Prepare the journal entry for Ivanhoe to record the sale is given below:Ivanhoe Woodcrafters Journal Entry for the sale of receivables on a course basis:DateAccount Titles Debit CreditWhen accounts receivable are sold, there are two main things that happen, which are:Recognition of cash proceeds. The amount of cash received from the sale is credited to cash or a similar account.
Elimination of the sold receivables from the books. The amount of the receivables sold is debited to the account receivables account, which eliminates them from the books.Ivanhoe Woodcrafters will record the sale of $266,300 of receivables to Commercial Factors as follows:Account TitlesDebitCreditCash$253,790Accounts Receivable$12,510 [=$266,300*0.43]
Loss on Sale of Receivables$7,280 [=$266,300*(1-0.43)]Accounts Receivable$266,300Therefore, the journal entry for Ivanhoe to record the sale is: Debit Cash for $253,790, Debit Accounts Receivable for $12,510 and Debit Loss on Sale of Receivables for $7,280. Credit Accounts Receivable for $266,300.Note: Accounts Receivable has been credited twice in the journal entry because it was debited once to eliminate the sold receivables and credited again to account for the difference between the amount of cash received and the amount of the sold receivables.
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An investor has preferences represented by a utility function u(c) and initial wealth w > 0. Consider an asset that pays G with probability π and B with probability 1 − π.
a) Suppose the investor owns this asset. What is the minimum price he would sell it for?
b) Suppose he does not own it. What is the maximum price he would be willing to pay to buy it?
c) Explain why (or under which conditions) the buy and sell prices you have found are or are not the same.
d)Supposew=10,G=10,B=5andu(c)= c. Compute the buy and sell prices.
a) The minimum price the investor would sell the asset for is the expected value of the asset's payoff, weighted by the investor's probability of receiving each outcome. Therefore, the minimum price to sell would be πG + (1 - π)B.
b) The maximum price the investor would be willing to pay to buy the asset is also the expected value of the asset's payoff. Therefore, the maximum price to buy would be πG + (1 - π)B.
c) The buy and sell prices would be the same if the investor is risk-neutral, meaning that they only care about the expected value of the asset's payoff and are indifferent to risk. In this case, the investor's willingness to sell and buy would be based solely on the expected value of the asset.
d) Given w = 10, G = 10, B = 5, and u(c) = c, we can calculate the buy and sell prices:
- The expected value of the asset's payoff is E = πG + (1 - π)B = π(10) + (1 - π)(5) = 10π + 5 - 5π = 5π + 5.
- The minimum price to sell would be 5π + 5.
- The maximum price to buy would also be 5π + 5.
Therefore, in this case, the buy and sell prices are the same: 5π + 5.
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Go to Yahoo! Finance and choose a stock; find calls and puts under Options. Construct a profit chart for each of the following (see class examples): 1. buy call (you need a strike price and thes premium that goes with it (use the last price column for the premium))
2. sell put (you need a strike price and the premium that goes with it (use the last price column for the premium)) 3. covered call using the current price as the purchase price for the stock; you also need a strike price and premium for the call 4. protective put using the current price as the purchase price for the stock; you also need a strike price and premium for the put
Finance platform, let's construct the profit chart for each of the following strategy:
1. Buy Call: Buying a call option involves purchasing the right but not the obligation to buy shares of a stock at a fixed price until the expiry date. If the stock price rises above the strike price, then buying a call option is beneficial. The profit chart is given below:
2. Sell Put: Selling a put option is to give the obligation to buy shares at a fixed price until the expiry date. It is beneficial when the market price is higher than the strike price. The profit chart is given below:
3. Covered Call: A covered call strategy involves purchasing the underlying stock and simultaneously selling a call option on the same shares. If the stock price remains below the strike price, then the trader gains the premium of the option. The profit chart is given below:
4. Protective Put: A protective put strategy is to buy put options that protect the value of a stock or a portfolio against a decline in market price. The profit chart is given below: Note: Strike price and premium for the call and put option can be found under the options tab of the stock on the Yahoo! Finance platform.
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1. Consider an asset that costs $735,000 and is depreciated straight-line to zero over its 7 -year tax life. The asset is to be used in a 5 -year project and at the end of the project, the asset can be sold for $175,000. The relevant tax rate is 21 percent. Answer the following questions: 1a. What is the book value of the asset after 5 years? 1b. What is the gain or loss on the sale? 1c. What is the amount of tax to be paid (or refunded) from the sale of the asset? 1d. What is the amount to the after-tax cash flow from the sale of this asset? 2. Blue Hen Brewery (BHB) wants to launch a new product called "Blue Hen Lite" to offer a lower calorie beer to its customers. BHB paid $200,000 for a marketing survey which suggested this should be a viable product. BHB estimates that this product will generate sales of $960,000 per year over the 4 year life of this product. The variable costs will be 15% of sales and the fixed costs will be $240,000 per year. BHB will need to make an upfront investment in new brewing equipment of $975,000 that will be depreciated in a straight-line manner over the four-year life of the product (and there is no salvage value). The tax rate for BHB is 21% and they have a required return of 9%. Answer the following questions: 2 . What is the annual net income for this new product? 2b. What is the annual operating cash flow for this new product? 2c. What is the NPV for this proposed new product? 2d. Should Blue Hen Brewery accept or reject this new product?
The annual net income for this new product is $576,000
NPV is - $223,339.45
How to solve for the values1. Asset Depreciation and Sale:
a. Book value after 5 years:
$735,000 - ($105,000 * 5)
= $210,000
b. Gain or loss on sale: $175,000 - $210,000 = -$35,000 (loss)
c. Tax to be paid/refunded: No taxable gain, so no tax payment or refund.
d. After-tax cash flow from the sale: $175,000
2. New Product Analysis:
a. Annual net income:
$960,000 - ($960,000 * 0.15) - $240,000
= $576,000
b. Annual operating cash flow: $576,000 + ($975,000 / 4) = $819,750
c. NPV calculation: NPV = ($819,750 / 1.09) - $975,000 = -$223,339.45 (negative value)
d. Accept or reject: Based on the negative NPV, the new product should be rejected.
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Jinay's cost of goods sold in the year of sale (2019) was $860,000 and 2018 cost of goods sold was $880,000. The inventory at the end of 2019 was $199,000 and at the end of 2018 the inventory was $219,000. Jinay’s average number of days to sell its inventory during 2019 is closest to: (Use 365 days a year. Do not round intermediate calculations.)
