Economic Value Added (EVA) is a financial performance measure used by Drew Concrete. Drew Concrete has $240 million in assets and the company has financed its assets with 37 percent equity and 63 percent debt with an interest rate of 6 percent.
The opportunity cost of Drew Concrete's funds is 12 percent, while the operating return on the firm’s assets is 14 percent. Economic Value Added measures the wealth that a company has created or destroyed over a given period. EVA is a measure of the company's ability to generate a profit from its invested capital. Economic Value Added is calculated by subtracting the firm's cost of capital from its net operating profit after taxes (NOPAT). The formula for calculating EVA is EVA = NOPAT - (WACC x Capital).Using the given values, the Economic Value Added created by Drew Concrete can be calculated as follows:EVA = NOPAT - (WACC x Capital)NOPAT = Operating return on assets x Capital = 14% x $240 million = $33.6 millionWACC = (Weight of Equity x Cost of Equity) + (Weight of Debt x Cost of Debt x (1 - Tax Rate))Weight of Equity = 37%, Weight of Debt = 63%, Cost of Equity = 12%, Cost of Debt = 6%, Tax Rate = 0.35WACC = (0.37 x 0.12) + (0.63 x 0.06 x (1 - 0.35)) = 0.0776 or 7.76%EVA = $33.6 million - (7.76% x $240 million) = $15.84 million
Therefore, the Economic Value Added created by Drew Concrete is $15.84 million.
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Consider an economy described by the 6 following equations. In this economy, compute private saving, public saving, and national saving is there a budget surplus or deficit?
(1) Y=C+I+G
(2) Y = 6,000
(3) G= 1,250
(4) T = 1,500
(5) Consumption function: C = 200+ 0.8(Y-T)
(6) Investment function : 1 = 1000 4r
Select one
a. Public Saving= 250; Private saving-750 and National saving-1,000. There is a budget surplus
b. Public Saving= 250, Private saving-700 and National saving-950. There is a budget surplus
c. Public Saving= -250, Private saving= 750 and National saving-500. There is a budget deficit
d. Public Saving=-250, Private saving-700 and National saving-450. There is a budget deficit
To compute private saving, public saving, and national saving, we need to use the given equations and formulas.
Private Saving (Sprivate) = Y - T - C
Public Saving (Spublic) = T - G
National Saving (Snational) = Sprivate + Spublic
Given:
Y = 6,000
G = 1,250
T = 1,500
C = 200 + 0.8(Y - T)
I = 1,000 - 4r (not provided)
Let's calculate the values:
C = 200 + 0.8(Y - T)
= 200 + 0.8(6,000 - 1,500)
= 200 + 0.8(4,500)
= 200 + 3,600
= 3,800
Private Saving (Sprivate) = Y - T - C
= 6,000 - 1,500 - 3,800
= 700
Public Saving (Spublic) = T - G
= 1,500 - 1,250
= 250
National Saving (Snational) = Sprivate + Spublic
= 700 + 250
= 950
Based on the calculations, we have:
Private Saving (Sprivate) = 700
Public Saving (Spublic) = 250
National Saving (Snational) = 950
To determine if there is a budget surplus or deficit, we compare public saving to zero. If Spublic is positive, there is a budget surplus. If Spublic is negative, there is a budget deficit.
In this case, Spublic is 250, which is positive. Therefore, the correct option is:
b. Public Saving = 250, Private saving = 700, and National saving = 950. There is a budget surplus.
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1. "When you are manufacturing at the scale of the global population, details matter. A victory came when they found a way to cut wastage and go from five doses per vial to six
Briefly discuss this statement in relation to SDG12: Responsible Consumption and
Production. Justify your position using TWO reasons based on utilitarianism.
From a utilitarian perspective, cutting wastage and increasing the number of doses per vial aligns with SDG12 by promoting responsible consumption and production. It maximizes overall utility by optimizing resource use, enhancing access to healthcare, and improving well-being for a larger population.
The statement highlights the importance of reducing wastage in manufacturing and its connection to SDG12: Responsible Consumption and Production. Utilitarianism, as an ethical framework, focuses on maximizing overall utility or happiness for the greatest number of people. Here are two reasons based on utilitarianism to justify the significance of cutting wastage in relation to SDG12:
1. Efficiency and Resource Optimization: By finding a way to increase the number of doses per vial from five to six, there is a reduction in wastage of the product. This optimization leads to more efficient use of resources, such as raw materials, energy, and packaging materials. From a utilitarian perspective, this reduction in wastage maximizes utility by minimizing the depletion of resources and allowing for the production of additional doses to meet the needs of a larger population. It contributes to responsible consumption by ensuring that resources are used effectively and sustainably to benefit a greater number of individuals.
2. Access to Healthcare and Improved Well-being: Cutting wastage and increasing the number of doses per vial has the potential to increase the availability and affordability of the product. This can have a significant positive impact on public health, as more people can access the necessary medication or treatment. Utilitarianism emphasizes the importance of promoting overall well-being and happiness. By reducing wastage and improving access to healthcare, the action aligns with the utilitarian principle of maximizing overall utility by providing more individuals with the means to lead healthier lives. This contributes to the broader goal of responsible consumption and production by ensuring that healthcare resources are utilized effectively and equitably.
