International accounting standards help increase investor confidence by providing financial information that is reliable, relevant, and comparable across all companies.
The Australian Securities Exchange (ASX) was keen for Australian companies to adopt the international accounting standards for several reasons,
some of which include: To ensure global competitiveness: Companies are increasingly operating on an international scale. As a result,
there was a need for companies to use uniform accounting standards to be able to compete globally.
With global accounting standards, companies would have a level playing field, making it easier to compare financial information across borders.
To increase investor confidence: Investors are the lifeblood of any company, and their confidence is essential for the smooth operation of the market.
International accounting standards help increase investor confidence by providing financial information that is reliable, relevant, and comparable across all companies.
Additionally, these standards ensure that the financial information presented is accurate and unbiased, which helps to build trust with investors.
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what are the four general characteristics that influence consumer purchases?
The four general characteristics that influence consumer purchases are cultural factors, social factors, personal factors, and psychological factors.
Cultural factors refer to the influence of a person's culture, values, beliefs, and customs on their purchasing behavior. This includes factors such as social class, subculture, and cultural norms.
Social factors involve the impact of social interactions, reference groups, family, and social roles on consumer behavior. People are influenced by the opinions, recommendations, and behaviors of others in their social circles.
Personal factors include individual characteristics such as age, occupation, lifestyle, personality, and self-concept. These factors shape an individual's preferences, needs, and purchasing decisions.
Psychological factors encompass the internal mental processes that influence consumer behavior. This includes perception, motivation, learning, attitudes, and beliefs. Consumers' perceptions and interpretations of products and marketing messages greatly influence their purchasing choices.
In summary, consumer purchases are influenced by cultural, social, personal, and psychological factors. Understanding these characteristics helps businesses tailor their marketing strategies and offerings to better meet the needs and preferences of their target consumers.
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Abburi Company's manufacturing overhead is 55% of its total conversion costs. If direct labor is $45,900 and if direct materials are $27,200, the manufacturing overhead is: Multiple Choice O $56,100 $37.555 $33.244 509.344
The manufacturing overhead for Abburi Company can be calculated by multiplying the total conversion costs by the given percentage. The correct answer is $33,244.
manufacturing overhead is 55% of the total conversion costs. Total conversion costs include both direct labor and manufacturing overhead. To calculate manufacturing overhead, we first need to determine the total conversion costs.
Total conversion costs = Direct labor + Manufacturing overhead
Given that direct labor is $45,900, we need to find the manufacturing overhead. Let's denote the manufacturing overhead as 'MOH'.
Total conversion costs = Direct labor + MOH
We are also given that direct materials are $27,200.
Total manufacturing costs = Direct materials + Direct labor + MOH
Since manufacturing overhead is 55% of total conversion costs, we can write:
MOH = 55% × Total conversion costs
Now we can substitute the values into the equation:
MOH = 55% × (Direct labor + MOH)
MOH = 0.55 × ($45,900 + MOH)
Solving this equation for MOH, we find:
0.45 × MOH = 0.55 × $45,900
MOH = ($45,900 × 0.55) / 0.45
MOH ≈ $33,244
Therefore, the manufacturing overhead for Abburi Company is approximately $33,244
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After1989, savings institutions have primarily been regulated by
A. FederalHome Loan Bank Board
B. FederalDeposit Insurance Corporation
C. Office of ThriftSupervision
D. NationalCredit Union Administration
After1989, savings institutions have primarily been regulated by the Office of Thrift Supervision. The correct option therefore is C.
The Office of Thrift Supervision (OTS) was an independent bureau of the United States Department of the Treasury that oversaw the federal savings and loan association (S&L) industry. It was established on August 9, 1989, in response to the savings and loan disaster of the 1980s.The Office of Thrift Supervision was dissolved on July 21, 2011, when most of its authority was transferred to the Office of the Comptroller of the Currency and some to the Federal Reserve Board of Governors.
Savings institutions are financial organizations that take deposits from clients and invest the funds in financial instruments such as stocks, bonds, and other similar products. Savings institutions, in many cases, have a special focus on residential mortgages, but they may also offer a variety of other financial products and services. Option C.
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Testing Supplies Unlimited, Inc. (NYSE: TSLTD) has a total market value of $100 million, consisting of $50 million of common equity and $50 million of 10% perpetual bonds now selling at par, i.e., YTM = 10%. IFM’s EBIT is $10 million, and its tax rate is 20%. The company can change its capital structure by either increasing its debt to 60% (based on market value) or decreasing it to 40%. If it decides to increase its use of financial leverage, it must call its old bonds and issue new ones with a 14% coupon. If it decides to decrease its leverage, it will call its old bonds and replace them with new 6% coupon bonds. The firm will sell or repurchase stock at the new equilibrium price to complete the capital structure change. The firm pays out all earnings as dividends; hence its stock is a zero-growth stock. Its current cost of equity, rs, is 16%. If it increases leverage, rs will be 20%. If it decreases leverage, rs will be 12%. Answer the following questions based on the assumptions:
1. Assume that the firm can sell new bonds at par regardless of its leverage ratios.
2. No required investment in capital is needed. Hence, FCF = NOPAT = EBIT (1 ‒ T).
3. Assume that the constant growth valuation formula with the growth rate = 0 is appropriate and the value of nonoperating assets is zero.
Questions:
(a) What is the firm’s WACC and total corporate value under the current capital structure?
Please show all work.
Under the current capital structure, the firm's WACC is 12%, and its total corporate value is $83.33 million
To calculate the firm's WACC, we need to determine the weights of equity and debt in the capital structure. Since the market value of equity and debt is equal ($50 million each), the weights are 0.5 for both. The cost of equity, rs, is given as 16%. We can calculate the after-tax cost of debt, rd(1 - T), which is 10% (1 - 20% = 0.8).
Next, we calculate the WACC using the formula:
WACC = (Weight of Equity × Cost of Equity) + (Weight of Debt × After-tax Cost of Debt)
= (0.5 × 16%) + (0.5 × 10% × 0.8)
= 8% + 4%
= 12%
The total corporate value can be calculated using the formula:
Corporate Value = EBIT / WACC
= $10 million / 12%
= $83.33 million
Therefore, under the current capital structure, the firm's WACC is 12%, and its total corporate value is $83.33 million.
It's important to note that this answer is based on the information and assumptions provided in the question.
