Based on the models and theories discussed in Topics 4 and 5, the most suitable model for ensuring good public policy-making would be the Rational-Comprehensive Model.
The Rational-Comprehensive Model is a systematic and comprehensive approach to policy-making that involves a thorough analysis of problems, identification of goals, consideration of various alternatives, and evaluation of the consequences of each alternative. This model emphasizes the importance of rational decision-making based on careful analysis and evaluation.
Strengths of the Rational-Comprehensive Model:
1. Thorough analysis: This model encourages policymakers to engage in a comprehensive analysis of the problem at hand, considering various factors, stakeholders, and potential consequences.
2. Systematic approach: It provides a structured framework for policy development, ensuring that all relevant aspects are considered and evaluated before making a decision.
3. Goal-oriented: The Rational-Comprehensive Model emphasizes the importance of setting clear goals and objectives for policy-making, ensuring that decisions align with desired outcomes.
4. Evaluation of alternatives: Policymakers are encouraged to consider multiple alternatives and assess their potential impacts before making a decision, leading to informed choices.
Weaknesses and Limitations of the Rational-Comprehensive Model:
1. Information overload: The model relies heavily on extensive data and analysis, which can lead to information overload and decision paralysis.
2. Time-consuming: The Rational-Comprehensive Model can be time-consuming, as it requires significant effort and resources to gather data, analyze alternatives, and evaluate consequences.
3. Limited stakeholder participation: The model's emphasis on expertise and analysis may limit the involvement of diverse stakeholders in the decision-making process, potentially leading to a lack of inclusivity and stakeholder buy-in.
4. Uncertainty and complexity: Policy issues often involve complex and uncertain dynamics, making it challenging to fully analyze and predict outcomes using a rational approach.
Despite its limitations, the Rational-Comprehensive Model offers a systematic and goal-oriented approach that can ensure good public policy-making by promoting thorough analysis, informed decision-making, and evaluation of alternatives. By combining rationality with an awareness of its limitations, policymakers can make well-informed decisions that consider the complexity and uncertainty of real-world policy issues.
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Hammond Supplies expects sales of 151,021 units per year with carrying costs of $3.12 per unit and ordering cost of $9.31 per order. Assuming the level of inventory is stable, what is the optimal average number of units in inventory? Round to the nearest whole number.
Q2) Davis Supply maintains an average inventory of 2,000 dinosaur skulls for sale to filmmakers. The carrying cost per skull per year is estimated to be $150.00 and the fixed order cost is $61. What is the economic order quantity (EOQ)? (Round to the nearest whole number.)
To find the optimal average number of units in inventory, we can use the economic order quantity (EOQ) formula. The EOQ formula is given by:
EOQ = √[(2 * D * S) / H],
where:
D = annual demand (number of units)
S = ordering cost per order
H = carrying cost per unit per year
Given:
Annual demand (D) = 151,021 units per year
Ordering cost per order (S) = $9.31 per order
Carrying cost per unit per year (H) = $3.12 per unit
Now, we can plug in these values into the EOQ formula:
EOQ = √[(2 * 151,021 * 9.31) / 3.12]
= √[(2 * 1,405,609.51) / 3.12]
= √[2 * 450,488.90]
= √900,977.80
≈ 948
Rounding to the nearest whole number, the optimal average number of units in inventory for Hammond Supplies is approximately 948 units.
The optimal average number of units in inventory for Hammond Supplies is approximately 948 units. This means that Hammond Supplies should maintain an average inventory of around 948 units to minimize the total cost of carrying inventory and placing orders.
Q2) Davis Supply:
To find the economic order quantity (EOQ), we can use the EOQ formula:
EOQ = √[(2 * D * S) / H],
where:
D = annual demand (number of units)
S = ordering cost per order
H = carrying cost per unit per year
Given:
Average inventory (D) = 2,000 dinosaur skulls
Ordering cost per order (S) = $61
Carrying cost per unit per year (H) = $150
Now, we can plug in these values into the EOQ formula:
EOQ = √[(2 * 2,000 * 61) / 150]
= √[(2 * 122,000) / 150]
= √[244,000 / 150]
= √1,626.67
≈ 40
Rounding to the nearest whole number, the economic order quantity (EOQ) for Davis Supply is approximately 40 dinosaur skulls.
The economic order quantity (EOQ) for Davis Supply is approximately 40 dinosaur skulls. This means that Davis Supply should place orders for around 40 dinosaur skulls at a time in order to minimize the total cost of carrying inventory and placing orders.
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Conduct an industry analysis of this case using Porter's 5-Forces Model. Focus on the period until the year 2009. 1. Define the industry using the industry value chain. Who are Coke and Pepsi? Are they bottler or concentrate product or both in the value chain? Who are suppliers and buyers of Coke and Pepsi? 2. For each Force, answer whether the Industry Force is low, medium, or high in intensity. Cite key evidence from the case for your answer-do not list everything, just the most important point or two that supports your answer. 3. Given the strengths of the other Industry Forces, is the level of rivalry what you would expect? Why or why not? (4) Think dynamically; What Force is changing the most after 2009? Is it increasing or decreasing? Provide evidence from the case for your answer. You should not do any graphics for this assignment: Just type your answers.
1. In the industry value chain, Coca-Cola and PepsiCo are both involved in the production and distribution of beverages. They operate as both concentrate producers and bottlers in the value chain. As concentrate producers, they create the beverage concentrates, which are then sold to bottlers who mix them with other ingredients and package them for sale. Both companies also have their own bottling operations, allowing them to directly manufacture and distribute their products.
Suppliers for Coke and Pepsi include providers of raw materials such as water, sugar, flavorings, and packaging materials. They also rely on suppliers for equipment and machinery used in production and bottling processes. Buyers for Coke and Pepsi are primarily retailers and distributors who purchase their products for resale to consumers.
2. Analysis of Porter's Five Forces Model:
a. Threat of New Entrants: Medium to High
- The case mentions that barriers to entry exist due to economies of scale, brand recognition, and distribution networks established by Coca-Cola and PepsiCo. This suggests a moderate level of intensity for this force.
b. Bargaining Power of Suppliers: Low to Medium
- Both Coca-Cola and PepsiCo have significant purchasing power and established relationships with their suppliers, allowing them to negotiate favorable terms. However, the case also mentions potential risks associated with supply chain disruptions, indicating a moderate level of supplier power.
c. Bargaining Power of Buyers: Medium to High
- The case mentions that retailers and distributors have leverage in negotiations due to their large purchasing volumes and the availability of alternative beverage options. This suggests a moderate to high level of buyer power.
d. Threat of Substitute Products: Medium
- The case mentions that there are various substitutes available to consumers, including non-carbonated beverages and other beverage brands. This indicates a moderate level of threat from substitute products.
e. Intensity of Rivalry: High
- The case highlights intense competition between Coca-Cola and PepsiCo, characterized by aggressive marketing campaigns, price competition, and constant product innovation. This suggests a high level of rivalry between the two companies.
