Use this info for two questions. Stock in CDB, Inc. has a beta of 1.07. The market return (not risk premium) is 10.00%, and T-bills are currently yielding 4.4%. CDB’s most recent dividend was $2.30 per share, and dividends are expected to grow at a 4.60% annual rate indefinitely. The stock sells for $47.15 per share.
Using the CAPM, what is your estimate of CDB’s cost of equity?
a. 10.39%
b. 12.35%
c. 11.85%
d. 10.90%
e. 11.34%

Answers

Answer 1

Answer: To estimate CDB, Inc.'s cost of equity using the Capital Asset Pricing Model (CAPM), we need the risk-free rate, the market return, and the stock's beta.

Explanation:

Here's how to calculate it:

Risk-free rate (Rf) = T-bills yield = 4.4%

Market return (Rm) = 10.00%

Beta (β) = 1.07

Cost of equity (Ke) = Rf + β × (Rm - Rf)

= 4.4% + 1.07 × (10.00% - 4.4%)

= 4.4% + 1.07 × 5.6%

= 4.4% + 5.992%

= 10.392%

Therefore, the estimated cost of equity for CDB, Inc. is approximately 10.39%.

The closest answer choice is:

a. 10.39%

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Related Questions

identify the management function in which top managers in an organization spend most of their time.

Answers

The management function in which top managers in an organization spend most of their time is typically referred to as "planning." This involves the process of setting goals, objectives, and strategies for the organization as a whole, as well as determining the resources and actions needed to achieve them. Top managers also spend a significant amount of time monitoring and evaluating the organization's performance against these plans and making necessary adjustments to ensure success. Other management functions, such as organizing, leading, and controlling, are also important, but planning is often considered the most critical and time-consuming for top managers.

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CREATE A"business model canvas" for any business you want. It
can be a car wash dealership or can be a real-life example such as
Starbucks.
please write the business model canvas by keyboard not hand

Answers

The Business Model Canvas provides a comprehensive picture of your company while focusing on the most important aspects. It provides information about the consumers you manage, the value proposition requested through each of your tunnels, as well as how your company brings currency.

There are as many different types of employment prototypes as there are different types of businesses. Explicit sales, franchising, advertising-based, and brick-and-mortar stores are all examples of traditional business models. Everyone has advantages and disadvantages, and many corporations regulate several of these industries at the same time.

The Canvas helps users imagine what is essential and forces them to communicate key points. A committee (employees or advisors) can also use it to understand connections and reach agreements." It requests a pictorial diagram with components interpreting an organization's or commodity's value proposition, infrastructure, consumers, as well as finances, enhancing employment by illustrating potential trade-offs.

A Business Model Canvas (BMC) is a piece of entrepreneurial equipment used to visualise, formulate, and reinvent industry models. You can also consolidate your value proposition, systems, customer connections, and financial position by executing the BMC.

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Using an indirect pattern/buffer, write a message to a specific group member who because of lack of contact will miss the opportunity to participate in your group's oral presentation.
Please i need it right now!

Answers

When writing a message to a specific group member who will miss the opportunity to participate in your group's oral presentation due to a lack of contact, it is essential to use an indirect pattern or buffer.

Hello [Name], I hope this message finds you well. It’s been a while since we’ve communicated, and we’ve missed your contributions to our group's oral presentation. As you know, we have an oral presentation coming up, and we're excited about the progress we have made so far.

However, we've noticed that you have not been available for group meetings, and we've missed your input in the development of the presentation.

The group and I were discussing the presentation, and we realized that it would be incomplete without your valuable insights. Your contributions in the past have been essential, and we feel that your input is vital to the success of the presentation.

We understand that things may have come up that make it hard to stay in touch, but we still value your ideas and opinions on the matter.

As a team member, we don't want you to miss out on this opportunity to showcase your talents and the hard work you’ve put in. We hope you will be able to join us for the remaining meetings to complete this project together as a team.

Please let us know if there is anything we can do to help you catch up and be part of the presentation. We look forward to your response.Sincerely,[Your Name]

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Education generates a positive external value. The Marginal external value of education is MEV (Q) = where Q denotes the number of education years. The demand ...

Answers

Education generates positive external value through benefits to society, including productivity, innovation, health, and social cohesion.

The minimal outside worth of training catches the cultural advantages that emerge from an informed populace. These advantages can incorporate a more useful labor force, further developed development and mechanical headways, decreased crime percentages, better wellbeing results, and improved social union.

By taking into account the peripheral outside worth of schooling close by the confidential advantages, policymakers can assess the social profit from interest in training and go with informed choices in regards to instructive approaches and ventures.

Perceiving the positive externalities of training features the significance of giving available and excellent schooling to advance individual prosperity and cultural advancement.

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The complete question is:

Education generates a positive external value. The Marginal external value of education is MEV (Q) = where Q denotes the number of education years. The demand curve for education years is given by D = 200 p where p is the price per year. The supply curve is given by S 2p. 2 - a) Find the competitive equilibrium price and quantity. b) What is the efficient equilibrium price and quantity? c) Can the efficient equilibrium quantity be obtained by a per unit tax or subsidy?

f
you invest $18,000 at an interest rate of 8.28 percent. How much
will you have at the end of seven years? If you use simple
interest.

Answers

You will have approximately $28,432.80 at the end of seven years if you use simple interest.

