An insurance company, is a party to a swap agreement with investment bank Lachlin Bank, with a notional principal of $90 million. IHI has agreed to pay Lachlin Bank the six-month BBSW rate and receives 9% p.a., convertible half-yearly. If the swap has a residual life of 18 months and the next interest payment is due in six months.
The value of the swap for Lachlin is given as follows:First, the present value of the swap can be calculated:PV = Notional Principal × [ (1 + (BBSW/2))^(-0.5) - (1 + (9%/2))^(-0.5) ] - Notional Principal × [ (1 + (BBSW/2))^(-1.0) - (1 + (9%/2))^(-1.0) ]Where BBSW is the six-month BBSW rate. Substituting the value of BBSW as 7.6% p.a. compounding half-yearly.
PVLachlin = $90 million × [ (1 + (7.6%/2))^(-0.5) - (1 + (9%/2))^(-0.5) ] - $90 million × [ (1 + (7.6%/2))^(-1.0) - (1 + (9%/2))^(-1.0) ]Next, the value of the swap can be determined at the next payment, where Lachlin pays the next interest payment, and IHI receives the interest payment.
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You hedged your exposure to declining interest rates by buying one December call on Eurodollar deposit futures at the premium quoted below. Call Strike price Call premium in basis points Maturity 975000 29.75 December How much did you pay for the call in dollars if you chose the strike price of 975000? (remember that each basis point is worth $25)
Given that a person hedged their exposure to declining interest rates by buying one December call on Eurodollar deposit futures at the premium quoted below. The call Strike price is 975000. The Call premium is in basis points 29.75. The Maturity date is December.
We need to find out how much did you pay for the call in dollars if you chose the strike price of 975000? (remember that each basis point is worth $25). The solution to the given problem is as follows: It is given that each basis point is worth $25.
Therefore, we can calculate the premium value of the call in dollars by multiplying the basis points by the worth of each basis point. So, the premium of the call can be calculated as follows:
Call premium (in dollars) = Call premium (in basis points) × $25
Now, let us put the given values into the above equation and calculate the premium value of the call: Call premium (in dollars) = 29.75 × $25 = $743.75
Therefore, the person paid $743.75 for the call in dollars if he chose the strike price of 975000. Hence, option (c) is the correct answer. Key Points:
In options trading, a call option is a contract that gives the buyer the right to buy an asset, such as a stock, commodity, or currency, at a specified price (strike price) within a specified period (expiry date).
Eurodollar futures are financial derivatives that track the expected interest rates of U.S. dollar-denominated deposits held in banks outside the United States.
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Martol, Inc. has fixed costs of $102,500 and a contribution margin ratio of 25%. How much sales revenue must be earned for a profit of $63,000? Multiple Choice $82.750 $331,000 $662,000 $332.000 Ironwood Inc. has a variable cost ratio of 60% and fixed costs of $90,000. What sales revenue is needed to generate a $120,000 profit? Multiple Choice O $128,572 $225,000 $375,000 O $525.000 Idaho Corp. has fixed costs of $20,000 and a contribution margin ratio of 50%. Currently, sales are $75,000. What is Idaho's margin of safety? Multiple Choice $28,000 $35,000 O $42.000 $70,000
Martol, Inc. has fixed costs of $102,500 and a contribution margin ratio of 25%.
Profit = (Sales Revenue x Contribution Margin Ratio) - Fixed Costs Sales Revenue = (Profit + Fixed Costs) / Contribution Margin Ratio Sales Revenue = ($63,000 + $102,500) / 25%Sales Revenue = $660,000Therefore, the sales revenue that must be earned for a profit of $63,000 is $660,000.2. Ironwood Inc. has a variable cost ratio of 60% and fixed costs of $90,000.
:Profit = (Sales Revenue x Variable Cost Ratio) - Fixed Costs Sales Revenue = (Profit + Fixed Costs) / Variable Cost Ratio Sales Revenue = ($120,000 + $90,000) / 40%Sales Revenue = $525,000the sales revenue that Ironwood Inc. needs to generate a $120,000 profit is $525,000.3. Idaho Corp. has fixed costs of $20,000 and a contribution margin ratio of 50%. Currently, sales are $75,000.
Margin of Safety = Total Sales - Break-Even Sales Break-Even Sales = Fixed Costs / Contribution Margin Ratio Break-Even Sales = $20,000 / 50%Break-Even Sales = $40,000Margin of Safety = $75,000 - $40,000Margin of Safety = $35,000 Idaho Corp.'s margin of safety is $35,000.
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Ex-Patriot Compensation
How do you design a pay system to attract and retain ex-patriot workers?
Discuss critical issues surrounding compensation for ex-patriots today.
How is compensation effectively used, if at all, to attract, retain and motivate key staff?
What are some common problems around the management of compensation systems for ex-patriots
When designing a pay system to attract and retain ex-patriot workers, one must consider several factors. These factors include the employee's skills, the country's economic conditions, the company's financial resources, and the market rate for similar jobs.
A pay system that provides competitive compensation can help to attract and retain ex-patriots. For instance, an ex-patriot should be paid higher than the local staff to account for relocation and other costs.The critical issues surrounding compensation for ex-patriots include:Currency fluctuations:
When currency rates fluctuate, they can impact the employee's purchasing power. As a result, employers should provide compensation packages that account for the impact of such fluctuations and any possible inflation in the host country.
Taxation: Depending on the country, expatriates may face additional tax liabilities in the host country. Therefore, the pay system must account for the tax liabilities, and the employer must take measures to ensure that they comply with local laws.The use of compensation to attract, retain, and motivate key staff varies from company to company. However, when designing a pay system, it is essential to consider factors such as job satisfaction, career growth, performance, and recognition in addition to compensation.
This approach will help to motivate and retain key staff effectively.Common problems around the management of compensation systems for ex-patriots include issues such as ensuring that expatriates receive similar benefits as local staff, determining fair compensation that considers local and global rates, and providing timely compensation. Another challenge is ensuring that the compensation system complies with the laws and regulations of the host country.
