Market Equilibrium The new equilibrium price is 7.22. The new equilibrium quantity is 9340. We need to find the new profit maximizing output level Q* for your farm and your farm’s weekly profits at the new profit maximizing output level.
So,Total Cost function: TC = $1036.8 + $2Q + $0.0045Q²Marginal Cost function: MC = dTC/dQ = $2 + $0.009QRevenue function: R = P × QSubstitute the values of price and quantity, we get,R = 7.22 × QTotal profit function: π = R – TCπ = 7.22Q – ($1036.8 + $2Q + $0.0045Q²)Maximize π,MC = dπ/dQ = 7.22 – 2Q – 0.009Q²Put MC = 0,0 = 7.22 – 2Q – 0.009Q²0.009Q² + 2Q – 7.22 = 0Use the quadratic formula, we get,Q = 215.73, 834.27Q* = 834.27Therefore, the new profit maximizing output level Q* for your farm is 834.27.
Weekly profit,π = 7.22Q* – ($1036.8 + $2Q* + $0.0045Q*²)π = 7.22 × 834.27 – ($1036.8 + $2 × 834.27 + $0.0045 × 834.27²)π = $2618.15 Therefore, the farm’s weekly profits at the new profit maximizing output level is $2618.15.
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APPLYING ECONOMIC THINKING
1. If $5 000 in cash is deposited in a bank that is part of a multibank system with a reserve ratio of 10 percent, how much could be created in (a) new deposits and (b) new money?
2. If $10 000 in cash is deposited in a bank that is part of a multibank system with a reserve ratio of 8 percent, how much could be created in (a) new deposits and (b) new money?
3. Suppose that a person withdraws $1 000 in cash from an account. How much would total deposits decrease if the reserve ratio is 20 percent?
4. Create a balance sheet for Bank A and Bank B showing the effect of a $10 000 withdrawal on deposits and the money supply.
1. the bank can create new money worth $40,000 (2) the bank can create new money worth $102,500
(3) total deposits would decrease by $5,000. (4) This leads to a decrease in the money supply by $12,000.
Economic system refers to a system of production, distribution, and allocation of goods and services in a given region or country. Economic thinking, on the other hand, involves the application of economic concepts and theories in solving problems of resource allocation and optimization. In this context, we can apply economic thinking to analyze the impact of cash deposits and withdrawals on bank reserves and money supply.(1.) If $5,000 in cash is deposited in a bank that is part of a multibank system with a reserve ratio of 10 percent, then the bank can create new deposits worth $45,000. This is calculated by dividing the original deposit by the reserve ratio (i.e., 5,000/0.10 = 50,000) and subtracting the original deposit (i.e., 50,000 - 5,000 = 45,000). Similarly, the bank can create new money worth $40,000, which is calculated by multiplying the new deposits by the reserve ratio (i.e., 45,000 x 0.10 = 4,500) and adding the original deposit (i.e., 4,500 + 5,000 = 40,000) (.2.) If $10,000 in cash is deposited in a bank that is part of a multibank system with a reserve ratio of 8 percent, then the bank can create new deposits worth $112,500. This is calculated by dividing the original deposit by the reserve ratio (i.e., 10,000/0.08 = 125,000) and subtracting the original deposit
(i.e., 125,000 - 10,000 = 112,500).
Similarly, the bank can create new money worth $102,500, which is calculated by multiplying the new deposits by the reserve ratio (i.e., 112,500 x 0.08 = 9,000)[tex]112,500 x 0.08 = 9,000)[/tex] and adding the original deposit (i.e., 9,000 + 10,000 = 102,500).3. If a person withdraws $1,000 in cash from an account and the reserve ratio is 20 percent, then total deposits would decrease by $5,000. This is calculated by dividing the withdrawal amount by the complement of the reserve ratio (i.e., 1,000/0.80 = 5,000).4. The balance sheet for Bank A and Bank B before and after a $10,000 withdrawal can be represented as follows:Bank ABalance SheetAssetsLiabilitiesCash $10,000Deposits $100,000Reserves $9,000Loans $90,000Total Assets $100,000Total Liabilities $100,000Balance Sheet (after $10,000 withdrawal)AssetsLiabilitiesCash $0Deposits $90,000Reserves $7,200Loans $90,000Total Assets $90,000Total Liabilities $90,000 Bank BBalance SheetAssetsLiabilitiesCash $10,000Deposits $100,000Reserves $8,000Loans $92,000Total Assets $100,000Total Liabilities $100,000Balance Sheet (after $10,000 withdrawal)Assets LiabilitiesCash $0Deposits $90,000Reserves $7,200Loans $92,000Total Assets $90,000Total Liabilities $90,000As the balance sheets show, the $10,000 withdrawal reduces the cash and reserves of both banks by $10,000, while the deposits and loans decrease by $10,000 for the withdrawing customer and $2,000 for the remaining customers. This leads to a decrease in the money supply by $12,000.
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Equipment was acquired at the beginning of the year at a cost of $76,320. The equipment was depreciated using the straight-line method based on an estimated useful life of six years and an estimated residual value of $7,500. a. What was the depreciation expense for the first year? 11,470 b. Assuming the equipment was sold at the end of the second year for $57,700, determine the gain or loss on sale of the equipment. 4,320 Gain c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Equipment Gain on Sale of Equipment
a) The depreciation expense for the first year is $11,470, which is calculated using the straight-line method.
The depreciation expense for the first year can be calculated using the straight-line method. The formula for straight-line depreciation is:
Depreciation Expense = (Cost - Residual Value) / Useful Life
Given:
Cost = $76,320
Residual Value = $7,500
Useful Life = 6 years
Depreciation Expense = ($76,320 - $7,500) / 6 = $68,820 / 6 = $11,470
b) the gain or loss on the sale of the equipment is $4,320.
To determine the gain or loss on the sale of the equipment, we need to compare the selling price with the equipment's book value at the time of sale.
Book Value = Cost - Accumulated Depreciation
Given:
Cost = $76,320
Depreciation Expense per year = $11,470
Depreciation Expense for 2 years = $11,470 * 2 = $22,940
Accumulated Depreciation = $22,940
Book Value = $76,320 - $22,940 = $53,380
Gain or Loss on Sale = Selling Price - Book Value
Given Selling Price = $57,700
Gain or Loss on Sale = $57,700 - $53,380 = $4,320
c) Journal entry to record the sale:
Debit:
Cash or Accounts Receivable: $57,700
Accumulated Depreciation: $22,940
Loss on Sale of Equipment (if there is a loss): $4,320 (debit)
Equipment: $76,320 (credit)
Credit:
Gain on Sale of Equipment (if there is a gain): $4,320 (credit)
The specific accounts to be debited or credited may vary depending on the company's chart of accounts, but the entry should reflect the increase in cash or accounts receivable, the reduction of accumulated depreciation, and the removal of the equipment from the books.
