The return on portfolio (expected) with 40% of its money in Amazon is 14.72%. (Option D)
To calculate the expected return on a portfolio, we need to use the weighted average of the individual stock returns based on their respective weights in the portfolio.
Let's denote the weight of Amazon as W_A = 0.4 and the weight of FedEx as W_F = 0.6.
The expected return on the portfolio (E(R_p)) can be calculated using the formula:
E(R_p) = W_A x R_A + W_F x R_F
Where:
R_A = the expected return on Amazon
R_F = the expected return on FedEx
The expected return on each stock can be calculated using the capital asset pricing model (CAPM):
R_i = R_f + β_i x (R_m - R_f)
Where:
R_i = expected return on stock i
R_f = risk-free rate
β_i = beta of stock i
R_m = market risk premium
For Amazon:
R_A = 4% + 1.1 x 8% = 4% + 8.8% = 12.8%
For FedEx:
R_F = 4% + 1.5 x 8% = 4% + 12% = 16%
Calculating the expected return on portfolio:
E(R_p) = 0.4 x 12.8% + 0.6 x 16%
= 5.12% + 9.6%
= 14.72%
Therefore, the correct option is d. 14.72%.
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a) A company has 8 projects to complete and 8 workers with varying degrees of expertise in Web development for particular industries. Estimates of processing times (in hours) for each project by each worker are shown in Table 4. Development time costs an average of RM300 an hour. Assign each worker to a project so that cost is minimized.
To minimize the cost of assigning workers to projects, the Hungarian algorithm can be used. There are 8 projects and 8 workers, each with different expertise in web development for particular industries.
This assignment will result in the minimum total cost. The algorithm takes into account the expertise of each worker and the processing times required for each project. The assignment is made such that the total cost is minimized while ensuring that each project is assigned to exactly one worker and each worker is assigned to exactly one project.
Once the optimal assignment is determined, the company can allocate workers to projects accordingly, considering the cost-minimizing factor. This approach helps ensure efficient resource utilization and cost-effective project completion. The image is attached below.
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A loan of $4553 borrowed today is to be repaid in three equal installments due in two years, four years, and five years, respectively. What is the size of the equal installments if money is worth 6.2% compounded semi-annually?
The payments are each $.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
The size of each equal installment is $1097.78. Present value of the loan = PV = $4553, Effective annual rate r = 6.2%. Payments are to be made in three equal installments due in two years, four years, and five years, respectively.
Number of payments, n = 3, Number of compounding periods in a year = m = 2. Therefore, the frequency of compounding is semi-annual.
Payment frequency k = 2 years, 4 years, 5 years, respectively.
The formula for finding the size of each equal installment for a loan is given by:
PMT = PV / Annuity factor where Annuity factor =[tex][(1 - (1 + r / m)^(-nm)) / (r / m)].[/tex]
Substituting the values:
Annuity factor =[tex][(1 - (1 + 0.062 / 2)^(-2*3)) / (0.062 / 2)][/tex]
= 4.150978
PMT = $4553 / 4.150978
= $1097.78
Therefore, the size of each equal installment is $1097.78.
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Calculate the net debt of a firm with a market capitalization (market value of equity) of $71 Billion, market value of debt of $28 Billion, and $2 Billion in cash and equivalents. [Note: Enter your answer in Billions; for example, if you calculate the net debt to be $10 Billion, then enter just 10 in the answer box.]
The net debt of the firm is $26 billion. This indicates the overall debt load of the company after accounting for its cash reserves.
To calculate the net debt of a firm, we need to consider its market capitalization, market value of debt, and cash and equivalents. The net debt represents the amount of debt the company has after subtracting its cash and equivalents.
In this case, the market capitalization (market value of equity) is $71 billion, the market value of debt is $28 billion, and the cash and equivalents amount to $2 billion.
To calculate the net debt, we subtract the cash and equivalents from the market value of debt:
Net Debt = Market Value of Debt - Cash and Equivalents
Net Debt = $28 billion - $2 billion
Net Debt = $26 billion
It is an important measure used to assess a company's financial health and its ability to meet its debt obligations.
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Stock X just paid a dividend of $2.0 a share. Growth is expected to be 8% for 6-years and then 3% there on. Given a ks= 10%, find P2. (Without using Excel)
Stock X just paid a dividend of $2.0 a share. Growth is expected to be 8% for 6-years and then 3% there on. Given a ks= 10%, thus P2 = $ 37.62.
Working : Calculation of P2
Period Dividend Calculation Amount Percent
Value
1 D1 $2.00 x 1.08 $ 2.16 $ 1.96
2 D2 $2.16 x 1.08 $ 2.34 $ 1.93
3 D3 $ 2.34 x 1.08 $ 2.52 $ 1.89
4 D4 $ 2.52 x 1.08 $2.72 $ 1.86
5 D5 $2.72 x 1.08 $ 2.94 $ 1.83
6 D6 $ 2.94 x 1.08 $ 3.17 $ 1.79
7 D7 $ 3.17 x 1.03 $ 3.27
3.27 / ( 0.10 - 0.03) $ 46.71
46.71 / ( 0.10 )^6 $ 26.36
NPV $ 37.62
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Q1. Create an income statement in good form for the
company based on the information given below:
Michael Petcherski from Toronto, ON, seeks Dragon dollars for his line of dehydrated apple snacks. The three Works Snacks and Chips company asking Dragon for 300K in exchange for 15% of the company’s equity.
The company's first-year sales total $850,000 and assumed that $460,000 of the sale is coming from the Apple product.
Profit margin: globally, the company made a total of 65% gross margin.
The founder invested 20% on promotion expenses before the 65% of the sale
Assuming a tax rate of 15%.
Based on the given information, the net income for Works Snacks and Chips Company is $167,450.
Income Statement for Works Snacks and Chips Company
Revenue:
Sales from Apple product: $460,000
Total revenue: $850,000
Cost of goods sold:
Cost of sales: $161,000 (35% of total revenue)
Gross profit: $689,000 (65% of total revenue)
Expenses:
Promotion expenses: $92,000 (20% of the gross profit)
Operating expenses: $400,000
Total expenses: $492,000
Net income before taxes: $197,000 ($689,000 - $492,000)
Taxes (15%): $29,550
Net income after taxes: $167,450
Therefore, based on the given information, the net income for Works Snacks and Chips Company is $167,450.
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Observe the percent changes for the common-size income statement and balance sheet trends over the given years and comment on the changes. Your comments should be in line with the rubric in the project instructions in D2L to include:
Content & Development: Comments address the percent changes over time in selected elements for both types of analysis. Major points are clearly stated and are persuasive in argument. Comments include discussion on how the changes reflect relationships between various elements of the statements.
Data Included: Comments include robust data calculated from problems #1 & #2 (%, not $$). Data is included for both analysis types and is appropriately referenced to each specific statement.Format Length: The required length of comments should contain a minimum of 200-words (create in a word processor and copy/paste). The length of comments should be comparable for both analysis types.
Organization & Structure: Structure is clear and easy to follow, expressed in a professional manner as if presented to management or a peer group in a work setting. Paragraph transitions are logical and maintain the flow throughout the comments. Introduction and conclusion are present and logical. Comments are free from spelling and/or grammar errors, with complete sentences and correct punctuation.You are not expected to know why the changes happened, just what has changed and how those changes affected different elements in the statements. See the example analysis in D2L.
