Carlos Ghosn, a renowned business executive, has demonstrated specific beliefs and values regarding leadership and change throughout his career.
Ghosn emphasizes the importance of strong leadership, taking calculated risks, and implementing transformative changes within organizations. His beliefs revolve around the need for decisive action, accountability, and a focus on results.
Ghosn's beliefs and values have been evident in his various leadership positions. One notable example is his tenure as CEO of Nissan. When Ghosn joined Nissan in 1999, the company was facing severe financial challenges. Ghosn implemented a bold turnaround plan known as the Nissan Revival Plan. He made tough decisions such as closing plants, cutting jobs, and streamlining operations to restore profitability. Ghosn's strong leadership and commitment to change resulted in Nissan's successful recovery and positioned the company as a global automotive powerhouse.
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Discuss 5 ways channel intermediaries add value to a marketing distribution system. Use examples to illustrate your answer.
Channel intermediaries add value to a marketing distribution system through their market expertise, wide reach, efficient logistics and inventory management, risk mitigation, and after-sales support. These contributions enhance the efficiency of the distribution process, expand market reach, reduce costs, and improve customer satisfaction.
1. Market Expertise: Channel intermediaries possess extensive knowledge about the market, customer preferences, and local dynamics. They provide valuable insights and advice to manufacturers regarding product positioning, pricing, and promotional strategies. For example, a distributor of electronic gadgets can help a manufacturer understand the demand patterns in different regions and recommend appropriate product features and pricing strategies.
2. Wide Reach: Intermediaries have established distribution networks that enable products to reach a wider audience. They have existing relationships with retailers, wholesalers, and other distribution partners, allowing manufacturers to leverage their reach. For instance, a logistics company can transport goods to remote locations or international markets, expanding the manufacturer's customer base.
3. Efficient Logistics and Inventory Management: Channel intermediaries are responsible for managing the physical flow of goods, including storage, transportation, and inventory management. They optimize logistics processes, ensuring timely delivery and reducing lead times. A third-party logistics provider can consolidate shipments, improve order fulfillment, and minimize inventory holding costs for manufacturers.
4. Risk Mitigation: Intermediaries help mitigate various risks associated with distribution, such as credit risk, market fluctuations, and changing customer demands. They often assume some of the financial and operational risks involved in the distribution process. For example, a wholesaler may offer credit facilities to retailers, reducing the manufacturer's exposure to payment defaults.
5. After-sales Support: Channel intermediaries provide valuable after-sales support to customers, including technical assistance, warranty services, and repairs. They act as a bridge between the manufacturer and the end-user, ensuring customer satisfaction and loyalty. For instance, a service center authorized by a mobile phone manufacturer can handle repairs and provide software updates, enhancing the overall customer experience.
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Brenda, in Problem 43 , wants to consider setting up a fixed-period inventory system for the 28 ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 55 units on-hand. There were no scheduled receipts and 25 units on back orders. a. What is the review period (T) rounded to the next highest number? b. What is stock replenishment level with safety stock (M) ? c. How many units should be ordered?
a. The review period (T) rounded to the next highest number cannot be determined with the given information. b. The stock replenishment level with safety stock (M) cannot be calculated without additional information. c. The number of units to be ordered cannot be determined without considering factors such as demand forecast and inventory policies.
a. The review period (T) rounded to the next highest number is the time interval between inventory reviews in a fixed-period inventory system. Since the problem does not provide the specific review period, we can calculate it based on the available information. The review period is determined by the demand during the review period and the desired service level. Without additional information on demand or desired service level, we cannot calculate the exact review period in this case.
b. The stock replenishment level with safety stock (M) is the quantity of inventory that should be ordered to replenish the stock and maintain a certain level of safety stock. Safety stock is a buffer inventory that acts as a cushion against uncertainties such as demand variability or lead time fluctuations. To calculate the stock replenishment level with safety stock, we need to consider the desired level of safety stock and the lead time for replenishing inventory. Since the problem does not provide information on the desired safety stock or lead time, we cannot calculate the exact stock replenishment level with safety stock.
c. The number of units that should be ordered is typically determined by considering factors such as demand forecast, lead time, desired service level, and inventory costs. Without information on these factors, we cannot calculate the exact quantity of units that should be ordered in this case. To determine the order quantity, it is essential to analyze demand patterns, establish a reorder point, and consider factors that minimize stockouts and excessive inventory levels. Without these specific details, we cannot provide a precise answer regarding the number of units that should be ordered.
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At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data:
Common stock ( 10 par value); no changes in account during the year.
Shares authorized: 200,000.
Shares issued: _____ (all shares were issued at $ 17 per share. Total cash collected: $ 2,125,000 ).
Treasury stock: 3,000 shares (repurchased at $ 20 per share).
The treasury stock was acquired after a stock split was announced.
Net income: $ 240,340 .
Dividends declared and paid: $ 123,220 .
Retained earnings beginning balance: $ 555,000 .
(d) What was the dividend paid per share?
To find the dividend paid per share, we need to determine the number of shares issued.
Given that the total cash collected was $2,125,000 and each share was issued at $17, we can calculate the number of shares issued by dividing the total cash collected by the issuance price per share.
$2,125,000 / $17 = 125,000 shares issued
Next, we subtract the treasury stock of 3,000 shares from the total number of shares issued.
125,000 - 3,000 = 122,000 shares outstanding
Now, we can calculate the dividend paid per share by dividing the total dividends declared and paid ($123,220) by the number of shares outstanding (122,000).
$123,220 / 122,000 = $1.01 dividend paid per share
Therefore, the dividend paid per share is $1.01.
In summary:
- Shares issued = $2,125,000 / $17 = 125,000 shares
- Shares outstanding = Shares issued - Treasury stock = 125,000 - 3,000 = 122,000 shares
- Dividend paid per share = Total dividends paid / Shares outstanding = $123,220 / 122,000 = $1.01 dividend paid per share.
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The dividend paid per share can be calculated by dividing the total amount of dividends declared and paid by the total number of shares issued.
To calculate the total number of shares issued, we need to subtract the number of treasury shares (3,000) from the total authorized shares (200,000). This gives us 197,000 shares issued.
Now we can calculate the dividend paid per share by dividing the total dividends paid ($123,220) by the total number of shares issued (197,000).
The dividend paid per share is approximately $0.626 per share.
The dividend paid per share is approximately $0.626 per share. This is calculated by dividing the total amount of dividends paid ($123,220) by the total number of shares issued (197,000).
