The stockholders' equity at the end of the year is $55,000.
Stockholders' equity represents the residual interest in the assets of a business after deducting liabilities. To calculate the stockholders' equity at the end of the year, we need to subtract the total liabilities from the total assets.
Total assets at the beginning of the year = $60,000
Total liabilities at the beginning of the year = $40,000
Revenues = $105,000
Expenses = $55,000
Dividends = $10,000
First, we calculate the net income:
Net Income = Revenues - Expenses
Net Income = $105,000 - $55,000
Net Income = $50,000
Next, we calculate the stockholders' equity at the end of the year:
Stockholders' Equity = Total Assets at the beginning of the year + Net Income - Dividends - Total Liabilities at the beginning of the year
Stockholders' Equity = $60,000 + $50,000 - $10,000 - $40,000
Stockholders' Equity = $60,000
Therefore, the stockholders' equity at the end of the year is $55,000.
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A good we demand less of when our income increases. Final good Final service Inferior good Normal good A good or service that is non-excludable and non-rival. private good common resource public good natural monopoly
A normal good is a good for which the demand decreases when our income increases. As our income rises, we tend to spend a smaller proportion of it on normal goods, opting for higher-quality or more luxurious alternatives.
The demand for normal goods is positively correlated with income.On the other hand, an inferior good is a good for which the demand decreases when our income increases. As our income rises, we tend to shift our consumption towards higher-quality substitutes, making inferior goods less desirable. The demand for inferior goods is negatively correlated with income.To summarize, when our income increases, we typically demand fewer inferior goods but more normal goods.
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A parts manufacturer is an acquisition target for your firm.
The target has $51M in debt capital, which has an average interest rate of 8.5%.
They have $80M in equity capital. The target's beta is 1.04, the risk free rate of return is 3%, and the market risk premium is 6%. The tax rate is 40%.
Your firm plans on making changes in the target's operations after the acquisition, so that the target firm's beta will be 0.65.
What is the required return for this acquisition?
The required return for this acquisition is 11.97%.
To calculate the required return, we need to determine the weighted average cost of capital (WACC) for the target firm. The WACC considers the cost of debt and the cost of equity.
First, we calculate the cost of debt by multiplying the average interest rate by (1 - tax rate). In this case, the cost of debt is 8.5% * (1 - 0.40) = 5.1%.
Next, we calculate the cost of equity using the capital asset pricing model (CAPM). The CAPM formula is: Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. Plugging in the values, we get: Cost of Equity = 3% + 1.04 * 6% = 9.24%.
Since the target firm's beta is expected to decrease to 0.65 after the acquisition, we can calculate the new cost of equity using the same formula: Cost of Equity = 3% + 0.65 * 6% = 6.9%.
Now, we calculate the WACC by weighting the cost of debt and the cost of equity by their respective proportions in the capital structure. The weight of debt is $51M / ($51M + $80M) = 0.389 and the weight of equity is $80M / ($51M + $80M) = 0.611.
Finally, we calculate the WACC: WACC = (0.389 * 5.1%) + (0.611 * 6.9%) = 11.97%.
Therefore, the required return for this acquisition is 11.97%.
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The general management of the client have a history of corporate tax avoidance and violating listing regulations. This fraud risk factor is classified as: Select one: a. Incentives / Pressures b. Opportunities c. Attitude / Rationalization
The fraud risk factor of the general management having a history of corporate tax avoidance and violating listing regulations is classified as:
The classification of this fraud risk factor as "Attitude / Rationalization" reflects the underlying mindset and justification of the general management. Their history of corporate tax avoidance and violation of listing regulations indicates a specific attitude or rationalization that enables them to engage in fraudulent activities. This could involve justifying their actions based on personal gain, perceived loopholes in tax laws, or a disregard for ethical and legal standards. Such attitudes and rationalizations contribute to a higher likelihood of fraudulent behavior within the organization.
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You are a consultant who has been hired to evaluate a new product line for Markum Enterprises. The upfront investment required to launch the product line is $6 million. The produ vill generate free cash flow of $0.78 million the first year, and this free cash flow is expected to grow at a rate of 5% per year. Markum has an equity cost of capital of 10.5%, a debt cost of capital of 6.75%, and a tax rate of 35%. Markum maintains a debt-equity ratio of 0.50. What is the NPV of the new product line (including any tax shields from leverage)? b. How much debt will Markum initially take on as a result of launching this product line? . How much of the product line's value is attributable to the present value of interest tax shields?
a. The NPV of the new product line (including any tax shields from leverage) is $7.06 million.
b. Markum will initially take on $2 million in debt to launch the product line.
c. For this case, the tax rate is 35% and the debt is $2.
a. To calculate the NPV of the new product line, we need to discount the free cash flows to their present value. The formula for calculating the present value of cash flows is:
NPV = ∑(FCFt / (1 + r)t)
Where FCFt is the free cash flow in year t, r is the discount rate, and t is the year. In this case, the free cash flows are expected to grow at a rate of 5% per year, so we can use the constant growth formula:
FCFt = FCF0 * [tex](1 + g)^t[/tex]
Where FCF0 is the free cash flow in the first year and g is the growth rate.
Using the given values, the calculation for the NPV of the new product line is as follows:
NPV = (FCF0 / (1 + r)) + (FCF0 * (1 + g) / [tex](1 + r)^2[/tex]) + (FCF0 * [tex](1 + g)^2[/tex] / [tex](1 + r)^3[/tex]) + ...
=[tex]($0.78 million / (1 + 0.105))^1 + ($0.78 million * (1 + 0.05) / (1 + 0.105)^2) + ($0.78 million * (1 + 0.05)^2 / (1 + 0.105)^3) + ...[/tex]
= $0.78 million / 1.105 + $0.78 million * 1.05 / [tex]1.105^2[/tex] + $0.78 million * [tex]1.05^2 / 1.105^3[/tex]+ ...
Evaluating the infinite series using the formula for the sum of an infinite geometric series, we find:
NPV = $0.78 million / 1.105 + $0.78 million * 1.05 / [tex](1.105^2 - 1)[/tex] = $7.06 million
Therefore, the NPV of the new product line, including any tax shields from leverage, is $7.06 million.
b. To determine how much debt Markum will initially take on, we need to calculate the target debt level. The debt-equity ratio is given as 0.50, which means that for every dollar of equity, Markum has $0.50 of debt.
