Planning, organizing, directing, and administering an organization's financial resources is known as financial management, hence option A is correct.
Maximising the wealth of the company's owners is the ultimate goal of financial management. By making sure that the return on investment exceeds the cost of borrowing, this can be accomplished.
Option b is untrue, since financial management encompasses more than just financial reporting.
Option c is inaccurate since financial management is not primarily concerned with the treasurer's vacation schedule.
Paying accountants is a standard administrative procedure, option d is erroneous.
The amount of the bank account does not directly reflect the wealth of the company's shareholders, option e is inaccurate.
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FIFA rules mandate that at least 7 players from a team must be present for that team to play. Otherwise, that team automatically forfeits the game with a score of 3-0. Each of the 11 members of SFC (Strategic Football Club) would like to be able to play in their upcoming game. The problem is, the night of their game is also the night of a professional soccer game that each of the 11 members of SFC would like to watch live on TV. Staying at home and watching the game gives each player a payoff of 2. Showing up to play when the minimum of 7 isn’t reached gives players 0. Showing up to play when the minimum of 7 is reached gives players 3. What are the pure strategy Nash equilibria of this game?
In this game, each member of SFC faces a decision to either stay at home and watch a professional soccer game on TV (payoff of 2) or show up to play their own game with the team (payoff of 0 if less than 7 players show up, and payoff of 3 if at least 7 players show up).
To find the pure strategy Nash equilibria, we need to identify the strategies for which no player has an incentive to unilaterally deviate from their chosen strategy.
In this case, if all 11 members of SFC decide to stay at home and watch the game, no player has an incentive to switch to playing because they would receive a higher payoff of 2 instead of 0 or 3. This constitutes a pure strategy Nash equilibrium.
On the other hand, if at least 7 players from SFC decide to show up and play, no player has an incentive to switch to staying at home because they would receive a lower payoff of 3 instead of 2. This also constitutes a pure strategy Nash equilibrium.
Therefore, the pure strategy Nash equilibria of this game are:
1. All 11 members stay at home and watch the game.
2. At least 7 members show up to play the game.
In both equilibria, no player has an incentive to unilaterally deviate from their chosen strategy.
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Case:
Among the most respected of our business institutions are the insurance companies. A group of insurance executives meeting recently in New England was startled when their guest speaker, social critic Daniel Patrick Moynihan, roundly berated them for "unethical" practices. They had been guilty, Moynihan alleged, of using outdated actuarial tables to obtain unfairly high premiums.
They habitually delayed the hearings of lawsuits against them in order to tire out the plaintiffs and win cheap settlements. In their employment policies they used ingenious devices to discriminate against certain minority groups. It was difficult for the audience to deny the validity of these charges.
But these men were business game players. Their reaction to Moynihan’s attack was much the same as that of the automobile manufacturers to Nader, of the utilities to Senator Metcalf, and of the food processors to Senator Hart. If the laws governing their businesses change, or if public opinion becomes clamorous, they will make the necessary adjustments. But morally, they have, in their view, done nothing wrong. As long as they comply with the letter of the law, they are within their rights to operate their businesses as they see fit.
You are to analyze the ethics of this behavior through (1) Virtue Ethics and then through (2) Deontological Ethics. After you have done this, reflect on and include a discussion of the following in your conclusion: "Sound ethics is good business."
Introduction: Provide a brief explanation (in your own words) of the theory. Introduce and briefly explain the criteria. Create a thesis statement based upon the prompt.
Body:
Paragraphs -- apply the THREE criteria (for each lens) to particular instances within the case study and conclude.
Each criterion needs to be explained and applied to a specific instance in the article/sstudy, and you must demonstrate how that criterion reinforces your thesis.
Each theory/lens should have its own paragraph. It can have more.
Conclusion
Summarize your analysis, discuss how your research and deliberation have strengthened your thesis (at least two examples), create a concluding remark
Rubric
Thesis Statement (Clear and Concise)
Analysis of the article throughout the paper
Explanation of theory and identification and explanation of the criteria
Application of each criterion to specific instances/ideas in the article
Conclusion: Neatly sums up the analysis and reflects back to the thesis
Clear articulation/Cohesiveness
The case study exemplifies that sound ethics is good business. Upholding ethical standards not only contributes to societal well-being but also fosters trust, reputation, and long-term success for businesses. Ethical behavior is not only a moral imperative but also a strategic advantage, creating sustainable relationships with stakeholders and promoting a positive business environment.
Introduction:
In this analysis, we will examine the ethics of the insurance executives' behavior from two ethical perspectives: Virtue Ethics and Deontological Ethics. Virtue Ethics focuses on character traits and virtues, while Deontological Ethics emphasizes adherence to moral duties and principles. The criteria for each perspective will be applied to specific instances within the case study. The thesis statement is: The behavior of the insurance executives can be deemed unethical based on both Virtue Ethics and Deontological Ethics.
1. Virtue Ethics:
a. Criteria: Virtue Ethics evaluates actions based on character traits and virtues, such as honesty, integrity, and fairness.
Example 1: Using outdated actuarial tables
The insurance executives' use of outdated actuarial tables to obtain unfairly high premiums can be seen as a violation of virtues such as honesty and fairness. By intentionally manipulating data to charge higher premiums, they are not demonstrating the virtues expected of ethical business conduct.
Example 2: Discrimination in employment policies
The executives' use of discriminatory practices in their employment policies goes against virtues like equality and justice. By employing ingenious devices to discriminate against certain minority groups, they are failing to uphold ethical standards that promote equal opportunities and fairness
Conclusion (Virtue Ethics):
The insurance executives' behavior, as described in the case study, can be considered unethical from the perspective of Virtue Ethics. Their actions demonstrate a lack of virtues such as honesty, fairness, equality, and justice, which are essential for ethical business conduct.
2. Deontological Ethics:
a. Criteria: Deontological Ethics assesses the morality of actions based on adherence to moral duties and principles, regardless of the consequences.
Example 1: Delaying lawsuits to tire out plaintiffs
The executives' practice of intentionally delaying the hearings of lawsuits against them in order to tire out the plaintiffs and win cheap settlements can be seen as a violation of the principle of fairness. Regardless of the legal permissibility, deliberately prolonging legal proceedings to gain an advantage goes against the moral duty of treating all parties involved fairly.
Example 2: Compliance with the letter of the law
While the executives argue that as long as they comply with the letter of the law, they are within their rights to operate their businesses as they see fit, this perspective neglects the moral duty to act in an ethical manner beyond legal obligations. Focusing solely on legality disregards ethical responsibilities to stakeholders and society at large.
Conclusion (Deontological Ethics):
From a Deontological Ethics perspective, the behavior of the insurance executives can be considered unethical. Their actions, such as deliberately delaying lawsuits and relying solely on legal compliance, fail to uphold moral duties and principles that extend beyond mere adherence to the law.
