The following statement is true of attorney-client privilege: d. An attorney who learns about a crime that a client is about to commit can choose not to reveal that information.
Attorney-client privilege refers to a legal privilege that protects confidential communications between clients and their attorneys. The privilege is intended to encourage clients to be candid with their attorneys about their legal issues without fear that what they say will be revealed to others.An attorney is prohibited from revealing any confidential information that they receive from their client unless the client authorizes them to do so. In addition, an attorney who learns about a crime that a client is about to commit may choose not to reveal that information.
This is because the attorney-client privilege is so strong that it even applies when the attorney believes that the client is going to commit a crime. Even if the client has already committed a crime, the attorney is still not permitted to divulge any information that they received from the client. .
An attorney-client privilege is a legal right that protects confidential communications between clients and their attorneys. The privilege is intended to encourage clients to be candid with their attorneys about their legal issues without fear that what they say will be revealed to others.
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a) Explain the notions of a circular economy and the 6 Rs of sustainability and how these could help companies broaden their performance measures for continuous improvement based on the balanced score card ideas.
b) How does the notion of the green economy feature in a) above.
c) for Zambia, why is the green economy even more important
QUESTION TWO
Explain the 5 Ps of strategy with examples and how companies can use them for competitive advantage
QUESTION THREE
a) How are the key principles of Purpose statements (i.e., Focus, Motivational and Clarity) reflected in the mission and vision
b) Suggest a strategy statement for a company and how does the change in mission justify the acquisitions reflecting in the article below?
a) The circular economy is an economic model that aims to minimize waste, promote sustainability, and maximize resource efficiency by emphasizing the principles of reduce, reuse, recycle, rethink, repair, and recover.b) The notion of the green economy aligns with the principles of the circular economy and emphasizes the importance of environmentally friendly practices and sustainable development. c) For Zambia, the green economy is particularly important due to its rich natural resources and the potential impacts of climate change.
a) The circular economy promotes sustainable practices by emphasizing the 6 Rs: reduce, reuse, recycle, rethink, repair, and recover. These principles encourage companies to minimize waste, extend the life cycle of products, and recover resources to create a closed-loop system. By incorporating these principles into the balanced scorecard, companies can broaden their performance measures beyond traditional financial metrics. For example, they can track indicators such as waste reduction, recycling rates, resource consumption, and social impact. This holistic approach allows companies to measure their progress in sustainability and identify areas for continuous improvement.
b) The notion of the green economy encompasses the principles of the circular economy, focusing on environmentally friendly practices and sustainable development. By embracing the green economy, companies can align their operations with principles such as resource efficiency, renewable energy, and eco-friendly technologies. The circular economy and the 6 Rs of sustainability play a significant role in achieving the goals of the green economy. These principles promote the reduction of waste, the efficient use of resources, and the development of sustainable business models that contribute to environmental protection and social well-being.
c) For Zambia, the green economy is of particular importance due to its natural resources and vulnerability to climate change. The country's economy relies heavily on sectors such as agriculture, mining, and tourism, which are highly sensitive to environmental factors. By adopting green practices and transitioning to a more sustainable economy, Zambia can mitigate environmental risks, conserve natural resources, and promote social and economic development. The green economy can create opportunities for green jobs, attract investments in renewable energy and sustainable industries, and enhance the country's resilience to climate-related challenges. Given Zambia's unique circumstances and natural assets, embracing the principles of the green economy is crucial for long-term sustainability and inclusive growth.
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1. (True/False) Initial Pricing reports of new securitizations that appear in the Commercial Mortgage Alert identify both the B-piece buyer and the IO buyer, even though these bonds are privately placed.
2. (True/False) In an A/B note structure, the B-note is not part of the CMBS collateral pool. Therefore, the borrower makes separate debt service payments directly to both the A-note and the B-note holders.
3. (True/False) In a Credit Default Swap (CDS), one party purchases from a counter-party "insurance" against the default of a debt instrument. It was not unusual to find these non-cash, synthetic derivative products in 2006 and 2007 CRE CDO securitizations.
False. The statement that Initial Pricing reports of new securitizations in the Commercial Mortgage Alert identify both the B-piece buyer and the IO buyer, even though these bonds are privately placed, is false.
Initial Pricing reports of new securitizations in the Commercial Mortgage Alert do not typically identify the B-piece buyer and the IO (interest-only) buyer. These reports provide information about the pricing and details of the securitized bonds, but specific buyer information is usually not disclosed due to confidentiality concerns in privately placed bonds. The focus is on market pricing and trends rather than individual buyer identification.
The statement that Initial Pricing reports of new securitizations in the Commercial Mortgage Alert identify both the B-piece buyer and the IO buyer, even though these bonds are privately placed, is false. These reports typically do not disclose specific buyer information due to confidentiality concerns in privately placed bonds. The reports focus on providing pricing and details of the securitized bonds without revealing individual buyer identities.
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which epeat criteria ask manufacturers to make their products last longer?
The EPEAT criteria that ask manufacturers to make their products last longer is the EPEAT criterion number 24 - The product is designed for durability, long-life and upgradeability.
EPEAT stands for Electronic Product Environmental Assessment Tool, which is a rating system created by the non-profit organization Green Electronics Council. It helps consumers, businesses, and governments evaluate and compare the environmental impact of electronics products. EPEAT is based on a set of criteria that were developed by a group of stakeholders including electronics manufacturers, environmental advocacy groups, and government agencies. The criteria are divided into eight categories:
1. Reduction or elimination of environmentally sensitive materials
2. Materials selection
3. Design for end of life
4. End of life management
5. Energy conservation
6. Product longevity and life-cycle extension
7. Sustainable packaging
8. Corporate performance
The EPEAT registry contains products from a variety of electronics categories, including desktop computers, laptops, displays, printers, copiers, and mobile devices like tablets and smartphones.
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Wheat, sugar, flour and gasoline are examples of:
Multiple Choice
a. fixtures
b. bills of lading
c. fungible goods
d. negotlable instruments
Wheat, sugar, flour, and gasoline are examples of fungible goods (c).
Fungible goods refer to items that are interchangeable and indistinguishable from one another in terms of their quality, quantity, and characteristics. They can be replaced or substituted by identical items without affecting their value or functionality. Wheat, sugar, flour, and gasoline all fall under this category as they are commodities that are uniform in nature and can be traded or used interchangeably without any significant difference in their attributes.