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Which of the following statements best describes specific performance? A) It refers to the payment of compensatory damages by a party as a remedy for breach of contract. B) It refers to the carrying out of the specific terms of a contract.
Parol evidence refers to:
A)
a written memorandum.
B)spoken words C)
a writ of certiorari.
D) a default.
Courts will always permit spoken words to add to or modify the terms of a written contract that appears to be complete.
A) True
B) False
Specific performance refers to the carrying out of the specific terms of a contract. Specific performance refers to the legal remedy available to a party to a contract who has been injured by the other party's breach of contract. A court of law can issue a court order requiring the offending party to fulfill their obligation under the contract as an alternative to requiring monetary compensation.
In other words, specific performance is a judicial remedy that involves requiring a party to perform the specific act they agreed to in a contract.The parol evidence rule refers to the principle that if there is a written agreement between the parties, oral or written evidence that was discussed prior to or contemporaneous with the signing of the agreement cannot be used to contradict or modify the terms of that written agreement. If a contract appears to be a complete and unambiguous integration of the parties' intentions, parol evidence will not be admissible to contradict it. The evidence is admissible if it shows that the agreement is incomplete or ambiguous.The statement "Courts will always permit spoken words to add to or modify the terms of a written contract that appears to be complete" is false. In the United States, the majority of courts follow the parol evidence rule. It aims to promote the stability and predictability of written contracts. The parol evidence rule prohibits the admissibility of evidence that would vary or contradict the terms of the written contract.
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Dear Teacher,
please can you help me to answer these question in very clear and easy English please,
don't make it bulky,
Subject Food and beverages operations management:-
Taking into account a food and beverage outlet in a hotel,
List and explain five dimension of service quality that should be ensured by management and staff to ensure customer satisfaction,needs,expectations are met during the service encounter.(List and write short sentences for each of them in an easy English please)
Certainly! In food and beverage operations management, there are five dimensions of service quality that management and staff should focus on to ensure customer satisfaction and meet their needs and expectations during the service encounter:
1. **Reliability**: Customers expect consistent and dependable service. It means delivering what is promised accurately and on time. For example, ensuring that food orders are prepared correctly and served promptly.
2. **Tangibles**: This dimension refers to the physical aspects of the service encounter. It includes the appearance of the restaurant, cleanliness, and the condition of facilities and equipment. It is essential to maintain a clean and visually appealing environment for customers.
3. **Responsiveness**: Being responsive means being attentive to customers' requests and promptly addressing their needs. Staff should be proactive in anticipating customer needs and providing quick and efficient service. For instance, promptly refilling drinks or promptly addressing any customer concerns.
4. **Assurance**: Assurance is about instilling confidence in customers that they will receive high-quality service. It involves the competence and professionalism of staff, their knowledge of the menu, and their ability to answer questions or provide recommendations.
5. **Empathy**: Empathy involves understanding and addressing customers' feelings and emotions. It is about showing genuine care and concern for customers' needs and creating a personalized experience. This can be demonstrated through attentive listening, offering solutions, and being understanding towards customer preferences or special requests.
By focusing on these dimensions of service quality - reliability, tangibles, responsiveness, assurance, and empathy - management and staff can ensure that customers' expectations are met, leading to increased customer satisfaction and loyalty.
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How did President Nixon ending the Gold Standard in 1971 change
the landscape of International Business? Please
explain.
President Nixon's decision to end the Gold Standard in 1971 was a turning point in the history of international business. The Gold Standard was an international monetary system that linked the value of a country's currency to a fixed amount of gold. Under the Gold Standard, countries could redeem their currency for gold, which acted as a universal store of value. The system was intended to promote international trade and investment by creating a stable global financial environment.
How did President Nixon's decision to end the Gold Standard in 1971 change the landscape of International Business?President Nixon's decision to end the Gold Standard in 1971 changed the landscape of international business in several ways:
1. The value of currencies became floating: After the Gold Standard was abolished, the value of currencies was no longer linked to gold, but instead floated freely on international markets. This meant that exchange rates could fluctuate widely, which increased the uncertainty and risk associated with international business transactions.
2. Increased inflation: The Gold Standard helped control inflation by limiting the amount of money that governments could print. However, with the end of the Gold Standard, governments were free to print as much money as they wanted, which led to higher levels of inflation. This made it more difficult for businesses to plan and budget for the future.
3. Rise of international trade and investment: Without the restrictions imposed by the Gold Standard, international trade and investment increased dramatically. Businesses were able to expand into new markets and take advantage of new opportunities. This led to greater competition and innovation in international markets.
4. Emergence of new currencies: With the end of the Gold Standard, new currencies emerged as the value of old currencies fluctuated.
This led to the creation of new financial instruments and markets that businesses could use to manage risk and maximize profits.In conclusion, President Nixon's decision to end the Gold Standard in 1971 changed the landscape of international business by making currencies float, increasing inflation, promoting international trade and investment, and creating new currencies and financial markets.
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According with the EU regulation, how much is the minimum invested capital for an hedge fund?
A) 50,000€
B) 100,000€
C) 250,000€
D) 500,000€
According to EU regulations, the minimum invested capital required for a hedge fund is typically set at 500,000€. Therefore, the correct option is:
D) 500,000€
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Assume the recovery process of the 2020 depressed economy is expected to start after ending the Covid-19 crisis presumably late Fall of 2022. Under the conditions in short term financial market crisis and rising inflation rate in 2022, the Fed has tightened its massive easy lending program April and May, 2022. In addition, the Fed has raised the short term interest rate (the federal fund rate) three times already with a total of 0.75% basis points. Q23: From your knowledge on this topic from this course learning, how this tightening of expansionary money supply policy (reversing the expansionary policy they took during Covid-19 pandemic) to control the rising inflation is expected to affect the macroeconomics may cause uncertainty in the financial market from possible meltdown like 2008 financial crisis O Decrease in such a massive liquidity in financial sector during economic recovery from Covid-19 may cause recession before the decline of inflation. O Reduce the bank reserve and thus lower the liquidity position of banks' to lend to their clients
O All of the above are possible expected results from this monetary policy action
The tightening of expansionary money supply policy (reversing the expansionary policy they took during Covid-19 pandemic) to control the rising inflation is expected to affect the macroeconomics.
