The correct option is: It can lead to customer fatigue.
Cause-related marketing is a strategy where companies align themselves with social or environmental causes to promote their products or services. While it can have several benefits, such as enhancing brand image and customer loyalty, it also has its drawbacks. One of the disadvantages is that cause-related marketing can lead to customer fatigue. When consumers are constantly bombarded with marketing messages tied to various causes, they may become overwhelmed or skeptical about the authenticity of the company's commitment to those causes. This can result in a negative impact on consumer perception and engagement.
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Fidelity is a mutual fund company. It purchases $1 billion of corporate stocks from the money it raises by selling shares in an equity mutual fund. Therefore, the corporate stocks are indirect securities and the mutual fund shares are direct securities, the corporate stocks are direct securities and the mutual fund shares are indirect securities, the corporate stocks are direct securities and the mutual fund sharcs are direct securities the corporate stocks are indirect securities and the mutual fund shares are indirect securities
The corporate stocks are direct securities and the mutual fund shares are indirect securities. Fidelity, being a mutual fund company, purchases corporate stocks using the money it raises from selling shares in an equity mutual fund. In this scenario, the investors in the mutual fund hold indirect ownership of the corporate stocks through their ownership of mutual fund shares.
The corporate stocks are direct securities and the mutual fund shares are indirect securities. Fidelity, being a mutual fund company, purchases corporate stocks using the money it raises from selling shares in an equity mutual fund. In this scenario, the investors in the mutual fund hold indirect ownership of the corporate stocks through their ownership of mutual fund shares. The corporate stocks themselves represent direct ownership in the underlying companies, while the mutual fund shares represent ownership in the mutual fund, which in turn holds a portfolio of various securities, including the corporate stocks.
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b. Thomas is planning to buy a motorbike at a price of £4,999 (assume that this amount does not change in the following 12 months). Thomas has two different choices for raising the money needed to make this purchase: i. Thomas could save £500 at the end of every month to his savings account, which pays a nominal interest rate of 6% payable monthly. Calculate how many months it will take until Thomas has saved enough money to buy the motorbike. [20% of marks for this question]
It will take Thomas approximately 10.24 months to save enough money to buy the motorbike.
To calculate the number of months, we need to find the future value of Thomas's savings that equals or exceeds the cost of the motorbike. The future value formula for monthly deposits with interest is:
[tex]FV = P * ((1 + r)^n - 1) / r[/tex]
Where:
FV = Future Value (cost of the motorbike)
P = Monthly deposit (£500)
r = Monthly interest rate (6% / 12 = 0.005)
n = Number of months
By rearranging the formula and solving for n, we get:
[tex]n = log(1 + (FV * r) / P) / log(1 + r)[/tex]
Substituting the values, we have:
[tex]n = log(1 + (4999 * 0.005) / 500) / log(1 + 0.005)[/tex]
[tex]n ≈ 10.24[/tex]
Therefore, it will take approximately 10.24 months for Thomas to save enough money to buy the motorbike.
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Indirect: Reporting cash flows from operations LO P2 Arundel Company disclosed the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Accounts receivable decrease Revenues $ 110,000 $ 24,000 Expenses: Salaries expense Purchased a machine for cash Salaries payable increase Interest payable decrease 68,000 30,000 30,000 22,000 28,000 16,000 Utilities expense. Depreciation expense Interest expense 8,500 Net loss. $ (26,500) Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. Statement of Cash Flows (partial) Cash flows from operating activities-indirect method Net income X Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities $ 0
Partial Statement of Cash FlowsOperating cash flows calculated using the indirect techniqueGross revenue: ($26,500)Reconciliation of net income to net cash produced by operating activities adjustments:
Cost of depreciation: +$8,500Current Operating Asset and Liability Changes:Accounts receivable decreased by $24,000.Payable salary increase: +$30,000Interest payments decreased by $22,000.An increasein utility costs of $16,000Operating activities' net cash flow: $30,000.
Explanation: We begin with net income of ($26,500) in the operating activities part of the cash flow statement. After that, we make adjustments to bring net income and net cash generated by operating activities into balance. Depreciation expense of $8,500 is one of these adjustments since it is a non-cash item. Next, we take current operating asset modifications into account.
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Han-9759 company manufactures 23,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials $ 3.70 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part 11.00 2.30 9.00 $26.00 -37:48 An outside supplier has offered to sell 23.000 units of part T-25 each year to Han-9759 for $22 per unit. If Han-9759 accepts this offer, it can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $73.000. However, Han-9759 has calculated that two-thirds of the fixed manufacturing overhead being applied to part T-25 will continue even if the part is bought from the outside supplier. What is the financial advantage of accepting the outside supplier's offer? O $25,000 O $27,000 O $30,000 O $29,000
Han-9759 company currently manufactures 23,000 units of part T-25 each year at a total cost per part of $26. An outside supplier has offered to sell the same quantity of part T-25 to Han-9759 for $22 per unit.
If Han-9759 accepts the offer, it can rent out its facilities for an annual rental income of $73,000. Two-thirds of the fixed manufacturing overhead applied to part T-25 will continue even if the part is bought from an outside supplier. The question asks for the financial advantage of accepting the outside supplier's offer.
To calculate the financial advantage of accepting the outside supplier's offer, we need to consider the relevant costs and income.
Currently, the total cost to manufacture 23,000 units of part T-25 internally is $26 per unit, resulting in a total cost of $598,000 (23,000 units * $26 per unit). Additionally, by manufacturing the part internally, Han-9759 cannot rent out its facilities, resulting in a foregone rental income of $73,000.
If Han-9759 accepts the outside supplier's offer, the cost per unit for part T-25 would be $22, resulting in a total cost of $506,000 (23,000 units * $22 per unit). However, two-thirds of the fixed manufacturing overhead, which is $6 per unit ($9 per unit * 2/3), will continue even if the part is bought from the outside supplier, adding an additional cost of $138,000 (23,000 units * $6 per unit).
