The option that is an effective control that encourages receiving department personnel to count and inspect all merchandise received is: "Receiving department personnel are expected to match and reconcile the receiving report with the purchase order."
By ensuring that receiving personnel are required to match and reconcile the receiving report with the purchase order, the company ensures that the goods received match the goods ordered, thereby reducing the risk of incorrect shipments or damaged goods. This control also discourages receiving department personnel from being complacent and neglecting to inspect and count the merchandise received, which could result in inaccurate accounting records and potential inventory discrepancies.
Additionally, this control helps to maintain the accuracy and integrity of the organization's financial statements by ensuring that the inventory records accurately reflect the actual goods in stock. By performing regular inventory counts, the company can also detect and eliminate any potential errors or discrepancies early on, before they become more significant.
Overall, this control is an effective way to encourage receiving department personnel to be vigilant and meticulously inspect and count all merchandise received, helping to protect the company's assets and prevent potential losses from misplacement, damage, or other errors. It also demonstrates the company's commitment to accountability and compliance, which can bolster the confidence of investors and stakeholders in the reliability and accuracy of its financial statements.
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NetSpace, Inc. has annual sales of $687,400, total debt (total liabilities) of $290,000, total equity of $343,000, and a net profit margin of 4.5 percent. What is the firm's return on assets? [Enter your answer as a percent, shown to one decimal place. For example, if your answer is 17.82% (or.1782 in decimal form) enter your answer às 17.8. You do not need to enter a percent symbol (%).] Your Answer: Answer
If NetSpace, Inc. has annual sales of $687,400, total debt (total liabilities) of $290,000, total equity of $343,000, and a net profit margin of 4.5 percent. The firm's return on assets is 4.89 percent.
What is the return on assets?Net Profit = Net Profit Margin * Annual Sales
Net Profit = 4.5% * $687,400
Net Profit = 0.045 * $687,400
Net Profit = $30,935
Total Assets = Total Debt + Total Equity
Total Assets = $290,000 + $343,000
Total Assets = $633,000
Now we can calculate the return on assets using the formula:
ROA = Net Profit / Total Assets
ROA = $30,935 / $633,000
ROA ≈ 0.0489
Therefore the firm's return on assets is approximately 0.0489, or 4.89 percent.
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Miller will deposit $3,000 in the bank for 17 years. The Bank pays 7.3% per year, but it compounds the money weekly. What is the value of the account after this period (to the nearest cent) ? Use 52 weeks in one year for your calculations. Hint: To get this correct, you can not truncate intermediate calculations because you will not be precise enough in your final answer. To avoid problems store intermediate results in memory or write down all the significant digits and then renter all of them to continue.
If he will deposit $3,000 in the bank for 17 years. The value of the account after this period is $10,368.19.
What is the value?Using this formula
Amount = Principal (1 + r/n)^(nt)
Where:
Principal amount= $3,000
Annual interest rate = 7.3%
Number periods per year = 52 week
Number of years = 17
Plugging the values into the formula:
A = $3,000 * (1 + 0.073/52)^(52*17)
A ≈ 10 368.19
Therefore the value of the account after 17 years is $10,368.19.
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Eimaan oil company has an unproved property account containing leases not considered individually significant with a balarice of $1,650,000 on 31 December 2021. Meanwhile, the allowance for impairment account had a $385,000 balance. The company policy provides for year-end allowance equal to 56% of the gross unproved properties. Which one is the part of the correct journal entry?1) Dr. Impairment for unproved properties - group 539,000
2) Dr. Impairment for unproved properties - group 1, 650.000
3)Dr.Impairment for unproved properties - group 593.000
4) Allowance for impairment - group 924.000
5) Dr.Allowance for impairment - group
687.500
The correct journal entry for Eimaan oil company is option 3, which is to debit Impairment for unproved properties - group with $593,000.
The allowance for impairment account had a balance of $385,000, and the company policy states that the year-end allowance should be 56% of the gross unproved properties. Therefore, the required allowance for impairment is $924,000 ($1,650,000 x 56%). Since the current balance in the allowance for impairment account is less than the required amount, the entry should debit the Impairment for unproved properties - group account with the difference of $539,000 ($924,000 - $385,000).
Option 1, which is to debit Impairment for unproved properties - group with $539,000, is incorrect because it only considers the difference between the required allowance and the current balance in the allowance for impairment account, without taking into account the gross unproved properties.
Option 2, which is to debit Impairment for unproved properties - group with $1,650,000, is incorrect because it debits the entire balance of the unproved property account, instead of only the required allowance for impairment.
Option 4, which is to credit Allowance for impairment - group with $924,000, is incorrect because it does not account for the current balance in the allowance for impairment account.
Option 5, which is to debit Allowance for impairment - group with $687,500, is incorrect because it only considers the difference between the required allowance and the current balance in the allowance for impairment account, without taking into account the gross unproved properties.
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If a firm is at or near financial distress, it has an incentive to 'gamble for resurrection', because of a conflict of interest between debt and equity arising out of the seniority of debt. Carefully describe this conflict of interest, possible remedies for it, and the kinds of firms that are more susceptible to it.
When a corporation is in or approaching financial hardship, it signifies that it is experiencing serious financial problems and might not be able to pay its debts. Due to the seniority of debt, there is a conflict of interest between the firm's debt and equity holders in such circumstances.
Because debt holders, like bondholders or banks, take priority over equity holders, like shareholders, in terms of claims on the firm's assets, there is a conflict of interest.
Debt holders are compensated before equity holders in a bankruptcy or liquidation. Due to the seniority of the debt, equity investors are incentivized to assume excessive risk or partake in “gambling for resurrection” in an effort to salvage the business.
