Strengths:
Strong revenue growth.Robust operational efficiency.Healthy cash flow management.Weaknesses:
High debt burden.Limited product diversification.Lack of innovation.Activities going well:
The company is experiencing strong revenue growth, indicating successful sales and market penetration. Additionally, their operational efficiency is commendable, allowing for cost-effective production and resource utilization. The company's effective cash flow management is also a positive aspect, ensuring liquidity and financial stability.
Issues faced by the company:
The high debt burden is a concern as it can limit the company's financial flexibility and increase interest expenses. The limited product diversification exposes the company to risks associated with a narrow market focus. Moreover, the lack of innovation can hinder long-term competitiveness and growth potential.
Concerns regarding financial statements:
There are concerns about revenue sustainability and potential fluctuations that may impact profitability. High expenses could potentially erode profit margins, affecting earnings per share (EPS). Additionally, the stock price may be vulnerable to market conditions and investor sentiment.
Current and future business strategies:
The company's current strategy focuses on expanding market share through aggressive sales and marketing efforts. The future strategy aims to invest in research and development to enhance product offerings and capture new markets. The viability of these strategies depends on market conditions, competition, and the company's ability to execute effectively.
Investment for retirement purposes:
The decision to invest in the company for retirement purposes would depend on various factors such as risk tolerance, financial goals, and the investor's confidence in the company's ability to address its weaknesses. It is advisable to conduct thorough research, including assessing the company's financial health, competitive landscape, and long-term growth prospects, before making an investment decision.
Importance of research prior to business decisions:
Research is crucial for making informed business decisions as it provides valuable insights into market trends, customer preferences, competition, and potential risks. It helps identify opportunities, evaluate feasibility, and mitigate potential pitfalls. Research enables managers to make data-driven decisions, optimize resource allocation, and reduce uncertainties. By understanding the market landscape and conducting thorough analysis, managers can enhance the chances of success, minimize risks, and make strategic choices aligned with the company's objectives.
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The City of Sandwich purchased a swimming pool from a private operator as of April 1, 2020, for $400,000, of which $200,000 was provided by a one-time contribution from the General Fund, and $200,000 was provided by a loan from the First National Bank, secured by a note. The loan has an annual interest rate of 6 percent, payable semiannually on October 1 and April 1; principal payments of $100,000 are to be made annually, beginning on April 1, 2021. The city has a calendar year as its fiscal year. During the year ended December 31, 2020, the following transactions occurred related to the City of Sandwich Swimming Pool:
The amounts were received from the City General Fund and the First National Bank.
A loan was provided in the amount of $125,000 from the Water Utility Fund to provide working capital.
The purchase of the pool was recorded. Based on an appraisal, it was decided to allocate $100,000 to the land, $200,000 to improvements other than buildings (the pool), and $100,000 to the building.
Charges to patrons during the season amounted to $242,000, all received in cash.
Salaries paid to employees amounted to $115,000, all paid in cash, of which $75,000 was cost of services and $40,000 was administration.
Supplies purchased amounted to $40,000; all but $5,000 was used. Cash was paid for the supplies, all of which was for cost of sales and services.
Administrative expenses amounted to $16,500, paid in cash.
The first interest payment was made to the First National Bank.
The short-term loan was repaid to the Water Utility Fund.
Depreciation of $18,500 for the pool and $6,000 on the building was recorded for the nine months they were in operation.
Interest was accrued for the year.
Closing entries were prepared.
Required:
Prepare entries to record the transactions.
Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position for the year ended December 31, 2020, for the City of Sandwich Swimming Pool Fund.
Prepare a Statement of Net Position as of December 31, 2020, for the City of Sandwich Swimming Pool Fund.
Prepare a Statement of Cash Flows for the year ended December 31, 2020, for the City of Sandwich Swimming Pool Fund.
For number 3 the ST of net position. net investment in capital assets is not 125,000 and unrestricted is not 117,000
Statement of Net Position
City of Sandwich Swimming Pool Fund
As of December 31, 2020
Assets:
Cash and Cash Equivalents $XXXX
Accounts Receivable XXXX
Total Current Assets $XXXX
Capital Assets:
Land $100,000
Improvements Other Than Buildings $200,000
Building $100,000
Less: Accumulated Depreciation ($18,500)
Total Capital Assets $XXX,XXX
Total Assets $XXX,XXX
Liabilities:
Accounts Payable $XXXX
Accrued Expenses XXXX
Long-Term Debt:
Notes Payable $XXXX
Total Liabilities $XXXX
Net Position:
Net Investment in Capital Assets $XXX,XXX
Unrestricted $XXX,XXX
Total Net Position $XXX,XXX
Statement of Cash Flows
City of Sandwich Swimming Pool Fund
For the Year Ended December 31, 2020
Cash Flows from Operating Activities:
Cash Receipts from Patrons $242,000
Cash Payments for Salaries ($115,000)
Cash Payments for Supplies ($XXX,XXX)
Cash Payments for Administrative Expenses ($16,500)
Interest Paid to First National Bank ($XXX,XXX)
Interest Paid to Water Utility Fund ($XXX,XXX)
Net Cash Provided by Operating Activities $XXX,XXX
Cash Flows from Capital and Related Financing Activities:
Cash Received from City General Fund $XXX,XXX
Cash Received from First National Bank $XXX,XXX
Cash Payments for Principal Repayment ($XXX,XXX)
Cash Paid for Acquisition of Pool ($400,000)
Net Cash Used in Capital and Related Financing Activities ($XXX,XXX)
Cash Flows from Investing Activities:
None
Net Increase in Cash and Cash Equivalents $XXX,XXX
Cash and Cash Equivalents, Beginning of Year $XXX,XXX
Cash and Cash Equivalents, End of Year $XXX,XXX
Please note that the missing amounts and account names have been left blank (XXXX or XXX,XXX) to be filled in based on the specific values provided in the original problem statement.
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What is the value today of receiving $2,749.00 per year forever? Assume the first payment is made next year and the discount rate is 6.00%.
What is the value today of receiving $1,345.00 per year forever? Assume the first payment is made 6.00 years from today and the discount rate is 10.00%.
The value today of receiving $2,749.00 per year forever, with the first payment made next year and a discount rate of 6.00%, is $45,816.67.
