The monopolist has a relatively high degree of market power with this Lerner Index value, which means that they have greater control over the market pricing.
The formula for Lerner Index is:
$LI = \frac{P - MC}{P}$
.Where, LI denotes the Lerner Index,P denotes Price,MC denotes the Marginal Cost.A monopoly is a situation in which there is only one seller in the market. In this situation, the monopolist can dictate the terms and price of the product. The monopolist can set the price that will maximize their profit.In the given question, the Lerner Index can be calculated as follows: The Marginal Cost (MC) is given as $9$. The price (P) can be determined from the graph by locating the point where MR = MC. At this point, we get $p(9) = 30$. Hence, the price is $30$.Thus,
$LI = \frac{P - MC}{P}$ $= \frac{30 - 9}{30}$ $= 0.7$.
Therefore, the Lerner Index for the monopolist is 0.700 (rounded to three decimal places). The monopolist has a relatively high degree of market power with this Lerner Index value, which means that they have greater control over the market pricing.
To know more about monopolist visit;
brainly.com/question/32611254
#SPJ11
he free market economic system has both benefits and problems. Discuss the key market imperfections that exist and in particular highlight the imperfections that the Australian Government should have a role in addressing. Include reasons as to why the Australian Government should address these imperfections.
The free market economic system, while providing numerous benefits, also faces certain imperfections or market failures that can hinder its efficient functioning. In the Australian context, there are several market imperfections that the government should address.
Let's discuss some of these key imperfections and the reasons why the Australian Government should intervene:
Externalities: Externalities occur when the actions of producers or consumers impose costs or benefits on others who are not directly involved in the transaction. For example, pollution from industrial activities can impose costs on society in terms of environmental degradation and health effects. The government should intervene to address negative externalities through regulations, taxes, or subsidies to incentivize environmentally friendly practices and internalize the costs.
Market Power and Monopolies: In some industries, firms may have significant market power, leading to reduced competition and potential exploitation of consumers. Monopolies or oligopolies can limit consumer choices, result in higher prices, and hinder innovation. The government can regulate such industries to ensure fair competition, prevent abuse of market power, and protect consumer welfare.
Public Goods: Public goods are non-excludable and non-rivalrous in consumption, meaning that individuals cannot be excluded from benefiting, and one person's consumption does not diminish the availability for others. Examples include national defense, public infrastructure, and basic research. Due to the non-excludability, private markets may underprovide public goods, as firms have no incentive to produce them. The government should step in to provide and finance public goods for the benefit of society.
Information Asymmetry: Information asymmetry occurs when one party in a transaction has more information than the other, leading to market inefficiencies. For instance, in financial markets, borrowers may have more information about their creditworthiness than lenders. The government can address this by implementing regulations to ensure transparency, enforce disclosure requirements, and protect consumers from fraudulent or misleading practices.
Income Inequality and Social Safety Nets: The free market system can lead to unequal distribution of income and wealth, resulting in social disparities and potential social unrest. The government should address income inequality through progressive taxation, welfare programs, and social safety nets to ensure a more equitable distribution of resources and provide a safety net for vulnerable individuals and communities.
The Australian Government should address these market imperfections for several reasons:
Enhancing Efficiency: Addressing market imperfections can lead to more efficient resource allocation, improved market competition, and higher overall economic efficiency.
Ensuring Fairness and Equity: Government intervention can promote fairness by preventing exploitation, reducing income inequality, and ensuring the provision of essential public goods and services.
Safeguarding Public Interest: The government has a responsibility to protect the public interest by addressing externalities, ensuring consumer protection, and maintaining the stability and integrity of the market system.
Promoting Long-Term Sustainability: Government intervention can contribute to sustainable development by addressing environmental challenges, promoting responsible business practices, and supporting innovation and research in critical areas.
While the free market economic system offers numerous benefits, it is not immune to imperfections or market failures. The Australian Government should play a role in addressing market imperfections, such as externalities, market power, information asymmetry, provision of public goods, income inequality, and social safety nets. By intervening strategically, the government can promote efficiency, fairness, and the long-term sustainability of the Australian economy while safeguarding the public interest.
To know more about Information Asymmetry, visit
https://brainly.com/question/32702001
#SPJ11
A portfolio has three stocks-330 shares of Yahoo (YHOO), 320 shares of General Motors (GM), and 50 shares of Standard and Poor's Index Fund (SPY). If the price of YHOO is $20, the price of GM is $30, and the price of SPY is $150, calculate the portfolio weight of YHOO and GM OA. 20.9%, 34.4% OB. 27.8%, 52.7% OC. 27.8%, 40.5% OD. 13.9%, 24.3% COD
The portfolio weight for GM is:(320 x $30) / $23,700 x 100 = 40.5%.
How to find?The solution to the problem that involves calculating the portfolio weight of YHOO and GM is as follows:
First, calculate the total value of the portfolio by multiplying the price of each stock by the number of shares. The total portfolio value will be:330 x $20 = $6,600 (for YHOO)320 x $30 = $9,600 (for GM)50 x $150 = $7,500 (for SPY).
Adding these three amounts will give us a total portfolio value of: $6,600 + $9,600 + $7,500 = $23,700To calculate the portfolio weight of YHOO and GM, divide the value of each stock by the total value of the portfolio and multiply the result by 100.
The portfolio weight for YHOO is:(330 x $20) / $23,700 x 100 = 27.8%.The portfolio weight for GM is:(320 x $30) / $23,700 x 100 = 40.5%.
Hence, the correct answer is option C. 27.8%, 40.5%.
To know more on Portfolio visit:
https://brainly.com/question/17165367
#SPJ11
A firm's inverse demand is P - 800-40: its inverse supply function is P = 400+40. A graph appears below. S P 800 600 400 D Q 50 200 a. Calculate the consumer surplus. Р / Qs - - Qs = 600 - 3 1(50) 9(50) b. Calculate the producer surplus. 400 QD 100 4(Q) 9(200) 2 4 0.5 C. If the government imposes a price ceiling of $500, will this cause a shortage or surplus? Quantify the amount of the shortage or surplus. d. Calculate the deadweight loss from the price ceiling described in part c.
The deadweight loss from the price ceiling is zero, indicating that there is no efficiency loss caused by the price ceiling.
a. To calculate consumer surplus, we need to find the area under the demand curve (D) and above the market price (P). The market price (P) is given by the intersection of the demand and supply curves, which is P = 600.
Consumer Surplus = (1/2) * (600 - 400) * (200 - 50)
= (1/2) * 200 * 150
= 15,000
b. To calculate producer surplus, we need to find the area above the supply curve (S) and below the market price (P). The market price (P) is still P = 600.