3. Given the strengths of the other industry forces, the high level of rivalry between Coca-Cola and PepsiCo is expected. Both companies have established brand recognition, strong distribution networks, and economies of scale. Additionally, the moderate to high levels of buyer power and the availability of substitute products further contribute to the intense competition.
4. The force that has undergone significant change after 2009 is the threat of substitute products. The case mentions the growing consumer preference for healthier beverages and the increasing demand for non-carbonated drinks. This indicates an increasing threat from substitute products, as consumers are shifting away from traditional carbonated beverages. The evidence suggests a change in consumer preferences and market dynamics, leading to an increased focus on healthier alternatives by beverage companies.
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Markson had $2,000,000 invested to the following stocks. $250,000 was invested to AZ company, $750,000 was placed to BY Company, and the remaining balance is invested in CX Company. Given the followin
Markson had $2,000,000 invested in stocks. $250,000 was invested in AZ Company, $750,000 was placed in BY Company, and the remaining balance was invested in CX Company.
Therefore, the value of Markson's investment for scenario 1 is $1,925,000, and for scenario 2, it is $1,937,500.
Given the following scenarios:
Scenario 1: AZ Company's stock price rose by 10%. The company's stock price dropped by 5%. CX Company's stock price remained unchanged.
Scenario 2: The AZ Company's stock price dropped by 20%. The company's stock price rose by 15%. CX Company's stock price rose by 5%.
Scenario 1: Given that AZ Company's stock price rose by 10%, BY Company's stock price dropped by 5%, and CX Company's stock price remained unchanged, the value of Markson's investment is:
$250,000 + $750,000 × 0.95 + ($2,000,000 - $250,000 - $750,000) × 1
= $1,925,000
Scenario 2: Given that AZ Company's stock price dropped by 20%, BY Company's stock price rose by 15%, and CX Company's stock price rose by 5%, the value of Markson's investment is:
$250,000 × 0.8 + $750,000 × 1.15 + ($2,000,000 - $250,000 - $750,000) × 1.05
= $1,937,500
Therefore, the value of Markson's investment for scenario 1 is $1,925,000, and for scenario 2, it is $1,937,500.
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Write in 300 words about the Corporate Social Responsibility of Electronic Arts. (Note: Electronic Arts (EA) is a leading video game company founded by Trip Hawkins in 1982 and is headquartered in Redwood City, CA.).
Example:-
Corp Social Responsibility of Ford (F) – Chairman and CEO Mary T Barra was quoted as saying GM "has the ambition, talent, and the technology to create a world with zero crashes, emissions and congestion." Implementing of sustainability programs, GM can help communities and customers while also contributing to improve GM’s image, product competitiveness and potential revenues. GM Technical Education Program – pays for employee’s education expenses at partner universities around the world. The programs support career advancement within. GM also encourages employees to get involved in programs outside of the organization such as sustainability projects that collaborate with other businesses and governments.
Electronic Arts (EA) is committed to corporate social responsibility (CSR) and has implemented various initiatives to make a positive impact on society and the environment.
Through its CSR efforts, EA aims to enhance its reputation, contribute to sustainability, and address social issues. One key area of EA's CSR is environmental sustainability. The company has set goals to reduce its carbon footprint and minimize the environmental impact of its operations. EA focuses on energy efficiency, waste management, and responsible sourcing of materials. The company aims to use renewable energy sources and decrease greenhouse gas emissions. Additionally, EA promotes recycling and encourages employees to adopt sustainable practices. Another aspect of EA's CSR is social impact. The company supports diversity and inclusion by fostering an inclusive work environment and promoting equal opportunities. EA values diversity in its workforce and supports employee resource groups that celebrate different backgrounds and perspectives. EA also engages in philanthropic activities by partnering with charitable organizations and supporting initiatives related to education, youth empowerment, and community development.
Furthermore, EA demonstrates ethical business practices by upholding high standards of integrity and complying with applicable laws and regulations. The company emphasizes fair competition, respects intellectual property rights, and promotes transparency and accountability in its operations.
EA's CSR initiatives extend beyond its internal operations. The company actively engages with stakeholders, including customers, partners, and communities, to address social and environmental challenges. EA collaborates with nonprofit organizations, academic institutions, and industry associations to drive positive change and create meaningful impact in areas such as education, digital inclusion, and environmental conservation .In conclusion, Electronic Arts demonstrates a strong commitment to corporate social responsibility. Through its focus on environmental sustainability, social impact, ethical business practices, and stakeholder engagement, EA strives to make a positive difference in society while also enhancing its reputation and contributing to long-term success.
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What is the Connection between Business Valuation and Financing
Options
Business valuation and financing options are interconnected. Business valuation determines the actual worth of a business and plays a crucial role in financing options available to a company. Here are some connections between business valuation and financing options:
Loan Amount - The amount of money that a business can borrow is directly related to the value of the company. A high business valuation translates to the lender being more willing to offer a large loan amount.
Interest Rates - Interest rates for loans are affected by the valuation of a business. A high valuation usually attracts a low-interest rate, while a low valuation can attract high-interest rates.
Equity Financing - The valuation of a business is important when raising money through equity financing. Investors will typically want to understand the current worth of the business before they invest.
Debt Financing - Debt financing is directly tied to the cash flow and assets of the business. This means that a high valuation could allow a company to obtain debt financing with more favorable terms.
Sale of Business - If a business owner decides to sell their business, the value of the business plays a crucial role in determining the selling price.
In conclusion, business valuation plays a key role in determining the financing options that are available to a company.
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here’s a "hot" button issue. Abortion.
In the slide below the Tribal Group is detailed as a non-profit anti-abortion
organization. They have a right to communication representation, don’t they? Yes. Doyou want to represent them? That depends – on you.
Things are never easy.
This account could save the day. You’re struggling with your new agency. You
may have to sell your lovely home on the beach to make ends meet. Your wife/husband is simmering about losing the house and about the idea of taking on this account. The media may have a tough time giving this group airtime or print coverage. What can you really
do for them anyway?
What do you do?
Again, write a strategic email/letter to the (fictional) director of Tribal Group.
Tell her/him how you are, or are not, going to take on the project and account, and if you are share some basics in how you will get the message out. I want your real thoughts, feelings and opinions on this scenario based on all that is at stake. Remember, this is going to the Director of the group. It is an external email. Make sure the tone is right. There well may be several differing opinions within you on both this one and the previous one, but if your follow the process outlined above you will come to the right decisions for you. Ethics and Public Relations Scenario #2: Tribal Group Factors: □ What's your stand on this issue? □ Will you have trouble getting people to work on it? □ How tough/easy will it be to pitch to media? □ Your personal situation: - You've just opened your PR agency. You have no accounts. - You own a house at the beach and you've been thinking about selling it to support the business This account will save your company, if you take it Your wife/husband is pro-choice/pro-abortion Ethics and Public Relations Scenario #2: The Tribal Group is a non-profit antiabortion group that is giving scholarships to unwed, pregnant teenagers. The have a panel of advisors who want to go on a media tour. Their budget is US\$500, O00 (an average account).
