The cost per equivalent unit of production is computed for several reasons. Let's explore each of the reasons you mentioned and why the cost per equivalent unit is relevant in those cases:
To compute the amount we need to charge customers:
The cost per equivalent unit helps determine the appropriate selling price for a product. By understanding the cost per unit, a company can factor in its desired profit margin and market conditions to determine the selling price that will cover the costs incurred during production and generate a profit.
To compute the net income:
Net income is calculated by subtracting total expenses from total revenue. To accurately determine the cost of goods sold (COGS) and ultimately calculate net income, it is essential to know the cost per equivalent unit. The cost per equivalent unit allows for a proper allocation of costs to the goods produced, providing an accurate measure of the expenses associated with the units sold.
To compute the cost of goods manufactured:
The cost per equivalent unit is used to allocate costs between goods that are partially completed and those that are fully completed. In manufacturing processes where goods are produced over multiple stages or periods, it is necessary to determine the cost of goods manufactured during a specific period. The cost per equivalent unit helps in determining the cost of partially completed goods by considering the costs incurred up to that point.
To compute the cost per one unit:
The cost per equivalent unit is used to calculate the cost of producing one unit of a product. This information is important for various purposes, such as pricing decisions, cost control, and financial analysis. It allows managers to assess the cost efficiency of the production process and make informed decisions about production levels, pricing strategies, and profitability.
In summary, the computation of the cost per equivalent unit of production is crucial for determining pricing, calculating net income, allocating costs, and understanding the cost structure of a company's products. It provides valuable insights into the production process and helps in making informed decisions related to pricing, cost control, and profitability.
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Technical efficiency is assured if you choose ; allocative efficiency is assured if you choose Selected answer will beautomatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a any point within the production possibilities frontier, any point on the production possibilities frontier b any point on the production possibilities frontier; any point within the production possibilities frontier c any point on the production possibilities frontier; the point on the production possibilities frontier that society m desires d both blanks should have the same answer since technical and allocatively efficiency is the same thing.
Technical efficiency and allocative efficiency are two distinct concepts in economics.
Technical efficiency refers to the ability to produce the maximum output from a given set of inputs or resources. It is achieved when production occurs on the production possibilities frontier (PPF), which represents the maximum attainable output combinations of two goods given the available resources and technology. Therefore, the correct answer is:
b) any point on the production possibilities frontier; any point within the production possibilities frontier.
Allocative efficiency, on the other hand, refers to the allocation of resources in a way that maximizes societal welfare. It occurs when resources are allocated in a manner that matches society's preferences and desires. In other words, it is achieved when production occurs at the point on the PPF that represents the combination of goods that society desires the most. Therefore, the correct answer is:
c) any point on the production possibilities frontier; the point on the production possibilities frontier that society desires.
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Which of th following are arguments against double taxation. Individuals don't face a direct impact from corporate taxes. Taxes on dividends lowers returns on retirement plans. Tax on net income is passed to consumers by way of higher prices. Taxes on dividends lead to more equal income distribution.
By taxing the income received by shareholders, it aims to reduce income inequality by ensuring that wealthier individuals pay a proportionate share of taxes on their investment income.
The arguments against double taxation are as follows:
1. Individuals don't face a direct impact from corporate taxes: This argument suggests that since corporate taxes are levied on the profits of a corporation, individuals who are not directly involved in the corporation's operations or ownership do not bear the burden of these taxes. Instead, it is argued that the burden is shifted to other stakeholders such as shareholders, employees, or customers.
2. Taxes on dividends lower returns on retirement plans: This argument highlights that when corporate profits are subject to taxation at the corporate level, and then dividends paid to shareholders are also taxed at the individual level, it reduces the overall returns on investments, including retirement plans. This can have an adverse impact on individuals who rely on these plans for their future financial security.
It's important to note that the other two statements you provided are not arguments against double taxation but rather potential consequences or effects of double taxation:
3. Tax on net income is passed to consumers by way of higher prices: This statement suggests that when corporations face higher taxes on their net income, they may pass on some or all of the tax burden to consumers by increasing the prices of their goods or services. This can potentially lead to higher costs for consumers.
4. Taxes on dividends lead to more equal income distribution: This statement suggests that taxing dividends at the individual level can contribute to a more equal distribution of income.
It's important to note that the arguments for or against double taxation can vary depending on different perspectives and economic theories.\
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WRITE IN YOUR OWN WORD. NO PLAGIARISM PLEASE.
Question II - Bobby Bigmouth is sued for slander by his boss. Bobby argues that he cannot be sued for slander because he did not publish any statement. He argues that his alleged slanderous comment was not published because he just made the comment to a co-worker about his boss rather than making that statement to a reporter to be published. Is Bobby’s argument correct?
Bobby's argument that he cannot be sued for slander because he did not publish any statement is incorrect.
Bobby Bigmouth's argument that he cannot be sued for slander because he did not publish any statement is not entirely correct. While it is true that slander typically involves making false and defamatory statements that are communicated to a third party, the concept of publication in defamation law does not solely refer to statements being made to the general public through media outlets.