The following are potential solutions to this conflict of interest:
Debt restructuring means that the interests of both debt and equity holders might be better aligned by renegotiating the terms of the debt, such as extending the payback period, lowering interest rates, or turning debt into equity.Covenants and limits are them lenders that may put constraints on the firm's ability to take on excessive risk or carry out specific activities without the lender's consent. As a result, the interests of debt holders are better protected, and equity holders' motivation to gamble on resurrection is lessened.Increased openness and communication by managing expectations and removing conflicts of interest can both be accomplished by clear and timely communication between the company, its debt holders, and equity holders.To learn more about the debt, refer to:
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ijay owns land (adjusted basis of $113,900) that he uses in his business. he exchanges the land and $56,950 in cash for a different parcel of land worth $136,680.
a. Ijay has a realized loss of $ _______
b. Can Ijay avoid like-kind exchange treatment and recognize his realized loss?
Ijay has a realized loss of $22,780.
No, Ijay cannot avoid like-kind exchange treatment and recognize his realized loss.
What is Ijay realized loss of $ ?To calculate the realized loss, we need to determine the difference between the adjusted basis of the old land and the fair market value of the new land received.
Realized Loss:
Adjusted basis of the old land = $113,900
Fair market value of the new land received = $136,680
Realized Loss = Adjusted basis of the old land - Fair market value of the new land received
= $113,900 - $136,680
= -$22,780
Therefore, Ijay has a realized loss of $22,780.
Can Ijay avoid like-kind exchange treatment and recognize his realized loss?To qualify for like-kind exchange treatment under Section 1031 of the Internal Revenue Code, the properties exchanged must be of "like kind" or similar nature, and the exchange must be for productive use in a trade or business or held for investment.
In this case, Ijay exchanged his land (used in his business) for a different parcel of land, indicating that the properties are of like kind. Therefore, Ijay can potentially qualify for like-kind exchange treatment.
However, recognizing the realized loss in a like-kind exchange depends on whether Ijay received any boot (non-like-kind property or cash) in the exchange. If Ijay received boot, he may need to recognize a portion of the realized loss.
From the information given, we know that Ijay received $56,950 in cash as part of the exchange. If this cash qualifies as boot, Ijay may have to recognize a portion of the realized loss.
To determine if the cash received is boot, we need to compare its value to the realized gain. If the cash received is less than or equal to the realized loss, it would not be considered boot, and Ijay can avoid recognizing the realized loss.
However, since the amount of the cash received ($56,950) is greater than the realized loss ($22,780), it exceeds the loss amount, and it would likely be considered boot. Therefore, Ijay may have to recognize a portion of the realized loss. The exact amount would depend on the specific rules and regulations related to like-kind exchanges and recognizing boot in your jurisdiction. It is recommended to consult with a tax professional or accountant for accurate advice regarding your situation.
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Alliance Aviation Services limited from the Australian Securities Exchange (ASX). Provide the following information on the company and what is the product or service the company produces?
Alliance Aviation Services Limited is a company listed on the Australian Securities Exchange (ASX). They provide air charter services primarily to the mining and resources industry in Australia.
Alliance Aviation Services Limited is an Australian company that operates in the aviation industry. They specialize in providing air charter services, particularly to the mining and resources sector. Their services include the transportation of personnel, equipment, and supplies to remote areas where mining and resource operations are located. As a charter airline, Alliance Aviation Services offers customized flight solutions tailored to the specific needs of its clients. This can involve transporting workers to mining sites, delivering equipment and materials, or facilitating fly-in fly-out (FIFO) operations for mining and resources companies. By focusing on serving the mining and resources industry, Alliance Aviation Services has carved out a niche market and established itself as a trusted provider of air charter services. Their ability to operate in remote locations and provide efficient and reliable transportation solutions contributes to the success of their business. As a publicly listed company on the Australian Securities Exchange (ASX), Alliance Aviation Services is subject to regulatory requirements and is accountable to its shareholders. Investors can buy and sell shares of the company on the ASX, allowing them to participate in the company's performance and potential growth.
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How does the monetary policy that has been carried out by Bank Indonesia as the central bank face the COVID-19 pandemic?
During the COVID-19 pandemic, Bank Indonesia, as the central bank of Indonesia, implemented various monetary policy measures to address the challenges posed by the crisis.
Their actions aimed to mitigate the economic impact and maintain financial stability. Bank Indonesia lowered interest rates to encourage borrowing and boost economic activity. They also provided liquidity support to banks and eased regulatory requirements to ensure the smooth functioning of the financial system.
Additionally, they implemented policies to stabilize the exchange rate and manage inflation expectations. Bank Indonesia worked closely with the government to coordinate fiscal and monetary measures, such as implementing quantitative easing programs and targeted financing schemes.
These efforts aimed to support businesses, preserve jobs, and facilitate economic recovery amidst the pandemic.
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Using the DIFA Model for international entrepreneurship (Demand, Innovation, Feasibility, Attraction) specifically for dairy products, write how your learning from the formative exercise and the subsequent feedback helped improve your future.
The learning from the formative exercise and subsequent feedback has helped improve my future in international entrepreneurship in the dairy products industry, using the DIFA Model (Demand, Innovation, Feasibility, Attraction).
The formative exercise and feedback have provided valuable insights and guidance in each aspect of the DIFA Model: Demand: Through the exercise and feedback, I have gained a deeper understanding of the demand for dairy products in different international markets. Innovation: The exercise and feedback have highlighted the importance of innovation in the dairy industry.This knowledge enables me to develop innovative product offerings, such as value-added dairy products or alternative dairy substitutes.Feasibility: The formative exercise and feedback have enhanced my understanding of the feasibility factors involved in international entrepreneurship for dairy products.Attraction: The exercise and feedback have provided insights into the factors that attract international customers to dairy products.
Overall, the learning from the formative exercise and feedback has equipped me with a more comprehensive understanding of the international entrepreneurship landscape in the dairy products industry. It has helped me identify opportunities, refine my strategies, and make informed decisions to improve my future endeavors in this sector.
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Discuss in detail the five stage team development model".