These goods are commonly traded in bulk or standardized units in the market, and their prices are determined based on factors such as supply and demand dynamics. Fungible goods play a crucial role in various industries and are often subject to price fluctuations based on market conditions. They are essential for sectors such as agriculture, food production, and energy, where large quantities of homogeneous products are required for consumption or further processing. Hence, wheat, sugar, flour, and gasoline are classified as (C) fungible goods due to their interchangeable and uniform nature.
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The Engel Curve for a good is derived by which of the following? Tracing the optimal allocation as the good's price changes Tracing the optimal allocation as income changes Tracing the optimal allocation as either income or price changes Any of the above None of the above
The Engel Curve for a good is derived by tracing the optimal allocation as income changes.
The Engel Curve shows the relationship between the quantity of a good consumed and the level of income. It illustrates how the demand for a particular good varies with changes in income while holding other factors constant, such as prices.
By tracing the optimal allocation of the good as income changes, economists can observe how individuals adjust their consumption patterns in response to changes in their income levels. As income increases, individuals may choose to allocate more of their budget towards certain goods, resulting in an upward shift in the Engel Curve. Conversely, as income decreases, individuals may allocate less of their budget towards certain goods, leading to a downward shift in the Engel Curve.
The Engel Curve provides insights into the income elasticity of demand for a good and helps economists understand how changes in income affect consumer behavior and consumption patterns. By examining the relationship between income and the quantity consumed, economists can gain valuable insights into consumer preferences and the income sensitivity of different goods
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You sell short 400 shares of stock at $189.01 per share. If the initial margin requirement is 42%, how much equity must you put in the account?
The amount of equity that has to be put into the account is $43,842.32.The initial margin is a percentage of the total value of the trade that has to be deposited in cash or securities with the brokerage firm. Given that the initial margin requirement is 42%.
The stock has been sold short by the individual, 400 shares of which is at $189.01 per share. The individual will be required to make a margin deposit for opening up the position.
Equity = Value of short sale - Margin requirement
Value of short sale = Quantity sold × Price per share
= 400 × 189.01
= $75,604
Margin requirement = 42% of value of short sale
= 42% × $75,604
= $31,761.68
Putting the above values in the formula for Equity, we have:
Equity = $75,604 - $31,761.68
= $43,842.32
Therefore, the amount of equity that has to be put into the account is $43,842.32.
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Calculate the following probabilities using the standard normal distribution. (a) Pr(Z<1.1 or Z>1.1) (b) Pr(Z>z)=0.25; find z.
(a) The probability is 0.3829 for the event Pr(Z<1.1 or Z>1.1).
(b) The value z is 0.6745 for the event Pr(Z>z)=0.25.
(a) If we use the standard normal distribution table, we can see that the probability of a value being less than 1.1 is 0.8643, and the probability of a value being greater than 1.1 is 0.1357. So, the probability of a value being less than 1.1 or greater than 1.1 is the sum of these probabilities:
0.8643 + 0.1357 = 1.
Since this probability of 1 is for the entire distribution, the probability for the event Pr(Z<1.1 or Z>1.1) is equal to:
Pr(Z<1.1 or Z>1.1) = 1 - Pr(Z<1.1 and Z>1.1)
Now, the value Z<1.1 and Z>1.1 is impossible because Z can't be less than 1.1 and greater than 1.1 at the same time. Thus, we can say that Pr(Z<1.1 or Z>1.1) = 1 - 0 = 1.
(b) The standard normal distribution table provides us with the probabilities for values less than a particular Z value, so we have to convert Pr(Z>z)=0.25 into the form of Pr(Zz) = Pr(Z<-z)
So, Pr(Z<-z) = 0.25 and we can find the Z value by looking up the probability of 0.25 in the standard normal distribution table.
The closest probability to 0.25 is 0.2514, and the Z value associated with this probability is -0.6745. However, since we want Pr(Z>z) and not Pr(Z<-z), we take the opposite of the Z value:
z = -(-0.6745) = 0.6745.
Therefore, the value z is 0.6745 for the event Pr(Z>z)=0.25.
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You and your business partners have contributed $30 million to start a new company. When your company’s stock starts trading on the stock market, you notice that the stock price has adjusted so that the total value of the equity is now $40 million. In the context of this course, how would you interpret the change in the value of the equity? Assume that no other funds have been raised by the company. (5 points)
In the context of this course, the change in the value of the equity can be interpreted as the creation of value, which is the result of the market's perception of the company's prospects. The increase in the total value of equity from $30 million to $40 million shows that the company has generated wealth for its owners.
The market price of a company's stock is a reflection of the value that investors assign to the company. When the stock price rises, it indicates that investors believe that the company is likely to be more profitable in the future, which means that it is more valuable.
The increase in value also reflects an increase in market capitalization. Market capitalization is the total value of a company's equity, which is calculated by multiplying the number of outstanding shares by the market price of each share. In this case, the market capitalization of the company has increased from $30 million to $40 million. This increase in market capitalization can also be interpreted as a measure of success.
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The following information relates to the business of Maria for the year ended 31 December 2020 : Capital account, 1 January 202013,640 Freehold properties at cost 7,500 Furniture and fittings at cost 2,000 Motor cars at cost 6,300 Accumulated depreciation to 1 January 2020 Freehold properties 450 Furniture and fittings 800 Motor cars 2,370 Inventory 1 January 20206,740 Purchases 54,520 Sales 79,060 Salaries 8,760 Rent 1,170 Office expenses 3,950 Motor expenses 3,790 Drawings 4,800 Loss allowance for receivables 1 January 2020600 Loan 4,000 Trade receivables 9,240 Trade payables 10,040 Bank balance 2,190 110.960110.960 You are also supplied with the following information: (1) Inventory at 31 December 2020 was $7,330. (2) Rent paid in advance at 31 December 2020 amounted to $250. (3) Loss allowance for trade receivables is to be made equal to 5% of accounts receivable at 31 December 2020. (4) Depreciation is to be charged for the year at the following annual rates calculated on cost at the year end: Freehold properties 1\% Furniture and fittings 10% Motor cars 20\% (5) Interest on the loan at 5% per annum is to be provided. Required: Prepare a statement of profit or loss for the year ended 31 December 2020 and a statement of financial position at that date.
Statement of Profit or Loss: Sales Revenue$ 79,060 Less: Cost of Goods Sold(49,100)Gross Profit 29,960Less: Operating Expenses Salaries$ 8,760Rent (1,170 + 250) 1,420Office expenses 3,950Motor expenses 3,790Depreciation - Freehold Property (7,500 x 1%) 75- Furniture and fittings (2,000 x 10%) 200.
