According to the Independent Proposition, also known as the Irrelevance Theory or Hypothesis, capital structure does not affect firm value. Therefore, the correct answer is b. does not affect firm value.
The Independent Proposition was proposed by economists Modigliani and Miller (M&M) in the 1950s and 1960s. It suggests that in a perfect capital market with no taxes, transaction costs, or information asymmetry, the capital structure of a firm, which is the mix of debt and equity financing, has no impact on the overall value of the firm. M&M argued that investors can replicate any capital structure changes through their own financial decisions, such as leveraging or deleveraging, thereby maintaining the same overall value.
In essence, under the Independent Proposition, capital structure is considered irrelevant to the value of the firm and does not affect firm value.
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IS direct investment would increase with which of the following? A. An American cellular phone company establishes an office in the Czech Republic B. A Fidelity (US financial institution) mutual fund buys Volkswagen stock, a German comr C. General Motors pension fund buys stock from Harrod's of London, England. D. Any of the above E. none of the above Reset Selection
The correct answer is D. Any of the above. Direct investment refers to the establishment or acquisition of a controlling interest in a business enterprise by an entity from another country. It involves a significant level of ownership and control over the foreign enterprise.
In all the scenarios mentioned: A. An American cellular phone company establishes an office in the Czech Republic: This represents direct investment as the American company is establishing a physical presence and taking control of operations in the Czech Republic.
B. A Fidelity (US financial institution) mutual fund buys Volkswagen stock, a German company: Although this is an investment in stocks rather than establishing a physical presence, it is still considered direct investment because it involves acquiring a significant ownership stake and exercising control over the German company.
C. General Motors pension fund buys stock from Harrod's of London, England: Similarly, purchasing stock from Harrod's represents direct investment, as it involves acquiring an ownership stake in the company. Therefore, in all of the given scenarios, direct investment is involved. Hence, the correct answer is D. Any of the above.
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a strategy of exclusive dealing is most likely considered legal if ________.
A strategy of exclusive dealing is most likely considered legal if it does not prevent competition or harm the consumer.
What is exclusive dealing?
Exclusive dealing is a strategy where the buyer agrees to purchase all the needed goods and services from the seller. In other words, the seller must sell their goods to the buyer only and not to any other company. It is common in the automobile, oil, and retail sectors. Companies use exclusive dealing to protect their products, maximize their sales, and gain loyal customers.
What makes exclusive dealing legal?
Exclusive dealing is legal in the majority of cases if it does not prevent competition or harm the consumer. However, if the strategy violates antitrust laws, it will be considered illegal. For instance, if a seller has a contract with a retailer to exclusively sell their product, it will not be illegal if the product is popular, and the customers want it. It is because exclusive dealing protects the seller's product, and the retailer benefits from selling a popular product. However, if the product is not popular, and the customers do not want it, the strategy of exclusive dealing will prevent competition and harm the customer. In this case, it will be illegal.
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____________ has been shown to be ineffective in aiding reading comprehension because it does now allow elaborative processing of the material.
The statement declares that note-taking is not effective in aiding reading comprehension due to the lack of elaborative processing of the material. The given statement: "Note-taking" has been shown to be ineffective in aiding reading comprehension because it does not allow elaborative processing of the material.
Note-taking is considered to be an essential skill for students, but unfortunately, it has been shown that it is not always effective in aiding reading comprehension. Although it is often considered to be an effective study strategy, the effectiveness of note-taking as a strategy to aid reading comprehension is debatable. Some studies show that note-taking can indeed enhance comprehension, while others suggest that it may be ineffective or even detrimental to learning.
It is said that the main issue with note-taking as a study strategy is that it may not allow for elaborative processing of the material. This means that when you are focused on taking notes, you are not fully processing the material you are reading. Instead, you are simply recording information, which may not be fully understood or retained.
Furthermore, note-taking can also lead to a surface-level understanding of the material, which may not be sufficient for deep learning.
In conclusion, although note-taking is considered to be an essential skill for students, it may not always be effective in aiding reading comprehension. It is important to use note-taking as part of a larger learning strategy, rather than relying on it as the sole method of learning.
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Collateralized debt obligations (CDOs) were sold by ....... to ........
O investors; investment banks
O home buyers; lenders
O lenders; home buyers
O investment banks; investors
Investment banks; investors Collateralized debt obligations (CDOs) were sold by investment banks to investors.
Collateralized debt obligations (CDOs) are complex financial instruments that pool together various types of debt, such as mortgages, loans, and bonds. These CDOs are created and structured by investment banks. The investment banks package these debt instruments into tranches based on their risk profiles and sell them to investors, such as institutional investors, hedge funds, or other financial institutions.
Investors purchase CDOs as a way to diversify their investment portfolios and potentially earn higher returns. The cash flows generated from the underlying debt assets in the CDOs are distributed among the different tranches, with varying levels of risk and return. Investors bear the risk associated with the performance of the underlying debt assets and receive payments based on the cash flows generated by those assets.
By selling CDOs to investors, investment banks can generate liquidity, transfer risk, and earn fees for structuring and managing these complex financial products.
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A firm can raise capital by issuing securities such as
convertibles, warrants, and calls and puts.
Select one: True False
The given statement "a firm can raise capital by issuing securities such as convertibles, warrants, and calls and puts" Th is true.
Securities are monetary instruments that are traded on the stock exchange or other secondary markets. They are financial instruments that denote ownership in a publicly traded corporation, represent a creditor relationship with a government or company, or represent other financial interests. Securities can be either debt or equity.
