Dividend per share for preferred stock and common stock for each year: Year 1: Preferred stock= $0.50, Common stock= $0.38 Year 2: Preferred stock= $0.50, Common stock= $0.20 Year 3: Preferred stock= $0.50, Common stock= $0.75
Total dividends for preferred stock in Year 1 = 25,000 × $50 × 1% = $12,500 Dividend per share for preferred stock = $12,500 / 25,000 = $0.50 Dividend per share for common stock in Year 1 = $18,800 / 50,000 = $0.38 Total dividends for preferred stock in Year 2 = 25,000 × $50 × 1% = $12,500 Dividend per share for preferred stock = $12,500 / 25,000 = $0.50 Dividend per share for common stock in Year 2 = $10,000 / 50,000 = $0.20
Total dividends for preferred stock in Year 3 = 25,000 × $50 × 1% = $12,500 Dividend per share for preferred stock = $12,500 / 25,000 = $0.50 Dividend per share for common stock in Year 3 = $37,500 / 50,000 = $0.75 Preferred Stock (dividend per share) Common Stock (dividend per share)Year 1 $0.50 $0.38 Year 2 $0.50 $0.20 Year 3 $0.50 $0.75.
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Howell Company is based in Southern California. It manufactures snow skis, ski equipment, and surfboards. It has contracted with a major consulting firm to review the controls over its information technology area. Which of the following controls might Howell have reasonably implemented? 1. Input controls that require that certain key data be validated. II. Input and processing controls that require that batch totals be maintained and verified for all transactions that are processed in batches. III. Output controls that require that all reports be printed and distributed to remote end users by UPS or FedEx delivery. Oll only is correct. O I, II, and III are correct. O III only is correct. O I and II only are correct.
Howell Company, based in Southern California, manufactures snow skis, ski equipment, and surfboards. It has contracted with a major consulting firm to review the controls over its information technology area. Which of the following controls might Howell have reasonably implemented? I, II, and III are correct.
Input controls that require that certain key data be validated. Input and processing controls that require that batch totals be maintained and verified for all transactions that are processed in batches. Output controls that require that all reports be printed and distributed to remote end-users by UPS or FedEx delivery. Input controls that require that certain key data be validated: This control is used to check the validity of certain critical data.
This is to ensure that data that is inputted into the system is correct and accurate. Input and processing controls that require that batch totals be maintained and verified for all transactions that are processed in batches: This control requires that batch totals be maintained and verified for all transactions that are processed in batches This will ensure that all end-users have access to the reports they need.
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With The Use Of Cases And/Or Examples, Explain FOUR (4) Of The Following Terms As Used In Company Law: Fixed Charges Preference Shares Registration Of Charges Iv. No Par Value V. Capital Maintenance
With the use of cases and/or examples, explain FOUR (4) of the following terms as used in company law:
Fixed charges
Preference shares
Registration of charges
iv. No par value
v. Capital maintenance
1)Fixed Charges: Fixed charges refer to a specific type of security interest or claim over a company's assets.
2) Registration of Charges: Registration of charges refers to the process of recording and filing charges created by a company over its assets with the appropriate regulatory authority.
3) Preference Shares: Preference shares are a class of shares in a company that hold certain preferential rights compared to ordinary shares.
4) No Par Value:No par value refers to shares issued by a company without a specified face or nominal value. In the past, shares were commonly issued with a fixed par value, which represented their stated value per share.
Fixed Charges:
Fixed charges refer to a specific type of security interest or claim over a company's assets. These charges provide a lender or creditor with priority in recovering their debt from the specified assets in the event of the company's insolvency. The assets subject to fixed charges are typically tangible and identifiable, such as land, buildings, or machinery. For example, a bank may provide a loan to a company and take a fixed charge over its factory premises. In case of default, the bank can sell the factory to recover its debt before other creditors.
Preference Shares:
Preference shares are a class of shares in a company that hold certain preferential rights compared to ordinary shares. These rights often include a fixed dividend payment, which must be paid to preference shareholders before any dividend is distributed to ordinary shareholders. In the event of the company's liquidation, preference shareholders have a higher claim on the company's assets compared to ordinary shareholders. However, they usually have limited or no voting rights. Preference shares are commonly issued to investors who seek a more stable income stream and priority in the distribution of assets.
Registration of Charges:
Registration of charges refers to the process of recording and filing charges created by a company over its assets with the appropriate regulatory authority. This process aims to provide public notice of the charges and establish their priority. In many jurisdictions, companies are required to register charges within a specified timeframe to ensure transparency and protect the interests of creditors. Failure to register charges may result in them being void against liquidators, creditors, or subsequent purchasers. For example, if a company grants a mortgage over its property to secure a loan, the mortgage should be registered with the relevant authority to establish its validity and priority.
No Par Value:
No par value refers to shares issued by a company without a specified face or nominal value. In the past, shares were commonly issued with a fixed par value, which represented their stated value per share. However, in many jurisdictions, companies now have the option to issue shares without a par value. Instead of a par value, these shares may have a stated value or no specific value assigned. The advantage of no par value shares is that they provide flexibility in determining the issue price and allow companies to avoid certain legal restrictions associated with issuing shares below par value. It should be noted that the absence of a par value does not mean the shares have no value; rather, their value is determined by market forces and the perception of investors.
Fixed charges create a specific security interest over identified assets, granting priority to the lender in recovering debt.
Preference shares provide holders with preferential rights, such as fixed dividends and higher claim in liquidation.
Registration of charges involves filing charges with the appropriate authority to establish their validity and priority.
No par value shares do not have a fixed nominal value, providing flexibility in determining the share price and avoiding legal restrictions associated with par value.
Understanding these terms in company law is crucial for investors, creditors, and companies themselves. Fixed charges and registration of charges relate to the security interests held by lenders, while preference shares represent a specific class of shares with preferential rights. No par value shares offer flexibility in determining share prices, and capital maintenance rules ensure the protection of a company's capital base. It is important to consult legal professionals and familiarize oneself with the specific laws and regulations governing these concepts in the relevant jurisdiction.
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The information below (in italics) provides information on a
grocery food chain based in Ghana. Use the data to tabulate the
SWOT position of the company.:
A weakening economy, Forms strategic allianc
To tabulate the SWOT position of the grocery food chain based in Ghana, we need to analyze the strengths, weaknesses, opportunities, and threats based on the provided information. Here's a table summarizing the SWOT position.
It is important to note that this SWOT analysis is based on the provided information and may not capture all factors relevant to the grocery food chain in Ghana. Conducting a comprehensive analysis involving further research and market assessment would provide a more accurate and detailed SWOT position.
