1.
Liquidity Ratios Current Ratio = Total Current Assets / Total Current Liabilities= $52,000 / $25,000 = 2.08
Quick Ratio = (Cash + Marketable Securities + Accounts Receivable) / Total Current Liabilities= ($1,500 + $2,500 + $15,000) / $25,000= $19,000 / $25,000= 0.76 approximately
2.
Activity Ratios
a. Average Collection Period = Accounts Receivable / Average Daily Credit
Sales Accounts Receivable = $15,000
Average Daily Credit Sales = Sales on credit / Number of days in a year
Sales on Credit = $130,000
Average daily credit sales = $130,000 / 365 days = $356.16 approximately.
Average Collection Period = Accounts Receivable / Average Daily Credit Sales= $15,000 / $356.16= 42.1 days approximately.
b. Inventory Turnover = Cost of Goods Sold / Average Inventory
Cost of Goods Sold = $103,000
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Average Inventory = ($33,000 + $35,000) / 2 = $34,000
Inventory Turnover = Cost of Goods Sold / Average Inventory= $103,000 / $34,000= 3.03 approximately.
c. Fixed Asset Turnover = Sales / Net Fixed Assets= $130,000 / $35,000= 3.71 approximately.
d. Total Asset Turnover = Sales / Total Assets= $130,000 / $87,000= 1.49 approximately.
3. Financial Leverage Ratios
a. Debt Ratio = Total Liabilities / Total Assets= $47,000 / $87,000= 0.54 approximately.
b. Debt-to-Equity Ratio = Total Liabilities / Total Stockholder's Equity= $47,000 / $40,000= 1.18 approximately.
c. Times Interest Earned Ratio = Earnings before Interest and Taxes / Interest Expense= $11,000 / $3,000= 3.67 approximately.
4. Profitability Ratios
a. Gross Profit Margin = Gross Profit / Sales = $27,000 / $130,000= 0.21 or 21% approximately.
b. Net Profit Margin = Net Income / Sales = $8,000 / $130,000= 0.06 or 6% approximately.
c. Return on Investment = Net Income / Total Assets= $8,000 / $87,000= 0.09 or 9% approximately.
d. Return on Stockholder's Equity = Net Income / Total Stockholder's Equity= $8,000 / $40,000= 0.20 or 20% approximately.
5. Market-Based Ratios
a. Price-to-earnings Ratio = Market Price per Share / Earnings per Share (EPS)= $9.50 / $0.01= 950 approximately.
b. Market Price to Book Ratio = Market Price per Share / Book Value per Share= $9.50 / $8.00= 1.19 approximately.
6. Return on Stockholder's Equity Ratio as a Function of Net Profit Margin, Total Asset Turnover, and Equity Multiplier
ROE = Net Profit Margin * Total Asset Turnover * Equity Multiplier
ROE = Net Income / Sales * Sales / Total Assets * Total Assets / Total Stockholder's Equity= Net Income / Total Stockholder's Equity
Therefore, ROE = Return on Stockholder's Equity= 0.20 or 20% approximately.
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Franklin Corporation has an opportunity to purchase bonds at a rate of 11%. They are in the 34% tax bracket. What is the after tax yield on these bonds?
a) 5.93%
b) 9.62%
c) 3.74
d) 11%
e) 7.26%
The answer to this question is (e) 7.26%.Explanation:A corporation's after-tax yield for taxable bonds may be calculated using the following formula:After-Tax Yield = Before-Tax Yield x (100% - Tax Rate)For Franklin Corporation.
Before-tax yield = 11%Tax rate = 34%The formula now becomes:After-tax Yield = 11% x (100% - 34%) = 7.26%Thus, the after-tax yield on these bonds is 7.26%.Option (e) is the correct answer.This question's response is (e) 7.26%.Explanation:The formula below can be used to determine a corporation's taxable bond after-tax yield:After-Tax Yield is Before-Tax Yield multiplied by (100% - Tax Rate).Franklin Corporation:11% is the before-tax yield.Tax rate is 34%.Now, the equation is:After-Tax Yield is equal to 11% x (100% – 34%), or 7.26%.Consequently, these bonds' after-tax yield is 7.26%.The right response is option (e).
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Franklin Corporation has an opportunity to purchase bonds at a rate of 11%. Thus the after-tax yield on these bonds is 7.26%, and option (e) is the correct answer.
The formula to calculate the after-tax yield on bonds is:
After-tax yield = Pre-tax yield × (100% - Tax rate) / 100
As per the question, Franklin Corporation is in the 34% tax bracket. Thus, its tax rate is 34%. Also, the rate at which Franklin Corporation is getting an opportunity to purchase bonds is 11%. Hence, substituting these values in the formula of the after-tax yield, we get:
After-tax yield = 11 × (100 - 34) / 100
= 11 × 66 / 100= 7.26%
Therefore, the after-tax yield on these bonds is 7.26%.
After-tax yield = Pre-tax yield × (100% - Tax rate) / 100
= 11 × (100 - 34) / 100
= 11 × 66 / 100 = 7.26%.
The after-tax yield on these bonds is 7.26%.
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Question 1 Please answer the questions based upon the following 5 separate scenarios in the residential market for solar panels in Maine: 1.HH Incomes increase 2.The Fed raises interest rates 3.Income tax credits provided to HH 4.Tariff placed on imports of materials used in constructing solar panels 5.A subsidy is provided to the manufacturers of solar panels A. Which of the scenarios will result in an increase in the price of residential solar panels in Maine? B. Which of the scenarios will result in a decrease in the price of residential solar panels in Maine? C. Which of the scenarios will result in an increase in the quantity of residential solar panels in Maine? D.Which of the scenarios will result in a decrease in the quantity of residential solar panels in Maine? Which of the scenarios will result in an indeterminate effect on the price of residential olar panels in Maine?
A. Which of the scenarios will result in an increase in the price of residential solar panels in Maine?
The scenarios that will result in an increase in the price of residential solar panels in Maine are:
Tariff placed on imports of materials used in constructing solar panels: By imposing a tariff on imported materials, the cost of production for solar panels will increase. This increase in production costs will likely be passed on to consumers in the form of higher prices.
A subsidy is provided to the manufacturers of solar panels: If a subsidy is given to manufacturers, it can incentivize them to increase production. However, this increase in production may not necessarily lead to a decrease in prices. Instead, manufacturers might choose to maintain or even increase prices to capture the benefit of the subsidy themselves.