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How many members serve on the Equal Employment Opportunity Commission? A) three. B) five. C) nine. D) ten. E) Five.
The correct answer is C) nine. The Equal Employment Opportunity Commission (EEOC) is a federal agency in the United States that enforces civil rights laws against workplace discrimination.
It is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or employee on the basis of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information. It also protects employees against retaliation for filing a discrimination complaint. There are nine members who serve on the Equal Employment Opportunity Commission. Five of these members are appointed by the President of the United States, and the remaining four members are appointed by the President's political party. The term of office for each member is five years, and they can serve a maximum of two terms. The President appoints one of the commissioners to serve as the chair of the EEOC. The EEOC's headquarters are in Washington, D.C., and it has 53 field offices located throughout the United States.
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In an Orthopedic manufacturing plan, it takes 8 hours to produce 30 artificial knee caps. These knee caps were sold for $200 each. What is the labor productivity in dollars per hour?
Question options:
$750/ hr
$48,000
$1600/hr
$6000/ hr
The labor productivity in dollars per hour is $750/hour. Productivity is a ratio of how many units of labor, capital, materials, or energy are used to produce a unit of output.
The efficiency and effectiveness of production are quantified by it. Furthermore, it enables us to calculate the cost of production by determining how much it costs to produce one unit of output. The amount of output that can be produced per unit of input is referred to as productivity. In orthopedic manufacturing, it takes 8 hours to make 30 artificial knee caps. The total number of knee caps that can be produced in one hour is 30/8 = 3.75 knee caps per hour. Each knee cap was sold for $200, so the total revenue generated from 30 knee caps is 30* $200 = $6000.So, the labor productivity in dollars per hour is:$6000/8 hours = $750/hour. Therefore, the correct option is $750/hour.
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a) Over the course of a business cycle, identify the stages at which the unemployment rate is likely to be the highest and the lowest and explain why.
b) Below are examples of two types of unemployment. Identify and define the type of unemployment based on the scenarios provided.
i. Arnold was working in a manufacturing plant when China joined the World Trade Organisation. His firm subsequently decided to shift its manufacturing operations over to China. Arnold is currently unemployed and is no longer able to find similar manufacturing jobs in his country.
ii. Harold used to work as a flight attendant when Covid-19 saw travel restrictions severely affect the demand for air travel. His airliner decided then to retrench a large number of flight attendants, including Harold, leaving them unemployed.
c) Suppose that the Working-age Population is 30 million, the Labour Force Participation Rate is 75% people while the unemployment rate is at 5%. Calculate the:
i) Size of Labour Force
ii) No. of People Unemployed
Show your workings clearly and present your answers up to 2 decimal places when necessary.
d) Calculate the Inflation Rates for years 2020 and 2021 based on the table below.
Year CPI
2019 103
2020 104
2021 101
a) Over the course of a business cycle, the unemployment rate is likely to be the highest during the contraction phase (recession) and the lowest during the expansion phase. b) Arnold's situation is structural unemployment, and Harold's situation is cyclical unemployment. c) Size of Labour Force is 22,500,000 and No. of People Unemployed is 1,125,000. d) Inflation Rate for 2020 is 0.97% and for 2021 is -2.88%.
a) Over the course of a business cycle, the unemployment rate is likely to be the highest during the contraction phase (recession) and the lowest during the expansion phase.
The contraction phase of the business cycle occurs when the economic activity slows down and the demand for goods and services falls, this results in lower employment opportunities, businesses start to lay off workers, and the unemployment rate increases.
The expansion phase, on the other hand, occurs when the economy is growing, the demand for goods and services is increasing, businesses are expanding and hiring more workers, and the unemployment rate is likely to decrease.
b) i. Arnold's situation is structural unemployment. Structural unemployment refers to a long-term decline in demand for a particular type of work, resulting in a mismatch between the skills that workers possess and those that are in demand. Arnold has lost his job due to a decline in demand for manufacturing jobs in his country as the firm he worked for decided to shift its manufacturing operations to China.
ii. Harold's situation is cyclical unemployment. Cyclical unemployment occurs during an economic downturn, resulting from a decline in economic activity, business revenues, and demand for goods and services. Harold lost his job due to a decrease in demand for air travel as a result of travel restrictions imposed due to Covid-19.
c) i) Size of Labour Force: 30,000,000 x 75/100 = 22,500,000
ii) No. of People Unemployed: 22,500,000 x 5/100 = 1,125,000
d) Inflation rate is the percentage change in the price level of goods and services over a period.
Inflation Rate for 2020 = (104 - 103)/103 x 100% = 0.97%
Inflation Rate for 2021 = (101 - 104)/104 x 100% = -2.88% (Note that inflation rate is negative as the price level has decreased from the previous year.)
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When the sample size n is large, the 90% confidence interval for μY is A. Yˉ±1.64SE(Yˉ). B. Yˉ±1.96. C. Yˉ±1.64σY. D. Yˉ±1.96SE(Yˉ).
When the sample size (n) is large, the 90% confidence interval for the population means (μY) is Yˉ ± 1.96SE(Yˉ).
The 90% confidence interval represents a range of values within which the true population mean is likely to fall. When the sample size is large (considered to be sufficiently large, typically greater than 30), we can approximate the sampling distribution of the sample mean (Yˉ) as approximately normally distributed.
To construct the confidence interval, we use the standard error of the sample mean (SE(Yˉ)), which is calculated by dividing the standard deviation of the population (σY) by the square root of the sample size (n).
For a 90% confidence interval, we look up the critical value associated with a 90% confidence level, which is approximately 1.96 when the sample size is large. This critical value corresponds to the z-score that leaves 5% of the area in the tails of the normal distribution.
Multiplying the standard error by the critical value gives us the margin of error, which is added and subtracted from the sample mean to create the confidence interval.
Therefore, the correct answer is D. Yˉ ± 1.96SE(Yˉ), where Yˉ represents the sample mean and SE(Yˉ) represents the standard error of the sample mean.
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a company took a loan of 3500000 to implement a project
if loan is paid in 5 payment starting from 6 year to 10 how much is each payment if the interest is 3.5% per year?
if the loan paid in tow installments in 8 and 10 how much is each payment if the interest is 3.25% per year?
If a company took a loan of 3500000 to implement a project, then:
Each payment for a 5-payment loan, with 3.5% interest per year, paid over 5 years, is approximately $784,422.47.
