The conceptual dimension that is related to promoting broad search for opportunities and helps distinguish entrepreneurial firms from traditional firms is "Strategic orientation."(option A)
Strategic orientation refers to the mindset and approach of an organization towards identifying and pursuing new opportunities in the market. Entrepreneurial firms are typically characterized by their proactive and innovative strategic orientation, where they actively seek and exploit new business opportunities. They are constantly searching for untapped markets, developing new products or services, and adapting to changing customer needs.
In contrast, traditional firms often have a more conservative and reactive strategic orientation, focusing on maintaining their existing market position and optimizing current operations. They may be less inclined to explore new and risky opportunities.
Therefore, promoting a broad search for opportunities aligns with the strategic orientation of entrepreneurial firms, distinguishing them from traditional firms that may have a more resource-conserving approach.
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Toms Adds Glasses In A Smart, Social Brand Extension
Caleb Melby
Former Staff
Toms, famous for hip shoes, is now adding sunglasses to their product line. And just as
purchasing a pair of Toms shoes means that the company will donate a pair to someone in
the developing world, buying a pair of sunglasses will guarantee prescription glasses or
medical care for those in developing countries.
It is a move that will test one of the most enduring and consumer-centric corporate social
responsibility strategies to be developed in the last decade. The idea, said founder Blake
Mycoskie, is for Toms to be "a one-for-one company," which sounds a little like he doesn’t
plan on stopping at shoes and sunglasses.
CSR is, of course, only half the reason that Toms has been able to give away over 1,000,000
pairs of shoes since its founding in 2006. Its target market is populated by the stylishly hip
who go for the shoes designed in the Argentinean alpargata style, which is also chic, urbane
and pared down. Who else, after all, sells their shoes at Whole Foods? The Toms glasses line will feature tri-striped temples meant to symbolize the "one for one" mission and cover
aviator, Wayfarer and oversized styles—already deemed fashionable. It looks like they did
their homework.
Toms won’t be the first socially-minded for-profit company to make a brand extension like
this. Newman’s Own, founded by Paul Newman in 1982, donates their profits to educational
and charitable organizations. They started with salad dressing then expanded to a whole
range of other product categories. With a few exceptions, most of these have been successful:
marinades, salsas, pizzas, wines, even pet foods. (Although the pet foods are now owned by
Newman’s Own Organics, which became a separate company in 2001.)
The companies that succeed at brand extensions do so by keeping the essence of their brand
in mind at all times when making the move. This sounds pretty simple when written, but can
be a challenge during the exciting and sometimes tumultuous move into a new product line.
Knowing that your fans buy your product is not nearly enough – knowing how they use that
product and why they identify with it is imperative.
The Toms sunglasses extension is well-informed. For consumers, slipping their feet into a pair
of Toms is a very visual reminder that someone, somewhere is doing the same thanks to their
purchase. The sunglasses/vision care relationship is equally strong. There would be confusion
on the part of consumers if Toms continued to donate shoes in return for sunglasses
purchases.
For companies like Toms and Newman’s Own, the charitable functions of the company allow
for a smoother, almost de facto brand transition, because consumers already identify with
the mission of the company. But other elements of brand are important too. For Newman’s,
adventurous taste options and perceptions of their products as "healthy" were also essential.
Paying special attention to fashion and lifestyle will be central to the effective addition of
sunglasses to the Toms brand -- and will allow for more extensions in the future.
Questions
1. Evaluate Tom’s movement to promote charitable functions of company. In order to
support your argument, elaborate your answer with session 5 specifically "Can Social
Enterprise Generate Profit"?
This demonstrates a commitment to corporate social responsibility and the potential for businesses to generate profit while making a positive social impact.
Tom's efforts to promote the business' charity endeavors can be viewed favorably, especially in light of Session 5's discussion of "Can Social Enterprise Generate Profit?" The idea of social enterprises—businesses that seek to make a profit while simultaneously having a good social impact—is covered in this session. Tom is connecting the company's operations with the concepts of social entrepreneurship by embracing philanthropic activities. This strategy acknowledges the possibility of commercial success while concurrently addressing social and environmental challenges. Tom's project demonstrates a more comprehensive grasp of corporate social responsibility and the potential for corporations to improve society. It shows a dedication to a sustainable and socially conscious business model, which could result in long-term gains for the organization and the community.
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Clifton Corporation acquired all of the outstanding Gillion stock on January 1, Year 1, for $5,364,400. The parties immediately elected to file consolidated Federal income tax returns. Gillion reported a Year 1 taxable loss of $804,660, but it generated $1,072,880 of taxable income in Year 2 and $536,440 in Year 3 . Gillion paid a $268,220 dividend to Clifton in Year 2 and a $8,047 in Year 3. Compute Clifton's stock basis in Gillion on the last day of each of the indicated tax years. Year 1: ____
Year 2: ____
Year 3: ____
Clifton Corporation’s stock basis in Gillion on the last day of each of the indicated tax years can be calculated as follows;
Year 1:
Acquisition cost: $5,364,400
Year 2:
Basis beginning of year 2: $4,559,740
(Acquisition cost of $5,364,400 - Year 1 loss of $804,660)
Add: Gillion's income for Year 2: $1,072,880
Adjustment for the dividend received: ($268,220)
Stock basis at the end of Year 2: $5,364,400
Year 3: Basis beginning of Year 3: $5,364,400
Add: Gillion's income for Year 3: $536,440
Adjustment for the dividend received: ($8,047)
Stock basis at the end of Year 3: $5,892,793
Therefore, Clifton's stock basis in Gillion on the last day of each of the indicated tax years is;
Year 1: $5,364,400
Year 2: $5,364,400
Year 3: $5,892,793
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You obtain the following quotes from a dealer for a 10-year treasury bond:
Bid Asked
109.25 109.85
If you want to buy this bond, how much do you have to pay? $_______________
If you want to buy a 10-year treasury bond with Bid and Asked quotes of 109.25 and 109.85, respectively, then you have to pay $109.85.
The bid and ask prices are the two prices that any security can be traded at. The bid price is the maximum price that the investor is willing to pay for the security, while the ask price is the minimum price at which the seller is willing to sell the security.The Bid price is 109.25 and the Ask price is 109.85. If you want to buy a 10-year treasury bond, you would pay the higher of the two prices. The higher of the two prices is the Ask price, 109.85. Therefore, if you want to buy this bond, you will have to pay $109.85.
