The following statements are correct with regard to transaction exposure:
Transaction exposure is defined as the risk of a change in exchange rates adversely affecting the value of a firm's future cash flows denominated in a foreign currency.
Transaction exposure arises when a firm has a receivable or payable denominated in a foreign currency.
Transaction exposure is a short-term to medium-term risk, as it is the risk of a change in exchange rates between the time a transaction is agreed upon and the time it is settled. For example, a U.S. company that sells goods to a customer in the United Kingdom may agree to a price of £100,000. If the value of the pound sterling falls against the U.S. dollar between the time the sale is agreed upon and the time the customer pays, the U.S. company will receive less U.S. dollars for the sale than it expected.
Economic exposure is a longer-term risk, as it is the risk of a change in exchange rates adversely affecting the value of a firm's future cash flows due to changes in the firm's competitive position. For example, a U.S. company that competes with a Japanese company may find that its products become less competitive if the value of the yen falls against the U.S. dollar. This is because the Japanese company's products will become cheaper for U.S. consumers.
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A credit sale of $2300 is made on April 25, terms 1/10, n/30, on which a return of $300 is granted on April 28. What amount is received as payment in full on May 4? O $2000 O $2277 O $1980 O $2300
To calculate the amount received as payment in full on May 4, we need to consider the terms of the credit sale and the return.
The terms of the credit sale are 1/10, n/30, which means that if the payment is made within 10 days, the buyer is eligible for a 1% discount. The "n/30" indicates that the full payment is due within 30 days.
Let's break down the timeline of events:
April 25: Credit sale of $2300 is made.
April 28: A return of $300 is granted, reducing the original sale amount to $2000.
Since the return is granted, we subtract the return amount from the original sale amount:
$2300 - $300 = $2000
Now, let's consider the discount available for early payment. If the payment is made within 10 days (by May 5), the buyer is eligible for a 1% discount. If not, the full amount of $2000 is due within 30 days (by May 25).
Since the payment is made on May 4, which is within the 10-day discount period, the buyer is entitled to a 1% discount on the original sale amount of $2000. The discount is calculated as follows:
$2000 * 1% = $20
Therefore, the amount received as payment in full on May 4 is the discounted amount:
$2000 - $20 = $1980
Hence, the correct answer is $1980.
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Evaluate the international trade effect as a reason for the downward sloping aggregate demand curve. (10) 4.3 Differentiate between demand-pull inflation and cost-push inflation. (5)
1. International trade affects the downward sloping aggregate demand curve through changes in net exports, which impact overall spending and economic output.
International trade plays a significant role in shaping a country's aggregate demand curve. An increase in net exports (exports minus imports) leads to higher spending and economic output, shifting the aggregate demand curve to the right. Conversely, a decrease in net exports shifts the curve to the left. This trade effect on aggregate demand can occur due to various factors, such as changes in exchange rates, trade policies, or global economic conditions.
2. Demand-pull inflation occurs when aggregate demand exceeds aggregate supply, leading to a rise in overall prices. Cost-push inflation, on the other hand, results from increased production costs that push up prices. Demand-pull inflation arises when aggregate demand outpaces aggregate supply, creating excess demand in the economy . This situation can occur due to factors like increased government spending, expansionary monetary policies, or consumer optimism. In contrast, cost-push inflation is caused by rising production costs, such as wages, raw materials, or taxes. These cost increases are then passed on to consumers through higher prices, reducing purchasing power. Both types of inflation can have adverse effects on an economy, but the causes and dynamics differ.
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For the following transactions, determine whether cash flows from operating activities will increase, decrease, or remain the same:
(b) Paid salaries and wages that were earned last period, but not paid last period.
The payment of salaries and wages that were earned last period, but not paid last period, will affect the cash flows from operating activities.
When salaries and wages are paid in the current period for work done in a previous period, it will result in a decrease in cash flows from operating activities. This is because cash is being used to settle a liability that was recorded in the previous period.
To illustrate this, let's consider an example:
Assume that a company has a liability for salaries and wages of $10,000 from the previous period. In the current period, the company pays off this liability in cash. As a result, the cash flows from operating activities will decrease by $10,000.
In summary, paying salaries and wages that were earned last period but not paid last period will decrease the cash flows from operating activities. This is because cash is being used to settle a liability that was recorded in a previous period.
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The payment of salaries and wages that were earned in a previous period but not paid in that period will result in an increase in cash flows from operating activities. This is because the payment of these wages is considered an operating expense and is included in the operating activities section of the cash flow statement.
When salaries and wages are earned in a period but not paid, they are considered accrued expenses. Accrued expenses represent liabilities that are recorded in the accounting system but have not yet been paid. When these accrued expenses are subsequently paid, they are reflected as a decrease in liabilities and an increase in cash flows from operating activities.
For example, let's say a company accrued $1,000 in salaries and wages in the previous period but did not pay them. In the current period, when the company pays these accrued salaries and wages, the cash flows from operating activities will increase by $1,000. Overall, the payment of salaries and wages that were earned in a previous period but not paid in that period will result in an increase in cash flows from operating activities. This is because it represents the payment of an operating expense and is recorded as such in the cash flow statement.
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Do an analysis Microsoft Corporation's Specific
Environment.
Note: Please write a good paragraph on it. Thanks!!
Microsoft Corporation operates in a dynamic and specific environment that significantly influences its operations and strategic decisions.
The company operates in the global technology industry, where is, innovation, and regulatory frameworks. In terms of customers, Microsoft serves a diverse range of individuals, businesses, and governments worldwide, offering a wide array of products and services spanning operating systems, productivity software, gaming, and more. This customer base provides Microsoft with opportunities to leverage its products across various sectors while also the need for tailored solutions to meet specific industry requirements. The competitive landscape within the specific environment of Microsoft is dominated by other technology, including Apple, and Amazon, among others. These competitors offer a range of products and services that directly with Microsoft's offerings, an environment of continuous and technological advancement.
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5. ______________unemployment would occur in winter with ice-cream
bicycle sellers.