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"KKK" was started in 2013 by Julia and her friend Julie. It provided services for business. Its primary service was jewelry designs. Many jewelers and high-end accessory retailers have their designs appear on their advertisements, promotions, and exhibitions. KKK, since inception, KKK put together a strong design and business team, raised a healthy fund of 2 million dollars and managed through friends and professional network to operate in three countries, further it secured contracts to design for several major jewelry brands. The company had revenue and happy customers almost from day one. It scored a major hire about two-thirds of the way through its existence. KKK hired a Sales Director to manage Sales in all locations, then the business hired the company’s first 15 salespeople and acquired their first high end accessory shop. Sadly, in 2017 KKK, however ceased operations.
KKK’s expertise was jewelry design, and by all objective measures it was very good. In fact, Julia has won several awards during her college year. Her passion for designs and her skills were obvious. She declined a highly paid job offer just to start KKK. She was encouraged by the good economic condition in that year and the potential of rapid exposure of her designs that is enabled by advancement in technology. Most important to her, she knew that most jewelers and jewelry retailor are continuously looking for new designs, their competitive advantage rely on their ability to dazzle jewelry lovers with a new design for every major occasion in their lives. She also knows that, in this industry one design could represent her for life.
In 2015’ jewelry exhibition, KKK designs was displayed on video monitors scattered throughout various hall of the exhibition. These monitors created a lot of conversation among customers who would see designs they had not seen before, which further generated an abundance of enquiries.
In 2019, when Julia was asked what went wrong, she said I love what I was doing it was amazing start up. But KKK just could not grow fast enough. When our firm closed, it was bringing in about $14000 a month and our expenses were $15000 per month. That is normal for start-ups. Many start-ups take considerable amount of time to reach breakeven and then start making money. But in KKK’s case revenue growth was painfully slow and unpredictable. The Co-founder Julie said that KKK was in a terrible possible place. When things work out, we know what to do, but when things move in the other direction, it is hard, but again its clear what to do. KKK found itself struggling neither failing nor succeeding. A decision had to be made no matter how painful it could be.
In her memoir, Julie elaborated on some of the challenges KKK encountered. First, competition is hard with multiple agencies offering similar service. Also selling to jewelers is not easy, it is not a high-volume sale industry. Jewelers are approached all times by junior designers trying to enter the market. Employing an army to try to sell their service also did not help. Before taking the tough decision to seize operation, Julia and Julie discussed possible alternatives. They still had investor money in the bank, so the situation was not horrible. They can continue to operate or partner with a specific jeweler for a percentage, explore other industries or close.
The decision eventually was to shut down. In a meeting with KKK investors and revealing the decision it was interesting how the investors reacted. When KKK closed, the company had in $ 2.2 million in the bank. The investors told them to keep the funds to start another start up.
Q: If you were assigned to develop a business model for the above business, what are the major components? Develop a summarized business model based on the information in the case above.
The major components of KKK's business model include providing high-quality jewelry designs to jewelers and high-end accessory retailers, targeting a niche market, generating revenue through contracts and sales, utilizing a talented team and network, facing challenges in a competitive industry, and ultimately deciding to shut down with investor support for future endeavors.
The business model for KKK revolves around delivering valuable jewelry design services to jewelers and high-end accessory retailers. The target market is focused on those seeking new and captivating designs to enhance their competitive advantage. The revenue streams primarily come from contracts with major jewelry brands, sales of designs, and revenue generated through exhibitions and promotions.
The key activities involve jewelry design, sales management, acquisition of accessory shops, participation in exhibitions, and effective marketing strategies. The key resources include a talented team, strong networks, significant funding, and leveraging technology for exposure. The cost structure entails various expenses to sustain operations and growth.
KKK's competitive advantage lies in its expertise in jewelry design, the founder's accolades, and the ability to spark conversations and generate customer interest. However, the business faced challenges such as intense competition, slow revenue growth, and difficulties in selling to jewelers. Ultimately, the decision to close was made, with investors encouraging the founders to utilize the remaining funds for future ventures.
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The UQ Union is weighing up two expenditure options. It can either buy 20,000 ice-creams (each costing $1.50) to distribute to UQ students or it can construct a skate park costing $50,000 for students to freely use. There are approximately 50,000 students at UQ and each student values an ice-cream and a skate park each at $1.50. Which of the following statements are true? The total summed MB for the skate park is $125,000. The total summed MB for the skate park is $75,000 when considering all students. The total summed MB for ice-creams is $75,000 and, as the cost is $50,000, this option will result in a surplus. If 20,000 ice-creams are provided and consumed, then the total summed MB will exceed the total expenditure on ice-creams.
Providing 20,000 ice-creams would be the more economically efficient option for UQ Union as the total marginal benefit of distributing ice-creams is $30,000, which equals the cost. In contrast, the total marginal benefit of constructing a skate park is $75,000, which is less than the cost of $50,000.
The true statement is: If 20,000 ice-creams are provided and consumed, then the total summed MB will exceed the total expenditure on ice-creams.
Each of the 50,000 students values an ice-cream and a skate park at $1.50, so the total marginal benefit of providing 20,000 ice-creams is:
20,000 * $1.50 = $30,000
Since the cost of providing the ice-creams is $1.50 x 20,000 = $30,000, this option will result in no surplus or deficit, but instead will break even.
In contrast, the total marginal benefit of constructing a skate park is:
50,000 x $1.50 = $75,000
This is less than the cost of constructing the skate park, which is $50,000. Therefore, the UQ Union would experience a deficit if it chose to construct the skate park.
Thus, providing ice-creams would be the more economically efficient option, and if 20,000 ice-creams are provided and consumed, then the total summed MB will exceed the total expenditure on ice-creams.
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On December 1, 2019, Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10, n/30, from Iowa
Farm Co. Even though the discount period had expired, Sandi Kurtz subtracted the discount of $400 when she processed
the documents for payment on December 15, 2019.
Discuss whether Sandi Kurtz behaved in a professional manner by subtracting the discount, even though the discount period had expired.
Sandi Kurtz's decision to subtract the discount even though the discount period had expired can be seen as unprofessional or unethical behavior.
Sandi Kurtz's decision to subtract the discount even though the discount period had expired can be seen as unprofessional or unethical behavior. The terms of the purchase were clear: a 2% discount would be given if payment was made within 10 days. By processing the payment after the discount period had expired, Sandi Kurtz was not entitled to the discount according to the agreed-upon terms.
Adhering to the terms and conditions of a purchase agreement is an important aspect of maintaining professionalism and ethical conduct in business transactions. By disregarding the expiration of the discount period and subtracting the discount anyway, Sandi Kurtz acted in a manner that could be seen as taking advantage of the seller, Iowa Farm Co.
In professional business practices, it is essential to honor agreed-upon terms and treat all parties involved fairly and honestly. Sandi Kurtz's behavior in this situation can be viewed as unprofessional and not in line with ethical standards. It would have been more appropriate for her to process the payment without deducting the discount since the discount period had already expired.
