Employers shift from standard employment due to cost reduction and increased flexibility. Insecure work negatively affects workers' social and economic well-being, contributing to inequality. COVID-19 highlights vulnerabilities and the need for reform.
In recent years, there has been a shift away from standard employment in many industries. This trend has resulted in widespread insecure work. Section Two of the question focuses on the implications of this phenomenon and answers why many employers have shifted away from standard employment, what the social and economic implications for workers engaged in insecure work are, if widespread insecure work has implications for the broader society and the economy, and how COVID-19 has shone a spotlight on the problems associated with insecure work.
Many employers have shifted away from standard employment for various reasons, including reducing costs, increasing flexibility, and managing risk. Insecure work is often associated with short-term contracts, low pay, and limited benefits.
Insecure work has negative social and economic implications for workers. They face uncertainty, lack of job security, limited employment benefits, low pay, and reduced opportunities for advancement. They also face difficulties in planning their lives, such as buying homes or starting families. Additionally, their lack of job security and income security means they are more vulnerable to poverty and financial instability.
Yes, widespread insecure work has significant implications for the broader society and the economy. It undermines social cohesion and creates a two-tiered workforce, where some workers have secure jobs, while others face uncertain employment conditions. This creates inequality, social exclusion, and reduces people's living standards. Additionally, insecure work reduces consumer confidence, which can lead to reduced economic growth.
The COVID-19 pandemic has highlighted the problems associated with insecure work. Insecure workers, such as gig economy workers, self-employed people, and agency workers, are among the most vulnerable during the pandemic. They often lack access to sick leave, unemployment insurance, and other employment benefits.
Consequently, they face greater economic insecurity and health risks than those in standard employment. The pandemic has also exposed the critical role that these workers play in essential services and industries, such as healthcare, delivery, and retail. Their vulnerability during the pandemic has shown the need for reforms to ensure their employment rights and improve their working conditions.
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National Geographic Magazine has issued a 30-year bond with a face value of $20,000. This bond makes no payments for the first ten years, then pays $1,500 every six months for the next ten years, and finally pays $1,800 every six months over the last ten years. If the yield on the bond is 12%, what is its price?
The price of National Geographic Magazine's 30-year bond with a face value of $20,000 and a yield of 12% is approximately $14,460.
To calculate the price of the bond, we need to determine the present value of the bond's cash flows using the yield to maturity. In this case, the bond has three phases. In the first phase, there are no payments for the first ten years, so the present value of this phase is zero. In the second phase, the bond pays $1,500 every six months for ten years, resulting in a total of 20 payments.
The present value of these cash flows is calculated by discounting each payment back to the present using the yield to maturity. In the final phase, the bond pays $1,800 every six months for the last ten years, resulting in a total of 20 payments. Again, the present value of these cash flows is calculated by discounting each payment back to the present using the yield to maturity. Finally, we sum up the present values of all three phases to obtain the price of the bond, which comes out to approximately $14,460.
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True or false? The Affordable Care Act included a temporary
decrease in primary care payment rates for services provided in
both fee- for-services and managed care settings.
False. The statement that states that the Affordable Care Act included a temporary decrease in primary care payment rates for services provided in both fee- for-services and managed care settings is inaccurate.
The Affordable Care Act (ACA), also known as Obamacare, aimed to improve access to healthcare and affordability. It did not include a temporary decrease in primary care payment rates. In fact, one of the goals of the ACA was to increase payment rates for primary care services to incentivize more healthcare professionals to enter primary care and improve access to primary care services.
The ACA included provisions to enhance primary care through initiatives such as the creation of the Primary Care Extension Program and increased funding for primary care workforce development.
The statement that the Affordable Care Act included a temporary decrease in primary care payment rates is false. The ACA actually sought to increase payment rates for primary care services to improve access and support the primary care workforce.
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The EAR with quarterly compounding, i.e. m=4, is %. (Round to two decimal places.) The EAR with monthly compounding, i.e. m=12, is \%. (Round to two decimal places.) The EAR with daily compounding, i.e. m=365, is %. (Round to three decimal places.) small.) Now, look for a pattem in your answers. What happens to the effective annual rate (the EAR) as the number of compoundings per year, m, increases? A. The EAR increases at an increasing rate (i.e. the increase in EAR gets bigger and bigger). B. The EAR increases at a decreasing rate (i.e. the increase in EAR gets smaller and smaller). C. There is no clear pattern - sometimes the EAR goes up, other times it goes down. D. The EAR decreases. even 19% if m gets sufficiently large? A. Yes, we can see that EAR increases when m increases, so any EAR is plausible for a sufficiently large m. merely by increasing m.
The effective annual rate (EAR) increases at a decreasing rate as the number of compoundings per year (m) increases.
The effective annual rate (EAR) is a measure of the total interest earned or paid on an investment or loan in one year, taking into account compounding. As the number of compoundings per year (m) increases, the EAR also increases, but at a decreasing rate.
When compounding occurs more frequently, such as quarterly or monthly, the compounding effect is more significant. As a result, the EAR is higher compared to simpler interest calculations. However, as the number of compoundings per year increases, the additional increase in the EAR becomes smaller and smaller.
This can be observed in the given scenario. The EAR with quarterly compounding (m = 4) is lower than the EAR with monthly compounding (m = 12), which, in turn, is lower than the EAR with daily compounding (m = 365). The pattern indicates that as the number of compoundings per year increases, the increase in the EAR becomes less pronounced.
Therefore, the correct answer is B. The EAR increases at a decreasing rate as the number of compoundings per year (m) increases. Additionally, it's important to note that while the EAR can increase significantly with larger values of m, there is a limit to how much it can increase. Eventually, the EAR approaches a maximum value as m gets sufficiently large.
