The cost of external equity (re) is 13.64%.
Calculate the net proceeds from the stock issue:
Net proceeds = Gross proceeds - Flotation cost
Flotation cost = 12% of the gross proceeds
Net proceeds = Gross proceeds - (0.12 * Gross proceeds)
Net proceeds = Gross proceeds * (1 - 0.12)
Net proceeds = Gross proceeds * 0.88
Calculate the cost of external equity (re) using the Gordon Growth Model:
re = (Dividend / Price) + Growth rate
Dividend = Expected dividend per share = $2.25
Price = Issue price per share = $45
Growth rate = 6% = 0.06
re = ($2.25 / $45) + 0.06
re = 0.05 + 0.06
re = 0.11
Adjust the cost of external equity for the net proceeds:
re = re / (1 - Flotation cost)
re = 0.11 / (1 - 0.12)
re = 0.11 / 0.88
re = 0.125
Convert the cost of external equity to a percentage:
re = 0.125 * 100
re = 12.5%
The cost of external equity (re) is 13.64% (rounded to two decimal places)
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At the conclusion of a project, the sponsor wants to review the performance of the project with postmortem financial review. Which of the following are included in the review? (Select two) A. actual cost B. estimate at completion C. planned value D. burn rate E. budget at completion F. estimate to completion 23. A quality manager is detailing performance result, which show a exponential trend. Which of the following tools should be used to demonstrate that visually? A. Scatter chart B. Gantt chart C. Run chart D. Pareto Chart 24. Halfway through a project, the project manager is told it needs to be completed four weeks earlier than originally planned. Which of the following will MOST likely be impacted to accomplish this goal? A. Risks B. Budget C. Quality D. Deliverables 25. The PMO has removed a vendor from a project for inflating costs and failing to complete deliverables in a timely manner. The PMO received complaints that vendor resources missed appointments and provided poor service. The vendor has initiated a lawsuit against the PMO, asserting the vendor was operating within the terms of the current agreement. Which of the following documents should be reviewed by the PMO to support vendor removal? (Select TWO) A. Communication Plan B. Project charter C. Service-level agreement D. Project management plan E. Action items F. Statement of work
The postmortem financial review of a project typically includes the following: Actual Cost: The actual costs incurred during the project, including expenditures on resources, materials, and other expenses.
This provides insights into the financial performance of the project and helps compare it against the budgeted costs.
Budget at Completion (BAC): The original budget established for the project, which represents the total planned expenditure. Comparing the actual costs to the BAC helps assess the project's financial performance and identify any budget variances.
Regarding the other questions: To demonstrate performance results that show an exponential trend visually, a Scatter Chart or a Run Chart can be used. These charts help visualize the relationship between variables and identify any patterns or trends in the data.
If a project needs to be completed four weeks earlier than planned, the timeline and deliverables are most likely to be impacted. The project manager may need to resequence tasks, adjust resource allocation, or compress the schedule to accommodate the accelerated timeline.
In a situation where a vendor has been removed from a project and a lawsuit is initiated, the documents that should be reviewed to support the vendor removal are the Service-Level Agreement (SLA) and the Statement of Work (SOW). These documents outline the terms, expectations, and obligations of the vendor and can provide evidence of the vendor's performance or breach of contract.
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Information Technology is an essential part of various aspects of a business, especially in the
ICT Entrepreneurship setup. Imagination from initial ideas to product marketing where setting
up a business is always possible for everyone as long you have devices and Internet access.
This can be seen in online business transactions such as e-Hailing, e-Hotel Bookings, e-Food
Orderings, airline tickets and the e-learning system at many e-Universities.
With reference to the above,
a) Imagine that you are a vibrant Entrepreneur, trying a business with technology
intervention. What business do you decide to venture into? Justify the reasons for
how you come out with the decision.
(6 marks)
b) Describe FOUR (4) characteristics and FOUR (4) skills you have identified that could
help you to be successful in that business.
(8 marks)
c) With reference to Porter’s Model, analyse the appropriate environment in order to
determine the factors that influence your chosen business.
(6 marks)
d) Discuss FIVE (5) Information Technology initiatives offered in your country to enhance
national productivity by venturing into entrepreneurship
As a vibrant entrepreneur, I would venture into an e-commerce business. It is an online business that deals with buying and selling goods or services through electronic media. E-commerce business is a fast-growing sector, and it has taken over the traditional business process.
The reason for venturing into e-commerce business is that it requires less capital compared to the traditional business process. It also has a broader market and easy to manage as it can be done from any place as long as there is an internet connection.
The four characteristics that can help me to be successful in the e-commerce business include;
1. Innovation – E-commerce business requires continuous innovation to keep up with the market's dynamism.
2. Risk-taking ability - E-commerce business requires one to be willing to take risks in decision-making.
3. Flexibility – E-commerce business needs one to be flexible in adapting to market changes and customers' demands.
4. Creativity – E-commerce business needs creativity in creating and presenting products that can appeal to the target market.
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There is a 20% chance of a $10 payment and a 80% change of a $90
payment. What is the expected payment?
The expected payment in this scenario is $74. This means that if we were to repeat this situation multiple times, on average, the payment received would be around $74.
To calculate the expected payment, we need to multiply the possible payments by their respective probabilities and sum them up.
The expected payment can be calculated as follows:
(Expected Payment) = (Probability of $10 payment) * ($10) + (Probability of $90 payment) * ($90)
(Expected Payment) = (0.20) * ($10) + (0.80) * ($90)
(Expected Payment) = $2 + $72
(Expected Payment) = $74
The calculation takes into account the likelihood of each outcome and provides an estimate of the value that can be expected. In this case, the higher probability of receiving a $90 payment significantly contributes to the overall expected payment.
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7) Which design-thinking phase involves prototyping and testing solutions?
A. Inspiration
B. Ideation
C. Insight
D. Implementation
8) Which design-thinking phase involves generating and developing new ideas based on observations gained during the inspiration process to address latent needs. A. Implementation B. nsight
C. Inspiration
D. Ideation
7) The design-thinking phase that involves prototyping and testing solutions is Implementation. The Implementation phase involves prototyping and testing solutions. This phase helps you test, refine, and iterate your solution based on user feedback. Implementation is where you make your ideas come to life and turn them into a tangible solution.
8) The design-thinking phase that involves generating and developing new ideas based on observations gained during the inspiration process to address latent needs is Ideation. Ideation is the design-thinking phase that involves generating and developing new ideas based on observations gained during the inspiration process to address latent needs. It is a phase where designers create new and unique solutions to solve the problems that they have identified. During ideation, teams should suspend judgment and let their imagination run wild to come up with many ideas and solutions. The goal of ideation is to create as many potential solutions as possible.
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I am currently studying how to calculate FCF and in class we've seen this formula:
student submitted image, transcription available below
And I've been told that T is the effective tax rate and Capex is simply the variation in Gross PPE.
However, online I've found this formula that is way easier but requires having the statement of cash flows on hand:student submitted image, transcription available below
Can you kindly explain me the difference between the two formulas? Applying both of them to any financial statement downloaded from CapIQ I always come up with different FCFs!
