Bond face value = $100Coupon rate = 10.80% p.a. Coupon payment =? Yield rate = 5.25% higher than 10-year Australian govt bond rateSemi-annual compounded yield = ?Maturity period = 1 June 2018 to 1 June 2021.3 years; 6 semi-annual periods Australian government bond rate = 5% p.a.Listed bonds = 1000 bondsQ1.
Semi-annual coupon rate = (10.80% / 2) = 5.40%p.a. (as coupon is paid semi-annually) Face value of bond = $100Coupon payment = Semi-annual coupon rate * Face value of bond = 5.40/100 * $100 = $5.40Therefore, the semi-annual coupon payment is $5.40.
Australian government bond rate = 5% p.a Yield rate = 5.25% + 5% = 10.25% p.a Semi-annual compounded yield rate = (1+ 10.25%) ^(1/2) – 1 = 5.04%Therefore, the semi-annual compounded yield rate is 5.04%.
Maturity period = 3 years Semi-annual periods = 6Effective semi-annual yield rate = 5.04%Face value of bond = $100Coupon payment = $5.40 per semi-annual period Number of semi-annual periods = 6The formula for Present value of annuity is: PV = A* [(1 – 1/(1+r)n)/r]Where A = Annual payment r = Interest rate per period n = Number of periods PV of interest payments = $5.40 * [(1 – 1/(1+ 5.04%)^6)/ 5.04%] = $26.729.44
Therefore, the present value of the interest payments on one bond is $26.729.44.Q4. What is the present value of the face value (principal) on one bond?Maturity period = 3 yearsSemi-annual periods = 6Effective semi-annual yield rate = 5.04%Face value of bond = $100The formula for present value of a lump sum amount is:PV = FV / (1 + r)^nWhere FV = Future valuer = interest raten = number of periodsPV of face value of bond = $100 / (1 + 5.04%)^6 = $74.03Therefore, the present value of the face value (principal) on one bond is $74.03.Q5. What is the present value of the total bond issue?Present value of the interest payments on 1 bond = $26.729.44Present value of the face value (principal) on 1 bond = $74.03Total present value of the bond issue = 1000 * ($26.729.44 + $74.03) = $26702944 + $74030 = $26776974Therefore, the present value of the total bond issue is $26,776,974.
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Consider the following premerger information about Firm A and Firm B:
Firm A Firm B
Total earnings $ 2,300 $ 700
Shares outstanding 1,000 200
Price per share $ 25 $ 29
Assume that Firm A acquires Firm B via an exchange of stock at a price of $31 for each share of B's stock. Both A and B have no debt outstanding.
a. What will the earnings per share, EPS, of Firm A be after the merger?
b. What will Firm A's price per share be after the merger if the market incorrectly analyzes this reported earnings growth (i.e., the price-earnings ratio does not change)?
c. What will the price-earnings ratio of the postmerger firm be if the market correctly analyzes the transaction?
d-1. If there are no synergy gains, what will the share price of A be after the merger?
d-2. What will the price-earnings ratio be?
d-3. What does your answer for the share price tell you about the amount A bid for B? Was it too high or too low?
The earnings per share of Firm A after the merger is $2.64. Firms A price per share after the merger is $29.26. The price-to-earnings ratio is 11.74. If there are no synergy gains, the share price of A will be $29.40. The post-merger P/E ratio is 11.14. Firm A overpaid for Firm B since the market price of the merged company did not change when there are no synergy gains.
a. After the merger, the earnings per share of Firm A will be $2.64 (($2,300 + $700) ÷ 1,000)).
In the given problem, Firm A acquires Firm B at a price of $31 per share of B's stock. And Firm A has earnings of $2,300 and 1,000 shares outstanding. Firm B has earnings of $700 and 200 shares outstanding. Since Firm A acquires Firm B, the earnings of both companies must be added.
The earnings after the merger would be $3,000 ($2,300 + $700), and the total number of shares outstanding would be 1,200 (1,000 + 200). Therefore, the EPS of Firm A after the merger would be $2.64 (($2,300 + $700) ÷ 1,000)).
b. If the market incorrectly analyzes the reported earnings growth, then Firm A's price per share after the merger would be $29.26.
The market price of Firm A's stock before the merger is $25, and the new earnings per share after the merger is $2.64. If the market price-earnings ratio (P/E ratio) does not change, then the post-merger share price will be $29.26.
(Price-earnings ratio = Market price per share ÷ Earnings per share)
($25 ÷ $2.64 = 9.47)
($29.26 ÷ $2.64 = 11.07)
c. If the market correctly analyzes the transaction, then the P/E ratio of the post-merger firm will be 11.74.
The new earnings per share after the merger is $2.64. If the market price-earnings ratio (P/E ratio) of Firm A changes and adjusts for the new earnings growth, then the post-merger P/E ratio would be:
(Price-earnings ratio = Market price per share ÷ Earnings per share)
($31 ÷ $2.64 = 11.74)
d-1. If there are no synergy gains, the share price of A will be $29.40 after the merger.
The value of the merged firm after the acquisition is $3,720 ($31 × 120). If there are no synergy gains, the value of the company after the merger is just the sum of the individual values of the firms before the merger, which is $3,200 ($25 × 1,000). The post-merger share price of Firm A would then be $29.40 ($3,200 ÷ 1,090).
d-2. The post-merger P/E ratio would be 11.14.
(Price-earnings ratio = Market price per share ÷ Earnings per share)
($29.40 ÷ $2.64 = 11.14)
d-3. Since the market price of the merged company does not change when there are no synergy gains, Firm A overpaid for Firm B.
The price paid by Firm A for each share of B's stock is $31, while the market price of Firm B's stock is $29. Since there are no synergy gains, the market price of the merged company would be the sum of the individual prices of the firms before the merger. Firm A overpaid for Firm B since the market price of the merged company did not change when there are no synergy gains.
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At 20.0°C, the vapor pressure of ethanol is 45.0 torr, and the vapor pressure of methanol is 92.0 torr. What is the vapor pressure at 20.0°C of a solution prepared by mixing 31.0 g methanol and 59.0 g ethanol?
The vapor pressure of the solution prepared by mixing 31.0 g of methanol and 59.0 g of ethanol at 20.0 °C is approximately 65.257 torr.
To determine the vapor pressure of the solution, we can use Raoult's law, which states that the partial pressure of each component in a solution is directly proportional to its mole fraction.
First, we need to calculate the mole fractions of methanol and ethanol in the solution.
The number of moles of methanol can be calculated using its molar mass:
moles of methanol = mass of methanol / molar mass of methanol
moles of methanol = 31.0 g / 32.04 g/mol = 0.968 mol
The number of moles of ethanol can be calculated in the same way:
moles of ethanol = mass of ethanol / molar mass of ethanol
moles of ethanol = 59.0 g / 46.07 g/mol = 1.281 mol
Next, we calculate the total number of moles in the solution:
total moles = moles of methanol + moles of ethanol
total moles = 0.968 mol + 1.281 mol = 2.249 mol
Now we can calculate the mole fractions:
mole fraction of methanol = moles of methanol / total moles
mole fraction of methanol = 0.968 mol / 2.249 mol = 0.431
mole fraction of ethanol = moles of ethanol / total moles
mole fraction of ethanol = 1.281 mol / 2.249 mol = 0.569
According to Raoult's law, the vapor pressure of the solution is:
vapor pressure = mole fraction of methanol × vapor pressure of methanol + mole fraction of ethanol × vapor pressure of ethanol
vapor pressure = (0.431 × 92.0 torr) + (0.569 × 45.0 torr)
vapor pressure = 39.652 torr + 25.605 torr
vapor pressure = 65.257 torr
Therefore, the vapor pressure of the solution prepared by mixing 31.0 g of methanol and 59.0 g of ethanol at 20.0 °C is approximately 65.257 torr.