Let D be the amount of debt and E be the amount of equity. We can set up the equation:
D / E = 0.50
D = 0.50 * E
The total investment required to launch the product line is $6 million. Since debt and equity together make up the total investment, we have:
D + E = $6 million
Substituting the value of D from the first equation into the second equation, we get:
0.50 * E + E = $6 million
1.50 * E = $6 million
E = $6 million / 1.50 = $4 million
Therefore, the initial equity investment is $4 million. Substituting this value back into the first equation, we can calculate the initial debt:
D = 0.50 * $4 million = $2 million
Markum will initially take on $2 million in debt to launch the product line.
c. The value of interest tax shields can be calculated by multiplying the present value of the tax shield by the corporate tax rate. The present value of the tax shield can be determined by calculating the tax shield in each year and discounting it to its present value.
The tax shield in each year is given by the equation:
Tax Shield = Debt * Tax Rate
Therefore, the tax rate is 35% and the debt is $2.
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Organisations are complex entities that involve many people and processes. The dynamics
between individuals often play an important role in decision-making. This is also more
apparent in the B2B buying processes as compared to consumer decision-making.
QN: Examine the differences between B2B buying process and consumer decision making. To do
so, please illustrate the differences between a product or service commonly used by organisations
and individual customers. You are expected to embed your answers with a proper
understanding of how the processes are different in terms of their contexts.
Note: Need some help with this question as i am not exactly sure what they are asking for since is a heavy weightage question that adds up to 100 marks. For the bold sentence, can i give an example of a product like a laptop? I am not too sure about the service that is shared by both.
B2B buying involves a more complex and formal process, driven by rational decision-making and involving multiple stakeholders.
In the B2B buying process for a laptop, organizations consider factors such as budget, functionality, compatibility with existing systems, and long-term support. The decision-making involves various stakeholders, including IT departments, finance teams, and decision-makers, who evaluate the product based on specific business needs and objectives. The process may also involve negotiations, contracts, and considerations of after-sales service and warranties.
In contrast, consumer decision-making for a laptop is driven by personal preferences, such as brand reputation, design, features, and affordability. Consumers may also consider factors like portability, entertainment features, and user-friendly interfaces. The decision-making process is more individualistic and less formal compared to B2B buying, often influenced by marketing campaigns, reviews, and recommendations from friends or family.
Overall, the B2B buying process is characterized by a more structured and analytical approach, focusing on meeting organizational requirements, while consumer decision-making is more subjective and driven by individual preferences and emotions.
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Wear \& Care Sdn Bhd (Wear \& Care) is an apparel company that designs adaptive clothing. Adaptive clothing is explicitly made for people with difficulties in dressing themselves due to age, disability, or general lack of mobility. The company was founded by Encik Yahya in 2007 with a shoestring budget. The business started small by providing comfortable adaptive clothing for the elderly, using deadstock fabrics that would otherwise go to waste. Encouraged by the success of its existing garment, the adaptive clothing is extended to people of any age with a temporary or permanent disability. Over the years, Wear \& Care has expanded its operation by offering a wider range of adaptive apparel such as tops, dresses, pants, shirts, socks and patches, swimwear, and health wear. In 2019, Wear \& Care's garments were regarded as the country's best adaptive apparel.
Encik Yahya is considering a new business venture. He is keen on embarking upon a venture in a lightweight airbag jacket, catered for any individuals susceptible to fall-related injuries. The jacket offers comfort to the elderly and people with disability. It tracks the user's centre of gravity by using microscopic sensors. When the sensor detects a devastating fall, the airbag will inflate in less than a half-second, which ultimately reduces the chance of serious injury. Clients and carers have constantly requested a similar jacket from Encik Yahya. Based on his previous engagement with local hospitals, he noticed that hip and spinal injuries are common among the elderly and contributed to the highest costs of all the fall-induced fractures. The Wear \& Care research team also discovered that falls are the second leading cause of unintentional deaths worldwide and adults older than 60 years of age suffer the greatest number of fatal falls. The statistic for senior citizens is gradually increasing in Malaysia. There are 2.9 million people aged 60 and above with one in six people experiencing at least one fall over a 12-month period. The current airbag jackets are well accepted in Japan. Even though these jackets have been commercialised by the Japanese company in some Malaysian pharmacies, Encik Yahya discovered that the existing jackets were sold with extremely high markups and limited sizes. Since customers expected that such merchandise should be tried-on and tested in stores, it is difficult for retailers to use an online ordering system. Encik Yahya saw this as an opportunity and quickly developed a simple business model. It aims to develop a similar lightweight airbag jacket using heat-resistant materials, provides size charts for online orders, and offers products at an attractive price with free delivery. Wear \& Care also lessens the customers' concerns about ordering online by offering a 90-day guarantee and free returns. Similarly, an in-store appointment can be scheduled for those who prefer an instore experience. Encik Yahya strongly believes that the new project is attainable and realistically achievable since the company has skillful manpower and the required resources.
a. Discuss how Encik Yahya can recognize any business opportunity in determining whether the idea is strong enough to become a new business venture.
b. Elaborate on the three (3) strengths and three (3) weaknesses of the entry strategy chosen by Wear \& Care for its new business venture.
c. Suggest four (4) human resource management practices that Wear \& Care can use to capture value from innovation.
Encik Yahya can recognize the strength of a business opportunity by conducting market and competitive analysis, assessing feasibility and financial viability, and performing a SWOT analysis.
a. Recognizing a business opportunity requires a systematic approach to evaluating the idea's viability and potential for success. Encik Yahya can use the following steps to assess the strength of the idea:
1. Market Analysis: Conduct thorough market research to identify the target audience, their needs, and existing solutions in the market. Evaluate the size of the target market and its growth potential.
2. Competitive Analysis: Assess the competition in the market, including existing airbag jacket manufacturers and their market share. Identify their strengths, weaknesses, pricing strategies, and distribution channels.
3. Feasibility Study: Evaluate the technical feasibility of developing a lightweight airbag jacket with microscopic sensors. Consider the cost of production, availability of resources, and any regulatory requirements or certifications needed for the product.
4. Financial Analysis: Assess the financial viability of the new venture by estimating the initial investment required, projected revenues, and potential profitability. Consider factors such as pricing, production costs, marketing expenses, and expected sales volume.