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Nanticoke Industries had the following operating results for 2018: sales $28,560; cost of goods sold = $19,460; depreciation expense = $5,020; interest expense = $2,340; dividends paid = $1,150. At the beginning of the year, net fixed assets were $16,980, current assets were $5,800, and current liabilities were $3,280. At the end of the year, net fixed assets were $20,360, current assets were $7,360, and current liabilities were $3,900. The tax rate for 2018 was 30 %. a. What is net income for 2018? (Negative answers should be indicated by a minus sign. Omit $ sign in your response.) Net income $ b. What is the operating cash flow for 2018? (Negative answers should be indicated by a minus sign. Omit $ sign in your response.) Operating cash flow $ c. What is the cash flow from assets for 2018? (Negative answer should be indicated by a minus sign. Omit $ sign in your response.) Cash flow from assets $ d. If no new debt was issued during the year, what is the cash flow to creditors? What the cash flow to shareholders? (Negative answers should be indicated by a minus sign. Omit $ sign in your response.) Cash flow to creditors Cash flow to shareholders $ $
a) Net IncomeNet income is used to determine the profitability of a company. It is the total revenue earned by the company minus the total expenses incurred by the company. By using the formula:Net Income = Sales - Cost of goods sold - Depreciation expense - Interest expense - Taxes - Dividends paidPlug in the given values, to find the net income:
Net income = 28,560 - 19,460 - 5,020 - 2,340 - 0.3(28,560 - 19,460 - 5,020 - 2,340) - 1,150
Net income = $1,836
b) Operating Cash FlowOperating cash flow refers to the cash generated from the company's operating activities.
It is calculated using the formula:
Operating Cash Flow = Net Income + Depreciation Expense
Net Income is calculated in part a) so we can just use that and depreciation expense is given in the operating results.Operating Cash Flow = $1,836 + $5,020Operating Cash Flow = $6,856
c) Cash Flow from AssetsCash flow from assets refers to the cash generated or used in a company's assets. It is calculated using the formula:Cash Flow from Assets = Operating Cash Flow - Net Capital Spending - Change in Net Working CapitalNet Capital Spending is calculated as:Net Capital Spending = Ending net fixed assets - Beginning net fixed assets + Depreciation ExpenseNet Working Capital is calculated as:Net Working Capital = (Ending current assets - Ending current liabilities) - (Beginning current assets - Beginning current liabilities)Plug in the given values to find Cash Flow from Assets:
Cash Flow from Assets = $6,856 - (20,360 - 16,980 + 5,020) - [(7,360 - 3,900) - (5,800 - 3,280)]
Cash Flow from Assets = $2,276d)
Cash Flow to Creditors
Cash flow to creditors refers to the cash paid to the company's creditors. If no new debt was issued during the year, the cash flow to creditors will be equal to the interest expense. Hence, cash flow to creditors = interest expenseCash Flow to Creditors = $2,340Cash Flow to ShareholdersCash flow to shareholders refers to the cash paid to the company's shareholders. It is calculated using the formula:Cash Flow to Shareholders = Dividends paid - Net New Equity RaisedDividends paid is given in the operating results and net new equity raised is not given. Since, no new debt was issued, we can assume that the only source of financing was through the sale of new equity.
Cash Flow to Shareholders = $1,150 - (20,360 - 16,980 + 5,020)
Cash Flow to Shareholders = -$7,210 (negative sign indicates cash outflow)
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A small Auckland based company, BigDan's Tools produces a small range of power tools for the local market. They specialise in power drills and their most popular product is the Ateam Drill. They have a stable customer base and are not looking to expand right now or in the immediate future. Their current production is at 95% capacity, where full capacity is 80,000 Ateam Drills. A new customer, Nicky, got in touch with the owner of BigDan's Tools and asked about buying 2000 Ateam Drills. Nicky wants to buy 2000 Ateam Drills for a unit price of $7.50 per Ateam Drill. The current costs associated with making the Ateam Drills are: raw materials of $2.50 per unit, direct labour of $2 per unit, variable overhead of $1.50 per unit and fixed overhead of $25,500 per 80,000 Ateam Drills produced. Normal selling price for each Ateam Drill is $10 per unit. The impact to profit for the period if the special order is accepted is: $6000 $15,000 O There is no way to tell with the information provided. $3000 $2380
The impact to profit is calculated by comparing the profit earned from the normal sales with the profit that will be earned by accepting the special order. When the profit earned from the special order is more than the profit earned from normal sales, it is worthwhile to accept the special order.
The company, BigDan's Tools, is currently producing 80,000 Ateam Drills at full capacity and not interested in expanding. Nicky has requested to buy 2,000 Ateam Drills at a price of $7.50 per unit. So, the company has to decide whether to accept the order or not. If the company accepts the special order of 2,000 Ateam Drills, then the impact on the profit can be calculated as follows:Calculating the total costs to produce 2,000 Ateam Drills= (Raw materials cost + Direct labor cost + Variable overhead cost) × Number of units= ($2.50 + $2.00 + $1.50) × 2,000= $12,000Fixed overhead cost per unit= Fixed overhead cost / Total units produced= $25,500 / 80,000= $0.32Total cost to produce.
2,000 Ateam Drills including fixed overhead costs= Total costs to produce 2,000 Ateam Drills + Fixed overhead cost per unit × Number of units= $12,000 + $0.32 × 2,000= $12,640Selling price per unit of Ateam Drill = $10So, Revenue earned by selling 2,000 Ateam Drills = Selling price per unit of Ateam Drill × Number of units= $10 × 2,000= $20,000Profit earned from normal sales= Revenue earned from normal sales - Total costs to produce 80,000 Ateam Drills= (80,000 × $10) - [(80,000 × $2.50) + (80,000 × $2) + (80,000 × $1.50) + $25,500]= $800,000 - $361,500= $438,500Profit earned by accepting the special order= Revenue earned from the special order - Total costs to produce.
