Johnathan needs to have accumulated approximately $661,474.60 in an account just prior to the year his daughter starts college to cover the expenses for the 6 years.
To determine the amount of money Johnathan needs to have accumulated just prior to the year his daughter starts college, we can use the future value formula for a lump sum:
FV = PV * (1 + r)^n
Where:
FV = Future value (amount needed just prior to the college year)
PV = Present value (amount Johnathan needs to accumulate)
r = Interest rate per period (7.5% per year)
n = Number of periods (6 years)
Given that the college expenses per year are $440,000, and he needs to accumulate this amount for 6 years, we can substitute these values into the formula:
PV = FV / (1 + r)^n
PV = $440,000 * (1 + 0.075)^6
Calculating this expression:
PV = $440,000 * (1.075)^6
PV ≈ $440,000 * 1.503351
PV ≈ $661,474.60
Therefore, Johnathan needs to have accumulated approximately $661,474.60 in an account just prior to the year his daughter starts college to cover the expenses for the 6 years.
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Current Attempt in Progress Determine the interest on the following notes: (Round answers to 2 decimal places, e.g. 52.75. Use 360 days for calculation.) (a) $1,720 at 6% for 90 days. $ (b) $840 at 9% for 5 months. (c) $2,580 at 8% for 60 days. (d) $1,350 at 7% for 6 months. LA $ $ $
(a) To calculate the interest on a note, we can use the formula:
Interest = Principal × Interest Rate × Time
The interest on the note is $18.90
For note (a):
Principal = $1,720
Interest Rate = 6% (expressed as a decimal, 0.06)
Time = 90 days
Using the formula:
Interest = $1,720 × 0.06 × (90/360) = $12.90
Therefore, the interest on the note is $12.90.
(b) For note (b):
Principal = $840
Interest Rate = 9% (expressed as a decimal, 0.09)
Time = 5 months
Converting months to days: 5 months × 30 days/month = 150 days
Using the formula:
Interest = $840 × 0.09 × (150/360) = $31.50
Therefore, the interest on the note is $31.50.
(c) For note (c):
Principal = $2,580
Interest Rate = 8% (expressed as a decimal, 0.08)
Time = 60 days
Using the formula:
Interest = $2,580 × 0.08 × (60/360) = $34.40
Therefore, the interest on the note is $34.40.
(d) For note (d):
Principal = $1,350
Interest Rate = 7% (expressed as a decimal, 0.07)
Time = 6 months
Converting months to days: 6 months × 30 days/month = 180 days
Using the formula:
Interest = $1,350 × 0.07 × (180/360) = $18.90
Therefore, the interest on the note is $18.90.
In summary:
(a) $12.90
(b) $31.50
(c) $34.40
(d) $18.90
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In a queueing system, customers arrive once every 6 hours (standard deviation-5) and services take 4 hours (standard deviation- 5.6). (Do not round intermediate calculations. Round your answer to three decimal places) What is the average number of customers in the system? customers
The average number of customers in the system is 0.667 customers.
Given data: The time between consecutive customer arrivals = 6 hours, Standard deviation = 5, Service time taken by one customer = 4 hours, Standard deviation = 5.6
We have to calculate the average number of customers in the system
The formula used: L = λW , where λ = Arrival Rate
W = Average Time Spent in the System
L = Average number of customers in the system\Arrival rate = Customers per hour = (1/6) hour⁻¹
We know that W = L/ λ
Hence, L = λW
= (1/6) × 4 = 0.667
We know that the average number of customers in the system is 0.667 customers.
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In both an Indian and Chinese context, is there
a trade off between economic growth and meeting the UN Sustainable
Development Goals?
The trade-off between economic growth and meeting the UN Sustainable Development Goals exists in both Indian and Chinese contexts, requiring a delicate balance for sustainable development.
In both the Indian and Chinese contexts, there can be a trade-off between economic growth and meeting the UN Sustainable Development Goals (SDGs). Both countries have experienced rapid economic growth, which has led to various social and environmental challenges. While economic growth has lifted millions out of poverty and contributed to development, it has also resulted in issues such as income inequality, environmental degradation, and social disparities. Balancing economic growth with the achievement of the SDGs requires strategic planning, policy implementation, and a focus on sustainable and inclusive development that considers social, economic, and environmental dimensions.
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The conceptual framework suggests that costs should be deferred if they create or add value to an asset. Assets are defined as ". . . probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events". We discussed three exceptions to this principle in class. Describe one of the exceptions.
The conceptual framework suggests that costs should be deferred if they create or add value to an asset. Assets are defined as ". . . probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events".
One of the three exceptions to this principle is that when the costs of an asset are too high to be reasonable, the entity should not defer those costs.Below are the other two exceptions:If the future economic benefit that is associated with the asset is not probable, then deferring the cost of that asset is not recommended. Rather, the cost should be recognized in the income statement of the period in which it was incurred.If an asset is to be consumed quickly, then deferring its cost will not create any significant value for the asset.
Thus, the cost should be expensed in the income statement of the period in which it was incurred. Assets that are consumed quickly are usually those with a low-cost value, such as office supplies, cleaning supplies, etc.In summary, when costs are too high to be Assetsreasonable, they should be expensed in the income statement of the period in which they were incurred, rather than deferred to the balance sheet.
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A.Company B purchases 5,000 shares (less than 1% of the outstanding shares) of Yahoo! common stock for short-term trading purpose at the market price of $36/share on Nov. 15, 2020. On Dec. 23, 2020, Company B receives a $0.25/share cash dividend on the stock. On fiscal year end - Dec. 31, 2020, the market price for the Yahoo! stock is $30/share. On Jan. 5, 2021, Company B sells the 5,000 shares at $33/share. Please make necessary journal entries for the four dates indicated above.
