The correct statement about markets is that both I and II are true. A market facilitates the allocation of resources to their highest-valued uses through the mechanism of prices. Additionally, a market encompasses the exchange arrangements of both buyers and sellers.
Statement I is correct. A market is a mechanism that allows resources to be allocated efficiently by guiding them towards their highest-valued uses.
This is achieved through the interaction of supply and demand, which determines the equilibrium price. Prices serve as signals that guide the allocation of resources, as goods and services are directed to where they are most valued.
Therefore, a market helps resources move to their highest-valued uses by means of prices.
Statement II is also correct. A market involves the exchange arrangements between buyers and sellers. It encompasses the interactions, transactions, and relationships between individuals or entities that engage in buying and selling activities.
The market brings together buyers who demand goods or services and sellers who supply them. The exchange arrangements, such as negotiations, contracts, and agreements, occur within the market framework, facilitating trade and economic activity.
Thus, both statements I and II are accurate in describing the nature and functioning of markets.
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You purchase a home for $436,000 by making a down payment of 15% and financing the remaining amount with a 15-year mortgage. Your mortgage has an annual percentage rate of 2.12%, compounded monthly, and requires monthly payments. How much total interest (in dollars) will you pay on this loan after 15 years? (Round your answer to the nearest dollar.)
The total interest paid on the $436,000 mortgage over 15 years is approximately $54,756.
To calculate the total interest, we first need to determine the loan amount after the down payment. The down payment is 15% of the home price, which is $436,000 * 0.15 = $65,400. Therefore, the loan amount is $436,000 - $65,400 = $370,600.
Next, we calculate the monthly interest rate by dividing the annual percentage rate (APR) by 12. In this case, the APR is 2.12%, so the monthly interest rate is 2.12% / 12 = 0.1767%.
The number of monthly payments over 15 years is 15 * 12 = 180.
Using the loan amount, monthly interest rate, and number of payments, we can use the formula for calculating the monthly payment on a mortgage:
M = P * r * (1 + r)^n / ((1 + r)^n - 1)
Where:
M = Monthly payment
P = Loan amount
r = Monthly interest rate
n = Number of payments
Plugging in the values, we find:
M = $370,600 * 0.001767 * (1 + 0.001767)^180 / ((1 + 0.001767)^180 - 1)
By multiplying the monthly payment by the number of payments and subtracting the original loan amount, we get the total interest paid over 15 years, which rounds to approximately $54,756.
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Explain in detail what are the pros and cons of
making Corporate Social Responsibility (CSR)
mandatory in China.
Making CSR mandatory in China has the potential to enhance social and environmental impact, protect stakeholder interests, and promote fairness. However, it may pose challenges for small businesses, require robust regulatory frameworks, and necessitate vigilance against greenwashing practices.
Making Corporate Social Responsibility (CSR) mandatory in China has its own set of pros and cons. Here is a detailed explanation of the advantages and disadvantages:
Pros:
Improved Social and Environmental Impact: Mandatory CSR can ensure that companies take responsibility for their social and environmental impact.
Protection of Stakeholder Interests: Mandatory CSR can safeguard the interests of various stakeholders, including employees, consumers, and local communities.
Level Playing Field: Making CSR mandatory ensures a level playing field among companies.
Cons:
Compliance Burden on Small Businesses: Mandatory CSR requirements can disproportionately affect small and medium-sized enterprises (SMEs) with limited resources.
Regulatory Complexity: Introducing mandatory CSR necessitates creating and implementing regulatory frameworks, monitoring mechanisms, and enforcement procedures.
Risk of Greenwashing: There is a risk that companies may engage in superficial CSR activities solely to meet legal requirements, without genuinely addressing social and environmental issues.
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Review the feature "I'll Never Have to Write Because..." on page 6 of our text. Have you had any of these same thoughts? Discuss.
Explain a time in a job, volunteer, or other organizational setting when you were forced to write or otherwise communicate when you didn't expect that to be "part of my job."
In your future career or job field, discuss where you expect to spend most of your time writing:
Interpersonal direct communications such as email or memos
Presentations such as teaching, meetings, or sales
Reports or other statistics info reporting
Contracts, bidding, or other negotiation/legal documents
Something else?
Review the Five Questions for Analysis on pages 17-18 or in the Chapter 1 slides. Which of these do you think you usually have the most trouble in utilizing or otherwise dealing with in your communications?
In my experience, I have occasionally entertained thoughts similar to those mentioned in the feature "I'll Never Have to Write Because..." on page 6 of the text.
The idea of avoiding writing or assuming it won't be a significant part of my responsibilities is something that can occur to anyone. However, it's important to recognize that effective communication, including writing, is often a crucial skill in various professional settings. One instance where I unexpectedly had to write extensively was during a volunteer project at a nonprofit organization. Initially, I thought my role would primarily involve hands-on tasks, but I soon realized that I needed to draft project proposals, reports, and fundraising letters. While it was unexpected, I understood the importance of clear and persuasive written communication in conveying the organization's mission and soliciting support. Looking ahead to my future career, I anticipate spending a substantial amount of time writing interpersonal direct communications, such as emails and memos. Effective written correspondence plays a vital role in conveying information, clarifying expectations, and maintaining professional relationships. Additionally, I expect to engage in writing reports or other statistical information reporting, as providing accurate and concise data analysis is often crucial in decision-making processes.
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What are different sources of Power in
any organization? Explain any two,
2+4= 6 marks
In an organization, power can be derived from various sources. Some common sources of power in an organization include.
Legitimate Power: This power is derived from an individual's formal position or authority within the organization. It is based on the belief that the person has the right to make decisions and give orders.
Reward Power: This power comes from an individual's ability to provide rewards, such as promotions, bonuses, or other incentives. It motivates others to comply with their requests or directives.
Coercive Power: Coercive power is based on the fear of negative consequences or punishment. It is the ability to impose penalties or take away privileges, which can influence others to comply.