Motor cars (6,300 x 20%) 1,260Loss allowance for receivables(9,240 x 5%) 462Total Operating Expenses 19,907Net Profit before Interest and Tax 10,053Less: Interest on Loan (4,000 x 5%) (200)Net Profit before Tax 9,853Less: Income Tax (20%) (1,971)Net Profit for the Year $ 7,882Statement of Financial Position:
Assets $ Non-Current Assets Freehold Properties at Cost 7,500Less: Accumulated Depreciation(525)7,500 - 525 6,975Furniture and Fittings at Cost 2,000Less: Accumulated Depreciation(1,000)2,000 - 1,000 1,000Motor Cars at Cost 6,300Less:
Accumulated Depreciation(3,630)6,300 - 3,630 2,670Total Non-Current Assets 10,645Current Assets Inventory at 1 January 2020 6,740Add: Purchases 54,520 61,260Less: Inventory at 31 December 2020(7,330)53,930Trade Receivables 9,240Less:
Allowance for Doubtful Accounts(462)8,778Cash and Cash Equivalents Bank Balance 2,190Total Current Assets 64,898Total Assets 75,543Equity and Liabilities $ Equity Capital Account 13,640Retained Earnings 7,882 21,522Non-Current Liabilities Loan 4,000Less.
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What are the benefits of aligning with a professional mentor? After conducting research about mentors, what are the most important criteria that you will use in selecting a mentor?
Aligning with a professional mentor offers several benefits, including guidance, knowledge transfer, and networking opportunities.
Aligning with a professional mentor can be a transformative experience for personal and professional growth. Mentors provide valuable guidance and support, drawing from their own experiences and expertise to help mentees navigate challenges, set goals, and make informed decisions. By sharing their knowledge, mentors can accelerate the learning process for mentees, helping them develop new skills, gain industry insights, and broaden their perspectives.
Furthermore, mentors can facilitate knowledge transfer by offering constructive feedback, sharing best practices, and providing resources and tools that mentees can leverage to enhance their performance. This personalized guidance helps mentees build confidence and make meaningful progress in their chosen field. Additionally, mentors can serve as role models, inspiring mentees to strive for excellence and pursue their aspirations with greater determination.
Another significant benefit of aligning with a mentor is the opportunity to expand one's professional network. Mentors often have extensive connections within their industry or field of expertise, and they can introduce mentees to key contacts, influential individuals, and potential collaborators or employers. Through these networking opportunities, mentees can gain access to a wider range of career prospects, enhance their visibility, and develop valuable relationships that can open doors for future opportunities.
In selecting a mentor, several criteria should be considered. Firstly, it is essential to find someone who has relevant experience and expertise in the area you wish to grow in. This ensures that the mentor can provide valuable insights and guidance specific to your goals. Additionally, a good mentor should be accessible and willing to invest time and effort in the mentoring relationship. Effective communication and a genuine interest in your success are crucial qualities to look for. Finally, it can be beneficial to seek a mentor whose values align with yours, as shared values can foster a stronger mentor-mentee connection and facilitate a more productive and fulfilling mentoring experience.
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Carter Enterprises can issue floating-rate debt at LIBOR + 1% or fixed-rate debt at 9%. Brence Manufacturing can issue floating-rate debt at LIBOR + 2.7% or fixed-rate debt at 11%. Suppose Carter issues floating-rate debt and Brence issues fixed-rate debt. They are considering a swap in which Carter makes a fixed-rate payment of 7.35% to Brence and Brence makes a payment of LIBOR to Carter. What are the net payments of Carter and Brence if they engage in the swap?
If Carter Enterprises engages in the swap and makes a fixed-rate payment of 7.35% to Brence Manufacturing while receiving a payment of LIBOR, the net payment for Carter would be 7.35% minus LIBOR, and the net payment for Brence would be LIBOR minus 2.7%.
In the swap agreement, Carter Enterprises agrees to make a fixed-rate payment of 7.35% to Brence Manufacturing, while Brence agrees to make a payment of LIBOR to Carter. Let's analyze the net payments for each party.
For Carter Enterprises:
Carter's initial fixed-rate debt was at 9%, but with the swap, they are effectively paying 7.35%. Since they receive LIBOR from Brence, their net payment would be 7.35% - LIBOR.
For Brence Manufacturing:
Brence's initial fixed-rate debt was at 11%, but with the swap, they receive a payment of LIBOR from Carter. Therefore, their net payment would be LIBOR - 2.7%.
The specific value of LIBOR will depend on the current market rates at the time of the swap.
In summary, if Carter Enterprises and Brence Manufacturing engage in the swap as described, Carter would have a net payment of 7.35% minus LIBOR, and Brence would have a net payment of LIBOR minus 2.7%. The exact values of these net payments would depend on the specific LIBOR rate at the time of the swap.
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"On January 1, 2021, Allied Industries leased a high-performance
conveyer to Karrier Company for a four-year period ending December
31, 2024, at which time possession of the leased asset will revert
ba"
The appropriate journal entries are presented below for the transactions made by Karrier Company.
What constitutes the journal entries?The journal entries are prepared as follows:
Required 1:
Karrier's Entry on January 1, 2021:
Date: January 1, 2021
No journal entry required.
Allied's Entry on January 1, 2021:
Date: January 1, 2021
Debit: Lease receivable $988,908
Credit: Cost of goods sold $862,020
Credit: Sales revenue $862,020
Credit: Equipment $676,282
Explanation:
Allied records the lease receivable at the present value of lease payments, which is $988,908, calculated using the 5% interest rate. The cost of goods sold and sales revenue represent the profit or gain on the sale of the equipment to Karrier. The equipment account represents the cost of the equipment transferred to Karrier.
Required 2:
Karrier's Entry on December 31, 2021:
Date: December 31, 2021
No journal entry required.
Allied's Entry on December 31, 2021:
Date: December 31, 2021
Debit: Lease payable $185,525
Credit: Right-of-use asset $185,525
Explanation:
Allied records the reduction in the lease payable balance and recognizes amortization expense equal to the lease payment made by Karrier on December 31, 2021. The amortization expense is calculated as $200,000 - $14,475 (interest portion), resulting in $185,525. The right-of-use asset is reduced by the same amount.
