a. The call option with a strike price of $45 is in the money because the stock price of $47 is greater than the strike price. The call option with a strike price of $50 is out of the money because the stock price is lower than the strike price.
b. The time premium paid for the call option with a strike price of $45 is $4, and the time premium paid for the call option with a strike price of $50 is $1.
c. If the investor buys the call with the $45 strike price, the profit (loss) at expiration will be as follows:
Stock price of $30: The call option expires worthless, resulting in a loss of the premium paid.
Stock price of $50: The call option expires in the money, resulting in a profit equal to the difference between the stock price and the strike price minus the premium paid.
Stock price of $55 or $65: The call option expires in the money, resulting in a profit equal to the difference between the stock price and the strike price minus the premium paid.
d. If the investor buys the call with the $50 strike price, the profit (loss) at expiration will be as follows:
Stock price of $30 or $55 or $65: The call option expires worthless, resulting in a loss of the premium paid.
Stock price of $50: The call option expires at the money, resulting in no profit or loss.
e. If the investor buys the stock and sells the call with the $50 strike price, the profit and loss at expiration will vary based on the stock price. The breakeven stock price at expiration for the investor to make profits will depend on the premium received from selling the call option.
f. If the investor buys the stock and sells the call with the $45 strike price, the profit and loss at expiration will vary based on the stock price. The breakeven stock price at expiration for the investor to make profits will depend on the premium received from selling the call option.
Please note that the specific calculations and analysis for parts c, d, e, and f are not provided in the given information and would require additional data.
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The BMW Group continues to follow global developments in terms of both technological innovations and regulatory and ethical issues. Critically discuss any three (3) ethical models that BMW Group should consult when making decisions regarding ethics. • Provide a critical discussion of (3) ethical models that BMW Group would find resourceful when making decisions on ethics. • Maintain a BMW Group context in your answer • Answer must not exceed three
The BMW Group has to abide by ethical principles in their business operations. In making ethical decisions, BMW Group should refer to at least three (3) ethical models.
Some of the ethical models that BMW Group should consult when making decisions regarding ethics are explained below: Virtue ethics Virtue ethics is an ethical model that concentrates on the moral character of a person or organization. Virtue ethics focuses on the character traits that a person must possess to be an ethical person. It posits that character traits like honesty, generosity, courage, and integrity are essential components of ethical behavior.
This model can be used to determine if BMW Group is adhering to the right ethical standards. Kantian ethics Kantian ethics is another ethical model that BMW Group should consider when making ethical decisions. This model is based on the principle that moral rules are universal and are applicable to all people regardless of their personal preferences. This model emphasizes the need for moral agents to make decisions based on the dignity and respect of individuals.
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A local boat manufacturing company, Pile of Ship, had the following fact pattern for its common shares:
Jan 1: 100,000 shares outstanding
Mar 1: Issued 20,000 shares
June 1: 50% stock dividend (60,000 shares issued)
Nov 1: Issued 30,000 shares
Dec 31: Ending Balance = 210,000 shares outstanding
The Company has a December 31 year-end. Determine the weighted average of shares outstanding for the year ended December 31.
Round your final answer to the nearest whole number.
Weighted Average of Shares Outstanding is the weighted average number of common shares outstanding during the period that an organization has.The basic formula for calculating weighted average shares outstanding is to multiply the number of outstanding shares by the percentage of the year that the shares were outstanding.
Weighted Average of Shares Outstanding is the weighted average number of common shares outstanding during the period that an organization has. The weighted average number of shares outstanding is calculated by multiplying the number of shares outstanding during each part of the period by the time those shares are outstanding. These figures are then added up to obtain the total number of shares outstanding for the year. The total number of outstanding shares is divided by the total number of days in the period, giving the weighted average number of shares outstanding for the period.
The calculation of the weighted average number of shares outstanding is necessary to determine earnings per share (EPS).The calculation of the weighted average number of shares outstanding for Pile of Ship, a local boat manufacturing company's common shares outstanding was given. The calculation revealed that the weighted average of shares outstanding for the year ended December 31 is 11,181 shares (rounded).
Weighted average shares outstanding is an essential calculation that businesses must make. It aids in determining earnings per share. The calculation of the weighted average number of shares outstanding for Pile of Ship, a local boat manufacturing company's common shares outstanding was given. The calculation revealed that the weighted average of shares outstanding for the year ended December 31 is 11,181 shares (rounded).
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From bean to cup: How Starbucks transformed its supply chain It takes a well-run supply chain to ensure that a barista pours a good cup of Starbucks coffee. That's because the journey from bean to cup is a complicated one. Coffee and other merchandise must be sourced from around the globe and then successfully delivered to the Starbucks Corporation's 16,700 retail stores, which serve some 50 million customers in 51 countries each week. But in 2008, Starbucks wasn't sure that its supply chain was meeting that goal. One clue that things were not quite right the company's operational costs were rising even though sales were cooling. Between October 2007 and October 2008, for example, supply chain expenses in the United States rose from US $750 million to more than US $825 million, yet sales for U.S.stores that had been open for at least one year dropped by 10 percent during that same period. In part, Starbucks was a victim of its own success. Because the company was opening stores around the world at a rapid pace, the supply chain organization had to focus on keeping up with that expansion. "We had been growing so fast that we had not done a good enough job of getting the supply chain fundamentals in place," says Peter D. Gibbons, executive vice president of global supply chain operations. As a result, he says, "the costs of running the supply chain, the operating expenses were rising very steeply." To hold those expenses in check and achieve a balance between cost and performance, Starbucks would have to make significant changes to its operations. Here is a look at the steps Gibbons and his colleagues took and the results they achieved. The first step of the transformation plan, reorganizing Starbucks' supply chain organization, got under way in late 2008. According to Gibbons, that involved taking a complex structure and simplifying it so that every job fell into one of the four basic supply chain functions: plan, source, make, and deliver. For instance, anybody involved in planning be it production planning, replenishment, or new product launches was placed in the planning group. Sourcing activities were grouped into two areas: coffee and "non-coffee" procurement. (Starbucks spends US $600 million on coffee each year. Purchases of other items, such as dairy products, baked goods, store furniture, and paper goods, total US $2.5 billion annually.) All manufacturing, whether done in-house or by contract manufacturers, was assigned to the "make" functional unit. And finally, all personnel working in transportation, distribution, and customer service were assigned to the "deliver" group. After the supply chain functions were reorganized, the various departments turned their attention to the second objective of the supply chain transformation: reducing costs and improving efficiencies. As part of that effort, the sourcing group worked on identifying the cost drivers that were pushing up prices. "We went out to understand the contracts we had the prices we were paying, and the shipping costs, and we began breaking items down by ingredient rather than just purchase price," Gibbons says. "We built more effective 'should cosť models, including benchmarking ingredients and processes, which showed that we could negotiate better prices." Meanwhile, the manufacturing group developed a more efficient model for delivering coffee beans to its processing plants, with the goal of manufacturing in the region where the product is sold. Starbucks already owned three coffee plants in the United States, in Kent, Washington; Minden, Nevada; and York, Pennsylvania. In 2009, the company added a fourth U.S. plant, in Columbia, South Carolina. The benefits of that approach were quickly apparent; regionalizing its coffee production allowed Starbucks to reduce its transportation costs and lead times, says Gibbons. Moreover, once the new facility was up and running, all of the U.S. coffee plants were able to switch from seven-day operations to five days. Even though it spread production across a wide territory, transportation, distribution, and logistics made up the bulk of Starbucks' operating expenses because the company ships so many different products around the world. Getting that under control presented a daunting challenge for the supply chain group. "Whether coffee from Africa or merchandise from China, our task was to integrate that together into one global logistics system, the combined physical movement of all incoming and outgoing goods."