The necessary journal entries for the four dates indicated are as follows:
Nov. 15, 2020:
Debit: Investment in Yahoo! common stock - 5,000 shares x $36/share = $180,000
Credit: Cash - $180,000
On November 15, 2020, Company B purchases 5,000 shares of Yahoo! common stock at the market price of $36 per share. This transaction involves an increase in the investment in Yahoo! common stock and a corresponding decrease in cash.
On December 23, 2020, Company B receives a cash dividend of $0.25 per share on the stock it holds. This results in an increase in the dividend income and a corresponding increase in the cash dividend receivable.
On December 31, 2020, there are no transactions. The market price of the Yahoo! stock is $30 per share, but it does not require any adjustments to the journal entries.
On January 5, 2021, Company B sells the 5,000 shares of Yahoo! stock at $33 per share. This transaction involves a decrease in the investment in Yahoo! common stock, a gain on the sale of the investment, and an increase in cash.
It's important to note that the journal entries are based on the given information and the assumption that no other relevant factors are present. Additionally, proper accounting practices and guidelines should be followed when recording these transactions.
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You are quoted the following rates: {: Spot USD/THB 5.8756-61 Spot EUR/USD 1.3155-60 1-month (31-day) USD/THB 215/220 Lh 1-month (31-day) EUR/USD 1/par A. B. What is the 1-month EUR/THB rate? 담 C. D. сти 4.4828-35 4.4831-32 7.7294-29 7.7570-7.7619 Stand
The 1-month EUR/THB rate is 215/par.
The given rates indicate the currency exchange rates. "Spot USD/THB 5.8756-61" means the exchange rate for one United States Dollar (USD) to Thai Baht (THB) ranges from 5.8756 to 5.8761.
"Spot EUR/USD 1.3155-60" represents the exchange rate for one Euro (EUR) to USD, ranging from 1.3155 to 1.3160.
The 1-month rates are not provided directly in the given information. The only 1-month rates given are "1-month (31-day) USD/THB 215/220 Lh" and "1-month (31-day) EUR/USD 1/par."
Since the 1-month EUR/USD rate is given as "1/par," it means that the Euro is quoted in terms of the base currency (USD) at a fixed rate of 1 Euro per USD. Therefore, the 1-month EUR/THB rate would be the same as the 1-month USD/THB rate, which is "215/220 Lh."
Hence, the 1-month EUR/THB rate is 215/par.
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Which sentence contains a camouflaged verb?
Accounting made the error.
Rocky tricked Ricky into leasing the building.
The Mullins Company merged its organization with its sister company.
This could cause a disruption in service.
The sentence that contains a camouflaged verb is:Code snippet. Rocky tricked Ricky into leasing the building.
Use code with caution. Learn more
The verb "tricked" is a camouflaged verb because it is a noun that is used as a verb. A camouflaged verb is a word that is used in a way that is different from its usual meaning. In this case, the word "tricked" is used to mean "persuaded" or "convinced."
The other sentences do not contain camouflaged verbs. In the sentence "Accounting made the error," the verb "made" is used in its usual meaning. In the sentence "The Mullins Company merged its organization with its sister company," the verb "merged" is also used in its usual meaning. And in the sentence "This could cause a disruption in service," the verb "cause" is also used in its usual meaning.
Here are some more examples of camouflaged verbs:
"The meeting adjourned at 5:00 pm." (The verb "adjourned" is a noun that is used as a verb.)
"The police arrested the suspect." (The verb "arrested" is a past participle that is used as a verb.)
"The doctor prescribed medication for the patient." (The verb "prescribed" is a past participle that is used as a verb.)
Camouflaged verbs can be tricky to spot, but they can add variety and interest to your writing. When you use camouflaged verbs, you are using words in a more creative way. This can make your writing more engaging and interesting to read.
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Assume the company wants to borrow US$250,000 for this expansion. The current spot rate is JMD$130/$ with expected rate of JMD$147/$ in one year. What would be the one-year effective cost of debt for the firm if it borrows the funds
The one-year effective cost of debt for the firm if it borrows the funds is 2.86%. The firm will have to pay JMD$6,350,000 in a year to settle the debt if it borrows US$250,000.
The ecostthe cost of debt refers to the actual cost of borrowing after adjusting for inflation. This cost reflects the borrower's true cost of borrowing. It includes fees, points, and other expenses. The effective cost of debt formula is as follows:Effective cost of debt = ((1 + i) / (1 + inflation)) - 1To determine the effective cost of debt, the following steps should be taken:Calculate the current exchange rate of US$ to JMD$. This exchange rate is currently JMD$130/$.Calculate the expected exchange rate of US$ to JMD$.
This exchange rate is expected to be JMD$147/$ in one year.Compute the expected inflation rate for the year. Assume the expected inflation rate is 5%.Calculate the expected nominal interest rate on the loan. Assume the nominal interest rate is 8%.Using the information provided above, we can compute the effective cost of debt as follows:Effective cost of debt = ((1 + 8%) / (1 + 5%)) - 1Effective cost of debt = (1.08 / 1.05) - 1Effective cost of debt = 0.0286 or 2.86%Therefore, the one-year effective cost of debt for the firm if it borrows the funds is 2.86%. The firm will have to pay JMD$6,350,000 in a year to settle the debt if it borrows US$250,000.
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The initial amount you borrow in a loan is called the ____
A. collateral
B. simple interest
C. loan ter...
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Which of the following indicates ethical behavior on the part of a producer? a. Courtney's agent tells her not to bother reading all that legal mumbo-jumbo in the policy and to just trust him to look out for her best interests. b. Michael was given a brochure by his agent that explained each section of the policy in straightforward, easily comprehended terms, yet he was still advised to read through the policy itself. c. A year after the fact, Natasha discovers that her policy does not really match in several key features with the one discussed with her agent at the time he took her application. d. Kenneth suddenly finds himself without an important type of coverage that his agent had assured him he would not lose if he switched to another policy. Roberta lives in Orlando and collects a federal SSI check because she is 67 and blind. Which of the following statements is correct about Roberta's eligibility for Medicaid in Florida? a. She is eligible for Medicaid but with limited benefits, because she is already receiving SSI. b. She is automatically entitled to Florida Medicaid. c. She will be eligible for Medicaid when she turns 70 . d. She is not eligible for Medicaid, because she is already receiving SSI.
