(a) According to the Lewis model, in the initial stage of development, the agricultural sector operates in a traditional or subsistence manner with surplus labor available for industrialization.
In this case, the level of employment in the informal agricultural sector would be determined by the availability of surplus labor. Since the Lewis model assumes an unlimited supply of surplus labor, the employment level would be determined by the labor supply. However, without specific information on the labor supply, we cannot determine the exact level of employment.
The food produced can be calculated using the production function: F = A * (L^b). Given A = 100 and b = 0.5, the food output produced would be F = 100 * (L^0.5).
(b) The wage earned by each worker in the informal agricultural sector in the Lewis model is typically low due to the surplus labor supply and limited bargaining power of workers. Without further information, we cannot determine the exact wage earned by each worker.
(c) The surplus generated in the informal agricultural sector can be used for investment in the farm or redirected towards industrialization in the urban sector, as per the assumptions of the Lewis model. The exact amount of surplus available for investment would depend on the level of employment, wage rates, and productivity levels, which are not provided in the given information.
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An investment is expected to generate 10 annual cash flows of $2117 per year, starting in exactly two years. There is an additional cash flow of $3200 expected in exactly 13 years. If the appropriate annual interest rate is 5%, compounded annually, what would you expect someone to pay for this investment today?
[Keep at least 3 decimal places for all intermediate steps. Express your final answer with 2 decimal places (ie. 55555.55 and NO COMMAS)
Amount invested: $
The total present value of this investment is $15,629.71. Thus, someone should pay $15,629.71 for this investment today.
This is a question about finding the present value of an investment. The present value formula is used to find the value of future cash flows when discounted back to the present at a certain interest rate.
In this case, we are given 10 annual cash flows of $2117 starting in two years and an additional cash flow of $3200 in thirteen years. We are also given the appropriate annual interest rate of 5%.
To find the present value of this investment, we must start by finding the present value of each individual cash flow discounted back at the 5% rate. To begin, we multiply each cash flows by the present value factor for an annuity that can be found in the table of present value factors. This will give us the present value of all 11 cash flows, which we add together to give us the total present value of the investment.
The total present value of this investment is $15,629.71. Thus, someone should pay $15,629.71 for this investment today.
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2) What lines of Businesses does President Choice currently
Cover?
What makes President Choice different or Better than their
Competition?
President's Choice stands out by combining quality, value, innovation, customer focus, and transparency, making it a preferred choice for many consumers seeking diverse and reliable products across multiple lines of business.
President's Choice (PC) currently covers various lines of business, including:
1. Grocery Retail: PC offers a wide range of grocery products, including fresh produce, packaged goods, dairy, and frozen items.
2. Financial Services: PC Financial provides banking services such as savings accounts, mortgages, loans, and credit cards.
3. Insurance: PC Insurance offers home, auto, travel, and pet insurance coverage.
4. Mobile Services: PC Mobile provides wireless phone plans and devices.
5. Loyalty Program: PC Optimum is a loyalty program that allows customers to earn points on purchases and redeem them for discounts or free products.
What sets President's Choice apart from its competition is its focus on the following key factors:
1. Quality and Value: PC emphasizes high-quality products at competitive prices. They offer a wide selection of private-label items that are often praised for their affordability without compromising on quality.
2. Innovation and Uniqueness: PC is known for introducing innovative and unique products to the market, such as plant-based alternatives, specialty foods, and ethnic cuisines. They strive to meet evolving consumer demands and preferences.
3. Customer-Centric Approach: PC values customer feedback and actively seeks input to shape their product offerings. They listen to consumer needs and preferences, resulting in tailored products and services.
4. Trust and Transparency: PC aims to build trust with its customers by providing transparent information about product ingredients, sourcing, and manufacturing processes. They have a commitment to food and product safety.
5. Multi-channel Presence: PC operates both physical stores and an online platform, offering convenience and accessibility to customers.
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Xavier plans to invest an equal amount of $5,000 in an equity
fund every year, starting today. The expected APR of the fund is
20%, compounded annually. How much will Xavier have at the end of
30 year
Xavier will have approximately $47,686,750 at the end of 30 years if he invests an equal amount of $5,000 in an equity fund every year, starting today, with an expected APR of 20%, compounded annually.
The question is asking for the future value of an annuity, where Xavier plans to invest an equal amount of $5,000 in an equity fund every year, starting today. The expected APR of the fund is 20%, compounded annually, and the investment period is for 30 years.
To find the future value of the annuity, we can use the formula:
FV = PMT x [(1 + r)ⁿ - 1] / r where PMT is the periodic payment, r is the interest rate, and n is the number of periods.Using the given values, we have:PMT = $5,000, r = 20% compounded annually,n = 30 years.
Therefore, the future value of the annuity is:
FV = $5,000 x [(1 + 0.2)³⁰ - 1] / 0.2
FV = $5,000 x (9,537.35)
FV = $47,686,750
Therefore, Xavier will have approximately $47,686,750 at the end of 30 years if he invests an equal amount of $5,000 in an equity fund every year, starting today, with an expected APR of 20%, compounded annually.