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The complete question goes thus:
On January 1, 2021, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $956,000 and has an expected useful life of five years. Allied expects the residual value at December 31, 2024, will be $300,000. Negotiations led to the lessee guaranteeing a $340,000 residual value. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) points Equal payments under the finance/sales-type lease are $200,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Karrier is aware that Allied used a 5% interest rate when calculating lease payments. Required: 1. Prepare the appropriate entries for both Karrier and Allied on January 1, 2021, to record the lease. 2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate entries for both Karrier and Allied on January 1, 2021, to record the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.) Debit Credit No 1 Date General Journal January 01, 2021 Right-of-use asset 742,098 Lease payable 742,098 2 988,908 676,282 X January 01, 2021 Lease receivable Cost of goods sold Sales revenue Equipment 862,020 X 862,020 < Required 1 Required 2 > Required: 1. Prepare the appropriate entries for both Karrier and Allied on January 1, 2021, to record the lease. 2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease. Answer is complete but not entirely correct. points Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.) No Date General Journal Debit Credit 1 December 31, 202 Lease payable 162,895 Interest expense 37,105 Cash 200,000 2 185,525 December 31, 204 Amortization expense Right-of-use asset 185,525 December 31, 202 Cash 200.000 Interest revenue Lease receivable 37,105 X 162,895 X < Required 1 Required 2 >
real gdp accounts for changes in product quality; nominal gdp does not.
The given statement "Real GDP accounts for changes in product quality; nominal GDP does not" is False because real GDP accounts for changes in product quality by using constant prices, while nominal GDP does not and reflects both changes in quantities and prices.
Nominal GDP and real GDP are two different measures used to analyze the economic output of a country, and they take into account different factors. Nominal GDP represents the value of goods and services produced in an economy using current market prices. It does not account for changes in product quality over time. Nominal GDP reflects both changes in quantities produced and changes in prices, which can be influenced by factors such as inflation.
On the other hand, real GDP adjusts for changes in product quality by using constant prices, usually from a base year, to eliminate the effect of price changes. Real GDP measures the actual physical output of goods and services produced in an economy while holding prices constant, allowing for a more accurate comparison of economic performance over time.
By excluding changes in product quality, nominal GDP may overstate or understate the true growth of the economy. For example, if a new and improved product is introduced at a higher price, nominal GDP would increase due to the price increase, even if there is no change in physical output. Real GDP, on the other hand, would not be affected by the price increase since it measures output at constant prices.
In summary, real GDP accounts for changes in product quality by using constant prices, while nominal GDP does not and reflects both changes in quantities and prices.
The question was incomplete, Find the full content below:
Real GDP accounts for changes in product quality; nominal GDP does not. true or false
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Suppose the real risk-free rate of interest is r = 4% and it is expected to remain constant over time. Inflation is expected to be 1.60% per year for - a liquidity premium is 0.35%, and the default risk premium for a corporate bond is 1.50%.
the next two years and 3.90% per year for the next three years. The maturity risk premium is 0.1 x (t 1)%, where t is number of years to maturity,
The average inflation during the first 4 years is 2.75%
What is the yield on a 4-year Treasury bond?
O 4.30%
O 6.75%
O 8.90%
O 7.05%
What is the yield on a 4-year BBB-rated bond?
O 7.05%
O 7.40%
O 8.90%
O 8.55%
If the yield on a 5-year Treasury bond is 7.38% and the yield on a 6-year Treasury bond is 7.88%, the expected inflation in 6 years is (Hint: Do not round intermediate calculations.)
Yield on a 4-year Treasury bond and Yield on a 4-year BBB-rated bond: The yield on 4-year Treasury bond, The yield on a 4-year Treasury bond can be calculated using the following formula:
r = r* + IP + MRPwhere,r* = Real risk-free rate = 4%IP = Inflation premium, IP = Average inflation during the first four years - expected inflation during the four years after the bond is issued, IP = 2.75% - 1.6%, IP = 1.15%MRP = Maturity risk premium, MRP = 0.1 x (t - 1)% = 0.1 x (4 - 1)% = 0.3%r = 4 + 1.15 + 0.3 = 5.45%Therefore, the yield on a 4-year Treasury bond is 5.45%.The yield on a 4-year BBB-rated bond . The yield on a 4-year BBB-rated bond can be calculated using the following formula:r = r* + LP + DRP + MRPwhere,r* = Real risk-free rate = 4%LP = Liquidity premium = 0.35%DRP = Default risk premium = 1.5%MRP = Maturity risk premium, MRP = 0.1 x (t - 1)% = 0.1 x (4 - 1)% = 0.3%r = 4 + 0.35 + 1.5 + 0.3 = 6.15%Therefore, the yield on a 4-year BBB-rated bond is 6.15%. Expected inflation in 6 years: The expected inflation in 6 years can be calculated using the following formula:7.88% = r* + IP + MRPwhere,r* = Real risk-free rate = 4%IP = Inflation premium, IP = Expected inflation during the 6th year = x%, MRP = Maturity risk premium, MRP = 0.1 x (t - 1)% = 0.1 x (6 - 1)% = 0.5%7.88% = 4% + IP + 0.5%IP = 7.88% - 4% - 0.5% = 3.38%Therefore, the expected inflation in 6 years is 3.38%.Hence, the answer is 3.38%.
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The battle for market share between America's three main equity markets- the New York Stock Exchange (NYSE), the Nasdaq electronic stockmarket and the smaller
American Stock Exchange (AMEX)-is getting hotter .... On March 2oth, Nasdaq unveiled a new trading system that may go some way to appeasing its critics by improving its efficiency in handling orders for investors. That will not deter the two floorbased exchanges, which have been trying to tempt firms quoted on Nasdaq to leave it and seek a listing with them. The AMEX is even running advertisements trumpeting the number of firms that have switched to it from Nasdaq (although plenty have also gone the other way). The implicit assumption is that when a firm migrates to one of the two New York exchanges, this reflects well on them and badly on Nasdaq. Not so. According to a new study, such a move may reveal more about the firm than about the markets. Bala Dharan and David Ikenberry, two economists at Rice University, Texas, analysed the performance of shares which left Nasdaq for either the NYSE or the AMEX between 1973 and 1990. They compared post-listing total returns (capital gains plus dividends) on these shares with total returns on similar sh a res already traded on the exchanges. Surprisingly, they found that in the three years following the switch from one Answers 133 exchange to another, the shares underperformed significantly. Total returns on shares that switched to NYSE underperformed by an average of 6% over three years compared with the benchmark; those joining AMEX by 15%. This seems puzzling. One possibility suggested by Messrs Dharan and Ikenberry is that the tough pre-listing requirements (eg, a healthy earnings record plus good prospects) of both the NYSE and AMEX mean that if a firm is considering relisting, yet foresees a future decline in profits, it has a strong incentive to move before that deterioration becomes obvious to investors. That may explain why underperformance was greatest for shares of small firms with few institutional shareholders: at listing, such firms are likely to be unfamiliar to investors, who may therefore find it hard to spot problems ahead and rely too much on their impressive track records. Whether managers are so deviousor investors are so gullible- is debatable. But whatever the explanation, if a firm quits Nasdaq for one of the other exchanges, it may be time to sell. (From The Economist)
a. The last half of this article contains two different arguments: two distinct conelusions drawn from some of the same data. Write each one out in a single
sentence paraphrase, modeled on those in the ccflags in partial paraphrases" section. [Hints: They each use as support that shares switched to the New York
exchanges do much worse than shares already on those exchanges for some years after the switch. One conclusion is normative.]