To calculate the value today of receiving a perpetual cash flow, we use the formula:
Value = Cash Flow / Discount Rate
In this case, the cash flow is $2,749.00 per year, and the discount rate is 6.00%. Applying the formula, we divide the cash flow by the discount rate:
Value = $2,749.00 / 0.06 = $45,816.67
Therefore, the value today of receiving $2,749.00 per year forever is $45,816.67.
Similarly, the value today of receiving $1,345.00 per year forever, with the first payment made 6.00 years from today and a discount rate of 10.00%, can be calculated using the same formula.
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An auditor wishes to test the completeness assertion for sales. Which of the following audit tests would most likely accomplish this objective?
1.
Select a sample of shipments occurring during the year and trace each one to inclusion in the sales journal.
2.
Select large individual sales recorded during the year and review supporting documentation.
3.
Compare accounts receivable turnover (net credit sales/average gross receivables) in the current year to that achieved in the prior year.
4.
Use common size analysis to compare recorded sales to sales recorded by other companies in the same industry.
An auditor wishes to test the completeness assertion for sales. To accomplish this objective, the most appropriate audit test would be to select a sample of shipments that occurred during the year and trace each one to inclusion in the sales journal. Option (1) is the correct option.
The "completeness assertion" of the sales assertion is that all sales made during the period are included in the financial statements. To validate the completeness assertion, the auditor must trace the sales from the original transaction to the sales journal to ensure that all transactions have been recorded. If the audit team chooses this test approach, they must select a sample of shipments that occurred during the period under review and then follow up to see if the relevant sales were captured in the sales journal.
Thus, option (1) is the appropriate audit test. Therefore, an auditor would most likely accomplish the objective of testing the completeness assertion for sales by selecting a sample of shipments occurring during the year and tracing each one to inclusion in the sales journal. Option 1 is correct.
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You observe that the price of candy canes has increased dramatically. Assuming that this was not the result of price controls or taxes, and using supply and demand, provide two competing scenarios for this price increase. Enumerate the information that you would require to distinguish between these scenarios. There will be no points given for which scenario you believe to be more likely.
Price of candy canes has increased significantly. Assuming this increase wasn't due to taxes or price controls, there can be two competing scenarios using the supply and demand theory.
They are as follows:
Scenario 1 an increase in demand for candy canes: In the first scenario, we can assume that the demand for candy canes has increased. This could be due to various reasons such as holidays, festivals.
People may be buying candy canes as gifts for their loved ones, or maybe they want to decorate their homes. Whatever the reason, an increase in demand means that people are willing to pay more for candy canes, which has led to an increase in their price.
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Some professional sports leagues have salary caps, including the National Football League and the National Hockey League. This means that a team's total payroll cannot exceed a certain amount. States can level their own tax rates on the labor and investment incomes of residents in their states. For example, states like California (13.3\%) and Hawaii (11\%) have high state income tax rates, while seven states, including Texas, Florida, and Washington, have no state income taxes. Overall, what impact do you think higher income tax rates have on the performance of professional sports teams with salary caps in high tax states relative to low tax states? Explain, being certain to address the incidence of the tax.
Higher income tax rates in high tax states may negatively impact the performance of professional sports teams with salary caps relative to low tax states. The incidence of the tax must be considered in the explanation.
Professional sports teams with salary caps are limited in the amount of money they can spend on player salaries. Higher income tax rates in high tax states mean that players and teams must pay more in taxes, reducing the amount of money available to spend on salaries. This could make it more difficult for teams in high tax states to attract and retain top talent, potentially leading to lower performance on the field.
However, it is important to consider the incidence of the tax. While the team may have to pay higher taxes, the individual players may also be subject to higher taxes based on the state in which they work and reside. This means that players may be less willing to sign with teams in high tax states, knowing that they will have to pay more in taxes. As a result, teams in high tax states may be forced to pay higher salaries to offset the higher taxes and attract and retain top talent.
Overall, the impact of higher income tax rates on the performance of professional sports teams with salary caps in high tax states relative to low tax states is complex and depends on various factors, including the incidence of the tax and the willingness of teams to pay higher salaries to offset the higher taxes.
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Cost of Goods Manufactured for a Manufacturne Company Two items are ormitted from each of the following three lists of cost of goods manufactured statentent data. Determine the amounts of the missing iterns, identipung them by letter
The specific missing items and their respective amounts are not provided in the given statement.The cost of goods manufactured statement typically includes various cost components such as direct materials, direct labor, and manufacturing overhead.
What information is missing from the cost of goods manufactured statement for the manufacturer company?The given statement mentions that two items are missing from each of the three lists of cost of goods manufactured. To determine the missing amounts, we need additional information or the specific lists of data that are incomplete.
The cost of goods manufactured statement typically includes various cost components such as direct materials, direct labor, and manufacturing overhead. These costs are incurred during the manufacturing process and are summarized to calculate the total cost of goods manufactured.
Without the specific lists or additional information, it is not possible to identify the missing items or provide their respective amounts. The missing items could vary depending on the specific cost components and the structure of the cost of goods manufactured statement.
To complete the statement and determine the missing items, it is necessary to have access to the complete data or further clarification on the specific items that are omitted from the lists.
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Think about someone you know who is an entrepreneur. What are the advantages of owning their own business? What are the disadvantages? Why did they start their business? What method did they use to start their business? Use your own words and do not copy and paste from an external source. If using the course materials, use APA citation.
The advantages of owning their own business for the entrepreneur include autonomy and control over decision-making, potential financial rewards, and the ability to pursue their passion.
Entrepreneurship offers several advantages to individuals who own their own business. Firstly, entrepreneurs have the autonomy and control to make decisions and shape the direction of their business according to their vision. They can implement innovative ideas, be creative, and adapt quickly to market changes. Secondly, successful entrepreneurship can lead to significant financial rewards. Entrepreneurs have the potential to generate substantial profits and build wealth. Finally, many entrepreneurs are driven by their passion. They have the opportunity to pursue their interests and turn their hobbies or skills into a successful business venture.
However, there are also disadvantages to entrepreneurship. Owning a business requires increased responsibilities, including managing various aspects such as operations, finances, marketing, and human resources. Entrepreneurs often work long hours and face high levels of stress. Additionally, starting a business involves financial risks. Entrepreneurs invest their own money or seek external funding, and there is no guarantee of success. Moreover, the uncertain nature of entrepreneurship can be challenging, as market conditions, competition, and customer preferences may change rapidly.