B. Which of the scenarios will result in a decrease in the price of residential solar panels in Maine?
The scenario that will result in a decrease in the price of residential solar panels in Maine is:
Income tax credits provided to households (HH): If income tax credits are provided to households, it can increase the affordability of solar panels for consumers. This increased demand can stimulate competition among solar panel providers, leading to lower prices in order to attract more customers.
C. Which of the scenarios will result in an increase in the quantity of residential solar panels in Maine?
The scenario that will result in an increase in the quantity of residential solar panels in Maine is:
A subsidy is provided to the manufacturers of solar panels: By providing a subsidy to manufacturers, it incentivizes them to increase production. This increased production can lead to a higher quantity of residential solar panels available in the market.
D. Which of the scenarios will result in a decrease in the quantity of residential solar panels in Maine?
The scenario that will result in a decrease in the quantity of residential solar panels in Maine is:
The Fed raises interest rates: When the Federal Reserve raises interest rates, borrowing costs increase. This can discourage investment in residential solar panels, as it becomes more expensive to finance the purchase. Consequently, the demand for solar panels may decrease, leading to a decrease in the quantity of residential solar panels.
Which of the scenarios will result in an indeterminate effect on the price of residential solar panels in Maine?
The scenario that will result in an indeterminate effect on the price of residential solar panels in Maine is:
HH Incomes increase: An increase in household incomes can potentially stimulate demand for residential solar panels. However, the overall effect on prices is indeterminate because it depends on the interplay between increased demand and supply factors. It is possible that increased demand may lead to higher prices if the supply of solar panels does not keep up with the increased demand.
It's important to note that these answers are based on general economic principles, and the actual outcomes may be influenced by various other factors in the market.
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Monthly rates of return on the shares of a particular common stock are independent of one another and normally distributed with a standard deviation of 2.2. A sample of 12 months is taken a. Find the probability that the sample standard deviation is less than 3.1. b. Find the probability that the sample standard deviation is more than 1.5. Click the icon to view a table of lower critical values for the chi-square distribution Click the loon to view a table of upper critical values for the chi-square distribution a. The probability is b. The probability is Click to select your answers)
The probability that the sample standard deviation is less than 3.1 is 0.9953 and the probability that the sample standard deviation is more than 1.5 is 0.0668.
Here is the solution:
Given:
Monthly rates of return on the shares of a particular common stock are independent of one another and normally distributed with a standard deviation of 2.2.
A sample of 12 months is taken.
To find:
The probability that the sample standard deviation is less than 3.1.
The probability that the sample standard deviation is more than 1.5.
Solution:
The sample standard deviation is a random variable with a chi-square distribution with 11 degrees of freedom.
The probability that the sample standard deviation is less than 3.1 is equal to the probability that the chi-square random variable is less than (3.1)^2 = 9.61.
The probability that the chi-square random variable is less than 9.61 is 0.9953.
The probability that the sample standard deviation is more than 1.5 is equal to the probability that the chi-square random variable is greater than (1.5)^2 = 2.25.
The probability that the chi-square random variable is greater than 2.25 is 0.0668.
Therefore, the probability that the sample standard deviation is less than 3.1 is 0.9953 and the probability that the sample standard deviation is more than 1.5 is 0.0668.
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Assume you are examining the reliability of a new test and obtain a reliability coefficient of 30. What does this mean?
If a reliability coefficient of 30 is obtained when examining the reliability of a new test, it means that the test is unreliable and cannot be used to accurately measure whatever construct it is intended to measure.
A reliability coefficient of 30 is extremely low; a coefficient of 0.7 or above is generally considered acceptable for most purposes.The reliability coefficient indicates the extent to which the scores obtained on a test are consistent and accurate. A higher coefficient indicates that the test is more reliable and that the scores obtained are more consistent and accurate. Therefore, a reliability coefficient of 30 implies that the scores obtained on the test are not consistent or accurate enough to be considered reliable.In order to improve the reliability of the test, further research is required. It may be necessary to revise the test or develop new items that are more reliable. It may also be necessary to administer the test to a larger sample in order to obtain more accurate and reliable results.
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The beginning balance in retained earnings of is $1200,000 (Cr.). The current period net loss is $350,000 and declared stock dividends $150,000. The ending balance in retained eamings equals: O A. Credit of $1550,000. O B. Credit of $1400,000. OC. Credit of $700,000. O D. Credit of $850.000.
To determine the ending balance in retained earnings, we need to consider the beginning balance, the net loss for the current period, and the declared stock dividends.
The beginning balance in retained earnings is given as $1,200,000 (Cr.). Since it is a credit balance, we subtract it from the total.
Next, we have a net loss of $350,000 for the current period. A net loss decreases retained earnings.
Lastly, we have declared stock dividends of $150,000. Stock dividends are distributions of a company's own stock to shareholders, and they also reduce retained earnings.
To calculate the ending balance in retained earnings, we need to sum up the beginning balance, the net loss, and the declared stock dividends while taking into account their respective effects.
Beginning balance: -$1,200,000
Net loss: -$350,000
Declared stock dividends: -$150,000
Total: -$1,700,000
Since the balance is a credit balance, the ending balance in retained earnings would be a credit of $1,700,000. Therefore, the correct answer is Option A: Credit of $1,700,000.
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On January 1, Carlo, Jamie, Roma, and Fe, formed CABLES Trading, a local partnership, with capital contributions of P500,000, P250,000, P350,000, and P200,000, respectively. The articles of co-partnership provided that: •Each partner shall receive a 6% interest on contributed capital; •Carlo and Jamie shall receive monthly salaries of P15,000 and P13,000, respectively; •The balance of the profits shall be distributed to Carlo, Jamie, Roma, and Fe in 3:3:2:2 ratio, respectively. If the net income for one quarter is P300,000, what is the share in the profit of Fe?
Fe's share in the profit is P50,000. Each partner shall receive a 6% interest on contributed capital.Using this formula, we can calculate the amount of interest that each partner will receive:Carlo = 6% x P500,000 = P30,000Jamie = 6% x P250,000 = P15,000
Cables Trading is a local partnership of Carlo, Jamie, Roma, and Fe, with P500,000, P250,000, P350,000, and P200,000 contributions, respectively. In one quarter, the net income of the company is P300,000. We can calculate each partner's share in the net income using the articles of co-partnership provided for in the problem.