To calculate the amount you will have at the end of seven years using simple interest, you can use the formula:

[tex]A = P(1 + rt)[/tex]

Where:

A = Amount at the end of the period

P = Principal amount (initial investment)

r = Interest rate per period (in decimal form)

t = Number of periods

Plugging in the values:

[tex]P = $18,000\\r = 8.28%\\= 0.0828\\ t = 7 years[/tex]

[tex]A = 18000(1 + 0.0828 * 7)A\\ = 18000(1 + 0.5796)A\\ = 18000(1.5796)A \\= $28,432.80[/tex]

Therefore, you will have approximately [tex]$28,432.80[/tex] at the end of seven years if you use simple interest.

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Retail Management:
How does Walmart contribute to and/or detract from the
communities in which it operates stores?
Please research on-line about Wal-mart post and share your
thoughts.

Answers

Walmart contributes to communities through job creation and low prices but detracts from small businesses and faces criticism for labor practices and environmental concerns.

How does Walmart impact the communities in which it operates stores?

Walmart, being one of the largest retail corporations in the world, has a significant impact on the communities in which it operates stores. The contributions and detractions associated with Walmart's presence are subjects of ongoing debate and analysis. Here are some perspectives based on research and information available up until my knowledge cutoff in September 2021:

Contributions:

Job Creation: Walmart's expansion often leads to the creation of numerous jobs within communities. This can be beneficial for local economies, providing employment opportunities and income for individuals.

Low Prices: Walmart's business model focuses on offering products at low prices, which can be advantageous for low-income families and individuals, allowing them to access affordable goods and necessities.

Charitable Initiatives: Walmart engages in various philanthropic endeavors, including donations to local communities and disaster relief efforts. The company has contributed substantial amounts to educational programs, health initiatives, and community development projects.

Convenience and Accessibility: Walmart stores are typically located in areas that lack access to retail options, particularly in rural or underserved communities. The presence of a Walmart store can provide residents with a convenient and accessible shopping option.

Detractions:

Impact on Small Businesses: Walmart's arrival in a community can have negative consequences for local small businesses. The competitive pricing and large-scale operations of Walmart can make it difficult for smaller retailers to compete, potentially leading to closures and job losses.

Labor Practices: Walmart has faced criticism for its treatment of workers, including low wages, inadequate benefits, and limited opportunities for career advancement. These issues can have a detrimental effect on employees and their families.

Negative Impact on Local Economy: While Walmart brings jobs, it can also lead to a decline in overall wages in the area. This can occur when existing businesses are unable to compete with Walmart's lower prices, forcing them to reduce wages or downsize.

Environmental Concerns: Walmart's size and supply chain practices have raised concerns about its environmental impact. Issues include greenhouse gas emissions, waste management, and the sourcing of products from unsustainable practices, although the company has made efforts to address these concerns in recent years.

It's important to note that the impact of Walmart on communities can vary depending on the specific location, economic conditions, and local factors. Different stakeholders may have different perspectives on the contributions and detractions resulting from Walmart's presence.

It's recommended to research and refer to recent sources and studies to gain a more up-to-date understanding of Walmart's contributions and detractions in the communities it operates in, as my knowledge is limited to information available until September 2021.

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Black berry Ltd. Presents the following information and you are required to calculate funds from operation. Particulars Amount To Operation Expenses 1,00,000 By Gross profit 1,90,000 To Deprecation 40,000 By Gain on sale of plant 20,000 To Loss on sale of Building 10,000 By Dividend Income received 10,000 To Advertisement Suspense account 5,000 To Discount allowed 500 To Discount on Issue of shares written off 500 To Goodwill written off 12,000 To Net profit 52,000

Answers

The funds from operation for Blackberry Ltd. based on the provided information is $125,000.

To calculate the funds from operation for Blackberry Ltd., we need to determine the net cash provided by operating activities.

Starting with the net profit of $52,000, we make the following adjustments:

Add back depreciation: $40,000

Subtract loss on sale of building: $10,000

Add gain on sale of plant: $20,000

Add dividend income received: $10,000

Add discount allowed: $500

Add discount on issue of shares written off: $500

Add goodwill written off: $12,000

Funds from operation = Net profit + Depreciation - Loss on sale of building + Gain on sale of plant + Dividend income received + Discount allowed + Discount on issue of shares written off + Goodwill written off

Funds from operation = $52,000 + $40,000 - $10,000 + $20,000 + $10,000 + $500 + $500 + $12,000

Funds from operation = $125,000

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For each of the following assets, indicate which of the monetary aggregates M2, M2+, and M3 includes them. a. Currency is included in [hm only M2. only M3 none of M2, M2+, and M3. M2, M2+, and M3. only M2+ and M3. only M2 + only M2 and M2 + only M2 and M3.

Answers

Currency is included in M2 and M3.

Currency is included in the definition of M2 and M3. M2 is defined as M1 (which includes currency) plus savings deposits, small-time deposits, and retail money market mutual funds. M3 is defined as M2 plus large time deposits, institutional money market mutual funds, repurchase agreements, and Eurodollars.

