Information systems in supply chains can create competitive advantages for organizations by enhancing efficiency, improving decision-making, and enabling effective coordination among various stakeholders.
These systems provide real-time visibility into inventory levels, production processes, and customer demands, enabling organizations to optimize their operations and reduce costs.
By analyzing data from these systems, organizations can identify patterns, trends, and opportunities for improvement, leading to better strategic planning and resource allocation. Moreover, information systems facilitate collaboration and information sharing among supply chain partners, fostering seamless communication and coordination. This integration leads to faster response times, improved customer service, and a streamlined supply chain, giving organizations a competitive edge in terms of agility, responsiveness, and overall performance.
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Betty is a senior citizen who relies on Social Security checks for income, receiving Y each month. As a retiree, her expenses are low and she only spends money on seeds for gardening, s, and toys for her grandchildren, t. Her utility function is given by: u(s, t) = st. Prices are given by ps and Pt. c) The price of seeds spikes to $48. What is Betty's new consumption of each good after this price change? What is her utility when she consumes this new bundle? d) Because of the price increase, local policymakers consider raising the amount Social Security recipients receive. Economists argue that a reasonable proposal is to supple- ment Betty's income in order to make her just as well off as she was before the price increase for seeds. Assuming that policymakers want to do this in the cheapest way possible, calculate how much her new income Y' would be. e) What is Betty's demand for each product if she has the income level Y' you calculated in the part (d), toys cost $1, and seeds cost $48? f) Due to budget constraints, the proposal to increase Social Security payments is re- jected, meaning Betty receives no additional income and she consumes the bundle you calculated in part (c). Decompose the demand changes between parts (a) and (c) into a substitution effect and an income effect. g) What is the compensating variation associated with the price of seeds increasing from $3 to $48?
The compensating variation for the price of seeds increasing from $3 to $48 is the difference in utility between the original consumption bundle and the new consumption bundle, i.e., CV= u(3,6)−u(2,48/1) = 4.
The new consumption bundle is s′=2 and t′= 48/pT. Thus, her new utility is u(s′,t′)=2*48/ Pt. Her new consumption of seeds and toys would be s′ and t′ respectively. Her utility function is given by u(s, t) = st.d) Given that Betty is being made just as well off as she was before the price increase for seeds, this means that her new utility will be equal to her old utility, i.e. 2*6=2*(Y′−48/ps) ⇒ Y′ = 144/ps. Hence, her new income Y' would be $72.e) The demand for seeds and toys are S(pS = 48, Y′) = Y′/48 and T(pT = 1, Y′) = (Y′/2). f).
The total effect of the price change is the sum of the substitution effect and the income effect, which are negative and positive, respectively. The substitution effect is negative because when the price of seeds increases, consumers will switch to consuming less of seeds and more toys. This means that if prices rise, consumers will consume less of the good with the highest relative price. The income effect is positive because when prices rise, consumers are less able to afford the same amount of goods as before and so they reduce their consumption of all goods.
The compensating variation is the amount of money needed to compensate Betty for the increase in the price of seeds. In other words, it is the amount of money that would make Betty as well off as she was before the price change. The compensating variation is equal to the dollar amount of income that would be required to bring her back to her original level of utility with the new, higher price of seeds. The compensating variation for the price of seeds increasing from $3 to $48 is the difference in utility between the original consumption bundle and the new consumption bundle, i.e., CV= u(3,6)−u(2,48/1) = 4.
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Can you please explain why it is hard for Apple companies to
reach their unit sales target every year and how they they can
solve this issue strategically? can you please explain in 2
pages
By expanding its product range or lowering its prices, Apple can appeal to a broader range of customers and increase its revenue streams.
Apple is one of the world's largest and most profitable companies, but it has not always been able to meet its unit sales targets every year. Despite this, Apple has become the most valuable company in the world by developing innovative products, delivering exceptional customer service, and building a loyal customer base. In this essay, we will explore why it is hard for Apple companies to reach their unit sales target every year and how they can solve this issue strategically.
One reason why Apple may find it difficult to meet its unit sales target is the company's pricing strategy. Apple has a reputation for being an expensive brand, and this may limit the number of people who can afford its products. While Apple's high prices may be justified by the quality of its products and the brand's reputation, it may still limit the company's sales potential.
In conclusion, while Apple may find it challenging to reach its unit sales target every year, the company has a range of strategic options available to it to address this issue. By expanding its product range or lowering its prices, Apple can appeal to a broader range of customers and increase its revenue streams.
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Overview: Volkswagen—the world’s 2nd largest automaker (Toyota is #1) with its VW, Audi, Bentley, Porsche, and Lamborghini brands—by itself plan to launch 50 EV models and achieve annual EV sales of three million units by 2025. However, despite potential bumps in the road, Tesla continues its journey from upstart niche to full mass-market brand. It is further diversifying its vehicle portfolio with self-driving EV semi-trucks and the new Cyberstruck slated for 2021—one that promises to shatter more records for speed, acceleration, range, and coolness.
Simulated Business Scenario: Since Tesla started selling automobiles, Zachary, Tesla's CMO (Chief Marketing Officer) has guided the brand to go further and faster than any other vehicle startup in history. He has created the image that Tesla is to cars what Apple has long been to consumer electronics, with the same kind of innovative products and cult brand following. With an ever-changing business environment, Zachary is being asked to create a report detailing a strategy to remain agile and ahead of the competition
. Questions:
1 -How have technology, natural, and cultural macro-environmental forces impacted Tesla?
2- What can Zachary recommend in his report to adapt (a proactive approach) and hold off the competition with Tesla in the electric car market?
Tesla has a unique technological platform for battery management, and it has a competitive edge in the global electric vehicle market.
However, EV charging infrastructure, consumer awareness, and government subsidies all play a significant role in Tesla's success. The natural environment is a double-edged sword for Tesla. With their focus on electric vehicles, the company has an excellent opportunity to reduce carbon emissions and decrease the negative impact of the automotive industry on the environment. Still, the battery production process and rare metal acquisition necessary for the batteries has negative environmental consequences. Tesla's mission statement is "to accelerate the world's transition to sustainable energy."
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Desperado Limited, based in Durban, is a company that manufactures and imports pallets and other storage handling items from Italy. The company is facing some serious issues due to the ailing economic conditions, together with the recent looting and flooding and as a result the financial director, Mr Bon Voyage, believes the company may need to dispose of a number of its assets, more particularly, its pallet manufacturing plant as has become more feasible to import pallets.