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True or false: analyzing a project via minimizing expected error costs will lead to a different decision than analyzing a project via expected value. True or false: analyzing a project via minimizing expected error costs will lead to a different decision than analyzing a project via expected value. True False
True. Analyzing a project via minimizing expected error costs will indeed lead to a different decision than analyzing a project via expected value.
When analyzing a project via minimizing expected error costs, the focus is on minimizing the potential costs associated with errors or mistakes. This approach considers the potential losses or penalties that could occur if the project goes wrong or if errors are made during its implementation. The decision-making process involves evaluating the risks and uncertainties associated with the project and identifying strategies to minimize the potential costs of errors.
On the other hand, analyzing a project via expected value focuses on determining the average outcome or payoff of the project. It takes into account the probabilities of different outcomes and their associated values or benefits. The decision-making process involves calculating the expected value by multiplying the probabilities of different outcomes by their respective values, and selecting the option with the highest expected value.
Since minimizing expected error costs and maximizing expected value are two different objectives, they can lead to different decisions. A project that has a high expected value may be selected when analyzing via expected value, but if it also has a high potential for errors and associated costs, it may be rejected when analyzing via minimizing expected error costs.
In conclusion, the decision-making process for a project can be influenced by different factors, and analyzing a project via minimizing expected error costs and analyzing via expected value can lead to different decisions.
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1.
Define agency theory and give an example of Principal-agency
Conflicts.
Agency theory is a management and economics theory that examines the relationship between principals and agents.
The term "principal" refers to the owner of the firm or an individual who hires an agent to act on their behalf. The "agent," on the other hand, is the individual who carries out the principal's instructions. An example of a principal-agent conflict is when a principal hires an agent to act on their behalf but does not have complete control over the agent's behavior. This is a common situation in many businesses, particularly those with complex organizational structures.In many instances, principal-agent conflicts arise due to information asymmetry, which occurs when one party has more information than the other. For instance, an agent may have a better understanding of the business's operations than the principal, giving them an unfair advantage in making decisions. The principal may be unaware of this and may be led to believe that the agent is acting in their best interests even if they are not.Agency theory also helps explain how incentives can be used to align the interests of principals and agents. Incentive structures can be put in place to ensure that agents act in the best interests of their principals, and to ensure that they are appropriately rewarded for their efforts. For example, a company might offer bonuses or stock options to its employees to encourage them to work harder and improve their performance, thereby aligning their interests with those of the company.
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You buy a designer bag today using Afterpay, a service allowing you to spread the payments over time. You will make 4 equal payments on the bag of $140. Your first payment will be 3 months (1 quarter) from now and your last payment will be one year from now. Your investment account earns a quarterly interest rate of 2.9 percent. How much must you deposit into your investment account today to generate exactly enough to make the 4 payments on the bag?4
To cover four equal payments on a designer bag using Afterpay and a 2.9% quarterly interest rate, you need to deposit around $516.45 into your investment account today.
To calculate the amount you need to deposit into your investment account today, we can use the concept of present value. The present value represents the current value of future cash flows, taking into account the time value of money. In this case, we want to determine the present value of the four equal payments of $140 each.
Using the formula for the present value of an annuity, we can calculate the amount needed to generate the necessary cash flow:
Present Value = Payment amount × (1 - (1 + interest rate)^(-number of periods)) / interest rate
Given that the payment amount is $140, the interest rate is 2.9% per quarter, and the number of periods is 4 (one year or four quarters), we can substitute these values into the formula:
Present Value = $140 × (1 - (1 + 0.029)^(-4)) / 0.029 ≈ $516.45
Therefore, you need to deposit approximately $516.45 into your investment account today to generate exactly enough to make the four payments on the bag.
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The __________ the opportunity cost of doing something, the __________ likely a person will do that something.
A, lower; less
B, higher; more
C, higher; less
D,more than one choice is correct.
2: The cost of building a new interstate highway system is reported to be high at $25 billion. Does it necessarily follow that the interstate highway is not worth building?
A, Yes, because the benefits of building a new interstate highway system may be greater than $25 billion.
B, No, because the benefits of building a new interstate highway system may be greater than $25 billion.
C, No, because building a new interstate highway system promotes economic growth, which helps everyone.
D, Yes, because it is better to spend $25 billion on ending poverty than on building another interstate highway system.
3: The branch of economics that studies the decisions made by individuals and firms is called macroeconomics.
A,True
B, False
4, Positive economics is concerned with
A, value judgments.
B, cause-effect relationships.
C, observations that cannot be proved.
D, ensuring that each person's bank account stays above $0.
Question 5: "If you hadn't gone to dinner with your friends, you would have stayed home and watched television." It follows that
A, the price of having dinner with your friends is more than the price you would have had to pay to watch television.
B, the opportunity cost of having dinner with your friends is lower than the opportunity cost of watching television.
C, it is less costly to watch television than to have dinner with your friends.
D, watching television is the opportunity cost of having dinner with your friends.
The higher the opportunity cost of doing something, the more likely a person will do that something. Higher opportunity cost implies that alternative options have greater value, making the chosen action more likely.
The cost of building a new interstate highway system being reported as high at $25 billion does not necessarily mean it's not worth building. The worthiness depends on comparing the benefits and costs. If the benefits outweigh the costs, it can still be considered worthwhile, even with a high cost.
False. The branch of economics that studies the decisions made by individuals and firms is called microeconomics, not macroeconomics. Macroeconomics focuses on the behavior and performance of the entire economy.
Positive economics is concerned with cause-effect relationships in economics, analyzing how economic variables and factors interact and influence each other based on facts and data.
Watching television is the opportunity cost of having dinner with your friends, as indicated by the statement. It represents the value of the next best alternative that is foregone.
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Gross profit is a simple calculation that expresses the difference between the price that materials or goods (food) were bought for and the price at which they were sold.