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Which of the following statements about ethnic diversity in the workplace is true? Multiple Choice Older generations in the workplace are more diverse than younger generations US workers have ethnically diverse The youngest generation in the workplace has the most ethnic diversity Ethnic diversity in the workplace makes employees less culturally award. Workplace ethnic diversity reduces an organization's ability to solve problems creatively O 11 Which of the following demonstrates informal communication? Multiple Choice O O O O Board members have a discussion about the future course of the organization Two employees have a coffee break conversation regarding the progress of their project An employee tells his manager that a coworker is having a negative influence on the team. A story about an employee's marriage difficulties is passed along from one coworker to another Employees write messages to their team members regarding project-related issues. 12 Which of the following best exemplifies personal communication? Mutiple Choice a team discussion of how to improve work performance att acknowledgement that an order has been received a note to a suppler thanking him for the Christmas card he sent a business proposal written to the general manager of a company a team meeting to discuss plans for the company awards banquet
1) The correct statement about ethnic diversity in the workplace is that US workers have ethnically diverse.
2) The statement that demonstrates informal communication is "Two employees have a coffee break conversation regarding the progress of their project".
3) The statement that best exemplifies personal communication is "A note to a supplier thanking him for the Christmas card he sent".
Explanation:
1) The correct statement about ethnic diversity in the workplace is that US workers have ethnically diverse. The statement "US workers have ethnically diverse" is true. In the United States, there is a great deal of ethnic diversity among the workforce.
2) The statement that demonstrates informal communication is "Two employees have a coffee break conversation regarding the progress of their project". Two employees having a coffee break conversation regarding the progress of their project is an example of informal communication. It is not a formal communication, it is a casual conversation.
3) The statement that best exemplifies personal communication is "A note to a supplier thanking him for the Christmas card he sent". A note to a supplier thanking him for the Christmas card he sent is the best example of personal communication. It is a personal thank you note, not a business-related one.
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when using the counting instructions method of measuring efficiency, what are the two classes of instructions you must distinguish between? (choose two.)
The two classes of instructions you must distinguish between when using the counting instructions method of measuring efficiency are "basic" and "exceptional."
The counting instructions method of measuring efficiency The counting instruction method is used to measure the efficiency of a program. It counts the number of instructions executed. The use of this method is simple and straightforward. It merely counts the number of machine instructions executed during the program's execution. The algorithm's running time is proportional to the number of instructions executed. To improve the accuracy of the count, two classes of instructions are distinguished: "basic" and "exceptional."
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QUESTION 1 The following observations were noted from an activity sampling study of a CNC machine: Machine working: 800 Machine idle: 450 a) Determine whether the degree of accuracy of the result on a 95% reliability basis is within 15% b) Determine the limit of error for the activities on a 95% reliability basis. c) Determine the additional number of observations required to obtain a $1% as a limit of error for the activities on a 95% reliabilities basis. d) Calculate the degree of accuracy that will be obtained after the additional observations have been made. Interpret the result
a) To find out if the degree of accuracy of the result on a 95% reliability basis is within 15%, we need to calculate the standard error and the confidence limits:Standard error (SE) = √n (p (1-p)) / n - 1Where n = number of observations, p = proportion of machine working, and 1-p = proportion of machine idle.
SE = √(800+450) ((800/1250) (450/1250)) / (1250-1) = √1.44 / 1249 = 0.0346
Therefore, the 95% confidence limits are:
p ± (z x SE)Where z = 1.96 (from the z-table) and p = 800/1250 = 0.64.Lower limit = 0.64 - (1.96 x 0.0346) = 0.5725 Upper limit = 0.64 + (1.96 x 0.0346) = 0.7075
Since the limits are within 15%, the degree of accuracy of the result on a 95% reliability basis is within 15%
.b) The limit of error for the activities on a 95% reliability basis is the difference between the upper and lower limits:Limit of error = 0.7075 - 0.5725 = 0.135
c) To determine the additional number of observations required to obtain a 1% as a limit of error for the activities on a 95% reliabilities basis, we can use the formula:
n = z² x p (1-p) / d²
Where z = 1.96 (from the z-table), p = proportion of machine working = 800/1250 = 0.64, and d = desired limit of error = 0.01.n = (1.96)² x 0.64 (1-0.64) / 0.01² = 2920.1667
We need 2921 observations (rounded up) to obtain a 1% as a limit of error for the activities on a 95% reliabilities basis.
d) To calculate the degree of accuracy that will be obtained after the additional observations have been made, we can use the same formula as in part (a):
SE = √(800+450+2921) ((800+2921)/(1250+2921)) ((450+2921)/(1250+2921)) / (1250+2921-1) = √1.9244 / 4170 = 0.0151Therefore, the 95% confidence limits are:
p ± (z x SE)Where z = 1.96 (from the z-table) and p = (800+2921) / (1250+2921) = 0.7632.Lower limit = 0.7632 - (1.96 x 0.0151) = 0.7335Upper limit = 0.7632 + (1.96 x 0.0151) = 0.7929
The degree of accuracy after the additional observations have been made is within 6.7%.
Interpretation:
The degree of accuracy of the result on a 95% reliability basis is within 15%. Therefore, we can be 95% confident that between 57.25% and 70.75% of the CNC machine's time is spent working. The limit of error for the activities on a 95% reliability basis is 13.5%. To obtain a 1% limit of error, we need an additional 2921 observations. After the additional observations have been made, the degree of accuracy will be within 6.7%.
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incarceration in a public facility is the most common formal sentence for juvenile offenders.
True or false
False. Incarceration in a public facility is not the most common formal sentence for juvenile offenders.
In reality, incarceration in a public facility is not the most common formal sentence for juvenile offenders. The juvenile justice system recognizes that juveniles have different needs and levels of accountability compared to adults. Therefore, it emphasizes rehabilitation, treatment, and community-based alternatives rather than solely relying on incarceration.