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If a product is bulky or heavy, transportation costs increase, and unless the product has an extremely high value-to-weight ratio, the least effective strategy would be.
The least effective strategy for transporting a bulky or heavy product would be air transportation.
This is because air transportation is generally more expensive compared to other modes of transportation such as road, rail, or sea. Air freight costs are typically calculated based on the weight and size of the product, and bulky or heavy products would incur higher costs due to their size and weight.
To minimize transportation costs, it would be more effective to consider other modes of transportation. Road transportation is suitable for shorter distances and offers flexibility in terms of pickup and delivery. Rail transportation is efficient for long distances and can handle heavier loads. Sea transportation is ideal for bulky products or those with low value-to-weight ratios, as it is cost-effective for larger volumes and longer transit times. These alternative modes of transportation can help reduce transportation costs while still ensuring the timely delivery of the product.
In conclusion, for bulky or heavy products, considering alternative modes of transportation such as road, rail, or sea would be a more effective strategy to minimize transportation costs.
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Determine the cost of goods sold. Exercise 2: Prepare the journal entries to record the transaction (purchase transactions) Feb . 5 purchased merchandise from Best Company for $5,000 Feb .10 purchased equipment on account for $6,000. Feb . 12 paid freight costs of $600 on merchandise purchased from Best company
Feb . 15 returned damaged merchandise to Best Company and was granted a $400 credit for returned merchandise Feb .20 paid the amount due to Best Company in full.
To determine the cost of goods sold, we need to consider the purchases of merchandise and any adjustments for returns. Here are the transactions:
Feb. 5: Purchased merchandise from Best Company for $5,000.
Feb. 15: Returned damaged merchandise to Best Company and received a $400 credit.
To calculate the cost of goods sold, we subtract the value of returned merchandise from the total purchases:
Cost of Goods Sold = Purchases - Returns
Cost of Goods Sold = $5,000 - $400 = $4,600
Therefore, the cost of goods sold is $4,600.
The cost of goods sold represents the expense incurred by a company for the direct costs associated with producing or acquiring the goods it sells. In this case, the cost of goods sold for the given transactions is $4,600.
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Zane Corporation has an inventory conversion period of 51 days, an average collection period of 37 days, and a payables deferral period of 28 days. Assume 365 days in year for your calculations
What is the length of the cash conversion cycle? Round your answer to two decimal places
days
h. If Zane's annual sales are $3,600,935 and all sales are on credit, what is the investment in acounts receivable? Do not round intermediate calculations Round your answer to the nearest cent
How many times per year does Zane turs aver as inventory? Assume that the cost of goods sold is 75% of sales. Do not found internedute calculations. Round your answer to two decimal places
The Zane turns over as inventory 7.14 times per year.
To calculate the length of the cash conversion cycle, we need to use the formula CCC = Inventory conversion period + Average collection period - Payables deferral period.
So, CCC = 51 + 37 - 28
= 60 days
Therefore, the length of the cash conversion cycle is 60 days.
The investment in accounts receivable can be calculated using the formula: Investment in accounts receivable = (Average daily credit sales * Average collection period)
Here, average daily credit sales = Annual credit sales / 365 days
Annual credit sales = $3,600,935
Average daily credit sales = $9,861.54
Investment in accounts receivable = ($9,861.54 * 37)
= $364,451.98
Therefore, the investment in accounts receivable is $364,451.98.
To calculate how many times per year Zane turns over as inventory, we need to use the formula:
Inventory turnover = Cost of goods sold / Average inventory
Here, cost of goods sold = 75% of sales
Annual sales = $3,600,935
Cost of goods sold = 0.75 * $3,600,935
= $2,700,701.25
Average inventory = (Inventory conversion period / 365 days) * Cost of goods sold
= (51/365) * $2,700,701.25
= $378,618.36
Inventory turnover = $2,700,701.25 / $378,618.36
= 7.14 times
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Jennifer would like to purchase a car in 6 years. The car will cost $20000 at that time. If she can earn 6% on an investment, how much would she need to invest today to make sure that she can afford the car at the end of 6 years?
$32410.
$14099. $23000. $11261.
Jennifer would need to invest approximately $14,099 today.
Jennifer would need to invest approximately $14,099 today to ensure that she can afford the car costing $20,000 in 6 years. This can be calculated using the formula for future value of a present sum, which is given by:
Future Value = Present Value * (1 + Interest Rate)Time
By rearranging the formula, we can solve for the present value:
Present Value = Future Value / (1 + Interest Rate)Time
Plugging in the given values:
Present Value = $20,000 / (1 + 0.06)⁶ = $14,099 (rounded to the nearest dollar)
Therefore, Jennifer would need to invest approximately $14,099 today in order to accumulate $20,000 in 6 years, assuming a 6% interest rate.
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Given the following:
• Stock equals 100
• Stock volatility of 40%
Debt maturity of 5 years
• Debt Face value of 150
• Risk-free rate of 3%
Use Merton's model to find the asset value and asset volatility?
What is the risk-neutral probability of default over the debt's maturity and the annualized default probability?
