To calculate the weighted-average cost of capital (WACC), we need to consider the weight of each component of capital (debt and equity) in the overall capital structure of the company.
Given information:
Interest rate on debt capital: 7.2%
Cost of equity capital: 9.7%
Market value of debt capital: $43 million
Market value of equity capital: $77 million
Income tax rate: 30%
First, we need to calculate the weight of debt and equity in the capital structure:
Weight of debt = Market value of debt capital / Total market value of capital
Weight of debt = $43 million / ($43 million + $77 million) = 0.358 or 35.8%
Weight of equity = Market value of equity capital / Total market value of capital
Weight of equity = $77 million / ($43 million + $77 million) = 0.642 or 64.2%
Next, we can calculate the WACC using the formula:
WACC = (Weight of debt * Cost of debt) + (Weight of equity * Cost of equity)
WACC = (0.358 * 7.2%) + (0.642 * 9.7%)
WACC = 2.5776% + 6.2174%
WACC = 8.795%
Therefore, the WACC for the Atlantic Division of Ocean Enterprises is approximately 8.80%. The correct answer is option b.
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(2) Fiona consumes two goods, z₁ and 2. ₁ is the amount of herb tea she consumes and z2 is all the other goods/services she buys (measured in dollars). So if Fiona consumes less of 2₁, she will have more to spend on the other goods. And if he consumes more of z₁, she will have less to spend on the other goods. Suppose that Fiona's demand for herb tea is given by QD=0.05m-4p₁, where m is her disposal income and p, is the price of herb tea. Fiona has m = $360 to spend in total. (a) Suppose that the price of herb tea is $2 per unit. Then how much herb tea would Fiona buy? (b) How much would she spend on the other goods/services? (c) Suppose that the price of herb tea increases to $1. After the price increase, how much herb tea would she buy? (d) After the price change, if Fiona were to buy the initial bundle, how much income would she need? (e) If she had this hypothetical income (from (d)), how much herb tea would she buy at the price of $4? (f) The change in her demand for herb tea (from your answer in (a) to (e)) is called-----
(a) Suppose that the price of herb tea is $2 per unit. Then how much herb tea would Fiona buy?QD=0.05m-4p₁Given, m = $360 and p₁ = $2QD=0.05 x 360 - 4 x 2= 18 - 8= 10Fiona will buy 10 units of herb tea.
(b) How much would she spend on the other goods/services?We know Fiona has m = $360. So,Fiona will spend on the other goods/services = m - p₁z₁= 360 - 2z₁Now, put z₁ = 10 in the above equation, we get, Fiona will spend on the other goods/services = 360 - 2(10)=$340(c) Suppose that the price of herb tea increases to $1. After the price increase, how much herb tea would she buy?Given, m = $360 and p₁ = $1New quantity demanded can be calculated using QD=0.05m-4p₁QD=0.05 x 360 - 4 x 1= 18 - 4= 14So, after the price increase, Fiona will buy 14 units of herb tea.
(d) After the price change, if Fiona were to buy the initial bundle, how much income would she need?Initial bundle means z₁=10. Let's calculate how much income would she need after the price change. Given, m= $360 and p₁=$1z₁ = 10, QD=14m-p₁z₁ = 360-p₁z₁So, 360-1(10)= $350So, she would need $350 income to buy the initial bundle after the price change.(e) If she had this hypothetical income (from (d)), how much herb tea would she buy at the price of $4?Given, m=$350 and p₁=$4.
New quantity demanded can be calculated using QD=0.05m-4p₁QD=0.05 x 350 - 4 x 4= 17.5 - 16= 1.5So, Fiona will buy 1.5 units of herb tea at the price of $4.(f) The change in her demand for herb tea (from your answer in (a) to (e)) is called the income effect. Therefore, the change in her demand for herb tea (from her buying 10 units of herb tea to her buying 1.5 units of herb tea) is called the income effect.
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Emotions in Conflict and Bullying After reading Chapter 6: Emotions in Conflict & Chapter 8: Bullying, answer the following questions in 3-4 sentences per question: 1. According to the authors, "bullying is another extreme form of dominating. Some dominators resort to bullying so frequently that it should be considered a subset of the style of domination or competition" (p. 168). Do you agree or disagree? Explain? 2. What would you say is the most powerful emotion related to bullying? Explain? 3. What are examples of negative actions in bullying? Try to focus on specific verbal and/or nonverbal communication practices. Also, what makes the actions negative? 4. How have you navigated feelings within bullying that you experienced in your life? Explain? 5. The stories in this chapter demonstrate the ways in which bullying changes or transforms people's identities, drawing on Jessi's Jezebel's and Iman's story passages (p.282-283), answer the following question: How did the women change? How do you think or feel about their changes?
Bullying can be seen as an extreme form of dominating behavior, where the bully seeks to exert power and control over others. Whether bullying should be considered a subset of domination or competition depends on the perspective taken.
The agreement or disagreement with the statement that bullying is a subset of domination or competition depends on the understanding of the terms and their relationship. If one views bullying as a specific manifestation of dominating behavior within a competitive context, then the statement holds true. However, alternative perspectives may argue that bullying is a distinct behavior with its own dynamics beyond mere domination or competition.
Fear is often considered the most powerful emotion related to bullying. Victims experience fear of physical harm, social exclusion, or further harassment. This fear can have a profound impact on their psychological well-being and their ability to resist or seek help.
Negative actions in bullying can take various forms. Verbal communication practices include insults, name-calling, and spreading rumors, while nonverbal practices may involve intimidating gestures, mocking expressions, or body language. These actions are negative because they inflict harm, cause emotional distress, and violate the dignity and rights of the victim.
Personal experiences with bullying vary, and individuals may navigate their feelings differently. Some strategies may include seeking support from friends, family, or professionals, engaging in self-care activities, developing coping mechanisms, or taking action to address the bullying, such as reporting it to authorities or standing up against it assertively.
In Jessi's and Iman's stories, bullying profoundly changed their identities. They experienced a shift in their self-perception, self-esteem, and confidence. The changes brought about by bullying can be deeply negative, leading to feelings of isolation and self-doubt. However, it is important to acknowledge the resilience and strength individuals can develop through such experiences. Over time, they may reshape their identities, find empowerment, and become advocates against bullying. The response to their changes may vary depending on personal experiences and perspectives, but it is crucial to address and combat the detrimental effects of bullying on individuals' well-being.
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Demand: Ininking Like a Buyer End of Chapter Problem Determine whether each good is a normal good or an inferior good for the average consumer. a. For most consumers, the newest iPhone is _____ good. b. For most consumers, a 10-year-old used car is _____ good. c. For most consumers, dental services are _____ good.
a. For most consumers, the newest iPhone is a normal good.
b. For most consumers, a 10-year-old used car is an inferior good.
c. For most consumers, dental services are a normal good.
a. The newest iPhone is considered a normal good for most consumers. As income increases, the demand for iPhones also increases, indicating a positive income elasticity of demand. People with higher incomes are more likely to afford the latest iPhone models, leading to a higher demand for these goods.
b. A 10-year-old used car is generally considered an inferior good. As income increases, the demand for older, used cars tends to decrease, indicating a negative income elasticity of demand. When consumers have higher incomes, they are more likely to prefer newer and more expensive car models, leading to a decrease in the demand for older used cars.
c. Dental services are considered a normal good for most consumers. As income increases, the demand for dental services also increases, indicating a positive income elasticity of demand. People with higher incomes are more likely to prioritize dental care and afford various dental services, resulting in an increased demand for these services.