5. SWOT Analysis: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to identify internal strengths that can be leveraged, weaknesses that need to be addressed, potential opportunities in the market, and external threats that may impact the business.
b. Strengths of Wear & Care's entry strategy for the new business venture:
1. Experience in Adaptive Clothing: Wear & Care has established expertise and a strong reputation in designing and producing adaptive clothing. This experience can be leveraged to develop the lightweight airbag jacket.
2. Existing Customer Base: The company already has a loyal customer base who trust the quality and functionality of their products.
3. Cost-Effective Pricing and Convenient Ordering: By offering competitive pricing, size charts for online orders, free delivery, and a 90-day guarantee, Wear & Care addresses the challenges faced by customers when purchasing similar jackets from competitors.
Weaknesses of Wear & Care's entry strategy:
1. Limited Retail Presence: The company's reliance on online ordering and limited in-store appointments may limit the reach and visibility of the new product.
2. Potential Competition: While the existing airbag jackets sold in pharmacies have high markups and limited sizes, there is a possibility of new competitors entering the market with similar offerings at competitive prices.
3. Technical Challenges: Developing a lightweight airbag jacket with microscopic sensors requires advanced technical capabilities.
c. Human resource management practices that Wear & Care can use to capture value from innovation:
1. Talent Acquisition and Retention: Identify and attract individuals with expertise in wearable technology, product development, and sensor integration.
2. Cross-functional Collaboration: Foster collaboration among different teams, such as designers, engineers, and marketing professionals, to ensure a holistic approach to product development. Encourage knowledge sharing, idea generation, and cross-pollination of skills.
3. Innovation Culture: Cultivate a culture of innovation by encouraging employees to propose new ideas, providing resources for experimentation, and recognizing and rewarding innovative contributions.
4. Agile Project Management: Implement agile project management methodologies to facilitate efficient and iterative product development. Emphasize flexibility, adaptability, and quick decision-making to respond to market needs and incorporate feedback during the development process.
Encik Yahya can recognize the strength of a business opportunity by conducting market and competitive analysis, assessing feasibility and financial viability, and performing a SWOT analysis. Wear & Care's entry strategy for the new business venture capitalizes on its experience in adaptive clothing, existing customer base, cost-effective pricing, and convenient ordering options. However, there are weaknesses related to limited retail presence, potential competition, and technical challenges.
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Please review the following hedge fund performances. Summarize your findings / key takeaways in terms of following. Please briefly define the following terms and cite specific ratios to support your statements.
Absolute Return and Alpha
Share Ratio
Treynor Ratio
Correlations with the market index
Hedge Fund Tracking errors
Market Risk Beta
The review of hedge fund performances reveals key findings related to absolute return, alpha, Sharpe ratio, Treynor ratio, correlations with the market index, hedge fund tracking errors, and market risk beta.
Absolute return refers to the total return generated by a hedge fund without considering a benchmark. It reflects the fund's performance in generating profits regardless of market conditions.
Alpha, on the other hand, measures the excess return of a fund compared to its expected return based on its level of risk.
A positive alpha indicates outperformance.
The Sharpe ratio measures the risk-adjusted return of a fund by considering the excess return earned per unit of risk. Higher Sharpe ratios indicate better risk-adjusted performance.
The Treynor ratio, similar to the Sharpe ratio, assesses risk-adjusted returns by accounting for the systematic risk of the fund.
Correlations with the market index determine the degree to which a hedge fund's returns move in line with the overall market.
Low correlations indicate that the fund's performance is less influenced by market movements.
Hedge fund tracking errors measure the deviation of a fund's returns from its benchmark index.
Lower tracking errors imply closer tracking to the benchmark.
Market risk beta represents the sensitivity of a hedge fund's returns to market movements.
A beta of 1 suggests the fund's returns move in line with the market, while a beta above or below 1 indicates higher or lower volatility, respectively.
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Promoting the organization's products or services is a responsibility of the ________ function.
A) finance and accounting
B) human resources
C) manufacturing and production
D) sales and marketing
Promoting the organization's products or services is a responsibility of the sales and marketing function. so, correct option is D) sales and marketing.
Promoting the organization's products or services is a responsibility of the sales and marketing function. Sales and marketing teams are responsible for developing strategies and tactics to promote and sell the organization's products or services.
They engage in activities such as market research, advertising, public relations, brand management, sales planning, customer relationship management, and sales force management.
Marketing focuses on understanding customer needs and preferences, conducting market analysis, developing marketing campaigns, and creating a favorable brand image. Sales, on the other hand, involves direct interaction with customers, building relationships, and closing deals.
The sales and marketing function plays a vital role in generating revenue and driving business growth. Their efforts aim to increase customer awareness, create demand, and ultimately convert leads into sales.
By effectively promoting the organization's products or services, sales and marketing contribute to the company's success and market competitiveness.
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The following transaction relates to ABC I to for the month of lune 2020: June 1 balance bought down (bal b/d) 15 units (a) $4.00each June 3 bought 20 units (is $6.00 each June 7 sold 20 units (10 each June 14 sold 4 units (12 each June 18 bought 24 units (a) 8 each June 21 sold 20 units (a) $15 June 28 Sold 5 units (c) 18 each Required: Prepared the Stock valuation using the FIFO, LIFO, AVCO and also the Income Statement for each
The stock valuation and income statement can be prepared using the FIFO, LIFO, and AVCO methods. The calculations will determine the value of ending inventory and the cost of goods sold under each method.
FIFO (First-In-First-Out) assumes that the items purchased first are sold first. According to the given transactions, the ending inventory under FIFO will consist of the most recent purchases, while the cost of goods sold will be based on the earlier purchases.
LIFO (Last-In-First-Out) assumes that the items purchased most recently are sold first. Using LIFO, the ending inventory will consist of the earliest purchases, and the cost of goods sold will be based on the most recent purchases.
AVCO (Weighted Average Cost) takes into account the average cost of all units available for sale. The ending inventory and cost of goods sold under AVCO are calculated by dividing the total cost of units available for sale by the total number of units.
To prepare the income statement, the cost of goods sold for each method is subtracted from the total sales amount. The difference represents the gross profit. The income statement will also include any other operating expenses and taxes to determine the net profit.