What is the market spread for the debt?
What is the implied Recovery Rate?
Merton's model is a structural model used to evaluate the risk of default of a business or company.
The Merton Model is utilized to determine the risk-neutral probability of default of a company or business with debt.
This model is based on the Black-Scholes model and is used to identify the value of a company's assets while taking into account its debt.
The formula for Merton's model is: = (1) − (2)
Where: V = the value of the assets S = the stock price N(d) = the cumulative normal distribution functiond1 = [ln(S/B) + (r + σ²/2)t]/σ√td2 = d1 - σ√t
Where :
r = the risk-free interest rateσ = the volatility of the underlying asset
B = the face value of debt
T = the time to maturity Asset value and
Asset Volatility:
The following data is given:
Stock price (S) = 100Stock volatility (σ) = 40%Risk-free rate (r) = 3�bt face value (B) = 150Debt maturity (T) = 5 years
The calculation of the asset value and asset volatility is shown below:1 = [ln(100/150) + (0.03 + (0.4²)/2)5]/(0.4√5) = -0.852 = -0.85 - 0.4√5 = -2.76 (1) = 0.1987 (2) = 0.0033 = 100 (0.1987) - 150 (0.0033) = $17.74 = 100(0.4)√0.1987 = 25.37%
Risk-neutral Probability of Default:
Based on the Merton model, the risk-neutral probability of default is calculated as follows: = (−2)Where:2 = -2.76 (-2) = 0.9974
Annualized Default Probability: The annualized default probability is determined using the following formula: = 1 − (1 − )^(1/)
Where: T = 5 years = 1 - (1 - 0.9974)^(1/5) = 19.20%
Market Spread: The market spread is the difference between the yield of a debt instrument and the risk-free rate.
Based on the provided data, the risk-free rate (r) is 3%.
Market Spread = (Coupon Payment - Risk-Free Rate) / (Debt Face Value)
If the coupon payment is not given, the market spread can be calculated as follows:
Market Spread = Yield - Risk-Free Rate Assuming that the yield of the debt instrument is 5%, the market spread is calculated as follows:
Market Spread = (5% - 3%) / $150 = 0.0133 or 1.33%
Implied Recovery Rate: The implied recovery rate is calculated using the following formula: = (1 − ) (/)
Where: = 0.9974 = $150 = $17.74 = (1 - 0.9974) (150/17.74) = 42.14%.
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DO NOT SAY "Tax rate applicable to company is used to calculate
the cash flows.However if the cash flows are calculated for the
future years then we should use the tax rate applicable for those
years.
When calculating cash flows for future years, the tax rate applicable to those years should be used, taking into account any changes or trends that may affect the company's tax liability.
To calculate the cash flows of a company, the tax rate applicable to the company should be used. Nevertheless, if the cash flows are determined for the future years, then we should use the tax rate applicable for those particular years. This method is often used when preparing cash flow statements or forecasting future financial data.It is because the tax rate applicable to a company may vary over time.
Additionally, tax rates can change at the discretion of the government, resulting in companies incurring more or less tax liabilities.
The future tax rate applicable to the company can be determined by looking at historical tax rates, analyzing future tax policies and trends, and taking into account other economic factors that may affect the company's tax situation.In conclusion, the tax rate applicable to a company is used to calculate its cash flows.
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Given the following information, what is the value of Starlight
Inc. (in millions)? Common Stock: 16.30 million shares outstanding
with a $10 par value. Market price is $47.10/share. Bond Issue 1:
$58
The value of Starlight Inc. is $772.73 million (in millions)
Common Stock: 16.30 million shares outstanding with a $10 par value.
So, the total value of the common stock outstanding
= ($10 x 16.3 million)
= $163 million
Market price is $47.10/share.
So, the total market value of the common stock outstanding
= (16.3 million shares x $47.10/share)
= $767.73 million
Bond Issue 1: $58 million
The total value of the firm = Value of common stock + Value of bonds outstanding
= $767.73 million + $58 million
= $825.73 million
Therefore, the value of Starlight Inc. is $772.73 million (in millions).
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Broussard Skateboard's Sales Are Expected To Increase By 25% From $7.4 Million In 2019 To $9.25 Milion In 2020 . Ifs Assets Totaled $4 Milion At The End Of 2019. Broussard Is Already At Full Capacity, So Its Assets Must Grow At The Same Rate As Projected Sales. At The End Of 2019 , Current Liablities Were $1,4 Mili On, Consisting Of $450,000 Of Accounts
Broussard Skateboard's assets must increase by $1 million and its current liabilities must increase by $950,000 in order to accommodate the projected sales increase of 25% from $7.4 million in 2019 to $9.25 million in 2020.
Broussard Skateboard's sales are expected to increase by 25% from $7.4 million in 2019 to $9.25 million in 2020. In order to accommodate this growth, its assets must also increase at the same rate as projected sales.
At the end of 2019, Broussard's assets totaled $4 million. To determine the increase in assets needed, we can multiply the projected sales increase by the current asset level.