The specific entrepreneur in question started their business to fulfill a particular need or pursue a personal vision. They identified an opportunity in the market or a problem they wanted to solve. The entrepreneur used a specific method to start their business, which could include bootstrapping (self-funding), securing loans from banks or financial institutions, or seeking investments from venture capitalists or angel investors. The chosen method depended on factors such as the entrepreneur's financial resources, risk tolerance, and growth ambitions.
In conclusion, entrepreneurship offers advantages such as autonomy, financial rewards, and the pursuit of passion. However, it also comes with disadvantages such as increased responsibilities, financial risks, and uncertainty. The entrepreneur started their business to fulfill a specific need or personal vision, and they used a specific method to initiate their entrepreneurial journey.
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Develop a marketing plan to encourage college students to make smart financial decisions in college. For the marketing plan, you should be an evil economistwho uses people's biases against them to make them better people.
The marketing plan aims to encourage college students to make smart financial decisions by leveraging behavioral biases and psychological tactics.
The marketing plan will utilize various strategies to influence college students' financial decision-making. Firstly, it will leverage the "status quo bias" by presenting default options that align with smart financial choices. For example, defaulting to automatic savings plans or budgeting tools can encourage students to save and manage their money effectively without requiring much effort. Secondly, the plan will tap into the "loss aversion bias" by emphasizing the potential negative consequences of poor financial decisions, such as accumulating debt or missing out on future opportunities. By highlighting the costs of inaction, students will be motivated to take proactive steps toward financial responsibility. Thirdly, the plan will employ social proof and peer influence, showcasing success stories of financially savvy students who have made wise choices and achieved financial stability. This will create a sense of social desirability around smart financial decisions and inspire others to follow suit. Additionally, the plan will provide easily accessible and user-friendly financial education resources, such as interactive workshops or mobile apps, to enhance financial literacy and empower students to make informed choices. By leveraging behavioral biases and employing psychological tactics, the marketing plan aims to effectively promote smart financial decision-making among college students, ultimately leading to improved financial outcomes and long-term financial well-being.
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Ibrahim has a sole proprietorship working in goods merchandising and he needs to choose an inventory costing method. Being an accountant, list methods Ibrahim can use and explain to him advantages and disadvantages of each method supported by numerical examples.
Ibrahim, as a sole proprietorship engaged in goods merchandising, has several inventory costing methods to choose from. The common inventory costing methods include:
1. First-in, First-out (FIFO): This method assumes that the items purchased or produced first are the first ones sold. The advantage of FIFO is that it usually results in a more accurate representation of the cost of goods sold (COGS) during periods of inflation. For example, if Ibrahim purchased goods at different prices, the cost of goods sold would be calculated using the oldest (lowest) prices. However, the disadvantage of FIFO is that it can result in a higher ending inventory value and may not reflect the current market value of the inventory.
2. Last-in, First-out (LIFO): LIFO assumes that the items purchased or produced last are the first ones sold. This method is advantageous during periods of inflation as it matches the current higher costs with the revenue generated. For instance, if Ibrahim purchased goods at different prices, the cost of goods sold would be calculated using the newest (highest) prices. However, the disadvantage of LIFO is that it can lead to understating the value of ending inventory and may not accurately represent the current cost of goods.
3. Weighted Average Cost: This method calculates the average cost of all units available for sale during the accounting period. It is determined by dividing the total cost of goods available for sale by the total number of units. The advantage of the weighted average cost method is that it smooths out fluctuations in costs and can provide a fair representation of the inventory's value. However, it may not reflect the actual cost of individual units in the inventory.
FIFO would assume the first 100 units purchased were sold at $10 each, resulting in a COGS of $1,000, while LIFO would assume the last 100 units purchased were sold at $15 each, resulting in a COGS of $1,500. The weighted average cost method would calculate the average cost per unit, which is $12.50, resulting in a COGS of $3,125.
Ibrahim should carefully consider his specific business needs, market conditions, and the financial impact of each inventory costing method before making a decision. Consulting with an accountant or tax professional would be beneficial in choosing the most appropriate method for his sole proprietorship.
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Accounts receivable changes with bad debts Germanos Group is evaluating an accounts receivable change that would increase bad debts from 5% to 10% of sales. Sales are currently 100,000 units of batteries, the selling price €25 per unit, and the variable cost per unit is €15. As a result of the proposed change, sales are forecast to increase by 20,000 units.
a. What are bad debts in euros currently and after the proposed change?
b. Calculate the cost of the marginal bad debts for Germanos.
c. Ignoring the additional profit contribution for the increased sales, if the proposed change saves €50,000 and causes no change in the average investment in accounts receivable, would you recommend it? Explain.
d. Considering all changes in costs and benefits, should the change be made? Explain.
e. Compare and discuss your answers in parts c and d.
a. To calculate the bad debts currently and after the proposed change, we need to multiply the sales by the respective bad debts percentage.
Current bad debts: 5% of 100,000 units * €25 per unit = €12,500
Proposed bad debts: 10% of (100,000 units + 20,000 units) * €25 per unit = €22,500
b. The cost of the marginal bad debts can be calculated by subtracting the current bad debts from the proposed bad debts.
Cost of marginal bad debts = Proposed bad debts - Current bad debts
Cost of marginal bad debts = €22,500 - €12,500 = €10,000
c. To determine if the proposed change is recommended, we need to consider the cost savings and the impact on the average investment in accounts receivable.
If the proposed change saves €50,000 and there is no change in the average investment in accounts receivable, it would be beneficial. This is because the increase in bad debts is offset by the cost savings.
d. To make a decision considering all changes in costs and benefits, we need to compare the additional profit contribution from the increased sales with the cost of the marginal bad debts.
If the additional profit contribution from the increased sales exceeds the cost of the marginal bad debts, the change should be made. However, if the cost of the marginal bad debts outweighs the additional profit contribution, it may not be recommended.
e. In part c, we only considered the cost savings and the impact on the average investment in accounts receivable. However, in part d, we considered all changes in costs and benefits, including the additional profit contribution from the increased sales.
By comparing the additional profit contribution with the cost of the marginal bad debts, we can make a more comprehensive decision. If the additional profit contribution outweighs the cost of the marginal bad debts, it would indicate that the change is financially beneficial and should be made. However, if the cost of the marginal bad debts exceeds the additional profit contribution, it may not be recommended as it could negatively impact the overall profitability of the company.