Expert Power: Expert power is derived from an individual's knowledge, skills, or expertise in a particular area. It is based on the belief that the person has valuable information or insights, and others perceive them as credible and competent.
Referent Power: Referent power is based on interpersonal relationships and admiration. It comes from others' identification and desire to be associated with a person they respect, admire, or want to emulate.
Informational Power: Informational power is derived from having access to valuable or critical information. It includes the ability to control and distribute information, which can give individuals an advantage in decision-making and influencing others.
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Required information [The following information applies fo the questions displayed below] Oslo Company prepared the following contribution format income statement based on a sakes volurim of 1000 urits (ure relevant range of production is 500 units to 1,500 units).
Sales $20,900
Variable expenses 12,300
Conribution margin 5,600
Fixed expenses 6,700
Operating Income $1,892
How many units must be sold to achieve a target profit of $5,246 ? (Do not round intermediate colculations.)
To achieve a target profit of $5,246, Oslo Company must sell 937 units. This calculation is based on the assumption that the company maintains the same contribution margin per unit and fixed expenses remain constant.
To achieve a target profit of $5,246, the number of units that must be sold can be calculated using the contribution margin per unit. The contribution margin per unit is obtained by dividing the contribution margin by the number of units sold in the original income statement. By dividing the target profit by the contribution margin per unit, we can determine the number of units that need to be sold to achieve the desired profit.
In the given information, the contribution margin is $5,600 based on a sales volume of 1,000 units. To calculate the contribution margin per unit, we divide the contribution margin by the number of units sold: $5,600 / 1,000 = $5.60 per unit.
To achieve a target profit of $5,246, we divide the target profit by the contribution margin per unit: $5,246 / $5.60 = 937 units.
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What forms of organizational politics have you observed in the workplace (this can be a current or previous workplace or one that you have researched)?
What are examples (both positive and negative) "organizational politics?"
What can future leaders do to keep employees from using politics as justification of the cause of the problem, when the fault does not rest with politics?
Various forms of organizational politics observed in the workplace include favoritism, information hoarding, power struggles, and undermining colleagues.
Organizational politics can have both positive and negative aspects. Positive examples include building relationships.
Future leaders can take several steps to prevent employees from using politics as a justification for problems when politics is not the root cause.
Organizational politics can manifest in different ways within a workplace. Favoritism is when certain individuals receive preferential treatment or opportunities based on personal relationships rather than merit. Information hoarding occurs when individuals withhold or selectively share information to gain advantage or maintain control.
Future leaders can create a transparent and open communication culture within the organization. This means encouraging employees to express their concerns and opinions freely, and actively listening to their perspectives. By promoting open dialogue, leaders can help employees understand that political factors may not always be the underlying cause of problems.
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consumers' needs and wants are fulfilled through ________.
Consumers needs and wants are fulfilled through the consumption of goods and services.
Goods are tangible products that are produced and can be physically owned or possessed, while services are intangible activities or tasks performed by individuals or businesses to meet consumers' demands.
Through the consumption of goods and services, individuals can satisfy their various needs and desires, ranging from basic necessities like food, shelter, and clothing to more complex desires for entertainment, luxury items, and personal experiences.
Consumption is the process by which individuals acquire and utilize goods and services to meet their needs and wants. Needs refer to the basic requirements for survival and well-being, such as food, water, and shelter.
Wants, on the other hand, are desires that go beyond basic needs and are shaped by individual preferences, cultural influences, and personal aspirations.
Goods encompass a wide range of physical products that can be purchased and consumed, including items like food, clothing, electronics, and furniture.
Services, on the other hand, are intangible actions or performances provided by individuals or businesses, such as healthcare, transportation, education, entertainment, and professional services.
By consuming goods and utilizing services, individuals are able to fulfill their needs and satisfy their wants, ultimately leading to their overall well-being and quality of life.
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Is a comprehensive theory of accounting possible? Why or why
not? Please provide definitions of terms, comparisons to other
theories, and/or some other specific support for your answer.
Accounting
A comprehensive theory of accounting is not considered possible due to the diverse nature of accounting practices and the multiple objectives it serves.
Accounting encompasses various aspects such as financial reporting, measurement, decision-making, and information disclosure. Different theories have been developed to address specific areas within accounting, such as the positive accounting theory, normative accounting theory, and the efficient market hypothesis. However, these theories have limitations and cannot provide a unified framework to explain all aspects of accounting due to the inherent complexities and subjectivity involved in accounting practices.
Accounting is a discipline that involves the measurement, processing, and communication of financial information about economic entities. It serves multiple purposes, including providing information for decision-making, financial reporting, and accountability. Due to the diverse nature of accounting practices, it is challenging to develop a single comprehensive theory that encompasses all aspects of accounting.
Various theories have been proposed in the field of accounting, each focusing on different aspects and objectives. For example, the positive accounting theory seeks to explain and predict accounting practices based on economic incentives and agency theory. The normative accounting theory, on the other hand, aims to establish principles and guidelines for ideal accounting practices.
Additionally, the efficient market hypothesis suggests that financial markets are efficient in reflecting all available information, including accounting information. This theory implies that accounting information is incorporated into market prices, influencing investors' decision-making.
Overall, the complex and dynamic nature of accounting, combined with the diversity of practices and objectives, makes it unlikely to achieve a comprehensive theory that encompasses all aspects of accounting. Instead, the field continues to evolve through the development of specific theories and frameworks to address different dimensions of accounting practice and theory.
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Consider the following income statement data for Oriole Inc.: The common-size percentage for selling and administration costs in 2024 was \[ 103.6 \% \]
The common-size percentage for selling and administration costs in 2024 was 103.6%.
The common-size percentage is a financial analysis tool that expresses each item on an income statement as a percentage of net sales. It allows for the comparison of different components of the income statement and provides insights into the company's cost structure.
