Considerations which are involved in choosing between financing through debt or equity are cost, control, flexibility, tax implication and Impact on financial statements.
These are defined below as follows-
1. Cost: The cost of financing through debt is typically lower than financing through equity. This is because debt financing is typically secured by assets and therefore carries less risk for the lender. In contrast, equity financing is typically unsecured and therefore carries more risk for the investor.
2. Control: Equity financing often requires the business owner to give up some control over the company, as investors may want a say in decision-making. In contrast, debt financing does not require the business owner to give up any control over the company.
3. Flexibility: Debt financing typically has fixed repayment terms, which can be less flexible than equity financing. Equity financing, on the other hand, typically does not have fixed repayment terms and therefore can be more flexible.
4. Tax implications: Interest payments on debt are typically tax-deductible, whereas dividends paid to equity investors are not. This can make debt financing more attractive from a tax perspective.
5. Impact on financial statements: Debt financing will increase the company's liabilities on its balance sheet, whereas equity financing will increase the company's equity. This can impact the company's financial ratios and its ability to obtain additional financing in the future.
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A conglomerate has decided to spin off a segment as a self-standing public company. In their estimation the newly spun off company will be paying $ 4 dividend next year that will grow by 6% annually until infinity. Investors determine their required return based on the CAPM. The beta of the segment is estimated to be 2.3, the market's expected return is projected to be 8% and the risk free rate is 3%.
What is the price of a share in the newly spun off company using the constant growth model?
Using the constant growth model, the price of a share in the newly spun off company can be calculated using the following equation:
P0 = D1 / (Ks – g)
Where D1 is the expected dividend per share for the upcoming year, Ks is the required return for the stock and g is the expected growth rate of the dividend.
In this case, D1 = 4, Ks = Rf + β(Rm - Rf) = 3 + 2.3(8-3) = 13.9%, and g = 6%.
Therefore, the price of a share in the newly spun off company is:
P0 = 4 / (13.9% - 6%) = $57.14
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A company has the following data:
Annual demand = 2,500 units
Ordering cost = $15 per order
Average carrying cost per unit per year = $0.75
Daily demand = 65 units
Delivery in 5 working days
Setup cost = $100
Carrying cost = $0.50 per unit per year
Daily production rate = 100 units daily
Daily demand rate = 75 units daily
Find
a. optimal order quantity EOQ to reduce inventory costs
b. total cost
c. Number of orders per year
d. Average inventory
e. The average dollar level of inventory
f. EOQ if we increase Co to $40
g. Reorder point (ROP)
h. How many units should Brown produce in each batch?
i. How long should the production part of the cycle last?
a. Optimal order quantity EOQ to reduce inventory costs: 244.95 units
EOQ = √(2DS/C)
= √(2*2500*$15/$0.75)
= √(60,000) = 244.95 units
b. Total cost: $275.13
Total cost = (D/EOQ)*S + (EOQ/2)*C
= (2500/244.95)*$15 + (244.95/2)*$0.75
= $183.28 + $91.85 = $275.13
c. Number of orders per year: 10.20
Number of orders per year = D/EOQ
= 2500/244.95
= 10.20 orders per year
d. Average inventory: 122.48 units
Average inventory
= EOQ/2
= 244.95/2
= 122.48 units
e. The average dollar level of inventory: $91.86
Average dollar level of inventory
= Average inventory * C
= 122.48 * $0.75
= $91.86
f. EOQ if we increase Co to $40: 565.69 units
EOQ = √(2DS/C)
= √(2*2500*$40/$0.75)
= √(320,000)
= 565.69 units
g. Reorder point (ROP): 325 units
ROP = Daily demand * Lead time
= 65 units * 5 days
= 325 units
h. Units Brown produce in each batch= 1000 units
EOQ = √(2DS/C)
= √(2*2500*$100/$0.50)
= √(1,000,000)
= 1000 units
i. The production part of the cycle last will last 10 days.
Production cycle time = EOQ/Daily production rate
= 1000/100
= 10 days
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Rights and privileges of common stockholders Larry Nelson holds 1,000 shares of General Electric (GE) common stock. As a stockholder, he has the right to be involved in the election of its directors, who are responsible for managing the company and achieving the company's objectives. True or False: The preemptive right allows Larry to purchase any additional shares sold by the company. This right will protect Larry from dilution in the value of the stocks he holds. True False Larry also holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company's stock currently is valued at $43.00 per share. The company needs to raise new capital to invest in production. The company is looking to issue 5,000 new shares at a price of $34.40 per share. Larry worries about the value of his investment. Larry's current investment in the company is ___. If the company issues new shares and Larry makes no additional purchase, Larry's investment will be worth ___. This scenario is an example of ___. Larry could be protected if the firm's corporate charter includes a ___ provision. If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become ___.
If Larry exercises the preemptive right provision in the corporate charter, his investment value in the firm will become $143,000 (2,000 x $43 + 5,000 x $34.40 + 3,000 x $43).
Larry Nelson currently holds 1,000 shares of General Electric (GE) common stock and 2,000 shares of a company with 20,000 shares outstanding.
His current investment in the company is $86,000 (2,000 x $43). If the company issues 5,000 new shares at a price of $34.40 per share, Larry's investment will be worth $102,000 (2,000 x $43 + 5,000 x $34.40).