25% of $4 million is $1 million. Therefore, Broussard's assets need to increase by $1 million in order to support the projected sales increase.
Now let's consider the current liabilities. At the end of 2019, the current liabilities were $1.4 million, consisting of $450,000 of accounts.
To find the increase in current liabilities, we subtract the current liabilities at the end of 2019 from the projected sales increase.
$1.4 million - $450,000 = $950,000
Therefore, Broussard's current liabilities need to increase by $950,000 to support the projected sales increase.
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n terms of the presidency, what is a consequence of greater polarization between the two parties?
A) Presidents veto more legislation proposed by their own party
B) The ideological preferences of Congress and the president are further apart under divided government, making passing legislation more difficult
C) The gridlock region in Congress is unlikely to change because of the importance of filibuster pivots
D) Congress is pushed more toward a district-centered basis of organization, which means presidents have to negate with senior committee leaders to pass legislation
E) Veto bargaining is less common under divided than unified government
The ideological preferences of Congress and the president are further apart under divided government, making passing legislation more difficult is a consequence of greater polarization between the two parties. option b is the correct answer.
Greater polarization between the two parties leads to a bigger ideological hole between the Congress and the president, particularly beneath isolated government where the official and authoritative branches are controlled by diverse parties. This uniqueness in belief systems makes it challenging to pass enactment, as there's less common ground and expanded resistance to compromise. This may result in gridlock and the next probability of stalemates within the authoritative handle.
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Two Firms Compete In A Market To Sel A Homogeneous Product With Inverse Demand Function P=200⋅Q. Each Firm Ptoduces At A Constant Tharginal Cost Of $50 And Has No Fixed Costs. Assuming Cournot Duopoly, Calculate The Following: Given Firm T's Reaction Function Where: A−BQ2=Q1 A) Solve For Value Of A: 75 B) Solve For Value Of B : 0.5 C) Profit For Each Firm:
A) The value of B is approximately 1.33.
B) The value of B is approximately 1.33.
C) The profit for each firm is $4,425,000.
To solve for the value of A in the reaction function A - BQ2 = Q1, we can use the given information.
We know that each firm produces at a constant marginal cost of $50 and has no fixed costs. The inverse demand function is P = 200Q, and the reaction function is A - BQ2 = Q1.
We can substitute the inverse demand function into the reaction function to solve for A:
200Q1 - BQ12 = Q1
199Q1 - BQ12 = 0
Since the marginal cost is constant and equal to $50,
we can substitute Q1 = Q2 = 150 into the equation:
199(150) - B(150)2 = 0
29950 - 22500B = 0
Now we can solve for B:
22500B = 29950
B ≈ 1.33
Therefore, the value of B is approximately 1.33.
To solve for the value of B in the reaction function A - BQ2 = Q1,
we can follow the same steps as in part A.
After substituting Q1 = Q2 = 150, we obtain the equation:
29950 - 22500B = 0
Solving for B, we find that:
B ≈ 1.33
Therefore, the value of B is approximately 1.33.
To calculate the profit for each firm, we need to determine the quantity produced by each firm and then use the inverse demand function and marginal cost to calculate the profit.
Since this is a Cournot duopoly, each firm assumes the other firm's quantity when deciding how much to produce. We know that Q1 = Q2 = 150.
Using the inverse demand function P = 200Q, we can calculate the price:
P = 200(150) = $30,000
To calculate the profit, we subtract the total cost from the total revenue:
Profit = (Price - Marginal Cost) * Quantity
For each firm, the profit would be:
Profit = (30,000 - 50) * 150 = $4,425,000
Therefore, the profit for each firm is $4,425,000.
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Let's say that you are currently the head of a U.S. household that earns $20,000 per year. Let's also say that your neighbor earns $60,000 per year. Which of the following can we NOT conclude (is incorrect)?
Group of answer choices
When the U.S. census bureau measures incomes (for income inequality measurement purposes), it does not include income from government transfer payments. This means that your $20,000 income most likely will be supplemented with government benefits.
Despite your lower income, if you save more (in absolute dollars) than your neighbor each year until retirement, you will have gained more net wealth than your neighbor at retirement.
There is currently income inequality between you and your neighbor. This means that your neighbor has more money (s)he can spend on groceries and other items.
Income inequality and wealth inequality are the same. Your neighbor has more income, so he has more wealth also.
The statement "Despite your lower income, if you save more (in absolute dollars) than your neighbor each year until retirement, you will have gained more net wealth than your neighbor at retirement" is incorrect and cannot be concluded based on the given information.
The level of wealth accumulation depends not only on the amount saved but also on the individual's starting point and their ability to generate returns on their savings. While saving more can certainly contribute to building wealth, it is not the sole determinant. Factors such as investment choices, time horizon, and returns on investments also play crucial roles in wealth accumulation.
Additionally, the information provided only states the current income levels of the head of the household and the neighbor. It does not provide information about their spending habits, expenses, or investment strategies, which are important factors in determining future wealth.
Therefore, without further information about saving patterns, investment strategies, and other relevant factors, it is not possible to conclude that saving more than the neighbor in absolute dollars will result in higher net wealth at retirement.