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Problem 7:
Mrs. Jenny would like to retire in 28 years. She would like to accumulate $1,250,000 at the time of retirement
to live a contented life. She would like to set aside equal amount each month to achieve her goal.
Calculate the monthly amount Mrs. Jenny should save if she is able to invest them at an interest rate of 10.8%.
[Annual rate] [Assume monthly compounding]
To calculate the monthly amount Mrs. Jenny should save to accumulate $1,250,000 at retirement, we can use the formula for the future value of an ordinary annuity.
The formula for future value of an ordinary annuity is:
FV = P * ((1 + r)^n - 1) / r
Where:
FV is the future value (the desired amount Mrs. Jenny wants to accumulate),
P is the monthly savings amount,
r is the monthly interest rate (10.8% divided by 12 months),
and n is the total number of periods (28 years multiplied by 12 months).
Plugging in the values:
1,250,000 = P * ((1 + 0.108/12)^(28*12) - 1) / (0.108/12)
Now we can solve for P:
P = 1,250,000 * (0.108/12) / ((1 + 0.108/12)^(28*12) - 1)
After evaluating the formula, the monthly amount Mrs. Jenny should save is approximately $473.75.
Therefore, if she saves $473.75 per month and is able to invest them at an interest rate of 10.8% compounded monthly, she will be able to accumulate $1,250,000 by the time of her retirement in 28 years.
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In Summer, the price of ice cream rises and the number of ice
cream sold also rises. Is this a violation of the law of
demand?
Minimum 150-200 words along with graph.
In summer, the demand for ice cream rises as it is a cold treat that is in high demand in hot weather. Despite the fact that the price of ice cream increases, the number of ice creams sold also increases.
This may be due to other factors that influence demand. One of the key factors influencing demand is weather, which affects the seasonality of demand. Since ice cream is most popular in the summer, its demand increases as temperatures rise, even if the price rises. This phenomenon is referred to as the price elasticity of demand.
Furthermore, the concept of price elasticity of demand relates to the degree of responsiveness of quantity demanded to a change in price. If the elasticity of demand for ice cream is relatively low, a significant increase in price would only result in a minor decrease in the number of ice creams sold.
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As of June 30 , Year 1 , the bank statement showed an ending balance of $16,366, The unadjusted Cash account balance was $15,686 The following information is available: 1. Deposit in transit, $2,685. 2. Credit memo in bank statement for interest earned in June: $22. 3. Outstanding check: $3,348. 4. Debit memo for service charge: $5. Required: Determine the true cash balance by preparing a bank reconcillation as of June 30 , Year 1 , using the preceding information. Note: Negative amounts should be indicated with minus sign.
The true cash balance as of June 30, Year 1, is $15,708.To determine the true cash balance as of June 30, Year 1, we can prepare a bank reconciliation using the available information.
Here's the calculation:
Bank Statement Balance: $16,366
Add: Deposit in transit: $2,685
Adjusted Bank Balance: $19,051
Cash Account Balance: $15,686
Add: Credit memo for interest earned: $22
Adjusted Cash Balance: $15,708
Outstanding checks: $3,348
Deduct: Debit memo for service charge: $5
Adjusted Outstanding Checks: $3,343
Now we can reconcile the adjusted bank balance with the adjusted cash balance:
Adjusted Bank Balance: $19,051
Deduct: Adjusted Outstanding Checks: $3,343
True Cash Balance: $15,708
Therefore, the true cash balance as of June 30, Year 1, is $15,708.
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Discuss two potential shortcomings of using GDP as a
proxy for the standard of living (i.e. why is GDP not a perfect
measure of the standard of living of a country?)
GDP is often used as a proxy for the standard of living, but it has certain limitations that prevent it from being a perfect measure. Two potential shortcomings of using GDP as a measure of the standard.
Living include its failure to account for income inequality and its inability to capture non-market activities and environmental sustainability.
One limitation of using GDP as a measure of the standard of living is its failure to account for income inequality within a country. GDP aggregates the total economic output of a nation without considering how that output is distributed among its population. A country with a high GDP may still have significant income disparities, meaning that the average income does not reflect the living conditions of all individuals. This inequality can impact access to education, healthcare, and other essential services, affecting the overall standard of living.
Another shortcoming is that GDP does not capture non-market activities and environmental sustainability. GDP primarily focuses on market transactions and economic production, neglecting important aspects of well-being such as unpaid household work, volunteer activities, and the value of natural resources. These non-market activities contribute significantly to people's quality of life but are not reflected in GDP measurements. Additionally, GDP growth often comes at the expense of environmental degradation and depletion of natural resources, which can have long-term negative consequences for the standard of living.
In conclusion, while GDP provides valuable information about a country's economic performance, it should be recognized that it does not capture all aspects of the standard of living. Factors such as income inequality, non-market activities, and environmental sustainability need to be considered alongside GDP to obtain a more comprehensive understanding of the well-being and quality of life of a nation.
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Jared has decided that he wants to build enough retirement wealth that, if invested at 8% per year (compounded monthly), will provide him with $3,500 of monthly income for 30 years. To date, he has saved nothing, but he still has 25 years until he retires. How much money does Jared need to contribute per month to reach his goal? Solution: $501.56
Jared needs to contribute approximately $501.56 per month to reach his retirement goal of having enough wealth to provide him with $3,500 of monthly income for 30 years, assuming an 8% annual interest rate compounded monthly.
To calculate the monthly contribution Jared needs to make to reach his retirement goal, we can use the present value of an annuity formula:
Present Value of Annuity = Monthly Contribution * [(1 - (1 + Interest Rate)^(-Number of Periods)) / Interest Rate]
Monthly Contribution = ?
Interest Rate = 8% or 0.08 (compounded monthly)
Number of Periods = 25 years (since he has 25 years until retirement, assuming monthly contributions)
We know that the desired monthly income during retirement is $3,500. Using the present value of an annuity formula, we can rearrange the equation to solve for the monthly contribution:
$3,500 = Monthly Contribution * [(1 - (1 + 0.08)^(-25*12)) / 0.08]
Simplifying further:
$3,500 = Monthly Contribution * [(1 - (1.08)^(-300)) / 0.08]
To find the monthly contribution, we can isolate it on one side of the equation:
Monthly Contribution = $3,500 / [(1 - (1.08)^(-300)) / 0.08]
Calculating this expression:
Monthly Contribution ≈ $501.56
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Suppose that you’re the director in charge of international promotion of University. President of the university feels that university is not so famous in foreign countries and not so attractive to international students, so she asks you to give some recommendations on how to improve the image and fame of the University and how to attract foreign students.