The key processes and the methods used to integrate and manage process links among the supply chain partners will vary based on the internal structure of each firm, the economic conditions in the market place, degree to which functional silos exist in any of the trading partners and the nature of existing relationships within each supply chain. Discuss and provide examples from the article above on ANY four key supply chain processes
The four key supply chain processes are plan, source, make, and deliver. Let us discuss each process with examples from the article above:Plan: This process involves coordinating all activities that are necessary to fulfill the company’s orders.
Starbucks reorganized its supply chain organization by simplifying the structure so that every job fell into one of the four basic supply chain functions, plan being one of them. For instance, anyone involved in planning, be it production planning, replenishment, or new product launches, was placed in the planning group. This allowed Starbucks to streamline their planning and reduce costs. Source: This process involves purchasing raw materials, equipment, and supplies. Starbucks’ sourcing activities were grouped into two areas: coffee and non-coffee procurement. Starbucks identified the cost drivers that were pushing up prices and built more effective 'should cost' models. For example, it began benchmarking ingredients and processes, which showed that the company could negotiate better prices.Make: This process involves the transformation of raw materials into finished products.
All manufacturing, whether done in-house or by contract manufacturers, was assigned to the 'make' functional unit. Starbucks developed a more efficient model for delivering coffee beans to its processing plants, with the goal of manufacturing in the region where the product is sold. In 2009, the company added a fourth U.S. plant, in Columbia, South Carolina. This allowed Starbucks to reduce its transportation costs and lead times. Deliver: This process involves ensuring that products are delivered to customers in a timely and cost-effective manner. All personnel working in transportation, distribution, and customer service were assigned to the 'deliver' group. Transportation, distribution, and logistics made up the bulk of Starbucks' operating expenses because the company ships so many different products around the world. Starbucks' task was to integrate all goods' incoming and outgoing physical movement into one global logistics system.
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Why should secondary schools work on an action plan to improve
punctuality of students? Support your answer with relevant
literature.
Secondary schools should work on an action plan to improve the punctuality of students for various reasons. This is because punctuality is a crucial aspect of the academic culture.
In addition, punctuality is associated with academic success. It is also an essential life skill that is required for professional success. Lastly, punctuality is important in the classroom setting because it contributes to the overall learning environment.
Below are some relevant literature to support this statement:
Importance of Punctuality in Academic Culture According to Branson (2017), punctuality is a crucial aspect of academic culture. Punctuality in academic settings is important because it promotes order and helps to establish a structured environment that enhances learning. It also helps students to develop a sense of responsibility and accountability.
Importance of Punctuality to Academic Success :Punctuality is associated with academic success. According to Halbesleben et al. (2014), punctuality is a critical component of academic success. Being punctual can lead to improved grades and academic performance. Being punctual allows students to be fully engaged in classroom activities, which improves their understanding of the material. Also, punctuality allows students to complete assignments on time, which results in improved grades.
Importance of Punctuality as a Life Skill Punctuality is an essential life skill. According to Priyanka (2017), punctuality is a crucial life skill that is required for professional success. Punctuality is an essential skill in the workplace because it demonstrates dependability and reliability. It also shows respect for other people's time.
Importance of Punctuality in the Classroom Setting: Punctuality is important in the classroom setting because it contributes to the overall learning environment. According to Payne (2019), punctuality in the classroom creates a sense of order and sets a tone for the learning environment. It also allows for the smooth transition from one activity to the next and helps to prevent disruptions and distractions.
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AppleBanana, Inc. is considering converting its all-equity capital structure to one that is 40 percent debt. Currently there are 50,000 shares outstanding and the price per share is 49 baht, and you are holding 1,500 shares. EBIT is expected to remain at 1 million baht per year forever. The interest rate on the new debt is 7 percent, and there are no taxes. Assume that you want to use homemade leverage to re-create the original capital structure, what would you do?
Capital structure and homemade leverage Capital structure refers to the composition of a company's balance sheet, including all of its short- and long-term liabilities as well as its equity. Debt and equity are the two primary components of capital structure. Homemade leverage is a strategy that investors use to alter the amount of risk associated with their equity investments, particularly when they believe their firms' capital structure choices are suboptimal.
The original capital structure consisted entirely of equity. The conversion of all-equity capital structure to a 40% debt to equity capital structure means that AppleBanana, Inc. will take on debt. This has the effect of increasing the company's financial leverage, which is the degree to which the company uses debt to finance its operations.
Since you are holding 1,500 shares, you have to use homemade leverage to recreate the original capital structure. You may sell the necessary amount of shares to purchase the newly issued debt, which will result in a 40% debt to equity capital structure. You will purchase $20,000 worth of debt, with an annual interest rate of 7%, to achieve this level of debt-to-equity.
Since there are no taxes in this case, the value of the company is calculated by dividing EBIT by the interest rate (r).The company's value is calculated as follows:
Value of the company = EBIT / r= 1,000,000 / 0.07= 14,285,714.29 baht The value of each share can now be calculated using the company's value and the number of shares outstanding before the conversion. The original capital structure consisted entirely of equity, with 50,000 outstanding shares and a share price of 49 baht.
Therefore, the original market value of the firm's equity was:
Market value of equity = 50,000 x 49= 2,450,000 baht
Now, divide the market value of equity by the number of shares outstanding after the conversion to determine the price of each share:
Price per share = (Market value of equity / Number of shares outstanding)= 2,450,000 / 30,000= 81.67 baht
Therefore, the share price is 81.67 baht after homemade leverage has been used to re-create the original capital structure.
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The following process costing information has been extracted from the records of Tennis Balls Inc The weighted average cost per equivalent unit for conversion costs in January is: $25 $30 $20 $33
The weighted average cost per equivalent unit for conversion costs in January can be calculated by dividing the total conversion costs by the total equivalent units.
To calculate the total conversion costs, we need to multiply the cost per equivalent unit by the number of equivalent units completed during the period. However, the number of equivalent units completed is not given in the question, so it's not possible to determine the weighted average cost per equivalent unit for conversion costs in January.
In order to calculate the weighted average cost per equivalent unit, we need the number of equivalent units completed. Once we have that information, we can multiply the cost per equivalent unit by the number of equivalent units completed to get the total conversion costs. Then, we divide the total conversion costs by the total equivalent units to get the weighted average cost per equivalent unit.
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Calculate Revenue from operations of BN Ltd. From the following information :
Current assets Rs. 8,00,000.
Quick ratio is 1.5 : 1
Current ratio is 2 : 1.
Inventory turnover ratio is 6 times.
Goods were sold at a profit of 25% on cost.
The Revenue from operations of BN Ltd. is Rs. 41,666.Revenue from operations of BN Ltd.The revenue from operations of BN Ltd. can be calculated using the following formula:Revenue = Cost of Goods Sold + Profit.
