The project manager should first assess the change request to ensure that it aligns with the project's objectives, scope, and requirements before proceeding with any actions.
While receiving a change request that does not affect the project schedule and is easy to complete may seem straightforward, the project manager should still follow a systematic approach to manage the change effectively. The first step is to carefully review the change request and evaluate its impact on the project. The project manager should consider whether the change aligns with the project's objectives, fits within the defined scope, and complies with the project requirements.
Next, the project manager should assess the feasibility and implications of implementing the change. This includes evaluating the resources, budget, and any potential risks associated with incorporating the change. It is essential to consider the long-term effects of the change and its potential impact on other project components.
Once the assessment is complete, the project manager should communicate with the customer and stakeholders to discuss the change request and seek their input and approval. This ensures that all parties are aligned and informed about the proposed change.
By following these steps, the project manager can ensure that the change request is evaluated thoroughly and that any necessary actions are taken in a structured and informed manner.
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Jon Jackson Manufacturing is searching for suppliers for its new line of equipment. Jon has narrowed his choices to two sets of suppliers. Believing in diversification of risk, Jon would select
two suppliers under each choice. However, he is still concerned about the risk of both suppliers failing at the same time. The "San Francisco option" uses both suppliers in San Francisco. Both
are stable, reliable, and profitable firms, so Jon calculates the "unique-event" risk for either of them to be 0.5%. However, because San Francisco is in an earthquake zone, he estimates the
probability of an event that would knock out both suppliers to be 2%. The "North American
option" uses one supplier in Canada and another in Mexico. These are upstart firms; John calculates the "unique-event" risk for either of them to be 10%. But he estimates the "super-
event" probability that would knock out both of these suppliers to be only 0.1%. Purchasing costs would be $500,000 per year using the San Francisco option and $510,000 per year using the
North American option. A total disruption would create an annualized loss of $800,000. Which option seems best?
The San Francisco option seems to be the best choice for Jon Jackson Manufacturing.
When comparing the two options, Jon needs to consider the unique-event risk and the super-event risk associated with each option.
For the San Francisco option, the unique-event risk of either supplier failing is 0.5% and the probability of a super-event, where both suppliers are knocked out, is 2%. On the other hand, for the North American option, the unique-event risk is higher at 10%, but the probability of a super-event affecting both suppliers is lower at 0.1%.
Considering the purchasing costs, the San Francisco option costs $500,000 per year, while the North American option costs $510,000 per year.
To evaluate the best option, Jon needs to assess the potential annualized loss in the case of a total disruption. The loss is estimated to be $800,000 per year.
By comparing the costs and potential losses, the San Francisco option appears to be more favorable. Even though the unique-event risk is slightly higher for the North American option, the significantly lower probability of a super-event outweighs that risk. Additionally, the lower purchasing cost for the San Francisco option provides further financial advantage.
Therefore, based on the given information, Jon should choose the San Francisco option as it offers a better balance between risk and cost.
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If real GDP grew by 6 percent and population grew by 2 percent,
then real GDP per person grew by approximately ______ percent.
Select one:
A. 2
B. 3
C. 4
D. 8
The real GDP per person grew by approximately 4 percent (C).This means that, on average, each individual experienced an increase in their share of the total economic output.
The growth rate of real GDP per person is calculated by subtracting the population growth rate from the real GDP growth rate. In this case, real GDP grew by 6 percent and population grew by 2 percent.
To calculate the real GDP per person growth rate, we subtract the population growth rate from the real GDP growth rate:
Real GDP per person growth rate = Real GDP growth rate - Population growth rate
Substituting the given values:
Real GDP per person growth rate = 6% - 2% = 4%
Therefore, the real GDP per person grew by approximately 4 percent.
When real GDP grows, it indicates an expansion of the economy, reflecting increased production and higher incomes. However, population growth needs to be taken into account to understand the impact on individual well-being.
If population grows at a faster rate than real GDP, it can lead to a decrease in real GDP per person, indicating a decline in living standards. Conversely, when real GDP growth outpaces population growth, real GDP per person increases, implying improved living standards.
In this case, the 6 percent growth in real GDP outpaced the 2 percent population growth, resulting in a positive growth rate of 4 percent in real GDP per person. Hence, the answer is C.
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2 points What is considered the best capital budgeting method when deciding between two mutually exclusive projects? CAPM IRR NPV YTM
The best capital budgeting method when deciding between two mutually exclusive projects is the Net Present Value (NPV) method The correct option is C).
The Net Present Value (NPV) method is considered the best capital budgeting method when choosing between mutually exclusive projects. NPV takes into consideration the time value of money by discounting future cash flows back to their present value.
By subtracting the initial investment from the present value of expected cash inflows, NPV determines the net value created by the project. A positive NPV indicates that the project is expected to generate more value than the cost of capital, making it a favorable investment.
Comparing the NPVs of different projects allows for an objective evaluation and selection of the project that maximizes shareholder wealth. The correct answer is C).
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Wang Company manufactures and sells a single product that sells for $320 per unit; variable costs are $176 per unit. Annual fixed costs are $927,000. Current sales volume is $4,260,000. Management targets an annual income of $1,185,000. Compute the unit sales to earn the target income. Multiple Choice 6,438 11.109
The unit sales required to earn the target income can be calculated using the following formula:
Unit Sales = (Fixed Costs + Target Income) / Contribution Margin
First, we need to calculate the contribution margin per unit. The contribution margin is the difference between the selling price and the variable cost per unit.