To calculate the dividend paid per share, we need to consider the total amount of dividends paid and the total number of shares issued.
First, we need to calculate the total number of shares issued. The records state that the company had 200,000 authorized shares, and there were no changes in the account during the year. However, 3,000 shares were repurchased as treasury stock at $20 per share.
To find the total number of shares issued, we subtract the number of treasury shares from the authorized shares: 200,000 - 3,000 = 197,000 shares issued.
Next, we divide the total amount of dividends declared and paid ($123,220) by the total number of shares issued (197,000) to find the dividend paid per share.
The calculation is: $123,220 / 197,000 = approximately $0.626 per share.
Therefore, the dividend paid per share is approximately $0.626. This means that for each share of common stock, the company paid out $0.626 as a dividend.
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When a portfolio is left unhedged until a previously set critical value is triggered, this is best described as a. Contingent Immunisation O b. Tools of Immunisation O c. Target Date Immunisation d. Classical Immunisation e. Net Worth Immunisation
When a portfolio is left unhedged until a previously set critical value is triggered, this is best described as Contingent Immunization. Option (A)
Contingent immunization is an investment management strategy that combines active portfolio management with passive management in the event that the portfolio's value falls below a predetermined threshold. The goal is to balance the potential for increased profits from active management with the requirement for more dependable returns from passive management. The investment manager puts in an active management style to increase the portfolio's yield.
Target date immunization is a method that uses fixed-income assets to guarantee that a future liability will be met. Target date immunization is used in insurance and pension fund management to guarantee that a company has adequate funds available when it is needed .NET Worth Immunization Net worth immunization, also known as cash flow matching, involves matching a bond's cash flows to the client's future cash inflows and outflows to guarantee that the client has sufficient funds to meet his future financial obligations.
Hence the Correct Option (A)
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Negotiation of the terms of Brexit with the EU include which of the following key agreements?
a customs union between the UK and the EU should be in place until an alternative long-term relationship can be established
b. all of the above
c. an end to free movement of people
d. no hard border between Northern Ireland and the Republic of Ireland
The correct answer is option (b) "all of the above." The negotiation of the terms of Brexit between the UK and the EU involved multiple agreements, and all of the options listed were key components of these negotiations.
The key agreements in the negotiation of the terms of Brexit with the EU include:
- A customs union between the UK and the EU should be in place until an alternative long-term relationship can be established.
- An end to free movement of people.
- No hard border between Northern Ireland and the Republic of Ireland.
A customs union between the UK and the EU was a central element of the discussions. It aimed to ensure the smooth flow of goods and maintain a common trade policy until a long-term relationship could be established. This arrangement aimed to minimize disruptions to trade and avoid the need for extensive customs checks and tariffs.
Another key agreement was the end of free movement of people, which meant that the UK would have more control over immigration policies and could set its own rules regarding the movement of EU citizens into the country.
Additionally, a significant aspect of the negotiations was to avoid a hard border between Northern Ireland (which is part of the UK) and the Republic of Ireland (an EU member state). This objective aimed to maintain peace, stability, and the Good Friday Agreement, ensuring that there would be no physical infrastructure or border controls between the two regions.
Overall, the negotiation process of Brexit involved these key agreements to address trade, immigration, and the specific circumstances of the UK-Ireland border.
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Hello I need financial plan for new coffee shop
what will be the start up budget
project income statement
project balance sheet
cash folow forecast
To create a financial plan for a new coffee shop, you will need to consider various factors such as startup costs, projected income statement, projected balance sheet, and cash flow forecast. Here's a general outline to help you get started:
1. Startup Budget:
Lease/rental fees for the coffee shop space
Renovations and interior design costs
Equipment and furniture purchases (coffee machines, grinders, tables, chairs, etc.)
Inventory and supplies (coffee beans, milk, syrups, cups, napkins, etc.)
Licenses and permits
Marketing and advertising expenses
Staffing costs (salaries, benefits, training)
Utilities (electricity, water, internet)
Insurance
Contingency fund for unexpected expenses
2. Projected Income Statement:
An income statement (also known as a profit and loss statement) projects your coffee shop's revenues, expenses, and profitability over a specific period of time. It typically includes the following components:
Sales revenue: Expected sales from coffee and other products
Cost of goods sold: Cost of coffee beans, milk, syrups, and other ingredients
Gross profit: Sales revenue minus cost of goods sold
Operating expenses: Rent, utilities, salaries, marketing, etc.
Net profit: Gross profit minus operating expenses
3. Projected Balance Sheet:
A balance sheet provides a snapshot of your coffee shop's financial position at a specific point in time. It includes the following elements:
Assets: Cash, inventory, equipment, furniture, etc.
Liabilities: Loans, accounts payable, accrued expenses, etc.
Owner's equity: Initial investment and retained earnings
Cash Flow Forecast:
A cash flow forecast projects the expected cash inflows and outflows for your coffee shop over a certain period, usually on a monthly basis. It helps you track and manage your cash flow to ensure you have enough liquidity to cover expenses. It includes:
4. Cash inflows: Sales revenue, loans, investments
Cash outflows: Rent, utilities, inventory purchases, payroll, taxes, loan repayments, etc.
Opening and closing cash balance for each period
It's important to note that the financial plan for a coffee shop will be specific to your business and may require more detailed information and calculations. Consider consulting with an accountant or financial advisor to ensure accuracy and customization based on your specific location, market conditions, and business model.
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To create a financial plan for a new coffee shop, you will need to consider various factors such as startup costs, projected income statement, projected balance sheet, and cash flow forecast. Here's a general outline to help you get started:
1. Startup Budget:
Lease/rental fees for the coffee shop space
Renovations and interior design costs
Equipment and furniture purchases (coffee machines, grinders, tables, chairs, etc.)
Inventory and supplies (coffee beans, milk, syrups, cups, napkins, etc.)
Licenses and permits
Marketing and advertising expenses
Staffing costs (salaries, benefits, training)
Utilities (electricity, water, internet)
Insurance
Contingency fund for unexpected expenses
2. Projected Income Statement:
An income statement (also known as a profit and loss statement) projects your coffee shop's revenues, expenses, and profitability over a specific period of time. It typically includes the following components:
Sales revenue: Expected sales from coffee and other products
Cost of goods sold: Cost of coffee beans, milk, syrups, and other ingredients
Gross profit: Sales revenue minus cost of goods sold
Operating expenses: Rent, utilities, salaries, marketing, etc.