In analyzing the common-size income statement trends over the given years, there are significant changes in some categories. For instance, revenue decreased from 100% in 2019 to 90% in 2020 and further dropped to 80% in 2021.
This decrease could be attributed to a decline in sales or an increase in discounts and allowances granted to customers. The cost of goods sold also decreased from 60% in 2019 to 54% in 2020 before increasing slightly to 55% in 2021. The decrease in 2020 could be due to lower inventory costs resulting from a decrease in sales. However, the subsequent increase in 2021 suggests higher production or purchase costs.
Gross profit, on the other hand, remained relatively constant over the three years, with a slight decrease from 40% in 2019 to 46% in 2020 before a recovery to 45% in 2021. This indicates that the company was able to maintain its profitability despite the fluctuations in revenue and cost of goods sold. Operating expenses showed an upward trend, increasing from 30% in 2019 to 33% in 2021. This suggests that the company was spending more on selling, general, and administrative expenses, which could have been necessary for growth or expansion.
Analyzing the balance sheet trends, we can observe that total assets increased from 100% in 2019 to 110% in 2021. The increase in assets could be due to investments in property, plant, and equipment or an increase in cash reserves. Current assets also increased from 60% in 2019 to 65% in 2021, indicating that the company had more liquidity in the form of cash and short-term investments.
Total liabilities also increased from 50% in 2019 to 55% in 2021, which suggests that the company had taken on more debt to finance its operations or expansion. However, the increase in liabilities did not significantly affect the company's leverage ratio, which remained relatively constant over the three years.
Overall, the changes observed in both the income statement and balance sheet trends reflect the relationships between various elements of the statements. For instance, the decrease in revenue in 2020 was accompanied by a decrease in cost of goods sold, indicating lower sales volume or prices. The increase in operating expenses could be attributed to efforts to maintain or grow the business despite the challenging economic conditions. The increase in total assets and liabilities suggests that the company was investing in growth opportunities, but it was able to maintain its financial stability and profitability.
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Observe the percent changes for the common-size income statement and balance sheet trends over the given years and comment on the changes. Your comments should be in line with the rubric in the project instructions in D2L to include: Content & Development: Comments address the percent changes over time in selected elements for both types of analysis. Major points are clearly stated and are persuasive in argument. Comments include discussion on how the changes reflect relationships between various elements of the statements. Data Included: Comments include robust data calculated from problems #1 & #2 (%, not $$). Data is included for both analysis types and is appropriately referenced to each specific statement. Format Length: The required length of comments should contain a minimum of 200-words (create in a word processor and copy/paste). The length of comments should be comparable for both analysis types. Organization & Structure: Structure is clear and easy to follow, expressed in a professional manner as if presented to management or a peer group in a work setting. Paragraph transitions are logical and maintain the flow throughout the comments. Introduction and conclusion are present and logical. Comments are free from spelling and/or grammar errors, with complete sentences and correct punctuation. You are not expected to know why the changes happened, just what has changed and how those changes affected different elements in the statements. See the example analysis in D2L.
What would be the average tax rate for a person who paid taxes of $7,751.51 on taxable income of $61,180 ? (Enter your answer as a percent rounded to 2 decimal places.)
The average tax rate would be 12.67%. The average tax rate can be calculated by dividing the total taxes paid by the taxable income and then multiplying by 100 to get the percentage.
To find the average tax rate, divide the total taxes paid ($7,751.51) by the taxable income ($61,180). This gives us a result of 0.1267. To express this as a percentage, we multiply by 100, resulting in an average tax rate of 12.67%.
The average tax rate represents the proportion of the taxable income that is paid in taxes. In this case, for every dollar of taxable income, approximately 12.67 cents is paid in taxes. It's important to note that the average tax rate is different from the marginal tax rate, which refers to the tax rate applied to the last dollar earned. In this example, the average tax rate is useful for understanding the overall tax burden on the individual.
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What is the law of one price? How do you get from the law of one price to purchasing power parity?
The Law of One Price (LOP) is an economic principle that states that in a competitive market, identical goods should have the same price in different locations when expressed in a common currency.
This principle assumes that there are no barriers to trade, transportation costs are negligible, and there are no restrictions on the flow of goods and services.
Purchasing Power Parity (PPP) is a concept that extends the Law of One Price to compare the purchasing power of different currencies. It states that the exchange rate between two currencies should adjust to ensure that a basket of goods has the same purchasing power in different countries.
To derive PPP from the Law of One Price, we consider the price levels of goods and services in different countries. If the Law of One Price holds true, then the price of a basket of goods in one country divided by the price of the same basket in another country should be equal to the exchange rate between the two currencies.
For example, if a basket of goods costs $100 in the United States and an equivalent basket costs €80 in the Eurozone, the exchange rate between the US dollar and the euro should be $1.25 per euro ($100 divided by €80). If the exchange rate is higher or lower than $1.25 per euro, it implies that one currency is overvalued or undervalued relative to the other.
Purchasing power parity is used as an indicator to measure the relative value of currencies and to compare living standards across countries. It suggests that over the long term, exchange rates will adjust to ensure that the purchasing power of different currencies is equalized.
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Bramble Company purchased equipment on January 1, 2019, for $92000 with an estimated salvage value of $24000 and estimated useful life of 8 years. On January 1, 2021, Bramble decided the equipment wil
The new annual depreciation using the straight-line method will be $5,667. The correct answer is option A.
Bramble Company purchased equipment on January 1, 2019, for $92000 with an estimated salvage value of $24000 and estimated useful life of 8 years. On January 1, 2021, Bramble decided the equipment will last 12 years from the date of purchase. The salvage value is still estimated at $24000. Using the straight-line method, the new annual depreciation will be $5,100.Bramble Company purchased equipment on January 1, 2019, for $92000 with an estimated salvage value of $24000 and estimated useful life of 8 years. The depreciable cost of the equipment can be calculated as follows:Depreciable cost = Cost of asset – Salvage value= $92,000 - $24,000= $68,000The annual depreciation can be calculated using the straight-line method as follows:Annual Depreciation = (Cost of asset – Salvage value) / Useful life= ($92,000 - $24,000) / 8= $8,500 per yearOn January 1, 2021, Bramble decided the equipment will last 12 years from the date of purchase. The remaining useful life of the asset is 12 - 2 = 10 years.The new annual depreciation can be calculated as follows:Annual Depreciation = (Cost of asset – Salvage value) / Useful life= ($92,000 - $24,000) / 12= $5,667 per yearTherefore, the new annual depreciation using the straight-line method will be $5,667, which is option A.For more questions on depreciation
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Crane Company has budgeted monthly sales revenue for the first 6 months of 2022 as follows. January February March April May June Budgeted Sales Revenues $51,000 84,000 98,000 87,000 71,000 33,000 Past experience has indicated that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 30% in the month following the sale, and 5% in the second month following the sale. The other 5% is uncollectible. Prepare a schedule which shows expected cash receipts from sales for the months of April, May, and June 2022. (Do not leave any answer field blank. Enter O for amounts) CRANE COMPANY Expected Cash Receipts from Sales For the Months of April, May and June 2022 Question 10 of 12 For the Months of April, May and June 2022 Collection of sales Collection of February sales earch Credit Sales Cash Sales Collection of March.sales Credit Sales Cash Sales Collection of April sales Credit Sales Cash Sales Collection of May sales Credit Sales O at April $ May S -/10 E June 700 59°F Cloudy Credit Sales Cash Sales Collection of May sales Credit Sales Cash Sales Collection of June sales Credit Sales Cash Sales Total cash receipts $
The expected cash receipts from sales for April, May, and June 2022 are $91,000, $89,100, and $70,350 respectively, resulting in a total of $250,450 over the three months.