In legal terms, publication in defamation law means that the statement has been communicated to at least one person other than the speaker and the target of the statement. It does not require widespread dissemination or involvement of the media. So, if Bobby made a slanderous comment about his boss to a co-worker, he would still be considered to have published the statement, as he communicated it to someone other than himself and his boss.
Therefore, Bobby's argument that his alleged slanderous comment was not published because he did not make it to a reporter to be published is not a valid defense against a slander lawsuit.
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An efficient agricultural marketing system is an effective
instrument for breaking the vicious circle of rural poverty.
Discuss
An efficient agricultural marketing system is a necessary instrument for breaking the vicious circle of rural poverty. This is because, without an effective marketing system, farmers are unable to obtain reasonable prices for their produce. Thus, they are unable to make a profit that would improve their standard of living.
In this way, the cycle of poverty is perpetuated in rural areas. When farmers have access to an efficient marketing system, they can sell their produce at reasonable prices. This enables them to make a profit, which they can use to improve their livelihoods. By having an efficient marketing system, farmers can also reduce post-harvest losses. These losses are incurred when the produce is not sold quickly enough and becomes unsuitable for consumption. An efficient marketing system also ensures that farmers have access to markets, which can help them to increase their income.
This can be achieved by providing them with information on market demand and price trends. By having this information, farmers can adjust their production accordingly. An efficient marketing system also helps to reduce market inefficiencies. Inefficient markets result in a high level of price variability and uncertainty. This makes it difficult for farmers to plan and invest in their production. An efficient marketing system can also reduce transaction costs for both buyers and sellers. This can be achieved through the use of appropriate technology, such as electronic payment systems. By reducing transaction costs, farmers can obtain better prices for their produce.
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Give a product example of a brand extension strategy and
explain at least two advantages and two disadvantages of this
strategy. (1 page max)
An example is Coca-Cola's introduction of Coca-Cola Zero Sugar. Coca-Cola's introduction of Coca-Cola Zero Sugar, offer advantages such as leveraging brand equity and cost efficiency.
Coca-Cola's brand extension strategy involves introducing new products under the same brand name to leverage brand equity and reach new consumer segments. Coca-Cola Zero Sugar is an extension of the original Coca-Cola brand but targets consumers who prefer a sugar-free option.
Advantages:
1. Leveraging Brand Equity: Brand extension allows a company to capitalize on the existing brand reputation and equity it has built over time. In the case of Coca-Cola, leveraging the strong brand recognition and loyalty associated with the original product helps to create a positive perception for Coca-Cola Zero Sugar as well.
2. Cost and Time Efficiency: Introducing a brand extension can be more cost-effective and time-efficient compared to launching an entirely new brand. By utilizing an established brand name, companies can save on marketing expenses, as consumers are more likely to be receptive to a new product under a familiar brand.
Disadvantages:
1. Dilution of Brand Image: Brand extension carries the risk of diluting the original brand's image if the new product fails to meet consumer expectations. If Coca-Cola Zero Sugar had not gained acceptance, it could have potentially impacted the perception of the entire Coca-Cola brand.
2. Cannibalization: Brand extension may lead to cannibalization, where the new product competes with the existing product rather than attracting new customers. In the case of Coca-Cola, the introduction of Coca-Cola Zero Sugar may have cannibalized sales of regular Coca-Cola, as both products target similar consumer preferences.
In conclusion, brand extension strategies, like Coca-Cola's introduction of Coca-Cola Zero Sugar, offer advantages such as leveraging brand equity and cost efficiency, but they also come with risks of diluting brand image and potential cannibalization of existing products. Companies need to carefully evaluate these factors before implementing a brand extension strategy.
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The revenue for a firm is $2,100,000. Its cost of revenue is
$890,000, and its average inventory for the year is $52,000. What
is the inventory turnover? Round your answer to one decimal
place.
The inventory turnover for this firm is 17.1.
Inventory turnover is a financial ratio that measures how many times a company sells and replaces its inventory over a given period. It helps to determine whether a company's inventory management strategy is effective or not.
To calculate the inventory turnover, we divide the cost of revenue, which represents the cost of goods sold during the year, by the average inventory, which represents the average value of inventory held by the company during the year.
In the example given, the cost of revenue for the firm is $890,000, and the average inventory for the year is $52,000. Dividing the cost of revenue by the average inventory gives us an inventory turnover of 17.1. This means that the company sold and replaced its inventory 17.1 times during the year.
A high inventory turnover ratio indicates that a company is selling its inventory quickly and efficiently. This is generally seen as a positive sign because it reduces the risk of obsolete inventory and frees up cash that can be used for other purposes. On the other hand, a low inventory turnover ratio could indicate poor sales, overstocking, or inefficient inventory management.
Overall, the inventory turnover ratio is an essential metric for businesses to monitor regularly, as it can help identify potential problems in their inventory management practices and inform decisions about pricing, purchasing, and production.
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Create all of the communications and make a layout that one communicates with the employees to mobilize the company to deal with the following situation. Layout the strategy in approximately 1 page, including identifying who your key audiences are, what key messages are, and what you need them each to think-feel-do. Then submit the actual communication you have put together to execute your plan E.g. if you would communicate in an email or a memo, submit the written document; if you would recommend a video, submit the written script, etc.
