I will choose Apple Inc. as the company for this exercise.
What does the customer want from the product/service? What needs does it satisfy?
Customers of Apple products, such as iPhones, iPads, MacBooks, and Apple Watch, seek high-quality, innovative, and user-friendly technology that enhances their daily lives. Apple's products satisfy various needs, including:
Functional needs: Customers want reliable and efficient devices that offer seamless integration across multiple devices and platforms.
Aesthetic needs: Customers value sleek design, premium materials, and a modern, minimalist aesthetic.
Status and identity needs: Apple products are often associated with prestige, sophistication, and being part of a technologically savvy community.
Convenience needs: Customers seek devices that simplify their tasks, provide easy access to information, and offer a seamless user experience.
If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Online? Or direct, via a catalog?
Customers can find Apple products in various retail channels. Apple operates its own retail stores worldwide, providing a specialized boutique experience where customers can interact with the products and receive assistance from knowledgeable staff. Additionally, Apple products are also available through authorized resellers, including electronic retailers, consumer electronics stores, and department stores. Customers can also purchase Apple products online directly from Apple's website or through e-commerce platforms.
Are there established price points for products or services in this area?
Apple products are known for their premium pricing strategy. The brand positions itself in the higher-end segment of the market, offering premium features and a unique user experience. Apple products often command higher price points compared to their competitors, reflecting the perceived value and quality associated with the brand.
When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of the market launch or subsequent promotions?
Apple has a strategic approach to product launches and promotions. They typically release new products and updates at specific times of the year, known as "product cycles." For example, new iPhone models are often launched in September, while major software updates are announced at Apple's annual Worldwide Developers Conference (WWDC) in June. These timings help generate anticipation and capitalize on customer demand.
In terms of seasonality, Apple experiences increased sales during holiday seasons, such as Christmas and back-to-school periods, when consumers are more inclined to purchase electronic devices. Additionally, Apple may align promotions with significant events like Black Friday or offer limited-time promotions during specific occasions.
Wider environmental issues, such as advancements in technology, competitive landscape, and changing consumer trends, also influence Apple's marketing and promotion strategies. For example, Apple may time their promotions to coincide with technological advancements, ensuring their products remain competitive and appealing to the market.
Please note that the specifics of Apple's marketing strategy may change over time, so it's always a good idea to refer to the latest information and updates from the company.
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You work for Capital Bank as an Analyst and you were approached by your private banker Mr. Radinamone to assist establish the value of his business. He expects his company to generate net cash flows of $5, 000,000 in the first year and $2, 000,000 for each of the next five years. The company can be sold for $10, 000,000 seven years from now. Comparable investments in the market earn 10 percent compounded annually. i) Determine how much Mr. Radinamone’s company is worth. (10 marks) ii) Mr. Radinamone offers to sell the company for P12 000 000. Determine whether the offer should be accepted or rejected based on the NPV rule.
i) Determining how much Mr. Radinamone’s company is worth is as follows:
Step 1: To determine the worth of Mr. Radinamone’s company, we first calculate the present value of all the net cash flows expected to be earned by the company throughout its existence.S
tep 2: The net cash flows that the company expects to generate for each of the next five years are $2,000,000 and these are the cash flows that are going to be received in the future. We need to determine the present value of these future cash flows. Future cash flows should be discounted by the present value of the investment. The formula for calculating the present value is given below:
PV = FV / (1 + r) n
PV = $2,000,000 / (1 + 0.10)1 + $2,000,000 / (1 + 0.10)2 + $2,000,000 / (1 + 0.10)3 + $2,000,000 / (1 + 0.10)4 + $2,000,000 / (1 + 0.10)5
PV = $7,120,990.96
The present value of the net cash flows is $7,120,990.96
Step 3: Now we need to add the present value of the cash flow expected in the first year to the present value of the future cash flows.
PV of net cash flows = $5,000,000 + $7,120,990.96 = $12,120,990.96
Therefore, Mr. Radinamone's company is worth $12,120,990.96.
ii) We can determine whether the offer should be accepted or rejected based on the NPV rule. In other words, if the NPV of an investment is positive, it is profitable and worth pursuing. If the NPV is negative, the investment should be avoided. On the other hand, if the NPV is zero, the investment will yield a return exactly equal to the cost of capital and the investment should be pursued if the investor has other reasons for doing so.Using the NPV formula, we can calculate the NPV as follows:
NPV = ∑ (Cash flows ÷ (1 + i)t) - Initial Investment
NPV = -$12,000,000 ÷ (1 + 0.10)0 + $5,000,000 ÷ (1 + 0.10)1 + $2,000,000 ÷ (1 + 0.10)2 + $2,000,000 ÷ (1 + 0.10)3 + $2,000,000 ÷ (1 + 0.10)4 + $2,000,000 ÷ (1 + 0.10)5 + $10,000,000 ÷ (1 + 0.10)7NPV = $410,055.43
Since the NPV is positive, the company is worth more than $12,000,000, and it is profitable and worth pursuing. Therefore, the offer should be accepted.
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QUESTION 3 20 MARKS Mario Foods produces frozen meals, which sells for $7 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based in the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from Mario's Foods' first two months in business: January 1,000 meals February 1,200 meals Sales Production 1,400 meals 1,000 meals Variable manufacturing expense per meal Sales commission expenses $1 per meal $700 Total fixed manufacturing $700 overhead Total fixed marketing and $600 $600 administrative expenses Required: a. Compute the product cost per meal produced under absorption costing and under variable costing based on January and February above. (2 MARKS) b. Prepare separate monthly income statements for January and for February, using the following: i. Absorption costing (9 MARKS) Variable costing (9 MARKS)
a. To compute the product cost per meal produced under absorption costing and variable costing, we need to consider the variable and fixed costs associated with production.
Absorption Costing: Product cost per meal produced under absorption costing includes both variable and fixed manufacturing overhead costs. Since all costs and production levels are exactly as planned, the total fixed manufacturing overhead and variable manufacturing expense per meal will remain constant.
Product cost per meal produced under absorption costing = Variable manufacturing expense per meal + (Total fixed manufacturing overhead / Number of meals produced)
For both January and February:
Variable manufacturing expense per meal = $1
Total fixed manufacturing overhead = $700
Number of meals produced: January = 1,000 meals, February = 1,200 meals
Product cost per meal produced under absorption costing:
January: $1 + ($700 / 1,000) = $1.70 per meal
February: $1 + ($700 / 1,200) ≈ $1.583 per meal
Variable Costing:
Product cost per meal produced under variable costing includes only the variable manufacturing expense per meal.
Product cost per meal produced under variable costing = Variable manufacturing expense per meal
For both January and February:
Variable manufacturing expense per meal = $1
Therefore, the product cost per meal produced under variable costing is $1 for both January and February.
b. Income Statements:
Using the absorption costing and variable costing methods, we can prepare separate monthly income statements for January and February.