Contribution Margin = Selling Price - Variable Cost
Contribution Margin = $320 - $176
Contribution Margin = $144
Next, we substitute the values into the formula:
Unit Sales = ($927,000 + $1,185,000) / $144
Unit Sales = $2,112,000 / $144
Unit Sales ≈ 14,667
Therefore, the unit sales required to earn the target income of $1,185,000 is approximately 14,667 units.
To determine the unit sales required to earn the target income, we need to calculate the contribution margin per unit. The contribution margin represents the amount of revenue that remains after deducting variable costs and is available to cover fixed costs and provide profit. In this case, the contribution margin is $144 per unit ($320 - $176). Then, we use the unit sales formula, which divides the sum of fixed costs and target income by the contribution margin. By substituting the values, we find that the unit sales required to earn the target income of $1,185,000 is approximately 14,667 units.
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When a plant asset is sold, its original cost and its
A. market value must be removed from the accounting records.
B accumulated depreciation must be removed from the accounting records.
C salvage value must be expensed immediately.
D related maintenance costs must be transferred to the income statement immediately.
When a plant asset is sold, its original cost and its accumulated depreciation must be removed from the accounting records. Option b is correct.
A plant asset is a long-term asset used to generate income for a company. Plant assets include physical assets such as machinery, furniture, buildings, and vehicles Accumulated depreciation is a contra asset account that lowers the book value of a company's plant assets. It keeps track of the total depreciation that a company has charged to date on its plant assets.
To calculate the book value of a plant asset, take its original cost and subtract the accumulated depreciation. In other words, the book value is the net amount that the company has invested in the asset.
When a plant asset is sold, its original cost and its accumulated depreciation must be removed from the accounting records. The difference between the asset's book value and the amount received in the sale is known as a gain or loss on the sale of a plant asset.
Therefore, b is correct.
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a) Mr. Smith buys a $1,000 bond in the secondary market which carries a semiannual coupon of 10%. The bond has 9 years until maturity. If the yield-to-maturity in today's market is 9%, what price should Mr. Smith pay for the bond?
b) A corporation issues a special 20-year bond that has no coupons. Rather, interest Will be accumulated on the bond at a rate of 11% per year (EAR) for the life of the bond. At the time of maturity, the total value of the bond will be paid off, including What is the current price of the bond if the yield is 10% ?
Mr. Smith should pay $596.59 for the bond. The current price of the bond is $497.18 if the yield is 10%.
a) The current price of the bond can be calculated using the present value of the expected cash flows. In this case, the expected cash flows are the coupon payments of $50 (10% of $1,000/2) every six months for 18 periods (9 years x 2 semi-annual periods). At the end of the 18th period, the bond's face value of $1,000 will be paid back.Using a financial calculator or Excel, the price of the bond can be calculated as follows:N
= 18 x 2
= 36I/Y
= 4.5% (9%/2)
PV = ?PMT = $50FV = $1,000Solving for PV, we get:
PVA = $1,000/(1 + 0.045)^36
= $596.59. Therefore, Mr. Smith should pay $596.59 for the bond.
b) The bond can be considered as a zero-coupon bond. The current price of the bond can be calculated using the present value of the bond's face value at maturity and the present value of the accumulated interest. Using a financial calculator or Excel, the price of the bond can be calculated as follows:N
= 20I/Y
= 5% (10%/2)
PV = ?FV
= $1,000 x (1 + 0.11)^20
= $7,383.66Solving for PV, we get:
PV Bond = $7,383.66/(1 + 0.05)^40
= $497.18. Therefore, the current price of the bond is $497.18 if the yield is 10%.
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Firm X buys equipment for $7,000 and leases the equipment to firm A for $400 a year for six years. After six years, firm X expects to sell the asset for $7,500. What is the return that firm X earns on the lease? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest whole number. %........?
The return that firm X earns on the lease, rounded to the nearest whole number, is approximately 141%.
To calculate the return that firm X earns on the lease, we need to determine the total cash inflows and outflows over the lease period. Firm X purchases the equipment for $7,000 and leases it to firm A for $400 per year for six years. At the end of the lease term, firm X expects to sell the asset for $7,500.
The total cash inflow from the lease would be the annual lease payment of $400 multiplied by the lease term of six years, resulting in $2,400. Additionally, the cash inflow from the sale of the asset would be $7,500. Thus, the total cash inflow for firm X is $2,400 + $7,500 = $9,900.
The initial cash outflow for the equipment purchase is $7,000. Therefore, the return on the lease can be calculated by dividing the total cash inflow ($9,900) by the initial cash outflow ($7,000) and multiplying by 100 to express it as a percentage.
Return on Lease = (Total Cash Inflow / Initial Cash Outflow) * 100 = ($9,900 / $7,000) * 100 ≈ 141%.
Therefore, the return that firm X earns on the lease, rounded to the nearest whole number, is approximately 141%.
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the hawthorne studies showed how _____ can influence work.
The Hawthorne studies showed how social and psychological factors can influence work.
The Hawthorne studies were a series of experiments conducted at the Western Electric Hawthorne Works in Chicago during the 1920s and 1930s. These studies aimed to understand the relationship between work conditions and employee productivity. However, the researchers discovered that various social and psychological factors had a significant impact on work outcomes.
The Hawthorne studies revealed that factors such as interpersonal relationships, group dynamics, leadership styles, and employee attitudes could significantly influence work performance. Researchers found that when employees felt valued, listened to, and included in decision-making processes, their productivity and job satisfaction increased. Additionally, the studies highlighted the importance of social interactions and informal social organization within the workplace.