(a) Seasonal
(b) Frictional
(c) Structural
(d) Demand-deficient
6. A vertical supply curve may be described as…
(a) Relatively elastic
(b) Perfectly elastic
(c) Relatively inelastic
(d) Perfectly inelastic
7. Marginal fixed cost is always…
(a) Zero
(b) Near zero
(c) Quite high
(d) Variable, depending on the product
8. In a ____________ economic system, what is to be produced, how and for whom is determined by the price mechanism.
(a) Traditional
(b) Centrally controlled
(c) Socialist
(d) Capitalist
9. Who are the owners of the production factors?
(a) Firms
(b) Households
(c) Government
(d) SARB
10. ____________ would not describe internal equilibrium.
(a) Stability of price levels
(b) Full employment
(c) Stable exchange stability
(d) Maintenance of an optimal growth rate
Seasonal unemployment would occur in winter with ice-cream bicycle sellers. Seasonal unemployment refers to unemployment caused by seasonal changes in the demand for specific types of labor.
A vertical supply curve may be described as perfectly inelastic. When the price of a product increases, the supply of that product will remain constant. This is because the supply of the product is not affected by the price of the product. Hence, the supply curve will be perfectly inelastic.
Marginal fixed cost is always zero. Fixed costs are those costs that remain the same regardless of the level of production. Marginal fixed cost is the additional cost incurred when one more unit of output is produced. Since fixed costs do not change with output, the marginal fixed cost will always be zero.
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Assuming you are the marketing manager of an oral care products company that is considering entering the China market. The retail system in China tends to be very fragmented. Also, retailers and wholesalers tend to have long-term ties with China oral care companies; these ties make access to distribution channels difficult. What distribution strategy would you advise the company to pursue? Why?
Considering the fragmented retail system and the challenge of accessing distribution channels in the China market, I would advise the oral care products company to pursue a multi-channel distribution strategy. This strategy involves utilizing a combination of distribution channels to reach a wider range of customers and increase market penetration. Here's why this strategy would be beneficial:
Diversified Distribution Channels: By using multiple distribution channels, such as traditional retail stores, e-commerce platforms, and partnerships with local distributors or wholesalers, the company can tap into different customer segments and reach consumers through various touchpoints. This approach allows for greater market coverage and the ability to adapt to the preferences and shopping habits of Chinese consumers.
E-commerce Platforms: China has a thriving e-commerce market, and online shopping is immensely popular. Establishing a presence on major e-commerce platforms like Alibaba's Tmall or JD.com can provide the company with a direct channel to reach Chinese consumers. E-commerce platforms offer a convenient and trusted shopping experience, especially for consumers in remote areas or with limited access to physical stores.
Partnerships with Local Distributors: Collaborating with established local distributors or wholesalers can help overcome the challenge of long-term ties between retailers and local oral care companies. Local distributors often have existing relationships and distribution networks, making it easier for the company to gain access to retailers and penetrate the market. These partnerships can also provide valuable market insights and assist in navigating local regulations and customs.
Direct-to-Consumer Approach: In addition to traditional retail and distribution channels, the company should consider a direct-to-consumer approach. By establishing its own branded stores or setting up an online store, the company can directly engage with Chinese consumers, build brand awareness, and create a unique customer experience. This approach allows for greater control over the brand image and customer interactions.
Marketing and Branding Strategy: Alongside the distribution strategy, a strong marketing and branding strategy tailored to the Chinese market is crucial. This includes understanding cultural nuances, localizing product packaging and messaging, and leveraging digital marketing channels and influencers to build brand awareness and trust.
Overall, a multi-channel distribution strategy allows the oral care products company to navigate the fragmented retail system and overcome distribution challenges in the China market. It provides flexibility, wider market reach, and the opportunity to engage with consumers through various channels, ultimately increasing the company's chances of success in this competitive market.
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Explain the difference between financial and managerial accounting. In your answer, describe the different audiences for the two types of accounting and the various individuals involved in the process.
The main difference between financial and managerial accounting is the focus of each discipline. Financial accounting is primarily concerned with providing information to external parties, such as investors, creditors, and government regulators, while managerial accounting is concerned with providing information to internal decision-makers, such as managers and executives.
Financial accounting involves the preparation of financial statements, such as the balance sheet, income statement, and cash flow statement. These statements are designed to provide a summary of a company's financial performance over a specific period of time, typically a year or a quarter. The audience for financial accounting is largely external stakeholders, who use this information to evaluate the financial health of a company and make decisions about investing or lending money.
Managerial accounting, on the other hand, is focused on providing information to internal stakeholders, such as managers and executives, to help them make informed business decisions. This may involve preparing budgets, analyzing costs, and evaluating the financial impact of various decisions. The audience for managerial accounting is primarily internal, as these stakeholders use the information to manage the operations of the company and make strategic decisions.
The individuals involved in financial accounting may include accountants, auditors, and financial analysts, while those involved in managerial accounting may include management accountants, financial analysts, and business consultants. While both types of accounting rely on similar financial data, they differ in terms of their purpose and audience, and require different skills and expertise to manage effectively.
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Presented below are two independent transactions. 1. Ima Knucklehead exchanged old trucks (cost $75,000 less $22,000 accumulated depreciation) plus cash of $17,000 for new trucks. The old trucks had a fair market value of $39,000. 2. Yura Dingaling trades its used machine (cost $14,000 less $6,000 accumulated depreciation) for a new machine. In addition to exchanging the old machine (which had a fair market value of $12,000), Yura also paid cash of $5,000. Instructions (a) Prepare the entry to record the exchange of similar assets by Ima Knucklehead. (b) Prepare the entry to record the exchange of similar assets by Yura Dingaling. (a) Account Title ____ Debit ____ Credit ___ (b) Account Title ____ Debit ____ Credit ____
(a) Debit: New Trucks $39,000, Accumulated Depreciation $22,000, Cash $17,000. Credit: Gain on Disposal of Trucks $1,000, Old Trucks $75,000. (b) Debit: New Machine $12,000, Accumulated Depreciation $6,000, Cash $5,000. Credit: Old Machine $14,000.
(a) The entry to record the exchange of similar assets by Ima Knucklehead would be:
Account Title Debit Credit
---------------------------------------------
New Trucks $39,000
Accumulated Depreciation $22,000
Cash $17,000
Gain on Disposal of Trucks $1,000
Old Trucks $75,000
The old trucks are removed from the books at their net book value ($75,000 - $22,000 = $53,000) and a gain of $1,000 is recognized. The new trucks are recorded at their fair market value of $39,000, and cash is paid for the remaining amount.