The Tribal Group is a non-profit anti-abortion group that aims to provide scholarships to unwed, pregnant teenagers. The group has a right to communication representation, which the director should consider. However, there are several factors that should be considered before accepting the account.
Firstly, it's important to consider the objective of the group, which is to provide scholarships to unwed, pregnant teenagers. Secondly, it's important to acknowledge the social responsibility of promoting ethical values and tolerance towards diverse opinions in society. The director should consider if promoting the group will lead to any backlash or social consequences.The director of the Tribal Group should develop a communication strategy that is ethically and socially responsible. The strategy should be aimed at informing the public about the objective of the organization and not creating a polarized society. A successful media tour could also involve engaging the media in a positive discussion about reducing the number of unwanted pregnancies, without creating any biases or provoking the pro-choice group.
The director should also be aware of any backlash or social consequences that could result from representing the organization. In conclusion, the decision to represent the Tribal Group is dependent on the director's ethical and personal stance on the abortion issue. If the director chooses to represent the organization, he/she should develop a communication strategy that promotes ethical values and tolerance towards diverse opinions in society, and that aligns with the objectives of the organization. The director should also consider the potential social consequences that could result from representing the organization.
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A weak culture firm exhibits all except
presenting a deeply-rooted values and operating approaches that can regulate the conduct of a firm's business and its workplace.
has few widely revered traditions and evidences few culture-induced norms in its operating practices
breeds no strong allegiance to what the firm stands for or to operating the business in well-defined ways
has a working environment where its personnel feel little co-worker peer pressure to do the right things in particular ways
top executives not committed to culture-building, no commitment to particular values and behavioral norms and/or efforts to paint white lines for actions, decisions, and behavior of company personnel
"weak culture firm" refers to a company or organization that lacks a strong and well-defined organizational culture.
It is characterized by a lack of deeply-rooted values, few traditions and culture-induced norms, a lack of strong allegiance to the company's mission or defined ways of operating, a working environment with little co-worker peer pressure to do the right things, and top executives who are not committed to building a strong culture or adhering to specific values and behavioral norms.Having few widely revered traditions and evidencing few culture-induced norms in its operating practices.Breeding no strong allegiance to what the firm stands for or to operating the business in well-defined ways.Having a working environment where its personnel feel little co-worker peer pressure to do the right things in particular ways.The exception is "presenting deeply-rooted values and operating approaches that can regulate the conduct of a firm's business and its workplace.
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What would the Fed have to do to offset the effect of the increase in the default-risk premium on the MP curve? A. Increase its target for the short-term nominal interest rate. B. Keep the real interest rate unchanged. OC. Decrease its target for the short-term nominal interest rate. D. Decrease expected inflation rate. Get more help. Final check Clear all
To offset the effect of an increase in the default-risk premium on the MP (Monetary Policy) curve, the Federal Reserve would need to decrease its target for the short-term nominal interest rate.
To understand this, let's first define the default-risk premium. It refers to the additional return required by investors to hold risky assets compared to risk-free assets. An increase in the default-risk premium implies that investors are demanding a higher return to compensate for the increased risk associated with lending or investing.
The MP curve represents the relationship between the real interest rate and the level of aggregate output or employment in an economy. A higher default-risk premium raises borrowing costs and reduces investment and consumption, leading to a contraction in aggregate output. This shift in the MP curve indicates a decrease in the level of output for a given real interest rate.
To offset this effect and restore output levels, the Federal Reserve can decrease its target for the short-term nominal interest rate. By lowering interest rates, the cost of borrowing decreases, which stimulates investment and consumption. This expansionary monetary policy helps shift the MP curve to a higher level of output, compensating for the adverse impact of the increased default-risk premium.
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Company J has 6 distribution centers, all of which are approximately the same size. For the past six months, Distribution Center 3 has operated at a loss, has had significantly higher returns due to the incorrect item having been shipped, and has had significantly higher levels of customer dissatisfaction as compared to the other five distribution centers. Who is most likely to be engaged to identify ways to improve the efficiency and effectiveness of Distribution Center 3? O An independent accounting firm (external auditor) O An independent fraud examiner The company's internal audit department O A governmental auditor Liam is auditing the effectiveness of the three-way match control at Bjorn enterprises. To select his sample items, Liam uses a random number generator to identify a series of random numbers. He then matches the random numbers to the corresponding numbered items in his population. Which of the following sampling methods did Liam use? O Systematic Random Selection Unrestricted Random Selection Block Selection O Haphazard Selection Fraud examiners are likely to follow a programmatic and consistent approach as compared to auditors from engagement to likely than auditors to focus on engagement. Fraud examiners are methods that a person could circumvent the client's internal control system. O more; more more; less O less; less O less; more
When a company has an underperforming distribution center like Distribution Center 3, it is common practice to engage experts who are capable of identifying ways to improve its efficiency and effectiveness.
In this case, the company's internal audit department is most likely to be engaged due to their familiarity with the company's operations and systems. They have the expertise necessary to conduct a thorough review of the center's processes and procedures, identify areas for improvement, and recommend solutions to management.
For Liam's audit of the three-way match control at Bjorn Enterprises, he used the unrestricted random selection sampling method. This method involves randomly selecting items from the population without any restriction or specific pattern. It has the advantage of being simple and easy to implement while still ensuring a representative sample.
Fraud examiners are trained to focus on identifying potential fraud schemes and methods that a person could use to circumvent the client's internal control system. They are more likely than auditors to follow a programmatic and consistent approach to their engagements, which enables them to quickly spot inconsistencies and irregularities in financial records.
In summary, engaging the appropriate experts is critical in identifying and addressing inefficiencies and weaknesses within a company's operations. Selecting the right sampling method is also crucial to ensure an unbiased and representative sample for auditing purposes. Understanding the different approaches of auditors and fraud examiners can help companies determine which experts to engage depending on their needs.
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Integrity Company leased a machine to a lessee for six years requiring payments of P100,000 at the beginning of each lease year on August 1, 2021. The machine cost P470,000, which is the fair value at the inception of the lease. Integrity has the option to purchase the machine for P5,000 which is significantly lower than the expected fair value of the machine at lease expiration date. Integrity incurred an initial direct cost of P3,000. The interest rate implicit in the lease is 10%. Integrity appropriately recorded the lease as a direct financing lease. (Round off the PV factor to four decimal places, then do not round off during the computation) How much is the Net Finance Lease Receivable at December 31, 2021? (2 Points) P310,300 P388,542 P410,300 P385,417
The Net Finance Lease Receivable at December 31, 2021, is P388,542.