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What recommendations would you make to marriott to improve the
price to attacted the customers and what is the segemnt they can
target ?
1. **Competitive Analysis**: Conduct a thorough analysis of the pricing strategies and offerings of Marriott's key competitors.
Identify areas where Marriott can differentiate itself by offering unique value propositions or competitive prices. This will help Marriott position itself effectively in the market.
2. **Promotions and Special Offers**: Implement targeted promotions and special offers to attract customers. This can include discounted rates during off-peak seasons, limited-time offers, or bundled packages that provide additional value at a competitive price. Effective marketing campaigns can create awareness and generate demand among potential customers.
3. **Segmentation and Targeting**: Utilize market segmentation to identify specific customer segments that can be targeted effectively with tailored pricing strategies. For example, Marriott can target business travelers, families, or millennials with different pricing approaches based on their specific needs, preferences, and price sensitivity.
4. **Value-Added Services**: Enhance the overall customer experience by providing value-added services that justify the price. This can include complimentary breakfast, airport transfers, free Wi-Fi, or access to exclusive facilities. By offering additional services that are highly valued by customers, Marriott can create a perception of increased value, thereby justifying the price point.
5. **Loyalty Programs**: Strengthen Marriott's loyalty program by offering rewards, exclusive discounts, and personalized experiences to loyal customers. This encourages repeat business and increases customer retention. Moreover, implementing referral programs can incentivize existing customers to recommend Marriott to their network, expanding the customer base.
Segment to Target: One potential segment that Marriott can target is the **"Millennial Travelers"**. This segment consists of tech-savvy, experience-oriented travelers who value unique and authentic experiences. To attract this segment, Marriott can offer competitive pricing coupled with innovative and modern amenities. Leveraging technology, such as mobile check-in and personalized recommendations, can further enhance their experience. Additionally, emphasizing sustainable practices and eco-friendly initiatives aligns with the values of many millennials, creating a positive brand perception and attracting this segment of customers.
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E-Games 4 U Corporation is evaluating some capital investments for the coming year. Since capital investments are a key factor for the firm's wealth creation, The board of directors has assigned you with finding the break points in their capital structure so that in the future they calculate properly the cost of capital. The firm has 1,590,966 common shares outstanding and can borrow up to $33,571,483 in new debt before the interest rate increases; the firm can then borrow any amount at the higher rate. Taxes are 31.6% and debt is 47% of the target capital structure. In addition, the firm forecast EPS of $21 for the current fiscal year and plans to continue with its historical dividend payout ratio of 35%. The firm does not use preferred equity. Hint: with the data above you can calculate retained earnings. Calculate the break point in the MCC schedule for Common Equity.
Break Point = 0.47 * Total capital structure + $13.65
Please note that the break point calculation is sensitive to the assumed market price per share. To obtain a precise break point, the market price per share would need to be provided.
To calculate the break point in the MCC (Marginal Cost of Capital) schedule for Common Equity, we need to determine the point at which the cost of issuing new equity (common shares) changes.
Given information:
Number of common shares outstanding = 1,590,966
Debt capacity before interest rate increases = $33,571,483
Debt proportion of target capital structure = 47%
Tax rate = 31.6%
EPS (Earnings per Share) = $21
Dividend payout ratio = 35%
First, let's calculate the retained earnings. Retained earnings are the portion of earnings that is reinvested in the business instead of being paid out as dividends.
Retained earnings = EPS * (1 - Dividend payout ratio)
Retained earnings = $21 * (1 - 0.35)
Retained earnings = $21 * 0.65
Retained earnings = $13.65
Next, let's calculate the break point in the MCC schedule for Common Equity.
Break Point = (Debt proportion of target capital structure) * (Total capital structure) + Retained earnings
Total capital structure = Market value of equity + Market value of debt
To calculate the market value of equity, we can use the number of common shares outstanding:
Market value of equity = Number of common shares outstanding * Market price per share
Since we don't have the market price per share, we cannot calculate the precise break point. However, we can calculate an approximate break point using the available information.
For example, if we assume the market price per share is $50, the calculation would be as follows:
Market value of equity = 1,590,966 * $50
Market value of equity = $79,548,300
Total capital structure = $79,548,300 + (Debt capacity before interest rate increases)
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You are considering purchasing a stock for $25 today. It is well known that the stock is expected to pay a dividend of $3.6, exactly one year from today and the same dividend into the infinite future. What is the expected rate of return on the stock at today's price? Report your number in decimal equivalent form to two decimal places, that is you should write 0.0601 rather than 6.01%
The expected rate of return on the stock, based on the given information and today's price of $25, is 14.4% in decimal form (0.144).
To calculate the expected rate of return on the stock, we need to consider the dividend and the future price of the stock. Given that the stock is expected to pay a dividend of $3.6 one year from today and the same dividend into the infinite future, we can use the dividend discount model (DDM) to calculate the expected rate of return.
The DDM formula is:
Expected Rate of Return = (Dividend / Stock Price) + (Dividend Growth Rate)
Since the dividend is expected to be constant and the stock price is $25, we can calculate the expected rate of return as follows:
Expected Rate of Return = ($3.6 / $25) + 0
Expected Rate of Return = 0.144 or 14.4% (rounded to two decimal places)
Therefore, the expected rate of return on the stock, based on the given information and today's price of $25, is 0.144 or 14.4% (in decimal form).
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Mutual altruism _____
Select one: O a. Involves doing whatever it takes to secure a personal advantage O b. Is a theoretical ideal that rarely occurs in practice O c. Doing good to others in order to secure some benefit for self O d. Involves an individual or group helping others without regard for the cost or inconvenience to themselves
The correct answer is: d. Involves an individual or group helping others without regard for the cost or inconvenience to themselves.
Mutual altruism refers to a form of behavior where individuals or groups help others without considering the personal cost or inconvenience they may face. It is based on the idea of selflessness and the desire to benefit others without expecting anything in return. This concept goes beyond personal advantage or securing benefits for oneself. Instead, it focuses on acts of kindness, generosity, and support solely for the well-being of others. Mutual altruism is often seen as a moral ideal and can be found in various contexts, such as charitable acts, volunteer work, or helping those in need. While it may not always be practiced universally, mutual altruism represents the notion of genuine and selfless acts of assistance towards others.
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Tower, Inc. had net sales of $4,725,000 during 2019. On January 1, 2019, Tower's accounts receivable were $960,000. On December 31, 2019, Tower's accounts receivable were $1,200,000. What was Tower's accounts receivable turnover for 2019? Select one: OA. 4.93 OB. 4.38 O C. 8.53 O D. 2.78
The correct Option is B. 4.38. To calculate Tower, Inc.'s accounts receivable turnover for 2019, use the formula: Accounts Receivable Turnover = Net Sales / Average Accounts Receivable.