" Highlight the various Situational Factors Affecting Team Development ''
Support your Submission with proper references
For most teams to become high performing, Bruce Tuckman outlined five stages of development: forming, storming, norming, performing, and adjourning.
Team development is the process of acquiring excellent teamwork skills. During formation stage, there is a lot of uncertainty, and individuals are seeking authority and leadership. As distinct personalities begin to form, the storming stage is a time characterised by conflict and competitiveness. On team objectives, members may disagree, and cliques and subgroups may develop.
In the norming stage, a sense of coherence and unity begins to emerge when interpersonal conflicts start to be resolved. Consensus and coordination have been firmly established, and the team is mature, structured, and functional at this point. In the adjourning stage, The majority of the team's objectives have been met and the focus is on finishing off last-minute activities and recording the work and outcomes.
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Chestnut, Inc. reported the following balances on its balance sheet at December 31, Year 1 12 Total Assets $254,000 8 01:49:06 Total Liabilities $ 81,000 eBook Common Stock Retained Earnings Total Equity 89,000 84,000 173,000 Total Liabilities and Equity $254,000 On January 1, Year 2, Chestnut purchased equipment for $52,000 on account. What is the company's debt- to-assets ratio immediately after the purchase of the equipment?
To calculate the debt-to-assets ratio immediately after the purchase of the equipment,
we need to determine the new total assets and the new total liabilities.Given the information provided, at the end of Year 1, the total assets were $254,000, and the total liabilities were $81,000. This means the equity was $173,000 ($254,000 - $81,000).On January 1, Year 2, Chestnut purchased equipment for $52,000 on account. This means the equipment is considered part of the company's assets.
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You own 20,000 shares of stock in Short-Term Corp. The company is expected to pay a dividend of $5.1 per share in one year, and a liquidating dividend of $72 per share in two years. The required return on the stock is 12% and there are no taxes.
a) What is the current stock price?
b) If you prefer equal dividends in both years, how many shares should you buy (enter as a positive number) or sell (enter as a negative number) in one year (just after the dividend payout)?
The current stock price can be calculated as the present value of the expected future dividends.
[tex]PV = $5.1 / (1 + 0.12) + $72 / (1 + 0.12)^2[/tex]
Hοw tο determine the current stοck price?Tο determine the current stοck price and the number οf shares tο buy οr sell, we need tο calculate the present value οf the expected future dividends.
a) Current stοck price:
The current stοck price can be calculated as the present value οf the expected future dividends. We can use the dividend discοunt mοdel (DDM) tο calculate this.
The present value (PV) οf the expected future dividends can be calculated using the fοrmula:
[tex]PV = D1 / (1 + r) + D2 / (1 + r)^2[/tex]
Where:
D1 = Dividend expected in οne year
D2 = Liquidating dividend expected in twο years
r = Required return οn the stοck
Given:
D1 = $5.1 per share
D2 = $72 per share
r = 12% οr 0.12
Plugging in the values:
[tex]PV = $5.1 / (1 + 0.12) + $72 / (1 + 0.12)^2[/tex]
Calculate the value of PV to find the current stock price.
b) To determine the number of shares to buy or sell in one year to achieve equal dividends, we need to equate the present value of the expected dividends to zero. We can set up the equation:
[tex]PV = D1 / (1 + r) + D2 / (1 + r)^2 = 0[/tex]
Then, solve for the number of shares (N) using the formula:
N = -PV / D1
Where:
N = Number of shares to buy (positive) or sell (negative)
PV = Present value of expected dividends
D1 = Dividend expected in one year
Substitute the values and solve for N to find the number of shares to buy or sell.
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For passively managed funds like Index ETFs, their fund
managers generally believe that the market is strongly efficient
and it is very difficult to outperform the market.
For passively managed funds like Index ETFs, their fund managers generally believe that the market is strongly efficient and it is very difficult to outperform the market. Index ETFs (Exchange-Traded Funds) are passively managed funds. These funds are designed to track the performance of a specific stock index by investing in the same companies that make up the index.
Investors in index ETFs have a diversified portfolio that reflects the performance of the overall market. The cost of investing in index ETFs is generally low. Fund managers are professionals who manage investment portfolios, including mutual funds, exchange-traded funds (ETFs), and other types of funds. Fund managers are responsible for analyzing securities and making investment decisions that will result in the best returns for investors. Passively managed funds like index ETFs are managed by fund managers who believe that the market is strongly efficient. This means that all publicly available information about a stock is already reflected in its price. Therefore, it is very difficult to outperform the market. As a result, fund managers who manage index ETFs do not try to beat the market. Instead, they aim to match the performance of the index they are tracking. This is why index ETFs are called passively managed funds.
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Suppose you have a project that has a 0.7 chance of tripling your investment in a year and a 0.3 chance of doubling your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)
To calculate the standard deviation of the rate of return on the investment, we need to know the expected rate of return and the probabilities associated with each possible outcome.
Given:
There is a 0.7 chance of tripling the investment, which means the rate of return is 200% (tripling = 3 times the investment).
There is a 0.3 chance of doubling the investment, which means the rate of return is 100% (doubling = 2 times the investment).
We can calculate the expected rate of return as the weighted average of the possible outcomes:
Expected Rate of Return = (0.7 * 200%) + (0.3 * 100%) = 140% + 30% = 170%.
Next, we need to calculate the variance of the rate of return. The variance is the sum of the squared differences between each possible outcome and the expected rate of return, weighted by their probabilities.
Variance = (0.7 * (200% - 170%)^2) + (0.3 * (100% - 170%)^2)
= (0.7 * 0.03^2) + (0.3 * (-0.07)^2)
= 0.00063 + 0.00147
= 0.0021
Finally, the standard deviation is the square root of the variance:
Standard Deviation = √0.0021 ≈ 0.0458
To express the standard deviation as a percentage, we multiply it by 100:
Standard Deviation = 0.0458 * 100 ≈ 4.58%
Therefore, the standard deviation of the rate of return on this investment is approximately 4.58%.