The Hawthorne studies contributed to the development of the field of organizational behavior, emphasizing the significance of human factors in the workplace. They demonstrated that work outcomes are not solely determined by physical conditions or economic incentives but are also influenced by social and psychological factors.
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QUESTION ONE (20 Marks)
Explain the nature of financial risk in the public sector and identify, evaluate and recommend appropriate financial risk mitigation strategies, including those relating to public borrowing and financial market risks.
QUESTION TWO (20 Marks)
Describe the budgetary framework, budget cycle and budget processes, including the nature of performance measures, target setting, budget monitoring, budget feedback and control
QUESTION THREE (20 Marks)
Evaluate the PFM system using the Public Expenditure and Financial Accountability (PEFA) framework
QUESTION FOUR (20 Marks)
Describe the nature of public sector capital projects including the approval process, performance measures, and target setting, paying particular attention to public/private partnerships
QUESTION FIVE (20 Marks)
A summary of the general fund transactions for the city of Wautoma for the year ended December 31, 2020 is as follows:
a. A budget was approved, showing estimated revenues of $900,000, appropriations of $875,000, transfers-in of $27,000 from other funds, and required transfers of $20,000 to other funds.
b. The reserve for encumbrance at the end of 2019 was $15,000. Amounts encumbered in the prior period are included in appropriations for 2020.
c. Property taxes for $650,000 were levied. In past years, 1% of the property taxes levied proved uncollectible.
d. Encumbrances for $250,000 had not been liquidated by the end of 2019. invoices for all these items received in 2020 and totaled $24,000.
e. Collections from property taxes totaled $644,000 of which $20,000 represented collections on delinquent taxes. Delinquent taxes of $8,000 remain uncollected, on which a $3,000 allowance is carried. Remaining taxes receivable – current and taxes receivable – delinquent were converted into taxes receivable – delinquent and tax liens receivable, respectively.
f. Purchase orders totaling $700,000 were issue. Subsequently, invoices were received amounting to $685,000 for items estimated to cost $680,000. included were supplies for $10,000.
g. An ending inventory of supplies amounted to $2,000 for which the fund balance should be reserved.
h. A tract of land was purchased for $250,000. Payment was made from the general fund, in whose appropriations the item had been included. The amount had not been encumbered. The purchase was made with the intent of reselling the land to a suitable developer.
i. Wautoma received $300,000 as its part of federal revenue sharing programs. Grants-in-aid of $60,000 due from the state governments are recorded. None of the grants is expenditure driven.
j. Required transfers of $20,000 are made to other funds.
k. A $50,000 payment is made on a mortgage payable. The payment includes $21,000 of interest and a principal payment of $29,000.
l. An offer was received from a land developer who will pay $380,000 for the land acquired by the city in item (h). the sale is approved. The developer remits $100,0000 with a note due in 90 days, bearing 8% interest. Any gain is to be considered revenue.
m. Transfers received from other funds amount to $23,000.
n. The developer in item (l) remits payments for the note plus interest.
REQUIRE
1. Prepare journal entries of record the general fund transactions
2. Prepare closing entries for the general fund
The nature of financial risk in the public sector involves the potential for adverse financial outcomes due to various factors such as economic volatility, budget deficits and reliance on external financing.
What are appropriate financial risk mitigation strategies?To mitigate financial risks in the public sector, several strategies can be implemented. One key approach is to establish robust risk management frameworks that identify, assess, and monitor financial risks. This involves regularly analyzing economic indicators, fiscal policies, and market conditions to anticipate potential risks and take necessary actions.
Also, diversifying funding sources and maintaining a balanced debt portfolio can reduce the vulnerability of public entities to fluctuations in interest rates and credit markets. Governments can also consider implementing prudent borrowing practices such as conducting thorough credit assessments and negotiating favorable terms and conditions with lenders.
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Reasons for the RDP House program’s existence, i.e. "business
drivers" and other factors that brought about the need for this
program: (Max. 5 lines, not 5 points)
The reasons for the RDP House program's existence, i.e., the business drivers and other factors that brought about the need for this program, include addressing the housing shortage, promoting socio-economic development, reducing inequality, improving living conditions, and fulfilling government commitments.
The RDP House program was established to tackle the housing shortage in South Africa and provide adequate housing for the population. It serves as a response to the social and economic challenges faced by many citizens, particularly those living in informal settlements and disadvantaged communities. By providing affordable housing, the program aims to uplift marginalized individuals and families, contributing to socio-economic development and poverty alleviation.
Additionally, the RDP House program seeks to reduce inequality by ensuring that all citizens have access to decent housing. It recognizes the importance of providing safe and secure living environments, which have a direct impact on the overall well-being and quality of life of individuals and communities.
Furthermore, the program aligns with the government's commitments and goals, such as the provision of basic services and the fulfillment of constitutional rights. It reflects a commitment to social justice and the realization of the right to adequate housing for all South Africans.
Overall, the RDP House program's existence is driven by the urgent need to address the housing crisis, promote socio-economic development, reduce inequality, improve living conditions, and fulfill government obligations to provide decent housing for all.
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Which of the following is not a case of creating shared value (CSV)?
O Reducing plastic in packaging with lower cost biodegradable materials
O Developing partnerships with local universities to commercialize university research
O Reducing energy consumption and in turn emissions of polluting gases through improved manufacturing processes
O Creating a PR campaign in which 5% of sales of a certain product goes to malaria treatments in Lesotho
O Developing novel products for low-income consumers for whom there was no previous equivalent product
Creating a PR campaign in which 5% of sales of a certain product goes to malaria treatments in Lesotho is not a case of creating shared value (CSV).