First, calculate the average accounts receivable for the year. Do this by taking the average of the accounts receivable at the beginning and end of the year.
Beginning Accounts Receivable: $960,000
Ending Accounts Receivable: $1,200,000
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Average Accounts Receivable = ($960,000 + $1,200,000) / 2
Average Accounts Receivable = $1,080,000
Now, calculate the accounts receivable turnover:
Accounts Receivable Turnover = Net Sales / Average Accounts Receivable
Accounts Receivable Turnover = $4,725,000 / $1,080,000
Accounts Receivable Turnover ≈ 4.38
Therefore, Tower, Inc.'s accounts receivable turnover for 2019 is approximately 4.38.
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if we take the production function and hold the level of output constant, allowing the amounts of capital and labor to vary, we get:
If we take the production function and hold the level of output constant, allowing the amounts of capital and labor to vary, we get an isoquant.
A production function is an equation that shows how a firm transforms inputs (such as labor, capital, and raw materials) into output (the products it sells or the services it provides). In economics, an isoquant is a contour line on a graph that represents a constant level of output of a specific good produced when there are different ways to combine inputs, such as capital and labor. Therefore, if we take the production function and hold the level of output constant, allowing the amounts of capital and labor to vary, we get an isoquant.
An isoquant can be defined as the locus of all combinations of labor and capital that can generate a fixed level of output. On a graph, it can be represented by a series of curved lines that are known as isoquants.
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Anheiser-Busch Co. wants to acquire Craft Brewery, If Craft Brewery was to be acquired, it would benefit their shareholders. However, Craft's management rejects the acquisition offer. This is an example of
Multiple Choice a compensation issue. a capital structure issue. an agency conflict. a corporate takeover.
The rejection of Anheuser-Busch Co.'s acquisition offer by Craft Brewery is an example of an agency conflict. While the acquisition would benefit the shareholders of Anheuser-Busch Co., Craft's management disagrees with the proposal, indicating a misalignment of interests between the shareholders and the management. That is option C is correct.
An agency conflict arises when there is a divergence of interests between different stakeholders within a company. In this case, the shareholders of Anheuser-Busch Co. see the potential acquisition of Craft Brewery as beneficial, likely expecting increased value and profitability for their investment. However, Craft Brewery's management rejects the acquisition offer, indicating a disagreement on the best course of action for the company.
The rejection highlights a conflict between the shareholders, who seek to maximize shareholder value, and the management, who may have different priorities or objectives. The management of Craft Brewery may have concerns about the impact of the acquisition on their autonomy, company culture, or long-term strategic vision. Such conflicts can arise due to differences in risk tolerance, personal ambitions, or the desire to maintain control.
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Q 29. Which of the following statements about the process analysis and project management is NOT TRUE? A. In capacity analysis, we want to increase the flow rate or capacity. B. In project management, we want to reduce the flow time or project duration. C. In capacity analysis, the bottleneck resources must have 100% utilization. D. In project management, the activities on the critical path must have 0 slack time. Q 30. Three restaurant are compared along the dimensions of responsiveness (e.g., average cus- tomer waiting time) and cost performance, as shown below: Responsiveness (min/customers) High 2 min 10 min Low Cost Performance (S/cintomer) Low 56 $4 Which of the following conclusions can be drawn? A. C is Pareto dominating A and B. B. C is Pareto dominated by A and B. C. If C increases the worker with more cost but decreases the customer waiting time, C is more likely to be dominated by B. D. If C increases the worker with more cost but decreases the customer waiting time, C is more likely to be dominated by A.
In capacity analysis, the bottleneck resources must have 100% utilization. In capacity analysis, the bottleneck resources must have 100% utilization.
The correct answer is C.
Process analysis helps identify opportunities for process improvement, and project management helps execute the improvements identified. In capacity analysis, we aim to increase the flow rate or capacity. In project management, we strive to reduce the flow time or project duration. Furthermore, in project management, the activities on the critical path must have zero slack time. Slack time is the amount of time that an activity can be delayed without affecting the completion date of the project.A bottleneck is the slowest process in a production or service delivery environment. For efficient use of resources, we must keep the bottleneck resource as busy as possible, but it doesn't necessarily have to be 100%. If a bottleneck is utilized at 100 percent, it will cause a process to become inefficient, as congestion will develop at the bottleneck resource.30.
Three restaurants are compared along the dimensions of responsiveness (e.g., average customer waiting time) and cost performance, as shown below: Responsiveness (min/customers) High 2 min 10 min Low Cost Performance (S/cintomer) Low 56 $4 Which of the following conclusions can be drawn?D. If C increases the worker with more cost but decreases the customer waiting time, C is more likely to be dominated by A.Answer: D. If C increases the worker with more cost but decreases the customer waiting time, C is more likely to be dominated by A.Long answer:A Pareto front is a set of non-dominated points in a multi-objective optimization problem. It comprises solutions that are not worse than others in at least one criterion while being better in others. We compare alternatives using two metrics or criteria: responsiveness (customer waiting time) and cost performance ($ spent per customer). According to the table, the restaurant with the best responsiveness (fastest average customer waiting time) is high.
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Write about OMAN AIR, and analyze the following points:
NO PLAGIARISM PLEASE
1. What is Oman Air's organization structure of this company? Based on your
learnings from this module what in your opinion is the best structure
for this organization and why?
2. Out of the four organization cultures you learned during this module,
explain which culture is used in Oman Air? In your opinion
analyze which would be the most ideal culture and why?
3. If you are the leader of this organization analyze the following:
a. Which management style will you use? Give justification.
b.How are you going to motivate the employees of this
organization? Explain and justify your points.
1. Oman Air has a hierarchical organizational structure with various functional departments and levels.
2. Democratic management would be the most ideal culture.
3. This would create a sense of belonging, pride, and motivation among the employees, which would lead to increased productivity and profitability.
Oman Air is the national carrier of Oman, established in 1993.
It follows a centralization organizational structure in which top management has the power of decision-making. This type of organizational structure enables Oman Air to streamline its operations and make informed decisions quickly.
Based on the module learnings, Oman Air's current organizational structure is ideal for the company. It allows for effective communication, faster decision-making, and centralized control.
The functional departments and levels in the organization structure allow for proper delegation of duties and responsibilities.
The organization culture in Oman Air is a market culture. It is characterized by a focus on competition and getting things done efficiently and quickly. This culture is ideal for an airline company as it allows for quick decision-making and streamlining of operations.
However, an adhocracy culture would be the most ideal culture for Oman Air. This culture allows for innovation, risk-taking, and creativity, which would enable Oman Air to keep up with the dynamic aviation industry.
If I were the leader of Oman Air, I would use a democratic management style. This style allows for the participation of employees in decision-making, which leads to increased job satisfaction and motivation.
Additionally, I would motivate the employees of this organization by providing them with training and development opportunities, performance-based rewards, and clear communication of company goals and objectives.
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Which step in the four-step model of ethical decision making do you think leads to most unethical actions? Explain your reasoning.