Mr Bon Voyage decided to discuss this matter with the accountant, however before Mr Bon Voyage could say anything, the accountant told him that the recent events of looting and with him losing his material possessions in the recent flood, he saw it as an opportunity to emigrate. Further, he will be resigning with immediate effect as he has received his emigration papers. Mr Bon Voyage is quite concerned as even though he is hands on, over the last few years, he left all the financial accounting to his accountant with limited involvement from himself.
The accountant reminded Mr Bon Voyage that if he intends to sell the company assets, that he may have to apply IFRS 5 Non-current assets held for sale and discontinued operations for the measurement of these assets however if it’s just individual assets to sell, the measurement is quite simple and if it is groups, he suggested to rather call in an IFRS expert as it could get tricky. Mr Bon Voyage already feeling despondent, nodded his head in silence, not having a clue what IFRS 5 was all about, mentally making a note to contact the company’s IFRS consultants to ask for advice. The next day, Mr Bon Voyage contacted the consultants and forwarded the following information on to them.
On 1 August 2021, Desperado Limited’s pallet making plant, plant Z was classified as ‘heldfor-sale’ in terms of all the classification criteria as set out in IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Plant Z had cost R100 000 and had a carrying amount of R80 000 on 1 January 2021. On 1 August 2021, the ‘fair value less costs of disposal’ of plant Z amounted to R68 000. On 31 December 2021, the ‘fair value less costs of disposal’ of plant Z amounted to R63 000.
All plant is depreciated at 10% p.a. on the straight-line basis with nil residual values. The carrying amount of the remaining assets of Desperado Limited at 31 December 2021 were as follows:
• Property, plant and equipment R200 000
• Inventory 70 000
• Intangible assets 62 000
• Trade receivables 40 000ues.
REQUIRED:
2.1 Draft all the journal entries relating to plant Z for the year ended 31 December 2021(8marks)
2.2 Prepare the Non- Current Asset Held for sale note Assets section of Desperado Limited’s statement of financial position at 31 December 2021 (comparatives not required) (4marks)
2.3 Explain the effect on your answer in 1 above if the ‘fair value less costs of disposal’ of plant Z amounted to:
a. R70 000 at 31 December 2021 (1mark)
b. R90 000 at 31 December 2021 (3marks)
Journal entries relating to plant Z for the year ended 31 December 2021:DateAccount TitleDebitCredit1 August 2021Plant Z held for sale account68,000Plant Z80,000Gain on the sale of plant .
Z12,000(To record the fair value less cost of disposal)31 December 2021Depreciation expense (10% of R80,000)8,000Accumulated depreciation8,000(To record the depreciation for the year ended December 31, 2021, on Plant Z)Plant Z held for sale account5,000Gain on the sale of plant Z3,000Plant Z8,000(To record the difference between carrying value and fair value less cost of disposal)2.2 Non-Current Asset Held for Sale note Assets section of Desperado Limited’s statement of financial position at 31 December 2021:Note20192020Carrying amount of plant Z at January 1(R80,000)(R100,000)Fair value less cost of disposal at August 1(R68,000)Carrying value of plant Z at August 1(R80,000)Assets classified as held-for-sale(R68,000)Gain on the sale of plant Z(R12,000)Carrying value of plant Z at December 31(R68,000)Assets classified as held-for-sale(R63,000)2.3 Effect of Fair Value less cost of disposal of Plant Z on journal entries above:a) If the ‘fair value less costs of disposal’ of plant Z amounted to R70 000 at 31 December 2021: The gain on the sale of plant Z will be R2,000 (R70,000 - R68,000).
The journal entry to record the gain on the sale of plant Z will be:DateAccount TitleDebitCredit31 December 2021Plant Z held for sale account70,000Plant Z80,000Gain on the sale of plant Z10,000b) If the ‘fair value less costs of disposal’ of plant Z amounted to R90 000 at 31 December 2021: The loss on the sale of plant Z will be R22,000 (R90,000 - R68,000). The journal entry to record the loss on the sale of plant Z will be:DateAccount TitleDebitCredit31 December 2021Plant Z held for sale account68,000Loss on the sale of plant Z22,000Plant Z90,000
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Which of the following statement is CORRECT? O Total Fixed costs change inversely with the level of production. O Costs are fixed or variable for a specific activity and/or for an indefinite time period. O Variable costs change, in per unit, in proportion to changes in the related level of activity or volume of output produced O Product costs are treated as expenses of the accounting period in which the product is sold.
Answer:
The correct statement is "Variable costs change, in per unit, in proportion to changes in the related level of activity or volume of output produced." This means that as the production level increases, variable costs will also increase in proportion. Total fixed costs, on the other hand, remain constant regardless of the level of production. Costs can be classified as either fixed or variable depending on whether they change with changes in production levels. Product costs are not treated as expenses but rather as assets until the product is sold, at which point they become expenses.
The statement that is correct regarding cost accounting is "Variable costs change, in per unit, in proportion to changes in the related level of activity or volume of output produced, option C.
"Variable costs are the costs which change with the level of production or sales volume. It may include the cost of raw materials, labor, packaging, and the like. Since variable costs are directly proportional to the level of production, as production or output increases, variable costs will increase too.
As the volume of production increases, fixed costs remain constant. Fixed costs, such as rent or salaries, are typically the same no matter how much you produce or sell. They are unaffected by the volume of production. In the short term, a company must cover fixed costs regardless of whether or not they are making a profit.
Product costs, such as the cost of materials and labor required to produce a product, are usually treated as inventory on the balance sheet until the product is sold. Once the product is sold, the costs are transferred from inventory to cost of goods sold and are treated as an expense in the period in which the product is sold. So option C is correct.
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Adam Smith has the following linear preferences over black tea (b) and earl gray tea (e) u(b, e) = 5b + 4e (a) Setup the expenditure minimization problem for Adam Smith. What conditions, (UC) or (NNC), will necessarily be binding at the optimum? Explain your answer. (Points: 5) Assume the price for a cup of black tea is pb = £10 and the minimal level of utility Adam Smith can obtain is ū = 40. (b) Solve the expenditure minimization problem and obtain the compensated demand as a function of the price of the cup of earl gray. (Points: 8) (c) Graph Adam Smith's compensated demand for earl grey
a. Setup the expenditure minimization problem for Adam Smith Expenditure minimization problem can be expressed as follows: pb bb + pe ee = m Subject to the budget constraint:5bb + 4ee ≥ ū The expenditure minimization problem for Adam Smith can be stated as follows:
Minimize pb bb + pe ee Subject to5bb + 4ee ≥ ū b. What conditions, (UC) or (NNC), will necessarily be binding at the optimum? The necessary conditions that will be binding at the optimum are Utility Maximization Condition (UC) and Non-negativity Condition (NNC).The Utility Maximization Condition (UC) implies that Adam Smith will allocate his expenditure to maximize his utility given his budget constraint.