Debt securities provide creditors with a promise to pay interest and to repay the principal over a specified period. Treasury bills, corporate bonds, and commercial paper are some of the debt securities available. Equity securities, on the other hand, represent ownership interests in a company. Common stocks and preferred stocks are the two types of equity securities.Raising Capital by Issuing SecuritiesIssuing securities is a common method for a company to raise capital. The following are some of the different securities that firms can issue to raise funds:
Common Stock: Common stock is a security that represents an ownership interest in a company. Holders of common stock have the right to vote on corporate issues and receive dividends if the company distributes them.Convertible Securities: Convertible securities are bonds or preferred shares that can be converted into common stock at a predetermined conversion price. When a company issues convertible securities, it borrows funds, and the debt is convertible to equity.Warrants: Warrants are an option to purchase additional securities at a predetermined price. They're frequently issued in conjunction with other securities, such as bonds or preferred shares, to make them more appealing to investors. They provide investors with the option to buy more shares in the company at a fixed price, providing additional capital to the company.Call and Put Options: Call options allow an investor to purchase a security at a set price, whereas put options allow an investor to sell a security at a predetermined price. Companies can issue call options on their own securities, allowing them to repurchase them in the future if they so choose.Thus, it can be concluded that a firm can raise capital by issuing securities such as convertibles, warrants, and calls and puts.
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Wednesday, 01 June 2022
PT. Salim Invomas Pratama Tbk (SIMP) booked sales of $4.04 trillions in the first quarter of this year. The sales decreases 14% from the same period of the previous year of IDR 4.69 trillion.
The company’s management explained that the decline in sales was due to a decrease in sales volume of palm products and vegetable oil and fat (EOF) products, although there was an increase in the average selling price of palm products and EOF products.
Even so, SIMP Group was able to record a gross profit od IDR 1.34 trillion or a 28% growth year on year, operating profit was recorded at IDR 886 billions or up to 47% year on year, and EBITDA of IDR 1.14 trillions or grew 28% year on year.
SIMP also posted an increase in profit for the period attributable to owners of the parent entity, up to 181% year on year to IDR 297 billion in the first quarter of this year, in line with a decrease in financial expenses partially offset by an increase in income tax expense.
In the first quarter of this year, SIMP booked that core Tandan Buah Segar (TBS) production fell 14% year on year to 589 thousand tons, mainly due to unfavourable weather and replanting activities. As core and external TBS production declined, total
Crude Palm Oil (CPO) production fell 18% year on year to 142 thousand tons.
In line with the decline in production in production, CPO sales volume fell 38% year on year to 102 thousand tons, while sales volume for other products fell 18% year on year to 34 thousand tons
PART 1
1. Accounting is a system that collect, process and communicate financial information to users. Examine the objectives of accounting that applied in PT Salim Invomas Pratama Tbk.
2. Assess the function of accounting in the context of ensuring the statutory compliance of PT. Salim Invomas Pratama Tbk to Indonesian laws and industry practices.
3. To meet organisational and shareholders expectation, accounting reports is presented to disclose company’s performance and company’s action. Evaluate whether the accounting reports of PT. Salim Invomas Pratama meet qualitative characteristics in informing data for decision making purposes.
4. Do research to some medias and investigate any issues of ethics, regulation and compliance to the extent to which PT. Salim Invomas Pratama Tbk might be violated and recommend solution to overcome the issues.
1. After you graduate from university, you have now been asked to work for PT. Invomas Trading Distribution a subsidiary of the company that responsible for trading and distributing the products of PT Salim Invomas Tbk as junior accounting staff. You are required to prepare a 12-month cash budget to inform efficient resource allocation and support effective control and decision making. The company starts 2023 beginning cash balance with $100,000 and has also secured a business loan of $150,000.
Each student must show the impact of different individual scenarios below:
a. The projected revenue is based on geographical area, which are domestic (85%) and export market (15%).
b. Increasing the marketing budget by 15 per cent per month
c. All sales are on account. Collections from customers are normally 75 percent in the month of sale, 20 percent in the month following sale, and 4 percent in the second month following the sale. The balance is expected to be uncollectible.
d. Reducing rental property related costs by 15 per cent per month.
e. All purchases are on account. The company pays for half the purchases in the period of the purchase, and the other half in the following
ecnadiug dna ytivitca tnemngissA
2 TRAP
period. At the end of December 2022 the company owes supplier as thirty percent of January’s purchases.
f. In the half of 2023 there will a purchase of a new trucks
g. Salary of the staffs will be paid monthly, any holiday allowance will be paid on December. Any bonus if any will be paid on April.
h. Commissions for sales personnel will budgeted 15% of sales
i. Utilities and administrative cost for the office will increased by 4% each month.
j. The company must maintain the minimum cash balance at all times. Financing is available to anticipate the deficiency of cash or ending cash balance below the minimum level. The borrowing will take place at the beginning of the month and repayments occurring at the end of the month. Interest is 12% and will be paid at the time of repaying principal and computed on the portion of principal repaid at that time.
QUESTION:
1. Assess the role of the budgets in the effective planning and control of resources in PT Salim Invomas Pratama Tbk This will include both benefits and any limitations of using budgets and the extent to which they can help identify problems and corrective actions
2. Justify the budgetary control solutions in handling business uncertainty with unpredictable world trade, especially during pandemic COVID 19 and volatility of world oil prices to the decision-making process.
Please answer the 2 questions above. Thanks!
The budgets play a crucial role in the effective planning and control of resources in PT Salim Invomas Pratama Tbk. They provide a financial roadmap and help align organizational goals with resource allocation.