By calculating the stock valuation and preparing the income statement using the FIFO, LIFO, and AVCO methods, the company can analyze the impact of different inventory valuation methods on its financial results. Each method may result in different values for ending inventory, cost of goods sold, and ultimately, the company's profitability.
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Kegler Bowling buys scorekeeping equipment with an invoice cost of $180,000. The electrical work required for the installation costs $18.900. Additional costs are $3,780 for delivery and $12,970 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,745. What is the total recorded cost of the scorekeeping equipment?
Total recorded cost = $217,395. The total recorded cost of the scorekeeping equipment is $217,395.
To calculate the total recorded cost of the scorekeeping equipment, we need to sum up all the costs associated with its purchase and installation.
Given:
Invoice cost of the equipment = $180,000
Electrical work cost = $18,900
Delivery cost = $3,780
Sales tax cost = $12,970
Repair cost = $1,745
Total recorded cost = Invoice cost + Electrical work cost + Delivery cost + Sales tax cost + Repair cost
Total recorded cost = $180,000 + $18,900 + $3,780 + $12,970 + $1,745
Total recorded cost = $217,395
Therefore, the total recorded cost of the scorekeeping equipment is $217,395.
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Williams & Sons last year reported sales of $31 million, cost of goods sold (COGS) of $24 million, and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.
The new inventory system would free up $1 million in cash for Williams & Sons. To determine the amount of cash freed up by the new inventory system, we need to calculate the difference in inventory levels between the old and new systems.
Given that the company maintains the same level of sales and cost of goods sold (COGS), any reduction in inventory would result in cash being freed up.First, we calculate the initial inventory level using the inventory turnover ratio of 4. The formula for inventory turnover ratio is COGS divided by the average inventory:
Inventory turnover ratio = COGS / Average Inventory
Rearranging the formula, we can calculate the average inventory:
Average Inventory = COGS / Inventory turnover ratio
Using the initial inventory turnover ratio of 4 and COGS of $20 million, we find the initial average inventory to be $5 million ($20 million / 4).
Next, we calculate the new inventory level using the increased inventory turnover ratio of 5. Using the same formula, we find the new average inventory to be $4 million ($20 million / 5).
The difference between the initial and new average inventory levels represents the amount of cash freed up:
Cash Freed Up = Initial Average Inventory - New Average Inventory
= $5 million - $4 million
= $1 million
CORRECT QUESTION :
Williams & Sons last year reported sales of $24 million, cost...
Williams & Sons last year reported sales of $24 million, cost of goods sold (COGS) of $20 million, and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.
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All went well. The business computer was delivered and installed in December. Then there was good news and bad news. The good news was that Jack’s product solution perfectly met the customer’s current needs and the customer was delighted. Then the bad news came. On the first business day of January, the customer called Jack, told him how happy he was with the product, and informed Jack that he wished to move up his anticipated growth schedule and immediately add additional workstations (displays/keyboards and printers). At this point, Jack panicked knowing that the product he had sold the customer was at its maximum capacity and could not accommodate the customer’s growth plan, but thinking he had one or two years to address the additional growth with another product solution. The customer expects Jack to set up an appointment as soon as possible to place an order for the additional workstations.
The Issue
What should Jack do? Jack realized he could be in trouble with both the customer and with his company. The customer would probable realize the company had purchased a business system that could not expand to keep up as transaction volumes increased the business grew rapidly over the next few years. Jack’s company identified such sales behavior as violating the company’s policies and grounds for dismissal.
By acting swiftly, communicating effectively, and actively seeking alternative solutions, Jack can navigate this challenging situation and work towards a resolution that satisfies both the customer and his company.
In this situation, Jack needs to handle the issue with transparency and take appropriate actions to address the customer's needs while mitigating any potential repercussions from his company. The first step for Jack should be to communicate openly and honestly with the customer. He should explain the limitations of the current product and apologize for any misunderstanding or inconvenience caused.
Next, Jack should explore alternative solutions to meet the customer's immediate demands. This could involve researching compatible products that can accommodate the customer's growth plans or seeking assistance from his company's technical team to find a suitable solution. By proactively seeking alternatives and presenting them to the customer, Jack can demonstrate his commitment to finding a resolution.
Simultaneously, Jack needs to inform his company about the situation promptly. It is important to be transparent with his superiors and provide a clear account of the circumstances. By taking responsibility for the oversight and showing a proactive approach in finding a solution, Jack can potentially minimize the consequences he may face within the company.
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You are manager of a firm with the following short-run production function: = 1/3. Fixed costs are R160
000, the wage rate is .
a) Graphically illustrate and explain the marginal cost, average variable cost and average total cost curves
of your firm, given the information above.
(10)
b) Based on your answer in a), graphically illustrate and explain the supply curve of the firm.
(10)
c) Suppose the firm faces the following demand curve: P= 14000 ―100, graphically illustrate and
explain the market equilibrium faced by the firm.
(10)
d) At what point would you set the production target and price for the firm? Graphically illustrate how far, in
terms of price and output, would the firm deviate from economic efficiency.
(10)
e) Suppose you intend to increase your revenue. Would you cut prices, given the information above?
(10)
To graphically illustrate and explain the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves, we need to understand the formulas and relationships between these cost curves.
Cost (MC): MC represents the additional cost incurred by producing one more unit of output. Mathematically, MC is calculated as the change in total cost (TC) divided by the change in quantity (Q): MC = ΔTC/ΔQ. In the short run, fixed costs are constant, so MC reflects the change in variable costs only.
Average Variable Cost (AVC): AVC is calculated as variable cost (VC) divided by the quantity (Q): AVC = VC/Q. AVC represents the average variable cost per unit of output.
d) To determine the production target and price for the firm, we need to consider economic efficiency. Economic efficiency occurs when the firm produces at the output level where marginal cost (MC) equals marginal revenue (MR). This output level maximizes the firm's profit.
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Describe the elements of branding a cool mist humidifier by brand name, sponsor, and brand strategy.
Provide a packing plan for a cool mist humidifier.
Describe the warranty or copy right involved with a cool mist humidifier.
What are two (2) different distribution models for getting a cool mist humidifier from the producer to consumer? Retail, wholesaler, and/or Agent/broker channels
Whag target audience would be best for a cool mist humidifier and why?
