These criticisms are reasonable concerns when considering the IS-LM model.
a) The IS equation is derived by equating total output (Y) to total demand (C + I + G), while the LM equation is obtained by equating real money demand to real money supply in Utopia.
b) Given a supply of capital and labor of 2000 and a nominal money supply of 4992, the long-run values of output, consumption, investment, real interest rate, public saving, private saving, national saving, and price level can be determined based on the equilibrium conditions in the IS-LM model.
c) Lowering net taxes by 300 and using new money to cover the deficit in Utopia would result in changes to output, consumption, investment, real interest rate, public saving, private saving, national saving, and price level in both the short-run and long-run, following the IS-LM equilibrium.
d) Lowering taxes by 300 and fully financing the deficit with newly printed money in Utopia, assuming full-employment, would lead to adjustments in output, consumption, investment, real interest rate, public saving, private saving, national saving, and price level in the short-run and long-run, determined by the IS-LM equilibrium.
e) The IS-LM model can be used to analyze the prominent economist's criticisms regarding the aggressive increase in the money supply in Utopia, and their concerns about high inflation and discouragement of physical capital investment, providing insights into the reasonableness of these arguments.
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max, nat, mia, and river go on a road trip deciding to split all the costs four ways: max spends $785.05
nat spends $42.20
mia spends $888.24
river spends $598.81
how much money does each person owe each other?
show your work.
how much money each person owes or is owed, we need to find the average cost per person and then determine the difference between each person's expenses and the average cost.
First, let's calculate the total expenses: Total expenses = Max's expenses + Nat's expenses + Mia's expenses + River's expenses Total expenses = $785.05 + $42.20 + $888.24 + $598.81 Total expenses = $2,314.30 Next, let's calculate the average cost per person: Average cost per person = each person owes or is owed by subtracting their individual expenses from the average cost per person: Max's share: $578.57 - $785.05 = -$206.48 (Max is owed $206.48) Nat's share: $578.57 - $42.20 = $536.37 (Nat owes $536.37) Mia's share: $578.57 - $888.24 = -$309.67 (Mia is owed $309.67) River's share: $578.57 - $598.81 = -$20.24 (River is owed $20.24) To summarize: Max is owed $206.48 Nat owes $536.37 Mia is owed $309.67 River is owed $20.24 Please note that the negative sign indicates that a person is owed money, while a positive sign indicates that a person owes money.
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What do you understand by cost drivers? What is variable and fixed cost? How do you differentiate between the two of them?
Cost drivers are the reasons or factors that lead to the creation of costs for an organization. The cost driver concept is used to allocate costs to products and services and the process of identifying, analyzing, and managing cost drivers is called cost management.
Variable costs are expenses that fluctuate in proportion to the output level of a company. They are incurred as the level of output changes, and they are constant on a per-unit basis. Variable costs are direct costs that vary based on the production level and are most often measured as a percentage of sales. Fixed costs are costs that remain constant regardless of the output level. The costs incurred by a company that does not vary based on the number of goods or services produced are referred to as fixed costs. Fixed costs are generally calculated over a specific time period, such as a month or year. In a nutshell, the primary difference between fixed and variable costs is that fixed costs do not change with variations in output, while variable costs do. Variable costs are incurred only when a product is sold or when a service is provided, whereas fixed costs remain constant, irrespective of the volume of products or services produced and sold.
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Which of the following statements regarding accounting systems is not true?
Select one:
Large organisations will find simple accounting system hard to satisfy their needs.
ERP systems are also suitable for small organisations.
Medium-sized organisations are better off using mid-range accounting systems.
None of the options is correct.
The statement "None of the options is correct" is not true regarding accounting systems.
Each statement provided in the options presents a viewpoint about accounting systems, and one of them is incorrect. While large organizations may indeed find simple accounting systems insufficient to meet their needs, ERP systems can be suitable for small organizations due to their scalability and customization options. On the other hand, medium-sized organizations may benefit from using mid-range accounting systems specifically tailored to their size and requirements.
Therefore, the statement "None of the options is correct" does not accurately represent the differences in accounting system suitability based on organization size. It is important to consider the specific needs and characteristics of an organization when choosing an accounting system that aligns with its size, complexity, and operational requirements. Hence, the correct answer is "None of the options is correct."
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Dr Nick would like to buy a new car-Tesla worth s7,ooo, but he can only afford a payment of
s900 per month.Tesla has offered Nick a seven-year loan with interest at 4% per year compounded monthly.
Use this information to answer the questions that follow
How much money can Nick afford to borrow from Tesla?
Identify the type of calculation you need to perform to answer this question. Is it Present Value. Future Value. Amortisation payment. or Sinking Fund payment? Then perform that calculation showing all your working out.
================================
For full marks, show the following steps:
Modelling (4.5 marks)-list data given,identify unknown(s), identify relevant equation(s) Solving(2 marks)-find the required quantity
Interpretina (0.5 mark)-aive the answerin words
To determine how much money Nick can afford to borrow from Tesla, we need to calculate the Present Value (PV) of the loan that corresponds to the monthly payment he can afford.