The financial advantage of accepting the outside supplier's offer is calculated by subtracting the total cost and the foregone rental income from the current cost:
Current cost = $598,000
Foregone rental income = $73,000
Additional cost for fixed manufacturing overhead = $138,000
Financial advantage = Current cost - Foregone rental income - Additional cost
= $598,000 - $73,000 - $138,000
= $387,000
Therefore, the financial advantage of accepting the outside supplier's offer is $387,000.
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mega pharmaceuticals, inc. scientists have invented a new pharmaceutical treatment for covid-19 named bleachurblud, which has a logo of a fanciful bleach bottle. if mega pharmaceuticals wants to protect the intellectual property associated with bleachurblud, what kind of protections can it get? group of answer choices
A. a copyright on the instruction manual for the new treatment. B. all of these. C. a tradename for bleachurblud. D. a patent for the new treatment. E. a trademark on the logo.
Mega Pharmaceuticals, Inc. can take the following steps to preserve "Bleachurblud"'s intellectual property:
All of them.
B is accurate. All of these strategies can safeguard distinct components of the new treatment's intellectual property.
A. Copyright: Mega Pharmaceuticals, Inc. can secure a copyright for the instruction manual to protect the content's expression and arrangement.
C. Tradename: Mega Pharmaceuticals, Inc. can give "Bleachurblud" a tradename to distinguish it from other treatments.
D. Patent: Mega Pharmaceuticals, Inc. can patent the innovative treatment. This would safeguard "Bleachurblud's" formula, production method, and any distinctive features or methods.
Trademark: Mega Pharmaceuticals, Inc. can trademark the bleach bottle logo. This would grant exclusive rights to use the logo in connection with the pharmaceutical treatment, preventing others from using a similar logo that could cause market confusion.
Mega Pharmaceuticals, Inc. can defend "Bleachurblud"'s invention, branding, and materials by seeking all of these protections.
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Define each of the following terms:a. PV; I; INT; FVN; PVAN; FVAN; PMT; M; INOMb. Opportunity cost ratec. Annuity; lump-sum payment; cash flow; uneven cash flow streamd. Ordinary (or deferred) annuity; annuity duee. Perpetuity; consolf. Outflow; inflow; time line; terminal valueg. Compounding; discounting h. Annual, semiannual, quarterly, monthly, and daily compounding i. Effective annual rate (EAR or EFF%); nominal (quoted) interest rate; APR; periodic ratej. Amortization schedule; principal versus interest component of a payment; amortized loan What is an opportunity cost rate
Opportunity cost rate refers to the return on the best alternative investment foregone when choosing another investment in the given conditions. It is the rate of return missed by choosing one investment over another.
To make an investment, you must have resources, which might be used for other purposes. By making one investment, you are eliminating the possibility of using those resources for another. This is referred to as the opportunity cost of an investment. In other words, the opportunity cost rate is the rate of return that a foregone investment might have generated had it been invested in the next best alternative investment.To sum up, Opportunity cost rate is the foregone rate of return on the best alternative investment that may be used for a specific purpose, usually investment in business projects.
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jason manages credit and collections at barkatorium pet supplies. he is responsible for accounts receivable and accounts payable. these activities suggest that jason's job is in financial management.
False. Jason manages credit and collections at barkatorium pet supplies. he is responsible for accounts receivable and accounts payable. these activities suggest that jason's job is in financial management.
While Jason's role at Barkatorium Pet Supplies involves managing credit and collections, as well as handling accounts receivable and accounts payable, it does not necessarily indicate that his job is in financial management. Financial management typically refers to roles that involve overseeing the overall financial operations and strategies of an organization, including financial planning, budgeting, investment decisions, and financial analysis. While credit and collections are related to financial activities, they are more specific to managing the creditworthiness of customers and ensuring timely payments. Jason's role may fall under credit management or accounts receivable management, which are specialized functions within financial operations.
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Lucky’ s Automotive produces auto parts for various automotive retailers. Lucky is evaluating the exhaust system division of the company and has come up with the following data for the year: net revenues are $1,200,000, variable costs are $400,000, and fixed costs are $300,000. Of the fixed costs, controllable fixe costs are $100,000 and noncontrollable fixed costs are $200,000.RequiredWhat is the controllable margin and total contribution by profit centre (CPC)?
The controllable margin and total contribution by profit center (CPC) for Lucky's Automotive exhaust system division can be calculated as follows:
Controllable Margin:
Controllable margin is the contribution margin generated by the division after deducting only the controllable fixed costs. It represents the portion of the contribution margin that the division's management has control over.
Controllable Margin = Net Revenues - Variable Costs - Controllable Fixed Costs
Controllable Margin = $1,200,000 - $400,000 - $100,000
Controllable Margin = $700,000
The controllable margin for Lucky's Automotive exhaust system division is $700,000.
Total Contribution by Profit Center (CPC):
Total contribution by profit center (CPC) represents the total contribution margin generated by the division, including both controllable and noncontrollable fixed costs.
Total Contribution by Profit Center (CPC) = Net Revenues - Variable Costs - Fixed Costs
Total Contribution by Profit Center (CPC) = $1,200,000 - $400,000 - $300,000
Total Contribution by Profit Center (CPC) = $500,000
The total contribution by profit center (CPC) for Lucky's Automotive exhaust system division is $500,000.
These calculations help in evaluating the financial performance of the exhaust system division by considering both the controllable and noncontrollable costs.
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jalen has a loan that requires a single payment of $4,000 at the end of 3 years. the loan's interest rate is 6%, compounded semiannually. how much did jalen borrow? (pv of $1, fv of $1, pva of $1, and fva of $1) (use appropriate factor(s) from the tables provided.)