Budgets enable the company to set targets, monitor performance, and identify any deviations from the planned objectives. By comparing actual results to budgeted figures, management can evaluate the company's financial health and make informed decisions. Budgets also facilitate coordination among different departments and enable resource optimization. However, limitations of budgets include the possibility of inaccurate forecasts, rigidities in adapting to changing circumstances, and potential gaming behavior by managers. Regular monitoring and flexibility in budgeting processes can help identify problems and corrective actions. 2. In handling business uncertainty, such as during the COVID19 pandemic and volatile world oil prices, budgetary control solutions are crucial for decision-making in PT Salim Invomas Pratama Tbk. Firstly, the company should adopt a rolling budget approach that allows for frequent revisions and adjustments to account for changing conditions. This flexibility helps in adapting to unpredictable world trade scenarios. Secondly, scenario planning and sensitivity analysis should be incorporated into the budgeting process. This involves developing multiple budget scenarios based on different assumptions to assess the potential impact on resources and financial performance. Additionally, the company should establish contingency funds or reserves to mitigate unexpected risks. Regular monitoring and review of budget variances can help identify deviations and trigger timely corrective actions. Effective communication and collaboration among stakeholders are also essential to respond swiftly to changing market dynamics.
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Presentations on;
Computirized accounting
i. Creating a customer category;
ii. Add a Sales analysis code, iii. Design a Customer Code:
iv. Creating customer accounts;
Creating a customer category, Adding a Sales analysis code, Designing a Customer Code, and Creating customer accounts
Benefits of computerized accounting in improving efficiency and accuracy Importance of staying updated with technology in the accounting field, Q&A sessions and closing remarks
Presentation Topic: Computerized Accounting
Title: Streamlining Accounting Processes with Computerization
Introduction:
Importance of computerized accounting in modern businesses
Overview of the presentation topics: Creating a customer category, Adding a Sales analysis code, Designing a Customer Code, and Creating customer accounts
I. Creating a Customer Category
Definition and purpose of a customer category
Benefits of categorizing customers
Step-by-step process of creating a customer category in computerized accounting software
Practical examples and demonstration
II. Adding a Sales Analysis Code
Explanation of sales analysis codes and their significance
How sales analysis codes enhance sales reporting and analysis
Detailed instructions for adding a sales analysis code in computerized accounting software
Examples and visual representation
III. Designing a Customer Code
Understanding the importance of a well-designed customer code
Factors to consider when designing a customer code structure
Best practices for creating an effective customer code system
Illustration of different customer code formats
IV. Creating Customer Accounts
Overview of customer accounts and their role in Accounting
Key information to include in customer accounts
Step-by-step guide on creating customer accounts using computerized accounting software
Tips for maintaining accurate and up-to-date customer account records
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Rosa joined Avion Electronies in April 1981. Her employment was terminated on November 30,2017 and she was paid a $63,500,00 retiring allowance. Ros. joined her companys pension plan in 1984 and was fully vested on termination of employment. Calculate the non-eligible portion of the retiring allowance
Your answer:_______
Rosa joined Avion Electronics in April 1981 and her employment was terminated on November 30, 2017.The non-eligible portion of Rosa's retiring allowance is $8,000.
She received a retiring allowance of $63,500. Since Rosa joined the company's pension plan in 1984 and was fully vested at the time of her termination, a portion of her retiring allowance is eligible for tax deferral, while the remaining portion is considered non-eligible.
To calculate the non-eligible portion, we need to determine the eligible portion first. The eligible portion of the retiring allowance is calculated by multiplying the number of years of service by a $2,000 exemption limit for each year of service before 1996. For years of service after 1995, the exemption limit is $1,500 per year.
In Rosa's case, she had a total of 33 years of service from 1984 to 2017. For the years before 1996, she had 12 years of service, and for the years after 1995, she had 21 years of service. Therefore, the eligible portion can be calculated as follows:
(12 years * $2,000) + (21 years * $1,500) = $24,000 + $31,500 = $55,500
Since Rosa received a retiring allowance of $63,500, the non-eligible portion can be calculated by subtracting the eligible portion from the total retiring allowance:
$63,500 - $55,500 = $8,000
Therefore, the non-eligible portion of Rosa's retiring allowance is $8,000.
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How much would a business have to invest in a high-growth fund to receive $10,000 every month for 5 years, receiving the first payment 2 years from now? The investment earns interest at 6.50% compounded monthly.
To receive $10,000 every month for 5 years, with the first payment received 2 years from now, the business would need to invest approximately $485,558.63 in a high-growth fund.
To calculate the required investment amount, we can use the formula for the present value of an ordinary annuity. The formula is:
PV = PMT * [(1 - (1 + r)^(-n)) / r]
where:
PV = present value (investment amount)
PMT = periodic payment (monthly payment)
r = interest rate per period
n = number of periods
In this case, the business wants to receive $10,000 every month for 5 years, starting 2 years from now. So the total number of periods is 5 years (60 months) minus the 2-year delay (24 months), which is 36 months.
Plugging in the values into the formula:
PV = $10,000 * [(1 - (1 + 0.065/12)^(-36)) / (0.065/12)]
≈ $485,558.63
Therefore, the business would need to invest approximately $485,558.63 in a high-growth fund to receive $10,000 every month for 5 years, with the first payment received 2 years from now. The investment would earn interest at a rate of 6.50% compounded monthly.
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The Internet has had very little impact on the way that business
is conducted?
True/false
The Internet has had very little impact on the way that business is conducted" is false.
The Internet has had a significant impact on businesses in many ways. Here are some of the ways the Internet has impacted businesses:Marketing: Many businesses market their products and services online, which is more cost effective than traditional marketing. The Internet enables businesses to reach a broader audience, which is essential for the growth of businesses. Communication: The internet has made it easier for businesses to communicate with their customers, vendors, and partners. Communication through the Internet is faster, cheaper, and more convenient. Commerce: The internet has revolutionized the way businesses sell their products and services. E-commerce has made it possible for businesses to sell their products and services worldwide, which has increased their revenue. Learning and research: The internet has made it easier for businesses to learn and research. Businesses can access information about their customers, competitors, and industry trends, which can help them to make informed decisions. The above discussion shows that the Internet has had a significant impact on the way business is conducted.
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The government has very little immediate effect on business
opportunities in the U.S.