This scenario is an example of dilution, as the value of Larry's investment will be diluted due to the issuance of new shares. Larry could be protected if the firm's corporate charter includes a preemptive right provision.
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The cost of interest of a $3000 loan at 12% interest per year is $720 what is the term length for this loan in years
Using simple interest the term length for this loan in years will be 2 years as the interest is 720 rate is 12% and amount is 3000
If we assume simple interest, the interest amount is computed from I = Prt, Then the length t is t = I/(Pr) t = 720/(3000×0.12) = 2.00 The term of the loan is about 2.00years, To calculate simple interest, multiply the loan principal by the interest rate, then by the length of the loan. Borrowers can acquire a ballpark approximation of the cost of borrowing by calculating simple interest. Auto loans and short-term personal loans are two common uses for simple interest loans.
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please i need a different answer not copy and paste
Assignment 2
You are the Project Manager for a software development project for Tema Oil Refinery. Discuss the duties and responsibilities that you will perform on this project.
As a Project Manager for a software development project for Tema Oil Refinery, my duties and responsibilities will include managing project scope, timelines, budgets, risks, and resources, ensuring project quality, communicating with stakeholders, and facilitating team collaboration to deliver the project within the agreed parameters.
The Project Manager will oversee the project from inception to delivery, ensuring the project is delivered within budget, timeline, and scope. They will manage the project team, ensuring that each member understands their roles and responsibilities and that everyone is working collaboratively. The PM will also monitor project progress, identifying and addressing risks and issues that may arise, communicating with stakeholders, and providing regular project updates.
Additionally, they will oversee project documentation, ensuring that all deliverables meet quality standards and are delivered on time. Finally, the PM will conduct post-project reviews to evaluate the success of the project and identify areas for improvement in future projects.
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Goldman Sachs and other investment firms are examples of: a.
Primary markets. b. Bond markets. c. Commodity markets. d.
Secondary Markets.
Goldman Sachs and other investment firms are examples of secondary Markets.
The correct answer is d. Secondary Markets.
Goldman Sachs and other investment firms are examples of secondary markets. A secondary market is a marketplace where previously issued securities, such as stocks and bonds, are traded among investors. These markets are important because they provide liquidity, meaning that investors can easily buy and sell securities.
Primary markets, on the other hand, are where new securities are issued and sold to the public for the first time. Bond markets are where bonds, which are a type of debt security, are traded. Commodity markets are where commodities, such as agricultural products and natural resources, are traded.
Goldman Sachs and other investment firms are examples of secondary markets, where previously issued securities are traded among investors.
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Zane works out in the ocean installing huge wind turbines to provide the coastal communities with clean energy. The Energy cluster pathway that Zane works in is _____.
Answer: energy and power technology.
Explanation: trust me i took the quiz
Zane works out in the ocean installing huge wind turbines to provide the coastal communities with clean energy. The Energy cluster pathway that Zane works in is energy and power technology.
What is energy?The phrase energy means the ability to accomplish work, which is the ability to apply a force that causes an item to move. Potential energy and kinetic energy are the two forms of energy. Each form can be converted or altered to another. Energy is what causes things to alter and move.
Zane is employed by the Energy cluster program, which trains students for employment in energy planning, generation, planning, maintenance, and distribution. Students are prepared for employment in the energy sector, especially those involving renewable energy sources like wind turbines, through the Energy Career Cluster.
As a result, the significance of the Energy cluster pathway that Zane works are the aforementioned.
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1. Selchow & Richter Company (S&R) owns the trademark to the famous board game Scrabble. Mark Landsberg wrote a book on strategy for winning at Scrabble and contracted S&R to request permission to use request permission to use the scrabble trademark. in response, S&R requeted a copy of landsberg's manuscript, which he provided. after prolonged negotiations between the parties regarding the possibility of S&R's publication of the manuscript broke off, S&R brought out its own scrabble strategy book. no express contract was ever entered into between landsberg and S&R. Landsberg sued S&R for damages for breach of an implied ontract between the parties?
Yes, Landsberg can sue S&R for damages for breach of an implied contract between the parties.
An implied contract occurs when two parties agree to a deal without an explicit agreement, but both parties imply that a contract exists through their behavior and words. In this case, Landsberg provided S&R with a copy of his manuscript, and S&R requested it.
This would be considered an implied contract, and when S&R broke off the negotiations and produced their own Scrabble strategy book, they would be considered to have breached that implied contract.
Landsberg would then be able to sue S&R for damages.
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Suppose that First Meriam decides that Marvin's shares are worth only $0.80 each. The common stock and the number of shareholders are as follows: Extract Common stock 1,000,000 Number of Shareholders 10 a. How many shares will Marvin need to sell to raise the additional $1 million? (Enter your answer in whole number not in millions.) Number of shares = ___
b. What fraction of the firm will Marvin's managers own after the VC investment? (Enter your answer as a percent rounded to 2 decimal places.) Percentage of the firm Marvin's managers will own after the VC investment = _____ %
a. Number of shares = 1,250,000. b. Percentage of the firm Marvin's managers will own after the VC investment = 44.44%.
a. To raise the additional $1 million, Marvin will need to sell 1,250,000 shares. This is because $1 million divided by the value of each share ($0.80) is equal to 1,250,000.