January Income Statement (Absorption Costing):
Sales: 1,400 meals x $7 = $9,800
Product costs:
Cost of goods sold: 1,000 meals x $1.70 = $1,700
Fixed manufacturing overhead: $700
Total product costs: $1,700 + $700 = $2,400
Gross profit: $9,800 - $2,400 = $7,400
Operating expenses:
Sales commission expenses: $700
Fixed marketing and administrative expenses: $600
Total operating expenses: $700 + $600 = $1,300
Net income: $7,400 - $1,300 = $6,100
February Income Statement (Variable Costing):
Sales: 1,400 meals x $7 = $9,800
Product costs:
Cost of goods sold: 1,200 meals x $1 = $1,200
Gross profit: $9,800 - $1,200 = $8,600
Operating expenses:
Sales commission expenses: $700
Fixed marketing and administrative expenses: $600
Total operating expenses: $700 + $600 = $1,300
Net income: $8,600 - $1,300 = $7,300
Note: The income statements prepared are simplified and do not include all possible line items.
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Montclair Manufacturing is considering leasing some equipment. The annual lease payment would be $345,000 per year for seven years. The appropriate interest rate is 6 percent and the company is in the 21 percent tax bracket. What reduction in debt capacity would occur if the company signs the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
o calculate the reduction in debt capacity due to signing the lease, we need to determine the after-tax cost of the lease payment and then calculate the present value of the lease payments.
Step 1: Calculate the after-tax cost of the lease payment
Lease payment = $345,000 per year
Tax rate = 21%
After-tax cost of lease payment = Lease payment × (1 - Tax rate)
After-tax cost of lease payment = $345,000 × (1 - 0.21)
After-tax cost of lease payment = $345,000 × 0.79
After-tax cost of lease payment = $272,550
Step 2: Calculate the present value of the lease payments
Interest rate = 6%
Number of years = 7
Present value factor = 1 - (1 / (1 + Interest rate))^Number of years
Present value factor = 1 - (1 / (1 + 0.06))^7
Present value factor ≈ 1 - (1 / 1.41851)
Present value factor ≈ 1 - 0.70506
Present value factor ≈ 0.29494
Present value of lease payments = After-tax cost of lease payment × Present value factor
Present value of lease payments = $272,550 × 0.29494
Present value of lease payments ≈ $80,341.02
Step 3: Calculate the reduction in debt capacity
Reduction in debt capacity = Present value of lease payments
The reduction in debt capacity if the company signs the lease is approximately
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Laredo Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,340. The freight and installation costs for the equipment are $640. If purchased, annual repairs and maintenance are estimated to be $400 per year over the four-year useful life of the equipment. Alternatively, Laredo Corporation can lease the equipment from a domestic supplier for $1,440 per year for four years, with no additional costs. Prepare a differential analysis dated March 15 to determine whether Laredo Corporation should lease (Alternative 1) or purchase (Alternative 2) the equipment. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.) If an amount is zero, enter "0". Differential Analysis Lease (Alt. 1) or Buy (Alt. 2) Equipment March 15 Lease Buy Differential Effects Equipment Equipment (Alternative 1) (Alternative 2) (Alternative 2) Purchase price Freight and installation Repair and maintenance (4 years) DDD Lease (4 years) Total costs Determine whether Laredo should lease (Alternative 1) or buy (Alternative 2) the equipment. Costs:
In business, it is essential to consider the benefits of purchasing or leasing assets before making a decision. Laredo Corporation has to decide whether to purchase or lease new equipment. A differential analysis will be used to assist in the decision-making process.
As per the given information, the purchase price of the equipment from the overseas supplier is $3,340, and the freight and installation costs for the equipment are $640. Repairs and maintenance are expected to cost $400 per year over the four-year useful life of the equipment. Alternatively, Laredo Corporation can lease the equipment from a domestic supplier for $1,440 per year for four years, with no additional costs.
Differential Analysis Lease (Alternative 1)Equipment Buy (Alternative 2)Equipment Differential Effects Purchase price- $3,340Freight and installation- $640Repair and maintenance (4 years)- $400*4 = $1,600Total costs- $1,440*4 = $5,760Purchase price- $0Freight and installation- $0Repair and maintenance (4 years)- $400*4 = $1,600Total costs- $3,340 + $640 + $1,600 = $5,580Differential Effects- $5,580 - $5,760 = -$180As per the differential analysis, the total cost of buying the equipment is $5,580, while the total cost of leasing the equipment is $5,760.
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What are teams and how they are formed? Who is in your team and how were the roles allocated?
Teams are groups of people working together to achieve a common goal. They are formed to bring together the skills, knowledge, and expertise of individuals who complement each other in order to accomplish something that would be difficult for one person to do on their own.
They are formed in a variety of ways, including through organizational structures, project-based work, and social activities.Teams can be formed formally or informally, depending on the purpose of the group. Formal teams are created by management to perform specific tasks or projects. Informal teams form naturally based on shared interests, expertise, or personalities. These teams can be highly effective in achieving results, even though they are not created through a formal process.
The composition of a team depends on the task or project at hand. Individuals with complementary skills and expertise are brought together to form a team. Some teams may require members with specific technical skills, while others may require individuals with strong leadership or communication skills.Roles in a team are allocated based on individual strengths and expertise. For example, someone with strong analytical skills may be allocated the role of data analyst. Someone with strong leadership skills may be allocated the role of team leader.
In order to ensure that everyone is working together effectively, it is important to have clear roles and responsibilities defined from the outset.Teams are an essential part of any organization and are formed to achieve a specific goal. They bring together individuals with complementary skills and expertise to work together towards a common objective. Roles within the team are allocated based on individual strengths and expertise.
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The CWB Company is considering opening a new gallery which is expected to generate the following cash flows over 5 years. Central Investment cost in Year O, HKD 460,064 Cash Flows in Year 1, HKD 70,000 Cash Flows in Year 2, HKD 100,000 Cash Flows in Year 3, HKD 130,000 Cash Flows in Year 4. HKD 140,000 Cash Flows in Year 5, HKD 140,000 Salvage Value in Year 5, HKD 100,000 Assume that cash flow is uniform within each year, what is the payback period for this gallery? (Round your final answer to two decimal places)
The payback period for the gallery is 3.71 years. Explanation:Payback period refers to the time it takes for the investment to generate enough cash to recover the investment's initial outlay. It also informs investors as to whether or not to invest in the project based on the time it takes for it to generate a profit.
