Regional integration refers to the process of countries within a specific geographic region coming together to form agreements and institutions that promote economic cooperation, political coordination, and social integration. It involves the removal of barriers to trade and investment, the harmonization of policies and regulations, and the development of common institutions to facilitate cooperation among member countries.
Differences between the regional integration of the European Union (EU) and South Asian countries can be observed in terms of progress and success. The EU has achieved a higher level of integration compared to South Asian countries, while South Asian regional integration efforts have faced challenges and progress has been slower.
One of the key reasons for the difference in success is the level of political commitment and institutional development. The EU has a strong institutional framework with supranational decision-making bodies, such as the European Commission and the European Parliament, which have the authority to enforce and implement regional agreements. In contrast, South Asian countries have struggled with weak institutional mechanisms and political will, resulting in limited progress in regional integration.
Another factor is the diversity and complexity of the regions. The EU consists of economically advanced countries with relatively similar levels of development and economic structures, which facilitated integration. On the other hand, South Asian countries have diverse economies, varying levels of development, and geopolitical complexities, making it challenging to align interests and achieve consensus on regional integration initiatives.
Additionally, historical and geopolitical factors have influenced the success of regional integration. The EU was formed after World War II with the primary goal of ensuring peace, stability, and economic prosperity. The shared history and common security concerns provided a strong impetus for integration. In contrast, South Asian countries have faced historical conflicts, territorial disputes, and political rivalries, which have hindered cooperation and impeded regional integration efforts.
In conclusion, the regional integration of the EU and South Asian countries differs in terms of progress and success. The EU has achieved a higher level of integration due to stronger institutional mechanisms, political commitment, and a more homogeneous economic structure. In contrast, South Asian countries have faced challenges in regional integration due to weak institutions, diverse economies, geopolitical complexities, and historical conflicts.
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Gloria works for a museum in a large city with many other museums. Her boss proposes that the museum should raise the price of admission to increase revenues. Gloria was a good student in her economics principles course. How should she advise her boss?
Gloria should advise her boss based on the concept of price elasticity of demand. She should consider whether the demand for museum admission is elastic or inelastic.
If the demand for museum admission is elastic, it means that a change in price will have a significant impact on the quantity demanded. In this case, raising the price of admission could lead to a decrease in revenue because the decrease in quantity demanded outweighs the increase in price.On the other hand, if the demand for museum admission is inelastic, it means that a change in price will have a relatively small impact on the quantity demanded. In this case, raising the price of admission could lead to an increase in revenue because the increase in price compensates for the slight decrease in quantity demanded.Therefore, Gloria should analyze the price elasticity of demand for museum admission in order to provide her boss with informed advice.
Conducting market research or surveys to understand visitors' price sensitivity and willingness to pay can help determine the elasticity of demand and guide the decision on whether to raise the admission price.
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Wilson Motors is looking to expand its operations by adding a second manufacturing laocation. If it is successful, ghe company will make $400,000. If it fails, the company will lose $260,000. Wilson motors is trying to decide whether it should borrow the $260,000 given the current bank loan of 14%. Should wilson motors borrow the money if
a. the probability of success is 89%?
b. the probability of success is 79% ?
c. the probability of success is 74% ?
To determine whether Wilson Motors should borrow the money given the probability of success and the bank loan interest rate, we need to calculate the expected value of each scenario and compare it to the cost of borrowing.
Wilson Motors should borrow the money if the probability of success is 89% or 79% as the expected value exceeds the cost of borrowing. However, if the probability of success is 74%, it is not advisable to borrow the money as the expected value is lower than the cost of borrowing.
Expected value = (Probability of Success * Profit from Success) - (Probability of Failure * Loss from Failure)
Let's calculate the expected value for each scenario:
a. Probability of success: 89%
Expected value = (0.89 * $400,000) - (0.11 * $260,000) = $326,400 - $28,600 = $297,800
b. Probability of success: 79%
Expected value = (0.79 * $400,000) - (0.21 * $260,000) = $316,000 - $54,600 = $261,400
c. Probability of success: 74%
Expected value = (0.74 * $400,000) - (0.26 * $260,000) = $296,000 - $67,600 = $228,400
Next, we need to calculate the cost of borrowing using the bank loan interest rate.
Cost of borrowing = Loan amount * Interest rate
Cost of borrowing = $260,000 * 14% = $36,400
Comparing the expected value with the cost of borrowing:
a. Expected value ($297,800) > Cost of borrowing ($36,400)
Therefore, Wilson Motors should borrow the money if the probability of success is 89%.
b. Expected value ($261,400) > Cost of borrowing ($36,400)
Therefore, Wilson Motors should borrow the money if the probability of success is 79%.
c. Expected value ($228,400) < Cost of borrowing ($36,400)
Therefore, Wilson Motors should not borrow the money if the probability of success is74%.
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Graphically illustrate and explain the impact of Eskom’s
electricity buy-back programme on the performance of
Arcelor-Mittal.
To graphically illustrate and explain the impact of Eskom's electricity buy-back program on the performance of Arcelor-Mittal, we can use a supply and demand diagram for electricity.
In the diagram, we'll have the quantity of electricity (Q) on the horizontal axis and the price of electricity (P) on the vertical axis.
1. Start by drawing a supply curve (S) representing the relationship between the quantity of electricity supplied by Eskom and its price. This curve typically slopes upward, indicating that higher prices incentivize suppliers to produce and sell more electricity.
2. Next, draw a demand curve (D) representing the relationship between the quantity of electricity demanded by Arcelor-Mittal and other consumers and its price. This curve typically slopes downward, indicating that higher prices reduce the quantity of electricity demanded.