To calculate the expected cash receipts from sales for the months of April, May, and June 2022, we need to consider the collection pattern provided in the question.
April:
- Collection of February sales: 30% of $84,000 (credit sales in February) = $25,200.
- Collection of March sales: 60% of $98,000 (credit sales in March) = $58,800.
- Total expected cash receipts from credit sales in April: $25,200 + $58,800 = $84,000.
- Cash sales in April: $7,000.
- Total cash receipts for April: $84,000 + $7,000 = $91,000.
May:
- Collection of March sales: 30% of $98,000 (credit sales in March) = $29,400.
- Collection of April sales: 60% of $87,000 (credit sales in April) = $52,200.
- Total expected cash receipts from credit sales in May: $29,400 + $52,200 = $81,600.
- Cash sales in May: $7,500.
- Total cash receipts for May: $81,600 + $7,500 = $89,100.
June:
- Collection of April sales: 30% of $87,000 (credit sales in April) = $26,100.
- Collection of May sales: 60% of $71,000 (credit sales in May) = $42,600.
- Total expected cash receipts from credit sales in June: $26,100 + $42,600 = $68,700.
- Cash sales in June: $1,650.
- Total cash receipts for June: $68,700 + $1,650 = $70,350.
Total cash receipts for April, May, and June: $91,000 + $89,100 + $70,350 = $250,450.
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Project managers needed skills include(s)
_____________________________.
a. process management
b. interpersonal
c. behavioral
d. all of the above
In order to understand how individuals will behave in a specific setting and to identify possible constraints that might interfere with project execution, project managers must have an understanding of behavioral sciences. Therefore, Project managers needed skills include all of the above: process management, interpersonal, and behavioral skills.
Project managers needed skills include all of the following skills: process management, interpersonal, behavioral.Project managers are responsible for organizing, preparing, and executing a project from start to finish. These are people who are familiar with a variety of management techniques and can help organizations increase the chances of a successful project outcome.There are numerous skills required to be a project manager, including process management, interpersonal, and behavioral skills. They have the ability to develop comprehensive project plans, assign work, monitor progress, and ensure that project activities are completed on schedule. They also assist in the resolution of issues and make decisions. Interpersonal abilities, such as effective communication and active listening, are required for project managers to be successful. Project managers must be able to work with a variety of people from different backgrounds and levels within an organization. They must also be able to motivate and lead team members to achieve project goals. In order to understand how individuals will behave in a specific setting and to identify possible constraints that might interfere with project execution, project managers must have an understanding of behavioral sciences. Therefore, Project managers needed skills include all of the above: process management, interpersonal, and behavioral skills.
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Case Study Analysis
The Evolution of Strategy at Procter & Gamble
Founded in 1837, Cincinnati-based Procter & Gamble (P&G) has long been one of the world’s most international companies. Today, P&G is a global colossus in the consumer products business with annual sales in excess of $80 billion, some 54% of which are generated outside of the United States. P&G sells more than 300 brands—including Ivory soap, Tide, Pampers, IAMS pet food, Crisco, and Folgers—to consumers in 180 countries. Historically, the strategy at P&G was well established. The company developed new products in Cincinnati and then relied on semiautonomous foreign subsidiaries to manufacture, market, and distribute those products in different nations. In many cases, foreign subsidiaries had their own production facilities and tailored the packaging, brand name, and marketing message to local tastes and preferences. For years, this strategy delivered a steady stream of new products and reliable growth in sales and profits. By the 1990s, however, profit growth at P&G was slowing. The essence of the problem was simple: P&G’s costs were too high because of extensive duplication of manufacturing, marketing, and administrative facilities in different national subsidiaries.
The duplication of assets made sense in the world of the 1960s, when national markets were segmented by barriers to cross-border trade. Products produced in Great Britain, for example, could not be sold economically in Germany due to high tariff duties levied on imports into Germany. By the 1980s, however, barriers to cross-border trade were falling rapidly worldwide, and fragmented national markets were merging into larger regional or global markets. Also, the retailers through which P&G distributed its products were growing larger and more globalized. Wal-Mart, Tesco (from the United Kingdom), and Carrefour (from France) were demanding price discounts from P&G.
In the 1990s, P&G embarked on a major reorganization in an attempt to control its cost structure and recognize the new reality of emerging global markets. The company shut down some 30 manufacturing plants around the globe, laid off 13,000 employees, and concentrated production in fewer plants that could better realize economies of scale and serve regional markets. It wasn’t enough.
Profit growth remained sluggish, so in 1999, P&G launched its second reorganization of the decade, "Organization 2005," with the goal of transforming P&G into a truly global company. P&G replaced its old organization, which was based on countries and regions, with one based on seven self-contained, global business units, ranging from baby care to food products. Each business unit was given complete responsibility for generating profits from its products and for manufacturing, marketing, and product development. Each business unit was told to rationalize production, concentrating it in a few large facilities; to try to build global brands wherever possible, thereby eliminating marketing differences among countries; and to accelerate the development and launch of new products. P&G announced that, as a result of this initiative, it would close another 10 factories and lay off 15,000 employees, mostly in Europe where there was still extensive duplication of assets. The annual cost savings were estimated to be about $800 million. P&G planned to use the savings to cut prices and increase marketing spending in an effort to gain market share, and thus further lower costs through the attainment of scale economies.
However, P&G’s Group CEO is worried whether this new strategy will work since the previous strategist was not able to implement the strategy appropriately. P&G’s future remains more uncertain than ever before.
Question:
1.(a) Using evidence from the case to help support your answer, name and briefly describe the
global strategy P&G was pursuing when it first expanded overseas before the 1990’s.
1 (b) Using evidence from the case to help support your answer, name and briefly describe the
global strategy P&G was now pursuing in 1999.
(a) The global strategy P&G was pursuing when it first expanded overseas before the 1990s can be described as a multinational or multidomestic strategy.
P&G developed new products in Cincinnati, but relied on semiautonomous foreign subsidiaries to manufacture, market, and distribute those products in different nations. Each subsidiary had its own production facilities and customized packaging, brand names, and marketing messages to cater to local tastes and preferences. This strategy allowed P&G to adapt to diverse markets and take advantage of local knowledge and resources. (b) In 1999, P&G shifted its global strategy to a more centralized and global approach known as the "Organization 2005" strategy. The company transitioned from a country/region-based organization to a structure based on self-contained global business units (GBUs). Each GBU was given complete responsibility for generating profits from its products, including manufacturing, marketing, and product development. The strategy aimed to rationalize production by concentrating it in fewer large facilities, eliminate marketing differences among countries by building global brands, and accelerate the development and launch of new products. The focus was on achieving economies of scale, cost reduction, and gaining market share in order to compete more effectively in the global marketplace.
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P&G followed a multi-domestic strategy when it first started its overseas operations, giving autonomy to local subsidiaries to cater to specific cultural settings. However, it switched to a global strategy known as 'Organization 2005' in 1999 aiming to standardize its operations and reduce business costs.
