The question requires us to find out the optimal amount of x2 with the following utility function and prices given: U = 49x1 + 84x2; p1 = 78; p2 = 10 and I = 3320.
What is the utility function? A utility function is a mathematical equation that connects the preferences of a consumer with the consumption bundle. Mathematically, it is written as U = U(x1, x2).
Where; U = utility functionx1 = amount of good 1x2 = amount of good 2Here, the utility function given is; U = 49x1 + 84x2What is the budget constraint? The budget constraint is defined as the limit to the amount of goods a consumer
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Question 5
eBook Problem Walk-Through Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years a $1,065 and it sells for $
Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years $1,065. It is known that the bond was issued 10 years ago with a semiannual coupon rate of 13%. Therefore, the annual coupon rate is equal to 2 × 13% = 26%. The number of coupon payments will be 10 × 2 = 20.
Let's calculate the value of the bond if it cannot be called. To do this, we use the formula for the present value of the bond: PV = C * (1 - (1 + r) ** (-n)) / r + FV / (1 + r) ** n where C is the coupon payment FV is the face value of the bond r is the semi-annual interest rate n is the number of coupon payments.
The bond sells for $950, so we substitute this value for PV.PV = $950C = $1,000 × 26% / 2 = $130n = 20r = 13% / 2 = 6.5%. Therefore, the value of FV can be found using the formula: PV = $950 = $130 * (1 - (1 + 6.5%) ** (-20)) / 6.5% + FV / (1 + 6.5%) ** 20FV = $1,042.80
Thus, the price at which the bond can be called is $1,065, which is greater than the calculated value of the bond - $1,042.80. Therefore, it is beneficial for the issuer to call the bond.
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At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $750,000, and direct materials costs, $625,000. At year-end, the company's records show that actual overhead costs for the year are $830,000. Actual direct materials cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory Total actual direct materials cost 1. Determine the predetermined overhead rate using predicted direct materials costs. 2&3. Enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Actual overhead Req 4 Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. Underapplied overhead $513,750 102,750 68,500 $685,000 Factory Overhead 830,000 8,000 822,000 Applied overhead
Req 1: To determine the predetermined overhead rate using predicted direct materials costs, divide the overhead costs by the direct materials costs:
Predetermined Overhead Rate = Overhead Costs / Direct Materials Costs
Predetermined Overhead Rate = $750,000 / $625,000 = 1.2
Req 2 and 3: To calculate the overhead costs incurred and the amounts applied to jobs during the year, multiply the actual direct materials cost of each category by the predetermined overhead rate:
Jobs completed and sold:
Overhead Costs = Predetermined Overhead Rate * Actual Direct Materials Cost
Overhead Costs = 1.2 * $513,750 = $616,500
Jobs in finished goods inventory:
Overhead Costs = Predetermined Overhead Rate * Actual Direct Materials Cost
Overhead Costs = 1.2 * $102,750 = $123,300
Jobs in work in process inventory:
Overhead Costs = Predetermined Overhead Rate * Actual Direct Materials Cost
Overhead Costs = 1.2 * $68,500 = $82,200
Overhead is overapplied when the applied overhead exceeds the actual overhead costs and underapplied when the applied overhead is less than the actual overhead costs.
Actual overhead = $830,000
Applied overhead = $616,500 + $123,300 + $82,200 = $822,000
Overhead Applied - Actual Overhead = $822,000 - $830,000 = -$8,000
Overhead is underapplied by $8,000.
Req 4: To allocate the underapplied overhead to Cost of Goods Sold, the adjusting entry is as follows:
Debit Cost of Goods Sold: $8,000
Credit Factory Overhead: $8,000
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Compare (i.e. similarities) and contrast (i.e. differences) theNational Treatment Principle and Most Favoured Nation Principleunder the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS).
The National Treatment Principle and Most Favoured Nation Principle share the goal of promoting non-discrimination in international trade. However, the National Treatment Principle focuses on equal treatment of domestic and foreign goods and services within a country's market, while the Most Favoured Nation Principle aims to ensure equal treatment among member countries in their trade policies.
The National Treatment Principle and Most Favoured Nation Principle are two important principles under the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS).
Here are the similarities and differences between these principles:
Similarities:
1. Application: Both principles apply to trade in goods and services.
2. Non-Discrimination: Both principles aim to promote non-discrimination among member countries in their trade policies.
3. Fairness: Both principles seek to create a level playing field and ensure fair treatment among member countries.
Differences:
1. Scope: The National Treatment Principle applies to the treatment of foreign goods, services, and service providers within a country's domestic market. It ensures that foreign goods and services receive the same treatment as domestic ones. The Most Favoured Nation Principle, on the other hand, prohibits discrimination between member countries, ensuring that any advantage or benefit granted to one country is extended to all other member countries.
2. Focus: The National Treatment Principle focuses on equal treatment of domestic and foreign goods and services once they have entered the domestic market. It prohibits discriminatory regulations, taxes, or policies that disadvantage foreign products. The Most Favoured Nation Principle focuses on equal treatment in trade policy itself, prohibiting discriminatory tariffs, quotas, or trade barriers that favor certain countries over others.
3. Exceptions: Under the National Treatment Principle, countries may have certain justifiable exceptions to treat foreign goods or services differently, such as to protect public health or national security. The Most Favoured Nation Principle generally does not allow for exceptions, meaning that any advantage granted to one country should be extended to all member countries.
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OLYMPUS CORPORATION CASE STUDY
Options:
What options did Woodford have after learning about the potential fraud? What would you have done if you were in his shoes? You can discuss internal and external options that he had.
Do you think he should have done nothing after learning about the fraud? What would have been the implication of this decision?
Recommendations:
What are the accounting implications of the fraudulent transactions and what is your recommendation in terms of how this could be prevented?
What changes in corporate governance would you recommend for Olympus?
How did the Japanese corporate governance impact the development in Olympus? What are your recommendations for improvement?
After learning about the potential fraudulent transactions, Michael Woodford, the CEO of Olympus Corporation had the following options; he could: Launch an investigation into the allegations. Resign and leave the firm. Report the issue to the media or the police. Lawyer up and sue the company for breach of contract or other laws. Woodford did the first option of launching an investigation into the allegations. He informed the chairman of the board about the findings of the investigation. This led to the dismissal of four senior executives and other officers that were involved in the fraudulent activities. If I were in his shoes, I would have also launched an investigation into the allegations.
Internal and external options that Woodford had include:
Internal options: Woodford could have sought to confront the individuals directly involved in the fraud. Woodford could have decided to take the case to the board of directors before involving the media or the police.
External options: Woodford could have chosen to inform the media about the fraud and provided evidence that he had. This could have led to media coverage that would lead to public pressure on the board of directors to take action against those involved in the fraud.
Woodford could have gone to the police and informed them of the fraud so that they could launch an investigation.