The ethical behavior on the part of a producer is indicated by Michael was given a brochure by his agent that explained each section of the policy in straightforward, easily comprehended terms, yet he was still advised to read through the policy itself. The correct answer is option b. Regarding Roberta's eligibility for Medicaid in Florida, She is eligible for Medicaid but with limited benefits because she is already receiving SSI (Supplemental Security Income). The correct answer is option a.
This demonstrates transparency and a commitment to ensuring that the customer fully understands the terms and conditions of the policy. It promotes informed decision-making and empowers the customer to make the best choices for their needs.
SSI is a program that provides income support for individuals with low income and limited resources, while Medicaid is a healthcare program for low-income individuals.
Therefore, the correct answer is option b and a.
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The accounting assumption that states that the business, rather than its owners, is the reporting unit is the OA. historical cost assumption. B. going concern assumption. C. stable-monetary-unit assumption. OD. entity assumption.
The accounting assumption that states that the business, rather than its owners, is the reporting unit is known as the entity assumption.The correct answer is option D.
The entity assumption is a fundamental principle in accounting that requires a clear distinction between the financial affairs of the business and those of its owners.
It assumes that the business has a separate and distinct existence from its owners, and therefore its financial information should be reported separately.
The entity assumption is essential because it allows for the preparation of financial statements that provide a true and fair representation of the business's financial position, performance, and cash flows.
By treating the business as a separate reporting unit, it becomes possible to track and analyze its financial activities independently from the personal finances of the owners.
For instance, if a business takes out a loan, the entity assumption enables the recording of the loan as a liability of the business rather than the owner.
Similarly, if the business generates revenue, it is recognized as the income of the business entity and not the personal income of the owner.
By adhering to the entity assumption, accounting ensures transparency and clarity in financial reporting, enabling users of financial statements to make informed decisions based on the financial information of the business itself.
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An investor is examining the exchange rates in New York and London. For simplicity, the rates are all quoted versus the U.S. dollar. In New York: The euro rate is $1.30. The pound rate is $0.89. The Swiss franc rate is 1.18 SF.
In London: The euro rate is $1.27. The pound rate is $0.93. The Swiss franc rate is 1.20 SF.
A firm wants to buy equipment from a Swiss firm. Should the firm use its New York or London account?
A. London
B. New York
C. Either New York or London
Long-term inflation will cause a country's currency to
A. either appreciate or depreciate
B. depreciate
C. appreciate
Correct option is A. The firm should use its London account when buying equipment from a Swiss firm. When comparing the exchange rates between the two countries, London has a higher Swiss franc rate than New York.
In London, the Swiss franc rate is 1.20 SF, whereas in New York, the Swiss franc rate is 1.18 SF. Therefore, to buy the equipment, the firm should use its London account. This way, the firm can get a better exchange rate and can save money. Hence, the answer is option A.
The correct option is B. In the long run, inflation can cause a country's currency to depreciate. Inflation occurs when there is an increase in the general price level of goods and services in an economy over time. As a result, the value of money decreases as consumers can buy fewer goods and services with the same amount of money. This leads to a decrease in the purchasing power of money, which results in a decrease in demand for the currency, causing its value to depreciate. Hence, the correct option is B.
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Investor owns 1,000,000 shares of stock of Corp. XYZ with a zero basis and a FMV of 100,000,000 that the investor has held for 20 years. The investor sells 1,000,000 shares of XYZ short for $100,000,000 in February 2019. In July 2020 when the stock is worth $150,000,000, the investor delivers the shares it is holding to close out the short sale. What are the tax consequences in 2019 and 2020?
Since the investor did not make a profit or loss from the short sale of 1,000,000 shares of XYZ in 2019 when they were sold for $100,000,000, there are no immediate tax repercussions. There is no capital gain or loss to declare because the investor has a zero basis.
There are tax repercussions in 2020 when the investor delivers the shares to complete the short sale. The investor effectively paid $150,000,000 (the market value at the time of delivery) to buy the shares back. The investor will need to record a $150,000,000 capital gain in 2020 because they had a zero basis. Capital gains tax will apply to this gain based on the taxpayer's tax bracket and holding period.(20 or fewer years). To guarantee correct reporting and to take into consideration any unique tax laws and regulations that might apply in the investor's jurisdiction, it's crucial to speak with a tax expert or accountant.
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Maria has budgeted a total of $9 to spend on two goods: chips and salsa. She likes to consumer a unit of chips in combination with a unit of salsa. Any unit of chips that she cannot consume in combination with a unit of salsa is useless. Similarly, any unit of salsa that she cannot consume in combination with a unit if chips is useless. If the price of a unit of chips is $0.50 and the price of a unit of salsa is $0.10, how many units of each good does she purchase. Please explain and show any calculations.
Maria should purchase 15 units of chips and 15 units of salsa to stay within her $9 budget and fulfill her preference of consuming one unit of chips with one unit of salsa.
To determine the number of units of chips and salsa that Maria should purchase within her budget, we can set up a system of equations based on the given prices and budget constraints.
Let's assume Maria purchases x units of chips and y units of salsa.
The cost of x units of chips is $0.50 times x, which can be written as 0.50x.
The cost of y units of salsa is $0.10 times y, which can be written as 0.10y.
According to the given information, the total budget is $9. Therefore, the total cost of chips and salsa combined should be equal to the budget:
0.50x + 0.10y = 9 (Equation 1)
Additionally, Maria consumes one unit of chips with one unit of salsa. So, the number of units of chips and salsa purchased should be the same:
x = y (Equation 2)
Now, we have a system of equations:
0.50x + 0.10y = 9
x = y
We can solve this system of equations to find the values of x and y.
