly people mean what they say . Increasing the number of skills used on the job results in a O higher likelihood of being motivated to work hard. O reduction in job dissatisfaction. O higher likelihood of a midlife career change. O reducti in job enrichment. An individual's feeling of confidence and worth as a person refers to O self-esteem. O communication. O motivation. O self-efficacy.

Answers

A true statement about displays is that they are used by people to clarify a point they might be making. Displays are used to get a person's attention and control the flow of communication. An individual's feeling of confidence and worth as a person refers to self-esteem.

Increasing the number of skills used on the job results in a higher likelihood of being motivated to work hard. Displays can be defined as a collection of visual aids or items arranged in a particular manner to assist viewers to understand or perceive specific information.  Displays are frequently used in educational and professional settings to facilitate presentations, lectures, and other forms of communication.

Self-esteem is defined as an individual's belief or confidence in themselves as a person. It is a reflection of an individual's worth and is influenced by a variety of internal and external factors. When employees have the chance to use and develop a range of abilities and knowledge on the job, they are more likely to feel challenged and engaged, resulting in higher levels of motivation.

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There are arguments for and against the use of tariffs.

How can tariffs help and hurt a country that already has a trade deficit with other countries?

What are the most likely reasons why a cattle-producing country like Argentina might have a tariff on the importation of beef?

Answers

Tariffs can have both positive and negative effects on a country with a trade deficit.

Here's how:
1. How tariffs can help:
- Tariffs can protect domestic industries by making imported goods more expensive, which can encourage consumers to buy domestically produced goods instead.
- Tariffs can also generate revenue for the government, as they are essentially taxes on imported goods.
2. How tariffs can hurt:
- Tariffs can increase the cost of imported goods for consumers, leading to higher prices and reduced purchasing power.
- Other countries may retaliate by imposing their own tariffs, which can harm the exporting industries of the country with the initial trade deficit.
As for why a cattle-producing country like Argentina might have a tariff on beef imports, there could be several reasons:
- To protect domestic cattle producers and ensure their competitiveness in the market.
- To maintain self-sufficiency in beef production and reduce dependence on imports.
- To stabilize domestic prices and prevent fluctuations due to foreign competition.
- To support local farmers and maintain agricultural employment.

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reach a mutual agreement ASSIGNMENT STEPS To complete this assignment: 1. You will work in groups of 4 to 5 and create a binding contract based on the scenario provided above (remember, you may choose an alternate scenario after consulting with the instructor) 2. Your assignment must be submitted in Word format and must be formatted in the appropriate manner for a legal document of this type Submissions must be double-spaced and typed in 11pt font Submissions must be no more than 5 pages long, not including appendices or cover page Final submission of the contract document should be done by only one member of the group. Be sure to include the names of all team members on the cover or front page of your submission Submissions may contain additional appendices if appropriate 3. Make sure the contract contains all 5 major elements of an enforceable contract 4 You must also address at least one of the following issues insurance, shipping, payment methods, and jurisprudence (optional clauses) 5. All communications between CBHC and Humber River Hospital must be online. Include this provision in the relevant clause reach a mutual agreement.

Answers

To complete the given assignment based on the scenario provided, there are several steps that must be followed. The first step is to create a binding contract in groups of 4 to 5 based on the given scenario or an alternate scenario after consulting with the instructor.

Once the group has created the contract, it must be submitted in Word format and formatted appropriately for a legal document. The submission must be double-spaced and typed in 11pt font and should not be more than 5 pages long, excluding appendices or cover page. The final submission of the contract document should be done by only one member of the group, and all team members' names should be included on the cover or front page of the submission. The submission may also contain additional appendices if appropriate.

The contract should contain all 5 major elements of an enforceable contract, and at least one of the following issues insurance, shipping, payment methods, and jurisprudence (optional clauses) must be addressed. All communications between CBHC and Humber River Hospital must be online, and this provision should be included in the relevant clause reach a mutual agreement.

Reach a mutual agreement means that all parties involved should come to an agreement on the terms and conditions of the contract. This involves negotiation and compromise so that all parties feel that the contract is fair and equitable. The contract should be clear and unambiguous so that there is no misunderstanding between the parties involved. Finally, all parties should sign the contract to show that they agree to the terms and conditions outlined in the contract.

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Killingsworth Inc. budgeted production of 64,000 personal journals in 20Y6. Paper is required to produce a journal. Assume 109 square yards of paper are required for each journal. The estimated January 1, 20Y6, paper inventory is 279,000 square yards. The desired December 31, 20Y6, paper inventory is 314,000 square yards. If paper costs $0.07 per square yard, determine the direct materials purchases budget for 20Y6. If required, round your final answer to the nearest dollar.

Answers

The direct materials purchases budget for 20Y6 is $490,770.

To determine the direct materials purchases budget for 20Y6, we need to calculate the paper requirements for production and the desired paper inventory levels. Here's how you can calculate it:

Paper Required for Production:

64,000 journals * 109 square yards per journal = 6,976,000 square yards

Paper Inventory Increase:

Desired paper inventory - Beginning paper inventory

314,000 square yards - 279,000 square yards = 35,000 square yards

Total Paper Required:

Paper required for production + Paper inventory increase

6,976,000 square yards + 35,000 square yards = 7,011,000 square yards

Cost of Paper:

Total paper required * Cost per square yard

7,011,000 square yards * $0.07 per square yard = $490,770

Therefore, the direct materials purchases budget for 20Y6 is $490,770.

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Standard Cost Journal Entries Bellingham Company produced 5,300 units that require 12 standard pounds per unit at a $8 standard price per pound. The company actually used 64,900 pounds in production. Journalize the entry to record the standard direct materials used in production. If an amount box does not require an entry, leave it blank.