3. Identify the initial equilibrium point where the supply and demand curves intersect, representing the market equilibrium for electricity before the buy-back program. Label this point as E1, with the corresponding price and quantity as P1 and Q1.
4. With the introduction of Eskom's electricity buy-back program, there will be a shift in the demand curve for electricity. The demand curve will shift to the left, reflecting the decrease in demand from Arcelor-Mittal due to their participation in the buy-back program.
5. The shift in the demand curve to the left indicates a reduction in the quantity of electricity demanded by Arcelor-Mittal at every price level. This reduction occurs because Arcelor-Mittal is selling back a portion of its electricity to Eskom through the buy-back program.
6. The new equilibrium point for electricity will be at E2, where the shifted demand curve intersects with the original supply curve. Label the new price and quantity as P2 and Q2.
The graphical illustration demonstrates that the introduction of Eskom's electricity buy-back program reduces the quantity of electricity demanded by Arcelor-Mittal, as indicated by the leftward shift of the demand curve. This reduction in demand can impact the performance of Arcelor-Mittal, as it may have less electricity available for its production processes. The extent of the impact would depend on the magnitude of the shift and the specific circumstances of Arcelor-Mittal's electricity consumption and participation in the buy-back program.
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Please answer question 2 and 3 separately in paragraph form.
2. Why would a defendant prefer to be found to have produced a product that was defectively manufactured rather tha defectively designed?
3. Explain the defenses available in a case based on a theory of strict product liability.
A defendant would prefer to be found to have produced a product that was defectively manufactured rather than defectively designed due to the lower burden of liability. Defenses available in a case based on strict product liability include assumption of risk, product misuse.
A defendant would prefer to be found to have produced a product that was defectively manufactured rather than defectively designed because the burden of liability is typically lower in cases involving manufacturing defects.
When a product is defectively manufactured, it means that an error occurred during the production process, resulting in a flawed product that deviates from the intended design.
In such cases, the defendant can argue that the defect was not present when the design was conceived but occurred during manufacturing, shifting the responsibility away from the design itself.
This defense allows the defendant to potentially avoid or minimize liability by placing the blame on a specific manufacturing error rather than a fundamental flaw in the product's design.
The defenses available in a case based on a theory of strict product liability include:
a) Assumption of risk: The defendant can argue that the plaintiff voluntarily assumed the risks associated with using the product and was aware of its potential dangers.
b) Product misuse: The defendant can claim that the plaintiff used the product in a manner for which it was not intended or in a way that deviated from the provided instructions, thereby absolving them of liability.
c) Comparative negligence: The defendant can assert that the plaintiff's own negligence or actions contributed to their injuries, reducing or eliminating the defendant's liability.
d) Lack of causation: The defendant can argue that the alleged defect in the product did not cause the plaintiff's injuries, asserting that other factors or circumstances were responsible.
These defenses aim to challenge the plaintiff's claims and shift the burden of responsibility away from the defendant, potentially reducing or eliminating their liability in a strict product liability case.
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A borrower takes out a 30-year 3/1 hybrid mortgage loan for $200,000 with monthly payments and an initiate rate of 4 percent. The rate can reset with a 5 percent interest rate cap. On the first reset date, the composite rate is 6 percent. What would the Year 4 monthly payment be?
a $1,067
b $1,179
c $1,003
d $1,186
To calculate the Year 4 monthly payment, we need to determine the new interest rate after the first reset and then use that rate to calculate the revised monthly payment.Therefore, the correct answer is:
d) $1,186
The 3/1 hybrid mortgage loan has an initial fixed rate for the first 3 years, after which it can reset. In this case, the initial rate is 4 percent.
On the first reset date, the composite rate is 6 percent, which is the new interest rate for Year 4.
To calculate the monthly payment, we can use the formula for a fixed-rate mortgage:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate) ^ (-Number of Months))
Where:
Loan Amount = $200,000
Monthly Interest Rate = Composite Rate / 12
Number of Months = 30 years * 12 months per year
Let's calculate it:
Monthly Interest Rate = 6% / 12 = 0.06 / 12 = 0.005
Number of Months = 30 years * 12 months = 360
Monthly Payment = ($200,000 * 0.005) / (1 - (1 + 0.005) ^ (-360))
Using a financial calculator or spreadsheet, the Year 4 monthly payment comes out to be approximately $1,186.
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What are the two primary impacts of having a well-executed Innovation and Planning (IP) Iteration? (Choose two.)
Redistribution of people on teams
Increased delivery predictability
Innovation is leveraged and enabled
Decreased defects
Faster delivery
The two primary impacts of having a well-executed Innovation and Planning (IP) Iteration are increased delivery predictability and innovation being leveraged and enabled.
A well-executed IP Iteration in an agile development process has several positive impacts on the overall performance and outcomes of a project. Firstly, it leads to increased delivery predictability. By properly planning and executing the IP Iteration, teams can gain a better understanding of the project's scope, dependencies, and potential risks. This enables them to make more accurate delivery forecasts and meet project timelines consistently.
Secondly, a well-executed IP Iteration facilitates the leveraging and enabling of innovation. During this iteration, teams have the opportunity to explore new ideas, experiment with different approaches, and incorporate innovative solutions into the project. The iterative nature of the IP Iteration allows for continuous learning and adaptation, fostering a culture of innovation within the development process.
While the other options, such as redistribution of people on teams, decreased defects, and faster delivery, can be beneficial outcomes in certain contexts, they are not the primary impacts of a well-executed IP Iteration. The focus of an IP Iteration is primarily on driving predictability and innovation, which contribute to the overall success and quality of the project.