The formula for calculating the Present Value (PV) of a loan with monthly compounding is:
PV = PMT * ((1 - (1 + r/m)^(-n*m)) / (r/m))
PMT = s900
n = 84 months
r = 4% = 0.04 (decimal)
m = 12
PV = s900 * ((1 - (1 + 0.04/12)^(-84*12)) / (0.04/12))
PV = s900 * ((1 - (1.00333333333)^(-1008)) / (0.00333333333))
PV ≈ s62,084.64
Therefore, Nick can afford to borrow approximately s62,084.64 from Tesla.
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A middle-level manager of the client is addicted to gambling. This fraud risk factor would possibly lead to: Select one: a. Fraudulent financial reporting b. Misappropriation of assets
b. Misappropriation of assets .a. Fraudulent financial reporting b. Misappropriation of assets
Gambling addiction is more closely associated with the misappropriation of assets rather than fraudulent financial reporting. In this case, the addicted manager may engage in embezzlement or theft of company funds to support their gambling habit. This represents a risk to the company's assets, as the manager may misuse or divert resources for personal gain, leading to potential financial losses for the organization.
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True or False? Under the provisions of Medicare Access and CHIP Reauthorization Act (MACRA), the Sustainable Growth Rate formula used
to calculate Medicare payments to physicians is not be used anymore.
O True
O False
The given statement "Under provisions of MACRA, SGR formula used to calculate Medicare payments to physicians has been eliminated." is true because SGR was a formula linked Medicare payment rates to growth of economy.
However, the SGR formula was widely criticized as it frequently led to scheduled cuts in Medicare reimbursement rates, which were often overridden by Congress through temporary patches.
MACRA, enacted in 2015, replaced the SGR formula with a new payment system called the Quality Payment Program (QPP). The QPP aims to shift Medicare payments towards a value-based model that emphasizes quality of care and patient outcomes.
It offers two payment tracks for eligible clinicians: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).
By replacing the SGR formula with the QPP, MACRA sought to provide stability and promote healthcare delivery reform. The focus is now on incentivizing value-based care, rewarding quality, and encouraging participation in alternative payment models that align with improved patient outcomes and cost-efficiency.
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Sara Hall is the production manager of a specialty toy manufacturer. The business has grown significantly over the past several years. As the company grows, Sara has found it more difficult to manage all the various activities of purchasing, production and quality control. In addition, the accounting department requires more and more feedback each month as costs rise in the growing business. Hall attended a manufacturing conference where she heard about budgeting. The toy manufacturer does not have a formal budgeting process and Sara thinks it might help the growing business. Hall is not an accountant but is putting together a report to discuss the topic of budgeting with accounting. Hall has done some studies on the current production processes. She has found that the company can produce a maximum number of toys each month, but never actually reaches that level of production. One of the areas that has become a significant issue in the growing business is stock- outs. Although Hall has been increasing the number of units produced each month, the toy manufacturer's sales department complains that they run out of toys at the beginning of each month. The sales department has provided the following projections for sales over the next quarter. Anticipated toy sales in units October 10,000 November 12,000 December 15,000 Hall has determined that the production should reach a level so that there will be an ending inventory equal to 30% of the next month's sales. Required: 1. Identify and explain four characteristics that could make this company's budgeting process successful. 2. Describe how this business should differentiate between ideal standards and currently attainable standards.
Characteristics for a successful budgeting process in the company Collaboration and Communication: manufacturer Successful budgeting.
requires between different departments. such as purchasing, production. Quality control, and accounting Realistic and Flexible Targets: The budgeting process should set realistic targets based on market demand, production capacity, and resource availability. Accurate Financial Data: The budgeting process relies on accurate financial data and cost information Regular Monitoring and Performance manager Evaluation: Continuous monitoring and evaluation of budget performance against actual results is essential for identifying variances and taking Differentiating between ideal standards and currently attainable standards: Ideal standards manufacturing represent the best possible performance levels that can be achieved under perfect conditions. They serve as benchmarks for long-term goals and continuous improvement. Currently the business can establish more realistic production targets that align with the company's current capabilities.
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A company has paid a dividend of $50 this year, the share holders expect the company to grow at 2.8% per year in the foreseeable future. If the expected rate of return is 5% then what should be the share price per share?
The expected share price per share of a company can be calculated by using the Gordon growth model. The formula for the Gordon growth model is:
Price of the share = Dividend paid / (Required rate of return - Growth rate)Given that the company has paid a dividend of $50 this year, the share holders expect the company to grow at 2.8% per year in the foreseeable future and the expected rate of return is 5%. Substituting the values in the formula:Price of the share = $50 / (0.05 - 0.028)Price of the share = $50 / 0.022Price of the share = $2272.73Thus, the expected share price per share of the company is $2272.73.
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What are the triggers and barrier of Indian consumers purchasing Premium chocolate?
What and why do Indian consumers buy premium chocolate, what are the factors that lead to purchasing of Premium chocolate in Indian market?