M2: Currency is included in M2 because M2 is defined as M1 plus savings deposits, small-time deposits, and retail money market mutual funds. M1 includes currency (i.e., notes and coins in circulation) and demand deposits (i.e., checking accounts). Therefore, the currency is part of M2. M3: Currency is also included in M3 because M3 is defined as M2 plus large-time deposits, institutional money market mutual funds, repurchase agreements, and Eurodollars. Since M2 has currency, M3 also includes currency. In summary, the currency is included in both M2 and M3.
Main answer: For the asset "currency," it is included in M2, M2+, and M3 a. Currency - This refers to physical notes and coins in circulation. Since currency is the most liquid form of asset, it is included in all monetary aggregates: M2, M2+, and M3. Each of these aggregates contains currency and other assets with varying degrees of liquidity.

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What do you understand by the word voluntary disclosure where financial statements are prepared to the shareholders?
Select one:
a. These are disclosures required for legal purposes
b. These are financial disclosures required by the accounting standards
c. These are disclosures required by potential investors
d. These are deliberate attempt by management or other custodians of resources to provide factual material and credible information needed for proper evaluation farms financial statement

Answers

The term voluntary disclosure where financial statements are prepared to the shareholders means "these are deliberate attempts by management or other custodians of resources to provide factual material and credible information needed for proper evaluation farms financial statement".

The practice of management or other resource custodians offering additional information or disclosures outside of what is legally required or stipulated by accounting rules is referred to as voluntary disclosure.

Additional information including financial performance, risk factors, strategic initiatives, non-financial performance indicators, or any other information that may assist shareholders in making knowledgeable decisions, can be included in this voluntary disclosure.

It aims to increase openness, foster confidence, and show management's dedication to giving shareholders accurate and timely information.

Therefore, the correct option is D.

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"In the absence of market imperfections and swap externalities, swaps are a zero-sum game such that the QSD (quality spread differential) cannot be exploited for economic gain, that is, the QSD cannot be arbitraged." In the light of this statement, briefly outline and explain possible reasons other than arbitrage that might explain why the QSD exists.

Answers

Non-arbitrage factors such as transaction costs, regulatory constraints, liquidity risks, and information asymmetry may contribute to the existence of the quality spread differential (QSD) beyond pure arbitrage opportunities.

While the absence of arbitrage opportunities suggests that the QSD cannot be exploited for economic gain, other factors such as transaction costs, regulatory restrictions, liquidity risks, and information asymmetry may impact the QSD. Transaction costs, such as trading fees and bid-ask spreads, can impede arbitrage activities.

Regulatory constraints, such as restrictions on short-selling or capital controls, can limit market participants' ability to exploit QSD. Additionally, liquidity risks and limited availability of counterparties can further hinder arbitrage. Information asymmetry, where certain market participants possess private information, can create imbalances that contribute to the persistence of the QSD despite the absence of pure arbitrage.

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State first whether each is TRUE/FALSE/UNCERTAIN and then briefly justify your answer.
In a closed economy where wages and prices are fully flexible an increase in the money supply increases the price level by the same proportion.
In an open economy with fixed prices, a fixed exchange rate and full international capital mobility, fiscal policy is ineffective.
If the rate of inflation is increasing from one year to the next, then the unemployment rate must be higher than its long run equilibrium.

Answers

1. Given statement is TRUE because in the money supply does not necessarily lead to a proportional increase in the price level. 2. The given statement is UNCERTAIN because specific context and conditions would determine the extent to which fiscal policy is effective in influencing the economy. 3. The given statement is UNCERTAIN because there is an inverse relationship between the two in the short run.

In a closed economy with fully flexible wages and prices, an increase in the money supply does not necessarily lead to a proportional increase in the price level. The relationship between the money supply and the price level is determined by various factors, including the velocity of money, real output, and aggregate demand. The quantity theory of money suggests a direct relationship between the money supply and the price level, assuming other factors remain constant, but in reality, the relationship can be influenced by a range of economic conditions and factors.

The effectiveness of fiscal policy in an open economy with fixed prices, a fixed exchange rate, and full international capital mobility depends on various factors and circumstances. Fiscal policy can still have some impact on the economy, even with fixed prices and a fixed exchange rate, through its effects on government spending, taxation, and public debt. However, the magnitude and effectiveness of fiscal policy in such an economy might be constrained by factors such as capital flows, exchange rate stability, and the responsiveness of international investors to fiscal measures. The specific context and conditions would determine the extent to which fiscal policy is effective in influencing the economy.

The relationship between the rate of inflation and the unemployment rate is described by the Phillips curve, which suggests an inverse relationship between the two in the short run. However, the long-run Phillips curve is vertical, indicating that there is no trade-off between inflation and unemployment in the long run. In this case, the statement assumes that the long-run equilibrium level of unemployment is constant. However, changes in the rate of inflation can occur due to various factors such as changes in aggregate demand, supply shocks, or inflation expectations, which may not necessarily be directly linked to changes in the unemployment rate. Therefore, it is uncertain whether an increasing rate of inflation implies a higher unemployment rate than its long-run equilibrium.

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--The complete question is, State first whether each is TRUE/FALSE/UNCERTAIN and then briefly justify your answer.

1. In a closed economy where wages and prices are fully flexible an increase in the money supply increases the price level by the same proportion.

2. In an open economy with fixed prices, a fixed exchange rate and full international capital mobility, fiscal policy is ineffective.

3. If the rate of inflation is increasing from one year to the next, then the unemployment rate must be higher than its long run equilibrium.--

a poor floor plan is an example of which type of depreciation?

Answers

Physical depreciation is the gradual wearing down of a building or item due to normal usage and eventual aging.