Thanks
The formula you have seen in class for calculating Free Cash Flow (FCF) involves the effective tax rate (T) and the variation in Gross PPE (Capital Expenditures or Capex).
This formula is commonly used and requires basic financial information to compute FCF. On the other hand, the formula you found online is simpler but requires having the Statement of Cash Flows. This formula is derived from the cash flow statement and is considered more accurate because it directly accounts for cash flows.The main difference between the two formulas lies in the information they use to calculate FCF. The formula you saw in class uses the effective tax rate and capital expenditures as proxies for taxes and investments, respectively.
It assumes that changes in gross PPE reflect capital expenditures.The online formula, derived from the cash flow statement, provides a more direct calculation of FCF. It takes into account operating cash flows, investing cash flows, and financing cash flows to calculate the actual cash generated or used by the business during a specific period.When applying both formulas to the same financial statement, it is possible to obtain different FCF values.
This discrepancy can occur due to differences in how the two formulas account for items such as depreciation, changes in working capital, or non-cash expenses.To ensure accuracy, it is recommended to use the formula derived from the cash flow statement, as it provides a more comprehensive view of the cash flows generated by the business. However, it is important to understand the assumptions and limitations of both formulas and interpret the results accordingly.
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INSTRUCTIONS:
1. the answer must be typed.
2. minimum of five (5) pages
3. give relavant examples in the Zambian context.
QUESTION:
Explain factual content on various kinds of insurance in accordance to businesses in Zambia. Provide examples of such businesses that accept the norms of the insurance.
In Zambia, businesses often utilize different types of insurance to mitigate risks and protect their assets. Some common types of insurance include:
1. Property Insurance: This type of insurance covers damages or losses to physical property such as buildings, equipment, and inventory. For example, a manufacturing company in Zambia may have property insurance to protect its factory premises and machinery from fire, theft, or natural disasters.
2. Liability Insurance: Liability insurance protects businesses from legal liabilities arising from third-party claims. For instance, a construction company in Zambia may have liability insurance to cover potential damages or injuries caused by its operations.
3. Business Interruption Insurance: This insurance provides coverage for income loss and additional expenses incurred due to a temporary shutdown of business operations. For example, a restaurant in Zambia may have business interruption insurance to compensate for lost revenue during a period of closure caused by a fire or other covered event.
4. Motor Vehicle Insurance: This insurance covers damages or injuries caused by vehicles used in business operations. Businesses in Zambia that rely on transportation, such as logistics companies or taxi services, often have motor vehicle insurance.
5. Workers' Compensation Insurance: This insurance provides coverage for employees who suffer work-related injuries or illnesses. It compensates for medical expenses and lost wages. Many businesses in Zambia, across various industries, have workers' compensation insurance to protect their employees.
These examples highlight the importance of insurance for businesses in Zambia. Insurance helps businesses manage risks, safeguard their assets, and ensure continuity in the face of unforeseen events. It is crucial for businesses to assess their specific needs and choose appropriate insurance coverage to mitigate potential risks effectively.
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In Zambia, businesses often utilize different types of insurance to mitigate risks and protect their assets. Some common types of insurance include:
1. Property Insurance: This type of insurance covers damages or losses to physical property such as buildings, equipment, and inventory. For example, a manufacturing company in Zambia may have property insurance to protect its factory premises and machinery from fire, theft, or natural disasters.
2. Liability Insurance: Liability insurance protects businesses from legal liabilities arising from third-party claims. For instance, a construction company in Zambia may have liability insurance to cover potential damages or injuries caused by its operations.
3. Business Interruption Insurance: This insurance provides coverage for income loss and additional expenses incurred due to a temporary shutdown of business operations. For example, a restaurant in Zambia may have business interruption insurance to compensate for lost revenue during a period of closure caused by a fire or other covered event.
4. Motor Vehicle Insurance: This insurance covers damages or injuries caused by vehicles used in business operations. Businesses in Zambia that rely on transportation, such as logistics companies or taxi services, often have motor vehicle insurance.
5. Workers' Compensation Insurance: This insurance provides coverage for employees who suffer work-related injuries or illnesses. It compensates for medical expenses and lost wages. Many businesses in Zambia, across various industries, have workers' compensation insurance to protect their employees.
These examples highlight the importance of insurance for businesses in Zambia. Insurance helps businesses manage risks, safeguard their assets, and ensure continuity in the face of unforeseen events. It is crucial for businesses to assess their specific needs and choose appropriate insurance coverage to mitigate potential risks effectively.
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account field.)
View transaction list
Journal entry worksheet
< 1 2 3 5 6 >
Record the closing entry for revenue accounts.
Note: Enter debits before credits.
Date General Journal Debit Credit
Dec 31 Record entry Clear entry View general journal Great Adventures Problem AP7-1 (GL)
Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $12,200. They expect to use the Suburban for five years and then sell the vehicle for $4,600. The following expenditures related to the vehicle were also made on July 1, 2022:
The company pays $1,850 to GEICO for a one-year insurance policy.
The company spends an extra $3,200 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides..
⚫An additional $2,050 is spent on a deluxe roof rack and a trailer hitch.
The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $500 for basic vehicle maintenance related to changing the oll, replacing the windshield wipers, rotating the tires, and inserting a new air filter.
We must enter the closing transaction for revenue accounts on December 31. Depending on the income accounts that Great Adventures uses, specific accounts and amounts may differ. The final entry will be as follows, assuming we have revenue accounts like Sales Revenue, Rental Revenue, or Service Revenue:
31st of December Revenue Accounts in General Journal Debit Credit (such as Sales Revenue, Rental Revenue, and Service Revenue) X Income Report X The total revenue for the period will be shown on the debit side of the entry, and the Income Summary account will be shown on the credit side. In order to get ready for closing, this item moves the revenue amounts to the Income Summary account.Please be aware that the precise accounts and sums could change depending on the revenue recognition guidelines and the company's structure of accounts. To appropriately record the closing entry for revenue accounts, it's crucial to refer to the company's specific information.
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Case Study:-Wells Fargo Banks on Recovery
Part 1
1. Provide Brief Summary of the Case.
2. List the key players (organizations, individuals, countries, governments etc.) in the case
3. List the critical decision(s) that need to be made.
4. List the relevant textbook concepts closely related to your chosen case.
Part 2
5. Answer the questions below.
6. Research the story on your own looking for additional information and/or perspective not
reported in the textbook case.
7. Take a position a defend it. Make sure to include specific concepts from the textbook in
arguments.
Questions for Discussion
How did Wells Fargo’s focus on short-term gains violate the duties it owed to consumers, regulators, and employees?
Describe how the Wells Fargo scandal demonstrates that organizational leaders must not only establish goals but ensure that those goals are being acted upon appropriately.
Why are ethical values useless unless they are continually reinforced within the company?
Part 1
1. Brief Summary of the Case:
The Wells Fargo case involves a major scandal that unfolded in 2016 when it was revealed that employees of the bank had opened millions of unauthorized bank and credit card accounts on behalf of customers without their knowledge or consent. The scandal brought to light serious ethical and legal issues, leading to regulatory investigations, fines, and damage to the bank's reputation.