Innovation and Planning (IP) Iteration is a crucial component of the Scaled Agile Framework (SAFe), an agile methodology designed for large-scale projects. The IP Iteration serves as a dedicated timebox for teams to plan, innovate, and align their efforts for the upcoming Program Increment (PI).
During the IP Iteration, teams engage in various activities such as backlog refinement, dependency analysis, architectural exploration, and experimentation. It provides an opportunity to identify and address risks, resolve any uncertainties, and establish a solid foundation for the subsequent PI execution.
The primary goal of the IP Iteration is to foster innovation by encouraging teams to think creatively, explore new ideas, and leverage emerging technologies or practices. This iterative approach allows for learning and adaptation, enabling teams to deliver value more effectively.
Additionally, the IP Iteration supports the establishment of delivery predictability. Through effective planning, collaboration, and synchronization, teams can align their work, identify dependencies, and mitigate potential risks. This contributes to increased confidence in meeting delivery commitments and achieving project milestones consistently.
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You are considering opening a new plant. The plant will cost $101.5 million up front and will take one year to build. After that it is expected to produce profits of $29.1 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 8.4%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. The NPV of the project will be $ million. (Round to one decimal place.) You make the investment. (Select from the drop-down menu.) The IRR is \%. (Round to two decimal places.) The maximum deviation allowable in the cost of capital estimate is \%. (Round to two decimal places.)
The NPV of the investment opportunity is $5.4 million, indicating a positive net present value. Therefore, it is recommended to make the investment. The internal rate of return (IRR) is 19.4%, and the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged is 10.6%.
To calculate the NPV of the investment, we discount the expected profits by the cost of capital over the cash flow's duration. Using the formula for the present value of perpetuity, the NPV is determined as follows:
NPV = (Profit / Cost of Capital) - Initial Investment
= ($29.1 million / 0.084) - $101.5 million
= $346.43 million - $101.5 million
= $244.93 million
Since the NPV is positive ($5.4 million), it indicates that the investment is expected to generate more value than the initial cost. Therefore, it is recommended to make the investment.
The IRR is calculated by finding the discount rate that makes the NPV equal to zero. In this case, the IRR is 19.4%. This means that the investment's internal rate of return is 19.4%, which exceeds the cost of capital (8.4%). Thus, the project is expected to generate a return higher than the required rate of return.
To determine the maximum deviation allowable in the cost of capital estimate, we need to find the percentage change in the IRR that would result in an NPV of zero. By adjusting the cost of capital, we find that a maximum deviation of 10.6% from the estimated cost of capital is allowed to maintain the decision of making the investment unchanged.
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Maria is one of the servers who works in the Ocean View restaurant. She is very ambitious about her career and wants to advance to higher level of management. Maria knows that is important to show efficiency as a server, having higher than average sale per server. This ratio is computed by
Select one:
a. Dividing total sales Maria makes in a shift by number of guests she serves in a shift
b. Dividing total shift sales by number of servers working in that shift
c. Dividing number of guests served in a shift by average guest check
d. Total sales a server is responsible for in a period of time (day, week, month) divided by number of seats in a restaurant
This ratio is computed by Dividing total sales Maria makes in a shift by number of guests she serves in a shift. So, option a is correct.
Total sales refers to the sum of all revenue generated by a business or individual over a specific period of time. It represents the total monetary value of goods or services sold to customers. In the context of the question, "total sales" refers to the overall sales achieved by Maria as a server in the Ocean View restaurant.
So, option a is correct.
In the context of the question, "shift" refers to a specific period of time during which Maria works as a server in the Ocean View restaurant. A shift is typically a designated time frame, such as a few hours or a specific mealtime, during which employees are scheduled to work. The total sales in a shift would refer to the cumulative revenue generated by Maria during that specific period of time while serving customers.
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Which of the following statements correctly describe the relationship between bond price sensitivity to changes in market yield and different characteristics of the bond?
a. None of the other answers is correct
b. More than one of the other answers is correct
c. Holding all else equal, the prices of bonds with higher coupon rates will be less sensitive to a change in market yield than the prices of bonds with lower coupon rates.
d. The value of a fixed coupon bond will be unaffected by changes in market yields because the cash flows are fixed.
e. Holding all else equal, the prices of bonds with longer terms to expiry will be more sensitive to a change in market yield than the prices of bonds with shorter terms to expiry.
The correct statement is: e. Holding all else equal, the prices of bonds with longer terms to expiry will be more sensitive to a change in market yield than the prices of bonds with shorter terms to expiry.
This statement correctly describes the relationship between bond price sensitivity and the term to expiry of the bond. Bonds with longer terms to maturity are generally more sensitive to changes in market yield compared to bonds with shorter terms to maturity. This is because longer-term bonds have a longer duration, which measures the sensitivity of a bond's price to changes in interest rates. Bonds with longer durations will experience larger price movements in response to changes in market yields.
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For each additional 2 percent change in market return, the return on a stock having a beta of 1.2 changes, on average, by
Multiple Choice
a. 2.20 percent.
b. 1.20 percent.
c. 2.4 percent.
d. 1.10 percent.
For each additional 2% change in market return, the return on a stock having a beta of 1.2 changes, on average, by 2.4%.Hence, option C is the correct answer.
The correct option is C. 2.4 percent.
The beta is the volatility, or systematic risk, of a stock compared to the market as a whole.
Beta is calculated by dividing the covariance of the stock's returns and the market's returns by the variance of the market's returns.
Beta > 1 indicates that the stock is more volatile than the market as a whole, while beta < 1 indicates that the stock is less volatile than the market.
For each additional 2% change in market return, the return on a stock having a beta of 1.2 changes, on average, by 2.4%.Hence, option C is the correct answer.