In this case, the selling and administration costs of Oriole Inc. accounted for 103.6% of their net sales in 2024. This indicates that the selling and administration expenses exceeded the net sales, resulting in a ratio above 100%. It suggests that the company's selling and administrative costs were relatively high compared to their revenue during that period. Further analysis would be necessary to understand the reasons behind this higher percentage and its impact on the company's overall profitability.
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Now suppose you have invested all your capital ($150,000) in TSLA stock only. You know the characteristics of TSLA , expected return 39% and volatility is 58%.
You know also that the market portfolio has an expected return of 15% and a volatility of 19.8%. Assume that the risk-free interest rate is 2%.
Under the CAPM assumptions:
i. How much you should borrow to create an investment with the lowest possible volatility while having the same expected return as TSLA? (6 marks)
ii. What would be the volatility of this new investment? (4 marks)
The minimum volatility of this new investment is $\sigma_L is 150000 \times 0.58 \approx 87000$.
According to CAPM, the required return on a security is equal to the risk-free rate plus a risk premium that is proportional to the market risk premium and beta, with the market risk premium being the difference between the expected market return and the risk-free rate.
The formula for CAPM is as follows:
$$r_i=r_f + \beta_i (r_m - r_f)$$
Where, $r_i$ is the expected return on security $i$, $r_f$ is the risk-free rate,
$\beta_i$ is the security $i$'s beta, and $r_m$ is the expected return on the market.
We want to find out how much we should borrow to create an investment with the same expected return as TSLA, but with the lowest possible volatility.
To do this, we need to find the beta of TSLA. The formula for beta is as follows:
$$\beta_i = \frac{\sigma_i}{\sigma_m}$$
Where, $\sigma_i$ is the standard deviation of security $i$ and $\sigma_m$ is the standard deviation of the market.
Using the given information, we get:
$\beta_{TSLA} = \frac{0.58}{0.198} \approx 2.93$
Now, we can use CAPM to find the required return for this new investment with the same expected return as TSLA, but with the lowest possible volatility. Substituting the given values, we get:
$$r_i = 0.02 + 2.93 \times (0.15 - 0.02) \approx 0.40$$
So, the required return for this new investment is 40%. To find out how much we should borrow, we need to use the formula for the expected return on a leveraged investment, which is as follows:
$$r_L = r_f + (r_i - r_f) \times \frac{E}{E+D}$$
Where, $r_L$ is the expected return on the leveraged investment, $E$ is the amount of equity, and $D$ is the amount of debt. Rearranging, we get:
$$D = \frac{E \times r_i - E \times r_f - r_f \times E}{r_L - r_i}
= \frac{-E \times r_f}{r_L - r_i}$$
We want to find the amount of debt such that the volatility of the investment is minimized. The volatility of a leveraged investment is as follows:
$$\sigma_L = \sqrt{E^2 \times \sigma_E^2 + D^2 \times \sigma_D^2 + 2 \times E \times D \times \rho_{ED} \times \sigma_E \times \sigma_D}$$
Where, $\sigma_E$ is the volatility of the equity,
$\sigma_D$ is the volatility of the debt, $\rho_{ED}$ is the correlation between equity and debt, and all other variables are as defined above. Since we want to minimize volatility, we need to minimize this expression with respect to $D$.
Answer: $221416$ dollars.
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a) Suppose the price of oll is risky, with a beta of 1.2. The monthly storage cost per barrel is $20, paid at the end of each month, and the current spot price is $1,000. The expected rate of return on the market is 1.5% per month, with a risk-free rate of 0.5% per month. What is the expected price of oil per barrel in three months (in the absence of storage cost)? Suppose that you need a barrel of oil in three months. You believe that the price per barrel will rise to $1,080. Which of the following, in your view, would be cheaper overall: buying a barrel today or buying it in 3 months? [5 marks]
b) Read the following statements. For each statement, first state whether it is true or false. Then explain your reasoning.
i. There was no material information released about Alibaba's investment or profit on Monday. However, its share price rose by more than 10%. The fact that the stock market reacted to nothing suggests that it is not informationally efficient. [3 marks]
ii. The only way for the financial market to be efficient is when every participant is fully rational. [3 marks]
iii. Long call options are safer assets than stocks because the downside is limited. [3 marks] iv. There is a lot of empirical support for the CAPM. [3 marks]
c) Consider the following butterfly spread using calls: go long one call with a low exercise price (£90), short two calls with a medium strike (£100) and long one call with a high exercise price (£110).
i. Show the payoff of this butterfly spread under different stock prices. You may ignore the purchase price. [3 marks]
ii. What is a person who purchases this butterfly spread betting on? [2 marks]
iii. Explain how you can achieve the same butterfly spread using puts only. You need to show the payoff under different stock prices as well. [3 marks]
It would be cheaper overall to buy the oil today.
a) Calculation of the Expected Price of oil in three months:
The formula for Calculation of Future Spot Price:
S1 = S0 x (1 + r)^n
Where,
S0 = Current spot price of oil
S1 = Spot price of oil after n month
sr = Expected rate of return per month
n = Number of months
The expected rate of return per month on the market is 1.5%, and the risk-free rate of return per month is 0.5%.
The expected return on oil per month can be calculated as follows:
R = Rf + β(Rm - Rf)
Where, Rf = Risk-free rate of return
Rm = Expected market return
β = Beta of oil
= 0.5% + 1.2(1.5% - 0.5%)
= 1.3%
The expected price of oil in three months:
S1 = 1000(1 + 1.3%)^3=
$1,038.97
Thus, the expected price of oil per barrel in three months is $1,038.97.
Buying the oil in three months for $1,080 would cost more than buying the oil now.
Therefore, it would be cheaper overall to buy the oil today.
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According to the text, which customer and competitor orientation should company's today practice?
A. Competitor-centered
B. Customer-centered
C.Product-centered
D. Market-centered
E. Profit-centered
Companies should prioritize a customer-centered orientation to succeed in today's competitive market by focusing on satisfying customers and meeting their needs.
