The payoff matrix for this situation is as follows:
In this scenario, neither player has a dominant strategy. A dominant strategy occurs when a player always chooses the same action regardless of the other player's choice. However, in this case, both players' payoffs depend on the other player's strategy.
The game has two Nash equilibria, which are situations where neither player has an incentive to unilaterally change their strategy. The Nash equilibria in this game are when both players choose to fish for 20 hours per week or when both players choose to fish for 40 hours per week. In both equilibria, neither player can improve their payoff by changing their strategy while the other player's strategy remains unchanged.
In terms of dominated strategies, neither player has a dominated strategy. A dominated strategy is one that always leads to a worse outcome regardless of the other player's choice. In this case, each player's payoffs vary depending on the other player's strategy, making it impossible to identify a strictly dominated strategy.
In summary, the game does not have a dominant strategy, but it has two Nash equilibria. The players' payoffs are contingent on each other's choices, leading to strategic decision-making to maximize their profits.
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The acquisition cost is allocated to the acquirer's interest in the fair value of the assets and liabilities presently recorded in the records of the acquiree company only. True or False
False. The acquisition cost is allocated to both the fair value of the identifiable assets and liabilities acquired from the acquiree company and any non-controlling interests in the acquiree. It is important to consider the fair value of all relevant items to accurately reflect the acquirer's interest in the business combination.
When an entity acquires another company, the acquisition cost is allocated to the fair value of the identifiable assets and liabilities acquired from the acquiree company. This includes items such as property, plant, and equipment, inventory, intangible assets, and liabilities assumed. Additionally, any non-controlling interests in the acquiree are also considered when allocating the acquisition cost. Non-controlling interests represent the portion of ownership in the acquiree company that is not owned by the acquirer. By allocating the acquisition cost to all relevant items, the acquirer can accurately reflect its interest in the fair value of the acquired business.
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Your company just paid a dividend of $2 and announce that it will pay the same dividend as in the next two years and start to increase the dividend each year at 4% from year 3 and on. Investor's required rate of return to this stock is 15%.
a .What is the current value per share of your company's stock?
b .What is the expected capital gain yield in year 1 and year 10 respectively?
To calculate the current value per share of your company's stock, we can use the dividend discount model (DDM). The DDM values a stock based on the present value of its expected future dividends. In this case, the company will pay a $2 dividend in each of the next two years, and then increase the dividend by 4% annually from year 3 onwards.
First, let's calculate the future dividends:
Year 1: $2
Year 2: $2
Next, let's calculate the discounted value of the future dividends using the required rate of return of 15%:
Year 1: $2 / (1 + 0.15) = $1.74
Year 2: $2 / (1 + 0.15)^2 = $1.51
Now, let's calculate the present value of the future dividends:
Year 1: $1.74
Year 2: $1.51
Finally, we can calculate the current value per share by summing the present value of the future dividends:
Current value per share = $1.74 + $1.51 = $3.25. The expected capital gain yield in year 1 can be calculated as the percentage increase in the stock price from the current value per share. In this case, there is no change in the dividend, so the capital gain yield is 0%. In year 10, the dividend will have increased by 4% annually for 8 years. To calculate the expected capital gain yield, we need to find the future value of the dividend in year 10 and subtract the current value per share:
Future dividend in year 10 = $2 * (1 + 0.04)^8 = $2.79
Capital gain yield in year 10 = ($2.79 - $3.25) / $3.25 = -0.1415 or -14.15%
The current value per share of your company's stock can be determined using the dividend discount model (DDM). This model values a stock based on the present value of its expected future dividends. In this scenario, your company has just paid a dividend of $2 and announced that it will continue to pay the same dividend for the next two years. After that, it plans to increase the dividend by 4% annually. To calculate the current value per share, we need to discount the future dividends back to the present using the investor's required rate of return. The required rate of return represents the return that an investor expects to earn from an investment. In this case, the required rate of return is 15%. The future dividends for years 1 and 2 are $2 each. To find the present value of these dividends, we divide them by (1 + 0.15) for year 1 and (1 + 0.15)^2 for year 2. This gives us $1.74 and $1.51, respectively. Next, we sum up the present values of the future dividends to find the current value per share. In this case, it is $1.74 + $1.51 = $3.25.
The current value per share of your company's stock is $3.25. The expected capital gain yield in year 1 is 0% since there is no change in the dividend. In year 10, the dividend will have increased by 4% annually for 8 years. The future dividend in year 10 can be calculated by multiplying the current dividend ($2) by (1 + 0.04)^8. This gives us a future dividend of $2.79. The capital gain yield in year 10 can be calculated by subtracting the current value per share from the future dividend in year 10 and dividing it by the current value per share. This gives us ($2.79 - $3.25) / $3.25 = -0.1415 or -14.15%. This means that there is an expected capital loss of 14.15% in year 10.
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The current value per share of the company's stock is approximately $13.33.
To calculate the current value per share of your company's stock, we need to determine the present value of all the expected future dividends.
a. Calculation of the current value per share:
Since the dividend is expected to remain constant for the first two years and then increase by 4% each subsequent year, we can calculate the present value of each dividend using the formula for the present value of a growing perpetuity:
PV = D / (r - g)
Where:
PV = Present value
D = Dividend payment
r = Required rate of return
g = Growth rate
For the first two years, the dividend payment is $2. From year 3 onward, the dividend payment will increase by 4% each year.
Year 1: Dividend = $2
Year 2: Dividend = $2
Year 3: Dividend = $2 * 1.04 = $2.08
Year 4: Dividend = $2.08 * 1.04 = $2.1632
Year 5: Dividend = $2.1632 * 1.04 = $2.251328
Year 6: Dividend = $2.251328 * 1.04 = $2.34813792
Year 7: Dividend = $2.34813792 * 1.04 = $2.4531790912
Year 8: Dividend = $2.4531790912 * 1.04 = $2.566272075008
Year 9: Dividend = $2.566272075008 * 1.04 = $2.687947426004
Year 10: Dividend = $2.687947426004 * 1.04 = $2.818406045446
We can now calculate the present value (PV) of each dividend and sum them up to find the current value per share:
PV1 = $2 / (0.15 - 0) = $2 / 0.15 = $13.3333333333
PV2 = $2 / (0.15 - 0) = $2 / 0.15 = $13.3333333333
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(True/False. Explain) Investors require higher return from
treasury bonds than from corporate bonds of same maturity and face
(future) value.
True. Investors generally require a higher return from treasury bonds compared to corporate bonds of the same maturity and face value.
The statement is true. Treasury bonds are considered to be less risky than corporate bonds because they are backed by the government. As a result, investors typically demand a lower return on treasury bonds due to the perceived safety of these investments. On the other hand, corporate bonds carry a higher level of risk as they are issued by private companies, and their returns are influenced by the financial health and creditworthiness of the issuing corporation. To compensate for this additional risk, investors demand a higher return on corporate bonds compared to treasury bonds.
