Gas: When I was young, a gallon of gas cost around $1.00. Today, a gallon of gas costs around $4.00. This represents a 400% increase in price.
Computers: When I was young, a personal computer cost thousands of dollars. Today, a personal computer can be purchased for a few hundred dollars. This represents a significant decrease in price.
There are a number of factors that have contributed to the increase in the price of gas. These factors include:
The rise in demand for oil: The global demand for oil has increased significantly in recent years. This is due to a number of factors, including the growth of the Chinese economy and the increasing use of oil in developing countries.
The decline in the supply of oil: The supply of oil has declined in recent years due to a number of factors, including the depletion of oil reserves and political instability in oil-producing countries.
There are a number of factors that have contributed to the decrease in the price of computers. These factors include:
The increase in the supply of computers: The supply of computers has increased significantly in recent years due to the rise of the personal computer industry.
The decrease in the cost of production: The cost of producing computers has decreased significantly in recent years due to technological advances and the outsourcing of manufacturing.
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Our project is to create a healthy kitchen that serves customized meals for people suffering from obesity and other diseases such as diabetes and undernourishment
And for those who seek to take care of healthy food but do not have time, and we also make meals based on your special request. Where all this is done
Based on the supervision of nutrition experts and based on the individual's health statement, they will be given appropriate meals with the right amounts of carbohydrates and fats
Calories and sugar on a weekly, daily, monthly basis.
*****I want to do a swot analysis for this project
Strengths: Expert supervision, customized meals, time-saving solution, variety, and special requests, nutritional accuracy.
Weaknesses: Cost, limited reach, potential food waste.
Opportunities: Growing health consciousness, partnerships with healthcare providers, online presence.
Threats: Competition, changing dietary trends, regulatory compliance.
SWOT Analysis for the Healthy Kitchen Project:
Strengths:
Expert Supervision: The project benefits from the guidance of nutrition experts, ensuring the meals are tailored to individual health needs.Customized Meals: The ability to provide personalized meals enables the kitchen to address specific dietary requirements, such as obesity, diabetes, and undernourishment.Time-Saving Solution: The project targets individuals who seek healthy food but lack time for meal preparation, offering a convenient option that promotes a healthy lifestyle.Variety and Special Requests: By accommodating special requests, the kitchen can cater to a broader range of dietary preferences, attracting more customers.Nutritional Accuracy: The meals are carefully designed to provide the right balance of carbohydrates, fats, calories, and sugar, ensuring optimal health outcomes.Weaknesses:
Cost: Providing customized meals and expert supervision may lead to higher prices, potentially limiting the customer base to those who can afford the service.Limited Reach: The project's impact may be constrained to individuals in close proximity to the kitchen's location, limiting its accessibility to a wider audience.Potential Food Waste: Customized meals might result in leftover ingredients that are not used efficiently, leading to food wastage unless appropriate measures are implemented.Opportunities:
Growing Health Consciousness: As more people prioritize healthy eating, there is an expanding market for services that cater to specific dietary needs and personalized meal plans.Partnerships with Healthcare Providers: Collaborating with doctors, nutritionists, and healthcare providers can help reach a broader customer base and establish credibility.Online Presence: Establishing an online platform for ordering meals can expand the customer reach beyond the physical location, attracting busy individuals seeking healthy food.Threats:
Competition: The market for healthy meal delivery services is becoming increasingly competitive, requiring the project to differentiate itself through quality, service, and innovation.Changing Dietary Trends: Dietary preferences and trends can evolve rapidly, necessitating continuous adaptation to meet shifting consumer demands.Regulatory Compliance: Compliance with health and safety regulations, as well as obtaining necessary licenses and certifications, can pose challenges.Overall, the Healthy Kitchen project holds significant potential to meet the needs of individuals with specific health conditions, time constraints, and dietary preferences. By leveraging its strengths, addressing weaknesses, capitalizing on opportunities, and navigating potential threats, the project can position itself as a leading provider of healthy and customized meal solutions.
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a) In what respect; the short term expectations differ from the longterm expectations in Keynesian analysis b) Suppose that a firm tries to forecast the monthly inflation rate of July using the adaptive expectations and following information Firm assigns a weight of 0.2 to April inflation rate, a weight of 0.3 to Mayl inflation and a weiight of 0.5 to June inflaton. What may be the firm's expectation for the July monthly inflation rate.
a) Short-term: current conditions. Long-term: past trends, fundamental factors.
b) Firm's expectation: weighted average of past three months' inflation.
a) In Keynesian analysis, short-term expectations are influenced more by current and near-term economic conditions, while long-term expectations take into account factors such as past trends, fundamental economic factors, and anticipated policy changes.
b) To calculate the firm's expectation for the July monthly inflation rate using adaptive expectations, we need the inflation rates for April, May, and June.
Let's assume these rates are 2%, 3%, and 4%, respectively.
The firm's expectation for July's inflation rate would be a weighted average of the past three months' inflation rates:
Expectation for July inflation = (0.2 * 2%) + (0.3 * 3%) + (0.5 * 4%)
Expectation for July inflation = 0.4% + 0.9% + 2%
Expectation for July inflation = 3.3%
Therefore, the firm's expectation for the July monthly inflation rate would be 3.3%.
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Beta is a very important indicator of the riskiness of a company. Technically, it is the covariance of the
company's return with return of a market portfolio. Discuss at least two factors that may influence the beta value of
a company and how they can affect the beta
Industry and leverage affect a company's beta: volatile industries and higher leverage result in higher beta values, indicating increased risk and sensitivity to market movements.
Two factors that can influence the beta value of a company are the nature of the industry it operates in and its financial leverage.
Industry Nature: The industry in which a company operates can significantly impact its beta value. Certain industries, such as technology or biotechnology, tend to exhibit higher levels of volatility and uncertainty, leading to higher betas. This is because these industries often experience rapid changes, innovation, and market fluctuations. On the other hand, companies operating in stable and mature industries like utilities or consumer staples may have lower betas due to relatively predictable cash flows and less exposure to market fluctuations.Financial Leverage: The level of financial leverage, or debt financing, employed by a company can affect its beta. Higher financial leverage magnifies the impact of market fluctuations on a company's earnings and stock price, potentially increasing its beta. This is because debt creates fixed interest obligations that must be met regardless of the company's performance. As a result, companies with higher debt levels are generally more sensitive to market movements and have higher betas. Conversely, companies with lower levels of financial leverage may have lower betas as they are less influenced by market fluctuations.In summary, the nature of the industry and the financial leverage of a company are two factors that can influence its beta value. Companies operating in volatile industries and those with higher financial leverage are likely to have higher betas, indicating greater riskiness and sensitivity to market movements.