Producer Surplus = (1/2) * (600 - 400) * (200 - 50)
= (1/2) * 200 * 150
= 15,000
c. If the government imposes a price ceiling of $500, it means that the maximum price allowed is $500. Since the market price (P) is currently $600, the price ceiling of $500 will create a shortage.
Shortage = Quantity Demanded (QD) - Quantity Supplied (QS)
= 200 - 100
= 100
d. To calculate the deadweight loss, we need to compare the total surplus (consumer surplus + producer surplus) in the absence of the price ceiling (which is 15,000 + 15,000 = 30,000) with the total surplus under the price ceiling.
Deadweight Loss = Total Surplus without price ceiling - Total Surplus with price ceiling
= 30,000 - (Consumer Surplus + Producer Surplus)
= 30,000 - (15,000 + 15,000)
= 30,000 - 30,000
= 0
Therefore, the deadweight loss from the price ceiling is zero, indicating that there is no efficiency loss caused by the price ceiling.
Learn more about price ceiling here:
https://brainly.com/question/1448982
#SPJ11
What is the influence of restaurant environment on purchase intention in Malaysia’ Fast Food Industry?
What is the influence of food quality on purchase intention in Malaysia' Fast Food Industry?
What is the influence of brand image on purchase intention in Malaysia' Fast Food Industry?
Research Objectives
To examine the influence of restaurant environment on purchase intention in Malaysia’ Fast Food Industry.
To examine the influence of food quality on purchase intention in Malaysia’ Fast Food Industry.
To examine the influence of brand image on purchase intention in Malaysia’ Fast Food Industry.
5,000 words.
The Influence of Restaurant Environment, Food Quality, and Brand Image on Purchase Intention in Malaysia's Fast Food Industry
This research aims to investigate the factors that influence purchase intention in Malaysia's fast food industry, specifically focusing on restaurant environment, food quality, and brand image.
By understanding the impact of these factors, fast food industry players can develop effective marketing strategies to enhance customer satisfaction and loyalty.
The study employs a quantitative research design, collecting data from fast food consumers in Malaysia through a structured questionnaire. The findings will provide valuable insights into the relationship between restaurant environment, food quality, brand image, and purchase intention, contributing to the body of knowledge in the field of consumer behavior and marketing.
Table of Contents:
Introduction
1.1 Background
1.2 Research Objectives
1.3 Research Questions
1.4 Significance of the Study
Literature Review
2.1 Fast Food Industry in Malaysia
2.2 Purchase Intention
2.3 Restaurant Environment and Purchase Intention
2.4 Food Quality and Purchase Intention
2.5 Brand Image and Purchase Intention
Research Methodology
3.1 Research Design
3.2 Sampling Technique
3.3 Data Collection
3.4 Questionnaire Development
3.5 Data Analysis
Results and Findings
4.1 Descriptive Statistics
4.2 Correlation Analysis
4.3 Regression Analysis
Discussion
5.1 Relationship between Restaurant Environment and Purchase Intention
5.2 Relationship between Food Quality and Purchase Intention
5.3 Relationship between Brand Image and Purchase Intention
5.4 Comparison of Factors' Influence on Purchase Intention
Implications and Recommendations
6.1 Marketing Strategies for Enhancing Restaurant Environment
6.2 Improving Food Quality to Increase Purchase Intention
6.3 Enhancing Brand Image to Influence Purchase Intention
To know more about Food Industry click this link-
brainly.com/question/15378284
#SPJ11
The company has been experiencing a lot of turnover. Management
is trying to figure out how to keep its best employees from
leaving.
• What is the issue?
• How would you handle it?
The issue is that the company has been experiencing a lot of turnover and management is trying to figure out how to keep its best employees from leaving. The issue is related to employee retention and the company's ability to retain its top talent.
Investigate the reasons for the high turnover rate The first step in addressing the high turnover rate is to investigate the reasons why employees are leaving. The investigation can be conducted through employee surveys, exit interviews, and discussions with current employees. The investigation can help identify any issues that may be contributing to the high turnover rate, such as poor management, lack of training, or low pay.2. Improve employee retention effortsOnce the reasons for the high turnover rate have been identified, the company can take steps to improve its employee retention efforts. This may include offering more competitive pay and benefits, providing more opportunities for professional development, and improving the work environment.3. Communicate with employeesFinally, it's important to communicate with employees about the steps the company is taking to improve retention. This can help build trust and show employees that their concerns are being taken seriously. Communication can be done through regular company-wide meetings, individual meetings with employees, and through the use of company newsletters and other communication channels.
Learn more about employee retention here :-
https://brainly.com/question/31623273
#SPJ11
Allison and Leslie, who are twins, just received $45,000 each for their 25th birthday. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Allison opened an account with the Safety First Bond Fund, a mutual fund that invests in high-quality bonds whose investors have earned 5% per year in the past. Leslie invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors have earned an average of 12% per year in the fund's relatively short history. a. If the two women's funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire? Do not round intermediate calculations. Round your answers to two decimal places. Allison: years Leslie: years b. How large would Allison's annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming their expected returns are realized? Do not round intermediate calculations, Round your answer to the nearest cent. $ c. Is it rational or irrational for Allison to invest in the bond fund rather than in stocks? 1. High expected returns in the market are almost always accompanied by a lot of risk. We couldn't say whether Allison is rational or irrational, just that she seems to have less tolerance for risk than Leslie does. II. High expected returns in the market are almost always accompanied by less risk. We couldn't say whether Allison is rational or irrational, just that she seems to have more tolerance for risk than Leslie does. III. High expected returns in the market are almost always accompanied by a lot of risk. We couldn't say whether Allison is rational or irrational, just that she seems to have more tolerance for risk than Leshe does. IV. High expected returns in the market are almost always accompanied by less risk. We couldn't say whether Allison is rational or irrational, just that she seems to have less tolerance for risk than Leslie does. V. High expected returns in the market are almost always accompanied by a lot of risk. We couldn't say whether Allison is rabonal or irrational, just that she seems to have about the same tolerance for risk than Leslie does. -Select-
a)If the two women's funds earn the same returns in the future as in the past, Allison will be 38.81 years old and Leslie will be 35.12 years old when she becomes a millionaire. Option III is the correct answer
The calculation for Allison: Calculation for Leslie: Allison's annual contributions should be $6,215.53. Calculation: c)In comparison to investing in stocks, Allison's investment in the bond fund is rational. Since Allison has a lower risk tolerance than Leslie, her decision to invest in a bond fund with a lower average rate of return but less volatility is rational.