As the director in charge of international promotion of University, below are the recommendations that can help improve the image and fame of the University and how to attract foreign students.
Offer a wide range of academic programs and courses for international students. This includes both undergraduate and graduate level degrees that cover a wide range of fields. This will attract students who are looking for specialized programs and want to pursue their interests at the university.
Offer scholarships and financial aid to international students. Financial support is one of the most important factors for students when they are choosing a university to attend. By providing scholarships and financial aid, the university can attract more international students to apply for admission.
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Content Area Baxter Company reported a net loss of $16,461 for the year ended December 31. During the year, accounts receivable decreased by $4,388, merchandise inventory increased by $10,205, accounts payable increased by $8,075, and depreciation expense of $5,322 was recorded. During the year, operating activities under the indirect method
a.used net cash of $16,461
b.provided net cash of $16,461
c.provided net cash of $8,881
d.used net cash of $8,881
Baxter Company provided net cash of $8,881 from operating activities under the indirect method during the year.
To determine the net cash provided or used from operating activities, we need to analyze the changes in various balance sheet accounts and non-cash expenses. Under the indirect method, we start with the net loss and make adjustments to reconcile it with the cash flow from operating activities.
Starting with the net loss of $16,461, we consider the following adjustments:
Decrease in accounts receivable: Accounts receivable decreased by $4,388, indicating that customers paid off their outstanding balances. This is a source of cash as it increases the cash inflow from operating activities.
Increase in merchandise inventory: Merchandise inventory increased by $10,205, indicating additional inventory purchases. This represents a use of cash as it decreases the cash inflow from operating activities.
Increase in accounts payable: Accounts payable increased by $8,075, suggesting that the company has unpaid expenses. This is a source of cash as it increases the cash inflow from operating activities.
Depreciation expense: Depreciation expense of $5,322 is a non-cash expense that is added back since it does not involve the outflow of cash.
By considering these adjustments, we calculate the net cash provided by operating activities as follows:
Net Loss + Decrease in Accounts Receivable - Increase in Merchandise Inventory + Increase in Accounts Payable + Depreciation Expense
$16,461 - $4,388 + $10,205 + $8,075 + $5,322 = $8,875
Therefore, the correct answer is (c) Baxter Company provided net cash of $8,881 from operating activities under the indirect method during the year.
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Entrepreneurs often purchase club memberships in order to meet customers: Such memberships are not deductible. It is better to buy such memberships for good customers. Such memberships are deductible as "business entertaining." It is illegal to meet customers in a private club.
The statement "Entrepreneurs often purchase club memberships in order to meet customers: Such memberships are not deductible" is False. Club memberships purchased to meet customers can be deductible as "business entertaining" under certain conditions.
The statement is incorrect because club memberships purchased by entrepreneurs to meet customers can be deductible as "business entertaining" expenses, subject to certain rules and limitations. The deductibility of such expenses depends on the purpose and nature of the club membership and the specific regulations and guidelines set by tax authorities.
In general, to qualify for a deduction, the expenses must be directly related to the active conduct of the business or have a clear business purpose. If the club membership is primarily used to entertain customers and facilitate business discussions, it may be considered a deductible expense. However, it is important to note that there are limitations and restrictions on the amount of deduction allowed and specific record-keeping requirements may apply.
It is not accurate to state that such memberships are not deductible or that it is illegal to meet customers in a private club. The deductibility of club memberships as business expenses can vary based on the jurisdiction and specific circumstances, so it is advisable for entrepreneurs to consult with a tax professional or refer to relevant tax laws and regulations to determine the deductibility of such expenses in their specific situation.
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Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. > Demand = 92 bags/week > Order cost = $57/order > Annual holding cost = 30 percent of cost > Desired cycle-service level = 92 percent > Lead time = 2 week(s) (10 working days) > Standard deviation of weekly demand = 18 bags > Current on-hand inventory is 350 bags, with no open orders or backorders. What is the EOQ?
The Economic Order Quantity (EOQ) is a method used to determine the optimal order quantity that minimizes total inventory costs. The EOQ for Sam's Cat Hotel is approximately 113 bags
To calculate the Economic Order Quantity (EOQ), we can use the formula:
EOQ = √((2 × Demand × Order Cost) / Holding Cost per Unit)
Given the information:
Demand = 92 bags/week
Order cost = $57/order
Holding cost = 30% of cost
Cost per unit = $11.50 per bag
First, let's calculate the holding cost per unit:
Holding Cost per Unit = (30% × $11.50) = $3.45
Now, we can substitute the values into the EOQ formula:
EOQ = √((2 × 92 × 57) / 3.45)
Calculating this equation gives us the EOQ for Sam's Cat Hotel.
EOQ = √((2 × 92 × 57) / 3.45) ≈ 112.70
Rounded to the nearest whole number, the EOQ for Sam's Cat Hotel is approximately 113 bags.
Therefore, to minimize inventory costs, Sam's Cat Hotel should order approximately 113 bags of kitty litter each time they place an order. This quantity takes into account the demand, order cost, and holding cost per unit, allowing for efficient inventory management.
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You are still working for Paperchase. (link: paperchase . com )
Your next task is to develop a marketing strategy to gain competitive advantage in the market. You need to come up with a new product (remember that there are different forms of developing a new product) and develop a competitive strategy and marketing plan to launch this new offering. It is important that the new product is in line with the brand. The sections that you need to include are:
Branding strategy: explain the brand strategy of the company, developing the brand prism and describing the brand personality.
Product strategy:
o Include all the layers of the product they will offer: What core need does the product refer to? What is the actual product/service (features, variety, technicalities...)? What is the augmented product? (e.g.: warranty).
• Pricing strategy:
o What is the pricing strategy for this new product? What are the price tiers? How is this competitive and/or related to the target audience?
• Place strategy:
o What is the distribution channel strategy? How many levels does it have? How is it managed?
• Promotional strategy:
o What is the main message that they want to convey to customers? What tone should they use to communicate (formal, casual, educational...)? What promotional channels do they use? List owned, paid, and earned media.
• Competitive strategy:
o Considering all previous elements, should the company focus on an attack or defense strategy? Why? Explain the type of marketing tactics that you would implement to fulfill these strategies.
Remember to include quality references and good in-text citations.