The triggers and barriers of Indian consumers purchasing premium chocolate can be influenced by various factors. Understanding why Indian consumers buy premium chocolate .
Indian consumers' purchase of premium chocolate is triggered by several factors. Firstly, the increasing disposable income and changing lifestyles have led to a growing desire for indulgent and luxury experiences, including premium chocolate.
Secondly, the perception of premium chocolate as a high-quality, gourmet product with superior taste and unique flavors attracts consumers seeking a premium culinary experience. Additionally, the influence of social media and advertising campaigns showcasing the exclusivity and status associated with premium chocolate can also serve as triggers for Indian consumers.
However, there are barriers that may hinder the purchase of premium chocolate. Price sensitivity is a significant factor, as premium chocolate is generally more expensive than regular chocolate options. Limited awareness and understanding of the distinct features and benefits of premium chocolate compared to regular chocolate can also be a barrier.
Cultural preferences and traditional consumption habits may play a role, as Indian consumers have a strong preference for traditional sweets and snacks. Availability and accessibility of premium chocolate brands and products in certain regions of India can also pose challenges.
To successfully tap into the Indian market, chocolate brands need to address these triggers and barriers. They should emphasize the unique qualities and taste of their premium products, educate consumers about the value proposition, and offer competitive pricing strategies that cater to different consumer segments.
Building brand awareness, engaging in targeted marketing campaigns, and expanding distribution networks to reach a wider consumer base are also essential to drive the purchase of premium chocolate in the Indian market.
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In a shifted uniform series where A is given, equivalent A is obtained by the following approach: a. (F/A,i,n) can be applied to find equivalent A. b. Find P at time 0 and apply F/P. c. find P2 at time 2 and apply (P/A,i,n). d. Find P at time 0 and apply (A/Pi, n)
To obtain the equivalent A in a shifted uniform series, the approach of finding P at time 0 and applying (A/P,i,n) can be used. This method involves determining the present worth P at time 0 and then applying the factor (A/P,i,n).
In the given options, option d aligns with this approach. By finding P at time 0 and applying (A/P,i,n), we can calculate the equivalent A in the shifted uniform series.
To elaborate, in this approach, we first determine the present worth P at time 0 using appropriate formulas. Then, we apply the factor (A/P,i,n), where i represents the interest rate and n denotes the number of periods, to find the equivalent A.
By following option d and using the (A/P,i,n) factor after finding P at time 0, we can accurately determine the equivalent A in the shifted uniform series.
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The Yard Company is located in Toronto, Ontario. The company's static budget at 5,000 units of production includes $50,000 for direct labour and $20,000 for direct materials. Total fixed costs are $25,000. Calculate the company's flexible budget report if 6,000 units are produced and sold? Why would the company use the flexible budget?
The answer is , The Yard Company's flexible budget report is $109,000.
Why would the company use the flexible budget?Calculation of flexible budget report if 6,000 units are produced and sold.
Direct labour = $50,000
Direct materials = $20,000
Variable costs per unit = ($50,000 + $20,000)/5,000 units
= $14
Fixed costs = $25,000
Flexible budget report = Variable costs + Fixed costs
Variable costs = Variable costs per unit × units produced and sold
= $14 × 6,000 units
= $84,000
Flexible budget report = Variable costs + Fixed costs
= $84,000 + $25,000
= $109,000
Therefore, The Yard Company's flexible budget report is $109,000.
Why would the company use the flexible budget?
A flexible budget is useful because it adjusts to changing business conditions. A flexible budget is a budget that adjusts for changes in output volume or sales.It takes into account that some expenses vary depending on the level of output, such as direct materials and direct labour. By modifying the budget to match actual output, the company may better control costs and budgeting.To know more on Budget visit:
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Company DELTA buys 100% of the shares of Company FLOP for 800. The book value of Company FLOP is 500. At the date of acquisition, Company FLOP had developed internally a brand name that has a fair value of 100. Which of the following statements regarding the consolidated financial statements is correct:
a.The goodwill of this acquisition is 300
b.When accounting for Company FLOP the full consolidation method has to be applied
c.Since the brand name is internally generated it cannot be accounted for
d. If the brand name is accounted for, it is mandatory in IFRS to depreciate (amortize) the brand name over its useful life
The correct statement regarding the consolidated financial statements is as follows:The goodwill of this acquisition is 300.The consolidated financial statements refer to the statement that combines the financial statements of a parent company and its subsidiary.
The aim of the consolidated financial statement is to offer investors and other stakeholders an overall perspective of the financial performance of the parent company and its subsidiary.On the acquisition of a company, the difference between the cost of the acquisition and the value of the net assets of the acquired company is the goodwill. It is determined based on the price paid for the business beyond its book value. The goodwill amount must be entered in the consolidated balance sheet as an asset.
The purchase method is used to calculate goodwill in an acquisition. If the purchase price is higher than the fair market value, goodwill is generated in the acquisition. The goodwill is determined as the difference between the fair market value of the net assets acquired and the acquisition price. Hence, the statement “The goodwill of this acquisition is 300” is correct.