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ABC Company is construction Company, it has three branches Dubai, Al Aid Abu Dha. The company has engineers and 100 minutos. Engineen urechi, architect, and power Administrative staff are purchasing marketing human resource, Finance and general in the company maintain Information about code, name, basic lary, overtime rate, laxtal, and social sauce rule for each employee The disainpuisbed code for each employee is eindigt code number. The first digt for brunch lication, the wecond digit fer jo tie, the third diplt for upecialitation, wed the last three-digit for target employee Required 1. Is payroll ile amater file or a traction file 2- How many records are there in a payroll ? 3- How many fields are there in each record? 4- Is coding system sequence coding or group coding or a black coding? -Create a code amber for the following work Determine all your assumptions before creating a code number A Lamia is a Chvil engineer Al-Ain branch B-Rizvanas marketing personnel at Al Ain branch Nawaf is general administration personnel at Duhul branch D. Majed is a human resource personnel at Abu Dhabi branch - Maryam is a power engineer at Dubai branch F- Yousif is a finance personnel at Abu Dhabi brand.
A payroll file is a transaction file. It is used to record the transactions related to payroll, such as employee pay, deductions, and taxes.
There are 100 records in a payroll file. This is because there are 100 employees in the company.
How many fields are in a record?There are 6 fields in each record in a payroll file. These fields are: code, name, basic salary, overtime rate, tax rate, and social security rate.
The coding system used in the payroll file is a sequence coding system. This means that the codes are assigned in a sequential order.
Here are the code numbers for the employees:Lamia (Civil engineer, Al Ain branch): 0101
Rizvan (Marketing personnel, Al Ain branch): 0201
Nawaf (General administration personnel, Dubai branch): 0301
Majed (Human resource personnel, Abu Dhabi branch): 0401
Maryam (Power engineer, Dubai branch): 0501
Yousif (Finance personnel, Abu Dhabi branch): 0601
I made the following assumptions when creating the code numbers:
The first digit of the code number represents the branch location.
The second digit of the code number represents the job title.
The third digit of the code number represents the specialization.
The last three digits of the code number represent the individual employee.
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If Canada increase its export of lithium, in such a way that national exports would increase, would that actually increase Canadian output? Or would it be washed out through an equal increase in imports? Explain your reasoning.
Yes, increasing Canada's lithium exports could potentially increase Canadian output, but it would depend on the country's ability to maintain a trade balance. An equal increase in imports could offset the gains from increased exports.
Increasing the export of lithium from Canada may lead to an increase in Canadian output, as the increased demand for lithium on the global market would stimulate the country's mining and production sectors. This could create jobs, attract investment, and generate economic growth. However, this scenario assumes that Canada can maintain or expand its lithium production capabilities and effectively manage its supply chain.
On the other hand, if Canada increases its lithium exports but also experiences a corresponding increase in imports of other goods and services, the net effect on the country's output may be neutralized. This can happen if the increased export revenue is used to purchase imports rather than being invested back into domestic production and infrastructure. Maintaining a trade balance is crucial in ensuring that increased exports lead to higher national output.
In summary, the impact of increased lithium exports on Canadian output would depend on the country's ability to manage its trade balance and invest the resulting revenue back into its economy. If Canada can effectively do this, increased lithium exports could lead to higher output and economic growth.
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the best term to describe research that measures target audience acceptance of creative ideas is
The best term to describe research that measures target audience acceptance of creative ideas is "content loaded." This type of research involves presenting various forms of content, such as advertisements or marketing materials, to a specific target audience and then evaluating their reactions and opinions.
The goal of this type of research is to gain insights into what creative concepts and ideas are most effective in engaging and resonating with the intended audience. By measuring audience acceptance of creative ideas, businesses and marketers can better tailor their messaging and strategies to effectively reach and connect with their target consumers.
Hi! The best term to describe research that measures target audience acceptance of creative ideas is "Ad Testing" or "Advertising Testing." This research method helps evaluate the effectiveness of an advertisement or marketing campaign before it's launched by gauging audience response. Ad testing can include various methods such as focus groups, surveys, or online tracking, and it aims to identify any potential issues or areas for improvement, ensuring the content resonates with the target audience and achieves the desired outcome. By conducting ad testing, marketers can optimize their campaigns and maximize their return on investment.
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Assume that the closed economy of Mwalyatunji is currently at the natural level of employment. As both the property market and the stock exchange are doing exceptionally well, people increase their autonomous consumption as they feel richer and more confident about the future. Show the effect of such an increase over both the short and medium run. Use both an IS-LM and an AS-AD diagram in your answer. Be sure to explain all the underlying mechanisms/dynamics, if output, price levels, interest rates are higher/lower or indeterminate after the effect of the increased consumer spending, and what has happened to the various components of demand.
In the short run, increased autonomous consumption in Mwalyatunji leads to higher output and potentially higher interest rates. This is shown in the IS-LM diagram with a rightward shift in the IS curve, indicating higher aggregate demand. Output increases as a result, but interest rates may rise due to increased investment and saving demand.
In the AS-AD diagram, the increase in autonomous consumption shifts the aggregate demand (AD) curve to the right, leading to an expansion in output and the price level in the short run. The higher demand for goods and services drives output growth, while increased spending and potential supply constraints contribute to a rise in the price level.
In the medium run, the effects of increased consumer spending evolve. The AS curve may shift to the right as firms adjust production levels and factor inputs to meet the increased demand. This can result in a higher level of output compared to the initial short-run equilibrium. However, the increase in the price level may be more moderate as the expansion in aggregate supply helps meet demand more efficiently. The exact adjustment in the medium run depends on supply responsiveness and any structural limitations in the economy.
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QUESTION NO.1
a) Shane invests $60 every month, beginning 30 April 2019 into an account that pays 9% compounded monthly. Find the amount in the account immediately after she deposits the last $60 on 30 September 2022.
b) Halimi invests RM300 every three months for four years. He is offered-
1.) 5% compounded quarterly for the first two years, and
2.) 8% compounded quarterly for the rest of the period.