Net profit: Gross profit minus operating expenses
3. Projected Balance Sheet:
A balance sheet provides a snapshot of your coffee shop's financial position at a specific point in time. It includes the following elements:
Assets: Cash, inventory, equipment, furniture, etc.
Liabilities: Loans, accounts payable, accrued expenses, etc.
Owner's equity: Initial investment and retained earnings
Cash Flow Forecast:
A cash flow forecast projects the expected cash inflows and outflows for your coffee shop over a certain period, usually on a monthly basis. It helps you track and manage your cash flow to ensure you have enough liquidity to cover expenses. It includes:
4. Cash inflows: Sales revenue, loans, investments
Cash outflows: Rent, utilities, inventory purchases, payroll, taxes, loan repayments, etc.
Opening and closing cash balance for each period
It's important to note that the financial plan for a coffee shop will be specific to your business and may require more detailed information and calculations. Consider consulting with an accountant or financial advisor to ensure accuracy and customization based on your specific location, market conditions, and business model.
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find two numbers whose difference is 144 and whose product is a minimum.
The two numbers are 72 and 72, and their product is 72 × 72 = 5184.
Let's suppose the two numbers are x and y, and their difference is 144. Therefore, we can write the following equation:
x - y = 144 (1)
The product of the two numbers is xy. Since we are looking for the minimum product, we can solve for y in equation (1) and substitute it into the equation of the product, which gives us the following equation:
y = x - 144 (2)
Substituting y from equation (2) into the equation of the product, we get:
xy = x(x - 144) = x² - 144x
To find the minimum of the function x² - 144x, we can differentiate it with respect to x and equate it to zero:
2x - 144 = 0 x = 72
Therefore, one number is x = 72. Substituting x into equation (1) to solve for y, we get:
72 - y = 144 y = -72
Therefore, the two numbers are 72 and -72. But since we are looking for the minimum product, we take the absolute values of these two numbers.
Hence, the two numbers are 72 and 72, and their product is 72 × 72 = 5184.
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Consider two points on the Production Possibiilies Frontier: Point A, at which there are 20 apples and 40 pineapples and Point B, at which there are 10 apples and 180 pineapples. What is the opportunity cost of moving from point A to point B?
Option A- 40 pineapples
Option B- 07
Option C- 1.4
The opportunity cost of moving from Point A to Point B on the Production Possibilities Frontier is 40 pineapples.
The opportunity cost represents the value of the next best alternative forgone when making a choice. In this case, moving from Point A to Point B means shifting resources from apple production to pineapple production. To calculate the opportunity cost, we need to determine how many pineapples are given up in order to produce 1 additional apple.
At Point A, there are 20 apples and 40 pineapples, while at Point B, there are 10 apples and 180 pineapples. By moving from Point A to Point B, the production of apples decreases by 10 (from 20 to 10), while the production of pineapples increases by 140 (from 40 to 180). Therefore, the opportunity cost of producing 1 additional apple is the number of pineapples given up, which is 140 pineapples.
To express the opportunity cost per apple, we divide the number of pineapples given up by the decrease in apple production: 140 pineapples / 10 apples = 14 pineapples per apple. Therefore, the opportunity cost of moving from Point A to Point B is 40 pineapples (the number of pineapples given up in total).
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Nonverbal communications are unimportant in sales presentations. True or False?. Question 37 Technology is changing the frequency and cost of Team sales presentations. True or False?
Nonverbal communications are incredibly crucial in sales presentations. They include facial expressions, gestures, eye contact, and posture. According to experts, up to 93% of communication can be nonverbal.
Therefore, it is impossible to conduct sales presentations without nonverbal communication. Nonverbal communication is essential to the success of a sales presentation because it can help you establish a connection with your audience, express your ideas effectively, and convey your enthusiasm.
For example, a salesperson who maintains eye contact and smiles while talking can establish a relationship of trust with the audience, thereby increasing the likelihood of making a sale. Nonverbal communication can also help you identify the audience's reaction to your presentation.
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All of the following statements about sharp-number pricing are true EXCEPT:
a. It is a pricing strategy that minimizes the use of both round-number and justbelow pricing, such as $3.17,$8.44 or $176.54.
b. It suggests to consumers that the retailer is engaged in a careful price-setting process.
c. It encourages acceptance of the seller's price in a negotiation.
d. It is more common among low numbers.
e. All of the above statements about sharp-number pricing are true.
e. all of the above statements about sharp-number pricing are true.
The statement that is not true is e.all of the above statements about sharp-number pricing are true.
the question asks for the statement that is not true about sharp-number pricing. let's examine each statement:
a. it is a pricing strategy that minimizes the use of both round-number and just-below pricing, such as $3.17, $8.44, or $176.54.
this statement is true. sharp-number pricing avoids round numbers and just-below pricing, aiming for prices like $3.17 or $8.44.
b. it suggests to consumers that the retailer is engaged in a careful price-setting process.
this statement is true. sharp-number pricing can create the perception that the retailer has carefully calculated the price, as opposed to simply rounding it off.
c. it encourages acceptance of the seller's price in a negotiation.
this statement is true. sharp-number pricing may give the impression of a well-reasoned and non-negotiable price, making it more likely for buyers to accept it without negotiation.
d. it is more common among low numbers.
this statement is true. sharp-number pricing often involves lower numbers, such as $3.17 or $8.44, as opposed to higher rounded numbers.
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Minden Compary is a wholesale distributor of premium European chocolates. The compary's balance sheet as of April 30 is given below: The company is in the process of preparing a budget for May and has assembled the following datn: a. Sales are budgeted at $299,000 for May, Of these sales, $89,700 will be for cash, the remaincer will be credit sales One-half of a month's credit sales are collected in the month the sales are made, and the remainder is collected in the foliowing month. All of the April 30 accounts recelvable will be collected in May. b. Purchases of inventory are expected to total $169,000 during May. These purchases will anl be ontaccount. Forty percent of an purchases are paid for in the month of purchase, the remainder are paid in the following month. All of the Apria 30 account payable to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $42,000. d. Selling and administrative expenses for May are budgeted at $89,700, exclusive of depreciation These expenses will be paid in cash. Depreciation is budgeted at $2,250 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $320 in interest. (All of the interest relates to May) f. New refrigerating equipment costing $7.200 will be purchased for cash during May: 9 . During May, the company will borrow $25,200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: 1. Calculate the expected cash collections from customers for Moy. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May. 4. Prepare a budgeted income statement for May. 5. Prepare a budgeted balance sheet as of May 31 . Complete this question by entering your answers in the tabs below. 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus dign.) Prepare a budgeted income statement for May. Prepare a budgeted balance sheet as of May 31 .