Conclusion:
The analysis through both Virtue Ethics and Deontological Ethics strengthens the thesis that the behavior of the insurance executives can be deemed unethical. Virtue Ethics highlights the absence of virtues like honesty, fairness, equality, and justice in their actions. Deontological Ethics emphasizes the violation of moral duties and principles, including fairness and ethical responsibilities beyond legal obligations.
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When designing for the customer it is important to distinguish between customer product requirements and product technical requirements. Which of the following statements about a smart sprinkler controller best illustrates this concept?
a. "easy to install" is a technical requirement and "installs with a #2 crosstip screwdriver"" is a customer requirement
b. "easy to install" is a customer requirement and "looks nice mounted on my garage wall" is a technical requirement
c. "controller is Smart Water Application Technologies (SWAT) tested" is a technical requirement and "lowers my water bill" is a customer requirement
"Controller is Smart Water Application Technologies (SWAT) tested" is a technical requirement and "lowers my water bill" is a customer requirement.
The above statement about a smart sprinkler controller best illustrates this concept: When designing for the customer, it is important to distinguish between customer product requirements and product technical requirements.
When designing for the customer, it is important to distinguish between customer product requirements and product technical requirements. Customer product requirements are generally related to the product's features and how it is used. It is what the customer expects or requires from the product, in terms of quality, usability, and benefits. On the other hand, product technical requirements are the engineering specifications, standards, and measurements that are used to develop the product. It is what the product requires to function properly and how it is built. A smart sprinkler controller is an example of a product that requires both customer product requirements and product technical requirements. The following statement about a smart sprinkler controller best illustrates this concept:
"Controller is Smart Water Application Technologies (SWAT) tested" is a technical requirement and "lowers my water bill" is a customer requirement. The statement "Controller is Smart Water Application Technologies (SWAT) tested" refers to the product's technical requirements. It is an engineering specification that ensures that the product meets certain standards. On the other hand, the statement "lowers my water bill" refers to the customer's product requirements. It is what the customer expects or requires from the product, in terms of benefits. In this case, the customer expects that the product will help reduce their water bill.
When designing for the customer, it is important to distinguish between customer product requirements and product technical requirements. A smart sprinkler controller is an example of a product that requires both customer product requirements and product technical requirements. The statement "Controller is Smart Water Application Technologies (SWAT) tested" is a technical requirement and "lowers my water bill" is a customer requirement.
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Sofi wants to make withdrawals of $41,143 at the end of each year for 4 years to pay for college. Her first withdrawal occurring in 11 years. She plans to finance these withdrawals with 3 savings payments of $26,817 in 2 year from today, $X 5 years from today and $12,087 9 years from today. How much must she deposit 5 years from today (X) to meet her goal if she can borrow and lend at 3.58% interest per year compounded annually.
Hint: this is a 2 part problem, the present value of the annuity, what she plans to spend will define how much she needs to save. From there you can backout X.
Answer Format:
INCLUDE ONLY NUMBERS AND DECIMALS IN YOUR ANSWER. Do not include "$" "," or any other formatting. Carry interim computations to at least 4 decimals.
Enter numerical answers as a positive or negative number rounded to 2 decimal places (###.##)
Sofi must deposit approximately $126,993.71 (rounded to 2 decimal places) 5 years from today to meet her college savings goal.
To solve this problem, we need to calculate the present value of the annuity and use it to determine the amount Sofi must deposit 5 years from today.
[tex]PV =\frac { P \times (1 - (1 + r)^{(-n)})}{r}[/tex] where
PV is the present value of the annuity (the total amount Sofi needs to save),
P is the amount of each annual withdrawal ($41,143),
r is the interest rate per year (3.58% or 0.0358),
n is the number of years (4).
Using these values, we can calculate the present value of the annuity:
[tex]PV = 41143 \times \frac {(1 - (1 + 0.0358)^{(-4)})}{0.0358}[/tex]
PV ≈ 143,545.36
To determine X, we need to find the present value of the savings payments that Sofi plans to make.
[tex]PV = X / (1 + r)^5 + 26817 / (1 + r)^2 + 12087 / (1 + r)^9[/tex]
Substituting the given values:
[tex]143,545.36 = X / (1 + 0.0358)^5 + 26817 / (1 + 0.0358)^2 + 12087 / (1 + 0.0358)^9[/tex]
(1 + 0.0358)⁵ ≈ 1.192052
(1 + 0.0358)² ≈ 1.072802
(1 + 0.0358)⁹ ≈ 1.355706
Substituting these values:
[tex]143,545.36 = X / 1.192052 + 26817 / 1.072802 + 12087 / 1.355706[/tex]
143,545.36 ≈ 0.83991X + 24997.66 + 8928.79
143,545.36 - 24997.66 - 8928.79 ≈ 0.83991X
106,618.91 ≈ 0.83991X
X ≈ 126,993.71
Therefore, Sofi must deposit approximately $126,993.71 (rounded to 2 decimal places) 5 years from today to meet her college savings goal.
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Perez Corporation sells products for $42 each that have variable costs of $14 per unit. Perez's annual fixed cost is $630,000. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
Break-even point in units ____
Break-even point in dollars ____
The break-even point for Perez Corporation is 22,500 units and $945,000. This means that Perez needs to sell at least 22,500 units or generate sales of $945,000 to cover all fixed costs and reach the break-even point.
To determine the break-even point in units and dollars using the per-unit contribution margin approach, we need to calculate the contribution margin per unit and then divide the fixed costs by the contribution margin per unit.
The contribution margin per unit is the selling price per unit minus the variable cost per unit. In this case, it is $42 - $14 = $28.
To find the break-even point in units, we divide the fixed costs by the contribution margin per unit: Break-even Point (in units) = Fixed Costs / Contribution Margin per Unit.
Break-even Point (in units) = $630,000 / $28 = 22,500 units.
To calculate the break-even point in dollars, we multiply the break-even point in units by the selling price per unit: Break-even Point (in dollars) = Break-even Point (in units) * Selling Price per Unit.
Break-even Point (in dollars) = 22,500 units * $42 = $945,000.
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a) Philadelphia Acoustics builds innovative speakers for music and home theater systems. Identify each cost as variable, fixed, or mixed, relative to the number of speakers produced and sold. V, F or M
1) Base salary of plant manager:
2) Renting an equipment and paying $30 per day plus $.20 per hour used:
3) Property taxes on the corporate office:
4) Overtime salary calculated as overtime hourly pay rate and overtime hours worked:
b) Indicate whether each item below is a characteristic of a price-taker or a price-setter:
1) Cost-plus pricing:
2) Less competition
3) A company begins with revenue at market price and subtracts desired profit to arrive at target total cost:
4) Lots of similar products in the market already:
5) Product lacks uniqueness:
a)1) Base salary of plant manager - Fixed cost
2) Renting equipment and paying $30 per day plus $.20 per hour used - Mixed cost3) Property taxes on the corporate office - Fixed cost4) Overtime salary calculated as overtime hourly pay rate and overtime hours worked - Variable costs)1) Cost-plus pricing - Price setter 2) Less competition - Price setter
3) A company begins with revenue at market price and subtracts desired profit to arrive at target total cost - Price setter
4) Lots of similar products in the market already - Price taker
5) Product lacks uniqueness - Price taker Philadelphia Acoustics is a company that is involved in the production of innovative speakers for music and home theater systems.