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pls
help asap
What is the nominal annual rate of interest compounded monthly at which $660.00 will accumulate to $1265.44 in seven years and one month? The nominal annual rate of interest is %. (Round the final ans
The nominal annual rate of interest compounded monthly at which $660.00 will accumulate to $1265.44 in seven years and one month is 7.5%.
The given formula for calculating the amount is:
A = P * [(1 + r/n)^(n*t)]
Where,
A = the accumulated amount (final balance)
P = principal (initial investment)
r = annual interest rate
n = number of times interest is compounded per year
t = time in years
The given data is:
P = $660.00
A = $1265.44
t = 7 years and 1 month = 7.08333 years
n = 12 (compounded monthly)
Substituting the values in the formula, we get:
1265.44 = 660 * [(1 + r/12)^(12*7.08333)]
1265.44 / 660 = [(1 + r/12)^(84.99996)]
1.919 = (1 + r/12)^(85)
Taking the 85th root on both sides, we get:
(1 + r/12) = 1.075r/12 = 0.075r = 0.075 * 12r = 0.9
Therefore, the nominal annual rate of interest is 9%.
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Suppose You Purchase A 30 -Year Government Of Canada Bond With A 5% Annual Coupon, Initially Trading At Par. In 10 Years' Time, The Bond's Yield To Maturity Has Changed To 7% (EAR). (Assume $100 Face Value Bond.) A. If You Sell The Bond Now, What Internal Rate Of Return Will You Have Earned On Your Investment In The Bond? B. If Instead You Hold The Bond To
The required answer is the -
A. the discount rate that sets the NPV to zero
B. the bond's yield to maturity is 7%.
A. To calculate the internal rate of return (IRR) on your investment in the bond, to consider the cash flows from purchasing and selling the bond.
Step 1: Determine the cash flows:
- When you purchase the bond, you receive the coupon payments of 5% annually for 30 years.
- When you sell the bond after 10 years, you receive the face value of $100.
Step 2: Calculate the present value of the cash flows:
- Calculate the present value of the coupon payments for 30 years using the bond's yield to maturity of 5%. This can be done using the present value of an ordinary annuity formula.
- Calculate the present value of the face value using the bond's yield to maturity of 7%. This can be done using the present value of a single sum formula.
Step 3: Calculate the IRR:
- Subtract the present value of the cash flows from the initial investment to find the net present value (NPV).
- Use a financial calculator or software to calculate the IRR, which is the discount rate that sets the NPV to zero.
B. If you hold the bond to maturity, the IRR earned on your investment will be equal to the bond's yield to maturity at that time. In this case, the bond's yield to maturity is 7%.
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The question is about calculating the internal rate of return on a government bond when the yield to maturity changes. If you sell the bond before maturity, the IRR will decrease due to a fall in the bond's market price, caused by an increase in YTM. However, if the bond is held to maturity, the IRR will remain the same as the initial coupon rate.
Explanation:In this scenario, you have purchased a 30-year bond with a 5% annual coupon for $100. After holding this bond for 10 years, the yield to maturity changes to 7%. Your Internal Rate of Return (IRR) or the yield you have earned on your investment will adjust according to the change in market rates.
The IRR can be calculated by equating the sum of present values of all future cash flows (here, the annual coupon payments and the face value of the bond at maturity) to the price of the bond.
However, in this case, as the yield to maturity (YTM) increases to 7% from the initial coupon rate of 5%, the price of the bond in the market would fall. This is because as per the basic bond valuation principle, bond prices and YTM move in opposite directions. Hence, in order to sell the bond after 10 years, you would have to sell it at a price less than the face value which results in a decrease in the IRR.
If you were to hold the bond to its maturity, notwithstanding the change in YTM in between, your IRR would be the initial coupon rate i.e., 5%, assuming that all coupon payments are reinvested at the same rate.
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The accounting break-even production quantity for a project is 7,209 units. The fixed costs are $34,780, and the contribution margin is $11. Assume a zero tax rate. What is the projected depreciation expense? Multiple Choice $43,600 $44,519 $47,053 $47,143 $45,050
To calculate the projected depreciation expense, we need to consider the accounting break-even production quantity, fixed costs, and contribution margin.
The accounting break-even production quantity formula is as follows:
Break-even quantity = Fixed costs / Contribution margin per unit
Given:
Break-even quantity = 7,209 units
Fixed costs = $34,780
Contribution margin per unit = $11
Substituting these values into the formula, we can calculate the contribution margin:
7,209 = $34,780 / $11
Now, we can solve for the fixed costs:
Fixed costs = 7,209 units * $11 = $79,299
To find the projected depreciation expense, we need to subtract the fixed costs from the total costs. Since the fixed costs include depreciation, we can calculate the projected depreciation expense by subtracting the non-depreciation portion of the fixed costs from the total fixed costs:
Projected depreciation expense = Total fixed costs - Non-depreciation fixed costs
Non-depreciation fixed costs = Break-even quantity * Contribution margin per unit
Non-depreciation fixed costs = 7,209 units * $11 = $79,299
Projected depreciation expense = $34,780 - $79,299 = -$44,519
Therefore, the projected depreciation expense is -$44,519.