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Scott Corporation makes one product. Budgeted unit sales for October, November, December and January are 10,000, 11,600, 13,300, and 12,700 units, respectively. The ending finished goods inventory should equal 20% of the following month's sales. The budgeted required production for November is closest to: 16,580 units 11,940 units 14,260 units O 11,600 units
To calculate the budgeted required production for November, we need to calculate the required ending finished goods inventory for November and add the November unit sales to it.
Then we will deduct the October finished goods inventory to find out the required production for November.
Required Ending Finished Goods Inventory for November:20% of November sales = 20% of 11,600 units= 0.20 * 11,600= 2,320 unitsRequired Production for November:
Therefore, the budgeted required production for November is 12,920 units. This is closest to option B (11,940 units).
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Twilight Capital Inc. is a large holding company that uses long-term debt extensively to fund its operations. At December 31, the company reported total assets of $100 million, total debt of $55 million, and total equity of $45 million. In January, the company issued $11 billion in long-term bonds to investors at par value. This was the largest debt issuance in the companies history, and it significantly increase the companies ratio of total debt to total equity. Five days after the debt issuance, Twilight Capital, Inc. filed legal documents to prepare for an additional $50 billion long-term bond issue. As a result of this filing, the price of the $11 billion in bonds that the company issued earlier in the week dropped to 94 because of the increase risk associate with the company's debt. The investors in the original $11 billion bond issuance were not informed of the companies plan to issue an additional debt so quickly after the initial bond issue.
Discussion:
• Did Twilight Capital Inc. act unethically by not disclosing to the initial bond investor its immediate plans to issue an additional $50 billion offerings.
• What are the investors alternatives to this act? Please explain.
The decision of whether Twilight Capital Inc. acted unethically by not disclosing its immediate plans to issue an additional $50 billion in long-term bonds depends on various factors, including the legal obligations and ethical standards applicable to the company and the bond issuance process.
In general, transparency and disclosure are considered important principles in financial markets to ensure fair and informed decision-making by investors.
Failing to disclose material information that could significantly impact the investment decision of bondholders may be seen as unethical or even illegal in some jurisdictions.
In this case, the immediate plans to issue an additional $50 billion in long-term bonds could be seen as material information that could affect the value and risk profile of the initial $11 billion bond issuance.
If Twilight Capital Inc. deliberately withheld this information from the initial bond investors, it could be perceived as a lack of transparency and potentially unethical behavior.
Investors who purchased the initial $11 billion bond issuance may have several alternatives if they feel disadvantaged or misled by Twilight Capital Inc.'s actions:
Legal Action: Investors could explore legal options if they believe Twilight Capital Inc. violated any disclosure obligations or securities laws. They may seek compensation or other remedies through litigation or arbitration.
Secondary Market Trading: Investors who no longer wish to hold the bonds due to the changed circumstances may choose to sell their bonds on the secondary market. However, the price drop to 94 suggests that the market has already adjusted to the new information, potentially resulting in a loss for the initial bond investors.
Engagement and Advocacy: Investors can use their influence as bondholders to engage with the company, express their concerns, and advocate for improved disclosure practices and transparency in the future. This can involve participating in shareholder meetings, submitting proposals, or communicating directly with company management.
It is important for investors to carefully assess the available information, consult legal and financial professionals, and consider their individual circumstances before taking any actions or making decisions related to their investments.
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The decision of whether Twilight Capital Inc. acted unethically by not disclosing its immediate plans to issue an additional $50 billion in long-term bonds depends on various factors, including the legal obligations and ethical standards applicable to the company and the bond issuance process.
In general, transparency and disclosure are considered important principles in financial markets to ensure fair and informed decision-making by investors.
Failing to disclose material information that could significantly impact the investment decision of bondholders may be seen as unethical or even illegal in some jurisdictions.
In this case, the immediate plans to issue an additional $50 billion in long-term bonds could be seen as material information that could affect the value and risk profile of the initial $11 billion bond issuance.
If Twilight Capital Inc. deliberately withheld this information from the initial bond investors, it could be perceived as a lack of transparency and potentially unethical behavior.
Investors who purchased the initial $11 billion bond issuance may have several alternatives if they feel disadvantaged or misled by Twilight Capital Inc.'s actions:
Legal Action: Investors could explore legal options if they believe Twilight Capital Inc. violated any disclosure obligations or securities laws. They may seek compensation or other remedies through litigation or arbitration.
Secondary Market Trading: Investors who no longer wish to hold the bonds due to the changed circumstances may choose to sell their bonds on the secondary market. However, the price drop to 94 suggests that the market has already adjusted to the new information, potentially resulting in a loss for the initial bond investors.
Engagement and Advocacy: Investors can use their influence as bondholders to engage with the company, express their concerns, and advocate for improved disclosure practices and transparency in the future. This can involve participating in shareholder meetings, submitting proposals, or communicating directly with company management.
It is important for investors to carefully assess the available information, consult legal and financial professionals, and consider their individual circumstances before taking any actions or making decisions related to their investments.
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Ex
Vikings Inc. reports the following amounts: How much goodwill would be recorded if Torretta Holdings purchases Vikings for $720,000?
