Firms can avoid the Bertrand paradox by making it difficult for consumers to switch between different firms. This statement is false.
False. The Bertrand paradox refers to a situation where firms in a duopoly with identical products compete by setting prices, and the competition drives prices down to marginal cost, resulting in zero profits. Making it difficult for consumers to switch between different firms does not resolve the Bertrand paradox.
The Bertrand paradox arises due to the assumption of perfect substitutability between the products offered by the firms. When consumers can easily switch between firms based on price differences, they will always choose the firm offering the lowest price, leading to fierce price competition and eroding profits.
Increasing switching costs or making it difficult for consumers to switch between firms may limit price competition to some extent. However, if the products are still perfect substitutes, consumers will still have an incentive to switch to the firm offering the lowest price. Therefore, the Bertrand paradox cannot be fully resolved by making it difficult for consumers to switch.
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Lavare, located in the Chicago suburbs, is a major manufacturer of stainless steel sinks. Lavare is in the middle of the S&OP exercise for the coming year. Anticipated monthly demand from distributors over the 12 months is shown below:
Month | Demand
January : 13000
February : 11000
March : 15000
April : 18000
May : 25000
June : 26000
July : 30000
August : 29000
September : 21000
October : 18000
November : 14000
December : 11000
Capacity at Lavare is governed by the number of machine operators it hires. The firm works 20 days a month, with a regular operating shift of eight hours per day. Any time beyond that is considered overtime. Regular-time pay is $15 per hour and overtime is $22 per hour. Overtime is limited to 20 hours per month per employee. The plant currently has 250 employees. Each sink requires two hours of labor input. It costs $3 to carry a sink in inventory for a month. Materials cost per sink is $40. Sinks are sold to distributors at a price of $125 each. We assume that no stock outs are allowed and the starting inventory entering January is 5,000 units and the desired ending inventory in December is also 5,000 units.
What is the annual profit from this plan?
What is the cost of this plan?
Annual profit is calculated by taking the revenue obtained from sales of the product and subtracting the cost of production. Revenue from sales is obtained by multiplying the number of units sold with the selling price of one unit.
Annual Profit
Annual profit from this plan can be calculated as follows:
Sinks manufactured = 10,000 + 12 × 25,000 = 310,000
Sinks sold = 12 × 13,000 + 11 × 11,000 + 15 × 15,000 + 18 × 18,000 + 25 × 25,000 + 26 × 26,000 + 30 × 30,000 + 29 × 29,000 + 21 × 21,000 + 18 × 18,000 + 14 × 14,000 + 11 × 11,000 = 340,000
Closing inventory = 5,000
Annual Profit = (Revenue - Cost)
Revenue = $125 x 340,000 = $42,500,000
Cost = (Inventory cost + Labor cost + Materials cost + Capacity cost)
Inventory cost = (Closing inventory + Opening inventory) / 2 x Inventory carrying cost per unit for one month.
= (5,000 + 5,000) / 2 x $3 x 12 = $180,000
Labor cost = Labor hours required to manufacture all units x (Regular time cost per hour x Regular time hours + Overtime cost per hour x Overtime hours)
Labor hours required to manufacture all units = 2 x 310,000 = 620,000
Regular time hours = 620,000 / (250 x 8 x 20) = 387.5 hours
Overtime hours = Max [0, (620,000 / (250 x 8)) - (8 x 20 x 12)] = Max [0, 60] = 60
Regular time cost per hour = $15
Overtime cost per hour = $22
Labor cost = 620,000 x (15 x 387.5 + 22 x 60) = $25,715,000
Materials cost = $40 x 310,000 = $12,400,000
Capacity cost = (Regular time hours + Overtime hours) x (Regular time cost per hour + Overtime cost per hour) x 250
Capacity cost = (387.5 + 60) x (15 + 22) x 250 = $16,971,875
Total Cost = Inventory cost + Labor cost + Materials cost + Capacity cost = $180,000 + $25,715,000 + $12,400,000 + $16,971,875 = $55,267,875
Therefore, annual profit from this plan is $42,500,000 - $55,267,875 = - $12,767,875 (which is a loss).
Cost of this plan is $55,267,875.
Annual profit is calculated by taking the revenue obtained from sales of the product and subtracting the cost of production. Revenue from sales is obtained by multiplying the number of units sold with the selling price of one unit. The cost of production is calculated by adding all the costs incurred in producing the product like labor cost, materials cost, capacity cost, and inventory cost. The inventory cost is the cost of holding the product in stock for a month. The labor cost is calculated by multiplying the total number of labor hours required to produce the product with the cost per hour for regular time and overtime hours.
Capacity cost is calculated by multiplying the number of hours taken to produce the product with the cost per hour for regular time and overtime hours and then multiplying the result with the number of employees. After calculating all the costs, they are added together to get the total cost of the product. Cost of this plan is $55,267,875.
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1. For better or worse, the Irish employment market has irrevocably changed over the last five years and with it the relationship between employers and employees. People issues are now recognised as being central to the success of any organisation and, as a consequence, human resource has assumed a higher profile. Few companies in the last five years held any sort of senior management meeting without addressing concerns around staffing levels, recruitment, management development and retention. Prior to this, how many companies could say that these issues featured often enough on meeting agendas?
2. HR now needs to be firmly aligned with wider business strategy and the relevant practitioners must be central to their organization’s efforts at optimizing the value delivered by its employees. In May, HRM Recruitment Group commissioned a unique survey of Ireland’s HR profession. The National Human Resource Practitioners Survey 2001 sought to identify the main issues and trends in HR in Ireland and to look at the people responsible for meeting the significant HR challenges that all organisations face.
3. A cross-ˇsection of 500 HR professionals from Irish industry and public service were invited to participate. Completed questionnaires were received from 253 respondents. Traditionally in Ireland, the HR or personnel function has not featured with the same prominence as within UK or US-ˇbased counterparts; 30 per cent of respondents highlighted their function’s biggest weakness as ‘lack of resources’. Unusual when you consider that in many global organisations, the chief executive officer will often come from HR or at least have spent some time within that department. For several years Guinness chiefs came directly from the HR function. Some 50 per cent of survey respondents highlighted that, were they not pursuing their careers in HR, they would choose general management, 15 per cent would choose operations while 10 per cent would currently be working in marketing.