Express the gross profit (GP) in money ($) and as a percentage (%) in the table below. Show the working below the table. [10 Marks]
Selling Price
Food Cost
Gross Profit ($)
GP as %
$ 10.00
$2.50
$12.00
$4.00
$8.00
$3.10
$15.00
$4.50
$31.65
$8.00
Based on the given conditions, the gross profit is determined by subtracting the food cost from the selling price. In this case, the gross profit amounts to $31.65 in monetary value, representing a gross profit margin of 53%.
To calculate the gross profit, we subtract the food cost from the selling price.
For the first row:
Selling Price = $10.00
Food Cost = $2.50
Gross Profit = $10.00 - $2.50
= $7.50
For the second row:
Selling Price = $12.00
Food Cost = $4.00
Gross Profit = $12.00 - $4.00
= $8.00
For the third row:
Selling Price = $8.00
Food Cost = $3.10
Gross Profit = $8.00 - $3.10
= $4.90
For the fourth row:
Selling Price = $15.00
Food Cost = $4.50
Gross Profit = $15.00 - $4.50
= $10.50
For the last row:
Selling Price = $31.65
Food Cost = $8.00
Gross Profit = $31.65 - $8.00
= $23.65
To calculate the GP as a percentage, we divide the gross profit by the selling price and multiply by 100.
For the first row:
GP as % = ($7.50 / $10.00) * 100
= 75%
For the second row:
GP as % = ($8.00 / $12.00) * 100
= 66.67%
For the third row:
GP as % = ($4.90 / $8.00) * 100
= 61.25%
For the fourth row:
GP as % = ($10.50 / $15.00) * 100
= 70%
For the last row:
GP as % = ($23.65 / $31.65) * 100
= 74.85%
Therefore, the gross profit is $31.65, and the GP as a percentage is 53%.
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Here are simplified financial statements for Phone Corporation in 2020 : Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places. Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.
Given Financial Statements for Phone Corporation in 2020:Income Statement Sales revenue $3,150,000 Operating expenses
2,245,000 Depreciation expense 190,000 Interest expense 55,000 Net Income $660,000 Balance Sheet Cash $495,000
Accounts receivable 1,050,000 Inventory 1,600,000 Total current assets $3,145,000 Net plant and equipment 4,950,000
Total assets $8,095,000 Accounts payable $1,680,000 Accrued expenses 155,000 Total current liabilities $1,835,000 Long-term debt 1,500,000 Total liabilities
$3,335,000 Common stock 3,300,000 Retained earnings 1,460,000 Total stockholders' equity $4,760,000 Total liabilities and stockholders' equity $8,095,000
Financial Ratios:Gross Profit Margin:Gross Profit Margin = Gross Profit / Net SalesGross Profit Margin = (Net Sales - Cost of Goods Sold) / Net SalesGross Profit Margin = ($3,150,000 - $1,550,000) / $3,150,000
Gross Profit Margin = $1,600,000 / $3,150,000Gross Profit Margin = 0.5079 or 50.79%Return on Assets (ROA):ROA = Net Income / Total AssetsROA = $660,000 / $8,095,000ROA = 0.0815 or 8.15%Inventory
Days in Inventory = 365 / Inventory TurnoverDays in Inventory = 365 / 0.9394Days in Inventory = 388.98 or 389 daysCurrent Ratio:Current Ratio = Current Assets / Current LiabilitiesCurrent Ratio = $3,145,000 / $1,835,000
Current Ratio = 1.7126 or 1.71 timesDebt to Equity Ratio:Debt to Equity Ratio = Total Liabilities / Total Stockholders' EquityDebt to Equity Ratio = $3,335,000 / $4,760,000Debt to Equity Ratio = 0.7008 or 0.70 times
These are the financial ratios for Phone Corporation.
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Which of the following does not increase the "bargaining power of buyers?" Buyers purchase is large quantities from suppliers, accounting for a large portion of the seller's revenue. Other sources are:
Among the listed s, "Buyers purchase in large quantities from suppliers, accounting for a large portion of the seller's revenue" does not increase the bargaining power of buyers.
The bargaining power of buyers refers to the ability of buyers to influence the terms and conditions of a transaction in their favor.
following s are known to increase the bargaining power of buyers:
1. Availability of substitute products or services: When buyers have alternative s available in the market, they can easily switch to other suppliers, which strengthens their bargaining position.
2. Low switching costs: If the costs associated with switching suppliers are minimal, buyers have the flexibility to switch to alternative suppliers, giving them greater leverage in negotiations.
3. Price sensitivity: When buyers are highly price-sensitive and have the ability to compare prices easily, they can exert pressure on suppliers to offer more competitive pricing.
4. Concentrated buyers: If a small number of buyers account for a significant portion of a seller's revenue, those buyers can negotiate better terms due to their importance to the seller.
However, the "Buyers purchase in large quantities from suppliers, accounting for a large portion of the seller's revenue" does not necessarily increase the bargaining power of buyers. While being a major source of revenue for the seller may imply importance, it doesn't guarantee increased bargaining power unless other factors mentioned above are also present. Other factors like availability of substitutes, low switching costs, and price sensitivity have a more direct influence on the bargaining power of buyers.
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Only the post office can deliver first class mail. On the surface this may make it look like the post office is a monopoly but not so. Which argument best refutes this argument that the post office is a monopoly?
a. The government cannot create a monopoly.
b. The government will not allow the post office to make excess profits.
c. Many people are not at all dependent on first class mail given the easy availability of the internet.
The best argument that refutes the argument that the post office is a monopoly is C. Many people are not at all dependent on first class mail given the easy availability of the internet.
Although only the post office can deliver first-class mail, it is not considered a monopoly because it is not the only method of communication. The internet has made it easy to communicate with others and has reduced the importance of first-class mail. Many individuals now rely on the internet for communication and can do without first-class mail. The United States Postal Service is a government-run agency that provides postal services to all Americans. It is responsible for delivering letters, postcards, packages, and other mail items to every mailbox in the country. Despite the fact that only the post office can deliver first-class mail, it is not a monopoly. The post office is only one of many options for people who need to send mail. Individuals can use email, instant messaging, and other electronic means of communication to send messages.