1. Each partner shall receive a 6% interest on contributed capital.Using this formula, we can calculate the amount of interest that each partner will receive:Carlo = 6% x P500,000 = P30,000Jamie = 6% x P250,000 = P15,000Roma = 6% x P350,000 = P21,000Fe = 6% x P200,000 = P12,0002. Carlo and Jamie shall receive monthly salaries of P15,000 and P13,000, respectively.Carlos' salary = P15,000 x 3 months = P45,000Jamie's salary = P13,000 x 3 months = P39,0003. The balance of the profits shall be distributed to Carlo, Jamie, Roma, and Fe in 3:3:2:2 ratios, respectively.
The total profit share is 3 + 3 + 2 + 2 = 10
Fe's share = 2/10 x P300,000 = P60,000Fe's share in the profit of Fe = P60,000 - P12,000 = P50,000
Therefore, Fe's share in the profit is P50,000.
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Your current client, Adele, has requested a meeting with you to discuss her life insurance policy. When her policy was issued a year ago, she was in a rated risk class because she was significantly over weight. Since then, Adele has lost weight and has lost 40 pounds in the last year alone. She knows she is better than average on the height weight charts for her age and she wants her rating removed. Which of the following is the correct response that you can provide her?
O Because of the significant change in weight, you can arrange to have the rating automatically reduced and premiums lowered.
O A physical examination from a nurse will be required to take Adele's height, weight, blood pressure, urine test, and blood test.
O Once a rate class has been assigned, it cannot be changed and Adele should cancel her existing policy and apply for a new policy.
O An Attending Physician's Statement (APS) will likely be required to confirm that Adele's weight no longer warrants the rated risk class.
O An Attending Physician's Statement (APS) will likely be required to confirm that Adele's weight no longer warrants the rated risk class.
To remove the rating and potentially lower the premiums on her life insurance policy, Adele would need to provide evidence that her weight has significantly changed.
An Attending Physician's Statement (APS) is a document completed by Adele's physician that provides detailed information about her medical history, current health status, and any changes that may impact her risk classification. This statement would likely be required to verify Adele's weight loss and support her request for the removal of the rated risk class. It is important to have professional medical documentation to support any changes in risk classification for life insurance policies.
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how can calculating a company's earnings per share (eps) help investors?
Calculating a company's earnings per share (EPS) can help investors in the following ways:It shows how much profit is being generated per share of stock and how much of that profit is being distributed to shareholders. It can be used to compare a company's performance to that of its peers and industry standards.
EPS (Earnings Per Share) is one of the most frequently used financial metrics by investors to evaluate a company's performance. EPS is calculated by dividing a company's net income by its outstanding shares of common stock. Investors can use EPS to determine a company's profitability on a per-share basis and compare it to other companies in the same industry.
Investors can also use EPS to determine the amount of money they would receive if the company decided to distribute its profits as dividends. It is important to note, however, that EPS should not be the only metric investors use to evaluate a company's performance, as it does not provide a complete picture of a company's financial health.
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In the 1970s when the Bank of England used monetary policy to trade off higher inflation for lower unemployment what happened? Unemployment was kept low and steady There was low inflation and low unemployment There was high unemployment and high inflation Inflation declined but unemployment stayed high For the Fed to reduce the money supply using open market operations it should... Increase the money supply. Lower the minimum reserve requirement. Buy treasury bills from banks. Sell treasury bills to banks. Which of the following is not a result of expansionary Open Market Operations? Increase in the money supply. Less investment spending. Banks make more loans. Decrease in the federal funds rate.
In the 1970s when the Bank of England used monetary policy to trade off higher inflation for lower unemployment, there was high unemployment and high inflation.
Therefore, inflation rose rather than declined but unemployment stayed high. For the Fed to reduce the money supply using open market operations, it should sell treasury bills to banks. This is because selling treasury bills to banks will decrease the amount of money in circulation, which will lead to a reduction in the money supply.
Therefore, the correct option is Sell treasury bills to banks. A decrease in the federal funds rate is not a result of expansionary Open Market Operations. This is because the federal funds rate is the rate at which banks lend to each other overnight. When the Fed buys securities, it increases the amount of reserves in the banking system, leading to a decrease in the federal funds rate. Therefore, the correct option is Decrease in the federal funds rate.
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the gdp market prices of India is 2.9 trillion USD at constant prices as on 2019-20. Explain the intuition why GDP calculated through three methods should give you 2.9 trillion or if they dont what will be the potential problem
The three methods of calculating GDP are the production approach, the income approach, and the expenditure approach. Ideally, all three methods should yield the same GDP figure of 2.9 trillion USD if calculated accurately. However, discrepancies may arise due to the following reasons:
1. Statistical Discrepancies: The three methods use different data sources and estimation techniques, which can lead to variations in the GDP calculations. Statistical discrepancies can occur when the data sources do not align perfectly or when there are measurement errors or gaps in data collection.
2. Time Lag: The GDP figure of 2.9 trillion USD is reported for the specific period of 2019-20. However, the data used for calculations may not be available for the exact same time period, resulting in differences in the reported GDP figures.
3. Assumptions and Estimations: GDP calculations involve assumptions and estimations for certain components, such as imputations for missing data or estimates for informal economic activities. These assumptions and estimations can introduce errors and discrepancies in the GDP calculations.
While the aim is for the three methods of calculating GDP to produce the same figure, variations can occur due to statistical discrepancies, time lags in data availability, and assumptions made during the estimation process. However, these differences are typically small and do not significantly impact the overall understanding of the country's economic performance.
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Which of the following is a major Crown corporation active in the bond market?
A. Fiscal Credit Corporation (FCC)
B. Export Design Corporation (EDC)
C. Canada Mortgage and Housing Corporation (CMHC)
D. Farm Consumer Corporation (FCC)
Canada Mortgage and Housing Corporation (CMHC) is a major Crown corporation active in the bond market.
The CMHC plays a significant role in the Canadian housing market by providing mortgage loan insurance, facilitating affordable housing programs, and offering securitization services for mortgage-backed securities. As part of its operations, the CMHC issues bonds to raise funds that support its activities. These bonds are backed by the Canadian government, making them attractive to investors. The CMHC's presence in the bond market allows it to access capital at favorable rates, which in turn enables it to fulfill its mandate of promoting housing affordability and stability in Canada. The CMHC's activities in the bond market contribute to the overall functioning and liquidity of the Canadian fixed-income market.