It can be expressed as: MU(b) / P(b) = MU(e) / P(e)Or, 5 / 10 = 4 / PeOr, Pe = 8NNC implies that the quantities of black tea (b) and earl grey tea (e) cannot be negative. It can be expressed as: b ≥ 0, e ≥ 0c. Graph Adam Smith's compensated demand for earl grey Compensated demand for earl grey can be expressed as: ee = [(m - pb bb) / pe]Where m is the total expenditure, bb is the amount of black tea purchased, pe is the price of earl grey tea and ee is the amount of earl grey tea purchased.
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Thirty percent of all resumes received by a corporation for a management position are from recent college graduates. Eighteen resumes were received on a particular day. (a) What is the probability tha
d. 0.025 is the probability that three or fewer of the resumes received were from recent college graduates so option d. is correct.
Thirty percent of all resumes received by a corporation for a management position are from recent college graduates, and eighteen resumes were received on a particular day. To find the probability that three or fewer of the resumes received were from recent college graduates.
The probability distribution used for this type of problem is the binomial distribution, where:
p is the probability of success in one trial
q is the probability of failure in one trial
n is the number of trials we want to perform
Here, p = 0.3, q = 0.7, and n = 18. Now we have to find the probability that three or fewer of the resumes received were from recent college graduates.
Therefore, to find the required probability, we need to add the probabilities of the following: P(X = 0) + P(X = 1) + P(X = 2) + P(X = 3).
The binomial probability formula is given as follows:
P(X = x) = (nCx) * p^x * q^(n-x)
Where, nCx = n! / (x!(n - x)!)
Now, let's use the formula and solve the problem.
P(X = 0) = (18C0) * (0.3)^0 * (0.7)^(18-0) = 0.000007168
P(X = 1) = (18C1) * (0.3)^1 * (0.7)^(18-1) = 0.000215051
P(X = 2) = (18C2) * (0.3)^2 * (0.7)^(18-2) = 0.002870019
P(X = 3) = (18C3) * (0.3)^3 * (0.7)^(18-3) = 0.021504899
Therefore, P(X ≤ 3) = P(X = 0) + P(X = 1) + P(X = 2) + P(X = 3)
= 0.000007168 + 0.000215051 + 0.002870019 + 0.021504899
= 0.024597138 ≈ 0.025
So, the probability that three or fewer of the resumes received were from recent college graduates is 0.025 (approx).
Hence, the correct option is (D) 0.025.
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Thirty percent of all resumes received by a corporation for a management position are from recent college graduates. Eighteen resumes were received on a particular day. (a) What is the probability that exactly 5 of the 18 resumes received on that day are from recent college graduates? (b) What is the probability that more than 10 of the resumes received on that day are from recent college graduates?
(a) To calculate the probability of exactly 5 resumes being from recent college graduates, we need to use the binomial probability formula. The formula is:
P(X = k) = C(n, k) * p^k * (1 - p)^(n - k)
Where:
P(X = k) is the probability of exactly k successes
C(n, k) is the number of combinations of n items taken k at a time (calculated as n! / (k! * (n - k)!)
p is the probability of success (in this case, the probability of a resume being from a recent college graduate)
n is the number of trials (in this case, the total number of resumes received)
k is the number of successful outcomes (in this case, exactly 5 resumes being from recent college graduates)
Given that 30% of resumes are from recent college graduates, the probability of success (p) is 0.3. The total number of resumes received (n) is 18, and we want exactly 5 resumes from recent college graduates (k = 5). Plugging these values into the formula, we can calculate:
P(X = 5) = C(18, 5) * 0.3^5 * (1 - 0.3)^(18 - 5)
(b) To calculate the probability of more than 10 resumes being from recent college graduates, we need to sum the probabilities of having 11, 12, 13, ..., up to 18 resumes from recent college graduates. We can calculate each individual probability using the binomial probability formula as described above and then sum them up:
P(X > 10) = P(X = 11) + P(X = 12) + P(X = 13) + ... + P(X = 18)
You can perform the calculations using the provided formulas and the given values. Remember to round your answers to the appropriate number of decimal places and submit your complete solution by the specified deadline.
define management and the various roles of managers at low, middle and top management with relevant examples
Management refers to the process of planning, organizing, directing, and controlling resources to achieve organizational goals and objectives. It involves making decisions, coordinating activities, and ensuring that resources are utilized effectively and efficiently
At the low management level, managers are responsible for overseeing the day-to-day operations and supervising front-line employees. They ensure that tasks are carried out efficiently, resources are utilized effectively, and performance targets are met.
For example, a shift supervisor at a manufacturing plant monitors production activities, assigns tasks to workers, and ensures that quality standards are maintained.
Middle managers operate at an intermediate level between low-level and top-level management. They are responsible for implementing the plans and strategies set by top management and coordinating the activities of various departments or teams. Middle managers serve as a link between lower-level employees and top management, providing guidance, support, and feedback.
An example of a middle manager is a department manager who oversees a team of supervisors and ensures that departmental goals are achieved.
Top managers are at the highest level of management and are responsible for setting organizational goals, formulating strategies, and making important decisions that impact the entire organization. They provide overall direction and vision, allocate resources, and establish policies and procedures.
Examples of top managers include CEOs, presidents, and executive directors who lead organizations and make strategic decisions to drive growth and success.
Overall, the roles of managers at different levels vary in terms of their scope, responsibilities, and decision-making authority. While low-level managers focus on operational tasks, middle managers bridge the gap between lower-level employees and top management, and top managers provide strategic direction and leadership for the entire organization.
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Osborn Manufacturing uses a predetermined overhead rate of $19.90 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $272,630 of total manufacturing overhead for an estimated activity level of 13,700 direct labor-hours. The company actually incurred $270,000 of manufacturing overhead and 13,200 direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much? 1. Manufacturing overhead 2. The gross margin would by by
Osborn Manufacturing has $2,630 of underapplied manufacturing overhead for the period. The gross margin would be decreased by $2,630.