Number of shares = 1,250,000
b. To determine what fraction of the firm Marvin's managers will own after the VC investment, we need to find the total number of shares after the investment. This is equal to the original number of shares (1,000,000) plus the number of shares sold to raise the additional $1 million (1,250,000), for a total of 2,250,000 shares.
The fraction of the firm that Marvin's managers will own is equal to the original number of shares (1,000,000) divided by the total number of shares (2,250,000), which is equal to 0.4444 or 44.44%.
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Create a TOWS Analysis on internal revenue service.Answer fast and i will upvote
A TOWS Analysis is a strategic planning tool that helps organizations identify their strengths, weaknesses, opportunities, and threats.
By analyzing these factors, organizations can make informed decisions about how to move forward and achieve their goals. Here is a TOWS Analysis on the Internal Revenue Service (IRS):
Strengths:
- Expertise in tax law and enforcement
- Access to taxpayer information and data
- Authority to collect taxes and enforce compliance
Weaknesses:
- Limited resources and funding
- Inefficient and outdated technology systems
- Negative public perception
Opportunities:
- Implementing new technology to improve efficiency and customer service
- Expanding online services for taxpayers
- Collaborating with other government agencies to improve tax enforcement and compliance
Threats:
- Changes in tax law and regulations
- Budget cuts and resource constraints
- Cybersecurity threats and data breaches
By considering these factors, the IRS can develop strategies to capitalize on its strengths, address its weaknesses, take advantage of opportunities, and mitigate threats. For example, the IRS could invest in new technology to improve efficiency and customer service, expand online services to make it easier for taxpayers to file and pay taxes, and collaborate with other government agencies to improve tax enforcement and compliance. At the same time, the IRS must be aware of potential threats, such as changes in tax law and regulations, budget cuts, and cybersecurity threats, and take steps to mitigate these risks.
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The public company "GQ ball pen industries ltd" Term paper.
Part 1:
Each group will be assigned one company by the course instructor to work with. Groups
will test the financial performance of the assigned company for the most recent 3 years
(using the published annual reports). For example, if a group is assigned Beximco
Pharmaceuticals Ltd, they must do ratio analysis for Beximco for the most recent 3 years.
Ratio Analysis should be made based on the following ratios-
I. Profitability Ratio – Gross Profit Margin, Net Profit Margin, Return on Asset and
Return on Equity
II. Asset Management Ratio – Average Age of Inventory, Average Collection Period,
Average Payment Period and Total Asset Turnover
III. Liquidity Ratio – Current Ratio and Quick Ratio.
IV. Debt Management Ratio – Debt-Equity Ratio and Interest Coverage Ratio
V. Market Ratio – P/E Ratio and EPS
VI. DuPont analysis – Decomposition of Return on Equity (ROE)
*** Calculation must be supported by relevant interpretation. Students have to show
and interpret each type of ratio containing the last 3 years’ performance of the
company. Without a logical and rich interpretation of the ratios, your assignment will
have no value. ***
Ratio Analysis must be done and submitted in PDF file. A detailed breakdown of the
calculation must be shown. Ex.-
Inventory + Trade Debtors + Advances Deposits and Payments + Short term Loan (Unsecured) + Cash Equivalents
Trade Creditors + Liabilities for Expenses + Liabilities for other Finance
3730808243 + 2204014900 + 1450936735 + 21386290 + 15768683854
843937277 + 27576542 + 1489930233
Part 2:
Students will have to show a one year trend analysis of the stock price for their assigned
company. The selected year (for the trend analysis) should be the latest year based on
which the financial ratios for the company were calculated. Furthermore they must follow
the accounting period (ex- Jul-Jun) of their assigned company.
Students need to do a thorough interpretation of the trend analysis of the stock price
movement. Stock price fluctuation must be graphically displayed through line-chart.
Interpretation of the fluctuation should be based on news archive, economic factors.
Trend Analysis should be performed using Excel.
Part 3:
As a reference to the work, each group must provide screenshots of pages from where
the amount/figures were derived and provide them in the appendix. Also an excel file
containing daily stock price for the entire year with trend analysis should be included in
the appendix. In addition to that, a reference page should also be included.
A separate findings section in the paper should take the reader in detail through the
companies’ performance over the same time period based on financial ratio and stock
price. Charts and graphs (explaining the financial performance) incorporated is a must.
This report will carry 10% Marks.
Use the online consultation hours of your respective faculty member if you need any
clarification.
V. Term Paper Structure:
Cover Page
Table of Content
Executive Summary
Background of the assigned company (Maximum half page)
Ratio Analysis: Calculation of financial ratios for the assigned company. It should be
submitted in a PDF file
Trend Analysis of Stock Price: Daily stock price of the assigned company with line charts
to show fluctuation. It should be submitted in Microsoft excel.
Analysis and findings: This section should have a detailed interpretation of company’s
financial position based on the all the ratios calculated in the previous section. Major
factors impacting the stock price fluctuation with citation (provided in reference).
Conclusion
References
Appendix
The term paper for the public company "GQ ball pen industries ltd" requires students to analyze the financial performance of the assigned company for the most recent 3 years using ratio analysis.