Subject: Annuity
I would like to have very clear and explained answer so that I can learn from it. Thank You.
The amount in Halimi's account after four years of quarterly deposits will be: RM5082.56.
What is the compound interest?a) To obtain the amount in Shane's account immediately after she deposits the last $60, one need to calculate the future value of the monthly deposits using compound interest.
The formula to calculate the future value of an annuity with compound interest is:
FV = P * [(1 + r)ⁿ⁻¹] / r
Note that :
FV = Future value
P = Monthly deposit amount
r = Interest rate per period (monthly interest rate in this case)
n = Number of periods (number of months in this case)
So
P = $60
r = 9% compounded monthly, which is 0.09/12 = 0.0075
n = 42 months (from April 2019 to September 2022)
The value will be:
FV = 60 x [(1 + 0.0075)⁴²⁻¹] / 0.0075
FV = $2949.20
So, the amount in the account immediately after the last deposit on 30 September 2022 is approximately $2949.19.
b) For Halimi's investment, we need to calculate the future value of his quarterly deposits for two different interest rates and periods.
One need to calculate the future value for the first two years that has a 5% interest rate compounded quarterly.
P = RM300
r = 5% compounded quarterly, that is 0.05/4 = 0.0125
n = 2 years = 2 x 4 = 8 quarters
So:
FV1 = 300 * [(1 + 0.0125)⁸⁻¹] / 0.0125
FV1 ≈ RM2507.67
So, calculate the future value for the remaining two years with an 8% interest rate compounded quarterly.
Where:
P = RM300r = 8% compounded quarterly, that is 0.08/4 = 0.02n = 2 years = 2 * 4 = 8 quartersFV2 = 300 * [(1 + 0.02)⁸⁻¹] / 0.02
FV2 = RM2574.89
So to get the total future value, we need to add FV1 and FV2:
Total FV = FV1 + FV2
Total FV ≈ RM2507.67 + RM2574.89
Total FV ≈ RM5082.56
Therefore, the amount in Halimi's account after four years of quarterly deposits will be about RM5082.56.
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International trade is the subject of much debate. Many economist favor encouraging international trade sighting the benefits gained by trade. However, there are economic arguments for limiting international trade with protectionism. Classify the given statements into the Arguments for limiting international trade with protectionism / Arguments for promoting international trade - Worries about domestic labor markets.
- The potential of other governments subsidizing their firms and allowing these firms the ability to charge lower prices than domestic firms - The infant industry argument. - The ability of a nation to consume more than could be produced on their own - Changes in productivity related to comparative advantage.
- The national defense argument.
Arguments for limiting international trade with protectionism:- Worries about domestic labor markets: Protectionism can help shield domestic jobs from foreign competition.
- The potential of other governments subsidizing their firms: This can allow foreign firms to charge lower prices than domestic firms, harming the domestic industry.
- The infant industry argument: Protectionism can help support and nurture new industries until they are strong enough to compete internationally.
- The national defense argument: Limiting trade can protect industries vital for national security.
Arguments for promoting international trade:
- The ability of a nation to consume more than could be produced on their own: International trade allows countries to access a wider variety of goods and services, benefiting consumers.
- Changes in productivity related to comparative advantage: By specializing in the production of goods and services where they have a comparative advantage, countries can increase productivity and economic growth.
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In order for APT to work, does it need arbitrageurs like LTCM to borrow almost infinite amount of capital to trade against mispricing and generate alpha?
Yes. The reason is only because that LTCM wants to have higher return. It has nothing to do with APT assumptions.
Yes. With infinite amount of capital, arbitrageurs can have large enough power to push price back to fundamentals.
No. If LTCM didn't borrow, arbitrage trading can also make price go back to fundamentals.
No. LTCM guys are just too greedy.
No. LTCM's borrowing or the greed of its traders are not necessary for the Arbitrage Pricing Theory (APT) to work.
The APT is a theoretical framework used to explain asset pricing based on the relationships between different risk factors and asset returns. It does not depend on the actions or borrowing capacity of specific arbitrageurs like LTCM.
The APT assumes that mispricing in the market will be quickly identified and exploited by rational arbitrageurs who will trade to bring prices back to their fundamental values. This does not necessarily require arbitrageurs to borrow almost infinite amounts of capital or have excessive greed. The APT is built on the idea that market forces will drive prices towards their true values as arbitrage opportunities are exploited.
While LTCM was a well-known example of an arbitrage fund that employed significant leverage, its specific actions or borrowing capacity are not essential to the functioning of the APT theory itself. The APT can work with rational arbitrageurs who trade based on mispricings without requiring extreme borrowing or greed-driven behavior.
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A stock is expected to return 8% in a normal economy, 15% if the economy booms, and lose 3% if the economy moves into a recessionary period. Economists predict a 63% chance of a normal economy, a 10% chance of a boom, and a 27% chance of a recession. The expected return on the stock is
To calculate the expected return on the stock, we need to multiply the possible returns by their respective probabilities and sum them up.
Expected Return = (Probability of Normal Economy * Return in Normal Economy) + (Probability of Boom * Return in Boom) + (Probability of Recession * Return in Recession)
Let's plug in the given values:
Expected Return = (0.63 * 8%) + (0.10 * 15%) + (0.27 * -3%)
Expected Return = (0.504) + (0.015) + (-0.081)
Expected Return = 0.438 or 4.38%
Therefore, the expected return on the stock is 4.38%.
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The main difference between merchandising companies and manufacturing companies is that merchandising companies _____ (buy/produce) goods ready for sale and manufacturing companies _____ (buy/produce) goods.
The main difference between merchandising companies and manufacturing companies is that merchandising companies buy goods ready for sale, while manufacturing companies produce goods.