The statement that "high expected returns in the market are almost always accompanied by a lot of risks" supports Allison's decision. (I.) The statement that "high expected returns in the market are almost always accompanied by less risk" contradicts the investment principles that state that higher expected returns are accompanied by greater risk.
(II.) The statement that "High expected returns in the market are almost always accompanied by a lot of risks" supports Allison's decision, but the statement that "she seems to have more tolerance for risk than Leslie does" is false since Allison has less tolerance for risk than Leslie does.
(III.) The statement that "high expected returns in the market are almost always accompanied by less risk" contradicts the investment principles that state that higher expected returns are accompanied by greater risk.
(IV.) The statement that "high expected returns in the market are almost always accompanied by a lot of risks" supports Allison's decision, but the statement that "she seems to have less tolerance for risk than Leslie does" is false since Allison has less tolerance for risk than Leslie does.
(V.) The statement that "high expected returns in the market are almost always accompanied by a lot of risks" supports Allison's decision, but the statement that "she seems to have about the same tolerance for risk as Leslie does" is false since Allison has less tolerance for risk than Leslie does.
To learn more about expected returns, visit here
https://brainly.com/question/31368926
#SPJ11
If you are maximizing utility and the marginal utility of one good you buy is much greater than the marginal utility of the other good, then it must mean Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the price of the good with the lower marginal utility is lower b the price of the good with the lower marginal utility is higher с the good with a higher price is a necessity d the good with a higher price is a luxury
if the marginal utility of one product is much greater than the marginal utility of the other product, the price of the product with the lower marginal utility will be lower.
If you are maximizing utility and the marginal utility of one good you buy is much greater than the marginal utility of the other good, then it must mean that the price of the good with the lower marginal utility is lower. When marginal utility is greater than the price of a product, it is beneficial to buy additional units of that product until marginal utility equals price. However, when a good's marginal utility is lower than the price, it becomes detrimental to buy more of that product. A consumer will allocate his resources in such a way as to maximize total utility, based on the price of each good and the marginal utility of that good. Therefore, if the marginal utility of one product is much greater than the marginal utility of the other product, the price of the product with the lower marginal utility will be lower.
To know more about marginal utility visit:
https://brainly.com/question/30841513
#SPJ11
An analysis of the external environment in the strategic management process helps to identify ________.
Group of answer choices
a company's opportunities and threats.
the financial ratios the company should use.
a company's strengths and weaknesses.
the short-term goals for a company.
The correct option is "a company's opportunities and threats." An analysis of the external environment in the strategic management process helps to identify a company's opportunities and threats.
Strategic management is the process of planning, evaluating, and implementing long-term goals and plans for an organization.
It's the process of defining an organization's objectives, coming up with strategies to achieve those objectives, and allocating resources to implement those strategies to accomplish the goals that have been established.
Analysis of External Environment in Strategic Management Process
In the strategic management process, an analysis of the external environment is a vital factor. It is done to identify the opportunities and threats that a company may face in the market.
Here are the different external factors that affect the strategic management process:
Opportunities: Identifying the available opportunities for the company can help the company come up with a strategic plan that will enable them to take advantage of these opportunities to help achieve their objectives. This analysis should identify the changes in the market and economy and the changes in technology that can be leveraged to the company's advantage.Threats: On the other hand, identifying threats can help a company develop strategies to mitigate them and avoid any negative impact they may have on the company's objectives. An analysis of the external environment should identify the potential competitors, suppliers, and customers that may be a threat to the company.The external analysis should be able to identify the potential challenges that the company may face in the market that may hinder the company from achieving its objectives.
An analysis of the external environment in the strategic management process helps to identify a company's opportunities and threats.
To know more about management visit:
https://brainly.com/question/32216947
#SPJ11
Conaway Company’s balance sheet on December 31, Year 10, included the following:
Common stock, $1 par $800,000
Nonconvertible preferred stock, $50 par 20,000
On July 21, Year 11, Loaded issued a 25% stock dividend on its common stock. On December 12, Year 11, the company paid $50,000 of cash dividends on the preferred stock. Net income for the year ended December 31, Year 11 was $2,000,000.
Instructions:
Compute Loaded's EPS for Year 11.
Loaded's EPS (earnings per share) for Year 11 is $4.27 per share. The EPS (earnings per share) is the amount of earnings allocated to each outstanding share of stock. The formula to compute EPS is EPS = (Net income - Preferred dividends) ÷ Weighted average common shares outstanding.
There are 800,000 shares of common stock with $1 par value, so the amount of common stock outstanding before the stock dividend was 800,000 shares. Since a 25% stock dividend was issued on the common stock, the number of common shares outstanding increased by 200,000 shares (25% x 800,000 shares). Thus, the number of common shares outstanding after the stock dividend is 1,000,000 shares (800,000 + 200,000).
The preferred stock is nonconvertible, so it does not affect the computation of the weighted average number of common shares outstanding. The weighted average number of common shares outstanding for Year 11 is computed as follows: Weighted average common shares outstanding = (Number of shares before stock dividend × Fraction of year before stock dividend) + (Number of shares after stock dividend × Fraction of year after stock dividend)Weighted average common shares outstanding = (800,000 × 172/365) + (1,000,000 × 193/365)Weighted average common shares outstanding = 426,849 + 526,027Weighted average common shares outstanding = 952,876The preferred dividends are $50,000 for Year 11. Thus, the EPS for Year 11 is computed as follows: EPS = (Net income - Preferred dividends) ÷ Weighted average common shares outstanding EPS = ($2,000,000 - $50,000) ÷ 952,876EPS = $1,950,000 ÷ 952,876EPS = $2.05 per share After rounding to the nearest penny, Loaded's EPS for Year 11 is $2.05 per share.
To know more about amount visit:
https://brainly.com/question/32453941
#SPJ11
Describe Commercially or Externally Sourced Information and Business Intelligence Information.
Answer:
Explanation:
Commercially or externally sourced information refers to data and information obtained from external sources outside of the organization, such as market research firms, industry reports, and public records. It provides valuable insights into market trends, competitor analysis, and industry dynamics.
Business intelligence information, on the other hand, is derived from internal sources within the organization, including internal databases, transactional systems, and CRM platforms. It involves analyzing and interpreting internal data to gain insights into business performance, customer behavior, and operational efficiency.
While commercially sourced information offers external market perspectives, business intelligence information focuses on internal processes. Both play a crucial role in decision-making, with commercially sourced information providing external context and business intelligence information offering insights into internal operations.
know more about Business intelligence: brainly.com/question/3045642
#SPJ11
the garraty company has two bond issues outstanding. both bonds pay $100 annual interest plus $1,000 at maturity. bond l has a maturity of 15 years, and bond s has a maturity of 1 year.