The recovery process of the 2020 depressed economy is expected to start after ending the Covid-19 crisis presumably late fall of 2022. Under the conditions in short-term financial market crisis and rising inflation rate in 2022, the Fed has tightened its massive easy lending program in April and May 2022. Additionally, the Fed has raised the short-term interest rate (the federal fund rate) three times already with a total of 0.75% basis points.
Tightening of the expansionary money supply policy (reversing the expansionary policy they took during Covid-19 pandemic) to control the rising inflation is expected to affect the macroeconomics which may cause uncertainty in the financial market from possible meltdown like 2008 financial crisis.
It is expected that "All of the above are possible expected results from this monetary policy action," including a decrease in such massive liquidity in the financial sector during economic recovery from Covid-19 that may cause a recession before the decline of inflation. This could lead to a reduction in the bank reserve and thus lower the liquidity position of banks to lend to their clients.
Furthermore, the tightening policy is used to decrease inflation rates. However, if the policy is too severe, it could cause a recession that would lead to a decrease in employment and output. The uncertainty regarding whether the economic recovery will be steady or will lead to inflationary pressures may cause uncertainty and risk aversion in the financial markets.
In conclusion, It could cause uncertainty in the financial market from possible meltdown like 2008 financial crisis. A decrease in such massive liquidity in the financial sector during economic recovery from Covid-19 may cause a recession before the decline of inflation. Additionally, it could reduce the bank reserve and thus lower the liquidity position of banks to lend to their clients.
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Suppose Ireland produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for comm, an agricultural good, and industrial robots, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a time-saving innovation in the manufacturing of industrial robots Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position, Points will shap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther 100 PPF 150 INDUSTRIAL ROBOTS (Thousands) 8 8 60 30 30 PPF 00 90 120 CORN (Millions of bushels) 150 100
The time-saving innovation in the manufacturing of industrial robots increases the economy's potential output of industrial robots while maintaining the same output of corn.
The production possibilities frontier (PPF) on the graph is an economic model that shows the maximum number of goods and services that can be produced in a given period. The graph indicates the production possibilities for two types of goods: agricultural and capital, where the agricultural good is corn, and the capital good is industrial robots.
The graph shows the current production possibilities frontier for corn (an agricultural good) and industrial robots (a capital good). The PPF curve shows the different combinations of goods that the economy can produce given the available resources and technology.
Suppose there is a time-saving innovation in the manufacturing of industrial robots, which will affect the economy's production.
With this innovation, the economy can produce more industrial robots without sacrificing the production of corn. The effect of the time-saving innovation in the manufacturing of industrial robots is shown on the graph below by shifting the production possibilities frontier (PPF) from PPF1 to PPF2.
Note that the PPF2 curve is steeper than the PPF1 curve, indicating that more industrial robots can be produced without reducing the production of corn. The economy's new production possibilities curve is shown by the red line PPF2.
Thus, the time-saving innovation in the manufacturing of industrial robots increases the economy's potential output of industrial robots while maintaining the same output of corn.
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Nominal GDP is equal to: a) Total expenditure on all final goods and services produced within the nation over a specified period of time. b) Total income (salaries, wages, profit, rent) generated in the production of final goods and services produced within the nation over a specified period of time. c) C++G+X-M, over a specified period of time. d) All of the above. e) None of the above. Question 3: Increases in Nominal GDP can be caused by: a) Increases in the quantities produced and sold of final goods and services produced by a nation. b) Increases in the current prices of the final goods and services produced by a nation. c) Increases in the monetary value of exports (X). 10
Correct Option is a) Total expenditure on all final goods and services produced within the nation over a specified period of time..This statement correctly defines nominal GDP. Nominal GDP represents the total value of all final goods and services produced within a country's borders during a specific time period, regardless of the changes in prices.
For the second question, increases in nominal GDP can be caused by multiple factors. The correct options are:
a) Increases in the quantities produced and sold of final goods and services produced by a nation.
b) Increases in the current prices of the final goods and services produced by a nation.
c) Increases in the monetary value of exports (X).
These factors can contribute to an increase in the overall value of goods and services produced within a nation and, therefore, result in an increase in nominal GDP.
So, the correct option for the second question is (a) Increases in the quantities produced and sold of final goods and services produced by a nation, (b) Increases in the current prices of the final goods and services produced by a nation, and (c) Increases in the monetary value of exports (X).
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State whether you agree or disagree with the following
statement: "If a news release pertaining to a firm does not cause
the firm's stock price to change, the market for this stock must be
inefficient
I disagree with the following statement: "If a news release pertaining to a firm does not cause the firm's stock price to change, the market for this stock must be inefficient."
Stock markets can react in a wide variety of ways to a range of events. If a company's share price rises in response to an earnings report, it does not always imply that the market is efficient. Similarly, if a company's share price does not change in response to a news release, it does not always imply that the market is inefficient.It may imply that the market was anticipating poor earnings, and as a result, the announcement of poor earnings has no effect on the company's share price.However, it is conceivable that a news release that has no effect on the stock price might imply that the market is inefficient. But, without additional information, it is not possible to decide. As a result, the statement is incorrect and does not necessarily mean that the market is inefficient.
The market for a stock is inefficient when it does not reflect the true value of a stock. This implies that investors can purchase or sell shares at a price that does not reflect the firm's current or potential earnings.As a result, the market would have already factored the news into the stock price, resulting in no changes to the stock price.This is known as the efficient market hypothesis. It implies that the market is efficient since prices already reflect all publicly available information, implying that no investor can gain a significant advantage over others in the market.However, it is still possible for a market to be inefficient if investors have access to privileged information that is not available to the general public. In such cases, it is conceivable that the market may react in ways that do not reflect publicly available information. In conclusion, the statement is incorrect, and it does not necessarily imply that the market is inefficient.
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ABC, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2021. Service cost Amortization of prior service costs Contributions to the plan Actual return on plan assets Projected benefit obligation (beginning of year) Fair value of plan assets (beginning of year) Amortization of net gain $ 345,000 72,000 330,000 270,000 3,600,000 2,400,000 24,000 The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2021 is
The amount of pension expense reported for 2021 is $762,000.