b. Write a structured paraphrase of each. [Hint: one involves a double-subordination.]
c. Schematize the two arguments [use the paraphrases in (b) as a guide].
d. You should now be able to see a stronger normative argument that isn't actually
made in the article, but may be created by taking some support from the other
argument and narrowing the normative conclusion. Schematize it.
The first conclusion drawn from the data is that shares that switch from Nasdaq to the NYSE underperform by an average of 6% over three years compared to the benchmark, indicating that firms migrating to the NYSE may not fare well.
The second conclusion is that shares that switch from Nasdaq to the AMEX underperform by an average of 15% over three years, suggesting that firms moving to the AMEX also face significant underperformance.
b. 1. Shares that switch from Nasdaq to the NYSE perform poorly, with an average underperformance of 6% over three years compared to the benchmark, indicating potential difficulties for firms choosing to relist on the NYSE.
2. Shares that switch from Nasdaq to the AMEX experience even greater underperformance, with an average of 15% underperformance over three years, implying that firms migrating to the AMEX may face significant challenges.
c. 1. Shares switching from Nasdaq to the NYSE ➞ Underperformance (6% average) over three years compared to benchmark.
2. Shares switching from Nasdaq to the AMEX ➞ Underperformance (15% average) over three years.
d. The stronger normative argument, not explicitly made in the article, can be created by taking support from the second conclusion and narrowing the normative conclusion.
Shares switching from Nasdaq to the AMEX underperform significantly (15% average) over three years, indicating that firms relocating to the AMEX may face substantial difficulties and suggesting that investors should be cautious when a firm quits Nasdaq for the AMEX.
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If planned expenditure is greater than output, inventories will be output will eventually and unemployment will A) lower, decrease, increase B) higher, increase, decrease C) lower, increase, decrease D) higher, decrease, increase Q2) If C=2000+.9(Y−T), what decrease in taxes must occur for equilibrium output to increase by 1000 ? A) 111 B) 100 C) 1000 D) 500 Q3) The money demand curve will shift to the left when which of the following occurs? A) an increase in the interest rate B) an open market sale of bonds by the central bank C) an increase in income D) none of the above Q4) The demand for money function is: −( P M ) d =(000−[0. The money supply is 1000 and the price level is 2. [HINT: do not divide 2 by 100] What is the equilibrium interest rate and what will the equilibrium interest rate be if M increases to 1200 , assuming P is fixed. A) 0%,2% B) 10%,12% C) 5%,4% D) 4.5%,2.75%
If planned expenditure is greater than output, inventories will be output will eventually and unemployment will B) higher, increase, decrease.
What does it entail?When planned expenditure exceeds output, it means that businesses are producing less than what is being demanded.
As a result, inventories will decrease because businesses will need to sell their existing inventories to meet the higher demand.
However, this increase in demand will eventually lead to an increase in production and therefore a decrease in unemployment.
2) To determine the decrease in taxes needed for equilibrium output to increase by 1000, we can use the equation [tex]C=2000+.9(Y−T).[/tex]
Since we want to increase equilibrium output by 1000, we can substitute Y with Y+1000. By rearranging the equation, we get-
T=2000+(0.9*1000)
=2000+900
=2900.
Therefore, the decrease in taxes that must occur is T=900.
The answer is A) 111.
3) The money demand curve will shift to the left when A) an increase in the interest rate occurs.
When the interest rate increases, the cost of borrowing money becomes higher, leading to a decrease in the demand for money.
4) The demand for money function is −(P*M) d = 1000−[0. The money supply is 1000 and the price level is 2.
To find the equilibrium interest rate, we can equate the demand for money to the money supply.
Therefore, 1000-2M=1000,
which simplifies to M=0.
Dividing this by 100, we get M=0%. If the money supply increases to 1200, the new equation becomes
1000-2*1200
=1000-2400
=-1400.
Dividing this by 100, we get M=-14%.
Therefore, the equilibrium interest rate will be 0% if M remains at 1000 and 2% if M increases to 1200. The answer is A) 0%,2%.
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15. each manufacturing process will have a WIP inventory accoun? A. True B. False
Which of the following is a measure of the amount of work done, expressed in complete urits of output? Equavalent unsts lob costing Process costing Question 14 (1 point) To ind the "cost per equivalent unt, "the "total costs to account for" ate divided by the "total equavalent unats." True False
The correct option for the given statement is A. True. What is WIP inventory WIP inventory (Work-in-Progress) is an account that represents products that are in the production process but are not yet completed.
The WIP inventory is classified as an asset on a company's balance sheet. Each manufacturing process will have a WIP inventory account is a true statement. This is because each manufacturer, whether they are manufacturing a small or large item, has a work-in-progress inventory account because products are typically not completed in one cycle of the manufacturing process.In general,
The WIP inventory account is essential in tracking the progress of products through the manufacturing process. The WIP inventory account is debited when production begins and is credited when production is complete.In conclusion, every manufacturing process will have a WIP inventory account. WIP inventory accounts are utilized to track the progress of products through the manufacturing process.
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Suppose that a sliver of oceanic crust were discovered in the
interior of a continent.
Would this refute the theory of plate tectonics? Explain.
The discovery of a sliver of oceanic crust in the interior of a continent would not refute the theory of plate tectonics. Instead, it would provide evidence in support of the theory.