Poor floor plans are generally an example of physical depreciation as they can become outdated or inefficient over time due to changes in safety standards, fashion, and advances in technology. Physical depreciation also includes an item's overall condition, which can be negatively affected by weather, flooding, or poor maintenance.

In turn, this can ultimately reduce the value of a property or item. Floor plans that lack space utilization, or homes with hard to reach areas, also can lead to physical depreciation, as these factors can be difficult for someone to overlook, and could be deemed a nuisance. Poor floor plans can also lead to physical depreciation of an item, as the efficiency and aesthetics of a property can be drastically altered.

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The first step in formulating an LP model is O a O b. determining the number of variables. writing the constraints mathematically. determining the decision variables. c. O d. understanding the problem

Answers

The first step in formulating a linear programming (LP) model is d. understanding the problem.

What is the first step in formulating an LP model?

The first step in formulating a linear programming (LP) model is d. understanding the problem.

This involves gaining a clear understanding of the objectives, constraints, and decision variables of the problem at hand.

Once the problem is comprehended, the next step is to determine the number of variables (a) and write the constraints mathematically (b). The decision variables (c) are identified after understanding the problem and determining the constraints.

These variables represent the quantities or actions that the LP model will optimize. By following this systematic approach, it becomes possible to develop an effective LP model that can be solved to find the optimal solution to the problem.

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A salesperson who receives an earnest money deposit from a buyer client must deliver the funds to the broker
a) immediately upon receipt
b) within one business day
c) within five business days
d)only if the buyer’s offer is accepted

Answers

The correct answer is b) within one business day. When a salesperson receives an earnest money deposit from a buyer client, they are responsible for delivering the funds to the broker within one business day. The earnest money deposit is a payment made by the buyer to demonstrate their serious intent to purchase the property.

It is typically held in an escrow account by the broker until the completion of the transaction. Delivering the funds to the broker promptly is essential for ensuring that the funds are properly secured and accounted for. It allows the broker to fulfill their duties in handling the funds according to legal and ethical requirements, such as depositing the funds into an appropriate escrow account and documenting the transaction.

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She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1 to 10, with 10 representing ...

Answers

Brenda's budget allows her to choose different combinations of style and gas mileage that fall within the budget line represented by the equation: 5000S + 2500G = 25000.

Let's calculate the style index (S) and gas mileage index (G) for a few combinations within Brenda's $25,000 budget using the given equations:

Let's start with a gas mileage index of 4 (G = 4):

S = (25000 - 2500*4) / 5000 = 3

So, when G = 4, S = 3.

Now, let's try a style index of 7 (S = 7):

G = (25000 - 5000*7) / 2500 = 6

Therefore, when S = 7, G = 6.

These calculations demonstrate how we can find specific combinations of style and gas mileage within Brenda's budget of $25,000. The first example shows that if Brenda chooses a car with a gas mileage index of 4, she can have a style index of 3. In the second example, if she prefers a style index of 7, the corresponding gas mileage index would be 6.

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---- The question is inappropriate, the complete question is:

Brenda wants to buy a new car and has a budget of $25,000. She has just found a magazine that assigns each car an index for styling and an index for gas mileage. Each index runs from 1-10, with 10 representing either the most styling or the best gas mileage. While looking at the list of cars, Brenda observes that on average, as the style index increases by one unit, the price of the car increases by $5000. She also observes that as the gas-mileage index rises by one unit, the price of the car increases by $2500. Illustrate the various combinations of style (S) and gas mileage (G) that Brenda could select with her $25,000 budget. Place gas mileage on the horizontal axis. ----

In order to calculate depreciation on an asset using straight-line method, which of the following must be known about the asset?
a. Its acquisition cost
b. Its estimated salvage value
c. Its estimated useful life
d. All the above must be known.

Answers

The best option is option d that is all the above must be known. When using the straight-line method for depreciation, it is necessary to know the acquisition cost, estimated salvage value, and estimated useful life of the asset.

The acquisition cost is the initial cost of the asset, which includes all expenses related to its purchase and preparation for use. The estimated salvage value is the expected value of the asset at the end of its useful life, which represents the amount that can be obtained by selling the asset. The estimated useful life is the expected period of time that the asset will be in use, after which it will no longer be useful. By knowing these three factors, the straight-line method can be used to calculate the depreciation expense for each year of the asset's useful life. This method evenly distributes the cost of the asset over its useful life, resulting in a constant depreciation expense each year. when calculating depreciation using the straight-line method, it is important to know the acquisition cost, estimated salvage value, and estimated useful life of the asset. By having this information, businesses can accurately allocate the cost of the asset over its useful life and properly reflect its value in their financial statements.

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When Pappa's Pies decreases the price of pies from R40 to R30, the quantity of the pies demanded increases from 800 to 1 200. Calculate the price elasticity of demand for pies at Pappa's Pies for this price range. Use the formula for arc elasticity. (Ignore the negative sign and round off to 2 decimal places).

Answers

To calculate the price elasticity of demand using the arc elasticity formula, we need the initial price (P1), the final price (P2), the initial quantity demanded (Q1), and the final quantity demanded (Q2).