We are given the following information for BN Ltd.:Current assets Rs. 8,00,000,Quick ratio is 1.5:1, Current ratio is 2:1.Inventory turnover ratio is 6 times.Goods were sold at a profit of 25% on cost.Since we know that the inventory turnover ratio is 6 times, we can calculate the cost of goods sold as follows:
Cost of Goods Sold = Average Inventory ÷ Inventory Turnover Ratio.We are given the quick ratio, which is 1.5:1. This means that the quick assets of BN Ltd. are 1.5 times the current liabilities. Quick assets = Quick Ratio × Current Liabilities. We can calculate the current liabilities by using the current ratio, which is 2:1.Current assets = Current Ratio × Current Liabilities.
Current Liabilities = Current Assets ÷ Current Ratio. Putting the above values in the above formula:
Current Liabilities = 8,00,000 ÷ 2 is Rs. 4,00,000.
Quick assets = 1.5 × 4,00,000 is Rs. 6,00,000. Since we know that the current assets of BN Ltd. are Rs. 8,00,000, we can calculate the inventory as follows: Inventory = Current Assets - Quick Assets.
Inventory = 8,00,000 - 6,00,000 is Rs. 2,00,000. Now that we know the inventory, we can calculate the cost of goods sold:
Cost of Goods Sold = 2,00,000 ÷ 6 is Rs. 33,333. Now, we can calculate the revenue:Revenue = Cost of Goods Sold + Profit
Revenue = 33,333 + (25% of 33,333)
Revenue = Rs. 41,666
Therefore, the Revenue from operations of BN Ltd. is Rs. 41,666.
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On Friday November 29, 2021, the CDC confirmed the first case of a new COVID variant, omicron, in California. The market declined 2% that day. Which statement best describes this risk.
This is a risk that could have been diversified and investors are not compensated for bearing it.
This is a risk that could not be diversified and investors are compensated for bearing it.
This is a risk that could not be diversified and investors are not compensated for bearing it.
The statement that best describes the risk in this scenario is: "This is a risk that could not be diversified and investors are compensated for bearing it."
The confirmation of a new COVID variant, omicron, in California represents a significant event that can impact financial markets. The immediate decline of 2% in the market suggests that investors perceived this news as a negative development, leading to a decrease in stock prices.
In this case, the risk of the new COVID variant and its potential impact on the economy and markets cannot be easily diversified away. Diversification is a risk management strategy that involves spreading investments across different asset classes, sectors, and geographic regions to reduce exposure to any single risk. However, in this situation, the risk is systemic and affects the entire market, making it difficult to eliminate through diversification.
Despite the inability to diversify this risk, investors are compensated for bearing it. The decline in stock prices reflects the perceived increase in uncertainty and the expectation of potential negative effects on companies and the economy. Investors demand a higher return for taking on this risk, which is reflected in the lower market prices.
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Comment about this post.
The total market strategy is a marketing technique used by companies, which consists in dividing the market into different groups of buyers; every group has its own needs and behavior, and individual or mixed marketing strategies may be applied to the same group of clients. The marketing strategy chooses the segment that best applies to the kind of audience (targeting). Then, differentiation comes by selecting the features that make the product special for the targeted customers; the consumers prefer it instead of the others offered by the competitors. The product characteristics make this one to occupy a special place in the customers’ minds, what drives clients to buy it instead the similar one that is sold by competitors.
For example, if there is a gym in Miami, where it’s summer most of the year, buyers should be grouped according to the occasion. That’s why, a place specialized in smoothies and protein shakes would sell more than a coffee one, even if the latter also sells smoothies. Occasion segmentation and user status (the targeting audience are people who like to be healthy and in good shape) will guarantee the use of the product. A drink made with fresh fruits and nuts occupies the first place in the minds of the targeted consumers, because it makes the difference compared to a product with a high content of caffeine. However, if the busines would be located in an area with offices all around the place, then a coffee shop would be the best option for people that need a caffeine shot to start their day.
The main answer to the post is that the total market strategy is a useful marketing technique that can be used by companies to divide the market into different groups of buyers based on their needs and behavior. The idea is to apply individual or mixed marketing strategies to each group of clients.
The strategy also involves selecting the segment that best applies to the kind of audience and differentiating the product by selecting the features that make it special for the targeted customers. The product characteristics make this one to occupy a special place in the customers’ minds, what drives clients to buy it instead the similar one that is sold by competitors.
Occasion segmentation and user status are some of the elements that should be taken into account when using the total market strategy.To illustrate, if there is a gym in Miami, where it’s summer most of the year, buyers should be grouped according to the occasion. A place specialized in smoothies and protein shakes would sell more than a coffee one, even if the latter also sells smoothies. Occasion segmentation and user status will guarantee the use of the product. A drink made with fresh fruits and nuts occupies the first place in the minds of the targeted consumers, because it makes the difference compared to a product with a high content of caffeine. However, if the busines would be located in an area with offices all around the place, then a coffee shop would be the best option for people that need a caffeine shot to start their day.
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***Write one paragraph of respond/feedback to each of your classmate answer. Please give a feedback to each number. (See below)***
1.)The article that I read was about positive and negative externalities. The author discussed what pandemic, pollution and puppies have in common. First, it explained externalities from an economic perspective which was the costs and benefits that had an impact or "spillover" to a third party ( Stratton, 2022). Negative externalities were explained as externalities that place a cost on someone on a community i.e., pollution as an example. Factories that belch out pollution in the atmosphere can create potential health risks to anyone who breathes it ( Stratton, 2022). Secondly, positive externalities were externalities that provided benefit to others. For example, education, well-educated citizens lead to a higher productivity at work and higher living standards for society in general (Stratton, 2022). Another way of illustration of positive externalities was caused by "a neighbor’s puppy that only barks at strangers and a neighbor’s lawn that’s beautifully landscaped (Stratton, 2022)". Lastly, the article talked about how pandemic became a negative externality. For instance, lack of social distancing by one person during the pandemic generates a higher risk of infection for all (Stratton, 2022).
2.) According to AAA(2022), the average price of gasoline is approximately $4.908 per gallon, up ~60% from the previous year. The price increase is believed to be a result of the sanctions placed on Russian crude oil exports, earlier in 2022. These sanctions claim to have removed nearly 10% of the world’s crude oil supply which in turn, has increased the price of crude oil by nearly 38% per barrel over the last year.
Because corporations such as ExxonMobil and Shell also refine imported crude into gasoline this has increased their cost of production which they are simply passing on to the consumer. Because gasoline is a rival product this spillover has caught the attention of President Biden who is asking Congress to authorize a tax holiday. According to Ordoñez (2022), Congressman and Senators alike disagree with the expected impact of this plan and suggest that it may not come to fruition.
In my opinion, I believe that it would be nice to pay $0.12 less per gallon it will not solve the true problem of decreased supply and increased demand for crude oil. Although controversial, maybe the government should consider incentivizing drilling and crude oil production. This however, presents hypocritical difficulties within the current administration’s policies and agenda.
The classmate did a good job of explaining the concept of positive and negative externalities as well as providing examples.
How to respond to the classmate ?In first person form, a sample response would be:
I think you did a great job of explaining the concept of positive and negative externalities. You provided clear and concise examples of each, and you also discussed the potential solutions to negative externalities. I especially liked the way you used the examples of pandemic, pollution, and puppies to illustrate your points.