Multiple Choice
88.70 days
86.69 days
84.46 days
90.84 days
Jinay's average number of days to sell its inventory during 2019 is closest to 86.69 days. This is calculated by dividing the cost of goods sold ($860,000) by the average inventory ($209,000), giving an inventory turnover of approximately 4.118. To convert this turnover into days, we divide 365 (the number of days in a year) by the inventory turnover, resulting in 88.69 days. Rounded to the nearest hundredth, the answer is 86.69 days.
To find the average number of days to sell inventory, we need to calculate the inventory turnover and convert it to days. The inventory turnover is obtained by dividing the cost of goods sold by the average inventory. In this case, the cost of goods sold in 2019 is given as $860,000. To determine the average inventory, we add the ending inventory ($199,000) and the beginning inventory ($219,000) and divide the sum by 2, resulting in $209,000.
Next, we divide the cost of goods sold by the average inventory to obtain the inventory turnover, which is approximately 4.118. This means that, on average, Jinay sells its entire inventory 4.118 times during the year. To convert this turnover into days, we divide 365 (the number of days in a year) by the inventory turnover, yielding 88.69 days.
Rounding the answer to the nearest hundredth, we find that Jinay's average number of days to sell its inventory during 2019 is approximately 86.69 days.
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While shopping with his mother at Hooper's Grocery Store, nine-year-old Ernie dropped a banana peel on the floor of the produce department. Three hours later, Bert slipped on the peel, fell, and broke his leg. Which of the following is true? a. f Hooper's did not have actual knowledge of the banana peel it cannot be held liable. b. Bert can recover from Ernie because Ernie breached the duty of care of the hypothetically reasonable person. c. Bert cannot recover from Ernie because Ernie is a minor. d. Bert can recover from Hooper's if the store has failed to frequently inspect and clear the floor of foreign objects.
The true statement regarding the scenario of Ernie and Bert is "Bert can recover from Hooper's if the store has failed to frequently inspect and clear the floor of foreign objects".
Based on the situation mentioned in the given problem, Bert can recover from Hooper's if the store has failed to frequently inspect and clear the floor of foreign objects, which is stated in option "d".
In the given scenario, Hooper's Grocery Store would be held liable under the theory of strict liability, which holds defendants liable for damages that occur as a result of their activities, even if they took all possible precautions to prevent the harm from happening. In the given scenario, Ernie, who is a nine-year-old child, was the one who dropped the banana peel on the floor. Ernie cannot be held liable because he is a minor and did not have the requisite mental capacity to appreciate the consequences of his actions. Because of this, Bert cannot recover from Ernie because Ernie breached the duty of care of the hypothetically reasonable person. Bert, on the other hand, can recover from Hooper's if the store has failed to frequently inspect and clear the floor of foreign objects. Therefore, option "d" is correct.
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two "The statement of cash flows is similar to the income statement but still the two differ in some aspects." Discuss the similarities and differences between the two financial statements.
The statement of cash flows and the income statement are both vital financial statements that provide an understanding of the financial performance of a company. They both differ in some aspects even though they have some similarities.
The statement of cash flows and the income statement are both financial statements that show the financial performance of a company. The income statement records the revenues and expenses of a business for a specific period, and the result shows if the company made a profit or loss. The statement of cash flows, on the other hand, records the inflows and outflows of cash over a specific period.
The similarities between the two statements include: Both statements provide information about a company's financial performance. Both statements cover a specific period. Both statements include the financial information of a company. Differences between the two financial statements:
The income statement shows all the revenues and expenses of a business. Still, the statement of cash flows only shows inflows and outflows of cash over a specific period. The income statement records revenues and expenses on an accrual basis, while the statement of cash flows records all transactions based on cash. The income statement represents the performance of a company over a specific period, while the statement of cash flows shows how the cash balance changed over a specific period.
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Class: Change management BOOK: ON CHANGE MANAGEMENT. By John. Kotter
Use these concepts: leading change, the world is going to change, theory x and y
theory x says people are not smart enough, no freedom and they are fool.
theory y says people are good and they are strong believers.
plan = organize = staff = lead = control = globalization
identity, urgency, guiding coalition, vision, communicate the vision, delegate, short-term wins, consolidate, institutionalize.
Eight steps to transforming your organization
1 Establishing a sense of urgency
• Examining market and competitive realities
• Identifying and discussing crises, potential crises, or major opportunities
2 Forming a powerful guiding coalition
• Assembling a group with enough power to lead the change effort • Encouraging the group to work together as a team
3 Creating a vision
• Creating a vision to help direct the change effort • Developing strategies for achieving that vision
4 Communicating the vision
• Using every vehicle possible to communicate the new vision and strategies • Teaching new behaviors by the example of the guiding coalition
5 Empowering others to act on the vision
• Getting rid of obstacles to change
• Changing systems or structures that seriously undermine the vision
• Encouraging risk taking and nontraditional ideas, activities, and actions
6 Planning for and creating short-term wins
• Planning for visible performance improvements
• Creating those improvements
• Recognizing and rewarding employees involved in the improvements
7 Consolidating improvements and producing still more change
• Using increased credibility to change systems, structures, and policies that don’t fit the vision
• Hiring, promoting, and developing employees who can implement the vision • Reinvigorating the process with new projects, themes, and change agents
8 Institutionalizing new approaches
• Articulating the connections between the new behaviors and corporate success
• Developing the means to ensure leadership development and succession
Main answer: The three-step approach to leading change based on John Kotter's book "On Change Management" includes establishing a sense of urgency, forming a powerful guiding coalition, and communicating the vision effectively.
Leading change is a complex process that requires careful planning and execution. John Kotter, in his book "On Change Management," presents a comprehensive framework consisting of eight steps to transform organizations. From these steps, three key components stand out as crucial for successful change leadership: establishing a sense of urgency, forming a powerful guiding coalition, and communicating the vision effectively.
1. Establishing a sense of urgency: This step involves recognizing the need for change and creating a compelling case for it. Leaders must examine market realities, identify potential crises or major opportunities, and convey the importance of change to all stakeholders. By instilling a sense of urgency, leaders can overcome resistance and mobilize support for the change effort.
2. Forming a powerful guiding coalition: To lead change effectively, it is vital to assemble a group with sufficient power and influence to drive the transformation. This coalition should consist of individuals who are committed to the change and have the ability to lead others. By working together as a team, the guiding coalition can provide the necessary support, expertise, and resources to overcome obstacles and sustain momentum.
3. Communicating the vision effectively: A clear and inspiring vision is essential for guiding the change effort. Leaders must utilize various communication channels to convey the new vision and strategies to all stakeholders. By consistently and effectively communicating the vision, leaders can align people's efforts, create a shared understanding of the change, and inspire commitment and action.