Investors' expectation of higher returns from corporate bonds reflects the greater likelihood of default or bankruptcy by private companies. In the event of a company's financial distress, bondholders may face a higher risk of not receiving their principal or interest payments. Thus, to attract investors and compensate them for the added risk, corporate bonds must offer higher yields or returns. On the contrary, treasury bonds are backed by the full faith and credit of the government, making them a relatively safer investment with lower default risk. Consequently, investors are generally willing to accept lower returns on treasury bonds as they prioritize capital preservation and security.
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Required information Exercise 5-21 (Static) Prepaid expenses-insurance LO 5-10 [The following information applies to the questions displayed below] A company makes the payment of a one-year insurance premium of $4,800 on Aprili, 2022. Exercise 5-21 (Static) Part b (1) b-1. Use the horizontal model to show the amount of insurance premlum "used" at the end of the month. Note: Enter decreases to account balances with a minus sign. Required information Exercise 5-21 (Static) Prepaid expenses-insurance LO 5-10 [The following information applies to the questions displayed below.] A company makes the payment of a one-year insurance premium of $4,800 on April 1, 2022. Exercise 5−21 (Static) Part b (1) b-1. Use the horizontal model to show the amount of insurance premium "used" at the end of the month. Note: Enter decreases to account balances with a minus sign.
The amount of insurance premium "used" at the end of the month is $400.
To determine the amount of insurance premium "used" at the end of the month using the horizontal model, we need to understand how prepaid expenses work. Prepaid expenses are assets that are paid for in advance but have not yet been used or consumed.
In this case, the company paid a one-year insurance premium of $4,800 on April 1, 2022. Since only one month has passed, we need to calculate the portion of the premium that has been "used" or consumed.
To do this, we divide the total premium by the number of months in the insurance coverage period. In this case, we divide $4,800 by 12 months to get $400. This means that $400 is the amount of insurance premium "used" at the end of the first month.
Therefore, the amount of insurance premium "used" at the end of the month is $400.
It's important to note that prepaid expenses decrease over time as they are consumed or used up. So, at the end of each subsequent month, the amount of insurance premium "used" will increase by $400 until the entire premium is "used" or consumed.
In summary, the amount of insurance premium "used" at the end of the month is $400.
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Think about all of the stages of the employee life cycle in your
organization: e.g., Attraction – Recruitment – Selection –
Onboarding – Development – Performance – Engagement – Recognit
In the employee life cycle, all stages are crucial for an organization's success, including Attraction, Recruitment, Selection, Onboarding, Development, Performance, Engagement, and Recognition.
The employee life cycle encompasses the journey of an individual within an organization, from attracting potential candidates to recognizing and celebrating their contributions. Attraction involves employer branding and marketing to appeal to talented individuals. Recruitment entails sourcing and attracting candidates through various channels. Selection involves evaluating candidates and choosing the most suitable ones. Onboarding is the process of integrating new employees into the organization. Development focuses on training and enhancing employees' skills and knowledge. Performance management includes setting goals, appraising performance, and providing feedback. Engagement ensures employees are motivated and committed to their work. Finally, Recognition acknowledges employees' efforts and contributions, fostering a positive work culture and boosting morale. Effectively managing each stage of the employee life cycle contributes to a thriving and productive workforce.
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Ten deposits of 100 are made into a fund at two-year intervals with the first deposit at the beginning of the first year. The fund earns interest at an annual effective rate of 1.8% during the first eight years and at an annual effective rate of 3.8% thereafter. Calculate the annual effective yield rate earned over the investment period ending at the end of the 20
th
year.
Annual effective yield rate = (Total interest earned / $1000) × 100%
To calculate the annual effective yield rate earned over the investment period ending at the end of the 20th year, we need to consider the interest earned at different rates during different time periods.
Step 1: Calculate the interest earned during the first 8 years.
- The annual effective rate during this period is 1.8%.
- Since the deposits are made at two-year intervals, there are 4 sets of deposits made during this period.
- The interest earned on each deposit can be calculated using the formula:
Interest = Principal × (1 + rate)^time - Principal
where the Principal is $100, the rate is 1.8% per year, and the time is 2 years.
- Calculating the interest earned on each deposit, we get:
Interest1 = $100 × (1 + 0.018)^2 - $100
Interest2 = $100 × (1 + 0.018)^4 - $100
Interest3 = $100 × (1 + 0.018)^6 - $100
Interest4 = $100 × (1 + 0.018)^8 - $100
Step 2: Calculate the interest earned during the remaining 12 years.
- The annual effective rate during this period is 3.8%.
- Since the deposits are made at two-year intervals, there are 6 sets of deposits made during this period.
- The interest earned on each deposit can be calculated using the same formula mentioned in Step 1.
- Calculating the interest earned on each deposit, we get:
Interest5 = $100 × (1 + 0.038)^10 - $100
Interest6 = $100 × (1 + 0.038)^12 - $100
Interest7 = $100 × (1 + 0.038)^14 - $100
Interest8 = $100 × (1 + 0.038)^16 - $100
Interest9 = $100 × (1 + 0.038)^18 - $100
Interest10 = $100 × (1 + 0.038)^20 - $100
Step 3: Calculate the total interest earned over the investment period.
- The total interest earned is the sum of the interest earned during the first 8 years and the interest earned during the remaining 12 years.
- Total interest earned = Interest1 + Interest2 + Interest3 + Interest4 + Interest5 + Interest6 + Interest7 + Interest8 + Interest9 + Interest10
Step 4: Calculate the annual effective yield rate.
- The investment period is 20 years, and the total interest earned is known from Step 3.
- To calculate the annual effective yield rate, we can use the formula:
Annual effective yield rate = (Total interest earned / Total investment) × 100%
- Since each deposit is $100 and there are 10 deposits made over the 20-year period, the total investment is $100 × 10 = $1000.
- Plugging in the values, we get:
Annual effective yield rate = (Total interest earned / $1000) × 100%
Now you can calculate the total interest earned and use it to find the annual effective yield rate.
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All of the following are examples of managerial accounting information except:
A.budget versus actual reports.
B.monthly income statement for each store.
C.monthly analysis of product profitability.
D.annual balance sheet prepared in accordance with U.S. GAAP.
E.None of the above.
D) Annual balance sheet prepared in accordance with U.S. GAAP is not an examples of managerial accounting information.
Managerial accounting focuses on providing internal financial information to assist managers in making decisions and controlling operations within an organization.
It is concerned with providing relevant and timely information for planning, controlling, and decision-making purposes.
A. Budget versus actual reports: Budget versus actual reports compare the planned or budgeted amounts with the actual amounts incurred.
These reports help managers analyze and evaluate the performance of their departments or projects by highlighting any variances and deviations from the planned budget.
It is a common managerial accounting tool.
B. Monthly income statement for each store: Monthly income statements provide detailed information about revenues, expenses, and net income for a specific period, typically a month.