Jalen borrowed the present value of the $4,000 payment due in three years. The tables' PV of $1 factor can be used.
Since the interest rate is 6% compounded semiannually, we must change it to fit the compounding period. Semiannual interest is 3% because there are two compounding periods every year. The present value of the single payment is the PV of $1 factor for 3 years at a 3% interest rate. The table shows the PV of $1 for 3 years at 3% is 0.8373.
Jalen borrowed $4,000 / 0.8373 = $4,775.52.
Jalen borrowed $4,775.52.
This estimate assumes semiannual compounding and a steady interest rate. Jalen borrowed the present value of the $4,000 payment due in three years. The tables' PV of $1 factor can be used. Since the interest rate is 6% compounded semiannually, we must change it to fit the compounding period. Semiannual interest is 3% because there are two compounding periods every year. The present value of the single payment is the PV of $1 factor for 3 years at a 3% interest rate. The table shows the PV of $1 for 3 years at 3% is 0.8373.
Jalen borrowed $4,000 / 0.8373 = $4,775.52.
Jalen borrowed $4,775.52.
This estimate assumes semiannual compounding and a steady interest rate.
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Walker Systems has an issue of preferred stock outstanding with a stated annual dividend of $2.60 that just sold for $23.85 per share. What is the bank's cost of preferred stock?
a. 10,9%
b. 8,39 %
c. 9,17 %
d. 7,06 %
e. 2,51%
The cost of preferred stock for Walker Systems is 10.9%.
The cost of preferred stock can be calculated by dividing the annual dividend by the market price per share. In this case, the stated annual dividend is $2.60, and the stock sold for $23.85 per share.
To calculate the cost of preferred stock, divide the annual dividend ($2.60) by the market price per share ($23.85) and multiply by 100 to express it as a percentage.
($2.60 / $23.85) * 100 ≈ 10.9%
Therefore, the cost of preferred stock for Walker Systems is approximately 10.9%. Option a, 10.9%, matches the calculated result and is the correct answer. Options b, c, d, and e do not match the calculated value and are incorrect choices.
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QUESTION 2
a. Briefly explain THREE (3) roles of the Board of Directors in planning, evaluation and control of strategic management.
b. With the aid of a diagram, discuss THREE (3) activities in a strategy evaluation framework.
The Board of Directors guide and oversee the strategic planning process and ensure that it aligns with the company's long-term goals and objectives.
To evaluate the progress of the company in achieving its strategic objectives by analyzing performance data and assessing the effectiveness of strategic initiatives.
To monitor and control the implementation of strategic plans to ensure that they are executed effectively and efficiently and that resources are allocated appropriately.
Here's a diagram for a strategy evaluation framework that describes three activities: Plan, Evaluate, and Adapt. Let's take a look at each one in more detail:
Plan: In this phase, the organization establishes the strategic plan and goals, as well as the metrics and performance measures used to assess progress toward those goals. This stage establishes the foundation for ongoing strategy evaluation and control.
Evaluate: This phase is about measuring progress and comparing actual performance to planned performance. It involves the identification of strengths and weaknesses, as well as any potential gaps between planned and actual performance.
Adapt: The final stage of the strategy evaluation process is to take corrective action based on the results of the evaluation process. This involves adjusting the strategic plan and making changes to the company's approach to achieving its goals. The goal of this phase is to continuously improve the organization's performance and ensure that it is able to adapt to changing circumstances.
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tour company uses two measures of activity, routes and passengers in its cost formulas used for budgeting and performance evaluation. The cost formula for tour operating costs is $56,840 per month plus $2,886 per route plus $17 per passenger. The company expected in August to perform 87 routes and serve 260 passengers, but the actual activity was 92 routes and 262 passengers. The actual tour operating costs in August was $305,100. The spending variance for tour operating costs in August would be closest to Multiple Choice $21,706 Unfavorable $7,242 Unfavorable $14,464 Favorable O $7,242 Favorable $21,706 Favorable
The spending variance will be: Favorable spending variance = Budgeted Cost - Actual Cost= $312,342 - $305,100= $7,242Hence, the answer is: O $7,242 Favorable.
Spending Variance refers to the difference between actual and budgeted expenditure. It can be calculated in terms of an absolute amount or as a percentage of the budgeted amount. The question is about the spending variance for tour operating costs in August. So, here is the solution for this:Given, the cost formula for tour operating costs is $56,840 per month plus $2,886 per route plus $17 per passenger. The company expected in August to perform 87 routes and serve 260 passengers, but the actual activity was 92 routes and 262 passengers.The company expected cost in August$56,840 (Base Cost) + $2,886 × 87 (for 87 routes) + $17 × 260 (for 260 passengers)= $56,840 + $251,082 + $4,420= $312,342The actual tour operating costs in August was $305,100.
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Check my we Word Problem 9-23 (Static) (LU 9-2 (1) Calculate Social Security taxes, Medicare taxes, and FIT for Jordon Barrett He earns a monthly salary of $12,000. He is single and claims I deduction. Before this payroll, Barrett's cumulative earnings were $120,000. (Social Security maximum is 6.2% on $128.400 and Medicare is 1.45%) Calculate FIT by the percentage method. (Use Table 91 and Table 9.2) (Do not round Intermediate calculations. Round your answers to the nearest cent.) Social Security taxes Medicare taxes s 174
The total payroll taxes for Jordon Barrett are $8,135.20, which includes $7,961.20 for Social Security taxes and $174.00 for Medicare taxes. Additionally, his Federal Income Tax (FIT) calculated by the percentage method is $39,302.50.