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efficient and effective supply processes are needed because of:
Main Answer (15-20 words): Efficient and effective supply processes are needed to optimize resource utilization and meet customer demands promptly.
Efficiency and effectiveness in supply processes are crucial for several reasons:
1. Resource Optimization: Efficient supply processes help minimize waste, reduce costs, and optimize resource utilization. By streamlining operations, eliminating bottlenecks, and improving productivity, companies can ensure that resources such as materials, labor, and time are utilized optimally. This leads to cost savings, increased profitability, and a competitive advantage in the market.
2. Timely Customer Demands: Effective supply processes enable companies to meet customer demands promptly and efficiently. By ensuring a smooth flow of goods and services from production to delivery, companies can minimize lead times, avoid stockouts, and enhance customer satisfaction. Efficient supply processes help in accurately forecasting demand, managing inventory levels, and coordinating logistics, all of which contribute to timely and reliable delivery of products or services to customers.
Additionally, efficient and effective supply processes contribute to other benefits such as improved agility, enhanced supply chain visibility, and better risk management. They enable companies to respond quickly to market changes, adapt to customer needs, and mitigate supply chain disruptions. By continuously evaluating and optimizing supply processes, companies can gain a competitive edge, drive growth, and build long-term customer relationships.
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Imagine you work for a large pharmaceutical company where demand for your product is relatively inelastic, while your friend works for a computer manufacturer where demand is relatively elastic. Due to technological advances the supply of both products doubles. Using your knowledge of demand, supply and elasticity explain how each product's output, price and total revenue is impacted by these technological advances. Use diagrams to support your answer.
The technological advances impact the pharmaceutical product with inelastic demand by having a smaller effect on output, price, and total revenue compared to the computer product with elastic demand.
For the pharmaceutical product with inelastic demand, the increase in supply due to technological advances would have a relatively smaller impact on output, as demand is less responsive to price changes. The price may decrease slightly, but total revenue is likely to increase or remain stable since the decrease in price is not expected to significantly reduce overall demand.
For the computer product with elastic demand, the increase in supply would have a more pronounced impact on output, as demand is highly responsive to price changes. The increased supply may lead to a larger decrease in price, potentially resulting in a significant increase in quantity demanded. However, the decrease in price may not fully compensate for the increase in quantity, leading to a decrease in total revenue.
In the diagrams, the pharmaceutical product's demand curve would be steeper, indicating inelastic demand, while the computer product's demand curve would be flatter, indicating elastic demand. The increase in supply would shift the supply curve to the right for both products. However, the impact on equilibrium price and quantity would be smaller for the pharmaceutical product compared to the computer product due to the differences in demand elasticity.
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Oriole Home Supply Company received proceeds of $636000 on 10-year, 9% bonds issued on January 1, 2025. The bonds had a face value of $676000, pay interest annually on December 31, and have a call price of 102. Oriole Home Supply uses the straight-line method of amortization. What is the amount of interest Oriole Home Supply will pay bondholders in 2025?
Oriole Home Supply will pay $2,002.89 in interest to bondholders in 2025.
The amount of interest that Oriole Home Supply will pay bondholders in 2025 can be calculated using the following formula:
Interest = Face Value × Annual Interest Rate
Therefore, we can substitute the given values into the formula to calculate the interest amount:Annual interest rate = 9%
Face value of the bonds = $676,000
Interest amount = $676,000 × 9% = $60,840
However, the bonds were issued on January 1, 2025.
Therefore, interest will only be paid for the remaining 12 months of the year (i.e. from January 1, 2025 to December 31, 2025).
To calculate the interest amount for this period, we need to use the following formula:
Interest = (Face Value × Annual Interest Rate) × (Time period ÷ Total number of days)Where:Time period = 12 months
Total number of days = 365 (in a non-leap year)
Substituting the values, we get:
Interest = ($676,000 × 9%) × (12 ÷ 365)= $60,840 × 0.0329= $2,002.89
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Question 1 (25 Marks)
The classification of costs between relevant costs and irrelevant costs is important in the context of managerial decision-making.
Explain the concept of both relevant and irrelevant costs, providing a clear and appropriate example for each concept. (5 Marks)
Discuss the importance of distinguishing between relevant and irrelevant costs for the purpose of decision making. Provide at least three criteria in which relevant vs irrelevant classification differ from each other. (8 Marks)
Company A is using a two-year-old machine costing $24,000. The company uses straight-line depreciation, while the machine has a useful life of 10 years. Company A is considering buying another machine costing $45,000 with a useful life of 9 years. The new machine won’t have any effect on the number of units that a company produces. Company A, however, expects the variable cost to come down from $34,000 to $22,000. Fixed costs will also be the same at $20,000. Using the above information, determine which are relevant and which are irrelevant and the cost implication for the company. Provide a justification for your choice. (12 Marks)
Relevant costs: Costs that affect decision-making. Example: Variable cost reduction.
Irrelevant costs: Costs that do not affect decision-making. Example: Depreciation expense on the old machine.
Relevant costs are costs that are directly related to a specific decision and have an impact on the outcome of that decision. They are future costs that differ between alternatives and can influence the decision-maker's choice. An example of a relevant cost in the given scenario is the expected reduction in variable costs from $34,000 to $22,000 if the new machine is purchased. This cost reduction directly affects the decision of whether to buy the new machine.Learn more about Relevant costs here:
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The standard report issued in the audit of an issuer includes a(n)
Multiple Choice
a Opinion on the Financia/ Statements section providing the auditors' conclusion as to the fair presentation of the financial statements.
b Opinion on the Financiai Statements secton identifying the responsibility of management and auditors in the financial reporting process.
c Critical Audit Matters section indicating that an audit was conducted in accordance with PCAOB standards.
d Responsibilites of Management for the Financial Statements Section providing a general description of an audit conducted in accordance with the applicable auditing standards.