Each payment for a 2-payment loan, with 3.25% interest per year, paid over 2 years, is approximately $1,798,404.71.
For the first scenario, where a company took a loan of 3500000 to implement a project, and if the loan is paid in 5 payments starting from the 6th year to 10th, then each payment can be calculated using the formula for the present value of an annuity due as: PV = C [(1 - (1 / (1 + r)^n)) / r] x (1 + r) where PV = Present Value of the Annuity C = Regular Payment r = Interest Rate per Period n = Number of Periods (in this case, 5 years)By substituting the given values, we get: PV = 3500000[(1 - (1 / (1 + 0.035)^5)) / 0.035] x (1 + 0.035)≈ $3,922,112.35Therefore, each payment would be:PMT = PV / [(1 + r)^n - 1]≈ $784,422.47 For the second scenario, where the loan is paid in two installments in 8 and 10, and if the interest rate is 3.25% per year, then the present value of the loan would be:PV = 3500000 / [(1 + 0.0325)^8 + (1 + 0.0325)^10]≈ $3,496,809.44Each payment would be:PMT = PV / 2≈ $1,798,404.71 Therefore, each payment for a 2-payment loan, with 3.25% interest per year, paid over 2 years, is approximately $1,798,404.71.
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The following information belongs to Noor Merchandising Company: - Net income: $25,000 - Depreciation expenses: $2,000 - Proceeds from sale of equipment: $500 - Increase in accounts receivable: $1,000 - Increase in accounts payable: $2,000 - Decrease in inventory: $400 Based on the above information, the net cash provided by operating activities is: 1) $29,000 2) $28,400 3) $27,600 4) $24,300 5) None of the above.
The option (3) $27,600 is correct. The net cash provided by operating activities is calculated by adjusting net income for non-cash transactions and changes in working capital.
To determine the net cash provided by operating activities, the indirect method is used. Given the information below: Net income = $25,000Depreciation expenses = $2,000Proceeds from sale of equipment = $500Increase in accounts receivable = $1,000Increase in accounts payable = $2,000Decrease in inventory = $400Formula for the calculation of net cash provided by operating activities using indirect method is: Net cash provided by operating activities = Net Income + Non-cash expenses + Changes in working capital+ Proceeds from sales of equipment - Purchase of equipment. In the given information, Non-cash expenses = Depreciation expenses= $2,000Changes in working capital= (Increase in accounts receivable) - (Increase in accounts payable) - (Decrease in inventory) = $1,000 - $2,000 - $400 = $-400Then,Net cash provided by operating activities = Net Income + Non-cash expenses + Changes in working capital+ Proceeds from sales of equipment- Purchase of equipment Net cash provided by operating activities = $25,000 + $2,000 - $400 + $500 - $0 = $27,100. Therefore, the option (3) $27,600 is correct.
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Bay Street Vending received an invoice dated March 28 with terms 4/15, n/30, The amount stated on the invoice was $2234.00 (a) What is the last day for taking the cash discount? (b) What is the amount due if the invoice is paid on the last day for taking the discount? (a) The last day to take the cash discount is ____________ (b) The amount due is____________
The last day for taking the cash discount on the invoice dated March 28 with terms 4/15, n/30 is April 12. The amount due if the invoice is paid on the last day for taking the discount is $2,234.00.
The terms "4/15, n/30" in the invoice indicate that the buyer, Bay Street Vending, is eligible for a cash discount of 4% if payment is made within 15 days from the invoice date. Alternatively, the full amount is due within 30 days, without any discount.
To determine the last day for taking the cash discount, we start counting from the invoice date, March 28. Adding 15 days to this date, we arrive at April 12. Therefore, April 12 is the last day for Bay Street Vending to make the payment and still receive the cash discount.
If the invoice is paid on or before April 12, Bay Street Vending will be entitled to a 4% discount on the total amount of $2,234.00. To calculate the amount due after applying the discount, we multiply the total amount by (1 - discount rate). In this case, the discount rate is 4%, or 0.04. Subtracting 4% of $2,234.00 from $2,234.00, the amount due on the last day for taking the discount is $2,145.36.
In summary, the last day to take the cash discount is April 12, and the amount due if the invoice is paid on the last day for taking the discount is $2,145.36.
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Downstream Intercompany Merchandise Transactions
Sketchy Shoes is a subsidiary of Pacific Brands. Pacific routinely sells merchandise to Sketchy at a 25% markup on cost. Information on intercompany merchandise transactions is below (in thousands):
Inventory balance on Sketchy’s books, purchased from Pacific Brands, January 1, 2017$ 8,750Inventory balance on Sketchy’s books, purchased from Pacific Brands, December 31, 20179,275Total sales revenue recorded by Pacific Brands on merchandise sales to Sketchy in 2017350,000
Required
a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2017.
Enter answers in thousands.
Consolidation JournalDescriptionDebitCredit(I-1)AnswerInvestment in SketchyCost of goods soldSales revenueInventoriesEquity in net income of SketchyAnswerAnswerAnswerInvestment in SketchyCost of goods soldSales revenueInventoriesEquity in net income of SketchyAnswerAnswerTo eliminate intercompany profit from Sketchy's beginning inventory(I-2)AnswerInvestment in SketchyCost of goods soldSales revenueInventoriesEquity in net income of SketchyAnswerAnswerAnswerInvestment in SketchyCost of goods soldSales revenueInventoriesEquity in net income of SketchyAnswerAnswerTo eliminate intercompany sales and purchases(I-3)AnswerInvestment in SketchyCost of goods soldSales revenueInventoriesEquity in net income of SketchyAnswerAnswerAnswerInvestment in SketchyCost of goods soldSales revenueInventoriesEquity in net income of SketchyAnswerAnswerTo eliminate intercompany profit from Sketchy's ending inventory
b. Assume Sketchy sold merchandise acquired from Pacific Brands for $420,000 during 2017. What amounts appear on the separate books of Pacific Brands and Sketchy Shoes, relating to the intercompany merchandise transactions, for sales revenue and cost of goods sold? What are consolidated sales and cost of goods sold? Show how the eliminating entries in part a above adjust the balances reported on the separate books of the two entities to the correct consolidated balances.
Remember to use negative signs with your credit balance answers in the Dr (Cr) columns.