According to the text, the customer-centered orientation should companies practice today. This orientation helps companies focus on satisfying customers by providing high-quality products and services that meet their needs and preferences. It is an approach that prioritizes the customer's needs and wants over the company's goals or products.
A customer-centered approach can help businesses achieve customer satisfaction and loyalty, leading to repeat business and positive word-of-mouth recommendations. In contrast, other orientations, such as a competitor-centered or product-centered approach, can be less effective in building long-term customer relationships and may result in a focus on short-term gains or a lack of understanding of customers' needs. Therefore, companies should prioritize the customer and focus on creating value for them to succeed in today's competitive market.
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Purchase: $1,000,000
Monthly cost: $12,500
Yearly cost: $50,000
Rate of Return: 3.25%
Time: 60 months.
What is the Net Present Value?
The Net Present Value (NPV) in this case is approximately -$1,391,278.82. This negative value indicates that the project or investment is not expected to generate a positive return, and it may not be financially viable.
To calculate the Net Present Value (NPV), we need to discount the future cash flows to their present value and subtract the initial investment.
Initial investment (Purchase): $1,000,000
Monthly cost: $12,500
Yearly cost: $50,000
Rate of Return: 3.25%
Time: 60 months
First, let's calculate the present value of the monthly costs over 60 months:
PV_monthly_costs = Monthly cost * Present value factor for 60 months
PV_monthly_costs = $12,500 * (1 - (1 + 0.0325)^(-60)) / 0.0325
PV_monthly_costs ≈ $652,266.12
Next, let's calculate the present value of the yearly costs over 60 months:
PV_yearly_costs = Yearly cost * Present value factor for 60 months
PV_yearly_costs = $50,000 * (1 - (1 + 0.0325)^(-60)) / 0.0325
PV_yearly_costs ≈ $2,609,064.49
Now, let's calculate the present value of the total cash inflows (rate of return) over 60 months:
PV_cash_inflows = Purchase * (1 + Rate of Return)^(-60)
PV_cash_inflows ≈ $1,000,000 * (1 + 0.0325)^(-60)
PV_cash_inflows ≈ $870,051.79
Finally, we can calculate the Net Present Value (NPV) by subtracting the initial investment from the present value of cash inflows minus the present value of cash outflows:
NPV = PV_cash_inflows - (PV_monthly_costs + PV_yearly_costs) - Purchase
NPV = $870,051.79 - ($652,266.12 + $2,609,064.49) - $1,000,000
NPV ≈ -$1,391,278.82
The Net Present Value (NPV) in this case is approximately -$1,391,278.82. This negative value indicates that the project or investment is not expected to generate a positive return, and it may not be financially viable.
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Sage Ltd. wished to purchase some new equipment for its factory. However, due to recent cash flow difficulties, Sage did not have enough cash on hand to complete the transaction. The equipment’s vendor agreed to accept 1,300 common shares in Sage in exchange for the equipment. Sage’s shares were actively trading at $14.10/share on the day of the exchange. Required a. Prepare the journal entry to record the purchase of the equipment on Sage’s books, assuming that the list price for the equipment was $20,240. b. Prepare the journal entry assuming Sage was a private company whose shares do not trade actively and that the equipment had a quoted fair value of $19,740.
a) The credit to the paid-in capital account represents the difference between the cost of the equipment and the value of the shares issued. in this case, it is $1,910 ($20,240 - $18,330).
b) Both the debit and credit are recorded for the same amount of $19,740.
a) assuming the list price for the equipment was $20,240 and sage ltd. issued 1,300 common shares valued at $14.10/share for the exchange, the journal entry to record the purchase of the equipment would be:
equipment [dr] $20,240
common stock [cr] $18,330 (1,300 shares * $14.10/share)
paid-in capital [cr] $1,910 (difference: $20,240 - $18,330)
the debit to the equipment account reflects the cost of the equipment, which is $20,240, based on the list price.
the credit to the common stock account represents the value of the shares issued. since 1,300 shares were issued at a value of $14.10 per share, the total value of the shares issued is $18,330.
b) assuming sage ltd. is a private company with shares that do not trade actively and the equipment has a quoted fair value of $19,740, the journal entry to record the purchase of the equipment would be:
equipment [dr] $19,740
common stock [cr] $19,740
in this scenario, since the equipment has a quoted fair value of $19,740, there is no difference between the fair value of the equipment and the value of the shares issued. the equipment account is debited for the fair value of the equipment, and the common stock account is credited for the value of the shares issued, which is equal to the fair value of the equipment.
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1. List and explain 2 strategies to Improve organizational effectiveness. 2. List and explain 2 techniques for goal setting. 3. List and explain 2 ways to practice workplace equity and inclusion.
To improve organizational effectiveness, clear communication channels and continuous learning are key. Setting SMART goals and utilizing the OKR framework aid in effective goal setting. Promoting workplace equity and inclusion involves diverse hiring, employee resource groups, and diversity training programs.
1. Strategies to Improve Organizational Effectiveness:
a) Clear Communication Channels: Establishing open and transparent communication channels within an organization is vital for enhancing organizational effectiveness. This ensures information flows smoothly, reducing misunderstandings and fostering collaboration.
b) Continuous Learning and Development: Encouraging a culture of continuous learning and development boosts organizational effectiveness. Providing opportunities for professional growth and training equips employees with the skills needed to enhance productivity and adapt to changes.
2.Techniques for Goal Setting:
a) SMART Goals: Setting Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals enables individuals and teams to create clear objectives that are actionable and trackable.
b) OKRs (Objectives and Key Results): The OKR framework involves defining ambitious objectives and measurable key results, enabling teams to align efforts, prioritize initiatives, and achieve impactful outcomes.