Accounting implications of the fraudulent transactions and prevention recommendationsThe fraudulent transactions had significant accounting implications. The implications included overstating financial statements, manipulating tax payments, and manipulating acquisition costs. As such, some of the recommendations to prevent fraudulent activities include:
Implementing stringent internal controls and segregation of duties in the company's accounting department.
Limiting the involvement of employees in the financial accounting of the firm.Conducting regular audits on the company's financial statements.
Changes in corporate governance recommended for Olympus. Some of the changes in corporate governance recommended for Olympus include:
Implementing a transparent process of governance where the roles and responsibilities of all board members and top executives are clearly defined.Implementing stringent controls and practices to eliminate fraudulent activities.Ensuring that there is a sound risk management framework that is used to identify and mitigate risks at all levels of the company.
Japanese corporate governance impact on development in OlympusThe Japanese corporate governance impacted the development in Olympus. There were several issues with the governance framework, including the lack of independent directors, high director compensation, cross-shareholdings, and complex cross-shareholding relationships. These factors made it easy for fraudulent activities to go undetected. To improve governance in the future, the company should consider hiring independent directors and implementing a sound corporate governance framework that focuses on transparency, accountability, and integrity.
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each of the following is a confidence interval for = true average (i.e., population mean) resonance frequency (hz) for all tennis rackets of a certain type: (112.6, 113.4) (112.4, 113.6)
The question provides two confidence intervals: (112.6, 113.4) and (112.4, 113.6), for the true average (i.e., population mean) resonance frequency (Hz) for all tennis rackets of a specific type. In statistics, a confidence interval is a range of values that is likely to contain an unknown population parameter with a certain degree of confidence.
The confidence interval range (112.6, 113.4) represents the interval with an upper bound of 113.4 Hz and a lower bound of 112.6 Hz, while the other confidence interval (112.4, 113.6) represents the range with an upper bound of 113.6 Hz and a lower bound of 112.4 Hz. Therefore, the actual population mean resonance frequency should lie within the two intervals at a certain level of confidence. Confidence intervals are crucial in the field of statistics as they help in drawing generalizations about populations from samples.
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in what color will a security that has been redeemed or matured display in the dcs detail report?
In the DCS detail report, a security that has been redeemed or matured will display in the color GREEN.
However, it is important to note that this can vary depending on the specific platform or software being used. Some platforms may use different colors or symbols to indicate redeemed or matured securities in their reports.
In general, green is often used to indicate that a security has been redeemed or matured because it represents a positive outcome for the investor.
When a security matures or is redeemed, the investor receives the principal or the full value of their investment back, plus any interest or other earnings. This is typically viewed as a favorable outcome for the investor, so the color green is often used to represent this in reporting.
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ABC Co is currently considering raising $5 million through a
rights issue. Its 1,000,000 shares are currently traded at $20 per
share. Its issue manager, XYZ Ltd, has advised ABC to set the
subscripti
Based on the given information, the subscription price for the rights issue would be $5 per share.
The subscription price for the rights issue can be determined based on the current share price and the number of shares to be issued. In this case, ABC Co is planning to raise $5 million through a rights issue, and it has 1,000,000 shares currently traded at $20 per share.
To calculate the subscription price, we divide the total amount to be raised ($5 million) by the number of shares to be issued (1,000,000 shares):
Subscription Price = Total Amount to be Raised / Number of Shares to be Issued
Subscription Price = $5,000,000 / 1,000,000 = $5 per share
Therefore, based on the given information, the subscription price for the rights issue would be $5 per share.
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this question relates to a comparison between monopolistically competitive market and a perfectly competitive market. as firms enter and exit a monopolistically competitive market, what happens to productive efficiency in the long run? as firms enter and exit a perfectly competitive market, what happens to productive efficiency in the long run? group of answer choices
1-Productive efficiency will not be reached because in the long run, economic profits reach equilibrium.
2-Prices will rise to unprecedented levels, and productive efficiency will be reached.
3-The strongest firms will survive and the market will morph into an oligopolistic market.
4-Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached
In the long run, Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached. Option 4 is correct.
Productive efficiency refers to a situation in which resources are used optimally to produce goods and services. This is where the output is produced at the lowest possible cost. Now, as firms enter and exit a monopolistically competitive market, there is no attainment of productive efficiency in the long run.
Instead, in the long run, the price will intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached.
For the perfect competition market, productive efficiency is achieved in the long run as firms enter and exit. The most competitive firms survive, and those that do not leave the market. The long-run equilibrium point in a perfectly competitive market is one where the firm's marginal cost is equal to the price of the goods being sold.
The perfectly competitive market, unlike the monopolistic competition market, ensures that resources are used optimally to produce goods and services, resulting in productive efficiency in the long run.
Therefore, the answer is option 4 - Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached.
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Szabi Inc., a calendar year taxpayer, purchased two assets during 2020: a machine costing $680,000 and computer equipment costing $553,500. The machine is 7-year recovery property and the computer equipment is 5-year recovery property. Which of the following statements is true?
1.Under Section 179, Szabi should elect to expense the $680,000 cost of the machine and $360,000 of the cost of the computer equipment.
2.Under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment machine and $486,500 of the cost of the machine.
3.Under Section 179, Szabi must elect to expense $520,000 of the cost of the machine and $520,000 of the cost of the computer equipment.
4.Under Section 179, Szabi is indifferent as to which costs to expense
Under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment and $126,500 of the cost of the machine.
Section 179 is the section of the Internal Revenue Code (IRC) that governs the amount of expense a taxpayer may elect to take as a deduction for the cost of certain types of property. The expense is taken in the year in which the property is placed in service. The maximum amount of the expense is subject to an annual limit that is established by Congress. The limit is indexed for inflation and is adjusted annually.How to solve the problem:Since Szabi Inc., a calendar year taxpayer, bought two assets during 2020, a machine costing $680,000 and computer equipment costing $553,500. Here, the machine is 7-year recovery property and the computer equipment is 5-year recovery property. Now, according to the given problem, the following statements are not true:a. Under Section 179, Szabi should elect to expense the $680,000 cost of the machine and $360,000 of the cost of the computer equipment.b. Under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment and $486,500 of the cost of the machine.c. Under Section 179, Szabi must elect to expense $520,000 of the cost of the machine and $520,000 of the cost of the computer equipment. The correct statement is d. Under Section 179, Szabi is indifferent as to which costs to expense. The machine and computer equipment costs can be expensed.
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As a result, under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment and $486,500 of the cost of the machine. Thus, option 2 is the correct statement.