Book Value Fair Value
Assets $400,000 $500,000
Liabilities $45,000 $45,000
Net income $25,000 A. $180,000
B. $280,000
C. $255,000
D. $100,000
E. $155,000
If Torretta Holdings purchases Vikings Inc. for $720,000, the amount of goodwill recorded would be $155,000.
Goodwill is an intangible asset that represents the value of a company's reputation, customer relationships, and other non-physical assets. To calculate goodwill in an acquisition, the purchase price is compared to the fair value of the net assets acquired. In this case, the fair value of Vikings Inc.'s assets is $500,000, and the fair value of liabilities is $45,000. Thus, the fair value of net assets is ($500,000 - $45,000) = $455,000. The purchase price of $720,000 exceeds the fair value of net assets, resulting in goodwill. Therefore, the goodwill recorded would be ($720,000 - $455,000) = $265,000. However, goodwill cannot exceed the fair value of the net assets, so the maximum goodwill recorded would be $155,000. If Torretta Holdings purchases Vikings Inc. for $720,000, the amount of goodwill recorded would be $155,000, as it is the difference between the purchase price and the fair value of net assets.
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Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Guatemala. The world price (Pw) of soybeans is $540 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic supphers will satssty domestic demand as much as possible before any exporting or importing takes place. Don Demand Danasic Supply 300 150 200 250 300 300 400 450 500 QUANTITY (Tarybars PRICE (Dulars par to 86888FELLI४ 840 If Guatemala is open to International trade in soybeans without any restrictions, it will import tons of soybeans. per Suppose the Guatemalan government wants to reduce imports to exactly 200 tons of soybeans to help domestic producers. A tariff of S ton will achieve this. A tariff set at this level would raise in revenue for the Guatemalan government.
A tariff set at this level would raise $27,000 in revenue for the Guatemalan government. (50*540)
The effect of a tariff on international trade can be described as a tax on imports. This tax raises the cost of goods purchased from overseas, making them more expensive than domestic goods. As a result, domestic businesses become more competitive, which can help them to grow and expand. This tariff can help to reduce imports, which can improve the country's balance of trade.
However, it can also lead to retaliation from other countries, which can damage international relations and harm businesses that rely on international trade. The graph shows the domestic supply of and demand for soybeans in Guatemala. The world price of soybeans is $540 per ton and is represented by the horizontal black line. Suppose Guatemala is open to international trade in soybeans without any restrictions, it will import 150 tons of soybeans. Given that the Guatemalan government wants to reduce imports to exactly 200 tons of soybeans to help domestic producers. A tariff of 50 tons will achieve this. A tariff set at this level would raise $27,000 in revenue for the Guatemalan government. (50*540)
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Intro One of IBM's bond issues has an annual coupon rate of 4.1%, a face value of $1,000 and matures 12 years. BAttempt 1/6 for 5 pts. Part 1 What is the value of the bond if the required return is 5%? 0+ decimals Submit Part 2 B Attempt 1/6 for 5 pts. What is the value of the bond if the required return is 6%? decimals
Part 1 The value of the bond can be calculated by using the formula given below:Value of bond = C × [(1 - (1 + r)-n)/r] + FV/(1 + r)nwhere,C = coupon payment,FV = face value of bond,r = required rate of return,n = number of years
The bond has a face value of $1,000, an annual coupon rate of 4.1%, and matures in 12 years. Therefore,C = Coupon payment = 4.1% of $1,000 = $41 FV = Face value of bond = $1,000 r = Required rate of return = 5%N = Number of years = 12 years Putting the values in the formula, we get,Value of bond = $41 × [(1 - (1 + 5%)^-12)/5%] + $1,000/(1 + 5%)^12= $41 × 7.3601 + $1,000/1.7623= $302.05 Therefore, the value of the bond is $302.05 if the required return is 5%.Part 2 FV = Face value of bond = $1,000 r = Required rate of return = 6%N = Number of years = 12 years Putting the values in the formula, we get,Value of bond = $41 × [(1 - (1 + 6%)^-12)/6%] + $1,000/(1 + 6%)^12= $41 × 6.5921 + $1,000/1.9487= $302.63
Therefore, the value of the bond is $302.63 if the required return is 6%.
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Decisions made by the Federal Reserve are part of:
Budget Policy
Monetary Policy
Tax Policy
Fiscal Policy
The best option is b that is monetary policy. The Federal Reserve is an independent entity in the US government that is responsible for monetary policy. Monetary policy refers to the actions taken by the central bank to manage the money supply and interest rates to achieve its objectives.
The decisions made by the Federal Reserve are part of monetary policy, not budget, tax, or fiscal policy. The central bank uses monetary policy tools such as open market operations, reserve requirements, and the discount rate to influence the supply of money and credit in the economy. Monetary policy can be used to stabilize the economy by influencing aggregate demand, which is the total demand for goods and services in the economy. The Federal Reserve can use expansionary monetary policy to stimulate economic growth by increasing the money supply and lowering interest rates. Conversely, the central bank can use contractionary monetary policy to slow down an overheating economy by reducing the money supply and increasing interest rates. Overall, the Federal Reserve plays a crucial role in managing the economy by using monetary policy tools to achieve its objectives of low inflation, stable prices, and maximum employment.