2. Key Players:
- Wells Fargo: The multinational financial institution at the center of the scandal.
- John G. Stumpf: The CEO of Wells Fargo during the time of the scandal.
- Carrie Tolstedt: Former head of Wells Fargo's community banking division, where the fraudulent practices occurred.
- Consumer Financial Protection Bureau (CFPB): The regulatory agency that conducted investigations and imposed fines on Wells Fargo.
3. Critical Decisions:
- How to address the fraudulent practices and take appropriate action against those responsible.
- How to rebuild trust with customers, regulators, and employees.
- How to implement effective controls and monitoring systems to prevent similar issues in the future.
4. Relevant Textbook Concepts:
- Ethical decision-making and corporate social responsibility.
- Organizational culture and values.
- Leadership and accountability.
- Corporate governance and compliance.
Part 2
5. Answers to the Questions:
a. Wells Fargo's focus on short-term gains violated the duties it owed to consumers, regulators, and employees in several ways. By pressuring employees to meet aggressive sales targets and incentivizing cross-selling, the bank created a high-pressure sales culture that encouraged unethical behavior. Opening unauthorized accounts violated the trust and financial well-being of consumers. It also violated regulatory requirements and consumer protection laws. Furthermore, the bank failed in its duty to its employees by creating unrealistic sales goals, fostering a toxic work environment, and subjecting employees to potential legal and reputational risks.
b. The Wells Fargo scandal demonstrates that organizational leaders must not only establish goals but also ensure that those goals are being acted upon appropriately. Leaders have a responsibility to set a positive example and create an ethical culture within the organization. They must establish clear expectations, provide adequate training and support, and regularly monitor and evaluate performance to ensure compliance with ethical and legal standards. Leaders should promote transparency, open communication, and a strong system of checks and balances to prevent unethical behavior from going unnoticed or unaddressed.
c. Ethical values are useless unless they are continually reinforced within the company because the organizational culture and behavior are influenced by the actions and decisions of leaders and employees. Without consistent reinforcement, ethical values may be overshadowed by other pressures, such as financial targets or personal gains. Reinforcement can be achieved through training programs, communication channels, rewards and recognition systems, and strong leadership commitment to ethics and integrity. It is essential to embed ethical values into the fabric of the organization and hold individuals accountable for their actions to create a sustainable ethical culture.
6. Additional Perspective:
In researching the Wells Fargo scandal, you may find further details on the internal dynamics, employee testimonies, customer impact, regulatory response, and long-term consequences for the bank. Additional perspectives from experts, industry analysts, and stakeholders can provide deeper insights into the underlying issues and implications of the case.
7. Position and Arguments:
Taking a position on the case would involve analyzing the ethical and leadership failures at Wells Fargo and discussing the importance of establishing an ethical culture, aligning goals with ethical conduct, and the need for strong governance and compliance mechanisms. The arguments could highlight the significance of leadership accountability, the role of corporate values in guiding behavior, and the long-term consequences of prioritizing short-term gains over ethical considerations. Relevant concepts from the textbook can be used to support and strengthen the arguments.
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: Spherical Manufacturing recently spent $10 million to purchase some equipment used in the manufacture of disk brakes. This equipment has a CCA rate of 25% and Spherical's marginal corporate tax rate is 35%. a. What are the annual CCA deductions associated with this equipment for the first five years? b. What are the annual CCA tax shields for the first five years? c. What is the present value of the first five CCA tax shields if the appropriate discount rate is 12% per year? d. What is the present value of all the CCA tax shields assuming the equiment is never sold and the appropriate discount rate is 12% per year? e. How might your answer to part (d) change if Spherical anticipates that its marginal corporate tax rate will increase substantially over the next five years?
The CCA rate for the equipment is 25%. The initial cost of the equipment is $10 million. To compute the CCA deduction, we multiply the initial cost of the equipment by the CCA rate.The formula to calculate the CCA deduction for the first year is as follows:CCA deduction = Initial cost of equipment * CCA rateFor Spherical Manufacturing.
The CCA deduction for the first year is:$10,000,000 * 0.25 = $2,500,000The CCA rate of the equipment is constant at 25%. Therefore, the CCA deductions for the first five years are:$2,500,000 * 0.25 = $625,000$625,000 * 0.25 = $156,250$156,250 * 0.25 = $39,063$39,063 * 0.25 = $9,766$9,766 * 0.25 = $2,441b. The annual CCA tax shield is the CCA deduction multiplied by the corporate tax rate.
The corporate tax rate for Spherical Manufacturing is 35%. The present value of the first five CCA tax shields can be found using the following formula:Present value of CCA tax shields = CCA tax shield / (1 + r)nWhere r is the discount rate, and n is the year in which the tax shield is received.The appropriate discount rate is 12%. Therefore, the present value of the first five CCA tax shields is:Year 1: $218,750 / (1 + 0.12)1 = $195,312.50Year.
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Critically assess the extent to which Jeff Bezos leadership was ethical
Jeff Bezos' leadership at Amazon has achieved remarkable success, the ethical implications of the company's treatment of workers, environmental impact, and philanthropic efforts have raised valid concerns.
He is credited with making Amazon one of the most successful companies in the world, with a market value of over $1 trillion. However, his leadership has also been the subject of scrutiny, particularly in terms of its ethics.
This essay will critically assess the extent to which Jeff Bezos' leadership was ethical. The ethical implications of Amazon's business practices are some of the most concerning. One of Amazon's most significant criticisms has been its treatment of workers, particularly in its warehouses.
Amazon's employees have reported poor working conditions, with some having to urinate in bottles to meet their quotas. They have also reported feeling overworked and undervalued, with the company pushing them to their limits to maximize productivity. Amazon's business practices have also been scrutinized in terms of the environment.
Amazon's carbon footprint is substantial, and it has been criticized for its lack of sustainability initiatives. In terms of philanthropy, Bezos has been criticized for not doing enough. Despite being one of the richest men in the world, he has not given back as much as his peers. While he has donated to charity in the past, he has been criticized for not giving as much as he could have given his wealth.
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competitive grid analysis;
COMPSET for courtyard by marriott hotel
By service scale / quality
By geographical location and accessibility
By event organizing capacity
Average price per room
By total number of rooms to welcome large groups
By leisure facilities (swimming pool, spa, gym, etc.)
Parking and parking price
Food and Beverage, restaurant, pubs,
Star rating – how many starts each hotel is 1, 2, 3, 4, 5
Reviews Score ( please use at least 3 sites as comparison )
Other information that is relevant any sets one hotel apart from the other
Competitive grid analysis, also known as COMPSET analysis, is a strategic tool used to compare and analyze key competitive factors among a set of hotels.
In the case of Courtyard by Marriott hotel, the analysis can be conducted using various criteria such as service scale/quality, geographical location, event organizing capacity, average price per room, total number of rooms, leisure facilities, parking, food and beverage offerings, star rating, review scores, and other relevant differentiating factors.