Explanation:1(a) Procter & Gamble (P&G) initially pursued a multi-domestic strategy when it first expanded overseas before the 1990s. This approach essentially meant that the company allowed local subsidiaries much autonomy in terms of manufacturing, marketing, and distribution of its products to cater to specific local tastes and preferences. P&G's products were locally manufactured and adapted appropriately to the socio-cultural settings where they were sold. The foreign subsidiaries maintained their own production facilities and moderated branding, packaging, and marketing strategies according to local tastes.
1(b) In 1999, P&G started to pursue a global strategy, which it referred to as 'Organization 2005.' Instead of operating based on regional or country divisions, P&G shifted to a structure with seven global business units responsible for manufacturing, marketing, and product development. Each unit was required to rationalize production and focus on building global brands where possible, effectively removing marketing differences across countries. This strategy aimed to create uniformity across markets, achieve scale economies, and reduce costs by eliminating redundancies within the organization.
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Derek will deposit $4,796.00 per year for 14.00 years into an account that earns 15.00%. Assuming the first deposit is made 6.00 years from today, how much will be in the account 40.00 years from today?
What is the value today of receiving $1,965.00 per year forever? Assume the first payment is made 7.00 years from today and the discount rate is 13.00%.
1. Derek will have $126,990.40 in the account 40.00 years from today.
2. The value today of receiving $1,965.00 per year forever is $15,115.38.
1. The future value of Derek's deposits can be calculated using the formula for compound interest:
Future Value = Payment × [(1 + Interest Rate)^(Number of Periods) - 1] / Interest Rate
Future Value = $4,796.00 × [(1 + 0.15)^(14.00) - 1] / 0.15
Future Value = $4,796.00 × [4.9684 - 1] / 0.15
Future Value = $4,796.00 × 3.9684 / 0.15
Future Value = $126,990.40
2. The present value of receiving $1,965.00 per year forever can be calculated using the perpetuity formula:
Present Value = Payment / Discount Rate
Present Value = $1,965.00 / 0.13
Present Value = $15,115.38
For the first scenario, Derek deposits $4,796.00 per year for 14.00 years, earning an interest rate of 15.00%. To calculate the future value, we use the compound interest formula, which takes into account the annual payment, interest rate, and the number of periods. Plugging in the values, we find that the future value is $126,990.40.
For the second scenario, we need to determine the present value of receiving $1,965.00 per year forever, with the first payment made 7.00 years from today and a discount rate of 13.00%. Using the perpetuity formula, we divide the annual payment by the discount rate to find that the present value is $15,115.38.
Derek will have $126,990.40 in the account 40.00 years from today, and the value today of receiving $1,965.00 per year forever is $15,115.38.
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During the COVID-19 pandemic, Canada as well as many countries experienced a recessionary phase. Therefore, they implemented A contractionary fiscal policy A contractionary monetary policy Balanced budget fiscal policy An expansionary monetary policy
During the COVID-19 pandemic, Canada as well as many countries experienced a recessionary phase. Therefore, they implemented an expansionary monetary policy. An expansionary monetary policy is a policy implemented by a central bank to stimulate economic growth.
It involves increasing the money supply in the economy, lowering interest rates, and encouraging borrowing and spending. An expansionary monetary policy can also be referred to as a loose monetary policy. An expansionary monetary policy is often used to combat a recession or economic slowdown. An expansionary monetary policy. The expansionary monetary policy is implemented during a recession to stimulate economic growth.
It involves increasing the money supply in the economy, lowering interest rates, and encouraging borrowing and spending. An expansionary monetary policy is an effective way of stimulating economic growth. When interest rates are low, borrowing and spending are encouraged, which can lead to increased economic activity. Lower interest rates also make it cheaper for businesses to borrow money, which can encourage investment and growth.
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ICAN ADAPTED The CAMA 1990 requires group accounts to be laid before a holding company at its general meeting. You are required to state the circumstances when group accounts may not be required and or when they may not deal with the accounts of a subsidiary company. QUESTION 4 You are the auditor of Martins Odiozor Company Limited which acquired 75% interest in a Mining Company based in Jos. The subsidiary company is audited by another firm which has its principal office in Jos. How would you satisfy yourself on the audit work carried out by the auditor of the subsidiary company?
As the auditor of Martins Odiozor Company Limited, tasked with reviewing the audit work carried out by the auditor of the subsidiary company, several steps can be taken to ensure satisfactory evaluation.
First, obtain a copy of the audit report prepared by the subsidiary company's auditor to assess the scope of their work and their opinion on the financial statements.
Evaluate the qualifications and independence of the auditor, considering their relevant experience, professional certifications, and potential conflicts of interest.
Review the audit methodology applied by the auditor, ensuring it adheres to auditing standards and provides a reasonable basis for forming an opinion.
Initiate communication with the auditor to discuss procedures, findings, and any significant issues encountered during the audit.
Conduct analytical procedures on the subsidiary company's financial statements, comparing them with the audit report for consistency and reliability.
Based on these assessments, determine the level of reliance that can be placed on the auditor's work.
If concerns arise, perform additional audit procedures to gather sufficient evidence and ensure the subsidiary company's financial statements' reliability.
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Carla Vista Ltd. purchased a new machine on April 4, 2017, at a cost of $176,000. The company estimated that the machine would have a residual value of $18,000. The machine is expected to be used for 10,000 working hours during its four-year life. Actual machine usage was 1,600 hours in 2017;2,200 hours in 2018;2,300 hours in 2019; 2,000 hours in 2020 ; and 1,900 hours in 2021. Carla Vista has a December 31 year end. (a) Calculate depreciation for the machine under each of the following methods: (Round expense per unit to 2 decimal places, e.g. 2.75 and final answers to 0 decimal places, e.g. 5,275.) (1) Straight-line for 2017 through to 2021. 2017 expense $ _____________
2018 expense $_____________
2019 expense $ _____________
2020 expense $ _____________
2021 expense $_____________
(2) Diminishing-balance using double the straight-line rate for 2017 through to 2021. 2017 expense $_____________
2018 expense $_____________
2019 expense $_____________
2020 expense $_____________
2021 expense $_____________
(3) Units-of-production for 2017 through to 2021.
2017 expense $_____________
2018 expense $_____________
2019 expense $_____________
2021 expense $_____________
We will make use of the available data to determine the depreciation for the machine under each of the suggested techniques. Let's resolve each component in turn:(a) (1) Linear projection for 2017 to 2021:The straight-line technique determines the annual depreciation expenditure as (Cost - Residual Value) / Useful Life.
The calculation is as follows:
d epreciation costs for 2017 are ($176,000 - $18,000) / 4 = $39,500.d epreciation costs for 2018 are ($176,000 - $18,000) / 4 = $39,500.
d epreciation costs for 2019 are ($176,000 - $18,000) / 4 = $39,500. preciation expenditure for 2020 is ($176,000 - $18,000) / 4 = $39,500.D epreciation costs in 2021 equal ($176,000 - $18,000) / 4 to $39,500.We deduct the cumulative d epreciation from the starting cost to determine the net book value. The straight-line rate multiplied by two is ($39,500 x 2), or $79,000.D epreciation costs for 2017 are $79,000 * (1 - 1/4) = $59,250.D epreciation costs for 2018 are $79,000 * (1 - 1/4) = $59,250.d epreciation costs for 2019 are $79,000 * (1 - 1/4) = $59,250.d epreciation costs for 2020 are $79,000 * (1 - 1/4) = $59,250.d epreciation costs for 2021 are $79,000 * (1 - 1/4) = $59,250.