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Explain any two categories where the special rates can be
grouped.
Special rates can be grouped into two categories: Promotional Rates and Negotiated Rates
Promotional Rates: Promotional rates refer to temporary or limited-time offers that are designed to attract customers and incentivize certain behaviors or actions. These rates are typically lower or discounted compared to standard rates and are aimed at increasing sales, attracting new customers, or promoting specific products or services. Examples of promotional rates include introductory offers, seasonal discounts, bundle deals, or loyalty rewards. Promotional rates are often used in marketing campaigns to create a sense of urgency and encourage immediate action from customers.
Negotiated Rates: Negotiated rates are custom rates that are agreed upon through a negotiation process between the service provider and the customer. These rates are often tailored to specific circumstances, volume commitments, or long-term contracts. Negotiated rates are commonly seen in industries such as transportation, hospitality, and telecommunications, where businesses or individuals can negotiate pricing based on factors like volume, duration, or specific needs. These rates are unique to each negotiation and can provide cost savings or preferential
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Desmond Was Appointed Director And Managing Director Of Candore Limited. The Terms Of His Service Contract Provided That He Should Hold Office For Eight Years And This Term Was Also Stated In Candor’s Articles Of Association. The Other Directors Decided That Desmond Should Be Removed From Those Positions And They Placed Such A Resolution Before Shareholders
Desmond was appointed director and managing director of Candore Limited. The terms of his service contract provided that he should hold office for eight years and this term was also stated in Candor’s Articles of Association. The other directors decided that Desmond should be removed from those positions and they placed such a resolution before shareholders at a general meeting and it was duly passed. Desmond is certain that his removal would be in breach of the Articles of Association as well as his contract and intends to seek legal advice.
Desmond's removal as director and managing director of Candore Limited may potentially be a breach of the Articles of Association and his service contract. He intends to seek legal advice to assess his rights and potential remedies in this situation.
1. Breach of the Articles of Association: The Articles of Association typically outline the internal regulations and rules governing a company's operations. If Desmond's removal does not comply with the provisions stated in the Articles of Association, it could be considered a breach of those provisions.
2. Breach of the service contract: Desmond's service contract stipulated that he should hold office for eight years. If his removal violates the terms and conditions of his service contract, it may be regarded as a breach of contract.
To ascertain the legality of Desmond's removal and the potential breach of the Articles of Association and his service contract, he intends to seek legal advice. A legal professional will analyze the specific terms and provisions of the Articles of Association and the service contract, review relevant company law and employment law, and provide guidance on Desmond's rights and available remedies.
Desmond's intention to seek legal advice is a prudent course of action to determine the validity of his removal as director and managing director of Candore Limited. By consulting with legal experts, he can gain a comprehensive understanding of his rights and potential legal remedies in response to the alleged breach of the Articles of Association and his service contract.
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A company has a return on assets of 10.92% total asset turnover
of .84. Its debt equity ratio is 1.4 and its equity multiplyer is
2.4. What is ROE?
To find the Return on Equity (ROE), we need to calculate the Return on Assets (ROA). Given the ROA of 10.92%, total asset turnover of 0.84, debt-equity ratio of 1.4, and an equity multiplier of 2.4, ROE is 22.01%.
The Return on Equity (ROE) is a measure of a company's profitability and efficiency in generating returns for its shareholders. It is calculated by multiplying the Return on Assets (ROA) by the equity multiplier.
To calculate ROA, we multiply the ROA of 10.92% by the total asset turnover of 0.84, which gives us a ROA of 9.17% (10.92% * 0.84 = 9.17%).
Next, we calculate the equity multiplier by adding 1 to the debt-equity ratio. In this case, the debt-equity ratio is 1.4, so the equity multiplier is 1 + 1.4 = 2.4.
Finally, to find the ROE, we multiply the ROA by the equity multiplier: ROE = ROA * Equity Multiplier = 9.17% * 2.4 = 22.01%.
Therefore, the Return on Equity (ROE) for the company is 22.01%.
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First, the S&P 500 consulting project implies that you will be analyzing one company and propose a viable strategy to regain competitiveness in the US Market. You picked Simon Property Group.
The proposal consists of submitting a cover letter where you need to develop the strategy, use the 5 elements of strategy to implement it, and provide convincing arguments about why you shall be hired by the company to lead this implementation. Present the strategy and develop convincing arguments to be hired for developing this implementation. In that manner, you must assume that you are acting as a consultant to Simon Property Group.
As a consultant to Simon Property Group, I propose a viable strategy to regain competitiveness in the US Market.
The proposed strategy is based on the 5 elements of strategy: goals, scope, advantage, resources, and actions. The goal is to become the leading retail real estate company in the US market.Scope: The company shall focus on expanding its presence in major US cities and suburban areas to increase foot traffic to its properties and generate higher revenues. Advantage: The company shall leverage its brand recognition, reputation, and experience to create a differentiated customer experience and attract more customers to its properties.Resources: The company shall allocate sufficient resources to invest in property development, renovation, marketing, and technology to enhance the customer experience and streamline operations.
I am confident that this strategy will help Simon Property Group regain competitiveness in the US market and achieve its goal of becoming the leading retail real estate company. I would be honored to lead the implementation of this strategy and contribute to the success of the company.
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Find the single discount rate that equivalent to a sale discount of 12% plus a cash discount of 8% (in the format 0.00% ).
To find the single discount rate that is equivalent to a sale discount of 12% plus a cash discount of 8%, we can calculate the net price applying.Therefore, the single discount rate that is equivalent to a sale discount of 12% plus a cash discount of 8% is 80.96%.
To find the equivalent single discount rate, we need to consider the combined effect of both discounts on the original price. The sale discount of 12% reduces the price by 12%, and the cash discount of 8% further reduces the remaining amount. By multiplying the decimal equivalents of the individual discounts (1 - 0.12) and (1 - 0.08), we obtain the net price after applying both discounts.
First, we calculate the net price after applying the discounts:
Net Price = (1 - Sale Discount)(1 - Cash Discount)
Net Price = (1 - 0.12)(1 - 0.08)
Net Price = 0.88 * 0.92
Net Price = 0.8096 or 80.96%
The resulting net price represents the value that is equivalent to the original price after applying the combined discounts. To express it as a single discount rate, we convert the net price back to a percentage by subtracting it from 100%. In this case, the net price is 80.96%, so the single discount rate that is equivalent to the given discounts is 80.96%.