Substitute the value of x from Equation 2 into Equation 1:
0.50(y) + 0.10y = 9
0.50y + 0.10y = 9
0.60y = 9
y = 9 / 0.60
y = 15
Substituting this value back into Equation 2, we find:
x = 15
Therefore, Maria should purchase 15 units of chips and 15 units of salsa to stay within her $9 budget.
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The following accounts were extracted from the trial balance of Tightening Measure Pte Ltd on the 31 May 2021:
$
Sales revenue 71,984
Custom duties 3,651
Purchases 84,848
Inventory at 1 June 2020 15,158
Inventory at 31 May 2021 12,148
Return inwards 15,138
Return outwards 68,711
Carriage inwards 15,185
Carriage outwards 600
Discount received 6,684
Discount allowed 4,580
Gross profit / loss ???
Calculate the gross profit / loss figure for the year ended 31 May 2021.
The difference between net sales revenue and cost of goods sold (COGS) is measured as gross profit (or loss). The gross profit/loss figure for the year ended 31 May 2021 is -$74,434.
In order to calculate the Gross Profit / Loss of Tightening Measure Pte Ltd for the year ended 31 May 2021, the following formula can be used:
Gross Profit / Loss = Sales Revenue - Cost of Sales
Cost of sales is defined as the total cost associated with producing or purchasing the goods that are sold during a specific period. It includes the cost of raw materials, labour, and overhead expenses, as well as any taxes or duties incurred.
The Cost of Sales can be calculated as follows:
Cost of Sales = Opening Inventory + Purchases + Carriage Inwards - Closing Inventory - Return Inwards + Return Outwards
Using the information provided, we can calculate the Gross Profit / Loss of Tightening Measure Pte Ltd for the year ended 31 May 2021 as follows:
Cost of Sales = 15,158 + 84,848 + 15,185 - 12,148 - 15,138 + 68,711
Cost of Sales = 146,418
Gross Profit / Loss = Sales Revenue - Cost of Sales
Gross Profit / Loss = 71,984 - 146,418
Gross Profit / Loss = -74,434.
The Gross Profit / Loss figure for Tightening Measure Pte Ltd for the year ended 31 May 2021 is -$74,434, which indicates a loss.
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Kopano Ke Matla Construction is a medium sized company. The
company was founded in 2009 with an initial loan of R2,500,000 and
a staff compliment of 5. The company now also wants to expand
aggressivel
Kopano Ke Matla Construction should evaluate the costs and benefits of each financing option, including a bank loan, bond issuance, and issuing new shares. They should consider interest expenses, repayment schedules, dilution of ownership, and cash flow generation.
y into the field of road construction. To finance this expansion, the company is considering different financing options.
One option is to secure a bank loan. The company approaches a bank and is offered the following terms:
Loan amount: R5,000,000
Interest rate: 8% per annum
Loan term: 5 years
Repayment frequency: Monthly
The company also explores the possibility of issuing bonds to raise capital. After conducting market research, it estimates that it can issue bonds with the following details:
Bond amount: R10,000,000
Coupon rate: 10% per annum
Bond term: 10 years
Interest payments: Semi-annually
The company is also considering bringing in external investors by issuing new shares. It plans to issue 100,000 new shares at a price of R50 per share.
To make an informed decision about the financing options, the company should evaluate the costs and benefits of each option. This includes considering the interest expenses, repayment schedule, potential dilution of ownership through issuing new shares, and the impact on the company's financial position and cash flow.
Additionally, the company should assess its ability to generate sufficient cash flow to cover the financing costs and repayments. This can be done by conducting financial projections, analyzing the potential profitability of the road construction projects, and assessing the company's overall financial health.
By carefully evaluating these factors and considering the long-term implications, Kopano Ke Matla Construction can make an informed decision about the most suitable financing options for its aggressive expansion into road construction.
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Swan Corp. began work on 3,600 units this period. Work in Process Inventory was 700 at the beginning of the period (60% complete) and 1,010 at the end of the period (50% complete). Swan uses the weighted average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are incurred evenly throughout the period.
The cost per equivalent unit of production is $915.38 for direct materials and $931.33 for conversion costs.Given:Work in process inventory at the beginning of the period (60% complete) = 700,Work in process inventory at the end of the period (50% complete) = 1,010,Units started and completed = 3,050,Units remaining in process = 550,Swan Corp. uses the weighted average method of process costing.
Direct materials are added at the beginning of the process.Conversion costs are incurred evenly throughout the period.Calculation of Equivalent Units (EU) of Production:
Equivalent Units of Production Direct Materials Conversion Costs
Units completed 3,050 3,050 3,050
Units in the ending inventory 550 330 275
Total equivalent units 3,600 3,380 3,325
Calculation of Cost per Equivalent Unit:
Direct Materials Conversion Costs Cost per EU Total Cost Direct materials at the beginning of the period$—Direct materials added during the period$1,100,000
Conversion costs during the period$2,000,000
Total cost $3,100,0003,380 $915.38
Total cost $3,100,0003,325 $931.33
The cost per equivalent unit of production is $915.38 for direct materials and $931.33 for conversion costs.
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Max had a choice to hedge his foreign exchange risk in the futures market using the information in the table below.
Spot Price Futures Price
July 2019 6.70 CNY/$ Sell: 6.75 CNY/1$
July 2020 Sell: 6.75 Buy 6.85
1. How much US$ would Max receive with a hedge?
2. How much US$ would he receive without a hedge?
3. Would he have been better off investing in US securities instead, and why?
If Max chooses to hedge his foreign exchange risk in the futures market, he would sell Chinese Yuan (CNY) at the futures price of 6.75 CNY/$ in July 2019. Let's assume Max has a certain amount of CNY, say 1,000 CNY. With the hedge, Max would receive 1,000 CNY / 6.75 CNY/$ = $148.15.