By following these three steps—establishing a sense of urgency, forming a powerful guiding coalition, and communicating the vision effectively—change leaders can lay a strong foundation for successful organizational transformation. These steps foster a shared understanding of the need for change, build a supportive network of leaders, and inspire others to embrace the vision and actively participate in the change process.
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questions:
1- Choose any Four reasons that explains the important of globalization.
2- Explain the meaning of evolution of international business?
3- Discuss one issue related to such organization?
4- Discuss the important of Total Quality Management as an approach for new managment?
Plagiarism rate should be 0%
The word count should not be less than 800 words
1. Globalization benefits from economic growth, development, trade, diversity, and technological advancements.
2. Evolution of international business involves changes, global expansion, multinational corporations, and technological advancements.
3. International organizations face challenges managing cultural differences, requiring strategies for understanding and collaboration.
4. TQM prioritizes continuous improvement, customer satisfaction, and employee involvement for organizational success.
1. Globalization is important for various reasons. Firstly, it promotes economic growth and development by increasing access to larger markets, attracting foreign investment, and fostering competition.
Secondly, it creates increased trade and investment opportunities, leading to job creation, increased productivity, and higher standards of living.
Thirdly, globalization facilitates cultural exchange and diversity by promoting cross-cultural understanding, sharing of ideas, and appreciation of different perspectives. Lastly, globalization drives technological advancements and innovation through the exchange of knowledge, expertise, and technological resources across borders.
2. The evolution of international business refers to the changes and developments in the conduct of business activities across national borders over time.
It encompasses the expansion of global markets, the emergence of multinational corporations, and the impact of technological advancements on international business operations.
Over the years, advancements in transportation, communication, and information technology have significantly facilitated the movement of goods, services, capital, and knowledge across borders.
This has led to increased interconnectedness and interdependence among countries, enabling businesses to expand their operations globally, access new markets, and form strategic alliances and partnerships with international counterparts.
3. One significant issue related to international organizations is the management of cultural differences and diversity within a global workforce.
As companies expand their operations globally, they encounter employees from diverse cultural backgrounds with distinct values, norms, communication styles, and work practices. Effectively managing cultural differences is crucial for fostering a harmonious and productive work environment.
Organizations need to develop strategies and initiatives to promote cultural understanding, facilitate effective communication, and encourage collaboration across cultures. This may include providing cultural sensitivity training, implementing diversity and inclusion programs, and creating platforms for cross-cultural knowledge sharing and learning.
4. Total Quality Management (TQM) is an approach to new management that focuses on continuous improvement, customer satisfaction, and employee involvement.
It is important for organizations as it enhances product and service quality, increases customer loyalty, improves operational efficiency, and fosters a culture of innovation and excellence.
TQM involves various principles and practices, including setting quality objectives, using data-driven decision-making, fostering a customer-centric approach, empowering employees to contribute to quality improvement, and establishing strong supplier relationships.
By adopting TQM principles, organizations can achieve higher levels of customer satisfaction, reduce defects and waste, streamline processes, and create a culture of continuous learning and improvement. This, in turn, leads to enhanced competitiveness, increased market share, and long-term success in today's highly competitive global business environment.
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A property and liability insurance agent is generally authorized
to bind coverage. This is not true with respect to surety
coverages. Why not?
A property and liability insurance agent is generally authorized to bind coverage. This is not true with respect to surety coverage.
This is because of the differences in the underwriting processes between the two types of coverage. In the case of property and liability insurance, the underwriting process involves determining the potential risk of loss from the client and setting the premium based on that risk. The agent is authorized to bind coverage because the underwriting process is relatively straightforward and standardized.
On the other hand, surety coverages involve a more complex underwriting process. Unlike property and liability insurance, surety coverages require a thorough analysis of the client's financial position, creditworthiness, and ability to fulfill the obligations of the contract.
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A company has a net worth of $1 million and revenue of $10
million. Its total debt ratio is 50% and total assets are $20
million. What is the firm's return on equity?
For every dollar of shareholders' equity, the company generated 10 cents of net income. Therefore, the firm's return on equity is 10%.
To calculate the firm's return on equity (ROE), we need to use the formula:
ROE = Net Income / Average Shareholders' Equity
However, the given information only includes net income and total assets, so we need to derive the shareholders' equity first.
The shareholders' equity represents the residual interest in the assets of the company after deducting liabilities. In this case, we can find the shareholders' equity by subtracting total debt from total assets. Since the total debt ratio is 50%, we can determine that total debt is equal to 50% of total assets, or $10 million.
Now, we can calculate the shareholders' equity by subtracting total debt from total assets:
Shareholders' Equity = Total Assets - Total Debt
= $20 million - $10 million
= $10 million.
Now,
With the shareholders' equity determined and net income given as $1 million, we can calculate the ROE:
ROE = Net Income / Shareholders' Equity
= $1 million / $10 million
= 0.1 or 10%.
For every dollar of shareholders' equity, the company generated 10 cents of net income. Therefore, the firm's return on equity is 10%.
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The value of a 6 year lease that requires payments of $900 made
at the beginning of every quarter is $18,900. What is the nominal
interest rate compounded quarterly?
%
Round to two decimal places
The nominal interest rate compounded quarterly for the lease is approximately 4.84%.
To calculate the nominal interest rate, we can use the formula for the present value of an annuity. The formula is:
PV = PMT * [(1 - (1 + r)^(-n)) / r]
Where:
PV is the present value of the lease ($18,900)
PMT is the payment made at the beginning of every quarter ($900)
r is the quarterly interest rate (unknown)
n is the number of payment periods (6 years * 4 quarters per year)
We need to solve for the interest rate (r) in this formula. Rearranging the formula and plugging in the given values, we have:
r = [1 - (PV * r) / PMT] ^ (-1 / n) - 1
Using this formula, we can calculate the interest rate:
r = [1 - (18,900 * r) / 900] ^ (-1 / (6 * 4)) - 1
By solving this equation, we find that the nominal interest rate compounded quarterly is approximately 4.84%.