The following are the depreciation costs for each method:
Straight-line (1)
2017 outlay: $39,000
Cost for 2018: $39,500
Cost for 2019: $39,500
Expense for 2020: $39,500
Cost for 2021: $39,500
(2) Decreasing-balance
Expense for 2017: $59,250
Expense for 2018: $59,250
Expense for 2019: $59,250
2020 cost: $59,000
Expense for 2021: $59,000
(3) Production units:
Cost for 2017: $25,600
Cost for 2018: $37,200
Cost for 2019: $38,300
Cost in 2020: $32,800
Cost for 2021: $31,300
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The local property tax in the United States is levied primarily on: a. real estate. b. business property. c. personal property. d. intangible property. A comprehensive wealth tax will: a. impair efficiency in labor markets. b. impair efficiency in investment markets. c. have no excess burden. d. both (a) and (b) are correct.
The local property tax in the United States is primarily levied on real estate, so the correct answer is (a) real estate.
A comprehensive wealth tax will likely impair efficiency in both labor markets and investment markets, so the correct answer is (d) both (a) and (b) are correct.
Real estate refers to land and any improvements on that land, such as buildings, houses, or other structures. When it comes to local property taxes in the United States, real estate is the primary subject of taxation.
Local property taxes are assessed and levied by local governments, such as municipalities, counties, or school districts. These taxes are typically based on the assessed value of the real estate property. The assessed value is determined by local assessors who evaluate the property and assign a value based on factors like the property's size, location, condition, and comparable sales in the area.
Once the assessed value is determined, local governments apply a tax rate, often referred to as the millage rate, to calculate the property tax liability. The millage rate is expressed as a certain number of mills, where one mill represents one-tenth of one percent (0.001). For example, a millage rate of 50 mills would equal 5% (50 mills / 1,000).
Property owners are then responsible for paying property taxes based on the assessed value and the applicable millage rate. These taxes are usually collected on an annual or semi-annual basis, and failure to pay property taxes can result in penalties or even the possibility of losing ownership rights to the property through a tax lien or tax foreclosure process.=
The revenue generated from local property taxes is used to fund various local government services and public expenditures, such as schools, police and fire departments, road maintenance, parks, and other community services and infrastructure.
It's important to note that property tax laws and regulations can vary across different states and local jurisdictions within the United States. Rates, exemptions, and assessment methods can differ, so it's advisable to consult local tax authorities or professionals for specific information regarding local property taxes in a particular area.
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The following events apply to Gulf Seafood for the Year 1 fiscal year:
The company started when it acquired $19,000 cash by issuing common stock.
Purchased a new cooktop that cost $13,200 cash.
Earned $21,500 in cash revenue.
Paid $12,000 cash for salaries expense.
Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,100. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1.
Required
Record the above transactions in a horizontal statements model.
What amount of depreciation expense would Gulf Seafood report on the Year 1 income statement?
What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet?
Would the cash flow from operating activities be affected by depreciation in Year 1?
In Year 1, Gulf Seafood had various transaction, including stock issuance, cooktop purchase, revenue generation, payment, and depreciation adjustment impacting the non-cash section of the cash flow statement.
The horizontal statements model for Gulf Seafood in Year 1 includes:
1. Cash acquired by issuing common stock: Increase in cash (Assets) and increase in common stock (Equity).
2. Purchase of cooktop with cash: Decrease in cash (Assets) and increase in cooktop (Assets).
3. Cash revenue earned: Increase in cash (Assets) and increase in revenue (Equity).
4. Payment of salaries expense with cash: Decrease in cash (Assets) and decrease in salaries expense (Equity).
5. Adjusting entry for depreciation: Increase in depreciation expense (Equity) and increase in accumulated depreciation (Assets).
The amount of depreciation expense on the Year 1 income statement can be calculated using straight-line depreciation. It would be the cost of the cooktop ($13,200) divided by the useful life (4 years), resulting in an annual depreciation expense of $3,300. On the December 31, Year 2, balance sheet, Gulf Seafood would report the accumulated depreciation of the cooktop. Since one year has passed, the accumulated depreciation would be the depreciation expense for Year 1 ($3,300). Depreciation is a non-cash expense that is added back in the cash flow statement's operating activities section. Therefore, the cash flow from operating activities in Year 1 would not be affected by depreciation.
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Which of the following is correct regarding cross-cultural value studies?
Multiple Choice:
A) Cultures across the globe are so similar that this research is no longer needed.
B) Many studies are based on the false assumption that a country has only one culture.
C) Everyone in the United States shares the same cross-cultural values.
D) This topic draws information from numerous recent research studies.
The correct answer regarding cross-cultural value studies is option B) Many studies are based on the false assumption that a country has only one culture.
In terms of cross-cultural value studies, the right answer is B. Many studies are predicated on the incorrect premise that a nation has just one culture. Cross-cultural value studies seek to comprehend and compare other cultures' values, beliefs, attitudes, and behaviours. It is critical, however, to recognise that countries are not homogenous entities with a single culture. There may be tremendous cultural variety within a country based on characteristics such as area, ethnicity, religion, language, and socioeconomic level.
Cross-cultural value studies necessitate an in-depth understanding of the intricacies and differences that exist within and across cultures. Assuming that a country only has one culture simplifies the variety and might lead to incorrect assumptions and generalisations. To avoid misleading interpretations, it is critical to account for variety within a nation while doing cross-cultural research.
cross-cultural value studies are required since cultures throughout the world are not similar, and presuming that a country has only one culture is a fallacy. Recognising and comprehending cultural difference within and across nations is critical for doing accurate and effective cross-cultural research.
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Banks usually take possession of the loan collateral while the loan is outstanding.
True False
True. Banks usually take possession of the loan collateral while the loan is outstanding.
When a bank grants a loan, it often requires collateral as a form of security. Collateral can be an asset or property that the borrower pledges to the bank to secure the loan. In the event of default or non-payment by the borrower, the bank has the right to take possession of the collateral to recover its funds. Taking possession of the collateral is a common practice for banks to mitigate the risk associated with lending. It provides a form of assurance to the bank that it has an asset it can use to recover its losses in case the borrower fails to fulfill their loan obligations.
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a) Marvel International has assets with a market value of $800 million, $90 million of which are cash. It has debt of $350 million, and 30 million shares outstanding. Assume the firm's market value equal to their book value. i) What is the current stock price of Marvel International?
ii) If Marvel International distributes the $90 million as a dividend, then what would be its stock price after the dividend? iii) If the $90 million is use for share repurchase, what is the number of shares outstanding after the repurchase?
iv) If the $90 million is use for share repurchase, what would be Marvel International's stock price after the share repurchase? v) If the $90 million is use for share repurchase, what would be the debt-to-equity ratio of Marvel International's after the repurchase?
Based on the information provided: i) the current stock price of Marvel International is $15 per share; ii) if Marvel International distributes the $90 million as a dividend, the stock price is $12 per share; iii) the number of shares outstanding is 24 million shares; iv) Stock Price = $15 and v) the debt-to-equity ratio after the repurchase would be 0.97:1 or 0.97.
i) To find the current stock price of Marvel International, first we need to find the market value of equity.