The Social Security taxes and Medicare taxes for Jordon Barrett are calculated as follows:
Social Security taxes = $128,400 x 6.2% = $7,961.20 (maximum taxable earnings for Social Security in 2021 is $142,800, but only $128,400 is subject to the 6.2% tax)
Medicare taxes = $12,000 x 1.45% = $174.00
To calculate the FIT by the percentage method, we need to first calculate Barrett's taxable income. His gross income is $12,000 per month, which means his annual salary is $144,000. He claims 1 deduction, which means his taxable income is:
$144,000 (gross income) - $12,550 (standard deduction for single taxpayers in 2021) - $4,300 (personal exemption in 2021) = $127,150
Using Table 9.1, we find that the amount of income tax for a single taxpayer with taxable income of $127,150 is $29,456.50 plus 24% of the amount over $86,375. Thus, the FIT for Barrett is:
FIT = $29,456.50 + ($127,150 - $86,375) x 24% = $29,456.50 + $9,846.00 = $39,302.50
Therefore, the Social Security taxes are $7,961.20, the Medicare taxes are $174.00, and the FIT is $39,302.50 for Jordon Barrett.
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Which of the following is NOT a relevant factor to consider in an EXTERNAL analysis?
a. Macroeconomic conditions
b. Political environment
c. Marketing budget
d. Consumer trends
e. Competition
The statement that is NOT a relevant factor to consider in an external analysis is c. Marketing budget
An external analysis involves assessing factors outside of a company's control that can impact its performance and strategy. While factors such as macroeconomic conditions, political environment, consumer trends, and competition are crucial in understanding the external business landscape, the marketing budget is an internal consideration that falls under the purview of the company's management and operations. It is not directly tied to external environmental factors but is instead a decision made by the company regarding its allocation of resources for marketing activities.
The marketing budget, being an internal consideration, is not typically included in an external analysis. It is important for companies to allocate appropriate resources to their marketing efforts, but this factor is more relevant to internal planning and decision-making rather than assessing the external business environment. When conducting an external analysis, organizations should focus on understanding and evaluating macroeconomic conditions, the political environment, consumer trends, and competition to gain insights that can inform strategic decision-making and improve their competitive position.
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"Developing and sustaining Employee Relations & Engagement
has been emerging as the heart of HRM". Based on the reading titled
"Becoming irresistible: A new model for employee engagement:
De
Developing and sustaining employee relations and engagement is indeed becoming the heart of Human Resource Management (HRM). The reading titled "Becoming irresistible: A new model for employee engagement" emphasizes the importance of creating an environment where employees feel valued, motivated, and connected to the organization. This not only leads to higher levels of employee satisfaction but also improves overall organizational performance.
Employee engagement refers to the emotional commitment and dedication employees have towards their work, their team, and the organization as a whole. It goes beyond mere job satisfaction and encompasses factors such as involvement, enthusiasm, and a sense of purpose. When employees are engaged, they are more likely to go above and beyond their job responsibilities, contribute innovative ideas, and strive for the success of the organization.
The reading proposes a new model for employee engagement called the "Irresistible Organization Model." This model suggests that organizations need to focus on three key elements to create an irresistible workplace:
1. Meaningful Work: Employees need to find their work meaningful and aligned with their values and aspirations. They should have a clear understanding of how their contributions make a difference and impact the organization's goals.
2. Supportive Management: Effective managers play a crucial role in employee engagement. They need to provide regular feedback, coaching, and support to help employees grow and develop. Trust, respect, and open communication are essential in fostering positive relationships between managers and employees.
3. Positive Work Environment: Creating a positive work environment involves promoting collaboration, recognition, and work-life balance. Employees should feel safe to express their ideas, receive recognition for their achievements, and have access to resources and opportunities for growth.
By focusing on these elements, organizations can enhance employee engagement and build strong employee relations. This leads to several benefits for both employees and the organization, including higher productivity, lower turnover rates, increased customer satisfaction, and improved financial performance.
In conclusion, the reading highlights the significance of employee relations and engagement in HRM. Developing and sustaining a positive work environment, meaningful work, and supportive management are key factors in creating an irresistible organization. By prioritizing employee engagement, organizations can build a committed and motivated workforce, leading to long-term success.
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4. Why is planning in an audit important? Under which standard in VSA that auditors are required to conduct careful planning of an audit? What else regarding planning in that VSA standard that auditors have to pay attention to?
Planning in an audit is crucial because it helps auditors efficiently and effectively execute the audit engagement.
It involves the development of a comprehensive strategy and approach to gather sufficient and appropriate audit evidence. Planning allows auditors to identify risks, set , allocate resources, and establish timelines for conducting the audit. Under the International Standards on Auditing (ISA), specifically ISA 300 "Planning an Audit of Financial Statements," auditors are required to conduct careful planning of an audit. This standard outlines the responsibilities of auditors in planning an audit engagement. In addition to general planning considerations, auditors must pay attention to the following aspects regarding planning under ISA 300:
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he only choice that a perfectly competitive firm can make to affect its profits is to decide the: multiple choice price to charge. profit to make. revenue to earn. quantity of output to produce.
The only choice that a perfectly competitive firm can make to affect its profits is to decide the price to charge. This is because in a perfectly competitive market, the firm is a price taker and has no control over the market price.
Therefore, the firm's profit maximization strategy revolves around selecting the optimal price level.
In a perfectly competitive market, there are numerous buyers and sellers who engage in the exchange of homogeneous products. As a result, each firm has no influence over the market price and must accept the prevailing price as given. The firm's primary goal is to maximize its profits, which is achieved by producing at a level where marginal cost equals marginal revenue.
To determine the quantity of output to produce, a perfectly competitive firm takes into account its cost structure and the market demand. However, the firm cannot directly control the market price or the revenue it earns. Instead, it must set a price based on the market conditions and then determine the quantity to produce at that price. By setting the price, the firm indirectly affects its revenue and subsequently its profits.