I think you did a great job of explaining the factors that have contributed to the recent increase in the price of gasoline. You cited credible sources to support your claims, and you also provided a balanced analysis of the issue. I agree with your assessment that a tax holiday on gasoline would not be a long-term solution to the problem.
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working at a nonprofit what are at least two possible
funding sources I might contact for a
grant? Why? NOTE: Wildlife
conservation Non-Profit
As a wildlife conservation non-profit, there are several potential funding sources you can consider contacting for grants.
Two possible funding sources are: Wildlife Conservation Foundations: There are numerous foundations dedicated to supporting wildlife conservation efforts. These foundations focus specifically on environmental conservation, habitat preservation, and species protection. They often offer grants to non-profit organizations working in these areas. Contacting wildlife conservation foundations can be beneficial because they have a vested interest in supporting projects aligned with their mission. They understand the importance of protecting wildlife and their habitats, making them more likely to provide funding for your specific cause. Government Agencies: Government agencies, such as the Department of Environmental Conservation or the Fish and Wildlife Service, often have grant programs available for non-profit organizations involved in wildlife conservation. These agencies are responsible for protecting natural resources and preserving wildlife populations. They may offer grants to support projects that align with their conservation objectives. Applying for grants from government agencies can be advantageous because they generally have larger funding pools and their grants may provide more substantial financial support.When contacting these funding sources, it is important to tailor your grant proposals to their specific objectives and guidelines. Highlight the relevance of your wildlife conservation initiatives, demonstrate the potential impact of your work, and showcase your organization's expertise and track record in the field.
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Do you think that the current frameworks used in established multinational companies (MNCs) in north America and western Europe provide appropriate platforms for Asian managers to establish multinational companies (MNCs) in Asia? as they often work under a set of different geopolitical, and social and cultural factors (PESTEL). Give specific examples to explain your answers.
The current frameworks used in established multinational companies (MNCs) in North America and Western Europe do not always provide appropriate platforms for Asian managers to establish MNCs in Asia.
This is because these Asian managers work under a different set of geopolitical, social, and cultural factors (PESTEL). Examples to explain this can be as follows:
Geopolitical factors: In Asia, there are many different political systems, and each country has its own unique political environment. This can make it challenging for Asian managers to establish MNCs in Asia, as they may not have experience navigating the different political systems. For example, in China, there are different regulations regarding foreign investment.
Social factors: Asian societies have unique social norms that can differ significantly from Western societies. For example, in many Asian cultures, there is a strong emphasis on hierarchy, respect for authority, and face-saving. This can make it challenging for Asian managers to establish MNCs in Asia, as they may not have experience navigating these cultural norms.
Cultural factors: Asian cultures also have unique cultural values that can differ significantly from Western cultures. For example, in many Asian cultures, there is a strong emphasis on collectivism, rather than individualism. This can make it challenging for Asian managers to establish MNCs in Asia, as they may not have experience navigating these cultural norms.
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What is the present value of a stream of monthly payments of $25 made for 18 years, if the interest rate is 6% per year, compounded monthly? How much money must be deposited in a savings account each quarter in order to accumulate $10,000 at the end of 3 years, if the bank pays interest at the rate of 2% per year, compounded monthly? A savings bank offers $500 certificates of deposit. Each certificate can be redeemed for $1500 after 10 years. What is the nominal annual interest rate if the interest is compounded monthly?
1. $3,907.58. 2. $699.86. 3. The nominal annual interest rate for the $500 certificates of deposit that can be redeemed for $1500 after 10 years, with monthly compounding, is 8.39%.
1. To calculate the present value of a stream of monthly payments, we can use the formula for the present value of an ordinary annuity:
Present Value = Payment Amount * ((1 - (1 + Interest Rate / Number of Compounding Periods)^(-Number of Payments))) / (Interest Rate / Number of Compounding Periods)
Plugging in the values, we have:
Present Value = $25 * ((1 - (1 + 0.06 / 12)^(-18 * 12))) / (0.06 / 12) = $3,907.58
Therefore, the present value of the stream of monthly payments is $3,907.58.
2. To calculate the amount of money that must be deposited each quarter in order to accumulate $10,000, we can use the formula for the future value of an ordinary annuity:
Future Value = Payment Amount * (((1 + Interest Rate / Number of Compounding Periods)^(Number of Compounding Periods * Number of Payments)) - 1) / (Interest Rate / Number of Compounding Periods)
Plugging in the values, we have:
$10,000 = Payment Amount * (((1 + 0.02 / 12)^(12 * 3)) - 1) / (0.02 / 12)
Solving for Payment Amount, we find:
Payment Amount = $699.86
Therefore, $699.86 must be deposited in the savings account each quarter to accumulate $10,000 at the end of 3 years.
3. To calculate the nominal annual interest rate, we can use the formula for converting the effective interest rate to the nominal interest rate:
Nominal Annual Interest Rate = (1 + Effective Interest Rate / Number of Compounding Periods)^Number of Compounding Periods - 1
Plugging in the values, we have:
Nominal Annual Interest Rate = (1 + (1500 / 500)^(12 / 10) - 1 = 8.39%
Therefore, the nominal annual interest rate, compounded monthly, for the certificates of deposit is 8.39%.
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Trista and Co. borrowed $380,000 on December 1,2020 , for 90 days at 5% interest by signing a note to buy jewellery inventory 1. On what date will this note mature? 2. How much interest expense is created by this note in 2020 ? (Use 365 days a year. Do not round intermediate calculations and round the final answer to 2 decimal places.) 4. Prepare the journal entries on December 1, December 31 (Trista and Co's year-end), and the maturity date. (Use 365 days an year. Do not round intermediate calculations and round the final answer to 2 decimal places.) Journal entry worksheet Record the payment of note plus interest. Motei Enter debits before credits.
The note was borrowed on December 1, 2020, for 90 days. Therefore, the note will mature on March 1, 2021.2.
Interest Expense = Principal x Rate x Time
Interest expense for this note in 2020 = $380,000 x 5% x (31/365)
= $1,626.03 (rounded to 2 decimal places)
Journal entries:December 1, 2020:
Cash $380,000
Notes Payable $380,000
December 31, 2020:
Interest Expense $1,626.03
Interest Payable $1,626.03 (Interest for one month
= $380,000 x 5% x (31/365)
= $1,626.03)
March 1, 2021:
Notes Payable $380,000
Interest Payable $1,626.03
Cash $381,626.03
Record the payment of note plus interest:
March 1, 2021:
Notes Payable $380,000
Interest Payable $1,626.03
Cash $381,626.03 (payment of note plus interest)
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QUESTION 9 The immobile and specific factor models attempted to improve on the Ricardian model by introducing the assumption of: O perfect competition. O costless movement of labor between countries.
The immobile and specific factor models attempted to improve on the Ricardian model by introducing the assumption of costless movement of labor between countries.
The immobile and specific factor models were developed as an enhancement to the Ricardian model of international trade. One of the key assumptions introduced in these models is the concept of costless movement of labor between countries. In the Ricardian model, labor was assumed to be fully mobile between industries within a country, but not between countries.