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May Ling was leading a new team at her company that consists of members from diverse background and job function. All team members get along very well except for Azmin that seems very reserve and shy. Suggest TWO (2) steps that May Ling can take to get Azmin to be more engaged in the team activities and explain why.
1. Foster an inclusive and supportive team environment: May Ling can take steps to create a team environment where all members feel valued and included.
2. Provide individual support and mentorship: May Ling can reach out to Azmin individually to understand their concerns and provide support.
Foster an inclusive and supportive team environment: May Ling can take steps to create a team environment where all members feel valued and included. She can encourage open communication, active listening, and respect for diverse perspectives. By promoting a culture of inclusivity and psychological safety, May Ling can help Azmin feel more comfortable expressing ideas and participating in team activities. This can be achieved through team-building exercises, regular check-ins, and creating opportunities for collaboration.
Provide individual support and mentorship: May Ling can reach out to Azmin individually to understand their concerns and provide support. She can schedule one-on-one meetings to discuss Azmin's role, goals, and any challenges they may be facing. May Ling can offer guidance, provide constructive feedback, and mentor Azmin to help them feel more confident and engaged within the team. By demonstrating a genuine interest in Azmin's development and offering personalized support, May Ling can help build trust and encourage Azmin to become more active in team activities.
Creating an inclusive team environment is essential to address Azmin's reserve and shy behavior. By fostering a culture of respect and openness, May Ling can encourage Azmin to feel more comfortable engaging with the team. Additionally, providing individual support and mentorship allows May Ling to address Azmin's specific needs, concerns, and challenges, which can help build their confidence and increase their engagement.
It's important for May Ling to approach Azmin with empathy, patience, and understanding, recognizing that everyone has unique personalities and communication styles. By implementing these two steps, May Ling can create an environment where Azmin feels supported, encouraged, and valued, ultimately increasing their engagement and contribution to the team.
To enhance Azmin's engagement in the team, May Ling should focus on creating an inclusive team environment and providing individual support and mentorship. By fostering a culture of respect and openness, and by addressing Azmin's specific needs, May Ling can help Azmin feel more comfortable and confident in participating in team activities. These steps will contribute to a more cohesive and collaborative team dynamic, enabling Azmin to become an active and engaged member.
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which one of the following factors would reduce the quantity of money balances that households would want to hold?
The term that would reduce the quantity of money balances that households would want to hold is an increase in the interest rate.
The increase in interest rates would reduce the amount of money that people would be willing to hold because when the interest rate is high, people would rather put their money in interest-bearing assets rather than hold it in cash.
As the interest rate rises, the opportunity cost of holding money balances rises too.
The opportunity cost is the amount of interest that could have been earned if the money had been invested in some other financial instrument.
So, people would find it unattractive to hold a large amount of money when the interest rate is high.
Therefore, an increase in the interest rate would lead to a reduction in the number of money balances that households would want to hold.
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Questions:
1. UsingthePESTLEanalysis,doacomprehensivescanningofthebusiness environment discussing in detail the threats and opportunities for Gredon Nigeria Limited
2. Basedonyouranalysisinno.1above,suggeststrategiesonhowtotake advantage of the opportunities and how to mitigate the identified threats.
3. HowcanGredonNigeriaLtdtakeadvantageofthedemographicprofileand broadband penetration in Nigeria to increase sales
1. Gredon Nigeria Limited can leverage the demographic profile and broadband penetration in Nigeria to increase sales.
Gredon Nigeria Limited can take advantage of the demographic profile and broadband penetration in Nigeria to increase sales by implementing targeted marketing strategies and embracing digital platforms. The demographic profile of Nigeria, with its large and diverse population, offers opportunities for Gredon to tailor its products and marketing campaigns to specific consumer segments. By conducting market research and understanding the preferences and needs of different demographic groups, Gredon can develop personalized offerings that resonate with their target audience. Additionally, with the increasing broadband penetration in Nigeria, the company can leverage digital platforms to reach a broader customer base. By utilizing social media marketing, influencer collaborations, and online advertising, Gredon can effectively promote its products and engage with customers. Furthermore, partnering with internet service providers or telecommunications companies can allow Gredon to explore bundled services and enhance its online presence. By capitalizing on the demographic profile and broadband penetration in Nigeria, Gredon Nigeria Limited can tap into a larger customer base, drive sales growth, and establish a strong market presence.
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Please help fast
Duration: 50 minutes. Q1. Please define "Cost Accounting"? (10p) Who are the users of financial information? (10p)
Cost accounting is a branch of accounting that focuses on the recording, analysis, and allocation of costs to aid in decision-making and cost control within an organization.
Cost accounting involves the process of collecting, analyzing, and reporting financial information related to the costs incurred in the production of goods or services. It provides detailed insights into various cost components, such as direct materials, labor, and overhead expenses, enabling management to make informed decisions and improve cost efficiency.