4. The most important people issues for over two-ˇthirds of Irish organisations for the future remain the ability to hire and retain the right people. Developing ‘strategic leadership competencies’ and ‘customer focus’ within the organisation are next. Amongst the biggest challenges to achieving HR goals, respondents highlighted ‘keeping line managers focused on HR issues’ (29 per cent) and ‘resistance to change’ (22 per cent). Survey participants identified ‘relevance to core business’ and ‘HR’s understanding of key business issues’ as presenting the greatest opportunities for the profession over the next five years while nearly two-ˇthirds cited the ‘outsourcing of HR activities’ as the greatest threat. The survey seems to suggest that the combination of pressure to recruit and the scarcity of key personnel over the last few years has resulted in some compromise amongst hiring companies.
5. Respondents were asked: ‘If you could change the employees in your workforce tomorrow, how many would you change?’ A surprisingly high number (78 per cent) indicated that they would change 25 per cent to 50 per cent of their employees. Only 12 per cent suggested they would make no changes.
Retention remains a critical issue for HR practitioners. Some 43 per cent of survey participants felt that
6. failure to retain key staff has a high impact on organisation performance. Only 4 per cent suggested no impact while 3 per cent of respondents estimated the annual cost of staff turnover as being in excess of í1 million, and 32 per cent indicated that their staff turnover costs could be between í100,000 and í500,000. Perhaps surprisingly, given the costs involved, the survey reveals that over a quarter of organisations do not even calculate the cost of staff turnover.
7. The survey highlights the three most effective methods for retaining employees in the longer term as being ‘management effectiveness through coaching and feedback’, ‘providing continuous learning opportunities’ for employees and the ‘culture fit between organisation and employee’. Retention bonuses were seen as the least effective method, identified by only 5 per cent of respondents.
8. High performance organisations of the future will be determined by the ability of HR practitioners to design credible and effective HR strategies, and by the ability of organisations to recognise HR needs through their full implementation.
Question
HR practitioners need to be involved at a strategic level and yet the professional function, it is argued, lacks prominence and resources. In such a context, what can practitioners do to become more central at a strategic level?
To become more central at a strategic level, HR practitioners can take several steps:
Demonstrate value: HR practitioners should strive to showcase the value they bring to the organization's overall strategy and goals. They can do this by aligning HR initiatives with business objectives and measuring the impact of HR activities on key performance indicators (KPIs). By presenting tangible data and outcomes, practitioners can establish their contribution to organizational success.
Develop business acumen: HR professionals should enhance their understanding of the business by staying informed about industry trends, market conditions, and the organization's competitive landscape. This knowledge enables practitioners to identify strategic opportunities and provide relevant insights to senior management.
Collaborate with key stakeholders: Building strong relationships with leaders and managers across the organization is essential for HR practitioners. By actively collaborating with other departments and understanding their needs, HR can contribute to strategic decision-making processes and ensure that people-related considerations are integrated into overall business plans.
Proactively identify HR implications: HR practitioners should anticipate and identify potential people-related challenges or opportunities that can impact the organization's strategic direction. By staying ahead of workforce trends, talent management issues, and organizational development needs, HR can offer proactive solutions and recommendations to senior management.
Advocate for resources: HR professionals need to advocate for the necessary resources, both financial and human, to effectively execute strategic HR initiatives. This includes making a compelling business case for investments in HR technology, training and development programs, and talent acquisition and retention efforts.
Enhance leadership capabilities: HR practitioners should focus on developing their own leadership skills and competencies. By demonstrating strong leadership qualities, such as effective communication, influencing skills, and strategic thinking, HR professionals can position themselves as trusted advisors to senior leaders and earn a seat at the strategic decision-making table.
Stay updated on HR best practices: Continuous learning and staying updated on the latest HR trends, research, and best practices are crucial for HR professionals to enhance their knowledge and expertise. This enables them to contribute strategic insights and innovative solutions that align with industry standards and drive organizational success.
In conclusion, HR practitioners can become more central at a strategic level by showcasing their value, developing business acumen, collaborating with stakeholders, proactively identifying HR implications, advocating for resources, enhancing leadership capabilities, and staying updated on HR best practices. By taking these steps, HR can elevate its role and influence within the organization's strategic decision-making processes.
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Assume you are working in a cubicle office, but unfortunately it is not always to your advantages; to have smooth work environment:
Give five good manners as an employee working in as cubicle office, and
five good manners expected from the visitors or colleagues to your cubicle office
As an employee working in a cubicle office, there are five good manners you can practice to maintain a smooth work environment. Firstly, maintain a considerate noise level by keeping conversations and phone calls at an appropriate volume.
Secondly, respect the personal space of your colleagues by avoiding unnecessary intrusion or hovering around their cubicles. Thirdly, practice good hygiene and cleanliness by keeping your workspace tidy and free of clutter.
Fourthly, be mindful of shared resources such as printers or common areas, and use them responsibly. Lastly, demonstrate professionalism by refraining from engaging in distracting or disruptive behaviors.
On the other hand, there are five good manners expected from visitors or colleagues when entering your cubicle office. Firstly, knock on the cubicle wall or door before entering to signal your presence and ask for permission to enter.
Secondly, respect the personal space and privacy of the employee by refraining from leaning over or touching their belongings without permission. Thirdly, keep conversations brief and relevant, as extended conversations can be disruptive to the employee's work.
Fourthly, be mindful of noise levels and try to keep voices down to avoid disturbing nearby coworkers. Lastly, if borrowing any items or using shared resources, return them promptly and in the same condition as when borrowed.
By practicing these manners, a respectful and harmonious work environment can be maintained in a cubicle office setting.
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(a) Throughout 2020 and 2021, countries around the world dedicated much of their resources to controlling the Covid-19 pandemic. In this question requires you will model the economic effects of the pandemic in the Australian context.
i. Draw a production possibility frontier for Australia with Covid-19 control on the Y-axis and all other goods and services on the X-axis (you do not need to include any numbers on your graph). Discuss where we would have operated pre-Covid, and how the onset and gradual worsening of the pandemic affected this choice.
ii. Use your PPF to discuss how the discovery and rollout of the Covid vaccine affected Australia.
iii. Discuss how the Covid-19 pandemic affected the fundamental questions of what, how and for whom to produce in the Australian context.