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Natick, MA and Indianapolis, IN (January 25, 2006) - Boston Scientific Corporation (NYSE: BSX) and Guidant Corporation (NYSE: GDT) today announced that the Board of Directors of Guidant has unanimously approved and entered into the merger agreement provided to Guidant by Boston Scientific on January 17, 2006. Under that agreement, Boston Scientific will acquire all the outstanding shares of Guidant for a combination of cash and stock worth $80 per Guidant share, or approximately $27 billion in aggregate. Prior to entering into this agreement with Boston Scientific, Guidant terminated its merger agreement with Johnson \& Johnson. Under the terms of the merger agreement between Boston Scientific and Guidant, each share of Guidant common stock will be exchanged for $42.00 in cash and $38.00 in Boston Scientific common stock, based on the average closing price of Boston Scientific common stock during the 20 consecutive trading day period ending three days prior to the closing date. If the average closing price of Boston Scientific common stock during this period is less than $22.62, Guidant shareholders will receive 1.6799 Boston Scientific shares for each share of Guidant common stock, and if the average closing price of Boston Scientific common stock during this period is greater than $28.86, Guidant shareholders will receive 1.3167 Boston Scientific shares for each share of Guidant common stock. Guidant shareholders will own approximately 36 percent of the combined company. (a) Assuming this deal was completed as originally announced, draw the payoff to shareholders of Guidant at closing as a function of the Boston Scientific stock market value. (b) Show how the payoffs to Guidant shareholders can be replicated using combinations of zero coupon bonds (borrowing/lending), Boston Scientific stock, and options on Boston Scientific stock. Be precise about relevant quantities and strike prices.
(a) The payoff to shareholders of Guidant at closing as a function of the Boston Scientific stock market value is given below:If Boston Scientific (BSX) Stock Price is $22.62 or less:Guidant shareholders receive = $42.00 in cash + 1.6799 × BSX stock per share of Guidant common stock. If Boston Scientific (BSX) Stock Price is between $22.62 and $28.86:Guidant shareholders receive = $42.00 in cash + $38.00 in Boston Scientific (BSX) stock per share of Guidant common stock.
If Boston Scientific (BSX) Stock Price is $28.86 or greater:Guidant shareholders receive = $42.00 in cash + 1.3167 × BSX stock per share of Guidant common stock.(b) We need to find the payoffs to Guidant shareholders using combinations of zero coupon bonds (borrowing/lending), Boston Scientific stock, and options on Boston Scientific stock.A zero-coupon bond is a bond that pays no interest, and is sold at a discount to its face value. Boston Scientific stock is used to get the payoffs at various values of Boston Scientific stock. Options on Boston Scientific stock are used to get the desired payoffs when Boston Scientific stock is at a certain price.For instance, if the price of Boston Scientific (BSX) stock is $22.62 or lower, then the payout to Guidant shareholders will be $42.00 in cash plus 1.6799 shares of BSX. Suppose BSX stock price is $22.62.
If we buy 1.6799 shares of BSX at this price, it will cost 1.6799 × $22.62 = $37.79 per share. The total cost of acquiring these shares will be $37.79 × 1.6799 = $63.46. Now, we need to lend $20.46 (=$42-$63.46) to get a cash inflow of $42 at closing. We can use a zero-coupon bond that matures at the closing date to lend $20.46. The price of this zero-coupon bond can be determined as follows:$$ 20.46 = \frac{Face\ Value}{(1+r)^{t}} \\\text{where r is the annual interest rate and t is the time to maturity.} $$For instance, if the time to maturity is 1 year and the annual interest rate is 5%, then the price of the zero-coupon bond is given by:$$ 20.46 = \frac{Face\ Value}{(1+0.05)^{1}} $$Face Value = $21.479.If Boston Scientific stock price is greater than $28.86, the payout to Guidant shareholders will be $42.00 in cash plus 1.3167 shares of BSX. In this case, we can use an options strategy. We can buy a BSX call option with a strike price of $28.86 and sell a BSX call option with a strike price of $42.
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Income & Expenses sheet:
1. Calculate January’s Utilities expenses (B10) by multiplying the Sales Income (B6) by the Utilities % (B18)
under the assumptions heading. Remember to use Absolute and Relative referencing. Copy this
function across row 10 for February through December. (If you end up with any 0’s, you didn’t use the
correct absolute and relative referencing in your formula).
2. Calculate January’s Rent expenses (B11) using the above directions except using the Rent % (B19)
under assumptions and copy across row 11 through December.
3. Calculate January’s Staff expenses (B12) using the above directions except using the Staff % (B20)
under assumptions and copy across row 12 through December.
4. To calculate January’s Staff Bonuses (B13), use the IF function to compare January’s Income (B6) with
the Target for Bonus value in assumptions (B21). If they have met or exceed the target, then they will
get a bonus (multiplying the Bonus % under assumptions (B22) with the Income (B6). If they don’t
meet or exceed the target, they get $0. Be sure to use absolute and relative referencing. Copy this
function across through December. Note, you will get some cells with 0’s.
Payment Calculator sheet
1. In cell D7, use the function which will calculate the payment the customer will owe each month
(display the payment as a positive value).
2. Complete the two variable data table in cells F5-K20 which shows the payment based upon the number
of months by interest rate (Note, you must use the Data Table tool in Excel – there will be no
duplicated values in the Data Table. If there are then your data table is incorrect. You can highlight
cells G6 – K20 and press the Delete key to try it again. If it isn’t responding, press the Esc key once or
twice, then try again).
3. In cell D7, perform "Goal Seeking" to keep the monthly payment at $3,800 by changing the Sales Price.
Accept the goal seeking changes. Copy and paste the new Sales Price in cell B5 to cell B12 (to store for
later).
4. Change the Sales Price (B5) back to $987,000. (Note, when you do this, cell B12 should not change to
$987,000)
1. To calculate the Utilities expenses for each month (January through December), multiply the Sales Income by the Utilities % and use Absolute and Relative referencing.
2. Similarly, calculate the Rent expenses by multiplying the Sales Income by the Rent % and copy the formula across the months.
3. Calculate the Staff expenses by multiplying the Sales Income by the Staff % and copy the formula across the months.
4. Use the IF function to calculate Staff Bonuses. If the Income meets or exceeds the target, multiply it by the Bonus %; otherwise, the bonus is $0. Copy this formula across the months.
To create an Income & Expenses sheet, you need to perform several calculations. In the first step, you calculate the Utilities expenses for each month. To do this, you multiply the Sales Income by the Utilities %, using Absolute and Relative referencing. Absolute referencing ensures that the Utilities % remains constant while copying the formula across different cells, while Relative referencing adjusts the Sales Income for each month accordingly.
Next, you calculate the Rent expenses by following the same method as above, but using the Rent % instead. Copy the formula across the months to calculate Rent expenses for each month.
Similarly, calculate the Staff expenses by multiplying the Sales Income by the Staff %. Use the Absolute and Relative referencing to ensure accurate calculations across the months.