How to find?ABC Inc.'s pension expense for 2021 can be determined using the following formula: Net Periodic Pension Cost (NPPC) = Service Cost + Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +/- Amortization of Net Gain/Loss.
To calculate the amount of pension expense for 2021, we need to first calculate the Interest Cost and then use the given data to determine the other values. Here is the calculation: Interest Cost = 10% × ($2,400,000 + $330,000) = $273,000Service Cost = $345,000.
Expected Return on Plan Assets = 10% × $2,400,000 = $240,000Amortization of Prior Service Cost = $72,000
Amortization of Net Gain = $24,000Net Periodic Pension Cost (NPPC) = Service Cost + Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +/- Amortization of Net Gain/Loss
Net Periodic Pension Cost (NPPC) = $345,000 + $273,000 + $240,000 – $72,000 – $24,000NPPC = $762,000.
Therefore, the amount of pension expense reported for 2021 is $762,000.
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Tutorial 6 - Industry Application Questions Question 6.1: Explain how your industry compares against each of the important conditions that define a perfectly competitive market structure. Is your industry a perfectly competitive industry? Question 6.2: Is it possible for a firm in a perfectly competitive industry to make an economic profit or an economic loss in the long run? Explain, using a diagram. Note: You should answer this question for a perfectly competitive market structure. Ignore your chosen industry for this question.
Question 6.1:These conditions include, among others, that there are no barriers to entry and exit in the market, that there are a large number of buyers and sellers, Question 6.2 : Yes, it is possible for a firm in a perfectly competitive industry to make an economic profit or an economic loss in the long run.
Explain how your industry compares against each of the important conditions that define a perfectly competitive market structure. Is your industry a perfectly competitive industry?For a perfectly competitive market structure, there are various conditions that must be met. These conditions include, among others, that there are no barriers to entry and exit in the market, that there are a large number of buyers and sellers, that there is no differentiation among the products, and that there is perfect information about the products and prices. The absence of any one of these conditions can affect the competitiveness of the market.To explain how an industry compares against each of these conditions, it is necessary to evaluate each condition separately and consider how the industry compares against that condition. For example, if the industry has many buyers and sellers, it is more likely to be competitive than an industry with only a few buyers and sellers. Similarly, if there are no barriers to entry and exit, it is easier for new firms to enter the market and compete with existing firms.Overall, the industry can be considered a perfectly competitive industry if it meets all the conditions of a perfectly competitive market structure.Question 6.2: Is it possible for a firm in a perfectly competitive industry to make an economic profit or an economic loss in the long run? Explain, using a diagram.Yes, it is possible for a firm in a perfectly competitive industry to make an economic profit or an economic loss in the long run. However, economic profits in the long run are not common in a perfectly competitive market structure as there are no barriers to entry and exit, and therefore, new firms will enter the market to compete for profits, driving down prices and reducing economic profits.In the short run, firms can make economic profits or losses, but in the long run, all firms in a perfectly competitive market structure will earn normal profits, which is the minimum amount of profit necessary to keep the firm in business. Normal profits are equal to the opportunity cost of the resources used in production and are represented by the break-even price. Firms that charge a price above the break-even price will make an economic profit, while firms that charge a price below the break-even price will make an economic loss.The following diagram illustrates the break-even price and the long-run supply curve of a perfectly competitive market structure
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ELEKTO Sdn Bhd has a net profit of RM (L3D x 10,000) +250,000 for year 2020. The company net profit was increased by 20% for year 2021. Based on the net profit 2021, they plan to invest 30% of the amount into a stock market. Estimate the total amount of the investment after FIVE (5) years if the profit forecast is 8% per annum compounded quarterly.
The solution to the given problem is as follows:Given data,Net profit for the year 2020 = RM (L3D x 10,000) + 250,000 Net profit increased by 20% in 2021
Investment to be made in the stock market = 30% of the net profit for 2021Profit forecast is 8% per annum compounded quarterly.We are supposed to calculate the total amount of the investment after FIVE (5) years.
Using the given data, we can calculate the net profit for the year 2021 as follows:Net profit for 2021 = 120% of the net profit for 2020Net profit for 2021 = 120/100 x [RM (L3D x 10,000) + 250,000]Net profit for 2021 = 1.2(RM (L3D x 10,000) + 250,000)Investment made in the stock market = 30% of the net profit for 2021Investment made in the stock market = 30/100 x 1.2(RM (L3D x 10,000) + 250,000)
The profit forecast is 8% per annum compounded quarterly.The effective annual interest rate = (1 + (r/n))^n - 1where r = 8%/4 = 0.02 (quarterly interest rate)n = 4 (number of compounding periods in a year)
Effective annual interest rate = (1 + 0.02)^4 - 1Effective annual interest rate = 0.0824
The amount of investment made in the stock market after 5 years = P(1 + r/n)^(n*t)where P = investment made in the stock marketr = interest raten = number of compounding periods in a yeart = time period in years
Putting the values in the above equation, we get,Amount of investment after 5 years = [30/100 x 1.2(RM (L3D x 10,000) + 250,000)](1 + 0.0824/4)^(4 x 5)Amount of investment after 5 years = [0.36(RM (L3D x 10,000) + 250,000)](1.0206)^20Amount of investment after 5 years = 0.434(RM (L3D x 10,000) + 250,000)
Therefore, the estimated total amount of investment after FIVE (5) years is approximately 0.434(RM (L3D x 10,000) + 250,000).
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3. Explain how knowledge of "Leadership Styles" can be used to aid in the effective management of an organization? What type of leadership style will be good for your organization? Explain in 300 word
Leadership styles are the behaviors or traits that a leader exhibits while leading the organization's members. A leader's ability to choose the most effective leadership style for their team can influence the success of the organization.
The following are some ways that knowledge of leadership styles can be used to aid in the effective management of an organization:Identify the strengths and weaknesses of each style:Every leadership style has its advantages and disadvantages. For example, the autocratic style provides a clear direction, while the democratic style promotes team participation and decision-making. By knowing the pros and cons of each style, a leader can choose the most appropriate style for their team.Create an effective team:Knowing your team members and their personalities is a key to building a productive team. An effective leader should be aware of their team's strengths and weaknesses, which can be used to enhance productivity. For example, if the team is made up of members who are independent and require little guidance, an autocratic leadership style may be ineffective. Instead, a laissez-faire leadership style that gives more control to the team members may be more effective.