The Covid-19 pandemic had significant economic effects on Australia. In this context, we will analyze the impact of the pandemic on Australia's production possibility frontier (PPF), the effect of the Covid vaccine rollout, and how the pandemic affected the fundamental questions of production in Australia.
i. Pre-Covid, Australia would have operated at a point on the production possibility frontier that reflects the allocation of resources between Covid-19 control measures and other goods and services. The onset and gradual worsening of the pandemic shifted the PPF inward, reducing the country's capacity to produce goods and services due to the diversion of resources towards controlling the virus. This shift represents a trade-off where the focus on Covid-19 control comes at the expense of producing other goods and services.
ii. The discovery and rollout of the Covid vaccine positively affected Australia. It allowed for the gradual easing of restrictions and the re-allocation of resources towards the production of other goods and services. This resulted in a shift of the PPF outward, indicating an expansion of the country's capacity to produce both Covid-19 control measures and other goods and services. The vaccine rollout provided the opportunity to regain economic stability and recover from the negative impact of the pandemic.
iii. The Covid-19 pandemic had significant implications for the fundamental questions of what, how, and for whom to produce in Australia. The focus on controlling the virus led to changes in production priorities, with an increased emphasis on healthcare, medical supplies, and essential services. The pandemic also influenced the way goods and services were produced, with the adoption of new safety protocols and work-from-home arrangements. In terms of whom to produce for, the pandemic highlighted the importance of addressing public health needs and ensuring equitable access to healthcare and essential goods for all Australians.
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A: On its 2022 statement of cash flows prepared using the direct method, Mould, Inc. reports cash collected from customers of $752,000. Mould also reports the following on its balance sheets:
December 31, 2022 December 31, 2021
Accounts receivable $38,000 $65,200
Accounts payable 53,800 23,700
What was Mould's 2022 sales revenue?
B:
Michaels, Inc. reports $4,974,000 of net income in 2022.
During 2022, Michaels had:
2,628,000 shares of common stock outstanding - dividends of $2.53 paid on each.
85,000 shares of preferred stock outstanding - dividends of $5.00 paid on each.
123,000 stock options outstanding. The options allow the holder to purchase a share of Michales common stock for $24.00. The average price of Michaels common stock was $37.00 in 2022.
Michaels' 2022 basic earnings per share, to the nearest penny, is
Mould, Inc.'s 2022 sales revenue can be calculated by adding the decrease in accounts receivable to the cash collected from customers. The difference between the accounts receivable balance at the beginning and end of the year represents the change in credit sales, which is equal to the sales revenue.
Michaels, Inc.'s 2022 basic earnings per share can be calculated by dividing the net income by the weighted average number of common shares outstanding. The weighted average number of common shares is calculated by considering the number of shares outstanding throughout the year, including any stock splits or stock issuances.
A: To determine Mould, Inc.'s 2022 sales revenue, we need to consider the change in accounts receivable. Accounts receivable decreased by $27,200 ($65,200 - $38,000) from December 31, 2021, to December 31, 2022. This decrease represents the cash collected from customers during the year. Therefore, the sales revenue for 2022 is $779,200 ($752,000 + $27,200).
B: To calculate Michaels, Inc.'s 2022 basic earnings per share, we need to divide the net income by the weighted average number of common shares outstanding. The weighted average number of common shares is determined by considering the number of shares outstanding throughout the year.
Since there were no stock splits or stock issuances mentioned, we can assume the number of common shares remained constant at 2,628,000. Therefore, the basic earnings per share is approximately $1.89 ($4,974,000 / 2,628,000).
By accurately calculating sales revenue and basic earnings per share, Mould, Inc. and Michaels, Inc. can assess their financial performance, track profitability, and provide valuable information to shareholders and investors.
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A call option, with a strike of \( \$ 40 \) is selling at a \( \$ 1 \) premium. At what stock price will this option break even (zero profit)?
The call option with a strike price of $40 will break even (zero profit) when the stock price is $41, considering that the option is selling at a $1 premium.
In options trading, the break-even point for a call option can be calculated by adding the strike price to the premium paid for the option. In this case, the strike price is $40, and the premium is $1. Therefore, the break-even point can be determined as $40 + $1 = $41.
When the stock price reaches or exceeds the break-even point of $41, the call option holder will start making a profit. This is because the option allows the holder to buy the underlying stock at the strike price of $40 and then sell it at the market price, which is higher than the break-even point.
Conversely, if the stock price remains below the break-even point of $41, the call option holder will not make a profit and may experience a loss. Therefore, for the call option to break even and result in zero profit, the stock price needs to be exactly $41.
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1. Consider three alternatives A,B, and "do-nothing." Construct a choice table for interest rates from 0% to 100%. (Review Chapter 8 ) 2. Wayward Airfreight, Inc. has asked you to recommend a new automatic parcel sorter. You have obtained the following bids: (Review Chapter 8 ) a. Construct a choice table for interest rates from 0% to 100%. b. Using a MARR of 15% and a rate of return analysis, which alternative, if any, should be selected?
Choice Table for Alternatives A, B, and "Do-Nothing" at Various Interest Rates:
Interest Rate Alternative A Alternative B Do-Nothing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Choice Table for Parcel Sorter Alternatives at Various Interest Rates:
Interest Rate Alternative A Alternative B Alternative C
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
b. To determine the alternative that should be selected using a MARR (Minimum Acceptable Rate of Return) of 15% and rate of return analysis, we would need additional information regarding the costs and benefits associated with each alternative. Without specific data on costs, benefits, and the cash flows associated with the alternatives, it is not possible to make a selection or perform the rate of return analysis.
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jones company is going to invest in new technology to expand its sales. the technology will cost 200000. it will generate cash revenues of 75000 a year for 8 years and cash expenses of 25000 per year over the same time horizon. the cost of capital is 10%
calculate the following:
the payback period for the project.
the AROR for the project.
the NPV for the project
The calculated values for the project are:
Payback Period: 4 years
AROR: 3.125%
NPV (Net Present Value): $65,716.16
To calculate the payback period for the project, we need to determine the time it takes for the cumulative cash flows to recover the initial investment.
Initial Investment: $200,000
Annual Cash Revenues: $75,000
Annual Cash Expenses: $25,000
Payback Period Formula:
Payback Period = Initial Investment / Annual Net Cash Flow
Calculating the annual net cash flow:
Annual Net Cash Flow = Annual Cash Revenues - Annual Cash Expenses
= $75,000 - $25,000
= $50,000
Payback Period = $200,000 / $50,000
Payback Period = 4 years
The payback period for the project is 4 years, meaning it will take approximately 4 years to recover the initial investment.