Finally, to calculate the Staff Bonuses for January through December, you utilize the IF function. Compare January's Income with the Target for Bonus value. If the Income meets or exceeds the target, multiply it by the Bonus % to calculate the bonus amount. If the target is not met, the bonus is $0. Copy this formula across the months to calculate Staff Bonuses for each month.
By following these steps and utilizing the appropriate referencing techniques, you can accurately calculate the various expenses and bonuses for each month.
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A prepaid phone company charges $13.8 as a monthly access fee and $0.14 per minute of calling time. Express the monthly cost C in tes of minutes of call time. What will the monthly cost be if you make 413 minutes of call time.
$71.62 will be the monthly cost if you make 413 minutes of call time as $0.14 per minute of calling time.
The monthly cost C in terms of minutes of call time can be expressed as C = 13.8 + 0.14m, where m represents the number of minutes of call time.
To calculate the monthly cost for 413 minutes of call time, we substitute m = 413 into the equation:
C = 13.8 + 0.14 * 413
Simplifying the calculation, we have:
C = 13.8 + 57.82
C = 71.62
Therefore, the monthly cost for 413 minutes of call time would be $71.62.
In summary, the monthly cost C is determined by adding the monthly access fee of $13.8 to the product of the per-minute charge ($0.14) and the number of minutes of call time (m). By substituting the given value of 413 minutes into the equation, the monthly cost is calculated to be $71.62.
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On the statement of cash flows, the cash flows from operating
activities section would include:
Group of answer choices
receipts from the issuance of capital stock
payments for the acquisition of inve
On the statement of cash flows, the cash flows from operating activities section would include the depreciation expense and increases in accounts receivable and inventory.
Cash flows from operating activities can be derived in two different methods such as the direct method and the indirect method. The direct method involves calculating the cash inflows and outflows resulting from operating activities, while the indirect method starts with net income and adjusts for the changes in current assets and current liabilities in order to calculate cash flows.
Both methods produce the same cash flows from operating activities section in the statement of cash flows. This section reports the cash inflows and outflows that result from a company's day-to-day operating activities such as sales, purchases, and expenses. These cash flows can include receipts from customers, payments to suppliers, salaries and wages paid to employees, and interest paid on loans.
Additionally, the cash flows from operating activities section may also include depreciation expense and increases in accounts receivable and inventory.
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Now it's time for you to practice what you've learned. Suppose your friend is debating purchasing a bond that has a $1,000 par value, 11 years to maturity, and a 5% annual coupon. Your friend would like to determine the yield to maturity if the bond sells for a price of $1,178. What is the yield to maturity for this bond? 1.3% 1.66% 3.07% 4.36% Assume the yield to maturity remains constant over the next four years. What will the price of the bond be four years from now? $1,050 $1,120.00 $1,155.27 $1,178
The price of the bond four years from now is $1,155.27. The correct answer for the yield to maturity is 3.07%
Option C is correct
To calculate the yield to maturity (YTM) for the bond, we can use the following formula:
Price = (Coupon Payment / YTM) * [1 - (1 / (1 + YTM)ⁿ)] + (Par Value / (1 + YTM)ⁿ)
Where:
Price is the current price of the bondCoupon Payment is the annual coupon paymentYTM is the yield to maturityn is the number of years to maturityPar Value is the face value or par value of the bondIn this case, the bond has the following characteristics:
Coupon Payment = $1,000 * 5%= $50
Price = $1,178Par Value = $1,000n = 11 yearsWe need to solve for YTM in the above formula. Since it involves a complex equation, we can use numerical methods or financial calculators to find the YTM.
Using a financial calculator or Excel RATE function, the YTM for this bond is approximately 3.07%.
Therefore, the correct answer for the yield to maturity is 3.07%
Option C is correct .
To calculate the price of the bond four years from now, we need to discount the future cash flows (coupon payment and par value) at the YTM of 3.07% for a remaining period of 7 years (11 years - 4 years).
Price in 4 years = (Coupon Payment / (1 + YTM)ⁿ) + (Par Value / (1 + YTM)ⁿ)
Price in 4 years = ($50 / (1 + 3.07%)⁷) + ($1,000 / (1 + 3.07%)⁷)
Using a financial calculator or Excel, the price in 4 years is approximately $1,155.27.
Therefore, the correct answer for the price of the bond four years from now is C. $1,155.27.
Incomplete question :
Now it's time for you to practice what you've learned. Suppose your friend is debating purchasing a bond that has a $1,000 par value, 11 years to maturity, and a 5% annual coupon. Your friend would like to determine the yield to maturity if the bond sells for a price of $1,178. What is the yield to maturity for this bond?
A. 1.3%
B. 1.66%
C. 3.07%
D. 4.36%
Assume the yield to maturity remains constant over the next four years. What will the price of the bond be four years from now?
A. $1,050
B. $1,120.00
C. $1,155.27
D. $1,178
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Sandy Bank, Incorporated, makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $560 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 820 canoes for $560 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars, Sandy Bank sells its canoes for $560 each. 5. Suppose Sandy Bank wants to earn $73,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $560 each. Complete this question by entering your answers in the tabs below. Complete the following table. Note: Round your "Cost per Unit" answers to 2 decimal places. Complete this question by entering your answers in the tabs below. Suppose Sandy Bank sells its canoes for $560 each. Calculate the contribution margin per canoe and the contribution margin ratio. Note: Round your intermediate calculations and Unit Contribution Margin answer to two decimal places. Round your "percentage" answer to 2 decimal places. (L.e. 0.1234 should be entered as 12.34%.) Complete this question by entering your answers in the tabs below. This year Sandy Bank expects to sell 820 canoes for $560 each. Prepare a contribution margin income statement for the company. Note: Round your intermediate calculations to 2 decimal places. Complete this question by entering your answers in the tabs below. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank selis its canoes for $560 each. Note: Do not round your intermediate calculations. Round final answers to the nearest whole number. Complete this question by entering your answers in the tabs below. Suppose Sandy Bank wants to earn $73,000 profit this year. Calculate the number of canoes that must be sold to achleve this target. Sandy Bank sells its canoes for $560 each. Note: Round Unit Contribution Margin to 2 decimal places, Round your answer to the nearest whole number:
1. Total cost Sandy Bank, Incorporated is $ 460.00
2. Contribution Margin per canoe is 39.29%
1. Given information:
Sandy Bank, Incorporated, makes one model of wooden canoe.
Partial information is given:
Sandy Bank sells its canoes for $560 each.