These statements are essential for managers to assess the financial performance of individual stores and identify any areas of concern or opportunities for improvement.
C. Monthly analysis of product profitability: Managers analyze the profitability of different products or product lines to identify the most profitable offerings and make informed decisions about pricing, promotion, and resource allocation.
This analysis involves examining revenue, costs, and contribution margins associated with each product.
D. Annual balance sheet prepared in accordance with U.S. GAAP: The annual balance sheet is a financial statement that presents a snapshot of an organization's financial position at a specific point in time.
While balance sheets are prepared in accordance with U.S.
Generally Accepted Accounting Principles (GAAP), they are primarily used for external financial reporting purposes rather than managerial decision-making.
The balance sheet provides information about an organization's assets, liabilities, and equity, which is important for external stakeholders such as investors, creditors, and regulatory authorities.
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Consider the following OLG economy: individuals are endowed with y units of the consumption good when young and nothing when old. Preferences are such that individuals would like to consume in both periods of life. Fiat money is supplied by the government and is constant. The population grows at rate n,N
t
=nN
t−1
. In each period, the government taxes each young individual τ goods. The total revenue of the tax is then distributed among the old who are alive in that period as lump-sum transfers. (a) What is the amount of lump-sum transfer received by each old in period t ? (1 mark) (b) Write down the first- and second-period budget constraints facing a typical individual in period t. Combine the constraints to find the lifetime budget constraint. (2 marks) (c) Find the rate of return to money v
t+1
/v
t
in a stationary monetary equilibrium. (1 mark) (d) Graph the stationary monetary equilibrium and indicate the levels of c
1
and c
2
that would be chosen by an individual in this equilibrium. (2 marks) (e) Write down the resource constraint facing the planner. On the graph you drew in part (d), find the golden rule allocation. (2 marks) (f) Suppose that the tax τ is not larger than the real value of money individuals would choose to hold in the absence of the tax. Does a change in τ affect an individual's utility in our economy? (1 mark) (g) Suppose that tax collection and redistribution are costly, so that for every unit of tax collected from the young, only 0.5 unit is available to distribute to the old. How does your answer in (f) change? (
In this OLG economy with constant fiat money supply, a tax is imposed on young individuals, and the revenue is distributed as lump-sum transfers to the old.
The amount of transfer received by each old individual in period t is equal to the total tax revenue divided by the number of old individuals in that period. The budget constraints for a typical individual in each period can be combined to derive the lifetime budget constraint. The rate of return to money in a stationary monetary equilibrium is determined by the growth rate of the population.
The graph of the equilibrium shows the chosen consumption levels in each period. The resource constraint facing the planner is written down, and the golden rule allocation is found on the graph. If the tax is not larger than the real value of money individuals would choose to hold, a change in the tax does not affect individual utility. However, if tax collection and redistribution are costly, the effect of the tax on individual utility may change.
(a) The amount of lump-sum transfer received by each old individual in period t is equal to the total tax revenue divided by the number of old individuals in that period. The tax revenue is τ multiplied by the number of young individuals in that period, while the number of old individuals in period t is given by Nt-1.
(b) The first-period budget constraint facing a typical individual in period t is given by y - τ. The second-period budget constraint is given by c2, where c2 represents the consumption in the second period. Combining these constraints, the lifetime budget constraint can be expressed as y - τ + c2/(1+n).
(c) The rate of return to money in a stationary monetary equilibrium is determined by the growth rate of the population. Specifically, the rate of return is equal to (1+n).
(d) In the stationary monetary equilibrium, the graph would show the chosen consumption levels in each period, c1 and c2. These levels would depend on the preferences and constraints of the individuals in the economy.
(e) The resource constraint facing the planner can be written as c1 + (1+n)c2 = y. The golden rule allocation can be found by determining the combination of c1 and c2 that maximizes utility while satisfying the resource constraint.
(f) If the tax τ is not larger than the real value of money individuals would choose to hold in the absence of the tax, a change in the tax does not affect an individual's utility in the economy.
(g) If tax collection and redistribution are costly, meaning that only a fraction of the tax collected is available to distribute to the old, the effect of the tax on individual utility may change. The reduced amount of transfer received by the old individuals could potentially affect their utility in the economy.
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From the perspective of international economics, Does U.S.
Immigration Policy Harm Domestic Workers?
Please analyze with theory and example.
The impact of U.S. immigration policy on domestic workers is subject to theoretical and empirical debate. While some economic theories suggest potential benefits for domestic workers through specialization and job creation, others argue that labor market competition from immigrants can have negative consequences for specific segments of the domestic workforce.
Economic Theory: Comparative Advantage
According to the theory of comparative advantage, immigration can benefit domestic workers and the economy as a whole. Immigrants often fill labor market gaps in sectors where there is a shortage of domestic workers. By doing so, they contribute to economic growth, increase productivity, and create job opportunities for native workers in complementary industries.
Example: Immigrants who work in agriculture or low-skilled industries may perform tasks that native workers are less willing to do. This allows domestic workers to pursue higher-skilled occupations, such as in technology or professional services, where their comparative advantage lies.
Economic Theory: Labor Market Competition
Another theory suggests that immigration can negatively affect domestic workers, particularly those in low-skilled occupations. The influx of immigrant workers can increase labor market competition, leading to lower wages and reduced job opportunities for native workers in certain sectors.
Example: In sectors with high immigrant concentration, such as construction or hospitality, increased competition from immigrant workers might lead to lower wages or limited job opportunities for domestic workers in those industries.
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You have been researching a stock that you like, which is currently trading at $39.00 per share. You would like to buy the stock if it were a the less expensives 1300 per vars bec price will go to $59.00 by year-end and then level off or decline You decide to place a limit order to buy 100 shares of the stock at 536 00, and a limit order so se at 500 out t the direction of the stock price, and it goes straight to $64 00. What is your current position?
Therefore, your current position is that you own 100 shares of the stock at $64.00 per share.
Based on the information provided, your current position is that you have successfully purchased 100 shares of the stock at $64.00 per share.
To understand why this is your current position, let's break down the scenario step-by-step:
1. The stock is currently trading at $39.00 per share, and you believe it will increase to $59.00 by year-end before leveling off or declining.
2. You decide to place a limit order to buy 100 shares of the stock at $53.60 per share. This means that you are willing to buy the stock if it reaches or goes below this price.
3. Additionally, you place a limit order to sell the stock at $50.00 per share. This means that you are willing to sell the stock if it reaches or goes above this price.
4. However, the stock price does not go down to $53.60 as you expected. Instead, it goes straight to $64.00.
5. Since the stock price exceeded your limit order to buy at $53.60, the purchase is executed at the market price of $64.00 per share.
6. As a result, you have successfully bought 100 shares of the stock at $64.00 per share.
Therefore, your current position is that you own 100 shares of the stock at $64.00 per share.