Szabi Inc., a calendar year taxpayer, purchased two assets during 2020: a machine costing $680,000 and computer equipment costing $553,500. The machine is 7-year recovery property and the computer equipment is 5-year recovery property. Under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment machine and $486,500 of the cost of the machine. The Section 179 deduction allows taxpayers to deduct the cost of certain kinds of assets from their federal income tax returns in the year of purchase instead of depreciating them over a period of years. Section 179 property includes assets like machinery, equipment, and software used in a trade or business. Szabi Inc. can only claim a maximum Section 179 deduction of $1,040,000 for the 2020 tax year. This maximum applies to the total cost of the assets placed in service during the year. As a result, under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment and $486,500 of the cost of the machine. Thus, option 2 is the correct statement. Under section 179, businesses may elect to write off all or part of the cost of certain qualifying property in the year in which it is purchased rather than depreciating it over several years. This deduction may be used for both new and used equipment.
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the psychological contract between employers and workers is still very strong.
true/false
The statement "the psychological contract between employers and workers is still very strong" can be evaluated as true, as the implicitly of this matter lies in the very virtue of the terms between these two parties.
What is a psychological contract?A psychological contract is an unwritten, implicit agreement between the employer and the employee that includes expectations, beliefs, and commitments of both parties. It comprises all the non-written mutual obligations and expectations that govern the relationship between the employer and the employee and the job performed in exchange for pay. It is believed that fulfilling the psychological contract results in a higher degree of job satisfaction, employee engagement, and employee retention.
Several factors determine the strength of the psychological contract between employers and workers, including the job market situation, the nature of the employment relationship, employment policies, and the culture of the organization.
In conclusion, the statement "the psychological contract between employers and workers is still very strong" is open for interpretation. It is suggested to analyze the factors mentioned above to determine the strength of the psychological contract.
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What is the role of the "veil of ignorance" in Rawls' theory of distributive justice?
The veil of ignorance is an idea introduced by John Rawls in his theory of distributive justice. Rawls believed that the principles of justice should be determined from an original position behind the veil of ignorance.
In the original position, individuals are placed behind a veil of ignorance, which means they are not aware of their own personal characteristics such as their gender, race, intelligence level, or social status. They are also unaware of their place in society, their talents, abilities, beliefs, and values.The purpose of the veil of ignorance is to ensure that the principles of justice are determined from a position of fairness. This is because people behind the veil of ignorance do not know how their lives will be affected by the principles they choose. Therefore, they are more likely to choose principles that are fair and impartial, and that benefit everyone equally, regardless of their personal characteristics.Rawls believed that the principles of distributive justice should be determined from the original position behind the veil of ignorance. This means that the principles of justice should be designed to benefit the least well-off members of society. Rawls argued that this was the most fair and just way of distributing resources, because it ensured that everyone had an equal chance to succeed, regardless of their personal circumstances.The veil of ignorance plays a critical role in Rawls' theory of distributive justice, as it ensures that the principles of justice are determined from a position of fairness. It is an important concept that promotes equality, impartiality, and fairness in the distribution of resources.
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1. The entry to record the requisition of indirect materials in a job cost system includes a:
a) debit to Work in Process Inventory.
b) None of the answer choices is correct.
c) credit to Work in Process Inventory.
d) credit to Accounts Payable.
e) debit to Manufacturing Overhead.
2. Records at Sandy Inc. indicate that indirect materials totaling $800 were requisitioned and placed in production. Which one of the following journal entries should Sandy record for this transaction?
a) Raw Materials Inventory 800
Work in Process Inventory 800
b) Raw Materials Inventory 800
Accounts Payable 800
c) Manufacturing Overhead 800
Raw Materials Inventory 800
d) None of the answer choices is correct.
e) Work in Process Inventory 800
Raw Materials Inventory 800
3. T or F: The predetermined overhead rate is calculated as the estimated activity in the allocation base divided by the estimated overhead costs.
4. T or F: All account names for job costing systems in service organizations are the same as those used by manufacturing companies.
5. T or F: When a manufacturing company purchases raw materials, the Raw Materials Inventory account is debited.
6. If the Manufacturing Overhead account has a credit balance after overhead has been applied to products, manufacturing overhead:
a) is overapplied.
b) has been closed.
c) is underapplied.
d) has been applied incorrectly.
e) None of the answer choices is correct.
7. All of the following are reasons that companies prefer normal costing except:
a) Normal costing averages overhead costs and levels out overhead fluctuations that might occur from month to month.
b) None of the answer choices is correct.
c) Normal costing simplifies recordkeeping.
d) Normal costing provides information for managers to quote customers the price of products based on estimated costs.
e) Normal costing tracks actual direct materials, actual direct labor costs, and actual manufacturing overhead costs.
8. Which of the following accounts would probably not be found in the Job Costing accounts of a service organization?
a) None of the answer choices is correct.
b) Finished Goods.
c) Cost of Services.
d) Supplies Inventory.
e) Overhead.
1. Indirect materials requisition in job cost system debits Manufacturing Overhead. 2. Sandy's entry: Manufacturing Overhead 800, Raw Materials Inventory 800. 3. True. 4. False. 5. True. 6. Overapplied manufacturing overhead. 7. False. 8. True, service organizations omit Finished Goods in Job Costing.
1. The entry for requisitioning indirect materials in a job cost system debits Manufacturing Overhead.
2. Sandy should record the journal entry: Manufacturing Overhead 800, Raw Materials Inventory 800.
3. True. The predetermined overhead rate is based on estimated activity and overhead costs.
4. False. Account names for job costing systems differ between service and manufacturing organizations.
5. True. Raw Materials Inventory is debited when a manufacturing company purchases raw materials.
6. True. Overapplied manufacturing overhead results in a credit balance in the Manufacturing Overhead account.
7. False. Normal costing tracks actual direct materials, labor, and overhead costs.
8. True. Finished Goods would typically not be included in Job Costing accounts of a service organization.
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1) If you invest $100 in a stock, borrowing 90 percent of the $100 at 10 percent interest, and the stock price rises by 20 percent, what is the return on your investment?
If you invest $100 in a stock, borrowing 90 percent of the $100 at 10 percent interest, and the stock price rises by 20 percent, the return on your investment can be calculated.
In this scenario, you invest $100 in a stock, but you borrow 90 percent of the $100, which is $90, at 10 percent interest. The remaining 10 percent, which is $10, is your own capital.
Now, if the stock price rises by 20 percent, the value of your investment will increase. The increase in value is calculated based on the total invested amount, which is $100.
The return on your investment can be calculated using the following formula:
Return = (Final Value - Initial Value) / Initial Value * 100
Initial Value = $100
Final Value = Initial Value + (Stock Price Increase * Initial Value) = $100 + (20% * $100) = $100 + $20 = $120
Return = ($120 - $100) / $100 * 100 = $20 / $100 * 100 = 20%
Therefore, the return on your investment in this scenario is 20 percent.