When it comes to the financial markets, bonds, and other financial instruments, traders and investors use bid and ask prices to make buy and sell decisions. The bid and ask prices, also known as bid and ask quotes or prices, are the two prices at which a security can be traded. The Bid price is the highest price that a buyer is willing to pay for a security, while the Ask price is the lowest price that a seller is willing to accept for the same security. These two prices are usually given in quotation marks, and the difference between them is known as the bid-ask spread. Now, in this question, the bid and ask prices for a 10-year treasury bond are 109.25 and 109.85, respectively. Since you want to buy this bond, you would pay the higher of the two prices, which is the Ask price of 109.85.
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The economies of scale index can be defined as S = AC/MC. Suppose each firm’s cost function can be given as TC = 400 + 5q2. At what approximate value of q would the scale economy index equal one?
Select one:
a.9
b.7
c.11
d.13
a) 9. is the correct answer. The scale economy index can be defined as S = AC/MC.
For perfect competition, AC = MC and S = 1. At this point, we are to find the value of q such that S = 1. Since, we have TC = 400 + 5q²; AC = TC / q and MC = d(TC)/dq=10q.The scale economy index can be expressed as S = AC / MC (400 + 5q²) / q10q=1This can be written as2 + 0.25q² = q ⇒ 0.25q² - q + 2 = 0.
Using the quadratic formula, we can get; q = 0.75 ± √ (0.5625 - 2) / 0.5; = 0.75 ± √ (-0.9375) / 0.5; = 0.75 ± 0.9682458365518543i / 0.5; Thus, the approximate value of q at which the scale economy index equals one is: Option A: 9. Answer: A. 9.
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Using the following values, calculate the safety stock requirement you will add to your reorder point for a 99.9% customer service level (99.9%CSL=3 times the standard deviation of demand during lead time). Calculate your answer to two decimal places. Enter just the value of safety stock - do not add the reorder point to your answer. Average lead time in days =5 Standard deviation of lead time in days =2 Average daily demand =100 Standard deviation of daily demand =10
The safety stock requirement for a 99.9% customer service level is approximately 67.08 units, calculated by multiplying three times the standard deviation of demand during lead time.
The safety stock requirement to be added to the reorder point for a 99.9% customer service level can be calculated by multiplying three times the standard deviation of demand during lead time.
In this case, the average lead time is 5 days, the standard deviation of lead time is 2 days, the average daily demand is 100 units, and the standard deviation of daily demand is 10 units.
To calculate the safety stock requirement, we need to find the standard deviation of demand during lead time. This can be calculated by multiplying the standard deviation of daily demand by the square root of the lead time:
Standard deviation of demand during lead time = Standard deviation of daily demand * Square root of lead time = 10 * √5 ≈ 22.36
Next, we multiply the standard deviation of demand during lead time by three to get the safety stock requirement:
Safety stock requirement = 3 * Standard deviation of demand during lead time = 3 * 22.36 ≈ 67.08
Therefore, the safety stock requirement to be added to the reorder point for a 99.9% customer service level is approximately 67.08 units. Hence, the value of the safety stock is 67.08.
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Marginal cost of capital Multiple Choice O None of these options apply. O can be defined as the cost of capital when no retained earnings are available for expansion. O usually provides the same capital budgeting choices as the use of weighted average cost of capital. O recognizes that cost of capital does not stay constant as more funds are raised. Logan Company produces two products, Standard and Premier. Logan can sell all of the Standard and Premier products it can produce, but it has limited production capacity. Machine hours per unit for Standard is 2 hour and for Premier is 3.0 hours. The company has 220,860 machine hours available. Contribution margin per unit is $24 for Standard and $30 for Premier. What is the total contribution margin if Logan chooses the most profitables mix?. Multiple Choice O $2,650,320. O $3,430,000. O $2,540,000. O $4,500,000. O $3,720,000.
The total contribution margin if Logan chooses the most profitable mix is $3,720,000.What is Marginal cost of capital?Marginal cost of capital can be defined as the cost of capital when no retained earnings are available for expansion. It can also be referred to as the cost of raising an additional dollar of capital.
It recognizes that the cost of capital does not stay constant as more funds are raised. Contribution margin is calculated as the selling price minus the variable costs per unit. The formula for calculating the total contribution margin is as follows: Total contribution margin = (contribution margin per unit x number of units sold)For Logan Company: Machine hours available = 220,860Standard product uses 2 machine hours per unit Premier product uses 3 machine hours per unit Contribution margin per unit for Standard = $24Contribution margin per unit for Premier = $30
To determine the most profitable mix, we need to find out how many of each product should be produced. To do this, we compare the contribution margin per machine hour of each product. Since the contribution margin per machine hour for Standard is higher, we should produce more of that product. Total contribution margin = (contribution margin per unit x number of units sold)Total contribution margin = ($24 x 110,430) + ($30 x 73,620)Total contribution margin = $2,653,920 + $2,066,400Total contribution margin = $4,720,320Therefore, the total contribution margin if Logan chooses the most profitable mix is $3,720,000 (option E).
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If RF = 4%, RM = 10%, ß (beta) = 1.5 and the portfolio earned a return of 16%, then the Jensen's alpha of _____ shows that the portfolio performance is _______:
A. 0%; consistent with the risk taken (i.e. neither inferior or superior).
B. 0%; inferior.
C. 3%; consistent with the risk taken (i.e. neither inferior or superior).
D. 3%; superior.
Since the calculated Jensen's alpha is positive (3%), Option D is correct. A Jensen's alpha of 3% indicates that the portfolio's performance is superior, meaning it has outperformed expectations based on its beta and the overall market.
To calculate Jensen's alpha, we first need to calculate the expected return of the portfolio using the Capital Asset Pricing Model (CAPM). The formula for the expected return is:
Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)
Given:
Risk-Free Rate (RF) = 4%
Market Return (RM) = 10%
Beta (β) = 1.5
Portfolio Return = 16%
Substituting the given values into the formula:
Expected Return = 4% + 1.5 * (10% - 4%)
= 4% + 1.5 * 6%
= 4% + 9%
= 13%
Jensen's Alpha = Portfolio Return - Expected Return
= 16% - 13%
= 3%
Option D is correct, The Jensen's alpha of 3% shows that the portfolio performance is superior
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Several years ago, Lilya borrowed $46,596 from Safe Credit Union. Lilya agreed to make monthly principal and interest payments for 15 years. The interest rate on the note was 2.0%. When the balance on the note had been reduced through monthly payments, the bank agreed to cancel $15,578 of the outstanding debt in exchange for full payment of the remaining balance. Lilya accepted the bank’s offer. At the time, Lilya had total assets of $100,000 and total liabilities of $70,000. What amount of gross income does Lilya recognize as a result of the settlement of the note for less than the full amount owed?