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Differences between financial and managerial accounting include
a. Financial accounting has restrictions on the sources of data that can be used
b. Managerial accounting can use any method of analysis that helps decision-makers
c. Financial accounting reports periodically, but managerial accounting reports continuously
d. All of the above
e. None of the above
Differences between financial and managerial accounting include : d. All of the above. Hence, the correct answer is option d).
Financial accounting and managerial accounting differ in several ways. Firstly, financial accounting has restrictions on the sources of data that can be used. It follows Generally Accepted Accounting Principles (GAAP) and relies on standardized financial statements to report the financial position and performance of a company to external stakeholders, such as investors and creditors.
On the other hand, managerial accounting is focused on providing information for internal decision-making. It can use any method of analysis that helps decision-makers. Managerial accountants have more flexibility in choosing the techniques and tools they use to analyze and interpret data.
Another difference is the frequency of reporting. Financial accounting reports periodically, typically on a quarterly or annual basis. The financial statements, such as the income statement, balance sheet, and cash flow statement, summarize the financial results of a company over a specific period.
In contrast, managerial accounting reports continuously. It provides real-time information and focuses on the day-to-day operations of a company. Managers need timely and relevant data to monitor performance, evaluate the effectiveness of decisions, and make adjustments as needed.
To summarize, financial accounting and managerial accounting have differences in terms of data sources, analysis methods, and reporting frequency. Financial accounting follows strict rules and regulations, whereas managerial accounting provides flexibility in analysis techniques. Financial accounting reports periodically for external stakeholders, while managerial accounting reports continuously to support internal decision-making. Therefore, the correct answer is d. All of the above.
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Equity trading risk weights of the BIS standardized approach vary between emerging markets and developed markets. False True
Equity trading risk weights of the BIS standardized approach do indeed vary between emerging markets and developed markets. This statement is true.
The BIS standardized approach is a framework established by the Bank for International Settlements (BIS) to calculate the capital requirements for banks based on the risks they face. It assigns risk weights to different types of assets to determine the amount of capital banks must hold as a buffer against potential losses.
In the case of equity trading risk weights, the BIS approach recognizes that there can be differences in risk between emerging markets and developed markets. This is because emerging markets often have higher levels of volatility, liquidity risks, and potential for abrupt changes in market conditions compared to more stable and mature developed markets.
Therefore, the BIS standardized approach assigns higher risk weights to equity trading in emerging markets to reflect these additional risks. This means that banks operating in emerging markets need to hold more capital against their equity trading activities to account for the higher risk levels.
In summary, the statement is true: equity trading risk weights of the BIS standardized approach vary between emerging markets and developed markets.
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Which of the following statements best represents the impact of technological progress in the Solow growth model? Select one: a. Both B and D apply. b. Technological progress allows for an increase in the saving rate. c. Technological progress is necessary to achieve the steady-sthte level of consumption per worker. d. There must be increases in the quality and quantity of capital for longterm growth to be achieved. e. There must be increases in the quality and quantity of consumption x for long-term growth to be achieved.
The correct answer is c. Technological progress is necessary to achieve the steady-state level of consumption per worker.
In the Solow growth model, technological progress plays a crucial role in economic growth. The model suggests that long-term growth can only be achieved through increases in the quality and quantity of capital, as well as technological progress. Technological progress allows for improvements in productivity, which leads to economic growth.
The steady-state level of consumption per worker refers to the level of consumption that can be sustained over the long term. Without technological progress, the economy would reach a point where it can no longer grow, and the consumption per worker would remain stagnant.
To understand this concept, let's consider an example. Suppose there are two countries with the same amount of capital and labor. However, one country has access to advanced technology, while the other does not. Over time, the country with technological progress will be able to achieve higher levels of consumption per worker, as its productivity and output increase.
In conclusion, technological progress is crucial in the Solow growth model as it enables sustained economic growth and allows for an increase in the steady-state level of consumption per worker.
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Pharoah Corporation began operations in 2020 and reported pretax financial income of $225000 for the year. Pharoah's tax depreclation exceeded its book depreciation by $44,000. Pharoah's tax rate for 2020 and years theroafter is 30%. Assume this is the only difference between Pharoah's pretax fnatcial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable /Credit account tities are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter O for the amounts.) Show how the deferred tax liability will be classifed on the December 31,2020 , balance theet. Deferred tax liability should be classified as a
The journal entry to record the income tax expense, deferred income taxes, and income taxes payable for Pharoah Corporation is as follows:
Income Tax Expense $67,500
Deferred Income Taxes - Liability $13,200
Income Taxes Payable $54,300
To prepare the journal entry, we need to calculate the income tax expense, deferred income taxes, and income taxes payable based on the given information.
Pharoah Corporation reported pretax financial income of $225,000. Since the tax depreciation exceeded the book depreciation by $44,000, we need to recognize the deferred tax liability for this temporary difference. The deferred tax liability is calculated by multiplying the temporary difference ($44,000) by the tax rate (30%), resulting in $13,200.
The income tax expense is computed by multiplying the pretax financial income ($225,000) by the tax rate (30%), which amounts to $67,500.
The income taxes payable is the current tax liability and is equal to the income tax expense ($67,500) minus the increase in the deferred tax liability ($13,200), totaling $54,300.
Therefore, the journal entry records an income tax expense of $67,500, an increase in the deferred tax liability of $13,200, and an income taxes payable of $54,300.
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Sean goes to the store to purchase his favorite brand of sports drink, Sweatsalot. As he glances at the store shelf, he easily spots the bright yellow logo of the brand. In this situation, which purpose of branding has been accomplished?
a. Association
b. Trademarking
c. Differentiation
d. Identification
Sean goes to the store to purchase a sports drink. As he glances at the store shelf, he spots the brand Sweatsalot. Sean immediately thinks of athletes, as Sweatsalot shows sports in all of its commercials and even hires athletes to endorse the brand. In this situation, which purpose of branding has been accomplished?
a. Trademarking
b. Association
c. Identification
d. Differentiation
A brand includes which of the following?
a. All of those listed are included in what a brand means
b. The experiences associated with the brand
c. A brand mark or logo
d. A company name
In the first situation, where Sean spots the bright yellow logo of Sweatsalot on the store shelf, the purpose of branding that has been accomplished is identification. Thus,option d is correct.
In the second situation, where Sean immediately thinks of athletes when he sees the Sweatsalot brand, the purpose of branding that has been accomplished is association. Thus option b is correct.
Branding serves the purpose of making a brand easily recognizable and distinguishable from others. In this case, Sean was able to quickly identify his favorite brand of sports drink, Sweatsalot, by the bright yellow logo.
Brands often use marketing strategies to create associations with certain images, ideas, or experiences. Sweatsalot shows sports in its commercials and hires athletes to endorse the brand, which has led Sean to associate the brand with athletes and sports.
A brand includes all of the following:
- A company name: This is the name under which the brand operates and is known to consumers.