The payback period for the gallery can be computed using the formula below:Initial investment = HKD 460,064Cash inflow for the Year 1 = HKD 70,000Cash inflow for the Year 2 = HKD 100,000Cash inflow for the Year 3 = HKD 130,000Cash inflow for the Year 4 = HKD 140,000Cash inflow for the Year 5 = HKD 240,000(Addition of Year 5 Cash inflow and Salvage Value)Calculation:The cumulative cash inflow can be determined by adding the cash inflow for each year, beginning with year 1.Cumulative cash inflowYear 1 = HKD 70,000Year 2 = HKD 170,000Year 3 = HKD 300,000Year 4 = HKD 440,000Year 5 = HKD 680,000Therefore, the payback period can be calculated as follows:Year 1: The cash inflow of HKD 70,000 is not enough to pay back the HKD 460,064 investment outlay.Year 2: The cumulative cash inflow of HKD 170,000 is still not sufficient to recoup the initial investment outlay of HKD 460,064.Year 3: The cumulative cash inflow of HKD 300,000 is still insufficient to recoup the initial investment outlay of HKD 460,064.Year 4: The cumulative cash inflow of HKD 440,000 is still not enough to recover the initial investment outlay of HKD 460,064.Year 5: The cumulative cash inflow of HKD 680,000 is enough to pay back the initial investment outlay of HKD 460,064.The payback period is determined by dividing the number of years it takes to recoup the initial investment outlay by the total cash inflow in year 5.Payback period = 4 – [(HKD 440,000/HKD 680,000)]= 3.71 years (rounded to two decimal places).Hence, the payback period for the gallery is 3.71 years.
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Clearly explain the effects of expert power within an organization. Discuss ways in which expert power can be reduced to help the organization achieve competitive advantage. no less than 100 words
Expert power refers to the influence an individual has due to their specialized knowledge, skills, and expertise in a particular field.
In an organization, expert power can have both positive and negative effects. On the positive side, expert power can lead to effective decision-making and problem-solving, as individuals with specialized knowledge can provide valuable insights and recommendations. It can also lead to innovation, as experts are often at the forefront of developing new ideas and solutions.
However, on the negative side, expert power can lead to the exclusion of other voices and perspectives within the organization. It can create silos and prevent cross-functional collaboration, as experts may be more focused on protecting their own domain of knowledge and influence.
To reduce the negative effects of expert power, organizations can take several steps. First, they can encourage and facilitate cross-functional collaboration and knowledge-sharing. This can help to break down silos and ensure that all perspectives are heard.
Second, organizations can develop systems of checks and balances to ensure that decision-making is not overly influenced by experts. For example, decision-making processes could involve multiple stakeholders with different areas of expertise to ensure a well-rounded perspective.
Finally, organizations can encourage a culture of humility and openness, where experts are willing to acknowledge their limitations and listen to the perspectives of others. This can help to ensure that decisions are made based on the best available knowledge and insights, rather than the influence of a few powerful experts.
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suppose that the market for sports watches is a competitive market. the following graph shows the daily cost curves of a firm operating in this market.
The graph represents the daily cost curves of a firm in a competitive sports watch market. The firm's marginal cost (MC) curve intersects with its average variable cost (AVC) and average total cost (ATC) curves at certain points.
In the graph, the marginal cost (MC) curve starts at a relatively low point and gradually increases as the firm produces more sports watches. This indicates that as the firm increases its production output, the cost of producing each additional watch also increases. The average variable cost (AVC) curve starts at a low point and initially decreases as production increases, indicating economies of scale. However, it eventually starts to increase, suggesting that the firm is experiencing diminishing returns to scale.
The average total cost (ATC) curve, which is the sum of the average variable cost (AVC) and the average fixed cost (AFC), follows a similar pattern as the AVC curve. It decreases initially due to economies of scale but eventually starts to rise as the firm encounters diminishing returns to scale. The intersection of the MC curve with the AVC and ATC curves occurs at their respective minimum points. This implies that the firm is producing at an efficient scale, where the cost of producing each additional watch is minimized. In a competitive market, firms aim to produce at the minimum point of their cost curves to remain competitive and maximize their profits.
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Ryson Incorporated sells a lantern popular with campers for $20 per unit. Variable expenses are 25% of sales, and fixed expenses total $427,500 annually.
Required: Answer the following in the space provided. Be sure to identify the question # with your response.
1. What is the product's CM per unit?
2. Use the CM per unit to determine the break-even point in units.
3. Ryson estimates that its sales will increase by $95,000 during the coming year due to increase in demand. By how much should net operating income increase?
4. Assume the company sold 40,000 units last year. The sales manager believes that a 3% reduction in the selling price, combined with an $148,000 increase in advertising expenditures, would increase annual unit sales by 30%. Calculate:
a) the total net operating income for last year and the sales manager's proposal
b) the CM per unit for last year and the sales manager's proposal.
Do not round intermediate calculations. Round "per unit" to 2 decimal places.
Tip: Be sure to show your calculations.
Consider using a comparative CM formatted income statement (image below) to support your analysis. You may integrate this into your response, however it is not a requirement.
Last year Proposed
Total Per unit Total Per unit
Sales Less: VC CM Less: FC Net operating income
Product's CM per unit: $15. Break-even point: 28,500 units. Net operating income increase: $71,250. Last year's net operating income: $200,000. Sales manager's proposal net operating income: $238,50
1. The contribution margin per unit is calculated by subtracting the variable expenses per unit from the selling price per unit: $20 - ($20 * 25%) = $15. 2. The break-even point in units is calculated by dividing the total fixed expenses by the contribution margin per unit: $427,500 / $15 = 28,500 units. 3. To calculate the increase in net operating income, we need to multiply the increase in sales by the contribution margin per unit: $95,000 * $15 = $1,425,000. Therefore, the net operating income should increase by $71,250. 4. Last year's total net operating income is not given in the question, so we cannot calculate it. However, using the given information, we can calculate the total net operating income for the sales manager's proposal. The new selling price per unit would be $20 * (1 - 3%) = $19.40. The total net operating income for the sales manager's proposal is calculated by multiplying the new contribution margin per unit ($19.40 - ($19.40 * 25%)) by the projected unit sales (40,000 * (1 + 30%)): ($19.40 - ($19.40 * 25%)) * (40,000 * (1 + 30%)) = $238,500. The CM per unit for last year is $15, and for the sales manager's proposal, it would be ($19.40 - ($19.40 * 25%)) = $10.50.
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As police chief in a small town, Luciano is very concerned about measuring the success of his organization. How might Luciano measure success?
A) based on whether he saved enough department funds last year B) based on social media comments related to local homelessness C) by increasing the amount of revenue earned from tickets and fines D) by considering the effectiveness of the police in protecting and serving the town
Option (d), As police chief in a small town, Luciano is very concerned about measuring the success of his organization. He might measure success by considering the effectiveness of the police in protecting and serving the town.
To get a detailed answer, let's see what each option means:
Option A: Based on whether he saved enough department funds last year- This answer choice is not suitable because it is not the right way to measure the success of a police department. Saving money is not the measure of success for a police department.
Option B: Based on social media comments related to local homelessness- This answer choice is incorrect because social media comments are not an appropriate way to measure the success of a police department.
Option C: By increasing the amount of revenue earned from tickets and fines- This answer choice is incorrect because generating revenue from tickets and fines is not an appropriate way to measure the success of a police department.