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The market for hot dogs on the streets of New York City can be considered close to a perfectly competitive market. Because there are so many individuals buying and selling hot dogs: there is a shortage of hot dogs. there is a surplus of hot dogs. market forces set the price in the market. firms are able to make large economic profits. firms cannot make positive accounting profits.
The market for hot dogs in New York City is a highly competitive market in which market forces set the price. firms in this market cannot make large economic profits
The market for hot dogs on the streets of New York City can be considered as close to a perfectly competitive market. This is due to the many individuals buying and selling hot dogs. In a perfectly competitive market, there is an equilibrium price and quantity at which the quantity of a good supplied equals the quantity of the good demanded. This is called the market-clearing price and quantity. In this market for hot dogs, market forces set the price. When there is a shortage of hot dogs, the quantity demanded exceeds the quantity supplied, which leads to higher prices. Conversely, when there is a surplus of hot dogs, the quantity supplied exceeds the quantity demanded, which leads to lower prices. Since there are no barriers to entry, firms in this market cannot make large economic profits and can only earn zero economic profits. They can only make positive accounting profits in the short run when the price is above their average total cost. In conclusion, the market for hot dogs in New York City is a highly competitive market in which market forces set the price. Firms can only earn normal profits in the long run, which is characteristic of perfectly competitive markets.
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complete question:
The market for hot dogs on the streets of New York City can be considered close to a perfectly competitive market. Because there are so many individuals buying and selling hot dogs:
there is a shortage of hot dogs.
there is a surplus of hot dogs.
market forces set the price in the market.
firms are able to make large economic profits.
firms cannot make positive accounting profits.
Which of the following scenarios would explain the Federal Reserve selling securities on the open market?
A The actual unemployment rate exceeds the natural unemployment rate.
B The short-run equilibrium is less than long-run equilibrium.
C Aggregate demand is growing faster than long-run aggregate supply, creating inflation.
D The economy is experiencing persistent low inflation.
E The government decreases spending by a significant amount.
The Federal Reserve selling securities on the open market is done to control the supply of money in the economy. Selling securities helps to reduce the amount of money in circulation, which can help to combat inflation and control the growth of the economy. The following scenario would explain the Federal Reserve selling securities on the open market: Aggregate demand is growing faster than long-run aggregate supply, creating inflation.
When aggregate demand is growing faster than long-run aggregate supply, it leads to an increase in demand-pull inflation. Inflation is a general increase in prices, and it can be caused by too much money chasing too few goods. The Federal Reserve can sell securities on the open market to reduce the amount of money in circulation, which can help to combat inflation.
This process is known as contractionary monetary policy. When the Federal Reserve sells securities, it reduces the amount of money in circulation, which leads to a decrease in demand for goods and services. This can help to control inflation by slowing down the growth of the economy.
In conclusion, the scenario that would explain the Federal Reserve selling securities on the open market is when aggregate demand is growing faster than long-run aggregate supply, creating inflation. The Federal Reserve uses contractionary monetary policy to control the supply of money in the economy and combat inflation.
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Ajax Limited is a company listed on the NZX. Ajax has announced it will make a dividend payment at the end of the year of $1.75 per share. The average annual growth rate in the company's dividends over the past five years has been 5%. Ajax's shareholders have a required rate of return of 15% p.a. Ajax's shares have been trading very consistently around $20 per share for the past few months and analysts suggest this is likely to continue for the foreseeable future. How can you explain this price based on the constant growth dividend discount model?
The actual market price of Ajax's shares can deviate from the price predicted by the model.
The constant growth dividend discount model, also known as the Gordon Growth Model, can be used to explain the current price of Ajax Limited's shares based on its dividends.
According to the constant growth dividend discount model, the price of a share is equal to the present value of its expected future dividends. The formula for calculating the price of a share using this model is:
Price = Dividend / (Required Rate of Return - Dividend Growth Rate)
In this case, the dividend payment at the end of the year is $1.75 per share, and the average annual growth rate in dividends over the past five years is 5%. The required rate of return for shareholders is 15% p.a.
Using the formula, we can calculate the price of Ajax's shares:
Price = $1.75 / (0.15 - 0.05) = $1.75 / 0.1 = $17.50
The calculated price based on the constant growth dividend discount model is $17.50 per share. However, the shares of Ajax have been consistently trading around $20 per share for the past few months. This suggests that the market price is higher than the price calculated using the model.
There could be several reasons for the market price being higher than the model's price. One possible explanation is that investors have a positive perception of Ajax's future prospects, leading them to assign a higher value to the company's shares. This positive sentiment could be driven by factors such as strong financial performance, anticipated growth opportunities, or positive industry trends.
It's important to note that the constant growth dividend discount model is a simplified valuation approach and relies on various assumptions. Market prices can be influenced by factors beyond the model's scope, such as market sentiment, supply and demand dynamics, and macroeconomic conditions. Therefore, the actual market price of Ajax's shares can deviate from the price predicted by the model.
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The mechanism of bond indicates that coupon payment in each period includes both principal and interests. A. True B. False Messenger, Inc. bonds have a 6% coupon rate with semiannual coupon payments and a exist1,000 par value. The bonds have 11 years until maturity, and sell for exist925. What is the CURRENT YIELD for Messinger's bonds? a. 2.16% b. 3.24% c. 5.52% d. 6.49% Junk bonds have an S&P bond rating of A) C or less. B) CCC or less. C) BB or less. D) BBB or less
Previous question
The mechanism of bond payments includes both principal and interest. The current yield for Messenger, Inc. bonds is 6.49%.
The statement that the mechanism of bond indicates that coupon payment in each period includes both principal and interest is true. When a bond is issued, it has a face value (or par value), which represents the principal amount that will be repaid to the bondholder at maturity. In addition to the principal repayment, the bond also pays periodic interest payments, known as coupon payments, to the bondholder.
To calculate the current yield, we divide the annual coupon payment by the bond's current market price. In the case of Messenger, Inc. bonds, the coupon rate is 6% and the par value is $1,000. The bond has semiannual coupon payments, so the annual coupon payment is (0.06 * $1,000) = $60. The bond is selling for $925 in the market.
Therefore, the current yield is ($60 / $925) * 100 = 6.49%. Hence, the correct answer is option d) 6.49%.
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The mechanism of a bond indicates that coupon payment in each period includes only interest, not the principal. So, the given statement is false. 925. the current yield is (60/925) * 100 = 6.49%. So, the correct option is d.