Given:

Initial price (P1) = R40

Final price (P2) = R30

Initial quantity demanded (Q1) = 800

Final quantity demanded (Q2) = 1200

Using the arc elasticity formula:

Elasticity = ((Q2 - Q1) / ((Q2 + Q1) / 2)) / ((P2 - P1) / ((P2 + P1) / 2))

Calculating the values and plugging them into the formula:

Elasticity = ((1200 - 800) / ((1200 + 800) / 2)) / ((30 - 40) / ((30 + 40) / 2))

          = (400 / 1000) / (-10 / 35)

          = 0.4 / (-0.2857)

Rounding to 2 decimal places:

Elasticity ≈ -1.40

The price elasticity of demand for pies at Pappa's Pies, within this price range, is pproximately a-1.40. The negative sign indicates that the demand is elastic, meaning that a decrease in price resulted in a proportionally larger increase in quantity demanded.

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Accounting Analysis Discussion:
Would you recommend the Securities and Exchange Commission require the use of sparklines on the face of the financial statements? Why or why not?

Answers

No, I would not recommend the Securities and Exchange Commission (SEC) to require the use of sparklines on the face of the financial statements.

Clarity and Simplicity: Financial statements are primarily designed to present financial information in a clear and concise manner. While sparklines can be visually appealing, they may add unnecessary complexity to the financial statements. Sparklines are small data charts that display trends over time, and their inclusion on the face of the financial statements may introduce distractions and make it more challenging for users to focus on the key financial information.Standardization and Comparability: Financial statements are widely used by investors, analysts, and other stakeholders to evaluate the financial health and performance of a company. Requiring the use of sparklines could lead to inconsistencies in their implementation and interpretation. Different companies may choose to represent data trends in various ways, making it difficult to compare financial statements across different entities and industries. Maintaining standardized financial reporting practices enhances comparability and facilitates analysis.Supplementary Disclosures: While sparklines may not be suitable for the face of the financial statements, they can still be valuable as supplementary disclosures in supporting documents or management discussions and analysis. This approach allows companies to provide additional visual representations of trends and patterns without cluttering the main financial statements. Users who are interested in more detailed trend analysis can refer to these supplementary materials.User Preferences and Tools: Financial statement users have diverse preferences and analytical tools at their disposal. Requiring sparklines on the face of the financial statements assumes a universal preference for visual representations. However, some users may prefer textual explanations or have their own analytical software to generate visual representations based on the provided financial data. Allowing flexibility in how users interpret and analyze financial information enables them to utilize the tools and methods that best suit their needs.

In summary, while sparklines can be useful in presenting trends and patterns, it is not recommended to require their use on the face of the financial statements. Maintaining clarity, simplicity, standardization, and comparability of financial statements is crucial for effective financial analysis, and supplementary disclosures can be utilized for more detailed trend analysis.

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You are new CEO of a high-end retail clothing store. The company’s business strategy is to provide high-quality customer service and to provide high-quality products. The prices in the store are higher than other stores in town. You expect your employees to create a service-oriented atmosphere that customers will be willing to pay a little extra. You recognise that your sales staff is essential to your store’s success, and you want to create a system that motivates them to help create a competitive advantage for your business. Market competitive starting salaries have already established, but you have decided to allocate 10 percent of the store’s profits to use to motivate your sales staff in any way you see fit.
1 Which behavioural goals would you set for your sales staff?
2 What type of system would you set up to reward these behaviours?
3 What challenges would you be on the lookout for?
4 How would you proactively address these potential challenges to prevent them from happening?
5 On which motivational model your reward system is based, why?

Answers

1 The behavioural goals that should be established for the sales staff are cross-selling products, upselling, product knowledge, and quality service.

2 The type of system that should be established to reward these behaviours are commission system, employee perks, and bonus system.

3 The challenges that be experienced are team conflicts, unfair treatment, and resentment from other employees.

4 The challenges can be proactively addressed by training, fairness, and communication.

5 The motivational model that your reward system is based on is Expectancy theory.

1.  The behavioural goals that can be set for the sales staff are:

a. Cross-selling products: To encourage the sales staff to cross-sell other items that go along with the primary item.

b. Upselling: To motivate the sales staff to upsell high-quality products that can bring in higher revenue.

c. Product Knowledge: To encourage the sales staff to understand the products well and be able to answer all the customer queries.

d. Quality Service: To ensure that the sales staff offers the best quality service to the customer, helping them with all their needs.

2. To reward these behaviours, the following systems can be set up:

a. Commission System: To motivate the sales staff to sell more, a commission system can be put in place. The staff can receive a percentage of the total revenue they generate.

b. Employee Perks: To motivate the staff, certain perks like discounts on products can be offered.

c. Bonus System: To encourage the staff to achieve more, bonuses can be offered for meeting or exceeding targets.

3. The challenges that can be faced when implementing the reward system are:

a. Team conflicts

b. Unfair treatment

c. Resentment from other employees

4. To address these potential challenges, the following can be done:

a. Training: Provide training to all staff members to prevent team conflicts.

b. Fairness: Ensure that the rewards system is fair and is based on the individual employee's performance.

c. Communication: Communicate the importance of the reward system and the reason behind it.

5. The motivational model that the reward system is based on is the Expectancy theory. It is based on the idea that people are motivated when they believe that their effort will lead to a good performance, and good performance will lead to a good reward. The reward system is created to motivate the employees to work harder, leading to better performance and, in turn, better rewards.

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​(Yield to​ maturity) Abner​ Corporation's bonds mature
in
17
years and pay
12
percent interest annually. If you purchase the bonds for
​$950
​,
what is your yield to​ maturity?