3.Ways to Practice andWorkplace Equity Inclusion:
a) Diverse Hiring and Inclusive Recruitment Practices: Promoting workplace equity and inclusion begins with diverse hiring and inclusive recruitment strategies. These involve actively seeking candidates from various backgrounds and implementing unbiased selection processes.
b) Employee Resource Groups and Diversity Training: Establishing Employee Resource Groups (ERGs) and providing diversity training programs create platforms for employees to connect, support one another, and raise awareness about biases, fostering an inclusive work environment.
Implementing these strategies and techniques enhances organizational effectiveness, fosters a positive work culture, and promotes equity and inclusion within the workplace.
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Banking is not just a domestic function anymore since it is influence by _____ issues.
The banking industry has become increasingly interconnected and influenced by global factors. Globalization, advancements in technology, and international trade have expanded the reach and impact of banking activities beyond domestic borders. Economic, political, and regulatory issues on a global scale can significantly affect the operations, performance, and stability of banks.
Global issues such as economic crises, trade policies, geopolitical tensions, and regulatory changes in one country can have ripple effects on financial markets worldwide. Banks are exposed to risks arising from fluctuations in foreign exchange rates, international market volatilities, and cross-border transactions. Additionally, the interconnectedness of banking systems through cross-border lending and financial instruments can lead to contagion effects, where problems in one country's banking sector can quickly spread to others.
Moreover, global issues like money laundering, terrorist financing, and cybersecurity threats have become major concerns for the banking industry. Banks must comply with international regulations and standards to combat financial crimes and ensure the security of customer data across borders.
In conclusion, banking has transcended domestic boundaries and is now influenced by various global issues. The interconnected nature of the banking industry and the impact of global factors on financial markets necessitate a global perspective and proactive risk management strategies for banks to navigate the challenges and opportunities presented by these issues.
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A retailer has received inventory twice in march The first shipment of 50 coffe makers cost $40 each, the second shipment of 50 coffe makers cost $60 each. The retailer sold 50 coffee makers at $80 each. How should the retailer report sales to the stockholders?
a. LIFO $4,000−$3,000=$1,000
b. FIFO $4,000−$3,000=$1,000
c. LIFO $4,000+$2,000=$6,000
d. FIFO $4,000−$2,000=$2,000
The retailer should report sales to the stockholders using FIFO (First-In, First-Out) method, which is a commonly used inventory valuation method. The correct option for reporting sales to the stockholders is d. FIFO $4,000 - $2,000 = $2,000.
Under FIFO, it is assumed that the items purchased or produced first are sold first. In this case, the first shipment of 50 coffee makers, which cost $40 each, would be considered as sold first. The retailer sold 50 coffee makers at $80 each, resulting in total sales revenue of $4,000.
To calculate the cost of goods sold (COGS) using FIFO, we consider the cost of the earliest inventory on hand. Since the first shipment of 50 coffee makers cost $40 each, the total cost of goods sold would be $40 multiplied by 50, which equals $2,000.
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What three elements described below are most important in terms of creating a great place to work?
Select one:
A. A feeling of being in on things, opportunities for promotion, congenial co-workers
B. Annual bonuses, flex-time, bigger offices, promotions, competitive wages
C. Tactful discipline, a pleasant working environment, caring management
D. Two-way feelings of trust, pride in the work and organization, a sense of enjoyment
Two-way feelings of trust, pride in the work and organization, a sense of enjoyment. The answer is option D.
When it comes to creating a great place to work, three essential elements are highlighted in option D. First, establishing two-way feelings of trust is crucial. This involves fostering an environment where both employees and management trust and respect each other, leading to open communication and collaboration. Second, instilling a sense of pride in the work and organization is important.
When employees feel a sense of ownership and take pride in their contributions and the overall mission of the organization, it cultivates a positive and motivating work culture. Lastly, creating a sense of enjoyment in the workplace is vital. When employees enjoy their work, find fulfillment, and have a positive attitude towards their tasks and colleagues, it enhances job satisfaction and overall well-being.
These three elements contribute to a positive work environment that fosters engagement, productivity, and employee retention. While factors mentioned in other options, such as promotions, competitive wages, pleasant working environments, and opportunities for growth, can also be important, the emphasis in option D is on the psychological aspects that create a fulfilling and rewarding work experience.
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Examine each of the external environmental factors that may be a
threat to stakeholder relations. (20)
External environmental factors that may pose threats to stakeholder relations include economic fluctuations, technological advancements, legal and regulatory changes, social and cultural shifts, political instability, and competitive pressures.
These factors can impact stakeholder relations by affecting their financial stability, disrupting operations, creating legal challenges, conflicting with societal values, causing uncertainties due to political changes, and intensifying competition. Organizations must monitor and manage these factors to maintain strong stakeholder relationships.
Economic factors such as recessions, inflation, or currency fluctuations can affect stakeholders' financial stability and influence their engagement with an organization. Technological advancements may create challenges if stakeholders are unable to adapt, leading to resistance to change. Legal and regulatory changes can impact stakeholder relations through non-compliance risks and disagreements on specific regulations. Social and cultural shifts in values and norms can affect an organization's reputation and stakeholder perceptions. Political factors like instability or policy changes may create uncertainties and impact stakeholder relationships. Lastly, competitive pressures can affect stakeholder expectations, leading to strained relations if organizations fail to meet those expectations.
Organizations should actively monitor and manage these external factors to mitigate threats and build strong stakeholder relationships. By effectively communicating, engaging, and adapting to changes, organizations can address the concerns and expectations of stakeholders, ensuring their support and cooperation in the long run.
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What is the title that AASB 112/IAS 12 Income Taxes uses to describe differences between the carrying amount of an asset or liability in the statement of financial position and the tax base of the asset or liability?
a.permanent differences.
b.timing differences.
c.carrying amount differences.
d.temporary differences.