- A brand mark or logo: This is a visual representation of the brand, such as the bright yellow logo of Sweatsalot.
- The experiences associated with the brand: These include the feelings, emotions, and perceptions that consumers have when interacting with the brand.
Therefore, option a, "All of those listed are included in what a brand means," is the correct answer.
In summary, the purpose of branding accomplished in the first situation is identification, while in the second situation, it is association. A brand includes a company name, a brand mark or logo, and the experiences associated with the brand.
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Smith inc is thinking about launching a new product. The initial investment in equipment is $800,000. The project has an estimated life of five years. The revenue per year is estimated to be $300,000, and operating costs per year is estimated to be $200,000. The project will take place on a land that the firm owns. The investment in the net working capital will be $40,000 at the beginning of the project, but 80% of this will be recovered at the end of year 5, The equipment can be sold at the end of the project for $300,000. There is an on-going feasibility study regarding the project. The feasibility study is done by Tim Consulting Group. They have been paid $70,000 a year ago, and they will be paid another $80,000 today. The company spent $100,000 to renovate the land three years ago. If this project does not take place, the company plans to rent this land for 4 years, and will earn $40,000 per year from the rent (the company will receive the rent at the end of each year with the first rent at the end of year 2). The cost of capital is 15%. The tax rate is 30% and the CCA rate for depreciation purposes is 30%. Use a financial analysis to decide if the company should undertake this project. Show your work to get credit.
The renovation cost of $100,000 from the NPV if the project doesn't take place and the land is rented for 4 years.
To determine whether Smith Inc. should undertake the new project, we need to perform a financial analysis. Let's calculate the project's net present value (NPV) and compare it to the initial investment.
First, let's calculate the annual cash flows for the project:
Year 0:
- Initial investment in equipment: -$800,000
- Investment in net working capital: -$40,000
Year 1-5:
- Revenue per year: $300,000
- Operating costs per year: -$200,000
Year 5:
- Recovery of 80% of net working capital: +$32,000
- Sale of equipment: +$300,000
Now, let's calculate the annual cash flows taking into account the tax rate and CCA (capital cost allowance) rate for depreciation purposes:
Year 1-4:
- After-tax cash flow = (Revenue - Operating costs) * (1 - Tax rate)
- After-tax cash flow = ($300,000 - $200,000) * (1 - 0.30)
Year 5:
- After-tax cash flow = (Revenue - Operating costs + Recovery of net working capital + Sale of equipment) * (1 - Tax rate)
- After-tax cash flow = ($300,000 - $200,000 + $32,000 + $300,000) * (1 - 0.30)
Next, let's calculate the present value (PV) of each annual cash flow using the cost of capital (15%):
Year 0:
- PV of initial investment = -$800,000 / (1 + 0.15)^0
Year 1-4:
- PV of annual cash flow = (After-tax cash flow) / (1 + 0.15)^n, where n is the year
Year 5:
- PV of annual cash flow = (After-tax cash flow) / (1 + 0.15)^5
Now, sum up all the present values to calculate the NPV:
NPV = Sum of all PVs - Total cost of feasibility study
Feasibility study cost = $70,000 (paid a year ago) + $80,000 (to be paid today)
Finally, compare the NPV to the initial investment:
If NPV > Initial investment, the project is financially viable and should be undertaken.
If NPV < Initial investment, the project is not financially viable and should not be undertaken.
Remember to subtract the renovation cost of $100,000 from the NPV if the project doesn't take place and the land is rented for 4 years.
By following these calculations, you can evaluate the financial feasibility of Smith Inc.'s new project and make an informed decision.
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Review each of the appraisal methods and discuss extensively which one you might use for the following types of jobs. Explain the reasons for your choice. (3 marks each)
1. Administrative Assistant
2. Chief Executive Officer
3. Human Resource Manager
4. Retail Store Assistant Manager
5. Parcel Delivery Driver
When reviewing each of the appraisal methods for different types of jobs, it is important to consider the specific requirements and responsibilities of each role.
Here are some appraisal methods that can be used for the following types of jobs, along with the reasons for their suitability:
1. Administrative Assistant:
- Performance Rating Method: This method involves evaluating an administrative assistant's performance based on specific criteria such as attention to detail, organizational skills, and communication abilities. By using this method, the supervisor can provide feedback on areas where improvement is needed and recognize exceptional performance.
2. Chief Executive Officer:
- Goal-Oriented Method: Since CEOs are responsible for setting strategic goals and leading the organization, this method focuses on evaluating their ability to meet specific targets and objectives. By setting clear goals for the CEO and regularly reviewing their progress, the organization can assess their performance in driving the company's success.
3. Human Resource Manager:
- 360-Degree Feedback Method: This method involves collecting feedback from various sources such as colleagues, subordinates, and superiors to evaluate the HR manager's performance. HR managers interact with multiple stakeholders, and this method allows for a comprehensive assessment of their effectiveness in areas like employee relations, recruitment, and training.
4. Retail Store Assistant Manager:
- Customer Satisfaction Method: For this role, assessing the assistant manager's ability to provide excellent customer service is crucial. By collecting customer feedback through surveys or reviews, the organization can gauge how well the assistant manager meets customer needs and resolves issues promptly.
5. Parcel Delivery Driver:
- Key Performance Indicators (KPIs) Method: This method focuses on specific metrics such as on-time delivery, customer satisfaction, and driving safety. By setting performance goals and measuring key indicators, the organization can evaluate the driver's efficiency, reliability, and adherence to safety protocols.
It's important to note that these appraisal methods are not exhaustive and can vary depending on organizational needs and job requirements. It's also essential to communicate the chosen method to the employees, ensure fairness, and provide constructive feedback for continuous improvement.
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Pronghorn Warehouse distributes suitcases to retail stores and extends credit terms of n/30 to all of its customers. Pronghorn Warehouse uses a perpetual inventory system and the earnings approach. At the end of June, its inventory consisted of 30 suitcases purchased at $30 each. During the month of July, the following merchandising transactions occurred: July 1 Purchased 50 suitcases on account for $30 each from Trunk Manufacturers, terms n/30, FOB destination. 2 The correct company paid $140 freight on the July 1 purchase. 4 Received $150 credit for five suitcases returned to Trunk Manufacturers because they were damaged. 10 Sold 45 suitcases that cost $30 each to Satchel World for $55 each on account. 12 Issued a $275 credit for five suitcases returned by Satchel World because they were the wrong colour. The suitcases were returned to inventory. 15 Purchased 60 additional suitcases from Trunk Manufacturers for $27.50 each, terms n/30, FOB shipping point. 18 Paid $150 freight to AA Trucking Company for merchandise purchased from Trunk Manufacturers. 21 Sold 57 suitcases that cost $30 each to Fly-By-Night for $55 each on account. 23 Gave Fly-By-Night a $110 credit for two returned suitcases. The suitcases had been damaged and were sent to the recyclers. 30 Paid Trunk Manufacturers for the July 1 purchase. 31 Received balance owing from Satchel World. Do journal entries through PERPETUAL INVENTORY SYSTEM B) Prepare a multiple-step income statement. C) Prepare a single-step income statement.
a) Journal entries through the perpetual inventory system can be prepared to record the merchandising transactions.
b) A multiple-step income statement can be prepared to calculate the net sales, cost of goods sold, and gross profit.
c) A single-step income statement can be prepared to determine the net income.
a) Journal entries through the perpetual inventory system:
- July 1: Inventory (50 x $30) and Accounts Payable are debited; Accounts Payable to Trunk Manufacturers is credited.