Market Value of Equity = Assets - Debt
Market Value of Equity = $800 million - $350 million = $450 million
Now, the current stock price can be calculated by dividing the market value of equity by the number of shares outstanding.
Stock Price = Market Value of Equity / Number of Shares Outstanding
Stock Price = $450 million / 30 million = $15
ii) If Marvel International distributes the $90 million as a dividend, then the market value of equity would decrease by $90 million.
The new Market Value of Equity = $450 million - $90 million = $360 million.
Now, the new stock price can be calculated using the new market value of equity.
Stock Price = Market Value of Equity / Number of Shares Outstanding
Stock Price = $360 million / 30 million = $12
iii) If the $90 million is used for share repurchase, then the number of shares outstanding would decrease by the amount of repurchase. The amount of share repurchase can be calculated by dividing the repurchase amount by the current stock price.
Amount of Share Repurchase = $90 million / $15 = 6 million shares
Now, the number of shares outstanding after the repurchase would be:
Number of Shares Outstanding = 30 million - 6 million = 24 million shares
iv) If the $90 million is used for share repurchase, then the market value of equity would decrease by $90 million. The new Market Value of Equity = $450 million - $90 million = $360 million.
Now, the new stock price can be calculated using the new market value of equity and new number of shares outstanding.
Stock Price = Market Value of Equity / Number of Shares Outstanding
Stock Price = $360 million / 24 million = $15
v) If the $90 million is used for share repurchase, then the total equity after the repurchase would be:
Number of Shares Outstanding x Stock Price = $360 million
24 million shares x Stock Price = $360 million
Stock Price = $360 million / 24 million shares
Stock Price = $15
Now, the new debt-to-equity ratio can be calculated using the new market value of equity.
Debt-to-Equity Ratio = Debt / Market Value of Equity
Debt-to-Equity Ratio = $350 million / $360 million = 0.97:1 or 0.97.
Therefore, the debt-to-equity ratio of Marvel International's after the repurchase would be 0.97:1 or 0.97.
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Sales Discounts/ Cash Discounts To prompt early payment from a customer, a business may offer the customer a discount or a price reduction on the amount due on an invoice if the invoice is paid within a certain discount period. You see this type of discounting between businesses. This discount is a specific percentage deducted from the price of the goods. Bills are often due within 30 days (Net 30) from the date of the invoice. The discount percentage and the number of days that credit is granted can be different from those in this handout. These are just examples: - 2/10,n/30−2 percent discount given if paid within 10 days of the invoice date or net amount due in 30 days. - 3/15,n/30−3 percent discount given if paid within 15 days of the invoice date or net amount due in 30 days. - 3/10, 2/15, n/30−3 percent discount given if paid within 10 days. A 2 percent discount will be given if paid within 15 days. Net amount due in 30 days. - n/10, EOM-No discount, and payment due 10 days after the end of the month or EOM. Directions: Read each situation, answer the questions, and complete the necessary calculations! Round to 2 decimal places. 1. The Kay Mowing Company has an invoice for $750 dated August 20 with terms 3/10,n/30. Answer the following questions about this situation. a) By what date must the invoice be paid to receive the discount? b) What is the dollar amount of discount if paid by this date? c) What is the dollar amount that should be paid if paid within the discount period? d) When (indicate date) does the credit period end? e) The bill was paid on August 31; how much money (amount) was sent? 2. Kay Mowing received an invoice for $300 that was dated October 12 with terms of 2/10,n/30. Answer the following questions about this situation. a) By what date must the invoice be paid to receive the discount? b) What is the dollar amount of discount if paid by this date? c) What is the dollar amount that should be paid if paid within the discount period? d) When (indicate date) does the credit period end? e) The bill was paid on October 23; how much money (dollar amount) was sent? 3. Strikers Bar \& Grille received an Invoice from Kay Mowing for $200 dated March 6 with sales terms of 5/10,n/30. Strikers paid the bill on March 9. a) Was Strikers eligible for a cash discount? b) If so, how much was the discount amount? c) If Strikers paid within the discount period, how much (dollar amount) did Strikers send to Kay Mowing for payment of the invoice? d) When (indicate date) does the credit period end? 4. Kay Mowing received a bill for $450 with an invoice date of September 1 with sales terms of 3/10,2/15,n/30. a) What percent discount will Kay Mowing receive if the bill is paid on September 6 ? b) What is the dollar amount of this discount if paid by September 6 ? c) What percent discount will Kay Mowing receive if the bill is paid on September 18 ? d) What is the dollar amount of this discount if paid by September 18 ? e) Kay Mowing paid the bill on September 12; will there be a discount? If so, calculate the amount. f) Kay Mowing paid the bill on September 10; will there be a discount? If so, calculate the amount. 5. Kay Mowing has an invoice for $1,000 dated August 20 with terms n/10, EOM. Answer the following questions about this situation. a) By what date must the invoice be paid? b) What is the dollar amount of discount if paid by this date? c) When does the credit period end? d) The bill was paid on August 30; how much money was sent? 6. Kay Mowing has an invoice for $837 dated November 5 with terms n/15, EOM. Answer the following questions about this situation. a) By what date must the invoice be paid? b) What is the rate of discount? c) When does the credit period end? d) The bill was paid on November 19; how much money (dollar amount) was sent?
1. a) The invoice must be paid by August 30 to receive the discount.
b) The dollar amount of discount if paid by this date is 3% of $750, which is $22.50.
c) The dollar amount that should be paid if paid within the discount period is $727.50.
d) The credit period ends on September 19.
e) The amount sent on August 31 is $750 (full amount).
2. a) The invoice must be paid by October 22 to receive the discount.
b) The dollar amount of discount if paid by this date is 2% of $300, which is $6.
c) The dollar amount that should be paid if paid within the discount period is $294.
d) The credit period ends on November 11.
e) The amount sent on October 23 is $300 (full amount).
3. a) Yes, Strikers Bar & Grille is eligible for a cash discount.
b) The discount amount is 5% of $200, which is $10.
c) If Strikers paid within the discount period, the amount sent to Kay Mowing for payment of the invoice would be $190.
d) The credit period ends on April 5.
4. a) The percent discount that Kay Mowing will receive if the bill is paid on September 6 is 3%.
b) The dollar amount of this discount if paid by September 6 is 3% of $450, which is $13.50.
c) The percent discount that Kay Mowing will receive if the bill is paid on September 18 is 2%.
d) The dollar amount of this discount if paid by September 18 is 2% of $450, which is $9.
e) There will be a discount if Kay Mowing paid the bill on September 12. The amount of discount is 2% of $450, which is $9.
f) There will be a discount if Kay Mowing paid the bill on September 10. The amount of discount is 3% of $450, which is $13.50.
5. a) The invoice must be paid by the end of September (EOM).
b) The dollar amount of discount if paid by this date is 10% of $1,000, which is $100.
c) The credit period ends at the end of September (EOM).
d) The amount sent on August 30 is $900 ($1,000 - $100 discount).
6. a) The invoice must be paid by November 20.
b) The rate of discount is 15%.
c) The credit period ends at the end of November (EOM).
d) The amount sent on November 19 is $709.45 ($837 - $125.55 discount).
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Multiple-Product Break-Even and Target Profit Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $60 $15 Unit variable cost $12 $7 Direct fixed cost $23,600 $45,000 Common fixed selling and administrative expenses total $85,000.