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When the budgeting process is communicated according to corporate policy, the employees involved are demonstrating a high level of: Select one: a. Integrity b. Confidentiality c. Credibility d. Competence
c. Credibility. Employees exhibit a high level of credibility when they convey the budgeting process in accordance with organisational policies.
They build trust and dependability in their communication by following set rules and communicating correct information, which raises their reputation within the organisation.
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Answer whether the following are expensed or capitalized:
Money spent to buy a patent from a competitor:
Money spent on software development before technological feasibility:
Money spent to defend a patent:
Money spent to buy a patent from a competitor: This is capitalized as an intangible asset. Intangible assets are long-lived assets that do not have physical substance, such as patents, trademarks, and copyrights.
Money spent on software development before technological feasibility: This is expensed as research and development costs. Research and development costs are costs incurred in the search for, development, and improvement of new products or processes.
. Money spent to defend a patent: This is capitalized as an intangible asset. The cost of defending a patent is considered to be an asset because it enhances the value of the patent.
Here are some additional details about each of these items:
. Money spent to buy a patent from a competitor: When a company buys a patent from a competitor, it is essentially buying the right to use that patent. The patent is an intangible asset, and the cost of buying it is capitalized as an asset on the company's balance sheet.
. Money spent on software development before technological feasibility: When a company spends money on software development, it is not yet clear whether the software will be successful. As a result, the costs of software development are typically expensed as research and development costs.
. Money spent to defend a patent: When a company is sued for infringing on someone else's patent, it may have to spend money to defend itself in court. The cost of defending a patent is considered to be an asset because it enhances the value of the patent.
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Taylor Guitars is a medium sized British electric guitar
manufacturing company founded by Mick Taylor, former lead guitarist
with The Rolling Stones rock band. Mick played with the group from
1969 to
Taylor Guitars is not a British electric guitar manufacturing company founded by Mick Taylor, the former lead guitarist of The Rolling Stones.
Taylor Guitars is an American company that specializes in acoustic guitars. It was founded by Bob Taylor and Kurt Listug in 1974 in California, United States. The company is known for its high-quality acoustic guitars, innovative design features, and commitment to sustainability.
Please note that the information provided in your question does not align with the actual history and background of Taylor Guitars. If you have any other questions or need accurate information about Taylor Guitars or any other topic, feel free to ask.
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What is India GDP per capita, GDP growth rate, and unemployment rate for market expansion? what are 2 opportunities and 2 threats for a bakery business?
What are political and legal factors in India foe starting a business? Explain 2 opportunites and 2 threats specifically to a bakery business.
What is the ranking of network readiness for India? Explain how and why the networked readiness presents opporunities or threats to a bakery business.
Explain geographical factors entering a bakery business in India. Why does this matter for a bakery business? What are 2 opportunties and 2 threats for a bakery business?
India's GDP per capita is approximately $2,200. The GDP growth rate stands at around 7%, and the unemployment rate is estimated to be around 7% as well. These figures indicate the current economic landscape in India.
India presents two opportunities for a bakery business. Firstly, the country has a large and growing population, providing a substantial customer base for the bakery to target. With rising disposable incomes and changing lifestyles, there is an increasing demand for baked goods. Secondly, India's diverse culinary culture offers opportunities for the bakery to cater to regional tastes and preferences, allowing for the creation of unique and specialized products.
However, there are also two threats that a bakery business in India should consider. Firstly, the market is highly competitive, with numerous existing bakeries and well-established brands. Differentiating the business and building a loyal customer base can be challenging. Secondly, fluctuations in ingredient prices, especially for items like wheat and dairy, can impact the bakery's profitability and cost management.
Political and legal factors play a crucial role in starting a business in India. Two opportunities arising from political factors include the government's initiatives to promote entrepreneurship and ease of doing business. These initiatives provide support and incentives for new businesses, making it easier to navigate the regulatory environment. Additionally, India's growing middle class and changing consumer preferences present an opportunity for bakery businesses to tap into the rising demand for quality baked goods.
However, there are also two threats related to legal factors that a bakery business should consider. Firstly, compliance with food safety and hygiene regulations is essential, as the failure to meet these standards can lead to reputational damage and legal consequences. Secondly, complex labor laws and regulations may pose challenges in terms of recruitment, employment, and adherence to employment practices.
India's network readiness ranking is subject to change and can be influenced by various factors. However, as of my knowledge cutoff in September 2021, India's network readiness ranked 72nd out of 139 countries, indicating room for improvement. The networked readiness presents opportunities and threats to a bakery business.
Improved network readiness can provide opportunities for a bakery business in terms of enhanced connectivity and access to digital platforms. It can facilitate online sales, marketing, and delivery services, enabling the bakery to reach a wider customer base and explore e-commerce channels. Additionally, improved network readiness can support efficient supply chain management, enabling better inventory control and timely delivery of ingredients.
On the other hand, inadequate network readiness can pose threats to a bakery business. Limited internet penetration and slow connectivity can hinder online presence and digital marketing efforts. It may limit the ability to reach customers through digital platforms and impact the competitiveness of the business. Furthermore, unreliable network infrastructure can disrupt online sales and delivery services, leading to customer dissatisfaction and potential revenue loss.
Geographical factors are significant for a bakery business in India. The location of the bakery can influence its accessibility, target market, and competition. Two opportunities arising from geographical factors include selecting a strategic location with high foot traffic, such as near residential areas, offices, or educational institutions. This can increase customer visibility and potential sales. Additionally, leveraging local sourcing of ingredients can ensure freshness and help create a unique selling proposition by highlighting the use of regional and traditional flavors.
However, there are also two threats related to geographical factors. Firstly, high rental and real estate costs in prime locations can pose a financial burden, especially for small bakery businesses. Secondly, varying climatic conditions across different regions of India can impact ingredient availability and shelf life. Adapting to seasonal changes and managing inventory accordingly can be challenging for bakery businesses operating in multiple locations.
Overall, understanding the economic, political, legal, network readiness, and geographical factors is essential for a bakery business in India to identify opportunities and threats, strategize effectively, and establish a successful presence in the market.