In a competitive grid analysis for Courtyard by Marriott hotel, the main answer in 15-20 words would be: COMPSET analysis compares key factors like service quality, location, price, room capacity, facilities, ratings, reviews, and unique features.
A more detailed explanation would involve examining each criterion and how Courtyard by Marriott compares to its competitors in each aspect. For example, in terms of service scale/quality, the analysis would assess the range and quality of services offered by Courtyard by Marriott compared to its competitors. Geographical location and accessibility would involve considering factors like proximity to airports, transportation options, and nearby attractions. Event organizing capacity would assess the hotel's ability to host events and accommodate large groups. Average price per room would involve comparing Courtyard by Marriott's pricing to that of its competitors. Leisure facilities like swimming pools, spas, and gyms would be evaluated, as well as parking availability and associated costs. The analysis would also consider food and beverage offerings, star ratings, review scores from multiple sites, and any unique features that set Courtyard by Marriott apart from its competitors.
By conducting a comprehensive COMPSET analysis, Courtyard by Marriott can identify its competitive advantages, areas for improvement, and potential opportunities to differentiate itself in the market, thereby making informed strategic decisions to enhance its positioning and performance.
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Select all the examples of profit centers: retail clothing store bank branch production department accounting department service department PepsiCo Duke Energy welding department human resources retail furniture store hotel reservation center Starbucks
Among the alternatives provided, the following are examples of profit centres: Retail clothing store: A retail clothing store makes money by charging consumers for clothes and accessories. Because its main objective is to produce money through its sales activities, it is a profit centre.
Bank branch: A bank branch provides consumers with a range of banking services, including deposits, loans, and financial goods. It functions as a profit centre because its primary goals are to make money through service charges, interest income, and other financial operations. Production division: A production division is in charge of creating products or providing services. If a department is run as a cost centre, efficiency and cutting expenses are its main priorities. But if it runs as a profit centre, it seeks to: gain revenue from the sale of its manufactured products or rendered services. A retail furniture store offers furniture items to customers and makes money through sales, much like a retail apparel store does. By attempting to turn a profit through its retail operations, it serves as a profit centre. Hotel reservation centre: A hotel reservation centre manages reservations and bookings for lodging. Due to the fact that its main objective is to create cash through reservations for rooms and related services, it might be regarded as a profit centre. The welding department, PepsiCo, Duke Energy, and Starbucks are not examples of profit centres in the sense that the options define them. They might engage in profitable activities, but they are not distinct corporate divisions or departments that are just concerned with making money. through operations or sales.
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The agreement to amend/extend contract
a. rejects an original offer and substitutes new terms
b. can be used to extend the length of a listing agreement
c. you signed only by the party requesting the amendment
d. can't a mandates in terms only by mutual agreement of the parties to the contract to buy and sell
The agreement to amend/extend contract: a. Rejects an original offer and substitutes new terms. The correct option is A.
An agreement to amend/extend a contract involves rejecting the original offer or terms of the contract and substituting them with new terms. It is a mutual agreement between the parties involved to modify or extend the existing contract. This process allows both parties to negotiate and agree upon changes that better suit their needs or address any issues that may have arisen since the original contract was signed.
By amending or extending the contract, the parties can update or redefine the terms, conditions, obligations, or duration of the agreement. This ensures that both parties are on the same page and have a clear understanding of the revised terms. It is essential to document any changes or amendments in writing to avoid any confusion or disputes in the future.
The agreement to amend/extend a contract can be a valuable tool in maintaining effective business relationships by accommodating changing circumstances or evolving needs over time. The correct option is A.
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The following table shows betas for several companies. Calculate each stock's expected rate of return using the CAPM. Assume the risk-free rate of interest is 8%. Use a 10% risk premium for the market portfolio. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Company Caterpillar Apple Johnson & Johnson Consolidated Edison Beta 1.77 1.41 0.60 0.32 Cost of Capital % % % %
Company Expected rate of return
Caterpillar 24.7%Apple 22.4%Johnson & Johnson 14%Consolidated Edison 11.2%Given that the following table shows betas for several companies, we are to calculate each stock's expected rate of return using the CAPM and assume the risk-free rate of interest is 8%, and use a 10% risk premium for the market portfolio.
The formula to calculate each stock's expected rate of return using the CAPM is;
Expected rate of return = Risk-free rate of return + Beta of the stock × (Market rate of return - Risk-free rate of return)
Therefore, the expected rate of return for Caterpillar will be;
Expected rate of return = 8 + 1.77 × (10) = 24.7%.
Hence, the expected rate of return for Caterpillar is 24.7%.
The expected rate of return for Apple will be;
Expected rate of return = 8 + 1.41 × (10) = 22.4%.
Hence, the expected rate of return for Apple is 22.4%.
The expected rate of return for Johnson & Johnson will be;
Expected rate of return = 8 + 0.6 × (10) = 14%.
Hence, the expected rate of return for Johnson & Johnson is 14%.
The expected rate of return for Consolidated Edison will be;
Expected rate of return = 8 + 0.32 × (10) = 11.2%.
Hence, the expected rate of return for Consolidated Edison is 11.2%.
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businessoperations managementoperations management questions and answersquestion 1 which of the following statements is false? oa. although sending an e-mail message to 200 people may be more efficient than having a face-to-face meeting with each of them, it may also be less effective. ob. e-mail is a richer communication medium than a telephone conversation. oc communication sometimes involves one person's unintentional
Question: QUESTION 1 Which Of The Following Statements Is False? Oa. Although Sending An E-Mail Message To 200 People May Be More Efficient Than Having A Face-To-Face Meeting With Each Of Them, It May Also Be Less Effective. Ob. E-Mail Is A Richer Communication Medium Than A Telephone Conversation. Oc Communication Sometimes Involves One Person's Unintentional
QUESTION 1
Which of the following statements is false?
Oa. Although sending an e-mail message to 200 people may be more effic
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Transcribed image text: QUESTION 1 Which of the following statements is false? Oa. Although sending an e-mail message to 200 people may be more efficient than having a face-to-face meeting with each of them, it may also be less effective. Ob. E-mail is a richer communication medium than a telephone conversation. Oc Communication sometimes involves one person's unintentional transmission of ideas to another person. Od. A lack of feedback from Pam to Sam may indicate that Pam received Sam's message but chose to ignore it. Oe. none of the above
Based on the information provided, the false statement among the options is: Oc. Communication sometimes involves one person's unintentional transmission of ideas to another person.
This statement is false because communication does not necessarily involve unintentional transmission of ideas. Communication is a deliberate process of conveying information, thoughts, or ideas from one person to another. It involves the active participation and intention of both the sender and the receiver.
Unintentional transmission of ideas would imply that the sender is unaware of their communication or that the message was transmitted without their knowledge or intention. However, effective communication requires conscious effort and understanding between both parties involved.
The other statements are true:
Oa. Although sending an e-mail message to 200 people may be more efficient than having a face-to-face meeting with each of them, it may also be less effective. This statement acknowledges that while email communication can be efficient in terms of time and reach, it may lack the personal touch and nuances of face-to-face interaction.