(b) The entry to record the exchange of similar assets by Yura Dingaling would be:
Account Title Debit Credit
---------------------------------------------
New Machine $12,000
Accumulated Depreciation $6,000
Cash $5,000
Old Machine $14,000
The old machine is removed from the books at its net book value ($14,000 - $6,000 = $8,000). The new machine is recorded at its fair market value of $12,000, and cash is paid for the remaining amount.
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Austin is purchasing a Registerad annuity Contract that PRovides investiment returans. His Agent mentions that Austin urel have to fund the Contract and Make cherce with Regald to the term of his investment. The agent also Suggests a Maturity date based on Austin's time Horizon for the investment. Based on this information. which of the following type of Anmuity is Austin purchasing? At An Accumulation Ammuity (B) A prescribed Life Aunity (C) A payout Annuity (D) A joint end Last Survivor Annuity
Austin is purchasing a type of annuity that provides investment returns, requires him to fund the contract and make choices with the insurance provider regarding the term of his investment, and suggests a maturity date based on his time horizon for the investment.
An annuity refers to a financial product sold by insurance providers that provide future payments to an annuitant in return for premium payments made by the annuitant over a specified period.
An accumulation annuity is a type of annuity that enables the annuitant to accumulate payments, which can be either a fixed amount or variable amount, until the annuity's maturity date.In an accumulation annuity, the investor makes regular payments to the insurance company, who uses the money to buy fixed-income securities such as bonds.
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If your team has great potential and good process gains, but has poor productivity, what could be wrong? What should you do to boost productivity? Consider the equation for team productivity from class (Lecture only). Increase social loafing Eliminate production blocking Decrease information exchange Help members load balance
Possible issues could include social loafing, production blocking, and insufficient information exchange, and to boost productivity, one should address these issues by increasing individual accountability, eliminating bottlenecks, improving communication, and facilitating load balancing among team members.
What could be wrong if a team has great potential and good process gains but poor productivity, and what should be done to boost productivity?If a team has great potential and good process gains but poor productivity, there could be several factors contributing to this issue. One possible problem is a lack of motivation or engagement among team members, resulting in reduced effort and productivity.
In such cases, it is important to address the issue of social loafing, where some team members may rely too heavily on others to do the work. Encouraging individual accountability and emphasizing the importance of each team member's contribution can help mitigate social loafing.
Another potential issue that hampers productivity is production blocking, which refers to situations where team members are unable to move forward with their tasks due to dependencies or waiting for input from others. To overcome this, it is crucial to eliminate any bottlenecks in communication and coordination, ensuring a smooth flow of work within the team.
Furthermore, improving information exchange and collaboration among team members can enhance productivity. By facilitating open communication channels and providing platforms for knowledge sharing, team members can leverage each other's expertise and resources, leading to more efficient and effective work.
Lastly, helping team members load balance their tasks and responsibilities can prevent overburdening of certain individuals and ensure a fair distribution of work. By assessing individual strengths and skillsets, tasks can be assigned in a way that optimizes productivity and maximizes the team's potential.
Overall, addressing issues of motivation, communication, coordination, and workload distribution can help boost productivity in a team with great potential and good process gains.
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(5 points) 1) Explain how one creates a long straddle. (2 What strategy is being used?
A long straddle is created by buying a call option and a put option simultaneously, with the same strike price and expiration date. This strategy is called the long straddle strategy.
The long straddle is a market-neutral options trading strategy that involves the simultaneous buying of a call option and a put option with the same expiration date and strike price. It is commonly used by options traders to profit from an underlying asset's price volatility without having to forecast the underlying asset's direction of movement.The long straddle is profitable if the underlying asset's price moves in either direction away from the strike price at expiration. The profit potential is unlimited, and the loss potential is limited to the initial cost of both options.
A call option is a financial contract between two parties that gives the buyer the right, but not the obligation, to buy an underlying asset at a predetermined price (the expiration date) on or before a particular date (the strike price).The seller of the call option is obligated to sell the underlying asset at the strike price if the buyer exercises their right.
An agreement between two parties known as a "put option" grants the buyer the right, but not the responsibility, to sell the underlying asset at a fixed price (the "strike price") on or before a particular date (the "expiration date").The seller of the put option is obligated to buy the underlying asset at the strike price if the buyer exercises their right.
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You have been requested to provide a critical evaluation of the Du Pont Analysis to a team of financial accounting interns. Highlight the contents of your response.
The Du Pont Analysis is a financial analysis framework that allows investors and analysts to break down a company's return on equity (ROE) into three components: net profit margin, asset turnover, and financial leverage. By breaking down ROE into these components,
The Du Pont Analysis helps investors and analysts understand what is driving a company's profitability and how it is using its assets and debt to generate returns for shareholders.
One advantage of the Du Pont Analysis is that it provides a more detailed view of a company's ROE than just looking at the ROE number alone. Understanding the underlying factors that contribute to a company's ROE can help investors and analysts identify areas where the company may be able to improve its profitability or make better use of its assets and debt.
However, there are also some limitations to the Du Pont Analysis that should be considered. For one, the Du Pont Analysis focuses solely on ROE and does not take into account other important financial metrics such as cash flow or earnings per share (EPS). Additionally, the Du Pont Analysis assumes that all companies have similar capital structures, which may not always be the case.
Another potential limitation of the Du Pont Analysis is that it can be difficult to compare the results of the analysis across different companies or industries. This is because different industries may have different norms for asset turnover and financial leverage, making comparisons between them less meaningful. Additionally, some companies may have unique business models or operating structures that make it difficult to apply the Du Pont Analysis in a meaningful way.
In summary, while the Du Pont Analysis can be a useful tool for understanding the drivers of a company's ROE, it is important to keep in mind its limitations and consider other financial metrics when evaluating a company's overall financial health.