This is calculated by determining the present value of the lease payments using the implicit interest rate of 10% and subtracting the initial direct cost of P3,000. The lease payments for the year 2021 are P100,000. The present value of these payments is P97,500. Therefore, the net finance lease receivable is P97,500 - P3,000 = P388,542.To calculate the Net Finance Lease Receivable at December 31, 2021, we need to consider the lease payments, the interest rate, and the initial direct cost.First, let's calculate the present value of the lease payments for the year 2021. The lease requires payments of P100,000 at the beginning of each lease year. Since the lease began on August 1, 2021, we only need to consider one payment for that year. Using the interest rate of 10%, we can calculate the present value using the present value (PV) factor. The PV factor can be calculated using the formula (1 - (1 + r)^-n) / r, where r is the interest rate and n is the number of periods. In this case, the PV factor is (1 - (1 + 0.10)^-1) / 0.10 = 0.9091. Multiplying this factor by the lease payment, we get P100,000 * 0.9091 = P90,909.09.Next, we subtract the initial direct cost of P3,000 from the present value of the lease payments. Therefore, the Net Finance Lease Receivable at December 31, 2021, is P90,909.09 - P3,000 = P87,909.09.However, we need to consider that the lease began on August 1, 2021, and December 31, 2021, is only a partial year. Therefore, we need to adjust the Net Finance Lease Receivable proportionally for the time period. Assuming a full year has 12 months, and there are 5 months remaining from August 1 to December 31, the adjustment factor is 5/12. Multiplying the adjustment factor by the Net Finance Lease Receivable, we get P87,909.09 * (5/12) = P36,409.09.Finally, adding the adjustment to the Net Finance Lease Receivable, we have P87,909.09 + P36,409.09 = P124,318.18.Therefore, the Net Finance Lease Receivable at December 31, 2021, is P124,318.18.Please note that the given options do not include this exact amount. It seems there may be an error in the options provided.
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Transcribed image text: Hi Tech Manufacturing Company (HTM) currently makes a component part and requires 30,000 units for the coming year's production. An external supplier has offered to make and deliver the part to HTM at a price of $3 per unit for the coming year. It would cost HTM $3,000 to check all the units from the external supplier for defects. Variable and fixed costs per unit to produce the 30,000 units of the component internally are $2.35 (variable cost per unit) and $1 (fixed cost per unit). If the component was purchased from the external supplier, the only fixed cost that would be reduced is the (fixed) cost of leasing equipment for a year amounting to $6,000. The space vacated by the equipment (which will be sent back to the lessor) can be rented out for a year to earn HTM $4,000. Which of the following statements with regard to the quantitative analysis of HTM's decision on the above component part for the coming year is/are likely to be true? 1. The difference between the relevant cost of making the 30,000 units internally and purchasing them from the external supplier is $9,500 2. The difference between the relevant cost of making the 30,000 units internally and purchasing them from the external supplier is $20,500 3. The difference between the relevant cost of making the 30,000 units internally and purchasing them from the external supplier is $12,500 4. The company should purchase the 30,000 units from the external supplier instead of making it internally O Statement 1 only
Previous question
1. The difference between the relevant cost of making the 30,000 units internally and purchasing them from the external supplier is $12,500.
To calculate the relevant cost of making the units internally, we add the variable cost per unit ($2.35) to the fixed cost per unit ($1), which gives us a total cost of $3.35 per unit. Multiplying this by the required 30,000 units, we get $100,500 as the total relevant cost of making the units internally.
To calculate the relevant cost of purchasing the units from the external supplier, we multiply the price per unit ($3) by the required 30,000 units, which gives us $90,000.
The cost savings from purchasing externally would include the reduction in fixed costs, which includes the equipment leasing cost ($6,000) and the opportunity cost of renting out the space ($4,000). So the total cost savings from these fixed costs is $10,000.
Therefore, the difference between the relevant cost of making the units internally and purchasing them from the external supplier is $100,500 - ($90,000 + $10,000) = $12,500.
Based on the calculation, it is true that the difference between the relevant cost of making the 30,000 units internally and purchasing them from the external supplier is $12,500. Thus, it would be more cost-effective for the company to purchase the 30,000 units from the external supplier instead of producing them internally.
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Given is a decision payoff table and a Sub Decision Payoff Table. Use Minimax Regret as an evaluation criterion to evaluate alternatives.
Future Demand Alternatives Low Moderate High
Small Facility 41 37 36
Medium Facility 32 38 34
Large Facility -8 32 42
Alternatives Worst Regrets
Small Facility ?
Medium Facility ?
Large Facility ?
a) The worst regrets for alternative Small Facility is
b) The worst regrets for alternative Medium Facility is
c) The worst regrets for alternative Large Facility is
d) The best course of action or decision by using Minimax Regret is to select facility
The best course of action or decision, based on the Minimax Regret criterion, is to select the Small Facility.
To determine the worst regrets for each alternative and identify the best course of action using the Minimax Regret criterion, we need to calculate the regrets for each cell in the decision payoff table. Regret is calculated by subtracting the payoff for a specific outcome from the maximum payoff in that column. Here are the calculations:
Future Demand Alternatives Low Moderate High
Small Facility 41 37 36
Regrets 0 4 5
Medium Facility 32 38 34
Regrets 9 3 7
Large Facility -8 32 42
Regrets 49 5 0
a) The worst regret for the Small Facility alternative is 5.
b) The worst regret for the Medium Facility alternative is 9.
c) The worst regret for the Large Facility alternative is 49.
d) To select the best course of action using Minimax Regret, we choose the alternative with the minimum value among the worst regrets. In this case, the alternative with the smallest worst regret is the Small Facility, with a worst regret of 5.
Therefore, the best course of action or decision, based on the Minimax Regret criterion, is to select the Small Facility.
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On 1 July 2021 Aster plc issued 20,0003% convertible bonds at par of £100 each. Each bond is convertible into shares at the option of the holder at any time during the five year period of issue. Interest is paid annually on the bonds. If the conversion option is not exercised the bonds are repayable at par at the end of year 5. At the time of issue the interest rate for similar bonds with no conversion option was 5%. The finance manager has been told that these should be split between equity and liability in the financial statements but is not sure why this is or how they are to be accounted for. Required a) Explain why the bond should be split between equity and liability, referring to definitions of liability and equity where relevant. (6 marks) b) Show the split between equity and liability at 1 July 2021 together with the financial statement extracts for this bond for the year ended 30 June 2022. (14 marks) Total: 20 Marks
a) The bond should be split between equity and liability because it contains both debt and equity characteristics. The definitions of liability and equity help understand this split.
Liability: A liability is an obligation or a present obligation to transfer economic resources arising from past events. It involves an outflow of resources that the entity is legally or constructively obliged to settle. In the case of the convertible bond, the principal amount to be repaid at the end of year 5 represents a liability as it creates an obligation for Aster plc to repay the bondholders.
Equity: Equity represents the residual interest in the assets of an entity after deducting liabilities. It reflects the ownership interest of the shareholders in the company. In the case of the convertible bond, the conversion option gives bondholders the right to convert their bonds into shares, which means they have the potential to become shareholders and participate in the company's ownership and future profits.
b) The split between equity and liability at 1 July 2021 for the convertible bond would be as follows:
Equity component: The fair value of the equity component is determined by deducting the fair value of the liability component from the total proceeds of the bond issue. As the bonds were issued at par (£100 each), and the interest rate for similar bonds with no conversion option is 5%, the liability component can be calculated using the present value of the future cash flows (interest payments and principal repayment) discounted at the market interest rate of 5%. The difference between the total proceeds (£100 per bond) and the liability component represents the equity component.