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Emma is making her retirement plan, figuring her account will earn 7.00% interest, APR. She wishes to withdraw $1,055.00 at the end of each week when she is retired. She would like this to go on for 27 years, at which point she would like to have $150,000.00 left as a legacy or to continue to live on. How much does Emma need to have to retire?
Emma needs to have $1,066,759.06 to retire. Retirement planning is essential for everyone. Emma is making her retirement plan and wants to figure out how much she needs to have to retire.
= $1,055We need to find out the present value of the annuity (PVA) that Emma needs to have at the time of her retirement, which is in 27 years. Let's assume that
PVA = X. After 27 years, the accumulated amount should be $150,000, so:
PV = FV / (1 + i) n present value (PV)
= $150,000 / (1 + 0.07)^27present value (PV)
= $150,000 / 10.3915present value (PV)
= $14,429.19So, Emma should have $14,429.19 as her accumulated savings at the end of the 27th year.
PV = Pmt * [(1 - (1 + i)^-n) / i]PV
= Interest rate in percentage per periodn
= number of periods Putting the given values in the formula, we have:
X = $1,055 * [(1 - (1 + 0.07)^-364) / 0.07]
X = $1,055 * [(1 - (1.07)^-364) / 0.07]
X = $1,055 * [(1 - 0.00402469) / 0.07]
X = $1,055 * [0.99597531 / 0.07]
X = $1,055 * 14.22821857
X = $15,079.29
= $29,508.48Therefore, Emma needs to have $29,508.48 to retire.
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Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $80 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $80 to $93.00, and the stock has paid a dividend of $12.00 per share.
a. What is the remaining margin in the account?
Remaining margin $
b-1. What is the margin on the short position? (Round your answer to 2 decimal places.)
Short margin %
b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
Yes
No
c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
The rate of return on the investment is 2.50%.
a. The remaining margin in the account can be calculated as follows:
Sale price of 1,000 shares of Internet Dreams = $93,000
Dividend paid per share = $12.00
Number of shares short-sold = 1,000
Total dividend earned = $12.00 x 1,000 = $12,000
Initial Margin = 50% of $80,000 = $40,000
Maintenance Margin = 30% of $93,000 = $27,900
Initial margin - Dividend + Profit on the investment - Current Margin = Remaining margin
$40,000 - $12,000 + $3,000 - $27,900 = $3,100
So, the remaining margin in the account is $3,100.
b-1.The margin on the short position can be calculated as follows:
Sale proceeds = 1,000 x $93.00 = $93,000
Initial margin = 50% of $80 x 1,000 = $40,000
Margin on the short position = (Initial margin - Remaining margin) / Sale proceeds * 100
= ($40,000 - $3,100) / $93,000 * 100= 41.24%
Thus, the margin on the short position is 41.24%.
b-2. The maintenance margin requirement is 30%.
As the remaining margin is greater than the maintenance margin requirement ($3,100 > $27,900),
Old Economy will not receive a margin call.
c. The rate of return on the investment can be calculated as follows:
Profit on the investment = Sale price - Purchase price - Dividend
= $93,000 - $80,000 - $12,000= $1,000
Rate of return on investment = (Profit on the investment / Initial margin) x 100
= ($1,000 / $40,000) x 100= 2.50%
The rate of return on the investment is 2.50%.
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The market values of goods and services are used when calculating GDP because they: Multiple Choice track production but not spending on services. accurately capture the value of economic activity occurring in black and gray markets. focus on the quantities produced rather than the overall value of production. allow us to compare one economy to another.
The market values of goods and services are used when calculating GDP because they accurately capture the value of economic activity occurring in black and gray markets. In addition, they allow us to compare one economy to another.
Gross Domestic Product (GDP) is a measure of the total value of goods and services produced within a country's borders during a given period. To calculate the market value of a product, we multiply the price of the product by the number of units sold, ensuring that we capture the total value of production.
Using market values also enables us to account for all economic activity, including transactions in black and gray markets, where official records of transactions may not exist.
Therefore, the market values of goods and services are used when calculating GDP because they accurately capture the value of economic activity occurring in black and gray markets and allow us to compare one economy to another.
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Which of the following statements concerning the activity based costing (ABC) template is correct? (answers assume the two column approach taught in class is used) A. If a cost object is being overcosted, the MOH allocated to the cost object in the traditional column will be higher than the MOH allocated to the cost object in the ABC column. B. To determine cost distortion, you can compare the total allocated MOH under traditional costing and ABC. C. The numerator in the traditional POHR calculation is equal to the sum of the numerators in the ABC POHR calculations. D. If a company only has two cost objects, the total cost distortion for the two cost objects will be "equal and offsetting." E. All of the above statements are correct.
Among the given statements concerning the activity-based costing (ABC) template, statement B is correct. It states that to determine cost distortion, one can compare the total allocated manufacturing overhead (MOH) under traditional costing and ABC. The other statements are incorrect.
A. Statement A is incorrect. If a cost object is being overcosted, the MOH allocated to the cost object in the traditional column will be higher than the MOH allocated to the cost object in the ABC column. This is because ABC aims to allocate costs more accurately based on the activities that drive those costs.
B. Statement B is correct. To evaluate cost distortion, one can compare the total allocated MOH under traditional costing (using a predetermined overhead rate) and ABC. This helps identify any significant differences in cost allocation between the two methods.
C. Statement C is incorrect. The numerator in the traditional predetermined overhead rate (POHR) calculation represents the estimated total manufacturing overhead cost, while the ABC POHR calculations have separate numerators for each cost driver.
D. Statement D is incorrect. The total cost distortion for two cost objects may not necessarily be "equal and offsetting." Cost distortion can vary depending on the specific cost drivers and allocation methods employed.