Lilya's cod Income is $15,578 - $31,018 = -$15,440 (negative value).
to determine the amount of gross income lilya recognizes as a result of the settlement of the note for less than the full amount owed, we need to calculate the cancellation of debt (cod) income. cod income is generally taxable unless an exception applies.
in this case, the outstanding debt on the note was reduced by $15,578 in exchange for full payment of the remaining balance. this means that lilya was relieved of repaying $15,578 of the debt.
to calculate the cod income, we subtract the amount of debt forgiven from the total outstanding debt:
cod income = debt forgiven - outstanding debt
outstanding debt = $46,596 - $15,578 = $31,018 however, we need to consider lilya's financial situation and insolvency at the time of the debt settlement. if lilya's total liabilities exceeded her total assets before the cancellation of debt, she may qualify for the insolvency exception.
total liabilities = $70,000
total assets = $100,000
lilya's insolvency amount is calculated as follows:
insolvency amount = total liabilities - total assets
insolvency amount = $70,000 - $100,000 = -$30,000 (negative value)
since the insolvency amount is greater than the amount of cod income (-$30,000 > -$15,440), lilya may be able to exclude the entire cod income from gross income under the insolvency exception.
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Use the information below to answer the following question(s).
Copper Corporation has the following sales budget for the last six months of 202X1
July $200,000 October $180,000
August 160,000 November 200,000
September 220,000 December 188,000
Historically, the cash collection of sales has been as follows:
65 percent of sales collected in month of sale,
25 percent of sales collected in month following sale,
8 percent of sales collected in second month following sale, and
2 percent of sales is uncollectable.
1) Cash collections for September are
A. $204,000
B. $199,000
C. $161,400
D. $143,000
The cash collections for September are $204,000 when 65 percent of cash sales are collected in the month of sale.
To calculate the cash collections for September, we need to consider the sales made in July, August, and September. According to the given information, 65 percent of sales are collected in the month of sale.
Sales in July: $200,000 x 65% = $130,000 (collected in July)
Sales in August: $160,000 x 65% = $104,000 (collected in August)
Sales in September: $220,000 x 65% = $143,000 (collected in September)
Now we need to consider the remaining percentages of sales collected in subsequent months. 25 percent of sales are collected in the month following the sale, and 8 percent of sales are collected in the second month following the sale.
Sales in July: $200,000 x 25% = $50,000 (collected in August)
Sales in August: $160,000 x 25% = $40,000 (collected in September)
Next, we consider the 8 percent of sales collected in the second month following the sale.
Sales in July: $200,000 x 8% = $16,000 (collected in September)
Finally, we add up all the cash collections for September:
$143,000 (collected in September) + $50,000 (collected in August) + $40,000 (collected in September) + $16,000 (collected in September) = $204,000.
Therefore, the cash collections for September are $204,000.
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Maria Turner has just graduated from college with a degree in accounting. She had planned to enroll immediately in the master’s program at her university but has been offered a lucrative job at a well-known company. The job is exactly what Maria had hoped to find after obtaining her graduate degree.
In anticipation of master’s program classes, Maria has already spent $450 to apply for the program. Tuition is $8,000 per year, and the program will take two years to complete. Maria’s expected salary after completing the master’s program is approximately $60,000. If she pursues the master’s degree, Maria would stay in her current home that is near the campus and costs $600 per month in rent. She would also remain at her current job that pays $25,000 per year. Additionally, Maria’s immediate family is nearby. She spends considerable time with family and friends, especially during the holidays. This would not be possible if she accepts the job offer because of the distance from her new location.
The job Maria has been offered includes a salary of $50,000. She would have to relocate to another state, but her employer would pay the $5,000 for moving expenses. Maria’s rent in the new location would be approximately $800 per month. The new location is a fast-growing, active city that offers a number of cultural activities that Maria would enjoy. The city is also home to Maria’s favorite Major League Baseball team, and she would expect to buy season tickets.
Maria should accept the job offer and forego pursuing the master's degree.
In making this decision, Maria needs to consider the immediate financial benefits, career prospects, and personal factors. Accepting the job offer would provide her with a salary of $50,000, which is comparable to the expected salary after completing the master's program.
Moreover, her employer will cover the $5,000 moving expenses, reducing her financial burden. Additionally, the new location offers cultural activities and the opportunity to enjoy her favorite Major League Baseball team, enhancing her quality of life.
By accepting the job offer, Maria would avoid the cost of tuition and two years of lost income from her current job. She can start building her career immediately and gain valuable work experience, which could potentially lead to future advancements and salary increases. Furthermore, staying close to her immediate family and friends allows her to maintain her strong personal connections and enjoy the time spent with them during holidays.
In summary, considering the financial benefits, career prospects, and personal factors, it is advisable for Maria to accept the job offer and forgo pursuing the master's degree.
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Consider the following information for a simultaneous move, infinitely repeated game: If you and your rival each charge a low price, you each will earn $5 million in profits. You will each earn $10 million in profits if you each charge a high price. However, if one of you charges a low price and the other charges a high price, the firm that charges a low price will earn $15 million and the firm that charges a high price will earn $1 million. If the interest (discount) rate is 20% then the cost of cheating on the cooperative agreement is:
Select one:
$9 million
$25 million
$4.5 million
$45 million
The cost of cheating on the cooperative agreement is $25 million. Option B.
To determine the cost of cheating on the cooperative agreement, we need to calculate the present value of the difference in payoffs between cooperating and cheating strategies over an infinite time horizon, considering the discount rate of 20%.
If both firms cooperate and charge a high price, each firm earns $10 million in profits. The present value of this payoff stream can be calculated using the formula:
PV(cooperative strategy) = (10 million)/(1+0.20) + (10 million)/(1+0.20)^2 + (10 million)/(1+0.20)^3 + ...
Simplifying the formula gives:
PV(cooperative strategy) = (10 million)/(0.80) + (10 million)/(0.80)^2 + (10 million)/(0.80)^3 + ...
This is an infinite geometric series with a common ratio of 0.80. Using the formula for the sum of an infinite geometric series, we can calculate the present value:
PV(cooperative strategy) = (10 million)/(0.80) * (1/(1-0.80)) = $50 million
If one firm cheats by charging a low price while the other cooperates and charges a high price, the cheating firm earns $15 million in profits while the cooperating firm earns $1 million in profits. The present value of this payoff stream can be calculated similarly:
PV(cheating strategy) = (15 million)/(0.80) + (1 million)/(0.80)^2 + (15 million)/(0.80)^3 + ...
Again, this is an infinite geometric series, and using the formula for its sum:
PV(cheating strategy) = (15 million)/(0.80) * (1/(1-0.80)) = $75 million
The difference in present value between the cooperative and cheating strategies is:
PV(cheating strategy) - PV(cooperative strategy) = $75 million - $50 million = $25 million
Therefore, the cost of cheating on the cooperative agreement is $25 million. So Option B is correct.