Option D: By considering the effectiveness of the police in protecting and serving the town- This answer choice is the right answer because a police department's effectiveness in protecting and serving the town is a measure of success.
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If Harry Doubleday’s price elasticity of demand is –2, and its profit-maximizing price is $6, then its:
a.
average cost is $3.00.
b.
average cost is $0.33.
c.
marginal cost is $3.00.
d.
marginal cost is $0.33.
e.
average cost is $5.67.
The correct answer is F. none of the above. The average cost or marginal cost cannot be determined solely based on the price elasticity of demand and the profit-maximizing price. Additional information, such as the cost structure of the company and its production function, is needed to determine the average cost or marginal cost.
The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. A price elasticity of demand of -2 indicates that a 1% increase in price will result in a 2% decrease in quantity demanded. The profit-maximizing price is determined by setting marginal cost equal to marginal revenue. However, without information about the cost structure or marginal cost, it is not possible to determine the average cost or marginal cost of Harry Doubleday's product.
' The average cost is calculated by dividing the total cost by the quantity produced. The marginal cost represents the additional cost incurred by producing one more unit. To accurately determine the average cost or marginal cost, information about the cost of production, such as fixed costs, variable costs, and economies of scale, is necessary. Without this information, none of the options provided can be identified as the correct answer.
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The complete question is: If Harry Doubleday’s price elasticity of demand is –2, and its profit-maximizing price is $6, then its:
a. average cost is $3.00.
b. average cost is $0.33.
c. marginal cost is $3.00.
d. marginal cost is $0.33.
e. average cost is $5.67.
f. none of the above
1. For the following transactions, analyze the accounting transactions using the accounting equation framework (10 Marks) Course: Financial Accounting & Analysis Internal Assignment Applicable for June 2022 Examination 1. Introduced Rs500000 through a cheque by the Owner as the Initial capital in the business 2. Purchased goods on credit from Ms. Ritu at Rs 40000 3. Paid Rs 10000 as salary to the employees 4. Invested Rs200000 in a fixed deposit account 5. Paid school fees of the kid Rs 25000, from the business's bank account. Note: (2*5 = 10 marks) 1 marks for analyzing each transaction and 1 mark for correct journal entry 2. You started learning the course of financial accounting and analysis in the MBA Program. You learned about commonly used accounting terms. Discuss about any five terms which are commonly used by the different users of accounting information for the sake of understanding the financial statements Student may define and describe about any five terms (10 Marks) (10 Marks) 3. From the given information Amount in Lakhs cost of goods sold 580 opening stock 40 closing stock 70 creditors at the beginning of the year 60 creditors at the end of the year 100 cash purchases 45 Original cost of equipment sold 400 Gain on the equipment sold 50 Accumulated depreciation on the equipment 80 Course: Financial Accounting & Analysis Internal Assignment Applicable for June 2022 Examination Calculate: a. Total purchases, credit purchases and payment to creditors (5 Marks) b. Define the term Net book value, Accumulated depreciation calculate the net book value and cash proceeds from sale of investment (5 Marks)
Analyzing the accounting transactions using the accounting equation framework: This transaction increases the owner's equity (capital) and also increases the assets of the business.
Introduced Rs500,000 through a cheque by the Owner as the Initial capital in the business:
This transaction increases the owner's equity (capital) and also increases the assets of the business. The accounting equation can be represented as:
Assets (+) Owner's Equity
500,000 + 500,000
Journal Entry:
Debit: Cash (Assets) - Rs 500,000
Credit: Owner's Capital (Equity) - Rs 500,000
b. Purchased goods on credit from Ms. Ritu at Rs 40,000:
This transaction increases the assets (inventory) and also increases the liabilities (creditors). The accounting equation can be represented as:
Assets (+) Liabilities
40,000 + 40,000
Journal Entry:
Debit: Purchases (Expenses/Assets) - Rs 40,000
Credit: Accounts Payable (Liabilities) - Rs 40,000
c. Paid Rs 10,000 as salary to the employees:
This transaction decreases the assets (cash) and decreases the owner's equity (expenses). The accounting equation can be represented as:
Assets (-) Owner's Equity
10,000 - 10,000
Journal Entry:
Debit: Salary Expense (Expenses) - Rs 10,000
Credit: Cash (Assets) - Rs 10,000
d. Invested Rs 200,000 in a fixed deposit account:
This transaction increases the assets (fixed deposit) and does not affect the owner's equity since it is a transfer of funds within the business. The accounting equation remains the same:
Assets (+) Owner's Equity
200,000, Journal Entry:
Debit: Fixed Deposit (Assets) - Rs 200,000
Credit: Cash (Assets) - Rs 200,000
Paid school fees of the kid Rs 25,000 from the business's bank account:
This transaction decreases the assets (cash) and does not affect the owner's equity since it is a personal expense. The accounting equation remains the same: Assets (-) Owner's Equity
25,000, Journal Entry:
Debit: Personal Expense (Expenses) - Rs 25,000
Credit: Cash (Assets) - Rs 25,000
Commonly used accounting terms by different users of accounting information:
a. Assets: These are economic resources owned by a business that are expected to provide future benefits.
b. Liabilities: These are obligations or debts owed by a business to external parties.
c. Equity: Also known as owner's equity or shareholders' equity, it represents the residual interest in the assets of a business after deducting liabilities.
d. Revenue: This represents the inflow of economic benefits resulting from the ordinary activities of a business, such as sales of goods or services.
e. Expenses: These are the costs incurred by a business in order to generate revenue. Expenses reduce the owner's equity.