Why do organizations struggle when employees with substantial amounts of tacit knowledge leave the organization unexpectedly?
Give an example of a nonprogrammed decision that organizations had to make as a result of COVID. Explain the context of the situation, why it was a nonprogrammed decision, and how the organization went about making the decision
Step 3 of the four-step model of ethical decision making, which is evaluating alternatives and their consequences, is where the most unethical actions take place.
In this step, decision-makers must consider all potential solutions to the problem at hand. In order to make this decision, they must weigh the pros and cons of each alternative and determine the one that is most ethical. Unfortunately, decision-makers sometimes make choices that go against their ethical principles because they feel that it will lead to a better outcome in the long run. This can be a slippery slope towards unethical behavior.
Organizations struggle when employees with substantial amounts of tacit knowledge leave the organization unexpectedly because this knowledge is often not recorded anywhere. Tacit knowledge is knowledge that is not easily transferred from one person to another and is often gained through experience. When an employee with this type of knowledge leaves, they take that knowledge with them. The organization is then left with a gap in knowledge that can be difficult to fill. This can cause disruptions in the organization's processes and may lead to decreased productivity.
An example of a nonprogrammed decision that organizations had to make as a result of COVID is whether or not to allow employees to work remotely. This was a nonprogrammed decision because it was a new situation that the organization had not encountered before. The context of the situation was that COVID-19 was spreading rapidly and there was a need to limit contact between individuals. Organizations had to decide whether or not to allow employees to work from home in order to limit contact and slow the spread of the virus.
Organizations went about making this decision by weighing the pros and cons of allowing employees to work remotely. They had to consider factors such as productivity, communication, and employee well-being. Ultimately, many organizations decided to allow employees to work remotely in order to limit contact and slow the spread of the virus.
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Extensive use of organizational politics has been found associated with feelings of _____ among employees.
The extensive use of organizational politics has been found to be associated with the feelings of cynicism among the employees.
The reason for this is that organizational politics negatively affect the employees' morale and their perception of the fairness of the workplace.Politics in the workplace refer to the use of power and influence by individuals or groups to gain personal benefits or achieve specific goals. Organizational politics refers to the political behavior that is within an organization. This behavior is characterized by employees who use tactics such as favoritism, manipulation, and gossiping to gain advantage over others, and those tactics may lead to feelings of cynicism among the employees.The use of organizational politics can lead to negative consequences such as loss of trust, decreased employee motivation, decreased job satisfaction, decreased employee commitment, and increased employee turnover. These consequences can ultimately hurt the overall performance of the organization. Thus, it is important for organizations to take measures to limit the use of politics in the workplace, such as creating a culture of transparency and fairness and promoting ethical behavior among employees.Answer: In conclusion, the extensive use of organizational politics has been found to be associated with the feelings of cynicism among the employees. The reason for this is that organizational politics negatively affect the employees' morale and their perception of the fairness of the workplace. Organizational politics refers to the political behavior that is within an organization. This behavior is characterized by employees who use tactics such as favoritism, manipulation, and gossiping to gain advantage over others, and those tactics may lead to feelings of cynicism among the employees. The use of organizational politics can lead to negative consequences such as loss of trust, decreased employee motivation, decreased job satisfaction, decreased employee commitment, and increased employee turnover. Thus, it is important for organizations to take measures to limit the use of politics in the workplace, such as creating a culture of transparency and fairness and promoting ethical behavior among employees.
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The major problem with the method of determining promotional expenditures is the tendency to spend more when sales are increasing and less when they are declining. O what can be spared O what it will take to do the job O sales plus O percentage of sales
The major problem with the method of determining promotional expenditures described as:
sales plus percentage of salesWhat is promotional expendituresInconsistent promotions may result from spending more during sales growth and less during decline. Consider objective-based budgeting for promotions instead of solely basing it on sales.
Therefore, its objectives include increasing brand awareness, acquiring customers, driving traffic, and reaching sales targets.
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Use the extended Euclidean algorithm to find the greatest common divisor of the given numbers and express it as the following linear combination of the two numbers: 4,020s + 1,515t, where
The GCD of 4,020 and 1,515 is 255, and it can be expressed as the linear combination 4,020s + 1,515t = 255. The values of s and t can be found using the extended Euclidean algorithm.
The extended Euclidean algorithm is a recursive algorithm that computes the greatest common divisor (GCD) of two integers a and b and also finds integers s and t such that as + bt = gcd(a, b).To apply the extended Euclidean algorithm to find the GCD of 4,020 and 1,515 and express it as the linear combination 4,020s + 1,515t = 255, we can follow these steps:Step 1: Write down the given numbers and find their remainders when divided:4,020 = 1 x 1,515 + 2,5051,515 = 0 x 2,505 + 1,5152,505 = 1 x 1,515 + 9901,515 = 1 x 990 + 525990 = 1 x 525 + 465525 = 1 x 465 + 606465 = 8 x 60 + 25560 = 3 x 20 + 0Step 2: Work backwards through the equations to find values of s and t.
Start with the last equation and substitute back into the previous equation:255 = 465 - 8 x 60 = 465 - 8 x (990 - 525) = -8 x 990 + 9 x 525525 = 990 - 465 = 990 - (1 x 1,515 - 1 x 990) = 2 x 990 - 1 x 1,515990 = 1,515 - 1 x 525 = 1,515 - 1 x (990 - 1 x 1,515) = -1 x 990 + 2 x 1,5151,515 = 2,505 - 1 x 990 = 2,505 - 1 x (1,515 - 1 x 990) = -1 x 1,515 + 2 x 2,5052,505 = 4,020 - 1 x 1,515 = -1 x 2,505 + 1 x 4,020Step 3: Write the GCD as the final value and express it as the linear combination 4,020s + 1,515t = 255.
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a. Owner, Lewis Andrews, invested $4,300 cash into the business. b. Rented a sound system and paid one month's rent, $1,350. c. Performed DJ services on account, $3,500. d. Paid $750 cash for equipment. e. Owner, Lewis Andrews, withdrew $620 cash for personal use. f. Purchased $55 of supplies for cash.
The statement of Cash Flows is Financing Activities: "Owner's equity increased by $4,300; Cash outflow of $620 for owner's personal withdrawal.”
In the statement of cash flows, under the Financing Activities section, it would be reported that the owner, Lewis Andrews, invested $4,300 cash into the business. This represents an increase in owner's equity and indicates an inflow of cash. Additionally, there was a cash outflow of $620 due to the owner's withdrawal for personal use.
This withdrawal represents a reduction in owner's equity and is considered a cash outflow from the business. Both of these transactions affect the financing activities section of the statement of cash flows, reflecting changes in the owner's investment and personal withdrawals.
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The common law tests used to determine employee status are not able to deal with the variety of types of employment relationship in the modern labour market. There is an urgent need for radical reform of the law in this area.’ Critically evaluate this statement.
The statement claims that the common law tests used to determine employee status are inadequate in addressing the diverse types of employment relationships in the modern labor market. It suggests that there is an urgent requirement for substantial legal reform in this domain. This evaluation will critically assess the validity of this statement.