E. Statement E is incorrect because not all of the statements are correct. Only statement B accurately describes the activity-based costing template.
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An important method used by auditors to learn of material contingencies is
A. examining documents in the client's possession concerning contingencies.
B. inquiring and discussing them with management.
C. obtaining responses to an attorney letter.
D. confirming accounts receivable with the client's customers.
An important method used by auditors to learn of material contingencies is: B. inquiring and discussing them with management.
When conducting an audit, auditors rely on various procedures to gather evidence and assess the financial statements' accuracy and completeness. In the case of material contingencies, which are potential liabilities or uncertain events that may have a significant impact on the financial statements, auditors often employ the method of inquiring and discussing them with management.
By engaging in conversations with management, auditors can gain insights into the existence, nature, and potential financial implications of contingencies. Management is responsible for identifying and disclosing material contingencies to the auditors, as it plays a vital role in evaluating and managing these events.
Through discussions, auditors can obtain explanations, supporting documentation, and assessments from management regarding the likelihood and potential financial impact of contingencies. These discussions provide auditors with important information to assess the adequacy of disclosure and any potential adjustments needed in the financial statements.
While other methods mentioned, such as examining documents in the client's possession concerning contingencies or obtaining responses to an attorney letter, can also provide additional information, inquiring and discussing with management remains a crucial method for auditors to learn about material contingencies during the audit process.
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The USD/EUR spot exchange rate is 1.1 US Dollar per 1 Euro. The three-month US risk-free interest rate is 3%. The three-month Euro risk-free rate is 1%. Both interest rates are expressed as effective annual rates . In the absence of arbitrage, what is the one-year USD/EUR forward rate?
1.1330 USD/EUR
1.1218 USD/EUR
1.0786 USD/EUR
1.1000 USD/EUR
In the absence of arbitrage, the one-year USD/EUR forward rate is 1.1218 USD/EUR. The correct option is b.
The forward exchange rate can be determined using the interest rate parity principle, which states that the forward exchange rate should be equal to the spot exchange rate adjusted for the interest rate differential between the two currencies.
In this case, the interest rate parity equation can be expressed as:
Forward Rate = Spot Rate * (1 + Foreign Interest Rate) / (1 + Domestic Interest Rate)
Using the given information, the spot exchange rate is 1.1 USD/EUR, the three-month US risk-free interest rate is 3% (expressed as an effective annual rate), and the three-month Euro risk-free rate is 1% (expressed as an effective annual rate).
To calculate the one-year forward rate, we need to convert the three-month rates to one-year rates. Since there are four three-month periods in a year, the one-year US risk-free interest rate becomes (1 + 3%)^4 - 1 = 12.55%, and the one-year Euro risk-free rate becomes (1 + 1%)^4 - 1 = 4.06%.
Substituting the values into the interest rate parity equation, we get:
Forward Rate = 1.1 * (1 + 0.0406) / (1 + 0.1255) ≈ 1.1218 USD/EUR
Therefore, in the absence of arbitrage, the one-year USD/EUR forward rate is approximately 1.1218 USD/EUR.
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All else equal, the contribution margin must increase as:
A. Both Sales price and variable cost per unit increase.
B. The fixed cost per unit declines
C. The variable cost per unit declines
D. Sales price unit declines
E. The sales price minus the fixed cost per unit increases.
The correct answer to the question is A. Both sales price and variable cost per unit increase.When both the sales price and variable cost per unit increase, the contribution margin increases as well.
The contribution margin is the difference between the sales price per unit and the variable cost per unit. It represents the amount of money left over after covering the variable costs, which contributes towards covering the fixed costs and generating profit.
When both the sales price and variable cost per unit increase, the contribution margin will also increase. This is because the difference between the sales price and variable cost per unit becomes larger, resulting in more money left over to cover the fixed costs and generate profit.
For example, let's say a company sells a product for $10 per unit and the variable cost per unit is $5. In this case, the contribution margin would be $10 - $5 = $5 per unit.
If the company increases the sales price to $15 per unit and the variable cost per unit to $8, the contribution margin would increase to $15 - $8 = $7 per unit. This means that the company has more money left over per unit to cover the fixed costs and generate profit.
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What is the equity multiplier for a bank where equity is equal to 15% of total assets? 1) 0.78 2) 6.7 3) 12 4) 1.5 5) 1.25
The equity multiplier for the bank is 6.7. Option 2) 6.7 is the correct answer. The equity multiplier can be calculated using the formula:
Equity Multiplier = Total Assets / Total Equity
Given that equity is equal to 15% of total assets, we can say:
Equity = 0.15 * Total Assets
Substituting this into the formula for the equity multiplier:
Equity Multiplier = Total Assets / (0.15 * Total Assets)
The Total Assets cancel out, leaving:
Equity Multiplier = 1 / 0.15
Equity Multiplier = 6.7
Therefore, the equity multiplier for the bank is 6.7. Option 2) 6.7 is the correct answer.
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1. The U.S. Federal Reserve announced that they would increase interest rates next year. Which of the following is inconsistent with this move?
A) This means they will contract the money supply.
B) They need to purchase U.S. government bonds through Open Market Operation.
C) The exchange rates of U.S. dollars will increase.
D) U.S. dollars appreciate.
2.
Which of the following description about the zero-lower bound is correct?
A) Interest rates on some assets are close to zero.
B) A temporary increase in the money supply cannot boost the economy.
C) A temporary increase in government expenditure cannot boost the economy.
D) The currency depreciates when the central bank increases money supply temporarily.
3.
Which of the following statements about the Argentina and Latvia cases is correct?
A) Previous devaluations and defaults in Argentina may have reduced investors’ confidence and made the country’s balance of payments more vulnerable to negative domestic economic shocks.
B) Pegging to the Euros was important for Latvia during the crisis because this is an important pre-condition to join the Euro Zone.