In the production process, the company incurs different types of costs, including variable costs, fixed costs, and mixed costs. These costs are related to the number of speakers produced and sold.
1) The base salary of the plant manager is a fixed cost because it remains constant regardless of the number of speakers produced and sold.
2) Renting equipment and paying $30 per day plus $0.20 per hour used is a mixed cost. It consists of a fixed component, which is $30 per day and a variable component, which is $0.20 per hour used.
3) Property taxes on the corporate office are a fixed cost because it remains the same regardless of the number of speakers produced and sold.
4) Overtime salary calculated as overtime hourly pay rate and overtime hours worked is a variable cost because it depends on the number of overtime hours worked and the overtime hourly pay rate. It is directly proportional to the number of speakers produced and sold.
The different items below are characteristics of either a price-taker or a price-setter.
1) Cost-plus pricing is a price-setter characteristic.
2) Less competition is a price-setter characteristic.
3) A company begins with revenue at market price and subtracts desired profit to arrive at target total cost is a price-setter characteristic.
4) Lots of similar products in the market already is a price-taker characteristic.
5) The product lacks uniqueness is a price-taker characteristic.
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Trade recelvables which are more than one-year old are normally transferred to non-current recelvables.
Trade receivables that are more than one year old are typically transferred to non-current receivables. It is False.
Trade receivables refer to the amounts owed to a company by its customers for goods or services provided on credit. These receivables are classified as current assets on the balance sheet if they are expected to be collected within one year. However, when trade receivables exceed the one-year mark, they are usually reclassified as non-current receivables.
Non-current receivables, also known as long-term receivables, represent the portion of trade receivables that are expected to be collected beyond the next operating cycle or within a timeframe longer than one year. These could include long-term payment plans or contracts with extended payment terms.
Transferring trade receivables to non-current receivables allows for better financial reporting and analysis. It reflects the fact that these receivables are less liquid and might require a longer period to collect. By separating them from current assets, it provides a more accurate representation of a company's short-term liquidity and working capital.
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Analysis of an expansion project:
Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of Fox Co.: Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs:
Year 1 Year 2 Year 3 Year 4 Unit sales 5,500 5,200 5,700 5,820 Sales price $42.57 $43.55 $44.76 $46.79 Variable cost per unit $22.83 $22.97 $23.45 $23.87 Fixed operating costs $66,750 $68,950 $69,690 $68,900
This project will require an investment of $25,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t = 0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project’s four-year life. Fox pays a constant tax rate of 25%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project’s net present value (NPV) would be under the new tax law.
Determine what the project’s net present value (NPV) would be under the new tax law. $106,876 $92,936 $83,642 $111,523
Now determine what the project’s NPV would be when using straight-line depreciation:$_______
Using the______ depreciation method will result in the highest NPV for the project.
No other firm would take on this project if Fox turns it down. How much should Fox reduce the NPV of this project if it discovered that this project would reduce one of its division’s net after-tax cash flows by $700 for each year of the four-year project?
$1,629 $2,389 $2,172 $1,846
The project will require an initial investment of $25,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $12,000, after taxes, if the project is rejected. What should Fox do to take this information into account?
Increase the NPV of the project by $12,000.
The company does not need to do anything with the value of the truck because the truck is a sunk cost.
Increase the amount of the initial investment by $12,000.
The net present value (NPV) of the expansion project for Fox Co. under the new tax law is $92,936.
This calculation takes into account the projected sales, variable costs, fixed operating costs, and the initial investment of $25,000 in new equipment. With 100% bonus depreciation and no salvage value, the equipment is fully depreciated at the time of purchase. Fox Co. has a constant tax rate of 25% and a weighted average cost of capital (WACC) of 11%. The NPV is a measure of the project's profitability, and a positive NPV suggests that the project is expected to generate value for the company. Using straight-line depreciation, the NPV of the project would be $106,876. This method evenly distributes the depreciation expense over the project's four-year life, resulting in a higher NPV compared to the new tax law scenario. If the project were to reduce one of Fox Co.'s division's net after-tax cash flows by $700 per year for the four-year duration, the NPV of the project should be reduced by $2,172. This reduction accounts for the negative impact on the company's overall cash flows. Taking into account the company-owned truck that could be sold for $12,000 after taxes if the project is rejected, Fox Co. should increase the NPV of the project by $12,000. This reflects the opportunity cost of not selling the truck and recognizes the potential value that could be gained by utilizing it within the project.
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Suppose you will need $68,000 in 10 years. If your bank compounds interest at an annual rate of 11%, how much will you need to deposit into your account 1 year(s) from now to reach your goal? Enter your answer rounded to two decimal places.
You would need to deposit approximately $25,907.68 into your account 1 year from now to reach your goal of $68,000 in 10 years.
To calculate the amount you need to deposit into your account 1 year from now to reach your goal of $68,000 in 10 years, we can use the concept of future value.
Given:
Goal amount: $68,000
Time period: 10 years
Annual interest rate: 11%
Time until deposit: 1 year
We can use the future value formula:
Future Value = Present Value * (1 + Interest Rate)^Time
Rearranging the formula to solve for Present Value:
Present Value = Future Value / (1 + Interest Rate)^Time
Substituting the given values:
Present Value = $68,000 / (1 + 0.11)^10
Calculating:
Present Value = $68,000 / (1.11)^10
Present Value ≈ $25,907.68
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Sketch the typical customer profile and his /her needs, who can
benefit or find value from purchasing solar panels
The typical customer profile for someone who can benefit from purchasing solar panels includes homeowners or property owners who are environmentally conscious and interested in reducing their carbon footprint. They may also be seeking long-term cost savings on their energy bills, have a desire for energy independence, or live in areas with abundant sunlight. These customers are often financially stable, have a long-term perspective on investment, and value sustainable and renewable energy solutions.
The customer profile for solar panel purchases can vary, but there are common characteristics and needs that align with the value proposition of solar panels. Homeowners who prioritize sustainability and want to contribute to a greener future are often attracted to solar panels. These customers may have a strong awareness of climate change and the benefits of renewable energy sources.
Additionally, customers who want to reduce their reliance on traditional energy sources and lower their electricity bills find value in solar panels. By generating their own electricity, they can offset their energy consumption and potentially even sell excess power back to the grid through net metering programs. This appeals to customers who want to achieve energy independence and secure long-term cost savings.
Financial stability is another characteristic of customers interested in solar panels. Although the upfront cost of installation can be significant, customers who can afford the initial investment see solar panels as a long-term financial benefit. The potential return on investment, in terms of reduced energy bills and potential government incentives or tax credits, is appealing to financially stable customers with a long-term perspective on their investment.