Calculation:
Total purchases, credit purchases, and payment to creditors:
Total purchases = Opening stock + Purchases + Cash purchases
Total purchases = 40 + Credit purchases + 45
To calculate credit purchases, we need to subtract cash purchases from total purchases:
Credit purchases = Total purchases - Cash purchases
Credit purchases = Total purchases - 45
Payment to creditors = Credit purchases + Increase in creditors
Payment to creditors = Credit purchases + (Creditors at the end of the year - Creditors at the beginning of the year)
b. Net book value, accumulated depreciation, and cash proceeds from the sale of investment:
Net book value = Original cost of equipment sold - Accumulated depreciation on the equipment
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Khanjar Corp derives revenue from flanging services. Its chief item of equipment is a "flangifier" produced by Omani Enterprises Ltd. The only flangifier that Khanjar owns was purchased on the 1st of July 2016 for $100 000. At that time, this item was estimated to last 10 years (i.e. to 30th June, 2026) and to have a salvage/residual value of $0 at the end of that useful life. However, at 30th June 2019, Khanjar noticed indicators of impairment due to Omani coming out with a new, cheaper and much more efficient neo-flangifier which could render the old one relatively inefficient. At that time, the old flangifier was estimated to have a recoverable amount of $40 000. Khanjar recognised an impairment loss on the old flangifier, but assessed that at that time the useful life would still last to 30th June 2026). Khanjar depreciates all assets on a straight line basis. - Required 1. Record the impairment of the flangifier on 30 June 2019. (4 marks) 2. Record depreciation for the flangifier on 30 June 2020. (3 marks) 3. Show the Carrying Amount on 30 June 2022. (3 marks)
The step by step answers to the three questions impairment and depreciation based on the information provided is as follows:
1. Recording impairment of the flangifier on 30 June 2019:
Depreciable cost = Cost – Residual value = $100,000 – $0 = $100,000
Impairment loss = Carrying amount – Recoverable amount = $100,000 – $40,000 = $60,000
Journal entry on 30 June 2019:
Impairment Loss Dr. $60,000
Accumulated Depreciation - Flangifier Dr. $21,000
Flangifier Cr. $81,000
2. Recording depreciation for the flangifier on 30 June 2020:
Depreciable cost = Cost – Residual value = $100,000 – $0 = $100,000
Annual depreciation = Depreciable cost / Useful life = $100,000 / 10 = $10,000
Journal entry on 30 June 2020:
Depreciation Expense Dr. $10,000
Accumulated Depreciation - Flangifier Cr. $10,000
3. Showing the carrying amount on 30 June 2022:
Annual depreciation = Depreciable cost / Useful life = $100,000 / 10 = $10,000
Accumulated depreciation as at 30 June 2020 = $10,000
Accumulated depreciation as at 30 June 2022 = 2 years × $10,000 = $20,000
Carrying amount = Cost – Accumulated depreciation = $100,000 – $20,000 = $80,000
Impairment Loss Dr. $60,000
Accumulated Depreciation - Flangifier Dr. $21,000Flangifier Cr. $81,0002.
Depreciation Expense Dr. $10,000
Accumulated Depreciation - Flangifier Cr. $10,0003.
Carrying amount as of 30 June 2022 is $80,000.
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With few exceptions, most business to business (B2B) companies compete in extremely competitive marketplaces. Sales are achieved by offering the right product/service at the right time, at the right prices but all of this is predicated on identifying the most likely customers. Many of the major players in this space are using video marketing as a way to capture the attention and interest of their target markets.
Many B2B companies are utilizing video marketing to capture the attention and interest of their target markets in highly competitive marketplaces.
In today's competitive B2B landscape, effectively identifying and engaging with potential customers is crucial for success. Video marketing has emerged as a powerful tool for capturing attention and interest in this context. By leveraging visual and audio elements, B2B companies can convey their value proposition, showcase their products or services, and establish a compelling brand presence.
Video marketing offers several advantages in capturing the attention of target markets. It allows companies to create engaging and dynamic content that can be easily consumed and shared across various platforms. Videos can convey complex information in a concise and visually appealing manner, increasing the likelihood of capturing and retaining audience interest. Furthermore, videos can evoke emotions, storytelling, and human connections, fostering a stronger connection between the company and its potential customers.
With the proliferation of online platforms, B2B companies can effectively distribute their videos to reach their target markets. These videos can be shared on websites, social media, email campaigns, and other digital channels, enabling companies to increase their visibility and reach a wider audience.
In summary, in the competitive B2B landscape, video marketing provides an effective means for B2B companies to capture the attention and interest of their target markets. It allows them to convey their value proposition, engage with potential customers, and differentiate themselves from competitors in a visually compelling and memorable way.
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1- YOUR FAITHFULLY IS A FORMAL ENDING COMPLEMENTARY CLOSE() 2- A QUOTATION BUSINESS LETTER IS SENT FROM THE BUYER TO THE PROSPECTIVE SELLER ( ) 3- AN ORDER IS NOT A LEGALBUSINESS LETTER OR COMMUNICATION DOCUMENT ( ) 4-WRITING THE ADDRESS OF A COMPANY IS VERY IMPORTANT IN MEMO 5- WRITTEN COMMUNICATION IS NOT IMPORTANT IN COMMUNICATION PROCESS ( )
1- “Yours faithfully” :
Is a formal ending used in a business letter to express sincerity and respect towards the recipient. It is commonly used when the letter is addressed to someone unknown or when using a general salutation like “To Whom It May Concern.”
2- A quotation business letter is indeed sent from the buyer to the prospective seller:
It is a formal communication that includes detailed information about the products or services being requested, along with the prices and terms of the proposed transaction.
3- An order is a legal business letter or communication document:
When a buyer places an order with a seller, it constitutes a legally binding agreement between the two parties. The order specifies the requested products or services, quantities, prices, and any other relevant terms and conditions.
4- Writing the address of a company is important in a memo:
While memos are typically internal documents used for communication within an organization, including the address of the company at the top or bottom of the memo helps to identify the source and provides a reference point for the recipients.
5- Written communication is indeed important in the communication process. It allows for clear and precise exchange of information, provides a permanent record of the communication, and allows for careful thought and planning of the message. While verbal communication is also important, written communication has its own advantages and plays a crucial role in various business and professional settings.
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(a) What is the value of the marginal propensity to consume (MPC) and to save (MPS)? Write the
formula (2 point)
(b) Write the formula and calculate the government-purchases multiplier. (2 point)
(c) Write the formula and calculate the tax multiplier. (2 point)
(d) Derive the equation for the IS curve. (Hint: It is easier to solve for Y) (e) Derive the equation for the LM curve (Hint: Again, it is easier to solve for Y) (f) Use the equations from Parts (d) and (e) to calculate the equilibrium levels of interest rate,
output, and investment in this economy. (s) Use the equations derived in (d) and (e) to draw the IS-LM curves, showing the intercepts in
the r and Y axes. Show the initial equilibrium values of Y and r.
Both MPC and MPS are important concepts in economics as they help us understand how changes in income impact consumption and saving patterns in an economy
The marginal propensity to consume (MPC) is the proportion of an additional unit of income that is spent on consumption. It represents the change in consumption divided by the change in income.
The formula for the marginal propensity to consume is:
MPC = ΔC / ΔY
Where:
MPC = Marginal Propensity to Consume
ΔC = Change in Consumption
ΔY = Change in Income
The marginal propensity to save (MPS) is the proportion of an additional unit of income that is saved rather than spent. It represents the change in saving divided by the change in income.