Here's why: According to the theory of plate tectonics, the Earth's lithosphere is made up of several plates that move and interact with each other. These plates can either move towards each other, away from each other, or slide past each other. As a result of these interactions, different types of geological formations are created, including mountain ranges, mid-ocean ridges, and oceanic trenches. In the case of the discovery of a sliver of oceanic crust in the interior of a continent, this could be explained by the process of subduction. Subduction occurs when one plate is forced beneath another plate. This process can cause oceanic crust to be carried deep into the Earth's mantle, where it may eventually be brought back up to the surface as part of a volcanic eruption. It's possible that a sliver of oceanic crust could have been carried down into the mantle during a subduction event and then brought back up to the surface during a volcanic eruption that occurred in the interior of the continent. This would be consistent with the theory of plate tectonics.In conclusion, the discovery of a sliver of oceanic crust in the interior of a continent would not refute the theory of plate tectonics. Instead, it would provide evidence in support of the theory.
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Generally, liberals believe that: Public housing units should be transferred to the private sector. The federal government should be involved in housing markets. The government should have less involv
Liberals believe that the federal government should be involved in housing markets and prioritize affordable housing, while advocating for reduced inequality and addressing the needs of vulnerable populations.
In general, liberals believe that the federal government should be involved in housing markets and play an active role in ensuring affordable and accessible housing for all citizens.
They argue for policies and programs that prioritize the needs of vulnerable populations, such as low-income individuals and families, and aim to reduce inequality in housing opportunities.
Liberals recognize the importance of housing as a basic human right and a fundamental aspect of a person's well-being. They believe that the private sector alone cannot adequately address the housing needs of the entire population, especially those with lower incomes who may face barriers in accessing affordable housing.
Therefore, they advocate for government intervention and the provision of public housing options to ensure that everyone has access to safe, decent, and affordable homes.
While some liberals may support initiatives to transfer public housing units to the private sector as a means to increase efficiency or address specific issues, the overarching belief is that the government should maintain a significant role in housing policy and regulation.
This includes implementing measures to prevent discrimination in housing, enforcing fair housing laws, providing financial assistance to low-income individuals and families, and investing in the construction and maintenance of affordable housing units.
In summary, liberals generally believe that the federal government should be involved in housing markets, prioritize affordable housing, and take an active role in addressing housing inequalities.
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In an analysis of rent discrimination of immigrant households living in rental housing (which are indexed by h ) a researcher regresses log rental prices on log distance from town center using the following regression equation: ln( rent h)=β0+β1ln( distance from town center h)+eh yielding coefficient estimates β^0=11.40 and β^1=−0.347. Provide an interpretation for size of β^1. The previous regression was estimated using data only on immigrant households. When using data on only native households, the slope coefficient estimate is β^1=−0.478. What does the relationship between the immigrant and native coefficients seem to suggest about rental discrimination in the suburbs? (Assume that β^0 is the same for both groups.) From these estimates, can you conclude that immigrants are discriminated against in the rental market?
The coefficient estimate [tex]β^1[/tex] in the equation ln[tex](rent_h) = β^0 + β^1[/tex] [tex]ln(distance from town center_h) + e_h[/tex] signifies the elasticity of rent h with respect to the distance from the town center.
A negative coefficient suggests that rent is decreasing as the distance from the town center increases. A unit increase in the distance from the town center results in[tex]β^1[/tex] percent changes in rent.
[tex]β^1 = -0.347 for immigrant households[/tex], where[tex]as β^1 = -0.478[/tex] for native households. This implies that a native family that lives further away from the town center pays approximately 1.4 times less rent than an immigrant family.
In other words, natives are discriminated against less than immigrants in the rental market. Thus, immigrant households experience rental discrimination.
Therefore, based on these estimates, it can be concluded that immigrants are discriminated against in the rental market.
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question 1 Karume starts his own business as a sole proprietor. This form of business has the advantage of ____.
a)payment of only small dividends to other owners
b)guaranteed income since he is the owner
c)the owner keeping all of the profits from the business
d)steady income
question 1 part 1
Prisha, a majority shareholder in Southwestern Home Furnishings, Inc., would like to convert the company to an S corporation. To do so, she must meet all but which of the following requirements?
a)The corporation must have no more than 100 stockholders.
b)The corporation must have two classes of outstanding stock (common and preferred).
c)All stockholders must agree to the decision to form the S corporation.
d)The corporation must not have nonresident, alien shareholders.
Question 1 part 2 Which of the following is correct regarding government regulation and paperwork requirements associated with the corporate form of business ownership?
a)Legally, a corporation’s activities cannot be limited to those activities identified in its corporate charter.
b)A corporation that sells its stock to the public must make periodic reports to its stockholders.
c)A corporation that sells its stock to the public is required to file numerous reports on its business operations and finances with the federal government, but it is not required to file similar reports at the state or local level.
d)A corporation is not required to register with the government before it sells its stock to the public.
The advantage of a sole proprietorship is that the owner keeps all the profits. To convert a corporation to an S corporation, it is not required to have two classes of outstanding stock. A corporation that sells its stock to the public must make periodic reports to its stockholders.
Question 1:
The advantage of a sole proprietorship is:
c) the owner keeping all of the profits from the business.
Question 1 part 1:
To convert Southwestern Home Furnishings, Inc. to an S corporation, Prisha does not need to meet the following requirement:
b) The corporation must have two classes of outstanding stock (common and preferred).
Question 1 part 2:
Regarding government regulation and paperwork requirements associated with the corporate form of business ownership, the correct statement is:
b) A corporation that sells its stock to the public must make periodic reports to its stockholders.
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"Consider a one-year European call option on a stock, current
price is $29, strike price $35, and the volatility is 80% per
annum. The risk-free rate is 2.5% per annum, continuously
compounded. Suppose"
To delta-hedge a short position of 10,000 European call options, the investor should short 5,778 shares of the underlying stock.
Delta-hedging involves maintaining a neutral position with respect to changes in the underlying stock price by adjusting the number of shares held. The delta of an option represents the sensitivity of the option price to changes in the underlying stock price.
To calculate the delta of a European call option, we can use the Black-Scholes formula. The delta of a call option is given by the formula:
[tex]\Delta = e^{-qt} \times N (d_{1})[/tex]
Where [tex]e^{-qt}[/tex] is the risk-free discount factor, N(d1) is the cumulative distribution function of the standard normal distribution evaluated at d₁.