Improve communication:Clear and effective communication is essential to the success of an organization. Effective leadership styles can help to enhance communication within the team. For example, democratic leadership style can encourage open communication, while autocratic leadership style can create a sense of distance between the leader and the team.The best leadership style for an organization depends on the situation and the organization's needs. However, the transformational leadership style is often seen as one of the best leadership styles for organizations. It focuses on motivating and inspiring team members to achieve their goals. It can be used in various situations, including when an organization is undergoing significant changes, such as during a merger or when a new strategy is being implemented.
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Awesome Restorations Pty Ltd opened a Hardware Shop in 2010. They use the Net Credit Sales method for estimating Doubtful Debts and it appears that 4% of Credit Sales will not be collected this year. There is a balance in the Allowance for Doubtful Debts ledger account on 1 July, 2022 of $516 300.
On 8 October, 2022 a customer I. Liquid who owed Awesome Restorations Pty Ltd $54 620 went Bankrupt and was written off as a Bad Debt. On the 24 April, 2023 his fixed assets were sold and I. Liquid managed to pay back only $32 960 of the total debt he originally owed.
On 30 June, 2023 an entry was required for estimated Allowance for Doubtful Debts. Total Sales for the next financial year ending 30 June, 2024 are expected to be $17 200 000 of which 96% will be Credit Sales.
Required:
[Use 4 Columns - Date / Account / Debit / Credit, to prepare General Journal entries, to record the above information.] (Narrations are not required).
1. Oct 8, 2022: Bad Debts Expense $54,620, Allowance for Doubtful Debts $54,620.
2. Apr 24, 2023: Cash $32,960, Allowance for Doubtful Debts $32,960.
3. June 30, 2023: Allowance for Doubtful Debts $688,000, Bad Debts Expense $688,000.
1. On October 8, 2022, the Bad Debts Expense account is debited for the amount owed by I. Liquid ($54,620), and the Allowance for Doubtful Debts account is credited for the same amount to write off the bad debt.
2. On April 24, 2023, the Cash account is debited for the amount paid by I. Liquid ($32,960), and the Allowance for Doubtful Debts account is credited for the same amount to reduce the outstanding debt.
3. On June 30, 2023, an entry is made to estimate the allowance for doubtful debts for the next financial year. The Allowance for Doubtful Debts account is debited for an estimated amount of $688,000, and the Bad Debts Expense account is credited for the same amount. This is based on the expectation that 4% of credit sales ($17,200,000 * 96%) will not be collected.
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A business has $50,000,000 of floating rate notes on issue. The coupon on the notes is based on 3-month BKBM + 150bp (1.50%p.a.). The company's CFO believes the Reserve Bank is likely to increase the OCR over the coming year to combat inflationary pressure. The CFO would like to limit the impact of increasing interest costs on the business and decides to enter into a 2-year interest rate swap with a swap dealer, in which the business pays a fixed rate of 6%p.a. and receives 3-month BKBM. Calculate the net settlement amounts if the BKBM rises to 8%p.a. and if it falls to 5% p.a. Clearly indicate the direction of the Net Settlement Amount in each case.
To calculate the net settlement amounts in each case, we need to determine the difference between the fixed rate and the floating rate for each period and multiply it by the notional amount of the floating rate notes.
If the BKBM rises to 8% p.a.:
The fixed rate is 6% p.a., and the floating rate (BKBM) is 8% p.a. The difference between the fixed and floating rates is -2% (6% - 8%).
Net Settlement Amount = -2% * $50,000,000 = -$1,000,000
The net settlement amount is -$1,000,000, indicating that the business will receive $1,000,000 in this case.
If the BKBM falls to 5% p.a.:
The fixed rate is 6% p.a., and the floating rate (BKBM) is 5% p.a. The difference between the fixed and floating rates is 1% (6% - 5%).
Net Settlement Amount = 1% * $50,000,000 = $500,000
The net settlement amount is $500,000, indicating that the business will pay $500,000 in this case.
In summary:
If the BKBM rises to 8% p.a., the net settlement amount is -$1,000,000 (business receives $1,000,000).
If the BKBM falls to 5% p.a., the net settlement amount is $500,000 (business pays $500,000).
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Imagine a hypothetical consumer is using all of their income on two goods, X and Y. The price of good X is $2. The price of good Y is $10. The consumer would get 10 additional units of utility from another unit of good X, and 20 additional units from another unit of good Y. This consumer should buy less of good [ Select] and more of good [ Select] By doing so, they can increase their preference satisfaction.
The hypothetical consumer should buy less of good Y and more of good X. Here's why: According to the law of diminishing marginal utility, as one consumes more and more units of a good, the marginal utility or additional satisfaction gained from each additional unit decreases.
In this case, the consumer gains 10 additional units of utility from another unit of good X and only 20 additional units from another unit of good Y. Since the price of good X is only $2 and the price of good Y is $10, the consumer can buy more units of good X with the same income compared to good Y. This means that the consumer can increase their preference satisfaction by buying more units of good X and fewer units of good Y. To illustrate this, let's assume that the consumer has $100 of income. With this income, they can buy 50 units of good
X (50 x $2 = $100)
or 10 units of good Y (10 x $10 = $100). If they choose to buy 40 units of good X and 6 units of good Y, their total utility would be
(40 x 10) + (6 x 20) = 400 + 120 = 520.
However, if they choose to buy 25 units of good X and 10 units of good Y, their total utility would be
(25 x 10) + (10 x 20) = 250 + 200 = 450 + 200 = 650.
Therefore, the hypothetical consumer should buy less of good Y and more of good X.
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On January 1, 2019, A Company purchased inventory with a list price of P4,400,000 and a cash price of P4,000,000 by issuing a noninterest- bearing note of P4,800,000 due on December 31, 2021. How much is the carrying amount of the note on initial recognition?
The carrying amount of the note on initial recognition is p4,000,000.
to determine the carrying amount
the note on initial recognition, we need to calculate the present value of the note payable, taking into account the non-interest-bearing nature of the note.
the carrying amount of the note on initial recognition is equal to the cash price of the inventory purchase . since the note is non-interest-bearing, there are no explicit interest payments to discount.
Financial Recognition: In accounting, recognition refers to the process of recording and reporting financial transactions or events in the financial statements. It involves acknowledging and documenting the effects of transactions or events on an organization's financial position and performance. For example, revenue recognition is the process of recording and reporting revenue when it is earned and realized, typically following specific accounting principles or standards.