Creating shared value (CSV) refers to business strategies that simultaneously create economic value for the company and societal value for the communities in which it operates. In the given options, all except the PR campaign contribute to CSV.
Reducing plastic in packaging with lower cost biodegradable materials is an example of CSV as it helps the environment while potentially reducing costs. Developing partnerships with local universities to commercialize university research creates shared value by fostering innovation and driving economic growth. Similarly, reducing energy consumption and emissions through improved manufacturing processes benefits both the company and the environment.
Developing novel products for low-income consumers is another example of CSV as it addresses a previously unmet need and provides economic opportunities. However, creating a PR campaign in which a percentage of sales goes to malaria treatments in Lesotho is not inherently CSV. While it supports a worthy cause, it primarily falls under corporate social responsibility (CSR) rather than CSV. CSV focuses on integrating social and environmental considerations into core business strategies to generate sustainable value for both the company and society, whereas the mentioned PR campaign appears to be more of a philanthropic initiative without direct ties to the company's core operations.
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4. Describe the needs for achievement, power, and affiliation, and how these needs affect work behaviour. Review the hygiene and motivators in the two-factor theory. Are there any hygiene factors that you would consider to be motivators and vice versa? Management: A Practical Introduction (10th edition), by Angelo Kinicki \& Denise Breaux (Min words 200-300)
The needs for achievement, power, and affiliation influence work behavior by driving individuals' motivations and priorities. The two-factor theory distinguishes between hygiene factors and motivators, which have different impacts on job satisfaction and motivation.
The needs for achievement, power, and affiliation are important factors that influence work behavior. Here's a summary of each need and its impact on work behavior:
1. Need for Achievement: This need refers to an individual's desire to excel, accomplish challenging goals, and continuously improve their performance. Individuals with a high need for achievement are motivated by personal accomplishments and take pride in their work. They tend to prefer situations where they can take personal responsibility, receive feedback on their performance, and have opportunities for growth and advancement. Such individuals often set high personal standards, take calculated risks, and strive for success.
2. Need for Power: The need for power is the desire to have an impact, influence others, and control the environment. Individuals with a high need for power are motivated by positions of authority and enjoy directing and guiding others. They are driven by the ability to make decisions, influence organizational outcomes, and be in control of their work environment. Such individuals tend to seek leadership positions and actively engage in activities that allow them to exercise authority and influence others.
3. Need for Affiliation: The need for affiliation refers to the desire to establish and maintain positive relationships with others. Individuals with a high need for affiliation are motivated by social interactions, teamwork, and a sense of belonging. They value cooperation, harmony, and interpersonal relationships in the workplace. Such individuals enjoy working in teams, seek social approval, and prioritize friendly and supportive work environments.
Moving on to the hygiene and motivators in the two-factor theory by Frederick Herzberg,
1. Hygiene Factors: Hygiene factors are external to the job itself but can impact job dissatisfaction if they are not present or adequate. These factors include working conditions, company policies, supervision, salary, job security, and interpersonal relationships. When hygiene factors are insufficient, they can lead to job dissatisfaction and a decrease in motivation. However, improving these factors alone does not result in increased motivation but rather removes dissatisfaction.
2. Motivators: Motivators are internal to the job and relate to the work itself. These factors include achievement, recognition, responsibility, growth, and the nature of the work itself. Motivators have the potential to positively influence job satisfaction and motivation. When present, they can contribute to a sense of fulfillment and intrinsic motivation.
It is important to note that hygiene factors and motivators are separate and distinct factors. Hygiene factors address basic job requirements and can prevent dissatisfaction, while motivators focus on the inherent rewards and satisfaction derived from the work. However, there can be instances where a hygiene factor may have motivating qualities or vice versa.
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A financial investment equal to BRL 100,000.00 allows a withdrawal of BRL 20,000.00 in the first year and an annual growth of 2% in the other withdrawals, up to the tenth year. Get the internal rate of return for this application
The internal rate of return (IRR) for the given financial investment is approximately 6.6%. This means that the investment is expected to generate a return of 6.6% per year, taking into account the initial withdrawal of BRL 20,000.00 in the first year and subsequent annual withdrawals with a growth rate of 2% up to the tenth year.
To calculate the internal rate of return, we need to find the discount rate that makes the present value of the cash inflows equal to the initial investment. In this case, the initial investment is BRL 100,000.00, and the cash inflows include the initial withdrawal of BRL 20,000.00 in the first year and subsequent withdrawals with a 2% growth rate. We can set up a discounted cash flow equation and solve for the discount rate using a financial calculator or software. By solving the equation, we find that the internal rate of return is approximately 6.6%, indicating the expected annual return on the investment. It's important to note that the IRR assumes that the cash inflows are reinvested at the same rate, which may not be realistic in practice.
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Alex has been hired as the Quality Manager with HUSKY Auto Services. In her first meeting with the company's team, she emphasized on applying the dimensions of quality for their auto services. LIST and EXPLAIN FIVE (5 ONLY) of the dimensions of Service quality.
The five dimensions of service quality that Alex emphasized for HUSKY Auto Services are as follows: Reliability: Reliability refers to the ability of the service provider to deliver their promised service dependably and accurately.
It involves consistently meeting customer expectations, delivering services on time, and providing reliable solutions to problems or complaints.