The formula for the marginal propensity to save is:
MPS = ΔS / ΔY
Where:
MPS = Marginal Propensity to Save
ΔS = Change in Saving
ΔY = Change in Income
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Suppose demand and supply are given by the following expressions. Qd = 189.3 – 4.4P Q* = 48.5 +4.7P. In equilibrium, consumer surplus is Question 2 1 pts [Round to nearest whole number.] Suppose demand and supply are given by the following expressions. Qd 189.3 – 4.4P QS = 48.5 + 4.7P. In equilibrium, producer surplus is Question 3 1 pts [Round to nearest whole number.] Suppose demand and supply are given by the following expressions. Qd 189.3 – 4.4P QS = 48.5 +4.7P. In equilibrium, total economic surplus is Question 4 1 pts [Round to nearest whole number.] Suppose demand and supply are given by the following expressions. Qd 189.3 – 4.4P Qs 48.5 +4.7P. If demand increases such that buyers are willing and able to purchase 50 more units of the good at every price, then at the new market equilibrium, consumer surplus increases by $____ Question 10 1 pts [Round your answer to the nearest 100ths.] Suppose demand and supply are given by the following, Qd = 167.4 – 2.9P Q$ = 31.2 +1.4P. = A tax of $3 creates $. of deadweight loss. Question 11 1 pts [Round your answer to the nearest 10ths.] Suppose demand and supply are given by the following, Qd = 167.4 – 2.9P Q* = 31.2 + 1.4P. --- A tax of $21 creates $ of deadweight loss. Question 12 1 pts Suppose demand and supply are given by the following, Qd = 167.4 – 2.9P = QS = 31.2 + 1.4P. = In the event of a per-unit tax, who will bear more of the burden of the tax? sellers buyers the tax will be split equally it depends on information that is not provided here
If the supply curve is relatively more elastic than the demand curve, the burden of the tax falls more on the buyers.
If the demand curve is relatively more elastic than the supply curve, the burden of the tax falls more on the sellers.
Given that, Qd = 189.3 – 4.4P and Qs = 48.5 + 4.7P
In equilibrium, consumer surplus is $1594 and producer surplus is $ 2129 and total economic surplus is $3723.
Suppose demand and supply are given by the following, Qd = 167.4 – 2.9P and Qs = 31.2 + 1.4P. The tax of $3 creates $11.1 of deadweight loss.
A tax of $21 creates $33.4 of deadweight loss.In the event of a per-unit tax, the burden of the tax depends on the relative elasticity of the demand and supply curves.
If the supply curve is relatively more elastic than the demand curve, the burden of the tax falls more on the buyers. If the demand curve is relatively more elastic than the supply curve, the burden of the tax falls more on the sellers.
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40
d A price ceiling that is set below the equilibrium price will cause Multiple Choice producer surplus to fall. total economic surplus to rise. quantity supplied to exceed quantity demanded. an increas
A price ceiling that is set below the equilibrium price will cause producer surplus to fall.
A price ceiling that is set below the equilibrium price will cause producer surplus to fall. When a price ceiling is imposed below the equilibrium price, it restricts the price at which a good or service can be sold. This results in a situation where the price is lower than what suppliers are willing to sell the product for. As a result, producers receive less revenue, leading to a decrease in producer surplus.
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Quicksilver Delivery Service contracts to deliver Pete's Pizza Parlor's products to its customers for $5,000, payable in advance. Pete's pays the money, but Quicksilver fails to perform. Can Pete's rescind the contract? Can Pete's also obtain restitution? What does it mean to "rescind" a contract? How is a contract rescinded? What is restitution? How is restitution accomplished? Explain. Eda
Rescinding a contract means to cancel or void it as if it never existed. Restitution refers to the return or repayment of the money or property that was given under the contract. Rescission and restitution can be sought through legal proceedings, typically by filing a lawsuit against the non-performing party.
1. In this scenario, since Quicksilver Delivery Service failed to perform its obligation of delivering the pizza products despite receiving payment in advance, Pete's Pizza Parlor may have grounds to rescind the contract. Rescission essentially means canceling the contract as if it never took place. It allows the injured party, Pete's Pizza Parlor in this case, to be released from their obligations under the contract and reclaim any benefits they provided.
2. In addition to rescission, Pete's Pizza Parlor may also seek restitution. Restitution refers to the act of returning or compensating for something that was lost or taken. In this situation, it would involve Pete's Pizza Parlor seeking the return of the $5,000 they paid to Quicksilver Delivery Service. Restitution aims to restore the injured party to the position they would have been in had the contract not been entered into or breached.
3. To pursue rescission and restitution, Pete's Pizza Parlor would typically need to take legal action against Quicksilver Delivery Service. They would file a lawsuit seeking the cancellation of the contract (rescission) and the return of the payment (restitution). The exact process and requirements for rescission and restitution can vary depending on the jurisdiction and applicable laws. It is advisable for Pete's Pizza Parlor to consult with a legal professional familiar with contract law to understand their specific rights and options in this situation.
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Patricia and Joe Payne are divorced. The divorce settlement stipulated that Joe pay $545 a month for their daughter Suzanne until she turns 18 in 2 years. Interest is 18% a year. How much must Joe set aside today to meet the settlement?
The amount that Joe needs to set aside today to meet the divorce settlement is $9077.28.
Explanation: The interest is compounded monthly since the monthly payment is given. Therefore, the interest rate per period is 18%/12 = 1.5% = 0.015.Then, the number of payments is 2 years × 12 months/year = 24 payments. The future value of an annuity formula gives us: FVA = C x [(1 + r)n - 1] / r, Where C = monthly payment, r = interest rate per period, and n = number of payments. The present value of an annuity formula gives us: PVA = FVA / (1 + r)n
Therefore, Joe must set aside PVA today.
FVA = $545 x [(1 + 0.015)24 - 1] / 0.015
= $19,254.56PVA
= $19,254.56 / (1 + 0.015)24
= $9,077.28.
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Department incurs $870,000 of manufacturing overhead while the Finishing Department incurs $420,000 of manufacturing overhead. Isaacs has identified machine hours (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor (DL) hours as the primary cost driver in the Finishing Department.
Based on the information provided, it appears that the Machining Department incurs $870,000 of manufacturing overhead, and the Finishing Department incurs $420,000 of manufacturing overhead.
The primary cost driver in the Machining Department is machine hours (MH), meaning that the amount of manufacturing overhead incurred is related to the number of machine hours used in the department.
On the other hand, the primary cost driver in the Finishing Department is direct labor (DL) hours. This means that the amount of manufacturing overhead incurred in the Finishing Department is related to the number of direct labor hours worked in the department.
It is important to note that the information provided does not specify the exact relationship or cost allocation between machine hours, direct labor hours, and the respective manufacturing overhead costs. Additional information or cost allocation methods would be needed to determine the specific allocation of manufacturing overhead costs to machine hours and direct labor hours in each department.
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Question 1 The decision as to whether or not to have online operations is typically placed i section of the Integrated Retail Management Chart? O Financial Operations Management O Mission or Vision O None of these answers is correct. O Laws and Ethics O Retail Information Systems Question 2 Retail objectives should: O Have a deadline and be challenging. O Have no deadlines attached to them. O Be realistic and difficult to measurable. O Have a deadline, be realistic and be measurable. O None of these answers is correct.
Have a deadline, be realistic, and be measurable. Retail objectives should have a deadline to create a sense of urgency and accountability.
They should also be realistic to ensure they can be achieved and measurable to track progress and success. By setting clear deadlines, ensuring the objectives are attainable, and having measurable metrics, organizations can effectively plan and evaluate their performance against set targets.
The decision as to whether or not to have online operations is not typically placed in any specific section of the Integrated Retail Management Chart. It is a strategic decision that may involve various aspects such as financial operations management, mission or vision alignment, laws and ethics, and retail information systems, but it is not confined to a single section of the chart.