The analysis should be based on the following ratios: profitability ratio, asset management ratio, liquidity ratio, debt management ratio, market ratio, and DuPont analysis. Each ratio should be calculated and supported by relevant interpretation.
Students should also show a one year trend analysis of the stock price for their assigned company and provide a thorough interpretation of the trend analysis. Additionally, students should include screenshots of pages from where the amount/figures were derived, an excel file containing daily stock price for the entire year with trend analysis,
And a reference page in the appendix. The term paper should also include a separate findings section that takes the reader in detail through the companies’ performance over the same time period based on financial ratio and stock price.
The term paper should be structured with a cover page, table of content, executive summary, background of the assigned company, ratio analysis, trend analysis of stock price, analysis and findings, conclusion, references, and appendix.
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Q2.X Ltd. manufactures plastic products and sells them for SAR 350 per unit. The firm's variable cost per unit is SAR 90, while its total fixed costs are SAR 110,000. The company expects to sell 1,800 units in the coming year. Calculate the following: (2 Marks) a) Degree of operating leverage h Margin of safety in units Margin of safety in SAR value Margin of safety in percentage Answer: 03. What is regression analysis and how does it help in estimating a cost function? Interpret your results with a numerical example. Marks) Answer:
Regression analysis is a statistical technique used to analyze the relationship between a dependent variable and one or more independent variables. It can be used to estimate a cost function by determining the degree to which changes in the independent variables affect the cost.
For example, a regression analysis can be used to estimate a cost function of a manufacturing firm where the cost of production is dependent on the number of machines used, number of employees hired, and the type of raw material used. In this example, the independent variables would be the number of machines, number of employees and type of raw material while the cost would be the dependent variable. The regression analysis can then be used to determine how the change in each of these independent variables affects the cost.
The results of the regression analysis can then be interpreted numerically by showing the impact of each independent variable on the cost. For example, if the regression analysis indicates that an increase in the number of machines will decrease the cost by $1,000, then the numerical interpretation would be that for every additional machine used, the cost of production will decrease by $1,000.
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Four Squares Productions, a firm hired to coordinate the release of the movie Pirates of the Caribbean: On Stranger Tides (starring Johnny Depp), identified 16 activities to be com- pleted before the release of the film. a) How many weeks in advance of the film release should Four Squares have started its marketing campaign? What is the critical path? The tasks (in time units of weeks) are as follows CHAPTER 3 PROJECT MANAGEMENT 97 MOST IMMEDIATE OPTIMISTIC LIKELY PESSIMISTIC TIME TIME TIME ACTIVITY PREDECESSOR(S) 3.5 12 10 13 4 5.5 7.7 9.9 12 4 6.5 F, G, H J, K, L I, M b) What is the probability of completing the marketing campaign in the time (in weeks) noted in part a? c) If activities I and J were not necessary, what impact would this have on the critical path and the number of weeks needed to complete the marketing campaign?
Based on computations, the firm should start 33 weeks ahead.
How to solve(a)
Critical path method
Forward pass
ES of the starting activities = 0ES of all other activities = Max. (EF of their immediate predecessors)EF of an activity = Its ES + Its durationBackward pass
LF of ending activities = Max (all EFs)LF of all other activities = Min. (LS of their immediate successors)LS of an activity = Its LF Its durationSlack = LF - EF
Activity a m b te-(a+4m+8)/6 σ=(b-a)/6 par = σ2 ES EF LS LF Slack\n0 2.17 10.13 12.30 10.13\n0 3.50 11.88 15.38 1.88\n0 11.83 0.
Note that the critical path is constituted by the activities with zero slack. So, the critical path is C-H-M-O and the expected duration (LF of 'O') is 32.05 weeks.
So, the firm should start 33 weeks ahead.
Calculations
A B C DE\nar = σ\nEF\n=L3.J3\nし4-14\n33.54\n10 12 13\n=(C4+4*D4+E4)/6\n=(CS+4*D5+E5)/6\n=(E4-C4)/6-4^2\n=(E5-C5)/6 -G5^2\nO\nO\n-L7-J7\n5\n9
(b)
The probability of finishing the campaign in 32.05 weeks is 50% always as this is the mean of the distribution.
For 33 weeks, the probability can be computed as:
=NORMDIST(33, 32.05, σcrit, 1)
If we add up the variances of C, H, M, and O, it will be close to 1.0. So, take σcrit = sqrt(1) = 1
So, Pr(completion <= 33 weeks) = NORMDIST(33, 32.05, 1, 1) = 82.9%
(c)
Nothing, because these are not critical activities.
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There are 5 women and 3 men applicants for a job.Only two out of eight are selected for a job.The probability that at least one of the selected person will be a women is:
What retirement plan do you think fits most people best?
Answer:
I think most people go with the IRA.
Sofia wants to buy a car when she graduates high school in 4 years’ time. She will need to have saved $5000 to do this. She has found a savings account with an interest rate of 3.5%. What is the present value of her saving target?
The present value of her saving target is $4,426.17.
Sofia needs to save $5,000 in 4 years in order to purchase a car. The interest rate of the savings account she found is 3.5%. To calculate the present value of her saving target, we use the formula:
Present Value = Future Value / (1+r)n
Where r is the interest rate, and n is the number of years.