Overall, the typical customer profile for solar panels includes environmentally conscious homeowners or property owners seeking sustainability, energy independence, cost savings, and long-term investment benefits. Understanding these customer needs allows solar panel providers to tailor their marketing efforts and value propositions to effectively reach and serve this target audience.
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If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded does not change, then the price elasticity of demand (by the midpoint method) is: 1. 0. 0.5. 2.
The price elasticity of demand (by the midpoint method) when the price of chocolate-covered peanuts decreases and the quantity demanded remains unchanged is 0. Option B.
To determine the price elasticity of demand (by the midpoint method) when the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded remains unchanged, we need to calculate the percentage change in quantity demanded and the percentage change in price.
Using the midpoint formula, the percentage change in quantity demanded is:
Percentage change in quantity demanded = [(New Quantity Demanded - Old Quantity Demanded) / ((New Quantity Demanded + Old Quantity Demanded) / 2)] * 100%
Since the quantity demanded does not change, the numerator of the formula is zero. Therefore, the percentage change in quantity demanded is also zero.
The percentage change in price is calculated as:
Percentage change in price = [(New Price - Old Price) / ((New Price + Old Price) / 2)] * 100%
Plugging in the values, we have:
Percentage change in price = [($0.90 - $1.10) / (($0.90 + $1.10) / 2)] * 100%
Percentage change in price = [(-$0.20) / ($1.00 / 2)] * 100%
Percentage change in price = -20%
Now, we can calculate the price elasticity of demand using the formula:
Price elasticity of demand = (Percentage change in quantity demanded) / (Percentage change in price)
Price elasticity of demand = 0 / -20% = 0
Therefore, the price elasticity of demand (by the midpoint method) is 0. So Option B is correct.
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3. What are the three types of inventory in CCC's factory? 4. Based on the financial statements in Exhibit 1−1.2, what is CCC 's total planned manufacturing costs for the year 2019? 5. Compute the following four ratios for CCC for the following years 2016, 2017, 2018 and 2019: - Return on equity - Return on sales - Inventory tumover - Debt-to-equity 6. What do these ratios indicate for the coming year for CCC based on the planned amounts?
The three types of inventory in CCC's factory are Raw materials, work-in-progress, and finished goods. Raw materials are basic substances and elements used in the manufacturing process, which are converted into finished products. Work-in-progress inventory is inventory that is in the manufacturing process.
Finished goods are completed products that are ready for sale.4. Based on the financial statements in Exhibit 1−1.2, CCC's total planned manufacturing costs for the year 2019 is $7,316,500.5. Return on equity: Return on equity is the measure of the profitability of the shareholders' investment in the company. It is the ratio of net income to shareholder's equity. This indicates how much profit is generated per dollar of shareholder equity. Return on sales: It measures the company's operating efficiency by calculating the profit per dollar of revenue.
Inventory turnover: This ratio measures the number of times inventory is sold and replaced during a particular period. Debt-to-equity: This ratio indicates the relationship between the company's long-term debt and its equity.6. These ratios indicate that CCC is in a good financial position. The return on equity ratio is high, which indicates that CCC is efficiently utilizing shareholder funds. The return on sales ratio is high, which indicates that CCC is generating a lot of profit for every dollar of revenue.
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Test question:While Mark was on a wilderness fishing trip in canada, flood waters threatened his neighborhood. His neighbors hired a contractor to build a temporary levee and all the houses including marks’ were saved from certain water damage. Upon his return mark refused to pay his share of the contractors bill, claiming that he hadn’t agreed to the work. Th most likely legal result would be :
a. Mark is right- his lack of agreement means there was no contract and he won’t have to pay
b.Mark is right- his lack of agreement means there was no contract, but he will still have to pay because he would be unjustly enriched if he is not required to pay
c. Mark is wrong-under these circumstances his agreement wasn’t necessary to form a contract and he will have to pay.
d. Mark is wrong- he is required to pay because it would be unethical for him not to pay his share of the cost
The most likely legal result in this situation is that Mark is wrong-under these circumstances his agreement wasn’t necessary to form a contract and he will have to pay. Contracts are binding legal agreements between parties to perform or refrain from specific actions.
They can be in writing or unwritten and formal or informal in nature. A contract can be formed when the parties have a mutual agreement to offer and acceptance, consideration, and a legal objective.Agreement, consideration, legal objectives, and contractual capacity are the four fundamental requirements for a legally enforceable contract. However, some contracts do not require mutual consent to be formed.
These contracts are usually known as "quasi-contracts" or "constructive contracts."This is most likely what happened in this situation; the contractor built the levee in response to a perceived emergency, and Mark benefited from the levee's construction. As a result, Mark would be required to pay his share of the cost because his agreement was not necessary to form a contract. Therefore, Mark is wrong-under these circumstances his agreement wasn’t necessary to form a contract and he will have to pay.
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ABC Inc. reported net income of $237 million, and it plans to retain 37.52 percent of its net income. The historical return of equity (ROE) has been 11.86 percent and it is expected to continue into the future. what is abc inc.’s sustainable growth?
1) 3.996%
2) 3.774 %
3) 4.44%
4) 4.218%
5) 4.884%
The sustainable growth rate of ABC Inc. is 4.44%. This is option 3
The sustainable growth rate of ABC Inc. can be calculated using the following formula:
Sustainable Growth Rate = Retention Ratio * Return on Equity (ROE)
Where Retention Ratio is the fraction of net income that the company decides to retain.
It is given that ABC Inc. plans to retain 37.52% of its net income, which means that the retention ratio is 0.3752.
ROE is given to be 11.86%.
Substitute the values in the formula:
Sustainable Growth Rate = 0.3752 * 11.86%
Sustainable Growth Rate = 4.44%
Hence, the sustainable growth rate of ABC Inc. is 4.44%.
Therefore, the correct option is 3) 4.44%.
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Explain two specific ways in which the balance sheet of a
company differs from its incomestatement.
The balance sheet of a company and its income statement differ from each other in two specific ways. Time Difference: The balance sheet and the income statement differ in terms of time. The balance sheet is a summary of a company's financial position at a specific time.
The balance sheet reflects the company's financial position on a specific date, whereas the income statement reflects the company's financial performance over a specific period of time, such as a quarter or a year. Purpose: The balance sheet and income statement differ in terms of purpose.
On the other hand, the income statement is used to provide information about the company's financial performance, including its revenues, expenses, and net income. It is used to calculate financial ratios such as the gross profit margin and the net profit margin.
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The market will be in equilibrium if is set the equilibrium price. Select one:
a. a price floor; below
b. actual price; below
c. a price ceiling; below
d. none of the choices
e. actual price; above
Neither a price floor nor a price ceiling can establish market equilibrium. It is only when the actual price matches the equilibrium price that the market will be in balance, with supply and demand being equal. Hence, the correct solutionis d. none of the choices.
The correct answer is d. none of the choices. The market will be in equilibrium if the actual price is set at the equilibrium price.
In economics, market equilibrium occurs when the quantity demanded by consumers equals the quantity supplied by producers at a particular price. This is the point where the market clears, and there is no excess supply or demand.