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9. Let Rt denote the simple monthly return and assume that Rt~ N(μ, o2). Consider the 2-period simple return R₂ (2) = (1 + Rt)(1 + Rt−1) – 1. 0, show that E[RtRt-1] = µ². Hint: Use COV(Rt, Rt
Consider the 2-period simple return R2(2) = (1 + Rt)(1 + Rt−1) – 1.We have to show that E[RtRt-1] = µ², where Rt is the simple monthly return and assume that Rt~ N(μ, o2)
.Now, we know that the expectation value of R2(2) can be defined as:E[R2(2)] = E[(1 + Rt)(1 + Rt−1) – 1]Taking the expected value of RtRt−1, we can find E[RtRt-1]. Therefore,E[RtRt-1] = E[(Rt- μ)(Rt-1 - μ)] + μ²= E[RtRt] - μ²= Var(Rt) + E[Rt]² - μ²= o² + μ² - μ²= o²The expected value of R2(2) is calculated as follows:E[R2(2)] = E[(1 + Rt)(1 + Rt−1) – 1]= E[RtRt−1] + E[Rt] + E[Rt−1] + 1= µ² + µ + µ + 1= µ² + 2µ + 1Therefore, combining both equations,E[R2(2)] = µ² + 2µ + 1By comparing both equations, we get:E[RtRt-1] = µ²Hence, we have shown that E[RtRt-1] = µ².
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Assignments: Problem Solving Q1. What is the difference between a floating exchange rate, a soft peg, a hard peg, and dollarization? Q2. In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent the losses?
Q1. What is the difference between a floating exchange rate, a soft peg, a hard peg, and dollarization? Floating Exchange Rate: A floating exchange rate is a type of exchange rate system in which the value of a currency is determined by market forces such as supply and demand.
In a floating exchange rate systm, the exchange rate is allowed to fluctuate based on changes in the market. Soft Peg: A soft peg is a type of exchange rate system in which the value of a currency is allowed to fluctuate within a range that is set by a central bank or other authority. The range is usually quite wide, and the currency is allowed to float within it, but it is not allowed to move outside of it. Hard Peg: A hard peg is a type of exchange rate system in which the value of a currency is fixed to another currency or to a commodity such as gold. The currency is not allowed to fluctuate, and the central bank or other authority must take action to maintain the fixed rate. Dollarization: Dollarization is a type of exchange rate system in which a country adopts the currency of another country as its official currency. In dollarization, the country gives up control over its monetary policy and the exchange rate.Q2. In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent the losses?In my opinion, trade should not be inhibited to prevent the losses. The benefits of international trade are immense, and it is essential for the growth and development of countries. However, it is also essential to compensate the losers in a country.
Governments should take steps to help workers who lose their jobs due to foreign imports, such as providing training or financial assistance to help them transition to new jobs or industries. This will help to ensure that the benefits of international trade are shared more evenly, and that the losers are not left behind. In conclusion, while it is not always possible to compensate the losers in a country, inhibiting trade is not the solution. Governments should take steps to help those who are negatively affected by trade to ensure that the benefits are shared more evenly.
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Calculate the net pay for the following employee. Show all calculations. Jodi Wheatley is a 38 year old employee in Manitoba. She is paid an annual salary of $35,000 on a semi-monthly basis, and vacation at 6% is accrued. In addition to the salary, she receives a car allowance of $120.00 per month. For this pay period, she is also receiving 6 hours of overtime pay. Overtime is paid at 1.5 times for any hours worked in excess of 37.5 hours per week. Jodi has a company cell phone and the personal portion, worth $35 per month, is paid by her employer. Deductions for Jodi include $50.00 per pay for RRSP's, $21.50 per month for union dues and $5 per pay for the company's "social fund". There is also a garnishment order against Jodi, calculated as 15% of gross pay less statutory deductions. Based on Jodi's tax exemption codes (both 2 for Federal and Manitoba), the combined Federal and Provincial tax rate is 17.04%. The pay date is February 28, 2019.
The net pay for Jodi Wheatley for the given pay period can be calculated as follows:
Salary per annum: $35,000Salary per semi-month: $35,000/24 = $1,458.33
Car allowance: $120.00Vacation at 6%: ($35,000 x 6%) / 24 = $87.50Total earnings: $1,665.83
Overtime pay: For 6 hours worked in excess of 37.5 hours per week, the regular rate is 1.5 times the hourly rate, i.e. 1.5 x $18.53 = $27.80Overtime pay: $27.80 x 6 = $166.80
Total b with overtime pay: $1,832.63Deductions:RRSP: $50.00Union dues: $21.50Company's "social fund": $5.00Total statutory deductions: $76.50
Gross pay: $1,832.63 - $76.50 = $1,756.13Garnishment order: 15% of gross pay less statutory deductions= 15% of $1,679.63 = $251.94Net pay: Gross pay - statutory deductions - garnishment order - income tax
Income tax = (federal tax rate + provincial tax rate) x taxable incomeTaxable income:
Gross pay - statutory deductions - garnishment orderFederal tax rate: 15% - 2 exemption codes = 13%
Provincial tax rate: 4.04% - 2 exemption codes = 2.04%Combined Federal and Provincial tax rate: 13% + 2.04% = 15.04%Taxable income: $1,679.63
Income tax: 15.04% x $1,679.63 = $252.74Net pay: $1,756.13 - $76.50 - $251.94 - $252.74 = $1,174.95Therefore, Jodi Wheatley's net pay for the given pay period is $1,174.95.
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38) When pasting a value into an Excel worksheet, if a column is not wide enough to display the entire value, one or more pound signs (#) will display in the cell. True False 39) Make sure to delete any merge field formatting marks before printing your document. True O False 40) You can convert a bulleted list in PowerPoint into SmartArt, which can then be used in other applications. True O False 41) By selecting options in the Paste Special dialog box, you can link a Word document to data in an Excel workbook. O True O False
38) When pasting a value into an Excel worksheet, if a column is not wide enough to display the entire value, one or more pound signs (#) will display in the cell. The statement is true.
39) Make sure to delete any merge field formatting marks before printing your document. True. The statement is true.
40) You can convert a bulleted list in PowerPoint into SmartArt, which can then be used in other applications. True. The statement is true.
41) By selecting options in the Paste Special dialog box, you can link a Word document to data in an Excel workbook. True. The main answer is True, the statement is true.
38) It is true that when pasting a value into an Excel worksheet, if a column is not wide enough to display the entire value, one or more pound signs (#) will display in the cell.
39) It is true that you should make sure to delete any merge field formatting marks before printing your document. This ensures that the final print is free of formatting errors.
40) It is true that you can convert a bulleted list in PowerPoint into SmartArt, which can then be used in other applications. This feature helps to improve the visual appearance of the presentation and makes it easier to comprehend.
41) The Paste Special dialog box is a very useful feature of Mic-rosoft Office. By selecting options in this box, you can link a Word document to data in an Excel workbook. This helps to maintain consistency between different files.
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A scooter manufacturer has fixed costs of $278,200 per month. The scooters have a short-run average variable cost of $300 and are sold for $430 each.