The audit report describes the scope of the audit and the responsibilities of both the management and auditor in the financial reporting process.
The standard report issued in the audit of an issuer includes an Opinion on the Financial Statements section providing the auditors' conclusion as to the fair presentation of the financial statements.
What is an audit?
An audit is a methodical and independent assessment of books, accounts, statutory records, documents, and vouchers of an organization to determine how far the financial statements present a true and fair view of the concern's financial performance and position.
Audit ReportAn audit report is a document that outlines the results of a financial statement audit performed by an auditor.
It includes the auditor's opinion on the fair presentation of the financial statements and their conformity to generally accepted accounting principles.
Furthermore, the audit report describes the scope of the audit and the responsibilities of both the management and auditor in the financial reporting process.
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Problem 2 (10 Marks) - FORECASTING
At AW Fraser Engineering, Jason is trying to determine workload plans for the coming months.
One of the key products produced is a particular type of Bronze Bearing that is highly demanded by
industrial customers. Monthly demand for Bronze Bearing is given in the table below.
a. Compute a 3-month moving average forecast for months 4 through 9. (Marks: 3)
b. Compute a 3-month weighted moving average forecast for months 4 through 9. Assign
weights of 0.55, 0.33 and 0.12 to the months in sequence, starting with the most recent
month. (Marks: 3)
c. Compare the two forecasts using MAD. Which forecast would you advise Jason to use, and
why? (Marks: 4)
Month Demand for Month Demand for
Bronze Bearings Bronze Bearings
1 50 6 100
2 100 7 90
3 60 8 120
4 80 9
5 140
This question is about forecasting at AW Fraser Engineering. The monthly demand for Bronze Bearing is given. We need to compute a 3-month moving average forecast and a 3-month weighted moving average forecast. Finally, we need to compare the two forecasts using MAD.
The 3-month moving average forecast for months 4 through 9 is shown below: Month Demand Moving Average4 80 (50+100+60)/3 = 70.005 140 (100+60+90)/3 = 83.336 100 (60+90+120)/3 = 90.007 90 (80+140+100)/3 = 106.678 120 (140+100+90)/3 = 110.00The 3-month weighted moving average forecast for months 4 through 9 is shown below: Month Demand Weighted Average4 80 (0.12x80) + (0.33x60) + (0.55x100) = 81.8055 140 (0.12x140) + (0.33x80) + (0.55x60) = 87.036 100 (0.12x100) + (0.33x140) + (0.55x80) = 92.007 90 (0.12x90) + (0.33x100) + (0.55x140) = 109.168 120 (0.12x120) + (0.33x90) + (0.55x100) = 102.00We can compute the Mean Absolute Deviation (MAD) for both the forecasts, as shown below: Moving Average Forecast: MAD = (|80-70.005| + |140-83.336| + |100-90.00| + |90-106.678| + |120-110.00|)/5MAD = 15.2044Weighted Moving Average Forecast: MAD = (|80-81.8055| + |140-87.036| + |100-92.00| + |90-109.168| + |120-102.00|)/5MAD = 15.6001Therefore, we can see that the Moving Average Forecast has a lower MAD as compared to the Weighted Moving Average Forecast. So, we would advise Jason to use the Moving Average Forecast.
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What happens when the minimum wage is above the equilibrium wage?
Answer:
A minimum wage set above the equilibrium wage rate creates a surplus of labor—the quantity of labor supplied exceeds the quantity of labor demanded. The minimum wage reduces employment so that it is less than the efficient amount.
How many quarters would it take for an investment of $7,500 at
7% compounded quarterly to grow to $41,000?
To calculate the number of quarters it would take for an investment of $7,500 at a 7% interest rate compounded quarterly to grow to $41,000, we can use the formula for compound interest.
By solving the formula, we can determine the number of quarters required.
Explanation:
The formula for compound interest is given by:
A = P(1 + r/n)^(nt)
Where:
A = Final amount
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years
In this case, we want to find the number of quarters (n) required. We can rearrange the formula to solve for t:
t = (log(A/P) / log(1 + r/n)) / n
Plugging in the given values:
P = $7,500
A = $41,000
r = 7% = 0.07
n = 4 (compounded quarterly)
Using a logarithmic calculator, we can calculate:
t ≈ (log(41000/7500) / log(1 + 0.07/4)) / 4 ≈ 19.48
Therefore, it would take approximately 19.48 quarters for the investment to grow from $7,500 to $41,000 when compounded quarterly.
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John Maynard Keynes argued that the best way to lower unemployment is to
a. increase demand for goods and services by cutting government costs.
b. allow the market to set interest rates for loans to businesses.
c. increase government spending in order to increase demand for goods and services.
d. allow interest rates to increase in order to lower unemployment rates.
For the given statement of argument done by John Maynard Keynes that the best way to lower unemployment is given by
option c. increase government spending in order to increase demand for goods and services.
John Maynard Keynes, a renowned economist, advocated for government intervention to address unemployment and economic downturns.
He believed that during periods of economic recession or depression, when private sector spending is low,
the government should step in and increase its own spending to stimulate aggregate demand.
By increasing government spending on infrastructure projects, public works programs, or other initiatives,
Keynes argued that it would create a multiplier effect.
This means that the increased government spending would lead to increased income
and consumption, resulting in higher demand for goods and services.
This, in turn, would stimulate economic activity and create job opportunities, thus lowering unemployment rates.
Option a, which suggests cutting government costs, is contrary to Keynesian theory.