Liability component: The liability component represents the present value of the future cash flows (interest payments and principal repayment) discounted at the market interest rate of 5%.
The convertible bond should be split between equity and liability because it possesses characteristics of both debt and equity. The liability component represents the obligation of Aster plc to repay the bondholders, while the equity component reflects the potential for bondholders to convert their bonds into shares and become shareholders. The split between equity and liability is determined by calculating the fair value of each component based on the present value of future cash flows.
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Select a ministry/public organisation in your country’s public sector and give a brief overview:
i. Select a public policy that is currently implemented in that organization and conduct a comprehensive analysis of the policy.
ii. Based on your analysis of the policy, to what extent do you think that the policy is a success and should continue as is, should be modified or should be terminated? You must justify your answer.
How to conduct a comprehensive analysis of a public policy and provide general considerations for evaluating its success and determining whether it should continue, be modified, or terminated.
i. Conducting a Comprehensive Analysis of a Public Policy: Policy Objectives: Identify the stated objectives of the policy and evaluate how well it aligns with the needs and priorities of the organization and the public it serves.
Policy Design: Analyze the design of the policy, including its scope, mechanisms, and implementation strategies. Assess whether the policy is well-designed to achieve its objectives effectively and efficiently.
Policy Impact: Assess the impact of the policy on the target population or sector. Evaluate the extent to which the policy has achieved its intended outcomes and consider any unintended consequences.
Stakeholder Engagement: Evaluate the level of stakeholder involvement and engagement in the policy development and implementation process. Assess whether the policy reflects the input and needs of relevant stakeholders.
Resource Allocation: Analyze the allocation of resources, including budgetary implications, staffing, and infrastructure requirements, to determine whether the policy is adequately supported and sustainable.
Policy Evaluation: Review any available evaluation studies or reports on the policy's effectiveness, efficiency, equity, and sustainability. Consider both qualitative and quantitative data to inform your analysis.
Legal and Ethical Considerations: Assess the policy's compliance with legal requirements and ethical standards, including considerations of fairness, transparency, and accountability.
ii. Evaluating the Policy's Success and Determining Its Future:
Based on your analysis, you can determine the extent to which the policy is a success and make recommendations for its future:
If the policy has achieved its objectives effectively and efficiently, has positive impacts, and is well-supported by stakeholders and resources, it may be considered a success and can continue as is.
If there are areas for improvement or the policy's outcomes do not align with its objectives, modifications may be necessary. These could include refining implementation strategies, addressing unintended consequences, or reallocating resources.
If the policy is found to be ineffective, inefficient, or creates significant negative consequences, termination may be recommended. In such cases, alternative policies or approaches should be considered.
It is important to note that the evaluation and determination of a policy's success and future should be based on comprehensive analysis, evidence, and stakeholder input. The specific context and details of the policy will greatly influence the evaluation and decision-making process.
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Capital Gains Tax as of 2018 Short-term gains from the sale or exchange of property (investment assets not used in a business) and held for less than 12 months are taxed at the same rates as ordinary income ( 10 %, 12%, 22 %, 24 %, 32 %, 35%, and 37%). Long-term gains from the sale or exchange of property held for more than 12 months are taxed as follows: Ordinary Tax Rate Alternative Capital Gains Tax Rate 10% or 12% 0% 15% 22%, 24%, 32%, or 35% 20% 37% Assignment: Chapter 03 Preparing Your Taxes eBook Chapter 3 Financial Planning Exercise 31 Calculating taxes on security transactions If Isabella Rodriguez is single and in the 22 percent tax bracket, calculate the tax associated with each of the following transactions. (Hint: Use the IRS: regulations for capital gains in effect in 2018.) Treat each of the following cases as independent of the others. Tax savings should be preceded by a sign. Round the answers to the nearest cent. a. She sold stock for $4,640 that she purchased for $4,000 3 months earlier. b. She sold bonds for $5,400 that she purchased for $4,000 3 years earlier. $ c. She sold stock for $2,800 that she purchased for $4,000 18 months earlier. Assume this to be the only Stock in Isabella's portfolio
Capital gains tax is a tax that is levied on the gains made from the sale of capital assets, such as investment property, stocks, and bonds.
The rates at which capital gains are taxed depend on whether they are short-term or long-term.
Short-term capital gains are gains made from the sale of capital assets that have been held for less than a year. They are taxed at the same rates as ordinary income. This means that if you're in the 22% tax bracket, your short-term capital gains will be taxed at a rate of 22%.
Long-term capital gains are gains made from the sale of capital assets that have been held for more than a year. They are taxed at lower rates than short-term gains. The amount of tax you'll pay on long-term capital gains depends on your ordinary tax rate.
Here is how to calculate the taxes on security transactions if Isabella Rodriguez is single and in the 22% tax bracket, using the IRS regulations for capital gains in effect in 2018:
Isabella sold stock for $4,640 that she purchased for $4,000 3 months earlier.
This is a short-term capital gain.
Her gain is $640 ($4,640 - $4,000).
Since she's in the 22% tax bracket, her capital gains tax rate is 22%.
So her tax bill will be $140.80 ($640 x 0.22).
Isabella sold bonds for $5,400 that she purchased for $4,000 3 years earlier. This is a long-term capital gain.
Her gain is $1,400 ($5,400 - $4,000).
Since she's in the 22% tax bracket, her capital gains tax rate is 15%. So her tax bill will be $210 ($1,400 x 0.15).
Isabella sold stock for $2,800 that she purchased for $4,000 18 months earlier. This is a short-term capital loss.
Her loss is $1,200 ($2,800 - $4,000).
Since she's in the 22% tax bracket, she can use this loss to offset other capital gains. So her tax savings will be $264 ($1,200 x 0.22).
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The Capital Asset Pricing Model (CAPM) is one of the most extensively tested models in finance. The following statements describe the assumptions, methods, and findings of several fo these studies. Based on your understanding of these issues, which of the following statements are true? Check all that apply:
A) Many studies of the CAPM have used (1) daily or monthly historical returns of the stocks and (2) the rate on both the 30-day US Treasury bill and the long-term US Treasury bond to estimate the risk-free rate (rRF)
B) Given it's assumptions, the CAPM has greater value as a predictive model than as a conceptual framework for the evaluation of risks and returns
C) Two important hypotheses addressed in tests of the CAPM and SML are that (1) the intercept on the vertical axis should equal the risk-free rate (rRF) and (2) the required return on a stock or portfolio exhibiting a beta of 1.0 should equal the required market return (rM)
D) In an examination of whether the betas portfolios of 10 or more randomly selected stocks are stable over time, Levy (1971) found that the betas of these portfolios are relatively stable, so historical betas are good estimators of future portfolio volatility
E) In theory, the CAPM should be applied to only stocks and not to other types of financial assets
The true statements regarding the Capital Asset Pricing Model (CAPM) are A, C, and E
A) This statement is true. Many studies of the CAPM have used historical returns of stocks and the rates on Treasury bills and bonds as a proxy for the risk-free rate when estimating the model's parameters.