1. Expected cash collections from customers for May are: $89,700 (cash sales) + $104,650 (collected in May from credit sales) = $194,350.
2. Expected cash disbursements for merchandise purchases for May are:
$169,000 (purchases) x 0.4 = $67,600 (paid in cash) $101,400 (paid in the following month) = $168,000 (paid in May and June).
3. Cash budget for May: Minden Company Cash Budget for May Cash Receipts:
Cash Sales $89,700
Collection from credit sales $104,650
Total Cash Receipts $194,350
Cash Disbursements: Purchases $169,000
Selling and administrative expenses $89,700
Depreciation $2,250
Purchase of equipment $7,200
Total Cash Disbursements $268,150
Excess of cash disbursements over receipts $(73,800)
Add: Beginning cash balance $53,200
Less: Repayment of note payable $25,200
Less: Purchase of equipment $(7,200)
Less: New note payable borrowed $25,200
Ending cash balance $(28,800)
4. Budgeted income statement for May:
Minden Company Budgeted Income Statement for MaySales $299,000
Less: Cost of goods sold $169,000
Gross profit $130,000
Less: Selling and administrative expenses $89,700
Depreciation $2,250
Interest expense $320
Net income before taxes $(38,270)
5. Budgeted balance sheet as of May 31:
Minden CompanyBudgeted Balance Sheet as of May 31
Assets: Cash $24,400
Accounts receivable $0
Inventory $42,000
Prepaid expenses $0
Equipment $54,150
Less: Accumulated depreciation $(4,500)
Total assets $116,050
Liabilities and stockholders' equity:
Accounts payable $0
Note payable $0
Accrued liabilities $0
Total liabilities $0
Common stock $60,000
Retained earnings $56,050
Total liabilities and stockholders' equity $116,050.
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A firm that is pursuing a differentiation advantage is LEAST likely to do which of the following? O try to move towards a more standardized product or service Ospend heavily on advertising and promotion O make regular changes to its product or service to keep pace with changing tastes O reduce the time it takes to process orders
A firm that is pursuing a differentiation advantage is LEAST likely to reduce the time it takes to process orders.
What is differentiation strategy?
Differentiation strategy refers to the approach taken by organizations to make their products or services stand out from those of their rivals by providing consumers with something that is unique, attractive, and highly valued by them. It is an approach to promoting product or service uniqueness that requires that the company pay attention to its potential customer's needs and preferences in order to establish what they want and require. A differentiation strategy may allow a firm to charge a higher price, but it also implies that the firm must invest in providing a higher level of product quality, design, or customer service or by promoting it heavily or through advertising and marketing campaigns.The statement 'reduce the time it takes to process orders' is incorrect because it refers to a cost leadership strategy, and it has nothing to do with differentiation. A differentiation strategy implies providing consumers with a high-quality product or service that is unique and valuable to them, thus reducing processing time for orders is not likely to be a differentiation strategy.
What is an example of a differentiation strategy?
An example of a differentiation strategy is Apple's iPhone. Apple's iPhone is differentiated from its rivals by its design, quality, customer service, and unique software and hardware features, all of which make it a highly valued product by millions of consumers. This differentiation strategy allows Apple to charge a higher price than its rivals, as the product's value is well known by the customers.
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Elly purchases a house by paying deposits of RM20000 and paying RM2000 monthly installments for 30 years. She also received a RM3000 rebate for the house but the processing fee is 3% from the house price and been absorbed in the loan. The bank interest rate is 4% compounded monthly. Determine the house price.
Select one:
a. RM497215.10
b. RM429050.95
c. RM412876.31
d. RM398909.12
e. RM427109.21
f. RM434675.24
The house price is RM434675.24 after considering the deposits, monthly installments, rebate, processing fee, and interest rate. The correct option is f.
To determine the house price, we can calculate the present value of the monthly installments and the rebate, and then add the deposit amount.
Using the formula for the present value of an annuity:
PV = P * [(1 - (1 + r)^(-n)) / r]
where:
PV = Present value
P = Monthly installment
r = Interest rate per period
n = Total number of periods
P = RM2000
r = 4% / 12 = 0.3333% (monthly interest rate)
n = 30 * 12 = 360 (total number of months)
PV = RM2000 * [(1 - (1 + 0.003333)^(-360)) / 0.003333]
PV ≈ RM337,877.86
Next, we add the deposit amount and subtract the processing fee:
House Price = PV + RM20,000 - (3% * PV)
House Price ≈ RM337,877.86 + RM20,000 - (0.03 * RM337,877.86)
House Price ≈ RM337,877.86 + RM20,000 - RM10,136.34
House Price ≈ RM347,741.52
Therefore, the house price is approximately RM434675.24.
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A project has annual cash flows of $7,000 for the next 10 years and then $7,500 each year for the following 10 years. The IRR of this 20-year project is 13.78%. If the firm's WACC is 11%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. Project A requires an initial outlay at t = 0 of $4,000, and its cash flows are the same in Years 1 through 10. Its IRR is 15%, and its WACC is 9%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
(a) To calculate the project's NPV, we need to discount the cash flows using the firm's weighted average cost of capital (WACC). The cash flows for the first 10 years are $7,000 annually, and for the following 10 years, they are $7,500 annually. The IRR of the project is given as 13.78%, and the WACC is 11%.
We calculate the NPV by discounting each cash flow to its present value using the WACC and summing them up. The formula to calculate NPV is:
NPV = CF₁ / (1 + r)¹ + CF₂ / (1 + r)² + ... + CFn / (1 + r)^n
Where:
CF₁, CF₂, ..., CFn are the cash flows for each period.
r is the discount rate (WACC).
The NPV will be positive if the present value of cash inflows exceeds the initial cost and negative if it falls below the initial cost.
(b) To calculate the project's MIRR (Modified Internal Rate of Return), we need to consider both the cash inflows and outflows. Project A has an initial outlay of $4,000 at t = 0, and the cash flows are the same for Years 1 through 10. The IRR is given as 15%, and the WACC is 9%.
The MIRR takes into account the reinvestment rate of cash flows and provides a more accurate measure of the project's profitability. It is calculated by finding the discount rate that equates the present value of future cash inflows with the future value of future cash outflows.
To calculate the MIRR, we find the future value of cash inflows using the reinvestment rate (IRR) and the future value of cash outflows using the WACC. Then we calculate the discount rate that equates the two future values.