Answers

The journal entry is as follows:

Date: [Date of the transaction] Account Titles Debit Credit

Work in Process Inventory $526,400 Raw Materials Inventory $526,400

The standard direct materials used in production can be calculated by multiplying the actual quantity used by the standard price per pound.

Standard direct materials used = Actual quantity used * Standard price per pound

Given:

Actual quantity used = 64,900 pounds

Standard price per pound = $8

Standard direct materials used = 64,900 pounds * $8

= $519,200

To record this in the journal entry, we debit the Work in Process Inventory account for the standard direct materials used and credit the Raw Materials Inventory account.

The journal entry to record the standard direct materials used in production is a debit to Work in Process Inventory for $526,400 and a credit to Raw Materials Inventory for the same amount. This entry reflects the transfer of standard direct materials from the raw materials inventory to the work in process inventory, aligning the inventory values with the production activity.

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Utilizing a change management framework implements a major organizational change or changes for a company with which you are familiar making them more competitive in the future.
You are required to write a business report outlining the various steps and processes involved in managing and implementing the change of KFC involving pizza in the menu. You must outline each steps of the process.
What are the proposed changes?
What are the changes being proposed and how can they help the company to be more competitive?
How will the change be implemented?
Entering
Contracting
Diagnosing
Planning
Implementing
Evaluating
Institutionalising
What challenges may need to be overcome and how?
What are the expected results of the changes?

Answers

The proposed change at KFC involves introducing pizza to the menu in order to enhance the company's competitiveness. By diversifying their offerings, KFC aims to attract new customers and meet the evolving preferences of existing customers. This change can help KFC stay ahead in the competitive food industry by expanding their customer base and leveraging the popularity of pizza. The implementation process will involve stages such as entering, contracting, diagnosing, planning, implementing, evaluating, and institutionalizing. Throughout these stages, KFC will need to address challenges such as operational complexities, customer acceptance, and internal resistance. However, by effectively managing the supply chain, communicating the benefits to customers, and involving employees in the process, these challenges can be overcome.

The proposed change of introducing pizza to KFC's menu will be implemented through a structured change management framework. The first stage, entering, involves creating awareness and commitment among key stakeholders, including employees, management, and shareholders. Clear communication about the rationale behind the change, its benefits, and the company's strategic goals will be crucial to gain support and alignment. The contracting stage will focus on negotiating and establishing clear objectives, roles, and responsibilities. KFC will align the change objectives with their strategic goals and define the key personnel responsible for implementing the change. This will ensure accountability and clarity throughout the process. The planning stage will involve developing a comprehensive plan that includes specific action steps, timelines, resource allocation, and communication strategies. KFC will need to consider aspects such as sourcing quality ingredients, training staff to prepare pizza, and optimizing operational efficiency. The implementation stage will focus on executing the plan, which may involve a phased approach or a trial launch in select locations. Continuous monitoring, feedback collection, and employee and customer engagement will be critical to address any operational challenges, refine the offering, and ensure a smooth transition. Evaluating the change's effectiveness through performance metrics, customer feedback, and financial analysis will provide insights into its impact on customer satisfaction, sales growth, market share, and profitability. Based on the evaluation, adjustments can be made to further improve the offering. Finally, institutionalizing the change involves integrating the successful changes into KFC's culture, processes, and practices. This may involve updating training programs, establishing new processes, and reinforcing the value of pizza in KFC's menu. Regular performance reviews and continuous improvement efforts will be essential to sustain the change in the long term.

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Kristina and Mallory decide to form a partnership. Kristina has $56,000 in her Capital account and nothing in her Drawings account. Mallory has $15,000 of cash to invest in the partnership. As they are going to deliver the pet treats to the pet stores, Mallory is also investing a truck into the partnership. The fair value of the truck is $23,000 and the partnership is going to take over the $11,000 bank loan that Mallory still has on the van. Kristina and Mallory agree that Mallory will receive 40% ownership of the company. The partnership will start January 1, 2024 and will have a December 31 year-end. Kristina has asked you to record the journal entry to form the partnership.

Answers

Kristina and Mallory are forming a partnership, and according to the agreement, the partnership will start on January 1, 2024. The partnership's year-end will be December 31.

Kristina will have $56,000 in her Capital account, and Mallory will contribute $15,000 in cash and a truck worth $23,000, as well as a $11,000 bank loan. Mallory will get a 40% ownership interest in the partnership. Mallory's investment in the partnership will be recorded as cash of $15,000 and a truck with a fair value of $23,000, for a total of $38,000, in the following journal entry.

The Journal Entry for forming the partnership: Cash $15,000.00 Truck $23,000.00 Notes Payable $11,000.00 Kristina, Capital $56,000.00 Mallory, Capital $19,000.00[Being the investment by Mallory in the Partnership]Total = $84,000.00 Thus, the above journal entry records the formation of the partnership between Kristina and Mallory.

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& Moving to another question will save this response Question 13 of 24 Question 13 1 points Which of the following provides an answer to questions: what is our business? Who are our customers? What do

Answers

The amount that your investment will be worth after the last payment is made is $5,639. Option A is correct.

To calculate the amount that your investment will be worth after the last payment is made, you can use the formula for the future value of an annuity.

The formula for future value of an annuity will be;

FV = P × [[tex](1+r)^{n-1}[/tex]] / r

Where;

FV = Future value

P = Payment amount per period

r = Interest rate per period

n = Number of periods

In this case, the payment amount per period is $570, the interest rate per period is 6% (0.06), and the number of periods is 8.

Plugging in the values into the formula:

FV = $570 × [(1 + 0.06)⁸⁻¹] / 0.06

Calculating this expression will give us the amount that your investment will be worth after the last payment is made.

FV = $570 × [1.593848 - 1] / 0.06

FV = $570 × 0.593848 / 0.06

FV ≈ $5639.87

Therefore, the amount that your investment will be worth after the last payment is made is $5,639.

Hence, A. is the correct option.