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Assume Bruno is a landowner and Angela is the farmer working on his land.
(a) UsingAngelaandBruno’sfeasiblefrontierandAngela’sbiologicalconstraint,illustrateandclearlylabelthe technically feasible set. What allocation point is likely to be chosen by Bruno under coercion and why?
(b) OnanewdiagramillustratetheallocationchosenifthereisbargainingbetweenAngelaandBruno.Explain whether Angela receives a larger share of economic rent as a result of bargaining?
(c) Onyourdiagramfrompart(b)clearlyindicatetheallocationthatAngelawouldreceiveifshewastheowner working on her own land. Is there any difference in Angela’s working hours and economic rent that she would receive if she was the owner, as compared to bargaining?
Angela's biological constraint is depicted in the graph as the curved line, and Angela's feasible frontier is shown as line AC.
(a) Using Angela and Bruno's feasible frontier and Angela's biological constraint, the technically feasible set can be illustrated as shown in the figure below. Angela's biological constraint is the curved line in the graph, and the feasible frontier for both Angela and Bruno is the line AB.
To allocate Bruno's feasible frontier when he is under coercion, it is likely that he will choose point B on the graph, which is the allocation point that benefits him the most. He is likely to choose point B because it provides him with more resources to utilize than any other point on the feasible frontier.
(b) If there is bargaining between Angela and Bruno, the allocation chosen can be illustrated by the figure below. Angela receives a larger share of economic rent as a result of bargaining. The bargaining curve is represented by the curved line that passes through points A and B.
(c) The allocation that Angela would receive if she were the owner working on her land is indicated in the figure below. The point at which Angela's biological constraint intersects her feasible frontier, which is point C, represents the allocation that Angela would choose if she were the owner working on her land. As compared to bargaining, there is no difference in Angela's working hours and economic rent that she would receive if she were the owner.
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Evaluate and assess a Human Resource Management’s position in a contract negotiation focus; i.e. David Tepper & the Panthers; Washington State Nurses Association ; Kevin Durant & Steph Curry; or an other recent/current negotiations. Also, evaluate and assess the impact on ALL stakeholders. Keep in mind that a stakeholder is anyone, any group, or any location that has a vested interest in a contract situation.
Your quest is to develop an I Win - You Win Environment by making adjustments in the Negotiations Process - but how? Remember all stakeholders have a position in the contract negotiation situation.
In any contract negotiation situation, the Human Resource Management position is vital. Contract negotiation is an art, and HRM plays a crucial role in ensuring that all stakeholders are considered and satisfied.
They need to strike a balance between player demands and organizational goals. Washington State Nurses Association: In this case, the Human Resource Management position would be to ensure that the organization maintains proper staffing levels and retains quality nurses. They need to ensure that the nurses are satisfied with their salaries and working conditions while also taking into account the budget constraints of the organization. Kevin Durant & Steph Curry: In this case, the HRM position would be to ensure that the organization retains top talent and remains competitive. They need to strike a balance between player demands and organizational goals, taking into account the team's long-term success.
They need to ensure that the players are satisfied with their salaries and working conditions while also taking into account the budget constraints of the organization. Evaluating and assessing the impact on all stakeholders is essential in any contract negotiation situation. Stakeholders may include employees, management, investors, customers, and the general public.
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Oregon legislative committee passes cap-and-trade bill Lawmakers are moving Oregon a step closer to adopting what would be the nation's second economywide carbon pricing scheme, after California. Source: Portland Business Journal, May 17, 2019- The transportation sector is Oregon's largest contributor to carbon emissions. Under what conditions would Oregon's carbon pricing scheme reduce carbon emissions to the efficient quantity? Use a graph to illustrate your explanation. Show the effects of setting the price of carbon too low and too high. GECED and The efficient quantity of transportation would be produced if the quantity of permits was set such that permits traded at a price A. marginal social cost of transportation equals marginal benefit; below marginal external cost OB. marginal private cost of transportation equals marginal benefit; above marginal external cost OC. carbon emissions were eliminated; equal to marginal benefit D. marginal social cost of transportation equals marginal benefit; equal to marginal external cost OE. marginal private cost of transportation equals marginal benefit; equal marginal external cost The graph shows the market for transportation in Oregon with no cap-and-trade system. On the graph, draw the marginal social cost curve of transportation. Label it. Draw a point to show the outcome of a cap-and-trade system that results in an efficient amount of emissions. Label it 1. Draw a point to show the outcome when the price of a permit is too low. Label it 2. Draw a point to show the outcome when the price of a permit is too high. Label it 3. Price and cost (cents per mile) 40- 35- 30- 25- 20- 15- 104 54 100 500 600 400 Quantity (thousands of miles) 200 300 S=MC D = MB 700 800 Q
Oregon's carbon pricing scheme can reduce carbon emissions to the efficient quantity under the conditions of marginal social cost of transportation equals marginal benefit; below marginal external cost. Let's see the graph to understand the concept well. **Graph** The graph shows the market for transportation in Oregon with no cap-and-trade system.
Drawing the marginal social cost curve of transportation, and labelling it: [tex]MSC = S[/tex]. Now, when the price of carbon permit is too low, it can lead to market failure. Drawing a point to show the outcome when the price of a permit is too low, and labelling it: [tex]2[/tex]. In this case, the quantity of carbon emission is higher than the efficient quantity. It happens because the marginal private cost is lesser than the marginal external cost of carbon emissions. So, the market fails to account for the harmful effects of carbon emissions. On the other hand, when the price of carbon permit is too high, it can also lead to market failure. Drawing a point to show the outcome when the price of a permit is too high, and labelling it: [tex]3[/tex]. In this case, the quantity of carbon emission is lesser than the efficient quantity.
It happens because the marginal private cost is greater than the marginal external cost of carbon emissions. So, the market overcompensates for the harmful effects of carbon emissions. Hence, the market fails to maximize economic efficiency. Therefore, the efficient quantity of transportation would be produced if the quantity of permits was set such that permits traded at a price equal to marginal social cost of transportation equals marginal benefit; below marginal external cost. In that case, the point where the [tex]MSC[/tex] curve intersects with the demand curve would represent the efficient quantity of emissions, and it is labelled [tex]1[/tex].
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If you can earn 12 percent on your investments, and you would like to accumulate $100,000 for your newborn child’s education at the end of 18 years, how much must you invest annually to reach your goal?
To accumulate $100,000 for the newborn child’s education at the end of 18 years, you must invest $9,969.39 annually
Investing in the future education of a newborn is a great step to take, and being able to accumulate funds to the tune of $100,000 after 18 years is a great feat. One of the first things to consider when planning to save towards a target is to understand the investment options available. Since the question provided an interest rate of 12%, it is safe to say that it is the expected return on investment, hence, making use of the compound interest formula is vital.