If a price floor is set below the equilibrium price (choice a), it would result in a surplus of the product because suppliers would be willing to supply more than consumers are willing to buy at that price. This would create an imbalance in the market, leading to unsold goods.
Similarly, if a price ceiling is set below the equilibrium price (choice c), it would create a shortage in the market because consumers would demand more than suppliers are willing to provide at that price. This would lead to a situation where demand exceeds supply.
Therefore, neither a price floor nor a price ceiling can establish market equilibrium. It is only when the actual price matches the equilibrium price that the market will be in balance, with supply and demand being equal. Hence, the correct answer is d. none of the choices.
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Discuss how each of the following events affects the number of hours the individual would like to work (increase/decrease/unclear/no change). For full credit, your answer must explain why things change using the terminology of labor supply theory. If the effect is theoretically ambiguous explain why. Depending on the question, you may need to discuss income effects, substitution effects, diminishing returns to income, diminishing returns to leisure and/or the labor/leisure tradeoff. (6 pts)
Shogher gets a raise so she makes $25 per hour instead of $20 per hour.
Todd inherits $1,000,000. His wage stays unchanged at $40 per hour.
Vinitha doesn’t work initially because the best wage offer she has received is $15 per hour and she values her leisure time more than that. One day, she gets a wage offer of $25.
Shogher's increase in wage would decrease the number of hours she wants to work. Todd's inheritance will not affect the number of hours he wants to work. Vinitha's wage is likely to increase the working hours.
Shogher's raise from $20 to $25 per hour increases her wage rate, leading to an income effect and a substitution effect. The income effect suggests that her increased wage provides her with a higher level of income, allowing her to afford more goods and leisure. This could potentially lead to a decrease in the number of hours she wants to work as she can now maintain the same level of utility with fewer working hours. The substitution effect suggests that the higher wage rate makes working relatively more attractive compared to leisure. However, the net effect depends on the relative strengths of the income and substitution effects. If the income effect dominates, Shogher may choose to work fewer hours.
Todd's inheritance of $1,000,000 does not directly affect his wage rate of $40 per hour. Since the inheritance is a one-time windfall and his wage remains unchanged, it is unlikely to have a substantial impact on the number of hours Todd wants to work. The income effect is minimal as there is no increase in his wage rate. Therefore, there is no clear reason to expect a significant change in Todd's desired number of working hours due to the inheritance.
Vinitha initially declines the wage offer of $15 per hour because she values her leisure time more than that. However, when she receives a wage offer of $25 per hour, it becomes more attractive in comparison to her leisure activities. This increase in wage provides both an income effect and a substitution effect. The income effect suggests that Vinitha now has a higher level of income and can afford more goods and leisure. This income effect could lead to an increase in the number of hours she wants to work as she can now achieve a higher level of utility with more income. Additionally, the substitution effect implies that the higher wage rate makes working relatively more desirable compared to leisure. Together, these effects suggest that Vinitha would likely choose to work more hours in response to the increased wage offer.
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Apex Corp. has two outstanding bond issues. One issue consists of 5% annual coupon bonds and the other issue consists of zero-coupon bonds. For each bond issue, calculate the bond prices and percentage change in prices when the required rate of return changes from 5% to 6%.
a. Ten years to maturity and the required rate of return goes from 5% to 6%.
b. Twenty years to maturity and the required rate of return goes from 5% to 6%.
c. Ten years to maturity and the required rate of return goes from 5% to 4%.
d. Twenty years to maturity and the required rate of return goes from 5% to 4%.
e. Compare and contrast your answers for parts a through d and comment on your observations.
- The ________ bond's price is more sensitive to interest rate risk because it has a ______ coupon rate.
- Regardless of the level of interest rate risk for given bond, the magnitude of the price change that results from an increase in underlying interest rates is ______ than the price change that results from a decrease in interest rates.
The prices of both bonds are inversely related to the required rate of return.
This means as the required rate of return increases, bond prices decrease and vice versa.
Zero-coupon bonds are more sensitive to interest rate risk than annual coupon bonds because zero-coupon bonds pay no coupon interest over their life and therefore their entire return is dependent on the bond's price appreciation over time.
Regardless of the level of interest rate risk for given bond,
the magnitude of the price change that results from an increase in underlying interest rates is greater than the price change that results from a decrease in interest rates.
This is because bonds have a downward sloping curve due to the time value of money,
where interest rate changes have a greater effect on bond prices when rates are lower than when rates are higher.
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Transportation (LO 3.3)
Martha is a self-employed tax accountant who drives her car to visit clients on a regular basis. She drives her car 4,000 miles for business and 10,000 miles for commuting and other personal use.
Assuming Martha uses the standard mileage method, how much is her deductible auto expense for the year?
a. The deductible business auto expense is $fill in the blank 1.
Martha drives her car 4,000 miles for business and 10,000 miles for commuting and other personal use. Assuming Martha uses the standard mileage method, her deductible auto expense for the year is calculated in the Second Paragraph.
Martha's deductible auto expense for the year will be calculated using the standard mileage method. It is a method in which the taxpayer can claim a standard amount of deduction per mile driven for business purposes. As per the US tax code, the standard mileage rate for business miles driven in 2021 is 56 cents per mile. Therefore, Martha's deductible auto expense for the year can be calculated by multiplying the standard mileage rate with the number of business miles driven i.e. 56 cents × 4,000 miles = $2,240.
The standard mileage method also allows taxpayers to claim a deduction for certain expenses such as parking fees and tolls, separately. Therefore, Martha can also claim a deduction for the parking fees and tolls paid during the business travel. However, she cannot claim any deduction for commuting and other personal use.
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You need a new car and the dealer has offered you a price of $20,000, with the following payment options: (a) pay cash and receive a $2,000 rebate, or (b) pay a $5,000 down payment and finance the rest with a 0% APR loan over 30 months. But having just quit your job and started an MBA program, you are in debt and you expect to be in debt for at least the next 2 ½ years. You plan to use credit cards to pay your expenses; luckily you have one with a low (fixed) rate of
14.99% APR. Which payment option is best for you?
your monthly discount rate is ___
Option (a), paying cash and receiving a $2,000 rebate, is the best option for you.
Considering the situation where the individual has just quit their job and started an MBA program, being in debt and expecting to remain in debt for the next 2½ years, it is important to minimize additional financial burden.
Option (a) of paying cash and receiving a $2,000 rebate is the better choice. By paying cash upfront, the individual avoids taking on any new debt. Additionally, the $2,000 rebate further reduces the cost of the car, resulting in a lower overall expenditure.
This option allows the individual to own the car outright without any financing or interest charges.
Option (b) involves making a $5,000 down payment and financing the rest of the car's cost with a 0% APR loan over 30 months. While the absence of interest charges is beneficial, it requires taking on debt for an extended period.
Given the individual's existing debt and anticipated financial constraints during their MBA program, it is advisable to avoid taking on additional financial obligations.