The users of financial information include both internal and external stakeholders. Internal users, such as managers and executives, utilize financial information to monitor and control costs, evaluate performance, and support decision-making. They rely on cost accounting reports to assess profitability, set pricing strategies, budget resources, and make strategic choices.
External users, such as investors, lenders, government agencies, and suppliers, rely on financial information to assess the financial health and performance of an organization. They use financial statements, including cost-related information, to analyze profitability, liquidity, solvency, and operational efficiency.
Cost accounting plays a crucial role in providing relevant and reliable financial information to meet the needs of various users, enabling effective management of costs and informed decision-making. It enhances transparency, aids in performance evaluation, and supports the overall financial health of an organization.
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In the second quarter of 2020, real GDP was $17.282 trillion, while potential GDP was $19.204 trillion.
The calculation for the output gap for that quarter is
A) $1.922 trillion.
B) -10%.
C) -$1.922 trillion.
D) 10%.
The correct answer is b) -10%.the output gap for the second quarter of 2020 is approximately -10% of potential gdp.
the output gap is a measure of the difference between actual gdp and potential gdp, expressed as a percentage of potential gdp. to calculate the output gap, we need to find the difference between actual gdp and potential gdp and express it as a percentage of potential gdp.
the calculation for the output gap in this case is:
output gap = (actual gdp - potential gdp) / potential gdp * 100
using the given values:
output gap = ($17.282 trillion - $19.204 trillion) / $19.204 trillion * 100
output gap = -$1.922 trillion / $19.204 trillion * 100
output gap ≈ -10%
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Domus Realty Limited has 20,000 common shares issued and outstanding at January 1, 20X4. On July 1, the company sold an additional 10,000 common shares for proceeds of $100,000. Net income for the year was $30,000. What would the earnings per share be?
O $1.20
O $4.00
O $1.00
O $3.33
Weighted average number of diluted common stocks = Number of common stock + Convertible preferred stock + [(convertible stock outstanding/Number of stock convertible)*Number of common stock]
Weighted average number of diluted common stocks = 200,000 + 20,000 + (1,000,000/$1,000)*45
Weighted average number of diluted common stocks = 200,000 + 20,000 + 45,000
Weighted average number of diluted common stocks = 265,000
Diluted earnings per share = Net income + Interest on convertible bonds / Weighted average number of diluted common stocks
Diluted earnings per share = $800,000 + ($1,000,000*10%*(1-30%) / 265,000
Diluted earnings per share = $800,000 + $70,000 / 265,000
Diluted earnings per share = $870,000 / 265,000
Diluted earnings per share = $3.283018867924528
Diluted earnings per share = $3.28
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In the essay "Emotional Energy in Business" by Warren Hilton, the author uses various people as ______ for success and achievement. fictional heroes.
In the essay "Emotional Energy in Business" by Warren Hilton, the author uses various people as "examples" or "illustrations" for success and achievement, rather than specifically referring to them as fictional heroes.
In the essay "Emotional Energy in Business" by Warren Hilton, the concept of "energy" is central to the discussion. The author emphasizes the importance of harnessing and directing one's emotional energy in order to achieve success in business. Hilton highlights the significance of positive emotional states, such as enthusiasm, determination, and optimism, in fueling productive and effective actions. He suggests that by cultivating and channeling one's energy effectively, individuals can overcome challenges, pursue their goals, and attain higher levels of accomplishment in the business realm.
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A young couple take out a loan of £200,000 from a bank, for their first house purchase. The loan is for a term of 25 years and is repayable monthly in arrears. Under the terms of the loan, the amount of each successive repayment instalment increases by £30 for the first 4 years and remains level at the amount of the 48th repayment thereafter. The bank charges an interest rate of 6% per annum nominal, convertible monthly. (i) Calculate the effective interest rate per month. [1 mark] (ii) Calculate the amount of the first monthly repayment instalment. [5 marks] (iii) Calculate the amount of loan outstanding after 10 years. [3 marks] (iv) Without doing any further calculations, explain how the amount calculated in (ii) would have altered if the interest rate had been 6% per annum effective.
We need to calculate the effective interest rate per month, the amount of the first monthly repayment installment, the outstanding loan amount after 10 years, and how the first repayment amount would have changed.
(i) The effective interest rate per month can be calculated using the formula: Effective interest rate = (1 + nominal rate/m)^m - 1, where m is the number of compounding periods in a year. In this case, the nominal rate is 6% per annum and the compounding is monthly. Plugging in the values, we can calculate the effective interest rate per month.
(ii) To calculate the amount of the first monthly repayment installment, we need to consider the increasing repayment amounts for the first 4 years. We add £30 to the previous repayment amount for the first 4 years and then use the fixed amount of the 48th repayment for the remaining period.
(iii) To calculate the outstanding loan amount after 10 years, we need to determine the number of remaining repayments and calculate the sum of their present values.
(iv) Without further calculations, we can explain how the first repayment amount would have changed if the interest rate were 6% per annum effective by considering the impact on the interest portion of the repayment. A higher effective interest rate would result in a higher interest component, which could potentially increase the first repayment amount.