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1. If you want to compare companies total assets/equity levels to their total debt levels you would use:
a. profitability ratios
b. liquidity ratios
c. cover ratios
d. debt ratios
2. Breakeven ______
a. the minimum profit point
b. is the point where total cost equals net income
c. is total fixed costs divided by contribution margin per unit
d. (a), (b) & (c)
e. (a) , (b) but not (c)
1. To compare companies' total assets/equity levels to their total debt levels, you would use debt ratios (option d).
2. Breakeven refers to the point where total cost equals net income. Therefore, the correct answer is option b.
1. When comparing companies' total assets/equity levels to their total debt levels, you would use debt ratios. Debt ratios provide insights into the company's leverage and its ability to meet its financial obligations. They measure the proportion of a company's total debt to its total assets or equity. By analyzing debt ratios, investors and analysts can assess the financial risk associated with a company's debt levels.
2. Breakeven refers to the point at which total cost equals net income, indicating that the company is neither making a profit nor incurring a loss. It is the point where the company covers all its expenses but does not generate any additional profit. Therefore, the correct answer is option b, which states that breakeven is the point where total cost equals net income. Options a and c do not accurately describe the concept of breakeven.
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Explain how each of the following would change the supply for organically grown broccoli. a. Government imposes a 10-cent tax on every pound of broccoli sent to market. b. An increase in the price of organically grown carrots and cauliflower. c. An increase in the price of pesticides necessary to reduce crop damage. d. An improvement in technology that allows broccoli to be harvested at a lower cost. e. An increase in the number of sellers. f. An increase in the price of broccoli (caused by a change in demand). g. An expectation that the price of broccoli will be higher next week. 8. Use the information below to graph the supply and demand curves for broccoli. What is the equilibrium price and quantity in this market?
A government-imposed tax, an increase in the price of related goods, an increase in input costs, technological advancements, changes in the number of sellers.
a. A government tax on broccoli would increase the cost of production and decrease the profitability for suppliers, leading to a decrease in supply.
b. An increase in the price of organically grown carrots and cauliflower may incentivize producers to allocate more resources towards growing those goods instead of broccoli, resulting in a decrease in broccoli supply.
c. If the price of pesticides increases, it raises input costs for broccoli farmers, reducing their profitability and leading to a decrease in supply.
d. Technological improvements in harvesting lower the cost of production for broccoli, which would increase supply as it becomes more profitable to produce.
e. An increase in the number of sellers expands the total supply available in the market, shifting the supply curve to the right.
f. An increase in the price of broccoli due to higher demand would likely encourage suppliers to produce more, resulting in an increase in supply.
g. Expectations of a higher price in the future may incentivize suppliers to reduce current supply and hold onto their stock, leading to a decrease in supply.
To determine the equilibrium price and quantity, a graph of the supply and demand curves for broccoli is needed. Without the specific information on the supply and demand schedules or equations, it is not possible to provide the equilibrium price and quantity.
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A government-imposed tax, an increase in the price of related goods, an increase in input costs, technological advancements, changes in the number of sellers.
a. A government tax on broccoli would increase the cost of production and decrease the profitability for suppliers, leading to a decrease in supply.
b. An increase in the price of organically grown carrots and cauliflower may incentivize producers to allocate more resources towards growing those goods instead of broccoli, resulting in a decrease in broccoli supply.
c. If the price of pesticides increases, it raises input costs for broccoli farmers, reducing their profitability and leading to a decrease in supply.
d. Technological improvements in harvesting lower the cost of production for broccoli, which would increase supply as it becomes more profitable to produce.
e. An increase in the number of sellers expands the total supply available in the market, shifting the supply curve to the right.
f. An increase in the price of broccoli due to higher demand would likely encourage suppliers to produce more, resulting in an increase in supply.
g. Expectations of a higher price in the future may incentivize suppliers to reduce current supply and hold onto their stock, leading to a decrease in supply.
To determine the equilibrium price and quantity, a graph of the supply and demand curves for broccoli is needed. Without the specific information on the supply and demand schedules or equations, it is not possible to provide the equilibrium price and quantity.
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Sam is a person who loves to spend his time in outdoor activities. Also, one of Sam's strengths is that he is very good at giving speeches and talk to people. Sam has__________
a.
An extroverted personaality
b.
An introverted personality
c.
A sensing personality
d.
A business man's personality
Sam is a person who loves to spend his time in outdoor activities. He is a sociable person who enjoys spending time with people and likes to share his thoughts and ideas with them. Sam has an extroverted personality
Sam has an extroverted personality, which means that he gains his energy by being around people and socializing. Additionally, Sam is very good at giving speeches and talking to people, which is one of his strengths.People with an extroverted personality often enjoy working in teams, collaborating with others, and leading group discussions. They also tend to be good at public speaking, as they are comfortable speaking in front of large groups of people and have excellent communication skills. Moreover, they are usually assertive and confident, which allows them to take risks and try new things.
In conclusion, Sam has an extroverted personality and is excellent at public speaking. He enjoys spending time with people, socializing, and sharing his thoughts and ideas with others.
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If the U.S. debt-to-GDP ratio were \( 100 \% \) and if the interest rate on the debt were \( 5 \% \) not far from the truth at present- what fraction of U.S. GDP would go toward paying interest on the
With a debt-to-GDP ratio of 100% and a 5% interest rate, a fraction of the U.S. GDP would be allocated towards paying interest on the debt.
If the U.S. debt-to-GDP ratio were 100%, it would mean that the national debt is equal to the country's annual GDP. Assuming an interest rate of 5% on the debt, the fraction of U.S. GDP allocated towards paying interest would be 5%. This means that 5% of the country's economic output would be used to service the interest on the debt. It's worth noting that this is a simplified calculation and does not account for other factors that can affect the debt burden and its impact on the economy, such as inflation, economic growth, and government policies.
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This type of small business exists in all industries, is fast growing, and innovative. Also kilown as gazelles these businesses aie outstanding job creators a. Corporations b. Main street
c. Non-employee businesses
d. Suppliers e. High growth
High-growth businesses, or gazelles, are innovative small enterprises found in all industries. They rapidly expand, create jobs, and drive industry innovation and economic growth.
e. High growth
High-growth businesses, also known as gazelles, are a remarkable type of small business that exists in all industries, displaying rapid expansion and a penchant for innovation. These enterprises possess the unique ability to scale quickly, often outperforming their competitors and creating a substantial number of jobs. Unlike large corporations, high-growth businesses are agile and flexible, enabling them to swiftly adapt to changing market demands. They thrive on their innovative approaches, leveraging disruptive technologies and embracing an entrepreneurial spirit.