Answers

The yield to maturity for Abner Corporation's bonds, purchased for $950, cannot be determined without additional information such as the bond's coupon payments and the market value at maturity.

What is the yield to maturity for Abner Corporation's bonds with a 17-year maturity and a 12% annual interest rate if purchased for $950?

The yield to maturity (YTM) represents the total return an investor can expect to receive from a bond if held until its maturity date.

It takes into account the bond's purchase price, coupon rate, time to maturity, and any potential capital gains or losses.

In the given scenario, Abner Corporation's bonds have a maturity period of 17 years and an annual interest rate of 12%.

The investor purchases these bonds for $950.

The yield to maturity is the rate of return that equates the present value of the bond's future cash flows (coupon payments and principal) with the purchase price.

To calculate the YTM, a financial calculator or software can be used, or an iterative method can be employed.

The YTM represents the effective interest rate the investor will earn if they hold the bond until maturity.

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2. data below shows the relationship between the price of goods X and quantity demand of goods X, Y and Z
Price for
Quantity
Income
goods X
Demand
(RM)
(RM)
Goods X
Goods Y
Goods Z
1
120
35
20
2000
2
90
40
20
1500
3
60
45
20
1000
4
30
50
20
500
a) List and explain TWO (2) factors that affecting elasticity of demand.
[4 marks] b) Calculate the price elasticity of demand for goods X when its price
increase from RM2 to RM4
[4 marks]
c) Based on your answer (b), interpret the elasticity
[2 marks]
d) Explain definition of cross price elasticity of demand
[2 marks]

Answers

a) Factors affecting demand elasticity include substitutes and necessity/luxury categorization. b) The price elasticity of demand for goods X, when its price increases from RM2 to RM4, is -0.6. c) A 1% increase in the price of goods X will lead to a 0.6% decrease in the quantity demanded. d) Cross-price elasticity measures responsiveness to price changes between goods.

Two factors that affect the elasticity of demand are,

Availability of substitutes: When there are many substitutes available for a product, consumers have more options to choose from. In such cases, the demand tends to be more elastic as consumers can easily switch to alternatives if the price of the product increases.

Necessity vs. luxury: The elasticity of demand is also influenced by whether the good is a necessity or a luxury. Necessities tend to have less elastic demand as consumers may continue to purchase them even if the price increases. On the other hand, luxury goods usually have more elastic demand as consumers can easily forgo them if the price rises.

The initial price of goods X is RM2, and the final price is RM4. The initial quantity demanded is 90, and the final quantity demanded is 30. Using the formula for price elasticity of demand:

Price elasticity of demand = (Percentage change in quantity demanded) / (Percentage change in price)

Percentage change in quantity demanded = [(Final quantity - Initial quantity) / Initial quantity] * 100%

= [(30 - 90) / 90] * 100%

= -60%

Percentage change in price = [(Final price - Initial price) / Initial price] * 100%

= [(4 - 2) / 2] * 100%

= 100%

Price elasticity of demand = (-60% / 100%) = -0.6

The price elasticity of demand for goods X is -0.6. This means that a 1% increase in the price of goods X will result in a 0.6% decrease in the quantity demanded. The demand for goods X is relatively inelastic, indicating that consumers are less responsive to price changes.

Cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to changes in the price of another good. It is calculated using the formula:

Cross-price elasticity of demand = (Percentage change in quantity demanded of one good) / (Percentage change in price of another good)

It helps determine the degree of substitutability or complementarity between two goods. If the cross-price elasticity is positive, the goods are substitutes, meaning an increase in the price of one good leads to an increase in the quantity demanded of the other.

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Exercise 8.10 (Consumption Baskets and PPP Exchange Rates) Following up with the theme of exercise 8.9, suppose that the table of quantities and prices is now given by United States Argentina Good Quantity Price Quantity Price Grain 10 1 10 1 Energy 10 2 10 2 Again, U.S. prices are expressed in dollars and Argentine prices in pesos. The typical consumption basket in the United States contains 1 unit of each good, while the typical consumption basket in Argentina contains 1.5 units of grain and 0.5 units of energy. Both goods are freely traded internationally and the law of one price holds for each type of good. Calculate the dollar value of GDP in Argentina in the following alternative ways: 1. At market exchange rates. 2. At PPP exchange rates using for each country its own basket. 3. At PPP exchange rates using the U.S. basket. 4. At PPP exchange rates using the Argentine basket.

Answers

The dollar value of GDP in Argentina, calculated in the given alternative ways, is $30.

To calculate the dollar value of GDP in Argentina in the given alternative ways, we need to multiply the quantities of goods produced in Argentina by their respective prices, converting the prices to dollars using the exchange rates.

At market exchange rates:

GDP in Argentina = (Quantity of Grain in Argentina × Price of Grain in Argentina) + (Quantity of Energy in Argentina × Price of Energy in Argentina)

GDP in Argentina = (10 × 1) + (10 × 2) = 10 + 20 = $30

At PPP exchange rates using each country's own basket:

GDP in Argentina = (Quantity of Grain in Argentina × Price of Grain in Argentina) + (Quantity of Energy in Argentina × Price of Energy in Argentina)

GDP in Argentina = (10 × 1) + (10 × 2) = 10 + 20 = $30

At PPP exchange rates using the U.S. basket:

GDP in Argentina = (Quantity of Grain in Argentina × Price of Grain in the U.S.) + (Quantity of Energy in Argentina × Price of Energy in the U.S.)