Therefore, the present value of Sofia's saving target is:
$5,000 / (1 + 0.035)4 = $4,426.17
An interest rate defined as the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed. The total interest on an amount lent or borrowed is generally depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed.
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Critically evaluate the use of a Balanced Scorecard in your organization (or a previous organization you have worked in)
1. Outline the Key Strategy (What is the overall goal?)
2. Develop a series of metrics based on Financial Performance, Customer, Internal Processes and finally Learning and Growth
3. Explain and identify how your Key Performance Indicators (KPIs) will meet the strategic goals
4. Evaluate the challenges of Balanced Scorecard and the challenges to achieving the goals in point 2c
The Balanced Scorecard is a strategic planning and performance management framework that is used to align an organization's activities with its vision and strategy, improve internal and external communications, and monitor organizational performance against strategic goals. In my previous organization, we used the Balanced Scorecard to help us achieve our key strategy and meet our strategic goals.
1. Our key strategy was to increase customer satisfaction and loyalty, while also improving our financial performance. This was the overall goal that we were striving to achieve.
2. To help us achieve this goal, we developed a series of metrics based on the four key perspectives of the Balanced Scorecard: Financial Performance, Customer, Internal Processes, and Learning and Growth. For Financial Performance, we focused on metrics such as revenue growth and profitability.
For Customer, we looked at customer satisfaction and loyalty. For Internal Processes, we focused on improving the efficiency and effectiveness of our operations. And for Learning and Growth, we looked at employee satisfaction and development.
3. Our Key Performance Indicators (KPIs) were designed to help us meet our strategic goals. For example, we set a goal to increase customer satisfaction by 10% and we used customer satisfaction surveys to measure our progress. We also set a goal to improve our profitability by 5% and we used financial metrics such as revenue and profit to measure our progress.
4. One of the challenges of using the Balanced Scorecard is ensuring that the metrics and KPIs are aligned with the overall strategy and that they are relevant and meaningful. Another challenge is ensuring that the organization has the resources and capabilities to achieve the goals.
Additionally, it can be difficult to balance the different perspectives and to ensure that they are all given equal weight and importance.
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A company has just converted a long-term note receivable into a short-term note receivable. The company's acid-test and current ratios are both greater than 1. This transaction will: A) increase the current ratio and decrease the acid-test ratio. B) increase the current ratio and increase the acid-test ratio. C) decrease the current ratio and increase the acid-test ratio. D) decrease the current ratio and decrease the acid-test ratio.
A company has just converted a long-term note receivable into a short-term note receivable and the company's acid-test and current ratios are both greater than 1, hence the transaction will increase the current ratio and decrease the acid-test ratio. Therefore, the correct answer is option A.
The current ratio is a measure of a company's ability to pay its short-term liabilities with its current assets. It is calculated by dividing current assets by current liabilities. The acid-test ratio, also known as the quick ratio, is a measure of a company's ability to pay its short-term liabilities with its most liquid assets. It is calculated by dividing current assets (excluding inventory) by current liabilities.
When a company converts a long-term note receivable into a short-term note receivable, it is increasing its current assets and decreasing its long-term assets. This will increase the current ratio, as there are now more current assets to cover current liabilities. However, it will decrease the acid-test ratio, as the note receivable is not considered a liquid asset and is not included in the calculation of the acid-test ratio.
Therefore, the correct answer is option A) increase the current ratio and decrease the acid-test ratio.
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NRM Industries Limited (NRM) is a large family-owned, import-export business. NRM was founded in 1972 by three brothers named Virk, who used the initials of their first names. Now, control is about to be passed from the brothers to their children, seven of whom work directly for NRM. Another three children work for companies with whom NRM does business. One, Virk Logistics, manages the warehouses and deliveries for NRM. The Board of Directors is composed of the three brothers plus all ten of their children.As part of estate planning, each brother owns a different company that owns their shares of NRM. When they formed the company, they each took one common share. Later, they reorganized. Each brother traded their one share for 10,000 new shares. Now they are about to reorganize again and go public. Their plan is to trade each10,000 shares for 10,000,000 shares and issue another 20,000,000 shares to the public.NRM has never had an audit. Jasmine Virk, CFO, has approached your audit firm, Rowlands, Marcellin and Khan (RMK) to do an audit prior to issuing a prospectus. Jasmine went to college with one of your partners. Sales in 2020 for NRM are approximately $130 million.RequiredBriefly discuss five elements to consider in your engagement planning.
There are several elements that should be considered in the engagement planning process for the audit of NRM Industries Limited.
These include:
1. Understanding the business: It is important to gain an understanding of NRM's business, including its operations, industry, and the regulatory environment in which it operates. This will help to identify potential risks and areas of focus for the audit.
2. Assessing the risk of material misstatement: The risk of material misstatement refers to the likelihood that the financial statements contain material errors or omissions. Assessing this risk will help to determine the nature, timing, and extent of audit procedures to be performed.
3. Considering the involvement of other auditors: As NRM is a large, family-owned business with multiple subsidiaries, it is likely that other auditors will be involved in the audit. It is important to consider the work performed by these auditors and how it will affect the overall audit.