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In measuring gross domestic product, goods produced by foreign firms in the united states are________.
In measuring gross domestic product (GDP), goods produced by foreign firms in the United States are included as part of the country's GDP.
Gross Domestic Product (GDP) is a measure of the total value of all goods and services produced within a country's borders during a specific time period.
is used to gauge the economic activity and size of an economy .
When calculating GDP, goods produced by foreign firms within the United States are considered part of the domestic production. This includes goods produced by foreign-owned companies operating in the United States. These goods contribute to the overall GDP figure as they represent economic activity occurring within the country's borders, regardless of the ownership of the producing firms.
The inclusion of goods produced by foreign firms in GDP measurement reflects the focus on the geographical location of production rather than the nationality of the producing entity. It allows for an accurate representation of the economic output and contribution of all economic activities taking place within the country, regardless of the ownership structure.
It is important to note that GDP calculations may differ based on whether they are measuring gross domestic product (GDP) or gross national product (GNP). GNP takes into account the nationality of the firms producing goods and services, considering the output of domestic firms abroad and excluding the output of foreign firms domestically.
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Should we move toward true Free Trade? Remove all trade
restrictions? Wouldn't everything balance out? Businesses and
consumers could buy the product with the best value for them?
Some of the factors are the political climate, the economic stability of countries and their relations, and the level of industrialization among others. It is true that removing trade restrictions could provide benefits, but it may not be a one-size-fits-all solution.
Advantages of removing all trade restrictions
Increased competition: The elimination of trade barriers will make the global market more competitive. Countries will be able to take advantage of each other's strengths, and the global economy will be able to benefit from the increase in competition. This increased competition will encourage businesses to innovate, making products more efficient and affordable.
Lower prices: The cost of goods and services will decrease as companies source materials and production processes from countries with lower labor and production costs. This will allow businesses to sell products at lower prices, which can increase sales and revenue.
Consumers will benefit: Consumers will have access to a wider range of products, at lower prices, and will be able to choose from more options. This increased competition will allow consumers to make informed decisions about which products to purchase based on their value.
Disadvantages of removing all trade restrictions
Loss of jobs: One of the main disadvantages of removing trade barriers is that it can lead to the loss of jobs. For example, if a business relocates to another country, it can lay off workers, leading to higher unemployment rates.
Unequal competition: Countries with weaker economies and lower standards of living may not be able to compete with stronger economies. They may not have the resources to create the same level of products or have the same production processes.
Environmental impact: The environmental impact of trade can be a significant concern. If a country has lower environmental standards than another, it may be able to produce goods at a lower cost. However, the production processes may be environmentally damaging.
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What is the informativeness principle? Explain how it
relates to subjective performance evaluation?
You take out a home loan for $205,000. The interest on this loan is fixed at 6.5% compounded monthly for 30 years. How much is your required monthly mortgage payment? $ Round to the nearest dollar USING THE WHOLE DOLLAR AMOUNT CALCULATED AS THE MONTHLY MORTGAGE PAYMENT, Over the entire period of the loan, what is the total amount of your payments? $ Round to the nearest dollar
The required monthly mortgage payment is $1,297. The total amount of payments over the entire period of the loan is $466,992.
To calculate the monthly mortgage payment, we can use the formula for calculating the monthly payment on a fixed-rate mortgage:
M = P [i(1 + i)^n] / [(1 + i)^n - 1]
Where:
M = Monthly mortgage payment
P = Loan amount
i = Monthly interest rate
n = Number of monthly payments
In this case, P = $205,000, i = 6.5% divided by 12 (monthly interest rate), and n = 30 years multiplied by 12 (number of monthly payments).
Plugging in the values, we get:
M = 205,000 [0.005416667(1 + 0.005416667)^360] / [(1 + 0.005416667)^360 - 1]
M ≈ $1,297
To calculate the total amount of payments over the entire period of the loan, we multiply the monthly payment by the number of monthly payments:
Total payments = Monthly payment x Number of monthly payments
Total payments = $1,297 x 360
Total payments ≈ $466,992
Based on the given loan amount, interest rate, and loan duration, the required monthly mortgage payment is approximately $1,297. Over the entire 30-year period of the loan, the total amount of payments will be approximately $466,992. It's important to note that these calculations assume a fixed interest rate and do not include additional costs such as taxes, insurance, or any changes in interest rates.
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c) A share has just paid a dividend of $2.00 yesterday. The dividend will be paid every year for the same amount for the foreseeable future. The rate of return is 12.5% p.a. effective. Calculate the price of the share in 3 years. (Round your answer to the nearest cent.)
The price of the share in 3 years would be $16.00.
To calculate the price of the share in 3 years, we can use the concept of present value. Since the dividend is paid annually and remains constant, we can use the perpetuity formula.
The perpetuity formula is a mathematical equation used to calculate the present value of a stream of cash flows that continue indefinitely into the future at a constant rate. It is commonly used when valuing assets or investments that generate a consistent cash flow over an extended period of time.