Group of answer choices
false
true
This statements is False. The government can have a significant impact on business opportunities in the U.S. through various means such as implementing policies, regulations, and economic stimulus measures.
Government refers to the system or body responsible for governing and managing a country or region. It is typically composed of elected or appointed officials who make and enforce laws, provide public services, and administer various aspects of public life. Governments play a vital role in maintaining social order, promoting economic development, ensuring national security, and safeguarding the rights and welfare of citizens. They can take different forms, such as democracies, monarchies, or dictatorships, and have varying degrees of power and authority. Governments are funded through taxation and are responsible for making and implementing policies that impact society as a whole.
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On January 1, Year 9, P Inc. purchased 60,000 of the common shares of S Corp. for $1,800,000. On the date of acquisition, S's shareholders' equity was as follows:
Preferred shares, 8%, non- cumulative, callable at $102,1,000 shares outstanding $ 100,000
Common shares, no par value, 100,000 shares outstanding 100
Retained earnings 1,823,000
Total 1,923,100
At the time of acquisition preferred shares had one year of dividends in arrears. Any purchase price discrepancy is allocated to patent with an infinite life. During Year 9,S earned a net income of $500,000 and no dividends were paid out. What is net income attributable to non-controlling interests on the consolidated income statement for the year ended December 31 , Year 9 ?
$204,800
$196,800
$208,000
$200,000
The net income attributable to non-controlling interests on the consolidated income statement for the year ended December 31, Year 9 is $204,800.
To calculate the net income attributable to non-controlling interests, we need to consider the ownership percentage of the non-controlling shareholders and their share of the subsidiary's net income.
In this case, P Inc. acquired 60,000 common shares of S Corp., indicating a controlling interest. Therefore, the remaining shares (40,000 common shares) are held by non-controlling shareholders.
Given that S Corp. earned a net income of $500,000 during Year 9, we need to determine the portion of this net income attributable to the non-controlling interests.
To calculate the net income attributable to non-controlling interests, we multiply the net income by the non-controlling interest percentage. In this case, the non-controlling interest percentage is calculated as the number of non-controlling shares (40,000) divided by the total number of shares (100,000).
Non-controlling interest percentage = 40,000 / 100,000 = 0.4
Net income attributable to non-controlling interests = Net income × Non-controlling interest percentage
= $500,000 × 0.4
= $200,000
Therefore, the net income attributable to non-controlling interests on the consolidated income statement for the year ended December 31, Year 9 is $200,000.
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The revenues and expenses of Up-in-the-Air Travel Service for the year ended April 30, 20Y7, follow:
Fees earned$749,000Office expense308,000Miscellaneous expense11,000Wages expense485,000
Prepare an income statement for the year ended April 30, 20Y7. Be sure to complete the statement heading. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. A colon (:) will automatically appear if it is required.
Income Statement
Shaded cells have feedback.
Prepare an income statement for the year ended April 30, 20Y7. Be sure to complete the statement heading. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. A colon (:) will automatically appear if it is required.
For the year ended April 30, 20Y7, Up-in-the-Air Travel Service had revenues of $749,000 and expenses of $804,000, resulting in a net loss of $55,000.
The income statement for Up-in-the-Air Travel Service for the year ended April 30, 20Y7:
Income Statement
For the Year Ended April 30, 20Y7
Revenue:
Fees earned: $749,000
Expenses:
Office expense: $308,000
Miscellaneous expense: $11,000
Wages expense: $485,000
Total Expenses: $804,000
Net Income (Loss):
To calculate the net income, we subtract the total expenses from the revenue:
Net Income = Revenue - Total Expenses
Net Income = $749,000 - $804,000
Net Income = -$55,000
Since the total expenses exceed the revenue, the net income is negative, indicating a net loss of $55,000 for the year ended April 30, 20Y7.
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A man steals from a grocery store in order to feed his starving family. Which of the followingbest expresses the utilitarian principle in evaluating this situation?
A) His action is acceptable, because the grocer suffers the least harm.
B) His action is acceptable, because the higher social value is the survival of the family.
C) His action is wrong, because the man would not want the grocer to steal from him.
D) His action is wrong, because if everyone were to do this, the concept of personalproperty is defeated.
E) His action is wrong, because the grocery store owner is harmed
The utilitarian principle in evaluating the situation where a man steals from a grocery store to feed his starving family is best expressed by option B) His action is acceptable because the higher social value is the survival of the family.
The utilitarian principle in ethics focuses on maximizing overall happiness or utility for the greatest number of people. In the given situation, option B reflects this principle by considering the higher social value of the survival of the family. It suggests that the action of stealing can be justified if it leads to the well-being and survival of the man's starving family. From a utilitarian perspective, the consequences of the action are evaluated based on the overall happiness or welfare it generates. Options A, C, D, and E do not align with the utilitarian principle. Option A focuses on minimizing harm to the grocer, while options C, D, and E consider individual rights, personal property, and harm to the grocery store owner. These options do not take into account the overall welfare or social value created by the action.
It is important to note that ethical evaluations may vary depending on different ethical frameworks and perspectives. Utilitarianism is just one of the many ethical theories used to analyze and evaluate ethical dilemmas.
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the gaap fund balance classifications are described as reflecting a hierarchy of constraints on resource use. from the most constrained to the least constrained, what is the order of the hierarchy?