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--The given question is incorrect, the correct question is

"A Moving to another question will save this response. Question 13 of 25 1 points Save Answer Suppose you plan to invest $570 in a mutual fund at the end of each of the next eight years. If your opportunity cost is 6 percent compounded annually, the amount that your investment will be worth after the last payment is made is closest to: A) $5,639 B) 55,868 C) $4,560."--

Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,800 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.87 per pound. Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper?
Round to two decimal places.

Answers

The joint costs for gold and copper are allocated using relative weight. The relative weight of copper is 62,800 / (62,800 + 250 * 16) = 99.7%. The joint cost allocated to copper is $499,250. The profit associated with copper is $750.

The relative weight of copper is calculated by dividing the weight of copper by the total weight of the two products. The total weight of the two products is 250 * 16 + 62,800 = 63,750 pounds. The joint cost allocated to copper is $499,250, which is 99.7% of the total joint cost. The profit associated with copper is calculated by subtracting the joint cost allocated to copper from the selling price of copper. The selling price of copper is 62,800 * $0.87 = $54,375. The profit associated with copper is $54,375 - $499,250 = $750.

Joint cost allocated to copper:

Relative weight of copper * Total joint cost

= 99.7% * $500,000

= $499,250

Profit associated with copper:

Selling price of copper - Joint cost allocated to copper

= $54,375 - $499,250

= $750

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Holding all other factors constant, fully explain how changing the
'Time to maturity' affects: (i) The price of a European call option
and (ii) The price of a European put option.

Answers

Increasing the time to maturity generally increases the price of a European call option and a European put option.

(i) The price of a European call option is influenced by various factors, one of which is the time to maturity. Increasing the time to maturity generally increases the price of a call option. This is because a longer time period provides more opportunities for the underlying asset's price to increase and potentially surpass the strike price, resulting in a higher probability of the option being profitable. With more time available, the option holder has greater flexibility and potential for capturing price movements. As a result, the option premium increases to reflect the extended time value and increased probability of the option being in-the-money.

(ii) Similar to a call option, the price of a European put option is also affected by the time to maturity. However, in this case, increasing the time to maturity generally increases the price of a put option. With a longer time period, there is a higher likelihood that the underlying asset's price may decrease and fall below the strike price. This increased potential for the option to be profitable results in a higher premium for the put option. As more time is available for the underlying asset's price to decline, the option holder gains additional protection and the put option becomes more valuable.

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Select any multinational company and explain the following based on Global Value Chain: Document Management: (3 Mark each)
1. Explain in detail company's overall international trade documents platform - types and critical importance of control, compliance and consistency.
2. Explain in detail company's important integration with stakeholders - shipping and transportation providers and financial organizations to draw global value proposition.
International Procurement (3.5 Mark each)
3. Explain with detail with examples overall strategic procurement process based on effective global trade practices that enhances maximum global value proposition.
4. Explain in detail importance of company's global sourcing of goods platform - strong motivators, careful indetail considerations and risk management that needs to be incorporated on global sourcing of goods.
5. Explain in detail how company defines current needs across the entire organization and determine whether new sources are required and which existing suppliers should be maintained. 6. Explain in detail company's strategic decision making process on global supplier selection - critical aspects, factors to consider and inherent risks.

Answers

Walmart's global value chain: Walmart has a global value chain that spans across the world and operates in more than 27 countries. The company has a well-established international trade documents platform that ensures control, compliance, and consistency in its operations.

Types of trade documents used by Walmart include commercial invoices, packing lists, bills of lading, and certificates of origin. These documents are critical in ensuring that the company complies with international trade regulations and avoids costly penalties and fines.

Walmart's integration with stakeholders such as shipping and transportation providers and financial organizations is important in drawing global value proposition. The company has established strong relationships with logistics providers such as FedEx, UPS, and DHL to ensure timely delivery of goods to its stores. It also works closely with financial institutions such as banks to facilitate international payments and manage foreign exchange risks.

In terms of international procurement, Walmart has a strategic procurement process that is based on effective global trade practices that enhance maximum global value proposition. The company sources products from all over the world to ensure that it offers its customers the best prices and quality. It has established procurement centers in different parts of the world to facilitate this process.

For example, Walmart has a procurement center in China that sources products for its stores in the US, Canada, and Mexico. The global sourcing of goods platform is an important aspect of Walmart's international procurement strategy. The company has strong motivators such as cost reduction and quality improvement to source products from different parts of the world.

Careful consideration is taken when sourcing goods to ensure that they meet Walmart's quality standards and comply with international regulations. Risk management is also an important aspect of the sourcing process, and the company has established risk management strategies to mitigate potential risks associated with global sourcing.To determine whether new sources are required and which existing suppliers should be maintained, Walmart defines its current needs across the entire organization.

It works closely with its suppliers to understand their capabilities and capacity to meet its needs. The company also uses advanced technologies such as data analytics to identify trends and patterns that help in making informed decisions on supplier selection. Walmart's strategic decision-making process on global supplier selection is guided by critical aspects such as quality, cost, and delivery.

Factors such as cultural differences, language barriers, and political risks are also considered when selecting suppliers. The company has established risk management strategies to mitigate potential risks associated with supplier selection.

For example, it has a Supplier Code of Conduct that outlines the expectations for its suppliers to ensure compliance with ethical and legal standards.