The price of the share can be calculated as follows:
Price = Dividend / Rate of Return
In this case, the dividend is $2.00, and the rate of return is 12.5% (or 0.125 in decimal form).
Price = $2.00 / 0.125 = $16.00
Therefore, the price of the share in 3 years would be $16.00.
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Kennedy Airlines is now in the final year of a project. The equipment originally cost $10 million, of which 100 percent has been depreciated. Kennedy can sell the used equipment today for $1.3 million, and its tax rate is 20 percent. What is the equipment’s after-tax net salvage value?
Answers: Correct answer is D 1,040,000 show me steps to solve after tax net salvage value !
a.
$260,000
b.
$900,000
c.
$3,040,000
d.
$1,040,000
e.
$1,560,000
Given that the equipment's initial purchase price of $10 million has already been fully depreciated. Kennedy may currently resell the secondhand machinery for $1.3 million, with a 20% tax rate.
The formula for calculating after-tax net salvage value is as follows: After-tax net salvage value = (Net salvage value) - (Tax on gain)Net salvage value = Sale price - Book value Here, Sale price = $1. 3 million Book value = 0 (since 100�preciation has been done)
Hence, Net salvage value = $1.3 million - $0 = $1.3 million Tax on gain = (Sale price - Book value) x Tax rate= ($1.3 million - $0) x 0.20= $1.3 million x 0.20 = $260,000The after-tax net salvage value is therefore calculated as follows: Net salvage value - Tax on gain ($1.3 million - $260,000 = $1,040,000).
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Samir works for The Rainforest Store, a major big-box retail store. As transit is unreliable, Samir has often been less than five minutes late to his shifts, usually only about once or twice a week. During one of his recent shifts, his manager instructed him to climb a ladder in the stock room to get stock from a high shelf. Samir noticed that the ladder was very shaky, and at times only three of the four legs touched the ground. Samir told his manager that he was refusing to climb the ladder, because it was unsafe. His manager asked another member of the management team to look at the ladder, and the two managers agreed the ladder was safe. Samir still refused to climb the ladder. The next day, The Rainforest Store terminated Samir’s employment, claiming that his constant lateness was a breach of the employment contract. Samir believes that he is being retaliated against for refusing unsafe work, and that The Rainforest Store is discriminating on the basis of ethnicity. You have been tasked to adjudicate this dispute: should Samir’s employment be reinstated?
Based on the provided information, Samir's employment should be reinstated. The Rainforest Store terminated his employment in response to his refusal to climb an unsafe ladder.
Samir's refusal to climb the shaky and unsafe ladder in the stock room was a responsible action to prioritize his personal safety. As an employee, he has the right to refuse work that poses a risk to his health and safety.
The fact that the ladder was confirmed as safe by the managers does not necessarily mean it was indeed safe, as they may have overlooked or downplayed the potential danger.
Terminating Samir's employment solely based on his refusal to perform an unsafe task raises concerns of retaliation, especially considering the timing of the termination following his objection. Retaliation for asserting one's rights in the workplace is generally prohibited and could be a violation of employment laws.
Regarding the allegation of discrimination on the basis of ethnicity, further investigation would be required to determine if there is any evidence to support this claim. If discrimination is found to be a factor in the termination decision, it would further strengthen the case for reinstating Samir's employment.
Overall, considering Samir's legitimate concern for his safety and the need to investigate the discrimination claim, it is recommended that his employment be reinstated while conducting a thorough investigation into the circumstances surrounding his termination.
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We have all watched TV and uttered the statement, "There is
nothing on!" If you had the power and the cash to
CREATE ANY NEW TV SHOW, WHAT WOULD BE YOUR IDEA?
(Please note that if you choose a reality
If I had the power and the cash to create any new TV show, I would go for a reality show that revolves around a group of individuals trying to make a positive difference in their community.
The show would be called "Impact Makers" and would feature a diverse cast of people from different backgrounds and professions who are passionate about making a difference in their local community. The cast would include volunteers, social workers, activists, environmentalists, and other people who are committed to creating positive change in their community.The show would follow the cast as they work on various community projects, from cleaning up local parks to volunteering at local shelters.
Each episode would focus on a different project, and viewers would see the cast members working together to overcome obstacles and achieve their goals. Along the way, they would also share their personal stories and explain why they are so passionate about making a difference in their community.The show would not only be entertaining, but it would also inspire viewers to get involved in their own communities and make a positive impact. It would show that even small actions can make a big difference and that anyone can be an impact maker if they are willing to put in the time and effort.
So, I would love to create a reality show that would inspire people to make a positive difference in their community. It would be a show that would entertain and inspire viewers and make them realize that even small actions can make a big difference.
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Aetna, a health insurer, attempted to buy Humana, another insurer, in 2015, but the deal was blocked on antitrust grounds. The attempted merger is an example of what type of corporate strategy?
The antitrust concerns surrounding the merger led to its rejection.