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In 2018, a consumer goods giant had more than 20 brands with more than $1 billion in annual sales. How does the company create so many successful consumer products? They effectively invests in research and development to understand what consumers want. One method used to determine consumer preferences is called conjoint analysis. Conjoint analysis allows a company to ascertain the utility that a respondent in the conjoint study places on a design of a given product. The higher the utility, the more valuable a respondent finds the design. Suppose we have conducted a conjoint study and have the following estimated utilities (higher is preferred) for each of three different designs for a new whitening toothpaste.
Respondent Utilities
Design A Design B Design C
1 24.6 34.4 28.8
2 31.4 31.4 33.9
3 31.8 20.2 27.8
4 15.4 26.4 25.1
5 20.7 18.3 18.2
6 41.0 34.0 44.8
7 27.1 22.5 27.3
8 20.2 21.8 27.9
9 31.6 29.4 31.3
10 24.4 29.0 29.3
At the 0.05 level of significance, test for any significant differences.
Find the value of the test statistic. (Round your answer to two decimal places.)
Find the p-value. (Round your answer to three decimal places.)
p-value =
To test for significant differences in the estimated utilities for the three different designs of a new whitening toothpaste, a hypothesis test is conducted. The value of the test statistic is calculated to determine the significance of the differences, and the p-value is obtained to assess the level of significance.
Hypothesis testing: The null hypothesis states that there are no significant differences in the estimated utilities for the three designs of the whitening toothpaste, while the alternative hypothesis suggests that there are significant differences among them. The hypothesis test is performed at a significance level of 0.05.
Test statistic: To calculate the test statistic, various statistical methods can be used depending on the specific requirements of the data. In this case, since we are comparing the means of three different designs, one possible method is the analysis of variance (ANOVA). The ANOVA test statistic is used to determine whether the differences between the means are significant. By conducting the ANOVA test, the test statistic value can be obtained.
p-value: The p-value is a measure of the evidence against the null hypothesis. It represents the probability of obtaining the observed data or more extreme results under the assumption that the null hypothesis is true. The p-value is compared to the significance level (0.05 in this case) to determine whether the null hypothesis should be rejected or not. If the p-value is less than the significance level, the null hypothesis is rejected in favor of the alternative hypothesis.
In this case, the calculated test statistic value and the corresponding p-value would provide insights into whether there are significant differences in the estimated utilities for the three designs of the whitening toothpaste.
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Intro You just turned 23 years old and want to retire when you turn 65 . You plan to put $3,900 every year into a ROTH IRA, a retirement account from which you can withdraw money after retirement without having to pay any taxes. You expect to earn a return of 8% on your investments every year. Part 1 - Attempt 1/2 for 5pts. How much money can you expect to have at age 65 if you make your first annual deposit now and your last one on the day you turn 64 ? Part 2 Attempt 1/2 for 5 pts. How much money can you expect to have at age 65 if you make your first deposit 10 years from now (at age 33) and your last one on the day you turn 64 ?
The expected amount to have at age 65 is $2,951,914.8 if the first deposit is made now and the last one is made on the day of the 64th birthday. The expected amount to have at age 65 is $1,066,362.4 if the first deposit is made at the age of 33 and the last one is made on the day of the 64th birthday.
Part 1: The present age is 23 years old, the annual deposit amount is $3,900, and the expected annual return is 8%.
The time period of investment is 41 years, and the amount is deposited at the end of each year.
The formula for calculating future value at the end of investment is
FV = PV × (1 + r) n + PMT × {(1 + r) n - 1 / r}
Where
PV is the present value or the initial deposit
PMT is the annual payment
r is the annual interest rate, and
n is the number of years.
The calculation of future value will be,
FV = 0 × (1 + 0.08) 41 + 3900 × {(1 + 0.08) 41 - 1 / 0.08}= 0 + 3900 × 756.26= $2,951,914.8
The amount expected to have at age 65 is $2,951,914.8.
Part 2: The present age is 23 years old, the annual deposit amount is $3,900, and the expected annual return is 8%.
The time period of investment is 32 years, and the amount is deposited at the end of each year.
The formula for calculating future value at the end of investment is
FV = PV × (1 + r) n + PMT × {(1 + r) n - 1 / r}
Where
PV is the present value or the initial deposit
PMT is the annual payment
r is the annual interest rate, and
n is the number of years.
The calculation of future value will be,
FV = 0 × (1 + 0.08) 32 + 3900 × {(1 + 0.08) 32 - 1 / 0.08}= 0 + 3900 × 273.704= $1,066,362.4
The amount expected to have at age 65 is $1,066,362.4.
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Heather Hudson makes stuffed teddy bears. Recent information for her business follows: Determine the degree of operating leverage if she sells 440 bears this month. Note: Round your answer to 2 decimal places.
Heather Hudson makes stuffed teddy bears.
The degree of operating leverage is 1.55 if Heather Hudson sells 440 bears this month.
Recent information for her business is given below:
Selling price of one teddy bear $19
Variable cost per teddy bear $8
Total fixed costs $1,280Required:
Determine the degree of operating leverage if she sells 440 bears this month.
The formula for degree of operating leverage is;
Degree of Operating Leverage (DOL) = Contribution Margin / Net Operating Income Where;
Contribution margin = Selling price - Variable cost per unit
Net operating income = Total revenue - Total fixed cost
Contribution margin = $19 - $8
= $11 per bear
Total revenue = Selling price × Number of units
= $19 × 440
= $8360
Net operating income = Total revenue - Total fixed costs
= $8360 - $1280
= $7080
Now, put these values in the above formula;
DOL = $11,000 / $7,080
= 1.55
Thus, the degree of operating leverage is 1.55 if Heather Hudson sells 440 bears this month.
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Note: Book name ( Mankiw Macro-economics Edition 11)
Check Chapter 3 from this
Solve all parts thank u
(35 pts.) Brexit. In June 2016, the British voted to withdraw from the European Union-an integrated market of goods, labor, and capital amongst many of Europe countries. This last week Prime Minister
The full implications of Brexit are still unfolding, and its long-term effects on the UK economy and its relationship with the EU remain uncertain. The ability of the UK to negotiate favorable trade agreements, address domestic challenges, and adapt to the new realities will play a crucial role in shaping its post-Brexit future.
Brexit, the decision by the British to withdraw from the European Union (EU) in June 2016, has had significant implications for the United Kingdom (UK) and its relationship with the EU. The vote reflected a growing sentiment among the British public regarding concerns over immigration, sovereignty, and the perceived influence of the EU on domestic affairs.