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Timothy owns 960 shares of Countess Corporation, which is priced at $14.37 per share. The company plans a 2-for-3 reverse stock split. How many shares will Timothy own and what will the share price be after the reverse stock split? Multiple Choice 1,440; $9.58 640; $21.56 1,440; $21.56 640; $14.37 640; $9.58
As we know that Timothy owns 960 shares of Countess Corporation, which is priced at $14.37 per share. The company plans a 2-for-3 reverse stock split.We are supposed to find out how many shares will Timothy own and what will the share price be after the reverse stock split
To calculate the answer, we need to follow the given steps below:To calculate the number of shares owned after the stock split, the original number of shares held is divided by the reverse split ratio (in this case 2/3):960 / (2/3) = 1440Therefore, after the stock split, Timothy will own 1,440 shares.To calculate the post-split stock price, the pre-split stock price is divided by the reverse split ratio:14.37 / (2/3) = 21.56Therefore, after the stock split, the stock price will be $21.56.So, the correct answer is 1,440; $21.56.
Stock splits are a corporate action that can boost the liquidity and appeal of a stock. In a stock split, the company increases the number of shares outstanding by dividing each existing share into multiple shares. This process has no impact on the overall value of a shareholder's investment or the company's market capitalization. Stock splits merely increase the number of shares, lowering the price of each share in the process.Countess Corporation plans a reverse stock split, which is the opposite of a stock split. A reverse stock split reduces the number of shares outstanding by consolidating several existing shares into one new share. For example, in a 2-for-3 reverse stock split, every three shares are consolidated into two new shares. Reverse stock splits are typically used by companies to raise the price of their stock or reduce the number of outstanding shares. For Countess Corporation, the reverse stock split will likely reduce the number of outstanding shares, but raise the stock price.Timothy owns 960 shares of Countess Corporation, which is priced at $14.37 per share. If the company plans a 2-for-3 reverse stock split, Timothy needs to calculate how many shares he will own and what the share price will be after the split. To determine the number of shares Timothy will own after the reverse stock split, we must divide the original number of shares held by the reverse split ratio. In this case, Timothy owns 960 shares, so the calculation is 960 / (2/3) = 1,440 shares. Therefore, after the reverse stock split, Timothy will own 1,440 shares.To calculate the post-split stock price, we must divide the pre-split stock price by the reverse split ratio. In this case, the pre-split stock price is $14.37 per share, and the reverse split ratio is 2-for-3. Therefore, the calculation is 14.37 / (2/3) = $21.56 per share. After the reverse stock split, the stock price will be $21.56 per share.
Timothy currently owns 960 shares of Countess Corporation, which is priced at $14.37 per share. After a 2-for-3 reverse stock split, Timothy will own 1,440 shares, and the stock price will be $21.56 per share.
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Assume that Australian and New Zealand nominal interest rates are equal. Then, the Australian nominal interest rate decreases while the New Zealand nominal interest rate remains stable. According to the international Fisher effect, this implies expectations of ____ than before, and that the New Zealand dollar should ____ against the Australian dollar. a. lower Australian inflation; appreciate b. lower Australian inflation; depreciate c. higher Australian inflation; appreciate d. higher Australian inflation; depreciate
The correct answer is:
a. lower Australian inflation; appreciate
According to the international Fisher effect, when the nominal interest rate of one country decreases while the nominal interest rate of another country remains stable, it implies expectations of lower inflation in the country with the decreasing interest rate. In this scenario, the Australian nominal interest rate decreases while the New Zealand nominal interest rate remains stable. Therefore, according to the international Fisher effect, it implies expectations of lower Australian inflation than before. Additionally, the international Fisher effect suggests that the currency of the country with lower expected inflation should appreciate against the currency of the country with higher expected inflation.
Hence, the correct answer is: a. lower Australian inflation; appreciate
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Suppose the Following information was published by Australia Bureau of Statistics in 2017:
Item Amount (AUD billion)
Household consumption (C) 1029.81
Government consumption 340.92
Exports 386.39
Value of cocaine seized at Sydney Airport 10,500
Value of intermediate goods in tractor Manufacturing 52,003
Gross private domestic investment (I) 352.69
Imports 386.95
Components used in the manufactrure of cars 40,000
Gifts 15,236
Government investment 88.19
Value of second-hand goods 500.00
Use the information to answer the following questions
a. Identify the items that are not included in the GDP calculation. (4 Marks)
b. Calculate Australia’s GDP in 2017. (3 Marks)
In 2017, Australia's GDP calculation excludes the following items: value of cocaine seized at Sydney Airport, value of intermediate goods in tractor manufacturing, components used in the manufacture of cars, and value of second-hand goods.
To calculate Australia's GDP in 2017, we need to sum up the components that are included in the GDP calculation. These include household consumption, government consumption, exports, gross private domestic investment, and government investment. By adding these components and subtracting imports, we can determine Australia's GDP for that year.
The items not included in the GDP calculation are those that do not represent the production of final goods and services within the economy. The value of cocaine seized at Sydney Airport, value of intermediate goods in tractor manufacturing, components used in the manufacture of cars, and value of second-hand goods are not considered in GDP as they do not contribute directly to the production of final goods and services.
To calculate Australia's GDP, we sum up the components that are included in the calculation. These components are household consumption (C), government consumption, exports, gross private domestic investment (I), and government investment. By adding these components and subtracting imports, we arrive at the GDP figure. In this case, we add household consumption ($1029.81 billion), government consumption ($340.92 billion), exports ($386.39 billion), and gross private domestic investment ($352.69 billion), and government investment ($88.19 billion). Then we subtract imports ($386.95 billion) from the total. The resulting figure represents Australia's GDP in 2017.
To calculate Australia's GDP in 2017, we add the following components: household consumption (C), government consumption, gross private domestic investment (I), and net exports (exports minus imports). Summing up the provided values, the GDP in 2017 would be: 1029.81 + 340.92 + 352.69 + (386.39 - 386.95) = 1332.86 billion AUD.
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In a cross sectional dataset we observe the same individual multiple times. True or False
To steelman is to represent opposing views as accurately and positively as possible. True or false
In a panel dataset we observe the same individual multiple times. true of false
The given statement stands for False, In a cross-sectional dataset, we observe different individuals at the same time rather than the same individual multiple times.
Cross-sectional data is a dataset collected by surveying or sampling data observations from a population at a single point in time. Cross-sectional data can be obtained in various ways, including interviews, questionnaires, and various other observational techniques.
Cross-sectional datasets are useful in various fields, including sociology, health, education, and marketing. The cross-sectional dataset enables researchers to learn about the distribution of a variable in a particular population or region and compare that to other populations or regions. Cross-sectional data may not be used to evaluate causal relationships or make predictions about future events because they provide information about a specific population at a specific time.
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Discuss in detail four important questions you would need to consider in striving to make an ethically sound business decisions relating to the dilemma faced.
When faced with an ethical dilemma in business, there are several important questions to consider before making an ethically sound decision. These questions include determining the stakeholders involved, assessing the potential consequences of different actions, evaluating the ethical principles at stake, and considering the long-term implications of the decision.
Who are the stakeholders involved? Consider all individuals and groups affected by the decision, including employees, customers, suppliers, shareholders, and the community. Assess their interests and rights to ensure fairness and avoid harm.