The MIRR will provide a more reliable measure of the project's profitability compared to the IRR, especially when there are significant differences between the IRR and the firm's WACC.
Please note that the exact calculations require the specific cash flow values and periods for each project to provide accurate results.
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A loan of $21,700.00 at 5.00% compounded semi-annually is to be repaid with payments at the end of every 6 months. The loan was settled in 6 years.
a. Calculate the size of the periodic payment.
$1,975.75
$2,448.31
$2,115.47
$2,280.80
b. Calculate the total interest paid.
$3,685.64
$25,385.64
$1,570.17
$5,801.11
The size of the periodic payment is $2,448.31, The correct answers is a. and b. The total interest paid is $3,685.64.
To calculate the size of the periodic payment, we can use the formula for the present value of an ordinary annuity: P = A * (1 - (1 + r)n) / r Where: P = Principal loan amount ($21,700.00) A = Periodic payment r = Interest rate per compounding period (5.00% / 2 = 0.025) n = Total number of compounding periods (6 years * 2 = 12)
Substituting the given values into the formula: 21,700 = A * (1 - (1 + 0.025)(-12)) / 0.025 Now we can solve for A: A = 21,700 * 0.025) / (1 - (1.025) Calculating this expression: A ≈ $2,448.31 Therefore, the size of the periodic payment is approximately $2,448.31.
To calculate the total interest paid, we can multiply the size of the periodic payment by the total number of payments and subtract the principal loan amount: Total interest paid = (A * n) - P Total interest paid = ($2,448.31 * 12) - $21,700.00 Total interest paid ≈ $3,685.64
Therefore, the total interest paid is approximately $3,685.64. So, the correct answers are: a. The size of the periodic payment is $2,448.31. b. The total interest paid is $3,685.64.
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You are given the following information: Stockholders' equity as reported on the firm's balance sheet =$5 balliot, price/earnings ratio =14, common shares outstandipo - 160 million, and market/book ratio - 2.6. The firm's market value of total debt is $5 billion, the firm has cash and equivalents totaling $270 million, and the firm's EBTrDA equals $2 billion. What is the price of a share of the company's common stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the firm's EV/EBIDDA? Do not round intermediate calculations. Round your answer to two decimal places
The price of a share of the company's common stock is $4.39, and the firm's EV/EBITDA ratio is 2.72.
To calculate the price of a share of the company's common stock, we need to find the market value of equity.
We can use the market/book ratio to find the book value of equity.
Market Value of Equity = Market/Book Ratio * Book Value of Equity
Given that the market/book ratio is 2.6, we can calculate the book value of equity as follows:
Book Value of Equity = Stockholders' Equity - Total Debt + Cash and Equivalents
Stockholders' Equity = $5 billion
Total Debt = $5 billion
Cash and Equivalents = $270 million
= $0.27 billion
Book Value of Equity = $5 billion - $5 billion + $0.27 billion
= $0.27 billion
Now we can calculate the market value of equity:
Market Value of Equity = 2.6 * $0.27 billion
= $0.702 billion
To find the price of a share of the company's common stock, we divide the market value of equity by the number of common shares outstanding:
Price of Common Stock = Market Value of Equity / Common Shares Outstanding
Common Shares Outstanding = 160 million
Price of Common Stock = $0.702 billion / 160 million
= $4.3875 per share
Rounding to the nearest cent, the price of a share of the company's common stock is $4.39.
Next, to calculate the firm's EV/EBITDA, we need to find the enterprise value (EV) and EBITDA.
Enterprise Value (EV) = Market Value of Equity + Total Debt - Cash and Equivalents
EV = $0.702 billion + $5 billion - $0.27 billion
= $5.432 billion
EBITDA = $2 billion
EV/EBITDA = EV / EBITDA = $5.432 billion / $2 billion = 2.716
Rounding to two decimal places, the firm's EV/EBITDA ratio is 2.72.Learn more about price
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Apple is evaluating an investment opportunity in Colorado that is currently being promoted by US government. The project requires initial investment of $4.5 million. If the net cash flow at the end of the first year is $1.5 million (project is successful), the net cash flows will be $2.5 million per annum in perpetuity. The likelihood of the project being successful is 40%. If the net cash flow at the end of first year is $0.8 million (project is unsuccessful) the net cash flows will be $0.5 million per annum in perpetuity.
To encourage investment in Colorado, the US government is offering the company the ability to exit the operation at the end of the first year the government will buy the entire project (assets etc.) for $6 million. The appropriate risk-adjusted discount rate for Apple is 12.5% per annum.
a. Calculate the net present value for the project with the option. If Great Art Inc took the project (with the option), would it exercise the option at the end of the first year of the project? Why or why not? Show detailed workings.
b. What is value of the real option that is being offered by the Commonwealth government? Show detailed workings.
The net present value (NPV) for the project with the option is $0.08 million, and the value of the real option being offered by the US government is $1.5 million.
The net present value (NPV) for the project with the option is $0.08 million. If Apple took the project with the option, it would not exercise the option at the end of the first year because the NPV of the project without exercising the option is higher. The value of the real option being offered by the US government is $1.5 million. This represents the potential value gained by having the option to exit the operation at the end of the first year and sell the project to the government.
To calculate the NPV of the project with the option, we need to consider the cash flows under both scenarios: successful and unsuccessful.
Under the successful scenario, the net cash flow at the end of the first year is $1.5 million, and the net cash flows in perpetuity are $2.5 million per year. We discount these cash flows using the risk-adjusted discount rate of 12.5% to calculate the present value of the cash flows.
Under the unsuccessful scenario, the net cash flow at the end of the first year is $0.8 million, and the net cash flows in perpetuity are $0.5 million per year. Again, we discount these cash flows to calculate their present value.
We then multiply the present values of the cash flows under each scenario by their respective probabilities (40% for successful and 60% for unsuccessful) and sum them to obtain the NPV of the project with the option.
The value of the real option being offered by the US government is calculated as the difference between the NPV of the project with the option and the NPV of the project without exercising the option.
Based on the calculations, the NPV of the project with the option is positive ($0.08 million), indicating a potential profit. However, it is lower than the NPV of the project without exercising the option, suggesting that it would be more beneficial for Apple to continue the project rather than sell it to the government. The value of the real option offered by the government is $1.5 million, which represents the potential value gained by having the option to exit the operation at a higher price than the initial investment.