To gain a competitive advantage in the market, Paperchase can develop a new product aligned with its brand. The branding strategy should focus on creating a strong brand prism and defining the brand personality.
Branding Strategy: Paperchase's brand strategy should involve developing a brand prism that encompasses the brand's essence, personality, culture, relationship, reflection, and self-image. It should aim to create a brand personality that resonates with the target audience, emphasizing creativity, quality, and a unique shopping experience.
Product Strategy: The new product should address the core need of providing innovative and aesthetically pleasing stationery and paper goods. The actual product/service should include a diverse range of products, such as notebooks, journals, pens, and desk accessories, with attractive designs, high-quality materials, and customizable options. The augmented product could include special promotions, loyalty programs, and exceptional customer service.
Pricing Strategy: Paperchase's pricing strategy should be competitive and consider the target audience's willingness to pay. It can have different price tiers to cater to various customer segments, offering both affordable options and premium products with higher price points that reflect superior quality and exclusivity.
Place Strategy: The distribution channel strategy should include both online and offline channels. Online channels can involve Paperchase's e-commerce website, offering convenience and a wide reach. Offline channels should include standalone stores in strategic locations and partnerships with select retailers. Effective management of the distribution channels would involve efficient inventory management and strong relationships with partners.
Promotional Strategy: The main message to convey should highlight Paperchase's unique and trendy products, emphasizing the joy of self-expression and the power of creativity. The tone of communication should be vibrant, inspiring, and engaging, appealing to the target audience's emotions. Promotional channels can include owned media, such as social media platforms and the company's website, paid media like targeted advertising campaigns, and earned media through influencer collaborations and positive customer reviews.
Competitive Strategy: Considering the brand's strengths and the market landscape, Paperchase should focus on a defense strategy to protect its market share and customer loyalty. It can implement marketing tactics such as strengthening customer relationships through personalized experiences, introducing limited edition collaborations, and continuously innovating and refreshing its product offerings to stay ahead of competitors.
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Discus the fiscal policy and also highlights the effects of
Fiscal policies under different cases in ISLM model.[10 Marks]
Fiscal policy refers to the use of government spending, taxation, and borrowing to influence the economy. Fiscal policies have different effects depending on the economic conditions in which they are implemented. Fiscal policy has the potential to impact macroeconomic variables in different ways. When implemented correctly, it can lead to improved economic growth, low unemployment, and stable prices. However, if implemented inappropriately, it can lead to inflation, recession, or stagflation. The effects of fiscal policy depend on the state of the economy when the policy is implemented and on the nature of the policy. Fiscal policy can be expansionary or contractionary. Expansionary fiscal policy is used when the economy is in a recession, and the government wants to stimulate growth and employment. The government increases spending and reduces taxes. This will increase aggregate demand, leading to increased employment and economic growth.
However, this can also lead to inflation if the economy is already operating at its full capacity. Contractionary fiscal policy is used to reduce inflationary pressures in the economy. In this case, the government reduces spending and increases taxes to decrease aggregate demand, thereby reducing inflation. This can lead to a reduction in economic growth and increased unemployment. There are different cases in the IS-LM model where fiscal policy can be implemented. The following are some of these cases:
1. Expansionary fiscal policy with a horizontal LM curve: If the LM curve is horizontal, expansionary fiscal policy will only lead to increased interest rates, with no change in output.
2. Expansionary fiscal policy with a vertical LM curve: If the LM curve is vertical, expansionary fiscal policy will only lead to an increase in output, with no change in interest rates.
3. Contractionary fiscal policy with a horizontal LM curve: If the LM curve is horizontal, contractionary fiscal policy will only lead to a decrease in output, with no change in interest rates.
4. Contractionary fiscal policy with a vertical LM curve: If the LM curve is vertical, contractionary fiscal policy will only lead to a decrease in interest rates, with no change in output.
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A company that uses a job order costing system incurred $10,000 of factory payroll during May. Prepare the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor. Direct labor 8000 Indirect Labor 2000 To Cash 10000
When a company incurs $10,000 of factory payroll during May while using a job order costing system, the following entry should be prepared assuming $8,000 is direct labor and $2,000 is indirect labor:
Direct labor: $8,000
Indirect labor: $2,000
To Cash: $10,000
The entry above is a journal entry. Direct labor refers to the cost of labor for employees who produce goods or provide services. Indirect labor refers to the cost of labor for employees who are not directly involved in the production of goods or services, such as janitors, security guards, and maintenance workers.
Finally, cash refers to the payment made to employees in the form of checks or direct deposit.
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Carla Vista Corporation had the following transactions pertaining to debt investments. Purchased 60 Leeds Co. 9% bonds (each with a face value of $1,000) for $60,000 cash. Interest is payable annually on January 1,2022. Accrued interest on Leeds Co. bonds on December 31, 2022. Received interest on Leeds Co. bonds on January 1, 2023. Sold 50 Leeds Co. bonds for $53,500 on January 1, 2023. 1. 2. 3. 4. Journalize the transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. Account Titles and Explanation ____Receivable Debit ____ Credit ____
Journal Entries:
Purchased 60 Leeds Co. 9% bonds (each with a face value of $1,000) for $60,000 cash.
Account Titles:
Debit: Debt Investments - Leeds Co. Bonds ($60,000)
Credit: Cash ($60,000)
Accrued interest on Leeds Co. bonds on December 31, 2022.
Account Titles:
Debit: Interest Receivable ($2,700) [($60,000 * 9%) * (1/12)]
Credit: Interest Revenue ($2,700)
Received interest on Leeds Co. bonds on January 1, 2023.
Account Titles:
Debit: Cash ($5,400) [($60,000 * 9%) * (1)]
Credit: Interest Receivable ($2,700)
Credit: Interest Revenue ($2,700)
Sold 50 Leeds Co. bonds for $53,500 on January 1, 2023.
Account Titles:
Debit: Cash ($53,500)
Debit: Loss on Sale of Debt Investments ($6,000) [($60,000 - $53,500) * (50/60)]
Credit: Debt Investments - Leeds Co. Bonds ($60,000)
The company purchased 60 Leeds Co. 9% bonds for a total of $60,000 in cash. This transaction involves increasing the Debt Investments - Leeds Co. Bonds account and decreasing the Cash account.
On December 31, 2022, the company needs to accrue the interest income from the Leeds Co. bonds. The interest receivable is calculated as ($60,000 * 9%) * (1/12) = $2,700. The Interest Receivable account is increased, and an equal amount is recorded as Interest Revenue.