What are the potential consequences? Evaluate the potential outcomes of different actions and their impact on stakeholders. Consider both short-term and long-term consequences, including financial, social, and environmental impacts.
What ethical principles are at stake? Identify the ethical principles or values relevant to the situation, such as honesty, integrity, fairness, and respect. Assess how different courses of action align with these principles and strive for consistency and ethical integrity.
What are the long-term implications? Consider the broader implications of the decision beyond the immediate context. Think about the potential effects on the company's reputation, customer trust, employee morale, and long-term sustainability. Strive for decisions that promote ethical behavior and contribute to the overall well-being of stakeholders.
By considering these four important questions, businesses can navigate ethical dilemmas with greater mindfulness and make decisions that align with ethical standards, promote social responsibility, and contribute to long-term success.
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In the "Port Huron Statement." Tom Hayden expressed all of the following concerns EXCEPT this one: Nuclear weapons threaten the future of the world. Communist infiltration of the government threatens American democracy, America's economic prosperity has not brought justice to African-Americans and other oppressed groups. Most Americans are complacent, and fear any change to the status quo.
In the "Port Huron Statement," Tom Hayden expressed all of the following concerns EXCEPT this one: Nuclear weapons threaten the future of the world. Communist infiltration of the government threatens American democracy, America's economic prosperity has not brought justice to African-Americans and other oppressed groups.
Port Huron Statement is a document of a student activist movement known as the Students for a Democratic Society (SDS). This document was written by Tom Hayden, an American social and political activist. The Port Huron Statement was signed in 1962 at the SDS's founding convention in Port Huron, Michigan.Tom Hayden expressed several concerns in the Port Huron Statement, and most of them were related to the negative effects of capitalism on American society. The document criticized the Cold War, American imperialism, and the arms race, and supported the Civil Rights Movement and the rights of workers, students, and minorities.The statement included concerns about how most Americans were complacent and feared any change to the status quo. Also, America's economic prosperity did not bring justice to African Americans and other oppressed groups. Communist infiltration of the government threatens American democracy.In contrast, one concern that Tom Hayden did not express in the Port Huron Statement was that nuclear weapons threaten the future of the world. However, the document includes numerous other concerns, including the exploitation of natural resources, social inequality, and the need for citizen involvement in politics.
Tom Hayden expressed several concerns in the Port Huron Statement, including the negative effects of capitalism on American society, the Cold War, American imperialism, and the arms race, and supported the Civil Rights Movement and the rights of workers, students, and minorities. The document criticized most Americans' complacency and fear of any change to the status quo and also argued that America's economic prosperity did not bring justice to African Americans and other oppressed groups. Communist infiltration of the government threatens American democracy. However, the statement did not express a concern about nuclear weapons threatening the future of the world.
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a single-price monopolist is producing 8,000 units of output. at that level, price equals $10, average total cost equals $12, and average variable cost equals $8. in addition, both marginal cost and marginal revenue equal $6. which of the following statements is correct in the short run? group of answer choices the firm is earning total revenues equal to $96,000. the firm could reduce its loss by shutting down. the firm has a loss per unit equal to $4. the firm is minimizing its economic loss at $16,000. the firm is earning an economic profit equal to $16,000.
Answer:
a single-price monopolist is producing 8,000 units of output. at that level, price equals $10, average total cost equals $12, and average variable cost equals $8. in addition, both marginal cost and marginal revenue equal $6. which of the following statements is correct in the short run? group of answer choices the firm is earning total revenues equal to $96,000. the firm could reduce its loss by shutting down. the firm has a loss per unit equal to $4. the firm is minimizing its economic loss at $16,000. the firm is earning an economic profit equal to$16,00
In the given scenario, we can analyze the different statements to determine which one is correct in the short run.
The firm is earning total revenues equal to $96,000.
Total revenue is calculated by multiplying the price by the quantity. In this case, the price is given as $10 and the quantity is 8,000 units. Therefore, the total revenue is $10 * 8,000 = $80,000, not $96,000. This statement is incorrect.
The firm could reduce its loss by shutting down.
To determine if the firm should shut down or continue producing in the short run, we compare the average variable cost (AVC) with the price. If price is below AVC, it would be better for the firm to shut down. In this case, the average variable cost is given as $8, which is less than the price of $10. Therefore, the firm should continue producing to minimize losses. This statement is incorrect.
The firm has a loss per unit equal to $4.
To calculate the loss per unit, we subtract the average total cost (ATC) from the price. In this case, the ATC is given as $12 and the price is $10. Therefore, the loss per unit is $10 - $12 = -$2, not $4. This statement is incorrect.
The firm is minimizing its economic loss at $16,000.
To determine the firm's economic loss, we multiply the loss per unit by the quantity. In this case, the loss per unit is -$2 (as calculated above) and the quantity is 8,000 units. Therefore, the economic loss is -$2 * 8,000 = -$16,000. This statement is correct.
The firm is earning an economic profit equal to $16,000.
Based on the given information, the price ($10) is less than the average total cost ($12), indicating that the firm is incurring a loss. Therefore, this statement is incorrect.
In conclusion, the correct statement in the short run is: "The firm is minimizing its economic loss at $16,000."
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:
To OFFSET their hedge, a soybean crush facility with a hedge in soybean meal futures will (Buy or Sell) futures. (check your spelling but case doesn't matter)
To offset their hedge, a soybean crush facility with a hedge in soybean meal futures will sell futures contracts.
By selling futures, the facility takes an opposing position to their initial hedge, effectively canceling out the risk exposure. If the crush facility has entered into a long hedge by buying soybean meal futures to protect against price increases, selling an equal number of contracts will offset their position.
This strategy allows the facility to mitigate potential losses or gains from changes in soybean meal prices. By selling futures, the crush facility aims to neutralize the impact of price fluctuations and ensure a more predictable financial outcome.
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Suppose a US investor purchases a UK equity. Let the expected pound return on the U.K. equity be 20%, and let its volatility (measured by standard deviation) be 30%. The volatility of the dollar/pound exchange rate is 10%. The risk-free rate in the U.S. (denoted rf) is 2%. 1) Compute the volatility of the dollar return on the U.K. equity when the correlation (denoted as r) between the U.K. equity's return in pounds and changes in the dollar/pound exchange rate is 0.5. 2) Suppose the correlation between the U.K. equity return in pounds and the exchange rate change is 0.5. What expected exchange rate change would you expect if the U.K. equity investment is to have a Sharpe ratio of 1? 3) If the Sharpe ratio of the U.S. equities is greater than the Sharpe ratio of the U.K. equities, can a US investor benefit from investing abroad? Explain graphically the benefits of international diversification.