To calculate the AROR (Average Rate of Return) for the project, we need to determine the average annual profit as a percentage of the initial investment.
Average Annual Profit = (Total Cash Revenues - Total Cash Expenses) / Number of Years
= ($75,000 - $25,000) / 8
= $50,000 / 8
= $6,250
AROR = (Average Annual Profit / Initial Investment) * 100
AROR = ($6,250 / $200,000) * 100
AROR = 3.125%
The AROR for the project is approximately 3.125%.
To calculate the NPV (Net Present Value) for the project, we need to discount the cash flows to their present value and subtract the initial investment.
Discount Rate (Cost of Capital) = 10%
Present Value of Cash Flows:
Year 1: $50,000 / (1 + 0.10)^1 = $45,454.55
Year 2: $50,000 / (1 + 0.10)^2 = $41,322.31
Year 3: $50,000 / (1 + 0.10)^3 = $37,565.74
Year 4: $50,000 / (1 + 0.10)^4 = $34,150.67
Year 5: $50,000 / (1 + 0.10)^5 = $31,045.15
Year 6: $50,000 / (1 + 0.10)^6 = $28,220.14
Year 7: $50,000 / (1 + 0.10)^7 = $25,649.22
Year 8: $50,000 / (1 + 0.10)^8 = $23,308.38
NPV = Sum of Present Values of Cash Flows - Initial Investment
NPV = $45,454.55 + $41,322.31 + $37,565.74 + $34,150.67 + $31,045.15 + $28,220.14 + $25,649.22 + $23,308.38 - $200,000
NPV = $265,716.16 - $200,000
NPV = $65,716.16
The NPV for the project is $65,716.16.
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Which one of the following is an example of a period cost?
a Workers' compensation insurance on factory workers' wages allocated to the factory.
b Payroll accountant's salary for work that is done in the corporate head office
c Packaging materials for finished products
d A change in benefits for the union workers who work in the New York factory of a Fortune 1000 manufacturer.
Costs can be categorized into two types:
product costs and period costs.
Product costs include the direct costs of products that are manufactured and sold, such as materials, labor, and overhead. Period costs, on the other hand, include costs that are not directly associated with the manufacture of products, such as rent, utilities, and insurance. They are also known as non-manufacturing costs.
The following is an example of a period cost:
b. Payroll accountant's salary for work that is done in the corporate head office.
Hence option B is correct.
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IBA Sdn Bhd is a company that produces and sells instant coffee. The company employs a traditional method in the production process to preserve the original aroma of the highquality coffee beans. Since its establishment, the company has been successful in the market through its ability to offer products at rather low prices. However, the continuous reduction in total sales figures for the past two years urged Encik lqbal, the owner, to revisit its business strategy. The marketing team reported changes in the customers behaviour based on the recent market analysis. Most IBA loyal customers have switched their interest and to purchase imported instant coffee from Barcaffe Sdn Bhd (BSB). The imported products are made from high quality ingredients. They are packed in modern and more attractive and convenient packaging which uses sustainable zipper coffee packaging materials to ensure product stay fresh until the very end. The packaging also provides detailed information about the ingredients, expiry date, and preparation instructions. After extensive discussion among the top management team, Encik lqbal decided that IBA Sdn Bhd will only focus on producing instant coffee added with Sabah Snake Grass extract. The high content of flavonoids, minerals, and amino acids in Sabah Snake Grass is claimed to have anticancer properties and thus would really be helpful for cancer patients. Due to a narrow target market segment and the increase in production costs, IBA Sdn Bhd will introduce the product to the market at a premium price.
Required:
a. Explain three (3) benefits IBA Sdn Bhd may have enjoyed when operating on the current business-level strategy.
b. Discuss three (3) competitive risks that IBA Sdn Bhd would face when employing the new business-level strategy to market its new instant coffee.
a. Benefits of IBA Sdn Bhd's current business-level strategy: Competitive Advantage , Cost Leadership , Market Penetration ,
b. Competitive risks associated with the new business-level strategy:
Higher Production Costs , Limited Target Market , Competitive Pressure
a. Benefits of IBA Sdn Bhd's current business-level strategy:
Competitive Advantage: By offering products at lower prices compared to competitors, IBA Sdn Bhd has gained a competitive advantage in the market. This has allowed the company to attract price-sensitive customers who prioritize affordability over other factors. The ability to offer lower prices helps IBA Sdn Bhd to capture a larger market share and maintain customer loyalty.
Cost Leadership: Through the use of traditional production methods, IBA Sdn Bhd has likely achieved cost savings. Traditional methods may require less sophisticated equipment and technology, resulting in lower production costs. This cost advantage enables the company to price its products competitively and maintain profitability despite the low prices.
Market Penetration: The ability to offer products at low prices has likely facilitated market penetration for IBA Sdn Bhd. By attracting customers with affordable instant coffee, the company has been able to expand its customer base and gain a stronger foothold in the market. This increased market share and customer base provide opportunities for future growth and potential economies of scale.
b. Competitive risks associated with the new business-level strategy:
Higher Production Costs: Introducing a new product with Sabah Snake Grass extract may involve higher production costs compared to the traditional method. The extraction process and sourcing of high-quality ingredients may require additional investments and increased expenses. This can erode the cost advantage previously enjoyed by IBA Sdn Bhd and impact profitability if the premium price does not compensate for the higher costs.
Limited Target Market: Focusing on a narrow target market segment of cancer patients may restrict the potential customer base for IBA Sdn Bhd. This niche market may have limited demand, making it challenging to achieve significant sales volume. The company would need to carefully assess the size and profitability of this market segment to ensure it justifies the investment and aligns with the company's goals.
Competitive Pressure: Introducing a new product at a premium price may attract competition from existing and new market players. Competitors might replicate the Sabah Snake Grass extract concept or offer similar health-oriented coffee products targeting the same customer segment. This can lead to increased competition, price wars, and potential loss of market share for IBA Sdn Bhd if competitors offer better value propositions or more attractive packaging and marketing strategies.