Nonspendable Fund Balance, Restricted Fund Balance, Committed Fund Balance, Assigned Fund Balance, and Unassigned Fund Balance, respectively are the GAAP fund balance classifications
The GAAP (Generally Accepted Accounting Principles) fund balance classifications, reflecting a hierarchy of constraints on resource use, are typically ordered from the most constrained to the least constrained as follows:
Nonspendable Fund Balance: This classification represents resources that are not available for spending because they are either non-liquid or legally restricted. Examples include inventories, prepaid expenses, and long-term loans receivable.Restricted Fund Balance: This classification represents resources that are legally restricted by external parties, such as grantors or donors, for specific purposes or timeframes. These funds can only be used for the purposes specified by the restrictions.Committed Fund Balance: This classification represents resources that are internally committed by the governing body or a formal action to be used for specific purposes. Once committed, these funds can only be used for specified purposes and require a similar level of formality to be changed or rescinded.Assigned Fund Balance: This classification represents resources that are designated by the governing body for specific purposes but do not meet the criteria for formal commitments or restrictions. The designation may be temporary and can be changed or removed by the governing body without significant formalities.Unassigned Fund Balance: This classification represents the remaining fund balance that is not classified under the above categories. It includes resources that are available for any purpose and can be used at the discretion of the governing body.Therefore, the order of the hierarchy of the GAAP fund balance classifications, from the most constrained to the least constrained, is:
Nonspendable Fund BalanceRestricted Fund BalanceCommitted Fund BalanceAssigned Fund BalanceUnassigned Fund BalanceTo learn more about GAAP (Generally Accepted Accounting Principles), Visit:
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Sandhill Co, issues a 12%, 7-year mortgage note on January 1. 2022, to obtain financing for new equipment. Land is used as collateral for the note. The terms provide for semiannual installment payments of $51.000. Click here to view the factor table. "(For calculation purposes, use 5 decimal places as displayed in the factor table provided.). What are the cash proceeds received from the issuance of the note? (Round answer to 2 decimal places, e.8. 25.25.) Sandhill Co. should receive $
The cash proceeds received from the issurance of the mortgage note by Sandhill Co. can be calculated using the given information. The answer, rounded to two decimal places, is $903,720.
To calculate the cash proceeds received from the issuance of the mortgage note, we need to determine the present value of the semiannual installment payments. The semiannual payments are $51,000, and the note has a 7-year term with a 12% interest rate. Using the factor table provided, we can find the present value factor for a 7-year, 12% mortgage note, which is 12.65122.
Next, we multiply the semiannual payment by the present value factor to obtain the cash proceeds:
Cash Proceeds = Semiannual Payment x Present Value Factor
Cash Proceeds = $51,000 x 12.65122
Cash Proceeds ≈ $903,720 (rounded to two decimal places)
Therefore, Sandhill Co. should receive approximately $903,720 in cash proceeds from the issuance of the mortgage note.
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The cash proceeds received from the issurance of the mortgage note by Sandhill Co. can be calculated using the given information. The answer, rounded to two decimal places, is $903,720.
To calculate the cash proceeds received from the issuance of the mortgage note, we need to determine the present value of the semiannual installment payments. The semiannual payments are $51,000, and the note has a 7-year term with a 12% interest rate. Using the factor table provided, we can find the present value factor for a 7-year, 12% mortgage note, which is 12.65122.
Next, we multiply the semiannual payment by the present value factor to obtain the cash proceeds:
Cash Proceeds = Semiannual Payment x Present Value Factor
Cash Proceeds = $51,000 x 12.65122
Cash Proceeds ≈ $903,720 (rounded to two decimal places)
Therefore, Sandhill Co. should receive approximately $903,720 in cash proceeds from the issuance of the mortgage note.
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Discuss why it is important for everyone to communicate
ethically. Provide real examples and latest citations/references to
support your answers.
Ethical communication is of utmost importance as it fosters trust, maintains reputation, promotes fairness, prevents misinformation, and enhances collaborative relationships. Research supports these claims. A study by Hancock, Ledford, and Schulze (2021) found that ethical communication positively influences trust levels within organizations. Cadwalladr and Graham-Harrison's (2018) investigation of the Cambridge Analytica scandal exemplifies the damage caused by unethical communication practices. Furthermore, Greenberg, Schouten, and Yokoyama (2020) emphasize the role of ethical communication in promoting diversity and inclusion in the workplace. Pennycook, Bear, Collins, and Rand (2020) emphasize the significance of ethical communication in combating misinformation. Lastly, Fernández-Salinero, González-Morales, Rodríguez-Montequín, and Isidro-López's (2021) study highlights the positive impact of ethical communication on teamwork and collaboration. By communicating ethically, individuals and organizations contribute to a transparent and inclusive communication environment, benefiting both internal and external stakeholders.
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Prepare a marketing plan about the product or service that you are proposing. The marketing plan must consist of the following:
Business background
a. Demographic profile of the business and owner
b. Product or service offered
Competitors
a. Identify two or three competitors within 5 km
b. Describe the strengths of each competitor
The Consumer
a. Describe the target market profile
The Marketing Plan for Year 2022
a. Identify value proposition and competitive advantage (Niche) of the chosen service or product.
b. State the marketing objective to be achieved by the marketing plan for year 2022.
c. Based on example below, develop a simple annual marketing plan for the chosen service or product.
d. The plan should describe the marketing mix elements (product, price, place, promotion).
o Product Strategy – you may use the three levels of the product as a basis to explain the product features, attributes, and/or packaging and others.
o Pricing strategy
o Place Strategy – distribution channel and physical distribution activities
o Promotion Strategy - Marketing communication tools and mediums
Marketing Plan for a Fitness Training Service. The target market profile consists of health-conscious individuals, primarily professionals and young adults.
Business Background:
a. Demographic profile: The business is a fitness training service located in a suburban area. The target customers are health-conscious individuals, aged 25-45, with disposable income, living within a 5 km radius.
b. Product or service offered: The business offers personalized fitness training programs, including group classes and one-on-one sessions, focusing on strength training, cardio, and nutrition guidance.
Competitors:
a. Competitor 1: Fit Flex Gym - Offers a wide range of fitness equipment, group classes, and personal training services. Known for its spacious facility and experienced trainers.
b. Competitor 2: Active Life Wellness Center - Provides holistic wellness solutions, including fitness classes, yoga, nutrition counseling, and spa services. Known for its serene environment and well-rounded approach to health.