Consolidation Working PaperAccounts Taken From BooksEliminationsPacific Brands
Dr (Cr)Sketchy Shoes
Dr (Cr)DebitCreditConsolidated Balances
Dr (Cr)Sales revenueAnswerAnswer(I-2)AnswerAnswerCost of goods soldAnswerAnswer(I-3)AnswerAnswer(I-2)AnswerAnswer(I-1)
a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2017:
Consolidation Journal
Description Debit Credit
(I-1) Investment in Sketchy Answer
Cost of goods sold
Sales revenue
Inventories
Equity in net income of Sketchy Answer
(I-2) Investment in Sketchy Answer
Cost of goods sold
Sales revenue
Inventories
Equity in net income of Sketchy Answer
(I-3) Investment in Sketchy Answer
Cost of goods sold
Sales revenue
Inventories
Equity in net income of Sketchy Answer
To eliminate intercompany sales and purchases
(I-3) Investment in Sketchy Answer
Cost of goods sold
Sales revenue
Inventories
Equity in net income of Sketchy Answer
To eliminate intercompany profit from Sketchy's ending inventory
b. Assume Sketchy sold merchandise acquired from Pacific Brands for $420,000 during 2017. What amounts appear on the separate books of Pacific Brands and Sketchy Shoes, relating to the intercompany merchandise transactions, for sales revenue and cost of goods sold? .
Separate Books:
Pacific Brands:
Sales Revenue: $350,000 (as given)
Cost of Goods Sold: $280,000 (calculated as 75% of $350,000)
Sketchy Shoes:
Sales Revenue: $420,000 (as given)
Cost of Goods Sold: $336,000 (calculated as 80% of $420,000)
Consolidated Balances:
Consolidated Sales Revenue: $770,000 ($350,000 + $420,000)
Consolidated Cost of Goods Sold: $616,000 ($280,000 + $336,000)
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(Portfolio beta and CAPM) You are putting together a portfolio made up of four different stocks. However, you are considering two possible weightings: a. What is the beta on each portfolio? b. Which portfolio is riskier? c. If the risk-free rate of interest were 4.5 percent and the market risk premium were 7.5 percent, what rate of return would you expect to earn from each of the portfolios? a. The beta on the first portfolio is (Round to three decimal places.) The beta on the second portfolio is. (Round to three decimal places.) b. Which portfolio is riskier? (Select the best choice below.) OA. The first portfolio because the beta is smaller. OB. The second portfolio because the beta is larger. C. The second portfolio because the beta is smaller. D. The first portfolio because the beta is larger. c. If the risk-free rate of interest were 4.5% and the market risk premium were 7.5%, then the rate of return on the first portfolio is expected to be %. (Round to two decimal places.) If the risk-free rate of interest were 4.5% and the market risk premium were 7.5%, then the rate of return on the second portfolio is expected to be%. (Round to two decimal places.) Data table Asset B Portfolio Weightings Beta 2.20 0.95 0.60 -1.60 (Click on the icon in order to copy its contents into a spreadsheet.) Print First Portfolio 20% 20% 30% 30% Done Second Portfolio 30% 30% 20% 20%
a. To calculate the beta of each portfolio, we need to calculate the weighted average beta of the individual stocks. For the first portfolio: Beta = (0.20 * 2.20) + (0.20 * 0.95) + (0.30 * 0.60) + (0.30 * -1.60) = 0.29 (rounded to three decimal places)
For the second portfolio: Beta = (0.30 * 2.20) + (0.30 * 0.95) + (0.20 * 0.60) + (0.20 * -1.60) = 1.06 (rounded to three decimal places)
b. The portfolio with a higher beta is considered riskier. In this case, the second portfolio with a beta of 1.06 is riskier than the first portfolio with a beta of 0.29.
c. To calculate the expected rate of return for each portfolio, we use the Capital Asset Pricing Model (CAPM) formula:
Expected Return = Risk-free rate + (Portfolio Beta * Market Risk Premium)
Given that the risk-free rate is 4.5% and the market risk premium is 7.5%:
For the first portfolio:
Expected Return = 4.5% + (0.29 * 7.5%) ≈ 6.18%
For the second portfolio:
Expected Return = 4.5% + (1.06 * 7.5%) ≈ 12.09%
Therefore, the expected rate of return for the first portfolio is approximately 6.18%, and for the second portfolio is approximately 12.09%.
Note: The provided data table is missing the asset weights for the second portfolio. Please ensure that all necessary data is provided for accurate calculations.
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Discuss the effects of the external factors on KPMG as an organisation. Provide excerpts from the article to substantiate. Identify an opportunity and a threat that KPMG can strategically respond to. ou have been promoted and are to perform the role of a financial manager within the company. Taking this into consideration and the questions that follow:
Identify and discuss the level of management you belong to. Explain the planning activities you would be involved in as a financial manager. Outline the importance of the organising function. Discuss two types of power that you would exhibit as a leader. Explain two control measures you would use to manage financial resources in an organisation. Discuss the importance of management to business. Explain the role of financial management in an organisation. Differentiate between top level and lower level management.
KPMG, as a worldwide professional duties firm, is influenced by miscellaneous outside factors that can impact allure movements, strategies, and overall depiction.
What is the external factors?These outside factors can contain financial conditions, supervisory changes, concerning details advancements, contest, and social flows. While I cannot provide particular excerpts from an item.
Economic Conditions: Fluctuations in the global frugality can considerably affect KPMG's trade. During business-related downturns, organizations grant permission defeat their giving on consulting and able duties, impacting KPMG's income.
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Which of the following is not an essential element of therapeutic jurisprudence? a. hands-on judicial involvement b. adversarial adjudication c. immediate
The following is not an essential element of therapeutic jurisprudence b. Adversarial adjudication.
Therapeutic Jurisprudence is a new interdisciplinary field of legal research that examines the extent to which the law can be utilized as a therapeutic instrument to address emotional health concerns and promote well-being. It seeks to optimize the therapeutic and anti-therapeutic consequences of the law and to recognize the law's impact on the emotional life of individuals and groups.
Adversarial adjudication is a dispute resolution mechanism in which two opposing parties argue their position before a neutral third party who makes a decision based on their arguments and the evidence provided. This method is utilized in most legal settings, including civil and criminal proceedings. Because the parties present their cases and the arbiter makes a decision based on the evidence presented, the procedure is deemed "adversarial."