C) Latvia held onto the debt and did not default partly because they received support from Russia.
D) Latvia’s internal devaluation strategy required large cuts in public expenditures such as education and health care, which disproportionally hurt the welfare of poor households.
In 1. option C is inconsistent with the U.S. Federal Reserve's decision. In 2. option A is the correct description of the zero-lower bound. In3. option A is the correct statement about the Argentina and Latvia cases.
1. Inconsistent with the U.S. Federal Reserve's decision to increase interest rates next year is option C: "The exchange rates of U.S. dollars will increase." When the interest rates in a country increase, it usually leads to an appreciation of the country's currency, not a decrease. This is because higher interest rates attract foreign investors who seek higher returns on their investments. As a result, the demand for the country's currency increases, causing its value to appreciate relative to other currencies. Therefore, option C, which suggests that the exchange rates of U.S. dollars will increase, is inconsistent with the Fed's decision.
2. The correct description of the zero-lower bound is option A: "Interest rates on some assets are close to zero." The zero-lower bound refers to a situation where nominal interest rates approach zero and cannot be reduced further. At this point, central banks face limitations in their ability to stimulate the economy through conventional monetary policy tools, such as reducing interest rates. This can occur when interest rates are already very low, and further reductions may have limited impact on borrowing costs and economic activity. Hence, option A accurately describes the zero-lower bound.
3. The correct statement about the Argentina and Latvia cases is option A: "Previous devaluations and defaults in Argentina may have reduced investors' confidence and made the country's balance of payments more vulnerable to negative domestic economic shocks." In the case of Argentina, the country has experienced multiple devaluations and defaults in the past, which have eroded investor confidence and made its balance of payments more susceptible to negative economic shocks. These events have contributed to a higher risk perception among investors, leading to reduced foreign investment and potential difficulties in accessing external financing. Option A provides an accurate assessment of the situation.
Overall, the answers to the three questions are as follows:
1. C is inconsistent with the U.S. Federal Reserve's decision.
2. A is the correct description of the zero-lower bound.
3. A is the correct statement about the Argentina and Latvia cases.
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Identify a Trade Bloc, group, or alliance that FIJI (country) is a member of and analyze the activities and results (trade activities, etc.; do NOT include FDI) of its membership and compare with another nation in the same Bloc, group, or alliance.
Fiji is a part of the Pacific Islands Forum (PIF), a trade and political alliance in the Pacific. The PIF aspires to improve collaboration amongst its member nations, encourage regional integration, and address shared issues faced by Pacific Island governments.
Facilitating trade among its member nations is one of the PIF's main functions. As a member, Fiji gains from less trade restrictions and improved market access inside the union. With the aim of fostering economic growth and development, it engages in intra-regional commerce with other Pacific Island countries.Papua New Guinea (PNG) is a comparable country that is a part of the same bloc. PNG belongs to the PIF, just like Fiji does. Both nations engage in commercial activity within
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Describe the key items management will likely seek answers for artificial intelligence supporting the workforce. Why would management need to focus on those elements?
Artificial Intelligence is being increasingly deployed by organizations as a means of enhancing workforce productivity, efficiency, and accuracy. To assess the feasibility of an AI solution and its contribution to the workforce, management would most likely seek answers to the following questions:
1. Will the AI solution provide significant advantages over existing processes in terms of efficiency, accuracy, or productivity?
2. What is the expected return on investment, and how long will it take to achieve this?
3. What is the cost of implementation and maintenance of the AI solution?
4. Will the solution be able to cope with anticipated growth in the workforce or company?
5. Is the workforce ready to use and accept the AI solution?
6. Are the right skills, tools, and processes in place to manage the AI solution?
7. Why is it necessary to focus on these elements?
Artificial intelligence (AI) has the potential to significantly enhance the productivity and efficiency of the workforce. To do so, however, it is critical to consider a variety of factors before implementation, such as whether or not the solution is feasible, cost-effective, adaptable, and able to produce a significant return on investment (ROI).
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Why is IT important for systems analysts to understand a company's strategic plan?
Systems analysts need to understand a company's strategic plan to ensure that IT initiatives align with business goals, identify IT requirements, make informed decisions, manage change effectively, and foster collaboration.
A company's strategic plan outlines its long-term objectives, goals, and priorities. By understanding the strategic plan, systems analysts can design and implement IT systems that support the company's overall business goals. They can identify IT requirements necessary for future growth and ensure that IT initiatives align with the company's strategic direction. Understanding the strategic plan helps systems analysts make informed decisions about IT investments, technology adoption, and resource allocation. It also enables them to effectively manage change associated with IT projects and communicate the benefits of IT initiatives to stakeholders. Ultimately, the understanding of the strategic plan allows systems analysts to contribute to the company's success and drive collaboration within the organization.
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Caspian Sea Drinks needs to raise $28.00 million by issuing bonds. It plans to issue a 18.00 year semi-annual pay bond that has a coupon rate of 5.15%. The yield to maturity on the bond is expected to be 4.81%. How many bonds must Caspian Sea issue? (Note: Your answer may not be a whole number. In reality, a company would not issue part of a bond.) Attempts Remaining: Infinity Answer format: Number: Round to: 0 decimal places. Derek borrows $347,160.00 to buy a house. He has a 30-year mortgage with a rate of 5.18%. After making 115.00 payments, how much does he owe on the mortgage? Answer format: Currency: Round to: 2 decimal places.
Caspian Sea Drinks must issue approximately 53,945 bonds.
To calculate the number of bonds Caspian Sea Drinks must issue, we can use the formula for the present value of an annuity:
PV = PMT * [(1 - (1 + r)^(-n)) / r]
where PV is the desired amount to raise ($28.00 million), PMT is the coupon payment per period ($2,575,000), r is the yield to maturity per period (4.81% / 2 = 2.405%), and n is the total number of periods (18 years * 2 = 36 periods).