The amount of underapplied or overapplied overhead is calculated by comparing the actual manufacturing overhead incurred to the amount of manufacturing overhead applied. In this case, the actual manufacturing overhead ($270,000) is less than the amount of manufacturing overhead applied ($272,630). This results in $2,630 of underapplied overhead.
When underapplied overhead is closed to Cost of Goods Sold, it is treated as an additional expense. This increases the cost of goods sold and decreases the gross margin. In this case, the gross margin would be decreased by $2,630.
The underapplied overhead is a result of the company's predetermined overhead rate being too high. This could be due to a number of factors, such as overestimating the level of activity or underestimating the cost of overhead items.
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1.Compare and contrast outsourcing and offshoring. List some of the companies that have adopted these strategies in recent years and the reasons for them. Chapter 2 1. Define productivity. What is the difference between productivity and efficiency? 2. From an operations strategy perspective, how can the balanced Scorecard be used as a performance measurement system?
Outsourcing involves hiring a third-party company to perform work that is usually carried out in-house, Whereas offshoring is the relocation of a company's business process from one country to another with the aim of reducing labor costs.
How do company use it?Companies that have adopted outsourcing and offshoring strategies in recent years include Apple, Nike, Microsoft, and others.
The reasons for outsourcing include reducing costs, allowing a company to focus on core competencies, and increasing efficiency.
2. Define productivity.
Productivity is the amount of output that is produced by a given input.What is the difference between productivity and efficiency?
The main difference between productivity and efficiency is that productivity focuses on output, while efficiency focuses on cost.
2. From an operations strategy perspective, how can the balanced Scorecard be used as a performance measurement system?The balanced scorecard is a performance measurement system that can be used from an operations strategy perspective. It is a tool that helps organizations align their activities with their strategic objectives. The balanced scorecard is made up of four perspectives: financial, customer, internal business processes, and learning and growth. By using the balanced scorecard, operations managers can measure their performance in each of these areas and identify areas that need improvement.In this way, they can align their operations with the company's overall strategy and ensure that their activities are contributing to the company's success.To know more on Company visit:
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A $1,000 par bond with a 4% semi-annual coupon has 10 years to maturity trades at a yield of 6%. What would be it’s price?
A. $851.23
B. $922.58
C. $1,148.77
D. $541.20
To calculate the price of the bond, the given parameters of a $1,000 par bond with a 4% semi-annual coupon has 10 years to maturity trades at a yield of 6% will be used. This can be done using the present value of annuity and the present value of the future value of money. The correct answer is option C, $1,148.77.
Given, PV = $1000
C = 4% / 2 = 2% = $20 (semi-annual coupon payment)
Y = 6%
N = 10 x 2 = 20 (semi-annual period)
Price of the bond can be calculated using the present value of annuity and the present value of the future value of money.
PV of Coupon Payments = [C x (1 - 1/(1+y)^n) / y]
PV of Coupon Payments = [20 x (1 - 1/(1+6%)^20) / 3%]
PV of Coupon Payments = $304.19
PV of Maturity Amount = F / (1 + y)^n
PV of Maturity Amount = $1000 / (1 + 6%)^20
PV of Maturity Amount = $310.57
Price of Bond = PV of Coupon Payments + PV of Maturity Amount
Price of Bond = $304.19 + $310.57
Price of Bond = $614.76
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What is the best procedure of NPV or present worth?
Calculate the effects of time value money by converting only the future costs to a common reference point in today’s dollars.
Calculate the effects of time value money by converting all past and present costs to a common reference point in today’s dollars.
Calculate the effects of time value money by converting all future costs to a common reference point in future dollars.
Calculate the effects of time value money by converting all present and future cost to a common reference point in today’s dollars
The best procedure for calculating the effects of time value money is to convert all future costs to a common reference point in today's dollars.
This approach is known as Net Present Value (NPV) or present worth analysis.
By converting future costs to today's dollars, we take into account the time value of money, which recognizes that the value of money changes over time due to factors such as inflation and the opportunity cost of capital.
Calculating the NPV involves discounting future cash flows to their present value using an appropriate discount rate. The discount rate reflects the required rate of return or the cost of capital, taking into consideration factors such as risk and opportunity cost.
The NPV represents the net value or the difference between the present value of cash inflows and the present value of cash outflows. If the NPV is positive, it indicates that the project or investment is expected to generate a return greater than the required rate of return, and it may be considered favorable. Conversely, if the NPV is negative, it suggests that the project may not meet the required rate of return and may be less desirable.
In summary, the best procedure is to calculate the effects of time value money by converting all future costs to a common reference point in today's dollars using NPV analysis. This allows for a more accurate assessment of the profitability and value of an investment or project.
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to be effective, control systems must :
a. be based on subjective standards
b. communicate needed information upward in the organizationb
c. be acceptable to top stockholders
d. use multiple approaches
e. centralize decision making
To be effective, control systems must use multiple approaches.
To be effective, control systems should employ multiple approaches. Control systems are designed to monitor and evaluate the performance of individuals, departments, or the organization as a whole. By using multiple approaches, organizations can ensure a comprehensive and well-rounded control mechanism. This may include a combination of financial controls, operational controls, performance indicators, feedback mechanisms, and qualitative assessments.
Using multiple approaches allows for a more balanced and comprehensive evaluation of performance, helps identify areas for improvement, and provides a more accurate picture of overall organizational effectiveness. It also helps in minimizing the reliance on any single control method, reducing the risk of bias or overlooking critical aspects of performance.
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What is born global?
Group of answer choices
When a firm is founded in a host country
When a firm initiates an international strategy upon founding
When a firm sells a product only within a foreign market
When a firm initiates an international strategy upon an acquisition
Born global is a term that refers to companies that seek international markets almost immediately upon their founding.
These companies are willing to internationalize and aim to achieve a competitive edge through rapid entry into foreign markets.Born global companies, unlike traditional export models, have not gradually increased their international activities. They were able to generate a substantial portion of their earnings through exports or overseas operations right away. They are able to accomplish this by implementing innovative business practices and partnering with other firms.To summarize, a born global company is one that initiates an international strategy upon founding. These companies are willing to internationalize from the very beginning and aim to achieve a competitive edge through rapid entry into foreign markets.