The profit-maximizing strategy for a perfectly competitive firm involves selecting a price that maximizes the difference between total revenue and total cost. The firm will continue adjusting its price until it reaches the point where marginal revenue equals marginal cost. At this point, the firm maximizes its profits by producing the corresponding quantity of output. Therefore, the sole choice that a perfectly competitive firm can make to impact its profits is the decision of what price to charge.
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On 3 May 2007, Mila received a 100 day promissory note with a simple interest rate 8% per annum On 1 July 2007, she discounted the note at a discount rate 7% and received proceeds of RM3454.97 Find a) maturity date (11/8/2007) b) maturity value (RM3482.74) c) the value of bank discount (RM27.77) d) the face value (RM3407.03)
Simple interest is a type of interest where the interest earned is based on the original principal amount. It is not compounded like other types of interest such as compound interest. Mila received a 100-day promissory note on 3 May 2007.
The promissory note has a simple interest rate of 8% per annum. On 1 July 2007, Mila discounted the note at a discount rate of 7% and received proceeds of RM 3454.97. We can find the maturity date, maturity value, value of bank discount, and face value using the following formulae:
Maturity Date: Maturity Date
= Issue Date + Number of Days Number of days
= 100 days - (1 July 2007 - 3 May 2007)
= 100 - 59
= 41 days Maturity Date
= 3 May 2007 + 41 days
= 11 June 2007 Maturity Value: Maturity Value
= Principal + Simple Interest Simple Interest
= Principal x Rate x Time / 100 Principal
= Face Value Rate
= 8%/365 (Since it is a 100-day note and not a 1-year note, we divide by 365)Time
= 100 days / 365 Maturity Value
= RM3407.03 + (RM3407.03 x 8%/365 x 100/365)
= RM3482.74
Value of Bank Discount: Value of Bank Discount
= Face Value - Proceeds Value of Bank Discount
= RM3407.03 - RM3454.97
= RM27.77 Face Value: Face Value
= Proceeds / (1 - Discount Rate x Time) Discount Rate
= 7%/365 Time = 100 days / 365 Face Value
= RM3454.97 / (1 - 7%/365 x 100/365)
= RM3407.03Thus, Mila's maturity date is 11 June 2007, maturity value is RM3482.74, the value of bank discount is RM27.77, and the face value is RM3407.03.
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Post Corporation purchases from suppliers on net 30 day terms, has an Accounts Receivable Turnover of 8 times, and an Inventory Turnover of 12 times. Cash inflows and outflows are
Multiple Choice
a. positively mismatched by 30 days.
b. negatively mismatched by 60 days.
c. evenly matched.
d. negatively mismatched by 45 days.
Post Corporation purchases from suppliers on net 30-day terms have an Accounts Receivable Turnover of 8 times and an Inventory Turnover of 12 times. Cash inflows and outflows are negatively mismatched by 45 days. The answer is option d. negatively mismatched by 45 days.
The Accounts Receivable Turnover formula is used to determine how many times a company can collect on its credit sales during an accounting period. It is determined by dividing the net credit sales by the average accounts receivable balance for the accounting period.
Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
The Inventory Turnover ratio shows how efficiently a company is managing its inventory and is determined by dividing the cost of goods sold by the average inventory.
Cost of Goods Sold / Average Inventory = Inventory Turnover ratio
Post Corporation has an Accounts Receivable Turnover of 8 times and an Inventory Turnover of 12 times.
Therefore, for every $1 of sales, they collect cash 8 times a year and sell their inventory 12 times a year. Since the company purchases from suppliers on net 30-day terms, it takes 30 days to pay its bills for inventory (Creditors payment period), which is less than the time it takes to collect cash from customers, which is 45 days (Debtors collection period). Therefore, the company's cash inflows and outflows are negatively mismatched by 45 days. The answer is option d. negatively mismatched by 45 days.
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At Dot Com, a large retailer of popular books, demand is constant at 20,400 books per year. The cost of placing an order to rreplenish stock is $35 and the annual cost of holding is $6 per book. Stock is received 5 working days after an order has been placed. No backordering is allowed. Assume 250 working days a year.
A. What isDot Com's optimal order quantity?
B. What is the optimal number of orders per year?
C. What is the optimal interval (in working days) between orders?
D. What is demand during the lead time?
E. What is the reorder point?
F. What is the inventory position immediately after an orderhas been placed?
Assuming 250 working days a year, the inventory position immediately after an order has been placed is 1,472 books.
The given data is as follows: Annual demand, D = 20,400 books Order cost, Co = $35Holding cost, Ch = $6 per book Lead time, LT = 5 days Working days in a year, W = 250 days
Now we can calculate the optimal order quantity (Q), the optimal number of orders per year, the optimal interval between orders, demand during the lead time, reorder point, and the inventory position immediately after an order has been placed.
The optimal order quantity (Q) can be calculated as follows:
EOQ = √[(2 × D × Co)/Ch]EOQ
= √[(2 × 20,400 × 35)/6]EOQ ≈ 1,880 books
Therefore, the optimal order quantity is approximately 1,880 books.
The optimal number of orders per year (N) can be calculated as follows:
N = D/QN = 20,400/1,880N ≈ 11 orders
Therefore, the optimal number of orders per year is approximately 11 orders
The optimal interval between orders (T) can be calculated as follows:
T = W/N
= 250/11T ≈ 22.7 days
Therefore, the optimal interval between orders is approximately 22.7 days
Demand during the lead time can be calculated as follows:
Lead time demand = D × LT/W
Lead time demand = 20,400 × 5/250
Lead time demand = 408 books
Therefore, the demand during the lead time is 408 books.
Reorder point (ROP) can be calculated as follows:
ROP = Lead time demand + Safety stock
ROP = 408 + 0 (Assuming no safety stock)
ROP = 408
Therefore, the reorder point is 408 books
The inventory position immediately after an order has been placed can be calculated as follows:
Inventory position after placing an order = EOQ - Lead time demand
Inventory position after placing an order = 1,880 - 408
Inventory position after placing an order = 1,472 books
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If Giordano's pizza in Chicago computed its profits without taking into account its implicit opportunity costs, it would then only be considering its _____ profit.