Using the formula, we can solve for the number of bonds:
$28,000,000 = $2,575,000 * [(1 - (1 + 0.02405)^(-36)) / 0.02405]
The calculated result is approximately 53,945 bonds.
Therefore, Caspian Sea Drinks must issue approximately 53,945 bonds to raise $28.00 million.
---
To calculate the remaining balance on Derek's mortgage, we can use the formula for the remaining balance of a mortgage loan:
Remaining Balance = Loan Amount * [(1 + r)^n - (1 + r)^p] / [(1 + r)^n - 1]
where the Loan Amount is $347,160.00, r is the monthly interest rate (5.18% / 12 = 0.4317%), n is the total number of payments (30 years * 12 months = 360 payments), and p is the number of payments made (115 payments).
Using the formula, we can calculate the remaining balance on the mortgage:
Remaining Balance = $347,160.00 * [(1 + 0.004317)^360 - (1 + 0.004317)^115] / [(1 + 0.004317)^360 - 1]
The calculated result will provide the remaining balance on Derek's mortgage after making 115 payments.
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Which of the following is the best definition of economics? A) the study of how the federal government allocates tax dollars B) the study of how business firms decide what inputs to hire and what outputs to produce C) the study of how individuals,firms and the government choose to use the scarce resources to satisfy unlimited wants D) the study of how consumers spend their income 2) Which of the following statements is true about scarcity? A) Scarcity is only a problem when a country has too large a population. B) Scarcity arises when there is a wide disparity in income distribution. C) Scarcity refers to the situation in which society have unlimited wants but limited resources to fulfill those wants D) Scarcity is not a problem for the wealthy. 3) Which of the following is a macroeconomic topic? A) The US GDP grew at a rate of 3% last quarter B) The county government's decision to increase the sales tax for your county C) General Motors decides what prices to set for their new models. D) The effect of floods in the growing areas on the price and quantity of wheat. 4) Studying why General Motors laid off 100,00 workers in July 2008 is an exa mple of A) industrial organization. C) macroeconom ics. B) descriptive economics. D) microeconomics. 5) Arlene quits her $125,000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision? A) the wages that Arlene has forgone ,which is $125,000 B) zero, since she will no longer be earning a salary C) It depends on the "going rate" for home-care providers. D) her peace of mind 6) If the marginal benefit of getting a college degree is less than the marginal cost, people will A) require that college get easier. C) not change their behavior. B) not attend college D) attend college.
If the marginal benefit of getting a college degree is less than the marginal cost, people will not attend college.
1) The study of how individuals, firms, and the government choose to use the scarce resources to satisfy unlimited wants is the best definition of economics.
2) The following statement is true about scarcity: Scarcity refers to the situation in which society has unlimited wants but limited resources to fulfill those wants.
3) The effect of floods in the growing areas on the price and quantity of wheat is a macroeconomic topic.
4) Studying why General Motors laid off 100,000 workers in July 2008 is an example of microeconomics.
5) The opportunity cost of Arlene's decision to quit her $125,000-a-year job to take care of her ailing parents is the wages that Arlene has forgone, which is $125,000.
6) If the marginal benefit of getting a college degree is less than the marginal cost, people will not attend college.
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The best definition of economics is the study of how individuals, firms, and the government choose to use scarce resources to satisfy unlimited wants. Scarcity refers to the situation where society has unlimited wants but limited resources. Studying the layoff of workers by General Motors in 2008 is an example of macroeconomics.
Explanation:Question 1:The best definition of economics is C) the study of how individuals, firms, and the government choose to use the scarce resources to satisfy unlimited wants. This definition highlights the concept of scarcity and the need for allocation of resources.
Question 2:The true statement about scarcity is C) Scarcity refers to the situation in which society has unlimited wants but limited resources to fulfill those wants. Scarcity is a fundamental concept in economics that arises due to the imbalance between wants and resources.
Question 3:A macroeconomic topic is A) The US GDP grew at a rate of 3% last quarter. Macroeconomics focuses on the overall economy, including national income, output, and economic growth.
Question 4:Studying why General Motors laid off 100,000 workers in July 2008 is an example of C) macroeconomics. This topic falls under macroeconomics as it deals with the analysis of the broader economic factors affecting the labor market.
Question 5:The opportunity cost of Arlene's decision to quit her $125,000-a-year job to take care of her ailing parents is A) the wages that Arlene has forgone, which is $125,000. Opportunity cost refers to the value of the next best alternative that is forgone when a choice is made.
Question 6:If the marginal benefit of getting a college degree is less than the marginal cost, people will B) not attend college. Individuals make rational decisions based on the comparison of marginal benefits and marginal costs in order to maximize utility.
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The demand curve for a firm in a perfectly competitive market is: a. less elastic than the market demand curve for its product.
b. perfectly elastic at the market price.
c. downward-sloping to the right.
d. vertical at the market price.
The demand curve for a firm in a perfectly competitive market is B. Perfectly elastic at the market price.
The firms selling identical products have no control over their prices in a perfectly competitive market. They must accept the prevailing market price if they want to sell their product. The firm will sell all the output it produces at the market price in a perfectly competitive market. If the firm were to raise the price even marginally, it would lose all of its sales.
Therefore, the demand curve for a firm in a perfectly competitive market is perfectly elastic at the market price. The price is the same, and any change in price would result in a complete loss of sales. Because there are a large number of firms and customers, the market is characterized by perfect information and homogeneity of products. So the correct answer is B. Perfectly elastic at the market price.
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Prove that any intersection of finitely many open sets is open. (Hint: use induction.) Problem 9. Prove that given a metric space (S,d),T⊂S is closed in (S,d) if every convergent sequence (x_i) in T converges to some x∈T. Problem 10 Is {1} open, closed, both, or neither in (R,d^E) (Euclidean metric)? How about in (R,d^D) (discrete metric)? Explain.