IBA Sdn Bhd's current business-level strategy of offering low-priced instant coffee has provided benefits such as a competitive advantage, cost leadership, and market penetration. However, the new business-level strategy focusing on premium-priced instant coffee with Sabah Snake Grass extract introduces competitive risks such as higher production costs, a limited target market, and increased competitive pressure. It is essential for IBA Sdn Bhd to carefully evaluate these risks and devise strategies to address them effectively in order to succeed in the market.
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Which of the following is most closely associated with expenses?
Group of answer choices
a. Equity risk premium
b Product (value propositions) design(s)
c Average operating assets
d Proportion of debt and equity in the company’s capital structure
c. Average operating assets. Expenses are costs incurred by a company in its day-to-day operations to generate revenue.
Average operating assets, such as the cost of raw materials, labor expenses, rent, utilities, and other operating expenses, are directly associated with the company's expenses. these assets are utilized in the production of goods or services and contribute to the overall cost structure of the company.
expenses are the costs incurred by a company to generate revenue and maintain its operations. they represent the outflow of resources or obligations arising from the company's activities.
the "a. equity risk premium" is not directly associated with expenses. equity risk premium is the excess return that investors expect to receive for holding stock over a risk-free investment. it is a measure of the additional compensation investors demand for taking on the higher risk associated with equity investments.
the "b. product (value propositions) design(s)" is not directly associated with expenses either. product design relates to the process of creating and developing products that meet customer needs and provide value. while product design can impact costs and profitability, it is not considered an expense itself.
the "d. proportion of debt and equity in the company's capital structure" is related to the company's financing decisions and capital structure. it refers to the mix of debt and equity used to finance the company's operations and investments. while capital structure decisions can affect the cost of capital and interest expenses, they are not considered direct expenses.
on the other hand, "c. average operating assets" is closely associated with expenses. average operating assets include the resources and investments used by a company in its day-to-day operations. these assets, such as inventory, equipment, buildings, and other resources, contribute to the company's expenses through costs such as depreciation, maintenance, and usage-related expenses. average operating assets.
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What is the product mix that will maximize operating income. (assume no demand contraint)
A. 14,000 units from designer and zero units from moderately prised.
B. 560 units from moderately priced and zero units from designer.
C. 437.5 units from designer and 280 units fron moderately priced.
D. 875 units from designer and zero units from moderately priced.
Without the necessary information on contribution margins and selling prices, it is not possible to determine the product mix that will maximize operating income.
To determine the product mix that maximizes operating income, it is essential to consider the contribution margin and selling prices for each product. The contribution margin represents the amount of revenue remaining after deducting variable costs, and it indicates the profitability of each product. Without this information, it is not possible to compare the profitability of different product mixes. Additionally, selling prices play a crucial role in determining the revenue generated by each product. Therefore, without knowledge of the contribution margins and selling prices for the designer and moderately priced products, it is impossible to determine which product mix will maximize operating income.
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A supplier produces a product at per unit cost $35 and sells it to a retailer at the wholesale price $75. The retailer decides how many units to order (q) before the sales season. The demand of customers is normally distributed with mean 250 and standard deviation of 125. The retail price is $115 and each unit of leftover
inventory has salvage value of $25. Which of the following statements is false?
A• The retailer should order less than 250 units
BO If the wholesale price increases from $75 to $85, the retailer would order more than
250 units C• If the retailer price increases from $115 to $135, the retailer would order more than
250 units D• If the wholesale price decreases from $75 to $35, the total profit earned in the supply
chain would be maximized
The false statement is:
C. If the retailer price increases from $115 to $135, the retailer would order more than 250 units.
According to the Newsvendor model, the optimal order quantity for maximizing expected profit is determined by comparing the expected marginal profit (selling price minus cost) with the expected marginal salvage value (salvage value minus cost) at the desired service level.
In this case, the retailer should order less than 250 units because the mean demand is 250 units, and ordering more than the mean would result in excess inventory and potential losses.
If the wholesale price increases from $75 to $85, the retailer would order more than 250 units. This is because a higher wholesale price reduces the expected marginal profit per unit, leading the retailer to order more units to compensate for the decreased profitability.
If the wholesale price decreases from $75 to $35, the total profit earned in the supply chain would be maximized. This is because a lower wholesale price increases the expected marginal profit per unit, encouraging the retailer to order more units and maximizing the overall profit.
However, if the retailer price increases from $115 to $135, it does not necessarily mean that the retailer would order more than 250 units. The retailer's order quantity depends on the trade-off between the increased selling price and the associated changes in expected marginal profit and salvage value. It is possible that the increase in retail price may lead to a decrease in expected demand, resulting in the retailer ordering less than 250 units.
Therefore, statement C is false as the retailer's order quantity cannot be determined solely based on the increase in the retail price.
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______________ generate revenue and provide loyalty or positive word-of-mouth promotion.
Satisfied customer generate revenue and provide loyalty or positive word-of-mouth promotion.
Customer play a vital role in generating revenue and promoting a business through loyalty and positive word-of-mouth. Satisfied customers not only make repeat purchases but also recommend the products or services to others, thereby acting as brand ambassadors. They contribute to the growth and success of a business by providing valuable feedback, endorsing the company through testimonials or online reviews, and influencing others' purchasing decisions. Cultivating strong customer relationships and delivering exceptional experiences are key strategies for businesses to harness the power of their customers and drive sustainable revenue growth.
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According to ISO 19650, Which of the following can NOT be true for a BEP?
A: It can relate to a single task team
B: It is established pre-appointment
C: It has industry standard contents
D: It is developed during an appointment
According to ISO 19650, the statement that cannot be true for a BEP (BIM Execution Plan) is C: It has industry standard contents. The BEP is a crucial document in the BIM (Building Information Modeling) process, which outlines the project-specific processes, procedures, and protocols related to the use of BIM. It serves as a roadmap for implementing BIM throughout the project lifecycle.
A BEP can relate to a single task team (A), meaning it focuses on the specific responsibilities and deliverables of a particular team within the project. It is established pre-appointment (B), which means it is developed before the appointment of the project participants to ensure a clear understanding of BIM requirements and objectives. However, it does not have industry standard contents (C), as the contents of a BEP are tailored to the specific project and client requirements. The BEP is developed during an appointment (D), as it is created and refined during the early stages of the project to align with the project's objectives and stakeholders' needs.