What distribution model would be most effective for the cool mist humidifier and why?
Branding Elements for a Cool Mist Humidifier:
1) Brand Name:
The brand name should reflect the qualities and positioning of the cool mist humidifier. It should be catchy, memorable, and relevant to the product. For example, "AirSense" or "MistPro."
2) Sponsor:
The sponsor could be a company that specializes in home appliances, wellness products, or air quality solutions. They should have a strong reputation and expertise in the industry.
3) Brand Strategy:
The brand strategy should focus on positioning the cool mist humidifier as a high-quality, reliable, and innovative product that improves indoor air quality and enhances the overall well-being of the consumers. The strategy could emphasize features such as adjustable mist levels, silent operation, sleek design, and easy maintenance. Marketing messages should highlight the benefits of using a cool mist humidifier, such as relieving dry skin, alleviating congestion, and promoting better sleep.
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Provide an example of how Boeing could use each of the following:
(i) Business-to-employee (B2E) e-commerce
(ii) Government-to-business e-commerce (G2B EC)
(iii) Reverse auction
(iv) Geographic positioning system (GPS)
(i) Boeing could use Business-to-employee (B2E) e-commerce to streamline internal processes and enhance employee engagement. For example, they could develop an online portal where employees can access and manage their benefits, view company policies, and participate in training programs.
This would improve the efficiency of HR operations and provide employees with easy access to relevant information, fostering a more productive work environment.
(ii) Government-to-business e-commerce (G2B EC) could be utilized by Boeing to facilitate interactions with government entities. For instance, they could develop an online platform where they can submit bids for government contracts, securely exchange documents, and comply with regulatory requirements. This would simplify the procurement process, reduce paperwork, and ensure transparency in government-business interactions.
(iii) Reverse auction could be employed by Boeing to optimize their procurement activities. They can invite multiple suppliers to bid on a specific project or product, and the supplier offering the lowest price wins the contract. This approach helps Boeing secure the best value for their purchases, promotes competition among suppliers, and can lead to cost savings.
(iv) Boeing can utilize the Geographic Positioning System (GPS) to enhance their aircraft navigation and tracking systems. GPS can provide accurate location data, enabling precise flight routes, improved fuel efficiency, and enhanced safety measures. Additionally, GPS can assist in tracking the movement of aircraft, facilitating logistics, and optimizing maintenance schedules. By incorporating GPS technology into their operations, Boeing can enhance the performance and reliability of their aircraft, ensuring a superior flying experience for their customers.
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In an isolated town, there are two distinct markets for cars. Buyers will pay
up to 10,000 for a high-quality car or 6,000 for a low-quality car. There are 100
high-quality cars for sale, and the sellers has a minimum accept price of 9,000.
There are 100 low-quality cars for sale, and the sellers has a minimum accept
price of 5,000.
(a) If there is perfect information, how many high-quality and how many
low-quality cars will be sold?
(b) Suppose that the quality of a car is known to the seller, but not to the
buyer. What price will prevail in the marketplace if buyers correctly esti-
mate the chance of acquiring a low-quality car at 50%? What happens to
the number of high-quality cars for sale at that price?
(c) After sellers make all adjustments, what will be the equilibrium price of
cars be? What proportion of those cars will be high-quality cars?
(a) If there is perfect information, 100 high-quality cars and 100 low-quality cars will be sold.
(b) If buyers correctly estimate a 50% chance of acquiring a low-quality car, the prevailing price will be $3,000, and no high-quality cars will be sold at that price.
(c) After sellers make all adjustments, the equilibrium price of cars will be $3,000, and the proportion of high-quality cars will be zero.
(a) If there is perfect information, all high-quality cars will be sold at a price of $10,000 each, and all low-quality cars will be sold at a price of $6,000 each.
(b) If the quality of the cars is known only to the sellers and buyers estimate a 50% chance of acquiring a low-quality car, the price that will prevail in the marketplace is determined by the buyers' willingness to pay.
Since buyers believe there is a 50% chance of acquiring a low-quality car, they will be willing to pay an expected value based on that probability. The expected value of a low-quality car is (0.5 * $6,000) = $3,000.
Buyers will not be willing to pay more than the expected value for a car, so the prevailing price will be $3,000. At this price, buyers are indifferent between buying a car or not, as the expected value of a low-quality car matches the price.
Since the sellers of high-quality cars have a minimum accept price of $9,000, there will be no high-quality cars sold in this market. All low-quality cars will be sold at a price of $3,000.
(c) In the equilibrium state, the price of cars will be determined by the intersection of the supply and demand curves. The equilibrium price is the point at which the quantity demanded equals the quantity supplied.
In this case, all low-quality cars will be sold at a price of $3,000. There will be no high-quality cars sold in the marketplace due to the sellers' minimum accept price of $9,000, which is higher than the price buyers are willing to pay.
Therefore, the equilibrium price of cars will be $3,000, and the proportion of cars that will be high-quality cars is zero.
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Which macroeconomic indicators are of most interest to portfolio
managers?
Portfolio managers closely monitor several macroeconomic indicators to make informed investment decisions. The most important macroeconomic indicators for portfolio managers include GDP growth, inflation, interest rates, employment data, and fiscal and monetary policies.
Gross Domestic Product (GDP) growth provides insights into the overall health and performance of an economy. Portfolio managers analyze GDP growth to assess the country's economic activity and identify potential investment opportunities. High GDP growth rates often indicate a favorable investment climate.
Inflation is another critical indicator as it affects the purchasing power of consumers and the profitability of businesses. Portfolio managers carefully monitor inflation rates to gauge the impact on various asset classes and adjust their investment strategies accordingly. Rising inflation may lead to higher interest rates, impacting bond prices and equity valuations.
Interest rates play a crucial role in investment decisions. Portfolio managers keep a close eye on central bank policies and changes in interest rates as they directly impact borrowing costs, bond yields, and the attractiveness of different investment options. Interest rate changes can influence asset prices and portfolio allocations.
Employment data, such as the unemployment rate and job growth numbers, provide valuable insights into the labor market and consumer spending power. Strong employment data often indicates a robust economy, higher consumer confidence, and increased potential for investment opportunities.
Lastly, portfolio managers pay attention to fiscal and monetary policies set by governments and central banks. Fiscal policies, such as tax reforms and government spending, can influence business profitability and investment climate. Monetary policies, including money supply, interest rate decisions, and quantitative easing, have a direct impact on financial markets and investment returns.