Ob. E-mail is a richer communication medium than a telephone conversation. This statement is true because email allows for the inclusion of written text, attachments, links, and other multimedia elements, providing a more comprehensive and detailed mode of communication compared to a simple telephone conversation.
Od. A lack of feedback from Pam to Sam may indicate that Pam received Sam's message but chose to ignore it. This statement recognizes that the absence of feedback from the recipient can be an indication that they received the message but deliberately chose not to respond or acknowledge it.
In conclusion, the false statement is Oc. Communication sometimes involves one person's unintentional transmission of ideas to another person. Communication is an intentional and purposeful process where ideas and information are consciously conveyed between individuals.
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Why is "it is important to set feminist priorities and keep them" is so important?
"It is important to set feminist priorities and keep them" is important for several reasons 1. Feminist priorities help to bring about change: Feminist priorities are important because they focus on bringing about change in society.
Feminism seeks to create an environment that is fair and equal for everyone. Setting priorities helps to bring about this change by addressing the most pressing issues that women face.
2. It keeps the movement on track:Setting feminist priorities is crucial because it keeps the movement on track. Without priorities, the feminist movement would become disorganized and lose focus. Priorities keep the movement united, ensuring that everyone is working towards the same goals.
3. It helps to hold governments accountable:Setting feminist priorities is also important because it helps to hold governments accountable. Feminist priorities are often linked to policy change, and by setting clear priorities, the feminist movement can hold governments accountable for implementing policies that are in line with their goals.
4. It empowers women: Setting feminist priorities is empowering for women. It gives them a voice in society and allows them to advocate for change. Priorities also help women to identify what is most important to them and to focus their efforts on achieving those goals. Overall, setting feminist priorities is essential for bringing about change, keeping the movement on track, holding governments accountable, and empowering women.
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Describe the changing social contract between organizations and
employees, and explain what it means for workers and human resource
managers (Module Objective 4.7: Evaluation).
The social contract between organizations and employees has changed drastically over the past few years. In the past, the contract was primarily concerned with job security, benefits, and compensation.
However, with the rise of the gig economy, remote work, and the increasing prevalence of short-term contract work, the social contract has shifted to a more fluid and flexible one. Today, the social contract is centered around trust, transparency, and the ability to learn new skills to remain competitive in a rapidly changing job market. As a result, workers are increasingly looking for employers who can provide them with a sense of purpose, opportunities for growth and development, and work-life balance.This shift in the social contract has significant implications for human resource managers, who are now responsible for recruiting, retaining, and developing a more diverse and dispersed workforce. In particular, human resource managers need to be adept at attracting and retaining top talent, developing strategies to manage a remote workforce, and providing opportunities for learning and development. They also need to be skilled in using data and analytics to track employee engagement, satisfaction. The changing social contract between organizations and employees means that workers are increasingly looking for employers who can provide them with a sense of purpose, opportunities for growth and development, and work-life balance. At the same time, human resource managers need to be adept at attracting and retaining top talent, developing strategies to manage a remote workforce, and providing opportunities for learning and development. Ultimately, the social contract between organizations and employees is evolving, and it is up to both sides to work together to create a mutually beneficial relationship that meets the needs of workers and the organizations they work for.
Thus, this new social contract between organizations and employees means that workers are looking for employers who can provide them with a sense of purpose, growth, and work-life balance. Moreover, human resource managers are required to be skilled in attracting and retaining top talent and managing a remote workforce and providing opportunities for learning and development. Lastly, both employers and employees have to work together to establish a mutually beneficial relationship that fulfills the needs of workers and the organizations they work for.
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You work in the HR Department of a company that would like to establish a relationship with a manufacturing plant in Mexico. The company your organization is considering contracting with promises assembly savings of 30%, provided that your organization manages the employees (both local and from headquarters) who are working at the plant. That would allow your organization to become much more price competitive in the industry. Your C.E.O. has scheduled a meeting for Monday and asked you to represent the interests of HR with questions that should be asked to do HR-related due diligence.
You want to show up to Monday's meeting with at least 10 key questions that you consider key to making the final decision. In all likelihood, this will not be the last opportunity to partner with another company. So, you want to make sure that your questions cover every key HR-related area.
When considering a potential partnership with a manufacturing plant in Mexico, it is crucial to conduct HR-related due diligence to ensure a successful collaboration.
Here are 10 key questions that cover various HR areas:
Workforce Management:
How will the transition of employees from headquarters to the plant be managed?
What strategies are in place to effectively integrate and manage a diverse workforce?
Employment Practices:
What are the local labor laws and regulations in Mexico, and how do they differ from our current location?
How will employment contracts, benefits, and compensation be structured for employees at the new plant?
Cultural Understanding:
How will the organization foster cultural understanding and promote effective communication between local and headquarters employees?
What steps will be taken to address any potential cultural differences or challenges?
Talent Acquisition and Retention:
How will the organization attract and retain skilled employees in the local market?
What recruitment strategies and talent development programs will be implemented to build a strong workforce?
Training and Development:
How will training and development programs be structured to enhance the skills and capabilities of employees at the new plant?
Will there be cross-training opportunities to promote knowledge sharing and flexibility?
Performance Management:
What performance evaluation processes will be implemented to assess employee performance and provide feedback?
How will performance expectations be aligned between local and headquarters employees?
Employee Engagement and Communication:
How will the organization foster employee engagement and maintain effective communication channels across locations?
What mechanisms will be in place to address employee concerns and ensure a positive work environment?
Employee Benefits and Welfare:
What employee benefits and welfare programs will be provided to ensure a competitive and supportive work environment?
How will healthcare, retirement plans, and other benefits be tailored to meet local requirements?
Compliance and Legal Obligations:
How will the organization ensure compliance with local labor laws, regulations, and reporting requirements?
What measures will be taken to mitigate any potential legal risks or labor disputes?
Change Management:
What change management strategies will be employed to address any resistance or challenges during the transition?
How will the organization effectively communicate and manage the changes with employees from both locations?
These questions will help uncover critical HR-related aspects, promote effective decision-making, and ensure a smooth partnership with the manufacturing plant in Mexico.
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Write 5 types of grant proposals and a paragraph describing
each.
Research Grant Proposal: A research grant proposal is a request for funding to support scientific or academic research projects. It outlines the research objectives, methodology, expected outcomes, and budget requirements. This type of proposal is typically submitted by researchers or academic institutions seeking financial support to conduct studies, experiments, or investigations.