When a bond is issued, it typically has a face value or par value, which represents the principal amount that will be repaid to the bondholder at maturity. The coupon rate is the interest rate stated on the bond, and it determines the periodic interest payments made to the bondholder. These coupon payments are based on the face value of the bond, not including the principal.
In the given example, the bond has a 6% coupon rate, which means that the bondholder will receive semiannual interest payments equal to 6% of the face value. The par value of the bond is $1,000, and it has 11 years until maturity. The bond is currently selling for $925.
To calculate the current yield, we divide the annual interest payment by the current market price of the bond and multiply by 100 to get a percentage. In this case, the annual interest payment is $60 ($1,000 * 6%), and the current market price is $925. Therefore, the current yield is (60/925) * 100 = 6.49%.
Therefore, the correct answer is d) 6.49%.
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When different amounts are needed for each Sharing Reservation, select this option to manually change the rate amount. A) Apply Split Rate B)Apply Entire Rate C)Apply Full Rate D)Apply Custom Split Rate
D) Apply Custom Split Rate. When different amounts are needed for each sharing reservation, the option to manually change the rate amount is to apply a custom split rate.
This allows for flexibility in assigning specific rates to each reservation based on individual requirements or circumstances.
Applying a custom split rate means that the rate can be customized or adjusted according to the specific needs of each reservation. This may be necessary when different sharing arrangements have varying pricing structures or when there are specific agreements in place for certain reservations.
By selecting the option to apply a custom split rate, the user can input the desired rate amount for each sharing reservation manually. This ensures that the correct pricing is applied and reflects the specific requirements of the reservation.
Overall, the option to apply a custom split rate provides the flexibility and control needed to accommodate varying rates for each sharing reservation, allowing for more accurate and tailored pricing.
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Assume that, under a system of flexible exchange rates, Mexicans decide to increase their financial investment in Canada. As a result:
a. the peso and the Canadian dollar will both depreciate in value
b. there will be no change in the values of the two currencies
c. the peso and the Canadian dollar will both appreciate in value
d. Canadians will want to buy fewer Mexican products at the new exchange rate
e. the peso will depreciate and the Canadian dollar will appreciate in value
ANSWER Option E
Assuming that, under a system of flexible exchange rates, Mexicans decide to increase their financial investment in Canada, then as a result, the peso will depreciate and the Canadian dollar will appreciate in value.Option E is correct.
Exchange rates are determined by the foreign exchange market under a flexible exchange rate system. The demand and supply of a particular currency determine its exchange rate with other currencies in the international market.
How does financial investment impact exchange rates: When a foreign investor invests in a country, the demand for that country's currency rises. Due to the increased demand, the value of that country's currency appreciates, causing the exchange rate of the foreign currency to depreciate. In the given scenario, as Mexicans decide to increase their financial investment in Canada, the demand for Canadian dollars will increase. As a result, the Canadian dollar will appreciate in value and the peso will depreciate. Hence, option E is correct.
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Case Study Resistance to Operative Site Marking To reduce the number of wrong-site surgeries in the United States, The Joint Commission’s National Patient Safety Goals (2012) include the mandate that all operative sites be marked prior to surgery. The operating surgeon is required to make the site marking in the preoperative area just before the patient is taken in to the operating room. You are the COO of a small town hospital, Center City Memorial Hospital with 32 beds. Your background is in finance and you have and MBA with no clinical experience. Dr. Josephine Roberts is the Chief of the Medical Staff, Dr. Harvey Rehnquist is the Chief of Surgery, and Dr. Townes is a busy general surgeon who does many surgeries. Dr. Townes has been resistant to marking his patients. There have been arguments between Dr. Townes and the operating room (OR) nurses in the past, which has been handled by Dr. Roberts, Chief of the Medical Staff. The OR nurses have been instructed not to bring patients in to the OR until have are properly marked. Despite site marking being The Joint Commission mandate, Dr. Townes refuses to mark the site and states it is detrimental to the patient’s well-being and invades the patient’s privacy being so close to the patient’s genital area. As COO, you have been called upon to resolve this issue on the spot as both clinical Chiefs are at a professional development conference that week. You decide that if the surgical site is not marked, then Dr. Townes would have to explain this to the patient and have the patient sign a release agreeing not to have the site marked and acknowledgement that omitting the marking may cause more risk for wrong-site surgery. After considering this option, Dr. Townes decides the consent procedure is more bothersome than just marking the site. Modified from: Buchbinder, S., Shanks, N., & Buchbinder, D. (2014). Improving Block Time Utilization to Increase Operating Room Efficiency. Cases in health care management, (pp. 93-95). Sudbury, Mass.: Jones & Bartlett Learning.
Utilizing the case study for Week 4 in the weekly readings, address each of the following bullets in a new paragraph. Please be specific.
Present a background statement on the case study identifying the problems and secondary issues from health care professionals and human resources perspectives.
Present a leadership team (identified by specific professions) to examine the problems and issues identified in the previous bullet.
Examine how this organization would achieve organizational excellence from the interdisciplinary model of care perspective.
Final thoughts on the course reading and viewing as applied to this case study. Please cite your sources in APA at the end of your content.
Leadership is required to identify the problems and issues associated with this case study of resistance to operative site marking in a hospital. The leadership team must include professionals with clinical experience and qualifications that are related to the present case. To resolve the issue on the spot, there is a need for a leadership team with specific professions. The following is an example of the leadership team:Chief Nursing Officer (CNO): The CNO is required to lead this leadership team.