By closely monitoring these macroeconomic indicators, portfolio managers can assess the overall economic environment, identify trends, and make informed investment decisions to optimize portfolio performance and manage risk effectively.
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A company in the Eurozone, Tornado Supercar Inc. will pay CNY 704,000 to its supplier in China. The bid-ask rate for a euro is USD 0.9374-1.0284 and the bid-ask rate for a Chinese Yuan is USD 1.693-1.8411. Find the amount Tornado has to pay to its Chinese supplier in euros. a. 427,639.46 b. 1,382,690.85 c. 1,271,465.76 d. 358,443.10
The amount Tornado Supercar Inc. has to pay to its Chinese supplier in euros is 427,639.46 euros (option a).
To find the amount in euros, we need to convert CNY to USD and then USD to euros.
Step 1: Convert CNY to USD
CNY 704,000 * (1 USD / 1.8411 CNY) = USD 382,433.51
Step 2: Convert USD to euros
USD 382,433.51 * (1 euro / 1.0284 USD) = 427,639.46 euros
Therefore, Tornado Supercar Inc. has to pay 427,639.46 euros to its Chinese supplier.
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According to IFRS, an operating segment is a reportable segment if
a the absolute amount of its operating profit or loss is 10% or more of the greater, in absolute amount, of (a) the combined reported operating profit of all operating segments that incurred a loss, of (b) the combined reported profit of all operating segments that did report a profit.
b its operating profit is 10% or more of the combined operating profit of profitable segments only.
c the absolute amount of its reported profit or loss is 10% or more of the greater, in absolute amount, of (a) the combined reported operating profit of all operating segments that did not incur a loss, or (b) the combined reported loss of all operating segments that did report a loss.
d its operating loss is 10% or more of
According to IFRS (International Financial Reporting Standards), an operating segment is considered a reportable segment if its operating profit or loss meets certain criteria. The correct answer is option c: the absolute amount of its reported profit or loss is 10% or more of the greater, in absolute amount, of (a) the combined reported operating profit of all operating segments that did not incur a loss, or (b) the combined reported loss of all operating segments that did report a loss.
In other words, for an operating segment to be deemed reportable, its reported profit or loss must be significant in comparison to the total reported profits or losses of other segments. The threshold is set at 10% or more of the greater amount between (a) the combined reported operating profit of all segments without losses or (b) the combined reported loss of all segments with losses.
This criterion ensures that significant segments are identified and reported separately, providing users of financial statements with relevant information about the performance and risks associated with individual operating segments.
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Contribution Margin Ratio, Break.Even Sales Revenue, 5 ales Revenue for Target Profit Schylar Pharmaceuticals, Inci, plans to self 100,000 units of antibiotic at an average price of $16 each in the coming year. Total variable costs equal $480,000. Total fixed costs equal 57,400,000. Required 1. What is the contribution margin per unit? Round your answer to the nearest cent. 3 What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) 2. Calculate the sales revenue needed to break even, Round your answer to the nearest dollar. 3 3. Calculate the sales revenue needed to achieve a target profit of $240,000. Round your answer to the nearest dollar. 3 4. What if the average price per unit increased to $17.50 ? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. 3 b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar. d. Sales revenue needed to achieve a target profit of $240,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
1. Contribution margin per unit: $4.80
2. Contribution margin ratio: 30%
3. Sales revenue needed to break even: $19,133,333
4. Sales revenue needed to achieve a target profit of $240,000: $61,600,000
5. If the average price per unit increased to $17.50:
a. Contribution margin per unit: $5.50
b. Contribution margin ratio: 34.37%
c. Sales revenue needed to break even: $16,754,286
d. Sales revenue needed to achieve a target profit of $240,000: $54,003,273
1. The contribution margin per unit is calculated by subtracting the variable cost per unit from the average price per unit. In this case, it is $16 - ($480,000 / 100,000) = $4.80 per unit.
2. The contribution margin ratio is the contribution margin per unit divided by the average price per unit. It is ($4.80 / $16) * 100 = 30%.
3. To calculate the sales revenue needed to break even, divide the total fixed costs by the contribution margin ratio. It is $57,400,000 / 0.3 = $19,133,333.
4. The sales revenue needed to achieve a target profit of $240,000 is calculated by adding the target profit to the total fixed costs and then dividing it by the contribution margin ratio. It is ($240,000 + $57,400,000) / 0.3 = $61,600,000.
5. If the average price per unit increased to $17.50, the calculations change accordingly:
a. The new contribution margin per unit is $17.50 - ($480,000 / 100,000) = $5.50 per unit.
b. The new contribution margin ratio is ($5.50 / $17.50) * 100 = 34.37%.
c. The sales revenue needed to break even is $57,400,000 / 0.3437 = $16,754,286.
d. The sales revenue needed to achieve a target profit of $240,000 is ($240,000 + $57,400,000) / 0.3437 = $54,003,273.
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Consider the following Cournot duopoly. Both firms produce a homogenous good. The demand function is Q=25−P, where Q is the total quantity produced. Firm 1's marginal cost is c 1 =3. Firm 2's marginal cost of production is c 2 H =4 with probability 0.3 and c 2 L =2 with probability 0.7. Firm 2 knows its own cost function and firm 1's cost function. Firm 1 knows its own cost function and the probability distribution of firm 2's marginal cost. In a Bayesan NE, the strategy of firm 2 is: 165/30 7.5 (6,8) (6.9,7.9)
In a Bayesian Nash equilibrium, the strategy of Firm 2 is to produce a quantity of 6 with a probability of 0.3 and a quantity of 6.9 with a probability of 0.7.
In the given Cournot duopoly scenario, the strategy of Firm 2 in a Bayesian Nash equilibrium (BNE) is represented as (6,8) with a probability of 0.3 and (6.9,7.9) with a probability of 0.7.
This notation indicates the quantity Firm 2 will produce in response to the quantity produced by Firm 1.
To elaborate further, when Firm 1 chooses its quantity, Firm 2 takes into account its own cost function and the probability distribution of Firm 2's marginal cost.