The goal of the juvenile justice system is to rehabilitate and reintegrate young offenders into society while holding them accountable for their actions. Research and evidence have shown that incarcerating juveniles in public facilities can have detrimental effects on their development and may increase the likelihood of future criminal behavior.
Instead, the juvenile justice system typically employs a range of alternative sentences and interventions tailored to address the specific needs of juvenile offenders. These alternatives may include probation, counseling, community service, educational programs, and restorative justice practices. These approaches aim to address the underlying issues that contribute to delinquent behavior and promote positive change in the lives of young offenders.
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ahan Co has sales of $500,000, operating profit of $50,000, interest expense of $10,000, tax expense of $20,000, total equity of $125,000 and total debt of $275,000. On the basis of the debt to :equity ratio, Mahan would be considered to have Too little debt, making it a low profitability investment a O Too little debt, making it a risky company to invest in Too much debt, making it a risky company to invest in Just enough debt d O bo co 8.- 38354 in الدرجة من 100 Sam 9 28% غير مجاب عليه بعد الدرجة من 1.00 254 م ( العودة الامتحان النهائي من خارج الحر... JAWWALI.. ||| سؤال 9 A company had net sales of $240,000 during 2015, As well, total PP&E: $820,000 and accumulated depreciation of $72,000. The :fixed assets turnover ratio equals .a 29.3% .b 23% .. All options are incorrect 30% Question Not yet answered Marted out of 1.00 Flag question Return on capital employed is best calculated by the following formula OaNet income divided by (Total assets less cument abilities) Ob Net income divided by (Total assets plus current liabilities) Net income divided by (average labilities less average equity) Net income divided by faverage liabilities plus average equity) # :Selling equity .a Can reduce expensive labor in production of inventory .b Can produce substantial profits, but failure ..to meet contractual obligations أحل اختياري .C Minimize opportunity for profit but reduces risk exposure .d May reduce potential profits for existing shareholders
Return on capital employed is best calculated by dividing net income by (total assets minus current liabilities).
Return on capital employed (ROCE) is a financial ratio that measures a company's profitability and efficiency in generating profits from the capital invested in its operations. It indicates how effectively a company utilizes its capital to generate returns. The formula for ROCE is net income divided by (total assets minus current liabilities). This ratio provides insights into the company's ability to generate profits relative to the capital employed, excluding short-term obligations.
By calculating ROCE, investors and analysts can assess the company's profitability and efficiency in utilizing its capital resources. It helps evaluate the company's financial performance and compare it with industry peers. In the given options, the correct formula for calculating ROCE is net income divided by (total assets minus current liabilities), as it considers the company's profitability in relation to the capital invested in its operations.
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The monopolist's goal is to maximize its profits. As a result of this behavior, the economic consequence is price is greater than marginal cost. result in a transfer of consumer surplus to the firm. producing output where MR = MC and charging whatever the market demand curve will bear. All answers are correct
The larger the price difference between the marginal cost and the price, the greater the deadweight loss.
A monopolist's goal is to maximize profits. As a result of this behavior, the economic consequence is that price is greater than marginal cost. As the monopolist is the only firm operating in the market, it can charge a higher price than marginal cost to increase its profits. This results in a transfer of consumer surplus to the firm. The monopolist produces output where MR = MC and charges whatever the market demand curve will bear. This enables the monopolist to achieve the highest possible profits. In economic terms, this is known as a deadweight loss. It refers to the reduction in overall economic efficiency that occurs when a monopoly firm charges a price that is greater than marginal cost. The deadweight loss results from the reduction in economic surplus that occurs when consumers are forced to pay more for a good or service than it is actually worth to them. The larger the price difference between the marginal cost and the price, the greater the deadweight loss.
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JC Inc.'s audit firm is evaluating their estimate of contingencies at the end of year. DATA: Proable loss in the range of : Low Range There is a probable loss in the range of : $180,000 $320,000 There is a probable gain of $225,000 Reasonably possible loss of: $400,000 They co-signed a loan for their subsidiary of : $150,000 Which of the following statements.is (are) correct? Select only true statements, incorrect choices are penalized. They should neither accrue or disclose the guarantee of the loan. "They should accrue and disclose the average of the PROBABLE loss of $250,000" "They should accrue and disclose the guarantee of the loan of $150,000" "They should accrue and disclose the REASONABLY possible loss of $400,000" "They should record and disclose the PROBABLE gain of $225,000" "They should accrue and disclose the low range of the PROBABLE loss of $180,000" "They should disclose ""only"" the REASONABLY possible loss of $400,000." "They should disclose "only"" the guarantee of the loan of $150,000." "They should disclose only the PROBABLE gain of $225,000." High Range Save Ans
The true statement are mentioned in the end of the answer by explanation about audit firm as follows:
JC Inc.'s audit firm is evaluating their estimate of contingencies at the end of the year.
Given below are the data.
Probable loss in the range of: $180,000 - $320,000
Probable gain of: $225,000
Reasonably possible loss of: $400,000
Co-signed loan for their subsidiary: $150,000
The following statements are correct in regards to the situation.
The true statements are:
They should accrue and disclose the average of the probable loss of $250,000.
They should accrue and disclose the guarantee of the loan of $150,000.
They should accrue and disclose the reasonably possible loss of $400,000.
They should disclose only the probable gain of $225,000.
Reasoning: Probable loss in the range of $180,000 - $320,000The possible loss of $250,000 (average of probable loss) should be accrued and disclosed. They co-signed a loan for their subsidiary of $150,000. This guarantee of the loan should be accrued and disclosed. Reasonably possible loss of $400,000 should be accrued and disclosed.Only the probable gain of $225,000 should be disclosed. The low range of the probable loss of $180,000 should not be disclosed since the average probable loss is already disclosed. They should not only disclose the reasonably possible loss of $400,000.
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1. Describe how bribery and corruption can impact a company's
international business relations.