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please help me with the journal entries You are hired as a new staff accountant for Chalky Co., a reputable chalkboard company, that specializes in selling and installing chalkboards. Your task is to prepare the financial statements for December 31, 2018 1. An audit of their supply inventory showed that $5,000 were used. 2. Previously Chalky Co. had purchased office furniture. The office furniture was purchased for $32,000. Chalky Co. expects the furniture to last 10 years and value $0 at the end of its useful life. 1 year of depreciation needs to be recorded 3. An insurance policy was purchased for $8,000. 6 months of it was used 4. Star Company paid for 50 chalkboards to be installed at $50 each last month. The chalkboards were installed in December. 5. Chalky Co. provided installation service to Peeps and Company for $8,000 on account. 6. Happy Cleaners provided cleaning services to Chalky Co. during December. An invoice was received for the amount of $1,200 due in 30 days. 7. Chalky Co. conducted a physical count of their inventory. The value of current inventory was $9,000.00 8. Based on previous experience, Chalky Co. estimates that 1% of its accounts receivable balance will go uncollected. 9. Chalky Co. aquired BD Company in 2017 for $175,000. At the time of acquisition, BD Company had net assets of $115,000. The current value of BD Company is $130,000 (in 2018). 10. Chalky Co. offers warranty on the services it provides. Based on the companies past experience they estimate warranty expense to be $4,500. 11. Chalky Co. is wanting to expand its operations and needs additional funding. As a result, they decide to sell an additional 15,000 shares at a market price of $20. The par value of the stock is $1 12. Chalky Co. purchased 1,000 of its own shares at the market price of $25.00
1. Journal entry: Debit Supplies Expense $5,000 and credit Supplies Inventory $5,000.
2. Journal entry: Debit Depreciation Expense $3,200 and credit Accumulated Depreciation $3,200.
3. Journal entry: Debit Prepaid Insurance $4,000 and credit Cash $4,000.
4. Journal entry: No journal entry needed for this transaction.
5. Journal entry: Debit Accounts Receivable $8,000 and credit Service Revenue $8,000.
6. Journal entry: Debit Cleaning Services Expense $1,200 and credit Accounts Payable $1,200.
7. Journal entry: Debit Inventory $9,000 and credit Cost of Goods Sold $9,000.
8. Journal entry: Debit Bad Debt Expense (based on estimated percentage) and credit Allowance for Doubtful Accounts (contra-asset).
9. No journal entry needed for this transaction.
10. Journal entry: Debit Warranty Expense $4,500 and credit Warranty Liability $4,500.
11. Journal entry: Debit Cash (number of shares sold * market price) and credit Common Stock (number of shares sold * par value) and Additional Paid-in Capital (excess of sale price over par value).
12. Journal entry: Debit Treasury Stock (number of shares purchased * market price) and credit Cash (number of shares purchased * market price).
1. The decrease in supplies is recorded as an expense and reduces the value of supplies inventory.
2. Depreciation expense is recognized to allocate the cost of office furniture over its useful life. Accumulated depreciation is a contra-asset account that accumulates the depreciation expense.
3. The purchase of insurance is recorded as a decrease in cash (prepaid expense) and an increase in prepaid insurance.
4. No journal entry is required for this transaction as the payment was made in the previous period.
5. The revenue earned from the installation service is recorded as an increase in accounts receivable and service revenue.
6. The invoice received for cleaning services is recorded as an expense and an increase in accounts payable.
7. The inventory count is recorded as a decrease in inventory and an increase in cost of goods sold.
8. A provision for bad debts is recorded based on the estimated uncollectible accounts.
9. No journal entry is needed as this is information about the acquisition and current value of BD Company.
10. The estimated warranty expense is recorded as an expense and an increase in the warranty liability.
11. The sale of additional shares is recorded as an increase in cash and an increase in common stock and additional paid-in capital.
12. The purchase of treasury stock is recorded as a decrease in cash and an increase in the treasury stock account.
These journal entries reflect the transactions and their effects on Chalky Co.'s financial statements.
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enny's Arcade has five video game machines. The average time between machine failures is 40 hours. Jimmy, the maintenance engineer, can repair a machine in 5 hours on average. The machines have an exponential failure distribution, and Jimmy has an exponential service-time distribution. a. Jimmy's utilization is. (Enter your response rounded to three decimal places.) b. The average number of machines out of service, that is, waiting to be repaired or being repaired is machines. (Enter your response rounded to two decimal places.) c. The average time a machine is out of service is hours. (Enter your response rounded to two decimal places.)
The average number is:
a. Jimmy's utilization is 0.125.
b. The average number of machines out of service is 0.142 machines.
c. The average time a machine is out of service is 5.68 hours.
To solve this problem, we can use the formulas for utilization, average number of machines out of service, and average time a machine is out of service in a M/M/1 queue system.
a. Jimmy's utilization (ρ) can be calculated using the formula:
ρ = λ / μ
where λ is the arrival rate and μ is the service rate.
Since the average time between machine failures is 40 hours, the arrival rate (λ) can be calculated as 1 / 40 (assuming one failure per 40 hours).
Since Jimmy can repair a machine in 5 hours on average, the service rate (μ) can be calculated as 1 / 5 (assuming one repair completed every 5 hours).
Substituting the values:
ρ = (1 / 40) / (1 / 5)
ρ = 0.125
b. The average number of machines out of service (L) can be calculated using the formula:
L = ρ / (1 - ρ)
Substituting the value of ρ:
L = 0.125 / (1 - 0.125)
L = 0.142
c. The average time a machine is out of service (W) can be calculated using the formula:
W = L / λ
Substituting the value of L and λ:
W = 0.142 / (1 / 40)
W = 5.68 hours
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To decrease the money supply, the Federal Reserve could
A. lower the required reserve ratio.
B. lower the discount rate.
C. raise income taxes.
D. raise transfer payments.
E. conduct an open market sale of Treasury securities.
To decrease the money supply, the Federal Reserve can conduct an open market sale of Treasury securities.
The correct option is E.
Treasury securities to commercial banks, financial institutions, or the public. By selling these securities, the Fed removes money from the banking system, reducing the overall money supply. When the Fed sells Treasury securities, buyers use their funds to purchase the bonds, transferring money from their bank accounts to the Fed.
As a result, the reserves of commercial banks decrease, limiting their ability to lend and create new money through the lending process. This contraction of lending and money creation reduces the money supply in the economy. Lowering the required reserve ratio Option A would actually increase the money supply as it reduces the amount of reserves banks are required to hold, allowing them to lend more. Similarly, lowering the discount rate Option B would encourage banks to borrow from the Fed at lower interest rates, leading to increased lending and money creation. Options C and D, raising income taxes and raising transfer payments, are fiscal policy tools that are not directly controlled by the Federal Reserve.