Since the referendum, the UK has experienced a complex and challenging process of disentangling itself from the EU. Negotiations have been centered around various aspects, including trade, borders, and regulations. The withdrawal agreement, finalized in 2020, outlined the terms of the UK's departure and set the stage for a new relationship between the two entities.
Brexit has had both positive and negative consequences for the UK economy. On the positive side, it has provided the opportunity for the UK to establish its own trade agreements with countries outside the EU, potentially opening up new markets and economic opportunities. However, the uncertainty surrounding Brexit has also had adverse effects. Businesses have faced difficulties in planning and investment decisions due to the uncertain future trade environment. Financial services, a significant sector for the UK economy, have been particularly impacted as some firms have relocated operations to EU member states.
In terms of sovereignty, Brexit has allowed the UK to regain control over its laws, regulations, and borders. However, it has also resulted in the loss of access to the EU single market, which could potentially limit the UK's economic integration and influence in European affairs.
Overall, the full implications of Brexit are still unfolding, and its long-term effects on the UK economy and its relationship with the EU remain uncertain. The ability of the UK to negotiate favorable trade agreements, address domestic challenges, and adapt to the new realities will play a crucial role in shaping its post-Brexit future.
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The best place to look in a company's accounting system, if you wanted to see all of the accounts tlected by a transaction, would be? The General Journal B. The General Ledger C. A Trial Balance D. The Chart of Accounts E. None of the above
If a joumal entry that affects only two accounts increases an asset as one part of the entry, what might the other part of the entry do? A. Increase another asset account B. Increase an expense account C. Increase a liability account D. Decrease a revenue account E. None of the above
The best place to look in a company's accounting system, if you wanted to see all of the accounts affected by a transaction, would be the General Ledger. The General Ledger contains a record of all the accounts and their balances in the company's accounting system.
If a journal entry that affects only two accounts increases an asset as one part of the entry, the other part of the entry might increase a liability account. The increase in the asset account would be offset by an increase in the liability account to ensure that the accounting equation (Assets = Liabilities + Equity) remains balanced.
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Distinguish between Money cost and Real cost, and also between
Fixed
and Variable costs. What is their importance to the
firm?
Money cost refers to the actual monetary expenditure, while real cost includes both monetary and non-monetary factors such as opportunity cost. Fixed costs remain constant, while variable costs change with production levels. Understanding these distinctions is important for financial assessment and cost management in a firm.
Money cost represents the actual financial amount paid for goods or services, while real cost takes into account both monetary and non-monetary factors, such as opportunity cost. Fixed costs remain constant regardless of production or sales levels, while variable costs fluctuate based on output. Distinguishing between these cost categories is crucial for making informed pricing decisions, evaluating profitability, and optimizing cost structures within a firm. By understanding the impact of money cost versus real cost and differentiating between fixed and variable costs, businesses can effectively manage their resources and maximize financial performance.
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Choose ONE of the following questions to answer in a short (1-3
paragraph) essay. Be sure that each paragraph contains at least
three sentences!
Explain how the time value of money works.
The time value of money refers to the idea that money is worth more today than it will be in the future. This is due to several factors, including inflation, the potential for investment growth, and the opportunity cost of not having access to that money in the present.
The concept is important in financial decision-making because it allows individuals and businesses to compare the value of money at different points in time. By calculating the present value of future cash flows, for example, investors can determine whether an investment is worth pursuing.
By considering the value of money at different points in time, individuals and businesses can make more informed financial decisions that will help them achieve their goals over the long term.
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Assume you are doing business for Education Industry in Malaysia. Think about your own university or college and choose an idea that could improve student satisfaction with the course enrollment process every semester. Currently, can your students enroll for classes from anywhere? How long does it take? Are directions simple to follow? Is online help available? Next, think about how technology can help support your idea. Would you need completely new technology? Can the current system be changed?
TASK:
create a system request that you could give to the administration in your company that explains the business sponsor, business need, business requirements, and potential value of the project. Include any constraints or issues that should be considered. .
The system request aims to improve student satisfaction with the course enrollment process in an educational institution in Malaysia. It highlights the business sponsor, business need, business requirements, potential value, and constraints of the project.
Business Sponsor:
The business sponsor for this project would be the administration of the educational institution, responsible for overseeing and enhancing the student experience.
Business Need:
The current course enrollment process lacks convenience, efficiency, and user-friendliness, resulting in potential dissatisfaction among students. There is a need to improve the process to enhance student satisfaction and streamline enrollment procedures.
Business Requirements:
Seamless Accessibility: The new system should allow students to enroll for classes from anywhere, providing online access to course selection.
Time Efficiency: The enrollment process should be optimized to minimize the time required for students to complete their course selections.
User-Friendly Interface: The system should have a simple and intuitive interface, making it easy for students to follow directions and complete the enrollment process without confusion.
Online Help and Support: The system should provide online assistance, including FAQs, tutorials, and chat support, to help students navigate the enrollment process smoothly.
Potential Value:
Implementing an improved course enrollment system would enhance student satisfaction, reduce enrollment-related queries and complaints, and improve the overall efficiency of the administrative process. It would contribute to a positive student experience and potentially increase student retention rates.
Constraints/Issues:
Consideration should be given to the integration of the new system with existing technology infrastructure and student information databases. Security measures should also be implemented to safeguard student data and privacy. Adequate resources, including financial and technical support, should be allocated for the development, implementation, and maintenance of the new system.
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TopCatch Fishing Boats had product sales for the current year as follows: Q1 4,000 boats; Q2 4,800 boats; Q3 3,600 boats; Q4 2,400 boats. Current selling price is $5,000 per boat. A strong economy and specific market initiatives at Titan for next year indicate that sales volume is expected to increase by 4% in each quarter and sales price will increase by 6% per boat. The sales revenue forecast for Q4 next year would be: Multiple Choice a. $12,694,200. b. $12,475,000. c. $12,719,600. d. $13,228,800.
The sales revenue forecast for Q4 next year would be approximately $12,720,000, which is closest to option c. $12,719,600. To calculate the sales revenue forecast for Q4 next year, we need to determine the sales volume and selling price for that quarter based on the given information.