Assurance: Assurance involves building trust and confidence in customers by demonstrating knowledge, competence, and professionalism. It includes having qualified and well-trained staff, clearly communicating service procedures and policies, and instilling a sense of security in customers regarding the service being provided.
Tangibles: Tangibles relate to the physical elements or attributes associated with the service. It includes factors such as the appearance of the service facility, the cleanliness and functionality of equipment, and the professionalism of staff attire. These tangible cues contribute to customers' perception of the service quality.
Responsiveness: Responsiveness refers to the willingness and promptness of service providers to help customers and address their specific needs or requests. It involves promptly attending to customer inquiries, providing personalized attention, and being flexible in adapting to customer preferences.
Empathy: Empathy refers to the service provider's ability to understand and relate to the customers' feelings, needs, and concerns. It involves showing genuine care, actively listening to customers, and being responsive to their emotional states. Empathy helps create a personalized and satisfying experience for customers.
By focusing on these dimensions of service quality, Alex aims to enhance customer satisfaction, build loyalty, and establish HUSKY Auto Services as a reliable and reputable brand in the auto service industry.
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QUESTION THREE (3)
a) Discuss three (3) types of compensation, along with
examples.
PLEASE I NEED SHORT ANSWERS
a) Three types of compensation include base salary, incentive-based pay, and benefits.
Base salary is the fixed amount of money an employee receives on a regular basis for performing their job. It is typically determined by factors such as job role, experience, and market rates. For example, a software engineer may have a base salary of $80,000 per year.
Incentive-based pay refers to compensation that is tied to an individual's performance or the achievement of specific goals. This can take the form of commissions, bonuses, or profit-sharing. For instance, a salesperson may receive a commission of 5% for every sale they make, motivating them to increase their sales volume.
Benefits encompass non-monetary rewards provided to employees, such as health insurance, retirement plans, vacation days, and tuition reimbursement. These benefits contribute to the overall well-being and job satisfaction of employees. As an example, a company may offer a comprehensive health insurance plan that covers medical, dental, and vision expenses. In summary, base salary provides a fixed amount of compensation, incentive-based pay aligns rewards with individual or organizational performance, and benefits offer additional perks and support to employees.
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The opportunity cost to the United States of placing a man on the moon was
a. the loss of government revenues that were allocated to the mission.
b. the cost of all production involved in the space program.
c. the loss of utility from the highest valued bundle of products that had to be forgone
because of the moon mission.
d. less than zero, because the long-run benefit of the project will be greater than the cost.
The opportunity cost to the United States of placing a man on the moon was the loss of utility from the highest valued bundle of products that had to be forgone because of the moon mission. The correct answer is option C.
The United States’ space program to put a man on the moon from 1961 to 1975 was an enormous achievement for the country. The mission required massive resources, including millions of employees, funds, and materials, that were reallocated from other government programs. The opportunity cost of placing a man on the moon refers to the value of the next best alternative that had to be forgone in order to pursue the moon mission. In this case, the opportunity cost is the loss of utility or satisfaction from the highest valued bundle of products or services that could have been produced or consumed with the resources allocated to the moon mission.
Choosing option c. "the loss of utility from the highest valued bundle of products that had to be forgone because of the moon mission" as the answer acknowledges that the resources, including financial, technological, and human resources, used for the moon mission could have been allocated to other productive activities. By focusing on the moon mission, resources were diverted from alternative uses, and the foregone production and consumption possibilities represent the opportunity cost.
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which ics function is responsible for documentation of mutual agreements
Answer:
The ICS function responsible for documentation of mutual agreements is the Planning Section.
Explanation:
Within the Incident Command System (ICS), the Planning Section is responsible for documenting mutual agreements. This section assists in the development of the Incident Action Plan (IAP), which outlines the objectives, strategies, and tactics for managing the incident. As part of the planning process, the Planning Section maintains records of agreements made with other agencies, organizations, or stakeholders involved in the incident response.
These mutual agreements may include resource sharing, coordination protocols, and operational procedures. Proper documentation of these agreements is crucial for maintaining clear communication, accountability, and effective collaboration among all involved parties.
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Discuss and demonstrate in detail how in a perfect capital market, dividend policy of a firm has no effect on its stock price.
In a perfect capital market, dividend policy has no effect on a firm's stock price because investors can easily sell their shares to get cash if they want dividends.
In a perfect capital market, investors can buy and sell shares of stock instantly and without any cost. This means that if a firm announces that it will be paying a dividend, investors can simply sell their shares and get the cash immediately.
Conversely, if a firm announces that it will not be paying a dividend, investors can simply hold onto their shares and wait for the company to reinvest the earnings in ways that will increase the share price in the future.
Because investors can easily get cash either by selling their shares or by waiting for the share price to appreciate, the dividend policy of a firm has no impact on its stock price.
The dividend irrelevance theory was first proposed by Miller and Modigliani in 1961. They argued that the value of a firm is determined by its underlying assets and its investment opportunities, not by its dividend policy.
This theory has been challenged by some empirical studies, but it remains an important concept in corporate finance.