The CNO is responsible for ensuring patient safety and should have experience and knowledge in clinical nursing practice, leadership, and patient safety. The CNO should lead the team and be responsible for ensuring the team develops, implements, and monitors strategies to address the problems and issues associated with the case. In this particular case, the CNO should work with other leaders to come up with a solution that ensures the OR nurses do not compromise patient safety.Chief Medical Officer (CMO): The CMO should have a background in medicine and have knowledge of hospital operations, clinical practice, and patient safety. In this case, the CMO can provide guidance on best practices for clinical practice, as well as how to educate staff and physicians on the importance of marking the operative site. The CMO should also ensure that all staff and physicians adhere to the policies set by the Joint Commission.Senior OR nurse: The senior OR nurse should have experience in OR nursing and should have knowledge of the policies and guidelines set by the Joint Commission. The senior OR nurse should be responsible for ensuring that all OR nurses comply with the policy and that patients are not brought to the OR until the operative site is marked. The senior OR nurse should also provide education to other OR nurses on the importance of marking the operative site.In conclusion, leadership is critical to address the issues associated with the case. The CNO, CMO, and senior OR nurse, are all professionals who are well qualified to address the issue. They should work together to develop strategies that will ensure that the operative site is marked in compliance with the Joint Commission’s mandate. Modified from: Buchbinder, S., Shanks, N., & Buchbinder, D. (2014). Improving Block Time Utilization to Increase Operating Room Efficiency. Cases in health care management, (pp. 93-95). Sudbury, Mass.: Jones & Bartlett Learning.Sources:Jones, G. R., & George, J. M. (2016). Contemporary management. New York, NY: McGraw-Hill Education.Buchbinder, S. B., Shanks, N. H., & Buchbinder, D. (2014). Introduction to health care management. Sudbury, MA: Jones & Bartlett Publishers.For such more question on Joint Commission
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What are some of the negative aspects of working remotely from
either a managers or an employees perspective?
Working remotely can have negative aspects both from a manager's and an employee's perspective. Managers may face challenges related to communication, team coordination, and monitoring employee productivity.
Employees, on the other hand, may experience feelings of isolation, blurred work-life boundaries, and reduced access to resources and support. These negative aspects can impact teamwork, collaboration, and overall job satisfaction.
From a manager's perspective, one of the challenges of remote work is maintaining effective communication and coordination among team members. Without face-to-face interactions, miscommunication can occur, leading to misunderstandings and delays in completing tasks. Managers may also find it difficult to monitor employee productivity and performance, as the lack of physical presence makes it challenging to observe work habits and provide timely feedback.
From an employee's perspective, working remotely can lead to feelings of isolation and reduced social interaction. The absence of in-person interactions with colleagues may result in decreased camaraderie and a sense of disconnection from the team. Additionally, remote work can blur the boundaries between work and personal life, making it challenging for employees to establish a healthy work-life balance. The absence of a physical workspace and access to office resources can also hinder employees' ability to collaborate, access information, and seek immediate support when needed.
These negative aspects can impact teamwork, collaboration, and job satisfaction. It is important for managers and employees to be aware of these challenges and take proactive measures to address them. Implementing effective communication strategies, establishing regular check-ins, promoting virtual team-building activities, and providing necessary resources and support can help mitigate the negative aspects of remote work and create a more positive and productive remote work environment.
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To write a congratulatory message, use a plan similar to the plan used for a thankful message.
TRUE
FALSE
FALSE. To write a congratulatory message, you may use a similar structure or format as a thankful message, but the content and tone will be different.
A congratulatory message is meant to celebrate and acknowledge someone's achievements, milestones, or successes, whereas a thankful message expresses gratitude and appreciation for someone's help, support, or kindness. While both messages may contain positive sentiments, the focus and purpose of each message differ.
In a congratulatory message, you would typically begin by directly addressing the recipient and expressing your congratulations. You would then highlight the specific achievement or milestone they have reached and express your admiration or praise. It's important to personalize the message and be specific about what you are congratulating them for. You can also include words of encouragement or well wishes for their future endeavors. Overall, the tone of a congratulatory message is joyful, celebratory, and inspiring.
In contrast, a thankful message would start by expressing your gratitude and acknowledging the specific actions or support you are thankful for. You would explain how the person's assistance or contribution has made a positive impact on your life or work. The tone would be more sincere, appreciative, and focused on expressing your gratitude.
While there may be some similarities in the structure or format of these messages, the content and purpose of a congratulatory message are distinct from a thankful message.
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After a recession, _____.
Select the correct answer below:
the economy's internal structure does not usually revert to its exact earlier shape
the economy no longer has an internal structure
the economy's internal structure is permanently altered
the economy's internal structure reverts back to ts exact earlier shape
After a recession, the correct answer is: the economy's internal structure does not usually revert to its exact earlier shape.
Recessions are periods of economic contraction and downturn characterized by a decline in economic activity, output, and employment. During a recession, various factors can impact the structure of the economy, such as changes in consumer behavior, technological advancements, shifts in industries, and government policies. These factors can lead to structural adjustments and alterations in the economy's internal structure.
After a recession, it is common for the economy to undergo changes that can have lasting effects. For example, certain industries may decline while new industries emerge, job opportunities may shift, and consumer preferences may change. These changes can result in a different composition of output, employment, and investment in the post-recession period.
While the economy may recover and experience growth following a recession, the internal structure is typically permanently altered to some extent. The exact shape of the pre-recession economy may not be replicated, as the economic landscape evolves in response to the challenges and opportunities arising from the recession.
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write mathematical model of lowest cost floor problem
by using operation research knowledge
The objective is to minimize the total cost of flooring while satisfying certain constraints such as the total area to be covered and the availability of different types of flooring options.
In the lowest-cost floor problem, we aim to find the optimal allocation of flooring materials to minimize the total cost. The variables in the mathematical model represent the quantities of different flooring options to be used. Let's assume we have n types of flooring options available, and for each type, we have the cost per unit area (Ci) and the available quantity (Qi).
The objective function is to minimize the total cost, which can be represented as the sum of the cost of each flooring type multiplied by its respective quantity. This can be expressed as:
Minimize: Z = C1x1 + C2x2 + ... + Cnxn
Subject to:
The total area to be covered: A = x1 + x2 + ... + xn
The quantity constraint for each flooring type: xi <= Qi, for i = 1 to n
Non-negativity constraint: xi >= 0, for i = 1 to n
By formulating and solving this linear programming model, we can determine the optimal quantities of each flooring type that minimize the total cost while satisfying the given constraints.
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The current price of neckties is $30, but the equilibrium price of neckties is $25. As a result,
A. the quantity supplied of neckties exceeds the quantity demanded of neckties at the $30 price.
B. the quantity supplied of neckties exceeds the quantity demanded at the $30 price.
C. there is a surplus of neckties at the $30 price.
D. All of the above are correct.
The correct answer is D) All of the above. With the current price of neckties at $30, the quantity supplied exceeds the quantity demanded, resulting in a surplus of neckties. This situation occurs because the equilibrium price, which is the price at which quantity supplied equals quantity demanded, is lower at $25. Therefore, all of the statements presented in options A, B, and C are correct.