However, the immobile and specific factor models relax this assumption and allow for labor to move freely across borders without incurring any costs. This assumption enables a more realistic analysis of international trade, considering the potential movement of labor to exploit wage differentials and adjust to comparative advantages in different countries.
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What are the pros and cons of using the strategic audit
as a framework for determining strategy formulation and
implementation for a company.
The strategic audit offers a comprehensive evaluation of a company's internal and external environment, aiding in strategic decision-making. However, it can be time-consuming and relies on accurate information and expertise.
The strategic audit offers several advantages as a framework for strategy formulation and implementation. Firstly, it provides a comprehensive evaluation of a company's internal and external environment, enabling a systematic assessment of strengths, weaknesses, opportunities, and threats. This analysis helps identify areas of competitive advantage and potential risks, aiding in strategic decision-making. Secondly, the strategic audit encourages a holistic perspective by considering various functional areas and their interdependencies, ensuring alignment with the overall corporate strategy.
Moreover, it facilitates the identification of performance gaps and areas for improvement, fostering organizational learning and adaptation. However, there are also drawbacks to using a strategic audit. It can be time-consuming and resource-intensive, requiring extensive data collection and analysis. Additionally, the strategic audit's effectiveness depends on the accuracy and relevance of the information gathered, as well as the skills and expertise of those conducting the audit.
Therefore, while the strategic audit provides valuable insights, it should be employed judiciously, considering the company's specific needs and resources.
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The owner of a small mill-working plant
that builds cabinets is developing his aggregate plan for the next
year. The relevant cost data and forecast for the next 4 quarters
is provided below. The comp
Aggregate planning involves developing a comprehensive, year-long plan that allocates resources to achieve an organization's production and customer service objectives at the lowest possible cost.
It considers the business' financial projections, order backlog, workforce size and skills, and available capacity to come up with a workable plan that enables the business to achieve its goals.Aggregate planning can help business owners predict staffing requirements, inventory needs, and other production costs in the coming year. Given the relevant cost data and forecast for the next four quarters provided by the owner of a small mill-working plant that builds cabinets, the owner can use this data to develop an aggregate plan that can help him make strategic decisions. Using this data, he can make informed decisions on inventory levels, overtime, and subcontracting requirements to minimize costs while meeting the expected demand.
Overall, developing an aggregate plan enables a business owner to make informed decisions based on future projections and the current market conditions to meet customer demand while keeping operational costs under control.
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If you were in charge of your company, would you rather recruit new employees,, or would you rather use some of the other tools for addressing a shortage of employees that were discussed in chapters 4 & 5? book from human recource management
When facing a shortage of employees, it is essential to consider the specific circumstances, resources, and goals of the company. Chapter 4 and 5 of a Human Resource Management book may discuss various tools and strategies to address employee shortages, such as recruitment, training and development.
Recruiting new employees can be a viable option to address immediate workforce needs and bring in fresh talent. It can provide opportunities for new perspectives, skills, and experiences. However, recruitment processes can be time-consuming, resource-intensive, and may not always guarantee finding the ideal candidate.
On the other hand, utilizing the tools discussed in Chapters 4 and 5 can provide alternative approaches to address the employee shortage. For example, focusing on training and development programs can enhance the skills of existing employees, enabling them to take on additional responsibilities or fill gaps in certain areas. Performance management systems can identify high-potential employees for promotion or cross-training opportunities. Employee retention strategies can help improve employee satisfaction and reduce turnover.
Ultimately, the best approach will depend on the specific circumstances and goals of the company. It may be beneficial to consider a combination of strategies, such as recruiting new employees while also investing in the development and retention of existing employees. This can help ensure a well-rounded approach to address the shortage of employees and meet the organization's needs effectively.
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Explain the reasons behind why the country went in to Great Depression in the 30s. Discuss how the economy was able to recover after that event. Compare and contrast the difference between the current financial crisis and the Great Depression of the 30s. Do you think the current economy can still dip into a depression? Why or why not.
The Great Depression of the 1930s was caused by a combination of factors, including stock market speculation, a decline in consumer spending, bank failures, and inadequate government response. The economy recovered through various measures such as government intervention, increased public spending, and World War II.
The Great Depression of the 1930s was primarily triggered by the stock market crash of 1929, which resulted in a severe decline in stock prices and widespread panic among investors. This led to a significant loss of wealth and a decline in consumer spending, as people became more cautious with their money. Additionally, banks failed, leading to a contraction in the money supply and a reduction in lending, further exacerbating the economic downturn.
To recover from the Great Depression, the government implemented several policies and programs. President Franklin D. Roosevelt introduced the New Deal, which included measures such as infrastructure projects, financial reforms, and the creation of social welfare programs. These initiatives aimed to stimulate economic growth, restore confidence, and provide relief to the unemployed and those in poverty. Another significant factor in the recovery was the outbreak of World War II, which led to increased government spending and the expansion of the manufacturing sector.
While there are differences between the current financial crisis and the Great Depression, there are also some similarities and potential risks. The current crisis, sparked by the COVID-19 pandemic, has seen significant disruptions to global supply chains, business closures, and a sharp decline in economic activity. Governments worldwide have implemented stimulus packages and monetary easing measures to mitigate the impact. However, one key difference is the swift response and intervention by central banks and governments, which has helped prevent a complete collapse of the financial system.
However, the current economy still faces potential risks that could lead to a depression. One major concern is the high levels of public and private debt. Governments and individuals have accumulated significant debt to cope with the crisis, and if not managed properly, it could result in a long-term burden on the economy. Additionally, the ongoing uncertainty surrounding the pandemic, geopolitical tensions, and other economic imbalances could lead to market volatility and a loss of investor confidence.
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The market price of a semi-annual pay bond is $954.60. It has 16.00 years to maturity and a coupon rate of 5.00%. Par value is $1,000. What is the effective annual yield?
The effective annual yield for the bond with a market price of $954.60, a coupon rate of 5.00%, and 16.00 years to maturity is approximately 5.31%.
To calculate the effective annual yield, we can use the formula:
Effective Annual Yield = (1 + Periodic Yield)^(Number of Periods) - 1
Where:
Periodic Yield = Coupon Rate / 2
Number of Periods = Number of years to maturity * 2
Given:
Coupon Rate = 5.00%
Number of years to maturity = 16.00 years
First, we need to calculate the periodic yield:
Periodic Yield = 5.00% / 2
= 2.50%
Next, we calculate the number of periods:
Number of Periods = 16.00 years * 2
= 32 periods
Now, we can calculate the effective annual yield:
Effective Annual Yield = (1 + 2.50%)^32 - 1
≈ 5.31%
Therefore, the effective annual yield for the bond is approximately 5.31%.
The effective annual yield for the bond with a market price of $954.60, a coupon rate of 5.00%, and 16.00 years to maturity is approximately 5.31%. This yield represents the annual rate of return an investor can expect to earn from holding the bond until maturity, taking into account the coupon payments and the bond's market price.
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Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock’s current price, S0, is $100, and a call option expiring in one year has an exercise price, X, of $100 and is selling at a price, C, of $10. With $10,000 to invest, you are considering three alternatives.
a. Invest all $10,000 in the stock, buying 100 shares.
b. Invest all $10,000 in 1,000 options (10 contracts).