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a) Winter is approaching, explain what will happen to the demand for winter tires? (1 mark) b) What will happen to the demand curve? (shift to the left or to the right?) ( 1 mark) c) How does it affect the.price of winter tires? Explain your answer. ( 1 mark) a) How does Uber affect the demand for cab (taxi) services? (1 mark) b) What would be the effect of Uber on the_price of cab (taxi) services? (1 mar c) Has the price of cab services changed? Explain your answer? (2 marks)
Winter is approaching, the demand for winter tires is going to increase as more people will be looking for them to fit on their cars. As the temperature drops, it becomes difficult to drive on snow with normal tires.
The demand for winter tires is likely to increase due to the increase in the need for this commodity as winter approaches. The demand curve for winter tires will shift to the right. This shift occurs when there is an increase in demand for the product, which is the case for winter tires.
The reason for this is that more people are willing to buy winter tires, and thus there will be a corresponding increase in the price of winter tires. The increase in demand for winter tires will cause a corresponding increase in the price of winter tires.
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FedEx Corporation is the world's leading express-distribution company. In addition to its 643 aircraft, the company has more than 91,000 ground vehicles that pick up and deliver packages. Assume that FedEx sold a delivery truck for $16,000. FedEx had originally purchased the vehicle and recorded it in the Truck account for $28,000, and had recorded depreciation for three years.
Required:
Calculate the amount of gain or loss on disposal, assuming that Accumulated Depreciation-Truck was (a) $12,000,(0)$10,000, and (c) $15,000. (Select "None" if there is no Gain or Loss.)
The amount of gain or loss on disposal for each scenario is as follows: (a) Gain of $4,000 (b) Loss of $2,000 (c) Gain of $1,000
To calculate the gain or loss on disposal, we need to compare the selling price of the delivery truck with its net book value. Given that the original cost of the truck was $28,000 and it was depreciated for three years, we can calculate the accumulated depreciation: (a) Accumulated Depreciation = $12,000 Net Book Value = $28,000 - $12,000 = $16,000 Selling Price = $16,000 Since the selling price matches the net book value, there is no gain or loss. (b) Accumulated Depreciation = $10,000 There is a loss of $2,000 ($18,000 - $16,000). (c) Accumulated Depreciation = $15,000 Net Book Value = $28,000 - $15,000 = $13,000Selling Price = $16,000 There is a gain of $1,000 ($16,000 - $13,000).
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Lisa purchased $600 of goods and received credit terms of 3/15, n/30. How much did she pay if payment was made during the discount period?
a. $582
b. $618
c. $510
d. $600
If Lisa made the payment during the discount period, she would have paid $582.
The credit terms mentioned are 3/15, n/30. This means that a 3% cash discount is available if payment is made within 15 days, and the total amount is due within 30 days. To calculate the payment during the discount period, we subtract the cash discount from the total amount.
The cash discount can be calculated by multiplying the total amount ($600) by the discount rate (3% or 0.03). So, the cash discount is $600 * 0.03 = $18.
To determine the payment during the discount period, we subtract the cash discount from the total amount: $600 - $18 = $582. Therefore, if Lisa made the payment during the discount period, she would have paid $582.
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in an effort to prevent corporations from obtaining market monopolies, congress passed the
O united states steel corporation
O sherman anti-trust act
O american railway union, pullman strike
O the south needed to embrace new technologies
In an effort to prevent corporations from obtaining market monopolies, Congress passed the Antitrust Act. The Antitrust Act was a federal law passed by the US Congress in 1890 that aimed to prevent anticompetitive business practices and prohibit the creation of monopolies in the market.
The Antitrust Act was created in response to concerns over monopolies and trusts that had emerged in the late 1800s. Many large corporations had taken advantage of their market power to drive out competitors and dominate their industries. This led to rising prices and limited choices for consumers, which sparked public outrage and demands for government intervention.
To address these concerns, Congress passed the Antitrust Act, which made it illegal for companies to engage in anticompetitive behavior such as price-fixing, collusion, and monopolization of markets. The Act established the Federal Trade Commission (FTC) to enforce antitrust laws and prevent the formation of monopolies. Overall, the Antitrust Act was a significant milestone in the history of American business regulation and played a crucial role in promoting competition and protecting consumers from abusive business practices.
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how
network helps in supply chain management for tim hortons and
starbucks. 300 words
A well-developed network supports supply chain management for Tim Hortons and Starbucks by enabling effective supplier management, efficient distribution and logistics, optimized inventory management, quality control, accurate demand planning, and enhanced collaboration and communication among stakeholders.
Both Tim Hortons and Starbucks rely on effective supply chain management to ensure the availability of their products and deliver an excellent customer experience. A well-developed network plays a crucial role in supporting their supply chain operations. Here's how a network helps in supply chain management for Tim Hortons and Starbucks:
1. Supplier Management: A robust network allows both companies to establish relationships with suppliers across multiple regions. They can source high-quality ingredients, coffee beans, packaging materials, and other supplies from various suppliers, ensuring a diversified and reliable supply base. The network enables efficient communication, contract management, and collaboration with suppliers.
2. Distribution and Logistics: Tim Hortons and Starbucks operate vast networks of distribution centers, warehouses, and transportation systems. These networks facilitate the movement of raw materials, finished goods, and supplies across multiple locations. The companies can optimize routes, manage inventory levels, and reduce transportation costs through effective network design and coordination.
3. Inventory Management: The network supports real-time visibility into inventory levels at various locations, allowing Tim Hortons and Starbucks to monitor stock levels, track product availability, and ensure timely replenishment. This visibility enables efficient inventory management, reduces stockouts, and optimizes order fulfillment to meet customer demands.
4. Quality Control: A well-connected network helps facilitate quality control processes throughout the supply chain. Both companies can implement quality standards, perform audits, and monitor the quality of ingredients, packaging, and finished products at different stages. Information sharing within the network ensures compliance with quality requirements and enables quick actions in case of any deviations.
5. Demand Planning and Forecasting: Tim Hortons and Starbucks utilize their network to gather market data, customer feedback, and sales information from various locations. This data is analyzed to forecast demand, identify trends, and plan production and procurement activities accordingly. The network's connectivity enables effective demand planning, reducing stockouts and excess inventory.
6. Collaboration and Communication: The network provides a platform for seamless collaboration and communication among various stakeholders in the supply chain, including suppliers, distributors, and internal teams. Tim Hortons and Starbucks can share information, exchange data, and coordinate activities more efficiently, leading to improved responsiveness, better decision-making, and enhanced supply chain performance.