Formula: Future value of an annuity FV = (PMT x (((1 + r)n - 1) / r)) x (1 + r)
FV: Future Value of Annuity PMT: Investment made at each interval r: Interest Rate per period n: Number of Periods Solution: Given that the expected return on investment is 12% per annum and the required amount is $100,000.
We can determine the annual investment required to reach the goal in 18 years.
The future value of an annuity is given by the formula
FV = (PMT x (((1 + r)n - 1) / r)) x (1 + r) = $100,000,
Where n = 18, and r = 12% converting the percentage into a decimal value (r = 0.12)
Hence, PMT = FV / ((1 + r)n - 1) / rPMT
= $100,000 / (((1 + 0.12)18 - 1) / 0.12)PMT
= $100,000 / 10.0346PMT
= $9,969.39 per year
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QUESTION 41 The inefficiency associated with monopoly is due to the monopoly's profits the monopoly's losses overproduction of the good underproduction of the good QUESTION 42 A Giffen good is: O always the same as an inferior good is the special subset of inferior goods in which the substitution effect dominates the income effect is the special subset of inferior goods in which the income effect dominates the substitution effect O must have a downward sloping demand curve QUESTION 43 Assuming a monopolist is maximising profit, that is inefficient because the monopolist imposes a cost on society because the selling price is above marginal cost imposes a cost on society because the selling price is equal to marginal cost Odoes not impose a cost on society because the selling price is above marginal cost Odoes not impose a cost on society because price is equal to marginal cost. QUESTION 44 "A decrease in income, holding prices constant, can be represented as: an outward shift in the budget line with its slope becoming flatter a parallel outward shift in the budget line a parallel inward shift in the budget line a change in the slope of the budget line
Question 41: The inefficiency associated with monopoly is due to the monopoly's profits. This statement is incorrect. The inefficiency associated with monopoly is due to the reason that the monopolist has market power, which leads to reducing output and raising prices compared to the competitive market. This can result in several factors, including deadweight loss, allocative inefficiency, and higher prices to the customers, etc. Thus, the correct answer is "the underproduction of the good."
Question 42: A Giffen good is the special subset of inferior goods in which the income effect dominates the substitution effect. A Giffen good has a positive relationship between the quantity demanded and the price. That is, as the price of a Giffen good rises, its demand also rises, and vice versa. Thus, the correct answer is "the special subset of inferior goods in which the income effect dominates the substitution effect."
Question 43: Assuming a monopolist is maximizing profit, that is inefficient because the monopolist imposes a cost on society because the selling price is above marginal cost. The selling price is higher than the marginal cost of production in the case of monopoly. Due to this, the monopoly reduces output and raises the price of goods, leading to allocative inefficiency and deadweight loss. Thus, the correct answer is "because the selling price is above marginal cost."
Question 44: A decrease in income, holding prices constant, can be represented as a parallel inward shift in the budget line. Holding prices constant implies that the slope of the budget line remains the same. The inward shift of the budget line represents the decrease in income, which leads to a decrease in the quantity of goods consumed.
Thus, the correct answer is "a parallel inward shift in the budget line."
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Which of the following is incorrect concerning taxation of disability income benefits?
A) if the employer paid the premiums, income benefits are taxable to the insured as ordinary income
b) if the insured paid the premiums, any disability income befits are tax-free
c) if the benefits are for a permanent loss, the benefits paid to the employee are not taxable
d) If paid by the individual, the premiums are tax deductible
The following option that is incorrect concerning taxation of disability income benefits is "if the insured paid the premiums, any disability income benefits are tax-free" (b).
This is an incorrect statement concerning taxation of disability income benefits because if the insured paid the premiums, income benefits are taxable to the insured as ordinary income.
Disability insurance refers to insurance that pays out benefits if the insured is unable to work and has a disabling illness. Disability insurance benefits are subject to tax, but the rules differ based on who pays the premiums for the policy. If the employee pays the premiums, the benefit is not subject to taxes, but if the employer pays the premiums, the benefit is taxable to the employee as ordinary income.
Benefits from a disability policy that an employee pays for out-of-pocket are usually tax-free, whereas benefits paid by an employer are taxed as ordinary income if the premium cost was included in the employee's gross income and taxed. The taxation rules apply regardless of whether the employee receives short-term or long-term disability benefits.
Permanent disability payments are tax-free, and workers' compensation benefits are usually tax-free as well. Workers' compensation insurance is a form of disability insurance that covers job-related injuries or illnesses, while permanent disability payments are those that are made to an individual who has suffered a permanent injury or illness that has rendered them unable to work.
Therefore, the correct answer is option b.
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Moving to another question will save this response. Question 10. If demand hardly changes with a small change in price such as gas, electricity, water, drinks. This type of demand is called: O a. inelastic demand Ob, income demand O c. elastic demand O d. price demand A Moving to another question will save this response.
The type of demand described, where demand hardly changes with a small change in price, is called inelastic demand.
Inelastic demand refers to a situation where the quantity demanded of a product or service shows little responsiveness to changes in its price. When demand is inelastic, consumers are less sensitive to price fluctuations, and even if the price increases or decreases, the quantity demanded remains relatively stable. This typically occurs when the product or service is considered essential, has limited substitutes, or is habitually consumed.
For goods like gas, electricity, water, and drinks, which are often considered necessities or have limited substitutes, the demand tends to be inelastic. People still need these items regardless of price changes, and they may be less likely to significantly alter their consumption patterns based on small price variations. As a result, the quantity demanded remains relatively constant, even when prices fluctuate.
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Suppose that Kesha deposits $7,000 into her savings account at First Bank. The reserve requirement facing First Bank is 9%. Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $7,000 in the bank. A Simple Bank Balance Sheet Assets Change in Reserves: $ Liabilities Change in Deposits: $ b. How much money can First Bank lend out to other people? $[ c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How do First Bank's assets and liabilities change?
a. First Bank's assets and liabilities initially change when Kesha deposits the $7,000 in the bank are as follows:Assets Change in Reserves: +$6,300Liabilities Change in Deposits: +$7,000The reason for this is that when Kesha deposits $7,000 into her savings account at First Bank, First Bank is required to hold 9% of that deposit as reserves.
As a result, First Bank has to keep $630 in reserves (9% of $7,000), while the remaining $6,370 becomes an increase in First Bank's assets, specifically in its deposits.b. The amount of money that First Bank can lend out to other people is equal to its excess reserves. Excess reserves refer to the amount of reserves that a bank holds above the minimum reserve requirement. In this case, First Bank's reserve requirement is 9%, and it has $6,300 in reserves after Kesha's deposit. Therefore, its excess reserves are $5700 ($6300-$630), which is the amount of money that First Bank can lend out to other people.c.
If First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit, its assets and liabilities change as follows:Assets Change in Loans: +$5,700Liabilities Change in Deposits: +$7,000As a result, First Bank's assets increase by $5,700 due to the loans it has given out, while its liabilities (deposits) increase by $7,000 due to Kesha's deposit.
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