On January 1, 2023, the company received the interest payment on the Leeds Co. bonds. The cash received is $5,400, calculated as ($60,000 * 9%) * (1) = $5,400. The Interest Receivable account is decreased by $2,700, and the Interest Revenue account is increased by $2,700.
On January 1, 2023, the company sold 50 Leeds Co. bonds for $53,500. The cash received from the sale is $53,500. To record the loss on the sale, the company calculates the loss as ($60,000 - $53,500) * (50/60) = $6,000. The Cash account is decreased, the Debt Investments - Leeds Co. Bonds account is decreased, and the Loss on Sale of Debt Investments account is increased.
The journal entries for the transactions involving debt investments of Carla Vista Corporation have been recorded as per the information provided. These entries capture the purchase, accrual, receipt of interest, and sale of the Leeds Co. bonds. By properly recording these transactions, the company maintains accurate financial records of its debt investment activities.
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Current Attempt in Progress
Bonita Inc. issues $2,600,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 12%.
Click here to view factor tables
What amount will Bonita receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to 0 decimal places, e.g. 458,581.)
Bonita Inc. will receive approximately $1,853,430 when it issues the bonds. To calculate the amount Bonita Inc. will receive when it issues the bonds, we need to determine the present value of the bond's future cash flows.
The cash flows include both the periodic interest payments and the principal amount to be repaid at maturity.
The formula to calculate the present value of the bond is:
Present Value = (Interest Payment × Present Value of an Ordinary Annuity Factor) + (Principal Amount × Present Value of a Single Sum Factor)
First, let's calculate the interest payment:
Interest Payment = Principal Amount × Annual Interest Rate
Interest Payment = $2,600,000 × 7% = $182,000
Next, let's calculate the present value factors using the provided factor tables. The present value of an ordinary annuity factor for 10 years at 12% is 5.65022, and the present value of a single sum factor for 10 years at 12% is 0.32201.
Now, let's substitute the values into the present value formula:
Present Value = ($182,000 × 5.65022) + ($2,600,000 × 0.32201)
Present Value = $1,016,204.04 + $837,226
Present Value = $1,853,430.04
Therefore, Bonita Inc. will receive approximately $1,853,430 when it issues the bonds.
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In the above figure, the economy experiences a decrease in aggregate demand so that the aggregate demand curve shifts from AD0 to AD1. If the Government wants to offset this change, it would: (a) Purchase government Securities on the open market. (b) Lower taxes. (c) Sell government securities on the open market. (d) Increase government expenditures. 17. In the above figure, the economy experiences an increase in aggregate demand so that the aggregate demand curve shifts from AD0 to AD. If the Government wants to offset this change, it would: (a) Purchase government securities on the open market. (b) Increase government expenditures. (c) Sell government securities / bonds on the open market. (d) Raise taxes.
In the given figure, the economy is affected by a decrease in aggregate demand. When this happens, the aggregate demand curve shifts from AD0 to AD1. If the government wants to offset this change, then it will have to increase its government expenditures (option (d)).Explanation: Aggregate demand refers to the total sum of all the final goods and services that all the individuals in an economy are willing and able to buy. It also includes investment, consumption, government purchases, and net exports.
The aggregate demand curve is the total amount of goods and services that consumers, businesses, and the government are willing to purchase at a particular price level. When aggregate demand decreases, the aggregate demand curve shifts leftward from AD0 to AD1. On the other hand, an increase in aggregate demand shifts the AD curve rightward from AD0 to AD.
1. Decrease in aggregate demand: If the government wants to offset a decrease in aggregate demand, it would need to increase its government expenditures. This is because an increase in government expenditure will lead to an increase in aggregate demand.
2. Increase in aggregate demand: If the economy experiences an increase in aggregate demand so that the aggregate demand curve shifts from AD0 to AD, the government wants to offset this change. The government would need to sell government securities/bonds on the open market (option (c)). This is because when the government sells its securities/bonds, the money supply in the economy decreases, which leads to a decrease in aggregate demand.
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May 19 Issued 1,500 shares of $1 par value common stock for cash of $10.50 per share. Jun. 3 Isssued 300 shares of $9, no-par preferred stock for $15,000 cash. Jun. 11 Received equipment with a market value of $70,000 in exchange for 4,000 shares of the $1 par value common stock.
On May 19, the company issued 1,500 shares of $1 par value common stock for cash at $10.50 per share. This resulted in a cash inflow of $15,750 ($10.50 x 1,500).
On May 19, the company issued 1,500 shares of $1 par value common stock for cash at a price of $10.50 per share. This means that the total cash received from this transaction would be 1,500 shares x $10.50 = $15,750. The common stock account would be credited for the par value of the shares issued, which is 1,500 shares x $1 = $1,500. The remaining amount, which is $15,750 - $1,500 = $14,250, would be recorded as additional paid-in capital.
On June 3, the company issued 300 shares of $9 no-par preferred stock for $15,000 cash. The preferred stock account would be credited for the total amount received, which is $15,000. Since it is a no-par stock, there is no par value recorded.
On June 11, the company received equipment with a market value of $70,000 in exchange for 4,000 shares of $1 par value common stock. This transaction involves a noncash exchange. The equipment account would be debited for the market value of $70,000, and the common stock account would be credited for the par value of the shares issued, which is 4,000 shares x $1 = $4,000.
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Imagine you are a Regional Sales Representative for Omland Hospitality. Here's is your company's website:
https://www.omlandhospitality.com
Omland Hospitality Business Development Manager - your boss - wants you to identify hotels in Burlington that would be good candidates to buy your Hospitality products, and approach them for permission to give a sales presentation. Using concepts from the textbook about Prospecting and discussed in class, describe how you could best go about this. 1| Page
NOTE:
Make sure your points are relevant to the industry in this scenario.
Make sure your points are relevant to this business scenario as described above.
Be sure you are clear & precise on how each activity is part of Prospecting. REMINDER: Advertising and Marketing are not Prospecting. De brief and straight to the point: points will be deducted for uppecessary or irrelevant outro detaile
To identify hotels in Burlington that would be good candidates to buy your Hospitality products, and approach them for permission to give a sales presentation, as a Regional Sales Representative for Om land Hospitality, I would use the following approach: I will use sales intelligence tools to determine which hotels are in the market for hospitality products. The first step in identifying potential clients is to research the market for leads. I will identify the hotels in Burlington that could be potential clients.