4. Evaluating internal controls: Internal controls are the policies and procedures that a company has in place to ensure the accuracy and completeness of its financial statements. Evaluating the effectiveness of these controls will help to determine the extent to which reliance can be placed on them during the audit.
5. Communicating with management and those charged with governance: It is important to establish clear lines of communication with management and those charged with governance, including the Board of Directors. This will help to ensure that any issues or concerns are addressed in a timely and effective manner.
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How do you write a banner ad?
To write a banner ad, craft a clear and attention-grabbing headline, use eye-catching visuals, include a compelling call-to-action, and keep the message concise and relevant to the target audience.
Banner ads are typically small digital advertisements displayed on websites or social media platforms. To create an effective banner ad, it's important to grab the viewer's attention with a clear and concise headline that highlights the benefits of the product or service being advertised.
The use of eye-catching visuals and colors can also help draw attention to the ad. It's important to keep the message focused and relevant to the target audience and include a clear call-to-action that encourages the viewer to click through to a landing page or take another desired action.
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Why do you think that load funds offer breakpoints to investors
the more they invest?
Load funds offer breakpoints to investors because it encourages investors to invest more money into the fund. By offering breakpoints, or reduced sales charges, at certain investment levels, investors are incentivized to invest larger amounts in order to take advantage of the reduced fees.
This benefits the load fund because it allows them to attract more assets and generate more income from management fees. Additionally, investors with larger investments in the fund are more likely to stay invested for longer periods of time, providing stability for the fund. Overall, breakpoints are a way for load funds to attract and retain investors with larger amounts of capital.
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17. Suppose you made a 90-day investment with a maturity value
of $8,000. Find the present value of the note if money is worth
6.27% at the time you sign the papers.
The present value of the note can be calculated by using the following formula:
PV = FV/(1+r)^n
Where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.
For this problem, the present value is:
PV = 8,000/(1+0.0627)^90
PV = $6,930.41
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Today, a company's shares sell for $425 each. Investors requirea 13.45% return on this stock. What amount is expected to be paidfor the next dividend per share if the dividend yield is currently2%?
The expected amount to be paid for the next dividend per share is $8.50.
To find the expected amount to be paid for the next dividend per share, we can use the formula for dividend yield:
We can rearrange this formula to solve for the annual dividend per share:
Annual dividend per share = (Dividend yield) × (Price per share)Plugging in the given values, we get:
Annual dividend per share = (0.02) × ($425)Annual dividend per share = $8.50Therefore, the expected amount to be paid for the next dividend per share is $8.50.
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Discuss how either the Dennison Measurement Index or the
Competing Value Measurement framework links to key elements of your
organizational culture
Organizational culture is the set of values, beliefs, and norms that shape the behavior and decision making of an organization. It is a key factor in determining the success or failure of an organization. The Dennison Measurement Index (DMI) and the Competing Value Measurement (CVM) framework are two tools that can be used to measure and understand organizational culture.
The Dennison Measurement Index (DMI) is a tool that measures the strength and effectiveness of an organization's culture. It looks at four key elements of organizational culture: mission, consistency, adaptability, and involvement. These elements are linked to key aspects of organizational culture such as vision, values, and norms. The DMI provides a comprehensive view of an organization's culture and can help identify areas of strength and weakness.
The Competing Value Measurement (CVM) framework is another tool that can be used to measure and understand organizational culture. It looks at four key dimensions of organizational culture: clan, adhocracy, market, and hierarchy. These dimensions are linked to key aspects of organizational culture such as collaboration, innovation, competitiveness, and control. The CVM framework provides a comprehensive view of an organization's culture and can help identify areas of strength and weakness.
Both the DMI and the CVM framework are valuable tools for measuring and understanding organizational culture. They can help organizations identify key elements of their culture and make changes to improve their effectiveness and success.
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As a cemetery manager, you are considering offering perpetual care contracts. You estimate that maintenance will cost you $200 during the first year and will increase by 2% every year thereafter.
If the appropriate discount rate is 5.5%, how much do you need to charge to break even on a perpetual care contract?
Please draw the timeline
You need to charge $3,709.09 to break even on a perpetual care contract.
To determine how much to charge to break even on a perpetual care contract, we need to use the present value of a perpetuity formula. The formula is PV = C / r, where PV is the present value, C is the annual cash flow, and r is the discount rate. In this case, C is the maintenance cost and r is the discount rate.
First, we need to determine the annual cash flow, which is the maintenance cost that will increase by 2% every year. We can use the formula C = C0 * (1 + g) [tex]x^{2}[/tex] n, where C0 is the initial maintenance cost, g is the growth rate, and n is the number of years. In this case, C0 is $200, g is 2%, and n is 1.
C = $200 * (1 + 0.02) [tex]x^{2}[/tex] 1
C = $200 * 1.02
C = $204
Next, we can plug in the values into the present value of a perpetuity formula:
PV = C / r
PV = $204 / 0.055
PV = $3,709.09
The timeline would look like this:
Year 0: Charge $3,709.09
Year 1: Maintenance cost $200
Year 2: Maintenance cost $204 (2% increase from year 1)
Year 3: Maintenance cost $208.08 (2% increase from year 2)
And so on, with the maintenance cost increasing by 2% every year.