With their significant contribution to job creation and economic growth, these high-growth businesses play a vital role in driving industry innovation and revitalizing local economies across a wide range of sectors. Their dynamic nature and ability to consistently innovate make them a force to be reckoned with in the business landscape.
Therefore, High-growth businesses, or gazelles, are innovative small enterprises found in all industries. They rapidly expand, create jobs, and drive industry innovation and economic growth.
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In a reorder point inventory problem, the standard deviation of the annual demand is 158 units, and the supply lead time is 13. What is the lead time standard deviation? (1 year=365 days).
The lead time standard deviation in the reorder point inventory problem is 13.
To find the lead time standard deviation in a reorder point inventory problem, we need to use the following formula:
Lead Time Standard Deviation = Standard Deviation of Annual Demand / Square Root of Lead Time
Given information:
Standard Deviation of Annual Demand = 158 units
Supply Lead Time = 13
1: Calculate the square root of the lead time.
Square Root of Lead Time = Square Root of 13 = 3.6056 (rounded to four decimal places)
2: Divide the standard deviation of annual demand by the square root of the lead time.
Lead Time Standard Deviation = 158 units / 3.6056 = 43.77 units (rounded to two decimal places)
Therefore, the lead time standard deviation in the reorder point inventory problem is 13 units.
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In a reorder point inventory problem, the lead time standard deviation can be calculated using the formula Lead Time Standard Deviation = Standard Deviation of Annual Demand / Square Root of Lead Time. In this case, the lead time standard deviation is approximately 43.54 units.
Explanation:The lead time standard deviation in a reorder point inventory problem can be calculated using the following formula:
Lead Time Standard Deviation = Standard Deviation of Annual Demand / Square Root of Lead Time
In this case, the standard deviation of the annual demand is 158 units, and the supply lead time is 13. So, using the formula:
Lead Time Standard Deviation = 158 / √13 ≈ 43.54 units
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At the beginning of the year, you buy 100 shares of stock for $64 each. During the year you receive $3 per share in dividends, and then sell the stock for $66 per share at the end of the year. What is your holding period return? Enter answer in percents, accurate to two decimal places.
The holding period return for this investment is 7.81%.
The holding period return is a measure of the return on an investment over a specific period of time. To calculate the holding period return, you need to consider both the dividends received and the capital gains or losses from selling the stock.
In this case, you bought 100 shares of stock for $64 each, so your initial investment was $6,400. During the year, you received $3 per share in dividends, which amounts to $300 in total ($3 per share x 100 shares). At the end of the year, you sold the stock for $66 per share, resulting in proceeds of $6,600 ($66 per share x 100 shares).
To calculate the holding period return, you need to determine the total return and divide it by the initial investment. The total return is the sum of dividends received and the capital gain or loss from selling the stock.
Dividends received: $300
Capital gain/loss: ($6,600 - $6,400) = $200
Total return: $300 + $200 = $500
Holding period return: ($500 / $6,400) x 100 = 7.81%
Therefore, the holding period return for this investment is 7.81%.
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Harlen Industries has a simple forecasting model: Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weekly demand for that month. This weekly average is used as the weekly forecast for the same month this year. This technique was used to forecast eight weeks for this year, which are shown below along with the actual demand that occurred.
The following eight weeks show the forecast (based on last year) and the demand that actually occurred:
WEEK FORECAST
DEMAND ACTUAL
DEMAND
1 135 132
2 135 128
3 142 147
4 140 157
5 142 177
6 152 167
7 145 184
8 147 204
The forecasting model used by Harlen Industries relies on historical data from the same month in the previous year to forecast the average weekly demand for the current year.
However, the actual demand that occurred in the current year differs from the forecasted values, indicating a deviation between the model's predictions and the real demand. The discrepancies between the forecasted and actual demands raise concerns about the accuracy and reliability of the forecasting model. It suggests that the model may not adequately capture the factors influencing demand fluctuations or fail to account for any changes in market conditions or customer behavior.
To improve the forecasting accuracy, Harlen Industries should consider incorporating additional variables into their model that can better reflect the underlying demand drivers. Factors such as seasonality, market trends, promotional activities, or changes in customer preferences could significantly impact demand and should be taken into account.
Additionally, the company should evaluate the forecasting model's performance over a longer time period to determine if the discrepancies observed in these eight weeks are consistent or isolated incidents. This analysis will help identify any systematic errors in the model and guide adjustments to enhance its predictive capabilities.
Continuous monitoring and refinement of the forecasting model are essential to ensure that the company can make informed decisions regarding production, inventory management, and resource allocation based on reliable demand forecasts.
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If Mrs A worked at a jewellery store and her employer gave her a sales bonus of a diamond ring valued at $10,000 how would you treat this for taxation purposes? The answer is required to briefly explain WITH reference to any relevant case law.
It's important to seek professional tax advice in order to determine the most appropriate treatment of bonuses for taxation purposes.
If Mrs A worked at a jewelry store and her employer gave her a sales bonus of a diamond ring valued at $10,000, this would be treated as income for taxation purposes and would be included in Mrs A's assessable income for the income year in which she received the ring.The treatment of bonuses as income for taxation purposes is discussed in FCT v Dixon (1952) 10 ATD 82.
According to this case law, any benefit that an employee receives that is in addition to their regular salary or wages, whether in cash or otherwise, is considered to be income and is therefore subject to income tax. This includes bonuses, which are generally treated as income in the year in which they are received.However, it's important to note that there are certain exemptions and concessions available for some types of bonuses.
For example, if Mrs A received the diamond ring as a result of her performance in a long-term incentive plan, she may be eligible for concessional tax treatment under the employee share scheme rules. Similarly, if the ring was given as a non-cash benefit in accordance with a salary sacrifice arrangement, it may be subject to different tax rules altogether.
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How do you, personally, try to restore equity when you perceive you have been treated unfairly? Please give specific examples.
Please use a minimum of 700 words
Restoring equity means to balance the scales, to rectify the inequitable treatment that you might have been subjected to. Restoring equity is not easy, and there is no one-size-fits-all solution to it, but there are a few things that I, personally, try to do when I perceive that I have been treated unfairly.
Some of these things include:Communication: Talking to the person or people who have been responsible for the perceived inequitable treatment, in a calm and respectful manner. It is essential to let them know how you feel and try to come up with a mutually agreeable solution.
Collaboration: When possible, working together with the person or people who have been responsible for the inequitable treatment can help restore equity. Cooperation with the other party involved can make a big difference, and it can lead to finding common ground that can be beneficial for both parties.
Documentation: Keeping records of the perceived inequitable treatment, such as emails, notes, and other forms of communication, can be helpful in presenting a case for equity. This can help to make it easier to communicate what the issue is, and it can also serve as evidence if the issue is taken further.