Judges being actively involved in the judicial process with a hands-on approach is an essential aspect of therapeutic jurisprudence. The notion of taking an active role in the resolution of conflicts and disagreements, emphasizing rehabilitation over punishment, and ensuring that court proceedings and other legal mechanisms do not exacerbate problems that bring people to the courts in the first place are all examples of this.
In contrast to adversarial proceedings, therapeutic jurisprudence encourages legal procedures to be supportive, compassionate, and participatory, with the goal of reducing and avoiding harm and improving the well-being of all stakeholders.
Therapeutic Jurisprudence is often utilized in family courts, mental health courts, and drug courts to reduce conflict and promote wellness by providing individuals with necessary therapeutic resources while also handling legal proceedings appropriately.
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Suppose a country with a current population of 80 million is expected to experience a population growth rate of 0.06 per year for the next 50 years. Assuming continuous compounding, what is the expected size of the population 50 years from now? Please round off your answers to the nearest million (i.e. if your answer is 109.9 million, then type 110).
2.Assume the total cost of a university education will be $200,000 when your child enters university in 8 years. You presently have $165,000 to invest. What annual rate of interest (APR) must you earn, if the interest is compounded continuously? Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign in your answer.
3.An investment promises to pay you $1,000 per year forever with the first payment in 7 years. If alternative investments of similar risk earn 10% per year, determine the maximum you would be willing to pay for this investment
1. To calculate the expected size of the population 50 years from now, we can use the formula for continuous compounding:
Future Population = Current Population * e^(growth rate * time)
Given:
Current Population = 80 million
Growth Rate = 0.06 per year
Time = 50 years
Plugging in the values, we have:
Future Population = 80 million * e^(0.06 * 50)
Using a calculator, we find that e^(0.06 * 50) ≈ 6.565
Future Population ≈ 80 million * 6.565 ≈ 525.2 million
Rounding to the nearest million, the expected size of the population 50 years from now is approximately 525 million.
2. To calculate the annual rate of interest (APR) needed to earn, we can use the continuous compound interest formula:
A = P * e^(r * t)
Where:
A = Final amount (total cost of university education)
P = Principal amount (present investment)
r = Annual interest rate (APR)
t = Time (in years)
Given:
Final amount (A) = $200,000
Principal amount (P) = $165,000
Time (t) = 8 years
We need to solve for the annual interest rate (r). Rearranging the formula, we have:
r = ln(A/P) / t
Substituting the given values, we have:
r = ln($200,000 / $165,000) / 8
Using a calculator, we find that ln($200,000 / $165,000) ≈ 0.182
r ≈ 0.182 / 8 ≈ 0.02275
Converting the decimal to a percentage and rounding to two decimal places, the required annual interest rate is approximately 2.28%.
3. To determine the maximum amount you would be willing to pay for the investment, we can use the formula for the present value of a perpetuity:
Present Value = Cash Flow / Discount Rate
Given:
Cash Flow = $1,000 per year
Discount Rate = 10% per year
First Payment in = 7 years
Substituting the values, we have:
Present Value = $1,000 / 0.10
Using the formula, we find:
Present Value = $10,000
Therefore, the maximum amount you would be willing to pay for this investment is $10,000.
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1- In what way is training on the job an investment in human capital?
2- Standardizing comparisons adjusts wage gaps for differences in skills and other characteristics across groups. Why is this method appropriate?
3-What makes it difficult for unions to succeed in the absence of any laws to help or to hinder unions? Identify several features from one or two laws or court rulings that helped unions overcome these difficulties.
4- We studied three measures of wage dispersion and two measures of wage asymmetry in the chapter. What are they?
Training on the job is an investment in human capital as it enhances an individual's knowledge, skills, and abilities, thereby increasing their productivity and potential for future earnings.
Standardizing comparisons is an appropriate method for adjusting wage gaps because it accounts for differences in skills and other relevant characteristics across groups. When comparing wages across different demographic groups, it is crucial to consider factors such as education, experience, job responsibilities, and other relevant attributes that may influence earning potential. By standardizing comparisons, these differences are taken into account, allowing for a fairer assessment of wage disparities. This method helps to identify and address potential discrimination or bias in compensation practices, ensuring that individuals are compensated based on their qualifications and job-related factors rather than arbitrary factors such as gender, race, or ethnicity. In the absence of laws to help or hinder unions, several difficulties arise that make it challenging for unions to succeed. Unions may face obstacles in organizing and collective bargaining, such as employer resistance, lack of access to workers, and limited bargaining power. However, certain laws or court rulings have helped unions overcome these difficulties. For example, the National Labor Relations Act (NLRA) in the United States grants employees the right to organize and engage in collective bargaining. It prohibits unfair labor practices by employers and establishes procedures for conducting union representation elections. Additionally, court rulings, such as the recognition of the "right to strike," have provided unions with a powerful tool to exert pressure and negotiate favorable terms with employers.
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For external reporting, generally accepted accounting principles
require that costs be classified as either variable or fixed costs.
Yes/no - Explain
No, for external reporting, generally accepted accounting principles (GAAP) do not require costs to be classified solely as either variable or fixed costs. GAAP focuses more on the proper presentation and disclosure of financial information, including costs, in the financial statements.
Generally accepted accounting principles (GAAP) provide a framework for preparing and presenting financial statements. They ensure that financial information is reliable, relevant, and comparable across different entities. However, GAAP does not mandate the classification of costs as solely variable or fixed.
While it is common for companies to analyze and classify costs as variable or fixed for internal management purposes, GAAP allows for a more nuanced approach to cost classification. Costs can have both variable and fixed components, and they can also be classified as semi-variable or semi-fixed.
In external financial reporting, the focus is on presenting the financial position, performance, and cash flows of the company. This includes providing relevant and reliable information about the nature and composition of costs incurred. Companies are required to disclose significant cost components and provide explanations regarding cost behavior, but they are not obligated to classify costs solely as variable or fixed.
In summary, while GAAP requires the proper presentation and disclosure of costs in financial statements, it does not mandate a strict classification of costs as variable or fixed. The classification of costs as variable, fixed, or other categories depends on the specific circumstances and needs of the company.
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According to the IASB's Framework for the preparation and presentation of financial statements, which of the following is not an objective of financial statements? O Providing information regarding the financial position of a business. O Providing information regarding the performance of a business. O Providing information on the financial adaptability of a business. O Helping to assess the going concern status of a business
According to the IASB's Framework for the preparation and presentation of financial statements Providing information on the financial adaptability of a business is not objective of financial statement .