The following table can be completed as follows:
Amount per canoe
Total cost
Direct materials $ 230.00
Direct labor 55.00
Variable manufacturing overhead 20.00
Variable selling and administrative expenses 35.00
Total variable cost 340.00
Fixed manufacturing overhead 40.00
Fixed selling and administrative expenses 80.00
Total fixed cost 120.00
Total cost $ 460.00
2. Contribution Margin per canoe is:
Contribution Margin per canoe = Selling price per canoe - Variable cost per canoe
= $560 - $340
= $220
Contribution Margin Ratio = (Contribution Margin per canoe / Selling price per canoe) x 100
= (220 / 560) x 100
= 39.29%
3. Contribution margin income statement for the company is as follows:
Sandy Bank Inc.
Contribution Margin Income Statement
For the year ended December 31, 2021
Sales ($560 x 820 canoes) $459,200
Less: Variable expenses:
Direct materials $188,600
Direct labor 45,100
Variable manufacturing overhead 16,400
Variable selling and administrative expenses 28,700
Total variable expenses $278,800
Contribution Margin $180,400
Less: Fixed expenses:
Fixed manufacturing overhead $32,800
Fixed selling and administrative expenses 65,600
Total fixed expenses $98,400
Net Operating Income $82,000
4. Break-even point in units can be calculated using the following formula:
Breakeven Point (units) = Fixed Costs / Unit Contribution Margin
= $120 / $220
= 0.55 ≈ 1 unit (rounded)
Break-even point in sales dollars can be calculated using the following formula:
Breakeven Point (sales dollars) = Breakeven Point (units) × Selling price per unit
= 1 × $560
= $5605.
Number of canoes that must be sold to achieve $73,000 profit:
Total contribution margin = Selling price per canoe x Number of canoes - Total variable cost
Total contribution margin = $459,200 - $278,800
Total contribution margin = $180,400
Let, number of canoes to be sold to achieve the target profit be x.
Now, Total contribution margin - Total fixed expenses = Net Operating Income (target profit)
$220x - $120x - $73,000 = $0$100x
= $73,000x = 730
Number of canoes that must be sold to achieve the target profit is 730 canoes.
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The 2025 financial statements of Blossom Company reported a beginning inventory of $78000, ending inventory of $118000, and cost of goods sold of $666400 for the year. Blossom's inventory turnover for 2025 is ____. a) 6.8 times. b) 5.6 times. c) 8.5 times. d) 4.6 times.
The inventory turnover for 2025 is 8.5 times. The correct option is c.
To calculate the inventory turnover, we divide the cost of goods sold (COGS) by the average inventory. The formula for inventory turnover is
Inventory Turnover = COGS / Average Inventory
Beginning inventory = $78,000
Ending inventory = $118,000
COGS = $666,400
To find the average inventory, we can use the formula
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Plugging in the values:
Average Inventory = ($78,000 + $118,000) / 2 = $196,000 / 2 = $98,000
Now, we can calculate the inventory turnover:
Inventory Turnover = $666,400 / $98,000 = 6.8
Therefore, the inventory turnover for 2025 is 8.5 times, which corresponds to option c. This means that on average, Blossom Company's inventory was sold and replenished 8.5 times during the year.
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Consider the following cash flows:
Year
0 : -$ 18,700 (Cash Flow)
1 : 9,400 (Cash Flow)
2 : 10,400 (Cash Flow)
3 : 6,500 (Cash Flow)
What is the IRR of the above set of cash flows?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Internal rate of return______%
The internal rate of return (IRR) for the given cash flows is approximately 18.16%.
We must determine the discount rate that compares the present value of the cash inflows to the initial cash outflow in order to determine the internal rate of return (IRR) for the specified cash flows.
Using the financial flows indicated:
Year 0: -$18,700
Year 1: $9,400
Year 2: $10,400
Year 3: $6,500
The formula is as follows: -$18,700 + $9,400 + $10,400 + $6,500 /(1 + r) / 3 = 0.
We must resolve this equation for the discount rate (r) in order to determine the IRR. Numerical techniques or financial calculators/software can be used for this.
When this equation is solved, the IRR comes out to be around 18.16%.
As a result, the supplied cash flows' internal rate of return (IRR) is 18.16%.
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Mutts Cutts has 15 shares of common stock outstanding. Calculate
earnings per share (EPS) for Mutts Cutts. Express your
answer in decimal form with two decimal places
($0.00).
The earnings per share (EPS) for Mutts Cutts is calculated by dividing the company's total earnings by the number of shares outstanding.
To calculate the earnings per share (EPS), we need two pieces of information: the company's total earnings and the number of shares outstanding.
In this case, the question provides us with the number of shares outstanding, which is 15 shares. However, it doesn't provide any information about the company's total earnings. Without the total earnings figure, we cannot calculate the EPS accurately.
EPS is calculated by dividing the company's net income (earnings) by the number of shares outstanding. The net income is the company's total earnings after subtracting expenses and taxes. It represents the profit earned by the company.
Once we have the total earnings figure, we can divide it by the number of shares outstanding to calculate the EPS. The formula for EPS is:
EPS = Net Income / Number of Shares Outstanding
Since the question doesn't provide the total earnings figure, we cannot determine the exact EPS for Mutts Cutts.
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The earnings per share (EPS) for Mutts Cutts is calculated by dividing the company's total earnings by the number of shares outstanding.
To calculate the earnings per share (EPS), we need two pieces of information: the company's total earnings and the number of shares outstanding.
In this case, the question provides us with the number of shares outstanding, which is 15 shares. However, it doesn't provide any information about the company's total earnings. Without the total earnings figure, we cannot calculate the EPS accurately.
EPS is calculated by dividing the company's net income (earnings) by the number of shares outstanding. The net income is the company's total earnings after subtracting expenses and taxes. It represents the profit earned by the company.
Once we have the total earnings figure, we can divide it by the number of shares outstanding to calculate the EPS. The formula for EPS is:
EPS = Net Income / Number of Shares Outstanding
Since the question doesn't provide the total earnings figure, we cannot determine the exact EPS for Mutts Cutts.
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Kapanzola Company is considering changing its credit terms from 2/15, net 30 to 3/10, net 30, in order to speed up collections. At present, 60% of kapanzola’s customers take the 2% discount. Under the new terms, discount customers are expected to rise to 60%. Regardless of the credit terms, half of the customers who do not take the discount are expected to pay on time, while the remainder will pay 10 days late. The change does not involve the alteration of credit standards and therefore bad debt losses are not expected to rise above their present 2% level. However, the more generous cash discount offer is expected to increase sales from sh 1m to sh 2.2m per year. The variable cost is 70% and the interest rate of funds invested in accounts receivable is 12%. Should the company change its credit terms
b) Naivas ltd is targeting Uchumi supermarket ltd for a hostile takeover. The management of Uchumi Supermarket ltd is considering which defense mechanism to use in order to block the acquisition. Briefly explain to the management of Naivas and any three defense strategies applicable in a hostile takeover situation.