Examples of restoring equity could be asking for a meeting with your boss to discuss why you are not being paid the same as someone with the same experience and qualification or explaining to someone why their comment was not okay.
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Maggie is a neighbor of yours who lives with her parents. She is 20 years old and has a one-year-old child. You know that Maggie was a full-time student until she quit college at the end of September of the tax year. Maggie gives you her tax documents and tells you that her mother said to claim herself and to claim her child for EITC. To meet the ETC due diligence knowledge requirement, you: a. Cannot ignore the facts about Maggie living with her mother for nine months of the year when she was a full-time student b. Can disregard information obtained through a personal relationship, c. Cannot complete Maggie's return under any circumstances. d. Can complete Maggie's return filing her as a single non dependent with EITC for her child
To meet the Earned Income Tax Credit (EITC) due diligence knowledge requirement, you cannot ignore the facts about Maggie living with her mother for nine months of the year when she was a full-time student. The correct option is a.
Maggie lived with her mother for nine months of the tax year while she was a full-time student. This information is crucial in determining her eligibility for certain tax benefits, such as claiming herself and claiming her child for EITC.
The due diligence requirement for EITC mandates that tax preparers must have a reasonable belief that the information provided by the taxpayer is accurate and complete.
In this case, disregarding the fact that Maggie lived with her mother for a significant portion of the year would not meet this requirement. Therefore, it is important to consider all relevant facts and circumstances when preparing Maggie's tax return. The correct option is a.
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Which of the project management limitations do you think will have the biggest near-term negative impact on the growth of project management? Please provide reasons to support your answers.
Discuss the advantages and disadvantages of project management for planning, scheduling, and budgeting.
In terms of project management limitations, one that can have a significant near-term negative impact on the growth of project management is the lack of skilled project managers. This limitation arises due to the increasing demand for project managers across various industries and sectors. As projects become more complex and diverse, the need for skilled professionals who can effectively manage and execute them becomes crucial.
The shortage of skilled project managers can hinder the growth of project management because it limits the availability of qualified individuals to lead and deliver projects successfully. This can result in project delays, cost overruns, and poor project outcomes. Without skilled project managers, organizations may struggle to effectively plan, execute, and control their projects, leading to a loss of efficiency, productivity, and customer satisfaction.
Advantages of project management for planning, scheduling, and budgeting include:
Improved Efficiency: Project management techniques help in defining clear objectives, creating realistic schedules, and allocating resources efficiently, leading to improved project execution.
Effective Resource Allocation: Project management enables effective resource allocation, ensuring that resources are utilized optimally, reducing waste and increasing productivity.
Risk Management: Project management allows for proactive identification and mitigation of risks, helping to minimize potential negative impacts on project timelines and budgets.
Disadvantages of project management for planning, scheduling, and budgeting include:
Time and Cost Constraints: Strict project schedules and budgets may limit flexibility and creativity, potentially affecting the quality of deliverables and innovation.
Complexity: Project management processes can be complex and require significant effort and coordination, which may pose challenges for smaller or less experienced organizations.
Overemphasis on Documentation: Excessive documentation and administrative tasks in project management can consume time and resources, diverting attention from actual project execution.
Overall, while project management offers numerous benefits for planning, scheduling, and budgeting, organizations should be mindful of potential disadvantages and tailor their approach to fit their specific needs and constraints.
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You are an auditor working in a public accounting firm, you are assigned by a partner to handle a transportation service company client for the financial year 31 December 2021. The following is what you encounter in auditing the client:
a. The company reported a gain on sale of non-current assets of Rp 1 billion. Derived from the sale of 10 units of operational cars in August 2021 for 10 cars purchased in May 2017. The client estimates the economic life of 4 years and is depreciated using the straight-line method, with no salvage value. The purchase price of the cars is IDR 200 million each, and the selling price is IDR 100 million each.
Question: Would you consider this a fair or a misstatement finding? Explain your answer
b. In 2021 there will be additions in the form of a new building used as an office and garage by the company. The value is material enough to make the ending balance of non-current assets much larger than the previous year.
Question: What audit procedures will you carry out, and what audit evidence is needed to ensure that the new building does exist, and does belong to the company?
c. As in previous years, there were repairs to operational car vehicles. However, this year some repair costs were not recognized as an expense in the income statement, but were capitalized by the client. Client said that the improvements were major, and extended the economic life.
Question: Is the capitalization allowed? What audit evidence do you need to examine the transaction?
d. There is a former office building of one of the branch offices which has stopped operating since last year. Since not in use, the building is left unattended and neglected. Upon inspection it was found that the building had been badly damaged. The client only calculates ordinary depreciation as in previous years, namely using the straight-line method with an economic useful life of 20 years.
Question: What accounting treatment should the client take regarding the recording of the badly damaged building?
a. The gain on the sale of non-current assets reported by the transportation service company appears to be a misstatement finding.
b. To ensure the existence and ownership of the new building, the auditor should perform appropriate audit procedures and gather relevant audit evidence.
c. The capitalization of repair costs by the client requires further examination to determine its validity.
d. The client should appropriately account for the badly damaged building that has been left unattended and neglected.
a. The company reported a gain on the sale of non-current assets of Rp 1 billion from the sale of 10 operational cars. However, the purchase price of the cars was IDR 200 million each, and the selling price was IDR 100 million each. This indicates that the selling price was lower than the purchase price, resulting in a loss rather than a gain. Therefore, the reported gain on the sale of non-current assets is incorrect and constitutes a misstatement.
b. The auditor should carry out procedures such as physically inspecting the new building, reviewing purchase contracts or agreements, and examining invoices or payment records related to the construction of the building. The audit evidence needed includes documents such as construction contracts, invoices from contractors, payment records, title deeds, and other supporting documents that prove the existence and ownership of the new building. These procedures and evidence will help ensure that the new building is real, belongs to the company, and its value is appropriately recorded in the financial statements.
c. The client capitalized some repair costs instead of recognizing them as expenses in the income statement. They claimed that the repairs were major and extended the economic life of the operational vehicles. The auditor needs to assess whether the capitalization of repair costs is allowed based on the applicable accounting standards. This may involve examining the nature and extent of the repairs, evaluating whether they meet the criteria for capitalization, and considering the impact on the economic life and future cash flows of the assets. Audit evidence required may include invoices, work orders, contracts, and other supporting documentation that provide details of the repairs, their purpose, and their impact on the assets.
d. The former office building of the branch office has suffered severe damage due to neglect and being left unattended. The client continues to calculate ordinary depreciation using the straight-line method, assuming a useful life of 20 years. However, the badly damaged condition suggests that the building may no longer have the same economic benefits or future cash flows as originally anticipated. The client should reassess the recoverability and carrying value of the building, and if necessary, recognize an impairment loss in accordance with the applicable accounting standards. The auditor needs to review the condition of the building, assess the extent of the damage, and evaluate whether the carrying value needs to be adjusted or impaired. Supporting evidence may include inspection reports, photographs, expert opinions, and assessments of the fair value or recoverable amount of the building.