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Suppose the price of gasoline per gallon is currently $5. The risk manager of Universe Airlines expects the price per gallon next year to be either $7 or $4 with equal probabilities. The company plans to buy 1 million gallons of gasoline in one year. The risk manager is concerned about future rising cost of gasoline and is considering using either futures or calls to hedge against the risk. Suppose the riskfree interest rate is 10% per annum.
a. What is the futures price of gasoline per gallon for delivery in one year?
b. What are the possible payoffs of the futures one year from now?
The possible payoffs of the futures one year from now are $0.95 or -$2.05, depending on the actual future spot price of gasoline.
a. To determine the futures price of gasoline per gallon for delivery in one year, we can use the concept of risk-neutral pricing. The futures price can be calculated as the expected future spot price of gasoline, discounted at the risk-free interest rate.
Let's calculate the futures price:
Futures Price = [P1 * (1 + r) + P2 * (1 + r)] / 2
Where:
P1 = Expected future spot price of gasoline ($7)
P2 = Expected future spot price of gasoline ($4)
r = Risk-free interest rate (10% per annum)
Substituting the values:
Futures Price = [7 * (1 + 0.10) + 4 * (1 + 0.10)] / 2
Futures Price = (7 * 1.10 + 4 * 1.10) / 2
Futures Price = (7.7 + 4.4) / 2
Futures Price = 12.1 / 2
Futures Price = $6.05
Therefore, the futures price of gasoline per gallon for delivery in one year is $6.05.
b. The possible payoffs of the futures one year from now can be determined by comparing the actual future spot price of gasoline with the futures price.
If the future spot price is $7, the payoff would be:
Payoff = Spot Price - Futures Price
Payoff = $7 - $6.05
Payoff = $0.95
If the future spot price is $4, the payoff would be:
Payoff = Spot Price - Futures Price
Payoff = $4 - $6.05
Payoff = -$2.05 (negative value indicates a loss)
Therefore, the possible payoffs of the futures one year from now are $0.95 or -$2.05, depending on the actual future spot price of gasoline.
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Philip Itd is considering a project costing N80,000. The project is expected to generate annual cash benefits of N50,000 per anum for 5 yrs before depreciation. Calculate the IRR of the project, should the project be accepted if the company's cost of capital is 20%.\
The Internal Rate of Return (IRR) of the project is approximately 26.84%. Since the company's cost of capital is 20%, the IRR exceeds the cost of capital, indicating that the project should be accepted.
To calculate the IRR, we need to find the discount rate at which the present value of the cash inflows equals the initial cost of the project. In this case, the project costs N80,000 and generates annual cash benefits of N50,000 for 5 years before depreciation.
To determine the IRR, we can set up the following equation:
N80,000 = N50,000 / (1+r)^1 + N50,000 / (1+r)^2 + N50,000 / (1+r)^3 + N50,000 / (1+r)^4 + N50,000 / (1+r)^5
By solving this equation for r, the discount rate, we find that the IRR is approximately 26.84%. Since the IRR (26.84%) exceeds the company's cost of capital (20%), it indicates that the project's returns are higher than the cost of capital. Therefore, accepting the project would be a favorable decision for the company.
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T/F: narcissistic leaders may inhibit innovation because they prefer their own ideas
True, narcissistic leaders can inhibit innovation because their preference for their own ideas often leads them to dismiss or ignore input from others.
Narcissistic leaders can indeed inhibit innovation due to their preference for their own ideas. Their inflated sense of self-importance and need for admiration often lead them to dismiss or overlook input from others, including creative ideas and perspectives that may contribute to innovation. Their tendency to dominate discussions and decision-making processes can stifle open dialogue and collaboration within teams, limiting the free flow of ideas and hindering the exploration of alternative approaches.
Consequently, innovative solutions may be overshadowed or disregarded in favor of the leader's own viewpoints, resulting in missed opportunities for growth and progress.
Narcissistic leaders' strong desire for validation and control can create a toxic work environment where individuals may feel discouraged from taking risks or proposing new ideas. Employees may fear retribution or belittlement if their suggestions deviate from the leader's preferences, causing them to withhold innovative ideas or conform to the leader's vision instead of offering fresh perspectives. This fear-based atmosphere can dampen creativity and hinder the development of innovative solutions.
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Suppose blue-eyed people were banned from working. How would
this affect a nation’s
production possibilities curve?
If blue-eyed people were banned from working, it would constitute discrimination based on physical characteristics, which is unethical and goes against principles of equality and fairness. However, if we hypothetically consider the impact on a nation's production possibilities curve (PPC), we can discuss the potential economic consequences.
The production possibilities curve represents the maximum output an economy can produce with its available resources and technology. It illustrates the trade-off between producing different goods and services. Banning a specific group of people from working based on their eye color would reduce the available labor force, which could have several effects on the PPC:
1) Decrease in labor supply:
Banning blue-eyed people from working would result in a decrease in the overall labor supply. This reduction in the number of workers available to participate in production would limit the economy's capacity to produce goods and services.