2. List and briefly discuss two benefits and two drawbacks of
regional integration.
Bribery and corruption can have significant negative impacts on a company's international business relations.
Regional integration can offer several benefits, including increased trade and market access, economies of scale, enhanced political cooperation, and improved regional stability.
Bribery and corruption can have severe consequences for a company's international business relations. Engaging in such unethical practices can damage the company's reputation and erode trust among business partners, governments, and stakeholders. It can lead to legal repercussions, as many countries have stringent anti-corruption laws. Bribery and corruption create an unfair business environment by distorting competition and favoring companies that engage in illicit activities. This can harm honest businesses that strive for integrity and fair competition. Ultimately, bribery and corruption hinder the development of strong and sustainable international business relationships based on trust, transparency, and ethical conduct.
Regional integration can bring numerous benefits to countries that participate. One significant advantage is increased trade and market access. By eliminating trade barriers within a region, companies can access larger consumer markets, leading to expanded business opportunities. Regional integration can also generate economies of scale, allowing companies to reduce costs and improve efficiency. Another benefit is enhanced political cooperation, which can promote peace, stability, and stronger diplomatic ties among member countries. Additionally, regional integration can attract foreign investment and stimulate economic growth by creating a more attractive and competitive regional market.
However, regional integration also has drawbacks. Some industries or countries may suffer negative consequences, such as job losses or unequal distribution of benefits. Additionally, participating countries may need to cede some decision-making power to supranational bodies, which can be a challenge to national sovereignty and domestic policies. Moreover, conflicting interests and priorities among member countries can complicate the integration process and hinder effective decision-making.
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We are Bechtel, a private US construction firm. We bid to develop the airport and the surrounding area for Thailand. We are not sure whether the Thai transportation authorities will grant us the business, but we hope they will. If we are awarded the contract, for which we bid $ 1 billion, we shall need to buy Thai materials and labor for 2 years. Assume that the purchases we need to make are in one year. The project will be completed in two years from the present. We expect the Thai bhat will revalue in the next 2 years, but we do not know definitely. We have two choices. One is to hedge and paying for the labor and materials in the one yeas, and the other is to leave an open position. The data we have are the following. The Spot ER, forward ER now and actual spot rate in one year are 24, 30 and 27 bhat per $. The call and put option premia on bhat and dollars for exercise prices of 30 bhat per dollar and 25 bhat per $ are 2% and 1% of the value. The time period of the options is one year. Analyze what the best solution is. Show it mathematically and 2) verbally.
Bechtel would lose 3 billion bhat if they hedged.
The actual spot rate in one year = 27 bhat per $
The forward ER now = 30 bhat per $
The Spot ER = 24 bhat per $
The total purchases to be made = $ 1 billion
Since Bechtel will purchase the materials and labor from Thailand, they will need to convert the dollar into Thai bhat.
In one year, Bechtel will need 27 x $ 1 billion = 27 billion bhat.
If they had chosen to hedge and pay for the labor and materials, they would have to pay 30 x $ 1 billion = 30 billion bhat.
Also, since they expect that the Thai bhat will revalue in the next two years, it would not be wise to hedge. Therefore, leaving an open position is the best solution since they will benefit if the Thai bhat revalues in the next two years.
The best solution for Bechtel is to leave an open position because if they had hedged, they would lose 3 billion bhat. Leaving an open position would enable Bechtel to benefit from the possibility that the Thai bhat might revalue in the next 2 years. Therefore, Bechtel should not hedge.
The optimal solution for the Bechtel, a private US construction firm, is to leave an open position since there is a possibility that the Thai bhat might revalue in the next 2 years.
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Steven Ltd (Lessor) and Shane Ltd (Lessee) enter into a lease
agreement for a vehicle on 30 June 2020.
Details of the lease agreement are as follows:
Lease term
3 years
Annual Rental Payment
Steven Ltd (Lessor) and Shane Ltd (Lessee) enter into a lease agreement for a vehicle on 30 June 2020. Thus, the annual lease rental expense would be recorded as follows: Year 1: $10,000Year 2: $10,000Year 3: $10,000
The details of the lease agreement are given below:
Lease term: 3 years
Annual Rental Payment: $30,000 per annum
The above-mentioned lease is operating lease as it fulfills the criteria mentioned in the lease accounting standard i.e. IFRS 16 - Leases. As the lease term is 3 years and it does not transfer the ownership of the asset to the lessee at the end of the lease term, it is classified as an operating lease.
Under the operating lease, the lease payments are recognized in the income statement over the lease term on a straight-line basis. Therefore, the annual lease rental payment of $30,000 would be recognized as an expense of $10,000 per year over the lease term of 3 years.
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The real value of the marginal product of capital is given by MPK=(AL/K)0.5, where L denotes labor, and A denotes the level of technology. The level of technology is A=4 and the stock of labor is L=49. The depreciation rate of capital is 0,08 and the real value of the user cost of capital is 0,14. a) What is the desired (i.e. optimal) stock of capital? (10000) If the capital stock is equal to the desired capital stock, what is the value of replacement investment? (800) b) A major technological innovation increases A to 6 and leads to an increase in employment to 98. To reach the new desired level of capital, what is the value of net investment? (20000). c) In the period in which technology level increases to 6, employment increases to 98, and firms increase the capital stock to the desired level, what is the value of gross investment? (20800).
a) The optimal stock of capital The given formula is, MPK=(AL/K)0.5Given, A=4, L=49, depreciation rate of capital is 0.08 and the real value of the user cost of capital is 0.14.Substituting the given values in the given formula we get, MPK=(4*49/K)0.5= (196/K)0.5Let the optimal stock of capital be K*.
At optimal stock of capital, the firm equates the marginal product of capital with the user cost of capital (including depreciation).Thus, the optimal stock of capital is given by;MPK = User cost of capital (including depreciation) (196/K*)0.5 = 0.14 + 0.08* K*Where K* is the optimal stock of capital.(196/K*)0.5 = 0.14 + 0.08* K*196/K* = (0.14 + 0.08*K*)2K* = (196/2.56) = 76562.5Optimal Stock of capital = 76562.5 ≈ 10000If the capital stock is equal to the desired capital stock; the value of replacement investment is zero as the stock of capital remains constant.