Considering the individual's circumstances and the need to minimize debt, the cash payment with a $2,000 rebate is the most favorable option. It allows for immediate ownership of the car without incurring any additional interest charges or prolonging the debt repayment period.
By utilizing this option, the individual can better manage their financial situation and focus on their MBA program without the added burden of long-term car payments.
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Option (a), paying cash and receiving a $2,000 rebate interest, is the best option for you.
Considering the situation where the individual has just quit their job and started an MBA program, being in debt and expecting to remain in debt for the next 2½ years, it is important to minimize additional financial burden.
Option (a) of paying cash and receiving a $2,000 rebate is the better choice. By paying cash upfront, the individual avoids taking on any new debt. Additionally, the $2,000 rebate further reduces the cost of the car, resulting in a lower overall expenditure.
This option allows the individual to own the car outright without any financing or interest charges.
Option (b) involves making a $5,000 down payment and financing the rest of the car's cost with a 0% APR loan over 30 months. While the absence of interest charges is beneficial, it requires taking on debt for an extended period.
Given the individual's existing debt and anticipated financial constraints during their MBA program, it is advisable to avoid taking on additional financial obligations.
Considering the individual's circumstances and the need to minimize debt, the cash payment with a $2,000 rebate is the most favorable option. It allows for immediate ownership of the car without incurring any additional interest charges or prolonging the debt repayment period.
By utilizing this option, the individual can better manage their financial situation and focus on their MBA program without the added burden of long-term car payments.
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Please explain in 75 words or more the following TRUE or FALSE questions. Answers need to
be supported with an economic model.
Government can correct for negative externality of production by subsidizing production.
Externalities will not affect the efficiency of the market.
TRUE: Government can correct negative externality of production by subsidizing production. FALSE: Externalities do affect market efficiency as they create market failures requiring government intervention.
1. Government can correct for negative externality of production by subsidizing production: TRUE. The government can intervene by providing subsidies to producers facing negative externalities, such as pollution. This reduces the production costs for these producers, encouraging them to reduce the negative externality and increasing the overall efficiency of the market. Subsidies effectively internalize the external cost, aligning private and social costs.
2. Externalities will not affect the efficiency of the market: FALSE. Externalities can significantly impact the efficiency of markets. Negative externalities, like pollution or congestion, create external costs that are not considered by market participants, leading to overproduction and inefficient resource allocation. Positive externalities, such as education or research, result in underinvestment as private actors do not capture the full social benefits. These market failures can be addressed through government intervention, such as implementing regulations or providing subsidies or taxes to internalize external costs or benefits and restore market efficiency.
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Dance-a-Boogie
Dance-a-Boogie (DaB) was set up ten years ago by three former graduates of leisure management and recreation. They had, as a team, cut their teeth in big sports and leisure companies but had decided to strike out and set up for themselves. The three had complementary skills: Danny was a marketer and salesman through and through, Ray was the project manager – keeping everything on spreadsheets, while Stu had catering in his blood. The three had the support of a small group of non-execs, including a retired accountant and a solicitor.
Over the years, their business, Dance-a-Boogie had allowed the three friends to become highly successful in their chosen markets – events and parties for groups large and small, ranging from birthday parties to corporate events. Though largely female, their target audiences spanned groups in their mid-20s to those who had been teenagers in the 1980s.
But they had reached a crossroad. The team realised that, though totally self-financed to date, to expand further from their current sites would require external investment – and the plan was to open operations in other suitable cities. Although respectably profitable to date, they needed to impress would-be investors. They felt that one way to improve the steady performance and attract financial support was to sweat their assets.
The six venues they leased around the UK were filled well most weekend evenings, and especially around the major seasonal times like Christmas and peak wedding season ( July to September). However, during the day they were largely unused and they were underused during normal weeknights too. Location was a factor too: the centres of cities with universities were particular targets.
Dance-a-Boogie’s particular successes included hen parties and tailor-made private corporate events. The corporate offerings had the potential to make more money to being paid for centrally and usually to celebrate some particular success. The venues all had a real club feel, being not too big or too small – any one venue housed no more than 250 people, and were a safe place for women alone or in groups.
The individual night’s formulae were tried and tested: either disco suited to a particular night out (’1970s, for example, or with the focus on a particular music genre – Motown, garage, etc.) or live bands with guests dressing up in the style of the performing band. Dance-a-Boogie prided itself on the quality of food that was provided in the all-inclusive, pre-paid price.
The only additional costs on any particular night were drinks on which DaB made good margins. Only pre-booked parties were admitted.
Danny led the way and decided to take some outside advice.
1 What analysis techniques would you use and why?
SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a tool that is used to identify a business's internal and external environment and its competitive position.
The analysis techniques that Danny should use for Dance-a-Boogie (DaB) to impress potential investors are as follows:
1. SWOT Analysis: SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a tool that is used to identify a business's internal and external environment and its competitive position. This tool will help Danny to identify the strengths and weaknesses of his business and will help him to overcome the weaknesses.
2. PEST Analysis: PEST analysis (Political, Economic, Social, and Technological analysis) is a tool used to analyze the external environment of a business. This tool helps Danny to identify the macro-environmental factors that may impact his business in a positive or negative way.
3. Porter’s Five Forces Model: Porter's Five Forces Model is a tool that is used to identify the competitive intensity of the industry. This tool will help Danny to understand the industry's competition and the power of suppliers, buyers, and substitutes.
4. Financial Analysis: Financial analysis is a tool that is used to analyze the financial performance of a business. This tool helps Danny to understand the profitability, liquidity, and solvency of the business. He can analyze financial statements like balance sheet, income statement, and cash flow statement to identify areas of improvement.
5. Break-Even Analysis: Break-even analysis is a tool used to analyze the break-even point of a business. This tool helps Danny to identify the minimum revenue that is required to cover the fixed and variable costs. It will also help him to identify the point where the business will start making a profit.
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Which of the following dients would you expect gets credit at the lowest rate?
A. Investor looking for a mortgage to buy an apartment building. She is borrowing 90% of the value of the property, and rents are projected to cover 110% of mortgage payments when the building is fully occupied. Building is located across a landfield.
B. Couple looking for a mortgage to buy their first home. They are borrowing 70% of the value of the home and make enough salary to achieve a 20% Debt-to-Income ratio. The house appraises at $356,000
C. Couple borrowing $10,000 to go on their honeymoon to Aruba.
D. Young student getting her first VISA Card
The individual who is likely to receive credit at the lowest rate is the investor looking for a mortgage to buy an apartment building. The correct answer is option a.
Among the given options, the investor looking for a mortgage to buy an apartment building is likely to receive credit at the lowest rate. This is because investing in a commercial property, such as an apartment building, carries higher risk compared to residential properties. Additionally, the location of the building across a landfill may further increase the perceived risk for lenders, affecting the interest rate.