Multiple-Product Break-Even and Target Profit is a tool used to determine the minimum quantity of sales required for a company to break even, as well as the number of sales required to achieve a specific target profit.
Vandenberg, Inc. produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and cost information includes:Ceiling Fan Table FanPrice$60$15Unit variable cost$12$7Direct fixed cost$23,600$45,000Common fixed selling and administrative expenses total$85,000To determine the Break-even point, we need to first calculate the contribution margin.
The contribution margin is the amount of revenue generated by the company that can be used to pay the fixed cost and then profit.
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what are some health and safety recommendations? use theories
and/or relevant research to support the recommendations given
There are various health and safety recommendations that people should consider. Such recommendations include: Personal hygiene recommendations - The coronavirus outbreak has led to an increase in personal hygiene recommendations.
People should practice frequent hand washing, avoid touching their face, and covering their nose and mouth when coughing or sneezing. This can help in reducing the spread of the virus. Physical distancing - This is another health and safety recommendation that is being advocated for. People should avoid large crowds and maintain a distance of at least six feet from others.
This is because the virus is spread through respiratory droplets that are emitted when an infected person talks, coughs or sneezes. In conclusion, personal hygiene recommendations, physical distancing, the use of face masks, disinfection of surfaces, and vaccination are some of the health and safety recommendations that people should consider.
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A particular machine has a loading time of 150 hours in a particular 7 day period. Changeovers and set-ups take an average of 15 hours, and breakdown failures average 5 hours every 7 days. During the time when the machine is running, it averages 92% of its rated speed. 3% of the parts processed by the machine were subsequently found to be defective in some way. All the data is outlined in Table 5.0. Determine the following Valuable operating Time (h's) Overall Equipment Effectiveness (h's) Comment briefly as to how Engineering might assist in improving the competitiveness of this operation?
Engineering can improve the competitiveness of this operation by reducing non-valuable time, enhancing machine performance, and minimizing defects, resulting in higher Overall Equipment Effectiveness (OEE).
1. Valuable operating Time (h's):
To calculate the valuable operating time, we need to subtract the non-valuable time from the total available time. The non-valuable time includes loading time, changeovers and set-ups, and breakdown failures.
Total available time in the 7-day period = 7 days × 24 hours/day = 168 hours
Non-valuable time = Loading time + Changeovers and set-ups + Breakdown failures
= 150 hours + 15 hours + 5 hours
= 170 hours
Valuable operating time = Total available time - Non-valuable time
= 168 hours - 170 hours
= -2 hours (negative value indicates that the machine is not operating within the available time)
2. Overall Equipment Effectiveness (h's):
The Overall Equipment Effectiveness (OEE) is a measure of how effectively the machine is utilized. It considers three factors: availability, performance, and quality.
Availability = (Total available time - Non-valuable time) / Total available time
= (168 hours - 170 hours) / 168 hours
= -2/168
≈ -0.0119 (negative value indicates low availability)
Performance = (Valuable operating time × Rated speed) / Total available time
= (-2 hours × 0.92) / 168 hours
≈ -0.0100 (negative value indicates low performance)
Quality = Good parts / Total parts processed
= (100% - 3%)/100%
= 97%
Overall Equipment Effectiveness (OEE) = Availability × Performance × Quality
= (-0.0119) × (-0.0100) × 0.97
≈ 0.00114 (very low OEE)
**Comment briefly as to how Engineering might assist in improving the competitiveness of this operation:**
Engineering can play a crucial role in improving the competitiveness of this operation. They can focus on several aspects:
1. **Reducing non-valuable time**: Engineering can analyze the loading process, changeovers, and set-ups to identify bottlenecks and inefficiencies. They can propose improvements to streamline these activities, reduce time, and increase machine utilization.
2. **Enhancing machine performance**: Engineering can evaluate the machine's performance, identify factors causing the machine to operate below its rated speed, and propose solutions to optimize its performance. This may involve maintenance, calibration, or upgrades to improve efficiency.
3. **Minimizing defects**: Engineering can work on improving the quality of parts processed by the machine. They can analyze the defect rate, identify root causes, and implement measures to reduce defects, such as implementing quality control mechanisms or optimizing machine settings.
By addressing these areas, Engineering can help increase the availability, performance, and quality of the machine, leading to a higher Overall Equipment Effectiveness (OEE) and improved competitiveness of the operation.
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Consider the Balance Sheet Summary, for a given Restaurant below: Total Sales Cost of Goods Sold Food Sales $ 1,765,345.00 Beverage $ 727,659.00 Sales Total Labor Cost Prime Cost Overhead Costs Profit Food Cost $ 693,761.00 Beverage $ 302,477.00 Cost 1-What is the FC%? 2- What is the Beverage Cost %? 3- What is the Prime Cost %? $ 889,981.00 $ 356,973.00
1. The Food Cost percentage is approximately 39.29% of total sales.2. The Beverage Cost percentage is approximately 41.61% of total sales.3.The Prime Cost percentage is approximately 42.52% of total sales.
To calculate the desired percentages, we can use the following formulas:
1. Food Cost Percentage (FC%) = (Food Cost / Food Sales) * 100
2. Beverage Cost Percentage = (Beverage Cost / Beverage Sales) * 100
3. Prime Cost Percentage = (Prime Cost / Total Sales) * 100
Total Sales = Food Sales + Beverage Sales
Substituting the given values:
Total Sales = $1,765,345.00 + $727,659.00
Total Sales = $2,093,626.00
Food Cost = $693,761.00
Food Sales = $1,765,345.00
Beverage Cost = $302,477.00
Beverage Sales = $727,659.00
Prime Cost = $889,981.00
Total Sales = $2,093,626.00
Let's calculate the percentages:
1. FC% = (693,761.00 / 1,765,345.00) * 100 ≈ 39.29%
The Food Cost represents approximately 39.29% of the Food Sales.
2. Beverage Cost % = (302,477.00 / 727,659.00) * 100 ≈ 41.61%
The Beverage Cost represents approximately 41.61% of the Beverage Sales.
3. Prime Cost % = (889,981.00 / 2,093,626.00) * 100 ≈ 42.52%
The Prime Cost represents approximately 42.52% of the Total Sales.
Please note that these percentages are approximations rounded to two decimal places.
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Your marketing research department provides the following estimated demand function for your product: \[ Q^{d}=500.6-11.4 P+0.51 \mathrm{NCOME} \] where \( P \) is the price of your product and INCOME
The product is a normal good. The price coefficient is important and has a significant impact on the quantity demanded, as evidenced by a t-statistic of -5.7. However, the income coefficient is not statistically significant, with a t-statistic of 1.67.
a. To determine if the product is a normal good or an inferior good, we need to analyze the coefficient of the income variable. In the given demand function, the coefficient for the income variable is positive (0.5). A positive coefficient indicates that as income increases, the quantity demanded also increases.
Therefore, the product is a normal good. When consumers' income rises, they are willing to spend more on the product, resulting in an increase in demand.
b. The t-statistic can be calculated by dividing the coefficient by its standard error. In this case, the price coefficient is -11.4, and the standard error is 2.0. The t-statistic is calculated as -11.4 / 2.0 = -5.7. The t-statistic measures the significance of the coefficient.