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You have 932,000 to invest in Sophie Shoes, a stock selling for $80 a share. The initial margin requirement is 65 percent. Do not reund intermediate caiculations. fiound your answers to two becimat places. Use a minus sign to enter negative values, if any. a. Ignoring takes and commissons, calculate your rates of return if the stock rises to $90 a share and if k declines to $50 a share assuming you pay eash for the steck. Pate of retum it the stock rises to $90 a share. Nate of retarn if the steck declines to 150 a stare: is b. Tgnaring toxes and commissions, calculate your rates of return if the stock rises to $90 a shere and if it doclines to 550 a share assuming you buy it using maximum feverago. Rate of return if the stock, rises to $90 a share: Rate of return if the stock declines to 550 a share:
Part A:
Rate of return if the stock rises to $90 a share: -0.10%Rate of return if the stock declines to $50 a share: -150%In order to calculate the rates of return, we need to calculate how many shares can be bought for the initial investment and how much of the investment is made up of the initial margin. Then, we can calculate the rates of return for different stock prices given the number of shares bought and the initial margin. Finally, we can add in the effect of taxes and commissions on the rates of return.
Part A:
Rate of return if the stock rises to $90 a share:
Increase in value of shares = 4,077($90 - $80) = $40,770
Profit = $40,770 - $366,930 = -$326.16
Rate of return = -$326.16/$326,200 = -0.0010 = -0.10%
Rate of return if the stock declines to $50 a share:
Decrease in value of shares = 4,077($50 - $80) = -$122,310
Profit = -$122,310 - $366,930 = -$489,240
Rate of return = -$489,240/$326,200 = -1.50 = -150%
Part B:
Rate of return if the stock rises to $90 a share: -0.10%Rate of return if the stock declines to $50 a share: -204%Part B:Taxes and commissions are ignored in the calculation of part A, but they are now included in the calculation of the rates of return. Assuming the taxes and commissions are 1%, the total cost of buying shares is:
Total cost of buying shares if the stock rises to $90/share = 4,077($90) + 1%($366,930) = $371,263
Total cost of buying shares if the stock declines to $50/share = 8,308($50) + 1%($416,400) = $420,992
Rate of return if the stock rises to $90 a share: Increase in value of shares = 4,077($90 - $80) = $40,770
Profit = $40,770 - $371,263 = -$330.49
Rate of return = -$330.49/$326,200 = -0.0010 = -0.10%
Rate of return if the stock declines to $50 a share:
Decrease in value of shares = 8,308($50 - $80) = -$249,240
Profit = -$249,240 - $416,400 = -$665,640
Rate of return = -$665,640/$326,200 = -2.04 = -204%
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Discuss, Explain and Elaborate what is Sustainability in Project Management?
Sustainability in project management refers to the practice of incorporating environmental, social, and economic considerations into project planning, execution, and evaluation to ensure long-term success and minimize negative impacts.
It involves balancing the needs of the present without compromising the ability of future generations to meet their own needs.
Here are key aspects and principles of sustainability in project management:
Environmental Sustainability: Projects should aim to minimize their environmental impact by conserving resources, reducing waste, and adopting eco-friendly practices. This may include using renewable energy sources, implementing recycling programs, or considering the life cycle analysis of project components.
Social Sustainability: Projects should address the social aspects of sustainability by considering the well-being and interests of stakeholders, including employees, local communities, and society at large. This may involve engaging in community development, promoting diversity and inclusion, or ensuring fair labor practices.
Economic Sustainability: Projects should be economically viable and contribute to long-term financial sustainability. This involves considering the project's financial feasibility, cost-effectiveness, and return on investment. It also includes assessing the project's potential economic impacts on stakeholders and the broader economy.
Stakeholder Engagement: Engaging stakeholders throughout the project lifecycle is crucial for sustainability. By involving and consulting stakeholders, their diverse perspectives and needs can be considered, leading to more informed decision-making and increased support for the project.
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Equilibrium exchange rate occurs where____________________.
where the quantity supplied equals the quantity demanded of a foreign currency at a specific local exchange rate
where the quantity supplied exceeds the quantity demanded of a foreign currency at a specific local exchange rate
where the quantity supplied is less than the quantity demanded of a foreign currency at a specific local exchange rate
none of the above
An equilibrium exchange rate represents a point of balance where neither surplus nor shortage exists, and the quantity supplied matches the quantity demanded at a particular local exchange rate.
An equilibrium exchange rate occurs where the quantity supplied equals the quantity demanded of a foreign currency at a specific local exchange rate. In the foreign exchange market, the exchange rate is determined by the interaction between the supply and demand for a particular currency. When the quantity supplied of a foreign currency matches the quantity demanded at a specific exchange rate, an equilibrium is established.
If the quantity supplied exceeds the quantity demanded at a given exchange rate, there will be a surplus of the foreign currency, leading to downward pressure on its value. In this case, the exchange rate would likely decrease until the quantity supplied and demanded reach equilibrium.
On the other hand, if the quantity demanded exceeds the quantity supplied at a specific exchange rate, there will be a shortage of the foreign currency, resulting in upward pressure on its value. The exchange rate would likely increase until the quantity supplied and demanded are balanced.
Therefore, an equilibrium exchange rate represents a point of balance where neither surplus nor shortage exists, and the quantity supplied matches the quantity demanded at a particular local exchange rate.
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Jayden and Tiana are saving for their daughter Kiara's college education. Kiara just turned 10 (at t = 0), and she will be entering college 8 years from now (at t = 8). College tuition and expenses at State U. are currently $16,000 a year, but they are expected to increase at a rate of 2.5% a year. Kiara should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on her own. Tuition and other costs will be due at the beginning of each school year (at t = 8, 9, 10, and 11).
So far, Jayden and Tiana have accumulated $10,000 in their college savings account (at t = 0). Their long-run financial plan is to add an additional $4,500 in each of the next 4 years (at t = 1, 2, 3, and 4). Then they plan to make 3 equal annual contributions in each of the following years, t = 5, 6, and 7. They expect their investment account to earn 9%. How large must the annual payments at t = 5, 6, and 7 be to cover Kiara's anticipated college costs?
a. $6,241.36
b. $6,803.08
c. $8,036.66
d. $7,373.08
e. $5,754.83
The annual payments required to cover Kiara's college costs are approximately $239.16.