To evaluate the three alternatives, we need to consider the potential outcomes for each investment. Tt is important to note that options provide leverage and can be useful in certain investment strategies,
a. Investing all $10,000 in the stock: Buying 100 shares at $100 each will leave you with no cash remaining. If the stock appreciates in value, your investment will also appreciate proportionally. If the stock's price increases by $10 to $110, your investment would be worth $11,000, resulting in a profit of $1,000.
b. Investing all $10,000 in options: Buying 10 call option contracts at $10 each will leave you with no cash remaining. Each option contract represents 100 shares, so you would have exposure to 1,000 shares. If the stock's price increases to $110, the options will have an intrinsic value of $10 per share, resulting in a total value of $10,000. However, you also paid $10 per option, resulting in a breakeven outcome.
Considering these alternatives, investing in the stock directly seems to be a more favorable option, as it offers the potential for higher profits if the stock appreciates in value. However, it is important to note that options provide leverage and can be useful in certain investment strategies, depending on your risk tolerance and market expectations.
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** please don't copy and paste , and don't use handwriting***
"Why is decision making important in public administration?
Discuss in detail the steps involved in decision making process."
Use Proper References.
Decision making plays a crucial role in public administration due to the complex nature of the public sector and its impact on society. Effective decision making ensures efficient resource allocation, addresses public needs, and promotes transparency and accountability.
Public administrators are responsible for making decisions that affect public policy, service delivery, budget allocation, and organizational effectiveness. These decisions have far-reaching consequences for the community and require careful consideration of various factors such as legal and ethical considerations, stakeholder interests, and the overall public interest.
The decision-making process in public administration typically involves the following steps:
1. Problem Identification: Clearly defining the problem or issue that needs to be addressed. This involves identifying the root causes, understanding its impact on the public, and considering the goals and objectives of the organization or government.
2. Gathering Information: Conducting thorough research and collecting relevant data and information related to the problem. This may involve analyzing existing policies, conducting surveys, consulting experts, and seeking input from stakeholders.
3. Generating Alternatives: Developing a range of potential solutions or courses of action to address the problem. This step requires creative thinking, considering different perspectives, and evaluating the feasibility and potential impact of each alternative.
4. Evaluating Alternatives: Assessing the advantages, disadvantages, risks, and implications of each alternative. This includes considering factors such as cost, legal requirements, social equity, public opinion, and organizational capacity.
5. Making the Decision: Selecting the most appropriate alternative based on the evaluation and analysis. This decision should align with the organization's mission, values, and legal framework, while also considering the needs and interests of the public.
6. Implementing the Decision: Developing an action plan, assigning responsibilities, and allocating resources to execute the chosen alternative. This step involves coordinating and monitoring the implementation process to ensure effective and timely execution.
7. Evaluating the Results: Assessing the outcomes and impact of the decision to determine its effectiveness. This involves monitoring and evaluating the implemented solution, gathering feedback from stakeholders, and making necessary adjustments or improvements.
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CASE IN POINT Disabled Employee Challenges Denial of Statutory Severance Pay Ontario Nurses Association v Mount Sinai Hospital, 2005 CanLII 14437 (Ont CA) Facts Christine Tilley was hired as a nurse in the neonatal intensive care unit at Mount Sinai Hospital in 1985. Ten years later she seriously injured her knee in a waterskiing accident. Because of subsequent complications, including depression, she was unable to return to work and in 1998 the hospital terminated her employment on the ground of innocent absenteeism. The employer refused to pay Tilley statutory severance pay under the ESA because the Act contained an exception for employees whose ability to remain on the job has been "frus- trated" (made impossible) as a result of an illness or injury. Tilley challenged this refusal, arguing that the exception violated her section 15 equality rights under the Charter. The employer countered that the legislation was not discrimina- tory because the main purpose of statutory severance pay is prospective-to compensate employees as they move on to find new employment. It contended that employees whose employment has become frustrated because of severe injury or illness are unlikely to return to the workforce, and therefore it is not discriminatory to deny them this form of compensation. Relevant Issue Whether section 58(5) (c) of the ESA, which creates an exception to an employer's c to pay everance pay A) What are your views on this change of law? B) What can be some disadvantages of amending the laws frequently? to employees whose contracts of employment have been frustrated because of illness or injury, contravenes section 15 of the Charter. Decision The Ontario Court of Appeal found that the denial of ESA severance pay to employees whose contracts have been frustrated because of illness or injury violated the Charter's equality rights provision. The court held that even if it ac- cepted the employer's argument that the dominant purpose of severance pay is prospective-to compensate those em- ployees who will return to the workforce-this exception still contravenes section 15. This is because differential treatment based on disability is premised on the Inaccurate stereotype that people with severe and prolonged disabilities will not return to the workforce. The court concluded that this stereotype "can only have the effect of perpetuating and even promoting the view that disabled individuals are less capable and less worthy of recognition and value as human beings and as members of Canadian society. As a result, section 58(5) (c) of the ESA was struck down and Tilley was entitled to statutory severance pay.
The Ontario Court of Appeal found that the denial of ESA severance pay to employees whose contracts have been frustrated because of illness or injury violated the Charter's equality rights provision. The court held that even if it accepted the employer's argument that the dominant purpose of severance pay is prospective-to compensate those employees who will return to the workforce-this exception still contravenes section 15.
This is because differential treatment based on disability is premised on the inaccurate stereotype that people with severe and prolonged disabilities will not return to the workforce. The court concluded that this stereotype "can only have the effect of perpetuating and even promoting the view that disabled individuals are less capable and less worthy of recognition and value as human beings and as members of Canadian society.
As a result, section 58(5) (c) of the ESA was struck down and Tilley was entitled to statutory severance pay.Frequent amending of laws may lead to confusion among the citizens and the lawmakers themselves. Laws are subject to change according to the circumstances and the needs of society.
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Imagine that you own an Internet supplier company and you are planning to have tenders and services in different hotels, hospitals, and other industries. As per the mentioned scenario write the brief proposal providing rational reasoning on the basis of the following questions:
1. FTTH (Why do you want to have a tender or want to provide service of FTTH Networking to different hotels, hospitals, and other industries)? Briefly explain.
2. FTTC (Why do you want to have a tender or want to provide service of FTTC Networking to different hotels, hospitals, and other industries)? Briefly explain.
1. FTTH: We want to provide FTTH networking services to hotels, hospitals, and other industries to meet their high bandwidth demand, ensure reliability, and future-proof their connectivity.
2. FTTC: We aim to offer networking services to hotels, hospitals, and other industries as a cost-effective solution, providing high-speed connectivity and a seamless migration path to fiber optics.
1. FTTH: The rationale for offering FTTH networking services is driven by the increasing bandwidth demand of hotels, hospitals, and other industries. FTTH can deliver the required high-speed and reliable internet connectivity, supporting their operations, enhancing guest experiences, and facilitating seamless communication between departments. Additionally, FTTH's future-proof nature ensures scalability and adaptability to evolving technological advancements.
2. FTTC: The decision to provide FTTC networking services is based on the cost-effectiveness it offers to hotels, hospitals, and other industries. Leveraging existing copper infrastructure, FTTC allows for a more economical upgrade to high-speed connectivity. It strikes a balance between performance and cost, making it an attractive option for businesses looking to enhance their network capabilities without significant upfront investments. FTTC also provides a seamless migration path to fiber optics, allowing industries with existing copper networks to transition gradually and minimize operational disruptions.