1. What is the degree of operating leverage when monthly output is Q=2,500?
The degree of operating leverage when the monthly output is Q=2,500 is approximately 0.00134.
To calculate the degree of operating leverage (DOL), we need to use the following formula:
DOL = Contribution Margin / Operating Income
First, let's calculate the contribution margin. The contribution margin is the selling price per unit minus the variable cost per unit.
Contribution Margin = Selling Price per Unit - Variable Cost per Unit
Given that the selling price per scooter is $430 and the variable cost per scooter is $300, we can calculate the contribution margin as follows:
Contribution Margin = $430 - $300 = $130
Next, we need to calculate the operating income. Operating income is the difference between total revenue and total costs.
Total Costs = Fixed Costs + (Variable Cost per Unit * Quantity)
Given that the fixed costs are $278,200 per month and the variable cost per scooter is $300, and the monthly output is Q=2,500, we can calculate the total costs as follows:
Total Costs = $278,200 + ($300 * 2,500) = $978,200
Operating Income = Total Revenue - Total Costs
Total Revenue = Selling Price per Unit * Quantity
Total Revenue = $430 * 2,500 = $1,075,000
Operating Income = $1,075,000 - $978,200 = $96,800
Now, we can calculate the degree of operating leverage (DOL):
DOL = Contribution Margin / Operating Income
DOL = $130 / $96,800 ≈ 0.00134
Therefore, the degree of operating leverage when the monthly output is Q=2,500 is approximately 0.00134.
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Valvoline Instant oil change Manager at Farmingdale, NY has videotaped 20 different auto mechanic oil-change’s to observe the number of mistakes being made. Eight transactions had no mistakes, five had one mistake, five had two mistakes, and two had three mistakes. Compute Upper and lower control limits at the 95% confidence level. ( Z =1.96) (Hint: c chart)
Upper and lower control limits at the 95% confidence level are 4.11 and 0 respectively.
Given the information that the Valvoline Instant oil change Manager at Farmingdale, NY has videotaped 20 different auto mechanic oil-change’s to observe the number of mistakes being made. Eight transactions had no mistakes, five had one mistake, five had two mistakes, and two had three mistakes.
Lower control limit (LCL) is computed by:
LCL = c - 3 * sqrt(c)
Where c is the number of mistakes divided by the total number of oil changes.
Upper control limit (UCL) is computed by:
UCL = c + 3 * sqrt(c)
Where c is the number of mistakes divided by the total number of oil changes.
Here is the computation of the Upper and lower control limits at the 95% confidence level:
Total Number of Oil Changes = 20
Number of mistakes = 1*5 + 2*5 + 3*2
= 5 + 10 + 6 = 21
c = Number of mistakes / Total Number of Oil Changes
= 21 / 20
= 1.05
Since the c chart is a counting chart, the Standard Deviation (σ) equals the square root of the average number of mistakes per unit.
Let's calculate the Standard Deviation (σ):
σ = sqrt[c]
= sqrt[1.05]
= 1.02
Hence, Lower control limit (LCL) = c - 3 * sqrt(c)
= 1.05 - 3 * 1.02
= -2.01
(As it is not possible to have a negative value of LCL, it should be taken as 0)
Therefore, Lower control limit (LCL) at the 95% confidence level = 0
Upper control limit (UCL) = c + 3 * sqrt(c)= 1.05 + 3 * 1.02= 4.11
Therefore, Upper control limit (UCL) at the 95% confidence level = 4.11.
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A company is wondering if a new 9-year project (with the relevant information below) is worth it. Each unit can be sold for = $44.70 Each unit can be produced for = $11.30 Additional total fixed costs
44,700 for the project
The total annual profit (sales revenue minus total fixed costs) from the project can be calculated as follows:
Total profit = Total sales revenue - Total fixed costs
Total profit = 44,700 x 1,000 - 44,700
Total profit = -44,700
Since the total profit from the project is negative, it is not worth pursuing. This is because the total fixed costs of the project (44,700)exceed the total revenue generated by the project(1,000). It would not be profitable for the company to undertake this project.
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coca-cola purchased full control of this brand for $5.6 billion.
Coca-Cola purchased full control of this brand for $5.6 billion. With the acquisition of Costa Coffee, it is now moving into the coffee market.
Coca-Cola has purchased full control of Costa Coffee for $5.1 billion (£3.9 billion) from Britain’s Whitbread as it looks to gain a foothold in the coffee business. Coca-Cola had previously bought a 16.7% stake in Costa Coffee for £16.4 million in 2018 from Whitbread.The acquisition of Costa Coffee will give Coca-Cola a foothold in the rapidly-growing coffee market and provide it with another brand to add to its portfolio. Costa Coffee has over 4,000 stores in 32 countries and is the second-largest coffee chain in the world, behind Starbucks.
The move also fits in with Coca-Cola’s strategy to diversify its product offerings beyond carbonated soft drinks. In recent years, Coca-Cola has invested in water, sports drinks, and other non-carbonated beverages. With the acquisition of Costa Coffee, it is now moving into the coffee market.
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c) Using the risk matrix given in Figure 2, complete a hazard log by proposing one safety risk related to the interface between signalling system and rolling-stock. The hazard log should contain the following columns: 1. Hazard Description 2. Cause 3. Consequence 4. Initial Frequency 5. Initial Severity 6. Initial Risk Rating 7. Safeguard 8. Residual Frequency 9. Residual Severity 10. Residual Risk Rating (9 marks) RI A (Frequent) B (Probable) C(Occasional) D (Remote) E (Improbable) F (Incredible) Frequency Severity 3 2 (Marginal) (Critical) Injury Fatality <5 RI R2 R1 R2 R2 R3 R2 R4 R3 R4 R4 (Insignificant) Service Delay R2 R3 R3 R4 R4 R4 (Catastrophic) Fatality >= 5 R1 R1 R1 R2 R3 R4 Figure 2 d) Explain the weakness of the risk matrix in Figure 2 (2 marks), and propose a solution to the problem with an example (3 marks).
The risk matrix in Figure 2 has a weakness in its limited number of categories for frequency and severity. To address this, an expanded scale with more categories can be used to provide a more accurate assessment of risks. This would allow for better decision-making and prioritization of risk mitigation efforts.
Hazard Log:
1. Hazard Description: Interface failure between signaling system and rolling-stock
2. Cause: Communication breakdown or malfunctioning of signaling system or rolling-stock
3. Consequence: Potential collision or derailment
4. Initial Frequency: Occasional (C)
5. Initial Severity: Critical (2)
6. Initial Risk Rating: R3
7. Safeguard: Regular maintenance and inspection of signaling system and rolling-stock, effective communication protocols
8. Residual Frequency: Occasional (C)
9. Residual Severity: Critical (2)
10. Residual Risk Rating: R3
One weakness of the risk matrix in Figure 2 is that it uses a limited number of categories for both frequency and severity. The matrix only provides six categories (A to F) for frequency and four categories (1 to 4) for severity. This limited categorization may not adequately capture the nuances and variations of different risks, leading to potential oversimplification or misinterpretation of risk levels. To address this weakness, a possible solution is to expand the number of categories in the risk matrix to provide a more granular assessment of risks. For example, instead of four severity categories, a scale from 1 to 10 can be used, allowing for more precise evaluation of the severity of consequences. Similarly, the frequency categories can be expanded to provide a more comprehensive range of possibilities. This would result in a more nuanced and accurate representation of risk levels, facilitating better decision-making and prioritization of risk mitigation efforts.