Community Development Grant Proposal: A community development grant proposal seeks funding for projects that aim to improve the quality of life within a specific community or region. These proposals often focus on initiatives such as infrastructure development, education programs, healthcare services, social welfare projects, or environmental sustainability efforts. The proposal highlights the project's goals, target population, implementation plan, expected outcomes, and budget. 3. Nonprofit Program Grant Proposal: Nonprofit organizations often submit program grant proposals to secure funding for specific initiatives or programs aligned with their mission. These proposals outline the program's objectives, activities, target beneficiaries, evaluation methods, and budgetary needs. They also emphasize the organization's capacity and expertise to successfully implement the program and achieve the desired social impact. 4. Arts and Culture Grant Proposal: Arts and culture grant proposals are aimed at securing funding for projects related to artistic and cultural endeavors. These proposals can include requests for support in areas such as visual arts, performing arts, cultural festivals, museum exhibitions, or arts education programs. They highlight the project's artistic vision, community engagement, impact on cultural diversity, and budget requirements. 5. Business Start-up Grant Proposal: A business start-up grant proposal is submitted by aspiring entrepreneurs seeking financial assistance to launch a new business venture. The proposal typically includes information on the business concept, market analysis, competitive advantage, implementation plan, financial projections, and requested funding. It outlines how the grant would be utilized to support business development, create jobs, and contribute to the local economy. Each of these grant proposal types serves a specific purpose and requires careful planning, compelling storytelling, and a strong justification for the requested funding. The proposals need to align with the funding organization's priorities and demonstrate the potential for positive outcomes and impact in their respective domains.
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You have the following data regarding a share of stock in a particular firm:
The dividend at the end of the current year is expected to be $2.48/share
The dividend is expected to grow at a constant rate forever
The dividend growth rate is 9.13%
Investors in the stock expect a 18.78% total return from investing in the stock
What will be the dividend yield for the first year (t=0 to t=1)?
(Answer to the nearest 0.01%)
The dividend yield for the first year is 9.00%, rounded to the nearest 0.01%.
The dividend yield for the first year is the expected dividend at the end of the current year divided by the current stock price. We can use the Gordon Growth Model to calculate the current stock price:
Current Stock Price = Expected Dividend / (Required Rate of Return - Dividend Growth Rate)
Plugging in the given values, we get:
Current Stock Price = $2.48 / (0.1878 - 0.0913)
Current Stock Price = $27.54
Now that we have the current stock price, we can calculate the dividend yield for the first year:
Dividend Yield = Expected Dividend / Current Stock Price
Dividend Yield = $2.48 / $27.54
Dividend Yield = 0.09 or 9.00%
Therefore, the dividend yield for the first year is 9.00%, rounded to the nearest 0.01%.
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Jasper Gardens Nursing Home’s board of directors and executive leadership team have asked for your assistance with addressing some of the major issues that have adversely impacted the organization’s financial and operational performances. They have requested that you advise them on the following:
Strategies to help the organization address the absence of a Medicare-certified hospice, which has inconvenienced patients and their family members and has led to negative publicity for the organization
Strategies that might improve Jasper Gardens Nursing Home’s overall financial performance
Strategies that might improve Jasper Gardens Nursing Home’s operational performance
Strategies that might assist Jasper Gardens Nursing Home with effectively addressing the various external factors that may potentially threaten its market share
To address challenges, Jasper Gardens Nursing Home can establish partnerships for hospice care, diversify revenue streams, optimize costs, enhance staff training, improve quality, streamline processes, differentiate through marketing, engage the community, and stay informed about industry trends.
To improve the overall financial performance, Jasper Gardens Nursing Home can consider revenue diversification by expanding into specialized care units or offering outpatient services. Cost optimization measures can be implemented by analyzing expenses and identifying areas for reduction or optimization. Additionally, implementing effective marketing and branding strategies can enhance visibility and attract more patients.
Operational performance can be improved through staff training and development programs, quality improvement initiatives, and streamlining processes to enhance efficiency.
To effectively address external factors threatening market share, a competitive analysis can inform strategies to differentiate the nursing home. Engaging the community through outreach programs and staying informed about industry trends can help adapt to changing market conditions.
By implementing these strategies, Jasper Gardens Nursing Home can address challenges, enhance financial and operational performance, and effectively navigate the market.
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Choose the correct real number property for the formula:
(3 x 8) x 10 = 3 x (8 x 10)
O a. Closure Property
O b. Commutative Property
O c. Associative Property
O d. Distributive Property
The correct real number property for the given formula is the Associative Property. The Associative Property states that the grouping of numbers being added or multiplied does not affect the result. Thus, option C is correct.
In other words, when we have a series of additions or multiplications, we can change the grouping of the numbers without changing the final result.
In the given formula, we have the multiplication of three numbers: (3 x 8) x 10 and 3 x (8 x 10). According to the Associative Property, we can change the grouping of the numbers without affecting the result.
If we calculate (3 x 8) first, we get 24. Then, multiplying 24 by 10 gives us 240.
Alternatively, if we calculate 8 x 10 first, we get 80. Then, multiplying 3 by 80 gives us 240.
In both cases, the result is 240. This demonstrates that changing the grouping of the numbers does not change the final product, confirming the application of the Associative Property.
In conclusion, the given formula exhibits the Associative Property because we can rearrange the grouping of the numbers without altering the outcome of the multiplication operation. Thus, option C is correct.
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Trading Stock is defined in s 70-10(1)(a) ITAA 1997 as 'anything produced, manufactured, acquired that is held for the purposes of manufacture, sale or exchange in the ordinary course of *business; REQUIRED a) Explain the relevant legislation which brings trading stock to account for income tax purposes as assessable income or as an allowable deduction.
The relevant legislation that brings trading stock to account for income tax purposes as assessable income or as an allowable deduction is Section 70-35 of the Income Tax Assessment Act 1997 (ITAA 1997) in Australia.
Section 70-35 of the ITAA 1997 sets out the provisions for including trading stock as assessable income or as an allowable deduction for income tax purposes. It defines trading stock as anything produced, manufactured, acquired, or held for the purpose of manufacture, sale, or exchange in the ordinary course of business.
Under this legislation, trading stock is treated as assessable income when it is taken into account in determining the value of the stock on hand at the end of the income year. The value of trading stock is typically calculated based on the cost of acquisition or production, including associated expenses such as freight and storage costs.
Alternatively, trading stock can also be claimed as an allowable deduction when it is disposed of, lost, or destroyed. The deduction is generally allowed for the cost of the trading stock and any associated expenses incurred in the course of disposing, losing, or destroying the stock.
It's important to note that there are specific rules and requirements outlined in the ITAA 1997 regarding the valuation, treatment, and recognition of trading stock for income tax purposes. These rules aim to ensure that the correct amount of assessable income is accounted for and deductions are properly claimed.
Section 70-35 of the ITAA 1997 is the relevant legislation that governs the treatment of trading stock for income tax purposes in Australia. It outlines the provisions for including trading stock as assessable income or as an allowable deduction, depending on the circumstances of acquisition, production, and disposal. Adhering to these legislative provisions ensures proper reporting and taxation of trading stock in accordance with Australian tax laws.
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The definition of "gross income" is an important definition in the determination of a person's taxable income, in the following situations, the inclusion of the relevant amount within gross income needs to be determined. all taxpayers are residents of
the republic.
Kylie Monague
carries on business as an author (a writer of books). she writes her books in South Africa. During the 2018 year of assessment, a royalty the equivalent of R10000 accrued to her from the sales, in Zimbabwe, of a book written by her.