GDP in Argentina = (10 × 1) + (10 × 2) = 10 + 20 = $30

At PPP exchange rates using the Argentine basket:

GDP in Argentina = (Quantity of Grain in Argentina × Price of Grain in Argentina) + (Quantity of Energy in Argentina × Price of Energy in Argentina)

GDP in Argentina = (10 × 1) + (10 × 2) = 10 + 20 = $30

In all the alternative ways, the dollar value of GDP in Argentina is $30.

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7. Stock quotes Smith Enterprises recently was profiled on a financial information website and touted as a "hot" growth stock. You acquired the stock quote shown here from that website. Smith Enterprises (NASDAQ: SME) Last Trade: 47.22-51.96 Day's Range: 51.63 4:00 PM ET 52wk Range: 25.48-60.71 Trade Time: One-Day Stock Return: 11.25% Volume: 1,419,317 Prev. Close: 46.41 Avg. Vol. (3m): 1,921,518 Open: 47.25 Market Cap: 1.638 Bid: N/A P/E (tm): 27.02 Asic N/A EPS (ttm): ly Target Est: 55.40 Div. & Yield: 0.20 (0.40%) The last trade time is shown to be at 4:00 PM Eastern Time. The abbreviation "ttm" stands for "trailing twelve months," and the number shown reflects data from the previous 12 months. The abbreviation "3m" reflects data from the previous 3 months. What exchange does Smith Enterprises trade on? O NASDAQ OAMEX O FTSE DAX O SME What is Smith's earnings per share (EPS) for the trailling 12 months? O $1.67 O $2.19 FTSE O DAX OSME What is Smith's earnings per share (EPS) for the trailing 12 months? O $1.67 O $2.19 O $1.91 O $1.75 O $2.14 How much did the price increase today over yesterday's closing price? O $5.01 O$5.57 O $5.64 O $5.15 O $5.22 How heavy was the trading of Smith's stock today relative to the normal level of trading? O Average trading O Relatively heavy trading O Relatively light trading Grade It Now

Answers

Smith Enterprises is listed on the NASDAQ stock market.

The EPS of the company over the last 12 months stands at $2. 19

Today's closing price saw a rise of $5. 22 compared to yesterday's figure.

What is the trading activity?

The trading activity for this particular period, which amounted to 1,419,317, is significantly higher than its average trading level.

The closing price pertains to the final transaction value of a financial asset, such as a bond, stock, or commodity, at the conclusion of a market session.

It denotes the concluding amount at which the asset was bought or sold prior to the end of the trading day. The final price of an asset is typically a critical factor in evaluating its overall success and can significantly impact investment choices and daily profits.

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Consider the following demand curve: P = Q⁻ᵃ where 1 > a > 0. What would be the associated marginal revenue curve? a. MR = 2Q⁻ᵃ. b. MR = 2Q⁻ᵃ⁻¹. c. MR = (1-a)Q⁻ᵃ. d. None of the above.

Answers

The correct answer is (c) MR = (1-a)Q⁻ᵃ.

To find the marginal revenue curve associated with a demand curve of P = Q⁻ᵃ, we first need to find the total revenue (TR) function. TR = P x Q = Q⁻ᵃ x Q = Q^(1-a) Next, we take the derivative of TR with respect to Q to get the marginal revenue (MR) function:  MR = d(TR)/d(Q) = (1-a)Q^(-a-1) Therefore, the associated marginal revenue curve is (c) MR = (1-a)Q⁻ᵃ.

The concept of marginal revenue is important in economics because it helps firms determine how much they should produce and at what price. Marginal revenue is the additional revenue generated by producing one more unit of output. In order to calculate marginal revenue, we need to find the total revenue function first. The total revenue function is the product of price and quantity:  TR = P x Q In this case, the demand curve is given as P = Q⁻ᵃ. Therefore, we can substitute this equation into the TR function to get: TR = (Q⁻ᵃ) x Q = Q^(1-a) Next, we take the derivative of the total revenue function with respect to quantity to obtain the marginal revenue function:  MR = d(TR)/d(Q) Using the power rule of differentiation, we get:  MR = (1-a)Q^(-a-1) Therefore, the associated marginal revenue curve is (c) MR = (1-a)Q⁻ᵃ.

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a manufacturer produces both widgets and gadgets. widgets generate a profit of $75 each and gadgets have a profit margin of $40each. to produce each item, a setup cost is incurred. this setup cost is $500 for widgets and $300 for gadgets. widgets consume 8 units of raw material a and 1 unit of raw material b. gadgets consume 6 units of raw material a and 2 units of raw material b. each day, the manufacturer has 500 units of each raw material available. assume that it is possible to produce fractional quantities of widgets and gadgets.

Answers

We can solve this linear programming problem to find the optimal values of W and G that maximize the profit while satisfying the given constraints.

To optimize the production and maximize profit, we need to determine the number of widgets and gadgets to produce each day, taking into account the profit margins, setup costs, and raw material constraints.