When the current price of neckties is $30, but the equilibrium price is $25, it indicates that the market is not in balance. In this case, the quantity supplied of neckties exceeds the quantity demanded at the $30 price (option B). Suppliers are willing to supply a higher quantity of neckties at the current price, anticipating higher sales. However, consumers are not demanding that same quantity at the given price, resulting in an excess supply.
This excess supply leads to a surplus of neckties in the market (option C). There are more neckties available than consumers are willing to buy at the $30 price. As a result, sellers may need to lower the price in order to clear the surplus and reach the equilibrium point where quantity supplied matches quantity demanded.
In summary, with the current price of neckties exceeding the equilibrium price, there is an excess supply, and the quantity supplied exceeds the quantity demanded. This creates a surplus of neckties in the market. Therefore, option D, "All of the above," is the correct answer.
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What is the value today of receiving $2,774.00 per year forever?
Assume the first payment is made next year and the discount rate is
6.00%. Answer format: Currency: Round to: 2 decimal places.
To determine the present value of receiving $2,774.00 per year forever, we can use the formula for the present value of a perpetuity:
Present Value = Annual Payment / Discount Rate
In this case, the annual payment is $2,774.00, and the discount rate is 6.00% or 0.06 in decimal form. Plugging these values into the formula, we get:
Present Value = $2,774.00 / 0.06 = $46,233.33 (rounded to 2 decimal places).
Therefore, the present value of receiving $2,774.00 per year forever, with the first payment made next year and a discount rate of 6.00%, is approximately $46,233.33.
This means that if you were to receive $2,774.00 per year indefinitely, the present value of that stream of cash flows, discounted at a rate of 6.00%, is equivalent to $46,233.33 in today's dollars.
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elaborate on the three orders of execution of the contract which
may be obtained from a court in dealing with a breach of
contract.
There are typically three orders of execution that a court may grant to address the issue and provide appropriate remedies:
Specific Performance: Specific performance is an order from the court requiring the breaching party to fulfill their obligations as outlined in the contract. It is usually granted when monetary damages are insufficient to fully compensate the aggrieved party. In such cases, the court may order the breaching party to perform the contract as originally agreed, such as delivering a specific product or providing a specific service.
Damages: Damages refer to the monetary compensation awarded to the non-breaching party to cover the losses suffered as a result of the breach. There are different types of damages, including compensatory damages, which aim to put the non-breaching party in the position they would have been in had the contract been fulfilled, and punitive damages, which may be awarded in cases of intentional or willful breach to punish the breaching party.
Rescission and Restitution: Rescission involves canceling the contract and returning both parties to their original pre-contractual positions. It is typically granted when the breach is significant or the contract is deemed voidable. Restitution involves returning any benefits or payments received under the contract.
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List every the financial journal entries on purchasing
processes in materials management, thus explain each listed
entries. (SAP)
I can provide you with a general overview of the financial journal entries related to purchasing processes in materials management. Please note that specific journal entries may vary depending on the company's accounting practices and the use of SAP software.
Here are some common journal entries you may encounter:
1. Purchase Order (PO) Creation:
Debit: Inventory or Raw Materials (Asset)
Credit: Accounts Payable (Liability)
When a purchase order is created in the system, it results in an increase in the inventory or raw materials account and a corresponding increase in the accounts payable liability.
2. Goods Receipt:
Debit: Inventory or Raw Materials (Asset)
Credit: Goods Received/Inspection Account
When goods are received and inspected, the inventory or raw materials account is increased, and a goods received/inspection account is credited to record the temporary holding of the goods before they are put into inventory.
3. Invoice Verification:
Debit: Accounts Payable (Liability)
Credit: Goods Received/Inspection Account
(or Debit: Expenses, such as Freight or Taxes)
(or Credit: Vendor Rebates)
When the invoice is received from the supplier, the accounts payable liability is increased, and the goods received/inspection account is decreased. Additional debit or credit entries may be made to account for expenses related to the purchase or vendor rebates, if applicable.
4. Payment:
Debit: Accounts Payable (Liability)
Credit: Bank/Cash (Asset)
When the payment is made to the supplier, the accounts payable liability is reduced, and the bank or cash account is credited to record the outflow of funds.
These are some general journal entries related to purchasing processes in materials management. The specific entries and their explanations may vary depending on the company's unique requirements, the implementation of SAP, and the accounting policies in place. It is recommended to consult with an SAP expert or refer to the system documentation for detailed information on journal entries specific to your organization's setup.
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The manager of Calypso, Inc. is considering raising its current price of $31 per unit by 10% .If she does so, she estimates that demand will decrease by 20,000 units per month. Calypso currently sells 51,600 units per month, each of which costs $23 in variable costs. Fixed costs are $199,000. a. What is the current profit? 0 Current Profit b. What is the current break-even point in units? (Round your answer to the nearest whole number.) Break-Even Point units c. If the manager raises the price, what will profit be? (Do not round intermediate calculations.) Target Profit d. If the manager raises the price, what will be the new break-even point in units? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Target Break-Even Point units e. Assume the manager does not know how much demand will drop if the price increases. By how much would demand have to drop before the manager would not want to implement the price increase? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Number of Units
a. Current profit: $213,600.
b. Current break-even point in units: 24,875.
c. Profit after price increase: Calculated based on new selling price and decreased demand.
d. New break-even point in units: Calculated using new selling price and variable cost per unit.
e. Demand drops before not implementing price increase: Calculated by finding the level of demand at which profit is lower than current profit.
Break-even point:
a. The current profit for Calypso, Inc. is $213,600. This is calculated by subtracting the total variable costs ($1,187,800) and fixed costs ($199,000) from the total revenue ($1,600,400).
b. The current break-even point in units is approximately 24,875. This is determined by dividing the fixed costs ($199,000) by the difference between the selling price per unit ($31) and the variable cost per unit ($23).
c. If the manager raises the price by 10% to $34.10 per unit and expects a decrease in demand of 20,000 units, the new profit can be calculated. With the new selling price and decreased number of units sold (31,600), the profit can be determined by subtracting the variable costs ($23 per unit) and fixed costs from the revenue.
d. The new break-even point in units can be calculated using the new selling price per unit ($34.10) and the variable cost per unit ($23). This provides the level of sales volume required to cover the fixed costs at the new price and cost structure.
e. To determine the level of demand drop before the manager would not want to implement the price increase, one would need to calculate different scenarios of decreasing demand until the profit falls below the current profit of $213,600. This would help identify the threshold at which the decrease in demand outweighs the benefits of the price increase.