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a) Provide a reason why a company would prefer to hedge over taking an insurance to minimize on risks. (4 marks) b) Your house is worth $200,000. Your risk of a catastrophic flood is 0.5 percent. Such a flood would destroy your house and would not be covered by homeowner's insurance. Although you grumble, you buy flood coverage for $1,200. Are you being Risky or Risk Averse? Justify your answer. (4 marks) c) There are 200 people of two types on the road: good drivers and bad drivers. Good drivers (G) have a 1% chance of causing an accident while bad drivers (B) have a 5% chance of causing an accident. The proportion of bad drivers is 0.5, so the proportic of good drivers is 0.5. The cost of an accident is $6,000. Good drivers have a willingness to pay for insurance of $200 while bad drivers have a willingness to pay of $400. I. Suppose the insurance company knows each driver's type. What premium would th insurance company charge each type of driver? (Assume the insurance company breaks even, so the premium is equal to the expected cost.) (4 marks) II. Now suppose that the insurance company does not know the driver's type. What would the insurance company's expected profit be if it charged premiums based on the individual's self-reported type? (4 marks) III. Now suppose that the insurance company does not know the driver's type. What premiums would the insurance company charge if they did not have any information on the driver's type? Is there a pooling equilibrium? (4 marks)
a) A company may prefer to hedge over taking insurance to minimize risks because hedging allows them to directly manage and control their exposure to specific risks, tailor the hedge to their specific needs, and potentially avoid costs associated with insurance premiums and coverage limitations.
b) By buying flood coverage for $1,200 despite the low risk of a catastrophic flood, the person is being risk averse. They are willing to pay a premium to protect themselves against the potential loss, indicating a preference for avoiding the risk altogether rather than accepting the possibility of a significant financial loss.
c) I. The insurance company would charge good drivers a premium of $60 ($6,000 accident cost multiplied by 1% accident probability) and bad drivers a premium of $300 ($6,000 accident cost multiplied by 5% accident probability).
II. If the insurance company charges premiums based on self-reported types, the expected profit would be zero. Good drivers would pay $200, and bad drivers would pay $400, but the claims paid out would equal the premiums collected, resulting in no profit.
III. Without any information on driver types, the insurance company would charge a single premium of $150 ($6,000 accident cost multiplied by the weighted average accident probability of 3%). This creates a pooling equilibrium where both good and bad drivers pay the same premium, and the insurance company covers the overall risk.
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Define quota rent and indicate how alternative ways of
instituting the quota distribute rents in different ways. Explain
how quotas can be used as an instrument of corruption.
Quota rent is the economic benefit arising from supply restrictions. It can be distributed through government allocation or licensing systems, benefiting those who secure quotas or licenses.
Quota rent refers to the economic benefit or surplus that arises from the artificial restriction of supply through a quota system. It represents the difference between the market price of a good or service and the price that would prevail in the absence of the quota.
Quotas can be implemented in various ways, and the distribution of rents can differ depending on the approach taken.
In a government-administered quota system, the state typically allocates quotas to specific individuals or entities. The allocation can be done through auctions, administrative discretion, or political connections.
In this case, those who secure the quota licenses can benefit from the quota rent by selling the restricted goods or services at a higher price.
Alternatively, quotas can be distributed through a licensing system where individuals or companies must meet certain criteria to obtain a license. In this scenario, the quota rent is captured by those who satisfy the licensing requirements and are granted the licenses.
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Suppose there are 3 firms in a market. The largest firm has sales of $60 million and each of the other two firms has sales of $25 million. The Herfindal-Hirshman Index of this industry is:
a. 2,500
b. 3,750
c. 2,550
d. 4008
To calculate the Herfindahl-Hirschman Index (HHI) for an industry, we square the market shares of each firm and sum them up. The HHI provides a measure of market concentration.
In this case, the largest firm has sales of $60 million, and the other two firms have sales of $25 million each. To calculate the HHI, we need to determine the market shares of each firm.The market share of the largest firm is:60 million / (60 million + 25 million + 25 million) = 0.545The market share of the other two firms is:25 million / (60 million + 25 million + 25 million) = 0.227Now, we square each market share and sum them up:HHI = (0.545^2) + (0.227^2) + (0.227^2) = 0.297 + 0.052 + 0.052 = 0.401Multiplying the result by 10,000 gives us the HHI:HHI = 0.401 * 10,000 = 4,010
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Exchange Rates and Central Bank Policy: The Brazilian economy currently operates with a floating exchange rate regime. Suppose the Central Bank of Brazil is concerned with fluctuations in the dollar/real exchange rate. Using a graph of the market for real assets and the current $/real exchange rate (), illustrate and explain what we would expect to happen if the Federal Reserve in the U.S. commits to raising its policy rate significantly over the coming year, holding all else constant. Does the real appreciate or depreciate?
Illustrate and explain how the policy of the Federal Reserve in part (a) affects the AD/AS framework for Brazil?
If the Central Bank of Brazil takes an activist approach to respond to the fluctuations for Brazil in part (b), how might they respond with conventional monetary policy? Explain what must be done to correct any output and inflation gaps.
If the Federal Reserve in the U.S. commits to raising its policy rate significantly over the coming year, holding all else constant, we would expect the dollar/real exchange rate to be affected.
Assuming that the Federal Reserve's policy rate increase makes holding U.S. assets more attractive, there would be an increase in the demand for dollars by Brazilian investors seeking higher returns. This increased demand for dollars would lead to an appreciation of the dollar relative to the real.On the graph, the demand for dollars curve would shift to the right, indicating an increase in demand for dollars, and the supply of dollars curve would remain relatively stable. As a result, the equilibrium exchange rate would shift in favor of the dollar, leading to an appreciation of the dollar and a depreciation of the real.(b) The policy of the Federal Reserve, as described in part (a), would affect the AD/AS framework for Brazil. An appreciation of the dollar and a depreciation of the real would influence the aggregate demand (AD) and aggregate supply (AS) in Brazil.The appreciation of the dollar makes imports cheaper for Brazilian consumers, leading to an increase in aggregate demand as consumers purchase more imported goods. This increase in aggregate demand shifts the AD curve to the right.On the other hand, the depreciation of the real makes Brazilian exports
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You are considering a project with an initial cost of $29,000. What is the discounted payback period for this project if the cash inflows are $14,650, $16,190, $12,480, and $9,500 a year over the next four years and a discount rate of 8%?