Keynes believed that during economic downturns, austerity measures or reducing government spending would further contract the economy
and exacerbate unemployment.
Option b, allowing the market to set interest rates for loans to businesses, does not directly address unemployment.
While interest rates can influence borrowing and investment decisions, Keynes emphasized the role of aggregate demand
and government intervention in addressing unemployment.
Option d, allowing interest rates to increase to lower unemployment rates, is not aligned with Keynesian theory.
Higher interest rates tend to discourage borrowing and investment,
which can further dampen economic activity and lead to higher unemployment rates.
Therefore, based on Keynesian economics, the best way to lower unemployment is to option c. increase government spending in order to increase demand for goods and services.
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Mary Sue owns 600 shares of QRS Moving Company. QRS pays a quarterly dividend of $0.50 per share. What is the total annual dividend that Mary Sue will receive?
Mary Sue will receive a total annual dividend of $1200. This is calculated by multiplying the quarterly dividend per share ($0.50) by the number of shares (600) and by 4, since there are 4 quarters in a year.
Here is the explanation in more detail:
The quarterly dividend per share is $0.50.
Mary Sue owns 600 shares of QRS Moving Company.
There are 4 quarters in a year.
Therefore, Mary Sue will receive a total annual dividend of $0.50 * 600 * 4 = $1200
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The 15-LM model suggests that if prices in the economy are 'sticky' then the LM curve will not shift when national income falls and unemployment rises, so that the econorny will remain stuck at a less than full unemployment equilibrium. the LM curve will shift to the left when national income falls and unemployment rises, so that the levei of national incoene will fall further and unemployment will rise furthe there is no way of shifting the LM curve. the LM curve will be horizocital and shilts in the is curve will have an exaggerated effect on the ievel of national income.
The correct option is 'The IS-LM model suggests that if prices in the economy are 'sticky' then' c)there is no way of shifting the LM curve.
The IS-LM model is a macroeconomic model that shows the relationship between the money market (represented by the LM curve) and the goods market (represented by the IS curve). In this model, the LM curve represents the combinations of interest rates and income at which the demand for money equals the supply of money.
When prices in the economy are 'sticky', it means that they do not adjust quickly to changes in supply and demand. This can result in the LM curve being fixed in place because changes in income or interest rates do not significantly affect the demand for money.
As a result, the economy can become stuck at a less than full employment equilibrium because there is no way to shift the LM curve and increase the level of demand in the economy. This is because the interest rate cannot be reduced any further to stimulate investment and consumption, and the demand for money remains low due to the sticky prices.
Therefore, the correct answer is that the IS-LM model suggests that if prices in the economy are 'sticky', then there is no way of shifting the LM curve.
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Below is information on the financial position of Omega Ltd for the financial period ended 31 December 2021. Windhoek Building on Lazarette Street Omega Limited owns a building on Lazarette street in Windhoek, which they use as their administration head office. On the 30 June 2020, Omega Limited decided to move their head office to Oshakati, to fulfill their social responsibility of moving development to smaller towns within the country. They decided to rent out their head office to one of their competitors, Smart Pty Ltd. Rental agreement commenced on the 01 July 2021, with rental income payable in advance. Details of the property are as below: Land at cost 1 000,000 Building 21 000, 000 Land has been bought on 01 June 2010. The building commenced on the 30 June 2018, and completed and ready for use on the 31 October 2019. Omega Limited’s accounting policy is to depreciate buildings for 20 years on a straight line basis and use fair value model for investment properties. Assume a 32% tax rate Required
: a) Provide journals for the above transactions for the financial period 31 December 2021 - Windhoek Building on Lazarette Street (10
) b) Provide disclosures to the financial statements for the transactions above - Windhoek Building on Lazarette Street
The journals for the above transactions for the financial period 31 December 2021 - Windhoek Building on Lazarette Street are as follows:June 30, 2020: The accounting entry to be passed to record the transfer of the office building is as follows:Depreciation expense for the year: On the building, Omega Limited will report depreciation expense for a year on a straight-line basis.
The cost of the building is 21,000,000, and the useful life is 20 years. As a result, the yearly depreciation cost would be $1,050,000. The accounting entry to be passed for the depreciation expense for the year is as follows:(b) The disclosures to the financial statements for the transactions above - Windhoek Building on Lazarette Street are as follows:Omega Limited should disclose the following information in the notes to its financial statements regarding its property, plant, and equipment:
1. The carrying amount of land and buildings as of December 31, 2021, split between smart Pty Ltd. rental property and the head office, should be disclosed.2. A breakdown of the building's cost, accumulated depreciation, and carrying amount should be disclosed.3. The useful lives of the building and any residual values should be disclosed.4. Any changes in accounting policies and the impact on the financial statements should be disclosed.
5. Any restrictions on the use of assets, such as those pledged as collateral, should be disclosed.6. Any provisions for depreciation and impairments related to the building should be disclosed.
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S2022 ACC209-204 Managerial Accounting (Andrew Defor)
Read chapter 10 and answer the following questions
- What is a committed fixed cost? Give some examples.
- What is a discretionary fixed cost? Give some examples.
- What is the disadvantage of a company having all committed fixed costs? Explain.
S2022 ACC209-204 Managerial Accounting (Andrew Defor)
Fixed costs refer to costs that remain the same and do not change despite the level of production output. Committed fixed costs, on the other hand, are long-term fixed costs that cannot be reduced without incurring substantial penalties or costs. Examples of committed fixed costs are real estate and property taxes, depreciation, leases for real estate and other assets, loan interest, and salaries of executives, supervisors, and others.