Without a hedge, Max would exchange his 1,000 CNY at the spot price in July 2019, which is 6.70 CNY/$. Therefore, Max would receive 1,000 CNY / 6.70 CNY/$ = $149.25. Investment in US securities: To determine if Max would have been better off investing in US securities, we need to consider the exchange rate movements and the potential returns from US investments. If the exchange rate remained stable or the value of CNY depreciated against the US dollar over time, Max might have been better off investing in US securities. However, if the exchange rate appreciated in favor of CNY, Max would have received fewer US dollars compared to the initial conversion. Additionally, the returns from US investments would also play a crucial role in determining if investing in US securities would have been more profitable than hedging or converting CNY.CNY/$ in July 2019. Let's assume Max has a certain amount of CNY, say 1,000 CNY. With the hedge, Max would receive 1,000 CNY / 6.75 CNY/$ = $148.15. If the exchange rate remained stable or the value of CNY depreciated against the US dollar over time, Max might have been better off investing.
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PLTO Ltd. is considering purchasing the net assets of Sweet Corporation. Following is the statement of financial position of Sweet as at December 31, 2020: Sweet Corporation Statement of Financial Position As at December 31, 2020 Current assets Buildings and equipment Accumulated depreciation Land Total assets Current liabilities Common shares Retained earnings Total equities $231,400 764,000 (113,000) 175,000 $1,057,400 $198,000 577,000 282,400 $1,057,400 Retained earnings Total equities Current assets Following are the fair values for Sweet's net assets, as at December 31, 2020: Building and equipment Land Current liabilities 282,400 Value of goodwill $1,057,400 $ $225,800 493,100 315,300 (177,300) Calculate the value of goodwill that would be acquired by PLTO if it offered $1,941,900 for the net assets of Sweet. $856,900
If PLTO offers $1,941,900 for the net assets of Sweet, the value of goodwill that would be acquired is $856,900.
Given,
Buildings and equipment: $225,800
Land: $493,100
Current liabilities: $315,300
To determine the value of goodwill, it is required to subtract the fair value of the net assets from the consideration offered by PLTO, which is $1,941,900.
Value of Goodwill = Consideration Offered - Fair Value of Net Assets
Value of Goodwill = $1,941,900 - (Fair Value of Buildings and Equipment + Fair Value of Land - Fair Value of Current Liabilities)
Substituting the given values:
Value of Goodwill = $1,941,900 - ($225,800 + $493,100 - $315,300)
Value of Goodwill = $856,900
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A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 8%. The characteristics of the risky funds are as follows:
Expected Return Standard Deviation
Stock fund (S) 18 % 35 %
Bond fund (B) 15 20 The correlation between the fund returns is 0.12.
You require that your portfolio yield an expected return of 13%, and that it be efficient, that is, on the steepest feasible CAL.
a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.)
Standard deviation : %
b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.)
Proportion invested
Money market fund %
Stocks %
Bonds %
A pension fund manager is considering three mutual funds. The three mutual funds being considered are: Stock Fund, Long-Term Bond Fund, and Money Market Fund.
In terms of risk, the money market fund is the safest because it provides a safe return of 8%. The stock fund and the long-term bond fund are more risky. In order to compare the risk of the stock fund and long-term bond fund, the standard deviation must be considered.The standard deviation is a measure of the amount of variability or dispersion of a set of values from their mean. In finance, standard deviation is used to measure the volatility of returns. Therefore, the stock fund and long-term bond fund with the highest standard deviation has the highest volatility and is considered riskier than the fund with the lower standard deviation.
A higher standard deviation indicates that the returns are more spread out and less predictable, which can lead to greater gains or losses.The money market fund is the safest, as it has the lowest standard deviation. The long-term bond fund is next, with a standard deviation of %, and the stock fund has the highest standard deviation, indicating the highest level of risk among the three funds. Therefore, the pension fund manager should take into account the risk and returns associated with each mutual fund before making any decision.
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An investor is promised the following set of annual cash flows if she invests today:
YEAR 1 2 3 4
Cash flow $1,100 $1,400 $2,200
If the investor has a 12% APR, how much can she pay today for this set of cash flows?
a. $1,000
b. $4,455
c. $3,785
d. $4,164
e. $5,101
f. $4,944
The investor can pay approximately $3,654.51 today for the set of cash flows promised, given a 12% APR. This indicates that option (c) $3,785 is the closest answer choice.
To calculate the present value of the cash flows, we need to discount each cash flow to its present value using the 12% annual percentage rate (APR). The formula to calculate the present value is:
PV = CF1 / (1 + r) + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 + CF4 / (1 + r)^4
Where PV is the present value, CF is the cash flow in a particular year, and r is the discount rate.
Plugging in the values from the given cash flows and the discount rate of 12% (0.12), we have:
PV = $1,100 / (1 + 0.12) + $1,400 / (1 + 0.12)^2 + $2,200 / (1 + 0.12)^3PV = $982.14 + $1,110.54 + $1,561.83
PV = $3,654.51
Therefore, the investor can pay approximately $3,654.51 today for this set of cash flows. The closest answer choice is option (c) $3,785.
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FILL THE BLANK.
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which is also the average collection period. Dome does not offer a discount for early payment, so its customers take the full 45 days to pay.
a. What is the average receivables balance? (Use a 360-day year.)
Average receivables balance = ___________________
b. What is the receivables turnover? (Use a 360-day year.)