Using the given parameters, we can calculate the delta of the call option. The delta represents the number of shares needed to hedge one call option. In this case, the investor has a short position of 10,000 call options, so to delta-hedge the position, the investor needs to take the opposite position in the underlying stock.
Calculating the delta and multiplying it by the number of call options, we find that the investor should short 5,778 shares of the underlying stock. Therefore, option (a) "Short 5,778 shares of the underlying stock" is the correct choice for delta-hedging the position.
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The complete question is:
Consider a one-year European call option on a stock, current price is $29, strike price $35, and the volatility is 80% per annum. The risk-free rate is 2.5% per annum, continuously compounded. Suppose an investor has a short position of 10,000 call options. What should she do to delta-hedge her position?
a. Short 5,778 shares of the underlying stock
b. Long 4,222 shares of the underlying stock
c. Long 5,778 shares of the underlying stock
d. Short 4,222 shares of the underlying stock
(Please write this version number in your answer sheet) [8 Marks] Kelly Manufacturing is a medium-sized company that manufactures and markets a range of products. The divisions of Kelly Manufacturing include white goods, kitchenware, and outdoor furniture. The manager of each division can determine the activities from purchasing materials to operation and pricing their products. Kelly Manufacturing also includes research and development, after-sales, and logistic department. Required: a. What type of responsibility center is the division of kitchenware likely to be? Provide brief reasons. [2 marks] b. The senior management team includes the managing director, the financial controller, the manufacturing director, and the marketing director. The senior management team determines promotion activities and how to allocate promotion costs to each division. Are costs of promotion activities controllable by division managers? Provide brief reasons. [2 marks] c. The senior management team oversees the budgeting process. The team gives the target sales revenue and target profit to each division manager for the following budget year. Briefly discuss two limitations of top-down budgeting. [2 marks] d. The senior management team realizes the issue with top-down budgeting and decides to change to bottom-up budgeting. Discuss a potential problem arising from bottom-up budgeting. [2 marks]
Version number: 1a. The division of kitchenware is a cost center because it focuses on controlling and minimizing costs. This is because in a cost center, managers are responsible for managing and controlling costs while maintaining the quality of their products or services.
The kitchenware division is likely to be a cost center because it is responsible for purchasing materials, operation, and pricing. Therefore, the kitchenware division can reduce costs by controlling the price of raw materials, reducing labor costs, and minimizing overhead costs.
b. No, the costs of promotion activities are not controllable by division managers. The reason is that promotion activities require input from senior management, such as the marketing director. The marketing director is responsible for developing marketing strategies that are aligned with the company's goals and objectives. Division managers do not have control over the cost of promotion activities because the senior management team determines how to allocate promotion costs to each division.
c. One limitation of top-down budgeting is that it may not be realistic or achievable. This is because the budget is created without consulting division managers or staff members who are in charge of the day-to-day operations. As a result, targets may be set too high, which can demotivate staff members and lead to lower performance. Another limitation of top-down budgeting is that it does not promote accountability. This is because the budget is imposed on division managers, and they may not take ownership of it.
d. A potential problem arising from bottom-up budgeting is that it may take longer to develop. This is because the budget is created from the bottom-up, which means that each division manager has to create their budget and then submit it to senior management for approval. As a result, the budgeting process may be time-consuming.
Another problem is that the budget may not be aligned with the company's overall goals and objectives. This is because each division manager may have their goals and objectives, which may not be aligned with the company's goals and objectives.
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Use TjMaxx as the retail store and describe and discuss their
signage relating to both Consumer Behavior and Why We Buy
T.J.Maxx is a popular retail store known for its discounted pricing on brand-name and designer products. When examining their signage, we can analyze its impact on consumer behavior and its connection to the principles discussed in the book "Why We Buy" by Paco Underhill.
From a consumer behavior perspective, T.J.Maxx's signage plays a crucial role in attracting and influencing shoppers. The store strategically uses signage to create a sense of excitement and urgency. Bold and eye-catching signs with phrases like "Designer Brands at Discounted Prices" or "Limited Time Offers" appeal to consumers' desire for value and the thrill of finding a great deal. This kind of messaging taps into the emotional aspect of consumer behavior, triggering excitement and the feeling of being smart shoppers.
Additionally, T.J.Maxx's signage focuses on creating a treasure hunt experience. The store often highlights phrases like "New Arrivals Daily" or "Discover Hidden Gems" to entice consumers to explore the store in search of unique and exclusive products. This aligns with the principles discussed in "Why We Buy," where Underhill emphasizes the importance of discovery and the pleasure of finding something unexpected. By strategically placing signage throughout the store that directs shoppers to various departments or highlights specific product categories, T.J.Maxx encourages consumers to engage in the hunt, spend more time in-store, and potentially make impulse purchases.
Furthermore, T.J.Maxx's signage reinforces the perception of value and savings. They frequently display "Compare at" or "Original Price" signs next to their discounted prices, showcasing the potential savings shoppers can achieve. This pricing strategy aligns with the concept of perceived value discussed in "Why We Buy," where consumers are more likely to make a purchase when they believe they are getting a significant discount.
In summary, T.J.Maxx effectively utilizes signage to influence consumer behavior by creating excitement, emphasizing the treasure hunt experience, and reinforcing the perception of value. Their signage aligns with the principles discussed in "Why We Buy" by triggering emotional responses, stimulating discovery, and leveraging the psychology of discounts.
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When two competitors enter into a strategic alliance, the two companies are referred to as antagonists star-crossed lovers frenemies alter-gos
When two competitors enter into a strategic alliance, the two companies are referred to as "frenemies." So the correct option is C.
A frenemy is a combination of the words "friend" and "enemy," which indicates that the two companies in question have a relationship that includes both rivalry and cooperation. A strategic alliance is a form of partnership between businesses in which they agree to work together for mutual benefit on a specific project or goal.
The partnership is not always a merger or acquisition, but rather a limited agreement between two or more entities to share resources in a way that benefits both parties. In the case of frenemies, the companies involved may collaborate on one project while remaining rivals on another. In conclusion, when two competitors enter into a strategic alliance, the two companies are referred to as "frenemies" which is option C.
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Question 2
Hadi is the President of Bumi Hijau Consulting Services Sdn Bhd,
a company offering consultancy services in engineering geology and
geotechnical engineering. After 12 years of operation his
Through his proactive approach and willingness to embrace change, Hadi demonstrates strong leadership and a forward-thinking mindset.