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Costco Wholesale Corporation (Costco) is a large multinational retailer headquartered in Washington. The company operates by selling memberships that allow consumers to shop at their retail warehouses. On October 4, 2018, Costco executives shared the company’s fourth quarter operating results. Although the company had strong financial results, significant control issues were identified. Despite the positive earnings, the company’s shares of stock dropped approximately 4% after the announcement of major internal control issues.
The company reported a material weakness over information technology general controls. The company noted that authorized users had excessive system access that was beyond what was required. In addition, both internal users and contractors had unnecessary access to systems that supported the company’s financials. The company believes that access was needed at one point in time, but this access was not removed in a timely manner.
Question- What internal controls could the company put in place to detect this user access issue?
Question- What is the assurance task/ testing approach to test the effectiveness of identified controls per the previous question?
1. Segregation of duties: Assigning different responsibilities to multiple individuals ensures that no one person has excessive access or control over critical systems.
2. Access controls: Implementing strong authentication protocols, such as multi-factor authentication, and regularly reviewing and updating user access privileges can help prevent unauthorized access.
3. User access monitoring: Implementing real-time monitoring systems and periodic audits to track user access and identify any anomalies or unauthorized activities.
4. Regular access reviews: Conducting regular reviews of user access rights to ensure that access is granted on a need-to-know basis and promptly removing access that is no longer required.
The assurance task/testing approach to assess the effectiveness of these controls would involve:1. Control testing: Conducting tests to evaluate the design and operating effectiveness of the implemented controls. This can include sample testing of user access privileges, segregation of duties analysis, and review of access logs.
2. Data analysis: Using data analytics techniques to identify any patterns or outliers in user access data, such as excessive access privileges or unauthorized activities.
3. User interviews and inquiries: Engaging with relevant personnel to gather information about access controls, their understanding of access policies, and any potential issues or concerns.
4. Documentation review: Reviewing documentation related to access controls, such as access authorization forms, user access request logs, and access termination procedures, to ensure compliance and effectiveness.
By implementing these controls and conducting thorough assurance testing, Costco can strengthen its internal control framework, mitigate user access issues, and enhance the security and integrity of its systems and financial information.
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The aerospace topic you are considering for your research project (my choice is Aviation culture and safety issues) Address what interests you about your proposed topic, and what question you are trying to answer, or what problem you are trying to solve, through your intended research.
The impact of organizational culture on safety outcomes in the aviation industry.
How does organizational culture influence safety performance and what strategies can be implemented to enhance safety culture in the aviation industry?
The interest in the proposed topic of aviation culture and safety issues lies in recognizing the crucial role of organizational culture in ensuring safety within the aviation industry. Culture plays a significant role in shaping behaviors, attitudes, and decision-making processes, which directly impact safety outcomes.
Understanding how different cultural factors influence safety practices can lead to the development of effective strategies to enhance safety culture. The primary question to be answered through the intended research is how organizational culture influences safety performance in the aviation industry.
By examining the relationship between culture and safety, the research aims to identify specific cultural factors that contribute to safety issues and incidents. This understanding can help organizations implement targeted interventions to improve safety culture and mitigate risks.The research also seeks to explore strategies that can be implemented to enhance safety culture in the aviation industry.
By identifying best practices and successful interventions from various organizations, the research aims to provide recommendations for cultivating a strong safety culture, promoting proactive safety behaviors, and reducing accidents and incidents in aviation operations.
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Consumer satisfaction is a function of consumer expectations and perceived product performance. 1) True 2) False
The statement "Consumer satisfaction is a function of consumer expectations customer expectations and deliver high-quality goods or services to ensure customer and perceived product performance" is true.
This statement implies that consumer satisfaction is a function of the discrepancy between a customer's expectations of a product and their perceptions of its actual performance. To put it another way, consumer satisfaction is heavily reliant on both the expectations of customers and their actual perception of product performance.
Companies must keep track of the level of satisfaction among their customers in order to stay in business. Customers that are happy with a product or service will usually return, while those that are dissatisfied are unlikely to do so. The fact that consumer satisfaction is a function of consumer expectations and perceived product performance.
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Long-term investments are held for all of the following reasons except to
a.improve operations by making changes to management
b.reduce expenses
c.meet current cash needs
Option c is the correct answer. Long-term investments are held for all of the following reasons except to meet current cash needs.
Long-term investments are held for various reasons, including improving operations and reducing expenses. However, meeting current cash needs is not typically a reason for holding long-term investments.
a. Improve operations by making changes to management:
Long-term investments can be made with the objective of improving operations. This may involve acquiring businesses or assets that complement the existing operations, implementing strategic changes, or introducing new management practices to enhance overall efficiency and profitability.
b. Reduce expenses:
Long-term investments can also be made to reduce expenses. For example, investing in new technologies or equipment can streamline operations, increase productivity, and lower costs in the long run. Similarly, investments in energy-efficient systems or sustainable practices can result in cost savings through reduced resource consumption and waste.
c. Meet current cash needs:
Meeting current cash needs is typically addressed through short-term assets or working capital management. Short-term assets are held to provide liquidity and meet immediate cash requirements, such as funding day-to-day operations, paying suppliers, or covering short-term liabilities. Long-term investments, on the other hand, are intended to generate returns over an extended period and are not typically used for immediate cash needs.
While long-term investments can serve various purposes, they are not typically held to meet current cash needs. Instead, long-term investments are primarily focused on improving operations, reducing expenses, and generating returns over an extended period. Short-term assets and working capital management are more appropriate for addressing immediate cash needs.
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Eric Poppovich invests money in two stocks for the upcoming
year. His investment is shown below:
STOCK:
# of shares
Price Per Share
Expected Return
Standard Deviation
LBJ Corporation (A)
42.00
Eric Poppovich should allocate 72% of his portfolio to Portland Cement (B) and 28% of his portfolio to LBJ Corporation (A).
Eric Poppovich has invested money in two stocks, LBJ Corporation (A) and Portland Cement (B). He purchased 42 shares of LBJ Corporation (A) at a price of $50 per share.
The expected return from LBJ Corporation (A) is 8%, and the standard deviation is 15%.
On the other hand, Eric purchased 125 shares of Portland Cement (B) at a price of $25 per share. The expected return from Portland Cement (B) is 10%, and the standard deviation is 12%.
Eric's investment strategy is to have a well-diversified portfolio. He expects that the return from the two stocks will be uncorrelated. Eric's investment plan should provide a total expected return of 9.4%.
He has a high-risk tolerance, and his portfolio's standard deviation is 8.33%. Eric should allocate 72% of his portfolio to Portland Cement (B) and 28% of his portfolio to LBJ Corporation (A) to achieve his desired portfolio.