With a probability of 0.3, Firm 2's marginal cost is c2H = 4, and it produces a quantity of 6 while Firm 1 produces a quantity of 8. With a probability of 0.7, Firm 2's marginal cost is c2L = 2, and it produces a quantity of 6.9 while Firm 1 produces a quantity of 7.9.
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The Seller’s Property Information Statement has several sections, each of which serves a special purpose. Which of the following typically is not one of the sections on the statement?
a. Information about any existing loans
b. Property records, such has building permits
c. Information about any existing leases
d. Affidavit of Non-foreign Status
d. Affidavit of Non-foreign Status is typically not one of the sections on the Seller's Property Information Statement.
The Seller's Property Information Statement generally includes sections related to the property itself, such as information about existing loans, property records, and existing leases. The Affidavit of Non-foreign Status is a separate document that may be required in certain real estate transactions to confirm the seller's status as a non-foreign individual or entity for tax purposes, but it is not typically included as a section in the Seller's Property Information Statement.
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Give a complete planning on following statement:
Suppose you have 1 million dollars and you have to choose any business to start(choose one). Moreover, you have to take five major decisions including accounting, finance and production to run it smoothly. And you also have to show your business running stable and revenue generating.
Business Choice: I would choose to start an e-commerce platform.
1. Business Choice: Start an e-commerce platform that sells a wide range of products.
2. Accounting Decision: Implement an automated accounting system to track sales, expenses, and inventory accurately.
3. Finance Decision: Secure funding from investors or consider taking a loan to cover initial expenses, such as website development, inventory, and marketing.
4. Production Decision: Establish partnerships with reliable suppliers and manufacturers to ensure a steady supply of quality products.
5. Marketing Decision: Develop a comprehensive marketing strategy to attract customers, including search engine optimization, social media marketing, and targeted advertising campaigns.
By starting an e-commerce platform, I can leverage the growing trend of online shopping and reach a wider audience. An automated accounting system will help me manage finances efficiently, while securing funding will provide the necessary resources. Partnering with reliable suppliers and manufacturers will ensure a smooth production process. Finally, implementing a robust marketing strategy will generate awareness and drive revenue. Overall, these decisions will contribute to a stable and revenue-generating business.
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If you were an economist, what trade policy would you suggest
the government to protect your coffee farmers by propping up
prices?
As an economist, to protect coffee farmers and prop up prices, I would suggest implementing a combination of trade policies. One approach would be to impose import tariffs on coffee products from foreign producers. This would increase the cost of imported coffee, making domestically produced coffee relatively more competitive in the market. Additionally, the government could provide subsidies or direct financial support to coffee farmers to offset production costs and stabilize prices. These measures aim to create a more level playing field for domestic coffee producers and ensure their sustainability in the face of global market fluctuations.
Import tariffs can act as a protective barrier, reducing the competition faced by domestic coffee farmers from lower-cost foreign producers. By increasing the price of imported coffee, it becomes more expensive for consumers, making domestically grown coffee comparatively more attractive. This stimulates demand for locally produced coffee, helping to maintain higher prices for farmers. However, it is essential to carefully consider the potential negative consequences of tariffs, such as possible retaliation from trading partners and increased costs for consumers.
Furthermore, providing subsidies or direct financial support to coffee farmers can help alleviate the challenges they face due to market volatility. These measures can assist in covering production costs, enabling farmers to withstand periods of low prices and ensuring their economic viability. However, it's important to design these support programs efficiently to avoid distorting market forces and encourage long-term competitiveness and sustainability in the coffee industry.
Overall, a combination of import tariffs and financial support measures can be employed to protect coffee farmers and stabilize prices. It is crucial to strike a balance between supporting domestic producers and maintaining an open and fair global trade environment.
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Which of the following is an advantage of the first-two-digits test? O It narrows the range of transactions to be investigated. O It identifies round numbers which are red flags for invented numbers. O It indicates instances where digits have been transposed to make the number larger. O It flags numbers that are repeated frequently as possible fictitious transactions.
The advantage of the first-two-digits test is that it flags numbers that are repeated frequently as possible fictitious transactions. This test involves analyzing the first two digits of numerical data.
such as transaction amounts or invoice numbers, to identify patterns or anomalies. By examining the first two digits, the test helps detect irregularities or suspicious patterns that may indicate fictitious transactions. For example, if certain numbers appear repeatedly as the initial two digits, it could suggest fraudulent activity, such as the creation of false transactions or the manipulation of data. This test is particularly useful in identifying round numbers, which are often red flags for invented numbers. It can also indicate instances where digits have been transposed to make the number larger, potentially pointing to attempts to deceive or inflate figures. In summary, the first-two-digits test's advantage lies in its ability to flag frequent number repetitions as possible fictitious transactions, aiding in the detection of fraudulent activities and irregular patterns in numerical data.
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Where will you be?
ANALYSIS: What are the one or two areas of continuous improvement and how do you intend to work on those?
SYNTHESIS: Referring to the course textbook(s), what leadership traits might you wish to develop (focusing on those you have already identified or those you wish to gain)?
My continuous areas of improvement are communication skills and time management.
Improving my communication skills is crucial because effective communication is the cornerstone of successful leadership. By honing my ability to express ideas clearly and listen actively, I can enhance collaboration, resolve conflicts, and inspire others. Additionally, effective communication fosters trust and transparency, enabling me to build strong relationships with colleagues, stakeholders, and team members.
To work on this area, I intend to engage in various activities. First, I will actively seek feedback from peers, mentors, and superiors to identify areas for improvement and implement their suggestions. I will also dedicate time to reading books and attending workshops on effective communication techniques, such as active listening, nonverbal communication, and persuasive speaking.
Additionally, I will practice my communication skills in real-life situations, such as leading team meetings, giving presentations, and engaging in constructive discussions.
In terms of time management, enhancing this skill will enable me to optimize productivity, meet deadlines, and effectively balance multiple responsibilities. I plan to employ strategies such as prioritizing tasks, setting realistic goals, and delegating when necessary. By leveraging tools like task management apps and calendar systems, I can better organize my workload and allocate time appropriately.
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A hedge fund manager decided to implement a 3-month carry trade strategy using currencies Z and Y. At the inception of the trading strategy, the 3-month interest rates of currencies Z and Y were 4% and 6%, respectively, and the exchange rate between currency Z and Y was 3 (1 unit of Y buys 3 units of Z). At the end of the 3-month period, the exchange rate between currency Z and Y was 2.5. The amount invested by the hedge fund manager in this strategy was 10,000,000 in terms of currency Z a) What do you expect to be the design of the carry trade strategy that this hedge fund manager has implemented? Explain your answer.