Furthermore, the fact that the projected rental income only covers 110% of the mortgage payments when the building is fully occupied indicates a relatively tight margin. Lenders prefer to see a higher cushion of rental income to cover the mortgage payments, as it provides a safety net in case of any unforeseen circumstances, such as vacancies or maintenance expenses. The combination of these factors contributes to a higher perceived risk for the lender, resulting in a higher interest rate for the investor.
In conclusion, considering the given options, the investor looking for a mortgage to buy an apartment building is likely to receive credit at the lowest rate due to the higher risk associated with the investment property, its location across a landfill, and the projected rental income margin. The other scenarios involve lower risks or smaller loan amounts, making them more favorable for lenders, resulting in potentially lower interest rates.
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Copper Industries has the following transactions related to notes receivables in November 2020 01-Nov. Borrowed Arthur James $60,000 cash on a 1-year, 5% note. Interest is due the first of each month commencing December 1. 15-Nov. Sold goods to J. Mardock, receiving a $9,000,4-month, 4% note. Interest is due the 15 of each month, commencing December 15. The merchandise cost $6,000 and the company uses perpetual inventory system. 30-Nov Accrued interest income on the notes receivable (Nov 1 and Nov 15). Show your Nov calculations.
In November 2020, Copper Industries earned $2,530 in interest income on notes receivable from Arthur James and J. Mardock, and accrued interest on both notes.
The calculations of Copper Industries' notes receivables for the month of November 2020 are as follows:
1. Calculating the interest income on the notes receivable of Arthur James:
- The amount of the note receivable borrowed from Arthur James on Nov 1 is $60,000.
- The annual interest rate on the note is 5%.
- Interest for one month on this note receivable will be calculated as: $60,000 × 5% ÷ 12 = $2,500.
- So, the interest income for November 1 will be $2,500.
2. Calculating the interest income on the notes receivable of J. Mardock:
- The amount of the notes receivable sold to J. Mardock on Nov 15 is $9,000.
- The annual interest rate on this note is 4%.
- Interest for one month on this note receivable will be calculated as: $9,000 × 4% ÷ 12 = $30.
- So, the interest income for November 15 will be $30.
3. Calculating the cost of merchandise sold to J. Mardock:
- The cost of merchandise sold to J. Mardock is $6,000.
4. Accrued interest income on the notes receivable:
- The accrued interest income for the month of November for both notes receivable will be calculated as:
Accrued interest income = Interest income on Nov 1 + Interest income on Nov 15 = $2,500 + $30 = $2,530.
Hence, the calculations of Copper Industries' notes receivables for the month of November 2020 are $2,530.
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A department uses the FIFO method of process costing. Direct materials are added ratably as conversion costs are consumed (see below percentages). This department has the following data for this month.
185 units in beginning WIP (42% complete with respect to conversion costs and direct materials).
11,404 units started
243 units in ending WIP (25% complete with respect to conversion costs and direct materials).
$21 direct material cost per equivalent unit
$18 conversion cost per equivalent unit
$2,618 beginning WIP direct materials costs
$4,836 beginning WIP conversion costs
What is the department's total cost of units completed and transferred out (round final answer to nearest cent if necessary)?
The department's total cost of units completed and transferred out is $456,345.
To calculate the department's total cost of units completed and transferred out using the FIFO method of process costing, we need to consider the units completed from the beginning work in progress (WIP) and the units started and completed during the month.
First, calculate the equivalent units for direct materials and conversion costs:
Equivalent units for direct materials:
185 units (beginning WIP) + 11,404 units (started) = 11,589 units
Equivalent units for conversion costs:
185 units (beginning WIP) + 11,404 units (started) + 243 units (ending WIP) = 11,832 units
Next, calculate the total cost for direct materials and conversion costs:
Total direct materials cost = Equivalent units for direct materials * Cost per equivalent unit for direct materials
= 11,589 units * $21
= $243,369
Total conversion costs = Equivalent units for conversion costs * Cost per equivalent unit for conversion costs
= 11,832 units * $18
= $212,976
Finally, calculate the total cost of units completed and transferred out:
Total cost of units completed and transferred out = Total direct materials cost + Total conversion costs
= $243,369 + $212,976
= $456,345
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Refrigerator Company manufactures ice-makers for installation in refrigerators. The costs per unit, for 20,000 units of ice-makers, are as follows.
Direct materials $ 7
Direct labor 12
Variable overhead 5
Fixed overhead 10
Total costs $34
Cool Compartments Inc. has offered to sell 20,000 ice-makers to Refrigerator Company for $28 per unit. If Refrigerator accepts Cool Compartments' offer, the facilities used to manufacture ice-makers could be used to produce 20,000 water filtration units. Revenues from the sale of water filtration units are estimated at $80,000, with variable costs equal to 60% of sales. In addition, $6 per unit of the fixed overhead associated with the manufacture of ice-makers could be eliminated.
What are the relevant costs involved for Refrigerator Company to make the ice-makers internally or to buy them externally from Cool Compartments, Inc.?
Refrigerator Company manufactures ice-makers for installation in refrigerators. Direct materials $ 7Direct labor 12Variable overhead 5Fixed overhead 10Total costs $34Cool Compartments Inc. has offered to sell 20,000 ice-makers to Refrigerator Company for $28 per unit.
The total cost of manufacturing 20,000 units of ice-makers internally is $34 per unit. This figure includes direct materials, direct labor, variable overhead, and fixed overhead per unit. To manufacture 20,000 ice-makers, the total cost is $680,000 ($34 x 20,000).
Therefore, the difference in cost for manufacturing internally or buying externally is ($34-$28) = $6. By choosing to purchase the ice-makers from Cool Compartments, Refrigerator Company can save $6 per unit.
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Diebold Incorporated manufactures, markets, and services automated teller machines in the United States. The following are selected numbers from the financial statements for 1992 and 1993 (in millions).
1992 1993
Revenues $544.0 $620.0
(Less) Operating Expenses ($465.1) ($528.5)
(Less) Depreciation ($12.5) ($14.0)
= Earnings before Interest and Taxes $66.4 $77.5
(Less) Interest Expenses ($0.0) ($0.0)
(Less) Taxes ($25.3) ($29.5)
= Net Income $41.1 $48.0
Working Capital $175.0 $240.0
The firm had capital expenditures of $15 million in 1992 and $21 million in 1993.
Estimate the cash flows to equity in 1993.
The estimated cash flows to equity in 1993 were -$9 million. Given: Capital expenditure in 1992 was $15 million.Capital expenditure in 1993 was $21 million.Working Capital was $175 million in 1992.Working Capital was $240 million in 1993.Revenue was $544 million in 1992.
Revenue was $620 million in 1993.Operating expense was $465.1 million in 1992.Operating expense was $528.5 million in 1993.Depreciation was $12.5 million in 1992.
Depreciation was $14 million in 1993.Interest was $0 million in 1992.Interest was $0 million in 1993.Tax was $25.3 million in 1992.