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Explain why the entry decision and exit decision in general are not "symmetric", that is, the
situation that would lead you to stay in the market might not lead you to enter it in the first place
The entry decision and exit decision are not symmetric because the costs and benefits of each decision are different. The cost of entry into a market can be high, including sunk costs, such as the cost of research and development, marketing, and plant and equipment.
The benefits of entry are the potential profits that can be earned from the market.The cost of exit from a market can also be high, including the cost of writing off assets, severance pay for employees, and the loss of goodwill. The benefits of exit are the potential to avoid losses that may occur if the firm remains in the market.The situation that would lead you to stay in the market might not lead you to enter it in the first place because the costs of entry are higher than the costs of exit. For example, a firm may be willing to stay in a market even if it is not profitable, because it has already incurred sunk costs.
However, the firm would not be willing to enter a market if it was not profitable, because it would not want to incur sunk costs.
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-Generally, using legalese and sophisticated phrasings will
impress most readers, particularly in tech or business writing.
- True or False
The statement "Generally, using legalese and sophisticated phrasings will impress most readers, particularly in tech or business writing" is a False statement.
What is legalese?
Legalese is a terminology that is generally used by the legal profession. In simple terms, legalese is a specialized language that is applied in legal documents. The legalese is frequently utilized to imply things with utmost clarity, without leaving any kind of space for confusion or misinterpretation.
Why should one avoid using sophisticated phrasings in writing?
Sophisticated phrasings are typically unfamiliar to people, and using them in writing can cause confusion. Moreover, using sophisticated words and terms can make the readers feel that the writer is attempting to show off their vocabulary rather than conveying a message.
Therefore, it is advisable to avoid using sophisticated phrasings while writing.
Likewise, using legalese and sophisticated phrasings will not impress most readers, particularly in tech or business writing. This is because most readers, even those in the tech or business industry, prefer simple and straightforward language to complicated vocabulary.
In conclusion, it is vital to use simple language and avoid sophisticated phrasings while writing.
The use of legalese is also discouraged unless it is necessary to imply things with utmost clarity.
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Nash Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of €4,260,000 on January 1, 2022. Nash expected to complete the building by December 31, 2022. Nash has the following debt obligations outstanding during the construction period.
Construction loan-12% interest, payable semiannually, issued December 31, 2021 €1,730,000
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2023 1,384,000
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2026 865,000
Assume that Nash completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,498,000. The following expenditures were made during the period forthis project: January 1, €865,000; April 1, €1,265,000; July 1, €1,665,000; and October 1, €560,000. Excess funds from the construction loans were invested during the period and earned €18,600 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)
Compute the depreciation expense for the year ended December 31, 2023. Nash elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a residual value of €279,000. (Round answer to 0 decimal places, e.g. 5,275.)
The depreciation expense for the year ended December 31, 2023, is €141,063.
To compute the amount of borrowing costs to be capitalized for the project, we need to calculate the weighted average accumulated expenditures and the weighted average interest rate.
Weighted Average Accumulated Expenditures:
(€865,000 × 12) + (€1,265,000 × 9) + (€1,665,000 × 6) + (€560,000 × 3) = €26,520,000
Weighted Average Interest Rate:
(€1,730,000 × 12% × 12/12) + (€1,384,000 × 10% × 8/12) + (€865,000 × 11% × 0/12) = €342,653.33
Borrowing Costs to be Capitalized:
€26,520,000 × €342,653.33 / €4,498,000 = €202,140.03
The amount of borrowing costs to be capitalized for this project is €202,140.
To compute the depreciation expense for the year ended December 31, 2023, we use the straight-line depreciation method:
Depreciation Expense per Year:
(€4,498,000 - €279,000) / 30 = €141,063.33
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Attempt in Progress On November 30, capital balances are Daniel $301000, Ellis $248000 and Gise $248000. The income ratios are 20%, 20% and 60%. respectively. Daniel decides to retire from the partnership. The partnership pays Daniel $348000 cash for her partnership interest. After Daniel's retirement, what is the balance of Ellis's capital account? O $236250 O $238600 O $248000 O $324500
Previous question
The balance of Ellis's capital account after Daniel's retirement is $378550. Hence, the correct option is O $378550.
Given that the capital balances of Daniel, Ellis, and Gise on November 30 are $301000, $248000 and $248000 respectively and their income ratios are 20%, 20% and 60% respectively. Daniel decided to retire from the partnership and was paid $348000 cash for her partnership interest. After her retirement, we are to determine the balance of Ellis's capital account. The total income ratio is 20% + 20% + 60% = 100%. Now, we can calculate the amount of the cash paid to Daniel, which can be calculated as follows:
Cash paid to Daniel = Daniel's capital balance before retirement - Her share of the total capital balance= $301000 - 20% of ($301000 + $248000 + $248000) = $301000 - $39900 = $261100
Therefore, the balance of the remaining partners (Ellis and Gise) is:
$261100 + $248000 + $248000 = $757100
Now, we can calculate Ellis's capital balance as follows: Ellis's capital balance = (Ellis's share of the total capital / remaining partners' total capital) * Remaining cash balance= (20% / 40%) * $757100= 0.5 * $757100= $378550
Therefore, the balance of Ellis's capital account after Daniel's retirement is $378550.
Check the calculation below:
D = $301000
E = $248000
G = $248000
Total capital = $797000
Total income = 20% + 20% + 60% = 100%
Cash paid to Daniel = $348000
Daniel's share of the total capital = 20% of $797000 = $159400
Cash paid to Daniel = $159400 / 20% = $797000 - $159400 = $637600
Remaining cash balance = $797000 - $348000 = $449000
Remaining partners' share of the total capital = $797000 - $159400 = $637600
Ellis's capital balance = ($637600 * 20%) / $637600 * $449000 = $378550
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(Working with a statement of cash flows) Prepare a statement of cash flows from the scrambled list of items in the popup window, CHOOS Complete the operating activities part of the statement of cash flows. (Round to the nearest dollar. NOTE: Input cash inflows as positive values and cash outlows as negative values.) Statement of Cash Flows Cash Flows from Operating Activities Adjustments Increase in inventories Operating income Dividends Increase in accounts payable Interest expense Increase in common stock (par) Depreciation expense Increase in accounts receivable $7,000 219,000 29,000 43,000 45,000 5,000 17,000 69.000 Increase in long-term debt Increase in short-term notes payable Increase in gross fixed assets Increase in paid in capital Income taxes Beginning cash (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a 53,000 15,000 54,000 20,000 45,000 250,000
The total net cash inflows from operating activities, which result from principal business activities of the company are $315,000.