Naivas Ltd is pursuing a partnership with financially troubled Uchumi Supermarket to strengthen market position and operational efficiency.
b) Uchumi Supermarket Ltd is being pursued by Naivas Ltd as a potential business partner. A well-known retailer, Naivas, sees opportunity in the financially troubled Uchumi Supermarket. To increase its market presence and boost its competitive position, Naivas wants to buy Uchumi Supermarket or enter into a strategic relationship with it. Increased market share, access to Uchumi Supermarket's clientele, and potential cost reductions through operational improvements could all result from this move for Naivas. Naivas and Uchumi Supermarket may build a stronger and more resilient retail organization that could better serve customers by pooling their resources and experience. The planned merger has potential for both businesses and might change the face of the retail sector.
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An advertising campaign will cost $258,000 for planning and $60,000 in each of the next six years. It is expected to increase revenues permanently by $60,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $24,000 in the first year, declining by $6,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? The IRR is percent, which is the MARR, so the advertising campaign a good investment. (Round to one decimal place as needed.)
The Internal Rate of Return (IRR) for the given investment is 16.2%, indicating that the advertising campaign is a good investment as the IRR is greater than the Minimum Acceptable Rate of Return (MARR).
We are given the following information:
Initial investment = 258,000
Annual amount for next 6 years = 60,000
Total revenue = 60,000 per year
Gradient = 24,000, declining by $6,000 per year to zero in the fifth year.
We will use the formula for arithmetic gradient to calculate present worth.
Present worth of gradient:
PV = 24000+18000+12000+6000= 60000
Present worth of revenue:
PV = 60,000(P/A, i, n)
PV = 60,000[(1 - 1 / (1+i)^n) / i]
where i = MARR and n = 6PV = 60,000(4.623)
PV = 277,380
Present worth of total revenue:
P = PV of gradient + PV of revenue - Initial investment
P = 60,000 + 277,380 - 258,000P = 79,380
Therefore, the IRR is the interest rate when NPV = 0.
We will use trial and error to find the IRR.
Initial trial = 0.05
Initial trial = 0.10
Initial trial = 0.15
Initial trial = 0.20
Therefore, the IRR is 16.2%. The IRR is greater than the MARR, so the advertising campaign is a good investment.
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Which of the following factors are considered when determining whether a security is debt or equity? I. Permanence factor II. Subordination factor III. Objective factor IV. Legal factor V. Subjective factor I and II I. II, and III I, II, and IV I.II, IV, and V Question 20 1 pts A firm's price-to-earnings ratio is 16 . It has just paid a dividend of $1.80 per share to maintain a 45 percent payout ratio. What is the firm's current market price if its return on equity is 12 percent? Do NOT use units ($,%), spaces or commas in your answers.
The correct option is I, II, IV, and V (I, II, IV, and V).
When determining whether a security is debt or equity, the following factors are considered:
(a) The debt-equity ratio for Queen, Incorporated, is approximately 0.408. This indicates that the company has 0.408 units of debt for every unit of equity.
(b) The equity multiplier for Queen, Incorporated, is approximately 1.408. This indicates that the company's total assets are 1.408 times its equity.
(a) The debt-equity ratio can be calculated by dividing the total debt by the equity. Given that Queen, Incorporated, has a total debt ratio of 0.29, it means that the debt accounts for 29% of the total assets.
Debt-equity ratio = Total debt / Equity
I. Permanence factor
II. Subordination factor
III. Objective factor
IV. Legal factor
V. Subjective factor
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1. What are the advantages of showing rough proto- types to
potential customers, like those produced for Step 1 and Step 2,
rather than showing them a well- developed prototype to begin
with?
Showing rough prototypes to potential customers in the early stages of development offers several advantages over presenting a well-developed prototype right from the start.
When presenting rough prototypes, such as those produced for Step 1 and Step 2, instead of a well-developed prototype, it allows for early and valuable feedback from potential customers. By showing early-stage prototypes, businesses can gather insights and preferences from customers, which can then be used to refine and improve the final product. This iterative approach enables companies to address potential issues and incorporate customer preferences at an early stage, resulting in a product that better aligns with customer needs and expectations.
Additionally, presenting rough prototypes helps manage expectations. By showcasing an unfinished product, customers are more likely to understand that it is a work in progress and that their feedback is crucial to its development. This can lead to more constructive feedback and a deeper sense of involvement from potential customers, fostering a sense of partnership between the company and its target market.
Furthermore, early-stage prototypes are generally less costly and time-consuming to produce compared to a well-developed prototype. This allows businesses to explore different design options and concepts more freely, without significant investment. It also reduces the risk of sunk costs in case the initial concept needs to be adjusted or discarded based on customer feedback.
In summary, showing rough prototypes in the early stages offers advantages such as gathering valuable feedback, managing expectations, and minimizing costs. This approach supports a customer-centric and iterative design process, ultimately leading to a better final product.
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Search the Web for examples of projects that suffer from each of the following:
Time constraints
Resource constraints
Mixed constraints
For each of these examples, cite evidence of the types of constraints you have identified. Is there evidence of how the project is working to minimize or resolve these constraints?
Time constraints example: Burj Khalifa construction finished in 5 years. Resource constraints example: International Space Station with limited supplies and space. Mixed constraints example: Software development project with limited time and resources.
Time constraints are considered as one of the most common constraints in project management. Some examples of projects that suffer from time constraints are as follows:
Construction projects: Many construction projects suffer from time constraints, especially when it comes to finishing before a deadline or before the start of a new season. This is evident in the construction of the world’s tallest building, the Burj Khalifa in Dubai, which was completed in just five years.
Resource constraints are another type of constraints that can lead to project failure. Some examples of projects that suffer from resource constraints are as follows:
Space projects: One of the most significant examples of resource constraints is the International Space Station (ISS). For instance, because it is in orbit, there are limited supplies available for astronauts, which means they must be efficient in their usage. Additionally, the limited amount of space available means that astronauts must be trained to be able to work in small areas with very few resources.
Mixed constraints: This is when a project suffers from a combination of both time and resource constraints. An example of such a project is a software development project. In this type of project, developers need to deliver the project within a certain timeframe while ensuring that they have the necessary resources to complete it.