Hence , E is the correct option
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A. Select any Multinational company and explain the following based on Corporate Social Responsibility: ( 2 Marks each) 1. Identify company's stakeholder management capability and stakeholder influencing strategy in detail. 2. Explain in details company's arrangement on social capital platform that creates value and facilitates the actions of stakeholders within and external to corporation. 3. Explain in detail company's business ethics and moral reasoning process platform by taking challenges of ethics in business. 4. Explain in detail company's business ethics platform on values, code of conduct, training, audits and ethics committees. 5. Explain in detall company's ethics reporting system and whistleblowing.
Multinational Company and describe its CSR initiatives in terms of stakeholder management, social capital arrangement, business ethics, ethics reporting, and whistleblowing.
Multinational corporations have a responsibility to engage in corporate social responsibility (CSR) initiatives. This essay evaluates how a selected company handles its CSR initiatives and describes the company's stakeholder management capacity, social capital arrangement, business ethics, ethics reporting, and whistleblowing strategies. Stakeholder management refers to the company's ability to manage the relationship between the organization and its stakeholders, while stakeholder influencing refers to the company's strategy for engaging with stakeholders to achieve mutual objectives. Companies must establish social capital arrangements that create value and help the actions of both internal and external stakeholders.
The company's business ethics and moral reasoning platform should include a code of conduct, training, audits, and ethics committees. The ethics reporting system should ensure that stakeholders may raise concerns about unethical conduct. Finally, whistleblowing policies should enable employees to report unethical conduct.
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During disinvestment training, implications include:
cross training
time management
team building
integration of training systems
Disinvestment refers to the process of selling or liquidating assets, such as investments or business assets, by a corporation, government, or individual. It involves divesting or reducing ownership in these assets for various reasons.
Cross training: This aspect of disinvestment training focuses on providing workers or personnel with training in multiple tasks. Cross training helps enhance their knowledge and skills, allowing them to perform different roles and responsibilities within the organization.
By having employees who are versatile and capable of handling various tasks, organizations can optimize their workforce and reduce the need for additional staff.
Time management: Disinvestment training emphasizes effective time management skills to ensure that tasks are completed efficiently within specified timeframes.
Employees receive training on prioritization, scheduling, and productivity techniques to maximize their use of time. This helps improve overall efficiency and productivity within the organization.
Team building: Disinvestment training can also serve as a team-building exercise. When employees participate in training programs together, it fosters a sense of unity, collaboration, and shared goals.
By undergoing training as a team, employees develop stronger bonds and work cohesively, leading to improved teamwork and cooperation in disinvestment-related projects.
Integration of training systems: Disinvestment training involves the integration of training systems to create a standardized and streamlined approach.
By aligning training processes and content, organizations can ensure that all employees receive consistent and comprehensive training. This integration helps establish a common knowledge base, enhances communication, and promotes a standardized understanding of disinvestment processes and practices.
In summary, disinvestment training encompasses cross training, time management, team building, and integration of training systems. By addressing these implications, organizations can equip their employees with the necessary skills and knowledge to navigate disinvestment processes effectively.
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Which of the following best describe simple and compound returns? compound returns earn "interest on interest" while simple returns do not simple returns earn "interest on interest" while compound returns do not a simple return of 5% per year accumulates more money than a 5% compound return per year over a 10 year period. present value calculations use simple, not compound, returns
Compound returns earn "interest on interest" while simple returns do not. Simple returns accumulate more money than compound returns over a 10-year period when the simple return is 5% per year.
Simple returns and compound returns are different ways to calculate investment returns. Compound returns earn "interest on interest" because they reinvest the interest earned back into the investment, resulting in exponential growth. On the other hand, simple returns do not earn "interest on interest" as the interest earned is not reinvested.
When comparing a simple return of 5% per year with a compound return of 5% per year over a 10-year period, the simple return will accumulate more money. This is because the simple return provides a constant percentage increase on the original investment each year, while the compound return provides a percentage increase on the growing balance each year.
Present value calculations, on the other hand, use simple returns instead of compound returns. This is because present value calculations discount future cash flows to their present value and do not take into account the compounding effect of interest.
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The primary objective of an advertisement that compares the amount of caffeine in Red Bull compared to other energy drink is to: Select one: a. build relationships with channel members b. build customer loyalty for the product c. persuade consumers to choose one product over another d. remind consumers to stock up on energy drinks e. inform consumers about products in the decline stage of their product life cycle
The primary objective of an advertisement that compares the amount of caffeine in Red Bull compared to other energy drinks is to persuade consumers to choose one product over another. So, the correct option is (c).
The objective of comparing the amount of caffeine in Red Bull with other energy drinks is to create a competitive advantage and convince consumers to select Red Bull over its competitors.
By highlighting its higher caffeine content, the advertisement aims to position Red Bull as a superior energy drink option, appealing to consumers seeking a stronger energy boost.
This strategy leverages a unique selling point to differentiate Red Bull from its competitors and influence consumer preferences, ultimately driving them to choose Red Bull as their preferred energy drink brand.
The advertisement's primary goal is to persuade consumers to make a specific product choice, rather than focusing on building relationships, loyalty, reminders, or informing consumers about declining products.
Hence, the correct option is (c) persuade consumers to choose one product over another .
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The primary objective of an advertisement that compares the amount of caffeine in Red Bull compared to other energy drinks is to persuade consumers to choose one product over another.
So, the correct option is (c).
The objective of comparing the amount of caffeine in Red Bull with other energy drinks is to create a competitive advantage and convince consumers to select Red Bull over its competitors.
By highlighting its higher caffeine content, the advertisement aims to position Red Bull as a superior energy drink option, appealing to consumers seeking a stronger energy boost.
This strategy leverages a unique selling point to differentiate Red Bull from its competitors and influence consumer preferences, ultimately driving them to choose Red Bull as their preferred energy drink brand.
The advertisement's primary goal is to persuade consumers to make a specific product choice, rather than focusing on building relationships, loyalty, reminders, or informing consumers about declining products.
Hence, the correct option is (c) persuade consumers to choose one product over another .
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The share of company ABC is trading at EUR 38 and the company is expected to pay annual dividend next year of EUR 1.25. Investors are expecting a rate of return of 11%. If the company is planning to provide a constant annual rate of growth in dividends, what is the growth rate? The US Treasury rate is 3% and the required rate of return or CAPM 11%, what is the company's beta? Calculate the weighted average of capital WACC considering that company ABC borrows at 3.5%, has a capital structure with 60% Equity and pays a corporate tax of 35%.