Option C is correct .
The objective of financial statements, according to the IASB's Framework, includes providing information about the financial position, performance, and changes in financial position of a business.
It also aims to provide information that is useful in assessing the entity's ability to generate cash flows and its financial adaptability, which refers to its ability to respond to changes in economic circumstances.
Therefore, option C is not an objective stated in the Framework.
Incomplete question :
According to the IASB's Framework for the preparation and presentation of financial statements, which of the following is not an objective of financial statements?
A. Providing information regarding the financial position of a business.
B.Providing information regarding the performance of a business.
C. Providing information on the financial adaptability of a business.
D. Helping to assess the going concern status of a business
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Challenge #3: Optimizing Margins as Revenue Drops.
Please explain this challenge.
The challenge of Optimizing Margins as Revenue Drops is a business dilemma. This occurs when a company experiences a decline in sales or revenue due to internal or external factors. When a company's sales and revenue decline, they often aim to improve margins by optimizing various factors. The following are some methods of optimizing margins as revenue drops that can help organizations remain financially stable during difficult times:
1.Implement Cost Control Measures: Organizations may identify and reduce non-essential expenditures during difficult times. Some cost control measures include reducing employee hours or implementing a hiring freeze, as well as decreasing marketing or advertising expenditures.
2.Boost Efficiency: Improve efficiency in production or service delivery, which reduces production expenses and increases revenue. Consider using technology solutions to automate, streamline, or outsource some business operations.
3.Negotiate With Suppliers: It's essential to communicate with vendors and negotiate with them for better prices and payment terms. It is a helpful technique to enhance margins while simultaneously reducing expenses.
4.Embrace New Marketing Strategies: When revenue drops, it is essential to establish new marketing tactics that focus on the target demographic to increase sales. Rebranding the product, targeting a new audience, and creating a social media presence are some examples of new marketing strategies that companies can implement.
5.Increase the Selling Price: One of the most obvious ways to increase margins is to raise the price of goods or services, but this might not always be feasible. However, by using some of the other techniques listed above, companies can increase their value proposition and justify a higher price point.
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A local auto part store would like to reduce its inventory cost by determining the optimal number of batteries to order (i.e., EOQ). The daily demand is estimated to be six batteries; the unit purchase price is $100; the inventory carrying charge per unit is 25%; the ordering cost per order is $25; the annual working days are 300 days. The lead-time for acquiring batteries is estimated to be 4 days. With this information, which of the following is the re-order point (ROP)? O 30 units O 60 units O 180 units O None of the above
The re-order point (ROP) for the auto part store, given the provided information, is 30 units.
To calculate the re-order point (ROP), we need to consider the daily demand, lead time, and safety stock. The daily demand is given as six batteries, and the lead time is four days.
First, we calculate the demand during the lead time: Daily demand * Lead time = 6 batteries/day * 4 days = 24 batteries.
Next, we calculate the safety stock, which is the buffer inventory to account for any uncertainties or unexpected demand. The safety stock can be determined based on factors such as desired service level or historical demand variability. However, the given information does not provide a specific safety stock requirement.
Since the safety stock is not mentioned, we assume there is none. Therefore, the re-order point (ROP) is equal to the demand during the lead time: ROP = Demand during lead time = 24 batteries.
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Barnes \& Noble is from the publisher and printer who make the books sold by Barnes \& Noble. Upstream Horizontally Integrated Dowintream Vertically Integrated Which of the following would be a "Direct to Consumer" supply chain? Producer - Consumer Producer - Wholesaler - Consumer Retailer - Consumer Producer - Retailer - Consumer
The "Direct to Consumer" supply chain would be: Producer-Consumer. In this supply chain, the producer directly sells the products to the end consumer without involving any intermediaries like wholesalers or retailers.
By eliminating intermediaries such as wholesalers or retailers, the producer has more control over the entire customer experience, from product development to marketing and distribution. This direct connection allows for better communication, personalized engagement, and the ability to gather valuable feedback directly from the consumers.
One of the key advantages of a "Direct to Consumer" supply chain is the potential for cost savings. By cutting out the middlemen, producers can bypass additional markups and expenses associated with traditional retail channels, allowing them to offer competitive pricing to consumers.
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Consider the ice cream vendors problem (Cournot competition), but this time the second vendor can produce the ice cream at the lower cost of $2 per gallon. Hence the payoff functions (profits) are: u1(q1, q2) = (70- 91 +92/ 10) q1-4q1
u2(q1, q2) = (70- 91 +92/ 10) q2 – 2q2. What is the Nash equilibrium in this case?
In the ice cream vendors problem with different production costs, the Nash equilibrium is reached when the first vendor produces 5 gallons of ice cream and the second vendor produces 10 gallons of ice cream.
To find the Nash equilibrium, we need to solve the system of equations by taking the partial derivatives of the payoff functions and setting them equal to zero. Let's solve the equations:
Partial derivative of u1 with respect to q1:
∂u1/∂q1 = (70 - 91 + 92/10) - 4 = (71.2 - 4) = 67.2 - 4 = 63.2
Partial derivative of u2 with respect to q2:
∂u2/∂q2 = (70 - 91 + 92/10) - 2 = (71.2 - 2) = 69.2 - 2 = 67.2
Setting both partial derivatives equal to zero:
∂u1/∂q1 = 0 ⇒ 63.2 = 0
∂u2/∂q2 = 0 ⇒ 67.2 = 0
Since the equations are contradictory and cannot be satisfied simultaneously, there is no Nash equilibrium in this case.
In this scenario, there is no Nash equilibrium in the ice cream vendors problem with different production costs. The contradictory nature of the partial derivatives indicates that neither vendor has a production quantity that maximizes their profit given the other vendor's quantity. Therefore, the vendors may engage in strategic decision-making and adjust their production quantities in response to each other's actions, resulting in a dynamic and potentially unstable situation.
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A startup entering an embryonic stage industry without sufficient capital to purchase required fixed assets would be best served by adopting which of the following strategies? a. Joint venture. b. Internal new venture. c. Acquisition. d. Do not enter at all
A startup entering an embryonic stage industry without sufficient capital to purchase required fixed assets would be best served by adopting the joint venture strategy. Explanation: A startup is an early-stage company with a limited operating history.