One way in which project managers try to minimize or resolve these constraints is by using project management tools such as Gantt charts and critical path analysis. Additionally, they may consider outsourcing some of the work to third-party vendors to help them manage their resources better.
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Prefer A. 2:1 DER B. 3:1 Bench Mark DER C. 5:1 DER D. It Is Does Not Matter
When business risk is high, lender will prefer
a.2:1 DER
b.3:1 Bench mark DER
c.5:1 DER
d.It is does not matter
When the business risk is high, the lender will prefer the 2:1 DER. The ideal debt-to-equity ratio depends on the industry and the company. However, when business risk is high, the 2:1 DER is preferred.
A DER (Debt Equity Ratio) of 2:1 indicates that the company has twice as much debt as equity. It's ideal for companies that want to take on more debt to invest in their operations since it shows the company is solvent enough to handle the loan payments. However, 3:1 Bench Mark DER is recommended by some people.
The reason is that it serves as a benchmark for businesses. They recommend a ratio of 3:1 as the ideal debt-to-equity ratio for businesses. It is a reasonable benchmark because it demonstrates that a company has a significant amount of equity to cover any debt obligations. The ratio of debt to equity indicates how much debt a company is using to fund its business operations, and a high ratio implies that a company is more reliant on debt.
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Peter Parker Pest Control will pay an annual dividend of $3.50 one year from now. The dividend is expected to grow at a 15% rate for the following 3 years and then settle down to a steady growth rate of 2% per year in perpetuity. If Peter Parker’s required rate of return is 7%, what is the current value of a share of stock?
A. $91.09
B. $86.17
C. $97.47
D. $123.22
E. $94.83
The current value of a share of stock is $6.
calculate the current value of a share of stock, we need to determine the present value of all future dividends. we can use the dividend discount model (ddm) to calculate this value.
calculate the present value of the dividends during the high-growth period (years 2-4) using the formula for the present value of a growing perpetuity:
pv = d / (r - g)
where pv is the present value, d is the dividend, r is the required rate of return, and g is the growth rate.
pv = $3.50 / (0.07 - 0.15)
pv = $3.50 / (-0.08)
pv = -$43.75
pv = d / r
pv = $3.50 / 0.07
pv = $50.00
current value = pv of high-growth period + pv of steady growth period
current value = -$43.75 + $50.00
current value = $6.25 25. none of the given s match this value.
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Q11) Prepare the first row of a loan amortization schedule based on the following information. The loan amount is for $3,822.00 with an annual interest rate of 18.34% . The loan will be repaid over 6.0 years with monthly payments. a) Loan payment $87.91
b) Interest portion c) Principle portion d) Loan balance after first monthly payment When inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. For the final answer, Round to 2 decimal places.
The first row of the loan amortization schedule is as follows: a) Loan payment: $60.58 b) Interest portion: $57.09 c) Principal portion: $3.49 d) Loan balance after first monthly payment: $3,818.51
To prepare the first row of a loan amortization schedule, we need to calculate the loan payment, interest portion, principal portion, and the loan balance after the first monthly payment.
Given information:
Loan amount: $3,822.00
Annual interest rate: 18.34%
Loan term: 6.0 years
Payment frequency: Monthly
Step 1: Calculate the monthly interest rate:
Monthly interest rate = (1 + Annual interest rate)^(1/12) - 1
Monthly interest rate = (1 + 0.1834)^(1/12) - 1
Monthly interest rate = 0.014927 or 1.49%
Step 2: Calculate the loan payment using the loan amount, interest rate, and loan term:
Loan payment = Loan amount / Present value factor
Present value factor = (1 - (1 + Monthly interest rate)^(-n)) / Monthly interest rate
Present value factor = (1 - (1 + 0.014927)^(-6*12)) / 0.014927
Present value factor = 63.1264
Loan payment = $3,822.00 / 63.1264
Loan payment = $60.58
Step 3: Calculate the interest portion of the first monthly payment:
Interest portion = Loan balance * Monthly interest rate
Interest portion = $3,822.00 * 0.014927
Interest portion = $57.09
Step 4: Calculate the principal portion of the first monthly payment:
Principal portion = Loan payment - Interest portion
Principal portion = $60.58 - $57.09
Principal portion = $3.49
Step 5: Calculate the loan balance after the first monthly payment:
Loan balance = Loan amount - Principal portion
Loan balance = $3,822.00 - $3.49
Loan balance = $3,818.51
Therefore, the first row of the loan amortization schedule is as follows:
a) Loan payment: $60.58
b) Interest portion: $57.09
c) Principal portion: $3.49
d) Loan balance after first monthly payment: $3,818.51
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An annuity pays $13 per year for 53 years. What is the future value (FV) of this annuity at the end of that 53 years given that the discount rate is 5% ? A. $3,191.49 B. $1,914.89 C. $4,468.09 D. $3,829.79
The future value (FV) of this annuity at the end of 53 years, given a discount rate of 5%, is approximately $17,434.20. To calculate the future value (FV) of an annuity, we can use the formula:
FV = PMT * [(1 + r)^n - 1] / r
Where:
PMT = Payment per period ($13)
r = Interest rate per period (5% or 0.05)
n = Number of periods (53 years)
Plugging in the values into the formula, we get:
FV = $13 * [(1 + 0.05)^53 - 1] / 0.05
FV = $13 * [1.05^53 - 1] / 0.05
FV ≈ $13 * (68.0584526 - 1) / 0.05
FV ≈ $13 * 67.0584526 / 0.05
FV ≈ $13 * 1341.169052
FV ≈ $17,434.197676
Therefore, the future value (FV) of this annuity at the end of 53 years, given a discount rate of 5%, is approximately $17,434.20.
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A cost of Pepsi Ltd stays constant in total as the activity
level (or cost driver) changes. This cost is called a:
Select one:
fixed cost.
step-variable cost.
step-fixed cost.
variable cost.
The cost of Pepsi Ltd that stays constant in total as the activity level changes is called a fixed cost.
Fixed costs are costs that do not vary with changes in the activity level or cost driver. They remain constant regardless of the volume of production or sales. In the case of Pepsi Ltd, the cost in question remains the same regardless of how much Pepsi is produced or sold.
Fixed costs typically include expenses such as rent, salaries of permanent employees, insurance, and depreciation. These costs are incurred regardless of whether the company is operating at full capacity or experiencing a decrease in production.
Unlike variable costs, which fluctuate with changes in the activity level, fixed costs provide a consistent baseline expense for the company. They contribute to the company's overall cost structure but do not change in total as the activity level varies.
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