2) Loss of specialized skills:
Blue-eyed people, like any other group, possess a diverse range of skills and expertise. By excluding them from the workforce, the economy would lose the contributions and unique abilities they bring. This loss of specialized skills can lead to a decrease in overall productivity and efficiency.
3) Misallocation of resources:
Banning blue-eyed people from working would lead to a misallocation of resources. Rather than allocating resources based on merit, efficiency, and productivity, resources would be allocated based on discriminatory criteria. This would hinder the optimal utilization of resources and negatively impact the overall productive capacity of the economy.
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5. The price of trade
Suppose that Greece and Austria both produce fish and stained glass. Greece's opportunity cost of producing a pane of stained glass is 3 pounds of
fish while Austria's opportunity cost of producing a pane of stained glass is 9 pounds of fish.
By comparing the opportunity cost of producing stained glass in the two countries, you can tell that ____ has a comparative advantage in the
production of stained glass and ____ has a comparative advantage in the production of fish.
Suppose that Greece and Austria consider trading stained glass and fish with each other. Greece can gain from specialization and trade as long as it
receives more than ____ of fish for each pane of stained glass it exports to Austria. Similarly, Austria can gain from trade as long as it
receives more than ____ of stained glass for each pound of fish it exports to Greece.
Based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of fish) would allow both
Austria and Greece to gain from trade? Check all that apply.
[] 8 pounds of fish per pane of stained glass
[] 4 pounds of fish per pane of stained glass
[] 17 pounds of fish per pane of stained glass
[] 2 pounds of fish per pane of stained glass
Based on the opportunity cost of producing stained glass in Greece and Austria, Greece has a comparative advantage in stained glass production, while Austria has a comparative advantage in fish production.
Greece can gain from specialization and trade as long as it receives more than 3 pounds of fish for each pane of stained glass exported to Austria, and Austria can gain from trade as long as it receives more than 9 pounds of stained glass for each pound of fish exported to Greece.
The prices of trade that would allow both countries to gain from trade are 4 pounds of fish per pane of stained glass and 2 pounds of fish per pane of stained glass.
To determine comparative advantage, we compare the opportunity cost of producing a good in two countries. In this case, Greece's opportunity cost of producing a pane of stained glass is 3 pounds of fish, while Austria's opportunity cost is 9 pounds of fish.
Comparing the opportunity costs, we can conclude that Greece has a comparative advantage in stained glass production (lower opportunity cost), and Austria has a comparative advantage in fish production (higher opportunity cost).
For Greece to gain from trade, it should receive more than its opportunity cost (3 pounds of fish) for each pane of stained glass it exports to Austria. Similarly, for Austria to gain from trade, it should receive more than its opportunity cost (9 pounds of stained glass) for each pound of fish it exports to Greece.
The prices of trade that would allow both countries to gain from trade are 4 pounds of fish per pane of stained glass and 2 pounds of fish per pane of stained glass. At these prices, Greece receives more than its opportunity cost, and Austria receives more than its opportunity cost.
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which of the following terms describe equity-indexed annuities? i investment product ii insurance product iii principal protected iv not principal protected
Equity-indexed annuities are a hybrid product that combines elements of both insurance and investment. They are primarily insurance products (ii) designed to provide principal protection (iii).
However, they also have an investment component (i) that allows the annuity's returns to be linked to the performance of a specific equity index. Therefore, while they offer potential for growth, they are not fully principal protected (iv) as the returns are subject to market fluctuations and may not guarantee a fixed rate of return.
Equity-indexed annuities are financial products that have characteristics of both insurance and investment. They are primarily considered insurance products because they provide certain protections, such as principal protection. This means that the initial investment amount is generally safeguarded, and the annuity holder will not lose the principal amount even if the underlying investments perform poorly.
However, equity-indexed annuities also have an investment component. They are linked to the performance of a specific equity index, such as the S&P 500. This means that the returns earned on the annuity are tied to the movements of the chosen index. If the index performs well, the annuity holder may receive a higher rate of return. Conversely, if the index performs poorly, the return may be lower or even zero.
It is important to note that while equity-indexed annuities offer the potential for growth, they are not fully principal protected. Unlike traditional fixed annuities where the rate of return is guaranteed, the returns of equity-indexed annuities are subject to market fluctuations. Therefore, there is a level of risk involved, as the returns may vary based on the performance of the underlying index.
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Mimi Couturier is a design company that specializes in formalwear for women. The company's fashion innovators use computer-assisted design software to create what they think women should wear. The company regularly hires industry experts to examine construction work areas to find waste and inefficiencies that can be eliminated. Its fashion innovators have expanded the number of products it offers for sale many times. However, for the last two years Mimi Couturier has lost money, and it has had to lay off some of its work force. What should the company do to avoid this occurrence in the future?
Mimi Couturier is a design company that specializes in formal wear for women. The company's fashion innovators use computer-assisted design software to create what they think women should wear. The company regularly hires industry experts to examine construction work areas to find waste and inefficiencies that can be eliminated.