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Companies are developing new technologies, products, and services. These include broadband networks, mobile commerce, wireless connectivity, and smartphones. For example, South Korea currently boasts the world's fastest average internet speed, and some other countries are responding to this by improving their broadband networks. Why? Broadband offers multiple marketing opportunities for all global companies. Cloud computing, smartphones, mobile advertising, mobile commerce, music, mobile gaming, e-sports, mobile payments, and streaming video and electronic books are also powerful tools for advertisers.
Companies are investing in new technologies, products, and services such as broadband networks, mobile commerce, wireless connectivity, and smartphones.
One notable example is South Korea, which currently holds the title for the world's fastest average internet speed. Other countries are taking note of this and striving to enhance their broadband networks in response.
The reason behind this focus on broadband networks is the multitude of marketing opportunities they offer to global companies. Broadband enables faster and more reliable internet connections, which in turn opens up avenues for various marketing strategies. These strategies include cloud computing, smartphones, mobile advertising, mobile commerce, music streaming, mobile gaming, e-sports, mobile payments, and streaming video and electronic books. All these tools provide powerful platforms for advertisers to reach their target audiences effectively.
By leveraging these technologies and services, companies can engage with consumers on multiple digital fronts, connect with them through various channels, and deliver content in engaging and personalized ways. This helps companies stay competitive in the rapidly evolving digital landscape and meet the changing demands and preferences of their customers.
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Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit and whose variable expense is $17 per unit. The company's monthly fixed expense is $10,800.
1. Calculate the company's break-even point in unit sales.
2. Calculate the company's break-even point in dollar sales.
3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales and in dollar sales?
The new break-even point in unit sales and in dollar sales if the company's fixed expenses increase by $600 are 2,850 units and $59,850 respectively.
1. Calculation of company's break-even point in unit sales is as follows: We can use the formula: Break-even point (unit sales) = Fixed expenses / (Selling price per unit - Variable expenses per unit) Given that: Fixed expenses = $10,800Selling price per unit = $21Variable expenses per unit = $17Substituting the given values in the formula, we get; Break-even point (unit sales) = $10,800 / ($21 - $17)= $10,800 / $4= 2,700 units Therefore, the company's break-even point in unit sales is 2,700 units.2. Calculation of company's break-even point in dollar sales is as follows: We can use the formula: Break-even point (dollar sales) = Break-even point (unit sales) × Selling price per unit Given that: Break-even point (unit sales) = 2,700 units Selling price per unit = $21Substituting the given values in the formula, we get; Break-even point (dollar sales) = 2,700 × $21= $56,700Therefore, the company's break-even point in dollar sales is $56,700.3. Calculation of the new break-even point in unit sales and in dollar sales if the company's fixed expenses increase by $600 is as follows: The new fixed expenses = $10,800 + $600= $11,400The new break-even point (unit sales) = New fixed expenses / (Selling price per unit - Variable expenses per unit)= $11,400 / ($21 - $17)= $11,400 / $4= 2,850 units The new break-even point (dollar sales) = New break-even point (unit sales) × Selling price per unit= 2,850 × $21= $59,850.
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Consider the following information:
State of Probability of State Rate of Return if State Occurs
Economy of Economy Stock A Stock B Stock C
Boom .68 .11 .05 .36
Bust .32 .25 .31 – .16
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Expected return: %
b. What is the variance of a portfolio invested 23 percent each in A and B and 54 percent in C? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)
Variance of a portfolio:
a.Expected return = (0.68)(0.11 + 0.05 + 0.36)/3 + (0.32)(0.25 + 0.31 – 0.16)/3 = 9.7%.b. The variance of a portfolio invested 23 percent each in A and B and 54 percent in C is 0.00137.
a. The expected return on an equally weighted portfolio of these three stocks is 9.7%.The expected return is calculated by taking the weighted sum of the returns. For an equally weighted portfolio, the weight of each stock is 1/3. Hence the expected return of an equally weighted portfolio is:Expected return = (0.68)(0.11 + 0.05 + 0.36)/3 + (0.32)(0.25 + 0.31 – 0.16)/3 = 9.7%
b. The variance of a portfolio invested 23 percent each in A and B and 54 percent in C is 0.00137.
The formula for calculating the variance of a portfolio consisting of n securities is:σ²p = ∑∑wijσiσjρijwhereσ²p is the variance of the portfoliowi is the proportion of the portfolio invested in security iσi is the standard deviation of security iρij is the correlation coefficient between securities i and jσiσjρij is the covariance between securities i and jGiven that the proportion of the portfolio invested in A and B is 23% each and that in C is 54%, the weights are:wA = 0.23, wB = 0.23, wC = 0.54.
The expected return and standard deviation of each stock are:E(RA) = 11%, σA = 20%E(RB) = 5%, σB = 10%E(RC) = 36%, σC = 25%The correlation coefficients are:pAB = 0.4, pAC = -0.2, pBC = 0.3Therefore, the covariance between A and B, A and C, and B and C are:COVAB = pABσAσB = 0.4(20%)(10%) = 0.08COVAC = pACσAσC = -0.2(20%)(25%) = -0.10COVBC = pBCσBσC = 0.3(10%)(25%) = 0.075Using the formula above, the variance of the portfolio is:σ²p = [0.23²(0.20²) + 0.23²(0.10²) + 0.54²(0.25²) + 2(0.23)(0.23)(0.08) + 2(0.23)(0.54)(-0.10) + 2(0.23)(0.54)(0.075)] = 0.00137Thus, the variance of the portfolio is 0.00137 (rounded to 5 decimal places).
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1) What is your opinion of the blend of Hip-Hop with Traditional Musical Theater? Does it work? Is it unwarranted? (1 Paragraph, 6-7 sentences)
2) Miranda and the cast do extensive research about the subject matter of the founding fathers. Being actors of color- they have a very different view of America and American history. Based on this documentary (albeit subjective, I know) do you think they are approaching the musical HAMILTON from a fair and balanced view point? Are they politicizing history? or shedding a new artistic light on the subject matter? (1-2 Paragraphs, Give examples)
3) What are your views of Musical Theater before and after this lecture and then viewing this documentary? Have your views or preferences changed? Are you more open to seeing or not seeing a Musical performance? (4-5 sentences)
4) After watching both the Vice News spot This Guy Hates Hamilton So Much He Made a Play to Roast Lin Manuel-Miranda and the PBS Hamilton's America what is your opinion about the Musical's impact on American audiences? After looking at some of the criticism's mentioned above, is it good that a dialog has been created about Race, Politics, Performance, and Accuracy in Theater? or do we loose integrity when historical content is misused (even with positive intentions)? Give me your opinions about Hamilton and it's criticisms. (1-2 paragraphs).