How is it done?Cash Flows from Operating Activities are the total net cash inflows from operating activities, which result from principal business activities of the company.
They are generally derived from the revenue and expense accounts of the company.
Complete the operating activities part of the statement of cash flows using the information provided in the question.
Statement of Cash Flows, Cash Flows from Operating Activities, Net income$219,000Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense $69,000Increase in accounts receivable$(29,000)Increase in inventories$(7,000)Increase in accounts payable$43,000Increase in short-term notes payable$15,000Increase in income taxes$20,000Interest expense$5,000Net cash provided by operating activities$315,000
Therefore, the total net cash inflows from operating activities, which result from principal business activities of the company are $315,000.
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Explain the difference between a decentralized price system and a centralized command and control system. Provide an example of each from the US economy. Provide examples and explain your answer
A decentralized price system is the price system which relies on the market forces to determine the prices and allocate resources. In this system, prices of goods and services are determined by supply and demand forces. The prices, therefore, send signals to buyers and sellers and they allocate resources accordingly.
On the other hand, a centralized command and control system is a price system that is determined by the government. It is a system where the government determines the prices and allocates resources. In this system, the government sets prices, produces goods and services, and distributes them according to its priorities. A decentralized price system is the price system which relies on the market forces to determine the prices and allocate resources. A centralized command and control system is a price system that is determined by the government. Decentralized price system In a decentralized price system, resources are allocated through the price mechanism, which is determined by supply and demand forces.
In other words, the prices of goods and services are determined by the market. Buyers and sellers then allocate resources based on those prices.In a decentralized price system, prices are influenced by market forces such as supply and demand. The prices determine the allocation of resources. If the demand for a particular good is high, its price will go up, and the suppliers will be incentivized to increase production. As a result, the market forces will lead to an optimal allocation of resources.Example of a decentralized price system from the US economy: The stock market is an example of a decentralized price system. The prices of stocks are determined by market forces. Buyers and sellers then allocate resources based on the prices of stocks.Centralized command and control system:In a centralized command and control system, the government determines the allocation of resources, sets prices, produces goods and services, and distributes them according to its priorities. This system is also known as a planned economy.Example of a centralized command and control system from the US economy: The military is an example of a centralized command and control system in the US economy. The government determines the allocation of resources, sets prices, produces goods and services, and distributes them according to its priorities. In a decentralized price system, the prices of goods and services are determined by supply and demand forces. On the other hand, in a centralized command and control system, the government determines the allocation of resources, sets prices, produces goods and services, and distributes them according to its priorities.In a decentralized price system, the prices are influenced by market forces such as supply and demand. However, in a centralized command and control system, the government has the power to set prices and allocate resources. The government uses its power to distribute resources according to its priorities.In the US economy, the stock market is an example of a decentralized price system. The prices of stocks are determined by supply and demand forces. On the other hand, the military is an example of a centralized command and control system. The government determines the allocation of resources, sets prices, produces goods and services, and distributes them according to its priorities.
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as output and employment contracted during the early 1930s, policy makers
During the early 1930s, as output and employment contracted, policy makers were unsure of the appropriate steps that could be taken to correct the economy for which they adopted fiscal and monetary policy.
The Great Depression, which was a long-term downturn in economic activity, posed significant challenges to policy makers. The Great Depression was a period of economic depression that lasted from 1929 to 1939. The Great Depression was caused by a stock market crash that resulted in a sharp decline in output and employment. As a result, many policy makers were left to wonder about the most appropriate policy choices to help stimulate the economy and get people back to work.
Fiscal and monetary policies were among the most important policies that policy makers implemented to combat the Great Depression.
Monetary policy, on the other hand, was focused on increasing the supply of money to help spur lending and economic growth. However, they implemented various policies like fiscal and monetary policies that helped in stimulating the economy and get people back to work.
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If total liabilities decreased by $51300 and stockholders' equity increased by $31300 during a period of time, then total assets must change by what amount and direction during that same period? A) $20000 increase B) $82600 increase
C) $20000 decrease D) $82600 decrease
Therefore, the correct answer is option A) $20000 increase. The total assets must change by an amount of $20000 increase during that same period if total liabilities decreased by $51300 and stockholders' equity increased by $31300.
The total assets must change by an amount of $20000 increase during that same period if total liabilities decreased by $51300 and stockholders' equity increased by $31300.What is the balance sheet?A balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a particular point in time. In financial accounting, the balance sheet is one of the four core financial statements. The other financial statements include the income statement, statement of retained earnings, and statement of cash flows.How are stockholders' equity and liabilities related?Stockholders' equity and liabilities are two categories of accounts found on a company's balance sheet. The balance sheet shows a company's assets, liabilities, and stockholders' equity. The relationship between stockholders' equity and liabilities is that both of these categories of accounts contribute to the company's total equity. A company's equity is the residual interest in the assets of the company after the liabilities are subtracted.How to find the change in assets if the change in liabilities and stockholders' equity is given?We know that total liabilities decreased by $51300 and stockholders' equity increased by $31300. Therefore, the total amount of change in the liabilities and stockholders' equity is:$51300 - $31300 = $20000Since the balance sheet must always balance, the change in the total assets must also be equal to $20000. As a result, the total assets must have increased by $20000. Therefore, the correct answer is option A) $20000 increase.
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Alpha Ltd acquired 30% of the voting shares of Beta Ltd on 1 July 2021 for $200 000. This acquisition resulted in Alpha Ltd having significant influence over Beta Ltd. At the date of acquisition, the shareholder's equity of Beta is as follows: Share capital 350 000 Retained profits 50 000 400 000 The following information relates to Beta Ltd as at 30 June 2022, the end of financial year FY2022: Profit for FY2022 100 000 60 000 Dividend paid out of the profit of FY2022 Asset revaluation reserve 20 000 Additional information: • Mu Ltd is 80% owned by Alpha Ltd and is Alpha's subsidiary. • During FY2022, Beta sold $100 000 of inventories to Mu Ltd and made profit of $50 000. As at 30 June 2022, 10% of the inventories were still held by Mu Ltd. Required: a) Prepare journal entries for Alpha Ltd in FY2022 to account for its investment in Beta Ltd using the Equity Method. Use the Reclassification Method to account for the profit and dividends that Alpha shares from Beta. Note 1) Use the provided journal entry template to enter your answer. 2) Workings/calculations or narrations are NOT required. 3) The template should provide enough space. However, if you find the space is insufficient in the template or encounter a table formatting issue, write your journal entries below the template and ensure labelling DR or CR. b) Describe the criteria used to identify subsidiaries and the criteria used to identify associates.
a) Journal Entries to account for Alpha Ltd’s investment in Beta Ltd: Alpha Ltd’s Investment 01/07/2021
Investment in Beta Ltd 200,000 [Debit] Cash 200,000 [Credit](To record the acquisition of 30% shares of Beta Ltd. Equity in profit of Beta Ltd during FY2022.