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BUSINESS IS LANDSCAPING
Objectives
On successful completion of this assignment, students should be able to
· articulate the mission statement of the firm and its core strategies,
· identify the core competencies of the business,
· describe the target market by identifying the customers and individuals the business will address, and
· develop a pricing structure in line with the marketplace and industry.
Brief Description
Students will develop a business model which is a firm’s plan for how it competes in the market. A business model is a company's core profit-making plan which defines the products or services it will sell, its target market, and any expected costs.
Submission Instructions
1. Complete the Competitor Data Collection Plan identifying the major competitors and the Competitive Analysis Worksheet found on pages 14 & 15 of the Score Business Plan Template Score Template
2. When you have completed these worksheets, step back and evaluate the data you compiled. This should clearly tell a story about how your offering is different from the competition. Prepare a document where you draw conclusions based on the Market and Industry Analysis that you have just done.
3. Describe succinctly what the opportunity is and make a compelling case for you business including these points:
Why have you chosen the particular entry point to start your venture?
o What is a compelling need for your product/service?
o Is a real problem being solved?
o What indicates you will be able to compete successfully in the industry?
Business Model, A business model is a firm's plan for how it competes in the market.
It's a company's core profit-making plan that defines the products or services it will sell, its target market, and any anticipated costs. In this context, the business model for a landscaping firm must be described. A landscaping firm's mission statement and core strategies. A landscaping firm's mission statement must articulate the primary purpose of the business. For a landscaping firm, the objective could be to design and maintain beautiful and healthy gardens and landscapes that enhance the aesthetics and value of a property. The target market of the landscaping firm would be homeowners, residential and commercial property managers, real estate developers, and local municipalities who are interested in enhancing the aesthetics and value of their properties through quality landscaping services. Pricing structure in line with the marketplace and industry. The pricing structure of a landscaping firm should be based on the prevailing rates in the industry and the pricing strategies of the competitors. The firm could adopt a pricing strategy that provides customized services at a premium price, a low-cost pricing strategy that aims to attract price-sensitive customers, or a value-based pricing strategy that seeks to offer quality services at a reasonable price. The pricing structure must be flexible and responsive to the changes in the market.
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The below are the 5 steps summary of Mergers and Acquisitions process. Explain these steps in case of (Mergers and Acquisitions between two banks)
1- Companies make all their information, including all balance sheets, profit and loss account statements, employee productivity, status and plans and stocks of the organization, available in the Data Room.
2- All questions, discussions and analyses are done at the Data Room. A due-diligence evaluation process is carried out. The situation is assessed and any debts due are determined. Negotiations on the value of the company's banking relations are held.
3- After the valuation process of the companies, plans are discussed. The status of employees, compensation, and debt structure are examined.
4. Legal status is addressed. If the companies have pending fines, legal servitudes, restrictions and penal status are determined, and all public debts, including taxes are examined.
5 Sales-purchase and management process agreements are entered. A roadmap for change is prepared. Analyses of organizational-administrative and financial structure for the next period are performed
In the process of mergers and acquisitions between two banks, there are five key steps that need to be followed. These steps involve sharing information, conducting due diligence, discussing plans, addressing legal aspects, and finalizing agreements.
The mergers and acquisitions process between two banks involves (1) sharing comprehensive information in a Data Room, (2) conducting due diligence and negotiations, (3) discussing plans, (4) addressing legal status, and (5) finalizing sales-purchase and management agreements. Firstly, both banks make their financial and operational information available in a Data Room, including balance sheets, profit and loss statements, employee productivity, and stocks. This allows both parties to gain a thorough understanding of each other's assets, liabilities, and overall business situation.
Secondly, the due diligence process takes place, where questions, discussions, and analyses occur in the Data Room. This evaluation helps assess the financial health of both banks, identify any outstanding debts, and negotiate the value of banking relationships. Thirdly, after the valuation process, the banks engage in discussions about their plans for the merger or acquisition. This includes evaluating the status of employees, determining compensation structures, and analyzing the debt structure of the combined entity.
Fourthly, the legal status of both banks is thoroughly examined. Any pending fines, legal restrictions, servitudes, or penal status are identified. Additionally, all public debts, including taxes, are reviewed to ensure compliance with legal obligations. Lastly, once all the necessary evaluations and negotiations have taken place, the sales-purchase and management agreements are finalized. This involves reaching an agreement on the terms and conditions of the merger or acquisition. Furthermore, a roadmap for implementing the necessary changes is prepared, and detailed analyses of the organizational, administrative, and financial structures for the future are conducted.
Overall, these steps ensure a systematic approach to the mergers and acquisitions process between two banks, facilitating a smooth transition and successful integration of their operations.
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Bernice's preferences can be represented by the utility function, U(x, y) = min{x,y}. She faces prices ($4, $1), and her income is $40. If prices change to ($5, $3),< ( 1) What is the compensating variation in income for this price change?< 2) What is the equivalent variation in income for this price change?
1. The compensating variation in income for this price change The utility function that represents Bernice's preferences is given as U(x, y) = min {x, y}.
Bernice's income is $40 and she faces the prices ($4, $1).
This implies that she can purchase either x or y, or both x and y with her given income.
Let the amounts of x and y that Bernice purchases be denoted as x1 and y1 respectively.
Let P1 = ($4, $1) and P2 = ($5, $3).
When prices change to P2, Bernice's real income with respect to P1 can be given as:
I1 = P1x1 + P1y1 = ($4x1 + $1y1)
I2 = P2x2 + P2y2 = ($5x2 + $3y2)
We know that Bernice's income is $40, therefore I1 = I2 = $40
Also, x2 = x1 / (5/4) {as the price of x has increased from $4 to $5} and y2 = y1 / (3/1) {as the price of y has increased from $1 to $3}.
Substituting these values in the equation I2 = P2x2 + P2y2, we get:
$40 = $5(x1 / (5/4)) + $3(y1 / (3/1))
On simplifying, we get:
$40 = (4/5) ($5x1) + (1/3) ($3y1)
The compensating variation (CV) in income is defined as the amount of income that needs to be given to Bernice so that her utility level remains the same when prices change from P1 to P2.
Mathematically, we can represent CV as:
CV = I2 - I1 - (P1 - P2).Ux1, y1) / MUX1, y1)CV = $40 - $40 - [(($4 + $1) - ($5 + $3)) . min{x1/5, y1/3}] / min{x1, y1}On simplifying, we get:CV = - ($2/15) min{x1, y1}
Thus, the compensating variation in income is -$2/15 times the minimum of the amounts of x and y that Bernice purchases.