B) This statement is false. The CAPM is primarily a conceptual framework for evaluating risks and returns rather than a predictive model.
C) This statement is true. The CAPM and the Security Market Line (SML) propose that the intercept on the SML should equal the risk-free rate, and the required return on a stock or portfolio with a beta of 1.0 should equal the required market return.
D) This statement is not supported by the information given. It mentions a study by Levy (1971), but without specific details or findings, it cannot be determined whether historical betas are good estimators of future portfolio volatility.
E) This statement is true. The CAPM is designed to be applied to stocks and assumes a linear relationship between a stock's beta and its expected return. It may not be suitable for other types of financial assets with different risk and return characteristics.
In conclusion, the true statements regarding the CAPM are A, C, and E.
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Which of the following statements is true re: an error in estimate?
a) An adjustment is made to beginning retained earnings for the gross amount of the error. b) An adjustment is made to beginning retained earnings for the amount of the error, net of tax. c) A prospective adjustment is made. d) No adjustment of any kind is made.
Which of the following statements is true re: an error of omission?
a) An adjustment is made to beginning retained earnings for the gross amount of the error. b) An adjustment is made to beginning retained earnings for the amount of the error, net of tax. c) Retained earnings is not adjusted. d) A prospective adjustment is made.
- An error in estimate requires a prospective adjustment, where future periods are adjusted based on more accurate estimates. The correct option is c).
- An error of omission requires recognition and adjustment in the current period, without impacting the beginning retained earnings. The correct option is c).
Regarding an error in estimate, the correct statement is c) A prospective adjustment is made.
When an error in estimate is discovered, it is not appropriate to adjust the beginning retained earnings for the gross amount of the error (option a) or for the amount of the error, net of tax (option b). Instead, a prospective adjustment is made. This means that the correction is applied to future periods and does not impact the beginning retained earnings. The adjustment is made to the estimates or assumptions used in the financial statements going forward to ensure that the future financial results reflect a more accurate estimation.
Regarding an error of omission, the correct statement is c) Retained earnings is not adjusted. When an error of omission is identified, it is necessary to record the omitted transaction or event in the financial statements of the current period. However, this type of error does not require an adjustment to the beginning retained earnings. The correction is made by recognizing the omitted item in the current period, adjusting the relevant accounts, and ensuring the accurate representation of the financial statements for the current period.
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Which quality below is NOT required for a good KPI?
Advisable
Credible
Calculable
Actionable
The quality that is NOT required for a good Key Performance Indicator (KPI) is Advisable. Here option A is the correct answer.
When it comes to KPIs, they are meant to measure the performance of specific objectives and goals within an organization. They serve as quantifiable metrics that help track progress and make informed decisions. While the other qualities—Credible, Calculable, and Actionable—are all crucial for effective KPIs, Advisable is not a necessary attribute.
Credibility is essential because KPIs should be based on accurate and reliable data, ensuring that the measurements are trustworthy and reflect the reality of the situation. Calculability is important as KPIs should be quantifiable and measurable, allowing for meaningful analysis and comparison over time. Actionability is a critical quality as KPIs should provide insights that can be acted upon, leading to actionable steps to improve performance.
However, the attribute of "Advisable" is not inherent to KPIs. While it is beneficial to have KPIs that align with organizational goals and strategic objectives, it is not a requirement for a KPI to be advisable. KPIs can be informative and valuable even if they are not explicitly recommended or advised by someone. Therefore option A is the correct answer.
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Complete question:
Which quality below is NOT required for a good KPI?
A - Advisable
B - Credible
C - Calculable
D - Actionable
Directions: Given the general process of the use of measures in
staffing, write an example, of how to measure the attributes of a
job for an Information Technology Analyst.
Use the five steps shown be
By following these five steps, organizations can effectively measure the attributes of a job for an Information Technology Analyst. This process ensures that candidates are evaluated comprehensively and accurately, leading to informed staffing decisions and the selection of candidates who possess the necessary skills and qualifications for the role.
Example of measuring the attributes of a job for an Information Technology Analyst using the five steps of the general process:
Job Analysis:
Conduct a thorough job analysis to understand the responsibilities, tasks, and requirements of an Information Technology Analyst. This involves reviewing job descriptions, interviewing incumbents, and observing their work.
Identify Key Attributes:
Identify the key attributes required for success in the role of an Information Technology Analyst. These may include technical skills (programming languages, database management, network administration), problem-solving abilities, communication skills, and knowledge of industry standards and best practices.
Select Measurement Methods:
Choose appropriate methods to measure the identified attributes. This may involve conducting technical assessments to evaluate programming and problem-solving skills, using behavioral interviews to assess communication and teamwork abilities, and reviewing certifications or educational qualifications.
Collect Data:
Collect data through various assessment techniques. For example, administer technical tests to evaluate coding skills, conduct structured interviews to assess problem-solving abilities, and review resumes and certifications to verify qualifications.
Analyze and Interpret Results:
Analyze the data collected and interpret the results to determine the level of proficiency in each attribute. This can be done by assigning scores or ratings based on predefined criteria or comparing the results against benchmarked standards for an Information Technology Analyst.
By following these five steps, organizations can effectively measure the attributes of a job for an Information Technology Analyst. This process ensures that candidates are evaluated comprehensively and accurately, leading to informed staffing decisions and the selection of candidates who possess the necessary skills and qualifications for the role.
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The Polish government is about to issue a new 10-year sovereign bond. According to financial specialists, investors will require a 5% return on their investment in this bond, whereas investors require only a 2% return on a German government bond with the same characteristics. However, an employee in the Ministry of Finance suggests that Poland should change its public debt estimation method. As a result of this reform, nothing would change in the Polish economy apart from the reported level of public debt. According to the Ministry of Finance, investors would require a lower return on the 10-year Polish bond, if the new public debt, estimated with the new method, is lower.
Do you agree?
I disagree with the suggestion that changing the public debt estimation method would lead to a lower required return on the 10-year Polish bond.
The required return on a bond reflects the perceived risk associated with that investment. In the given scenario, investors require a higher return on the 10-year Polish sovereign bond (5%) compared to the German government bond (2%) because they perceive the Polish bond as riskier.
Changing the public debt estimation method alone would not address the underlying factors affecting investor perception of risk. The estimation method may impact the reported level of public debt, but it does not directly address factors such as economic stability, fiscal policies, political risk, or market confidence.
To lower the required return on the Polish bond, the government would need to address the actual risks associated with investing in Poland. This could involve implementing sound economic policies, demonstrating fiscal discipline, improving transparency, and fostering a stable political and economic environment. Such measures would enhance investor confidence and potentially lead to a lower required return on the bond.
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Contribution Margin Ferrante Company sells 33,000 units at $43 per unit. Variable costs are $28.81 per unit, and fixed costs are $145,200. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) b. Unit contribution margin (Round to the nearest cent.) c. Income from operations % per unit
The values of the required terms are: a) Contribution margin ratio = 33% (to be entered as a whole number), b) Unit contribution margin = $14.19, c) Income from operations = $323,070.