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Calculating EFN with multiple conditions: In Problem 4, suppose the firm was operating at only 80 percent capacity in 2011. Also, going into 2012 it expects the following changes to take place: (1) the firm will want to have a minimum cash balance of $30,000 (higher minimum cash balance); (2) its customers will start making payments by day 30, in other words DSO will become 30 or Account Receivable outstanding will be 30 days of sales; (3) they will start paying suppliers every 10 days on average, in other words DPO will become 10; (4) Inventory Turnover will slow down to 6 times a year, in other words DIO will become 61 days and the firm will take longer to turn its inventory over. What is EFN now? *think about how each of the changes included in the above questions individually influences the firm's need for external financing/borrowing and why. 8. Calculating EFN: In Problem 4, suppose the firm wishes to keep its debt, equity ratio constant. What is EFN now? 9. EFN and Internal Growth: Redo Problem 4 using sales growth rates of 15 and 25 percent (you used 20 percent in Problem 4). Illustrate graphically the relationship between EFN and the growth rate, and use this graph to determine the relationship between them. At what growth rate is the EFN equal to zero? (Hint: you need to graph EFN at the Y axis and % growth on the X axis) Income Statement Balance Sheet 2011 Assets 2011 $ Sales Costs Other expenses EBIT Interest expense Taxable income Taxes $ 743,000 578,000 15,200 $ 149,800 11,200 $ 138,600 48,510 Cash AR Inventory Total Current Assets 20,240 -32,560 69,520 122,320 $ $ Net Plant Total assets 330,400 452,720 $ Net income $ 90,090 $ Dividends (constant) Add. to RE 27,027 63,063 $ $ 54,400 13,600 68,000 126,000 194,000 Liabilities and owners' equity AP NP Total Current Liabilities Long-term Debt Total Liabilities Owners' Equity Common Stock RE Total Owner's Equity Total Liabilities and Owners' Equity $ $ $ 112,000 146,720 258,720 452,720 $ S

Answers

The EFN (External Financing Needed) with the given changes and conditions is X million dollars.

What is the EFN considering the specified changes?

To calculate the EFN, we need to consider the effects of each change on the firm's need for external financing:

1. Higher minimum cash balance: The firm's minimum cash balance of $30,000 will require additional funds to meet this requirement.

2. Decreased DSO (Days Sales Outstanding): If customers start making payments by day 30, the firm will receive cash faster, reducing the need for financing.

3. Decreased DPO (Days Payable Outstanding): If the firm pays suppliers every 10 days on average, it will need additional funds to cover the shorter payment period.

4. Slower inventory turnover (increased DIO): If the firm takes longer to turn over its inventory (61 days), it will tie up more funds in inventory, requiring additional financing.

Considering these changes, we can calculate the EFN by comparing the projected assets and liabilities with the expected sales and retained earnings.

The difference between these values represents the external financing needed (EFN) to maintain the desired level of operations.

EFN (External Financing Needed) is a measure used to determine the additional funding required by a firm to support its growth or maintain its operations.

It takes into account various factors, such as changes in sales, assets, liabilities, and profitability ratios.

Understanding EFN helps businesses plan their financing strategies and identify the need for external funding sources, such as loans or equity investments, to meet their operational requirements and growth objectives.

Monitoring EFN is crucial for financial planning and ensuring a company has adequate resources to sustain its operations and pursue its strategic initiatives effectively.

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Service members who wish to exclude gain on the scale of the primary residence and who are on extended duty may suspend the application of the five-year ownership and use test four up to....
no extension allowed
5 years
10 years
12 years

Answers

Service members who wish to exclude gain on the sale of the primary residence and who are on extended duty may suspend the application of the five-year ownership and use test for up to 10 years.

The five-year ownership and use test is a rule that helps service members to exclude gain on the sale of their primary residence. A gain on the sale of the principal residence is the difference between the price for which it was sold and the cost basis. Service members are eligible to exclude gain on the sale of the primary residence provided that they meet the eligibility criteria and certain conditions, such as the five-year ownership and use test.

Service members must have owned and lived in the home as their primary residence for at least two of the five years preceding the sale to qualify for the exclusion. However, if they are on extended duty and want to exclude gain on the sale of the primary residence, they may suspend the application of the five-year ownership and use the test for up to 10 years (two years longer than the default five-year test).

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Select the statement that is TRUE.
A) Limited partners are not employees but general partners are employees.
B) If Cooper, a partner, has a monthly salary allowance of $1,400, the partnership would record salary expense of $0.
C)Partners are employed by the partnership.
D) If Cooper, a partner, has a monthly salary allowance of $1,400, the partnership would record salary expense of $16,800.

Answers

The statement that is TRUE regarding the given terms "salary allowance" is: D) If Cooper, a partner, has a monthly salary allowance of $1,400, the partnership would record a salary expense of $16,800. Option D is the correct answer

Salary allowance is a fixed amount that an employee gets every month in addition to basic pay to cover living expenses, meals, and other daily needs. It is typically referred to as an additional sum of money added to the employee's monthly paycheck.

Salary allowance is not part of basic pay or any incentive pay that an employee earns. When a partner of a partnership has a salary allowance, the partnership will have to record salary expenses equal to the partner's allowance. Hence, if Cooper, a partner, has a monthly salary allowance of $1,400, the partnership would record a salary expense of $16,800 (1,400 x 12). Therefore, option D is the correct answer.

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1.Suppose you invested in a bond three years ago. You bought the bond at $965 and today the price of the bond is $1047.75. You just calculated that your HPR on the bond is 35%. Given this and a face value of $1,000, what is the coupon rate of the bond?
a.4.9%
b.6.2%
c.8.5%
d.10.6%

Answers

To calculate the coupon rate of the bond, we can use the formula for the Holding Period Return (HPR) and the given information.

HPR is calculated as:

HPR = (Ending Value - Beginning Value + Coupon Payment) / Beginning Value

In this case, the beginning value is $965, the ending value is $1047.75, and the HPR is 35%. The face value of the bond is $1,000.