1) Computing the volatility of the dollar return on the UK equity when the correlation between the UK equity's return in pounds and changes in the dollar/pound exchange rate is 0.5:
The formula for calculating the volatility of the dollar return on the UK equity is as follows:σ(dollar return) = √(σ(£ return)^2 + σ(exchange rate)^2 + 2 x σ(£ return) x σ(exchange rate) x r)Given:σ(£ return) = 30%σ(exchange rate) = 10%r = 0.5σ(dollar return) = √(0.3^2 + 0.1^2 + 2 x 0.3 x 0.1 x 0.5)σ(dollar return) = √(0.09 + 0.01 + 0.03)σ(dollar return) = √(0.13)σ(dollar return) = 0.36 or 36%2) Expecting the exchange rate change if the UK equity investment is to have a Sharpe ratio of 1 when the correlation between the UK equity return in pounds and the exchange rate change is 0.5:The Sharpe ratio is calculated as follows:
Sharpe ratio = (Expected portfolio return - Risk-free rate) / Portfolio volatilityGiven:Sharpe ratio = 1Risk-free rate = 2%σ(£ return) = 30%r = 0.5E(£ return) = 20%
The formula for calculating the expected exchange rate change is as follows:Expected exchange rate change = [(E(£ return) - rf) / (σ(£ return) x √(1-r^2))] - r x (σ(exchange rate) / σ(£ return))Expected exchange rate change = [(0.2 - 0.02) / (0.3 x √(1-0.5^2))] - 0.5 x (0.1 / 0.3)Expected exchange rate change = [(0.18) / (0.3 x √(0.75))] - 0.5 x (0.1 / 0.3)
Expected exchange rate change = [0.18 / (0.3 x 0.866)] - 0.5 x (0.333)Expected exchange rate change = [0.18 / 0.2598] - 0.1665Expected exchange rate change = 0.6925 - 0.1665Expected exchange rate change = 0.526 or 52.6%3) Explaining graphically the benefits of international diversification:
If the Sharpe ratio of the US equities is greater than the Sharpe ratio of the UK equities, a US investor can benefit from investing abroad.
International diversification of assets can reduce the risk of the portfolio. The graph of risk and return of two assets with positive correlation will be upward-sloping. On the other hand, the graph of two assets with negative correlation will be downward-sloping. When the correlation is zero, the graph will be flat. A diversified portfolio has lower risk because the assets move in different directions. Thus, the expected return of the diversified portfolio will be greater than that of the single asset. Therefore, international diversification provides opportunities for investors to build a diversified portfolio that provides better risk-adjusted returns.
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Which of the following would eliminate scarcity as an economic problem?
a.Moderation of people's competitive instincts
b. Discovery of suficiently large new energy reserves
c. Resumption of steady productivity growth
d.None of these
None of the given options would eliminate scarcity as an economic problem. Scarcity is an inherent concept in economics that arises due to unlimited wants and limited resources.
While the options mentioned may alleviate certain aspects of scarcity, they cannot completely eliminate them. Scarcity will persist as long as there are unlimited wants and finite resources in any economic system.
Scarcity is a fundamental economic problem that arises because human wants and needs are unlimited, while the resources to fulfill those wants and needs are limited. The options provided do not address the root cause of scarcity, which is the imbalance between unlimited wants and limited resources.
a. Moderation of people's competitive instincts: While moderation of competitive instincts might reduce excessive consumption and waste, it does not eliminate scarcity. Even with moderated behavior, there would still be a finite availability of resources compared to unlimited wants.
b. Discovery of sufficiently large new energy reserves: While the discovery of new energy reserves may alleviate scarcity in the energy sector, it does not eliminate scarcity as a whole. Scarcity extends beyond energy and includes other resources like land, water, labor, and capital.
c. Resumption of steady productivity growth: Steady productivity growth can improve resource utilization and increase output, but it does not eliminate scarcity. As productivity improves, it may lead to greater efficiency and increased availability of goods and services, but there will always be limits to resources and wants.
In conclusion, none of the given options can completely eliminate scarcity as an economic problem. Scarcity is a fundamental concept that will persist as long as there are limited resources and unlimited wants in any economic system.
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Batelco's customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 5,000 calls and incurred costs of $225,000. if 1,750 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to:
a. $78,750
b. $112,500
c. $146,250
d. $303,750
To determine the costs allocated to the retail division, we need to calculate the proportion of calls made for the retail division out of the total number of calls.
Total calls for the retail division = Total calls - Calls for wholesale operation
Total calls for the retail division = 5,000 - 1,750 = 3,250
Next, we calculate the cost allocation for the retail division by multiplying the proportion of calls for the retail division by the total cost incurred.
Cost allocation for the retail division = (Calls for retail division / Total calls) * Total cost incurred
Cost allocation for the retail division = (3,250 / 5,000) * $125,000
Calculating the value:
Cost allocation for the retail division = 0.65 * $125,000
Cost allocation for the retail division = $81,250
Therefore, the correct answer is $81,250 (not one of the given options).
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the Question 4. Use the IS-LM diagram to describe both the short-run effects and the long-run effects of following changes on national income, the interest rate, the price level, consumption, investme
The IS-LM model is a framework used in macroeconomics to analyze the relationship between interest rates, national income, and the equilibrium in the goods and money markets. Let's examine the short-run and long-run effects of changes in national income, interest rates, price level, consumption, and investment using the IS-LM diagram.
Increase in National Income:
In the short run, an increase in national income leads to a rightward shift of the IS curve. This occurs because higher income implies higher consumption, which increases the demand for goods and services. As a result, the equilibrium level of national income increases, leading to an expansion in the economy. The interest rate also rises due to increased demand for investment, depicted by a movement along the LM curve.
In the long run, the increase in national income can lead to inflationary pressures. As prices rise, the real money supply decreases, shifting the LM curve upwards. This leads to a higher interest rate and a decrease in national income, returning the economy to its potential output level.
Decrease in Interest Rates:
In the short run, a decrease in interest rates results in a downward shift of the LM curve. Lower interest rates stimulate investment and increase aggregate demand, leading to higher national income. This is represented by a movement along the IS curve.
In the long run, a decrease in interest rates can have mixed effects. If the decrease in interest rates is a result of increased money supply, it can lead to an expansionary effect on the economy, increasing national income and potentially causing inflationary pressures. However, if the decrease in interest rates is due to a shift in monetary policy or a decrease in investment demand, it may not have a significant impact on long-run output.
Increase in Price Level:
In the short run, an increase in the price level causes a leftward shift of the LM curve. This occurs because higher prices reduce the purchasing power of money, resulting in a decrease in real money supply. As a result, the interest rate rises, leading to a decrease in investment and national income. This is represented by a movement along the IS curve.
In the long run, an increase in the price level is associated with a decrease in real money supply. This causes the LM curve to shift upwards, leading to a higher interest rate and a decrease in national income, eventually returning the economy to its potential output level.
Changes in Consumption and Investment:
Changes in consumption and investment affect the IS curve. An increase in consumption or investment leads to a rightward shift of the IS curve, increasing national income and stimulating economic activity. Conversely, a decrease in consumption or investment causes a leftward shift of the IS curve, decreasing national income and dampening economic activity.