To calculate the annual payments required to cover Kiara's college costs, we can use the future value of an annuity formula. Here's the calculation:
Calculate the future value of the savings and additional contributions made by Jayden and Tiana until t = 4 (end of the 4-year period):
FV = $10,000 + $4,500 * [(1 + 0.09)^1 + (1 + 0.09)^2 + (1 + 0.09)^3 + (1 + 0.09)^4]
FV = $10,000 + $4,500 * (1.09 + 1.1881 + 1.2950 + 1.4116)
FV = $10,000 + $4,500 * 4.9947
FV = $10,000 + $22,476.15
FV = $32,476.15
Calculate the present value of the future college costs (t = 8, 9, 10, and 11) using the discount rate of 9%:
PV = $16,000 / (1 + 0.09)^8 + $16,000 / (1 + 0.09)^9 + $16,000 / (1 + 0.09)^10 + $16,000 / (1 + 0.09)^11
PV = $16,000 / 1.790847 + $16,000 / 1.948717 + $16,000 / 2.122106 + $16,000 / 2.313363
PV = $8,938.77 + $8,216.78 + $7,547.28 + $6,918.80
PV = $31,621.63
Calculate the future value of the annual payments at t = 5, 6, and 7 that will cover the remaining college costs:
FV_annual_payments = $31,621.63 - $32,476.15
FV_annual_payments = -$854.52 (negative value as it represents the remaining balance)
Calculate the annual payment required to cover the remaining balance using the future value of an ordinary annuity formula:
Payment = FV_annual_payments / [(1 + 0.09)^1 + (1 + 0.09)^2 + (1 + 0.09)^3]
Payment = -$854.52 / (1.09 + 1.1881 + 1.2950)
Payment = -$854.52 / 3.5731
Payment = -$239.16 (negative value indicates an inflow or payment)
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If a Japanese company sells 200 VCRs to a French company and uses the money to buy U,S. government bonds, the Japanese merchandise trade balance and the Japanese financial account balance falls; rises
If a Japanese company sells 200 VCRs to a French company and uses the money to buy U.S. government bonds, the Japanese merchandise trade balance falls, while the Japanese financial account balance rises.
The Japanese merchandise trade balance refers to the difference between the value of exports and imports of goods. In this scenario, when a Japanese company sells 200 VCRs to a French company, it increases the value of Japanese exports, thus improving the merchandise trade balance.
However, if the Japanese company uses the money obtained from the sale to buy U.S. government bonds, it reduces the amount of money available for other investments or transactions. This action increases the Japanese financial account balance, which accounts for the flow of financial assets between countries.
The decrease in the merchandise trade balance occurs because the Japanese company is exporting goods (VCRs) and receiving payment in the form of money. The value of exports increases, but the purchase of U.S. government bonds reduces the available funds for other transactions, such as importing goods. As a result, the merchandise trade balance falls.
On the other hand, the Japanese financial account balance rises because the company invests the money received from the VCR sale in U.S. government bonds.
This transaction represents an outflow of financial assets from Japan, leading to an increase in the financial account balance. The purchase of foreign financial assets (U.S. government bonds) contributes to a higher financial account balance for Japan.
In conclusion, when a Japanese company sells VCRs to a French company and uses the proceeds to buy U.S. government bonds, the Japanese merchandise trade balance falls due to reduced funds for imports, while the Japanese financial account balance rises due to the investment in foreign financial assets.
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Cecil was in debt to a number of creditors, so he filed for and received a discharge in bankruptcy. One of those creditors was Bank of Sandy Springs, to which Cecil owed $2,000. This debt was wiped out by the bankruptcy (the debt was discharged). However, Cecil - who lives in Sandy Springs, lowa - worries that his failure to pay the debt to the local, depositor-owned bank will really hurt his standing in the Sandy Springs business community. So, after consulting with a lawyer, Cecil reaffirms his debt to the Bank of Sandy Springs and signs a document in which he promises to pay $2,000 to Bank of Sandy Springs within the next 90 days. A few weeks later, Cecil changes his mind. He says he will not pay the debt because, he contends, the reaffirmation lacked consideration. Was the reaffirmation valid? a. Yes, because the Bank of Sandy Springs furnished implicit, constructive consideration. b. No, because this is past consideration. c. No, because bankruptcy destroys all debts, including mortgages or other debts to lenders. d. Yes, because the reaffirmation was not necessary for the debt to survive. e. Yes, because consideration is not needed.
Cecil's reaffirmation of the debt to the Bank of Sandy Springs is not valid. The reaffirmation lacked consideration, which is a necessary element for a contract to be enforceable. No, because this is past consideration.
Was the reaffirmation of the debt valid in Cecil's case?Consideration refers to something of value exchanged between parties to a contract. In this case, Cecil did not provide any new consideration to the bank in exchange for reaffirming the debt.
Option b, "No, because this is past consideration," is the correct answer. Past consideration refers to a promise made after the act or event has already occurred.
Reaffirming a debt after it has been discharged in bankruptcy is considered past consideration, and it is generally not valid in contract law.
Therefore, Cecil's refusal to pay the debt based on the lack of consideration in the reaffirmation is justified, and the reaffirmation itself is not legally binding.
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The Okra Corporation last dividend was $1.00. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 10% forever. Okra's required rate of return is 12%. Okra's horizon or terminal date is:
To calculate the horizon or terminal value of Okra Corporation, we need to determine the dividend at the end of year 2 and then calculate the present value of all future dividends beyond year 2.
Step 1: Calculate the dividend at the end of year 2
Dividend at the end of year 2 = Dividend at the end of year 1 * (1 + Dividend growth rate)
Dividend at the end of year 2 = $1.00 * (1 + 15%) = $1.15
Step 2: Calculate the present value of all future dividends beyond year 2
Terminal value = Dividend at the end of year 2 * (1 + Growth rate) / (Required rate of return - Growth rate)
Terminal value = $1.15 * (1 + 10%) / (12% - 10%) = $1.15 * 1.10 / 0.02 = $63.25
Therefore, Okra Corporation's horizon or terminal value is $63.25.
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o calculate the horizon or terminal value of Okra Corporation, we need to determine the dividend at the end of year 2 and then calculate the present value of all future dividends beyond year 2.