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At time t=0, R$= 15%, R€= 15%, and E$/€=1. Assume that Reserve Bank of Australia permanently increases money supply in Australia by 30% at time t=2. In addition, assume the following: 1. The policy change is anticipated at t=1
2. Prices are completely flexible in the short run and immediately respond to any change in money supply
3. Output is always fixed at Y 4. R€= 15% at t=1 and t=2
Select the most appropriate option:
A. E$/€=1.3 at t=1 and in the long-run; E$/€>1.3 at t=2
B. E$/€=1.3 at t=1, t=2, and in the long-run
C. E$/€=1.0 at t=1; E$/€>1.3 at t=2; E$/€=1.3 in the long-run
D. E$/€>1.3 at t=1 and t=2; E$/€=1.3 in the long-run
E. E$/€>1.3 at t=1; E$/€=1.3 at t=2; E$/€=1.3 in the long-run
The correct option is D)
E$/€>1.3 at t=1 and t=2; E$/€=1.3 in the long-run.What is the effect of an increase in the money supply on exchange rates?The question is about exchange rates and specifically about the effect of an increase in the money supply on exchange rates. The Reserve Bank of Australia increases the money supply in Australia by 30% at time t=2, which is the most critical piece of information required to answer the question. An increase in the money supply leads to a decrease in interest rates and causes the exchange rate to fall. The supply of currency has risen, causing the value to drop. A change in the money supply will affect exchange rates in the short and long run. It's worth noting that when prices are fully flexible in the short run, they immediately react to any changes in the money supply. Therefore, at t=1, individuals will anticipate a rise in the money supply, which will cause the Australian dollar to depreciate. However, by t=2, when the money supply actually rises, the exchange rate will have declined even more. So, E$/€ will be greater than 1.3 at t=1 and t=2, but in the long run, it will be 1.3.
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Blake took a marketing class at the local community college before starting his landscape business. He decided that his time would be better utilized in this class because if he could learn to sell his services well, the revenues and profits would follow. Your assessment of his plan might include which of the following?
A) Blake understands that marketing is the lifeblood of the company, and he is right on track with his approach.
B) Blake has elected to operate like a virtual company and leave various parts of the business including accounting, environmental trends scanning, and management to outsourcers.
C) Blake knows that increasing revenues will always keep the business profitable and in a positive cash position.
D) Blake needs to realize that the ability to understand and interpret financial statements provided by his accountant might enhance his profits.
Blake is right on track with his approach to taking a marketing class to improve his knowledge and skills in the field. Answer A is the correct answer.
Blake took a marketing class at the local community college before starting his landscape business. He decided that his time would be better utilized in this class because if he could learn to sell his services well, the revenues and profits would follow. Your assessment of his plan might include the following: Blake understands that marketing is the lifeblood of the company, and he is right on track with his approach. Marketing is the essential function of any company as it is responsible for determining what consumers need and making sure the company is fulfilling that need. Furthermore, marketing is the driver of revenue and profit since it helps customers understand the value of a product or service in exchange for money. In Blake's case, if he can learn to market his landscape business correctly, he can effectively reach more potential customers, leading to more revenues and profits.
Hence, Blake is right on track with his approach to taking a marketing class to improve his knowledge and skills in the field. Answer A is the correct answer.
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If the IRR of Alternative A is 10%, the IRR of Alternative B is 8% and the MARR is 6%, which of the following is true? Alternative B is preferred over Alternative A O Alternative A is preferred over Alternative B O Both alternatives are preferred over the do nothing alternative O Both b and care true
the answer is Both alternatives are preferred over the do-nothing alternative.
Both alternatives are preferred over the do nothing alternative if the IRR of Alternative A is 10%, the IRR of Alternative B is 8% and the MARR is 6%.The two methods of evaluating the economic worth of investment projects are the internal rate of return (IRR) and the minimum attractive rate of return (MARR).The Internal Rate of Return (IRR) is the rate at which the net present value of an investment equals zero. It is used to calculate the discount rate for a project and helps to decide if the investment will generate a profit for the investor.The MARR (Minimum Acceptable Rate of Return) is the lowest rate of return that investors will accept for a new investment, taking into account the level of risk involved.In order to choose between two investment projects, we compare their IRRs to the MARR. If the IRR is higher than the MARR, the project is deemed to be a good investment since it provides a return greater than the MARR. If the IRR is lower than the MARR, the project is not considered a good investment. As a result, if both IRRs are greater than the MARR, both investment alternatives A and B are acceptable and are better than the do-nothing alternative since they provide a return that is higher than the MARR.
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t-bills are financial instruments initially sold by ________ to raise funds. a) commercial banks b) the u.s. government c) state and local governments
T-bills are financial instruments initially sold by the U.S. government to raise funds. Treasury bills (T-bills) are one of several types of marketable securities that the United States government offers to investors to finance its operations.
'Treasury bills, like other marketable securities, are debt obligations of the federal government, with different maturity periods ranging from a few days to 52 weeks. Treasury bills are known for their low risk, high liquidity, and short maturity. They are often regarded as a risk-free investment since the federal government is unlikely to default on its debt obligations. As a result, T-bills have a lower yield than other securities since investors are willing to accept lower interest rates in exchange for the perceived security they provide.
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All of the following are nontraditional tools of monetary policy except O Buying long term bonds to influence mortgage rates.. O Bailing out Investment banks O C. Buying and selling of bonds thru open market operations Guaranteeing loans by banks for private businesses
All of the listed options are nontraditional tools of monetary policy except for "Guaranteeing loans by banks for private businesses."
he correct answer is "Guaranteeing loans by banks for private businesses." This is not a nontraditional tool of monetary policy. The other three options—buying long-term bonds to influence mortgage rates, bailing out investment banks, and buying and selling bonds through open market operations—are all examples of nontraditional tools used by central banks to implement monetary policy.