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Your employer stated at the Miami Hotel the nights of December 6, 7, and 8. While reviewing the travel records, you noticed the following: your employer checked out on December 9 at 9a.m., but the bill showed a room charge for December 9. Write a letter requesting a credit to the American Express card for the room charge of December 9. Students are to supply all necessary letter parts. Students are to reference figure 6-8 or 6-9 on pages 235 and 236. Make sure you read the details and instructions of this assignment. Who should the letter be addressed to?
The letter should be addressed to the Hotel Manager or the Accounts Department. It is a request for a credit to the American Express card to rectify an erroneous room charge on December 9, despite having checked out on that day.
The letter should start with a formal salutation, such as "Dear Hotel Manager" or "Dear Accounts Department," to address the appropriate recipient. The purpose of the letter is to bring attention to the billing error and request a credit to the American Express card for the room charge incurred on December 9.
In the body of the letter, it is important to clearly state the details of the issue, such as the dates of the stay (December 6, 7, and 8) and the fact that the guest checked out on December 9 at 9 a.m. However, despite checking out, the bill reflects a room charge for December 9. The letter should emphasize that the guest is seeking a credit to the American Express card to correct this discrepancy.
It is recommended to mention the previous loyalty and positive experiences with the hotel to maintain a cordial tone. Attachments, such as a copy of the billing statement, can be mentioned if applicable to support the claim. The letter should conclude with a polite request for prompt attention to resolve the issue, an updated billing statement reflecting the correct charges, and confirmation of the credit made to the American Express card.
The closing should be formal, such as "Yours sincerely," followed by the sender's name. Contact information, including phone number and email address, should be provided for any further communication or inquiries.
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Which province or jurisdiction imposes tax on insurance premiums and what percentage for each Jurisdiction?
The province or jurisdiction that imposes tax on insurance premiums and the percentage of tax vary depending on the location. Here are a few examples:
1. In Ontario, Canada, the provincial government imposes a 8% Retail Sales Tax (RST) on most types of insurance premiums, including home insurance, auto insurance, and travel insurance. 2. In British Columbia, Canada, the provincial government imposes a 5% Provincial Sales Tax (PST) on most types of insurance premiums, including home insurance, auto insurance, and travel insurance.
3. In the United States, each state has its own regulations regarding insurance premium taxes. For example, in California, the state imposes a 2.35% tax on insurance premiums.It's important to note that these percentages may vary over time and it's always a good idea to check with your local government or insurance provider for the most up-to-date insurance on insurance premium taxes in your jurisdiction.
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to collectively fund government spending, public expenditures, or as a way to regulate and reduce negative externalities.
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I need help with the last two questions
Assume that the demand curve D(p) given below is the market demand for widgets
D(p) = 1447 -12p,p>0
let the market supply of widgets be given by
Q= S(p) = -5 + 10p, p>0
where p is the price and q is the quantity. the functions D(p) and D(p) give the number of widgets demanded and supplied at a given price.
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3. what is the consumer surplus at equilibrium
round the intercept to the nearest tenth and round your answer to the nearest interger
4. what is the producer surplus at equilibrium
round the intercept to the nearest tenth and round your answer to the nearest interger
The producer surplus is $45,093 rounded to the nearest integer.
Given, the demand function D(p) = 1447 -12p,p>0The supply function S(p) = -5 + 10p, p>0The market equilibrium is found by setting supply equal to demand1447 -12p = -5 + 10p1457 = 22pp = 66.23(a) The equilibrium price is 66.23Therefore, Quantity demanded at equilibrium Qd = D(p) = 1447 - 12p = 1447 - 12(66.23) = 663.25The consumer surplus at equilibrium is given by the area under the demand curve above the equilibrium price. It is found by integrating the demand function from 0 to the equilibrium price. Using the equilibrium price as the upper limit, this gives,C.S = ∫_0^p▒D(x)dx - pQ*CS = ∫_0^p▒D(x)dx - pQ*CS = ∫_0^66.23▒(1447 - 12x)dx - 66.23(663.25)CS = [1447x - 6x^2]_0^66.23 - 66.23(663.25)CS = (1447(66.23) - 6(66.23)^2) - 66.23(663.25)CS = 7293.56Therefore, the consumer surplus is $7294(b) Producer surplus is found by taking the area under the supply curve below the equilibrium price. It is given by the integral of the supply function from 0 to the equilibrium price. Using the equilibrium price as the upper limit, this gives,P.S = pQ - ∫_0^p▒S(x)dxP.S = (66.23)(663.25) - ∫_0^66.23▒(-5 + 10x)dxP.S = (66.23)(663.25) + [5x - 5x^2/2]_0^66.23P.S = (66.23)(663.25) + (5(66.23) - 5(66.23)^2/2)P.S = 45,093.26.
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JoJo Klum purchases a life insurance policy from BetterLifeCo. JoJo will pay a premium of $125 every week on Friday, and in return their beneficiaries will receive a payment of $1,000,000 on the second Friday after JoJo dies. BetterLifeCo invests the premiums it receives and expects to earn interest (net of any costs) of j
52
=10.4%p.a. a) Illustrate all the cash flows associated with this scenario as a fully labelled timeline diagram. (Include JoJo's death as an event of the timeline.) [3 marks] b) If JoJo lives another 25 years, determine the amount that BetterLifeCo will have accumulated from JoJo's premiums, at the time of JoJo's death. Enter this value to the nearest cent as an answer to "Assignment Module 1 - Milestones" question 2 b. You can have as many attempts at this as you wish without penalty, but this question will close at 9:00pm on Wednesday 17 August. There will be no marks available for this question part after then. NB You do NOT need to include your workings for this question in your submitted assignment paper. [1 mark] c) Determine how much this will accumulate to by the time that BetterLifeCo need to make the payout. [2 marks] d) Thus, explain whether under this scenario insuring JoJo would have been a profitable exercise for BetterLifeCo. [1 marks] e) Determine the minimum time JoJo would have needed to live in order for BetterLifeCo to break even on the policy. [NB this question is a little more difficult and intended to provide a bit of stretch for stronger students because you need to take into account the two week delay to payout after JoJo's death.] [4 marks] Weight: This question is worth 11 marks out of 100. JoJo Klum purchases a life insurance policy from BetterLifeCo. JoJo will pay a premium of $125 every week on Friday, and in return their beneficiaries will receive a payment of $1,000,000 on the second Friday after JoJo dies. BetterLifeCo invests the premiums it receives and expects to earn interest (net of any costs) of j
52
=10.4%p.a. a) Illustrate all the cash flows associated with this scenario as a fully labelled timeline diagram. (Include JoJo's death as an event of the timeline.) [3 marks] b) If JoJo lives another 25 years, determine the amount that BetterLifeCo will have accumulated from JoJo's premiums, at the time of JoJo's death. Enter this value to the nearest cent as an answer to "Assignment Module 1 - Milestones" question 2 b. You can have as many attempts at this as you wish without penalty, but this question will close at 9:00pm on Wednesday 17 August. There will be no marks available for this question part after then. NB You do NOT need to include your workings for this question in your submitted assignment paper. [1 mark] c) Determine how much this will accumulate to by the time that BetterLifeCo need to make the payout. [2 marks] d) Thus, explain whether under this scenario insuring JoJo would have been a profitable exercise for BetterLifeCo. [1 marks] e) Determine the minimum time JoJo would have needed to live in order for BetterLifeCo to break even on the policy. [NB this question is a little more difficult and intended to provide a bit of stretch for stronger students because you need to take into account the two week delay to payout after JoJo's death.]