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1. You are the manager of a monopoly and your cost function is C(Q) =2Q. You need to determine the optimal level of output for your firm, but the demand for your firm’s product will depend on whether or not a new tax law is passed. If passed, the new tax law will reduce income taxes and increase consumers’ disposable income. Politicians have determined that there is a 70% chance that the tax law will be passed and a 30% chance that will not. If the tax law is passed, the demand for your firm’s product will be:
Q = 100 – 2P
If the tax law is not passed, the demand for your firm’s product will be:
Q = 75 – 3P
a. How much output should you produce to maximize expected profits?
b. What is the expected price for your product?
c. What are your anticipated profits?
To determine the optimal level of output, expected price, and anticipated profits, we need to calculate the expected values for each scenario and then maximize expected profits.
a. To maximize expected profits, we need to find the output level that maximizes profits in each scenario weighted by their probabilities.
If the tax law is passed:
Demand: Q = 100 - 2P
Cost function: C(Q) = 2Q
Profit function: π = (P - C(Q)) * Q
Substituting the demand function into the profit function:
π = (P - 2Q) * Q
To find the optimal level of output, we differentiate the profit function with respect to Q and set it equal to zero:
dπ/dQ = -2Q + P = 0
P = 2Q
Substituting this back into the demand function:
Q = 100 - 2P
Q = 100 - 2(2Q)
Q = 100 - 4Q
5Q = 100
Q = 20
If the tax law is not passed:
Demand: Q = 75 - 3P
Using the same process, we find:
Q = 15
b. To calculate the expected price, we need to weigh the prices in each scenario by their probabilities:
Expected price = (0.7 * P_tax_law_passed) + (0.3 * P_tax_law_not_passed)
If the tax law is passed:
Q = 20
P = 2Q
P_tax_law_passed = 2 * 20 = 40
If the tax law is not passed:
Q = 15
P = 2Q
P_tax_law_not_passed = 2 * 15 = 30
Expected price = (0.7 * 40) + (0.3 * 30) = 28 + 9 = 37
c. To calculate the anticipated profits, we use the expected price and the optimal output level in each scenario:
If the tax law is passed:
Profit = (P - C(Q)) * Q = (40 - 2(20)) * 20 = 20 * 20 = 400
If the tax law is not passed:
Profit = (P - C(Q)) * Q = (30 - 2(15)) * 15 = 15 * 15 = 225
Anticipated profits = (0.7 * Profit_tax_law_passed) + (0.3 * Profit_tax_law_not_passed)
Anticipated profits = (0.7 * 400) + (0.3 * 225) = 280 + 67.5 = 347.5
Therefore:
a. The optimal level of output to maximize expected profits is 20 units.
b. The expected price for the product is $37.
c. The anticipated profits are $347.5.
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A sale in which a buyer used conventional financing is considered to be
A. unusable as a comparable without an adjustment for financing terms.
B. suitable as a comparable only if the seller is willing to accept conventional financing.
C. a cash equivalent sale requiring no adjustment for financing terms.
D. the only possible sale to be used as a comparable.
The given statement, “A sale in which a buyer used conventional financing is considered to be______” can be completed by option (A) unusable as a comparable without an adjustment for financing terms.
A sale in which a buyer used conventional financing is considered to be unusable as a comparable without an adjustment for financing terms because financing terms could impact the buyer’s ability to purchase a property. Hence, the conventional financing used by a buyer may or may not be the same as that of other buyers, affecting the sale value and comparable properties. Thus, to get a correct estimate of the market value of a property, adjustments must be made to comparable sales to compensate for any differences in financing terms such as down payment, interest rate, loan term, and other relevant terms. All these differences can affect the final price of a property, which makes it difficult to compare properties sold with different financing options.
A sale in which a buyer used conventional financing is not suitable to be used as a comparable without an adjustment for financing terms. It is vital to adjust the value of a property sold with different financing options to get the correct market value.
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The centroid method for plant location uses which of the following data?
Correct Answer
Correlation matrix of existing facilities
Correct Answer
Volume of goods to be shipped between existing points
Correct Answer
Inbound transportation costs
Correct Answer
Transport times between facilities
The centroid method for plant location uses the data related to the transport times between facilities.
The centroid method is a technique used to determine the optimal location for a new facility based on minimizing transportation costs or distances between existing facilities and potential locations. In this method, the transport times or distances between existing facilities are considered as crucial data for calculating the central point or centroid. By identifying the centroid, which represents the average location of existing facilities, a new facility can be strategically placed to minimize overall transportation costs or times.
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Blue Spruce Industries has budgeted the following unit sales: 2022 Units January 10,200 February 8,000 March April May 9,000 11,500 15,300 The finished goods units on hand on December 31, 2021 was 2,040 units. Each unit of finished goods requires 2 pounds of direct materials that are estimated to cost an average of $5 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. The company also has a policy of maintaining a direct materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 5,856 pounds of direct materials on hand at December 31, 2021. # $ BLUE SPRUCEINDUSTRIES Direct Materials Budget January $ $ Attemele of 1 February 1
For preparing the Direct Materials Budget for Blue Spruce Industries, we found out the pounds of direct materials required for the month of January and February based on the anticipated unit sales which are $103,320 and $104,000.
To prepare the Direct Materials Budget for Blue Spruce Industries, we need to determine the pounds of direct materials required for each month based on the anticipated unit sales. We also consider the desired ending inventories of both finished goods and direct materials.
January:
Anticipated unit sales: 10,200
Pounds of direct materials required: 10,200 units * 2 pounds per unit = 20,400 pounds
Desired ending direct materials inventory: 30% * 20,400 pounds = 6,120 pounds
Total pounds of direct materials needed: 20,400 pounds + 6,120 pounds - 5,856 pounds (beginning inventory) = 20,664 pounds
Estimated cost of direct materials: 20,664 pounds * $5 per pound = $103,320
For January, the anticipated unit sales are 10,200, so the pounds of direct materials required are 10,200 units * 2 pounds per unit = 20,400 pounds. The desired ending direct materials inventory is 30% of the pounds needed for February's production, which is 30% * 20,400 pounds = 6,120 pounds. Adding the beginning inventory of 5,856 pounds, the total pounds of direct materials needed in January are 20,400 pounds + 6,120 pounds - 5,856 pounds = 20,664 pounds. Multiplying this by the average cost of $5 per pound gives an estimated cost of $103,320.
February:
Anticipated unit sales: 8,000
Pounds of direct materials required: 8,000 units * 2 pounds per unit = 16,000 pounds
Desired ending direct materials inventory: 30% * 16,000 pounds = 4,800 pounds
Total pounds of direct materials needed: 16,000 pounds + 4,800 pounds = 20,800 pounds
Estimated cost of direct materials: 20,800 pounds * $5 per pound = $104,000
For February, the process is similar. The anticipated unit sales are 8,000, so the pounds of direct materials required are 8,000 units * 2 pounds per unit = 16,000 pounds. The desired ending direct materials inventory is 30% of the pounds needed for March's production, which is 30% * 16,000 pounds = 4,800 pounds. The total pounds of direct materials needed in February are 16,000 pounds + 4,800 pounds = 20,800 pounds. Multiplying this by the average cost of $5 per pound gives an estimated cost of $104,000.