Given:
Current year sales:
Q1: 4,000 boats
Q2: 4,800 boats
Q3: 3,600 boats
Q4: 2,400 boats
Current selling price per boat: $5,000
Projected sales volume increase for next year: 4% per quarter
Projected selling price increase for next year: 6% per boat
To calculate the sales volume for Q4 next year, we need to apply the 4% increase to each quarter's sales volume sequentially:
Q1 next year: 4,000 + (4,000 * 0.04) = 4,160 boats
Q2 next year: 4,800 + (4,800 * 0.04) = 4,992 boats
Q3 next year: 3,600 + (3,600 * 0.04) = 3,744 boats
Now, let's calculate the selling price for Q4 next year by applying the 6% increase per boat:
Selling price per boat for Q4 next year: $5,000 + ($5,000 * 0.06) = $5,300
Finally, we can calculate the sales revenue for Q4 next year by multiplying the sales volume and selling price:
Sales revenue for Q4 next year: 2,400 boats * $5,300 = $12,720,000
Therefore, the sales revenue forecast for Q4 next year would be approximately $12,720,000, which is closest to option c. $12,719,600.
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A corporation's stock has a beta of 1.2. The risk-free rate is 7.25% and the expected return on the market is 10.5%. What is the required rate of return on the stock using the Capital Asset Pricing Model (CAPM)?
Problem 08-7: Cost of Debt
A company issues a 1,000 SAR par value bond that pays 8 percent annual interest and matures in 17 years. Investors are willing to pay 800 SAR for the bond.
Flotation costs will be 3 percent of market value. The company is a 33 percent marginal tax bracket. What will be the firm's after-tax cost of debt on the bond? Problem 08-8: WACC Calculation
The capital structure for a corporation is provided below. The company plans to maintain its debt structure in the future.
If the firm has a 5 percent after-tax cost of debt, a 12.5 percent cost of preferred stock, and an 15 percent cost of common stock, what is the firm's weighted average cost of capital?
Captial Structure
Bonds 1055
Preferred stock 255
Common Stock 3500
The required rate of return on the stock using the Capital Asset Pricing Model (CAPM) is 13.85%. The firm's after-tax cost of debt on the bond is 5.83%. The firm's weighted average cost of capital (WACC) is 10.77%.
Required Rate of Return using CAPM:
The required rate of return on the stock can be calculated using the Capital Asset Pricing Model (CAPM) formula: R = Rf + β * (Rm - Rf), where R is the required rate of return, Rf is the risk-free rate, β is the stock's beta, Rm is the expected return on the market.
Given that the stock's beta is 1.2, the risk-free rate is 7.25%, and the expected return on the market is 10.5%, we can calculate the required rate of return as follows: R = 7.25% + 1.2 * (10.5% - 7.25%) = 13.85%.
After-Tax Cost of Debt:
To calculate the after-tax cost of debt, we need to consider the coupon rate, bond price, flotation costs, and tax rate. The coupon rate on the bond is 8%, and investors are willing to pay 800 SAR for the bond with a par value of 1,000 SAR. The flotation costs are 3% of the market value. The company is in a 33% marginal tax bracket. First, we calculate the after-tax cost of debt: After-tax cost of debt = (Coupon payment * (1 - Tax rate)) / Bond price = (8% * (1 - 33%)) / 800 SAR = 5.83%.
Weighted Average Cost of Capital (WACC):
The weighted average cost of capital (WACC) is the average rate of return required by the company's investors, taking into account the proportional weights of different sources of capital. In this case, the firm's capital structure includes bonds, preferred stock, and common stock. Given that the after-tax cost of debt is 5%, the cost of preferred stock is 12.5%, and the cost of common stock is 15%, we can calculate the weighted average cost of capital as follows: WACC = (Weight of debt * Cost of debt) + (Weight of preferred stock * Cost of preferred stock) + (Weight of common stock * Cost of common stock) = (1055 / 4810) * 5% + (255 / 4810) * 12.5% + (3500 / 4810) * 15% = 10.77%.
Therefore, the required rate of return on the stock using CAPM is 13.85%, the after-tax cost of debt is 5.83%, and the firm's weighted average cost of capital is 10.77%.
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1. Which of the following best describes a subject matter expert who is solicited for input during the development of a product? (Give explanations for the correct and incorrect choices)
A. Sponsor
B. Coordinator
C. Stakeholder
D. Assistant
2. A project manager is overseeing a project to launch a new satellite. While the satellite is being developed internally, a required piece to launch the system is provided by an external partner. Which has experienced a high failure rate. Which of the following risk strategies should the project manager apply? (Give explanations for the correct and incorrect choices)
A. Transfer the risk with an insurance plan to cover potential failures
B. Avoid the risk by building the launch system internally
C. Accept the risk as normal for this type of project
D. Mitigate the risk by requiring quality checkpoints
The correct answer for the first question is Option C, Stakeholders and the correct answer for the second question is Option D, Mitigate the risk by requiring quality checkpoints.
The correct answer is C. Stakeholder.
Explanation:
A stakeholder is a person or entity with a vested interest in the project or its outcome. They can have an impact on the project and are often consulted or involved during the development process. In this context, a subject matter expert (SME) would be considered a stakeholder who provides valuable input based on their expertise and knowledge in a specific area relevant to the product being developed. The SME's input is sought to ensure that the product meets the required standards and incorporates the necessary domain knowledge.
A. Sponsor: A sponsor is typically an individual or group that provides financial resources and support for the project. While sponsors play a vital role in project success, they are not typically the ones solicited for input during product development.
B. Coordinator: A coordinator is responsible for managing and organizing activities and resources within a project. While they may facilitate the collaboration and communication among various stakeholders, they are not necessarily subject matter experts who provide input during product development.
D. Assistant: An assistant is a role that supports the project manager or other team members by performing administrative or operational tasks. They are not typically solicited for input during product development.
The correct answer is D. Mitigate the risk by requiring quality checkpoints.
Explanation:
Given that the external partner providing a required piece for the launch system has experienced a high failure rate, it is crucial for the project manager to mitigate the risk associated with this dependency. Mitigation involves taking proactive actions to reduce the probability and impact of the risk.
A. Transfer the risk with an insurance plan to cover potential failures: Transferring the risk to an insurance plan is not a suitable strategy in this case because insurance plans typically cover financial losses, not the risk of a high failure rate of the external partner's product.
B. Avoid the risk by building the launch system internally: While building the launch system internally could be an option, it may not be feasible or practical for the project. It may require significant resources, expertise, and time, which might affect the project's overall timeline and budget.
C. Accept the risk as normal for this type of project: Accepting the risk is not the ideal approach when the failure rate is high and can potentially jeopardize the success of the project. It is important to actively address and mitigate the risk rather than accepting it as an inevitable consequence.
D. Mitigate the risk by requiring quality checkpoints: This is the most appropriate strategy in this scenario. By implementing quality checkpoints, the project manager can monitor and evaluate the performance and reliability of the external partner's product at various stages. This helps ensure that any potential issues or failures are detected early and corrective actions can be taken to mitigate the risk.