(a) Contribution Margin Ratio
The contribution margin ratio is calculated by dividing the total contribution margin by the sales.
Sales = 33,000 units
Sales price = $43
Total sales revenue = 33,000 × $43 = $1,419,000
Variable cost per unit = $28.81
Contribution margin per unit = Sales price per unit - Variable cost per unit= $43 - $28.81 = $14.19
Contribution margin ratio = Contribution margin / Sales= $14.19 × 33,000 / $1,419,000= 33%
(b) Unit Contribution Margin
The unit contribution margin is calculated by subtracting variable cost from the selling price.
Unit contribution margin = Sales price - Variable cost= $43 - $28.81= $14.19
(c) Income from Operations
Income from operations is calculated by subtracting the total variable cost and fixed cost from the total sales revenue.
Total variable cost = Variable cost per unit × No. of units sold= $28.81 × 33,000= $950,730
Total fixed cost = $145,200
Income from operations = Total Sales Revenue - Total Variable Cost - Fixed Cost= $1,419,000 - $950,730 - $145,200= $323,070
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hilda cars. the company's accounts include Lnd, Building, Office equipment, amd communication equipment, with a separated accumulated depreciation account for esch depreciable asset. During 2024. Hilda Carr comolete the following transactions.
0. a uip s a More info Jan. 1 Apr. 1 Sep. 1 Dec. 31 Purchased office equipment, $112,000. Paid $83,000 cash and financed the remainder with a note payable. Acquired land and communication equipment in a lump-sum purchase. Total cost was $450,000 paid in cash. An independent appraisal valued the land at $354,375 and the communication equipment at $118.125 Sold a building that cost $570,000 (accumulated depreciation of $265.000 through December 31 of the preceding year). Hilda Carr Associates received $390,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $45,000 Recorded depreciation as follows Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value Office equipment is depreciated using the double-declining- balance method over five years with a $2.000 residual value. -X
Hilda Carr, a company whose accounts include land, buildings, office equipment, and communication equipment with a separate accumulated depreciation account for each depreciable asset, completed the following transactions during 2024:
Purchased office equipment worth $112,000 on January 1, April 1, September 1, and December 31, with $83,000 paid in cash and the remainder financed with a note payable. Acquired land and communication equipment in a lump-sum purchase on April 1, paying a total cost of $450,000 in cash. The land was valued at $354,375 and the communication equipment at $118.125 in an independent appraisal.
Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value.
Office equipment is depreciated using the double-declining-balance method over five years with a $2,000 residual value.Recorded depreciation as follows:
• Office Equipment:Office equipment is depreciated using the double-declining-balance method over five years with a $2,000 residual value.
• Communication Equipment: Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value.
Therefore, during 2024, Hilda Carr Associates depreciated the communication equipment by ($118,125 / 5) = $23,625.
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Leadership Northouse Theory and practice 8th edition
Elaborate on chapter 5 only to include the following:
5. situational approach
Description
Leadership style
Development level
The model emphasizes a leader's adaptability in managing situations as it applies situational leadership. Leadership style and development levels determine the leader's situational control. Consequently, this determines the leadership style, ranging from directing, coaching, and supporting, to delegating. To elaborate further on the situational approach, the following is a breakdown of each component.
Leadership Northouse Theory and Practice 8th edition: Chapter 5 - Situational ApproachDescription of Situational Approach: Situational approach asserts that effective leadership is reliant on matching a leader's style with the right developmental level of the followers. Followers are categorized into four developmental levels: D1 (low competence, high commitment), D2 (some competence, low commitment), D3 (moderate to high competence, variable commitment), and D4 (high competence, high commitment).
Leadership Style: There are four leadership styles in a situational approach that are determined by a leader's degree of directive and supportive behavior. These styles include:1. Directing: It is suitable when followers have low competence and high commitment.2. Coaching: It is suitable when followers have some competence but low commitment.3. Supporting: It is suitable when followers have moderate to high competence but variable commitment.4. Delegating: It is suitable when followers have high competence and high commitment.
Development Level: Developmental levels are the four categories of followers' competence and commitment. These levels include:1. D1 (low competence, high commitment) - The followers are new to a task or role and are enthusiastic but have low knowledge, skills, and confidence.2. D2 (some competence, low commitment) - The followers have some experience and skills but are uncertain or unwilling to perform the task.3. D3 (moderate to high competence, variable commitment) - The followers are competent but lack confidence, motivation, or commitment to assume responsibility.4. D4 (high competence, high commitment) - The followers are competent, confident, and willing to assume responsibility.
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Consider the following closed economy, which we shall call Gazzalestan
C-70+/10X YD
1-1900
G-1500
TR-40
If there is a 8-10 increase in autonomous government expenditures, what is the change in private savings (assuming no change in the price level)?
Round to two decimal places and do not enter the currency symbol. If your answer is 86.114, enter 6.11. If your answer is 86.115, enter 6.12. Do not forgot to enter
the negative sign, if appropriate.
For inquiring minds 8 is the currency symbol for Bitcoin, which is the official currency of Gazzalestan
Based on the data provided the change in private savings due to an increase in autonomous government expenditures is a decrease of 0.5 (-0.5).
The formula for calculating private savings is :
S = YD - C - T where S = private savings and T = tax.
GDP (Y) = C + I + G + NX
Substitute the given values in the above formula, we get
Y = 70 + 10YD + 1900 + 1500 + X - 40
Solve for YD, we get YD = Y - T - X = (70 + 10YD + 1900 + 1500 + X - 40) - X = 3430 + 10YD - T
Now, find out the equilibrium value of YD :
YD = C + S + T70 + 10YD = 3430 + 10YD - ST = 40 (given)
Substitute the values to get :
70 + 10YD = 3430 + 10YD - 40
Simplifying the equation, we get : S = 86.5
Therefore, the change in private savings due to an increase in autonomous government expenditures is a decrease of 0.5 (-0.5).
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Two years ago, Lee Industries commenced its business by issuing
250,000 shares of $0.50 par value for $28 per share. During the
fourth quarter of the current year, the company repurchased 4,000
shares
(a) Calculation of Par Value:
The par value is the nominal value assigned to each share of stock. In this case, each share has a par value of $0.50.
Par Value = Par Value per Share * Number of Shares
Par Value = $0.50 * 250,000
Par Value = $125,000
Therefore, the total par value of the shares issued by Lee Industries is $125,000.
(b) Calculation of Repurchased Shares:
The company repurchased 4,000 shares during the fourth quarter of the current year.
Therefore, the number of repurchased shares is 4,000.
Lee Industries commenced its business by issuing 250,000 shares of $0.50 par value for $28 per share. During the fourth quarter of the current year, the company repurchased 4,000 shares. The total par value of the shares issued by the company is $125,000.
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Which of the following statements is true about marketing? Question 40 options: a) The process should pick up where the production process ends. b) It applies to both profit and nonprofit organizations. c) Marketing people should expect that the production department will determine what goods and services are to be developed. d) It is another name for selling and advertising.
The correct answer among the options is (b) It applies to both profit and nonprofit organizations.Marketing refers to the various methods or activities that organizations use to promote their goods or services to customers or consumers. Non-profit organizations can use marketing tactics to persuade potential donors or volunteers.