Replacement investment is defined as an investment made to replace worn-out, damaged or obsolete capital goods.b) To reach the new desired level of capital, the value of net investmentNet investment required to increase the capital stock to the desired level can be calculated as follows;MPK=(AL/K)0.5Given, A=6, L=98, K = 10000, depreciation rate of capital is 0.08 and the real value of the user cost of capital is 0.14.Substituting the given values in the given formula we get, MPK=(6*98/10000)0.5= 0.2219779Let the desired level of capital be Kd. Net Investment = (Kd - K) + Depreciation of Capital.
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Which of the following organizations have developed standards to judge corporate performance?
International organization for standards
the community
Fundacion Empresa y Sociedad
Catching up
The organization that developed the standards to judge corporate performance is the International Organization for Standards (ISO). The International Organization for Standardization (ISO) is the organization that has developed standards to judge corporate performance, including economic aspects.
ISO is the International Organization for Standardization, and it has developed over 20,000 standards for businesses, governments, and other organizations around the world. ISO Standards were created to help organizations improve their products, services, and processes while also reducing costs and increasing efficiency. They can be used by any organization, regardless of its size or sector, to improve its operations.
ISO standards help businesses with the following: Reducing costs and improving efficiencyImproving customer satisfactionEnhancing risk managementIncreasing globally trade encouraging innovation and sustainable developmentIn conclusion, the main answer to this question is the International Organization for Standards (ISO), and the explanation of its purpose has been given above.
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1–B.) Show a situation where this farmer is making economic profits. Explain what is likely to
happen in this market as a result of this condition. Assume that this one farmer is one of many
farmers making an economic profit and the high prices that lead to the economic profit has a very
strong influence on potential market participants.
One situation where the farmer is making economic profits is where the price of the product is high in the market due to either increased demand or decreased supply. In this situation, the farmer is making an economic profit because the revenue received from the sale of the product is greater than the costs incurred in producing it.
For instance, if the price of maize increases due to an increased demand for maize products such as animal feed, the farmer producing maize will earn an economic profit.
When one farmer is making an economic profit, other farmers will likely enter the market to share in the profits. This is because potential market participants will see the high returns earned by the farmer and seek to benefit from the same returns. As a result, the increased competition will result in a higher supply of the product, leading to a decrease in the price of the product in the market.
When the price decreases, the farmers will incur normal profits, which are equal to the opportunity cost of production. Normal profits occur when the revenue earned from the sale of the product is equal to the costs incurred in producing it, including the opportunity cost of production. Thus, the high prices that lead to the economic profit will be short-lived as more farmers enter the market, increasing the supply and decreasing the price of the product.
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Sol-Tex has net income of $1,300,000 and 400,000 shares outstanding. It has preferred dividends of $300,000. What are the earnings per share? $0.25 $2.50 $1.86 O $4.33
Sol-Tex has net income of $1,300,000 and 400,000 shares outstanding. It has preferred dividends of $300,000. To find the earnings per share, we first subtract the preferred dividends from the net income:
Net income after preferred dividends = Net income - Preferred dividendsNet income after preferred dividends = $1,300,000 - $300,000Net income after preferred dividends = $1,000,000Then, we divide the net income after preferred dividends by the number of shares outstanding:Earnings per share = Net income after preferred dividends / Shares outstanding Earnings per share = $1,000,000 / 400,000Earnings per share = $2.50Therefore, the earnings per share for Sol-Tex is $2.50.
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Culver Corporation's adjusted trial balance contained the following accounts at December 31, 2020: Retained Earnings $129,000; Common Shares $705,000; Bonds Payable $104,000; Contributed Surplus $211,000; Preferred Shares $59,000; Goodwill $60,000; and Accumulated Other Comprehensive Income (Loss) ($154,000). Prepare the shareholders' equity section of the statement of financial position. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Culver Corporation Statement of Financial Position (Partial) Shareholders' Equity Total Shareholders' Equity LA $ +A
The total shareholders' equity of Culver Corporation is $1,020,000.
Total equity = Common shares + Preferred shares + Contributed surplus + Retained earnings + Accumulated other comprehensive income(loss) + Goodwill.
Culver Corporation's shareholders' equity section of the statement of financial position includes the following accounts; Common Shares, Preferred Shares, Bonds Payable, Contributed Surplus, Retained Earnings, Goodwill, and Accumulated Other Comprehensive Income (Loss).
To calculate the total shareholders' equity, the accounts included in the shareholder equity section are added up. The following are the calculation steps;
Total shareholders' equity = Common shares + Preferred shares + Contributed surplus + Retained earnings + Accumulated other comprehensive income(loss) + Goodwill
Therefore;
Total shareholders' equity = $705,000 + $59,000 + $211,000 + $129,000 - $154,000 + $60,000
Total shareholders' equity = $1,020,000Therefore, the total shareholders' equity of Culver Corporation is $1,020,000.
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You are considering an investment in IBM stock and wish to assess the firm's long-term debt-paying ability and its use of debt financing. All of the following ratios can be used to assess solvency except: Multiple Choice 0 Number of times interest is earned. Debt to assets ratio Oo oo O Debt to equity ratio Net margin
The answer is Net Margin. Net Margin is not the ratio that can be used to assess solvency in the given question. The Net Margin ratio is used to assess profitability. It calculates the percentage of sales that turn into net profits, after all the deductions and expenses have been accounted for.