Tax was $29.5 million in 1993. The formula for cash flows to equity is given as:
Cash Flow to Equity = Net Income + Depreciation - Capital Expenditure - Increase in Net Working Capital
Let’s calculate each of these: Net Income = $48 million
Depreciation = $14 million
Capital expenditure = $21 million – $15 million = $6 million
Increase in net working capital = $240 million – $175 million = $65 million
Cash Flow to Equity = $48 million + $14 million - $6 million - $65 million= -$9 million
Thus, the estimated cash flows to equity in 1993 were -$9 million.
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On November 17, the White House announced that it "plans to spend billions expanding Covid vaccine manufacturing in the U.S." Please explain answers by DRAWING graphs/models AND explaining shifts and effects on variables.
(a) Use the AD/AS model to predict the short-run and long-run effects of this fiscal shock on output, prices, real and nominal wages, employment, and unemployment, ignoring possible productivity effects. How will your answer change if the infrastructure spending generates a positive productivity effect? Please explain answers by DRAWING AD/AS model AND explaining shifts and effects on variables.
(b) The US is an open economy. Consider the open-economy IS/LM model and assume the dollar is freely floating. What will be the effects of this fiscal policy on US output and interest rates, the dollar exchange rate, and foreign (Rest-of-the-World) output and interest rates? Please explain answers by DRAWING IS/LM model AND explaining shifts and effects on variables.
(c) Use the Solow model to predict the effects of the higher government spending on US steady-state income per capita. [Hint: what is that fiscal policy’s effect on the US national saving rate?] How does your answer change if spending on vaccines also raises multifactor productivity? Please explain answers by DRAWING Solow model AND explaining shifts and effects on variables.
(a) AD/AS Model: In the short run, the fiscal shock of expanding COVID vaccine manufacturing in the U.S. will lead to an increase in government spending, shifting the aggregate demand (AD) curve to the right.
This will result in an increase in output, employment, and potentially inflation. In the long run, the increase in government spending will have a limited effect on output as the economy adjusts. The aggregate supply (AS) curve will shift to the left due to potential inflationary pressures. Output will return to the long-run equilibrium level, but prices and nominal wages may remain higher.
If the infrastructure spending generates a positive productivity effect, it will shift the AS curve to the right, leading to higher output and lower inflationary pressures.
(b) Open-Economy IS/LM Model: In the open-economy IS/LM model, the fiscal policy expansion will increase government spending, shifting the IS curve to the right. This will lead to an increase in output and potentially higher interest rates.
The higher interest rates will attract capital flows, appreciating the value of the dollar. The exchange rate will rise, making imports relatively cheaper and exports relatively more expensive, which can lead to a decrease in net exports and potential crowding out of domestic investment.
Foreign output and interest rates may be affected indirectly through changes in exchange rates and trade flows.
(c) Solow Model: The higher government spending on vaccines will increase the national saving rate in the Solow model. This increase in saving will lead to higher investment and capital accumulation, resulting in higher steady-state income per capita in the long run.
If spending on vaccines also raises multifactor productivity, it will shift the production function upward, leading to a higher level of steady-state income per capita.
The Solow model illustrates the relationship between saving, investment, capital accumulation, and long-run income per capita, showing how changes in government spending can impact the economy's long-term growth.
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Business Model (5 marks) 1. Describe your business model. How do you imagine your business operating to create and deliver value to customers? 2. Give highlights of how your business will be organized to make it effective and efficien in delivering customer value. Business Strategy (8 marks) 1. Briefly describe the strategies your business will employ, e.g. 2. Production strategy 3. Marketing strategy - including pricing, promotion, and distribution. 4. How will you deploy your resources, especially human resources to achieve the busines: goals? Finances (7 marks) 1. Give an idea of the main costs involved in starting this business; minimum amount of resources need at start-up. 2. Describe your income and expenditure flows: 1. What will be your major sources of income? 2. What will be your major expenses 3. How long do you think it will take for this business to start making profit?
The business is expected to start making a profit in the second year of operations.
1. Business Model: My business model is to provide healthy and organic food products to customers. The products will include fruits, vegetables, meats, and dairy products. The business will operate through a combination of online and offline channelsThe business will also have a physical store where customers can visit and buy the products. The main focus will be on quality and freshness of the products, and the business will source its products directly from the farmers.
2. Organization: The business will be organized to make it effective and efficient in delivering customer value. The key functions of the business will include production, procurement, logistics, sales, and marketing. The production will be done in-house, and the procurement will be done directly from the farmers. The business will be managed by a team of experienced professionals.
3. Business Strategy: The business will employ the following strategies:Production strategy: The production will be done in-house to ensure quality and freshness of the products.
Marketing strategy: The marketing will be done through social media and other channels. The pricing will be competitive to attract customers. The promotion will be done through discounts and other offers. The distribution will be done through online and offline channels.Resources deployment: The business will deploy its resources, especially human resources, to achieve the business goals. The business will also invest in technology to improve efficiency and productivity.
4. Finances: The main costs involved in starting this business will include the cost of setting up the physical store, procurement of raw materials, and marketing expenses.
Therefore, The major expenses will be on raw materials, logistics, and marketing.
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6. What is a global network of organizations and activities that supply a firm with goods and services? a. supply tree b. provider network c. supply chain d. vendor network c. vendor tree 7. Which of the following statements about organizational missions is FALSE? a. They reflect a company's purpose. b. They are formulated after strategies are known. c. They indicate what a company intends to contribute to society. d. They define a company's reason for existence. e. They provide guidance for functional area missions. 8. The three major types of forecasts used by organizations in planning future operations are: (a) economic, technological, and demand. b. strategic, tactical, and operational. c. exponential smoothing, Delphi, and regression. d. causal, time-series, and seasonal. e. departmental, organizational, and territorial. 9. Productivity can be improved by: a. increasing inputs while holding outputs steady. b. decreasing outputs while holding inputs steady. c: increasing inputs and outputs in the same proportion. d. decreasing inputs while holding outputs steady. e. none of the above. 10. The ability of an organization to produce goods or services that have some uniquenes in their characteristics is: a. mass production. b. time-based competition. c. competing on productivity. d. competing on quality. e. competing on differentiation.
Q6. The supply chain is a global network of organizations and activities that supply a firm with goods and services. Option C. Q7. The given statement "They are formulated after strategies are known" is a FALSE statement about organizational missions. Option B. Q8. Option B. Q9. Option D. Q10. Option E.
6. Supply chain is a global network of organizations and activities that supply a firm with goods and services. It is a series of activities that begins with the conversion of raw materials into parts and ends with their delivery as products to the end customer.
7. The given statement "They are formulated after strategies are known" is a FALSE statement about organizational missions. An organizational mission is a statement that explains why an organization exists and what it hopes to achieve in the future. An organization's mission should be formulated before strategies are decided.
8. The three major types of forecasts used by organizations in planning future operations are strategic, tactical, and operational.
9. Productivity can be improved by decreasing inputs while holding outputs steady.
10. The ability of an organization to produce goods or services that have some uniqueness in their characteristics is competing on differentiation.
Hence, the right answer is Options C, B, B, D, and E.
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