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When north caroline increased the price of vanity license plates from $30 to $40 the quantity demanded:
1)lost revenue is represented by areas C and E while gained revenue is represented by area A
2)gained revenue is represented by areas B, C, D and E while lost revenue is represented by area A
3)gained revenue is represented by areas C and E while lost revenue is represented by area A
4)lost revenue is represented by areas B, C, D and E while gained revenue is represented by area A
The right alternative is 1. Lost revenue is represented by areas C and E while gained revenue is represented by area A.
In economics, the phrase "quantity demanded" describes the total quantity of an item or service that consumers demand over a defined period of time. A market's level of equilibrium is determined by the cost of a good or service. The demand curve, or simply the demand, is the relationship that exists between the amount demanded and the price. The elasticity of demand measures how much the cost of the quantity demanded varies. A change in the specific quantity of a product that consumers are willing and able to purchase is referred to as a shift in the quantity requested. A variation in pricing resulted in this change in the required amount.
The item's price has an impact on the required amount. Demand will decrease as the price rises. As the price declines, demand will increase. There is a negative relationship between price and demand.
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Assuming the balance of cash on january 1, 2024, equals $5,400, calculate the balance of cash on december 31, 2024
Calculating the balance of cash on December 31, 2024, requires an understanding of the factors that affect cash inflows and outflows during the year.
Revenues and Expenses: The revenue generated by a business and the expenses incurred during the year can impact the cash balance. If revenues are greater than expenses, then the business will have a positive cash flow, whereas if expenses are greater than revenues, then the business will have a negative cash flow.
Capital Expenditures: Capital expenditures refer to investments in long-term assets such as property, plant, and equipment. These investments can impact the cash balance since they require a cash outflow at the time of purchase.
Financing Activities: Financing activities refer to transactions related to the company's financing, such as issuing stock, paying dividends, or borrowing money. These activities can either increase or decrease the cash balance depending on whether the company is raising money or making payments.
Given that the starting cash balance is $5,400 on January 1, 2024, it is necessary to consider the above factors to determine the balance of cash on December 31, 2024. Let's assume that the business generates $200,000 in revenue and incurs $150,000 in expenses during the year. The difference between revenue and expenses, which is $50,000, is referred to as net income. Assuming the business has no capital expenditures, the net income will be the cash inflow, which means the cash balance will increase by $50,000 to $55,400 on December 31, 2024.
However, if the business had capital expenditures of $30,000, the cash outflow would be $30,000, which would reduce the cash balance to $25,400. Alternatively, if the business borrowed $20,000 during the year, the cash inflow would be $20,000, which would increase the cash balance to $25,400 + $20,000 = $45,400. Finally, if the business paid dividends of $10,000 during the year, the cash outflow would be $10,000, which would reduce the cash balance to $45,400 - $10,000 = $35,400.
In conclusion, the balance of cash on December 31, 2024, is influenced by various factors, including revenues and expenses, capital expenditures, and financing activities. Therefore, to determine the cash balance on a specific date, it is necessary to consider all of these factors and make appropriate adjustments to the starting balance of cash.
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4. Consider the following problems. Each problem is unrelated to the other. [1+2+2=5] a) Selling price per unit, Tk. 29; total fixed expenses, Tk. 30,400; variable expenses per unit, Tk. 13. Find total sales in units to achieve a profit of Tk. 8,000, assuming no change in selling price. b) Sales, Tk. 51,000; variable expenses, Tk. 18,000; fixed expenses, Tk. 18,000; net income, Tk. 15,000. Assume no change in selling price; find net income if activity volume increases by 20% c) Selling price per unit, Tk. 48; total fixed expenses, Tk. 106,000; variable expenses per unit, Tk. 36. Assume that variable expenses are reduced by 25% per unit, and the total fixed expenses are increased by 15%. Find the sales in units to achieve a profit of Tk. 23,000, assuming no change in selling price.
a) The total sales in units to achieve a profit of Tk. 8,000 is 2,400 units. b) The net income if activity volume increases by 20% is Tk. 21,600. c) The sales in units to achieve a profit of Tk. 23,000 is 6,900 units.
a) To find the total sales in units to achieve a profit of Tk. 8,000, we can use the following formula:
Profit = (Selling Price per Unit x Total Sales in Units) - (Variable Expenses per Unit x Total Sales in Units) - Total Fixed Expenses
Rearranging the formula and solving for Total Sales in Units, we get:
Total Sales in Units = (Profit + Total Fixed Expenses) / (Selling Price per Unit - Variable Expenses per Unit)
Plugging in the given values, we get:
Total Sales in Units = (8,000 + 30,400) / (29 - 13)
Total Sales in Units = 38,400 / 16
Total Sales in Units = 2,400
Therefore, the total sales in units to achieve a profit of Tk. 8,000 is 2,400 units.
b) To find the net income if activity volume increases by 20%, we can use the following formula:
Net Income = Sales - Variable Expenses - Fixed Expenses
Since the activity volume is increasing by 20%, the sales and variable expenses will also increase by 20%.