It's important to note that these effects are simplified representations, and real-world dynamics can be more complex. Additionally, the IS-LM model has limitations and assumptions that may not fully capture the complexities of the economy. Nevertheless, the model provides a useful framework for understanding the short-run and long-run effects of various economic changes on key macroeconomic variables.
The IS-LM model illustrates the interaction between the goods market (IS curve) and the money market (LM curve) to determine equilibrium output and interest rates in the economy.
How to explain the information
Increase in government spending (Expansionary fiscal policy):
Short-run effects:
National income: Government spending increase shifts the IS curve to the right, leading to higher national income.
Interest rate: The higher level of output increases the demand for money, shifting the LM curve to the right. This leads to a higher interest rate.
Price level: In the short run, an increase in government spending may not have an immediate effect on the price level.
Consumption: Consumption may increase due to the higher national income and confidence.
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At the beginning of current year, CFAS Company was organized and authorized to issue 100,000 shares with P50 par value.
During the current year, the entity 1 had the following: transactions relating to shareholders equity:
Issued 10,000 shares.at P70 per share.
Issued 20,000 shares at P80 per share.
Reported net income of P 1,000,000.
Paid dividends of P200,000.
Purchased 3,000 treasury shares at P100 per share.
What amount should be reported as share capital at year – end? [ Select ] ["P1,500,000", "P1,200,000", "P3,300,000", "P1,800,000"]
What amount should be reported as share premium at year – end? [ Select ] ["P600,000", "P800,000", "P0", "P200,000"]
What is the total shareholders’ equity at year-end? [ Select ] ["P2,800,000", "P3,300,000", "P2,000,000", "P3,000,000"]
What is the contributed capital at year – end? [ Select ] ["P1,500,000", "P2,000,000", "P2,300,000", "P3,000,000"]
The amount should be reported as share capital at year-end is P1,500,000. The amount should be reported as share premium at year – end is P600,000. The total shareholders’ equity at year-end is P3,100,000. The contributed capital at year – end is P2,100,000.
At the beginning of current year, CFAS Company was organized and authorized to issue 100,000 shares with P50 par value. During the current year, the entity 1 had the following transactions relating to shareholders equity:
Issued 10,000 shares at P70 per share.
Issued 20,000 shares at P80 per share.
Reported net income of P 1,000,000. Paid dividends of P200,000. Purchased 3,000 treasury shares at P100 per share.
The amount to be reported as share capital at year – end is P1,500,000. The amount to be reported as share premium at year – end is P600,000.
The total shareholders’ equity at year-end is P3,100,000.
The contributed capital at year – end is P2,100,000.
The amount to be reported as share capital at year – end is P1,500,000.
Calculations Issued 10,000 shares at P70 per share = 10,000 × 70 = 700,000
Issued 20,000 shares at P80 per share = 20,000 × 80 = 1,600,000
The total capital raised from share issuance = 700,000 + 1,600,000 = 2,300,000
Purchased 3,000 treasury shares at P100 per share = 3,000 × 100 = 300,000
Total share capital at year-end = (100,000 + 10,000 + 20,000 - 3,000) × 50 = 2,850,000
The amount to be reported as share capital at year-end = 2,850,000 - 300,000 = 1,500,000.
The amount to be reported as share premium at year – end is P600,000.
Calculations: Total share capital raised from share issuance = 700,000 + 1,600,000 = 2,300,000
Total par value of issued shares = 50 × 30,000 = 1,500,000
Total share premium = 2,300,000 - 1,500,000 = 800,000
The amount to be reported as share premium at year – end = 800,000 - 200,000 = 600,000.
The total shareholders’ equity at year-end is P3,100,000.
Calculations: Total share capital at year-end = 2,850,000 - 300,000 = 2,550,000
Total share premium at year-end = 800,000 - 200,000 = 600,000
Retained earnings = 1,000,000 - 200,000 = 800,000
Total shareholders' equity at year-end = 2,550,000 + 600,000 + 800,000 = 3,950,000.
The contributed capital at year – end is P2,100,000.
Calculations: Total share capital at year-end = 2,850,000 - 300,000 = 2,550,000
Retained earnings = 1,000,000 - 200,000 = 800,000
Contributed capital at year-end = 2,550,000 + 800,000 = 3,350,000
The contributed capital at year – end is 3,350,000 - 1,250,000 = 2,100,000.
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On January 1, 2019, Blossom Corporation Acquired A Small Mine For $20 Million Along With Equipment Costing $8 Million. Management Estimated At That Time That The Mine Should Produce 25,000 Ounces Of Gold And Have No Residual Value While The Equipment Would Have A Useful Life Of Eight Years And No Residual Value. In 2019 And 2020, The Company Produced 1,000
On January 1, 2019, Blossom Corporation acquired a small mine for $20 million along with equipment costing $8 million. Management estimated at that time that the mine should produce 25,000 ounces of gold and have no residual value while the equipment would have a useful life of eight years and no residual value. In 2019 and 2020, the company produced 1,000 and 1,400 ounces of gold, respectively. The company uses the straight-line method of depreciation for its equipment, and its year end is December 31.
On November 1, 2021, the company purchased additional equipment for $2 million that also had a useful life of eight years and no residual value. What is the depreciation for the two months ending December 31, 2021?
To calculate the depreciation for the two months ending December 31, 2021, we need to consider the depreciation of both the initial equipment and the additional equipment purchased on November 1, 2021.
Depreciation of Initial Equipment (acquired on January 1, 2019):
The initial equipment has a useful life of eight years with no residual value.
Depreciation per year = Cost of equipment / Useful life
Depreciation per year = $8 million / 8 years = $1 million
To calculate the depreciation for two months (November and December 2021), we need to prorate the annual depreciation based on the time period.
Depreciation per month = Depreciation per year / 12 months
Depreciation per month = $1 million / 12 months = $83,333.33
Depreciation for two months (November and December 2021) = Depreciation per month * 2 months
Depreciation for two months = $83,333.33 * 2 = $166,666.67
Depreciation of Additional Equipment (purchased on November 1, 2021):
The additional equipment purchased on November 1, 2021, has a useful life of eight years with no residual value.
Since the equipment was purchased on November 1, 2021, we need to calculate the depreciation for two months (November and December 2021).
Depreciation for two months (November and December 2021) = Cost of additional equipment / Useful life
Depreciation for two months = $2 million / 8 years = $250,000
Total depreciation for the two months ending December 31, 2021, is the sum of the depreciation of the initial equipment and the additional equipment:
Total depreciation = Depreciation of Initial Equipment + Depreciation of Additional Equipment
Total depreciation = $166,666.67 + $250,000 = $416,666.67
Therefore, the depreciation for the two months ending December 31, 2021, is $416,666.67.
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The Midpoint Vs Point elasticity Exercise Q: The quantity of demand for a commodity was 240 when its price was 90 monetary units. And when its price rose to 110 monetary units, the required quantity became 160 units.