Let's rearrange the formula to solve for the coupon payment:

35% = ($1047.75 - $965 + Coupon Payment) / $965

Now, we can solve for the coupon payment:

35% * $965 = $1047.75 - $965 + Coupon Payment

0.35 * $965 = $82.75 + Coupon Payment

$337.75 = $82.75 + Coupon Payment

Coupon Payment = $337.75 - $82.75

Coupon Payment = $255

The coupon payment is $255. Now, to calculate the coupon rate, we divide the coupon payment by the face value of the bond and express it as a percentage:

Coupon Rate = (Coupon Payment / Face Value) * 100

Coupon Rate = ($255 / $1000) * 100

Coupon Rate = 25.5%

Therefore, the coupon rate of the bond is 25.5%. None of the provided options (a. 4.9%, b. 6.2%, c. 8.5%, d. 10.6%) match the calculated coupon rate.

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Consider a simple two-period economy. In the second period there are two possible contingencies/states of nature denoted by s=1,2. Financial markets are complete and the matrix of asset returns is given by (columns refer to assets, rows to states of nature): [
3
1


2
1

]. (a) Find the portfolios attaining returns (1,0) and (0,1). (b) If the price of asset 1 and 2 are 4 and 3 respectively, find the prices of the portfolios delivering returns (1,0) and (0,1). (c) Find the risk neutral probabilities of state 1 and 2 for the above economy

Answers

To find the portfolios attaining returns (1,0) and (0,1), we need to solve the system of equations where the portfolio weights multiplied by the asset returns equal the desired returns. The risk-neutral probabilities of state 1 and 2 are 0.83 and 0.17, respectively.

Let x and y represent the portfolio weights for asset 1 and asset 2, respectively.

For the portfolio attaining return (1,0):
3x + 1y = 1
x + y = 0
Solving this system of equations, we find that x = -1/2 and y = 1/2.

For the portfolio attaining return (0,1):
3x + 1y = 0
x + y = 1
Solving this system of equations, we find that x = 1/2 and y = -1/2.

To find the prices of the portfolios delivering returns (1,0) and (0,1), we multiply the portfolio weights by the prices of the assets.
For the portfolio delivering return (1,0):
Price = 4(-1/2) + 3(1/2) = 2.5

For the portfolio delivering return (0,1):
Price = 4(1/2) + 3(-1/2) = 0.5

The risk-neutral probabilities of state 1 and 2 can be found by dividing the price of the corresponding portfolio by the sum of the prices of both portfolios.

For state 1:
Prob(state 1) = Price of portfolio delivering return (1,0) / (Price of portfolio delivering return (1,0) + Price of portfolio delivering return (0,1))
             = 2.5 / (2.5 + 0.5)
             = 2.5 / 3
             = 0.83

For state 2:
Prob(state 2) = Price of portfolio delivering return (0,1) / (Price of portfolio delivering return (1,0) + Price of portfolio delivering return (0,1))
             = 0.5 / (2.5 + 0.5)
             = 0.5 / 3
             = 0.17

Therefore, the risk-neutral probabilities of state 1 and 2 are 0.83 and 0.17, respectively.

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On April 13 the Barclays signed an agreement to purchase certain property owned by the Taylors for the sum of $15,500. The purchase and sale agreement did not specify a form of payment except that the purchasers were to pay a deposit of $500 in cash and the balance on closing. The date of closing was set out in the agreement as July 1. The agreement also contained the following provision:
This sale is conditional for a period of 15 days from the date of acceptance upon the Purchaser being able to obtain a first mortgage in the amount of ten thousand dollars ($10,000); otherwise, this agreement shall be null and void and all deposit monies shall be returned to the Purchaser without interest or penalty. This Sale is also conditional for a period of 15 days from the date of acceptance upon the Purchaser being able to secure a second mortgage in the amount of $2,500 for a period of five (5) years; otherwise, this agreement shall be null and void and all deposit monies shall be returned to the Purchaser without interest or penalty.
The Barclays were able to arrange for a first mortgage of $12,000 and on April 28 a notice in the following form was delivered to the Taylors:
This is to notify you that the condition specified in the agreement of purchase and sale between the Vendors and Purchasers has been met. The transaction will therefore close as per the agreement.
On July 1 the Barclays presented a certified cheque to the Taylors in the amount of $15,000. The Taylors, however, refused to deliver the deed to the Barclays on the grounds that the condition in the purchase and sale agreement had not been complied with. The Barclays then instituted legal action against the Taylors

Answers

The Barclays entered into a purchase and sale agreement with the Taylors to purchase certain property for $15,500. The agreement included conditions that the Barclays must obtain a first mortgage of $10,000 and a second mortgage of $2,500 within 15 days.

The Barclays and the Taylors entered into a purchase and sale agreement for the property. The agreement stated that the sale was conditional upon the Barclays being able to obtain a first mortgage of $10,000 and a second mortgage of $2,500 within 15 days.

The Barclays managed to secure a first mortgage of $12,000 and provided a notice to the Taylors confirming the fulfillment of the condition within the specified timeframe.

However, when the closing date arrived on July 1, the Taylors refused to deliver the deed to the Barclays, claiming that the condition in the agreement had not been complied with.

This disagreement led the Barclays to initiate legal action against the Taylors, likely seeking enforcement of the purchase and sale agreement and the transfer of the property's deed.

The outcome of the legal action will depend on the specific terms and conditions outlined in the purchase and sale agreement, as well as any applicable laws and regulations.

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The purpose of cost-flow assumption methods is OA. to calculate the quantity of items in ending inventory. O B. to ensure cost of goods sold matches budget. OC. to perform calculations that do not affect the financial statements. OD. to determine the dollar values for cost of goods sold and ending inventory.

Answers

The purpose of cost-flow assumption methods is to determine the dollar values for cost of goods sold and ending inventory, which is option D.

Cost-flow assumption methods are used to track how costs flow through a company's inventory system. These methods help companies determine the value of their inventory at the end of an accounting period and the cost of goods sold during that same period. By selecting a cost-flow assumption method, a company can establish a systematic methodology for assigning costs to its inventory.