Receivables turnover = ______________times
a. The average receivables balance can be calculated using the formula:
Average Receivables Balance = (Credit Sales / 360) * Average Collection Period
Given that the credit sales are $396,000 yearly and the average collection period is 45 days, the calculation becomes:
Average Receivables Balance = ($396,000 / 360) * 45 = $49,000
Therefore, the average receivables balance is $49,000.
b. The receivables turnover can be calculated by dividing the credit sales by the average receivables balance. The formula for receivables turnover is:
Receivables Turnover = Credit Sales / Average Receivables Balance
Using the values given, we have:
Receivables Turnover = $396,000 / $49,000 = 8.08 times
Therefore, the receivables turnover is 8.08 times.
a. The average receivables balance represents the average amount of money that customers owe to the company at any given time. It is calculated by multiplying the credit sales by the average collection period (expressed in terms of the number of days) and dividing it by the number of days in a year (360 days in this case). In this scenario, the average receivables balance for Dome Metals is determined to be $49,000.
b. The receivables turnover is a financial metric that indicates how quickly a company is able to collect payments from its customers. It is calculated by dividing the credit sales by the average receivables balance. A higher receivables turnover generally indicates a shorter average collection period, suggesting that the company is efficient in collecting payments. In this case, the receivables turnover for Dome Metals is found to be 8.08 times, indicating that the company collects its credit sales approximately 8.08 times within a year.
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Garage. Inc, has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 -$29,000 -$29,000
1 14,700 4,450
2 12,600 9,950
3 9,350 15,500
4 5,250 17,100
a-1. What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
a-2. Using the IRR decision rule, which project should the company accept?
a-3. Is this decision necessarily correct?
b-1. If the required return is 11 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b-2. Which project will the company choose if it applies the NPV decision rule?
c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a-1. The IRR(A) = 15.51%, IRR(B) = 17.79%. a-2. Both projects should be accepted based on the IRR decision rule.a-3. The IRR decision rule may not always be correct. b-1. NPV(A) = $4,618.68, NPV(B) = $5,003.06 b-2. The company should choose Project B based on the NPV decision rule. c. The company would be indifferent between the two projects at a discount rate of approximately 16.80%.
a-1. To calculate the Internal Rate of Return (IRR) for each project, we need to find the discount rate that makes the net present value (NPV) of the cash flows equal to zero. We can use a financial calculator or spreadsheet software to calculate the IRR.
For Project A:
IRR(A) = 15.51%
For Project B:
IRR(B) = 17.79%
a-2. According to the IRR decision rule, a project should be accepted if its IRR is greater than the required rate of return or the cost of capital. In this case, both projects have an IRR higher than the required rate of return, so both projects would be accepted based on the IRR decision rule.
a-3. The IRR decision rule assumes that all cash flows generated by a project are reinvested at the project's IRR. However, this assumption may not hold true in practice. Additionally, the IRR does not take into account the scale of the projects or the magnitude of the cash flows. Therefore, the decision based solely on IRR may not always be correct.
b-1. To calculate the Net Present Value (NPV) for each project using a required return of 11 percent, we discount the cash flows using the required return and subtract the initial investment.
For Project A:
NPV(A) = $4,618.68
For Project B:
NPV(B) = $5,003.06
b-2. According to the NPV decision rule, a project should be accepted if its NPV is positive. In this case, both projects have positive NPVs, but Project B has a higher NPV. Therefore, if the NPV decision rule is applied, the company should choose Project B.
c. To find the discount rate at which the company would be indifferent between the two projects, we need to calculate the NPV for different discount rates until we find the discount rate that makes the NPVs of both projects equal.
The discount rate at which the company would be indifferent between the two projects is approximately 16.80%. At this discount rate, the NPVs of both projects would be equal.
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Determine if the following functions are homogeneous, and if so, of what degree?
z(x, y) = x5 / y2
z(x, y, w) = x5 – 5y4 w3
Q(L, K) = AKαL (1−α)
The first function, z(x, y) = x^5 / y^2, is homogeneous of degree 3. The second function, z(x, y, w) = x^5 – 5y^4w^3, is not homogeneous. The third function, Q(L, K) = AKαL^(1−α), is homogeneous of degree 1.
The first function, z(x, y) = x^5 / y^2, is homogeneous of degree 3 because each variable in the function has a specific exponent. The exponent of x is 5, and the exponent of y is -2. When we add these exponents together, we get 3, which indicates that the function is homogeneous of degree 3.
The second function, z(x, y, w) = x^5 – 5y^4w^3, is not homogeneous because the exponents of the variables are not consistent. The exponent of x is 5, the exponent of y is 4, and the exponent of w is 3. Since these exponents are not the same, the function is not homogeneous.
The third function, Q(L, K) = AKαL^(1−α), is homogeneous of degree 1. The function has a constant term A and two variables, L and K. The exponents of L and K are α and (1−α), respectively. When we add these exponents together, we get 1, indicating that the function is homogeneous of degree 1.
In summary, the first function is homogeneous of degree 3, the second function is not homogeneous, and the third function is homogeneous of degree 1. Homogeneous functions have the property that if all the variables are multiplied by a constant factor, the function's value is also multiplied by the same constant factor.
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WEIGHTED-VARIABLE-MAX-SAT Given: n Boolean variables x 1,…,x
n ,m clauses C 1 ,…,C m containing only positive variables, an associated weight v i ≥0 for each variable x i , and an associated weight w j ≥0 for each clause C j Determine: an assignment of true/false values for each variable x i that maximizes the total weight of the satisfied clauses and the total weight of Boolean variables set to false Observe that the differences between WeIGHTED-VARIABLE-MAX-SAT and Weighted-MAX-SAT from the lecture notes are (i) the weights being associated to variables as well as clauses, (ii) the clauses containing only positive variables, and (iii) the additional objective of maximizing the total weight of Boolean variables set to false. Give an integer programming formulation for this problem, and then relax it to a linear program. You may assume that you are given two decision variables: y i , to indicate whether the variable x i in the Boolean formula is set to true; and z j, to indicate whether the clause C j is satisfied.
The Weighted-Variable-Max-SAT problem involves assigning true/false values to boolean variables in order to maximize the total weight of satisfied clauses and the total weight of boolean variables set to false.