The BEP should be comprehensive and cover various aspects of BIM implementation, including project goals, information requirements, collaboration procedures, model management, data exchange protocols, and quality assurance. The contents of the BEP are specific to each project and should be developed in collaboration with the project team, taking into account the project's unique requirements and the stakeholders' expectations. By tailoring the BEP to the specific project, it ensures that the BIM processes and deliverables align with the project's goals and requirements, promoting efficient and effective BIM implementation.
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What government agency has the responsibility to handle investor-related issues? Select one: a. Department of Labor b. Environmental Protection Agency c. FTC d. SEC e. EEOC
The responsibility to handle investor-related issues is on the government agency called SEC (Securities and Exchange Commission). Hence, the correct answer is option (d).
What is the SEC?The SEC is a federal government agency in the United States which was established in the year 1934 by the Securities Exchange Act. It is responsible for protecting investors, facilitating capital formation, and maintaining orderly markets. The SEC is the primary regulator of the securities market, where stocks, bonds, and other types of securities are bought and sold publically.
What are investor-related issues?Some of the issues that investors may face in the securities market include:
-fraud
-insider trading
-misrepresentation
-market manipulation
-other unethical or illegal practices.
The SEC investigates these types of violations and take remedial actions to protect investors and maintain the integrity of the capital markets.
How does the SEC handle investor-related issues?The SEC can bring civil actions against individuals or companies that violate securities laws. It can also impose criminal charges in some cases. If the SEC determines that a violation has occurred, it can impose penalties such as fines, injunctions, and other remedial actions to prevent future violations.
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Which of the following is a completed taxable gift?
A. $15,000 in cash given to Valley Hospital for the care of a neighbor who was in an auto accident.
B. $20,000 in cash contributed to the committee to reelect Senator Cone.
C. $55,000 in cash transferred to a former spouse under a written property settlement shortly after a divorce.
D. $18,000 in cash given to a needy student to pay for college tuition
The completed taxable gift is $55,000 in cash transferred to a former spouse under a written property settlement shortly after a divorce.
The completed taxable gift is cash transferred to a former spouse under a written property settlement shortly after a divorce. A taxable gift refers to a gift made by an individual to another person without receiving anything in return. A gift is said to be completed when the donor has irrevocably transferred all interest and control of the property to the donee.
A completed gift is not subject to modification or revocation by the donor. In this context, of the options given above, the following is a completed taxable gift: $55,000 in cash transferred to a former spouse under a written property settlement shortly after a divorce.
The above option is the answer because when a divorce settlement agreement includes a provision for property transfer, the transfer is considered a gift, which is subject to a gift tax. Therefore, it is a completed taxable gift.
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What is the average utilization of the truck?
How many people, on average, are waiting in line?
What is the minimum number of servers they would need to get the probability of delay to under 10%? (Assume all servers have identical service
To determine the average utilization of the truck, we need to know the average service time and the average arrival rate of customers.
Unfortunately, the information regarding service time and arrival rate is not provided in your question. Please provide the necessary data so that I can assist you in calculating the average utilization.
Similarly, to calculate the average number of people waiting in line, we need to know the arrival rate and service time. Without this information, it is not possible to determine the average number of people waiting in line.
Regarding the minimum number of servers needed to achieve a probability of delay under 10%, we would require the arrival rate and service time as well as the desired level of service, such as the maximum acceptable waiting time or the targeted probability of delay. Please provide these details so that I can help you determine the minimum number of servers required.
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Judy has been successful in proving that a contract she entered into was voidable as the parties had failed to reach consensus. She wants to know what remedies are available to her. Which of the following statements is incorrect? Select one: a. She may claim damages if she suffered any loss b. She may choose to set aside or enforce the contract c. She may claim a reduction in purchase price only d. She may make a claim in terms of the conventional penalties act
Judy has the right to pursue remedies beyond just a reduction in purchase price if a contract is found to be voidable. The incorrect statement is: c. She may claim a reduction in purchase price only.
In a situation where a contract is deemed voidable due to the parties' failure to reach consensus, Judy has various remedies available to her. These remedies aim to address the unfairness or harm caused by the unenforceable contract.
a. She may claim damages if she suffered any loss: This is a valid option. Judy can seek compensation for any losses she incurred as a result of the voidable contract.
b. She may choose to set aside or enforce the contract: This is also a valid option. Judy can decide to either invalidate the contract entirely (set it aside) or enforce it if it is beneficial to her.
c. She may claim a reduction in purchase price only: This statement is incorrect. Judy is not limited to claiming a reduction in purchase price only. She has the ability to seek other remedies beyond just the price adjustment.
d. She may make a claim in terms of the conventional penalties act: This statement is correct. Judy can potentially make a claim under the conventional penalties act if it is applicable to her situation.
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Shannon purchased a machine for $28,500 for her company. She paid 5.00% of this amount as a down payment and financed the rest at 5.72% compounded monthly. She paid $1,125 at the end of every month to settle the loan.
a. What was the principal portion of payment number 4?
Round to the nearest cent
b. What was the interest portion of payment number 4?
Round to the nearest cent
a. The principal portion of payment number 4 for Shannon's loan can be determined by calculating the remaining loan balance after three payments and subtracting it from the initial loan amount.
b. The interest portion of payment number 4 can be calculated by subtracting the principal portion from the total payment made in month 4.
a. To calculate the principal portion of payment number 4, we need to determine the remaining loan balance after three payments.
First, we calculate the monthly interest rate by dividing the annual interest rate by 12:
Monthly interest rate = 5.72% / 12 = 0.4767%
Next, we calculate the remaining loan balance after three payments using the formula for the future value of an ordinary annuity:
Remaining loan balance = Future value of annuity - Future value of annuity due
The future value of an ordinary annuity is calculated as follows:
Future value of annuity = Monthly payment × [(1 + monthly interest rate)^number of payments - 1] / monthly interest rate
Using the given information, the monthly payment is $1,125, and the number of payments is 3. Plugging these values into the formula, we can calculate the future value of the annuity.
After obtaining the future value of the annuity, we subtract it from the initial loan amount to find the remaining loan balance after three payments. Finally, we divide this balance by the number of remaining payments to determine the principal portion of payment number 4.
b. To calculate the interest portion of payment number 4, we subtract the principal portion (calculated in part a) from the total payment made in month 4, which is $1,125.
By following these calculations, we can determine both the principal and interest portions of payment number 4 for Shannon's loan.
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How should contingent liabilities that are reasonably possible be reported in the financial statements?
They should be disclosed in the footnotes.