Buying long-term bonds to influence mortgage rates is a form of quantitative easing, where central banks purchase long-term bonds to lower interest rates and stimulate borrowing and economic activity. Bailing out investment banks refers to providing financial assistance to troubled financial institutions to prevent systemic risks and stabilize the financial system. Buying and selling bonds through open market operations is a traditional tool used by central banks to control the money supply and influence interest rates.
On the other hand, guaranteeing loans by banks for private businesses is not a direct tool of monetary policy. It falls more within the domain of fiscal policy or government programs aimed at supporting businesses and promoting economic growth rather than directly influencing the money supply or interest rates.
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Here is the complete question:
All of the following are nontraditional tools of monetary policy except
Buying long term bonds to influence mortgage rates..
Bailing out Investment banks
Buying and selling of bonds thru open market operations
Guaranteeing loans by banks for private businesses
When transactions costs are sufficiently high, it may be more efficient to supply the good publicly than to have the good supplied by private markets". Do you agree with the statement? Graphically explain your point of view.
Kindly give answer in detail but relevant answer. Here subject is Public Sector Economics.
Yes, I agree with the statement that "When transaction costs are sufficiently high, it may be more efficient to supply the good publicly than to have the good supplied by private markets".
In this case, the private market may not be able to supply the good efficiently, and hence, the public sector should take over the supply of the good.
Graphical explanation: When the transaction cost is too high, the supply of goods is inefficient in private markets.
This is because the transaction cost includes the costs associated with searching for information, bargaining with suppliers, and making contracts.
Therefore, the supply of goods in a private market is inefficient, and the supply curve will be higher than it should be.
Hence, the private market will supply less of the good than it should.
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if apple chose instead to commit to an annual dividend from 2012-2017 think they could affect to distribute each year
Answer:
If Apple choose to distribute dividend for each year in the period of 2012 to 2017, the company would afford to pay $129 per share in the year 2012, because of the huge pile up of excessive cash on the balance sheet of the company.
If Apple chose instead to commit to an annual dividend from 2012-2017, the amount they could affect to distribute each year would depend on their earnings and financial condition. The dividend amount would be determined by the board of directors of Apple and would be based on various factors, including the company's financial performance, growth prospects, cash flow, and capital requirements.
Apple has been known to be cautious with its dividend payouts, as it prefers to retain earnings for future investment opportunities. However, the company has also been increasing its dividend payouts over the years, with the dividend per share increasing from $0.38 in 2012 to $0.82 in 2017.
It is important to note that dividend payouts are not guaranteed and can be subject to change based on various factors. Therefore, it is crucial for investors to consider the company's overall financial health and future growth prospects before making investment decisions.
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There is many Potential business value from collaboration with IT. Choose three from the following figure that help to improve business with IT successfully. Why these concepts can make valuable collaboration? Justif your answer. (6 Marks) - (Minimum 200 Words). Top-line value Cost savings Effectiveness Accessibility of people Accessibility of information Flexibility Potential business value from collaboration
Collaboration with IT offers significant potential business value for organizations. Three key concepts that can enhance business success through IT collaboration are cost savings, effectiveness, and accessibility of information.
Cost savings can be achieved by leveraging IT to streamline processes, automate tasks, and optimize resource utilization. This leads to reduced labor costs, increased operational efficiency, and improved profitability.
Effectiveness is enhanced through IT collaboration by utilizing data-driven insights, real-time analysis, and predictive modeling. This enables informed decision-making, strategic planning, and the ability to identify areas for improvement. By optimizing operations and resources, businesses can improve product/service quality, customer satisfaction, and market competitiveness.
The accessibility of information is crucial in today's digital age. IT collaboration enables employees to access relevant data and resources from anywhere, facilitating seamless communication and collaboration. Real-time insights empower businesses to make informed decisions, respond quickly to customer needs, and stay ahead of market trends.
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For the given cost=$212 and markup = $44, complete the following parts. a. Find the rate of markup based on cost. b. Find the selling price. www a. The rate of markup based on cost is%. (Round to the nearest tenth as needed.) b. The selling price is (Simplify your answer.) A lamp costs $36 and is marked up based on cost. If the lamp sold for $99, what was the percent of markup? The rate of markup is %
The percent of markup is approximately 175%. The selling price is $256.now, let's move on to the second question:
a lamp costs $36 and is marked up based on cost.
a. to find the rate of markup based on cost, divide the markup amount by the cost and multiply by 100:
rate of markup based on cost = (markup / cost) * 100
given:
cost = $212
markup = $44
rate of markup based on cost = (44 / 212) * 100 = 20.8% (rounded to the nearest tenth)
b. to find the selling price, add the markup to the cost:
selling price = cost + markup
selling price = $212 + $44 = $256 if the lamp sold for $99, we can find the percent of markup.
let's denote the rate of markup as x.
markup based on cost = x% of $36
selling price = $36 + markup based on cost
we know that the selling price is $99, so we can set up the equation:
$36 + (x/100) * $36 = $99
simplifying the equation:
36 + 0.01x * 36 = 99
36 + 0.36x = 99
0.36x = 99 - 36
0.36x = 63
x = 63 / 0.36
x ≈ 175
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Suppose you deposit $2,848.00 into an account today. In 13.00
years the account is worth $3,593.00. The account earned ____% per
year. Answer format: Percentage Round to: 2 decimal places
(Example: 9.