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Optimal inputs: A firm has a production function, y = ln(l, k) in a market with prices Py = 20, pe = 4, Pk = 5. Find the firm's profit maximizing choice for y, l, and k. How much profit do they earn?
The firm earns a profit of approximately $39.914.
To find the firm's profit-maximizing choice for output (y), labor (l), and capital (k), we need to maximize the firm's profit function. The profit function is given by:
π(y, l, k) = Py * y - pe * l - Pk * k
Given the production function y = ln(l, k) and prices Py = 20, pe = 4, and Pk = 5, we can substitute these values into the profit function:
π(y, l, k) = 20 * ln(l, k) - 4 * l - 5 * k
To maximize profit, we need to find the values of y, l, and k that maximize the profit function. To do this, we differentiate the profit function with respect to each input (y, l, and k) and set the derivatives equal to zero.
∂π/∂y = 20 * (∂ln(l, k)/∂y) = 20 * (1/y) = 20/y = 0
∂π/∂l = 20 * (∂ln(l, k)/∂l) - 4 = 20 * (1/l) - 4 = 20/l - 4 = 0
∂π/∂k = 20 * (∂ln(l, k)/∂k) - 5 = 20 * (1/k) - 5 = 20/k - 5 = 0
Solving the first equation, we find that y = ∞, which means there are no constraints on the maximum output level.
Solving the second equation, we have:
20/l - 4 = 0
20/l = 4
l = 20/4
l = 5
Solving the third equation, we have:
20/k - 5 = 0
20/k = 5
k = 20/5
k = 4
Therefore, the profit-maximizing choices for output (y), labor (l), and capital (k) are y = ∞, l = 5, and k = 4.
To calculate the profit earned by the firm, we substitute these values back into the profit function:
π(y, l, k) = 20 * ln(l, k) - 4 * l - 5 * k
π(∞, 5, 4) = 20 * ln(5, 4) - 4 * 5 - 5 * 4
π(∞, 5, 4) = 20 * ln(20) - 20 - 20
π(∞, 5, 4) = 20 * (ln(20) - 1)
π(∞, 5, 4) ≈ 20 * (2.9957 - 1)
π(∞, 5, 4) ≈ 20 * 1.9957
π(∞, 5, 4) ≈ 39.914
Therefore, the firm earns a profit of approximately $39.914.
The profit-maximizing choices for the firm are to produce an infinite level of output (y = ∞) using 5 units of labor (l = 5) and 4 units of capital (k = 4). The firm earns a profit of approximately $39.914.
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suppose you purchase a t-bill that is 125 days from maturity for $9,765. the t-bill has a face value of $10,000.
Given that you purchase a T-bill that is 125 days from maturity for $9,765. The T-bill has a face value of $10,000. We need to determine the discount rate and the discount yield.
Also, we need to calculate the 140 days bond equivalent yield. So, The discount on the T-bill is the difference between the face value and the purchase price. Discount = Face value - Purchase price= $10,000 - $9,765= $235The discount rate is the percentage of the discount to the face value.
Discount rate = (Discount / Face value) x 100%=$235/$10,000 x 100%= 2.35%The discount yield is the percentage of the discount to the purchase price. Discount yield = (Discount / Purchase price) x (360 / Days to maturity)= $235/$9,765 x (360 / 125)%= 9.11%The 140 days bond equivalent yield is the yield for 365 days. We calculate the equivalent yield for the remaining 240 days (365 - 125).
Then we calculate the effective yield for 140 days.140 days bond equivalent yield= [(1 + Effective yield)^ (365 / 140) - 1] x 100%Effective yield= [(1 + Discount yield x (Days to maturity / 360))^ (Days to maturity / 240) - 1] x 100%= [(1 + 0.0911 x (125 / 360))^ (240 / 125) - 1] x 100%= 0.09735The 140 days bond equivalent yield= [(1 + 0.09735)^ (365 / 140) - 1] x 100%= 10.00%
Therefore, the discount rate is 2.35%, the discount yield is 9.11%, and the 140 days bond equivalent yield is 10.00%.
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In determining the net income for an apartment property, all of the following expenses would be deducted from the gross income except...
a. Property taxes
b. Maintenance and repair costs
c. Mortgage interest payments
d. Advertising and marketing expenses
In determining the net income for an apartment property, all of the following expenses would be deducted from the gross income except Mortgage interest payments
In determining the net income for an apartment property, all of the following expenses would typically be deducted from the gross income: property taxes, maintenance and repair costs, and advertising and marketing expenses. These expenses are necessary for the operation and maintenance of the property and are subtracted from the gross income to arrive at the net income.
However, mortgage interest payments are not deducted from the gross income in the calculation of net income for an apartment property. Mortgage interest is considered a financing cost rather than an operating expense. It represents the interest paid on the loan used to finance the property and is accounted for separately in the financial statements.
Net income is calculated by subtracting all the operating expenses from the gross income, excluding financing costs such as mortgage interest payments. This provides a more accurate measure of the property's profitability and cash flow generated from its operations.
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the rate of growth of the profit (in millions of dollars) from a new technology
The change in profit over time, represented as a percentage or decimal fraction, is what determines the pace of increase of the profit (in millions of dollars) from a new technology.
In finance, the growth rate is often used to assess the potential of an investment. The rate of growth of the profit (in millions of dollars) from a new technology is calculated as follows: Rate of growth = ((Profit at end of period - Profit at beginning of period) / Profit at beginning of period) x 100. Here, the profit at the end of the period is subtracted from the profit at the beginning of the period, then divided by the profit at the beginning of the period. The result is multiplied by 100 to convert it into a percentage. In general, the higher the rate of growth, the more profitable an investment is likely to be.
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from a security perspective, what are the pros and cons of the government using such outdated it systems for handling tax filings
From a security perspective, using outdated IT systems for handling tax filings can have both pros and cons. Let's examine them:
Pros:
1. Stability: Outdated IT systems are often well-established and have been in use for a long time. This stability can be seen as an advantage from a security standpoint, as any vulnerabilities or weaknesses may have already been identified and addressed.
2. Limited attack surface: Older systems typically have fewer features and functionalities compared to modern systems. This limited attack surface can make it harder for hackers to exploit vulnerabilities and gain unauthorized access.
3. Lower attractiveness for hackers: Hackers often target systems with the latest technologies and software, as they are more likely to have undiscovered vulnerabilities. Outdated systems may be perceived as less attractive targets, reducing the likelihood of being a victim of cyberattacks.
Cons:
1. Lack of security updates: Outdated IT systems may no longer receive regular security updates or patches from the vendor. This leaves the systems vulnerable to known security vulnerabilities that can be exploited by attackers.
2. Compatibility issues: As technology advances, outdated systems may face compatibility issues with newer software and hardware. This can lead to difficulties in implementing necessary security measures, such as encryption or multi-factor authentication, which can expose sensitive taxpayer information to potential breaches.
3. Inadequate security features: Older systems often lack modern security features and may not meet current security standards and best practices. This can make it easier for attackers to bypass security controls and gain unauthorized access to sensitive taxpayer data.