As a result, startups generally have little to no access to capital. In fact, many startups are launched on a shoestring budget, with founders operating on their own dime or funding from friends and family. A startup that is entering an embryonic stage industry without sufficient capital to purchase required fixed assets would be best served by adopting the joint venture strategy.
A joint venture is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. Joint ventures are often used by startups that do not have the resources to undertake a particular project on their own.
By partnering with another company or investor, startups can access the resources they need to accomplish their goals. This can include financial resources, intellectual property, and other assets. In exchange for access to these resources, the startup will typically offer a share of the profits or equity in the company to its partner.
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Simple capital structure. Weighted Average
On January 1, 2012, Stairshard Corp. had 480,000 shares of common stock outstanding. During 2012 it had the following transactions that affected the Common Stock account:
February-1 Issued 120,000 shares
March-1 Issued a 20% stock dividend
May-1 Purchased 100,000 shares of treasury stock
June-1 Issued a 3-for-1 stock split
Oct-1 Sold 60,000 shares of treasury stock (previously purchased)
Instructions – Calculate Weighted Average.
1- First - Determine the weighted average. Number of outstanding shares as of December 31, 2012. Construct table.
2- Second - Wain Corp. obtained a net income of $3,256,000 during 2012. Calculate EPS for 2012. Use the weighted average number of shares determined in the first part.
In addition, Wain Corp. had 100,000 preferred shares at 9%, $100 par non-convertible, non-cumulative preferred shares outstanding for the full year. The company did not declare or pay a dividend in 2012.
In October, 60,000 shares of treasury stock were sold, leaving 1,800,000 shares as of December 31, 2012. The EPS for 2012, we need to divide the net income of $3,256,000 by the weighted average number of shares, the EPS for 2012 would be $1.81 per share.
Stairshard Corp. had various transactions in 2012 that impacted its common stock account, including share issuances, stock dividends, treasury stock purchases and sales, and a stock split. To calculate the weighted average number of outstanding shares as of December 31, 2012, a table needs to be constructed.
Additionally, Wain Corp. earned a net income of $3,256,000 during 2012, and the earnings per share (EPS) for the year can be calculated using the weighted average number of shares determined in the first part. Wain Corp. also had 100,000 preferred shares outstanding but did not declare or pay a dividend in 2012.
To determine the weighted average number of outstanding shares as of December 31, 2012, we need to consider the various transactions throughout the year. We start with the initial 480,000 shares of common stock. In February, 120,000 shares were issued, bringing the total to 600,000.
Then in March, a 20% stock dividend was issued, which means an additional 20% of 600,000 shares, or 120,000 shares, were distributed, resulting in a total of 720,000 shares. In May, 100,000 shares of treasury stock were purchased, reducing the total to 620,000 shares. In June, a 3-for-1 stock split occurred, meaning each share was split into three, resulting in a total of 1,860,000 shares. Finally, in October, 60,000 shares of treasury stock were sold, leaving 1,800,000 shares as of December 31, 2012.
Next, to calculate the EPS for 2012, we need to divide the net income of $3,256,000 by the weighted average number of shares. Using the value determined earlier, the EPS for 2012 would be $1.81 per share.It's important to note that Wain Corp. had 100,000 preferred shares outstanding throughout the year, but since no dividends were declared or paid, they do not impact the EPS calculation.
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When creating and operating a business the owner must determine his or her "basis" in the business. How does the owner compute his or her basis in the business when the business is operated as a "C" corporation, an " C " corporation or a partnership? What is the significance (i.e. importance) of the basis amount to the owners?
The owner's basis in a business is determined differently based on the entity type: capital contributions for C corporations, and investments, contributions, and distributions for S corporations and partnerships. The basis amount is important as it affects tax consequences, deductions, and the tax treatment of transactions for the owners.
When a business operates as a C corporation, the owner's basis is determined by the amount of capital contributed to the corporation. This includes initial investments and subsequent capital contributions made by the owner. The basis can be increased by additional capital contributions or decreased by distributions received.
For an S corporation or partnership, the owner's basis starts with the initial investment and is adjusted for subsequent contributions, distributions, and other factors. This basis is important as it affects the owner's tax liability and determines the tax treatment of certain transactions.
The basis amount is significant to owners because it determines the tax consequences of various events. For example, if the owner's basis is higher than the business's value, they may be able to deduct losses on their personal tax return. Additionally, when the owner sells their interest in the business, the basis is used to determine the gain or loss on the sale. Thus, understanding and maintaining an accurate basis is crucial for owners to properly manage their tax obligations and make informed financial decisions regarding the business.
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Brar: You Suspect That One Of The Customers In Your Store Is A Competitor That Operates A Business Nearby. They Are Asking A Lot Of Questions, Specifically About The Way You Set Up Your Business, File Your Taxes And Serve Disabled Customers. You Get The Feeling They Are Looking For Any Way You Have Broken The Law When Establishing
[7:25 a.m., 2022-09-27] Brar: You suspect that one of the customers in your store is a competitor that operates a business nearby. They are asking a lot of questions, specifically about the way you set up your business, file your taxes and serve disabled customers. You get the feeling they are looking for any way you have broken the law when establishing your business [7:30 a.m., 2022-09-27] Husan Brar: From the list below, choose the legal considerations due to your competitors inquiries. Select all that apply Accessibility Pricing strategies Business incorporation Accounting
The paragraph highlights the legal considerations that arise from your competitor's inquiries, including accessibility, business incorporation, and accounting practices. Ensuring compliance with these legal requirements is vital to protect your business from potential legal risks and maintain a strong legal standing in the market.
The legal considerations due to your competitor's inquiries would include:
Accessibility: Your competitor's interest in how you serve disabled customers raises concerns about compliance with accessibility laws. It is essential to ensure that your business premises and services are accessible to individuals with disabilities as required by law. Failure to comply with accessibility regulations can result in legal consequences.
Business Incorporation: If your competitor is asking about how you set up your business, including inquiries about business structure, registration, and legal compliance, it suggests they may be investigating whether you have followed proper procedures for business incorporation. Ensuring that your business is legally registered and operating in accordance with the relevant laws and regulations is crucial to avoid legal issues.
Accounting: Your competitor's questions about how you file your taxes indicate an interest in your financial practices. It is important to maintain accurate and transparent accounting records and comply with tax laws and regulations. Failure to do so may lead to penalties, fines, or legal consequences.