30/06/2022 Equity in profit of Beta Ltd 30,000[Debit] Investment in Beta Ltd 30,000 [Credit] (To adjust for the share of profits from Beta Ltd during FY2022)
Reclassification of profit from Alpha’s share of Beta’s profit:30/06/2022 Receivable from Beta Ltd 60,000 [Debit] Equity in profit of Beta Ltd 60,000 [Credit] (To adjust for Alpha Ltd’s share of Beta’s profits and record as receivable)
30/06/2022 Cash 54,000 [Debit] Receivable from Beta Ltd 54,000[Credit] (To record the receipt of the dividend paid)Asset Revaluation.
30/06/2022 Investment in Beta Ltd 2,000[Debit] Asset Revaluation Reserve2,000 [Credit] (To record the revaluation reserve on Beta Ltd's assets)
Intra-group transaction between Beta and Mu:30/06/2022 Purchases 50,000[Debit] Trade Payables 50,000[ Credit] (To record Mu’s purchases from Beta)
30/06/2022 Trade Receivables 50,000 [Debit] Sales 50,000 [Credit] (To record Beta’s sales to Mu)
B) Criteria to identify subsidiaries and associated subsidiaries are businesses that are under the control of another company that owns more than 50% of the voting shares.
In contrast, associates are companies in which the investor has significant influence but does not have a controlling interest. Significant influence is generally deemed to exist if an investor holds between 20% and 50% of the voting shares for the given journal entries
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Price Controls and Quotas: Meddling with Markets End of Chapter Problems In Maine, you must have a license to harvest lobster commercially, these licenses are issued yearly. The state of Maine is concerned about the dwindling supplies of lobster found off its coast. The state fishery department has decided to place a yearly quota of 80,000 pounds of lobsters harvested in all Maine waters. It has also decided to give licenses this year only to fishermen who had licenses last year. The accompanying diagram shows the demand and supply curves for Maine lobsters. Price of lobster (per pound) 522 20 18 16 14 0 20 40 600 100 120 140 Quantity of lobsters (thousands of pounds). what is the quota rent per pound of lobster when 80,000 pounds are sold?
The quota rent per pound of lobster is the difference between the equilibrium price and the quota price, which is $20 - $16 = $4.
What is the quota rent per pound of lobster when 80,000 pounds are sold?The quota rent per pound of lobster when 80,000 pounds are sold can be determined by analyzing the difference between the equilibrium price and the price at the quota quantity.
In this case, the quota is set at 80,000 pounds, so we need to find the corresponding price on the supply curve. From the diagram, we can see that at a quantity of 80,000 pounds, the price is $16 per pound.
The equilibrium price, where the demand and supply curves intersect, is $20 per pound. Therefore, the quota rent per pound of lobster is the difference between the equilibrium price and the quota price, which is $20 - $16 = $4.
This means that for every pound of lobster sold under the quota, there is a rent of $4 per pound. The quota rent represents the additional price fishermen are willing to pay to obtain the limited licenses and catch the restricted quantity of lobsters.
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Analysis of local, regional and international competitors
for: Singapore Airlines
500-600 words
Singapore Airlines (SIA) is a flag carrier airline in Singapore. The airline is renowned for its high-quality customer service and state-of-the-art amenities. It is an established brand that operates globally and has a strong market presence.
Regional Competitors- There are several regional competitors of SIA, such as Cathay Pacific Airways, Emirates, and Qantas Airways. Cathay Pacific Airways is a Hong Kong-based airline that operates in many of the same markets as SIA, including Southeast Asia, North America, and Europe.
The airline offers a similar level of service as SIA, but at a lower price. Similarly, Emirates is a Dubai-based airline that operates in many of the same markets as SIA. Emirates has been known for its high-quality service, and it has been growing rapidly over the years. This makes it a significant competitor of SIA. Qantas Airways is an Australian airline that operates in many of the same markets as SIA.
The airline has been experiencing challenges in recent years, but it remains a competitor of SIA.International CompetitorsThere are many international airlines that compete with SIA, including Delta Air Lines, British Airways, and Lufthansa.
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In non-price competition, sellers
seek to shift the demand curves of consumers.
seek to shift their supply curves.
move along a demand curve.
reduce prices by being cost efficient.
In non-price competition, sellers- A. seek to shift the demand curves of consumers.
What is it?Non-price competition refers to the use of marketing strategies such as branding, advertising, product differentiation, and product design to attract customers and increase market share.
In non-price competition, firms seek to shift the demand curves of consumers by creating differences in their products that make them more desirable to consumers.
By offering products that are slightly different from those of their competitors, firms can create a loyal customer base that is willing to pay higher prices for their products. This is often done through the use of branding, packaging, and other marketing techniques that emphasize the uniqueness of the product.
In conclusion, sellers seek to shift the demand curves of consumers in non-price competition through marketing and advertising campaigns that emphasize the unique features of their products.
This allows them to capture more market share and charge higher prices for their products.
Hence option a. is correct.
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The following six parts are ALL based on the status quo of company BW.
(1) Company BW has issued 10,000 zero-coupon bonds with a face value of $1,000. Those bonds will mature in 8 years and the current market price is $576.18 per bond. Marginal corporate income tax rate is 20%, find the annual after-tax effective cost of debt.
(2) Company BW has borrowed $2,500,000 from a bank. The nominal interest rate is 6.6% and BW is making monthly payment. Find the annual after-tax effective cost of bank loan.
(3) Company BW has 50,000 shares of preferred stock outstanding. The par value is $10 and dividend rate is 12%. Dividends are paid every six months and the current market price of the preferred is $8.76 per share. Find the annual effective cost of preferred stocks.
(4) Company BW has 1,000,000 shares outstanding and the market price is $22 per share. Investors believe that company BW’s beta is 1.78 and market risk premium is 8.5%. If risk-free 2 rate is 2.5%, which is the cost of common stocks?