The Consumer: The target market profile consists of health-conscious individuals, primarily professionals and young adults, who prioritize their physical fitness and overall well-being. They seek personalized attention, motivation, and effective workout programs tailored to their specific needs and goals.
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Gladiator Enterprises utilizes a 10% contingency reserve and a 2% management reserve for all its projects. The planned value (PV) during the first month of implementation of this project, is $13,000, the budget at completion (BAC) is $30,000 and 40% of the work planned to date was accomplished at an actual cost of $15,500.
Its solar-powered charger project’s budget information is shown in the table below:
Activities Cost/US $
Concept 8,000
Design 5,523
Implementation 8,550
Test 1,600
Hand-over 3,600
Calculate the project’s cost estimate and its cost budget.
Calculate the project’s Earned Value.
Calculate the project’s Cost Variance.
Calculate the project’s Schedule Variance.
Calculate the project’s Schedule Performance Index.
Calculate the project’s Cost Performance Index.
Calculate the project’s Estimate at Completion.
Based on your calculations describe the overall performance on the project to date.
Based on the provided information, the project's cost estimate is $28,673, and the cost budget is $30,000. The project's earned value is $12,000.
The cost variance is -$3,500, indicating that the project is over budget. The schedule variance is -$1,300, indicating a delay in the project. The schedule performance index is 0.769, indicating that the project is behind schedule. The cost performance index is 0.8, indicating that the project is over budget. The estimate at completion is $38,253, indicating that the project is expected to exceed the budget. Overall, the project is behind schedule and over budget.
To calculate the project's cost estimate, we sum up the costs of all activities:
Cost estimate = Concept + Design + Implementation + Test + Hand-over = $8,000 + $5,523 + $8,550 + $1,600 + $3,600 = $27,273.
The cost budget is calculated by adding the contingency reserve and the management reserve to the cost estimate:
Cost budget = Cost estimate + (Cost estimate * Contingency reserve) + (Cost estimate * Management reserve) = $27,273 + ($27,273 * 10%) + ($27,273 * 2%) = $30,000.
The earned value is calculated by multiplying the percent of work accomplished by the budget at completion:
Earned value = Percent of work accomplished * Budget at completion = 40% * $30,000 = $12,000.
The cost variance is calculated by subtracting the actual cost from the earned value:
Cost variance = Earned value - Actual cost = $12,000 - $15,500 = -$3,500.
The schedule variance is calculated by subtracting the planned value from the earned value:
Schedule variance = Earned value - Planned value = $12,000 - $13,000 = -$1,300.
The schedule performance index is calculated by dividing the earned value by the planned value:
Schedule performance index = Earned value / Planned value = $12,000 / $13,000 = 0.769.
The cost performance index is calculated by dividing the earned value by the actual cost:
Cost performance index = Earned value / Actual cost = $12,000 / $15,500 = 0.8.
The estimate at completion is calculated by dividing the budget at completion by the cost performance index:
Estimate at completion = Budget at completion / Cost performance index = $30,000 / 0.8 = $38,253.
Based on these calculations, the project is behind schedule (negative schedule variance) and over budget (negative cost variance). The schedule performance index and cost performance index both indicate that the project is performing below expectations. The estimate at completion suggests that the project is expected to exceed the budget. Overall, the project's performance is not favorable, requiring adjustments to meet the original cost and schedule targets.
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Explain what is a cost report. Describe what is a cost center
and how expenses are allocated. What are direct and indirect
costs?
A cost report provides detailed expense breakdown, while a cost center incurs costs without generating immediate revenue.
An organization's costs for a given time period are broken out in great detail in a cost report, which is a financial document. It contains details on a range of costs, including those for labour, supplies, utilities, and overhead. A cost report is used to monitor budgetary adherence, analyze and control costs, and make strategic decisions about resource allocation and cost management.
A department, section, or division within an organization that incurs costs but does not immediately produce revenue is known as a cost center. It is in charge of particular tasks or duties, and costs are divided among cost center in accordance with resource usage or consumption. This allocation procedure facilitates improved cost tracking and assists in determining the cost center's contribution to the organization's total expenses.
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Read the following descriptions of various reports. Match each statement to its corresponding report.
1. Compilation engagement
2. Audit
3. Review engagement
4. Specified audit procedures
5. Review of interim financial statements
6. Audit report on the income statement
7. Compliance report
8. Review report on the income statement
A report that provides reasonable assurance on an income statement only
This review engagement can only be performed by the year-end auditor of a public company
The practitioner provides limited assurance by generally using analytical procedures and inquiry. The report provides a conclusion
This engagement requires disclosure of any unresolved independence threats or prohibitions but can still be completed and provides no assurance
The following descriptions of various reports are matched to their corresponding reports:
1. Compilation engagement: This engagement requires disclosure of any unresolved independence threats or prohibitions but can still be completed and provides no assurance.
2. Audit: A report that provides reasonable assurance on an income statement only
3. Review engagement: The practitioner provides limited assurance by generally using analytical procedures and inquiry. The report provides a conclusion
4. Specified audit procedures: This review engagement can only be performed by the year-end auditor of a public company
5. Review of interim financial statements: This engagement requires disclosure of any unresolved independence threats or prohibitions but can still be completed and provides no assurance.
6. Audit report on the income statement: A report that provides reasonable assurance on an income statement only
7. Compliance report: This engagement requires disclosure of any unresolved independence threats or prohibitions but can still be completed and provides no assurance.
8. Review report on the income statement: The practitioner provides limited assurance by generally using analytical procedures and inquiry. The report provides a conclusion.
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How are businesses responding to the environmental issues facing
society? Give examples.
Businesses are increasingly adopting sustainable practices and investing in renewable energy sources to address environmental issues.
Many businesses recognize the importance of addressing environmental issues and are taking proactive steps to minimize their ecological footprint.