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A couple wishes to accumulate 1,500,000 pesos in a college fund for their son who is now celebrating his 7th birthday. They want the money to be available to him on his eighteenth birthday, and they are prepared to make equal annual contributions starting now and every birthday of their son until his 17th birthday. The fund has an annual interest rate of 5% compounded annually. How large should the couple's annual contributions be?
The couple should make annual contributions of approximately 90,211.57 pesos to accumulate 1,500,000 pesos by their son's 18th birthday, assuming an annual interest rate of 5% compounded annually.
To calculate the annual contributions required by the couple, we can use the formula for the future value of an ordinary annuity.
The formula for the future value of an ordinary annuity is:
Future Value = Payment × [(1 + Interest Rate)^Number of Periods - 1] / Interest Rate
In this case, the couple wants to accumulate 1,500,000 pesos by their son's 18th birthday, which means there will be 12 equal annual contributions (from his 7th to 17th birthday).
Let's calculate the annual contributions step-by-step:
Step 1: Determine the number of periods.
The number of periods is the difference between the ending year (his 18th birthday) and the starting year (his 7th birthday) plus one (including the starting year). Number of Periods = 18 - 7 + 1 = 12
Step 2: Calculate the future value of the annuity.
We'll use the formula mentioned earlier.
1,500,000 = Payment × [(1 + 0.05)^12 - 1] / 0.05
Step 3: Solve for the annual payment (contribution).
Rearrange the formula and solve for Payment.
Payment = 1,500,000 × 0.05 / [(1 + 0.05)^12 - 1]
Using a calculator, we can calculate the value of Payment.
Payment = 1,500,000 × 0.05 / [(1.05)^12 - 1]
≈ 90,211.57 pesos
Therefore, the couple should make annual contributions of approximately 90,211.57 pesos to accumulate 1,500,000 pesos by their son's 18th birthday, assuming an annual interest rate of 5% compounded annually.
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farmer signed a basis contract on 6/01 for wheat she will sell in the Fall of 2022. At the time she signed the contract, the basis being offered for September is - $0.40, the cash price was $7.60, and the futures price for fall was $8.00. Come September, the farmer delivers the wheat. On that day, basis is -$0.50, cash price is $6.85, and futures price is $7.35. What price will the farmer receive for their wheat?
$6.85 $7.60 $6.95 $7.50
When the farmer signed the basis contract on 6/01, the basis was -$0.40. Basis, which is the difference between the cash and futures price, is typically negative. The cash price was $7.60, and the futures price was $8.00 for fall. Come September, when the farmer delivered the wheat, the basis was -$0.50, the cash price was $6.85,
The futures price was $7.35. Now let's calculate the final price the farmer will receive for their wheat. The basis in September is -$0.50. We can subtract this value from the price per bushel the farmer was promised: $8.00 - $0.50 = $7.50. The final price the farmer will receive for their wheat will be $7.50.
The farmer signed a basis contract on 6/01 for wheat she will sell in the Fall of 2022. At the time of the contract, the basis being offered for September was -$0.40, the cash price was $7.60, and the futures price for the fall was $8.00. In September, when the farmer delivered the wheat, the basis was -$0.50, the cash price was $6.85, and the futures price was $7.35.To determine the final price the farmer will receive for their wheat, we will need to use basis, cash, and futures prices. Basis is the difference between the cash and futures prices and is typically negative. A negative basis means that the futures price is higher than the cash price. When the farmer signed the contract on 6/01, the basis was -$0.40. This means that the cash price was $0.40 lower than the futures price. The futures price at that time was $8.00, so the cash price would be $7.60. This is the price the farmer would have received if she had delivered the wheat in June, but since she delivered it in September, we need to take into account the change in basis and the cash and futures prices.The basis in September was -$0.50, which means that the cash price was $0.10 lower than the futures price. The futures price was $7.35, so the cash price was $7.25. To determine the final price the farmer will receive for their wheat, we need to subtract the basis from the price per bushel the farmer was promised: $8.00 - $0.50 = $7.50. This means that the final price the farmer will receive for their wheat is $7.50.
The final price the farmer will receive for their wheat is $7.50. This is determined by subtracting the basis of -$0.50 from the promised price per bushel of $8.00. The farmer signed the basis contract on 6/01 when the basis was -$0.40, the cash price was $7.60, and the futures price was $8.00. When the farmer delivered the wheat in September, the basis was -$0.50, the cash price was $6.85, and the futures price was $7.35.
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When government increased spending during the 1930s in an attempt to create jobs and stimulate the economy, this is an example of expansionary:
a. welfare policy
b. monetary policy
c. fiscal policy
d. regulatory policy
When government increased spending during the 1930s in an attempt to create jobs and stimulate the economy, this is an example of expansionary fiscal policy.
Option C, fiscal policy is the correct answer.Fiscal policy is the use of government taxation and expenditure to control the economy. Fiscal policy is divided into two categories: expansionary and contractionary. When the economy is slowing down or in a recession, expansionary fiscal policy is implemented to boost aggregate demand by raising government spending and lowering taxes.Examples of Expansionary Fiscal PolicyWhen the government increases spending or lowers taxes to boost economic growth, it is engaging in expansionary fiscal policy. Here are a few examples of expansionary fiscal policy:Increase in government spending Cutting taxes on individuals or businessesIncrease in transfer payments, such as unemployment benefitsDecrease in tax rates on capital gains and dividend income.
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When the government increased spending during the 1930s to create jobs and stimulate the economy, this is an example of expansionary, fiscal policy. Therefore, the correct option is c. fiscal policy.
Expansionary fiscal policy is a strategy in which the government boosts spending or reduces taxes to encourage economic growth. The government will raise spending or decrease taxes to boost the economy and keep unemployment levels low as part of the approach. This approach may result in a budget deficit, but it is expected to assist the economy in the long run as it recovers. Fiscal policy refers to the steps taken by the government to regulate the economy. It deals with government revenues and expenditures. The economy's pace is controlled by adjusting tax rates and government spending. Fiscal policy is divided into two categories: expansionary fiscal policy and contractionary fiscal policy. Expansionary fiscal policy is a measure taken by the government to boost the economy and increase output. The government boosts spending and reduces taxes during this time to encourage economic growth and improve the standard of living. Expansionary fiscal policy results in budget deficits because the government spends more than it receives in taxes.
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