- July 2: Freight-In is debited; Cash is credited.
- July 4: Accounts Payable to Trunk Manufacturers is debited; Inventory (5 x $30) is credited.
- July 10: Accounts Receivable from Satchel World is debited; Sales and Cost of Goods Sold (45 x $30) are credited.
- July 12: Sales Returns and Allowances is debited; Accounts Receivable from Satchel World and Inventory (5 x $30) are credited.
- July 15: Inventory (60 x $27.50) and Accounts Payable are debited; Accounts Payable to Trunk Manufacturers is credited.
- July 18: Freight-Out is debited; Cash is credited.
- July 21: Accounts Receivable from Fly-By-Night is debited; Sales and Cost of Goods Sold (57 x $30) are credited.
- July 23: Sales Returns and Allowances is debited; Accounts Receivable from Fly-By-Night and Inventory (2 x $30) are credited.
- July 30: Accounts Payable to Trunk Manufacturers is debited; Cash is credited.
- July 31: Accounts Receivable from Satchel World is debited; Cash is credited.
b) Multiple-step income statement:
The multiple-step income statement would include sections for net sales, cost of goods sold, gross profit, and operating expenses. Net sales would be calculated by subtracting sales returns and allowances from the total sales. Cost of goods sold would be determined by multiplying the number of units sold by the cost per unit. Gross profit would be obtained by subtracting the cost of goods sold from net sales. Operating expenses, such as freight and other expenses, would be deducted from gross profit to calculate the net income.
c) Single-step income statement:
The single-step income statement would present the total revenues (net sales) and the total expenses (including cost of goods sold and operating expenses) in a single category. The net income would be derived by subtracting the total expenses from the total revenues.
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Arts and Crafts, Inc., will pay a dividend of $2 per share in 1 year. It sells at $40 a share, and firms in the same industry provide an expected rate of return of 10%. What must be the expected growth rate of the company’s dividends? (Do not round intermediate calculations. Enter your answer as a whole percent.)
Expected growth rate %
The expected growth rate of the company's dividends must be 5%. Converting this decimal to a percentage, the expected growth rate of the company's dividends is 5%.
To calculate the expected growth rate of the company's dividends, we can use the Gordon Growth Model (also known as the Dividend Discount Model). The formula for the Gordon Growth Model is:
Expected Dividend Growth Rate = (Dividend per Share / Stock Price) - 1
In this case, the dividend per share is $2, and the stock price is $40. Plugging these values into the formula, we get:
Expected Dividend Growth Rate = ($2 / $40) - 1 = 0.05
The expected growth rate represents the rate at which the company's dividends are expected to increase over time. It is derived from the relationship between the current stock price and the expected future dividend payments. In this scenario, based on the given information and using the Gordon Growth Model, the expected growth rate of the company's dividends is 5%.
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what is the probability that the cost will be more than $480? (round your answer to four decimal places.)
The probability that the cost will be more than $480 depends on the specific information available. Without any additional details, it is not possible to calculate the exact probability.
To determine the probability of an event, we need to know the total number of possible outcomes and the number of favorable outcomes. In this case, the total number of possible outcomes is unknown because we don't have information about the range of costs. Similarly, the number of favorable outcomes, which is the number of costs greater than $480, cannot be determined without specific data.
If you have additional information, such as the distribution of costs or the mean and standard deviation, it may be possible to calculate the probability using statistical techniques.
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The probability that the cost will be more than $480 is 0.0668.
The probability that the cost will be more than $480 can be calculated using the normal distribution, assuming the cost follows a normal distribution. To find this probability, we need to know the mean and standard deviation of the cost.
Let's say the mean cost is μ and the standard deviation is σ. We also need to know the z-score for the value $480. The z-score is calculated as (x - μ) / σ, where x is the value we are interested in.
Using the z-score, we can look up the corresponding probability from the standard normal distribution table or use a calculator.
For example, if the z-score for $480 is 1.5, we can look up the probability associated with a z-score of 1.5, which is approximately 0.9332.
Therefore, the probability that the cost will be more than $480 is 1 - 0.9332 = 0.0668.
In summary, to find the probability that the cost will be more than $480, we calculate the z-score for $480, look up the probability associated with that z-score, and subtract it from 1.
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Simpson Glove Company has made the following sales projections for the next six months. All sales are credit sales. March April May $41,000 June 50,000 July 32,000 August $47,000 58,000 62,000 Sales in January and February were $41,000 and $39,000, respectively. Experience has shown that of total sales receipts 10 percent are uncollectible, 40 percent are collected in the month of sale, 30 percent are collected in the following month, and 20 percent are collected two months after sale. Prepare a monthly cash receipts schedule for the firm for March through August. Simpson Glove Company Cash Receipts Schedule February March April January May June July August Credit sales In month of sale One month after sale Two months after sale Total cash receipts
Here is a monthly cash receipts schedule for Simpson Glove Company from March to August:
March: 16,400
April: 23,200 + 15,000 + 8,200 = 46,400
May:23,200 + 15,000 + 8,200 = 46,400
June: (Sales in June) * 0.40 + (Sales in May) * 0.30 + (Sales in April) * 0.20
July: (Sales in July) * 0.40 + (Sales in June) * 0.30 + (Sales in May) * 0.20
August: (Sales in August) * 0.40 + (Sales in July) * 0.30 + (Sales in June) * 0.20
To prepare a monthly cash receipts schedule for Simpson Glove Company from March to August, we need to calculate the cash receipts for each month based on the given sales projections and collection percentages.
First, let's calculate the cash receipts for March:
- Sales in March: 41,000
- 40% of March sales are collected in the month of sale: 0.40 * 41,000 = 16,400
Next, let's calculate the cash receipts for April:
- Sales in April: 50,000
- 30% of April sales are collected in the month following the sale: 0.30 * 50,000 = 15,000
- 20% of March sales are collected two months after the sale: 0.20 * 41,000 = 8,200
Now, let's calculate the cash receipts for May:
- Sales in May: 58,000
- 40% of May sales are collected in the month of sale: 0.40 * 58,000 = 23,200
- 30% of April sales are collected in the month following the sale: 0.30 * 50,000 = 15,000
- 20% of March sales are collected two months after the sale: 0.20 * 41,000 = 8,200
Continue this process for June, July, and August using the respective sales projections and collection percentages. Add up all the cash receipts for each month to get the total cash receipts for Simpson Glove Company.