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TI Ltd has the following tax balances at the end of its first financial period: current tax liability $12 000, deferred tax liability $15 000, and deferred tax asset $18 000. There is no tax on items of other comprehensive income. What recognise as income tax expense in its first financial period?
a.$30 000 [= $12 000 + $18 000]
b.$27 000 [= $12 000 + $15 000]
c.$15 000 [= $12 000 – $15 000 + $18 000]
d.$9000 [= $12 000 + $15 000 – $18 000]
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AASB 112/IAS 12 Income Taxes defines ‘current tax’ as:
a. the amount of income tax recognised that is attributable to the transactions and events of the current period.
b. the amount of income taxes payable (recoverable) classified as a current liability (current asset).
c. the amount of income taxes payable classified as a current liability.
d. the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period.
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AASB 112/IAS 12 Income Taxes defines ‘accounting profit’ as:
a. profit or loss and other comprehensive income for a period before deducting tax expense
b. profit or loss for a period after deducting tax expense
c. profit or loss for a period before deducting tax expense
d. profit or loss and other comprehensive income for a period after deducting tax expense
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Carmen Limited has an accounting profit before tax of $240 000. All of the following items have been included in the accounting profit: depreciation of equipment $30 000 (tax deductible depreciation is $40 000); entertainment expenses $10 000 (non-deductible for tax purposes); long service leave expense $80 000 (long service leave paid is $50 000). The tax rate is 30%. What is the taxable profit for the period?
a.$320 000.
b.$310 000.
c.$270 000.
d.$290 000.
The taxable profit for the period is $310,000. This is calculated by starting with the accounting profit of $240,000 and adjusting for the differences between accounting and tax rules.
The adjustments include adding back the non-deductible entertainment expenses of $10,000 and subtracting the tax-deductible depreciation of $40,000. The long service leave expense is not adjusted because it represents a timing difference, not a permanent difference. Finally, the taxable profit is multiplied by the tax rate of 30%.
The taxable profit is calculated by making adjustments to the accounting profit based on tax rules. Non-deductible expenses are added back, while tax-deductible expenses are subtracted. The long service leave expense is not adjusted because it represents a timing difference, meaning it will be deductible for tax purposes in future periods. The resulting taxable profit is then multiplied by the applicable tax rate to determine the income tax expense. In this case, the taxable profit is $310,000.
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Arbitrage. Suppose one British pound is equal to 2.4 U.S. dollars in New York, one U.S. dollar is worth 1.05 euros in Paris, and one British pound is equal to 2.5 euro in London. If you begin by holding 1 British pound, is there an opportunity for arbitrage? If so, what is your arbitrage profit per pound you trade?
Yes, there is an arbitrage opportunity with a profit of 0.1 euros per pound traded.
Arbitrage opportunity exists with a profit of 0.1 euros per pound traded. This can be achieved by taking advantage of the exchange rate differences between New York, Paris, and London. By sequentially converting currencies, starting with British pounds, one can exploit the favorable exchange rates and generate a profit. In this case, the profit is obtained by converting 1 British pound to U.S. dollars, then converting the U.S. dollars to euros, and finally converting the euros back to British pounds. The resulting profit per pound traded is 0.1 euros, highlighting the potential gain from engaging in arbitrage in this scenario.
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1) What are the factors that affect Demand
2) What are the factors that affect Supply
3) What is cost price, price and Income Price in elasticity
4) What is Average Variable Cost, Average Total Cost and Marginal Average Cost
5) What are the diagram for perfect competition
6) How do you determine the optimal use of data
7) What is the Dominant Strategy, Nash Equilibruim and Best response cover.
8) How do a business sustain cooperation, limit entry and expansion
9) What is a multi plant firm and how does one determine level of output.
10) What is the Consumer Income Theory and Substitution Theory
Demand factors: price, income, preferences, demographics; Supply factors: cost, technology, regulations, number of suppliers.
1) Factors that affect demand:
- Price of the product: Typically, as the price of a product decreases, the quantity demanded increases, and vice versa.
- Income of consumers: Higher incomes generally lead to increased demand for normal goods.
- Consumer preferences: Changes in tastes, preferences, and trends can impact demand for specific products.
- Price of related goods: The prices of substitutes and complements can influence the demand for a particular product.
- Population and demographics: Changes in population size, age distribution, and demographics can affect demand for various goods and services.
2) Factors that affect supply:
- Cost of production: Input costs, such as raw materials, labor, and energy, can impact the supply of goods.
- Technological advancements: Improvements in technology can increase production efficiency and supply.
- Government regulations: Regulations on production, taxes, subsidies, and trade policies can affect supply.
- Number of suppliers: The number of producers in a market can influence the overall supply.
- Expectations of future prices: If suppliers anticipate higher future prices, they may reduce current supply.
3) Cost price, price, and income price in elasticity:
- Cost price elasticity measures the responsiveness of quantity demanded to changes in the cost price of a product.
- Price elasticity measures the responsiveness of quantity demanded to changes in the price of a product.
- Income elasticity measures the responsiveness of quantity demanded to changes in consumer income.
4) Average Variable Cost (AVC) is the cost per unit of output that varies with the level of production. Average Total Cost (ATC) is the total cost per unit of output, including both fixed and variable costs. Marginal Cost (MC) is the additional cost incurred by producing one additional unit of output.
5) The diagram for perfect competition is the horizontal demand curve (representing the firm's average revenue) intersecting with the marginal cost curve at the equilibrium point, determining the optimal quantity of output produced.
6) The optimal use of data is determined by identifying the specific objectives, analyzing the available data sources, selecting relevant data, applying appropriate analysis techniques, and interpreting the results to make informed decisions or draw meaningful insights.
7) Dominant strategy refers to a strategy that yields the highest payoff regardless of the actions of other players. Nash equilibrium is a situation in which each player's strategy is the best response to the other players' strategies. Best response covers are strategies that maximize a player's payoff given the actions of other players.
8) Businesses can sustain cooperation by establishing long-term relationships, implementing contracts, and fostering trust among participants. Limiting entry and expansion can be achieved through barriers to entry such as high capital requirements, government regulations, and economies of scale.