To calculate the growth rate of dividends, we can use the Gordon Growth Model formula:
Dividend Growth Rate = (Dividend Next Year / Share Price) - 1
Dividend Next Year = EUR 1.25
Share Price = EUR 38
Dividend Growth Rate = (1.25 / 38) - 1 = 0.0329 or 3.29%
The growth rate of dividends for company ABC is 3.29%.
To calculate the company's beta, we need the risk-free rate and the market risk premium. The risk-free rate is given as 3%, and the required rate of return (CAPM) is 11%. Using the formula:
Beta = (Required Rate of Return - Risk-Free Rate) / Market Risk Premium
Beta = (11% - 3%) / Market Risk Premium
Since the market risk premium is not provided in the question, we cannot determine the exact value of the company's beta without additional information.
To calculate the weighted average cost of capital (WACC), we need the cost of equity and the cost of debt.
Cost of Equity:
Equity Portion = 60% (as given in the question)
Risk-Free Rate = 3%
Market Risk Premium = Not provided
Cost of Debt:
Debt Portion = 100% - Equity Portion = 40% (as given in the question)
Interest Rate = 3.5%
Tax Rate = 35%
Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium
Cost of Debt = Interest Rate * (1 - Tax Rate)
WACC = (Equity Portion * Cost of Equity) + (Debt Portion * Cost of Debt)
Since the Market Risk Premium is not provided, we cannot calculate the exact values for the cost of equity, cost of debt, and WACC without that information.
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2. a). "Organizing is the primary mechanism which is used by the managers to activate the plans". Do you agree with the statement? Elaborate your answer with workplace-related examples. b). "Workplace conflicts are neither good nor bad". Explain your answer with workplace- related examples.
I concur with the statement, yes. Setting up uses for all resources within the management system is what it entails. Because it is the main method by which managers implement their plans, organizing is crucial to the management system.
Conflicts at work are neutral in nature. Productivity might decline as a result of disagreement at work. Increases in absenteeism resources within the organization will occur.
To keep up a contentious relationship with the employer would be too difficult. It creates tension relating to employment. Conflict will arise at work if the manager doesn't get along with the staff. As a result, the workplace is unpleasant for the employees.
The productivity side will undoubtedly increase if they help the staff, which also fosters a positive work environment. The business's productivity will undoubtedly suffer if the boss maintains a poor connection with the staff. The work management system has become unpleasant, and the employees are unwilling .
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A 10-year bond of a firm in severe financial distress has a coupon rate of 14% and sells for $900. The firm is currently renegotiating the debt, and it appears that the lenders will allow the firm to reduce coupon payments on the bond to one-half the originally contracted amount. The firm can handle these lower payments. What are (a) the stated and (b) the expected yield to maturity of the bonds? The bond makes its coupon payments annually. Stated Yield to Maturity Expected Yield to Maturity 5 pts % Do not round intermediate calculations. Round your answer to 3 decimal places include trailing zeros. Do not enter percent signs (no %)
The annual coupon payment will be $70 ($140/2) instead of $140. Now, using the same formula as mentioned in part (a), we get the expected yield to maturity as 20.21%. Therefore, the expected yield to maturity is 20.21%.
a) Calculation of stated yield to maturity:Stated yield to maturity is the interest rate, which is paid to the bondholders over the life of the bond.
The calculation of stated yield to maturity for the given bond is as follows:Face value of the bond = $1000Coupon rate = 14%Annual coupon payment = 14% of $1000 = $140Market value of bond = $900Number of years to maturity = 10 yearsWe know that, PVA = PMT[1 - 1/(1 + r)n] / r + FV / (1 + r)n.
Where,PVA = Market value of bondPMT = Annual coupon paymentr = Yield to maturityFV = Face value of bondn = Number of years to maturitySubstituting the given values in the above formula, we get, 900 = 140[1 - 1/(1 + r)¹⁰] / r + 1000 / (1 + r)¹⁰Solving the above equation by trial and error method, we get the value of r as 15.57%.
Hence, the stated yield to maturity is 15.57%.b) Calculation of expected yield to maturity:The expected yield to maturity is the rate of return which is expected to be earned on the bond if it is held till maturity. As the firm has renegotiated the debt, the coupon payments will be reduced to one-half of the originally contracted amount.
Therefore, the annual coupon payment will be $70 ($140/2) instead of $140. Now, using the same formula as mentioned in part (a), we get the expected yield to maturity as 20.21%. Therefore, the expected yield to maturity is 20.21%.
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Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
Year Project A Cash Flow Project B Cash Flow
0 $(110,000) $(110,000)
1 $35,000 $0
2 $35,000 $0
3 $35,000 $0
4 $35,000 $0
5 $35,000 $240,000
If the appropriate discount rate on these projects is 9percent, which would be chosen and why?
The NPV of Project A is __ (Round to the nearest cen
To determine which project to choose based on their net present value (NPV), we need to calculate the NPV for each project using the appropriate discount rate of 9 percent.
NPV is calculated by discounting each cash flow and summing them up. A positive NPV indicates that the project is expected to generate more value than the initial investment.
For Project A:
NPV = (-$110,000) + ($35,000 / (1 + 0.09)^1) + ($35,000 / (1 + 0.09)^2) + ($35,000 / (1 + 0.09)^3) + ($35,000 / (1 + 0.09)^4) + ($35,000 + $240,000 / (1 + 0.09)^5)
Calculating this using a financial calculator or spreadsheet software, we find that the NPV of Project A is approximately $25,645.70.
For Project B:
NPV = (-$110,000) + ($0 / (1 + 0.09)^1) + ($0 / (1 + 0.09)^2) + ($0 / (1 + 0.09)^3) + ($0 / (1 + 0.09)^4) + ($240,000 / (1 + 0.09)^5)
Calculating this, we find that the NPV of Project B is approximately $188,950.43.
Comparing the NPVs, we can see that Project B has a higher NPV of $188,950.43 compared to Project A's NPV of $25,645.70.
Therefore, based on the NPV criterion and using a discount rate of 9 percent, Project B would be chosen because it is expected to generate higher value and returns compared to Project A.
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The NPV of Project A is $8,733.94 (rounded to the nearest cent).
To determine which project should be chosen, we compare the NPV of each project.
The NPV of Project A is positive, indicating that the present value of its cash flows exceeds the initial investment. On the other hand, the NPV of Project B is zero, implying that its cash flows exactly cover the initial investment.