A)explicit financial
B)accounting
C)implicit
D)economic
If Giordano's pizza in Chicago computed its profits without taking into account its implicit opportunity costs, it would then only be considering its accounting profit.
Accounting profit refers to the calculation of profit based solely on explicit financial costs, such as expenses for labor, materials, and overhead. It does not take into account implicit opportunity costs, which include the foregone alternative uses of resources, such as the owner's time and capital.
When Giordano's pizza computes its profits without considering implicit opportunity costs, it is focusing only on the explicit financial costs associated with running the business. This approach provides a narrower perspective on profitability, as it ignores the value of the resources used in the business that could have been employed in alternative ventures. Implicit opportunity costs represent the value of these resources in their next best alternative use, and they are an essential component of economic analysis.
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All of the following are examples of accrued liabilities, EXCEPT:
A. Accrued payroll taxes
B. Accrued compensation
C. Accrued interest receivable
D. Accrued taxes payable
The correct answer is C. Accrued interest receivable.
Accrued liabilities are expenses that a company has incurred but has not yet paid or recorded in its books. They represent obligations that are recognized and recorded even though payment has not been made. Accrued liabilities typically arise from expenses such as salaries, wages, taxes, and other financial obligations.
A. Accrued payroll taxes represent the taxes that are withheld from employees' paychecks but have not yet been remitted to the appropriate tax authorities. This is an example of an accrued liability.
B. Accrued compensation refers to wages, salaries, or bonuses that have been earned by employees but have not yet been paid. It is an obligation that the company has incurred but not settled, making it an accrued liability.
C. Accrued interest receivable is not an example of an accrued liability. Instead, it represents the interest income that a company has earned but has not yet received. It is an asset on the company's books, not a liability.
D. Accrued taxes payable represents taxes that have been incurred but have not yet been paid. This can include income taxes, property taxes, or sales taxes that are due but have not been settled. It is a typical example of an accrued liability.
In summary, while options A, B, and D are examples of accrued liabilities, option C (Accrued interest receivable) does not fall under the category of accrued liabilities but rather represents an asset.
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If the returns on Stock A are as follows: Year 1 return = -12 %, Year 2 return = -11%, Year 3 return = -20 %, Year 4 return = 19 %, and Year 5 return = -17 %, what is the average return for Stock A over this 5 year period? (Record your answer as a percent rounded to 1 decimal place. If your answer is negative, place a minus sign before your number with no space between the sign and the number. For example, record negative 14.284% as -14.3).
The average return for Stock A over this 5 year period is -8.2% (rounded to 1 decimal place).
Given the returns on Stock A are as follows: Year 1 return = -12 %, Year 2 return = -11%, Year 3 return = -20 %, Year 4 return = 19 %, and Year 5 return = -17 %
To find the average return for Stock A over this 5 year period, we can use the formula:Average return = (Total returns) / (Number of returns)
Now, Total returns = (-12) + (-11) + (-20) + 19 + (-17)= -41%
So, the average return for Stock A over this 5 year period isAverage return = (Total returns) / (Number of returns)= (-41) / (5)= -8.2%
Therefore, the average return for Stock A over this 5 year period is -8.2% (rounded to 1 decimal place).Note: Since the average return is negative, we can say that Stock A has not been performing well during this 5 year period.
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A financial analyst is examining the relationship between stock prices and earnings per share. She chooses fifteen publicly traded companies at random and records for each the company's current stock price and the company's earnings per share reported for the past A financial analyst is examining the relationship months. Her data are given below, with denoting the earnings per share from the previous year, and denoting the current stock price (both in dollars). Based on these data, she computes the least-squares regression line to be . This line, along with a scatter plot of her data, is shown in Figure 1.
Earning per share, X (in dollars Current stock price Y (indollars)
56.48 2.14
43.36 1.54
26.80 0.91
42.71 1.09
17.84 0.58
32.79 1.66
36.58 1.54
14.20 0.60
49.88 1.64
36.00 0.98
57.93 2.85
22.44 0.48
29.96 1.40
41.98 1.76
29.93 1.02
Based on her data and her regression line, answer the following:
1. Fill in the blank: For these data, values for earnings per share that are less than the mean of the values for earnings per share tend to be paired with current stock prices that are _____ the mean of the current stock prices.
Choose one
greater than
less than
2. According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding increase of how many dollars in current stock price?
3. From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 17.84 dollars? (Round your answer to at least two decimal places.)
4. From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 23.03 dollars? (Round your answer to at least two decimal places.)
1. For these data, values for earnings per share that are less than the mean of the values for earnings per share tend to be paired with current stock prices that are less than the mean of the current stock prices.
2. According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding increase of $0.02758 in current stock price.
3. The predicted current stock price (in dollars) when the earnings per share is 17.84 dollars is $0.68.4. The predicted current stock price (in dollars) when the earnings per share is 23.03 dollars is $0.96.
The relationship between the stock prices and earnings per share can be examined with the help of a scatter plot and a regression line.
The regression line represents the line of best fit for the data, and it provides a way to estimate the value of one variable based on the value of another variable.
The regression line can be calculated using the least-squares regression method. The equation of the regression line is given by:y = mx + b,where y is the predicted value of the dependent variable (current stock price), x is the independent variable (earnings per share), m is the slope of the line, and b is the y-intercept of the line.
1. The mean of the values for earnings per share is:μ = (56.48 + 43.36 + 26.80 + 42.71 + 17.84 + 32.79 + 36.58 + 14.20 + 49.88 + 36.00 + 57.93 + 22.44 + 29.96 + 41.98 + 29.93) / 15 = 35.147
Thus, values for earnings per share that are less than the mean of the values for earnings per share tend to be paired with current stock prices that are less than the mean of the current stock prices. Therefore, the correct option is less than.