Merchandising companies are primarily involved in the buying and selling of finished products. They typically purchase goods from manufacturers or wholesalers and then sell them directly to customers. These companies focus on selecting and sourcing the right products to meet customer demand. They often engage in activities such as inventory management, pricing, marketing, and distribution. Merchandising companies aim to generate profit by effectively buying and selling products without being directly involved in the production process.
On the other hand, manufacturing companies are involved in the production of goods. They take raw materials and transform them into finished products through various manufacturing processes. These companies typically have their own facilities, equipment, and workforce to carry out the production activities. Manufacturing companies are responsible for designing, planning, and executing the production process to create goods that meet specific quality standards. They focus on efficiency, cost management, and continuous improvement in their manufacturing operations.
In summary, merchandising companies primarily buy goods ready for sale, while manufacturing companies produce goods through their own production processes.
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All-State Moving had sales of $899,000 in 2017 and $967,000 io 2018. The firm's current accounts remained constant. Given this information, which of the following statements must be true? The total asset turnover ratio increased. The average collection period decreased. The fixed asset tumover ratio increased The current ratio has decreased. None of the above
The following statement must be true: The total asset turnover ratio increased.The total asset turnover ratio is calculated by dividing the net sales by the average total assets. Since the firm's sales increased from $899,000 in 2017 to $967,000 in 2018, while the current accounts remained constant, it implies that the average total assets also remained constant or increased at a smaller rate.
As a result, the total asset turnover ratio would increase. The other statements cannot be determined solely based on the given information. The average collection period, fixed asset turnover ratio, and current ratio require additional information about the accounts receivable, fixed assets, and current liabilities to make a conclusion.
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1.7 pointsa.1 pointDescribe how to determine forward price of investment assets. b.2 pointsTSLA stock is traded at $734 per share. If the risk-free rate of interest is 0.2% per month with continuous compounding, and TSLA will not pay any dividend in the coming 6 months.The beta of TSLA is 2.What is the six-month futures price of TSLA? c1 pointDescribe how to determine forward price of a foreign currency exchange rate, Answer: d(1 point)Describe how to determine the forward price of storable consumption assets Answer: e2 pointsGiven that the crude oil price is $105 per barrel.The annual storage cost is $5 per barrel paid at the end of each year.The risk free rate is 3% per annum with continuous compounding. You should assume that the crude oil is a consumption commodity and there is no way to borrow the crude oil for a short sale. But, of course, you can borrow or lend money at the risk frec rate. Based on the price formula in our textbook,what is the right range of price for a two-year futures contract on the crudes oil?
To determine the forward price of investment assets, you can use the concept of no-arbitrage.(b)the six-month futures price of TSLA would be approximately $734.734.(c)To determine the forward price of a foreign currency exchange rate, you can use the concept of interest rate parity.(d)To determine the forward price of storable consumption assets, you can consider factors such as storage costs, interest rates.
a. To determine the forward price of investment assets, you can use the concept of no-arbitrage. The forward price represents the expected future price of an asset, taking into account factors such as interest rates, dividends (if applicable), and the risk associated with the asset. The process involves estimating the future cash flows, discounting them to the present value using an appropriate interest rate, and considering any adjustments for dividends or storage costs. By ensuring that there are no opportunities for riskless arbitrage, the forward price can be determined.
b. To calculate the six-month futures price of TSLA, we can use the cost of carry model, which takes into account the risk-free interest rate and any expected dividends.
First, calculate the cost of carry:
Cost of Carry = Risk-Free Rate - Dividend Yield
Since TSLA is not expected to pay any dividend in the coming six months, the dividend yield is zero. The risk-free rate is given as 0.2% per month with continuous compounding, so the cost of carry is 0.2% - 0 = 0.2%.
Next, calculate the futures price using the cost of carry model:
Futures Price = Spot Price * e^(Cost of Carry * Time)
Where:
Spot Price = $734 (given)
Cost of Carry = 0.2% per month = 0.002
Time = 6 months = 6/12 = 0.5
Futures Price = $734 * e^(0.002 * 0.5)
= $734 * e^0.001
≈ $734 * 1.001
≈ $734.734
Therefore, the six-month futures price of TSLA would be approximately $734.734.
c. To determine the forward price of a foreign currency exchange rate, you can use the concept of interest rate parity. Interest rate parity states that the forward exchange rate should be determined by the interest rate differentials between two currencies. By comparing the interest rates in the two countries and considering any expectations of future exchange rate movements, the forward price of the foreign currency can be estimated.
d. To determine the forward price of storable consumption assets, you can consider factors such as storage costs, interest rates, and the expected supply and demand dynamics of the asset. The forward price should reflect the cost of holding and storing the asset over the specified period, as well as any expectations about its future availability and demand. By assessing these factors, the forward price of storable consumption assets can be determined.
e. Based on the price formula in the textbook, the right range of price for a two-year futures contract on crude oil can be determined by considering the spot price of $105 per barrel, the annual storage cost of $5 per barrel, and the risk-free rate of 3% per annum with continuous compounding.
The range of the futures price can be calculated as follows:
Lower Bound = Spot Price + Storage Cost - Present Value of Storage Cost
Upper Bound = Spot Price + Storage Cost + Present Value of Storage Cost
The Present Value of Storage Cost can be calculated using the formula:
Present Value = Storage Cost / (1 + Risk-Free Rate)^n
Where:
Storage Cost = $5 per barrel
Risk-Free Rate = 3% per annum = 0.03
n = number of years = 2
Present Value of Storage Cost = $5 / (1 + 0.03)^2
Lower Bound = $105 + $5 - Present Value of Storage Cost
Upper Bound = $105 + $5 + Present Value of Storage Cost
Calculate the Present Value of Storage Cost and substitute it into the bounds to determine the range of the futures price.
Note: The specific calculations for the lower and upper bounds are not provided here as they require numerical computations.