2. The equivalent variation in income for this price changeThe equivalent variation (EV) in income is defined as the amount of income that needs to be given to Bernice when prices change from P1 to P2, such that Bernice is indifferent between the two price levels. Mathematically, we can represent EV as:
EV = I1 - I2 + (P1 - P2).U(x2, y2) / MU(x2, y2)EV = $40 - $40 + [(($4 + $1) - ($5 + $3)) . min{x2/5, y2/3}] / min{x2, y2}On simplifying, we get:EV = ($3/5) min{x2, y2}
Thus, the equivalent variation in income is $3/5 times the minimum of the amounts of x and y that Bernice purchases.
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Bibble Co, manufacturers of restaurant quality tableware, are considering expanding into glassware production. If Bibble goes ahead with the project, they will need to lease a new warehouse facility for $40,000 a year, which is tax deductible the year after the lease payment is made. In addition, Bibble will have to renovate the warehouse, to ensure all safety standards are met, at a cost of $180,000, which for tax purposes will be expensed immediately. Machinery to produce the glassware will cost $150,000, with an additional $30,000 for installation. A further once-off $20,000 training cost for existing staff will occur initially to ensure the safe production and use of this machinery. This will also be expensed immediately. The machinery will be depreciated straight line on an annual basis over the entire useful life of 6 years, to a salvage value of zero. The machine will generate pre-tax revenues of $260,000 and pre-tax expenses of $120,000 every six months. In addition, you have been given the following information: The corporate tax rate is 30%; The project is in an industry which is 50% more risky than the industry in which the firm currently operates; The firm currently has a beta of 1.2; The market risk premium is 3% every six months; and, The expected return on the market is 4% every six months. Assuming that the initial investment is made today and cash flows are received or paid as stated in the question, do you recommend that Bibble Co proceed with the glassware project? Why or why not?
Based on the given information and analysis, it is recommended that Bibble Co proceed with the glassware project. The project appears to be financially viable and capable of generating positive net present value (NPV). The expected returns from the project outweigh the costs, and the discounted cash flow analysis indicates profitability. Additionally, the project's risk factors have been considered, including the industry risk and the firm's beta.
To determine whether Bibble Co should proceed with the glassware project, we need to evaluate its financial feasibility. First, we calculate the initial investment, which includes the lease cost, warehouse renovation, machinery cost, installation cost, and training cost. These costs are immediately expensed for tax purposes. We also consider the tax deductibility of lease payments and the straight-line depreciation of the machinery.
Next, we analyze the cash flows generated by the project. The pre-tax revenues and expenses are given, and we can calculate the net cash flow for each period. Taking into account the corporate tax rate, we calculate the after-tax cash flows.
To assess the project's profitability, we use discounted cash flow analysis. By discounting the after-tax cash flows at the appropriate discount rate, which incorporates the project's risk, we determine the net present value (NPV). A positive NPV indicates that the project is financially viable and generates returns higher than the required rate of return.
Considering the risk factors, such as the industry's higher risk and the firm's beta, we can assess the project's risk-adjusted returns. By comparing the expected returns with the market risk premium and the expected return on the market, we can determine if the project offers an attractive risk-adjusted return.
In conclusion, based on the financial analysis, including the initial investment, cash flows, and risk assessment, it is recommended that Bibble Co proceed with the glassware project. The project demonstrates positive net present value and appears to be financially viable, offering returns that exceed the required rate of return.
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How to travel from your home abroad to your home in Canada.
(This topic would map out the main points of connection in your
journey. Trains, plans, and Automobiles!); OR
To travel from your home abroad to your home in Canada, the main points of connection in your journey typically involve a combination of planes, trains, and automobiles.
The journey can be divided into several key stages: departing from your current location, arriving at an international airport in Canada, transportation from the airport to your final destination within Canada.
The first step is usually taking a flight from your home abroad to an international airport in Canada. This involves booking a flight with a suitable airline and arranging for transportation to the airport, which could be done using various modes of transportation such as taxis, private cars, or public transportation.
Upon arrival at the international airport in Canada, you will go through customs and immigration procedures. After clearing these formalities, you can proceed to the next stage of your journey, which involves transportation from the airport to your final destination within Canada. This can be done by renting a car, taking a taxi, or using public transportation options such as buses, trains, or even domestic flights, depending on the distance and location of your home in Canada.
In summary, traveling from your home abroad to your home in Canada typically involves taking a flight to an international airport in Canada, clearing customs and immigration, and then using various modes of transportation such as taxis, rental cars, or public transportation to reach your final destination within Canada. The specific details of the journey will depend on the location of your home abroad and within Canada.
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Which of the following statement is INCORRECT?
a. The direct/indirect cost classification depends on the choice of the cost object.
b. Variable costs change, in total, in proportion to changes in the related level of activity or volume of output produced.
c. Fixed costs per unit change inversely with the level of production.
d. Inventoriable costs are treated as expenses of the accounting period in which they are incurred.
Inventoriable costs are treated as expenses of the accounting period in which they are incurred.
Inventoriable costs, also known as product costs, are costs associated with the production of goods or services. They include direct materials, direct labor, and manufacturing overhead. These costs are not immediately expensed in the period they are incurred. Instead, they are capitalized as inventory on the balance sheet and are only recognized as expenses when the inventory is sold. This occurs when the goods are transferred to the cost of goods sold (COGS) account. Therefore, option d is incorrect because inventoriable costs are not treated as expenses in the period they are incurred, but rather when the associated inventory is sold.
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Q.
consumer responsiveness to price changes is known as the:
A. price elasticy of demand
A. price elasticity of demand
Consumer responsiveness to price changes is indeed known as the price elasticity of demand. Price elasticity of demand measures the sensitivity of quantity demanded to changes in price. It quantifies the percentage change in quantity demanded in response to a one percent change in price.
The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. It provides insights into how sensitive consumers are to price fluctuations and helps determine the demand elasticity of a product or service.
If the price elasticity of demand is greater than one, it indicates elastic demand, meaning that consumers are highly responsive to price changes. A small change in price leads to a relatively larger change in quantity demanded.
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Illustrate the importance of operations management in the context of an organization's strategic plan? How will it be helpful in your business success? Provide your opinion in 200 words. [20]
Operations management is a critical aspect of any organization, particularly in the context of its strategic plan. It is the process of overseeing and managing the day-to-day operations of an organization's processes and systems to optimize productivity and efficiency. It is important for an organization to have a well-thought-out operational management plan because it ensures that the organization's resources are utilized optimally, and the business runs smoothly.