The attempted merger between Aetna and Humana in 2015 is an example of a corporate strategy known as horizontal integration. Horizontal integration refers to the consolidation of companies operating at the same level of the supply chain or in the same industry. In this case, Aetna, a health insurer, aimed to acquire Humana, another insurer, to expand its market share and increase its competitive advantage.
However, the deal was blocked on antitrust grounds, which means that it was deemed to be anticompetitive and would have resulted in reduced competition in the health insurance industry. Antitrust laws are in place to promote fair competition and prevent companies from gaining excessive market power.
By attempting to merge with Humana, Aetna sought to achieve economies of scale, enhance its bargaining power, and potentially reduce costs. However, the antitrust concerns surrounding the merger led to its rejection.
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A company has preferred stock that can be sold for $100 per share. The preferred stock pays a quarterly dividend $1.5. Therefore, the cost of preferred stock is: 4.0% 5.0% 6.0% 10.0%
A company has preferred stock that can be sold for $100 per share. The preferred stock pays a quarterly dividend $1.5.The cost of the preferred stock is 6%.
the cost of preferred stock can be calculated by dividing the annual dividend payment by the market price per share.
In this case, the preferred stock pays a quarterly dividend of $1.5 per share. To calculate the annual dividend payment, we need to multiply the quarterly dividend by the number of quarters in a year. Since there are 4 quarters in a year, the annual dividend payment is:
$1.5 * 4 = $6
Next, we divide the annual dividend payment by the market price per share, which is $100:
$6 / $100 = 0.06
To convert this decimal to a percentage, we multiply by 100:
0.06 * 100 = 6%
Therefore, the cost of the preferred stock is 6%.
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One of the main criticisms of the Keynesian IS-LM model is that it implies that the real wage rate is not procyclical. Modern versions of the Keynesian model have allowed for procyclical real wages by assuming
a. that the price level and nominal wage rate are no longer rigid.
b. that the labor market is always in equilibrium.
c. that worker effort is procyclical, causing the efficiency wage to become procyclical.
d. that worker effort is countercyclical, causing the efficiency wage to become procyclical.
By incorporating the notion of procyclical worker effort and efficiency wages into the keynesian model, economists can better explain and account for the observed procyclicality of real wages during economic fluctuations.c. that worker effort is procyclical, causing the efficiency wage to become procyclical.
In the keynesian is-lm model, the traditional assumption is that the nominal wage rate is fixed or rigid in the short run, leading to an inverse relationship between the real wage rate and output or employment (i.e., a countercyclical relationship). however, this assumption has been criticized because it does not align with empirical evidence suggesting that real wages can be procyclical, meaning they move in the same direction as output or employment during economic cycles.
to address this criticism, modern versions of the keynesian model have introduced the concept of efficiency wages. efficiency wages are higher than the market-clearing wage rates, and they are paid to motivate workers to exert higher effort, reduce turnover, and increase productivity.
the assumption that worker effort is procyclical implies that during economic expansions, workers tend to exert more effort, leading to higher productivity and output. in turn, firms are willing to pay higher efficiency wages to retain motivated and productive workers. as a result, the real wage rate becomes procyclical, moving in the same direction as output or employment.
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Suppose that the market demand for medical care is summarized by the demand function: Qd=150−4p and the market supply is summarized by the supply function: Qs=60+4p Calculate the equilibrium quantity and price, assuming no health insurance is available. P ∗ =10.25,Q ∗ =105 p∗ =10.25,Q ∗ =90 P∗ =11.25,Q ∗ =105 P ∗ =8.15,Q ∗ =90
The equilibrium price and quantity are option C) P∗ =11.25,Q ∗ =105
Given,
The market demand for medical care is summarized by the demand function:
Qd=150−4pThe market supply is summarized by the supply function:
Qs=60+4p
By equilibrium we mean the point where quantity demanded and quantity supplied is equal, i.e.,
Qd=Qs.
The equilibrium price can be found by substituting the equilibrium quantity into either the demand or supply function and solving for the price.
Also, the equilibrium quantity can be found by substituting the equilibrium price into either the demand or supply function and solving for the quantity.
Therefore,By equating the given demand and supply functions we get,
150 − 4p = 60 + 4p
Simplifying the above equation, we get,
150 − 60 = 4p + 4p90
= 8pp
= 11.25
Substituting the value of p = 11.25 in the supply or demand function to find the equilibrium quantity,We get,
Qs = 60 + 4p
= 60 + 4(11.25)
= 105
The equilibrium price and quantity are
P∗=11.25,
Q∗=105
P∗=11.25,Q∗=105
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Suppose that inflation INCREASES in the economy. We would expect band PRICES to: O increase O decrease stay the same
The answer is "increase" and the effect of inflation on bond prices is as follows:
When inflation increases in an economy, the prices of bonds decrease. When inflation rises, the purchasing power of a currency decreases as well. This implies that the rate of return on a bond will be reduced since the amount of money received after the bond matures will not be able to buy as much as it would have previously.
Therefore, when investors purchase bonds that pay a fixed interest rate, they are making an investment in future cash flows that will be diminished in value by inflation over time. As a result, inflation reduces the value of a bond's future cash flows and lowers the bond's price.
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