Hadi is the President of Bumi Hijau Consulting Services Sdn Bhd, a company offering consultancy services in engineering geology and geotechnical engineering. After 12 years of operation, his company has established a strong reputation in the industry and has a loyal client base. However, Hadi realizes that in order to sustain growth and stay competitive, he needs to adapt to changing market trends and leverage technology.To achieve this, Hadi decides to implement a digital transformation strategy within his company. He invests in advanced software and tools that can streamline project management, data analysis, and reporting processes.Through his proactive approach and willingness to embrace change, Hadi demonstrates strong leadership and a forward-thinking mindset. He understands the importance of adapting to the evolving business landscape and leveraging technology to drive innovation and maintain a competitive edge in the consulting services industry.
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15. The US government helps pay for some of the cost of
employment-based insurance by not taxing the monthly premium.
True
False
True. The statement is true. The US government does provide tax benefits for employment-based insurance by not taxing the monthly premium.
One of the ways the US government encourages individuals to obtain health insurance coverage through their employers is by offering tax advantages. Employer-sponsored health insurance premiums are generally excluded from an employee's taxable income. This means that the portion of the premium paid by the employee is not subject to federal income tax, Social Security tax, or Medicare tax. Similarly, employers can deduct the cost of providing health insurance for their employees as a business expense.
This tax exclusion serves as an incentive for employers to offer health insurance as part of their employee benefits package and for individuals to participate in employer-sponsored health insurance plans. It helps reduce the financial burden of healthcare expenses for both employers and employees, making it more affordable for individuals to obtain coverage and access necessary medical services.
By not taxing the monthly premium for employment-based insurance, the US government aims to promote wider access to healthcare coverage and support the stability of the employer-sponsored insurance system.
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which of these is the correct formula for calculating interest on a loan?
The correct formula for calculating interest on a loan is:
I = P × R × T
Where,
I = Interest
P = Principal
R = Rate of Interest
T = Time
Let us break down the formula and understand it better:
What is Interest?
Interest is a fee paid by a borrower to the lender for borrowing money or any asset. Interest can be charged on a loan, debt, deposit or any other financial product. The amount paid or received for the use of money is called interest.
What is Principal?
Principal is the initial amount of money borrowed or deposited, excluding interest. In other words, the principal is the amount on which interest is calculated.
What is Rate of Interest?
The rate at which interest is charged or paid, expressed as a percentage of the principal, is known as the rate of interest.
What is Time?
The period for which the loan or deposit was borrowed or deposited is called time. Time is usually expressed in years, months, days, or hours.
So, the formula to calculate interest on a loan is I = P × R × T.
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You are the accountant for Fun Times Ltd, an Australian trampoline wholesaler. The directors have just finished reviewing the draft financial reports that you have prepared for the year ended 30 June 2023. They understand the rationale for including a ‘provision for annual leave’ in the financial reports, but have questioned why a ‘provision for warranties’ has been included in the financial reports. Given there is only a small chance that each item sold will be returned under warranty, the directors argue that the recognition criteria for provisions is not met. They think that warranties should be classified as a contingent liability. You consider their question and review the requirements contained in the accounting standards before preparing a response.
Required: Prepare a memo to the directors to respond to their question and their suggested treatment of warranties. In your response, advise the directors of the appropriate accounting treatment for warranties. Provide references to specific paragraphs in the accounting standards to support your adv
A provision for warranties is recognized under AASB 137. The memo to the directors regarding the treatment of warranties is given below.
To: The Directors of Fun Times Ltd
Subject: Appropriate accounting treatment for warranties
Dear Sirs,
This memo is in response to your question regarding the provision for warranties and your suggestion of the proper treatment of warranties as a contingent liability. Based on the Australian Accounting Standards, I recommend that warranties should be recognized as provisions in the financial statements since they meet the criteria for recognition. The following are the reasons for this recommendation:
A provision for warranties is recognized under AASB 137. The standard defines a provision as a liability of uncertain timing or amount. This definition is applicable to warranties since there is no certainty when or if a warranty will be exercised.
A provision is recognized if the entity has a present obligation to transfer economic benefits as a result of a past event. In this case, the past event is the sale of the product that includes a warranty. The provision for warranty is, therefore, a present obligation resulting from the past event of selling a product that includes a warranty.
There is a possibility that some items sold will be returned under warranty. Therefore, a provision for warranties should be recognized in accordance with the standards. The probability of each item being returned under warranty is not relevant to the recognition of the provision.
I hope this response clarifies the proper treatment of warranties in the financial statements and that you find this information helpful.
If you have any further questions, please do not hesitate to contact me.
Sincerely,
[Your name]
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Territory and Product Profitability Analysis Coast to Coast 5 urfopards inc. manufactures and selis two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold-in two tegions, East Coast and West Coast. fnformation about the two surfboards is as follows: The coles unit volume foe the terntories and products foe the period is at followiz if required. Coast to Coast Surfboards Inc, Contribution Maroin by Territory a. Prepare a contribution margin by syes territory report. Compute the contribubion margin ratio for each ternary as a whole percent, rounded to two decimal places If required. Coast to Coast Surtboards Ine. Contribution Margin by Territory Fresterer F Cowern My Whx? divide the contributon margin-by wates.
The contribution margin ratio for each territory as a whole percent is East Coast - 30.45% and West Coast - 35.36%.
Territory and Product Profitability Analysis Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows:
Atlantic Wave:
Sales price per unit - $600
Variable cost per unit - $360
Total sales in East Coast - 500 units
Total sales in West Coast - 600 units
Pacific Pounder:
Sales price per unit - $800
Variable cost per unit - $540
Total sales in East Coast - 250 units
Total sales in West Coast - 350 units
Contribution margin is calculated by deducting variable cost per unit from sales price per unit.
Contribution margin per unit for Atlantic Wave = $600 - $360
= $240
Contribution margin per unit for Pacific Pounder = $800 - $540
= $260
Next, let's calculate the total contribution margin for each product in each sales territory and the overall contribution margin for each sales territory.
Contribution margin ratio is calculated by dividing the contribution margin by sales.
Territory Contribution Margin
Contribution Margin Ratio
East Coast $185,000 ($185,000 ÷ ($500 × $600 + $250 × $800)) × 100 = 30.45%
West Coast $235,000 ($235,000 ÷ ($600 × $500 + $350 × $800)) × 100 = 35.36%
Therefore, the contribution margin ratio for each territory as a whole percent is:
East Coast - 30.45%
West Coast - 35.36%
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