(5) Find the overall (annual) cost of capital for BW (WACC), based on questions 4.1—4.4.
The annual after-tax effective cost of debt for Company BW's zero-coupon bonds is approximately $43.36.
(1) The annual after-tax effective cost of debt for Company BW's zero-coupon bonds is calculated by taking into account the marginal corporate income tax rate and the difference between the face value and the current market price of the bonds. In this case, the cost is approximately $43.36 per year.
(2) The annual after-tax effective cost of the bank loan for Company BW is determined by applying the marginal tax rate to the nominal interest rate. With a 6.6% nominal interest rate and a 20% marginal tax rate, the cost of the bank loan is 5.28% per year.
(3) The annual effective cost of preferred stocks for Company BW is calculated by dividing the dividend rate by the current market price of the preferred stock. With a 12% dividend rate and a market price of $8.76 per share, the cost of preferred stocks is approximately 1.37% per year.
(4) The cost of common stocks for Company BW is determined using the Capital Asset Pricing Model (CAPM), taking into account the risk-free rate, beta, and market risk premium. With a beta of 1.78, a risk-free rate of 2.5%, and a market risk premium of 8.5%, the cost of common stocks is approximately 17.63%.
(5) The overall cost of capital (WACC) for Company BW cannot be determined without the weights of each component of capital. The weights of debt, preferred stock, and common stock are needed to calculate the weighted average cost of capital. Without this information, it is not possible to determine the WACC for Company BW.
Therefore, the after-tax effective cost of debt, bank loan, preferred stocks, and common stocks have been calculated, but the overall cost of capital (WACC) cannot be determined without additional information on the weights of each component.
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Inflationary expectations in the economy increase rapidly, evoking a much stronger response from issuers of bonds than borrowers of bonds. Using the model of supply and demand for bonds, illustrate and explain the impact of this increase in inflationary expectation on equilibrium bond price and interest rate.
An increase in inflationary expectations in the economy leads to a stronger response from bond issuers compared to bond borrowers. This has a significant impact on the equilibrium bond price and interest rate.
In the model of supply and demand for bonds, an increase in inflationary expectations affects both the demand and supply of bonds. When inflationary expectations rise, bond issuers anticipate higher future interest rates to compensate for the eroding effect of inflation on the bond's purchasing power. As a result, they respond by increasing the supply of bonds in the market.
On the other hand, bond buyers, who are borrowers of funds, anticipate higher interest payments in the future due to inflation and become less willing to purchase bonds at the current interest rate. This leads to a decrease in bond demand.
The increase in bond supply and decrease in demand create an imbalance in the bond market. To restore equilibrium, bond prices must decrease, and interest rates must increase. The decrease in bond prices raises the yield or interest rate offered on the bonds, which attracts buyers back into the market.
In summary, when inflationary expectations increase, bond issuers respond by increasing the supply of bonds, while bond buyers become less willing to purchase bonds. This results in a decrease in bond prices and an increase in interest rates to restore equilibrium in the bond market.
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Which bond is more sensitive to an interest rate change of 1 percent? Bond Alpha: Yield to maturity = 4.00%, maturity = 8 years, coupon = 6% or £6, face value = £100. OR Bond Beta: Yield to maturity = 3.50%, maturity = 5 years, coupon = 7% or £7, face value = £100.
1) Bond Beta
2) Bond Alpha
3) Cannot be determined
4) Both are equally sensitive
Bond Alpha is more sensitive to an interest rate change of 1 percent compared to Bond Beta.
To determine the bond that is more sensitive to an interest rate change, we need to consider the concept of duration. Duration measures the sensitivity of a bond's price to changes in interest rates. The longer the duration, the more sensitive the bond is to interest rate fluctuations.
In this case, Bond Alpha has a yield to maturity of 4.00% and a maturity of 8 years, while Bond Beta has a yield to maturity of 3.50% and a maturity of 5 years. By comparing their maturities, we can infer that Bond Alpha has a longer duration compared to Bond Beta. Additionally, Bond Alpha's coupon rate is 6%, while Bond Beta's coupon rate is 7%. A lower coupon rate generally implies a longer duration.
Considering the longer maturity and lower coupon rate of Bond Alpha, it indicates that Bond Alpha will have a higher duration and, therefore, be more sensitive to changes in interest rates. Therefore, Bond Alpha is more sensitive to an interest rate change of 1 percent compared to Bond Beta.
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.The ledger of Swifty Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared
Debit Credit
Prepaid Insurance $1,968
Supplies 2,050
Equipment 24,600
Accumulated Depreciation-Equipment $58,172
Notes Payable 18,030
Unearned Rent Revenue 7,380
Rent Revenue 64,620
Interest Expense -0-
Salaries and Wages Expense 13,670
An analysis of the accounts shows the following
1. The equipment depreciates $259 per month.
2. One-third of the unearned rent was earned as revenue during the quarter
3. The interest of $520 is accrued on the notes payable.
4. Supplies on hand total $640.
5. The insurance expires at the rate of $279 per month.
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expenses. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
After making these adjusting entries, the accounts will reflect the appropriate balances and recognize the expenses, revenues, and liabilities accurately.
The adjusting entries at March 31 are as follows:
Depreciation Expense:
Equipment depreciates $259 per month. Therefore, the depreciation expense for the quarter (3 months) is $777.
Depreciation Expense $777
Accumulated Depreciation-Equipment $777
Insurance Expense:
The prepaid insurance account has a balance of $1,968, and it expires at the rate of $279 per month. So, the insurance expense for the quarter is $837 ($279 x 3).
Insurance Expense $837
Prepaid Insurance $837
Interest Payable:
The interest expense on the notes payable is $520, which needs to be accrued.
Interest Expense $520
Interest Payable $520
Supplies Expense:
The supplies on hand total $640, and the beginning balance of the supplies account is $2,050. Therefore, the supplies expense for the quarter is $1,410 ($2,050 - $640).
Supplies Expense $1,410
Supplies $1,410
Unearned Rent Revenue:
One-third of the unearned rent revenue was earned as revenue during the quarter. One-third of $7,380 is $2,460.
Unearned Rent Revenue $2,460
Rent Revenue $2,460
No adjusting entry is needed for Interest Expense, as it is already at $0.
After making these adjusting entries, the accounts will reflect the appropriate balances and recognize the expenses, revenues, and liabilities accurately.
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