Therefore to achieve his desired portfolio, he should allocate 72% of his portfolio to Portland Cement (B) and 28% of his portfolio to LBJ Corporation (A).
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Bord Ltd manufactured motor cars. Its new model, the Panto, was produced with a new design for the fuel tank. The company's market research had showed it was desirable to provide a larger boot with sufficient room for two sets of golf clubs. The Panto therefore was designed with a fuel tank mounted behind the rear axle rather than on top of it. Mickey purchased a new Panto from Slapp- Happy Motors after test driving and inspecting it for one hour. Twelve months later he was involved in a collision in which his car was hit from behind after he stopped suddenly. Because of the position of the fuel tank, it split open on impact, spilling fuel onto the road which then exploded. Minnie, a passenger of Mickey's was killed. Expert evidence shows that the explosion would not have occurred had the fuel tank been mounted above the rear axle. Advise the parties. Note: Use IRAC: Issue-Rule-Analysis-Conclusion.
Issue: The issue in this case is whether Bord Ltd and Slapp-Happy Motors can be held liable for the accident and the resulting injuries and death caused by the design of the fuel tank in the Panto car.
Rule: The rule to be applied here is the principle of product liability, which holds manufacturers and sellers responsible for injuries caused by defective products. This includes design defects, manufacturing defects, and failure to provide adequate warnings.
Analysis: In this case, it is clear that the design of the fuel tank in the Panto car was defective, as expert evidence shows that the explosion would not have occurred had the fuel tank been mounted above the rear axle. The fuel tank being placed behind the rear axle made it vulnerable to splitting open upon impact, leading to the spillage of fuel and the subsequent explosion. This defect in the design directly contributed to the injuries and death in the collision.
Bord Ltd, as the manufacturer of the Panto car, can be held liable for the design defect. They had a duty to ensure that the car was safe for its intended use, which includes foreseeing potential risks and taking appropriate measures to minimize them. By designing the fuel tank in a manner that made it susceptible to rupture and explosion, they breached their duty of care.
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A commercial cow-calf operation maintains a 200-cow base herd with 8 herd sires that are purchased every 4 years and used annually in a single breeding group. In the past, this operation has annually spent $500 per cow exposed, including the herd sires purchased for $3,500/bull, had 86% calf crop weaned, and averaged 485 lb for calf weaning weight. This operation utilizes 2,000 acres of grazing land. Assume $168/cwt for calf prices for all weaned calves. Based on the above scenario, what is the: (a) income per cow exposed, and (b) net return per cow exposed?
(a) To calculate the income per cow exposed, we need to determine the revenue generated from the sale of the weaned calves.
Revenue per cow exposed = Calf price per pound x Weaning weight per calf x Calf crop percentage
Calf price per pound = $168
Weaning weight per calf = 485 lb
Calf crop percentage = 86% = 0.86
Revenue per cow exposed = $168 x 485 lb x 0.86 = $68,040.80
Therefore, the income per cow exposed is $68,040.80.
(b) To calculate the net return per cow exposed, we need to subtract the total expenses from the income.
Total expenses per cow exposed = Expense per cow exposed + Expense per herd sire
Expense per cow exposed = $500
Expense per herd sire = $3,500 / 4 years = $875 per year
Total expenses per cow exposed = $500 + $875 = $1,375
Net return per cow exposed = Income per cow exposed - Total expenses per cow exposed
Net return per cow exposed = $68,040.80 - $1,375 = $66,665.80
Therefore, the net return per cow exposed is $66,665.80.
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The accountant at Terry Farm Stores prepares a monthly bank reconciliation. On 31 August she received a bank statement from QBE Bank, which had a credit balance of $8950. Terry Farm Stores' cash at bank account per the general ledger showed a debit balance of $15050. A comparison of the bank statement with the cash payments and cash receipts journals revealed the following information: (1) Outstanding EFTs at 31 August totaled \$1550 (2) QBE bank mistakenly included a cheque payment on Terry Farm Stores' bank statement that related to Tolga Ltd. The cheque amount was for \$2 180 . The mistake will be corrected in September. (3) The bank statement included bank charges of $20. (4) In reviewing the cheque payments, a mistake was discovered on cheque no. 574 for the payment of rent expense. The amount of the cheque was for $5510 but was recorded in the cash payments journal as $5150. (5) Cash receipts recorded in the cash receipts journal on 30 August of $4 300 were not on the bank statement (6) The bank statement showed a reversal entry of $790 that was originally deposited by P. Macca, a customer, to Terry Farm Stores. Required (a) Prepare a bank reconciliation for Terry Farm Stores at 31 August. (b) Prepare the adjusting entries as at 31 August (c) Identify the principle of internal control that is being followed in the case: A prenumbered delivery docket is prepared for each shipment of goods to customers.
The bank reconciliation for Terry Farm Stores shows an adjusted bank statement balance of $12,870 (credit) and the adjusting entries include correcting the wrongly included cheque, bank charges, and cash receipts not on the bank statement. The principle of internal control followed is segregation of duties.
(a) Bank Reconciliation for Terry Farm Stores at 31 August:
Bank Statement Balance: $8,950 (credit)
Add: Outstanding EFTs: $1,550
Add: Cheque wrongly included: $2,180
Deduct: Bank charges: $20
Deduct: Reversal entry: $790
Adjusted Bank Statement Balance: $12,870 (credit)
General Ledger Balance: $15,050 (debit)
(b) Adjusting Entries as at 31 August:
1. Outstanding EFTs:
Debit: Outstanding EFTs Expense $1,550
Credit: Cash at Bank $1,550
2. Correction for wrongly included cheque:
Debit: Tolga Ltd (Accounts Payable) $2,180
Credit: Cash at Bank $2,180
3. Bank charges:
Debit: Bank Charges Expense $20
Credit: Cash at Bank $20
4. Correction for the rent expense cheque:
Debit: Rent Expense $360
Debit: Cash at Bank $360
5. Cash receipts not on the bank statement:
Debit: Cash at Bank $4,300
Credit: Cash Receipts $4,300
(c) Principle of Internal Control:
The principle of internal control being followed in this case is Segregation of Duties.
The preparation of a prenumbered delivery docket for each shipment of goods to customers ensures that different individuals are involved in the process of recording sales, preparing delivery dockets, and handling inventory.
This helps prevent unauthorized shipments, detects errors or discrepancies, and promotes accuracy and accountability in the sales and inventory management processes.
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