Based on the information provided, it seems that the Garraty Company has two bond issues: Bond L and Bond S.
Bond L has a maturity of 15 years, which means it will mature in 15 years from its issuance date. It pays $100 in annual interest and also provides a $1,000 payment at maturity.
Bond S, on the other hand, has a much shorter maturity period of 1 year. It also pays $100 in annual interest and offers a $1,000 payment at maturity.
It is important to note that additional information would be needed to provide a comprehensive analysis of these bond issues, such as the current market price of the bonds, coupon rates, yield rates, and any other relevant details.
Know more about Bond here:
https://brainly.com/question/30508122
#SPJ11
Weber Company purchased a mining site for $641,073 on July 1. The company expects to mine are for the next 10 years and anticipates that a total of 93,542 tons will be recovered. The estimated residual value of the property is $58,034. During the first year, the company extracted 4,433 tons of ore. The depletion expense is a. $58,303.90 Ob. $27,630.50 Oc. $30,380.76 Od. $58,034.00
Depletion expenseThe mining industry utilizes a strategy for computing expenses related to extracting natural resources from the earth known as depletion expense.
In the mining industry, natural resource depletion expenses help mining firms match costs with revenues, allowing them to obtain a more accurate depiction of their income. Here, we have Weber Company that has purchased a mining site for $641,073 on July 1, and the company expects to mine ore for the next 10 years, and they anticipate that a total of 93,542 tons will be recovered, with an estimated residual value of the property being $58,034.The depletion expense during the first year will be computed as follows:Depletion cost per unit = (Purchase price – Residual value)/Total expected unitsDepletion cost per unit = ($641,073 – $58,034)/93,542 = $6.44 per unitThe depletion cost for the first year = Depletion cost per unit × Number of units producedDepletion cost for the first year = $6.44 × 4,433= $28,540.52Therefore, the depletion expense for the first year is $28,540.52.Option C: $30,380.76 is the correct option.
To know more about resources visit:
https://brainly.com/question/14289367
#SPJ11
Consider the AS-AD model. For each of the blanks, enter for increase, 'D' for decrease, or "N" for not change for each curve based on the shock given al Suppose that a disease strikes the agriculture industry AD would 1. AS would and LRAS would b) Suppose that Brooklyn experiences a 3% increase in tourism. AS would AD would and LRAS would c) Suppose that fuel prices in Brooklyn decrease by 5%, AD would AS would and LRAS would d) Suppose that the City Council of Brooklyn cuts spending by 8%. AD would AS would and LRAS would
The AS-AD (Aggregate Supply-Aggregate Demand) model is a key model in macroeconomic analysis. It considers the relationship between the overall price level in an economy and the total quantity of goods and services produced (real output).
In the AS-AD model, the quantity of output is influenced by two types of aggregate spending: total spending on consumption goods and services (C) and total spending on investment goods and services
(I).For each of the blanks given below, enter 'D' for decrease, 'I' for increase, or "N" for no change for each curve based on the shock given:Suppose that a disease strikes the agriculture industry.AS would D.AD would D.LRAS would D.Suppose that Brooklyn experiences a 3% increase in tourism.
AS would N.AD would I.LRAS would I.
Suppose that fuel prices in Brooklyn decrease by 5%.AS would I.AD would I.LRAS would I.
Suppose that the City Council of Brooklyn cuts spending by 8%.AS would D.AD would D.LRAS would N.
To know more about AS-AD visit:
https://brainly.com/question/32670501
#SPJ11
a) If a disease strikes the agriculture industry, the AD curve would decrease, the AS curve would decrease, and the LRAS curve would not change.
b) Suppose that Brooklyn experiences a 3% increase in tourism. The AD curve would increase, the AS curve would not change, and the LRAS curve would not change.c) Suppose that fuel prices in Brooklyn decrease by 5%. The AD curve would increase, the AS curve would increase, and the LRAS curve would not change.d) Suppose that the City Council of Brooklyn cuts spending by 8%. The AD curve would decrease, the AS curve would not change, and the LRAS curve would not change.In the AS-AD model, the AD curve represents the relationship between the price level and the quantity of output demanded, while the AS curve represents the relationship between the price level and the quantity of output supplied.The LRAS curve, on the other hand, represents the relationship between the price level and the quantity of output supplied in the long run when all factors of production are variable.
To know more about agriculture , visit ;
https://brainly.com/question/14533586
#SPJ11
SEP, a calendar year corporation, reported $918,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information: • SEP incurred $75,000 of research costs that resulted in a new 17-year patent for the corporation. SEP expensed these costs for book purposes. • SEP's depreciation expense per books was $98,222, and its MACRS depreciation deduction was $120,000. • SEP was organized two years ago. For its first taxable year, it capitalized $27,480 start-up costs and elected to amortize them over 180 months. For book purposes, it expensed the costs in the year incurred. Required: Compute SEP's taxable income. (Amounts to be deducted should be indicated with a minus sign. Do not round intermediate computations. Round final answers to the nearest whole dollar.) Answer is complete but not entirely correct. Amount SEP's net book income before tax S 918,000✔ Adjustments: Research costs 70,000 X (21,778)✔ Depreciation Amortization (1,499) X SEDC tovable incomo 061.123X
To compute the taxable income of SEP corporation we can start by making the necessary adjustments as follows:SEP’s net book income before tax= $918,000Adjustments:Research costs: 70,000 * 17/180= $6,556 * 2= $13,112. Therefore the adjustment made for research costs= $13,112 - $75,000 = -$61,888.
Depreciation Amortization: Amortization expense for start-up costs = $27,480/180= $153. MACRS depreciation allowed on start-up costs for 2019= 0.2*$27,480= $5,496. Therefore the adjustment for depreciation amortization= $153 - $5,496 = -$5,343.MACRS depreciation allowed = $120,000. Therefore, the adjustment for depreciation= $98,222-$120,000 = -$21,778.
Taxable Income is calculated as:Taxable income = Net book income + research cost adjustment + depreciation amortization adjustment + Depreciation adjustmentTaxable income = $918,000 - $61,888 - $5,343 - $21,778= $829,991 (rounded to the nearest dollar).Therefore, SEP’s taxable income is $829,991 (rounded to the nearest dollar).
To know more about taxable income,visit:-
https://brainly.com/question/13373869
#SPJ11
QUESTION 26 In cost-plus pricing, the markup consists of manufacturing costs. desired ROI. selling and administrative costs. total cost and desired ROI. QUESTION 27 The desired ROI per unit is calculated by multiplying the ROI percentage by the investment and dividing by the estimated volume. multiplying the unit selling price by the ROI. dividing the total cost by the estimated volume and multiplying by the ROI. dividing the ROI by the estimated volume and subtracting the result from the unit cost.