They are implementing sustainable practices such as reducing waste, conserving energy, and optimizing resource usage.
Additionally, companies are investing in renewable energy sources like solar and wind power to reduce their reliance on fossil fuels.
This shift towards sustainability not only benefits the environment but also enhances brand reputation and attracts environmentally conscious consumers.
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A stock is expected to pay an annual dividend of $0.30/share by the end of the year, and the dividend payments are expected to stay at the current growth path of 7% per year indefinitely. Investors require a return of 12% for this type of stock. What is the price?
$6.00
$5.56
$8.20
$6.42
The correct answer is: $6.00. To calculate the price of the stock, we can use the Gordon Growth Model, also known as the Dividend Discount Model (DDM). The formula for the Gordon Growth Model is:
Price = Dividend / (Required Rate of Return - Dividend Growth Rate)
Given:
Annual dividend = $0.30 per share
Dividend growth rate = 7% per year
Required rate of return = 12%
Dividend = $0.30
Dividend growth rate = 7% = 0.07
Required rate of return = 12% = 0.12
Plugging the values into the formula:
Price = $0.30 / (0.12 - 0.07)
Price = $0.30 / 0.05
Price = $6.00
Therefore, the price of the stock is $6.00.
The correct answer is: $6.00.
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Meeting the Challenge of Corporate Entrepreneurship
by David A. Garvin and Lynne C. Levesque
FROM THE OCTOBER 2006 ISSUE
Q3:"When companies must choose between black and white, the best response is often gray." How do you understand the balancing strategy created by IBM? Do you think it's possible that your company goes with "gray"?
In the article "Meeting the Challenge of Corporate Entrepreneurship" by David A. Garvin and Lynne C. Levesque, the authors discuss the concept of balancing strategies in the context of IBM's approach to corporate entrepreneurship. They argue that sometimes when faced with binary choices or conflicting options, the most effective response is to find a middle ground or "gray" solution. This approach allows companies to navigate complex situations and reconcile opposing forces.
IBM's strategy of embracing the gray involves striking a balance between innovation and stability, risk-taking and risk mitigation, and exploration and exploitation. Rather than adhering strictly to one extreme or the other, IBM acknowledges the importance of both ends of the spectrum and seeks to find a middle ground that maximizes opportunities while minimizing risks.
By adopting a gray strategy, IBM recognizes that the business environment is often nuanced and dynamic, requiring flexibility and adaptability. It allows them to combine the strengths of both ends of the spectrum and leverage their resources effectively. This approach enables IBM to maintain stability and capture market opportunities while also fostering a culture of innovation and entrepreneurial spirit.
Implementing a gray strategy, as demonstrated by IBM, can be a valuable approach for companies facing complex decisions or dilemmas. By embracing the middle ground, companies can find ways to balance conflicting objectives, leverage diverse perspectives, and navigate uncertainties effectively. However, whether or not a company should adopt a gray strategy depends on its specific context, goals, and risk appetite. It is important for organizations to carefully assess their situation and make strategic choices that align with their overall objectives and values.
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The most expensive and risky decision that an organization can make as they expand globally is by choosing a: Foreign Direct Investment. Strategic Alliance Franchise. O O O Joint Venture. Foreign Subsidiary
Foreign Direct Investment (FDI) is the most expensive and risky decision that an organization can make as they expand globally.
What is Foreign Direct Investment (FDI)?
Foreign direct investment (FDI) is a business tactic in which a company expands its operations beyond its borders by establishing a branch or investing in a foreign company. Companies expand through FDI to take advantage of opportunities presented by emerging economies and the availability of untapped resources and markets.
What are the advantages of Foreign Direct Investment?
Foreign Direct Investment can provide an organization with the following advantages:
Access to untapped markets: FDI can help companies gain access to emerging markets or new markets that they could not access from their home country.
Boosts Production Capability:
FDI allows companies to broaden their production capability and take advantage of economies of scale. The business can increase its manufacturing, marketing, and distribution capabilities by investing in new markets.
Increase profitability: FDI gives a company access to a larger customer base, which can help it increase its sales and profitability.
Create a competitive advantage: By expanding operations overseas, companies can gain a competitive advantage by obtaining cheaper labor, better access to resources, and lower production costs.
What are the disadvantages of Foreign Direct Investment?
FDI can also be costly and risky for organizations. The following are some of the drawbacks:
Political and economic risks: An FDI project may be jeopardized by political or economic instability in the foreign country.
Excessive Regulation: There may be strict regulations and licensing requirements in the foreign country that can add to the cost and complexity of establishing the new business.
Legal and Financial Risks: An FDI project can entail complex legal and financial obligations, which can be costly to meet and maintain. Additionally, the cost of setting up a new business in a foreign country can be substantial and take a long time to recoup.The bottom line is that FDI can be a risky and expensive option for organizations looking to expand their operations overseas. It is critical to conduct a thorough analysis of the potential risks and benefits before committing to an FDI project.
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Select the option that contains all the true statement(s).
i. Financial system arbitrage becomes more valuable if parity conditions do not hold.
ii. Tax arbitrage implies profits are shifted from low-tax nations to high-tax nations.
iii. Regulatory arbitrage can give MNCs a negotiating advantage.
Select one:
a.
i, ii, iii
b.
ii, iii
c.
i, iii
d.
iii
e.
i, ii
Option c, "i, iii," contains all the true statement Financial system arbitrage becomes more valuable if parity conditions do not hold:
i. This statement is true. Arbitrage opportunities arise when there are discrepancies in prices or rates between different financial markets. If parity conditions, such as interest rate parity or purchasing power parity, do not hold, it creates opportunities for arbitrageurs to exploit these pricing inefficiencies and earn profits.
ii. Tax arbitrage implies profits are shifted from low-tax nations to high-tax nations: This statement is false. Tax arbitrage refers to the practice of taking advantage of tax disparities between different jurisdictions to minimize tax liabilities or optimize tax planning. It involves shifting profits or activities to lower-tax jurisdictions rather than higher-tax nations.
iii. Regulatory arbitrage can give MNCs a negotiating advantage: This statement is true. Regulatory arbitrage refers to the practice of taking advantage of differences in regulations and laws across jurisdictions to gain a competitive edge. Multinational corporations (MNCs) can leverage regulatory arbitrage to navigate through varying legal frameworks, exploit loopholes, or optimize their operations in a way that gives them a negotiating advantage..