However, for the last two years, Mimi Couturier has been losing money, and it has had to lay off some of its workforce.To avoid this occurrence in the future, the company should:Reduce the number of products it offers for sale. Mimi Couturier should concentrate on producing a few products that sell well.
This will enable the company to save money on production costs and increase profit margins.Conduct a thorough financial analysis of the business operations. The financial analysis should include a review of all expenses and revenue streams.
This will allow the company to identify areas where expenses can be reduced, and revenue streams increased.Improve customer service. The company should work towards improving the customer experience. This includes offering better customer service and ensuring that customers receive their orders on time. This will help to increase customer satisfaction and lead to repeat business.
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Tom has come to you for advice regarding his home mortgage. He bought a house for $1.2 million. To finance the purchase of his home, he took out a mortgage for $865,000 The interest rate on the mortgage is 3.85% (APR) and it is amortized for 25 years. Tom tells you that the replacement cost of the house is $980,000. Required:| a) Tom tells you he can pay $1,10o bi-weekly towards his mortgage. How long will it take Tom to pay off the mortgage? (5 marks) Answer: b) Explain to Tom the amount of homeowner's insurance he should buy and give your reasons. Assume his insurance company has an 8o% coinsurance factor. (2 marks) Answer:
a) Tom must make biweekly payments in order to pay off the mortgage. The annual interest rate is first divided by 12 to determine the monthly interest rate: 3.85% / 12 = 0.0321. Next, we calculate that there are 26 biweekly payments made in a year.
Tom is required to pay $1,100 every two weeks. We divide the mortgage amount by the biweekly payment amount to determine the total number of payments: $1,100 / $865,00 equals about 786.36. Tom will pay 787 every two weeks, rounded up. Since there are 26 biweekly payments in a year, we may calculate the number of years by dividing 787 by 26: 787 / 26 = approx. 30.27. Tom will therefore need to pay off the mortgage in about 30 years and 3 months. b) Tom should think about getting homeowner's insurance that is at least as much as the $980,000 replacement cost of his home. The replacement cost represents the sum required to totally reconstruct the home in the event that it is destroyed. We use the 80% coinsurance factor offered by Tom's insurance provider to calculate the coverage amount. We get at $784,000 by multiplying 80% by $980,000. Tom should therefore think about getting homeowner's insurance with a coverage limit of $784,000 or more. With this coverage, he can recover the entire replacement cost in the event of a catastrophic loss and rebuild his house without having to shell out a sizable amount of money out of pocket.
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The money spent on domestically produced final goods and services: A) is the GDP. B) appears as income to someone. C) appears in the circular flow model. D) is the GDP, appears as income to someone, and appears in the circular flow model.
The money spent on domestically produced final "goods, services" is : (a) the GDP.
When money is spent on domestically produced final goods and services, it contributes to the calculation of the Gross Domestic Product (GDP).
The GDP represents the total value of all final goods and services produced within a country's borders in a specific time period. By including all spending on final goods and services, GDP captures the overall economic activity and output of a nation.
It serves as a indicator of the economic health and size of an economy.
Therefore, the correct option is (a).
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The given question is incomplete, the complete question is
The money spent on domestically produced final goods and services:
(a) is the GDP.
(b) appears as income to someone.
(c) appears in the circular flow model.
(d) is the GDP, appears as income to someone, and appears in the circular flow model.
On December 31, 2015, Grando Company sells production equipment to Feliz Inc. for R$50,000. Grando includes a 1-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31, 2015. Grando estimates the prices to be R\$48,800 for the equipment and R$1,200 for the cost of the warranty.
Exercise Instructions
(a) Prepare the journal entry to record this transaction on December 31, 2015.
(b) Repeat the requirements for (a), assuming that in addition to the assurance warranty, Grando sold an extended warranty (service-type warranty) for an additional 2 years (2017-2018) for R\$800.
Grando Company sells production equipment to Feliz Inc. on December 31, 2015, and includes a 1-year assurance warranty service with the sale.
The total estimated price for the equipment and warranty is R$50,000, with R$48,800 allocated to the equipment and R$1,200 to the warranty. In part (a) of the exercise, we need to prepare the journal entry to record the transaction. In part (b), assuming an extended warranty is also sold for an additional 2 years (2017-2018) for R$800, we need to repeat the requirements and prepare the journal entry for the transaction.
(a) The journal entry to record the transaction on December 31, 2015, would be:
Accounts Receivable - Feliz Inc. 50,000
Sales Revenue 48,800
Unearned Warranty Revenue 1,200
Equipment 50,000
The entry recognizes the revenue from the sale of equipment and defers a portion for the warranty service.
(b) If an extended warranty is also sold for R$800, the revised journal entry on December 31, 2015, would be:
Accounts Receivable - Feliz Inc. 50,800
Sales Revenue 49,600
Unearned Warranty Revenue 1,200
Equipment 50,000
The entry now includes the revenue from the sale of the extended warranty, increasing the total revenue and adjusting the unearned warranty revenue.
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