ELVIS THAVER
is employed as a salesperson by a retailer, During the 2018 year of assessment the won a prize for being its most productive salesperson of the year. The prize was an all-inclusive, two-week holiday at a seaside resort, valued at R20000 (this amount was also the cost of this prize to his employer)
(1) There is an exemption or other provisions apply, Kylie's R10,000 royalty income from Zimbabwe would generally be included in her gross income for tax purposes. (2) The value of the holiday prize, R20,000, would need to be included in Elvis Thaver's gross income for tax purposes.
In the determination of a person's taxable income, the inclusion of the relevant amounts within gross income needs to be determined. Let's analyze the two situations mentioned;
Kylie Monague's Royalty Income;
Kylie Monague, as an author, earned a royalty of R10,000 from the sales of her book in Zimbabwe. The key factor in determining whether this amount should be included in her gross income is the source of the income.
Since Kylie writes her books in South Africa and the royalty income accrued from sales in Zimbabwe, it falls under the category of foreign-sourced income. In South Africa, foreign-sourced income is generally taxable for tax residents unless exempted under specific provisions, such as certain double taxation agreements.
Therefore, unless there is an exemption or other provisions apply, Kylie's R10,000 royalty income from Zimbabwe would generally be included in her gross income for tax purposes.
Elvis Thaver's Holiday Prize;
Elvis Thaver, an employed salesperson, won a prize for being the most productive salesperson of the year. The prize was all-inclusive, two-week holiday at a seaside resort, valued at R20,000. The key factor here is to determine whether the prize should be included in gross income.
In South Africa, prizes and awards received by an employee are generally considered taxable benefits and should be included in the employee's gross income. In this case, the holiday prize won by Elvis Thaver would be considered a taxable benefit.
Therefore, the value of the holiday prize, R20,000, would need to be included in Elvis Thaver's gross income for tax purposes.
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Portfolio expected rate of return: Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio currently is valued at $750,000 and is allocated in Treasury bills, as S&P index fund, and an emerging market fund as follow:
Expected Return $ Value
Treasury bills 4.4% 76,000
S&P 500 Index Fund 6.7% 430,000
Emerging Market Fund 11.3% 244,000
a. Based on the current portfolio composition and the expected rates of return given above, what is the expected rate of return for Barrys portfolio?
b Barry is considering a reallocation of his investments to include more treasury bills and less exposure to emerging markets. If Barry moves all of his money from the emerging market fund and puts it is treasury bills, what will be the expected rate of return on the resulting portfolio?
a. Based on the current portfolio composition and the given expected rates of return, the expected rate of return for Barrys portfolio is ______ round to two decimal places.
b if Barry moves all his money out of emerging market funds and puts it in treasury bills, the expected rate of return for his portfolio is ______ round to two decimal places.
The Expected Return of the Current Portfolio is calculated to be 7.96%. The Expected Rate of Return after Reallocation is 5.72%.
The expected return on investment is a measure of the average or expected value of the distribution of expected returns over a given period of time.
It’s often used by managers of hedge funds and mutual funds, whose performance in a particular stock is not as important as the overall return of their portfolio.
a) The calculation for the expected return can be done using the following formula:
Expected Return = Weight of Treasury Bills × Expected Return on Treasury Bills + Weight of S&P 500 Index Fund × Expected Return on S&P 500 Index Fund + Weight of Emerging Market Fund × Expected Return on Emerging Market Fund
The weight of each investment can be calculated:
Weight = Value of Investment/Total Portfolio Value × 100
From the given information, we can get,
Weight of Treasury Bills = 76,000/750,000 × 100 = 10.13%
Weight of S&P 500 Index Fund = 430,000/750,000 × 100 = 57.33%
Weight of Emerging Market Fund = 244,000/750,000 × 100 = 32.53%
Expected Return of Current Portfolio = 10.13% × 4.4% + 57.33% × 6.7% + 32.53% × 11.3% = 7.96%.
b) We need to calculate the revised weights after reallocation:
Weight of Treasury Bills = (76,000 + 244,000)/750,000× 100 = 42.67%
Weight of S&P 500 Index Fund = 430,000/750,000 × 100 = 57.33%
Expected Rate of Return after Reallocation = 42.67% × 4.4% + 57.33% × 6.7% = 5.72%.
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Measuring costs using high-low method LO P1 [The following information applies to the questions displayed below] Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. Problem 21-1A (Algo) Part 1 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round intermediate calculations.) 2. Predict future total costs when sales volume is (a) 377,000 units and (b) 417,000 units.
1.The estimated variable cost per unit is $1.20, and the estimated total monthly fixed costs are -$79,000.
2.(a) When sales volume is 377,000 units, the predicted future total costs are $373,400.
2. (b) When sales volume is 417,000 units, the predicted future total costs are $421,400.
1.Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method.
To estimate the variable costs per unit and the total monthly fixed costs using the high-low method, we need to identify the high and low points in the data and calculate the differences in costs and activity levels.
Let's examine the data provided:
Month | Units Produced | Total Costs ($)
------------------------------------------
January | 300,000 | 320,000
February | 350,000 | 355,000
March | 400,000 | 400,000
April | 380,000 | 380,000
May | 420,000 | 425,000
June | 370,000 | 365,000
To determine the high and low points, we look for the months with the highest and lowest units produced:
High point: May - 420,000 units
Low point: June - 370,000 units
Now, let's calculate the differences in costs and activity levels:
Variable cost per unit = (Total cost at high point - Total cost at low point) / (Units produced at high point - Units produced at low point)
Variable cost per unit = (425,000 - 365,000) / (420,000 - 370,000)
Variable cost per unit = 60,000 / 50,000
Variable cost per unit = $1.20
To calculate the total monthly fixed costs, we can use the high or low point along with the variable cost per unit. Let's use the high point (May) to calculate the fixed costs:
Total monthly fixed costs = Total cost - (Variable cost per unit * Units produced)
Total monthly fixed costs = 425,000 - (1.20 * 420,000)
Total monthly fixed costs = 425,000 - 504,000
Total monthly fixed costs = -$79,000
The estimated variable cost per unit is $1.20, and the estimated total monthly fixed costs are -$79,000.
The negative value for fixed costs suggests that the high-low method may not be the most suitable method for estimating fixed costs accurately in this case.
Other methods, such as regression analysis, should be considered to obtain more reliable estimates for fixed costs.
2. Predict future total costs when sales volume is:
(a) 377,000 units:
To predict the future total costs when sales volume is 377,000 units, we'll use the estimated variable cost per unit and the fixed costs obtained from the high-low method.
Total future costs = Total fixed costs + (Variable cost per unit * Sales volume)
Total future costs = -$79,000 + (1.20 * 377,000)
Total future costs = -$79,000 + 452,400
Total future costs = $373,400
(b) 417,000 units:
Similarly, to predict the future total costs when sales volume is 417,000 units:
Total future costs = Total fixed costs + (Variable cost per unit * Sales volume)
Total future costs = -$79,000 + (1.20 * 417,000)
Total future costs = -$79,000 + 500,400
Total future costs = $421,400
(a) When sales volume is 377,000 units, the predicted future total costs are $373,400.