The account earned an interest rate of 2.75% per year. By using the given values and the formula for compound interest, we determined the annual interest rate that resulted in the given growth of the deposit amount over a period of 13 years.
Given:
Deposit amount = $2,848.00
Value of the account after 13 years = $3,593.00
To determine the interest rate earned per year on the deposit, we use the formula:
Amount = Principal × (1 + Interest Rate)^n
1. Plugging in the given values, we have:
$3,593 = $2,848 (1 + r)^13
2. Now, let's solve for the interest rate, r:
$3,593 / $2,848 = (1 + r)^13
1.262 = (1 + r)^13
3. To isolate r, we take the 13th root of each side:
1.262^(1/13) = (1 + r)^(13/13)
1.0275 - 1 = r
0.0275 or 2.75%
Therefore, the account earned an interest rate of 2.75% per year. By using the given values and the formula for compound interest, we determined the annual interest rate that resulted in the given growth of the deposit amount over a period of 13 years.
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Q=100-2P
MC=5+0,05Q
a)profit maximization ?
b) social risk ?
The profit maximization occurs at a quantity of approximately 81.82 units and a price of $63.64. It is not possible to determine the specific social risks associated with this particular market.
a) To find the profit maximization point, we need to equate marginal cost (MC) with marginal revenue (MR). In this case, MR is the derivative of the demand equation Q=100-2P, which gives MR=50-Q/2. Setting MC equal to MR, we have:
5+0.05Q = 50-Q/2
Simplifying the equation, we get:
0.05Q + Q/2 = 45
Multiplying through by 2, we have:
0.1Q + Q = 90
1.1Q = 90
Solving for Q, we find:
Q = 81.82
Substituting the value of Q into the demand equation, we can find the corresponding price (P) by:
P = 100 - 2Q
P = 100 - 2(81.82)
P = 100 - 163.64
P = -63.64 (ignore negative value)
Therefore, the profit maximization occurs at a quantity of approximately 81.82 units and a price of $63.64.
b) The social risk associated with this market is not explicitly provided in the given information. However, social risks in a market context typically refer to potential negative impacts on society, such as environmental degradation, public health concerns, or unfair distribution of wealth. To assess the social risks, we would need additional information on externalities, the market structure, and the effects of the industry on stakeholders. Without such information, it is not possible to determine the specific social risks associated with this particular market.
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Suppose a perfectly competitive firm's total cost of production (TC) is TC(q) = 99 - 10q2 + 30q +5 + and the firm's marginal cost of production (MC) is MC(q) = 3q2 - 200 + 30 + The firm's short-run supply curve is given by A. P=02 - 100 + 30 for prices above $10 B. P = 392 - 200 + 30 for prices above $2.5. C. P=q2-109 +30 for prices above $5. OD P=02 - 10q +30 + 5 + q OE P=392-20 + 30 for prices above $5.
The short-run supply curve for the perfectly competitive firm can be represented by option B: P = 392 - 200 + 30 for prices above $2.5. This curve indicates that the firm will supply a positive quantity of output when the price exceeds $2.5.
The short-run supply curve reflects the marginal cost (MC) curve above the minimum average variable cost (AVC). In this case, the MC curve is given as MC(q) = 3q^2 - 200 + 30. The firm will produce and supply output as long as the price covers at least the marginal cost of production. Option B represents the short-run supply curve accurately, as it shows that the firm will supply output when the price exceeds the minimum level required to cover the variable costs. At prices below $2.5, the firm will not supply any output as it cannot cover its variable costs.
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A discount security will:
a.
be traded in the primary market.
b.
pay face value to the investor at purchase
c.
pay a regular coupon or interest payment until maturity
d.
have a sale price less than (a
A discount security will have a sale price less than its face value. Therefore, the correct answer is option (d).
Discount securities are financial instruments that are sold at a price lower than their face value.
They do not pay a regular coupon or interest payment like regular bonds.
Instead, investors earn a return by purchasing the security at a discount and receiving the full face value at maturity.
Let's consider an example to illustrate this. Suppose there is a discount security with a face value of $1,000 and a maturity period of 1 year. The security is sold at a discount of 10%, which means it can be purchased for $900 ($1,000 - 10% discount).
At maturity, the investor will receive the full face value of $1,000, regardless of the purchase price. Therefore, the investor earns a return of $100 ($1,000 - $900) over the course of one year. This return represents the interest or yield on the investment.
A discount security is traded in the secondary market and is characterized by having a sale price lower than its face value.
Unlike regular bonds, discount securities do not pay regular coupon or interest payments. Investors earn a return by purchasing the security at a discount and receiving the full face value at maturity.
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Based on your understanding, briefly explain the way(s) to
detect the problem of multicollinearity in the model (Maximum 250
words).
Multicollinearity is a problem that arises when there is high correlation between predictor variables. This can lead to a number of issues, such as difficulty in interpreting the coefficients, instability in the coefficients, and decreased predictive power of the model.
There are a number of ways to detect multicollinearity in a model. One way is to look at the correlation matrix between the predictor variables. If there are high correlations (e.g., >0.7 or < -0.7) between two or more variables, this could indicate multicollinearity. Another way is to calculate the variance inflation factor (VIF) for each predictor variable. The VIF measures how much the variance of the estimated coefficient is increased due to multicollinearity.
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According to Justice Scalia, during the 1960's, courts and law schools took the interpretation of the Constitution in radical direction. He points out 2 doctrinal developments that were central to this change. What are they?