Since Project A has a positive NPV, it would be chosen over Project B. A positive NPV indicates that the project is expected to generate more value than the initial investment, considering the time value of money and the discount rate of 9%. Project A's cash flows, particularly the significant cash inflow in Year 5, contribute to its positive NPV.
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Do some research and highlight the actions your feel will increase the probability that a change initiative
Implementing a successful change initiative within an organization requires careful planning and execution. Here are some actions that can increase the probability of a successful change initiative:
Effective Communication: Clear and consistent communication is crucial during a change initiative. Leaders should openly communicate the reasons behind the change, its benefits, and how it aligns with the organization's vision and goals. Regular updates and opportunities for dialogue should be provided to address concerns and keep employees informed and engaged.
Strong Leadership Support: Leaders play a vital role in driving and championing the change. They should actively support and demonstrate their commitment to the initiative by aligning their actions with the proposed changes. This includes providing resources, removing obstacles, and modeling the desired behaviors to inspire employees.
Employee Involvement and Engagement: Involving employees in the change process increases their ownership and commitment. This can be achieved through seeking their input, involving them in decision-making, and providing opportunities for training and skill development to adapt to the change. Employees should be empowered to contribute their ideas and be part of the solution.
Clear Vision and Goals: A clear vision and well-defined goals help employees understand the purpose and direction of the change. The goals should be specific, measurable, achievable, relevant, and time-bound (SMART), providing a roadmap for success. When employees have a clear understanding of the desired outcome, they are more likely to support and work towards it.
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What are the conditions that may make a country protection of pharmaceutical industry more successful
What are the conditions that may make a country protection of pharmaceutical industry more successful
The conditions that may make a country's protection of the pharmaceutical industry more successful the measures to be taken like, favorable tax environment, and strong export capacity etc.
Favorable regulatory environment: A regulatory environment that favors research and development, intellectual property protection, and efficient approval processes can make it easier for pharmaceutical companies to operate and thrive.
Strong Intellectual Property Protection: A strong intellectual property protection regime, including patent protection, can encourage innovation by allowing companies to recoup their investments in research and development.
Skilled Workforce: A skilled workforce, particularly in the areas of science and engineering, can support the research and development efforts of pharmaceutical companies.
Access to Capital: Access to capital, such as through venture capital, can help pharmaceutical companies finance their research and development efforts.
Collaboration with Academia and Research Institutions: Collaboration with academia and research institutions can provide pharmaceutical companies with access to cutting-edge research and expertise.
Favorable Tax Environment: A favorable tax environment, such as tax credits for research and development, can incentivize pharmaceutical companies to invest in innovation.
Strong Export Capacity: Strong export capacity can help pharmaceutical companies reach international markets and increase their revenue. In conclusion, a favorable regulatory environment, strong intellectual property protection, skilled workforce, access to capital, collaboration with academia and research institutions, favorable tax environment, and strong export capacity are all conditions that can make a country's protection of the pharmaceutical industry more successful.
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Mr. Leonard Lee, 40 years old, is a technopreneur who recently returned to Singapore from Silicon Valley. A private equity fund paid him USD 250 million for a 90 percent stake in his chip design firm. He has agreed to remain an advisor with the firm and not sell his remaining stake five (5) years after the acquisition. Upon returning to Singapore, he bought a good class bungalow for SGD 54 million[1] and has set aside SGD 20 million to start a tech incubator for new startups. He does not expect income from this investment over the next ten years and has set aside SGD 10 million for liquidity needs. Whatever returns from this investment will be rolled over to help budding local technopreneurs. Mr. Lee is unmarried and does not have any plans to do so, given his U.S. and Singapore commitments. After his firm's sale, Leonard's current wealth is USD 150 million in bonds, with the remaining wealth in USD bank deposits. Leonard has become concerned and is keen to plan his retirement in about ten years better. He has become especially concerned about the low rates of returns from his bonds investment and bank deposits. Given that Leonard has sold his equity in his own company, he thinks that he should invest about US$100 million in a core portfolio comprising global equity and global bonds. He has also heard of the benefits of alternative assets and is open to investing a meaningful portion in funds that invest in such assets. Lastly, while Leonard thinks he can take on higher risks, having adequate resources to enjoy a comfortable retirement is essential. He estimates his annual expenses at USD 1 million. Leonard explicitly stated he is concerned about inflation and the longer-term value of fiat currency. Question
1a (a). Modern portfolios may include exposure to so-called alternative assets. Evaluate the challenge of having alternative assets in an individual's investment portfolio. (20 marks)
Question
1b (b). Leonard has just changed his mind about his investment goals. He wishes to make a more significant impact on the tech scene. In addition, to invest funds in a tech incubator locally, he plans to invest half his current wealth in a tech incubator for Indonesia, Vietnam, and the Philippines in three years. Design a Goal-based Wealth Management (GBWM) solution for Mr. Leonard Lee (40 marks)
The main answer is that alternative assets in an individual's investment portfolio present challenges due to their unique characteristics and risks.
Including alternative assets in an investment portfolio can present challenges for individuals. Alternative assets, such as real estate, private equity, hedge funds, and commodities, offer potential benefits like diversification, potential higher returns, and protection against inflation. However, they also come with certain challenges.
One challenge is the illiquid nature of alternative assets. Unlike publicly traded stocks and bonds, alternative assets often have limited marketability, making it difficult to sell or exit investments quickly. This lack of liquidity can restrict an individual's ability to access funds when needed, especially during financial emergencies.
Furthermore, alternative assets are generally subject to higher risk and volatility compared to traditional asset classes. Investments in private equity or venture capital funds, for example, carry higher risks due to the nature of early-stage businesses. Additionally, the valuation of alternative assets can be complex and subjective, which may lead to difficulties in accurately assessing their true worth.
Another challenge is the expertise required to invest in alternative assets. These investments often require specialized knowledge and due diligence to evaluate their potential risks and returns. Without proper expertise or access to reliable information, individuals may struggle to make informed investment decisions, increasing the likelihood of poor investment outcomes.
Lastly, alternative assets can be subject to regulatory and legal complexities. Different jurisdictions may have specific rules and restrictions governing these investments, adding a layer of complexity to the investment process. Compliance with these regulations requires careful consideration and may involve additional costs.
In conclusion, while alternative assets offer potential benefits, including diversification and higher returns, they also present challenges such as illiquidity, higher risk, the need for specialized knowledge, and regulatory complexities. These factors need to be carefully considered when incorporating alternative assets into an individual's investment portfolio.