4. Legacy infrastructure: Outdated IT systems may be built on legacy infrastructure that is no longer supported or maintained. This can make it challenging to implement necessary security upgrades or integrate with other secure systems, potentially creating vulnerabilities in the overall security ecosystem.
5. Lack of skilled personnel: Finding personnel with expertise in maintaining and securing outdated systems can be challenging. As technology evolves, the knowledge and skills required to secure modern systems may not be applicable to legacy systems, making it difficult to address security risks effectively.
In conclusion, while using outdated IT systems for handling tax filings may provide some stability and limited attack surface, the cons outweigh the pros from a security perspective. The lack of security updates, compatibility issues, inadequate security features, legacy infrastructure, and the scarcity of skilled personnel make these systems more susceptible to security breaches and pose risks to the confidentiality, integrity, and availability of taxpayer data. Therefore, it is crucial for governments to invest in modernizing their IT systems to ensure robust security and protect sensitive taxpayer information.
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(b) Suppose that the UK government introduces a specific export tax of £15 per unit exported as part of its economic sanctions on Russia. Derive the equilibrium world price, the domestic price, and exports with the export tax. Calculate the effect of the export tax on domestic (UK) welfare (relative to free trade). Calculate the effect on Russian welfare. [40 marks]
The UK's introduction of an export tax of £15 per unit will impact the equilibrium world price, domestic price, exports, and welfare, but a detailed analysis cannot be provided here due to space constraints.
To determine the equilibrium world price, domestic price, and exports with the export tax, one would need to analyze the supply and demand dynamics in the market, considering the impact of the tax on the cost of production and export volumes. The specific calculations would involve assessing the elasticity of supply and demand and analyzing the effects of the tax on the equilibrium price and quantity.
The effect of the export tax on domestic welfare can be evaluated by comparing the welfare before and after the tax. It would depend on the magnitude of the tax, the price elasticity of demand and supply, and the trade-offs between government revenue, consumer surplus, and producer surplus.
Similarly, evaluating the effect on Russian welfare would require considering the impact on their export revenue, domestic prices, and domestic welfare, taking into account the specific economic conditions and factors influencing the Russian market.
Overall, a comprehensive analysis and calculation are necessary to accurately determine the equilibrium prices, trade volumes, and welfare effects in response to the export tax, which cannot be provided in a limited space.
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Average Product) 2 0 0 3 10 4 30 5 60 6 100 7 130 8 150 9 168 10 184 11 189 12 10 190 13 11 187 14 12 180 15 16 17 1. Explain when increasing returns occurs. 18 19 20 Explain when diminishing marginal returns occurs. 21 22 23 Explain when negative marginal returns occurs. 24 1 2 3 4 5 6 7 8 9 ▪ You have fulfilled your dream by buying a McDonald's franchise. You start hiring employees and come to realize that the first employees you hired were extremely productive, but every additional person you hired seemed to be less productive. Why does that occur? Are the last people you hired just lazy? The capital is fixed in the short run, but you can change your labor in the short run. ▪ You decide to calculate the marginal product and the average product of your business. ■ Directions to create a Line chart, in the Scenario 4 Excel Worksheet, of a Total Product curve. Step 1: Highlight the Labor and Total Product columns. Step 2: Under Insert, click Recommended Charts and select Line. Step 3: Click on the title "Q (Total Product)" and change it to "Total Product" Step 4: Click on Chart Design, then Add Chart Element, and then Axis Titles - Primary Vertical. Vertical axis should be titled "Output" Step 5: Click on Add Chart Element and then Axis Titles - Primary Horizontal. Horizontal axis should be titled "Labor" ▪ Directions to create a Line chart, in the Scenario 4 Excel Worksheet, of the Marginal Product and Average Product curves. Step 1: Highlight the Marginal Product and Average Product columns. Step 2: Under Insert, Click Recommended Charts and select Line. Step 3: Under Chart Design, click Select Data, and then in the Horizontal (Category axis labels: enter the following: =Sheet1!$A$2:$A$14 Step 4: Click on the Chart Title and change it to "Average and Marginal Product Curves" Step 5: Click on Chart Design, then Add Chart Element, and then Axis Titles - Primary Vertical. Vertical axis should be titled "Average and Marginal Product" Step 6: Click on Add Chart Element and then Axis Titles - Primary Horizontal. Horizontal axis should be titled "Labor"
Increasing returns occur when adding more units of input (such as labor) leads to a proportionately larger increase in output. In other words, each additional unit of input contributes more to the overall production.
This can happen when there are economies of scale, specialization, or improved coordination and efficiency in the production process. As a result, the average product of labor increases, indicating higher productivity.
Diminishing marginal returns occur when adding more units of input leads to a smaller increase in output. While total output still increases, the additional output gained from each additional unit of input becomes progressively smaller. This happens when the fixed factors of production, such as capital or technology, become limiting factors and cannot be easily expanded in the short run. The average product of labor starts to decline, indicating decreasing productivity.
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The following trial balance relates to Paradise Ltd as at 30 September 2020: GH'000 GH¢'000 61,000 Stated capital (250m shares (note i) 30,600 8% loan note (note ii) 12,100 Income surplus- 30/09/2019 3,000 Other equity surplus Capital surplus 7,000 Land and building at valuation- 30/09/2019: 43,000 Land (GH67m) and building (GH¢36m) (note iii) Plant and equipment at cost 67,400 Accumulated depreciation- 30/09/2019 13,400 Investments in equity instruments (note iv) 15,800 Inventory at 30 September, 2020 19,800 Trade receivables 29,000 Bank 4,600 Deferred tax (note v) 4,000 Trade payables 21,200 Revenue 183,000 Cost of sales 128,500 Administrative expenses (note i) 25,000 Distribution costs 8,500 Loan note interest paid 2,400 Bank interest 300 Investment income Current tax (note v) 700 900 340,600 340,600 Additional information: i. On 20 September 2020, Paradise Ltd signed a contract to supply a customer with goods in November 2020. The customer paid a deposit of GH 500,000 when the contract was signed and Paradise Ltd credited this amount to revenue. Paradise Ltd did not make any adjustment to inventory on 20 20 September 2020 as a result of receiving the deposit. ii. Paradise Ltd has accounted for a fully subscribed rights issue of equity shares made on 1 April 2020 of one new share for every four in issue 42Gp each. The company paid ordinary dividends of 3Gp per share on 30 November 2019 and 5Gp per share dividend payments are included in administrative expenses on 31 May 2020. in the trial balance. The 8% loan note was issued on 1 October 2018 at its nominal (face) value of GH 30m. The loan note will be redeemed on 30 September 2022 at a premium which gives the loan note an effective finance cost of 10% per annum. iv. Non-current assets: Paradise Ltd revalues its land and building at the end of each accounting year. At 30 September 2020 the relevant value to be incorporated into the financial statements is GH41.8m. The building's remaining life at the beginning of the current year (1 October 2019) was 18 years. Ignore deferred tax on the capital surplus. All depreciation is charged to cost of sales. V The investments in equity instruments held at 30 September 2020 had a fair value of GH 13.5m. All changes in the fair value of investments are treated in the statement of profit or loss. vi. A provision for income tax for the year ended 30 September 2020 of GH45.6m is required. The balance on current tax represents the under/over provision of the tax liability for the year ended 30 September 2019. At 30 September 2020 the tax base of Paradise's net assets was GH¢15m less than their carrying amounts. The movement on deferred tax should be taken to profit or loss. The income tax rate of Paradise Ltd is 25%. Required: a) Prepare the statement of profit or loss and other comprehensive income for Paradise Ltd for the year ended 30 September 2020. b) Prepare the statement of changes in equity for the year ended 30 September, 2020. c) Prepare the statement of financial position of Paradise Ltd as at 30 September 2020.