According to Justice Scalia, during the 1960s, courts and law schools adopted a radical interpretation of the Constitution. Two doctrinal developments that were central to this change, as pointed out by Scalia, are:
1. Substantive Due Process: This doctrine expanded the scope of individual rights protected by the Constitution beyond its original intent. It argued that certain fundamental rights were implied within the Due Process Clause of the Fourteenth Amendment, allowing the courts to strike down laws that were seen as infringing upon these rights.
2. Living Constitution Theory: This theory suggests that the Constitution is a living document that should adapt and evolve with society's changing values and needs. It rejects strict adherence to the original meaning of the Constitution, enabling judges to interpret and apply its provisions in a more flexible manner.
Justice Scalia criticized the direction taken by courts and law schools in the 1960s, asserting that they deviated from a strict originalist interpretation of the Constitution. Two significant doctrinal developments he identified were Substantive Due Process and the Living Constitution Theory.
Substantive Due Process expanded the interpretation of the Due Process Clause of the Fourteenth Amendment, allowing courts to protect individual rights not explicitly mentioned in the Constitution. The Living Constitution Theory advocates for a more flexible interpretation of the Constitution, arguing that its meaning should adapt to societal changes. Scalia's critique suggests that these developments led to a departure from the original intent of the framers and a more activist approach to constitutional interpretation.
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Which of the following refers to no tax assessed on the earnings in the account in the year that the earnings are received? Tax-deferred earnings. Traditional IRA withdrawal. Pretax basis. O After-tax basis.
The correct answer is Tax-deferred earnings. No tax assessed on the earnings in the account in the year that the earnings are received refers to tax-deferred earnings.
A tax-deferred earnings is an investment in which taxes on certain transactions are delayed until a later time. In a tax-deferred investment, all capital gains, dividends, and interest payments are not taxed until withdrawn.
A tax-deferred investment may also provide tax deductions for certain contributions. These investments are usually in the form of individual retirement accounts (IRAs) or company-sponsored retirement plans.
Therefore, the correct answer is Tax-deferred earnings.
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Joe Techno placed an order to an online technology products company. The bundling of a printer, desk-top computer and 2 GB external hard drive in a single shipment by the wholesaler constitutes which of the following 21st0-century channel roles?
A. system solver
B. Resource prospector
The bundling of a printer, desktop computer and 2 GB external hard drive in a single shipment by the wholesaler constitutes the 21st-century channel role of a system solver.
System Solver is a 21st-century channel role that refers to a participant in a marketing channel that recognizes customers' problems and brings together all necessary resources to solve the problem. This ensures that the customer receives all items necessary to address their problems from a single supplier. In other words, a system solver bundles goods and services in response to a customer's specific needs.
Joe Techno placed an order for a printer, desktop computer, and 2 GB external hard drive from an online technology products company. The wholesaler bundled all three items in one shipment to meet Joe Techno's specific need. In this case, the wholesaler acts as a system solver.
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the highest fifth of all families receive approximately what percent of the distribution of annual money income among families?
The specific percentage corresponding to the highest fifth of all families receiving annual money income may vary depending on the data and time period being referenced.
However, if we consider a commonly used measure of income distribution, such as the "Quintile Share Ratio," we can make a general statement.
In the Quintile Share Ratio, the highest fifth of families refers to the top 20% of income earners. This group consists of the families with the highest incomes in the distribution. Typically, this segment holds a significant portion of the total income in the distribution.
While the exact percentage may vary, it is common for the highest fifth of families to capture a significant share of the income distribution, often ranging from approximately 40% to 50% or even higher, depending on the specific distribution of income within a country or region. It is worth noting that income inequality can differ across countries and over time, leading to variations in the percentage held by the highest income group.
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The following transactions occurred over the months of September to December at Nicole’s Getaway Spa (NGS). September Sold spa merchandise to Ashley Welch Beauty for $1,800 on account; the cost of these goods to NGS was $900. October Sold merchandise to Kelly Fast Nail Gallery for $450 on account; the cost of these goods to NGS was $200. November Sold merchandise to Raea Gooding Wellness for $300 on account; the cost of these goods to NGS was $190.
summary of the transactions that occurred at Nicole's Getaway Spa (NGS) from September to November:
NGS sold spa merchandise to Ashley Welch Beauty for $1,800 on account. The cost of these goods to NGS was $900.
2. October: NGS sold merchandise to Kelly Fast Nail Gallery for $450 on account. The cost of these goods to NGS was $200.
3. November: NGS sold merchandise to Raea Gooding Wellness for $300 on account. The cost of these goods to NGS was $190.
It's important to note that the information provided only covers the months of September to November. If there are any additional transactions or if you require further details or analysis, please let me know, and I'll be glad to assist you further.
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the valuation approach that gives the lowest value of the business is:
The valuation approach that gives the lowest value of the businessdepends on the specific circumstances and assumptions used in the valuation.
Different valuation approaches can yield varying results based on factors such as the purpose of the valuation, the industry, the company's financial performance, and the market conditions.
However, one valuation approach that is generally considered to provide a relatively conservative or lower value for a business is the liquidation approach. The liquidation approach assumes that the business is sold in a forced liquidation scenario, where assets are sold quickly, often at a discount, and liabilities are settled. This approach typically results in a lower valuation compared to other approaches because it does not consider the business as a going concern or account for the potential future profitability and growth of the company.
It's important to note that the choice of valuation approach should be based on the specific circumstances and purpose of the valuation, and it is often recommended to use multiple approaches to arrive at a comprehensive and well-rounded valuation opinion.
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