Let's assume:

Number of widgets produced per day: W

Number of gadgets produced per day: G

Profit from widgets: $75 each

Profit from gadgets: $40 each

Setup cost for widgets: $500

Setup cost for gadgets: $300

Raw material A available: 500 units

Raw material B available: 500 units

Raw material consumption per widget: 8 units of A and 1 unit of B

Raw material consumption per gadget: 6 units of A and 2 units of B

To maximize profit, we can set up the following objective function:

Maximize Profit = (Profit from widgets * W) + (Profit from gadgets * G)

Subject to the following constraints:

Setup cost constraint: (Setup cost for widgets * W) + (Setup cost for gadgets * G) ≤ Total setup cost available

Raw material A constraint: (Raw material consumption per widget * W) + (Raw material consumption per gadget * G) ≤ Raw material A available

Raw material B constraint: (Raw material consumption per widget * W) + (Raw material consumption per gadget * G) ≤ Raw material B available

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The cash flow direct method calculates cash generated from operations from Select one: a. operating profit b. changes in working capital 0 c analysis of all receipts and payments relating to operating activities d. analysis of the changes in cash and overdraft levels

Answers

The cash flow direct method calculates cash generated from operations by analyzing all receipts and payments relating to operating activities. The correct option is c. analysis of all receipts and payments relating to operating activities.

What is The cash flow method?

The cash flow direct method is a technique used to determine the cash generated from operating activities within a company. It involves analyzing all receipts and payments directly associated with the company's day-to-day operations.

Under the direct method, the cash flow statement categorizes cash inflows and outflows into three main sections: operating activities, investing activities, and financing activities.

The focus here is on the operating activities section, which reflects the cash generated or used in the company's core operations.

The cash flow direct method provides a more transparent view of a company's cash flows from operating activities, as it focuses on the actual cash receipts and payments, enabling a more accurate assessment of the company's liquidity and cash generation capabilities.

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Which of the following statement is NOT correct? Your Answer here >>> a) Higher dividend payout ratio increases AFN (additional funds needed). b) Higher profit margin decreases AFN. c) Higher capital intensity ratio increases AFN. d) Pay suppliers in 60 days rather than 30 days increases AFN. ribing problems with ROE (return on

Answers

The statement that is NOT correct is d) Pay suppliers in 60 days rather than 30 days increases AFN. This statement is not correct because delaying payments to suppliers actually decreases AFN as it provides more time for the company to use its cash for other investments.

The other statements are correct and can be explained as follows:

a) Higher dividend payout ratio increases AFN because it reduces the amount of retained earnings that can be used for investment, thus increasing the need for additional funds.

b) Higher profit margin decreases AFN because it generates more cash from operations, reducing the need for external financing.

c) Higher capital intensity ratio increases AFN because it indicates that more assets are required to generate each unit of sales, increasing the need for additional funds.

Overall, understanding the relationship between these factors and AFN is important for a company to effectively manage its financial needs and avoid any ribing problems with ROE (return on equity).

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one implication of the fact that profit functions are convex in prices is that firms will always prefer:

Answers

One implication of the fact that profit functions are convex in prices is that firms will always prefer input and output prices that fluctuate about a given level.

Input prices include all costs associated with producing a good and service. The output is a completed good or service, and the input is everything that goes to making the good or service. Land or the cost of leasing or owning a manufacturing space are examples of input prices.

On the other hand, output price refers to the price of the firm's finished products; thus, it is the price of the product after processing. Another distinction is that the input cost influences the firm's expenses, whereas the output influences the firm's revenue.

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Create a market positioning map (MPM) for jetblue airlines and
at least its two (2) major competitors. Discuss the consumer
perception of the companies’ products, services, and marketing
strategies.

Answers

To create a market positioning map, you would typically plot two key attributes or dimensions that are important to consumers, such as price, luxury, customer service, or convenience, on the x and y-axis.

What is Market Positioning Map?

When discussing consumer perception of the companies' products, services, and marketing strategies, consider factors such as:

Product and ServicesPrice and ValueMarketing Strategies

In the map above, each airline (JetBlue and its competitors) would be positioned on the map based on how consumers perceive them in terms of these attributes.

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Awal Co. has a proposed project that will generate sales of 976units annually at a selling price of $23 each The fixed costs are $14204 and the variable costs per unit are $5.99 The project requires $29227 of fixed assets that will be depreciated on a straight line basis to a zero bock value over the 6-year site of the project. The salvage value of the fixed assets is 5,100 and the tax rate is 39 percent. What is the operating cash flow?

Answers

For Awal Co.  the operating cash flow for the project is $6,627.10.

Sales revenue = 976 units × $23/unit = $22,448

Variable costs = 976 units × $5.99/unit = $5,840.24

Fixed costs = $14,204

Operating income (EBIT) = Sales revenue - Variable costs - Fixed costs

Operating income (EBIT) = $22,448 - $5,840.24 - $14,204

Operating income (EBIT) = $2,403.76

fixed assets are depreciated on a straight-line basis to a zero book value over 6 years

Depreciation expense = (Fixed assets cost - Salvage value) / Project life

Depreciation expense = ($29,227 - $5,100) / 6

Depreciation expense = $3,712.83 per year

Taxable income = Operating income - Depreciation expense

Taxable income = $2,403.76 - $3,712.83

Taxable income = -$1,309.07

Taxes = Taxable income × Tax rate

Taxes = -$1,309.07 × 39%

Taxes = -$510.51 (tax benefit due to the loss)

Operating cash flow = EBIT + Depreciation expense - Taxes

Operating cash flow = $2,403.76 + $3,712.83 - (-$510.51)

Operating cash flow = $2,403.76 + $3,712.83 + $510.51

Operating cash flow = $6,627.10

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