2. We can use the regression equation to find the corresponding increase in current stock price for an increase of one dollar in earnings per share. The slope of the regression line is:
m = 0.02758.Thus, for an increase of one dollar in earnings per share, there is a corresponding increase of $0.02758 in current stock price.
3. To find the predicted current stock price (in dollars) when the earnings per share is 17.84 dollars, we can plug this value into the regression equation:
y = 0.02758 x + b, We can use the data from the table to calculate the slope and y-intercept of the line.Using the formula:
b = y - mx,we get:b = 0.58 - 0.02758 × 17.84 = 0.68.Therefore, the predicted current stock price (in dollars) when the earnings per share is 17.84 dollars is $0.68.4.
To find the predicted current stock price (in dollars) when the earnings per share is 23.03 dollars, we can plug this value into the regression equation:
y = 0.02758 x + b Using the formula:b = y - mx,we get:b = 0.91 - 0.02758 × 26.80 = 0.96
Therefore, the predicted current stock price (in dollars) when the earnings per share is 23.03 dollars is $0.96.
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Special Order Decision LO13-4 Imperial Jewelers manufactures and sells a gold bracelet for $189.95. The company's accounting system says that the unit product cost for this bracelet is $149.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 84.00 45.00 20.00 $149.00 The members of a wedding party have approached Imperial Jewelers about buying 20 of these gold bracelets for the discounted price of $169.95 cach. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $2.00. Imperial Jewelers would also have to buy a special tool for $250 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $4.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? EVEDA
To determine the financial advantage or disadvantage of accepting the special order from the wedding party, we need to calculate the incremental costs and revenues associated with the order.
1. Incremental Costs:
Direct materials cost increase per bracelet: $2.00
Cost of special tool: $250
Total incremental costs = (Incremental direct materials cost per bracelet * Number of bracelets) + Cost of special tool
= ($2.00 * 20) + $250
= $40.00 + $250
= $290.00
2. Incremental Revenues:
Selling price per bracelet: $169.95
Total incremental revenues = Selling price per bracelet * Number of bracelets
= $169.95 * 20
= $3,399.00
Total incremental profit = Total incremental revenues - Total incremental costs
= $3,399.00 - $290.00
= $3,109.00
Based on the analysis, the financial advantage of accepting the special order from the wedding party would be a total incremental profit of $3,109.00.
To determine whether the company should accept the special order, further considerations may include factors such as the impact on production capacity, long-term customer relationships, and strategic business goals. However, based solely on the financial advantage, accepting the special order would result in a positive incremental profit, indicating that it may be beneficial for the company to accept the order.
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Melania T. Rikenbach sold a piece of land in 2020 for $60,000 that she had purchased for $40,000 in 2018. Which rule/doctrine dictates that she only recognize $20,000 in gross income?The return of capital principleThe tax basis ruleThe constructive receipt doctrineThe tax benefit rule
The tax basis rule dictates that Melania Rikenbach only recognizes a $20,000 gross income from selling land due to subtracting the cost basis from the selling price.
The correct rule/doctrine that dictates Melania T. Rikenbach only recognizes $20,000 in gross income from the sale of the land is the tax basis rule.The tax basis rule states that when determining the taxable gain or loss on the sale of an asset, the taxpayer should subtract the cost basis of the asset from the selling price. The cost basis is generally the amount originally paid for the asset, plus any additional costs incurred to acquire, improve, or maintain the asset.
In this case, Melania purchased the land for $40,000 in 2018. When she sold it for $60,000 in 2020, the taxable gain is determined by subtracting the cost basis ($40,000) from the selling price ($60,000). This results in a gain of $20,000, which is the amount she would recognize as gross income for tax purposes.
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Following is the Receipts and Payments accounts of Hanoi Football Club for the year ended 31 December 2019: Receipts Payments $ 2,096 56,400 Bank (as at 1 January 2019) Subscription received for 2018 1,400 Paid to bar inventory suppliers Wages for Barman Repair to stands 16,250 30,800 1,450 Subcription received for 2019 Bar sales Donations received 142,400 Ground maintenance 4,630 2,500 2,460 Secretary's expenses Transport expense 4,672 Bar expenses 568 Bank as at 31 December 2019 92.766 179.196 179.196 Following are the additional information to be considered: 1. At 31 December 2018, the following assets were valued i. Football stand was valued at $36,000, and they are to be depreciated by 15% per annum. ii. Equipment was valued at $6,500 and to be depreciated 25% per annum. 2. The following were the opening and closing balances 31 Dec 2018 31 Dec 2019 (S) (S) 17,650 15,245 13,246 11,567 Inventory in the bar - at cost Owing for bar suplliers Bar expense owing Transport expense owing 560 473 234 3. Subscription owing by members on 31 December 2018 was $1,400 and 31 December 2019 was $4,600. Required: a) Show the relevant workings of Bar Trading account and Subscription account. (show all your workings) (9.0 marks) b) Prepare the Income and Expenditure account. (show all your workings) (6.0 marks) c) When single entries are used? (5.0 marks)
a) Key operations for Bar Trading and Subscription accounts:
Bar Trading Account: $560 in initial stockAdd: Purchases (Payments to suppliers of bar inventory): $56,400$56,960 is the total amount up for grabs.Less: Closing stock: $473
Product cost: $56,487Add: Bar costs: $568
$57,055 was spent overall.Net income: Bar sales - overall costs
In bars: Total receipts - Subscription totals - Donations received - Grounds upkeep - Secretary's costs - Transport cost
The income and expense account receives the net profit transfer.