The common law tests traditionally applied to ascertain employee status, such as the control test and the economic reality test, have been developed over time based on long-standing legal principles. However, with the evolving nature of work and the emergence of new employment arrangements, these tests may face limitations in adequately capturing the complexities of modern employment relationships.
Several factors contribute to this assessment:
Variation in employment relationships: The gig economy, freelancing, and other non-traditional employment models have increased the diversity of employment relationships. These arrangements often blur the lines between traditional employer-employee dynamics, making it challenging to categorize workers solely as employees or independent contractors using existing legal tests.Lack of statutory clarity: The absence of clear statutory definitions for different types of employment relationships exacerbates the difficulty of applying common law tests. Without explicit legislative guidelines, courts rely on precedents and case law, which may not adequately address the nuances of contemporary work arrangements.Limited protection for workers: Existing employment laws and regulations often provide stronger protections and benefits for employees compared to independent contractors. This distinction becomes crucial when determining entitlements such as minimum wage, overtime pay, and employment benefits. In cases where individuals are misclassified, they may face a lack of legal protections and benefits associated with employee status.Implications for stakeholders: The current limitations in employment status determination impact various stakeholders. Workers may experience uncertainty regarding their rights and protections, while businesses may face challenges in navigating legal obligations and responsibilities towards workers. Additionally, governments may struggle to enforce labor standards effectively.Considering these factors, there are valid arguments supporting the urgent need for reform in the law governing employment status.
Any potential reforms should aim to address the following aspects:
Clarity and flexibility: Legislation should provide clearer definitions of different employment relationships, encompassing a range of modern work arrangements. This would enable better classification and treatment of workers, offering them appropriate legal protections based on the nature of their engagement.Fairness and protection: Reforms should strive to ensure that workers are appropriately classified and afforded necessary protections, regardless of their employment arrangement. This could involve creating a more inclusive legal framework that acknowledges the unique characteristics of non-traditional work arrangements.Balancing flexibility and rights: It is essential to strike a balance between promoting labor market flexibility and safeguarding workers' rights. Reforms should consider the needs of both businesses and workers to establish a framework that supports fair and sustainable employment relationships.In conclusion, while the common law tests for determining employee status have served as the foundation for employment law, the increasing complexity of modern employment relationships necessitates a critical evaluation of their effectiveness. There is a persuasive argument for radical reform to address the limitations of these tests and create a legal framework that better aligns with the realities of the contemporary labor market. Such reforms should focus on providing clarity, fairness, and protection to workers while accommodating the evolving nature of work.
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Explain some of the gains and challenges from collusions under
oligopoly. State an incentive to cheat a cartel agreement by a
member.
Collusion in an oligopoly refers to an agreement or understanding among a few dominant firms in an industry to coordinate their actions and manipulate market outcomes. While collusion can bring certain gains, it also presents challenges and incentives for cheating.
Gains from Collusion:
Market Power: Collusion allows firms to act collectively as a monopolist, enabling them to exert control over prices, output levels, and market conditions. This can lead to increased profitability and market dominance.
Stability: Collusion promotes stability in the market by reducing price competition and preventing disruptive price wars. Firms can establish a predictable environment, ensuring steady profits and reducing uncertainty.
Barrier to Entry: Colluding firms may create barriers to entry, making it difficult for new competitors to enter the market. This protects their market share and reduces the threat of competition.
Challenges of Collusion:
Monitoring and Enforcement: Maintaining a collusion agreement requires ongoing monitoring and enforcement, which can be costly and challenging. Firms need to ensure compliance with the agreed-upon terms and detect and address cheating behavior.
Incentive to Cheat: One of the significant challenges in collusion is the incentive for individual firms to cheat on the agreement. Cheating allows a firm to gain a competitive advantage over other members and capture a larger market share.
External Factors: Collusion can be disrupted by external factors such as changes in market conditions, new entrants, technological advancements, or regulatory interventions. These factors can undermine the stability and effectiveness of the collusion agreement.
Incentive to Cheat:
An incentive to cheat a cartel agreement arises when a member believes it can benefit individually by deviating from the agreed-upon terms. Some reasons for cheating include:
Profit Maximization: A member may believe that by increasing its production or lowering prices, it can attract more customers and increase its profits at the expense of other cartel members.
Demand Fluctuations: If there is a sudden increase in demand, a member may be tempted to cheat by producing more to capture additional market share and profit opportunities.
Weak Enforcement: If the monitoring and enforcement of the collusion agreement are ineffective, a member may perceive a low risk of being caught or facing consequences, making cheating more appealing.
Overall, while collusion can provide benefits to firms in an oligopoly, the challenges of maintaining and enforcing the agreement, as well as the incentives to cheat, pose significant risks to the sustainability and effectiveness of collusion in the long term.
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Question 4 (12 Marks) Assume you are playing the trading game and you are the manager of a portfolio of liabilities that had a market value of $1.1 billion at the start of the current quarter (i.e., on 15th March). Bond coupons (and fixed swap payments) are paid in March and September each year. Today is 14th June 2001, which is the last day of the quarter. The yield on 10-year bonds rose significantly during the current quarter. Other information: • At the start of the current quarter (i.e., on 15th March) you advanced one of your clients $100mil for five years and the same client (QEPA) requires a further $20mil tomorrow (the first day of the new quarter). For new advances, the five-year fixed rate was 5.77% on 15th March and will be 6% tomorrow. • Another client (LG), will make a one-off repayment of $15mil tomorrow and a debt service payment of $3.4mil. • On behalf of LG, tomorrow, you will also enter a forward contract (which settles in three months' time) to buy $20mil USD (AUD$40mil) that LG needs to pay a supplier. • At the start of the current quarter, you bought 500 10-year bond futures contracts with brokerage of $5 per contract and deposit margin of $1,000 per contract (assume that the deposit margin has not accrued interest over the quarter). The absolute dollar value of variation margin on the futures contract stands at $700,000 for the quarter. • At the start of the current quarter, you issued commercial paper with face value of $212,601,014. The face value and coupon of bonds currently on issue is: DB02 ($150mil/5.2%); DB04 ($100mil/5.1%); DB06 ($250mil/5.3%); and DB11 ($226.77mil/5.65%). There are two pay-fixed, receive-floating domestic interest rate swaps on issue with face value and coupon: IRSDB04 ($50mil/5.1%) and IRSDB11 ($125mil/5.65%). Also on issue is one USD denominated Eurobond (US11) with face value and coupon of $USD36mil/6% and one Euro denominated Eurobond (EUR06) with face value and coupon of EUR58.75mil/5%. Both Eurobonds have been swapped back into domestic CP3M with a face value of AUD165mil. • Last quarter you made a significant error and raised too much money. As a result, the portfolio cash at bank balance is currently $85mil. • Assume that there are no other debt service payments other than those mentioned or implied above. Also, assume an administrative charge of 0.5% per annum. Required: a) Calculate the net client cash flows that will occur on the first day of the new quarter (i.e., tomorrow). Clearly show and label all calculations and cash flows. [4 marks] b) Calculate the portfolio generated cash flows. Note: The mid 3-month rate from last quarter (for the floating side of swaps) was 5.67% and there were 92 days in the quarter just completed. [6 marks] c) Calculate the net funding or investment amount. Clearly state whether the amount requires a funding or an investment. [2 marks]