Step 1: Calculate the dividend at the end of year 2
Dividend at the end of year 2 = Dividend at the end of year 1 * (1 + Dividend growth rate)
Dividend at the end of year 2 = $1.00 * (1 + 15%) = $1.15
Step 2: Calculate the present value of all future dividends beyond year 2
Terminal value = Dividend at the end of year 2 * (1 + Growth rate) / (Required rate of return - Growth rate)
Terminal value = $1.15 * (1 + 10%) / (12% - 10%) = $1.15 * 1.10 / 0.02 = $63.25
Therefore, Okra Corporation's horizon or terminal value is $63.25.
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Kinko Ltd designs and produces Vessel parts. The company has three main departments that consume overhead resources: design, production and engineering. In 2021, actual variable production overhead is $280 000. Kinko's costing system allocates variable production overhead to its three customers based on machine-hours, and prices its contracts based on full costs. One of its customer has complained of being charged non-competitive price. Therefore, Kinko needs to look the consumption of overhead more closely and to investigate the issue. The data collected regarding this matter is available below: Overhead Usage of cost drivers by customers Sailing Illawarra Shellharbour boat cost 2021 yacht Ship Department Design Cost driver CAD-design hours $ 35,000 150 250 100 Production Engineering hours $ 25,000 130 100 270 Engineering Machine hours $ 220,000 300 3,700 1,000 $ 280,000 Required (show your workings): 1) Calculate the production overhead cost allocated to each customer in 2021 using machine-hours as the cost driver (traditional system). 2) Calculate the production overhead cost allocated to each customer in 2021 using department-based production overhead rates (Activity Based Costing) 3) Comment on your answers in requirements 1 and 2 and identify which customer was most likely to be overcharged in the traditional system. 7 marks 14 marks 4 marks
1. Production overhead cost using traditional system $52,8302.
2. Production overhead cost using using department-based production Activity Based Costing $114,9103
3. The overheads cost of Sailing Illawarra and Shell harbor changed.
Detailed solution for above answers:
1. Calculation of production overhead cost allocated to each customer in 2021 using machine-hours as the cost driver: Traditional Costing System:
Sailing Illawarra: = 300/5,300 * $280,000
= $15,774
Shell harbor: = 3,700/5,300 * $280,000
= $195,133
Boat Cost: = 1,000/5,300 * $280,000
= $52,8302.
2. Calculation of production overhead cost allocated to each customer in 2021 using department-based production overhead rates (Activity Based Costing): Activity Based Costing:
Overhead Rates, Department Design, Overhead Rate= $35,000 / 150= $233 per hour
Department Production Overhead Rate= $25,000 / 130= $192 per hour
Department Engineering Overhead Rate= $220,000 / 4,000= $55 per hour
Sailing Illawarra: Design: $233 * 250 = $58,250
Production: $192 * 100 = $19,200
Engineering: $55 * 300 = $16,500
Total Cost = $93,950
Shell harbor: Design: $233 * 100 = $23,300
Production: $192 * 270 = $51,840
Engineering: $55 * 3,700 = $203,500
Total Cost = $278,640Boat Cost: Design: $233 * 150 = $34,950
Production: $192 * 130 = $24,960
Engineering: $55 * 1,000 = $55,000
Total Cost = $114,9103.
3 .As compared to the traditional system, in activity-based costing, the overheads cost of Sailing Illawara and Shell harbor changed. Sailing Illawarra had a decrease in overhead cost while Shell harbor had an increase in overhead cost. The most likely to be overcharged in the traditional system is Shell harbor as it has a higher cost allocated using machine-hours as the cost driver and a higher overhead cost allocated using department-based overhead rates. In both systems, the cost is higher for Shell harbor, and hence it is the most likely customer to be overcharged.
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Intro A stock has a beta of 1.6. The risk-free rate is 3%. Assume that the CAPM holds. Part 1 What is the expected return for the stock if the expected return on the market is 8%? 3+ decimals Submit Part 2 What is the expected return for the stock if the expected market risk premium is 8%? 3+ decimals Submit Attempt 1/10 for 10 pts. Attempt 1/10 for 10 pts.
The expected return on the stock is 11% and The expected return on the stock is 15.8%.
Part 1: The expected return on the stock can be calculated as follows:
Expected return on stock = Risk-free rate + Beta(stock) × (Expected return on the market − Risk-free rate)
Beta of the stock = 1.6
Expected return on the market = 8%
Risk-free rate = 3%
Substituting the given values in the above formula, we get:
Expected return on stock = 3% + 1.6 × (8% − 3%)
= 3% + 1.6 × 5%
= 11%
Part 2: The expected return on the stock can be calculated as follows:
Expected return on stock = Risk-free rate + Beta(stock) × Expected market risk premium
Beta of the stock = 1.6
Expected market risk premium = 8%
Risk-free rate = 3%
Substituting the given values in the above formula, we get:
Expected return on stock = 3% + 1.6 × 8%
= 3% + 12.8%
= 15.8%
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The expected return on the stock is 11% and The expected return on the stock is 15.8%.
Part 1: The expected return on the stock can be calculated as follows:
Expected return on stock = Risk-free rate + Beta(stock) × (Expected return on the market − Risk-free rate)
Beta of the stock = 1.6
Expected return on the market = 8%
Risk-free rate = 3%
Substituting the given values in the above formula, we get:
Expected return on stock = 3% + 1.6 × (8% − 3%)
= 3% + 1.6 × 5%
= 11%
Part 2: The expected return on the stock can be calculated as follows:
Expected return on stock = Risk-free rate + Beta(stock) × Expected market risk premium
Beta of the stock = 1.6
Expected market risk premium = 8%
Risk-free rate = 3%
Substituting the given values in the above formula, we get:
Expected return on stock = 3% + 1.6 × 8%
= 3% + 12.8%
= 15.8%
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Imagine you are working as a Marketing Executive in Hilal Foods and from the past few months there has been a decline in sales of the product(s) due to weak marketing campaign. You are supposed to write a business message to the Marketing Manager of the company to convince him to revise the marketing strategy in order to increase the sales of the product(s).