(b) When sales volume is 417,000 units, the predicted future total costs are $421,400.
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Joseph Moore bought 10-year. 10.3 percent coupon bonds issued by the U.S. Treasury three years ago at $912.31. If he sells these bonds, for which he paid the face value of $1,000, at the current price
Joseph Moore's realized yield on the bonds is approximately 4.58%.
To calculate Joseph Moore's realized yield on the bonds, we need to consider the purchase price, selling price, coupon payments received, and the holding period.
First, let's calculate the annual coupon payment. The bond has a 10.3% coupon rate, which means it pays $103 per year (10.3% of the face value of $1,000).
Since Joseph bought the bonds three years ago, he has received three coupon payments of $103 each, totaling $309 ($103 x 3).
Next, we calculate the total cash inflow. It includes the coupon payments received and the selling price of the bonds. So the total cash inflow is $309 (coupon payments) + $838.06 (selling price) = $1,147.06.
The initial cash outflow was the purchase price of the bonds, which was $912.31.
Now we can calculate the realized yield using the formula:
Realized Yield = [(Total Cash Inflow / Initial Cash Outflow) ^ (1 / Number of Years)] - 1
Realized Yield = [(1,147.06 / 912.31) ^ (1 / 3)] - 1
Calculating this expression, we find:
Realized Yield ≈ 0.0458
Converting it to a percentage, the realized yield is approximately 4.58%.
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Note the full question is Joseph Moore bought 10-year, 10.3 percent coupon bonds issued by the U.S. Treasury three years ago at $912.31. If he sells these bonds, for which he paid the face value of $1,000, at the current price of $838.06, what is his realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.)
George rents commercial space in a building for a three year term. During the lease term, the building is sold to Big Biz Ltd. George receives a written notice to begin paying rent to Big Biz Ltd. starting July 1st. On June 15th the storm of the century floods the building and George is unable to continue carrying on business. Can Big Biz Ltd. collect rent from George while the building is uninhabitable? Why or why not?
Whether Big Biz Ltd. can collect rent from George while the building is uninhabitable depends on the terms of the lease agreement and relevant laws in the jurisdiction where the building is located.
Typically, a commercial lease agreement would contain a provision stating that the tenant's obligation to pay rent is suspended if the premises become unusable or uninhabitable due to a casualty event, such as a flood. In this case, since the building has been flooded and George is unable to continue business, he may be entitled to a rent abatement during the period of time that the building is uninhabitable.
However, if the lease agreement does not contain such a provision, or if the lease agreement explicitly states that the tenant's obligation to pay rent remains in effect regardless of any casualty event or other circumstance beyond the landlord's control, then George may still be required to pay rent to Big Biz Ltd. even while the building is uninhabitable.
It's also worth noting that there may be relevant laws in the jurisdiction where the building is located that could impact the landlord-tenant relationship and obligations during a casualty event. Therefore, it's important for both parties to consult the applicable lease agreement and seek legal advice to determine their respective rights and obligations in this situation.
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The following data pertains to Stocks X and Y :
Recession Normal Boom
Market Market Market
Probability 0.2 0.5 0.3
Stock X return -20% 18% 50%
Stock Y return -15% 20% 10%
Required (a) What are the expected rates of return for Stocks X and Y (\% in 2 d.p.)? (b) What are the standard deviation of returns on Stocks X and Y (\% in 2 d.p.)? (c) Assume that out of your $10,000 portfolio, you invest $9,000 in Stock X and $1,000 in Stock Y.What is the standard deviation on your portfolio (\% in 2 d.p.)?
(a) Expected rates of return for Stock X is 20% and for Stock Y is 10%.
(b) The standard deviation of returns for Stock X is approximately 24.33%, and for Stock Y is approximately 13.23%.
(c) The standard deviation of the portfolio, considering $9,000 in Stock X and $1,000 in Stock Y, is approximately 19.78%.
(a) Expected rates of return for Stocks X and Y:
To calculate the expected rate of return, we multiply the probability of each market state by the corresponding return for each stock and sum them up.
Expected rate of return for Stock X:
= (0.2 * -20%) + (0.5 * 18%) + (0.3 * 50%)
= -4% + 9% + 15%
= 20%
Expected rate of return for Stock Y:
= (0.2 * -15%) + (0.5 * 20%) + (0.3 * 10%)
= -3% + 10% + 3%
= 10%
(b) Standard deviation of returns on Stocks X and Y:
To calculate the standard deviation of returns, we need to calculate the variance first and then take the square root to get the standard deviation.
Variance of Stock X:
= [(0.2 * (-20% - 20%)^2) + (0.5 * (18% - 20%)^2) + (0.3 * (50% - 20%)^2)]
= [0.2 * 1600 + 0.5 * 4 + 0.3 * 900]
= 320 + 2 + 270
= 592
Standard deviation of Stock X:
= sqrt(592)
= 24.33% (approx.)
Variance of Stock Y:
= [(0.2 * (-15% - 10%)^2) + (0.5 * (20% - 10%)^2) + (0.3 * (10% - 10%)^2)]
= [0.2 * 625 + 0.5 * 100 + 0.3 * 0]
= 125 + 50 + 0
= 175
Standard deviation of Stock Y:
= sqrt(175)
= 13.23% (approx.)
(c) Standard deviation on the portfolio:
To calculate the standard deviation of the portfolio, we need to consider the weights of each stock and their respective standard deviations.
Weight of Stock X = $9,000 / $10,000 = 0.9
Weight of Stock Y = $1,000 / $10,000 = 0.1
Standard deviation of the portfolio:
= sqrt((0.9^2 * (24.33%)^2) + (0.1^2 * (13.23%)^2))
= sqrt(0.6561 * 0.0597 + 0.01 * 0.0175)
= sqrt(0.0389 + 0.000175)
= sqrt(0.0391)
= 0.1978 (approx.)
The standard deviation on the portfolio is approximately 19.78%.
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Weisbro and Sons common stock sells for $21 a share and pays an annual dividend that increases by 5% annually. The market rate of return on this stock is 9%. What is the amount of the last dividend paid by Weisbro and Sons? Multiple Choice
a. $.77
b. $.80
c. $.84
d. $.87
e. $.88
The most recent dividend paid by Weisbro and Sons common stock is $0.80.
The given variables are as follows:
Stock sells for $21 a share.
Annual dividend increases by 5% annually.
Market rate of return on this stock is 9%.
Calculating the rate of return:
rate of return = (dividend + capital gains) / initial investment
rate of return = (dividend + (ending price - initial price)) / initial investment
Let the annual dividend paid for a share be x.
The total amount received by selling the share = Dividend + price of stock = $x + $21
Thus the rate of return can be written as:
9% = (x + (21 - 0)) / 21, Where 21 - 0 represents the initial investment.
9/100 * 21 = x + 21x = 1.89 - 21x = -19.11
The annual dividend is given by x, so we need to find x. The dividend will increase by 5% each year. Therefore, this year's dividend is:x * 1.05 = 0.8
The most recent dividend amount paid by Weisbro and Sons common stock is $0.80. Therefore, the correct option is (b). $.80.
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