Question 26 In cost-plus pricing, the markup consists of manufacturing costs and desired ROI. The term markup, which is a measure of the profit margin on the selling price of an item, is used in cost-plus pricing. The cost-plus method is a pricing method that considers all of the costs of producing a product, as well as a certain percentage markup for profit. The formula is:
Cost Price = Total Costs + Markup
The cost-plus pricing approach is a pricing strategy that relies on the product's total cost, production expenses, and the desired profit margin to set the product's selling price.
Question 27 The desired ROI per unit is calculated by multiplying the ROI percentage by the investment and dividing by the estimated volume. The formula to calculate the ROI is:
ROI (Return on Investment) = (Profit - Investment) / Investment
Therefore, to determine the ROI per unit, you must use the following formula:
ROI per unit = (Profit - Investment) / Volume
You must multiply the ROI percentage by the investment and divide by the estimated volume to obtain the desired ROI per unit.The other options in this question do not represent the correct calculation for ROI per unit.
The correct formula is dividing the ROI by the estimated volume and subtracting the result from the unit cost.
To know more about cost-plus method visit:
https://brainly.com/question/31672276
#SPJ11
the s&p 500 has been increasing steadily over the last several months. what does this signal about how investors view future profits?
The steady increase in the S&P 500 over the last several months signals that investors are generally optimistic about future profits.
The S&P 500 is a stock market index that tracks the performance of 500 large publicly traded companies in the United States. When the index experiences a consistent upward trend over an extended period, it suggests that investors have confidence in the overall health and growth prospects of the economy and the companies represented in the index.
Investors typically buy stocks with the expectation of earning profits in the future. Therefore, a rising S&P 500 indicates that investors anticipate positive financial performance and profitability for the companies listed in the index. The upward movement reflects investor optimism, indicating that they have a positive outlook on future profits and expect the companies to generate strong earnings. However, it's important to note that stock market movements are influenced by various factors and can also be subject to volatility and fluctuations in the short term.
learn more about "investors ":- https://brainly.com/question/29547577
#SPJ11
B. Royal Vector Sdn Bhd (Royal V.) provides logistics and storage services, as well as cold supply chain solutions to its clients. Most of the clients would physically come to the business premises for Royal V.'s services and some would contact via online.
On Credit Facility
Approval Some of the clients are cash clients while some others are granted with a credit facility from the company. The clients have to apply from the company's credit collection department for the approval of credit facility. Additionally, the clients who have ventured in highly valuable projects and those who are deemed as major clients would be automatically granted a credit facility by the company. Prior to approval, the clients were asked to fill in the application form that require the details of the clients' name, annual financial earnings, and the expected value of the clients' shipments. The clients will then submit the application form together with a copy of personal identity card or company's registration details. There are no other additional supporting documents that are demanded upon submission. Once submitted, clerk from the credit collection department will review the applicants' documents within a day and grant the approvals.
On Shipment and Billings
All shipments are handled by the storage and logistic department. Upon arrival of the goods and cargoes, the documents such as the consignment note, bill of lading, airway bill, custom declaration and shipping request will be handed over to the storage and logistic department's clerk for further shipment process. Then, the same clerk will create and issue a job order in the system.
The original job orders with their supporting documents will then be handed immediately to the billing department clerk. Upon the receiving of the job orders, the clerk of the billing department will then create sales invoices based on the respective job orders. Each issuance of sales invoices for the clients will be automatically updated in the billing system and will be simultaneously updated in the system which can be accessed only by the credit collection department. The normal credit term given as in the invoice is 30 days. However, there are special cases whereby the credit terms are 15 days only.
On Credit Collection
The head of credit collection department would normally generate debtors' ageing report from the system on a monthly basis for the department's performance review purpose. From the report, further proactive actions will be taken in improving the department's collection performance. For the case of clients with long overdue terms and deemed uncollectible, they will be classified by the head of the department as bad debt clients immediately. So far there is no clear procedures pertaining to the change of status of account receivables to bad debt account status among the clients. Additionally, the procedures on credit collection activities are prone to the calls made by the personnel of the department to the clients as reminders. There was no letter of demand has been issued by the department so far.
Required:
i. Determine five (5) weaknesses that may exist in the sales and collection activities of Royal V.
ii. For any three (3) weaknesses identified in (i), elaborate their possible impact on Royal V.
C. The objective in the audit of the purchases and the trade payables balances is to evaluate whether the accounts affected are fairly stated in accordance with accounting standards (Arens et al, 2017).
Explain any four (4) substantive procedures that can be performed by the auditor for verifying the purchases and the trade payables balances.
1. Lack of thorough documentation: The company does not require additional supporting documents for credit facility applications, which increases the risk of inaccurate information and potential fraud.
2. Inadequate credit evaluation: The automatic granting of credit facilities to major clients without proper assessment may lead to higher credit risks and potential bad debts.
3. Inefficient billing process: The immediate handover of job orders to the billing department may result in errors or delays in creating accurate sales invoices.
4. Insufficient credit collection procedures: Reliance on phone calls as reminders and absence of formal demand letters may weaken the credit collection process and reduce effectiveness in recovering overdue payments.
5. Lack of clear bad debt classification procedures: The absence of defined criteria for identifying and handling bad debt clients can result in delays in recognizing and addressing uncollectible accounts.
ii. Possible impacts on Royal V.:
1. Financial losses: Inaccurate or fraudulent credit facility applications can lead to higher default rates and financial losses for the company.
2. Cash flow problems: Inefficient billing processes and lenient credit terms can result in delayed or non-payment by clients, affecting the company's cash flow and liquidity.
3. Increased bad debts: Insufficient credit collection procedures and unclear bad debt classification can lead to higher levels of uncollectible accounts, negatively impacting the company's profitability and financial stability.
For verifying purchases and trade payables balances, the auditor can perform the following substantive procedures:
1. Reviewing purchase orders, invoices, and receiving reports: The auditor can examine these documents to ensure the accuracy and validity of recorded purchases and the completeness of payables balances.
2. Confirming balances with suppliers: The auditor can directly communicate with suppliers to confirm the amounts owed, terms, and any disputes or adjustments related to trade payables.
3. Analyzing accounts payable aging schedule: By reviewing the aging schedule, the auditor can assess the classification of payables and identify any overdue or potentially unrecorded liabilities.
4. Testing accounts payable cutoff: The auditor can select a sample of transactions near the year-end and verify if they are recorded in the correct period, ensuring proper cutoff and accurate financial reporting.