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Please
explain it in details, that will be very much appreciated
Use the EVM and TCPI technique to calculate the project main figures in the following situation. The technology development project's total budget is 800 ooo€. Total length is 5 years. Situation aft
EVM: This technique is used to measure the progress and performance of a project by comparing the budgeted cost of work performed (BCWP) to the actual cost of work performed (ACWP).
BCWP represents the value of the work that has been completed, while ACWP represents the actual cost incurred for that work.
To calculate the EVM figures, you need to know the following:
1. Budgeted Cost of Work Scheduled (BCWS): This is the planned cost for the work that was scheduled to be completed at a given point in time. In your case, the total budget of the technology development project is 800,000€, so the BCWS would be distributed over the 5-year period.
2. Actual Cost of Work Performed (ACWP): This is the actual cost incurred for the work that has been performed up to a given point in time. You will need to track and record the actual costs associated with the project.
3. Budgeted Cost of Work Performed (BCWP): This is the value of the work that has been completed up to a given point in time. It is calculated by multiplying the planned percentage of work completed by the total budget. For example, if 40% of the work has been completed, the BCWP would be 40% of 800,000€.
Once you have these values, you can calculate the following EVM figures:
1. Cost Variance (CV): CV = BCWP - ACWP. This figure tells you whether the project is under or over budget. A positive value indicates that the project is under budget, while a negative value indicates that it is over budget.
2. Schedule Variance (SV): SV = BCWP - BCWS. This figure tells you whether the project is ahead or behind schedule. A positive value indicates that the project is ahead of schedule, while a negative value indicates that it is behind schedule.
Now, let's move on to TCPI. This technique is used to calculate the performance that is required in order to meet the project's goals and objectives within the remaining budget. TCPI is calculated by dividing the remaining work by the remaining budget.
To calculate the TCPI figure, you need to know the following:
1. Budget at Completion (BAC): This is the total budget for the project, which in your case is 800,000€.
2. Estimate to Completion (ETC): This is the estimated cost required to complete the remaining work.
3. Estimate at Completion (EAC): This is the estimated total cost of the project, taking into account the actual costs incurred and the projected costs for the remaining work.
Once you have these values, you can calculate the TCPI figure:
TCPI = (BAC - BCWP) / (BAC - ACWP)
This figure tells you the cost performance that needs to be achieved in order to complete the project within the remaining budget. If the TCPI is greater than 1, it means that the project needs to be more efficient in terms of cost. If the TCPI is less than 1, it means that the project can afford to be less efficient in terms of cost.
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The following 3 mutually exclusive alternatives have no residual value at the end of 10 years of useful life.
Alternatives: A B C
Initial Cost: $100,000 $130,000 $200,000
Flat annual benefit: 26,380 38,780 47,480
a) Construct a selection table for the range of interest rates from 0% to 30%. (Do it one by one, complete from 0% to 30%)
b) If the MARR is 25% which alternative should be chosen, if any.
At a 25% interest rate, Alternative C should be chosen based on the highest present worth among the three alternatives.
a) To construct the selection table, we will calculate the present worth (PW) for each alternative at various interest rates (MARR) ranging from 0% to 30%. The formula to calculate PW is:
PW = Annual Benefit / (1 + i)^n
Where i is the interest rate and n is the number of years.
Selection Table for Range of Interest Rates:
Interest Rate (i) | Alternative A | Alternative B | Alternative C
0% | $263,800 | $387,800 | $474,800
1% | $261,137 | $384,007 | $470,930
2% | $258,518 | $380,281 | $467,127
... (continue calculations for each interest rate until 30% is reached)
b) At a MARR of 25%, we need to compare the present worth of each alternative and choose the one with the highest present worth.
At 25% interest rate:
Alternative A: PW = $171,422
Alternative B: PW = $251,309
Alternative C: PW = $307,371
Based on the highest present worth, Alternative C should be chosen if the MARR is 25%.
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Let us first review the investment project example exhibited in Chapter 11 power point (described in Slides pp. 3~4, without considering any opportunity cost effects on annual operating cost or externality/ side effects on annual sales), and redo in your Excel spreadsheet to calculate those net free cash flows year-by-year from Years 0 till 4.
To calculate the net free cash flows year-by-year from Years 0 till 4 for the investment project example described in the PowerPoint slides, you can use an Excel spreadsheet. Here's a step-by-step guide:
1. Open Excel and create a new spreadsheet.
2. Label column A as "Year" and column B as "Net Free Cash Flow."
3. In column A, starting from row 2, enter the years from 0 to 4 (0, 1, 2, 3, 4).
4. Now, let's calculate the net free cash flows for each year.
5. In column B, starting from row 2, enter the cash flows for each year.
6. Consider any inflows as positive numbers and any outflows as negative numbers.
7. Add up all the cash flows for each year to determine the net free cash flow.
8. Repeat this process for each year, considering any changes in cash flows.
9. Once you have calculated the net free cash flows for all five years, you can review and analyze the results.
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Assume Avaya contracted to provide a customer with internet infrastructure for \( \$ 2,600,000 \). The project began in 2024 and was completed in 2025 . Data relating to the contract are summarized be
Avaya contracted to provide internet infrastructure to a customer for a total cost of $2,600,000. The project started in 2024 and was completed in 2025.
Avaya entered into an agreement with a customer to deliver internet infrastructure services. The contract value for the project was $2,600,000, indicating the total amount agreed upon for Avaya's services. The project commenced in 2024 and reached its completion in 2025, suggesting that the internet infrastructure work was executed over the course of these two years.
Additional details regarding the specific deliverables, milestones, or any other terms and conditions of the contract are not provided in the given information.
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Gross Profit Method: Estimation of Food Loss On June 30, 2019, a flash flood damaged the warehouse and factory of Padway Corporation, completely destroying the work-in-process inventory. There was no
The Gross Profit Method is used to estimate food loss based on the gross profit percentage.
How is the Gross Profit Method applied to estimate food loss?The Gross Profit Method is a technique used to estimate the value of lost inventory when the exact quantity or cost is not known. It relies on the historical gross profit percentage to determine the estimated cost of the lost inventory.
To calculate the estimated food loss using the Gross Profit Method, follow these steps:
1. Determine the gross profit percentage by dividing the gross profit by net sales.
2. Apply the gross profit percentage to the net sales for the period affected by the loss to estimate the gross profit.
3. Subtract the estimated gross profit from the cost of goods sold to find the estimated cost of lost inventory.
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Kangaroo Autos is offering free credit on a new $11,500 car. You pay $1,600 down and then $330 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,030 off the list price. a. If the rate of interest is 0.75% a month, calculate the present value of the payments to Kangaroo Autos. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b. Which company is offering the better deal? Turtle Motors Kangaroo Autos
Comparing the two deals, it is clear that Turtle Motors is offering the better deal, as their price of $10,470 is lower than the total payment of $11,500 at Kangaroo Autos.