1.89 years
2.84 years
3.82 years
2.16 years
The discounted payback period for this project if the cash inflows are $14,650, $16,190, $12,480, and $9,500 a year over the next four years and a discount rate of 8% is 2.84 years.
The discounted payback period is the length of time it takes for the discounted cash inflows to equal or exceed the initial cost of the project. In this case, the initial cost of the project is $29,000 and the cash inflows over the next four years are $14,650, $16,190, $12,480, and $9,500. The discount rate is 8%.
To calculate the discounted payback period, we need to discount each cash inflow to its present value using the discount rate of 8%. Then we accumulate the discounted cash inflows until the cumulative amount equals or exceeds the initial cost of $29,000.
By calculating the present value of each cash inflow and accumulating them, we find that the discounted payback period for this project is approximately 2.84 years. Therefore, the correct answer is 2.84 years, which is the option provided.
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A bond selling at a discount will have:
Group of answer choices
A coupon rate lower than the YTM, and a price lower than the face value.
A coupon rate lower than the YTM, and a price higher than the face value.
A coupon rate higher than the YTM, and a price lower than the face value.
A coupon rate higher than the YTM, and a price higher than the face value.
When a bond sells at a discount, it will have a coupon rate lower than the YTM, and a price lower than the face value.T
he bond is sold at a discount when the bond's coupon rate is lower than the market interest rate of the bond. The market interest rate is also referred to as the yield to maturity (YTM). This is because investors are willing to pay a lesser amount for the bond if the interest rate is lower than the market interest rate. Therefore, when a bond is sold at a discount, it has a coupon rate lower than the YTM, and a price lower than the face value.
The face value of a bond is the principal amount that the issuer of the bond has to pay the bondholder at the time of maturity. It is the amount that the bondholder will receive if the bond is held until maturity. In contrast, the coupon rate is the annual interest rate paid on the bond, and it is calculated as a percentage of the bond's face value.
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Oliver Ortega operates a small boutique in Scottsdale, Arizona that sells Kachina dolls. Oliver expects to generate revenue of $40,000, $50,000, and $60,000 during October,
November, and December, respectively. Oliver's cost of goods sold average 60 percent of revenues, and his budgeted marketing and administrative costs are $4,000, $6,000,
and $5,000 for October, November, and December, respectively.
Oliver expects to receive 70% of his revenues in cash during the month of sale and 30% in the following month. Oliver receives his dolls on consignment, with the purchase
price being due at the time of sale. Thus, Oliver's cash outflow for goods sold equals his cost of goods sold. Finally, Oliver pays for all marketing and administrative expenses
in cash as they are incurred.
Required: (3 + 3 = 6 points)
What is Oliver's cash budget for November and December? Assume that Oliver expects to have $16,000 in cash on November
Oliver's cash budget for November shows a net cash inflow of $33,400, while the cash budget for December shows a net cash inflow of $35,600.
To prepare Oliver's cash budget for November and December, we need to consider the cash inflows and outflows during these months.
Cash Inflows:
In November, Oliver expects to receive 70% of his October revenue ($50,000) in cash, which amounts to $35,000. Additionally, he expects to receive 30% of his November revenue ($60,000) in cash, which amounts to $18,000. Therefore, the total cash inflow for November is $35,000 + $18,000 = $53,000.
In December, Oliver expects to receive 70% of his November revenue ($60,000) in cash, which amounts to $42,000. Additionally, he expects to receive 30% of his December revenue ($60,000) in cash, which amounts to $18,000. Therefore, the total cash inflow for December is $42,000 + $18,000 = $60,000.
Cash Outflows:
Oliver's cost of goods sold is 60% of his revenues. In November, his cost of goods sold would be 60% of $50,000, which is $30,000. In December, his cost of goods sold would be 60% of $60,000, which is $36,000.
Oliver's budgeted marketing and administrative costs are $6,000 for November and $5,000 for December.
Net Cash Budget:
November: Cash inflow - Cash outflow
$53,000 - ($30,000 + $6,000) = $17,000
December: Cash inflow - Cash outflow
$60,000 - ($36,000 + $5,000) = $19,000
Considering that Oliver expects to have $16,000 in cash at the beginning of November, his cash balance at the end of November would be $16,000 + $17,000 = $33,000. Similarly, his cash balance at the end of December would be $33,000 + $19,000 = $52,000.
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Part U67 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 10,000 units of the part that are needed every year.
Direct materials......$9.00
Direct labor....$3.00
Varibale overhead...$4.00
Supervisor's salary....&1.50
Depreciation of special equipment....$1.40
Allocated general overhead....$5.00
An outside supplier has offered to make the part and sell it to the company for $18.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $8,000 of these allocated general overhead costs would be avoided. Required:
a. Prepare a report that shows the effect on the company's total net operating income of buying part U67 from the supplier rather than continuing to make it inside the company.
b. Which alternative should the company choose?
a. To determine the effect on the company's total net operating income of buying part U67 from the supplier, we need to compare the costs of making the part internally with the cost of purchasing it externally.