The most common cost-flow assumption methods include First-In, First-Out (FIFO), Last-In, First-Out (LIFO), and Weighted Average Cost. Each method has its own advantages and disadvantages, but they all serve the same purpose of determining the value of a company's inventory and cost of goods sold.

Therefore, the correct answer is option D - to determine the dollar values for cost of goods sold and ending inventory.

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Following the heightened geopolitical tension and economic instability globally, the Department of Trade and Industry has requested the Ministry of Finance to help educate businesses in the country with international trade exposure. Explain briefly what could be the potential risk specifically in trading, apart from currency risk in the current scenarios and why:

Answers

Potential risks in international trade, apart from currency risk, may include political instability, trade barriers (tariffs, quotas), changing regulations, supply chain disruptions, intellectual property theft, and geopolitical conflicts.

In the current scenarios of heightened geopolitical tension and economic instability, these risks become even more significant. Political instability can lead to abrupt policy changes or trade disputes, impacting business operations and market access. Trade barriers, such as tariffs or quotas imposed by countries, can increase the cost of imports and exports, affecting competitiveness and profitability.

Changing regulations can create uncertainty and additional compliance costs for businesses operating internationally. Supply chain disruptions, like the ones witnessed during the COVID-19 pandemic, can disrupt production and distribution, leading to delays and increased costs.

Intellectual property theft is a persistent concern in international trade, with businesses facing risks of counterfeiting, piracy, or unauthorized use of their intellectual assets. Geopolitical conflicts can escalate tensions between countries, potentially resulting in trade sanctions or restrictions that hinder market access and disrupt supply chains.

Overall, these risks highlight the importance of proactive risk management, diversification of markets and suppliers, staying updated on regulatory changes, and engaging in thorough due diligence while conducting international trade.

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Your company is planning on introducing a new residential smoke detector at the start of next year. The COS2013 carbon monoxide and smoke alarm (to be called the LifeSaver II) monitors and detects harmful smoke and carbon monoxide gas. It measures the concentration of CO or smoke and sounds a loud alarm pattern when a potentially harmful level is reached. The alarm is designed to detect both fast burning and slow smoldering fires. The type of alarm is visibly indicated by an alarm icon. The new model is a 120 volt hardwire combination smoke and carbon monoxide alarm, using the latest ionization, photoelectric and semiconductor technology. Features include visual alarm icons (for both smoke and CO), instant test and retest feature, inter-connectability for up to 12 units, an alarm pause silencer feature, an 85 dB alarm pattern, a 5 year warranty and is UL & ULc listed. The COS2013 is clearly superior to your other lines but will actually carry a lower price due to the lower cost of the new technology. Your company also realizes that competitors possess similar technology and cost structures which necessitate the introduction of the new alarm. Your company will continue to sell its current product: the LifeSaver I. Your boss has asked you to assess the impact of cannibalization on the company's projected total contribution margin. The LifeSaver I is priced at $48 and has unit variable costs of $25. The LifeSaver II will be priced at $40 and will carry unit variable costs of $24. First year LifeSaver II sales are projected at 375,000 units. The company had expected to sell 450,000 LifeSaver I alarms, without the introduction of LifeSaver II. While difficult to estimate, the company believes that about 200,000 LifeSaver I's will be cannibalized by the introduction of the LifeSaver II. Calculate the projected 2013 total contribution margin for LifeSaver II.

Answers

Total Contribution Margin is calculated as the product of the number of units sold and the contribution margin per unit. The contribution margin per unit is determined by subtracting the unit variable costs from the selling price per unit. Here is the calculation:

Given data:Number of units of LifeSaver II sold in 2013 = 375,000Selling price per unit of LifeSaver II = $40

Unit variable costs of LifeSaver II = $24Total contribution margin per unit of LifeSaver II = ($40 - $24) = $16

Number of LifeSaver I units cannibalized by LifeSaver II = 200,000Number of LifeSaver I units sold in 2013 without LifeSaver II = 450,000 - 200,000 = 250,000

Selling price per unit of LifeSaver I = $48Unit variable costs of LifeSaver I = $25

Total contribution margin per unit of LifeSaver I = ($48 - $25) = $23

Therefore, the total contribution margin for LifeSaver II in 2013 is calculated as:

Total contribution margin = Total contribution margin per unit * Number of units sold= $16 * 375,000= $6,000,000

Therefore, the projected 2013 total contribution margin for LifeSaver II is $6,000,000.

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1. What is the primary object of the law of tort?
2. Although the law of tort and the law of contract are both areas of civil law, identify the key conceptual difference between the two.
3. Although there may be overlap between a tortious action and a criminal action what is the key distinction between the two, in relation to the sanctions?
4. What are the four main elements of a negligence action?
5. The first element that a plaintiff must prove is that the defendant owed the plaintiff a duty of care. Lord Atkin, in Donoghue v Stevenson [14.70], used, for the first time, the concept of the "neighbor" as a general limiting principle. Who, according to Lord Atkin, is our neighbour, at least according to law? What specific duty of care was owed by a manufacturer to a consumer? 6. In Donoghue v Stevenson [14.70], why did May Donoghue not sue the shop owner?
7. In novel situations, where the duty of care question has not been settled by case law, what twofold or composite test is outlined by the High Court in Tame [14.110]?
8. Explain why the courts have been reluctant to find a duty of care in cases where the damage is psychological.
9. The High Court in Annetts [14.180] rejected the proposition that a plaintiff is only entitled to compensation if (a) the psychiatric injury suffered was as a result of a "nervous shock" or (b) the plaintiff was a witness to the incident (or its immediate aftermath). Do you agree with the decision? Can you appreciate why Mrs Tame failed and the Annetts’ succeeded?
10. What is a "pure economic loss" and why have the courts limited the scope of the duty of care where such a loss occurs?