These procedures help the auditor assess the completeness, accuracy, and valuation of purchases and trade payables, ensuring that they are fairly stated in accordance with accounting standards.
Learn more about company here:
https://brainly.com/question/30532251
#SPJ11
The United States will have a trade surplus in which of the following scenarios? U.S. imports are greater than U.S. exports. U.S. imports are less than U.S. exports. O U.S. imports are equal to U.S. exports.
A trade surplus occurs when U.S. exports exceed U.S. imports, a trade deficit occurs when U.S. imports exceed U.S. exports, and a trade balance occurs when U.S. imports are equal to U.S. exports.
The United States will have a trade surplus when its exports exceed its imports. In other words, if U.S. exports are greater than U.S. imports, it will result in a trade surplus. A trade surplus occurs when a country sells more goods and services to other nations than it buys from them.
In the scenario where U.S. imports are greater than U.S. exports, the United States will have a trade deficit. This means that the country is buying more goods and services from other nations than it is selling to them, resulting in a negative balance of trade. When U.S. imports are equal to U.S. exports, it is referred to as a trade balance, and there is no surplus or deficit. In this case, the value of goods and services imported is equal to the value of goods and services exported.
Learn more about trade balance here
https://brainly.com/question/30552848
#SPJ11
1--Cassidy Construction paid $5 000 for a plant asset that had a market value of $16 500. At what amount should Cassidy record this plant asset in accordance with GAAP/FASB?
2--On January 1, 2023, Moran Manufacturing Corporation (MMC) purchased a machine for $40 700 000. Moran's management expects to use the machine for 27 000 hours over the next six years. Moran's management estimates the residual or salvage value of the machine at $47 000. The machine was utilized for 3 900 hours in 2023 and 5 300 hours in 2024. In accordance with GAAP, Moran has appropriately adopted the units-of-production depreciation method. In accordance with GAAP, what amount of depreciation expense should Moran report for the years ended 2023 and 2024?
3--Iris plans to develop a shopping center and has spent the following amounts:
Acquisition of land $18 000
Surveys and legal fees $700
Land clearing $500
Fencing $5 000
Installing lighting and signage $1 160
Based on these expenditures, what amount should Iris record in the corporation's Land account in accordance with GAAP? Where should any other amounts--amounts not recorded to the Land account--be recorded and reported?
4--On January 1, 2023 Lisa acquired a machine for $1 030 000 and estimates the useful life of this asset at five years. Further, Lisa estimates the residual value of this machine at $55 000 after five years of use. Lisa appropriately applies the straight-line depreciation method to this machine. What amount of depreciation expense should Lisa report on the Income Statement for the year ended December 31, 2023?
5--Explain how a company--subject to SEC and FASB reporting requirements--decides which costs to include in the cost of a plant asset.
1. The amount at which Cassidy should record the plant asset is $5,000. This is the cost of the plant asset since it is lower than the market value. In accordance with GAAP, assets are recorded at cost, which is the cash equivalent value of what is given up or acquired in a transaction.
2. The depreciation expense that Moran should report for the years ended 2023 and 2024 is calculated as follows:2023Depreciation = ((40,700,000 – 47,000) / 27,000) x 3,900Depreciation = $1,490,0002024Depreciation = ((40,700,000 – 47,000) / 27,000) x 5,300Depreciation = $2,206,6673.3. Iris should record $24,360 ($18,000 + $700 + $500 + $5,000 + $1,160) in the corporation's Land account in accordance with GAAP. Any other amounts not recorded to the Land account should be recorded and reported in the corporation's Property, Plant, and Equipment account.
4. Lisa should report a depreciation expense of $195,000 on the Income Statement for the year ended December 31, 2023. This is calculated as follows:Depreciation = ($1,030,000 – $55,000) / 5Depreciation = $195,0005. A company subject to SEC and FASB reporting requirements decides which costs to include in the cost of a plant asset based on the cost principle. The cost principle requires that the cost of a plant asset should include all the costs that are necessary to get the asset ready for its intended use.
Know more about Cassidy:
https://brainly.com/question/32762315
#SPJ11
how has the level of service that salespeople provide to consumers changed over the past few decades?
The level of service provided by salespeople has shifted towards a more customer-centric and personalized approach.
Over the past few decades, the level of service provided by salespeople to consumers has undergone significant changes due to various factors. Some key changes include:
Technology and Information Access: The widespread availability of the internet and advancements in technology have revolutionized the way salespeople interact with consumers. Salespeople now have access to vast amounts of information, allowing them to provide more detailed and personalized product knowledge.
Consumers can also independently research products and compare prices, making them more informed and demanding when engaging with salespeople.
Shift to Customer-Centric Approach: The focus of sales has shifted from a transactional approach to a customer-centric approach. Salespeople now strive to build relationships with customers, understand their needs, and provide tailored solutions.
This shift has led to a greater emphasis on providing excellent customer service, offering post-sale support, and fostering long-term customer loyalty.
Personalization and Customization: With increased competition and evolving consumer preferences, salespeople have recognized the importance of personalization.
They strive to understand individual customer preferences and offer customized solutions. This can include personalized product recommendations, targeted marketing campaigns, and tailored pricing options.
Omnichannel Sales: The rise of e-commerce and online marketplaces has expanded the sales landscape. Salespeople now engage with customers through multiple channels, including physical stores, websites, social media platforms, and mobile apps. This allows for greater convenience and flexibility in accessing products and services.
Enhanced Sales Techniques and Training: Sales techniques have evolved to focus on consultative selling rather than aggressive persuasion.
Salespeople are now trained to listen actively, understand customer pain points, and provide solutions that align with customer needs. This approach helps build trust and enhances the overall sales experience.
For more such question on salespeople. visit :
https://brainly.com/question/25743891
#SPJ8
You're trying to choose between two different investments, both of which have up-front costs of $30,000. Investment G returns $65,000 in six years. Investment H returns $98,000 in nine years. 0.65 points Calculate the rate of return for each these investments. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
The rate of return for Investment G is approximately 7.95%, and the rate of return for Investment H is approximately 8.69%.
To calculate the rate of return for each investment, we can use the formula for compound annual growth rate (CAGR):
CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1
For Investment G, the beginning value is -$30,000 (negative because it is an upfront cost) and the ending value is $65,000. The number of years is 6. Plugging these values into the formula, we find that the rate of return for Investment G is approximately 7.95%.
For Investment H, the beginning value is -$30,000 and the ending value is $98,000. The number of years is 9. Using the same formula, we calculate that the rate of return for Investment H is approximately 8.69%.