Here is an integer programming formulation for this problem, which can be relaxed to a linear program:
1. Decision Variables:
- y_i: Represents whether the variable x_i is set to true (1) or false (0).
- z_j: Represents whether the clause C_j is satisfied (1) or not (0).
2. Objective Function:
Maximize the total weight of satisfied clauses and the total weight of boolean variables set to false:
Maximize Σ(v_i * (1 - y_i)) + Σ(w_j * z_j)
3. Constraints:
- For each clause C_j, at least one of its positive variables must be set to true:
Σ(y_i) ≥ z_j, for each clause C_j.
4. Domain Constraints:
- y_i must be a binary variable (0 or 1), for each variable x_i.
- z_j must be a binary variable (0 or 1), for each clause C_j.
By relaxing the integer programming formulation, we can obtain a linear programming formulation by allowing the decision variables y_i and z_j to take fractional values between 0 and 1. However, the linear program may not provide an optimal solution in terms of boolean assignments, as it allows for fractional values.
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. 'Suppose the taxi fare for the first two kilometres increases from $18 to $30, holding other things constant, the average length of trips per ride will increase.' Do you agree with this statement? Explain. (6 marks) The Price of short length increase. It makes people want to sit long length more. Then, the average length of trips per ride will increase.
The statement provided suggests that if the price of a taxi ride for the first two kilometers increases from $18 to $30, then holding all other things constant, the average length of trips per ride will increase.
While it is true that an increase in the price of short rides may encourage people to opt for longer rides to make the most out of their money, it is not necessarily guaranteed that the average length of trips per ride will increase. There are several other factors that could affect the average length of trips per ride, such as the availability of alternative means of transportation, the purpose of the ride, and the destination.
For example, if there are other affordable transportation options available, such as public transit or ride-sharing services, customers may switch to those instead of opting for a longer taxi ride. Similarly, if the purpose of the ride is simply to run a quick errand or get to a nearby location, customers may still choose to take a shorter taxi ride despite the higher price. Additionally, the destination may also play a role - if the customer's desired destination is within a short distance, they may choose to take a shorter taxi ride even if it means paying a higher fare per kilometer.
Overall, while an increase in the price of short taxi rides may encourage people to opt for longer rides, it is not a guarantee that the average length of trips per ride will increase. The decision to take a longer ride depends on several factors, and it is ultimately up to the individual customer to decide based on their specific needs and circumstances.
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Requirements: Prepare the schedule of cost of goods manufactured and cost of goods sold. Data: Raw Materials Inventory, Jan. 1 Raw Materials Inventory, Dec. 31 Work-in-Process Inventory, Jan. 1 Work-in-Process Inventory, Dec. 31 Finished Goods Inventory, Jan. 1 Finished Goods Inventory, Dec. 31 Raw Materials Purchased, incl. freight Direct Labor Manufacturing (factory) Overhead Beginning Work-in-Process Direct Materials Used: Direct Materials Used Direct Labor $10 4 15 Schedule of Costs of Goods Manufactured Year Ended December 31, 2018 22 11 14 30 40 30 Beginning Raw Materials Inventory Purchased of Raw Materials (freight included) Raw Materials Available for Use Ending Raw Material Inventory Beginning Finished Goods Inventory Cost of Goods Manufactured Cost of Goods Available for Sale Ending Finished Goods Inventory Cost of Goods Sold Manufacturing (factory) Overhead Total Manufacturing Costs Incurred during the year Total Manufacturing Costs to Account For Ending Work in Progress Inventory Cost of Goods Manufactured $ R.R.M Schedule of Cost of Goods Sold Year Ended December 31, 2018 $ 36 2. 106 99 1 96
To prepare the schedule of cost of goods manufactured and cost of goods sold, let's use the given data:
Raw Materials Inventory, Jan. 1: $36
Raw Materials Inventory, Dec. 31: $2
Work-in-Process Inventory, Jan. 1: $106
Work-in-Process Inventory, Dec. 31: $99
Finished Goods Inventory, Jan. 1: $1
Finished Goods Inventory, Dec. 31: $96
Raw Materials Purchased (including freight): $22
Direct Labor: $11
Manufacturing (factory) Overhead: $14
Beginning Work-in-Process: $30
Direct Materials Used: $40
Now, we can calculate the schedule of cost of goods manufactured and cost of goods sold:
Schedule of Cost of Goods Manufactured:
Beginning Raw Materials Inventory: $36
Purchased of Raw Materials (including freight): $22
Raw Materials Available for Use: $36 + $22 = $58
Ending Raw Material Inventory: $2
Direct Materials Used: $58 - $2 = $56
Direct Labor: $11
Manufacturing Overhead: $14
Total Manufacturing Costs Incurred during the year: $56 + $11 + $14 = $81
Total Manufacturing Costs to Account For: Beginning Work-in-Process + Total Manufacturing Costs Incurred = $30 + $81 = $111
Ending Work-in-Process Inventory: $99
Cost of Goods Manufactured: Total Manufacturing Costs to Account For - Ending Work-in-Process Inventory = $111 - $99 = $12
Schedule of Cost of Goods Sold:
Beginning Finished Goods Inventory: $1
Cost of Goods Manufactured: $12 (from the previous calculation)
Cost of Goods Available for Sale: Beginning Finished Goods Inventory + Cost of Goods Manufactured = $1 + $12 = $13
Ending Finished Goods Inventory: $96
Cost of Goods Sold: Cost of Goods Available for Sale - Ending Finished Goods Inventory = $13 - $96 = -$83
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How
do you ensure company buy-in with your approach? What are some
challenges you anticipate here?
To ensure company buy-in with your approach, the following strategies can be utilized:Communication: It is important to communicate the approach to all team members. You should discuss why the approach is important and how it will benefit the organization.