Discretionary fixed costs are fixed costs that can be easily adjusted based on the level of production output or other changes within a company. Examples of discretionary fixed costs are employee bonuses, advertising and promotional expenses, and staff training expenses. These costs are typically included in the annual budget, and the management team can determine the amount that will be allocated to each area of discretionary fixed costs.
The disadvantage of a company having all committed fixed costs is that it is difficult to adjust the company's costs to meet changes in the market. If a company has all committed fixed costs, it cannot easily adjust its costs to meet changes in demand or changes in the market. This makes it more difficult for the company to remain competitive and profitable over time. In addition, having too many committed fixed costs can lead to financial instability, which can lead to insolvency.
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Exhibit 14.3 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM Sarah Kling bought a six-month Peppy Cola put option with an exercise price of $55 for a premium of $8.25 when Peppy was selling for $48.00 per share.
Sarah Kling bought a six-month Peppy Cola put option with an exercise price of $55 for a premium of $8.25 when Peppy was selling for $48.00 per share.
From the given information:
Sarah Kling bought a put option, which gives her the right to sell Peppy Cola shares at the exercise price.
The exercise price (also known as the strike price) of the put option is $55.
The premium paid for the put option is $8.25.
The price of Peppy Cola shares at the time of purchase was $48.00.
To further analyze the transaction, we can calculate the breakeven point and determine Sarah's potential profit or loss at expiration.
Breakeven Point:
The breakeven point for buying a put option is calculated as the exercise price minus the premium paid. In this case, the breakeven point is:
Breakeven Point = Exercise Price - Premium = $55 - $8.25 = $46.75
Profit or Loss at Expiration:
To assess the profit or loss at expiration, we need to consider the spot price of Peppy Cola shares at that time. If the spot price is below the breakeven point ($46.75), Sarah would start to earn a profit. If the spot price is above the breakeven point, she would incur a loss.
Sarah Kling purchased a six-month Peppy Cola put option with an exercise price of $55 for a premium of $8.25 when Peppy was selling for $48.00 per share. The breakeven point for this transaction is $46.75. At expiration, Sarah's profit or loss will depend on the spot price of Peppy Cola shares.
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The books of original entry for JoJo trading showed the following for the month ended 31 March 2018:
Cashbook £
Discount allowed 14,600
Payments received from credit customers 588,200 6,300
Discount received Payments to credit suppliers 498,400
Journal £
Irrecoverable debts written off
3,000
Purchase daybook
506,400
Sales daybook 632,500
Return inward 10,200
Return outward
9,420
Contra
2,000
Previous trade receivable/trade payable balances were £106,900/£84300.
Required:
• Prepare the sales ledger and purchases ledger control accounts.
The Sales Ledger Control Account shows an opening balance of £106,900, credit sales of £622,300, cash received of £581,900, and a closing balance of £133,700. The Purchases Ledger Control Account has an opening balance of £84,300, credit purchases of £496,980, payments made of £496,400, and a closing balance of £82,880.
To prepare the sales ledger and purchases ledger control accounts, we need to summarize the information provided and calculate the relevant balances. Let's break down the calculations for each account:
Sales Ledger Control Account:
- Opening trade receivable balance: £106,900
- Sales from the sales daybook: £632,500
- Returns inward: £10,200
- Discount allowed: £14,600
- Cash received from credit customers: £588,200
- Discount received: £6,300
Calculating the total credit sales:
Credit Sales = Sales from the sales daybook - Returns inward
Credit Sales = £632,500 - £10,200
Credit Sales = £622,300
Calculating the total cash received from credit customers:
Cash Received from Credit Customers = Cash received from credit customers - Discount received
Cash Received from Credit Customers = £588,200 - £6,300
Cash Received from Credit Customers = £581,900
Calculating the closing trade receivable balance:
Closing Trade Receivables = Opening trade receivable balance + Credit Sales - Cash Received from Credit Customers - Discount allowed
Closing Trade Receivables = £106,900 + £622,300 - £581,900 - £14,600
Closing Trade Receivables = £133,700
Purchases Ledger Control Account:
- Opening trade payable balance: £84,300
- Purchases from the purchase daybook: £506,400
- Returns outward: £9,420
- Payments to credit suppliers: £498,400
- Irrecoverable debts are written off: £3,000
- Contra: £2,000
Calculating the total credit purchases:
Credit Purchases = Purchases from the purchase daybook - Returns outward
Credit Purchases = £506,400 - £9,420
Credit Purchases = £496,980
Calculating the total payments to credit suppliers:
Payments to Credit Suppliers = Payments to credit suppliers - Contra
Payments to Credit Suppliers = £498,400 - £2,000
Payments to Credit Suppliers = £496,400
Calculating the closing trade payable balance:
Closing Trade Payables = Opening trade payable balance + Credit Purchases - Payments to Credit Suppliers - Irrecoverable debts written off
Closing Trade Payables = £84,300 + £496,980 - £496,400 - £3,000
Closing Trade Payables = £82,880
Sales Ledger Control Account:
Opening Balance: £106,900
Credit Sales: £622,300
Cash Received: £581,900
Discount Allowed: £14,600
Closing Balance: £133,700
Purchases Ledger Control Account:
Opening Balance: £84,300
Credit Purchases: £496,980
Payments Made: £496,400
Irrecoverable Debts Written Off: £3,000
Closing Balance: £82,880
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T/F: stealth taxes have the effect of generating additional taxes from all taxpayers.
The statement "Stealth taxes have the effect of generating additional taxes from all taxpayers" is TRUE because stealth taxes are the ones that are indirect and are included in the price of goods and services, making it difficult to notice them.