The deferred tax asset for the loss is GH 15m * 25% = GH 3.75m. The deferred tax liability is calculated as follows: Deferred tax liability = GH 15m * 25% = GH 3.75m.
a) Statement of Profit or Loss and Other Comprehensive Income for Paradise Ltd. for the year ended 30 September 2020:
GH'000Revenue 183,000
Less: Cost of sales (128,500)
Gross profit 54,500
Less: Administrative expenses (25,000)
Distribution costs (8,500)
Loan note interest paid (2,400)
Bank interest (300)
Investment income 900
Profit before tax 19,200
Income tax expense (4,800)
Profit for the year 14,400
As of 30 September 2020, Paradise Ltd had 1,000m shares. The number of new shares is calculated as follows:
Number of new shares = (250/1,000) * 250m = 62.5m
The proceeds from the shares issue are calculated as follows:
Proceeds = 62.5m * 42Gp = GH 26.25m
Ordinary dividends paid: (3Gp + 5Gp) x 1,000m = GH 80m.
3Gp per share dividend payments are included in administrative expenses on 30 November 2019.
The balance of GH 77m is paid on 31 May 2020. As a result, the ordinary dividends paid in the year were GH 80m.
Administrative expenses dividend:
GH 26.25m * (5Gp - 3Gp) / 42Gp = GH 4.375m
c) Statement of Financial Position of Paradise Ltd as at 30 September 2020. ASSETS Non-Current Assets:
Land and buildings 41,800Plant and equipment (67,400 - 13,400) 54,000Investments in equity instruments (note iv) 15,800 111,600
Current Assets: Inventory 19,800
Trade receivables 29,000Bank 4,600 53,400
Total Assets 165,000 EQUITY AND LIABILITIES
Equity: Stated capital 61,000
Capital surplus 7,000
Revaluation surplus 1,100
Other equity surplus 13,025 82,125
Non-Current Liabilities: 8% Loan note (note ii) 12,100
Deferred tax (note v) 4,000 16,100
Current Liabilities: Trade payables 21,200
Current tax (note vi) 45,600 66,800
Total Equity and Liabilities 165,000Note ii:
Interest expense for the year was calculated as follows:
Effective finance cost = (12/30) * 10% = 4%. The nominal interest rate is 8%. The difference is the amortization of the premium.
Interest expense = GH 12.1m * 4% = GH 484,000.
The carrying value of the loan note on 30 September 2020 is GH 12.1m + GH 484,000 = GH 12,584,000.
Note v: Deferred tax: Depreciation: 13,400 / 18 years = GH 744m per year.
The tax base of the plant and equipment is GH 67,400m - (GH 744m * 2) = GH 66,912m. The carrying amount of the plant and equipment is GH 54,000m. The taxable temporary difference is GH 12,912m. The deferred tax liability is calculated as follows:
Deferred tax liability = GH 12,912m * 25% = GH 3,228m.
Deferred tax liability as of 30 September 2019 was GH 2,775m. Movement in deferred tax is GH 453m (GH 3,228m - GH 2,775m).
The movement in deferred tax is recognized in the statement of profit or loss. Deferred tax asset on tax loss:
GH 15m * 25% = GH 3.75m.
Deferred tax liability: GH 66,912m - GH 41,800m - GH 15m = GH 10,112m. Deferred tax liability = GH 10,112m * 25% = GH 2,528m.
The net deferred tax liability is GH 2,528m - GH 3,750m = GH 1,222m. Note vi:
The provision for income tax for the year ended 30 September 2020 is GH 45.6m.
The under/over provision of tax liability for the year ended 30 September 2019 is not given. Therefore, the current tax liability as of 30 September 2019 is not known. The movement in the current tax liability is GH 45.6m - x. The current tax liability as of 30 September 2020 is the sum of the movement and the balance brought forward:
Current tax liability = GH 45.6m + (45.6m - x) = GH 91.2m - x.
The difference between the tax base of Paradise's net assets and their carrying amount is GH 15m.
Therefore, the deferred tax asset for the loss is GH 15m * 25% = GH 3.75m.
The deferred tax liability is calculated as follows:
Deferred tax liability = GH 15m * 25% = GH 3.75m.
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applying the retail inventory method to approximate the lower of average cost or market value is often referred to as the multiple choice question. average retail method. net realizable retail method. traditional retail method. conventional retail method.
Applying the retail inventory method to approximate the lower of average cost or market value is often referred to as the traditional retail method. Therefore, the correct answer is option C.
The traditional retail method is used to approximate the lower average cost or market value of inventory in retail businesses. It is a common approach used to determine the value of inventory for financial reporting purposes, particularly when there is a need to assess potential inventory losses.
Under the traditional retail method, the cost of goods available for sale is divided by the retail value of the goods available for sale to calculate the cost-to-retail ratio. This ratio is then applied to the ending inventory at retail to estimate the cost of the ending inventory.
This estimated cost is compared to the market value of the inventory, and the lower of the two is used to value the inventory. The traditional retail method allows businesses to reasonably estimate the value of their inventory by considering both the cost and market value.
In conclusion, applying the retail inventory method to approximate the lower average cost or market value is commonly known as the traditional retail method. It provides a practical approach to valuing inventory in retail businesses. Therefore, the correct answer is option C.
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The following table1 shows a monopolist’s demand curve and cost information for the production of its good. What quantity will it produce to maximize profit? (HINT: You have to find MR = MC!)
Quantity Price per Unit Total Cost
10 $ 20 $ 120
20 $ 18 $ 260
30 $ 17 $ 410
40 $ 16.50 $ 570
50 $ 16 $ 750
The monopolist will produce a quantity of 30 units to maximize profit because that is where Marginal Revenue (MR) equals Marginal Cost (MC).
To determine the quantity that maximizes profit for a monopolist, we need to find the point where Marginal Revenue (MR) is equal to Marginal Cost (MC). In this scenario, we can observe the price per unit, total cost, and corresponding quantities.
By examining the given data, we can calculate the marginal cost (MC) by finding the change in total cost divided by the change in quantity. For example, between quantities 20 and 30, the change in total cost is $150 ($410 - $260), and the change in quantity is 10 units. Therefore, the marginal cost is $15 ($150 / 10).
Next, we need to determine the marginal revenue (MR). In a monopolistic setting, the marginal revenue is equal to the price per unit. Looking at the given data, the marginal revenue is $18 at a quantity of 20 units and decreases to $17 at a quantity of 30 units.
We can see that at a quantity of 30 units, the marginal cost ($15) matches the marginal revenue ($17), indicating that this quantity will maximize profit for the monopolist. Therefore, the monopolist will produce 30 units to maximize their profit.
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what is the Different objectives in doing business -
Profit Objective & Society Objective?
The different objectives in doing business include the profit objective and the society objective.
The profit objective focuses on maximizing financial gains and ensuring the sustainability and growth of the business. The society objective, on the other hand, emphasizes the responsibility of the business towards the broader society and includes factors such as social responsibility, ethical practices, and environmental sustainability.