Account for Subscriptions:Initial subscription balance: $1,400
Add: 2019 subscriptions received: $142,400143,800 subscribers altogetherLess: At the conclusion of the year, there were $4,600 in unpaid subscriptions.
$139,200 total was received in subscriptions.
b) The income and expense account:
Bar Trading Net Profit: Add $2,460 to the net profit from the bar trading account.Net
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consider a u.s.-based mnc with a wholly-owned italian subsidiary. following a depreciation of the dollar against the euro, which of the following describes the competitive effect of the depreciation
The depreciation of the dollar against the euro would typically benefit the U.S.-based multinational corporation (MNC) with a wholly-owned Italian subsidiary.
1. Increased competitiveness: When the dollar depreciates against the euro, it means that the euro strengthens relative to the dollar. As a result, the goods and services produced by the Italian subsidiary become relatively cheaper when exported to countries that use the euro as their currency. This increased competitiveness can lead to higher demand for the subsidiary's products, potentially resulting in increased sales and market share.
2. Impact on profitability: The increased competitiveness due to the depreciation can also positively impact the profitability of the Italian subsidiary. If the subsidiary's costs are mainly denominated in euros (e.g., labor, raw materials), while its revenues are earned in U.S. dollars or other currencies, the depreciation of the dollar would reduce the cost base in dollar terms, leading to higher profit margins.
3. Potential risks: It's important to note that the competitive effect of currency depreciation is not without risks. While a weaker dollar may benefit the U.S.-based MNC's subsidiary in Italy, it can also increase the cost of imported inputs or raw materials denominated in euros. Additionally, if the subsidiary has significant local expenses in dollars (e.g., rent, utilities), the depreciation may lead to higher operating costs.
In summary, the depreciation of the dollar against the euro generally has a positive competitive effect for a U.S.-based MNC with a wholly-owned Italian subsidiary. It can increase the competitiveness of the subsidiary's products, boost sales, and potentially improve profit margins. However, it's important to consider the potential risks and impacts on costs associated with currency depreciation.
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When the prices of a good increases, ______
A. Quantity demanded increases
B. Quantity demanded decreases
C. Quantity supplied increases
D. Quantity supplied decreases
When the prices of a good increase, the quantity demanded decreases (option B).
The correct relationship between the price of a good and the quantity demanded is known as the law of demand. According to this economic principle, when the price of a good increases, the quantity demanded decreases. This inverse relationship occurs due to various factors. As the price of a good rises, consumers typically find it less affordable or attractive, leading to a decrease in their willingness to purchase it. Higher prices may deter consumers, especially if they can find substitute goods or alternatives at lower prices. Additionally, higher prices can reduce the purchasing power of consumers, limiting their ability to buy the same quantity of the good.
Options A, C, and D are incorrect because they do not align with the law of demand. An increase in the price of a good does not lead to an increase in the quantity demanded (option A). The quantity supplied (option C) and quantity demanded (option D) are typically inversely related, meaning that when the price of a good increases, the quantity supplied decreases and the quantity demanded decreases. Therefore, option B is the correct statement indicating that when the prices of a good increase, the quantity demanded decreases.
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On December 31, the capital balances and profit and loss ratios in the MRS Partnership are as follows Capital Profit and Partner Balance loss ratio B. McLaren $83,000 41% P. Ready 70,000 34% D. Symes 41.500 25% Assume Symes withdraws from the partnership on December 31 of the current year under each of the following independent conditions: (a) Symes is paid $38,500 cash from partnership assets. (b) Symes is paid $47,500 cash from partnership assets. (c) McLaren and Ready agree to purchase Symes' equity by paying $21,750 each from their personal assets. Each purchaser receives 50% of Symes' equity. (d) Ready agrees to purchase all of Symes' equity by paying $43,500 cash from his personal assets. (e) McLaren agrees to purchase all of Symes' equity by paying $36,500 cash from his personal assets. (f) Symes withdraws $41,500 cash from the partnership. No. Account Titles and Explanation (a) D. Symes, Capital # Cash B. McLaren, Capital P. Ready, Capital D. Symes, Capital B. McLaren, Capital P. Ready, Capital Cash D. Symes, Capital B. McLaren, Capital P. Ready, Capital D. Symes, Capital (b) (c) (d) Debit 41500 41500 3280 2720 www III 41500 Credit 41500 38500 1640 1360 47500 21750 21750 (d) (e) (f) D. Symes, Capital P. Ready, Capital D. Symes, Capital B. McLaren, Capital D. Symes, Capital D. Symes, Drawings 41500 41500 41500 41500 36500 41500 Determine the balances in the partners' capital accounts and in total partners' equity after Symes has withdrawn, for conditions (a) and (b) above
In the MRS Partnership, the capital balances and profit and loss ratios are given in the following table:CapitalProfit and loss ratioB. McLaren$83,00041%P. Ready$70,00034%D. Symes$41,50025%Given: Symes withdraws from the partnership on December 31 of the current year under each of the following independent conditions:
Condition a:Symes is paid $38,500 cash from partnership assets. In this case, Symes' share is deducted from the partnership. Thus, the balance in the partners' capital accounts and total partners' equity after Symes has withdrawn are given in the table below:No. Account Titles and ExplanationDebitCreditD.
Symes, Capital41,50041,500Cash38,500B. McLaren, CapitalN/AP. Ready, CapitalN/ATotal83,00083,000-3,00037.78%37.78%24.44%Condition b:Symes is paid $47,500 cash from partnership assets. In this case, Symes' share is deducted from the partnership. Thus, the balance in the partners' capital accounts and total partners' equity after Symes has withdrawn are given in the table below:No.
Account Titles and ExplanationDebitCreditD. Symes, Capital41,50041,500Cash47,500B. McLaren, CapitalN/AP. Ready, CapitalN/ATotal83,00083,0006,50036.53%36.53%26.94%
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