Answers

1. The primary object of tort law is to provide compensation for harm caused by wrongful actions, while contract law focuses on enforcing agreements.

2. Courts are cautious in recognizing duties of care for psychological harm, and the scope of duty is limited in cases of pure economic loss to avoid excessive liability.

1. The primary object of the law of tort is to provide a legal framework for individuals to seek compensation for harm or injury caused by the wrongful actions of others.

2. The key conceptual difference between the law of tort and the law of contract is that tort law deals with civil wrongs committed against individuals, whereas contract law governs the enforcement of agreements and obligations between parties.

3. The key distinction between a tortious action and a criminal action, in terms of sanctions, is that tort law primarily aims to compensate the victim for their losses or injuries, while criminal law focuses on punishing the wrongdoer through fines, imprisonment, or other criminal penalties.

4. The four main elements of a negligence action are: (1) Duty of care - the defendant owed a legal duty of care to the plaintiff; (2) Breach of duty - the defendant breached that duty by failing to meet the required standard of care; (3) Causation - the defendant's breach of duty caused the plaintiff's harm or injury; (4) Damages - the plaintiff suffered actual harm or loss as a result of the defendant's actions.

5. According to Lord Atkin in Donoghue v Stevenson, our "neighbor" is any person who can be reasonably foreseen as being affected by our actions. In the case, the specific duty of care owed by a manufacturer to a consumer was to take reasonable care to avoid acts or omissions that could harm the consumer.

6. May Donoghue did not sue the shop owner because her friend had purchased the drink for her, and she did not have a contractual relationship with the shop owner. Instead, she sued the manufacturer of the ginger beer based on the duty of care owed to consumers.

7. In novel situations where the duty of care question is not settled by case law, the High Court in Tame outlined a twofold or composite test. This test involves considering whether a reasonable person in the defendant's position would have foreseen the risk of harm to the plaintiff and whether it is just and reasonable to impose a duty of care in the circumstances.

8. Courts have been reluctant to find a duty of care in cases where the damage is psychological due to the difficulty in establishing causation and foreseeability. Psychological harm is often more subjective and complex to prove compared to physical harm, which has led to cautiousness in recognizing such claims.

9. In the case of Annetts, the High Court rejected the proposition that a plaintiff is only entitled to compensation if the injury suffered was due to a "nervous shock" or witnessing the incident. Whether one agrees with the decision is subjective, but it highlights the court's recognition that psychological harm can be caused in various ways and should not be limited to specific circumstances. Mrs. Tame failed because her psychiatric injury did not meet the requirements set by the court, while the Annetts succeeded because their claim was deemed to meet the necessary criteria.

10. "Pure economic loss" refers to financial or economic harm that does not arise from any accompanying physical harm or property damage. Courts have limited the scope of the duty of care in cases involving pure economic loss due to concerns about indeterminate liability and the potential for imposing excessive burdens on defendants. The courts have established various tests and criteria to assess the existence and extent of a duty of care in such cases.

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What types of financing do small entrepreneurs
typically use? What are some of the pros and cons of each?

Answers

Small entrepreneurs typically use a variety of financing options to fund their businesses. Some common types of financing available to small entrepreneurs include:

1. Personal Savings:

Pros:

- Easy access: Entrepreneurs can use their own savings to fund their business without going through complex application processes.

- Control: Entrepreneurs maintain full control over their business decisions and do not have to answer to external investors.

Cons:

- Limited funds: The amount of money available is dependent on the entrepreneur's personal savings, which may not be sufficient to cover all business expenses.

- Personal risk: Using personal savings means risking one's own money, and if the business fails, the entrepreneur may suffer financial losses.

2. Friends and Family:

Pros:

- Trust and flexibility: Friends and family members may be more willing to invest in the entrepreneur's business and offer flexible repayment terms.

- Potential lower interest rates: Friends and family may provide loans or investments with lower interest rates compared to traditional lenders.

Cons:

- Strained relationships: Mixing personal relationships with business can sometimes lead to conflicts or strained relationships, especially if the business encounters difficulties.

- Limited funding: The pool of funds from friends and family may be limited, making it insufficient for substantial business growth.

3. Bank Loans:

Pros:

- Established process: Banks have well-defined loan application processes, making it easier for entrepreneurs to understand and navigate.

- Potential lower interest rates: Depending on the entrepreneur's creditworthiness, bank loans may offer lower interest rates compared to other forms of financing.

Cons:

- Stringent requirements: Banks typically require collateral, a good credit score, and a detailed business plan, which can be challenging for small entrepreneurs to meet.

- Lengthy approval process: Obtaining a bank loan may involve lengthy approval periods, which can delay the entrepreneur's access to funds.

4. Microloans:

Pros:

- Small loan amounts: Microloans are designed for small businesses and entrepreneurs who need smaller amounts of capital.

- Flexible eligibility criteria: Microloan providers may have less stringent requirements compared to traditional banks, making it more accessible to small entrepreneurs.

Cons:

- Higher interest rates: Microloans often come with higher interest rates due to the perceived higher risk associated with lending to small businesses.

- Limited funding: The maximum loan amount available through microloans may not be sufficient for larger business ventures.

5. Crowdfunding:

Pros:

- Access to a broad audience: Crowdfunding platforms allow entrepreneurs to reach a large number of potential investors and customers.

- Validation and marketing: A successful crowdfunding campaign can validate the business idea and generate early marketing buzz.

Cons:

- Time-consuming: Running a crowdfunding campaign requires significant time and effort to create compelling campaigns and engage with backers.

- Uncertain outcomes: Crowdfunding success is not guaranteed, and if the funding goal is not reached, the entrepreneur may receive no funds at all.

6. Angel Investors:

Pros:

- Capital infusion: Angel investors provide funding to early-stage businesses in exchange for equity or convertible debt.

- Expertise and connections: Angel investors often bring valuable industry experience, knowledge, and networks to help the entrepreneur grow the business.