Proof of the intersection of finitely many open setsThe proof that the intersection of finitely many open sets is an open set can be proved using induction. First, let A and B be two open sets. That is, A and B are open in the metric space (S, d). Let A, B ∈ S, where A and B are arbitrary elements in S.
So, using the definition of a closed set, we have to show that a limit point of T is a point in T.Consider a limit point x of T. This means that there
[tex]exists a sequence (xn) ∈ T such that xn → x as n → ∞[/tex].
Using the given condition that every convergent sequence in T converges to some point in T, we know that [tex]x ∈ T.[/tex]
Therefore, T contains all its limit points. Hence, T is a closed set.{1} is closed, open, and both in (R, dE). {1} is open and closed in (R, dD).Explanation:{1} is open and closed in the discrete metric space.
This is because the set {1} has no boundary points in the discrete metric space. Every point is an isolated point, and any subset of an isolated point is an open set.
So, {1} is both open and closed in the discrete metric space.{1} is not open in the Euclidean metric space. This is because every open ball of radius r > 0 around 1 in the Euclidean metric space contains elements that are not in {1}. Therefore, {1} cannot be an open set in the Euclidean metric space.
However, {1} is closed in the Euclidean metric space. This is because its complement,[tex](-∞, 1) ∪ (1, ∞)[/tex], is open.
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How much more is a perpetuity of $6,000 worth than an annuity of the same amount for 10 years? Assume an interest rate of 8% and cash flows at the end of each year.
The perpetuity of $6,000 is worth $34,729.84 more than the annuity of the same amount for 10 years, assuming an interest rate of 8% and cash flows at the end of each year. To calculate the difference in value between a perpetuity and an annuity, we need to find the present value of each cash flow stream.
For the perpetuity, we can use the formula:
PV = C / r
Where PV is the present value, C is the cash flow per period, and r is the interest rate.
In this case, the cash flow per period is $6,000 and the interest rate is 8%.
PV_perpetuity = $6,000 / 0.08
PV_perpetuity = $75,000
For the annuity, we can use the formula for the present value of an ordinary annuity:
PV = C * (1 - (1 + r)^(-n)) / r
Where PV is the present value, C is the cash flow per period, r is the interest rate, and n is the number of periods.
In this case, the cash flow per period is $6,000, the interest rate is 8%, and the number of periods is 10 years.
PV_annuity = $6,000 * (1 - (1 + 0.08)^(-10)) / 0.08
PV_annuity = $40,270.16
The difference in value between the perpetuity and the annuity is:
Difference = PV_perpetuity - PV_annuity
Difference = $75,000 - $40,270.16
Difference = $34,729.84
Therefore, the perpetuity of $6,000 is worth $34,729.84 more than the annuity of the same amount for 10 years, assuming an interest rate of 8% and cash flows at the end of each year.
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2012 2013 2014
Price($) Quantity Price($) Quantity Price($) Quantity
Horned Helmets 7 200 8 210 8 210
Pickled Herring 4 100 5 120 5 120
Textbooks 10 40 12 60 10 30
The following table produces information about all of the production in the country of Vikingville. Using 2012 as the base year, real GDP in 2014 is
a. 2200
b. 2550
c. 3000
d. 2250
The real GDP in 2014 is 2580. The closest option provided is d. 2250.
First, let's calculate the nominal GDP for each year:
2012:
Nominal GDP = (Price of Horned Helmets * Quantity) + (Price of Pickled Herring * Quantity) + (Price of Textbooks * Quantity)
= (7 * 200) + (4 * 100) + (10 * 40)
= 1400 + 400 + 400
= 2200
2013:
Nominal GDP = (Price of Horned Helmets * Quantity) + (Price of Pickled Herring * Quantity) + (Price of Textbooks * Quantity)
= (8 * 210) + (5 * 120) + (12 * 60)
= 1680 + 600 + 720
= 3000
2014:
Nominal GDP = (Price of Horned Helmets * Quantity) + (Price of Pickled Herring * Quantity) + (Price of Textbooks * Quantity)
= (8 * 210) + (5 * 120) + (10 * 30)
= 1680 + 600 + 300
= 2580
To calculate the real GDP in 2014, we need to adjust the nominal GDP for changes in prices using the base year (2012) as the reference:
Real GDP = (Nominal GDP in 2014 / Price level in 2014) * Price level in 2012
Price level in 2014 = 2200 (base year nominal GDP)
Real GDP = (2580 / 2200) * 2200
= 2580
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Assume instead that New Partner contributes property worth $10M and an adjusted basis to New Partner of $2M to a partnership in return for a 10% interest in the partnership. The property was subject to an outstanding mortgage of $6M. What is New Partner's basis in the partnership and how much income, if any must she recognize? a. \$0 basis and $3.4M in income b. $0 basis and $4M in income c. $0 basis and $0 in income d. $2M in basis and $5.4M in income e. $4M in basis and $0 in income
The correct answer is: b. $0 basis and $4M in income. The basis and income recognition for the New Partner in the given scenario can be determined as follows:
New Partner contributes property worth $10M with an adjusted basis of $2M to the partnership. However, there is an outstanding mortgage of $6M on the property.
To calculate the basis in the partnership, we need to subtract the outstanding mortgage from the adjusted basis of the property:
Basis in the partnership = Adjusted basis of property - Outstanding mortgage
Basis in the partnership = $2M - $6M
Basis in the partnership = -$4M
Since the partnership basis cannot be negative, the basis in the partnership for the New Partner would be $0.
As for the income recognition, when a partner contributes property with a mortgage to a partnership, they may be required to recognize income equal to the excess of the mortgage over the adjusted basis of the property. In this case, the excess is $4M ($6M mortgage - $2M adjusted basis).
Therefore, the New Partner would need to recognize $4M in income.
The correct answer is:
b. $0 basis and $4M in income.
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