Cost of making the part internally:
Direct materials: $9.00 per unit * 10,000 units = $90,000
Direct labor: $3.00 per unit * 10,000 units = $30,000
Variable overhead: $4.00 per unit * 10,000 units = $40,000
Supervisor's salary: $1.50 per unit * 10,000 units = $15,000
Depreciation of special equipment: $1.40 per unit * 10,000 units = $14,000
Allocated general overhead (avoided cost): $5.00 per unit * 10,000 units - $8,000 = $42,000
Total cost of making the part internally = $90,000 + $30,000 + $40,000 + $15,000 + $14,000 + $42,000 = $231,000
Cost of purchasing the part externally:
Number of units needed: 10,000 units
Cost per unit from the supplier: $18.00 per unit
Total cost of purchasing the part externally = $18.00 per unit * 10,000 units = $180,000
Effect on net operating income = Cost of making internally - Cost of purchasing externally
Effect on net operating income = $231,000 - $180,000 = $51,000 (a decrease in net operating income)
b. Based on the calculations, if the company chooses to buy part U67 from the supplier instead of making it internally, the total net operating income would decrease by $51,000. Therefore, the company should consider continuing to make the part internally as it results in higher net operating income.
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Benion Corp issued the following bond at 103 : Maturity amount and date: $160,000 due in 10 years Interest: 10 percent per year payable each December 31 Determine the carrying value reported on the balance sheet at the issue date. Multiple Choice $155,200 $160,000 $160,480
The carrying value reported on the balance sheet at the issue date would be $160,000.
The carrying value reported on the balance sheet at the issue date would be $160,000. This value represents the maturity amount of the bond, which is the amount that Benion Corp is obligated to repay to bondholders at the end of the bond's maturity period. Since the bond was issued at 103, indicating a premium of 3%, the carrying value remains the same as the maturity amount. Therefore, the carrying value reported on the balance sheet at the issue date is $160,000.
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If the overhead is over-applied, is the total overhead variance favourable or unfavourable? Favourable Unfavourable Neither
If overhead is over-applied, the total overhead variance is considered favorable.
Overhead is a term used to describe indirect costs incurred by a business that cannot be directly attributed to a specific product or service.
Overhead is usually applied to products or services based on a predetermined rate or allocation method.
The overhead variance measures the difference between the actual overhead costs incurred and the overhead costs applied to the products or services.
When overhead is over-applied, it means that more overhead costs have been allocated or assigned to the products or services than what was actually incurred. In this case, the total overhead variance is considered favorable.
A favorable overhead variance indicates that the actual overhead costs are lower than the allocated or applied overhead costs. This can be seen as a positive outcome, as it suggests that the business has managed to control its overhead costs effectively and has achieved cost savings.
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Fred's bookkeeping business provides you the following Accounting GAAP financial information for this year's business income tax return
Income Statement:
1 Revenue $100,000
2. Meals and Entertainment $10,000
3: Supply Expenses $2.000
4. Depreciation Expenses: $5,000
Assets
Furniture (Class 8, 20%); UCC was $10,000: Purchase this year was $10,000 and disposed of furniture for proceeds of $10,000 and had an original cost of $5,000,
Building (Class 1, 4%) UCC was $100,000
The Business Income tax profit to be inserted into Line 13700 is?
The Business Income tax profit to be inserted into Line 13700 is $71,800.
The Business Income tax profit to be inserted into Line 13700 is $71,800.
How to calculate the Business Income tax profit to be inserted into Line 13700?
The Business Income tax profit to be inserted into Line 13700 can be calculated as follows:
Revenue $100,000
Less: Meals and Entertainment $10,000
Less: Supply Expenses $2,000
Net revenue $88,000
Less: Depreciation Expenses $5,000
Less: Capital cost allowance (CCA) - Furniture:
[(10,000 + 10,000) - 5,000] * 20% = $2,000
CCA - Building: 100,000 * 4% = $4,000 $11,000
Net income before taxes $77,000
Income tax expense $5,200
Net income after taxes $71,800
Therefore, the Business Income tax profit to be inserted into Line 13700 is $71,800.
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(a) Treasury bond markets in New Zealand and the U.S. are dealer markets. What are the pros and cons of this market structure as compared to trading securities on an exchange? (b) The Reserve Bank of New Zealand reports the following (annually compounded) treasury bond spot rates (as of 26 July 2022). Can we conclude that the market is expecting short term interest rates to rise over the next 10 years? Discuss. (c) You are in the United States. The date is 26 July 2022. You decide that the market has under-estimated the yield on long term Treasury bonds. You observe the following bond: Describe how you would use this bond to trade in order to profit from your beliefs.
Pros: Higher liquidity, faster trades, competitive prices. Cons: Reliance on dealer integrity, limited transparency, potentially higher transaction costs compared to exchange trading. Not enough information. Spot rates alone do not indicate market expectations for short-term interest rates. Buy the bond at a lower price and hold it until the market realizes the higher yield, leading to capital gains upon selling.
(a) Dealer markets in treasury bond trading offer advantages such as increased liquidity, faster trade execution, and competitive prices due to market-making activities. However, cons include reliance on dealer integrity, limited transparency, and potentially higher transaction costs compared to exchange trading.
(b) The given spot rates alone do not provide enough information to conclude the market's expectations for short-term interest rates. Other factors like market sentiment, economic indicators, and monetary policy actions need to be considered for a comprehensive assessment of interest rate expectations.
(c) To profit from the belief of under-estimated long-term Treasury bond yields, one can buy the bond at a lower price and hold it until the market recognizes the higher yield. Selling the bond at a later date would generate capital gains as the bond price increases due to the realization of the higher yield.
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