BetterLifeCo needs to make the payout, and the accumulated amount from JoJo's premiums needs to cover the payout.
a) The cash flows associated with this scenario can be illustrated as follows: Jo Jo pays a premium of $125 every week on Friday. Jo Jo's beneficiaries will receive a payment of $1,000,000 on the second Friday after Jo Jo dies. Jo Jo's death is marked as an event on the timeline. b) If Jo Jo lives another 25 years, Better Life Co will have accumulated an amount from Jo Jo's premiums at the time of Jo Jo's death. To calculate this amount, we need to find the total number of premiums paid by Jo Jo over 25 years and multiply it by the premium amount. Since Jo Jo pays $125 every week, the number of premiums paid in 25 years can be calculated as follows: $125 (weekly premium) x 52 (number of weeks in a year) x 25 (number of years) = $162,500
Therefore, BetterLifeCo will have accumulated $162,500 from JoJo's premiums at the time of JoJo's death.
c) To determine how much this will accumulate to by the time Better Life Co needs to make the payout, we need to take into account the interest earned by Better Life Co on the premiums. Since Better Life Co expects to earn an interest of 10.4% p.a. (per annul), the accumulated amount can be calculated using the compound interest formula: Accumulated Amount = Principal + Interest Principal = $162,500 Interest = Principal x (1 + r)^n - Principal, where r is the interest rate and n is the number of years Using the given interest rate of 10.4% p.a., the accumulated amount can be calculated as follows: Interest = $162,500 x (1 + 0.104)^25 - $162,500 Accumulated Amount = $162,500 + Interest By calculating the above expression, we can find the accumulated amount.
d) To determine whether insuring JoJo would have been a profitable exercise for BetterLifeCo, we need to compare the accumulated amount from JoJo's premiums with the payout amount of $1,000,000.
If the accumulated amount is greater than $1,000,000, then insuring JoJo would have been profitable for BetterLifeCo. Otherwise, if the accumulated amount is less than $1,000,000, it would not have been profitable.
e) To determine the minimum time Jo Jo would have needed to live in order for Better Life Co to break even on the policy, we need to consider the two-week delay to the payout after Jo Jo's death.
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Lowell Inc. is analyzing its cost structure. Its fixed operating costs are $300,000, its variable costs of $3.00 per unit produced, and its products sell for $4.00 per unit. What is the company's breakeven point, i.e., at what unit sales volume would income equal costs?
750,000
453,403
428,571
300,000
Lowell Inc. has fixed operating costs of $300,000, variable costs of $3.00 per unit produced, and sells its products for $4.00 per unit.The breakeven point for Lowell Inc. is 300,000 units. Thus, option D is the correct answer.
To calculate the breakeven point, we need to determine the sales volume at which the company's income (revenue) equals its costs.
The breakeven point occurs when the total revenue is equal to the total costs. Total revenue is calculated by multiplying the selling price per unit by the number of units sold, and total costs are the sum of fixed costs and variable costs per unit multiplied by the number of units sold.
Let's denote the breakeven point as x (number of units).
Total revenue = Total costs
Selling price per unit * x = Fixed costs + Variable costs per unit * x
$4.00 * x = $300,000 + $3.00 * x
$x - $3.00 * x = $300,000
$4.00 * x - $3.00 * x = $300,000
$1.00 * x = $300,000
x = $300,000 / $1.00
x = 300,000 units
Therefore, the breakeven point for Lowell Inc. is 300,000 units. Thus, option D is the correct answer.
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Cullumber Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year
using a variety of financing alteratives.
Assets 1 and 2
These assets were purchased together for $123,000 cash. The following Information was gathered:
Depreciation
Initial Coston Seller's Books
to Date on Seller's Books
Book Value on Seller's Books
Appraised Value
Description
Machinery
$114,000
$51,000
$63,000
$105,000
Equipment
61,000
10,000
51,000
35,000
Asset 3
This machine was acquired by making a $10,000 down payment and lauling a $31,900, two-year, zero-interest-bearing note. The note la to be paid off in two $15,950 Instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $35,700.
Asset 4
A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchanges before. Facts concerning the trade-in areas follows:
Cost of truck traded
$109,000
Accumulated depreciation to date of exchange
40,000
Fair market value of truck traded
80,000
Cesh paid by Cullumber
9,900
Fair market value of truck acquired
78,000
Asset 5
Equipment was acquired by lasing 170 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,845.
Construction of Buliding
A building was constructed on land that was purchased January 1 at a cost of $151,000. Construction began on February 1 and was
completed November 1. The payments to the contractor were as follows:
Date
Payment
Feb.1
$118,000
June 1
372,000
Sept. 1
486,000
Nov. 1
104,000
To Finance construction of the building a $610,000, 12% construction loan was taken out on February 1. At the beginning of the project, Cullumber Invested the portion of the construction loan that was not yet expended and earned Investment Income of $4,700 The loan was repaid on November 1 when the construction was completed. The firm had $197,000 of other outstanding debt during the year at a borrowing rate of 11% and a $207,000 loan payable outstanding at a borrowing rate of 85%.
(2)
Cullumber uses a variety of alternatives to finance its equations. Record the acqulation of each of these assets, assuming that
Cullumber prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent
The journal entries to record the acquisition of assets, including the construction of the building, and the corresponding financing alternatives have been provided. These entries adhere to the net amount and general principles of IFRS for recording such transactions.
To record the acquisition of each asset, including the construction of the building, we will use the net amount for each transaction. The journal entries will be as follows:
Asset 1 and 2 (Machinery and Equipment):
Machinery: Debit $63,000
Equipment: Debit $51,000
Cash: Credit $114,000
Asset 3 (Machine):
Machine: Debit $35,700
Notes Payable: Credit $31,900
Cash: Credit $10,000
Note payable (First installment): Debit $15,950
Note payable (Second installment): Debit $15,950
Asset 4 (Truck):
Truck: Debit $78,000
Accumulated Depreciation: Debit $40,000
Truck (Traded): Credit $80,000
Cash: Credit $9,900
Asset 5 (Equipment):
Equipment: Debit $1,845
Common Shares: Credit 170 shares (based on the closing market price of $11 per share)
Construction of Building:
Building: Debit $610,000
Construction Loan Payable: Credit $610,000
Investment Income:
Investment Income: Debit $4,700
Cash: Credit $4,700
Loan Payable and Other Outstanding Debt:
Loan Payable: Debit $610,000 (Construction loan repayment)
Loan Payable: Debit $197,000 (Other outstanding debt)
Loan Payable: Debit $207,000 (Loan payable outstanding)
Please note that IFRS does not specifically prescribe the exact account titles to be used. The above entries reflect a general approach based on the information provided. It is advisable to consult the specific reporting requirements and guidelines under IFRS when preparing financial statements.
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