A carry trade is a strategy that involves borrowing money in a currency with a low-interest rate and then investing that borrowed money in another currency with a higher interest rate.
This strategy is implemented to make a profit off the interest rate differential, as well as any changes in the exchange rate between the two currencies. Thus, a hedge fund manager decided to implement a 3-month carry trade strategy using currencies Z and Y.
At the inception of the trading strategy, the 3-month interest rates of currencies Z and Y were 4% and 6%, respectively, and the exchange rate between currency Z and Y was 3 (1 unit of Y buys 3 units of Z).
This means that the hedge fund manager would have borrowed currency Z at a 4% interest rate and then invested it in currency Y at a 6% interest rate.
At the end of the 3-month period, the exchange rate between currency Z and Y was 2.5. This means that 1 unit of Y could now buy 2.5 units of Z. Since the hedge fund manager had invested in currency Y, they would receive a higher amount of currency Z when they convert their investment back into the original currency.
The amount invested by the hedge fund manager in this strategy was 10,000,000 in terms of currency Z.
Therefore, the hedge fund manager would have made a profit by implementing this carry trade strategy. They would have borrowed currency Z at a lower interest rate of 4% and invested it in currency Y at a higher interest rate of 6%.
Moreover, due to the change in the exchange rate, they would have received more units of currency Z when they converted their investment back into the original currency.
Thus, the design of the carry trade strategy that this hedge fund manager has implemented is to borrow currency with a lower interest rate and invest it in currency with a higher interest rate while also benefiting from changes in the exchange rate between the two currencies.
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Required Prompt (100 words): What can a company do to position itself as a captivating employer in order to attract the talent needed to achieve the organization's goals?
To position itself as a captivating employer, a company can create a strong employer brand that highlights its unique culture, values, and opportunities for growth.
This can be achieved through effective employer branding strategies, such as showcasing a positive work environment, offering competitive compensation and benefits, providing opportunities for career advancement, and fostering a diverse and inclusive workplace. Additionally, the company can actively engage with potential candidates through various channels, such as social media, networking events, and career fairs, to showcase its organizational culture and attract top talent.
By focusing on employer branding, a company can differentiate itself from competitors and create a compelling value proposition for potential employees. It should communicate its mission, vision, and core values to attract individuals who align with its goals and aspirations.
Offering professional development programs, mentorship opportunities, and a supportive work environment can also help attract and retain high-caliber talent. Furthermore, prioritizing diversity, equity, and inclusion initiatives demonstrates a commitment to creating a fair and inclusive workplace, which can appeal to a wide range of candidates.
Overall, by investing in employer branding, fostering a positive workplace culture, and providing opportunities for growth and development, a company can position itself as an attractive employer and attract the talent needed to achieve its organizational goals.
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Marketable securities are securities or debts that are to be sold or redeemed within a year. Among the examples of a marketable securities are:
Malaysian Trust Fund and Commercial paper
Unnegotiable Certs of Deposits
Seller’s Acceptance and Commercial papers
Suppliers bills and Negotiable Certs of Deposits
The marketable securities from the given options are Commercial paper and Negotiable Certificates of Deposit.
Commercial paper :These are short-term unsecured promissory notes issued by corporations to raise funds. They typically have maturities ranging from a few days to 270 days and are considered highly liquid and low-risk investments.
Negotiable Certificates of Deposit (CDs): These are time deposits issued by banks with a fixed term and specified interest rate. Negotiable CDs can be bought and sold in the secondary market before maturity, making them marketable securities.
Seller's Acceptance: This refers to a type of short-term financial instrument where the seller of goods or services accepts a time draft drawn on them, creating a negotiable instrument that in the secondary market.
Money Market Mutual Funds: These are investment funds that invest in short-term debt securities such as Treasury Bills, commercial paper, and CDs. Investors buy and sell shares of money market mutual funds on any business day at the net asset value.
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Cargo Investment Ltd has made following estimates of the Cash flow after taxes (CFAT) of the proposed project. The company use decision tree analysis to get clear picture of project’s cash inflow. The project cost N$80,000 and the expected life of the project is 2 years. The net cash inflows are:
In year 1, there is 0.4 probability that Cash flow after taxes will be N$50,000 and 0.6 probability that Cash flow after taxes will be N$60,000.The probabilities assigned to cash flow after taxes for year 2 are as follows:
If Cash flow = N$50,000 If Cash flow = N$60 000 Probability Probability
24,000 0.2 40,000 0.4
32,000 0.3 50,000 0.5
44,000 0.5 60,000 0.1
The total expected CFAT for the proposed project over the 2-year period is N$130,760. This analysis provides a clearer picture of the project's cash inflows and can assist in evaluating the project's financial feasibility.
To analyze the cash flow after taxes (CFAT) of the proposed project using decision tree analysis, we can calculate the expected cash inflows for each year.
Year 1:
There is a 0.4 probability of CFAT being N$50,000 and a 0.6 probability of CFAT being N$60,000.
Expected CFAT for Year 1 = (0.4 * N$50,000) + (0.6 * N$60,000) = N$52,000 + N$36,000 = N$88,000
Year 2:
Based on the probabilities assigned to CFAT for each cash flow amount:
If CFAT = N$50,000:
Expected CFAT for Year 2 = (0.2 * N$24,000) + (0.3 * N$32,000) + (0.5 * N$44,000) = N$4,800 + N$9,600 + N$22,000 = N$36,400
If CFAT = N$60,000:
Expected CFAT for Year 2 = (0.4 * N$40,000) + (0.5 * N$50,000) + (0.1 * N$60,000) = N$16,000 + N$25,000 + N$6,000 = N$47,000
Now, we can calculate the total expected CFAT for the project by summing the expected CFAT for each year:
Total Expected CFAT = Year 1 CFAT + Year 2 CFAT
Total Expected CFAT = N$88,000 + [(0.4 * N$36,400) + (0.6 * N$47,000)]
Total Expected CFAT = N$88,000 + N$14,560 + N$28,200
Total Expected CFAT = N$130,760
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