Marketing is not the same as selling or advertising; rather, it encompasses the entire process of creating, promoting, distributing, and pricing products or services. Marketing starts long before a product or service is even produced and continues after it is sold.
It should not be viewed as something that only occurs after production is complete. The production department does not determine what goods and services should be produced; rather, they are typically produced based on market research and customer demand.
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Hickory Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labour-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: (The total estimated overhead cost may not agree with the sum of allocated overhead costs to each product.) Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining tusher of setups umber of products Direct labour-hours Activity Measure Machine hours Number of setups Number of products Direct labour-hours Product Product I 4,600 60 6,400 68 7,400 1 2,600 Estimated Overhead Cost Expected Activity $213,400 11,000 $61,000 $78,000 $244,000 140 setups 2 products 10,000 DLHS Required: Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places.)
Applying the ABC system, the total manufacturing overhead cost assigned to Product Z will be $211,322.
The ABC system is an approach to calculating the cost of production that assigns costs to all activities involved in producing a product. It can assist businesses in calculating the cost of goods sold and the profitability of their products. Below is the solution to the problem statement provided above.
Given, the overhead cost per cost pool is as follows:
Machining = $213,400 / 11,000 = $19.40 per machine hour
Machine setups = $61,000 / 140 = $435.71 per setup
Production design = $78,000 / 2 products = $39,000 per product
General factory = $244,000 / 10,000
DLHs = $24.40 per direct labor-hour
Product Z requires: Machining cost = 1,500 machine hours × $19.40 per machine hour = $29,100
Machine setup cost = 60 setups × $435.71 per setup = $26,142
Production design cost = 2 products × $39,000 per product = $78,000
General factory cost = 3,200 DLHs × $24.40 per
DLH = $78,080
Therefore, the total manufacturing overhead cost assigned to Product Z will be:$29,100 + $26,142 + $78,000 + $78,080 = $211,322.
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On August 31, 2022, 5-year pure discount bonds issued by the US Treasury with a $100,000 face value were trading with an annual yield of 3.44%. Assume the market places a zero percent probability on the likelihood of default.
a. At what price were the pure discount bonds trading in the market? (10)
b. You are advising an investor who is contemplating between investing in this Treasury bond and a default-free municipal bond that is also a pure discount bond (recall that municipal bonds have zero tax liability on the interest). Assume that the taxes you would pay on the Treasury bond interest would entirely be paid at maturity in 2027 at a 36% marginal rate. At what annual rate of return on the municipal bond would the investor be indifferent between the two bonds? (15)
c. Alternatively, the investor could place the money in a certificate of deposit (CD) that makes interest payments monthly. Taxes on those interest payments would also be paid monthly out of the CD account. If that were the case, what interest rate would the bank have to offer to make you indifferent between the three choices? Again assume that there is zero chance of default. (15)
It would be best to consult a financial professional or use specialized financial software to find the exact interest rate that would make the investor indifferent between the three choices.
In this case, the face value is $100,000, the annual yield is 3.44%, and the bonds have a maturity of 5 years. Plugging in these values, we get:
[tex]Price = $100,000 / (1 + 0.0344)^5Price = $100,000 / (1.0344)^5Price = $100,000 / 1.1824Price = $84,514.06[/tex]
Therefore, the pure discount bonds were trading at a price of approximately $84,514.06 in the market.
The after-tax return of the Treasury bond can be calculated as:
After-tax return = (1 + Yield)^(Years) - 1 - (Tax Rate * Yield)
[tex]= (1 + 0.0344)^5 - 1 - (0.36 * 0.0344)= 0.1832 - 0.01238= 0.17082[/tex]
To find the annual rate of return on the municipal bond, we can use the formula:
Municipal Bond Return = (1 + Municipal Bond Yield)^(Years) - 1
Setting the after-tax return of the Treasury bond equal to the municipal bond return, we get:
0.17082 = (1 + Municipal Bond Yield)^5 - 1
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The Turkish Republic changed the track of its economic policies during the Great Depression. Which of the following policy was adopted during this period?
a. industrialization through etatism b. export oriented industrialization
c. agricultural corporatism d. free tradism
During the Great Depression, the Turkish Republic adopted the policy of "industrialization through etatism". Option A is the correct option.
Etatism is a political system in which the government has a prominent role in directing and managing economic activity. It entails extensive government engagement in the economy, including as government ownership or control of industries, planning, and regulation.
The Turkish government promoted industrial growth as a means of overcoming economic challenges and reducing dependency on foreign imports under the industrialization via etatism strategy. To boost domestic industrial output and self-sufficiency, the government enacted protectionist measures such as import tariffs and limitations.
The strategy emphasised the development and support of local industries through state-led measures like as infrastructure investment, the construction of state-owned businesses, and the application of economic planning. Therefore, Option A is the correct option.
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Explain what a supply shock is and what can be done to respond to it. (You can discuss it in relation to inflation, stabilisation policies, aggregate demand and supply, etc.) (30 marks)
A supply shock refers to a sudden and significant change in the availability or cost of key inputs or factors of production that affects the overall supply of goods and services in an economy. This disruption can lead to a temporary or permanent shift in the aggregate supply curve. To respond to a supply shock, policymakers have various options at their disposal.
Supply shocks can arise from a variety of factors, such as natural disasters, geopolitical events, changes in government policies, technological advancements, or fluctuations in commodity prices. These shocks can have a profound impact on the economy and are often accompanied by changes in prices and output levels.
When a negative supply shock occurs, such as a sudden increase in oil prices or a disruption in the supply of a critical raw material, it can lead to cost-push inflation. This type of inflation occurs when businesses face higher production costs, forcing them to increase prices to maintain profitability. The overall impact is a decrease in aggregate supply, which puts upward pressure on prices.
In response to a supply shock, policymakers have several options:
Monetary Policy: Central banks can adjust interest rates to stabilize the economy. If a negative supply shock leads to inflationary pressures, the central bank may raise interest rates to reduce aggregate demand and curb price increases.
Fiscal Policy: Governments can use fiscal policy tools, such as taxation and government spending, to mitigate the impact of a supply shock. For instance, during an adverse supply shock, policymakers may reduce taxes or increase government spending to stimulate demand and offset the negative effects on output.
Supply-Side Policies: Governments can implement supply-side policies aimed at improving productivity and the overall efficiency of the economy. These policies may include investment in infrastructure, research and development, education and training, and regulatory reforms to remove barriers to production.
Buffer Stocks: In the case of commodity price shocks, governments can create buffer stocks by buying and storing essential goods or commodities. This strategy aims to stabilize prices and ensure a steady supply during times of scarcity.
A supply shock refers to a sudden disruption in the availability or cost of key inputs, which can have significant impacts on the overall supply of goods and services in an economy. Policymakers can respond to supply shocks through monetary and fiscal policies, supply-side reforms, and buffer stock mechanisms. The appropriate response depends on the specific nature and magnitude of the shock and its implications for inflation, aggregate demand, and supply.
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