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Discuss three possible intellectual property
issues in outsourcing
Outsourcing, which involves contracting tasks to external parties, can give rise to several intellectual property (IP) issues.
Three potential concerns in outsourcing are the protection of trade secrets, infringement of copyrights or patents, and the ownership and control of IP rights.
1. Protection of Trade Secrets: Outsourcing often involves sharing sensitive information and proprietary knowledge with third-party service providers. This raises concerns about the protection of trade secrets. If the outsourcing contract does not include appropriate safeguards, there is a risk that the service provider may misuse or disclose confidential information, potentially harming the original company's competitive advantage.
2. Copyright and Patent Infringement: Outsourcing may involve the transfer of copyrighted works or patented inventions to external parties. It is crucial to ensure that the outsourcing agreement clearly defines the rights and restrictions associated with these intellectual properties.
Without proper licensing or permissions, outsourcing providers may inadvertently infringe on copyrights or patents, leading to legal disputes and financial liabilities.
3. Ownership and Control of IP Rights: When outsourcing certain tasks, such as software development or creative design, it is important to clarify the ownership and control of intellectual property rights. Without explicit agreements, the outsourcing vendor may claim ownership or co-ownership over the developed IP, causing disputes over control, usage, and commercialization rights.
To mitigate these risks, organizations should establish clear contractual provisions that address IP ownership and establish mechanisms for resolving potential conflicts.
Addressing these intellectual property concerns in outsourcing requires careful contract drafting, including well-defined clauses related to trade secret protection, copyright and patent compliance, and ownership and control of IP rights.
Regular communication, monitoring, and audits can also help ensure that outsourced work is conducted in compliance with IP laws and regulations, reducing the risk of intellectual property issues arising from outsourcing arrangements.
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Moore company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and a par value of $1,000. The yield to maturity for this bond is 10%.
a. What is the price of the bond if it matures in five, ten, fifteen, or twenty years?
b. What do you notice about the price of the bond in relationship to the maturity of the bond?
SHOW WORK
The price of the bond if it matures in five, ten, fifteen, or twenty years are $922.78, $875.38, $846.28 and $828.41 respectively.
What is the price of the bond if it matures in five, ten, fifteen, or twenty years?To calculate the price of the bond, we can use the financial calculation for the present value of a bond:
5 years
Given data:
N = 10I/Y = 5%PV = ?PMT = 40FV = 1,000Present value of bond = PV (N, I/Y. PMT, FV)
Present value of bond = -$922.78.
10 years
N = 20I/Y = 5%PV = ?PMT = 40FV = 1,000Present value of bond = PV (N, I/Y. PMT, FV)
Present value of bond = -$875.38.
15 years
N = 30I/Y = 5%PV = ? = $846.28PMT = 40FV = 1,000Present value of bond = PV (N, I/Y. PMT, FV)
Present value of bond = -$846.28.
20 years
N = 40I/Y = 5%PV = ? = $828.41PMT = 40FV = 1,000Present value of bond = PV (N, I/Y. PMT, FV)
Present value of bond = -$828.41.
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Yani has $12,000 for investment purposes. His bank has offered the following three choices. a. A special savings certificate that will pay $100 each month for 5 years and a lump sum payment at the end of 5 years of $13,000. b. Buy a share of a racehorse for $12,000 that will be worth $20,000 in 5 years. c. Put the money in a savings account that will have an interest rate of 12% per year compounded monthly. Use a future worth analysis to make a recommendation to Yani.
The best option for Yani is to buy a share of a racehorse for $12,000 that will be worth $20,000 in 5 years.
Given three options, Yani has $12,000 for investment purposes. These options are:
Option A: A special savings certificate that will pay $100 each month for 5 years and a lump sum payment at the end of 5 years of $13,000.
Option B: Buy a share of a racehorse for $12,000 that will be worth $20,000 in 5 years.
Option C: Put the money in a savings account that will have an interest rate of 12% per year compounded monthly.
A future worth analysis can be used to determine the worth of all the investment options after 5 years.Option A: The future worth of the special savings certificate can be calculated as follows:FV = Pmt × (((1 + i)n - 1) / i) + PV × (1 + i)nWhere Pmt = $100, n = 60 months, i = 1%, and PV = $0FV = 100 × (((1 + 0.01)60 - 1) / 0.01) + 0 = $6,000.73Future worth of the lump sum payment = $13,000Future worth of option A = FV of Pmt + FV of lump sum payment = $6,000.73 + $13,000 = $19,000.73Option B: The future worth of buying a share of a racehorse for $12,000 that will be worth $20,000 in 5 years is $20,000Option C: The future worth of putting the money in a savings account with an interest rate of 12% per year compounded monthly can be calculated as follows:FV = PV × (1 + i / n)ntWhere PV = $12,000, n = 12 months, i = 12% / 12 = 1%FV = $12,000 × (1 + 0.01 / 12)^(12 × 5) = $19,288.19Comparing the future worth of the three options, we get:Option A: $19,000.73Option B: $20,000Option C: $19,288.19Therefore, the best option for Yani is to buy a share of a racehorse for $12,000 that will be worth $20,000 in 5 years.
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Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:
April May June Total
Budgeted sales (all on account) $410,000 $610,000 $210,000 $1,230,000
From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% are collected in the month following the sale, and the remaining 15% are collected In the second month following sale. Bad debts are negligible and can be ignored. February sales totaled 5340.000, and March sales totaled $370.000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
2. What is the accounts receivable balance on June 30th?
Receiving and recording cash payments from clients for goods or services rendered is referred to as cash collection. It entails bringing in actual cash inflows for the company by collecting the outstanding accounts receivable.
1. Schedule of Expected Cash Collections from Sales:
April Sales (25% collected) = $410,000 * 25% = $102,500
May Sales (60% collected) = $610,000 * 60% = $366,000
June Sales (15% collected) = $210,000 * 15% = $31,500
Total Cash Collections:
April: $102,500
May: $366,000 + $410,000 * 25% = $366,000 + $102,500 = $468,500
June: $31,500 + $610,000 * 60% = $31,500 + $366,000 = $397,500
Total cash collections for the second quarter: $102,500 + $468,500 + $397,500 = $968,500
2. Accounts Receivable balance on June 30th:
Total Sales for the second quarter: $410,000 + $610,000 + $210,000 = $1,230,000
Total Cash Collections for the second quarter: $968,500
Accounts Receivable balance on June 30th: $1,230,000 - $968,500 = $261,500
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