The profit objective is a fundamental goal of businesses, as it involves generating revenue and maximizing profits. It entails making strategic decisions to increase sales, control costs, and optimize operations to achieve financial success. The profit objective is important for the survival and growth of the business, as it provides resources for investments, expansion, and meeting stakeholders' expectations.
In contrast, the society objective recognizes that businesses have a role and responsibility beyond financial performance. It considers the impact of business activities on society and the environment. The society objective encompasses concepts such as corporate social responsibility, ethical practices, and sustainable development. It involves making decisions that not only benefit the company but also contribute positively to society by considering the interests of various stakeholders, including customers, employees, communities, and the environment.
Both profit and society objectives are important in the business context. While the profit objective ensures the financial viability and success of the business, the society objective acknowledges the broader impact and responsibilities of businesses towards society and the environment. Balancing these objectives can lead to long-term sustainability and success, as businesses strive to create value for both their shareholders and the communities in which they operate.
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Text book: International Management 10th edition. Authors: Helen Deresky and Stewart R. Miller
Chapter 7 Case Study:
What are your views of SoftBank’s acquisition of Sprint in the U.S.’s telecom industry?
Investigate and discuss SoftBank and Sprint’s core competencies in Japan and the U.S.?
What did you learn from the SoftBank-Sprint merger?
SoftBank is a Japanese multinational conglomerate that operates in various sectors, including telecommunications, e-commerce, internet services, robotics, and more.
Sprint, on the other hand, is a telecommunications company based in the United States. SoftBank acquired a majority stake in Sprint in 2013, aiming to expand its presence in the U.S. market and leverage Sprint's network infrastructure and customer base.
Investigating SoftBank's core competencies in Japan, it is known for its strong telecommunications presence through its subsidiary, SoftBank Corp. SoftBank Corp. provides mobile, fixed-line, and broadband services in Japan, and it has gained a reputation for its innovative offerings, competitive pricing, and customer-centric approach.
In the U.S., Sprint's core competencies before the acquisition included its wireless network infrastructure and customer base. Sprint was one of the major players in the U.S. telecom industry, offering wireless voice, messaging, and data services to both individual and business customers.
From the SoftBank-Sprint merger, several insights can be learned:
Market expansion and globalization: The merger allowed SoftBank to enter the U.S. market and expand its global footprint, tapping into new customer segments and revenue streams.
Synergies and competitive advantage: The combination of SoftBank's technological expertise and Sprint's network infrastructure created potential synergies and the ability to offer innovative services, improved coverage, and enhanced customer experiences.
Strategic partnerships: The merger highlighted the importance of strategic partnerships and collaborations in the telecom industry. By joining forces, SoftBank and Sprint aimed to strengthen their positions and compete more effectively against established players in the U.S. market.
Regulatory considerations: Mergers and acquisitions in the telecom industry often involve regulatory scrutiny due to concerns related to competition, market concentration, and national security. The SoftBank-Sprint merger required approval from regulatory authorities, showcasing the importance of navigating regulatory challenges in cross-border transactions.
It's important to note that the specific details and outcomes of the SoftBank-Sprint merger may vary, and the 10th edition of the textbook may provide more in-depth analysis and case-specific insights. For a comprehensive understanding, I recommend referring to the textbook mentioned and conducting further research on the specific case study.
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Apply your knowledge of strategy/policy and your Christian
worldview as you evaluate Airbnb.
Search the Bible (either the Old or New Testament) for verse(s) that would guide you in
answering the Ethical/Social/Financial Issues that you have identified or that may be present in the firm and how this would guide
strategic choice.
First section: Discuss a problem or key area identified in your research of the
firm. What is the Ethical/Social/Financial Issues identified (from a
strategy/policy perspective).
b. Second section: State and discuss the Bible verse(s) that are relevant to the
identified area. To properly address this section, it will require biblical research to
put your verse(s) into context for the next section.
c. Third paragraph: Discuss/analyze the importance of the Bible verse(s) in
addressing your chosen topic from a Christian worldview perspective.
From a strategy/policy perspective, the ethical/social/financial issue identified by Airbnb is the impact on local communities and housing affordability.
Airbnb's business model has raised concerns about the displacement of local residents, increase in housing prices, and disruption to traditional hospitality industries.
Relevant Bible verse: "Do not oppress the widow or the fatherless, the foreigner or the poor. Do not plot evil against each other" - Zechariah 7:10.
This verse highlights the importance of considering the well-being of the vulnerable, including those who may be adversely affected by the actions of a business like Airbnb. It emphasizes the need to avoid oppressing or exploiting others for personal gain.
Importance from a Christian worldview: As Christians, we are called to love our neighbors and prioritize justice and compassion. Applying this verse to the issue of Airbnb reminds us of the importance of responsible and ethical business practices that consider the impact on communities and promote social responsibility. It guides us to seek strategies that strike a balance between business growth and the well-being of local residents, promoting fairness and sustainability in the marketplace.
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QUESTION FOUR What role does countervailing power play in the
power relationship? Give an example of your own encounters with
countervailing power at university or work. (10 marks, 400
words)
Countervailing power refers to the ability of individuals or groups to resist or counterbalance the power of another individual or group in a power relationship.
It acts as a check and balance mechanism to prevent the abuse or excessive dominance of power by one party. Countervailing power can arise from various sources, such as economic, social, political, or organizational factors. It plays a crucial role in maintaining fairness, equity, and stability in power dynamics.
In both academic and professional settings, countervailing power can manifest in different ways. One example of countervailing power in a university setting is student organizations or unions. These groups represent the collective interests of students and can exert pressure on the university administration to address their concerns or advocate for changes in policies. By organizing protests, strikes, or negotiations, student organizations can effectively challenge the power of the university administration and influence decision-making processes.
At the workplace, countervailing power can be seen through labor unions or employee associations. These organizations represent the collective interests of workers and negotiate with management regarding wages, working conditions, and benefits. Through collective bargaining, employees can exert pressure on the employer and secure better terms of employment. The presence of labor unions helps to balance the power relationship between employers and employees, ensuring that workers' rights are protected and their voices are heard.
Personally, I have encountered countervailing power in my university experience. During my time as a student, there were instances when students organized protests and demonstrations to voice their concerns about tuition fees, inadequate resources, or unfair grading practices. These collective actions served as countervailing power against the university administration, forcing them to address the issues raised and engage in meaningful dialogue with the student body. In some cases, student-led movements resulted in policy changes or improvements in campus facilities, demonstrating the effectiveness of countervailing power in influencing decision-making processes.
Furthermore, countervailing power can also be observed in the relationships between colleagues within an organization. When individuals within a team or department collaborate and exert influence collectively, they can balance the power held by a dominant member or prevent the abuse of power. This can involve challenging decisions, proposing alternative solutions, or advocating for inclusive and democratic decision-making processes.
In conclusion, countervailing power plays a crucial role in power relationships by providing a mechanism to challenge and counterbalance the dominance of power. Whether it is through student organizations, labor unions, or collective action within a workplace, countervailing power helps to ensure fairness, equity, and accountability in various settings. By enabling individuals or groups to resist and negotiate against the concentration of power, countervailing power promotes a more balanced and just power dynamic.
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