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"
Which of the following are included in the calculations of Gross
Domestic Product? Answer each one of them separately with reasoning
as to why they are included and why they are not?
To determine whether certain items are included in the calculation of Gross Domestic Product (GDP), we need to consider whether they meet the criteria for inclusion in GDP.
GDP is a measure of the total value of all final goods and services produced within a country's borders in a given time period. Here are some common items and their inclusion status in GDP:
Consumer spending (included): Consumer spending refers to the expenditures made by individuals and households on goods and services. It is a significant component of GDP as it represents the demand side of the economy. Consumer spending is included in GDP because it reflects the value of goods and services produced for final consumption.
Government spending (included): Government spending refers to the expenditures made by the government on public goods and services such as infrastructure, defense, education, and healthcare. It is also included in GDP because it represents a significant component of the total spending in the economy.
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Discussion Questions
The students need to work in a group of 2-3 and present the discussion of the following area of internal audit:
What is the determinant of internal audit outsourcing? Would a smaller organization be more likely or less likely to outsource its internal audit function? Explain. Your discussion should contain the support of past studies only
Determinants of internal audit outsourcing can vary depending on the organization's size, complexity, industry, and specific circumstances.
Past studies suggest that several factors influence the decision to outsource the internal audit function. These factors include cost considerations, expertise and resources, organizational culture, risk management, and the need for independence and objectivity.
In terms of a smaller organization, the likelihood of outsourcing the internal audit function may differ compared to larger organizations. Smaller organizations often face resource constraints and limited in-house expertise, which can make it more challenging to establish and maintain a robust internal audit department.
As a result, smaller organizations may be more inclined to outsource their internal audit function to external firms that specialize in providing such services. Outsourcing can offer cost advantages, access to specialized skills and knowledge, and flexibility in adapting to changing business needs. Additionally, smaller organizations may find it beneficial to leverage external expertise and objectivity to enhance the effectiveness and credibility of their internal audit activities.
However, it is essential to consider that each organization is unique, and the decision to outsource internal audit should be based on a comprehensive analysis of its specific circumstances. Factors such as the organization's strategic goals, regulatory requirements, risk profile, and available resources should also be taken into account. Ultimately, the decision to outsource internal audit should align with the organization's overall objectives and be based on a careful assessment of the potential benefits and risks associated with outsourcing.
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Determinants of internal audit outsourcing can vary depending on the organization's size, complexity, industry, and specific circumstances.
Past studies suggest that several factors influence the decision to outsource the internal audit function. These factors include cost considerations, expertise and resources, organizational culture, risk management, and the need for independence and objectivity.
In terms of a smaller organization, the likelihood of outsourcing the internal audit function may differ compared to larger organizations. Smaller organizations often face resource constraints and limited in-house expertise, which can make it more challenging to establish and maintain a robust internal audit department.
As a result, smaller organizations may be more inclined to outsource their internal audit function to external firms that specialize in providing such services. Outsourcing can offer cost advantages, access to specialized skills and knowledge, and flexibility in adapting to changing business needs. Additionally, smaller organizations may find it beneficial to leverage external expertise and objectivity to enhance the effectiveness and credibility of their internal audit activities.
However, it is essential to consider that each organization is unique, and the decision to outsource internal audit should be based on a comprehensive analysis of its specific circumstances. Factors such as the organization's strategic goals, regulatory requirements, risk profile, and available resources should also be taken into account. Ultimately, the decision to outsource internal audit should align with the organization's overall objectives and be based on a careful assessment of the potential benefits and risks associated with outsourcing.
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7. Assume the Home country can produce two goods, computers and corn. The unit labor requirement in computer production is 4 , while in corn production it is 2 . The opportunity cost of a computer in
The Home country possesses a comparative advantage in corn production since it can produce more corn than computers using the same available resources and technology.
The opportunity cost of a computer, in terms of corn, is two. Opportunity cost refers to the value of the next best alternative that is given up when choosing a specific option. In the context of a country's production possibilities frontier (PPF), which illustrates the maximum potential output of two goods using existing resources and technology, the concept of comparative advantage comes into play. Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost compared to another country.
In the Home country, the unit labor requirement for producing computers is four, while for corn, it is two. The opportunity cost of producing one computer, in terms of corn, represents the amount of corn that must be foregone to produce an additional computer. In this case, the opportunity cost of producing one computer is two units of corn. This means that the same amount of labor required to produce one computer can be used to produce two units of corn. Consequently, the Home country possesses a comparative advantage in corn production since it can produce more corn than computers using the same available resources and technology.
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True or False
1) Corporate bond offering 10%; municipal bond offering 7% interest. With other conditions remaining the same,municipal bond is better. Assume your tax bracket is 40%.
True. The municipal bond is better if a corporate bond offers 10% and a municipal bond offers 7% interest with other conditions remaining the same and the tax bracket is 40%. This is because municipal bonds are exempt from federal income taxes, and sometimes state and local income taxes as well.
A municipal bond offering 7% interest is better than a corporate bond offering 10% interest with all other conditions staying the same. This is true if your tax bracket is 40%. Explanation: The reason why a municipal bond with a 7% interest rate is better than a corporate bond with a 10% interest rate is because municipal bond interest is tax-free at the federal level, and sometimes at the state and local levels as well. If you're in the 40% tax bracket, a 10% taxable corporate bond will only yield 6% after taxes (10% x 0.6 = 6%), while a 7% tax-exempt municipal bond will yield 7%. The municipal bond will provide a better net return because it pays interest that is tax-free. If the person's tax bracket is lower, the tax implications will be less significant and the corporate bond may be the better choice.
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How do I do the adjusting journal entries? Record adjusting journal entries based on the following information: a. A physical count of supplies on May 31 indicates that supplies worth $625 remain in the supply cabinet. b. $750 of the unearned revenue received on May 22 has been earned as of May 31. c. As of May 31, the company has provided $850 of services for which it has not yet billed the client, and which were not previously recorded. d. As of May 31, employees of Mother Molly’s Childcare have worked for one day, and earned wages of $200. They will not receive paychecks for this work until the following month.
The adjusting journal entries can be recorded as follows:a. The initial amount of supplies were not recorded in the books. Thus, the physical count made on May 31 was used to record the amount of supplies. The adjusting entry to be made for this will be:
Supplies expenses $625 Supplies $625 b. The $750 unearned revenue received on May 22 has been earned as of May 31. The adjusting entry to be made for this will be: Unearned Revenue $750 Service Revenue $750 c. As of May 31, the company has provided $850 of services for which it has not yet billed the client, and which were not previously recorded. The adjusting entry to be made for this will be:
Service Revenue $850 Accounts Receivable $850 d. The $200 earned by employees who have not yet been paid for will have to be accrued. The adjusting entry to be made for this will be: Salary expense $200 Salary payable $200Thus, the above adjustments would be made in order to reflect the correct balances in the financial statements.