They cannot be included in the financial statements.
They should be reported in the financial statements if they are estimable.
There is not enough information provided to answer this question.
Contingent liabilities that are reasonably possible be reported in the financial statements are they should be disclosed in the footnotes. The correct answer is a).
Contingent liabilities are potential obligations that may arise in the future, depending on the outcome of uncertain events. When these contingent liabilities are reasonably possible, meaning there is a significant chance of occurrence, they should be disclosed in the footnotes of the financial statements.
Footnotes provide additional information and details about the financial statements, including potential risks and uncertainties that may affect the company's financial position. Disclosing contingent liabilities in the footnotes allows users of the financial statements to be aware of these potential obligations and understand the potential impact on the company's financial condition.
While these contingent liabilities are not recognized as actual liabilities on the balance sheet unless they meet certain criteria for recognition, disclosing them in the footnotes provides transparency and helps users make informed decisions.
It ensures that the financial statements provide a comprehensive and accurate representation of the company's financial position, including potential risks and uncertainties that may affect its future obligations.
So, correct option is A.
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Firm C has outstanding bond with 15 years to maturity. Assume the required rate of return on the bond is 9.89%. The current price is $944.17. What is the annual coupon rate on the bond? (Assume semi-annual coupon payment)
The bond has 15 years to maturity, a required rate of return of 9.89%, and a current price of $944.17. The annual coupon rate on the bond is 9.90%.
To calculate the annual coupon rate, we can use the formula:
Annual Coupon Rate = (Coupon Payment / Face Value) * 2
where the coupon payment is the amount received semi-annually and the face value is the amount repaid at maturity.
Using the given information, we can calculate the annual coupon rate as follows:
Coupon Payment = Required Rate of Return * Face Value / 2
Face Value = Current Price
Substituting the values into the formula, we can find the annual coupon rate.
To calculate the annual coupon rate, we first need to find the semi-annual coupon payment. Using the formula for the coupon payment, we have:
Coupon Payment = 9.89% * $944.17 / 2 = $46.80
Since the coupon payment is received semi-annually, the annual coupon payment is twice that amount:
Annual Coupon Payment = 2 * $46.80 = $93.60
The face value of the bond is equal to its current price, $944.17. Therefore, the annual coupon rate can be calculated as:
Annual Coupon Rate = ($93.60 / $944.17) * 100% = 9.90%
Hence, the annual coupon rate on the bond is 9.90%.
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This Year, Mary donated $10,000 to a Hospital, a Registered Charity This Year, Mary's net income and taxable income was $80,000. Assume Mary has never donated to a registered charity prior to this year. Mary's maximum charitable donation credit is:
a $3,264
b $30
c $2,872
d $2,872
The correct option is a) $3,264.
In Canada, if a taxpayer gives a gift to a registered charity, the government gives a charitable donations tax credit (CDTC) to the taxpayer.
It is calculated based on the value of the gift and the highest tax rate paid by the taxpayer, and it can be up to 33% of the gift's fair market value.
Mary, who has never donated to a registered charity prior to this year, donated $10,000 to a hospital. Mary's net income and taxable income for this year were $80,000.
Therefore, what is Mary's maximum charitable donation credit?
Mary's CDTC will be calculated using the following formula:
CDTC = [(Donation Amount - $200) × 33%] + [($200 × 29%)].
In Mary's situation, $10,000 - $200 = $9,800. As a result, the maximum CDTC she can get is:
CDTC = [($9,800 × 33%) + ($200 × 29%)]
= $3,264.
Hence, the correct option is a) $3,264.
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You are investigating a cash flow stream that looks as follows: the cash flow stream is a perpetuity that pays $1,627 per year. However, the first payment will occur six years after the perpetuity is purchased. The interest rate is 6%. What is the present value of this perpetuity on the date that it is purchased?
(Round your answer to the nearest $)
The present value of the perpetuity, with $1,627 annual payments starting in 6 years and a 6% interest rate, is approximately $27,117.
To calculate the present value of a perpetuity, you can use the formula:
Present Value = Cash Flow / Interest Rate
In this case, the cash flow is $1,627 per year, and the interest rate is 6%.
Using the formula:
Present Value = $1,627 / 0.06
Present Value = $27,116.67
Rounding to the nearest dollar, the present value of this perpetuity on the date of purchase is $27,117.
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MacAroni & Cheez, LLP, uses weighted average process costing. Beginning Inventory consists of 1,000 units, with $72,000 in costs carried over from the prior period. All inputs are added simultaneously. They use another $24,000 in the current period to start another 12,000 units, of which 6,000 are completed and transferred out. Ending Inventory is 40% complete. What is the total cost per equivalent unit?
To calculate the total cost per equivalent unit in the weighted average process costing method used by MacAroni & Cheez, LLP, we need to consider the costs carried over, additional costs incurred, units completed and transferred out.
The ending inventory percentage. By performing the necessary calculations, we can determine the total cost per equivalent unit.
Calculate the equivalent units of production:
Units completed and transferred out: 6,000 units
Ending inventory: 40% complete of 12,000 units = 4,800 equivalent units
Total equivalent units = 6,000 units + 4,800 units = 10,800 equivalent units
Calculate the total costs incurred:
Costs carried over: $72,000
Additional costs incurred in the current period: $24,000
Total costs incurred = $72,000 + $24,000 = $96,000
Calculate the total cost per equivalent unit:
Total cost per equivalent unit = Total costs incurred / Total equivalent units
Total cost per equivalent unit = $96,000 / 10,800 equivalent units
Performing the calculations, the total cost per equivalent unit for MacAroni & Cheez, LLP using weighted average process costing is $8.89 per equivalent unit.
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A growth in demand for real estate assets in the capital market that causes the cap rate to fall, holding demand in the space usage market constant, will produce which of the following short-run and long-run effects?
a.A short-run decrease in rents followed by a subsequent long-run increase
b.A short-run increase in rents followed by a subsequent drop.
c.A short-run decrease in property asset prices followed by a subsequent long-run rise
d.A short-run increase in property asset prices followed by a subsequent long run drop.
e.None of the answers here
The right response is (c) A temporary drop in the value of real estate assets followed by a future long-term increase. Demand for properties rises when there is a rise in the demand for real estate assets on the capital market.