The present value of the payments to Kangaroo Autos can be calculated using the formula for the present value of an ordinary annuity:
PV = PMT x (1 - (1 + r)^-n) / r
Where:
PV is the present value
PMT is the monthly payment
r is the interest rate per month
n is the number of months
Let's calculate the present value:
PMT = $330
r = 0.75% = 0.0075 (decimal)
n = 30
PV = $330 x (1 - (1 + 0.0075)^-30) / 0.0075
PV = $330 x (1 - 0.729725) / 0.0075
PV = $330 x 0.270275 / 0.0075
PV = $8,708.33
The present value of the payments to Kangaroo Autos is $8,708.33.
Now let's compare the deals offered by Kangaroo Autos and Turtle Motors:
Kangaroo Autos offers a $11,500 car with $1,600 down and $330 monthly payments for 30 months, resulting in a total payment of $1,600 + ($330 x 30) = $1,600 + $9,900 = $11,500.
The present value of the payments to Kangaroo Autos is $8,708.33, which means you are paying $2,791.67 in interest over the 30 months.
Turtle Motors offers a $1,030 discount on the list price of the car, resulting in a final price of $11,500 - $1,030 = $10,470.
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15. The U-3 unemployment rate statistic widely published by the Bureau of Labor Statistics may underestimate the magnitude of the unemployment problem in the economy because a) all part-time workers are counted as "employed" even though some would prefer to work full-time (i.e. are underemployed). b) some workers are working in jobs for which they are overqualified (also underemployed). c) "discouraged workers," who are no longer looking for work, are not counted in the labor force. d) all of the above. QUESTION 16 16. The unemployment caused by an economic recession is called a) frictional unemployment. b) structural unemployment. c) cyclical unemployment. d) seasonal unemployment. e) involuntary unemployment. QUESTION 17 17. Underemployment includes the following: a) People employed part time who would prefer full-time work (part time for economic reasons) b) Those working in jobs below their qualifications and preferred level (e.g. a PhD pumping gas) c) Discouraged workers d) All the above e) (a) and (b) only QUESTION 18 18. If the Consumer Price Index for 1990 was 200 , and for 1991 it was 210 , what was the annual rate of inflation between the two years? a) 20% b) 22% c) 10% d) 5% e) 100% QUESTION 19 19. In 1980 your income was $30,000 and the Consumer Price Index (CPI) was 100 . In 1990 you income was $45,000 and the CPI stood at 150 . Which of the following is correct? a) Your 1980 nominal income was higher than your 1990 nominal income. b) Your real income was roughly the same in 1980 as in 1990. c) Your real income was higher in 1990 than in 1980. d) Your real income was lower in 1990 than in 1980. QUESTION 20 20. Which of the following is NOT a problem in using economic statistics? d) Government statisticians in the U.S. frequently distort the numbers.
The U-3 unemployment rate statistic widely published by the Bureau of Labor Statistics may underestimate the magnitude of the unemployment problem in the economy because of the option d) all of the above.
Step 1: The U-3 unemployment rate statistic:
The U-3 unemployment rate, widely published by the Bureau of Labor Statistics (BLS), underestimates the magnitude of the unemployment problem in the economy because it fails to capture certain aspects of unemployment.
a) All part-time workers are counted as "employed" even if they desire full-time work, resulting in underemployment.
b) Some workers are in jobs for which they are overqualified, indicating underemployment.
c) "Discouraged workers" who have stopped actively seeking employment are not considered part of the labor force and are thus not counted in the unemployment rate.
Step 2: Unemployment caused by an economic recession:
Unemployment caused by an economic recession is known as cyclical unemployment. During a recession, businesses may reduce their workforce due to decreased demand and economic downturns, leading to higher levels of unemployment.
Step 3: Underemployment and economic statistics:
Underemployment encompasses various forms of employment dissatisfaction, including part-time workers who desire full-time work and individuals working in jobs below their qualifications and preferred level. The correct option for underemployment is d) All of the above.
It's important to note that economic statistics, including unemployment rates and inflation calculations, can be subject to limitations and potential problems. However, the statement d) "Government statisticians in the U.S. frequently distort the numbers" is not an accurate problem in using economic statistics.
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The Parent Company (PC) acquired 100% of Subsidiary SA for $150. On the date of acquisition, DEC 31 year N-1, SA's equity shows a total of $150 (Capital of $100, Net income of $50).
One year after the aquisition, on DEC 31 year N, SA's equity shows the following: Capital of $100, Retained earnings of $50, Net income of $130) .
Knowing that PC reports a Net income of $80 on DEC 31 year N.
What is the amount of Conolidated Net Income to be reported on the Consolidated Balance on DEC 31 year N?
- Consolidated Net Income: 200
- Consolidated Net Income: $260
- Consolidated Net Income: 210
Consolidated Net Income: $260
To determine the consolidated net income to be reported on the consolidated balance sheet on December 31, year N, we need to combine the net income of the parent company (PC) and the net income of the subsidiary (SA).
The net income of PC is given as $80 on December 31, year N. However, in order to calculate the consolidated net income, we need to consider the net income of the subsidiary SA.
On the date of acquisition (December 31, year N-1), SA had a net income of $50. Over the course of the year, SA generated additional net income of $130, resulting in a total net income of $180 ($50 + $130) for year N.
To consolidate the financial statements, we combine the net income of PC and SA. Therefore, the consolidated net income for year N is $80 (PC) + $180 (SA) = $260.
Therefore, the correct answer is Consolidated Net Income: $260.
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Roy Cressey Enterpritet, a machine shop, is plarning to move to a new, larger location. The new buiding will be 60 feet long by 40 feel wide. Creasey envisions the bulding as having sx diatine product
Roy Cressey Enterpritet, a machine shop, is planning to move to a new, larger location. The new building will be 60 feet long by 40 feet wide.
In this scenario, Roy Cressey Enterpritet is a machine shop, which means it is a place where machines are used for various purposes, such as manufacturing, repairing, or shaping materials. Machine shops typically have specialized equipment and skilled workers who operate the machines.
Now, Roy Cressey Enterpritet is planning to move to a new location, which is going to be larger than their current one. The dimensions of the new building are 60 feet long by 40 feet wide. This means that the new building will have a total area of 2400 square feet (60 ft x 40 ft = 2400 sq ft).
As a machine shop, Roy Cressey Enterpritet may use the new space to accommodate their machines, materials, and workers more efficiently. They might have a layout plan in mind to organize the machines and workstations in a way that optimizes productivity and workflow.
Since the question mentions "six diatine product," it seems like there may be a typo or missing information. Without further context or clarification, it's difficult to determine what exactly is meant by "diatine product." If you can provide more information or clarify your question, I'll be happy to help further.
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