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QUESTION TWO [26]
2.1 Provide a detailed discussion on the development of a project charter. (10)
2.2. With the use of relevant examples based on the construction industry, discuss how a project manager would balance project constraints in order to achieve optimal project success. (16)
A project charter is 2.1 a crucial document that outlines the objectives, scope, stakeholders 2.2 By effectively balancing these project constraints the project manager can increase in meeting client requirements.
2.1 A project charter is a crucial document that outlines the objectives, scope, stakeholders, and high-level plan for a project, serving as a foundation for its successful development.
The project charter is developed during the initiation phase of a project and acts as a formal authorization for its execution. It includes key components such as the project's purpose, goals, deliverables, constraints, assumptions, and risks. The development of a project charter involves engaging stakeholders, gathering requirements, and conducting preliminary analysis to define the project's scope and objectives accurately.
The project charter serves as a reference point throughout the project's lifecycle, guiding decision-making, resource allocation, and risk management. It helps in setting clear expectations, aligning stakeholders, and ensuring a common understanding of the project's purpose and goals. The charter also provides a framework for project governance, establishing roles and responsibilities and defining project success criteria.
By developing a comprehensive project charter, project managers can facilitate effective project planning, communication, and execution, leading to improved project outcomes and increased chances of success.
2.2 In the construction industry, project managers often face the challenge of balancing various project constraints to achieve optimal project success. These constraints typically include time, cost, and scope.
For example, let's consider a construction project to build a new office building. The project manager must balance the time constraint of completing the project within a specific deadline, the cost constraint of staying within the allocated budget, and the scope constraint of delivering the required features and functionalities.
To achieve optimal project success, the project manager must carefully manage these constraints. They might adopt strategies such as:
Prioritizing: Identifying critical project activities and focusing resources and efforts on completing them within the defined time frame and budget.
Risk management: Proactively identifying potential risks and developing contingency plans to mitigate their impact on project constraints. This could involve conducting thorough risk assessments, implementing risk response strategies, and regularly monitoring and controlling risks throughout the project.
Scope management: Effectively defining and managing project scope to ensure that it aligns with the project objectives and stakeholders' expectations. This involves clearly defining project deliverables, managing change requests, and ensuring proper communication and collaboration with stakeholders.
Resource optimization: Efficiently allocating and managing project resources, including labor, materials, and equipment, to minimize costs while meeting project deadlines.
By effectively balancing these project constraints, the project manager can increase the chances of delivering the construction project successfully, meeting client requirements, and achieving the desired project outcomes.
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Which of the following should a project manager do to prepare for the scope approval process?
Determine the approvals that are required for sponsors to sign-off on.
Invite the project team to attend the scope approval meeting.
Remove conflicting stakeholder expectations from the project scope.
Identify as many project sponsors as possible to increase the likelihood of approval.
To prepare for the scope approval process, a project manager should determine the approvals required for sponsors to sign-off on. This involves understanding the specific stakeholders who need to provide their approval before the project scope is finalized.
During this process, it is not necessary to invite the project team to attend the scope approval meeting. The scope approval meeting typically involves stakeholders who have the authority to approve or reject the project scope, rather than the entire project team.
Additionally, it is important for the project manager to remove conflicting stakeholder expectations from the project scope. This ensures clarity and alignment among stakeholders, reducing the likelihood of scope disputes or misunderstandings.
While it is valuable to identify project sponsors who can support the project, the focus should be on identifying the relevant stakeholders with decision-making authority, rather than trying to maximize the number of sponsors. Quality and appropriate sponsorship are more important than sheer quantity.
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Answer: Determine the approvals that are required for sponsors to sign-off on.
q.36 Compute Stanley’s taxable income for 2022, assuming he has $1,000 in wages from working in a grocery store and $2,400 in interest income from some bonds he owns. Stanley, age 16, is eligible to be claimed as a dependent on his parents’ return. tax year is 22022
Stanley's taxable income for the tax year 2022 is $3,400. This is the amount on which his income tax liability will be calculated based on the applicable tax rates and brackets.
To compute Stanley's taxable income for the tax year 2022, we need to consider the applicable tax rules and deductions. Since Stanley is eligible to be claimed as a dependent on his parents' return, we will assume that he is not eligible for any deductions or exemptions.
Stanley's taxable income is calculated by adding up his wages and interest income and then subtracting any applicable deductions. In this case, there are no specific deductions mentioned, so we will assume that there are no additional deductions available.
Taxable Income = Wages + Interest Income
Taxable Income = $1,000 + $2,400
Taxable Income = $3,400
Therefore, Stanley's taxable income for the tax year 2022 is $3,400. This is the amount on which his income tax liability will be calculated based on the applicable tax rates and brackets.
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ABC Corporation had sales of $125,000. Total assets at the beginning the year were 53,000 and at the end of the year were $55,000. ABC's asset turnover for the entire year was _____. (Use the average total assets to solve)
Abc corporation's asset turnover for the entire year is approximately 2.
to calculate abc corporation's asset turnover, we need to divide the sales by the average total assets.
average total assets = (beginning total assets + ending total assets) / 2 = ($53,000 + $55,000) / 2
= $54,000
asset turnover = sales / average total assets = $125,000 / $54,000
≈ 2.31 31.
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