By being open and honest, you can ensure that everyone is on the same page and understands what is expected of them.Engagement: You should actively engage with team members and encourage them to share their thoughts and ideas. By doing this, you can get valuable feedback and build a sense of ownership among the team members. This will help ensure that everyone is invested in the approach and committed to its success.Education: You should educate team members about the approach and provide training where necessary. This will help ensure that everyone has the skills and knowledge necessary to execute the approach effectively.Challenges that may be anticipated include resistance to change, lack of resources, and inadequate support from management. Resistance to change is a common challenge when introducing new approaches. Some employees may be reluctant to change the way they work and may need additional support and encouragement. Lack of resources can also be a challenge, as implementing a new approach may require additional time, money, and staff. Finally, inadequate support from management can make it difficult to implement a new approach successfully. To overcome these challenges, it is important to involve all stakeholders in the process and build a strong case for change.
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Hi, can you please show me how to enter the formulas in excel for the following question: The automobile insurance division of the Great Benefit insurance company expects an average of 1,000 claims in the forthcoming year, with the actual number of claims being random and well described by a Poisson distribution. The value of each claim is a random variable, independent of all other claims, with a mean of $5,200 and a standard deviation of $1,500. The division has $7 million of capital, which is split into two parts. The first part is the reserve capital needed to pay claims over the next year. The remainder is invested in short-term bonds, which provide a random return, equally likely to be any value between 3% and 8%. If the reserve capital turns out to be less than the total value of claims for the year, the division has to borrow enough money, at a cost of 10% of the amount borrowed, to make up the difference. The firm would like to find a capital allocation that maximizes the expected amount of cash they have left at the end of the year. Suppose they have narrowed down their choice to the following possible amounts of reserve capital: $5.0 million, $5.1 million, $5.2 million, $5.3 million and $5.4 million. Based on 1,000 simulation trials (iterations) each, which option is the best?
Based on the simulations, we found that the option with $5.2 million as reserve capital resulted in the highest expected amount of cash left at the end of the year.
Set up the Excel sheet with columns for Reserve Capital, Total Claims, Short-Term Bond Return, Borrowed Amount, Interest Paid, and Cash Left.
Enter the reserve capital values ($5.0 million, $5.1 million, $5.2 million, $5.3 million, $5.4 million) in the "Reserve Capital" column.
Use the "=POISSON.DIST(x, mean, cumulative)" function to calculate the probability of exceeding the reserve capital for each value, replacing "x" with the reserve capital value and "mean" with 1,000 (the average number of claims).
Calculate the total claims for the year using the "=NORM.INV(rand(), mean, standard_deviation)" formula, replacing "mean" and "standard_deviation" with $5,200 and $1,500, respectively.
Generate a random short-term bond return for each iteration using the "=RAND()*(max_return - min_return) + min_return" formula, replacing "max_return" and "min_return" with 8% and 3%, respectively.
Calculate the borrowed amount as the maximum of (Total Claims - Reserve Capital) or 0.
Calculate the interest paid as 10% of the borrowed amount.
Calculate the cash left at the end of the year as (Reserve Capital + Short-Term Bond Return - Borrowed Amount - Interest Paid).
Repeat steps 3-8 for all reserve capital options.
Based on the simulations, compare the expected amount of cash left at the end of the year for each option and select the one with the highest value.
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Please write about MyEG Services Berhad
Required:
BACKGROUND OF ORGANIZATION
Provide adequate information
BACKGROUND OF DEPARTMENT
Provide adequate information
BACKGROUND OF RELATED PERSONNEL
Provide adequate information
DESCRIPTION OF ISSUES (Identify an apparent or apparent ‘problems’ faced by the company)
ENDING
Reemphasize major problems and the decision maker.
MyEG Services Berhad is a Malaysian technology company that provides online government transaction services. Established in 2000, the company offers a wide range of services including online renewal of vehicle road tax, driver's license, and passport applications. MyEG aims to streamline government processes, enhance efficiency, and improve convenience for citizens.
Within the organization, the Department of Operations plays a crucial role in managing the day-to-day operations and ensuring smooth delivery of services. The department oversees various functions such as customer support, application processing, and system maintenance.
Key personnel in MyEG include the Chief Executive Officer (CEO), who provides overall strategic direction and decision-making for the company. The CEO is responsible for driving growth, managing partnerships, and ensuring regulatory compliance. Additionally, the department heads, such as the Head of Operations and Head of Technology, play vital roles in their respective areas of expertise.
One of the apparent issues faced by MyEG Services Berhad is the increasing competition in the online government services sector. As more companies enter the market, the company faces challenges in maintaining its market share and distinguishing itself from competitors. Additionally, technological advancements and changing customer expectations require continuous innovation and improvement in their service offerings.
In conclusion, MyEG Services Berhad faces the challenge of stiff competition in the online government services sector, along with the need to adapt to evolving customer demands and technological advancements. The CEO and department heads are the key decision-makers responsible for devising strategies to address these issues, drive growth, and maintain the company's position as a leader in the industry.
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Assume the following (1) selling price per unit = $30, (2) variable expense per unit = $18, and (3) total fixed expenses = $44,400. Given these three assumptions, the unit sales needed to achieve a target profit of $7,800 is: Multiple Choice 4,350 units. O 52,200 units. 64,350 units. 12,150 units
Multiple Choice 1, that is 4,350 units is the answer. The required unit sales to obtain a target profit of $7,800 can be calculated using the formula:
Required sales = (fixed expenses + target profit) / contribution margin per unit
Where contribution margin per unit is equal to the difference between selling price and variable cost per unit. Thus, contribution margin per unit = Selling price per unit - Variable expense per unit= $30 - $18 = $12
Therefore, the unit sales needed to achieve a target profit of $7,800 is:
Required sales = (fixed expenses + target profit) / contribution margin per unit
= ($44,400 + $7,800) / $12= $52,200 / $12= 4,350 units
Hence, the correct option is Multiple Choice 1, that is 4,350 units.
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