New Sales = 51,000 x 1.20 = 61,200
New Variable Expenses = 18,000 x 1.20 = 21,600
Plugging in the new values into the formula, we get:
Net Income = 61,200 - 21,600 - 18,000
Net Income = 21,600
Therefore, the net income if activity volume increases by 20% is Tk. 21,600.
c) To find the sales in units to achieve a profit of Tk. 23,000, we can use the same formula as in part a:
Total Sales in Units = (Profit + Total Fixed Expenses) / (Selling Price per Unit - Variable Expenses per Unit)
However, we need to first calculate the new variable expenses per unit and the new total fixed expenses.
New Variable Expenses per Unit = 36 x 0.75 = 27
New Total Fixed Expenses = 106,000 x 1.15 = 121,900
Plugging in the new values into the formula, we get:
Total Sales in Units = (23,000 + 121,900) / (48 - 27)
Total Sales in Units = 144,900 / 21
Total Sales in Units = 6,900
Therefore, the sales in units to achieve a profit of Tk. 23,000 is 6,900 units.
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A friend of yours has invented a unique and useful new product. This friend is a fashion designer by profession and understands very little about marketing and selling this new product. She does understand, however, that "Nothing happens until someone sells the products". She has asked you to describe three general factors that need to be considered when you market a product. Make an outline of what you will say
There are a number of general factors that need to be considered when marketing a product. Here are three of the most important ones Target market,Pricing,Distribution.
1. Target market: The first thing you need to consider when marketing a product is who your target market is. This means thinking about who your ideal customer is, what their needs and wants are, and how your product can meet those needs and wants. By understanding your target market, you can tailor your marketing efforts to appeal to them specifically and increase the chances of making a sale.
2. Pricing: Another important factor to consider when marketing a product is pricing. You need to think about how much your product will cost to produce and how much you should charge for it in order to make a profit. You also need to consider how your pricing compares to that of similar products on the market and what your target market is willing to pay.
3. Distribution: The final factor to consider when marketing a product is distribution. This means thinking about how you will get your product to your target market. Will you sell it online, in stores, or through other channels? You also need to think about how you will ship your product and how you will handle returns and exchanges.
By considering these three factors, you can create a marketing plan that will help you successfully sell your friend's new product.
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This case presents an opportunity for us to calculate beta using the "bottoms-up" approach described by Professor Damodaran, as a reality check on the "top-down" regression betas provided in the case. We will also revisit some of the other issues that confound practitioners when they set out to estimate a company cost of capital. After watching the recorded presentation and the Excel demonstration, you should be ready to tackle this assignment. STUDY QUESTIONS FOR THIS ASSIGNMENT
1. (5.0 points) Why is it important to use the market value of equity rather than the book value in calculating the component weights on the sources of capital?
2. (5.0 points) Identify which regression beta is more relevant (and why):
a. The popular estimate based on monthly price data over the previous 5 years, described on p. 192, paragraph 2, or
b. Sheppard's own calculation of beta, based on daily price data for the last year, described in footnote 5 on p. 192.
3. (5.0 points) Justify which Treasury yield is the best estimate of the risk-free rate in a cost of capital calculation.
4. (5.0 points) Why is there so much difference of opinion regarding the estimate of the average Market Risk Premium?
5. (5.0 points) Determine the most appropriate bond yield to use for the cost of debt and justify your choice.
6. (5.0 points) Why do we calculate an after-tax cost of debt for the WACC?
7. (20.0 points) Complete the template. Discuss the conditions under which a larger sample (the three comparable firms) might provide better information than the firm's own calculated WACC.
1. The market value more accurately reflects the true value of the company,
2. The regression beta based on monthly price data over the previous 5 years is more relevant.
3. Treasury yield, as it reflects the current long-term interest rate in the economy
4. It is a subjective measure.
5. The current yield on high-grade corporate bonds with a maturity closest to the maturity of the company's debt.
6. Tax cost of debt for the WACC because interest payments are tax-deductible
7. It provides better information.
1. It is important to use the market value of equity rather than the book value in calculating the component weights on the sources of capital because the market value more accurately reflects the true value of the company, which will more accurately reflect the cost of capital.
2. The regression beta based on monthly price data over the previous 5 years is more relevant, because it provides a larger sample size and a longer period of time to capture more accurate market fluctuations, thus providing a more accurate estimate of the beta.
3. The most appropriate Treasury yield to use for the cost of capital calculation is the 10-year US Treasury yield, as it reflects the current long-term interest rate in the economy, and is most consistent with the duration of the debt that a company typically takes on.
4. There is so much difference of opinion regarding the estimate of the average Market Risk Premium because it is a subjective measure, as it is difficult to estimate the difference between the expected return of an investment in the stock market and the risk-free rate.
5. The most appropriate bond yield to use for the cost of debt is the current yield on high-grade corporate bonds with a maturity closest to the maturity of the company's debt. This provides an accurate estimate of the cost of debt as it reflects the current cost of borrowing for a similar company.
6. We calculate an after-tax cost of debt for the WACC because interest payments are tax-deductible and so the effective cost of borrowing to the company is lower than the pre-tax cost of borrowing.
7. The larger sample (the three comparable firms) may provide better information than the firm's own calculated WACC if the three companies are more similar to each other than they are to the company in question, as the WACC of the comparable companies can more accurately reflect the cost of capital of the company in question.
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