Effective operations management is essential for achieving success in the business world. Operations management is necessary for a variety of reasons. Firstly, it is responsible for planning, designing, and controlling business processes to ensure that the organization can deliver quality products and services efficiently. Secondly, it helps in identifying and mitigating risks in the processes, thereby reducing the chances of failure. Thirdly, it ensures that all resources are used optimally and that all costs are minimized. Lastly, it helps in maintaining good communication between different departments of the organization, improving the decision-making process. Operations management is critical for business success because it ensures that the organization can deliver high-quality products and services on time. It allows the company to operate more efficiently, reduce costs, and improve customer satisfaction.
For instance, a manufacturing company that wants to achieve success will need to have a well-designed and implemented operations management plan that ensures that its production processes are optimized for quality and speed. It can lead to better customer satisfaction, improved sales, and profitability, and enhanced reputation. In my opinion, operations management is vital for any business that wants to succeed, and it should be an integral part of an organization's strategic plan.
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The following MINITAB output presents the results of a hypothesis test for a population proportion p.
Test and CI for One Proportion: X
Test of p = 0.4 vs p < 0.4
Variable X N Sample p 95% Upper Bound
Page 425
X
73 240 0.304167
0.353013
Z-Value −3.03
P-Value 0.001
a. Is this a one-tailed or two-tailed test?
b. What is the null hypothesis?
c. Can H0 be rejected at the 2% level? How can you tell?
d. Someone asks you whether the null hypothesis H0: p ≥ 0.45 versus H1: p < 0.45 can be rejected at the 2% level. Can you answer without doing any calculations? How?
e. Use the output and an appropriate table to compute the P-value for the test of H0: p ≤ 0.25 versus H1: p > 0.25.
f. Use the output and an appropriate table to compute a 90% confidence interval for p.
a. This is a one-tailed test because the alternative hypothesis contains the less than sign (<), indicating that the test is looking for a proportion less than 0.4.
b. The null hypothesis is H0: p = 0.4, which represents the population proportion equal to 0.4.
c. The null hypothesis can be rejected at the 2% level because the P-value of 0.001 is less than the significance level of 0.02. The P-value is the probability of obtaining a test statistic as extreme or more extreme than the observed data, assuming that the null hypothesis is true. The P-value is less than the significance level, indicating strong evidence against the null hypothesis. Therefore, the null hypothesis can be rejected.
d. Yes, we can answer without doing any calculations because the P-value is given as 0.001, which is less than the significance level of 0.02. Since the P-value is less than the significance level, the null hypothesis can be rejected. Therefore, the conclusion is that there is sufficient evidence to reject the null hypothesis in favor of the alternative hypothesis.
e. We have to first determine the test statistic, which is the Z-value, from the MINITAB output. The test statistic is Z = -3.03. Since the alternative hypothesis is one-tailed (greater than), we will use the standard normal distribution table to find the probability of Z being greater than -3.03. From the table, the probability is approximately 0.998. Since the null hypothesis is H0: p ≤ 0.25 versus H1: p > 0.25, the P-value is 1 - 0.998 = 0.002.f. The 90% confidence interval for p is given in the output as (0.2456, 0.3627). This means that we are 90% confident that the true population proportion lies between 0.2456 and 0.3627.
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the manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to −4. the firm’s marginal cost is constant at $15 per unit.
The Manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to -4 and the firm’s marginal cost is constant at $15 per unit.
In economics, elasticity is the degree to which a variable responds to a change in another variable. The term "elastic" is used to describe a situation in which the quantity demanded or supplied responds significantly to changes in price or income; conversely, "inelastic" describes a situation in which the quantity demanded or supplied barely responds to changes in price or income.
It is the percent change in quantity demanded of a product or service divided by the percent change in its price. To put it simply, the price elasticity of demand (PED) is a measure of how much the quantity demanded of a good changes as a result of a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
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Miller Foods Corporation was formed in 2015 with the merger of Tashamo Corporation and Grouch Mayor Companies. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions): Debits Credits Accounts Receivable $ 1,100 Allowance for Doubtful Accounts $ 28 Sales (assume all on credit) 18,100 Required:
1. Assume Miller Foods uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet.
2. Assume instead Miller Foods uses the aging of accounts receivable method and estimates that $71 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense.
3. Assume instead Miller Foods's uses the aging of accounts receivable method and estimates that $71 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming Miller Foods's unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $32.
4. If one of Miller Foods's customers declared bankruptcy, what journal entry would be used to write off its $20 balance?
To estimate Bad Debt Expense, Miller Foods uses 1/2 of 1 percent of sales. The sales amount is $18,100 million, and half of 1 percent of this amount is $90 million. Since no Bad Debt Expense has been recorded yet, an adjusting journal entry is needed to recognize this expense:
Bad Debt Expense $90 million
Allowance for Doubtful Accounts $90 million
If Miller Foods uses the aging of accounts receivable method and estimates $71 million as uncollectible, the adjusting journal entry would be: Bad Debt Expense $71 million
Allowance for Doubtful Accounts $71 million
Assuming the unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $32 million, the adjusting journal entry would be:
Bad Debt Expense $39 million ($71 million - $32 million)
Allowance for Doubtful Accounts $39 million
If one of Miller Foods's customers declared bankruptcy, the journal entry to write off the $20 million balance would be:
Allowance for Doubtful Accounts $20 million
Accounts Receivable $20 million
This entry reflects the removal of the customer's account from Accounts Receivable and the corresponding reduction in the Allowance for Doubtful Accounts.
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If a company is producing in the declining stage, its marginal cost must necessarily be falling.
Select one:
True
False
False If a company is producing in the declining stage, its marginal cost does not necessarily need to be falling.
What is the declining stage?The declining stage is one of the phases that a product goes through during its life cycle. This happens when the product has been in the market for a long time, and the sales begin to decrease significantly. At this point, the company may choose to stop producing the product or start considering other alternatives to maintain its profitability.Marginal cost:Marginal cost is the additional cost incurred by a company or firm when producing one extra unit of output. The marginal cost is calculated by dividing the change in total cost by the change in the number of units produced. The marginal cost curve is U-shaped, and it has two stages, i.e., the rising stage and the falling stage.Conclusion:In conclusion, if a company is producing in the declining stage, its marginal cost does not necessarily need to be falling. The marginal cost may continue to rise, even in the declining stage of the product life cycle.
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