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Problem 18-01 Suppose that you own a 10-acre plot of land that you would like rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. Instructions: Enter your answers as a whole number. a. If the price at which wheat can be sold is $5.50 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 10 acres? $ b. What price would the farmer pay to rent your 10 acres if the price of wheat rises to $6.50 per bushel?
The maximum rent for the 10-acre plot would be $400 if the price of wheat is $5.50 per bushel. If the price of wheat rises to $6.50 per bushel, the farmer would pay $800 to rent the 10 acres.
The maximum amount a farmer would pay to rent the 10-acre plot of land can be calculated by subtracting the total costs per acre from the revenue per acre. In this case, the revenue per acre is the price of wheat per bushel multiplied by the yield of 40 bushels per acre. The total costs per acre include the costs for seed, fertilizer, and equipment rentals and labor.
a. Revenue per acre = Price of wheat per bushel * Yield per acre = $5.50 * 40 = $220
Total costs per acre = Seed cost + Fertilizer cost + Equipment and labor cost = $30 + $80 + $70 = $180
Profit per acre = Revenue per acre - Total costs per acre = $220 - $180 = $40
Maximum rent for 10 acres = Profit per acre * Number of acres = $40 * 10 = $400
Therefore, the most that any farmer would pay to rent the 10 acres is $400.
b. If the price of wheat rises to $6.50 per bushel, the revenue per acre would increase.
Revenue per acre = $6.50 * 40 = $260
Profit per acre = Revenue per acre - Total costs per acre = $260 - $180 = $80
Maximum rent for 10 acres = $80 * 10 = $800
Hence, if the price of wheat rises to $6.50 per bushel, the farmer would pay $800 to rent the 10 acres.
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Foxburg Company Has The Following Information: What Was The Direct Labor For The Period? Multiple Choice $5,500 $5,800 $6,30
Direct Labor = $15,900 - ($400 + $1,100 + Manufacturing Overhead + $0)
Direct Labor = $14,400 - Manufacturing Overhead
To determine the direct labor for the period, we need to use the following formula:
Direct Labor = Total Manufacturing Costs - (Beginning Work-in-Process Inventory + Direct Materials Used + Manufacturing Overhead + Ending Work-in-Process Inventory)
Using the given information, we can calculate the direct labor as follows:
Total Manufacturing Costs = Beginning Finished Goods Inventory + Cost of Goods Sold
Total Manufacturing Costs = $300 + $15,600
Total Manufacturing Costs = $15,900
Direct Materials Used = Purchases of Materials + Beginning Materials Inventory - Ending Materials Inventory
Direct Materials Used = $1,500 + $300 - $700
Direct Materials Used = $1,100
Therefore,
Direct Labor = $15,900 - ($400 + $1,100 + Manufacturing Overhead + $0)
Direct Labor = $14,400 - Manufacturing Overhead
Since we do not have the manufacturing overhead information, we cannot calculate the exact amount of direct labor. Hence, none of the multiple-choice options provided are correct in this case.
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Foxburg Company has the following information:
Work-in-
Process
Finished
Goods
$ 400
Beginning inventory
$300
Materials
$500
Ending inventory
Purchases of materials
$ 700
$7,700
$ 900
$ 1,500
Cost of Goods Sold
$ 15,600
$ 4,300
Manufacturing overhead
What was the direct labor for the period?
Multiple Choice
O
$5,500
$5,800
$6,300
O O
O
$6,800
. BOP, NFA and Fixed exchange rate regime (20 marks) Suppose a small economy is represented by a household. The basic information is: Only two members, You and Xiaomi You are the authority, who can issue the currency Peso. The Peso is used for domestic transaction and investment. At the beginning of 2020, the authority (You) have foreign asset 6kg gold, and foreign liability 4000 Peso (foreigner’s holding of domestic bond, which is issued by the government). The private sector (Xiaomi) have foreign asset 4 kg gold, and foreign liability 4000 Peso. Let us assume that the exchange rate is 1kg Gold=1000 Peso. There are no statistical errors and no changes of the capital accounts initially.
A) What is the household total Foreign asset and Foreign liability at the beginning of 2020? And what is the initial net foreign asset, measure in gold?
B) During 2020, the national income account shows that CA=-1kg Gold. Consequently, the household depletes it net foreign wealth. Can you figure out: what is the consequence on the household’s NFA?
C) The incremental wealth may be held by Xiaomi (Private sector) or You (authority) If Xiaomi increases the position of Gold by -0.5 kg Gold (The non-official reserve part) Can you figure out: what is the balance of official settlement?
D) Let us assume that initially, the authority implements the fixed exchange rate regime. After the realized CA and the official settlement balance, do you think that the authority can maintain the fixed regime or not?
E) Instead of implementing fixed exchange rate, the authority allows the exchange rate to fluctuate. At the end of the year, exchange rate turns out to be 1kg Gold=500 Peso. Can you check what is the valuation effect? And what is the net foreign asset in the end of 2020? (Hint: changes of NFA includes the valuation change and the current account).
A)
- Household total Foreign assets: 6 kg gold (You) + 4 kg gold (Xiaomi) = 10 kg gold
- Household total Foreign liabilities: 4000 Peso (You) + 4000 Peso (Xiaomi) = 8000 Peso
- Initial Net Foreign Asset (NFA) measured in gold: Total Foreign assets - Total Foreign liabilities = 10 kg gold - 8000 Peso / (1000 Peso/kg) = 2 kg gold
B) Since CA (Current Account) is -1 kg gold, it indicates that the household is running a current account deficit. This deficit implies a reduction in the household's Net Foreign Asset (NFA).
C) If Xiaomi (Private sector) increases its position in gold by -0.5 kg gold (non-official reserve part), the balance of the official settlement would change accordingly. Assuming no other changes, the balance of official settlement would decrease by 0.5 kg gold.
D) To determine if the authority can maintain the fixed exchange rate regime, we need more information about the realized CA and the official settlement balance.
E) Valuation effect refers to the impact of changes in exchange rates on the value of foreign assets and liabilities. In this case, the exchange rate changed from 1kg Gold = 1000 Peso to 1kg Gold = 500 Peso. The valuation effect can be calculated by comparing the initial value of foreign assets and liabilities to the final value using the new exchange rate. The net foreign asset in the end of 2020 would be the sum of the initial NFA and the current account balance, considering the valuation effect.
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