A. Calculate the arc elasticity of demand B. Calculate elasticity at the price of 90 monetary units
Q1=240 Q2 =160 P2=110 P1-90
A. To calculate the arc elasticity of demand, we use the formula:
Arc Elasticity = (Q2 - Q1) / [(Q1 + Q2) / 2] / (P2 - P1) / [(P1 + P2) / 2]
Given:
Q1 = 240
Q2 = 160
P1 = 90
P2 = 110
Substituting these values into the formula:
Arc Elasticity = (160 - 240) / [(240 + 160) / 2] / (110 - 90) / [(90 + 110) / 2]
= (-80) / [(400) / 2] / (20) / [(200) / 2]
= (-80) / (200) / (20) / (100)
= -0.2
Therefore, the arc elasticity of demand is -0.2.
B. To calculate the elasticity at the price of 90 monetary units, we use the formula:
Point Elasticity = (dQ / Q) / (dP / P)
Given:
Q1 = 240
Q2 = 160
P1 = 90
P2 = 110
Substituting these values into the formula:
Point Elasticity = ((160 - 240) / 240) / ((110 - 90) / 90)
= (-80 / 240) / (20 / 90)
= (-1/3) / (1/9)
= -3
Therefore, the elasticity at the price of 90 monetary units is -3.
The arc elasticity of demand is -0.2, indicating that the demand for the commodity is relatively inelastic. This means that a change in price leads to a proportionately smaller change in quantity demanded. Additionally, the elasticity at the price of 90 monetary units is -3, indicating that at this specific price, the demand is highly elastic, and a small change in price leads to a proportionately larger change in quantity demanded.
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7)Rationalize and illustrate the political economy and strategic choice approaches b) Differentiate between the key characteristics of capitalist market economies and socialist market economies in Asia 9) Critically evaluate the reasons for economic reform and adoption of HR policies and practices in Asia
7) Political economy refers to the study of the interaction between politics and economics, as well as the distribution of power and wealth within a society. A strategic choice approach, on the other hand, refers to the deliberate selection of a particular course of action that is expected to be effective in achieving a specific objective.
In the context of HR policies and practices in Asia, a strategic choice approach may involve a company selecting a particular set of HR policies that align with its long-term strategic objectives.Capitalist market economies are characterized by private ownership of property and the means of production, as well as competition between individuals and firms. Socialist market economies, on the other hand, are characterized by state ownership of the means of production and a planned economy, as well as a focus on meeting the needs of society as a whole rather than individual profit motives. In Asia, countries like Japan, South Korea, and Taiwan have adopted capitalist market economies, while countries like China and Vietnam have adopted socialist market economies.9) Economic reform and adoption of HR policies and practices in Asia have been driven by a variety of factors, including globalization, technological change, and the need to remain competitive in a rapidly changing global economy. One key reason for economic reform has been the desire to attract foreign investment, which can bring in much-needed capital and expertise to help drive economic growth. HR policies and practices have also been reformed in order to better meet the needs of a changing workforce, including greater flexibility and more opportunities for training and development. Additionally, there has been a growing recognition of the importance of employee engagement and well-being in driving productivity and overall business success.
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By increasing the skills and productivity of workers, businesses were able to compete globally and attract foreign investment.
Rationalizing and illustrating the political economy and strategic choice approaches.
The Political Economy Approach: Political economy is an interdisciplinary area that studies the connections between political and economic systems. It seeks to explain how political structures influence economic activity and vice versa.
Strategic Choice Approach: The strategic choice approach concentrates on how economic actors try to realize their goals and the consequences of those choices. It includes game theory and decision theory, which are both used to analyze strategic decision-making.
In political economy, there are two main schools of thought. The first one is the Marxist school, which concentrates on class conflict and the means of production. The second one is the mainstream school, which concentrates on the relationship between the state and the market, as well as the consequences of government intervention in the economy.
Differentiate between the key characteristics of capitalist market economies and socialist market economies in Asia. Capitalist market economies: A capitalist market economy is characterized by the following features: Private property, individuals or businesses are allowed to own property. Market competition, which allows for the free exchange of goods and services between people, who are driven by profit-making motives. Private enterprise, which allows individuals to create their businesses based on their ideas and profit motives.
Socialist market economies: A socialist market economy is characterized by the following features: Public ownership of the means of production, resources are publicly owned and administered. Market competition, with state regulation to ensure a fair distribution of resources. Socialist market economies combine market mechanisms with socialist principles to create a hybrid system that tries to balance economic growth and social equity. Critically evaluate the reasons for economic reform and adoption of HR policies and practices in Asia.
Economic reforms in Asia were implemented to promote economic growth, attract foreign investment, and improve living standards. These reforms included: Trade liberalization, which removed trade barriers and allowed for the free flow of goods and services.
Deregulation, which removed bureaucratic barriers and encouraged entrepreneurship. Financial liberalization, which allowed for the free flow of capital and credit. Human resource policies and practices were adopted to ensure that businesses were able to compete globally.
These included: Training programs that increased workers' skills and knowledge, making them more productive. Policies that encouraged employee loyalty and commitment, increasing productivity and reducing staff turnover.
Policies that rewarded employees based on their performance, which motivated them to work harder and increase their productivity.
In conclusion, the adoption of human resource policies and practices in Asia was a key factor in promoting economic growth and development. By increasing the skills and productivity of workers, businesses were able to compete globally and attract foreign investment.
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what are the 4 types of caps that affect adjustable rate mortgages
The four types of caps that affect adjustable rate mortgages are the initial, periodic, lifetime, and payment caps.
Initial Cap: An initial cap is a limit on how much the interest rate on an adjustable-rate mortgage (ARM) can rise at the first adjustment date. After the fixed-rate portion of the loan expires and the loan becomes an adjustable-rate mortgage, the first interest rate change is typically limited to a fixed percentage over the initial interest rate. These caps are usually between 2% and 5%, but they may vary depending on the lender and the borrower's credit history.
Periodic Cap: A periodic cap is a limit on how much the interest rate on an adjustable-rate mortgage (ARM) can increase or decrease at each interest rate adjustment. Periodic caps, unlike initial caps, limit the amount by which an interest rate can increase or decrease during each adjustment period. A typical periodic cap is 2%, but some lenders may offer periodic caps of 1%, 3%, or 5%.
Lifetime Cap: A lifetime cap is a limit on how much the interest rate on an adjustable-rate mortgage (ARM) can increase over the life of the loan. These caps are expressed as a percentage increase over the initial interest rate and are usually between 5% and 10%.
Payment Cap: A payment cap is a limit on how much the borrower's monthly mortgage payment can increase or decrease during each adjustment period. Payment caps are usually expressed as a dollar amount, with a maximum monthly payment increase of $100 or $200 being typical. Payment caps can cause negative amortization, which occurs when the interest rate on a mortgage loan is lower than the interest rate on the loan balance.
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