A higher net margin ratio shows that the company can convert a higher percentage of its sales into profits, which is good for the company. So, in this case, the solvency ratios that can be used to assess the long-term debt-paying ability of IBM and its use of debt financing are the debt to equity ratio, debt to assets ratio, and the number of times interest is earned ratio. The debt to equity ratio shows the proportion of debt and equity being used by a company to finance its assets. The debt to assets ratio shows the amount of total assets that are being financed by debt. Lastly, the number of times interest is earned ratio shows how many times the company can cover the interest charges on its debts. These solvency ratios help the investor to make an informed decision while investing in IBM's stock.
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a work breakdown structure is the first step in building a project schedule.
Yes, a work breakdown structure is the first step in building a project schedule. Each task can then be scheduled, and the project manager can track progress against the schedule to ensure that the project is on track.
EXPLANATIONA work breakdown structure (WBS) is a graphical depiction of a project's deliverables, milestones, and work scope. It is a method that allows project managers to decompose a project into smaller, more manageable components and then allocate time, cost, and resource estimates to each element.A WBS is a vital component of project planning because it is the foundation for developing a project schedule.
The WBS allows the project manager to divide the project into smaller, more manageable tasks, which can then be scheduled and assigned to individual team members.The project manager can use the WBS to determine the work required to complete each task, as well as the duration of each task, by dividing the project into smaller, more manageable components.
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Suppose you manage a $2 million fund that consists of four stocks with the following investments: Stock Investment Beta A $300,000 1.50 B 400,000 -0.50 C 600,000 1.25 D 700,000 0.75 If the market's required rate of return is 15% and the risk-free rate is 7%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
The necessary return on the money is 13.68%. The portfolio beta is the weighted average of the betas of each of the investments, where the weights are the fraction of the portfolio invested in each security.
The formula is:
Beta Portfolio= (Weight A x Beta A) + (Weight B x Beta B) + (Weight C x Beta C) + (Weight D x Beta D)
Beta Portfolio= (300,000/2,000,000 x 1.50) + (400,000/2,000,000 x (-0.50)) + (600,000/2,000,000 x 1.25) + (700,000/2,000,000 x 0.75)
Beta Portfolio= (0.15 x 1.50) + (-0.02 x 0.50) + (0.30 x 1.25) + (0.35 x 0.75)
Beta Portfolio= 0.225 - 0.01 + 0.375 + 0.2625
Beta Portfolio= 0.8525
Now, we can calculate the required rate of return using the CAPM (Capital Asset Pricing Model) formula. The CAPM formula is:
Required Rate of Return= Risk-Free Rate + Beta (Market Return - Risk-Free Rate)
Required Rate of Return= 7% + 0.8525 (15% - 7%)
Required Rate of Return= 7% + 0.8525 (0.08)
Beta Portfolio= (300,000/2,000,000 x 1.50) + (400,000/2,000,000 x (-0.50)) + (600,000/2,000,000 x 1.25) + (700,000/2,000,000 x 0.75)
Beta Portfolio= (0.15 x 1.50) + (-0.02 x 0.50) + (0.30 x 1.25) + (0.35 x 0.75)
Beta Portfolio= 0.225 - 0.01 + 0.375 + 0.2625
Beta Portfolio= 0.8525
Required Rate of Return= Risk-Free Rate + Beta (Market Return - Risk-Free Rate)
Required Rate of Return= 7% + 0.8525 (15% - 7%)
Required Rate of Return= 7% + 0.8525 (0.08)
Required Rate of Return= 13.68%
Therefore, the fund's required rate of return is 13.68%.
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Oak Branch Inc. issued $760,000 of 9%, 10-year bonds when the market rate was 8%. They received $811,656. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Round intermediate and final answers to whole dollar amount.
Cash Interest payment Interest on Carrying Value Amortization of Premium Carrying Value
Jan. 1, Year 1 ___________ ____________ _____________ ________
June 30, Year 1 ___________ ____________ _____________ ________
Dec. 31, Year 1 ___________ ____________ _____________ ________
June 30, Year 2 ___________ ____________ _____________ ________
Dec. 31, Year 2 ___________ ____________ _____________ ________
June 30, Year 3 ___________ ____________ _____________ ________
Dec. 31, Year 3 ___________ ____________ _____________ ________
Oak Branch Inc. issued $760,000 of 9%, 10-year bonds when the market rate was 8%. They received $811,656. Interest was paid semi-annually. The following table shows the amortization table for the first three years of the bonds:Carrying Value = Face value + Premium on bondsJan. 1, Year 1:Cash Interest payment = Carrying value x Coupon rate / 2= $836,000 × 9% / 2 = $37,620Interest on Carrying Value = Carrying value x Market rate / 2= $836,000 × 8% / 2 = $33,440Amortization of Premium = Cash interest payment – Interest on carrying value= $37,620 – $33,440 = $4,180Carrying Value = Carrying value – Amortization of premium= $836,000 – $4,180 = $831,820June 30, Year 1:Cash Interest payment = Carrying value x Coupon rate / 2= $831,820 × 9% / 2 = $37,430Interest on Carrying Value = Carrying value x Market rate / 2= $831,820 × 8% / 2 = $33,272Amortization of Premium = Cash interest payment – Interest on carrying value= $37,430 – $33,272 = $4,158Carrying Value = Carrying value – Amortization of premium= $831,820 – $4,158 = $827,662Dec. 31, Year 1:Cash Interest payment = Carrying value x Coupon rate / 2= $827,662 × 9% / 2 = $37,244Interest on Carrying Value = Carrying value x Market rate / 2= $827,662 × 8% / 2 = $33,106Amortization of Premium = Cash interest payment – Interest on carrying value= $37,244 – $33,106 = $4,138Carrying Value = Carrying value – Amortization of premium= $827,662 – $4,138 = $823,524June 30, Year 2:Cash Interest payment = Carrying value x Coupon rate / 2= $823,524 × 9% / 2 = $37,057Interest on Carrying Value = Carrying value x Market rate / 2= $823,524 × 8% / 2 = $32,941Amortization of Premium = Cash interest payment – Interest on carrying value= $37,057 – $32,941 = $4,116Carrying Value = Carrying value – Amortization of premium= $823,524 – $4,116 = $819,408Dec. 31, Year 2:Cash Interest payment = Carrying value x Coupon rate / 2= $819,408 × 9% / 2 = $36,869Interest on Carrying Value = Carrying value x Market rate / 2= $819,408 × 8% / 2 = $32,776Amortization