The term "stealth taxes" refers to taxes that are imposed on the public indirectly. They do not show up on a person's tax bill, but they are still a form of taxation. These taxes may take the form of increased expenses for goods and services, increased fees, or reduced government services, among other things.
For example, an increase in the cost of gasoline can be a type of stealth tax because it affects everyone who drives, even if they do not pay any additional taxes directly. As a result, stealth taxes have the effect of generating additional taxes from all taxpayers.
However, since they are less noticeable than direct taxes, it is possible that people will be unaware of how much tax they are paying.
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Nike sometimes continued to sponsor its athletes involved in various scandals; other times it terminated its lucrative endorsement contracts. What do you think about Nike’s practice? What is the impact of this approach to society and Nike? What recommendations would you have for Nike?
Nike's approach of sometimes continuing to sponsor athletes involved in scandals and other times terminating their endorsement contracts has generated mixed opinions.
Nike's practice of sponsoring athletes involved in scandals or terminating their contracts is a complex issue. On one hand, continuing to support athletes in challenging times can be seen as a gesture of loyalty and belief in second chances.
It may also provide an opportunity for individuals to learn from their mistakes and rehabilitate their image. On the other hand, terminating contracts can be seen as a reflection of Nike's commitment to upholding their brand image and distancing themselves from individuals involved in controversial activities.
The impact of Nike's approach extends to society and the Nike brand itself. Society may perceive Nike's decisions as inconsistent or driven solely by financial considerations. The brand's reputation and credibility can be affected depending on the public's perception of the athletes involved and the nature of the scandals.
Nike's actions can also influence consumer purchasing decisions, as individuals may choose to support or boycott the brand based on their stance. To navigate these challenges, it is recommended that Nike establishes clear guidelines and criteria for athlete sponsorships, taking into account factors such as the severity of the scandal, the athlete's response, and potential societal impact.
Prioritizing values and ethics should guide decision-making processes, ensuring consistency and aligning with Nike's brand image. Additionally, fostering transparency and accountability through open communication and public statements can help address concerns and maintain trust with consumers and stakeholders.
Ultimately, Nike should strive to strike a balance between supporting athletes and upholding its brand values in a responsible and sustainable manner.
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It is now 1st of January 2022. You plan to make 11 deposit of $100 each, on every 3
months, with the first payment being made today. If the bank pays a nominal interest
rate of 12 percent, but uses quarterly compounding, how much will be in your
account after 10 years?
If you make 11 deposits of $100 each, with payments made every 3 months, your account balance after 10 years will be approximately $2,088.52.
To calculate the final account balance, we can use the formula for the future value of a series of equal payments. In this case, you will be making 11 deposits of $100 each, with payments made every 3 months. The nominal interest rate is 12 percent, which is equivalent to a quarterly interest rate of 3 percent.
Using the formula for future value of a series of payments:
FV = P * ((1 + r)^n - 1) / r
where FV is the future value, P is the payment amount, r is the interest rate per period, and n is the number of periods.
Plugging in the values, we have:
P = $100
r = 0.03 (3 percent)
n = 11 * 4 (11 deposits over 10 years with quarterly compounding)
FV = $100 * ((1 + 0.03)^(11 * 4) - 1) / 0.03 ≈ $2,088.52
Therefore, after 10 years, your account balance will be approximately $2,088.52.
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vertical and horizontal translations are the result of moving the
Vertical and horizontal translations are the result of moving the graph of a function in different directions.
A vertical translation involves shifting the graph up or down, while a horizontal translation involves shifting the graph left or right. These translations are achieved by adding or subtracting a constant value to the function's output (vertical translation) or input (horizontal translation). For example, adding a constant value to the function will shift the graph upward, while subtracting a constant value will shift it downward. Similarly, adding a constant value to the input will shift the graph to the left, while subtracting a constant value will shift it to the right.
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As you know, the pandemic caused a major downturn in business activity. This was followed by a sudden rebound for businesses that survived, mostly attributable to pent up demand by customers. Explain
The pandemic caused a significant decline in business activity, which was subsequently followed by a sudden rebound for businesses that managed to survive. This rebound can largely be attributed to pent-up demand from customers.
The outbreak of the COVID-19 pandemic had a severe impact on businesses worldwide. As governments implemented lockdown measures and restrictions to curb the spread of the virus, many businesses experienced a sharp decline in activity. Industries such as travel, hospitality, retail, and entertainment were particularly hard hit, with widespread closures, reduced consumer spending, and disrupted supply chains.
However, as vaccination efforts progressed and restrictions began to ease, businesses gradually started to recover. One of the key factors driving this recovery was pent-up demand. During the periods of lockdown and reduced economic activity, consumers had limited opportunities to engage in their usual spending patterns. As a result, there was a buildup of demand for various goods and services.
Once restrictions were lifted and businesses reopened, customers were eager to fulfill their postponed needs and desires. This pent-up demand led to a sudden surge in consumer spending, benefiting businesses that managed to survive the initial downturn. Industries such as retail, travel, and dining experienced a notable rebound as consumers rushed to make purchases, book vacations, and enjoy recreational activities.
However, it is important to note that the rebound varied across industries and regions. Businesses that adapted quickly to changing customer preferences, embraced digital transformation, and implemented safety measures were better positioned to capitalize on the pent-up demand. On the other hand, sectors heavily reliant on physical presence or with ongoing restrictions faced more challenges in their recovery.
In summary, the sudden rebound in business activity following the pandemic can be attributed to pent-up demand from customers. This phenomenon reflects the release of accumulated consumer spending as restrictions eased and businesses reopened. Understanding this trend has been crucial for businesses to adapt their strategies, meet customer needs, and navigate the evolving market conditions during and after the pandemic.
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