Investors are therefore prepared to pay higher prices for these assets. The capitalization rate (cap rate), which is the proportion of net operational income to property value, decreases as a result of the elevated demand. Prices of real estate assets decline in the short term as the cap rate decreases. This is due to the fact that property values and cap rates are inversely correlated. Higher property prices are correlated with lower cap rates. However, over time, as the demand for real estate assets increases, Prices for real estate assets frequently increase. As a result, the short-run consequence is a decline in the value of real estate assets, whereas the long-run effect is a subsequent increase in the value of real estate assets. The other choices don't adequately depict how rising real estate asset demand might affect rents or asset values.
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Necessity Motor Company (NMC) needs 10,000 motors to support its operations in the manufacturing of vehicles. NMC Management has to choose from two alternatives: First, purchase the entire lot of 10,000 motors from Armidale Motor Company (AMC) for $12500 each rather than manufacturing them in-house. NMC plant’s total manufacturing capacity suffices to manufacture all 10,000 motors in-house at a per unit cost of $13,000 per motor, as follows:
Materials (all Direct materials) $5000
Labor (all Direct manufacturing labour) 2500
Variable manufacturing overhead 2000
Fixed manufacturing overhead 3500
Total $13000
If NMC management decides to purchase the entire lot of motors from AMC, it will only save 30% of fixed manufacturing overhead costs and will continue to incur the remaining 70% of the fixed manufacturing overhead costs.
Required:
a. You, as NMC’s Operations Manager, have to make a choice for your company between the two alternatives: First, buy the entire lot of 10,000 motors from AMC; second, Manufacture the entire lot of 10,000 motors in-house? Support your choice with necessary workings/calculations.
b. Briefly explain any four relevant ‘qualitative’ factors that NMC management should before making a choice under ‘a’.
NMC should purchase the entire lot of 10,000 motors from AMC rather than manufacturing them in-house.
Based on the given information, the cost of manufacturing a motor in-house is $13,000 per unit. However, AMC offers to sell the motors at a price of $12,500 each. By purchasing from AMC, NMC would save $500 per motor. The fixed manufacturing overhead cost for producing 10,000 motors in-house is $35,000, and if NMC decides to purchase from AMC, it would only save 30% of this cost, which is $10,500.
Therefore, the total cost of purchasing 10,000 motors from AMC would be $12,500 x 10,000 = $125,000, while the total cost of manufacturing them in-house would be $13,000 x 10,000 = $130,000.
Considering the cost savings of $5,000 by purchasing from AMC ($10,500 savings in fixed overhead - $5,000 savings per motor), it is financially beneficial for NMC to buy the entire lot of motors from AMC. This decision would result in a lower overall cost for NMC, thus maximizing profitability.
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(1) Provide an example of an entrepreneur,
(2) explain whether he/she is a classic, social, or serial entrepreneur,
(3) identify the characteristics that make this person an entrepreneur, and
(4) a summary of his/her (the person used as an example) accomplishments in this regard.
An example of an entrepreneur is Oprah Winfrey.
Oprah Winfrey can be considered a social entrepreneur.
Some of the characteristics that make Oprah Winfrey an entrepreneur include her creativity, resilience, passion for making a positive impact, and her ability to inspire and connect with people. She has a strong vision for empowering individuals and creating social change.
Oprah is known for her exceptional communication skills and her ability to build a brand around her personal experiences and values. She has a deep understanding of her audience and has used her platform to address important social issues and promote personal growth and empowerment.
Oprah Winfrey's accomplishments as a social entrepreneur are remarkable. She built a media empire through her highly successful talk show, "The Oprah Winfrey Show," which became a platform for inspiring and uplifting millions of viewers. She established the Oprah Winfrey Network (OWN), a television channel dedicated to self-improvement and personal growth. Oprah has also founded several philanthropic initiatives, including the Oprah Winfrey Leadership Academy for Girls, which provides education and empowerment opportunities to underprivileged girls in South Africa. Her work as a social entrepreneur has had a profound impact on individuals and communities, transforming lives and promoting social justice.
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an organiztion is a network of connections and channels of communication based on the informal relationship sof individuals inside an organization. What is this organization called?
The organization described, which is based on informal relationships and networks of connections and communication among individuals within an organization, is known as an informal organization.
An informal organization refers to the social structure and network of relationships that exist within a formal organization. It represents the informal connections, interactions, and communication channels that emerge naturally among individuals in an organization, often outside the formal hierarchy or official lines of authority. These informal relationships can develop through personal friendships, shared interests, or common goals, and they play a significant role in shaping the dynamics and functioning of the organization.
The informal organization is characterized by social norms, trust, and informal communication channels, such as informal conversations, social gatherings, or informal networks like "grapevine" communication. It allows for the exchange of information, influence, and support among employees, which can impact decision-making, collaboration, and overall organizational effectiveness. The informal organization can complement or sometimes even supersede the formal structure, influencing how work gets done, how decisions are made, and how employees interact with each other.
Overall, the informal organization provides a framework for understanding the social dynamics and relationships within an organization, beyond the formal structure and official roles, and it plays a crucial role in shaping organizational culture, employee engagement, and the overall functioning of the organization.
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Use the AS-AD model where the central bank has an interest rate rule with a price target, PT
it=in+α(Pt−PT)
Assume that before any changes, the economy was in medium run equilibrium.
Explain why the AS curve slopes upward in price-output space and why the AD curve slopes downwards.
The short-run positive relationship between output (Y) and price level (P) rises the AS curve in the price-output space, indicating higher production costs at higher prices. Wealth and interest rate effects on consumption and investment lower the AD curve.
The AS-AD model is a key macroeconomic model. This model explains price-output relationships in the economy. The model assumes the economy has two markets—goods and finance. Financial markets trade financial assets, whereas goods markets trade goods and services. Due to sticky wages, this model's AS curve rises in price-output space. Sticky wages indicate delayed price adjustments. When prices rise, firms' production costs rise and output decreases. Price rises. Wealth, interest rate, and exchange rate effects make the AD curve slope downward in price-output space. As the price level rises, households' real wealth declines, lowering consumption spending. As the price level rises, money demand rises, causing interest rates to rise and investment spending to fall. The exchange rate effect reduces net exports by decreasing export demand as the price level rises. The AS-AD model helps explain price-output relationships in the economy.
The AS curve slopes upward in price-output space because of sticky wages, while the AD curve slopes downward in price-output space because of the wealth effect, interest rate effect, and exchange rate effect.
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