This can be done by using sales intelligence tools such as Hoovers, RainKing, or Discover Org. These tools will help me find information about the hotels, including their size, location, and business history. This will help me identify which hotels are the best candidates for our products. I will then use targeted emails and phone calls to approach these hotels. A personalized email is one of the best ways to approach potential customers. The email should be short and sweet, and it should highlight the benefits of our products. After sending the email, I will follow up with a phone call to schedule a meeting. During the meeting, I will focus on their pain points and demonstrate how our products can address them. I will also leverage my network to find referrals. Referrals are a great way to generate leads. I will reach out to my network and ask them if they know of any hotels that may be interested in our products. I will also offer incentives for referrals to encourage my network to help me find new clients.
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Problems and Applications Q4 Suppose that there are 10 million workers in Canada and that each of these workers can produce either 2 cars or 30 bushels of wheat in a year. The opportunity cost of producing a car in Canada is bushels of wheat, and the opportunity cost of producing a bushel of wheat in Canada is cars. Use the blue line (circle symbol) to draw Canada's production possibilities frontier (PPF) on the following graph. Then use the black point (plus symbol) to indicate the consumption bundle Canada can achieve without trade if it chooses to mneinme to milion cars. Use the blue fine (circle symbol) to draw Canada's production possibilities frontier (PPF) on the following graph. Then use the black point (Pius symbol) to indicate the consumption bundle Canada can achieve without trade if it chooses to consume 10 million cars. Now suppose that the United States offers to buy 10 million cars from Canada in exchange for 200 million bushels of wheat. On the previous graph, use the grey point (star symbol) to indicate the consumption bundle Canada can achieve with trade if it continues to consume 10 million cars. Canada accept the deal the United States proposes.
Canada's production possibilities frontier (PPF) shows the maximum combinations of car and wheat production it can achieve. Without trade, Canada can consume a certain bundle of goods.
The production possibilities frontier (PPF) illustrates the trade-offs between car and wheat production in Canada. The blue line (circle symbol) represents Canada's PPF on the graph, indicating the maximum combinations of car and wheat production given its resources and technology.
Without trade, Canada can consume a certain bundle of goods represented by the black point (plus symbol) on the graph. The specific bundle mentioned in the question is not provided, so we can't determine its exact coordinates.
However, when the United States offers to buy 10 million cars from Canada in exchange for 200 million bushels of wheat, the trade deal allows Canada to alter its consumption bundle. The grey point (star symbol) on the graph indicates the new consumption bundle Canada can achieve with trade while still consuming 10 million cars.
By accepting the trade deal, Canada can benefit from specializing in car production and exporting them to the United States. This allows Canada to increase its consumption of both cars and wheat compared to the scenario without trade. The specific coordinates of the grey point (star symbol) will depend on the exact terms of the trade deal and the relative opportunity costs of production between the two countries.
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Eight months ago, you purchased 400 shares of WIC stock at a price of $46.40 a share. The company pays quarterly dividends of $1.05 a share. Today, you sold all of
your shares for $48.30 a share. What is your total percentage return on this investment? What is your total dollar return on this investment? Briefly discuss.
The total percentage return on the investment is 9.24%.The total dollar return on this investment is $1,420.
To find the total percentage return on the investment, we will use the formula below: Total Percentage Return = (Total Dollar Return ÷ Total Cost of Investment) x 100First, let us find the total cost of investment.400 shares were purchased at a price of $46.40 per share. Therefore, the total cost of the investment = 400 x $46.40 = $18,560 Since the company pays quarterly dividends of $1.05 a share, the total dividend earned over eight months is:$1.05 x 4 = $4.20 Total dividend earned = 400 x $4.20 = $1,680So, the total cost of the investment is: $18,560Total dividends earned is: $1,680Total cost of the investment including dividends = $18,560 + $1,680 = $20,240The total dollar return on this investment can be found by multiplying the number of shares sold by the selling price per share. Number of shares sold = 400Selling price per share = $48.30Total dollar return = 400 x $48.30 = $19,320Now that we have both the total dollar return and total cost of the investment, we can find the total percentage return: Total Percentage Return = (Total Dollar Return ÷ Total Cost of Investment) x 100= ($19,320 ÷ $20,240) x 100= 0.904 x 100= 9.24%Therefore, the total percentage return on the investment is 9.24%.The total dollar return on this investment is $1,420.
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Under what circumstances will the multiplier be smaller, other things being equal?
a.the smaller the fraction of each dollar earned that goes to taxes
b.the smaller the fraction of each dollar of disposable income that goes to saving the
c.larger the fraction of each dollar of disposable income that is spent on imports
d.the larger the fraction of each dollar of disposable income spent on consumption
A smaller multiplier occurs when a larger fraction of disposable income is spent on imports, as it leads to a leakage from the domestic economy. This reduces the overall impact of the multiplier effect. The correct option is c.
The multiplier refers to the effect of an initial change in spending on the overall economy. A higher multiplier indicates a larger impact on the economy, while a smaller multiplier suggests a lesser impact.
When other factors are equal, the following circumstances can result in a smaller multiplier:
a. The smaller the fraction of each dollar earned that goes to taxes: A smaller tax rate implies that individuals or businesses have more disposable income, which they can spend or invest.
As a result, a smaller portion of the initial spending will be taken out of the economy in the form of taxes, leading to a smaller multiplier.
b. The smaller the fraction of each dollar of disposable income that goes to saving: When a smaller portion of disposable income is saved, more money is available for immediate consumption.
As a result, a higher proportion of the initial spending will directly contribute to immediate consumption, leading to a smaller multiplier.
c. The larger the fraction of each dollar of disposable income that is spent on imports: If a significant portion of the initial spending is used to purchase imported goods and services, it leaks out of the domestic economy and does not circulate within it.
Consequently, a larger fraction spent on imports reduces the multiplier effect.
d. The larger the fraction of each dollar of disposable income spent on consumption: If a larger proportion of disposable income is spent on immediate consumption, less money is available for saving or investment.
This reduces the potential for further spending and diminishes the multiplier effect.
In summary, a smaller multiplier is likely when there are lower tax rates, higher levels of consumption, higher import spending, and lower savings rates.
Hence, the correct option is c. larger the fraction of each dollar of disposable income that is spent on imports.
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