My opinion of the blend of Hip-Hop with Traditional Musical TheaterHip-hop is a popular genre that was born in the 1970s in the United States, whereas traditional musical theater has been around for centuries.
Hip-hop may seem like a modern genre to some, but it has roots that go back to the music of Africa, the Caribbean, and other parts of the world, and it has influenced music around the world. When it comes to blending hip-hop with traditional musical theater, I believe it can work well, but it depends on how it's done. Some productions may use hip-hop beats or rhymes simply to be trendy, which can be unwarranted if it doesn't add to the story or character development.
On the other hand, if the blend is well-executed, it can bring a fresh perspective to the art form and help connect with younger audiences.
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Suppose that we are considering the AEF, which is made up of desired C,G,I, and NX.As in lecture, we will assume that both C and NX respond to prices (p) in the economy. I and G do not. All four are given by: C=40(10−p)+0.85YI=200G=300NX=20(10−p)−0.1Y 1. What is the expression for the AEF here? Simplify your answer as much as you can. [3 points] 2. What is the equilibrium Y∗ if (i) p=4, and if (ii) p=7 ? [2 points] 3. What is the equilibrium value of Y for any given level of p ? (in other words, you do not know what p is, but you can solve for Y∗ as a function of p.) [3 points] 4. Use your answer from part c to draw the Aggregate Demand Curve, with Aggregate Demand for Y on the x-axis and the price level on the y-axis. Label both the x-intercept and y-intercept for the AD curve. [2 points] Suppose instead that the price level affected the marginal propensity to consume and the Marginal propensity to import, such that: (note the numbers are different from your previous AEF) AEF=900+0.7Y−100pY 5. In this case, what would be the expression for the AD curve as a function of prices? What does this AD curve look like? Sketch a picture of it with Aggregate Demand for Y on the x-axis and the price level on the y-axis [4 points]
1. The expression for the Aggregate Expenditure Function (AEF) is:
AEF = C + I + G + NX
= 40(10 - p) + 0.85Y + 200 + 300 + 20(10 - p) - 0.1Y
= 60 - 60p + 0.75Y
2. (i) If p = 4:
AEF = 60 - 60(4) + 0.75Y
= -120 + 0.75Y
Equilibrium Y* is the value of Y where AEF equals Y, so we solve for Y:
Y* = -120 + 0.75Y*
Y* = 480
(ii) If p = 7:
AEF = 60 - 60(7) + 0.75Y
= -360 + 0.75Y
Equilibrium Y*:
Y* = -360 + 0.75Y*
Y* = 1440
3. To find the equilibrium value of Y for any given level of p, we set AEF equal to Y:
AEF = 60 - 60p + 0.75Y
Y* = 60 - 60p + 0.75Y*
0.25Y* = 60 - 60p
Y* = 240 - 240p
4. The Aggregate Demand (AD) curve is obtained by plotting the equilibrium values of Y* for different price levels. The x-intercept of the AD curve is the value of Y* when p is zero, and the y-intercept is the value of AEF when p is zero. The specific values would depend on the calculations in part 3.
5. The expression for the AD curve in this case is:
AD = AEF - Y
= 900 + 0.7Y - 100pY - Y
= 900 - 0.3Y - 100pY
The AD curve in this case would have a negative slope due to the negative coefficient of Y. The exact shape of the curve would depend on the specific values of Y and p. Please note that a sketch cannot be provided without specific values.
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Given the budget constraint \( x_{1}+4 x_{2}=10 \), find the slope of the budget constraint when \( x_{2} \) is plotted on the vertical axis and \( x_{1} \) is plotted on the horizontal.
The slope of the budget constraint when [tex]\( x_{2} \)[/tex] is plotted on the vertical axis and [tex]\( x_{1} \)[/tex] is plotted on the horizontal is -1/4.
How to find?To find the slope of the budget constraint when [tex]\( x_{2} \)[/tex] is plotted on the vertical axis and [tex]\( x_{1} \)[/tex] is plotted on the horizontal, we need to rearrange the equation[tex]\( x_{1}+4 x_{2}=10 \)[/tex]
to be in the form [tex]\( x_{2}=f(x_{1}) \).[/tex]
Rearranging the equation, we get:
[tex]\( 4 x_{2} = 10 - x_{1} \)[/tex]
Divide both sides by 4:
[tex]\( x_{2} = \frac{{10 - x_{1}}}{4} \)[/tex]
Now, we have the equation[tex]\( x_{2} = \frac{{10 - x_{1}}}{4} \)[/tex] which represents the relationship between [tex]\( x_{2} \)[/tex]and [tex]\( x_{1} \)[/tex]on the graph.
The slope of the budget constraint can be found by taking the derivative of the equation with respect to [tex]\( x_{1} \)[/tex].
Differentiating both sides of the equation with respect to [tex]\( x_{1} \)[/tex], we get:
[tex]\( \frac{{d x_{2}}}{{d x_{1}}} = -\frac{1}{4} \)[/tex]
Therefore, the slope of the budget constraint when [tex]\( x_{2} \)[/tex] is plotted on the vertical axis and [tex]\( x_{1} \)[/tex] is plotted on the horizontal is -1/4.
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A company uses machine hours as its cost driver. The following information is provided. For the current period, was manufacturing overhead over or under applied? By what arnount did this company over or under apply overhead? Overhead is underapplied by $5,980 Overhead is underapplied by $4,062 Overhead is overapplied by $4,062 Overhead is overapplied by $5,980 None of the above
The correct option is 4. Overhead is overapplied by $5,980. Overhead refers to indirect expenses incurred by a business that are not directly attributable to the production of goods or services.
we can calculate the predetermined overhead rate as follows:
Predetermined overhead rate = Budgeted manufacturing overhead / Budgeted machine hours
= $74,390 / 4,300
= $17.30 per machine hour
Next, we can calculate the amount of overhead applied based on the actual machine hours incurred:
Applied overhead = Actual machine hours incurred x Predetermined overhead rate
= 4,600 x $17.30
= $79,580
We can then determine whether overhead was over or under applied by comparing the applied overhead with the actual manufacturing overhead incurred:
Overhead applied - Actual overhead incurred = $79,580 - $73,600 = $5,980
Therefore, the correct answer is Overhead is overapplied by $5,980.