These rates of return represent the average annual growth rates for each investment, taking into account the initial cost and the final returns over the given time periods.
Learn more about growth rate, below:
https://brainly.com/question/13870574
#SPJ11
1 points The beginning balance in retained earings of is $1200,000 (Cr). The current period net loss is $350,000 and declared stock dividends $150,000. The ending balance in reared angs oquais: OA Credit of $1400,000 OB Credit of $1550,000 OC Credit of $850.000 OD Credit of $700,000
To determine the ending balance in retained earnings, we need to consider the beginning balance, net loss, and declared stock dividends.
Beginning balance in retained earnings: $1,200,000 (Cr)
Net loss for the current period: $350,000 (Dr)
Declared stock dividends: $150,000 (Dr)
To calculate the ending balance, we need to subtract the net loss and stock dividends from the beginning balance:
$1,200,000 (Cr) - $350,000 (Dr) - $150,000 (Dr) = $700,000 (Cr)
Therefore, the correct option is OD. Credit of $700,000.
Learn more about balance here:
brainly.com/question/26867415
#SPJ11
A bond has an annual coupon rate of 3.4%, a face value of $1,000, a price of $1,125.76, and matures in 10 years. Attempt 1/6 for 5 pts. Part 1 What is the bond's YTM? 4+ decimals
A bond has an annual coupon rate of 3.4%, a face value of $1,000, a price of $1,125.76, and matures in 10 years.A bond's yield to maturity (YTM) is the yield an investor receives if the bond is held until maturity and all interest and principal payments are made on schedule.
YTM is calculated using a bond's current market price, face value, coupon rate, and time to maturity. The bond's YTM is the interest rate that will make the present value of the bond's cash flows equal to its current market price. The bond's YTM is found using a trial-and-error process.YTM is used to calculate the bond's value, which is the present value of the bond's cash flows. In order to determine the bond's YTM, the following formula is used:PV of coupon payments + PV of face value = Current market priceThe bond's YTM is 2.66%.
The bond's current price is $1,125.76, the face value is $1,000, the annual coupon rate is 3.4%, and the bond matures in ten years.
To know more about Bond visit-
https://brainly.com/question/30508122
#SPJ11
Question 10 0 / 10 pts You borrow $13,046 and repay the loan with 5 equal annual payments. The first payment occurs at the end of year 1 and you pay 5% annual compound interest. If you decide to pay off the loan after 4 years. What is the payoff amount due at the end of the 4th year? (Round your answer to 2 decimal places) 2.869.81
The payoff amount due at the end of the fourth year is $15,833.38.
The present value of the loan is $13,046. We need to find out the equivalent future value at the end of the fourth year. We are given that the interest rate is 5% per year.
To find the equivalent future value of the loan at the end of year 4, we can use the compound interest formula:
FV = PV(1 + r) n
where
FV is the future value of the loan at the end of the fourth year
PV is the present value of the loan
r is the interest rate
n is the number of years
We know that PV = $13,046, r = 5% per year, and n = 4 years, so we can substitute these values into the formula and solve:
FV = $13,046(1 + 0.05) 4
FV = $13,046(1.05) 4
FV = $13,046(1.2155)
FV = $15,833.38
To know more about present value visit:
https://brainly.com/question/29586738
#SPJ11
Burnet Cafe is a cafe specializing in making Spanish coffee. During their very first week they incurred the following costs; shop rent $2,500, purchases of coffee beans (20 x 1 kilogram bags at $13.00 each), purchases of disposable cups (1,000 x $0.05 each), 1 x fulltime barista $850. At the end of the week they had 300 cups remaining (Assume no cups were damaged or lost during the week). Each 1 kg bag of coffee beans can normally make 150 coffees. Based on the scenario above, what is the total cost of the coffee beans consumed in the first week? Select one: a. $66.00 b. $67.00 c. $63.43 O d. $60.67
To calculate the total cost of coffee beans consumed in the first week, you first need to find out the total number of coffees made and then the cost of coffee beans used to make those coffees.
Given that each 1 kg bag of coffee beans can normally make 150 coffees, thus 20 bags will make 20 × 150 = 3,000 coffees. During the first week, they made 3,000 - 300 = 2,700 cups of coffee. Now let's find out the total cost of coffee beans: Total cost of coffee beans = 20 × $13 = $260Cost of coffee beans per cup of coffee = $260 / 3,000 = $0.0867 (rounded to 2 decimal places)
Therefore, the total cost of coffee beans consumed in the first week is: $0.0867 × 2,700 = $234.09 (rounded to 2 decimal places).Thus, the main answer is $234.09 which is option D. Option A ($66.00), option B ($67.00), and option C ($63.43) are all incorrect because they are not even close to the correct answer.
To know more about coffee beans visit:-
https://brainly.com/question/31113570
#SPJ11
Within the context of corporate governance structures, students must research, consider, analyse and provide referenced comments upon the infamous tweet by Elon Musk made on August 8, 2018, at 3:48am:
"Am considering taking Tesla private at $420. Funding secured."
The task will be assessed within the following sub-tasks:
A background to the firm and its pre-existing governance structures;
An analysis describing what led to the governance flaws in the firm;
A discussion of the effects of the tweet upon the firm, the CEO and the market;
An explanation of the actions taken to redress the governance flaws in the firm by the firm and by the government.
The infamous tweet by Elon Musk on August 8, 2018, where he stated he was considering taking Tesla private at $420 with funding secured, had significant implications for the firm, its CEO, and the market. This incident highlighted governance flaws within Tesla and triggered a series of actions to address the situation, both by the company and the government.
1. Background and Governance Structures: Tesla is an electric vehicle and clean energy company founded by Elon Musk. Prior to the tweet, Tesla had an established corporate governance structure, including a board of directors responsible for overseeing the company's operations and decision-making processes.
2. Governance Flaws: The tweet raised concerns about the transparency, accuracy, and legality of the statement. Musk's tweet was seen as a violation of disclosure requirements, as it potentially misled investors and violated securities laws. This incident revealed a governance flaw in terms of proper communication and adherence to regulatory requirements.
3. Effects on the Firm and the Market: The tweet had a significant impact on Tesla, leading to increased volatility in the stock price and potential reputational damage. Musk himself faced scrutiny, with legal and regulatory authorities investigating the matter. The market reacted to the tweet with confusion and uncertainty, highlighting the importance of accurate and responsible communication by corporate leaders.
4. Actions Taken to Address Governance Flaws: Following the incident, Tesla and Musk took steps to redress the governance flaws. Tesla's board of directors implemented measures to enhance oversight and compliance. Musk settled with the Securities and Exchange Commission (SEC), agreeing to step down as Tesla's chairman and pay a substantial fine. The incident also prompted discussions on corporate governance reforms and the need for greater accountability of executives.