Cons:

- Equity dilution: Accepting angel investment means giving up a portion of the business ownership and decision-making control.

- High expectations: Angel investors typically expect a high return on investment and may impose certain growth targets and milestones on the entrepreneur.

It's important for entrepreneurs to carefully consider the pros and cons of each financing option and assess which one aligns best with their specific needs and goals. Additionally, seeking professional advice from financial advisors or mentors can provide valuable insights for making informed financing decisions.

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Return on Assets Ratio and Asset Turnover Ratio
Campo Systems reported the following financial data (in millions) in its annual report:
2015 2016
Net Income $8,052 $6,134
Net Sales 39,540 36,117
Total Assets 58,734 68,128
If the company’s total assets are $55,676 in 2014, calculate the company’s (a) return on assets (round to one decimal point) and (b) asset turnover for 2015 and 2016 (round to two decimal points).
2015 2016
a. Return on Assets Ratio b. Asset Turnover Ratio

Answers

(a) The company's return on assets ratio for 2015 is 13.7% and for 2016 is 9.0%. (b) The company's asset turnover ratio for 2015 is 0.67 and for 2016 is 0.53.

a. The return on assets ratio for 2015 and 2016 is 13.7% and 9.0%, respectively.

To calculate the return on assets (ROA) ratio, we divide the net income by the total assets and express it as a percentage. In 2015, the net income is $8,052 million, and the total assets are $58,734 million. Therefore, the ROA for 2015 is calculated as follows:

ROA 2015 = (Net Income 2015 / Total Assets 2015) * 100

      = ($8,052 million / $58,734 million) * 100

      ≈ 13.7%

Similarly, for 2016, the net income is $6,134 million, and the total assets are $68,128 million. Thus, the ROA for 2016 is:

ROA 2016 = (Net Income 2016 / Total Assets 2016) * 100

      = ($6,134 million / $68,128 million) * 100

      ≈ 9.0%

b. The asset turnover ratio for 2015 and 2016 is 0.67 and 0.53, respectively.

The asset turnover ratio measures how efficiently a company utilizes its assets to generate sales. It is calculated by dividing net sales by average total assets. To calculate the asset turnover ratio, we need the net sales data. In 2015, the net sales are $39,540 million, and the total assets are $58,734 million. Therefore, the asset turnover ratio for 2015 is:

Asset Turnover 2015 = Net Sales 2015 / Total Assets 2015

                         = $39,540 million / $58,734 million

                         ≈ 0.67

For 2016, the net sales are $36,117 million, and the total assets are $68,128 million. Thus, the asset turnover ratio for 2016 is:

Asset Turnover 2016 = Net Sales 2016 / Total Assets 2016

                         = $36,117 million / $68,128 million

                         ≈ 0.53

Note: Average total assets are not provided in the given data, so we have used the total assets for each respective year.

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Instructions: Complete all questions. Show working for all parts. Answers do not have to be integers: assume all variables (goods, prices) are infinitely divisible. Submit answers in P DF format. 1. Alice, Bill and their mother are deciding how to split a chocolate bar. Assume that the chocolate bar has 8 squares, so can only be divided into multiples of 81. Assume also that each only wants to maximise how much chocolate he or she gets. (a) Consider the following simultaneous move game: Alice, Bill and the mom each name a fraction of the chocolate bar that would be allocated to them. If the three fractions add up to a number less than or equal to 1 , each player gets the share of the chocolate equal to the fraction they named (e.g. if the mom says 41, Alice says 41 and Bill says 41, each gets 41 of the chocolate). If the three fractions add up to more than 1 , each player gets no chocolate. Name one Nash equilibrium of the game. (b) Consider the following simultaneous move game: Alice, Bill and the mom each name a fraction of the chocolate bar that would be allocated to them. If the three fractions add up to a number less than or equal to 1 , each player gets the share of the chocolate equal to the fraction they named (e.g. if the mom says 41, Alice says 41 and Bill says 41, each gets 41 of the chocolate). If the three fractions add up to more than 1 , each player gets 81 of the chocolate. Name a strategy profile that constitutes a Nash equilibrium of the game in part (a) but would not be a Nash equilibrium of this game. (c) Consider the following sequential move game: in the first st age, the mom divides the chocolate bar into 3 pieces. In the second stage, Alice takes one of these three pieces. In the second stage, Bill takes one of the remaining two pieces. The mom then gets the piece that remains. This game has two SP NE. In both of them, the mom gets the same fraction of the chocolate. What is this fraction? Explain in two sentences, and feel free to include a drawing if it helps.

Answers

(a) One Nash equilibrium is for each player to name 1/3 of the chocolate bar.

(b) One strategy profile that constitutes a Nash equilibrium in part (a) but would not be a Nash equilibrium of this game is for Alice and Bill to name fractions that add up to more than 1.

(c) The mom gets 3/8 of the chocolate bar in both SPNEs. In the first stage, the mom divides the chocolate bar into 3 pieces of 3, 3, and 2 squares.

If any player deviates from this strategy, they will receive less chocolate since the other two players will also change their strategy to maintain their equal share.

While the mom names a fraction that will bring the total below 1 so that she receives no chocolate and Alice and Bill each receive 81. This is not a Nash equilibrium in the second game because if the mom deviates by naming a fraction that brings the total above 1, Alice and Bill will also deviate and the mom will receive nothing while Alice and Bill each receive 40.5.

In the second stage, Alice takes the piece with 2 squares, and in the third stage, Bill takes one of the pieces with 3 squares. The mom then takes the remaining piece with 3 squares. Since the mom knows that she will get one of the three pieces, she chooses to divide the chocolate into pieces such that each piece has the same ratio of squares to the total number of squares (i.e. 3/8 in this case) to ensure that no matter which piece she gets, she receives the same fraction of the chocolate bar.

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