9) A multi-plant firm is a company that operates multiple production facilities. The determination of the level of output in a multi-plant firm involves assessing the production costs, capacity constraints, market demand, and economies of scale at each plant to optimize the overall production and cost efficiency.
10) Consumer Income Theory analyzes the relationship between consumer income and the demand for goods, considering normal goods, inferior goods, and luxury goods. Substitution Theory examines how consumers substitute between different goods in response to changes in relative prices, assessing the price elasticity of demand for substitutes and complements.
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Trecek Corporation incurs research and development costs of $646,000 in 2020, 30 percent of which relate to development activities subsequent to IAS 36 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2021 and is expected to generate sales revenue for 10 years.
Assume that Trecek Corporation is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.
Required:
Prepare journal entries for research and development costs for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS.
Prepare the entry(ies) that Trecek would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert U.S. GAAP balances to IFRS.
Journal entries for research and development costs under U.S. GAAP and IFRS:
December 31, 2020:
1. U.S. GAAP:
Research and Development Expense $646,000
Cash or Accounts Payable $646,000
2. IFRS:
Development Expense $193,800
Research Expense $452,200
Cash or Accounts Payable $646,000
December 31, 2021:
1. U.S. GAAP:
Research and Development Expense $646,000
Cash or Accounts Payable $646,000
2. IFRS:
Development Expense $193,800
Research Expense $452,200
Cash or Accounts Payable $646,000
Conversion entries on the December 31, 2020, and December 31, 2021, worksheets to convert U.S. GAAP balances to IFRS:
December 31, 2020:
1. Development Expense (IFRS) $193,800
Research and Development Expense (U.S. GAAP) $193,800
December 31, 2021:
No conversion entry is required as the balances remain the same under both U.S. GAAP and IFRS.
The journal entries for research and development costs under U.S. GAAP and IFRS are provided, considering the allocation of 30% of the costs to development activities. For the conversion entries, the Development Expense is recognized separately under IFRS, while the Research Expense reflects the remaining portion of the costs. The conversion entry on the December 31, 2020, worksheet ensures that the Development Expense is properly recognized under IFRS.
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which of the following does the insuring clause not specify
The correct answer is C. The Insuring Clause does not specify the list of available doctors. The Insuring Clause in an insurance policy is a provision that outlines the key details of the insurance contract.
It typically includes information such as the insurance company, the name of the insured (policyholder), the coverage period, the type of coverage, and the covered perils or risks. However, it does not specify the list of available doctors as that is usually addressed in other sections of the policy, such as the provider network or medical services provisions.
The Insuring Clause is a fundamental component of an insurance policy as it sets out the basic terms and conditions of coverage. It establishes the relationship between the insurance company and the insured, providing clarity on who is covered and under what circumstances.
The purpose of the Insuring Clause is to clearly define the scope of coverage and the risks that are protected under the policy. It ensures that both the insurer and the insured have a clear understanding of the coverage provided, helping to prevent any misunderstandings or disputes in the event of a claim.
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The complete question is:
Which of the following does the Insuring Clause NOT specify? A. The insurance company B. The name of the insured C. The list of available doctors D. Covered perils
Demonstrate the understanding of the basic principles of VAT and explain the registration issues relating to VAT of James Business.
Advice to James with proper calculation, and justification to minimize their tax liability of James.
As a tax advisor, explain your role to minimize the Impact of Legal and ethical constraints with the help of a code of ethics applicable to taxation issues.
As a tax advisor, I would help James Business minimize their VAT liability by optimizing input tax credits, exploring exemptions and reliefs, managing VAT payment timing, and adhering to ethical guidelines. Seeking specific advice from a professional is crucial to address their unique circumstances and comply with tax regulations.
Value Added Tax (VAT) is a consumption tax levied on the value added at each stage of the production and distribution chain. As a tax advisor, my role is to assist James Business in understanding and managing their VAT obligations effectively.
Registration for VAT is mandatory for businesses that exceed a certain threshold of annual turnover. James Business should assess whether their annual turnover exceeds the registration threshold set by the tax authorities. If it does, they must register for VAT and charge VAT on their sales.
To minimize tax liability, I would advise James Business on the following strategies
Input Tax Optimization: James Business should ensure they claim all eligible input tax credits for VAT paid on purchases and expenses related to their business activities. This includes keeping proper records and documentation to support these claims.
VAT Exemptions and Reliefs: James Business should explore potential VAT exemptions and reliefs applicable to their specific industry or business activities. This can help reduce their VAT liability by excluding certain goods or services from being subject to VAT.
Timing of VAT Payments: Managing the timing of VAT payments can also help minimize tax liability. James Business should review their cash flow and consider the VAT payment deadlines to optimize their payment schedules.
Regarding legal and ethical constraints, tax advisors must adhere to a code of ethics when providing advice.
This includes ensuring compliance with tax laws and regulations, maintaining client confidentiality, and avoiding conflicts of interest. I would prioritize ethical conduct, ensuring accurate reporting, and minimizing tax liability within the boundaries of the law.
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Ratio analysis is a very useful tool to understand company’s profitability and financial position. However, financial ratios have some flaws. Outline main disadvantages and limitations of using financial ratios. Up to 120 words
Financial ratios have limitations and disadvantages including reliance on historical data, susceptibility to manipulation, inability to capture qualitative aspects, and oversimplification of complex financial situations.
While financial ratios provide valuable insights into a company's profitability and financial position, they have certain disadvantages and limitations.
Firstly, financial ratios are based on historical data, which may not accurately reflect the company's current or future performance.
Additionally, ratios can be easily manipulated or distorted by accounting practices, making it difficult to compare ratios across companies or industries.
Moreover, financial ratios may not capture qualitative aspects such as management quality, competitive advantages, or market dynamics.
They also rely on accurate and reliable financial statements, which may not always be available or trustworthy.
Lastly, ratios provide a simplified view of a company's complex financial situation and may overlook important contextual factors that impact its performance.