a) Net client cash flows on the first day of the new quarter (tomorrow):
QEPA loan advanced on 15th March: $100 million (funding)
QEPA additional loan advanced tomorrow: $20 million (funding)
LG one-off repayment: -$15 million (repayment)
LG debt service payment: -$3.4 million (repayment)
Forward contract to buy USD: -$40 million (payment)
Total net client cash flows: $61.6 million (funding)
b) Portfolio generated cash flows:
Coupon payments on DB02: ($150 million * 5.2% * 92/365) = -$197,260.27 (outflow)
Coupon payments on DB04: ($100 million * 5.1% * 92/365) = -$131,780.82 (outflow)
Coupon payments on DB06: ($250 million * 5.3% * 92/365) = -$352,054.79 (outflow)
Coupon payments on DB11: ($226.77 million * 5.65% * 92/365) = -$407,640.02 (outflow)
Coupon payments on IRSDB04: ($50 million * 5.1% * 92/365) = -$34,246.58 (outflow)
Coupon payments on IRSDB11: ($125 million * 5.65% * 92/365) = -$78,051.37 (outflow)
Coupon payments on USD Eurobond: ($36 million * 6% * 92/365) = -$228,767.12 (outflow)
Coupon payments on EUR Eurobond: (EUR58.75 million * 5% * 92/365) = -EUR373,972.60 (outflow)
Interest on QEPA loan advanced on 15th March: ($100 million * 5.77% * 92/365) = -$363,835.62 (outflow)
Interest on QEPA additional loan advanced tomorrow: ($20 million * 6% * 92/365) = -$30,136.99 (outflow)
Variation margin on bond futures contracts: -$700,000 (outflow)
Administrative charge: 0.5% * ($1.1 billion + $85 million) * 92/365 = -$328,219.18 (outflow)
Total portfolio generated cash flows: -$2,903,975.37 (outflow)
c) Net funding or investment amount:
Net funding or investment amount is the difference between net client cash flows and portfolio generated cash flows:
Net funding or investment amount = Net client cash flows - Portfolio generated cash flows
= $61.6 million - (-$2,903,975.37)
= $2,965,575.37 (investment)
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Consider the following options, which have the same two-year maturity and are written on the same stock. The firm does not pay dividends.
Put option P1 has a strike price Xp1 = $50
Put option P2 has a strike price Xp2 = $100
Call option C1 has a strike price Xc1 = $100
Call option C2 has strike price Xc2 = $50
Your broker offers two trading strategies that can be derived from the options above.
Strategy A: Long two puts P1 and long two calls C1
Strategy B: Long two calls C2 and long two puts P2
A. Which strategy would you choose if the two strategies have the same costs? Explain your answer.
You now collect more information about the available securities. The stock has an implied volatility of 45% p.a.. The current risk-free rate is 1% p.a. The current stock price is $56.
B. Calculate the value of the call option C1 using the Black-Scholes formula. Explain why such a deep out-of-the-money option still has a positive value.
C. Calculate the cost of strategy B using the Black-Scholes formula.
(A) if the two strategies have the same costs, both strategies would result in the same payoff of zero.(B) Even though the probability of the stock price reaching or exceeding the strike price is low, there is still a possibility of a substantial gain if it does happen. This potential upside contributes to the positive value of the option.(C)Using the Black-Scholes formula for each option, we can calculate the values of C2 and P2 using the inputs mentioned earlier. Once we have the values, we can substitute them into the formula to find the cost of strategy B.
A. If the two strategies have the same costs, we need to compare their potential payoffs to determine which one is more favorable.
Strategy A (Long two puts P1 and long two calls C1):
If the stock price is below $50 (the strike price of P1), the put options will be exercised, and the payoff will be (Xp1 - Stock price) for each put.
If the stock price is above $100 (the strike price of C1), the call options will be exercised, and the payoff will be (Stock price - Xc1) for each call.
Strategy B (Long two calls C2 and long two puts P2):
If the stock price is above $50 (the strike price of C2), the call options will be exercised, and the payoff will be (Stock price - Xc2) for each call.
If the stock price is below $100 (the strike price of P2), the put options will be exercised, and the payoff will be (Xp2 - Stock price) for each put.
Given that the stock price is currently $56, it falls between the strike prices of all the options involved in both strategies. Therefore, if the two strategies have the same costs, both strategies would result in the same payoff of zero.
B. To calculate the value of the call option C1 using the Black-Scholes formula, we need the following inputs:
Stock price: $56 Strike price: $100 Risk-free rate: 1% (0.01) Time to maturity: 2 years Implied volatility: 45% (0.45)Using the Black-Scholes formula, the value of the call option C1 can be calculated as follows:
C1 = S * N(d1) - X * e^(-r * T) * N(d2)
where:
S = Stock price
N() = Cumulative standard normal distribution
d1 = (ln(S/X) + (r + (σ^2)/2) * T) / (σ * sqrt(T))
d2 = d1 - σ * sqrt(T)
Calculating the values:
d1 = (ln(56/100) + (0.01 + (0.45^2)/2) * 2) / (0.45 * sqrt(2))
d2 = d1 - 0.45 * sqrt(2)
Using a standard normal distribution table or a calculator, we can find the values of N(d1) and N(d2).
C1 = 56 * N(d1) - 100 * e^(-0.01 * 2) * N(d2)
The positive value of a deep out-of-the-money call option like C1 is due to the potential for the stock price to increase significantly before the option expires. Even though the probability of the stock price reaching or exceeding the strike price is low, there is still a possibility of a substantial gain if it does happen. This potential upside contributes to the positive value of the option.
C. To calculate the cost of strategy B using the Black-Scholes formula, we can add the values of the call options C2 and the put options P2.
The cost of strategy B = 2 * C2 + 2 * P2
Using the Black-Scholes formula for each option, we can calculate the values of C2 and P2 using the inputs mentioned earlier. Once we have the values, we can substitute them into the formula to find the cost of strategy B.
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Manchester United FC: competing with Europe's elite clubs (page 600) 1. Identify the different forms of ownership that might be adopted by MUFC and how these might lead to different expectations. 2. Identify the main stakeholder groups involved in MUFC and using Figure 5.3 map their power and level of interest. How might the expectations of the various stakeholder groups differ and potentially come into conflict. 3. Do you feel that the various aspects of corporate governance are appropriate for a football club? What changes in governance would you like to see at elite football clubs? 4. How has Manchester United aligned itself to the external environmental factors in the football industry? Identify key opportunities and threats commenting on how well placed the club is to exploit the opportunities and deal with the threats.
1. The different forms of ownership that might be adopted by Manchester United Football Club (MUFC) include private ownership, public ownership, or a combination of both. Private ownership could involve an individual, a group of investors, or a consortium owning the club. Public ownership would involve the club being publicly traded on a stock exchange. Each form of ownership brings different expectations. Private ownership may prioritize profit generation, success on the field, and return on investment. Public ownership would require transparency, accountability to shareholders, and satisfying financial performance expectations.
2. The main stakeholder groups involved in MUFC include fans, players, coaching staff, sponsors, shareholders, local community, media, and governing bodies. Mapping their power and level of interest using Figure 5.3 would reveal that fans have high power and interest as they are a vital part of the club's success. Shareholders and sponsors also possess significant power due to their financial contributions. However, their level of interest may vary. Conflicts may arise when the expectations of stakeholders differ, such as fans seeking on-field success while shareholders prioritize financial gains.