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Answer:
a. To determine the forward price of an investment asset, you can use the cost of carry model. The forward price is calculated by considering the spot price of the asset, the cost of carry (which includes storage costs, financing costs, dividends or income generated by the asset), and the time until the forward contract expires. The formula for the forward price is:
Forward Price = Spot Price * e^(cost of carry * time)
b. To calculate the six-month futures price of TSLA, we can use the cost of carry model. Since TSLA does not pay any dividends in the coming six months, the cost of carry consists of the risk-free rate.
Risk-free rate = 0.2% per month = 0.002
Time = 6 months = 0.5 years
Futures Price = Spot Price * e^((Risk-free rate - Dividend yield) * Time)
Since TSLA does not pay dividends, the dividend yield is 0. Therefore:
Futures Price = $734 * e^((0.002 - 0) * 0.5)
Futures Price = $734 * e^(0.001)
Futures Price ≈ $734 * 1.001
Futures Price ≈ $734.34
Therefore, the six-month futures price of TSLA would be approximately $734.34.
c. To determine the forward price of a foreign currency exchange rate, you can use the interest rate parity theory. The forward exchange rate is calculated based on the spot exchange rate, the domestic interest rate, the foreign interest rate, and the time until the forward contract expires. The formula for the forward exchange rate is:
Forward Exchange Rate = Spot Exchange Rate * (1 + Domestic Interest Rate) / (1 + Foreign Interest Rate)
d. To determine the forward price of storable consumption assets, such as commodities, you can use the cost of carry model. The forward price is calculated by considering the spot price of the asset, the cost of carry (which includes storage costs, financing costs), and the time until the forward contract expires. The formula for the forward price is similar to the one mentioned in part a.
e. To determine the right range of price for a two-year futures contract on crude oil, we need to consider the cost of carry model and the fact that crude oil is a consumption commodity. The right range of the futures price should take into account the spot price of crude oil, the cost of carry (including storage costs), the risk-free rate, and the time until the futures contract expires.
Since the annual storage cost is $5 per barrel paid at the end of each year and the risk-free rate is 3% per annum, we need to discount the storage costs. However, without specific storage costs for the two-year period, it is not possible to provide an exact range for the futures price. The range will depend on factors such as storage costs, market expectations, and supply-demand dynamics.
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An oligopoly industry has two firms, Firm 1 and Firm 2. The price of the industry output is given by P= 36 - Q, where Q is the total output of the two firms. Suppose that Firm 1 has a marginal cost of $9. And suppose that Firm 2 has a marginal cost of $0. a. Using reaction functions, derive the Cournot outputs of Firm 1 and Firm 2. b. Suppose now that Firm 1 becomes a Stackelberg leader and Firm 2 becomes a follower in this market. Derive how much should the Stackelberg leader and follower produce respectively?
The Stackelberg leader (Firm 1) will produce 9 units, while the follower (Firm 2) will produce 18 units.
a. To derive the Cournot outputs, we need to consider the reaction functions of both firms. In Cournot competition, each firm chooses its quantity to maximize its profit taking into account the quantity set by the other firm.
Let's start with Firm 1:
Firm 1's profit (π1) is given by: π1 = (P - MC1) * Q1
where MC1 represents Firm 1's marginal cost, which is $9.
The industry price (P) is given by: P = 36 - Q1 - Q2
where Q1 and Q2 are the quantities produced by Firm 1 and Firm 2, respectively.
Taking the derivative of Firm 1's profit with respect to Q1 and setting it equal to zero (to maximize profit), we have:
dπ1 / dQ1 = (36 - Q1 - Q2 - MC1) + (P - MC1) * (-1) = 0
Substituting the values, we have:
36 - Q1 - Q2 - 9 - (36 - Q1 - Q2) * (-1) = 0
Simplifying the equation, we find:
2Q1 + Q2 = 27
Similarly, we can derive the reaction function for Firm 2:
2Q2 + Q1 = 27
Solving these two equations simultaneously, we find the Cournot outputs for Firm 1 and Firm 2.
b. In the Stackelberg competition, Firm 1 becomes the leader and Firm 2 becomes the follower. The leader chooses its quantity first, anticipating the reaction of the follower.
As the Stackelberg leader, Firm 1 chooses its quantity to maximize its profit taking into account the reaction of Firm 2. Firm 1's profit function remains the same as in the Cournot case.
Firm 2, as the follower, chooses its quantity to maximize its profit given the quantity set by Firm 1. In this case, Firm 2's profit function is:
π2 = (P - MC2) * Q2
where MC2 represents Firm 2's marginal cost, which is $0.
The industry price (P) is still given by: P = 36 - Q1 - Q2
Taking the derivative of Firm 2's profit with respect to Q2 and setting it equal to zero, we have:
dπ2 / dQ2 = (36 - Q1 - Q2 - MC2) + (P - MC2) * (-1) = 0
Substituting the values, we have:
36 - Q1 - Q2 - 0 - (36 - Q1 - Q2) * (-1) = 0
Simplifying the equation, we find:
Q2 = 18
Since Firm 1 is the leader, it can choose its quantity after considering the reaction of Firm 2. Therefore, the Stackelberg leader (Firm 1) will produce the remaining quantity:
Q1 = Q - Q2
= 27 - 18
= 9
Hence, the Stackelberg leader (Firm 1) will produce 9 units, while the follower (Firm 2) will produce 18 units.
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Larry's Landscaping & Garden Supply-Processing transactions Required The following are situations where an error or fraud has occurred. You are to recom mend one or more internal controls to prevent or detect the error or fraud. a. Shane Hamby processed a nonexistent purchase transaction payable to himself. He then procssed a check to pay for the purchase and forged the controller's signature.
To prevent or detect the error or fraud where Shane Hamby processed a nonexistent purchase transaction payable to himself, and forged the controller's signature, the following internal controls can be recommended:
1. Segregation of duties: Implement a segregation of duties policy that separates the purchasing, payment authorization, and check issuance processes. Assign different individuals to handle these tasks to create a system of checks and balances. This reduces the risk of an individual having sole control over all stages of the transaction, making it more difficult for fraudulent activities to occur without detection.