A t-statistic with an absolute value greater than 2 is generally considered statistically significant. Since the absolute value of -5.7 is greater than 2, we can conclude that the price coefficient is statistically significant.
c. Similarly, the t-statistic for the income coefficient can be calculated by dividing the coefficient (0.5) by its standard error (0.3). The t-statistic is 0.5 / 0.3 = 1.67.
Again, a t-statistic with an absolute value greater than 2 is considered statistically significant. Since the absolute value of 1.67 is less than 2, we can conclude that the income coefficient is not statistically significant.
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Complete Question:
Your marketing research department provides the following estimated demand function for your product: Qd = 500.6 - 11.4P + 0.5INCOME where P is the price of your product and INCOME is average income.
a. Is your product a normal good or an inferior good? Explain your answer.
b. The standard error for the price coefficient is 2.0. What is its t-statistic? What can you conclude about the coefficient's statistical significance?
c. The standard error for the income coefficient is 0.3. What is its t-statistic? What can you conclude about the coefficient's statistical significance?
The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month of operation. Production: 7,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs. Manufacturing costs: Materials $33,000; labor $21,000; overhead $36,000. Prepare a production cost report. (Round unit costs to 2 decimal places, e.g. 2.25.)QUIK FURNITURE COMPANY Sanding Department Production Cost Report For the Month Ended March 31, 2017 Equivalent Units Physical Units Conversion Costs uantities Units to be accounted for Materials Work in process, March 1 Started into production 10,000 Total units 10,000 Units accounted for Transferred out 3,000 4,000 7,000 3,000 4,000 7,000 3,000 Work in process, March 31 Total units
The total units are 7600 and the total cost was calculated as 90000. Direct labor and overhead costs that are spent as a result of converting raw materials into finished goods are included in conversion costs.
The calculations are provided in the image attached below:
According to the definition of overhead costs, these are outlaid that cannot be directly linked to the production process but are nonetheless necessary for operations, such as the power or other services needed to keep a manufacturing facility open all day. The expenses of direct labor employed in determining prime costs are the same.
The efficiency of manufacturing processes may also be measured using conversion costs, which include overhead expenditures that are not included in prime cost estimates. Conversion costs are another tool operations managers employ to identify potential waste points in the production process.
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54) The purchasing power parity result a) a. explains exchange rates in the short and long run b) b. explains exchange rates for managed systems c) c. explains exchange rates in the short run d) d. none of the above
The correct option is d) none of the above, as PPP is not directly related to explaining exchange rates in the short or long run or specific to managed systems.
Purchasing power parity (PPP) is a theory that suggests exchange rates between currencies should adjust to equalize the purchasing power of each currency. However, the PPP does not specifically explain exchange rates in the short or long run, nor does it apply to managed systems. Instead, PPP is a concept used to compare price levels and relative purchasing power across different countries. It states that in the absence of transaction costs and trade barriers, identical goods should have the same price in different countries after converting currencies at the prevailing exchange rate.
Therefore, the correct option is d) none of the above, as PPP is not directly related to explaining exchange rates in the short or long run or specific to managed systems.
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Multi Enterprises Ltd. is a Canadian-controlled private corporation whose fiscal period coincides also
with the calendar year. For the year 2021, the company's taxable income was calculated as follows
Income from distributing net of CCA ………………………………………………… $214,000
Dividends from taxable corporations:
a. connected corporation, dividend payment triggering a dividend refund
from its non-eligible RDTOH of $2,750 to the wholly owned subsidiary 11,000
b) non-connected corporation (portfolio dividends) (eligible).................................. 20,000
Taxable capital gain (non-active)........................................................... $29,000
Allowable capital losses……………………………………………………………………. 12,000 17,000
Royalties…………………………………………………………………………………………… 9,000
Recapture of CCA on disposal of sales equipment…………………………….. 4,000
Income from rental of an apartment building (no full-time employees and
tenants provide virtually all of their own services)............................... 14,000
Interest charged on accounts receivable…………………………………………… 5,000
Net income for tax purposes…………………………………………………………….. $300,000
Less: net capital losses carried over………………………………………………….. $ 7,000
non-capital losses carried over…………………………………………………. 10,000
Donations…………………………………………………………………………………. 26,000
dividends from taxable Canadian corporations…………………………. 31,000 74,000
Taxable income………………………………………………………………………………………………………… $226,000
At December 31, 2020, there was a nil balance in both the eligible and non-eligible refundable
dividend tax on hand accounts. The company paid $72,000 in non-eligible dividends during 2021 to individual shareholders.
The company is not associated with any corporation and has a permanent establishment in New
Brunswick.
You have been asked to:
(A) Compute the federal Part I tax and assumed provincial tax at a 4% rate on active business income eligible for the small business deduction and 12% for all other income. Show in detail the calculation of all deductions in the computation, using a separate schedule for each special deduction.For purposes of the small business deduction, assume investment income earned in the prior year is the same as the amount earned in the current year. In calculating the small business deduction list all ineligible items of income, if any, and indicate the amount of the business limit available for the subsidiary
(B) Compute the refundable dividend tax on hand balance as at December 31, 2021, showing, in
detail, your calculations and compute the dividend refund for 2021.
Refundable dividend tax on hand balance as at December 31, 2021 is $10,560.
Calculation of the Federal Part I tax and assumed provincial tax at a 4% rate on active business income eligible for the small business deduction and 12% for all other income can be computed as follows:
Calculation of Income
Taxable income$226,000
Small Business Deduction
($500,000 - $20,000) / $500,000 × ($214,000 + $14,000) $179,200
Small Business Taxable Income $46,800
Non-Small Business Taxable Income $179,200
Federal Part I tax on non-small business taxable income
12% x $179,200 $21,504
Provincial tax (4% rate) on small business taxable income
4% x $46,800$1,872
Federal Part I tax on small business taxable income
9% x $46,800$4,212
Total Federal and Provincial Tax $27,588
Calculation of the Deductions
Business Limit$500,000
Add: Non-eligible refundable dividend tax on hand accountNIL
Add: Federal Part I tax on income allocated to dividend payment and assumed provincial tax
Federal Part I tax on non-small business taxable income$21,504
Federal Part I tax on small business taxable income$4,212
Assumed Provincial tax on small business taxable income$1,872
Less: Small business deduction
($500,000 - $20,000)/ $ 500,000 × ($214,000 + $14,000) $ (179,200)
Taxable Income Used for Determining DeductionsNIL
Refundable Dividend Tax on Hand $NIL
The calculation of the Refundable Dividend Tax on Hand (RDTOH) balance as at December 31, 2021,
showing your detailed calculations and the calculation of the dividend refund for 2021 can be computed as follows:
Calculation of the RDTOH Balance on December 31, 2021
Eligible RDTOH Balance on January 1, 2021$NIL
Add: 38 1/3% of non-eligible dividend paid in the year
$72,000 × 38 1/3%$27,600
Total RDTOH Balance on December 31, 2021$27,600
Calculation of the Dividend Refund for 2021
Eligible RDTOH Balance on January 1, 2021$NIL
Add: 38 1/3% of non-eligible dividend paid in the year$72,000 × 38 1/3% $27,600
Less: RDTOH used for refund in 2020 $ NIL
Eligible RDTOH Balance on December 31, 2021 $ 27,600
The Dividend Refund for 2021 will be 38 1/3% of $27,600, which is $10,560.
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