3. The appropriateness of corporate governance aspects for a football club like MUFC is subjective. However, improvements in governance can enhance transparency, accountability, and long-term sustainability. One change could be increasing fan representation in decision-making processes, fostering better communication and addressing their concerns. Additionally, strengthening regulations on financial fair play, transfer policies, and ensuring responsible ownership can help protect the club's interests and maintain fairness within the industry.
4. Manchester United has aligned itself with external environmental factors in the football industry through various strategies. For example, the club has embraced global branding and expanded its reach in international markets to capitalize on growing fan bases worldwide. It has also capitalized on media and digital platforms to engage with fans and increase revenues. Key opportunities lie in the global expansion of football and the increasing demand for digital content and merchandise. However, threats such as intense competition from other elite clubs, regulatory changes, and economic uncertainties must be carefully managed. Overall, Manchester United is well-placed to exploit opportunities given its global brand recognition, loyal fan base, and commercial partnerships.
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The demand function faced by a monopolist is P = 160 - 0.0025Q and the cost function (C) is C = 15Q + 0.0025Q2
(i) Find the profit maximizing price and the quantity of the monopolist.
(ii) Check if the monopolist is earning profit.
(iii) If the monopolist is earning profit, show it with the help of a figure.
The monopolist in this scenario maximizes profit by producing and selling 3,000 units at a price of $152.5. This output level allows the monopolist to cover its costs and generate a positive profit.
1) To find the profit-maximizing price and quantity, we need to determine the level of output where marginal revenue (MR) equals marginal cost (MC).
The monopolist's total revenue (TR) can be calculated by multiplying the price (P) by the quantity (Q), so TR = P * Q. The marginal revenue is the change in total revenue resulting from a one-unit change in quantity, so MR = dTR/dQ.
Differentiating the demand function P = 160 - 0.0025Q with respect to Q, we get dP/dQ = -0.0025. Since MR is equal to the slope of the demand curve, we have MR = -0.0025.
The monopolist's marginal cost (MC) is given by the derivative of the cost function C = 15Q + 0.0025Q^2 with respect to Q, which is MC = dC/dQ = 15 + 0.005Q.
To find the profit-maximizing quantity, we set MR equal to MC:
-0.0025 = 15 + 0.005Q
Solving for Q, we find Q = 3,000.
Substituting the value of Q into the demand function, we can find the corresponding price:
P = 160 - 0.0025(3,000)
P = 152.5
Therefore, the profit-maximizing price is $152.5 and the quantity is 3,000 units.
(ii) To check if the monopolist is earning a profit, we compare the total revenue (TR) and total cost (TC) at the profit-maximizing quantity.
Total revenue is calculated by multiplying the price by the quantity, so TR = P * Q:
TR = 152.5 * 3,000 = $457,500
Total cost is given by the cost function, so TC = C = 15Q + 0.0025Q^2:
TC = 15(3,000) + 0.0025(3,000)^2
TC = $45,000 + $22,500 = $67,500
Since TR ($457,500) is greater than TC ($67,500), the monopolist is earning a profit.
(iii) In order to illustrate the profit, a figure showing the monopolist's revenue, cost, and profit can be constructed. The horizontal axis represents the quantity (Q) of output, while the vertical axis represents the price (P), cost (C), and profit.
The demand curve P = 160 - 0.0025Q can be plotted as a downward-sloping line. The cost function C = 15Q + 0.0025Q^2 can be represented by an upward-sloping quadratic curve. The profit can be shown as the vertical distance between the total revenue (TR) and total cost (TC) curves.
At the profit-maximizing quantity of 3,000 units, the price (P) is $152.5. The total revenue (TR) curve intersects the total cost (TC) curve, indicating the monopolist's profit. The area between the TR and TC curves represents the profit earned by the monopolist.
Overall, the monopolist in this scenario maximizes profit by producing and selling 3,000 units at a price of $152.5. This output level allows the monopolist to cover its costs and generate a positive profit.
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Which is the third step in the supply chain for retailers? A. Distributors B. Manufacturers C. Retailers D. Suppliers E. Collectors
The third step in the supply chain for retailers is C. Retailers. After the products are manufactured by the manufacturers and supplied by the distributors, they reach the retailers.
Retailers are the business or entities that sell products directly to consumers. They can include various types of retailers such as brick-and-mortar stores, online retailers, department stores, specialty stores, and supermarkets.
Retailers play a crucial role in the supply chain as they bridge the gap between manufacturers and consumers. They are responsible for purchasing goods from manufacturers or distributors and making them available to customers through their retail outlets or online platforms. Retailers manage inventory, display products, set prices, and engage in marketing and sales activities to attract and serve customers.
The supply chain continues beyond the retailers to reach the final consumers, which is the fourth step in the supply chain. The supply chain can involve additional steps such as suppliers (providing raw materials or components to manufacturers), collectors (for recycling or waste management), and other intermediaries, depending on the specific industry and product. However, in the context of the supply chain for retailers, the third step is the retailers themselves.
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Suppose that the following two scenarios occur: Scenario 1: the renegotiation of a trade agreement between Australia and the UK leads to a reduction in Australian exports to the UK. Scenario 2: rising wealth levels in China leads to increased demand for expensive Australian wines. Scenario 1 will cause the AUD to ____ relative to the British Pound (GBP) and Scenario 2 will cause the AUD to relative to ____ the Yuan a depreciate; depreciate b depreciate; appreciate c appreciate; depreciate d stablize; appreciate e appreciate; appreciate
Scenario 1: The renegotiation of a trade agreement between Australia and the UK will cause the AUD to depreciate relative to the British Pound (GBP).
Scenario 2: Rising wealth levels in China will cause the AUD to appreciate relative to the Yuan.
In Scenario 1, when the trade agreement between Australia and the UK is renegotiated and Australian exports to the UK decrease, it will result in a reduction in the demand for Australian dollars (AUD) in the UK. As a consequence, the value of the AUD will depreciate relative to the British Pound (GBP). The decrease in demand for the AUD is due to the reduced need for it to facilitate trade between the two countries.
In Scenario 2, when wealth levels rise in China and there is an increased demand for expensive Australian wines, it will lead to an increase in Australian exports to China. This increase in exports will result in an increased demand for the AUD in China, causing the value of the AUD to appreciate relative to the Chinese Yuan. The higher demand for the AUD is driven by the need to purchase Australian wines and other goods, reflecting the increased economic activity and purchasing power in China.
In summary, Scenario 1, involving a reduction in Australian exports to the UK, will cause the AUD to depreciate relative to the GBP. On the other hand, Scenario 2, characterized by rising wealth levels in China and increased demand for expensive Australian wines, will cause the AUD to appreciate relative to the Yuan. These currency movements are driven by changes in export levels and demand for the respective currencies in international trade.
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Firefly Company just paid a dividend of $15 per share, but the management expects to reduce the payout by uce the payout by 5 percent per year if you require a return of 10 percent on this stock, what will you pay for a share today?