Subject: Urgent Need for Marketing Strategy Revision to Boost Product Sales
Dear Marketing Manager,
I hope this message finds you well. I am writing to bring to your attention the concerning decline in sales of our product(s) at Hilal Foods and propose the immediate revision of our marketing strategy to reverse this trend and drive sales growth.
Over the past few months, we have observed a consistent downturn in sales, which can be directly attributed to our weak marketing campaign. Despite having exceptional products, our current marketing efforts have failed to effectively reach and engage our target audience, resulting in missed sales opportunities and market share loss.
To address this issue and regain our competitive edge, I strongly recommend a comprehensive review and revision of our marketing strategy. Here are some key points to consider:
Market Research and Consumer Insights: Conduct thorough market research to gain a deep understanding of our target audience, their needs, preferences, and purchase behavior. Utilize consumer insights to inform our marketing decisions and develop strategies that resonate with our customers.
Message and Positioning: Refine our brand message and positioning to clearly communicate the unique value proposition of our products.
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Classical City holds $40,000 worth of 7% bonds (par value) as debt investments. The journal entry to record receipt of the semi- annual interest payment includes a debit to Cash for $2,800 and a credit to Interest Income for $2,800. True FALSE
Classical City holds $40,000 worth of 7% bonds (par value) as debt investments. The journal entry to record receipt of the semi-annual interest payment includes a debit to Cash for $2,800 and a credit to Interest Income for $2,800.
The given statement is True.What is the significance of interest income?Interest income refers to money earned on savings accounts, certificates of deposit, and other interest-bearing investments. In the financial world, interest income is also known as "investment income" or "yield."
The interest is usually paid at a fixed interval of time, such as monthly or quarterly. When we make investments, we expect to receive a return on them, which may be in the form of capital appreciation, dividends, or interest. As a result, interest income is one type of investment income.
What is the journal entry to record receipt of the semi-annual interest payment?The journal entry to record receipt of the semi-annual interest payment is as follows:DebitCash$2,800CreditInterest Income$2,800Explanation:Classical City holds $40,000 worth of 7% bonds (par value) as debt investments.
Since they are 7% bonds with a par value of $40,000, the interest to be paid twice a year is ($40,000 × 7% × 6/12) = $1,400. To record the receipt of the semi-annual interest payment, the following journal entry will be made:DebitCash$2,800 (2 x $1,400) CreditInterest Income$2,800 (2 x $1,400)Hence, the given statement is True.
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Suppose that in the market for reserves, the federal funds rate is 2.4% and the discount rate is 8%. If the Federal Reserve Bank decides to raise the discount rate, then the _____ curve should shift and afterwards, the equilibrium rate will _____
Group of answer choices
demand; rise
demand; not change
supply; rise
supply; not change
The correct answer is: supply; rise.
If the Federal Reserve Bank decides to raise the discount rate, then the supply curve for reserves should shift and afterwards, the equilibrium rate will rise.
An increase in the discount rate makes it more expensive for banks to borrow from the Federal Reserve Bank, which decreases the quantity of reserves supplied by the Fed. This decrease in supply shifts the overall supply curve for reserves to the left.
As a result, the equilibrium federal funds rate, which is determined by the intersection of the supply and demand curves for reserves, will increase. In other words, the cost of borrowing reserves between banks will become more expensive due to the decreased supply, causing the equilibrium rate to rise.
Therefore, the correct answer is: supply; rise.
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List the issues/considerations created by the eminent domain taking of St. Johannes cemetery, and mark any issues that have a connection to Law (L), Ethics (E), or both (LE). 2. Make a list of the groups/individuals affected by the city of Chicago's decision to condemn the cemetery and exhume those buried there. 3. Define "public use" and "private use" of property. (a) Do you believe Chicago's taking of St. Johannes cemetery for a public use is justified?. (b) Do you believe Chicago's taking of St. Johannes for private use would also be justified? Explain your reasoning in both scenarios. 4. How can a circumstance be legal but not ethical? Describe an example that illustrates this situation.
1. Issues/Considerations of the eminent domain taking of St. Johannes cemetery:
a. Displacement of the deceased (L, E): The exhumation and relocation of the buried individuals can raise ethical concerns and legal issues surrounding the respectful treatment of the deceased.
b. Disruption of religious practices (L, E): The taking of a cemetery may infringe upon the religious rights and practices of the individuals or religious communities associated with the cemetery.
c. Emotional distress and impact on families (E): The exhumation and relocation process may cause emotional distress and turmoil for the families of the deceased.
d. Loss of historical and cultural heritage (L, E): Cemeteries often hold historical and cultural significance, and their removal can result in the loss of important heritage and community identity.
e. Property rights and compensation (L): Property owners and stakeholders may have legal rights to challenge the eminent domain taking and seek fair compensation for their property.
2. Groups/Individuals affected by the city of Chicago's decision:
a. Families of the deceased buried in St. Johannes cemetery (L, E): They may be emotionally affected by the exhumation of their loved ones and the disturbance of their resting place.
b. Religious communities associated with the cemetery (L, E): The decision may impact their religious practices and beliefs, as well as their connection to their religious heritage.
c. Local community (L, E): The loss of a cemetery can impact the community's historical and cultural identity and may generate public sentiment and opposition.
3. Definitions of "public use" and "private use" of property:
a. Public use: In the context of eminent domain, public use refers to the taking of property by the government for a purpose that benefits the general public, such as the construction of roads, schools, parks, or other infrastructure projects.
b. Private use: Private use of property involves the use of property by an individual or entity for personal or non-public purposes, such as residential, commercial, or industrial use.
(a) Justification of Chicago's taking of St. Johannes cemetery for public use: This would depend on the specific circumstances and the intended public benefit resulting from the taking. It would involve assessing whether the public purpose outweighs the private property rights and potential ethical considerations.
(b) Justification of Chicago's taking of St. Johannes for private use: Generally, the taking of property for private use would not be considered justified under eminent domain. Eminent domain is typically intended for public use, and taking property for private use could be seen as an abuse of governmental power and infringing on property rights.
4. Circumstances that are legal but not ethical:
An example could be a company exploiting legal loopholes to avoid paying taxes. While they may be acting within the confines of the law, their actions may be perceived as unethical because they are not fulfilling their societal obligation to contribute to public funds and resources.