The complete question is
A company uses machine hours as its cost driver. The following information is provided. Budgeted manufacturing overhead = $74,390 Budgeted machine hours =4,300 Actual manufacturing overhead incurred= $73,600 Actual machine hour incurred=4600 For the current period, was manufacturing overhead over or under applied? By what amount did this company over or under apply overhead? 1.Overhead is underapplied by $5,980 (2). Overhead is underapplied by $4,062 (3).Overhead is overapplied by $4,062 (5). Overhead is overapplied by $5,980 (6).None of the above
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Oriole Inc. management expects the following cash flow stream over the next five years. They discount all cash flows using a 20 percent discount rate. What is the present value of this cash flow stream? (Round answer to 2 decimal places, e.g. 15.25. Enter negative amount using either a negative sign e.g. -15.25 or parentheses e.g. (15.25). Do not round factor values) 1 2 3 4 5 Year $273,700 $870,300 $1,849,000 $1,103,000 $974,000 Present value $
The present value of the cash flow stream is -$2,401,593.91.
To calculate the present value of a cash flow stream, we need to discount each cash flow to its present value and then sum up the present values. The discount rate is given as 20 percent, which is equivalent to 0.20 when expressed as a decimal.
Using the formula for calculating the present value of a cash flow, which is:
PV = CF / (1 + r)^n
Where:
- PV is the present value
- CF is the cash flow
- r is the discount rate
- n is the time period
We can calculate the present value of each cash flow and then sum them up:
Present Value = $273,700 / (1 + 0.20)^1 + $870,300 / (1 + 0.20)^2 + $1,849,000 / (1 + 0.20)^3 + $1,103,000 / (1 + 0.20)^4 + $974,000 / (1 + 0.20)^5
After performing the calculations, we find that the present value of the cash flow stream is approximately -$2,401,593.91.
Therefore, the present value of the cash flow stream, when discounted at a 20 percent rate, is -$2,401,593.91. The negative sign indicates that the net present value of the cash flow stream is negative, indicating that the cash flows are not sufficient to cover the initial investment or do not meet the required rate of return. This implies that the investment may not be financially viable or attractive under the given discount rate of 20 percent.
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"Question 2
Identify the grammatical subject of this sentence:
Because the quick brown fox jumped over the lazy dog, it
made sure to get away before trouble happened .
It
Trouble
Fox"
Dog
The grammatical subject of this sentence "Because the quick brown fox jumped over the lazy dog, it made sure to get away before trouble happened " is IT ,
Therefore the correct option is A.
In English grammar, the grammatical subject is the actor or doer of the action in a sentence. It usually comes before the verb and answers the question "who or what is doing the action?" For example, in the sentence "John eats breakfast every morning," "John" is the grammatical subject because he is doing the action of eating breakfast.
The subject can be a noun, pronoun, or even a gerund, but it must always agree with the verb in number. Identifying the grammatical subject is essential for constructing sentences with proper syntax and conveying meaning clearly.
Hence the correct option is A
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In the given sentence 'Because the quick brown fox jumped over the lazy dog, it made sure to get away before trouble happened', the grammatical subject is 'it' because it is the doer of the action in the main clause.
Explanation:In the sentence 'Because the quick brown fox jumped over the lazy dog, it made sure to get away before trouble happened', the grammatical subject is 'it'. 'It' refers back to 'the quick brown fox' as it does the action in the main clause of the sentence which is 'made sure to get away before trouble happened'. So, in the context of this sentence, 'it' is the pronoun that represents 'the quick brown fox' and is the doer of the action, hence the subject.
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company currently has contribution margin of $1,800 and operating income of $1,000. Recent events have caused management to think that the company's brand is gaining traction and that sales may increase next year. If management is correct and revenues increase 24% next year, what will the company's income be? Round all calculations to 2 decimals.
The company's income will be $2,240.
To calculate the company's income for the next year, we need to consider the increase in revenues and the relationship between contribution margin and operating income.
Given that the current contribution margin is $1,800 and the operating income is $1,000, we can determine the contribution margin ratio. The contribution margin ratio is calculated by dividing the contribution margin by the revenues. In this case, the contribution margin ratio is $1,800 divided by the current revenue.
Next, we can estimate the increase in revenues by multiplying the current revenue by the projected increase of 24%.
With the estimated increase in revenues, we can calculate the new contribution margin using the contribution margin ratio. Multiplying the new revenue by the contribution margin ratio will give us the new contribution margin.
Finally, we add the new contribution margin to the current operating income to calculate the company's income for the next year.
Therefore, the company's income will be $2,240.
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Bonds Issued at a Premium (Effective Interest) Haley Industries issued $160,000 of 15%, 7-year bonds on January 1, 2024, with a $6,861 premium. Interest is paid annually on December 31. The market rate of interest is 14%. Required: Prepare the amortization table using the effective interest rate method. If an amount box does not require an entry, leave it blank. If the answer is zero, enter 0. When required, round your answers to the nearest whole dollar. And, round final year to complete the amortization.
Year Beginning Balance Interest Expense (10%) Annual Coupon Payment Ending Balance1 166,861 16,686 24,000 158,5472 158,547 15,855 24,000 149,4023 149,402 14,940 24,000 138,3424 138,342 13,834 24,000 125,1755 125,175 12,518 24,000 109,6936 109,693 10,969 24,000 91,6627 91,662 9,166 24,000 70,828We will round the final year to complete the amortization. Therefore, the ending balance for the seventh year is $70,828.
Bonds are debt securities issued by firms and government entities to investors. It is generally a long-term security with a fixed interest rate. Bonds Issued at a Premium (Effective Interest)Haley Industries issued $160,000 of 15%, 7-year bonds on January 1, 2024, with a $6,861 premium. Interest is paid annually on December 31. The market rate of interest is 14%.To get started, we will first calculate the proceeds received from issuing the bonds:Proceeds = Face Value + Premium= $160,000 + $6,861= $166,861To prepare an amortization table using the effective interest rate method, we need to calculate the effective interest rate first. We can calculate the annual interest on the bonds as follows:Annual Interest = Face Value × Coupon Rate= $160,000 × 15%= $24,000Therefore, the effective interest rate will be the rate that discounts the future cash flows of the bond to equal the proceeds received from issuing the bond.Using the following formula, we can calculate the effective interest rate:i = [Annual Interest – Premium] ÷ [Face Value – Premium]= [$24,000 – $6,861] ÷ [$160,000 – $6,861]= 10%Now, we can use this effective interest rate to calculate the interest expense and the bond balance for each year using the following table: **Year Beginning Balance Interest Expense (10%) Annual Coupon Payment Ending Balance1 166,861 16,686 24,000 158,5472 158,547 15,855 24,000 149,4023 149,402 14,940 24,000 138,3424 138,342 13,834 24,000 125,1755 125,175 12,518 24,000 109,6936 109,693 10,969 24,000 91,6627 91,662 9,166 24,000 70,828We will round the final year to complete the amortization. Therefore, the ending balance for the seventh year is $70,828.
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