Firefly Company has paid a dividend of $15 per share, but the management plans to reduce the dividend payout by 5 percent annually. If you require a 10 percent return on this stock.
To calculate the price you should pay for a share of Firefly Company today, we need to consider the future dividends and the required return on the stock.
Given that the dividend payout is expected to decrease by 5 percent per year, we can calculate the future dividends using this reduction rate. Let's denote the future dividends as D1, D2, D3, and so on.
The dividend in the first year (D1) would be $15 since that is the current dividend. In the second year (D2), the dividend would be 5 percent less than D1, which is (1 - 0.05) * D1. Similarly, in the third year (D3), the dividend would be (1 - 0.05) * D2, and so on.
To determine the price you should pay for a share today, we can use the dividend discount model (DDM). The DDM calculates the present value of future dividends by discounting them at the required return rate.
Let's denote the price you should pay for a share today as P0. The price P0 can be calculated using the formula:
P0 = D1 / (1 + r) + D2 / (1 + r)^2 + D3 / (1 + r)^3 + ...
Where:
D1, D2, D3, ... are the future dividends
r is the required return on the stock
In this case, the required return is given as 10 percent, so r = 0.10.
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Kansas Enterprises purchased equipment for $78,500 on January 1, 2024. The equipment is expected to have a five-year service life, with a residual value of $9,000 at the end of five years.
Using the straight-line method, depreciation expense for 2025 and the book value at December 31, 2025, would be:
Multiple Choice
$13,900 and $41,700, respectively.
$15,700 and $38,100, respectively.
$15,700 and $47,100, respectively.
$13,900 and $50,700, respectively.
The book value can be calculated as:
Double declining rate=200/useful life= 200/5=40%
Depreciation for 2021
=78500×40%
=31,400.
Option D is the correct option.
When calculating book value, businesses net an asset's worth against its total depreciation. Book value is the cost of carrying an item on a company's balance sheet. Since a company's total assets are deducted from its intangible assets (patents, goodwill), liabilities, and liabilities, its net asset value (NAV) is also known as book value.
In relation to an investment's initial outlay, book value may be gross or net of costs like trading fees, sales taxes, service fees, and other similar charges.
The entire equity held by common shareholders less preferred stock is divided by the total number of outstanding common shares to arrive at book value per share (BVPS). "Net book value" is another name for "book value."
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The simplest measure of performance is the variance that compares: Multiple Choice budgeted sales revenue with actual sales revenue. standard direct labor rates with actual direct labor rates. standard material prices with actual material prices. budgeted operating income with actual operating income.
The simplest measure of performance is the variance that compares budgeted operating income with actual operating income. Variance refers to the difference between actual results and budgeted results. The correct answer is option d.
It is used as a measure of performance in budgeting and managerial accounting. The budgeted operating income is the expected amount of operating income for a specific period, while the actual operating income is the real amount of operating income generated by a business during the same period. If the actual operating income is higher than the budgeted operating income, it is considered favourable or positive variance.
If the actual operating income is lower than the budgeted operating income, it is considered unfavourable or negative variance. In conclusion, the variance that compares budgeted operating income with actual operating income is the simplest measure of performance. It helps a business to analyze its performance and identify areas that need improvement or further attention.
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Allen Lumber Company had earnings after taxes of $500,000 in the year 2015 with 380,000 shares outstanding on December 31, 2015. On January 1, 2016, the firm issued 39,000 new shares. The company took the proceeds from these new shares as well as other operating improvements and earned $610,000 earnings after taxes in 2016. Earnings per share for the year 2016 were: O $1.32 $1.61 $1.33 O $1.46
We are required to calculate the earnings per share for Allen Lumber Company in 2016.
The company had earnings after taxes of $500,000 in the year 2015 with 380,000 shares outstanding on December 31, 2015. On January 1, 2016, the firm issued 39,000 new shares. The company took the proceeds from these new shares as well as other operating improvements and earned $610,000 earnings after taxes in 2016. We can calculate the earnings per share for the year 2016 by using the formula:Earnings per share = Earnings after taxes / Number of shares outstanding in that yearNumber of shares outstanding in the year 2015 = 380,000Number of shares outstanding in the year 2016 = 380,000 + 39,000 = 419,000Earnings after taxes in the year 2016 = $610,000Using the formula of EPS, we get:Earnings per share = $610,000 / 419,000Earnings per share = $1.46Therefore, the earnings per share for Allen Lumber Company in 2016 was $1.46. The correct option is option D.
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The Total Quality Management school of thought gives more importance to the process rather than to the product O True O False QUESTION 41 Increasing the number of skills used on the job results in a O higher likelihood of being motivated to work hard O reduction in job dissatisfaction O higher likelihood of a midlife career change O reduction in job enrichment. The process of discovering one's real self is known as developing one's Oself-awareness. Oself-actualization. Oideal self. Olooking-glass self. QUESTION 22 Members of a group conform in order to Oavoid meeting the group's shared objectives. increase one-member domination. Oavoid coercion or exclusion by the rest of the group. O reduce inbreeding of innovation. QUESTION 23 Value that indicate the manner in which a person wishes to behave are called instructional values. True False QUESTION 24 refers to compassion for others combined with sensitivity and effective social skills. Emotional contagion O Personal competence O Social rejection O Social competence
The Total Quality Management school of thought gives more importance to the process rather than to the product. This statement is true.
What is Total Quality Management?]Total Quality Management (TQM) is an approach to management that aims to maximize customer satisfaction and long-term growth by providing excellent quality products and services. TQM was initially developed in Japan during the 1950s and is a management approach that aims to increase the effectiveness of an organization by continuously improving its systems, processes, products, and services.
41. Increasing the number of skills used on the job results in a- a. higher likelihood of being motivated to work hard. The process of discovering one's real self is known as developing one's self-awareness.
22. Members of a group conform in order to- A. avoid coercion or exclusion by the rest of the group.
23. Value that indicate the manner in which a person wishes to behave are called instructional values. The statement is false. Instructional values are standards of behavior that are used to guide people's actions in a particular situation. These values provide a framework for making decisions and taking actions that are in line with an individual's goals and principles.
24. Compassion for others combined with sensitivity and effective social skills is called- d. social competence.
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Why is falling GDP or negative GDP growth generally seen as a bad sign?
For each item, put a "C" if it represents Consumption Spending, an "I" for Investment Spending, a "G" for Government Spending, or a "X" for export spending or "M" for import spending.
Apple purchases a new warehouse
I get a haircut for graduation
The State of New Jersey repairs roads
You buy a laptop for school
The federal government buys a jet
Your family goes out for pizza.
Falling GDP or negative GDP growth is generally seen as a bad sign because it indicates a contraction in the overall economic activity of a country.
This can have negative implications for various aspects of the economy, including employment, income, business profits, and government revenues. It often leads to lower consumer spending (C) as people become more cautious about their expenses. Additionally, businesses may reduce their investment (I) as they anticipate weaker demand and lower profitability. Government spending (G) might also be impacted as reduced economic activity leads to lower tax revenues. Finally, falling GDP can affect export (X) spending negatively as other countries may experience a decline in demand for goods and services. Overall, a decline in GDP reflects economic challenges and can have wide-ranging effects on different sectors of the economy.
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