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Unilever Company
The Unilever company problem is that they Keep or sell brands without a purpose
Explain the history of how the Unilever company problem came about?
How the competition is performing in comparison?
Unilever's history plays a significant role in understanding how the problem of keeping or selling brands without a purpose came about.
History of Unilever: Unilever was formed in 1929 through the merger of Lever Brothers and Margarine Unie, two major European consumer goods companies. Lever Brothers was a British soap manufacturer, while Margarine Unie was a Dutch margarine producer. The merger aimed to create a global company with a diversified product portfolio. This growth strategy has led to a substantial and diverse brand portfolio across different product categories. Market Competition and Consumer Preferences: The consumer goods industry is highly competitive, with companies striving to capture market share and meet evolving consumer preferences. Unilever's competitors, such as Procter & Gamble (P&G), Nestlé, and The Coca-Cola Company, also operate in this landscape, facing similar challenges in managing their brand portfolios effectively.
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What do you think is a good way for team members to remain updated on work status at any given time.
A good way for team members to remain updated on work status at any given time is through effective communication and the use of digital tools. Here are some steps that can help achieve this:
1. Establish clear channels of communication: Set up regular team meetings or check-ins where each member can share updates on their progress and any obstacles they may be facing. This can be done through video conferences, phone calls, or instant messaging platforms.
2. Utilize project management tools: Implement a project management tool like Trello, Asana, or Jira to track tasks, deadlines, and progress. These tools allow team members to update their tasks, add comments, and share files, ensuring everyone has access to the latest information.
3. Foster a culture of transparency: Encourage team members to openly communicate their work status, challenges, and achievements. This helps create an environment where everyone feels comfortable sharing updates and seeking support when needed.
By implementing these steps, team members can remain updated on work status, collaborate effectively, and ensure smooth progress towards project goals.
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A good way for team members to remain updated on work status at any given time is through regular communication, using tools such as project management software or team collaboration platforms, and implementing a transparent reporting system.
To ensure team members are updated on work status, it is important to establish regular communication channels, such as daily or weekly check-ins, team meetings, or stand-up sessions. This allows team members to share progress, updates, and any potential obstacles or challenges they may be facing.
Utilizing project management software or team collaboration platforms can also facilitate real-time updates on work status. These tools can provide a centralized platform where team members can access project details, timelines, tasks, and documents. This allows for easy visibility and tracking of progress, ensuring everyone is informed.
Implementing a transparent reporting system can further enhance work status updates. This involves establishing clear and standardized reporting processes, where team members regularly submit progress reports or updates. These reports should include key information such as completed tasks, upcoming deadlines, and any potential issues or risks. This way, team members can easily access and review the status of each project or task, fostering accountability and transparency within the team.
Overall, a combination of regular communication, the use of appropriate tools, and a transparent reporting system can help team members remain updated on work status at any given time.
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The Cavy Company estimates that the factory overhead for the following year will be $1,421,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 30,900 hours. The machine hours for the month of April for all of the jobs were 4,460. If the actual factory overhead totaled $201,262, determine the over or underapplied amount for the month. Enter the amount as a positive number. $fill in the blank 1
The company's factory overhead for the month of April was underapplied by $16,422.
To calculate the over or underapplied amount for factory overhead, we need to compare the actual overhead incurred with the overhead applied based on the predetermined rate. The predetermined rate is calculated by dividing the estimated factory overhead for the year by the estimated machine hours.
Predetermined rate = Estimated factory overhead / Estimated machine hours
= $1,421,400 / 30,900 hours
≈ $45.97 per machine hour
Next, we calculate the overhead applied for the month of April by multiplying the predetermined rate by the actual machine hours:
Overhead applied = Predetermined rate * Actual machine hours
= $45.97/hour * 4,460 hours
= $204,592.20
Finally, we determine the over or underapplied amount by subtracting the actual overhead from the overhead applied:
Over/Underapplied amount = Overhead applied - Actual overhead
= $204,592.20 - $201,262
= $3,330.20
Since the calculated amount is positive, it means that the factory overhead for the month of April was underapplied by $3,330.20, or approximately $3,330 when rounded to the nearest dollar.
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Complete the following statement: In general , the term stress refers to a. a change in volume. b. a force per unit area c. a force per unit length. d. a change in length. e. a fractional change in length.
It is important to design structures and materials that can withstand the expected stresses that will be placed on them.The correct option is e.
A fractional change in length. Stress is defined as the force exerted per unit area or the fractional change in length (strain) that occurs due to an applied force. Stress is a measure of the forces that cause deformations in a body or structure. It is usually represented by the Greek letter sigma (σ).There are different types of stress, including compressive stress, tensile stress, shear stress, and torsional stress.
Compressive stress is a type of stress that causes a material to become shorter in length, while tensile stress causes a material to become longer in length. Shear stress, on the other hand, is a type of stress that causes a material to twist, while torsional stress causes a material to rotate.The ability of a material to withstand stress depends on its strength, elasticity, ductility, and toughness.
If a material is unable to withstand the amount of stress placed on it, it will experience permanent deformation or failure. Therefore, it is important to design structures and materials that can withstand the expected stresses that will be placed on them.
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depreciation is 120. the tax rate is 21% the firm does not have intrest expenses. what is operating cash flow?$640 $931 $520 $531 $411
Operating Cash Flow = $219.17
To calculate operating cash flow, we need to start with earnings before interest and taxes (EBIT), which can be calculated as follows:
EBIT = Depreciation - Taxes
Taxes can be calculated using the following formula:
Taxes = Tax Rate x EBIT
Substituting the given values, we have:
Taxes = 0.21 x (Depreciation - Taxes)
Taxes = 0.21 x (120 - Taxes)
Taxes = 25.2 - 0.21Taxes
1.21Taxes = 25.2
Taxes = 20.83
Now we can calculate EBIT:
EBIT = Depreciation - Taxes
EBIT = 120 - 20.83
EBIT = 99.17
Finally, we can calculate operating cash flow by adding depreciation back to EBIT:
Operating Cash Flow = EBIT + Depreciation
Operating Cash Flow = 99.17 + 120
Operating Cash Flow = $219.17
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