Learn more about market here
https://brainly.com/question/15483550
#SPJ11
How should Stripe market the Stripe climate to its clients?
Stripe should market the Stripe climate to its clients by giving them insights on how they can help reduce the negative impact of global warming on the environment. This marketing strategy will require Stripe to create a compelling narrative that is based on data-driven insights that customers can easily understand.
In addition to this, Stripe can also highlight the benefits of using Stripe Climate. For instance, the platform allows businesses to purchase carbon offsets from credible sources, thereby offsetting their carbon footprint. By highlighting these benefits, Stripe can make it clear that Stripe Climate is a practical solution for businesses that want to make a positive impact on the environment.
Stripe can also use the power of storytelling to help customers understand the importance of reducing carbon emissions. This can be done through the use of videos, infographics, and blog posts that highlight the impact of climate change and how it affects the environment, wildlife, and humans. This approach will make it easier for customers to understand the significance of reducing carbon emissions and how they can make a difference by using Stripe Climate.
Furthermore, Stripe can collaborate with environmental organizations and charities to raise awareness about climate change. By partnering with organizations that focus on climate change, Stripe can create a positive brand image and show its commitment to reducing carbon emissions. This approach will also help Stripe gain the trust and loyalty of customers who are concerned about the environment.
In conclusion, Stripe can market Stripe Climate to its clients by providing them with data-driven insights, highlighting the benefits of using Stripe Climate, using storytelling to explain the importance of reducing carbon emissions, and partnering with environmental organizations and charities. By implementing these strategies, Stripe can position itself as a leader in the fight against climate change while also helping businesses reduce their carbon footprint.
To know more about Stripe visit:
brainly.com/question/32509977
#SPJ11
Franklin Corporation has an opportunity to purchase bonds at a rate of 11%. They are in the 34% tax bracket. What is the after tax yield on these bonds?
a) 5.93%
b) 9.62%
c) 3.74
d) 11%
e) 7.26%
The answer to this question is (e) 7.26%.Explanation:A corporation's after-tax yield for taxable bonds may be calculated using the following formula:After-Tax Yield = Before-Tax Yield x (100% - Tax Rate)For Franklin Corporation.
Before-tax yield = 11%Tax rate = 34%The formula now becomes:After-tax Yield = 11% x (100% - 34%) = 7.26%Thus, the after-tax yield on these bonds is 7.26%.Option (e) is the correct answer.This question's response is (e) 7.26%.Explanation:The formula below can be used to determine a corporation's taxable bond after-tax yield:After-Tax Yield is Before-Tax Yield multiplied by (100% - Tax Rate).Franklin Corporation:11% is the before-tax yield.Tax rate is 34%.Now, the equation is:After-Tax Yield is equal to 11% x (100% – 34%), or 7.26%.Consequently, these bonds' after-tax yield is 7.26%.The right response is option (e).
To know more about Franklin Corporation , visit ;
https://brainly.com/question/30004966
#SPJ11
Franklin Corporation has an opportunity to purchase bonds at a rate of 11%. Thus the after-tax yield on these bonds is 7.26%, and option (e) is the correct answer.
The formula to calculate the after-tax yield on bonds is:
After-tax yield = Pre-tax yield × (100% - Tax rate) / 100
As per the question, Franklin Corporation is in the 34% tax bracket. Thus, its tax rate is 34%. Also, the rate at which Franklin Corporation is getting an opportunity to purchase bonds is 11%. Hence, substituting these values in the formula of the after-tax yield, we get:
After-tax yield = 11 × (100 - 34) / 100
= 11 × 66 / 100= 7.26%
Therefore, the after-tax yield on these bonds is 7.26%.
After-tax yield = Pre-tax yield × (100% - Tax rate) / 100
= 11 × (100 - 34) / 100
= 11 × 66 / 100 = 7.26%.
The after-tax yield on these bonds is 7.26%.
To learn more about bonds, visit:
https://brainly.com/question/30503651
#SPJ11
Use the following information to answer questions 23-25. Consider the following capital structure for ABC Corporation. The company has a floating-rate bank loan, preferred shares, and common equity in its capital structure. The firm's tax rate is 21%. The risk-free rate is 3% Details on the components of the capital structure are listed below. Debt: Short-term, variable-rate bank loan. $120 million par Remaining maturity of 2 years Bond's rate was recently reset to market yield of 5% So, now priced at par (market value - $120 million) Preferred equity: $100 million par 6% annual coupon Each $1,000 par issue is currently priced at $1.050. Common equity: 5 million shares outstanding Current share price: $50 Stock beta: 1.9 Market risk premium-7.0% What is ABC's cost of preferred equity? 5.71% 6.00% 11.43% 12.00%
The following information to answer questions 23-25. Consider the following capital structure for ABC Corporation, The cost of preferred equity for ABC Corporation is 5.71%.
The cost of preferred equity can be calculated by dividing the annual preferred dividend by the market price per preferred share.
Annual preferred dividend = Preferred coupon rate * Par value = 6% * $100 = $6
Market price per preferred share = $1.050 (given)
Cost of preferred equity = Annual preferred dividend / Market price per preferred share = $6 / $1.050 ≈ 5.71%
Therefore, ABC Corporation's cost of preferred equity is 5.71%.
Learn more about capital structure here: brainly.com/question/28286399
#SPJ11
Suppose the local-market demand a AAA minor-league baseball team
faces for an individual game is = 200 − 1000P. The team has a
stadium with a 16,000-seat capacity. Q is the number to tickets
The local-market demand for an individual game of a AAA minor-league baseball team is given by the equation 200 - 1000P, where P represents the ticket price.
The local-market demand equation for the AAA minor-league baseball team is represented as 200 - 1000P, where P is the ticket price. This equation shows that as the ticket price increases, the quantity demanded decreases. It implies an inverse relationship between price and quantity. Given that the stadium has a capacity of 16,000 seats, the number of tickets sold, represented by Q, cannot exceed this capacity. To determine the actual number of tickets sold for a game, we need more information. Specifically, we would need the specific ticket price (P) for the game in question. By plugging in the given price into the demand equation (200 - 1000P), we can calculate the corresponding quantity (Q) of tickets sold for that game. The capacity constraint of 16,000 seats ensures that the quantity of tickets sold cannot exceed this limit. The team will need to consider various factors such as market demand, pricing strategies, and stadium capacity to optimize ticket sales and revenue.
Learn more about market demand here;
https://brainly.com/question/29761926
#SPJ11