Therefore, while financial ratios offer valuable insights, they should be used in conjunction with other financial analysis tools to gain a comprehensive understanding of a company's financial health.
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A licensed real estate salesperson wants to change brokers. Which of the following actions is required?
A. turn in the current license to the new broker
B. place the current license on inactive status
C. notify the commission in writing within 10 days after the intended date of change and return license
D. Notify the current broker in writing within 10 days before the intended date of change
The licensed real estate salesperson is required to notify the commission in writing within 10 days after the intended date of change and return the license.
The correct option is C. notify the commission in writing within 10 days after the intended date of change and return license
When a licensed real estate salesperson wants to change brokers, it is important to follow the necessary procedures to ensure a smooth transition. In this case, the correct action required is to notify the commission in writing within 10 days after the intended date of change and return the license. This ensures that the commission is aware of the change and can update their records accordingly.
By notifying the commission in writing, the salesperson provides official documentation of the change in brokers. This allows the commission to update their records, ensuring that the salesperson is properly affiliated with the new broker. Returning the license is also necessary as it signifies the end of the salesperson's affiliation with the previous broker.
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Using economic terms in 800-1000 words: Write down why some zoning regulations cause house prices to rise in cities, and explain how some zoning regulations can cause house prices to fall. Use both sides of the argument to come to a middle ground and explain what would be the best type of zoning regulation to bring house prices down. Show sources and use paragrapphs.
Zoning regulations can have a significant impact on house prices in cities. Some zoning regulations cause house prices to rise by limiting the supply of housing and increasing the cost of construction.
Zoning regulations are rules and restrictions imposed by local governments to control land use and development within a specific area. These regulations can influence the availability and cost of housing, thereby impacting house prices in cities. There are different ways in which zoning regulations can affect house prices.
Zoning regulations causing house prices to rise:
a) Restrictive zoning: Zoning regulations that impose strict restrictions on land use, such as limiting the density or type of housing allowed, can reduce the supply of housing. This limited supply coupled with growing demand can drive up house prices. Developers face higher costs and delays in obtaining approvals, leading to increased construction costs that are passed on to homebuyers.
b) Exclusionary zoning: Some zoning regulations aim to maintain exclusivity in certain neighborhoods by setting high minimum lot sizes or imposing design standards that increase construction costs. These regulations limit the supply of affordable housing options, driving up prices and exacerbating housing affordability challenges.
Zoning regulations causing house prices to fall:
a) Inclusionary zoning: In contrast to exclusionary zoning, inclusionary zoning regulations require developers to include affordable housing units in new developments or contribute to affordable housing funds. By increasing the supply of affordable housing, these regulations can help mitigate rising house prices and promote housing affordability.
b) Mixed-use zoning: Zoning regulations that allow for mixed-use development, where residential and commercial activities coexist in the same area, can increase housing supply and affordability. Mixed-use neighborhoods reduce commuting distances and provide access to amenities, making them desirable places to live. This increased demand can help stabilize or even lower house prices.
Finding a middle ground in zoning regulations is crucial to address the issue of rising house prices while maintaining balanced urban development. The best type of zoning regulation to bring house prices down would include the following elements:
a) Encourage affordable housing: Implementing inclusionary zoning policies that require developers to include affordable housing units or contribute to affordable housing funds can increase housing affordability.
b) Promote mixed-use neighborhoods: Allowing for mixed-use zoning that combines residential, commercial, and recreational spaces can create vibrant and walkable communities, attracting a diverse range of residents and providing a variety of housing options.
c) Increase housing density: Relaxing restrictions on housing density can promote the construction of higher-density housing, such as townhouses or apartment buildings. This can increase housing supply and help stabilize or reduce house prices.
d) Flexibility and adaptive zoning: Implementing zoning regulations that are flexible and adaptable to changing market conditions and community needs can ensure that housing supply remains responsive to demand fluctuations.
By adopting a balanced approach that considers affordability, mixed-use development, increased density, and flexibility, cities can create zoning regulations that promote housing affordability while maintaining the integrity of neighborhoods and urban planning objectives.
Sources:
Glaeser, E. L., Gyourko, J., & Saks, R. E. (2005). Why have housing prices gone up? American Economic Review, 95(2), 329-333.
Freemark, Y. (2018). The impact of zoning on housing affordability. Journal of Planning Literature, 33(4), 379-394.
HUD USER. (2015). Inclusionary zoning. U.S. Department of Housing and Urban Development.
Downs, A. (2005). Smart growth: Why we discuss it more than we do it. Journal of the American Planning Association, 71(4), 367-378.
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our job satisfaction tends to __________ over time, __________ when we change jobs or employers.
Our job satisfaction tends to change over time, often decreasing, especially when we change jobs or employers.
Satisfaction in the workplace is a subjective measure of contentment and fulfillment derived from one's job. It encompasses various factors such as job security, work-life balance, recognition, compensation, and opportunities for growth and development. Job satisfaction plays a crucial role in employee engagement, productivity, and overall well-being. It can fluctuate over time due to various factors, including changes in job responsibilities, work environment, and interpersonal dynamics. Employers strive to create a conducive work environment and address employees' concerns to enhance job satisfaction and foster a positive and motivated workforce.
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A car dealership has a used truck on its lot that it bought for $15,000 and is selling it for $20,000. The rate of markup on cost is:
a 16 and 2/3%
b 30%
c 25%
d 33 and 1/3%
e None of these answers is correct
The answer is option D 33 and 1/3%.
The answer is 33 and 1/3%.
To find the markup rate on cost we need to calculate the percentage markup.
We use the formula:
Percentage markup = [(Selling price - Cost price) / Cost price] × 100
Given that the car dealership bought a used truck for $15,000 and is selling it for $20,000.
So, Cost price = $15,000
Selling price = $20,000
Percentage markup = [(20,000 - 15,000) / 15,000] x 100
= (5000 / 15,000) x 100
= 33 and 1/3%.
Therefore, the answer is option D 33 and 1/3%.
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