2. Dual authorization: Require dual authorization for purchase transactions and payments above a certain threshold. This means that two authorized individuals must review and approve each transaction independently. This control adds an additional layer of scrutiny and reduces the likelihood of fraudulent transactions going unnoticed.
3. Regular bank reconciliations: Conduct regular bank reconciliations to compare the issued checks against the actual cleared checks. This reconciliation process helps identify any discrepancies or irregularities, such as forged signatures or unauthorized payments.
4. Strong internal control environment: Establish and enforce a strong internal control environment within the organization. This includes implementing policies and procedures related to financial transactions, conducting periodic internal audits, and promoting an ethical work culture that encourages employees to report any suspicions or concerns about fraudulent activities.
5. Employee training and awareness: Provide training programs to employees to raise awareness about fraud risks, ethical behavior, and the importance of internal controls. By educating employees about their roles and responsibilities, they become more vigilant and better equipped to identify and report any potential fraudulent activities.
To prevent or detect the error or fraud where Shane Hamby processed a nonexistent purchase transaction payable to himself and forged the controller's signature, implementing internal controls such as segregation of duties, dual authorization, regular bank reconciliations, a strong internal control environment, and employee training and awareness can significantly mitigate the risk of such fraudulent activities. These controls create a system of checks and balances, enhance accountability, and promote transparency within the organization, making it more difficult for fraudulent transactions to occur undetected.
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Which of the following fits the description of an Insurance Agent?
A
Mrs. K is an employee of a large insurance company and processes several applications on a daily basis; however, her pay is not impacted by the amount of applications processed
B
Mr. R negotiates multiple reinsurance contracts and is actively seeking a suitable representative for his personal needs
C
Mr. Y represents XYZ insurance company and is authorized to solicit, negotiate, or sell insurance on the company's behalf
D
Mrs. O represents multiple clients and is seeking an unauthorized insurance carrier in New York to represent her clientele
Mr. Y represents XYZ insurance company and is authorized to solicit, negotiate, or sell insurance on the company's behalf best describes insurance agent. The Option C.
Does Mr. Y fit the description of an Insurance Agent?Yes, Mr. Y fits the description of an Insurance Agent. As a representative of XYZ insurance company, he has the authority to solicit, negotiate and sell insurance policies on behalf of the company.
This means he is responsible for interacting with potential clients, explaining policy options and assisting them in selecting appropriate coverage. His role involves actively engaging in insurance-related activities and acting as a liaison between the insurance company and customers seeking insurance coverage.
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Long question (25 points) In this question, we analyze the economy when the nominal interest rate becomes zero (called a liquidity trap) using the IS-LM framework. We assume that prices are fixed during the economic events considered in this question (i.e., we focus on the short run). For simplicity, we assume the expected inflation rate is 0. For the following questions, please label the original equilibrium point A, indicate the directions in which the curves shift, and label the new equilibrium point B. Your answers must be no more than 5 sentences excluding graphs. Suppose the economy is in a general equilibrium with a positive interest rate initially. Due to the spread of COVID-19, households become pessimistic about the prospects of the economy and the stock market crashes, causing the economy to enter a liquidity trap. Show how the IS/LM/FE curves shift in the IS-LM diagram and explain how and why those curves shift
Initially, the economy is in a general equilibrium with a positive interest rate. However, due to the spread of COVID-19 and pessimism among households, the stock market crashes, pushing the economy into a liquidity trap.
In the IS-LM diagram, the IS curve will shift to the left, indicating a decrease in aggregate demand. The LM curve will become horizontal at the zero interest rate level, indicating that the central bank is unable to stimulate the economy further through monetary policy. The FE (full-employment) curve remains unchanged as it represents the level of output consistent with full employment. The new equilibrium point, labeled as B, occurs at the intersection of the shifted IS curve and the horizontal LM curve.
The shift of the IS curve to the left occurs because households, expecting a worsened economic outlook, reduce their consumption and investment. This decrease in aggregate demand leads to a decrease in output and an increase in unemployment. The LM curve becomes horizontal at the zero interest rate level because, in a liquidity trap, the central bank's conventional monetary policy tools (such as lowering the interest rate) are ineffective. The zero interest rate reflects the point at which the demand for money is perfectly elastic, and further reductions in the interest rate do not stimulate additional investment or borrowing. Consequently, the economy remains stagnant at a lower level of output and employment.
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Assume, that there are
constraints for consumer’s possibilities (
concerning buying), resulting from price
system and consumer’s income):
namely p x = 8, p y = 12, I = 144 :(p x x + p y y I).
Which of above baskets (from problem 1)
are available for him /her? Sketch the
corresponding budget set B.
To determine which baskets are available for the consumer given the price and income constraints,
constraints for consumer’s possibilities (concerning buying), resulting from pricesystem and consumer’s income):namely p x = 8, p y = 12, I = 144 :(p x x + p y y I).Which of above baskets (from problem 1)are available for him /her
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Given the following information, what is this stock's intrinsic
value to you? D1 = $1.60 IRRR = 12% Dividend growth rate = 8%
The stock's intrinsic value is $40. This means that, according to the Gordon Growth Model, the stock is valued at $40 per share.
To calculate the intrinsic value of a stock, we can use the Gordon Growth Model, also known as the Dividend Discount Model (DDM). The formula for calculating the intrinsic value of a stock using the Gordon Growth Model is:
Intrinsic Value = D1 / (IRRR - Dividend growth rate)
Given information:
D1 = $1.60
IRRR = 12% (0.12)
Dividend growth rate = 8% (0.08)
Plugging the values into the formula:
Intrinsic Value = $1.60 / (0.12 - 0.08)
Simplifying the expression:
Intrinsic Value = $1.60 / 0.04
Intrinsic Value = $40
Therefore, based on the given information, the intrinsic value of the stock is $40. This means that, according to the Gordon Growth Model, the stock is valued at $40 per share.
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