of Premium = Cash interest payment – Interest on carrying value= $36,869 – $32,776 = $4,093Carrying Value = Carrying value – Amortization of premium= $819,408 – $4,093 = $815,315June 30, Year 3:Cash Interest payment = Carrying value x Coupon rate / 2= $815,315 × 9% / 2 = $36,680Interest on Carrying Value = Carrying value x Market rate / 2= $815,315 × 8% / 2 = $32,625Amortization of Premium = Cash interest payment – Interest on carrying value= $36,680 – $32,625 = $4,055Carrying Value = Carrying value – Amortization of premium= $815,315 – $4,055 = $811,260Dec. 31, Year 3:Cash Interest payment = Carrying value x Coupon rate / 2= $811,260 × 9% / 2 = $36,491Interest on Carrying Value = Carrying value x Market rate / 2= $811,260 × 8% / 2 = $32,450Amortization of Premium = Cash interest payment – Interest on carrying value= $36,491 – $32,450 = $4,041Carrying Value = Carrying value – Amortization of premium= $811,260 – $4,041 = $807,219Hence, the required Amortization table for the first three years of the bonds is as follows:Carrying Value = Face value + Premium on bondsJan. 1, Year 1: Cash Interest payment = $37,620 Interest on Carrying Value = $33,440 Amortization of Premium = $4,180 Carrying Value = $831,820June 30, Year 1: Cash Interest payment = $37,430 Interest on Carrying Value = $33,272 Amortization of Premium = $4,158 Carrying Value = $827,662Dec. 31, Year 1: Cash Interest payment = $37,244 Interest on Carrying Value = $33,106 Amortization of Premium = $4,138 Carrying Value = $823,524June 30, Year 2: Cash Interest payment = $37,057 Interest on Carrying Value = $32,941 Amortization of Premium = $4,116 Carrying Value = $819,408Dec. 31, Year 2: Cash Interest payment = $36,869 Interest on Carrying Value = $32,776 Amortization of Premium = $4,093 Carrying Value = $815,315June 30, Year 3: Cash Interest payment = $36,680 Interest on Carrying Value = $32,625 Amortization of Premium = $4,055 Carrying Value = $811,260Dec. 31, Year 3: Cash Interest payment = $36,491 Interest on Carrying Value = $32,450 Amortization of Premium = $4,041 Carrying Value = $807,219
Q = 6L - 0.1L^2 + 4 K - 0.2 K^2 The wage rate is $30, the cost of capital is $40, and output sells for $50. a) In the short run, capital is fixed at 5 units. How much labor do you recommend? b) In the long run, the firm decides to increase its inputs by 10% as compared to its inputs in part a. What do you conclude about returns to scale?
In the given production function Q = 6L - 0.1L^2 + 4K - 0.2K^2, with a fixed capital of 5 units, we need to determine the optimal amount of labor. In the long run, the firm plans to increase its inputs by 10% compared to the previous scenario. We need to analyze the returns to scale based on this change.
a) In the short run, with capital fixed at 5 units, we need to determine the optimal amount of labor. To maximize output, we can use the marginal product of labor (MPL) and compare it to the wage rate. The MPL is given by the first derivative of the production function with respect to labor (L). In this case, MPL = 6 - 0.2L. To find the optimal labor input, we set MPL equal to the wage rate of $30 and solve for L. By setting MPL = 30, we have 6 - 0.2L = 30, which yields L = 24. Therefore, we recommend employing 24 units of labor in the short run.
b) In the long run, the firm decides to increase its inputs by 10% compared to the previous scenario. This implies that both labor (L) and capital (K) will be increased by 10%. To examine the returns to scale, we can compare the percentage increase in output to the percentage increase in inputs. If the percentage increase in output is greater than the percentage increase in inputs, we have increasing returns to scale. Conversely, if the percentage increase in output is less than the percentage increase in inputs, we have decreasing returns to scale. If the two are equal, we have constant returns to scale. In this case, as both labor and capital increase by 10%, we can calculate the new output and compare it to the previous output. By substituting the new inputs into the production function, we can determine the change in output. Based on this comparison, we can conclude whether there are increasing, decreasing, or constant returns to scale.
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T. The men who played for the late, great Vince Lombardi, coach of the Green Bay Packers, commented that he treated them all the same, "...like dogs. This perception on the part of his players most likely addresses the component of organizational justice your text describes as justice. O informational O interpersonal O interactional O distributive O transformational
The correct option is distributive. The component of organizational justice that most likely addresses the perception of Vince Lombardi's players that he treated them all the same, "...like dogs" is distributive justice.
Organizational justice refers to the perceptions that people have regarding the fairness or unfairness of the distribution of rewards and resources in an organization. It can be divided into three distinct categories: procedural, distributive, and interactional justice.
Distributive justice is concerned with the fairness of the distribution of rewards and resources. It refers to the perception that people have regarding the fairness or unfairness of the allocation of rewards such as pay, benefits, promotions, recognition, and other organizational resources.
The men who played for Vince Lombardi, the late great coach of the Green Bay Packers, commented that he treated them all the same, "...like dogs."
This perception on the part of his players most likely addresses the component of organizational justice, which is distributive justice.
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Q11) a. using a diagram that begins with an eocnomy operating at Yfe, show and explain what will happen to output, unemployment, and the price level if Country A's government reduces the use of fossil fuels to generate electricity and makes firms use more expensive alternative energy. [10 pts] b. Using the same diagram as above, show and explain what will happen to output, unemployment, and inflation if the central bank decides to sell short-term governemtn bonds to investors and banks in that country [10 pts]
a) Diagram Explanation: In the above diagram, Yf represents the natural rate of output that is determined by the economy's supply-side factors, whereas Y is the actual output level where aggregate intersects aggregate supply line.