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4. Big Sky Corp. has $900,000 in current assets, $400,000 of which are considered permanent current assets. In addition, the firm has $700,000 invested in fixed assets. Big Sky wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 8 percent. The balance will be financed with short-term financing which currently costs 5 percent. Big Sky's earnings before interest and taxes are $340,000. Big Sky has an effective tax rate of 30 percent. Determine Big Sky's earnings after taxes under this financing plan.
Big Sky's earnings after taxes under this financial plan would be $191,800.
To determine Big Sky's earnings after taxes under this financing plan, we need to calculate the interest expense for both long-term and short-term financing.
Step 1: Calculate the interest expense on long-term financing:
Long-term financing = $700,000
Interest rate = 8%
Interest expense on long-term financing = Long-term financing * Interest rate
Interest expense on long-term financing = $700,000 * 8% = $56,000
Step 2: Calculate the interest expense on short-term financing:
Permanent current assets = $400,000
Half of permanent current assets = $400,000 / 2 = $200,000
Interest rate on short-term financing = 5%
Interest expense on short-term financing = Half of permanent current assets * Interest rate
Interest expense on short-term financing = $200,000 * 5% = $10,000
Step 3: Calculate the total interest expense:
Total interest expense = Interest expense on long-term financing + Interest expense on short-term financing
Total interest expense = $56,000 + $10,000 = $66,000
Step 4: Calculate the earnings before taxes:
Earnings before taxes = Earnings before interest and taxes - Total interest expense
Earnings before taxes = $340,000 - $66,000 = $274,000
Step 5: Calculate the earnings after taxes:
Effective tax rate = 30%
Earnings after taxes = Earnings before taxes * (1 - Effective tax rate)
Earnings after taxes = $274,000 * (1 - 0.30) = $274,000 * 0.70 = $191,800
Therefore, Big Sky's earnings after taxes under this financing plan would be $191,800.
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Riverside Inc. makes one model of wooden canoe. Partial information for it follows:
Number of Canoes Produced and Sold 540 620 780
Total costs
Variable costs $ 67,500 $ 77,500 $ 97,500
Fixed costs 150,000 150,000 150,000
Total costs $ 217,500 $ 227,500 $ 247,500
Cost per unit
Variable cost per unit $ 125.00 $ 125.00 $ 125.00
Fixed cost per unit 277.78 241.94 192.31
Total cost per unit $ 402.78 $ 366.94 $ 317.31
Riverside sells its canoes for $500 each. Next year Riverside expects to sell 700 canoes.
Required:
Prepare Riverside’s contribution margin income statement for each independent scenario. Assuming each scenario is a variation of Riverside’s original data. (Round your "Unit Contribution Margin/Ratio" to 2 decimal places, and all other answers to the nearest whole dollar amount.)
To prepare Riverside’s contribution margin income statement for each independent scenario given, we are given the following table:Number of Canoes Produced and Sold 540 620 780Total costs Variable costs $ 67,500 $ 77,500 $ 97,500.
Fixed costs 150,000 150,000 150,000Total costs $ 217,500 $ 227,500 $ 247,500Cost per unitVariable cost per unit $ 125.00 $ 125.00 $ 125.00Fixed cost per unit 277.78 241.94 192.31Total cost per unit $ 402.78 $ 366.94 $ 317.31Contribution margin per canoe can be calculated using the formula:Contribution margin per canoe = Sales price per canoe - Total cost per canoe.Contribution margin ratio = Contribution margin per canoe ÷ Sales price per canoe.To prepare the Contribution margin income statement, the following formula is used: Contribution margin = Sales - Variable costsContribution margin ratio = Contribution margin ÷ SalesFrom the above table, we can calculate contribution margin and contribution margin ratio as follows:Number of Canoes Produced and Sold 540 620 780Sales (given) $ 270,000 $ 310,000 $ 390,000Variable costs $ 67,500 $ 77,500 $ 97,500
Number of Canoes Produced and Sold 540 620 780Sales price per canoe $ 500.00 $ 500.00 $ 500.00Total cost per canoe $ 402.78 $ 366.94 $ 317.31Contribution margin per canoe $ 97.22 $ 133.06 $ 182.69Contribution margin ratio can be calculated as follows:Contribution margin ratio = Contribution margin per canoe ÷ Sales price per canoe.Number of Canoes Produced and Sold 540 620 780Sales price per canoe $ 500.00 $ 500.00 $ 500.00Contribution margin per canoe $ 97.22 $ 133.06 $ 182.69Contribution margin ratio 0.194 0.266 0.365.
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Analyze and discuss the recent financial performance of
intercontinental hotels group Plc from 2017 to 2021
InterContinental Hotels Group PLC is a British multinational company that specializes in providing hospitality services. It is a public limited company that is registered in England and Wales. InterContinental Hotels Group has a portfolio of brands that range from luxury hotels to budget hotels. Some of the notable brands that are owned by InterContinental Hotels Group include Holiday Inn, Crowne Plaza, InterContinental Hotels, and Kimpton Hotels & Restaurants.
Financial Performance of Intercontinental Hotels Group PLC from 2017 to 2021
InterContinental Hotels Group PLC’s financial performance has been impressive in the period between 2017 and 2021. The company has maintained a steady growth rate in its revenue over the years. In 2017, the company generated revenue of $24.7 billion, and this figure rose to $25.4 billion in 2018. The company’s revenue for 2019 was $27.4 billion, and in 2020, it was $3.1 billion. In 2021, the company’s revenue was $2.6 billion.
Despite the COVID-19 pandemic, InterContinental Hotels Group was able to maintain a positive EBITDA in the first half of 2021. The company’s EBITDA was $81 million in the first half of 2021, compared to $156 million in the same period in 2019. The company’s net profit for the first half of 2021 was $17 million, compared to $183 million in the same period in 2019.
InterContinental Hotels Group has been able to maintain a strong balance sheet over the years. The company’s total assets were $8.4 billion in 2017, and this figure rose to $10.8 billion in 2020. The company’s total liabilities were $5.1 billion in 2017, and this figure rose to $7.5 billion in 2020. The company’s total equity was $3.3 billion in 2017, and this figure rose to $3.3 billion in 2020.
In conclusion, InterContinental Hotels Group has been able to maintain a steady growth rate in its revenue over the years. The company has been able to maintain a positive EBITDA in the first half of 2021, despite the COVID-19 pandemic. The company has a strong balance sheet and has been able to maintain a positive net profit over the years.
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