At Yf output level, the economy has a certain level of unemployment, represented by the vertical distance between the actual output level and the natural rate of output. The P* line in the increase in unemployment, and a fall in the price level. represents the price level that is consistent with the natural rate of output. A reduction in fossil fuel usage in the generation of electricity by the government of Country A would result in a decrease in aggregate supply, causing it to shift upwards (from AS to AS1). This shift would raise the price level from P* to P1. As a result, the natural rate of output would fall from Yf to Yf1.
The decrease in the natural rate of output would increase the unemployment rate to a level higher than 100. Therefore, the increase in alternative energy would result in an increase in unemployment and the price level.b)Diagram Explanation: In the diagram above, the economy is initially operating at Yf output level where the vertical distance between Yf and Y is the level of unemployment. The P* line represents the price level consistent with Yf output level. Selling short-term government bonds to investors and banks in Country A by the central bank would result in a decrease in the money supply and a shift in the AD curve from AD to AD1.
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The expected market rate of return is 0.12. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1 is equal to Multiple-Choice A.0.12 8. Unable to calculate due to lack of sufficient information C.0.08 D. 0.1
The expected market rate of return is 0.12. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1 is equal to Multiple-Choice A.0.12 8.
The Capital Asset Pricing Model (CAPM) is a financial model used to determine the expected rate of return on an investment based on its risk and the overall market conditions. It incorporates the risk-free rate of return, the expected market rate of return, and the beta coefficient of the security.
In this case, the expected market rate of return is given as 0.12. The beta coefficient measures the sensitivity of a security's returns to market movements. A beta of 1 indicates that the security has the same level of risk as the overall market. According to the CAPM formula, the expected rate of return on a security is calculated by adding the risk-free rate of return (usually a government bond yield) to the product of the security's beta and the difference between the expected market rate of return and the risk-free rate of return.
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In technical analysis the larger the number of days used in a
moving average, the less smoothing of prices will occur
True
False
False. In technical analysis, the larger the number of days used in a moving average, the more smoothing of prices will occur.
A moving average is a calculation that helps to smooth out price data by averaging it over a specific period of time. When a larger number of days is used, it takes into account a longer time period, resulting in a smoother line that is less sensitive to short-term price fluctuations. On the other hand, using a smaller number of days in a moving average will result in a line that is more sensitive to short-term price movements. By using a larger number of days in the calculation of the moving average, it takes into account a longer period of price data, resulting in a smoother line that represents the average price over that period.
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In ES, smaller values of a will produce forecasts which react more quickly to changes in the demand pattern. True False
In ES (exponential smoothing), smaller values of a will produce forecasts that react more quickly to changes in the demand pattern. Smaller values of a lead to more weight given to the most recent observations, and the forecast is more sensitive to changes in the data.
ES is a popular forecasting method that employs the use of weighted averages of past observations. It is a simple but powerful technique for short-term forecasting of time series data. The technique involves the use of a smoothing constant (a), which determines how much weight is given to the most recent observation. A smaller value of a leads to more weight given to the most recent observations, and the forecast is more sensitive to changes in the data. This means that smaller values of a will produce forecasts that react more quickly to changes in the demand pattern, making it easier to adjust the forecast to reflect changing market conditions.
Therefore, the given statement is True. In ES (exponential smoothing), smaller values of a will produce forecasts that react more quickly to changes in the demand pattern. Smaller values of a lead to more weight given to the most recent observations, and the forecast is more sensitive to changes in the data. In ES (exponential smoothing), smaller values of a will produce forecasts that react more quickly to changes in the demand pattern. Smaller values of a lead to more weight given to the most recent observations, and the forecast is more sensitive to changes in the data.
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Max industries is planning to invest in a number of projects
during the next fiscal year. Given they substantial capital
investment, the board of directors have assigned you with finding
the break poi
Max industries is a company that is looking to invest in several projects during the next fiscal year.
The board of directors has charged the company with the task of finding the break point. The break point is the point at which the company's revenues equal its costs. This is a critical factor to consider when deciding whether or not to invest in a project. If a project is not expected to generate enough revenue to cover its costs, then it may not be worth pursuing. Therefore, it is essential to calculate the break point before making any investment decisions.
Calculating the break point involves analyzing the cost structure of each project and determining how much revenue each project is expected to generate. This can be a complex process that requires a lot of data analysis and modeling. However, it is an essential step in making informed investment decisions.
In conclusion, calculating the break point is a critical factor in deciding whether or not to invest in a project. By doing so, companies like Max Industries can make informed investment decisions that will help them maximize their returns and achieve their business goals. The process involves analyzing the cost structure of each project and determining how much revenue each project is expected to generate.
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Project your own business career five to ten years ahead as an employee in one or more large, publicly traded companies. In what role would you be dominantly involved strategy making or strategy execution? Do explain your answer fully
In my business career five to ten years ahead as an employee in one or more large, publicly traded companies, I envision myself being dominantly involved in strategy making rather than strategy execution.
Based on my skill set, experience, and interests, I see myself taking on a strategic leadership role such as a Senior Vice President or Chief Strategy Officer. In this position, my primary responsibility would be to formulate and drive the overall strategic direction of the company. I would analyze market trends, competitive landscape, and industry dynamics to identify growth opportunities and develop innovative strategies to enhance the company's market position and profitability. I would work closely with the executive team and the board of directors to align business objectives with long-term strategic goals and ensure the successful implementation of strategic initiatives. As a strategic leader, I would collaborate with cross-functional teams, including finance, operations, marketing, and technology, to translate strategic plans into actionable steps and monitor their progress. I would also engage in strategic partnerships, mergers and acquisitions, and other strategic alliances to expand the company's reach and capabilities.
Overall, my focus would be on driving the vision, mission, and strategic priorities of the organization, guiding its growth and ensuring its competitiveness in the market.
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