The situation:
You are the head of Corporate Communications for a large widget manufacturer. Your company employs 1200 people on the manufacturing floor, 200 in the headquarters office and 100 sales people who work in remote locations
Recently a major defect was discovered in Widget B, your most popular and most profitable product. Your company is going to be dealing with massive returns of the product by customers, along with a large volume of questions and concerns. Replacing the defective items will require many hours of overtime in the plant, along with additional work in the office and the sales field. Plus, due to the economic impact, the company will not be able to pay any bonuses this year, or give any raises in the coming year
Corporate Communications Strategy: Dealing with Widget B Defect
Key Audiences: Manufacturing Floor Employees (1200 people)
Headquarters Office Employees (200 people)
Sales Team (100 people)
Key Messages:
Transparency: Communicate openly about the defect and its impact on the company.
Accountability: Emphasize the collective responsibility in addressing the situation.
Support: Assure employees that their efforts are valued and necessary for resolving the issue.
Unity: Encourage teamwork and collaboration across departments and locations.
Long-term Vision: Highlight the importance of maintaining customer trust and the potential for future growth.
Desired Outcomes:
Employees understand the gravity of the situation and the need for their active involvement.
Employees remain committed and motivated despite the challenges.
Employees feel supported and appreciated for their efforts.
Employees demonstrate resilience and adaptability to handle the increased workload effectively.
Communication Execution: Memo
Subject: Addressing Widget B Defect: A Collective Effort
Dear Team,
I hope this message finds you well. I wanted to bring to your attention a significant development concerning Widget B, our most popular product. Recent inspections have revealed a defect that requires immediate attention and action from all of us.
The impact of this defect extends beyond the manufacturing floor. It affects our sales team, our headquarters office, and the trust our customers have placed in us. We are now faced with the task of addressing customer concerns, processing returns, and replacing defective items.
I want to acknowledge the challenges that lie ahead. Resolving this issue will require extra effort, including overtime on the manufacturing floor, additional work in the office, and support from our sales team in the field. It is important to remember that our customers are counting on us to make things right.
I want you to know that your contributions are vital to the success of this endeavor. We cannot do this without each and every one of you. Your expertise, dedication, and teamwork will be essential in ensuring that we navigate this situation with integrity and efficiency.
I understand that the economic impact of this situation means we will not be able to provide bonuses this year or give raises in the coming year. However, let us remain focused on the long-term vision of our company. By resolving this issue promptly and maintaining our customers' trust, we can pave the way for future growth and success.
I encourage you to support each other, communicate openly, and seek guidance whenever needed. Together, we will overcome this challenge and emerge stronger as a team.
Thank you for your unwavering commitment and dedication to our company. I have full confidence in our collective ability to tackle this situation head-on and restore the trust our customers have in us.
Best regards,
[Your Name]
Head of Corporate Communications
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1 Briefly explain any TWO (2) categories of systematic risks and unsystematic risks Briefly explain the significance of Time Value of Money concept. Explain the organizational form of sole proprietorship, partnership, and corporation with examples. QUESTION 2 ZAMANI has just bought a new HONDA ACCORD that costs RM 89,000. She took a 9-year loan from ABC Bank that requires her to pay 10% of the cost, as down payment. Determine amount of ZAMANI’s annual payment if the ABC Bank interest is 4% per annum. How much will RM 2,000 deposited in a current account earning a compound annual interest rate of 6% be worth at the end of 4 years? We are going to deposit $5,600 at the end of each year for the next 10 years in a bank where it will earn 10% interest. How much will we get at the end of 10 years? We are going to deposit $1,000 at the beginning of each year for the next 5 years in a bank where it will earn 5% interest. How much will we get at the end of 5 years? Differentiate between Non-Current Assets and Current Assets. Non-Current Liabilities and Current Liabilities. Big Mom Sdn. Bhd is evaluating an investment with different probabilities. Based on the following information, calculate the expected return if the Treasury Bills carries a return of 5.5% Probability Market Return 1 0.17 7% 2 0.33 8% 3 0.43 11% 4 0.18 15% 5 0.22 12% QUESTION 3 Differentiate between Investment Decisions and Financing Decisions. Nasi Kandar Corp. is considering an investment in one of the two common shares. Given the information that follows, which investment is better, based on risk and return? COMMON SHARES LA COMMON SHARES TI Probability Return Probability Return 0.30 12% 0.20 -6% 0.40 16% 0.30 7% 0.30 20% 0.30 15% 0 0 0.20 23% Briefly explain characteristics Common Shares and Preferred Shares
1. Systematic risks refer to risks that affect the overall market or economy and cannot be diversified away, such as changes in interest rates or geopolitical events. Unsystematic risks are specific to a particular company or industry and can be reduced through diversification, such as management issues or product recalls.
The Time Value of Money concept recognizes that a dollar today is worth more than a dollar in the future due to the potential to earn interest or investment returns.
The three main organizational forms are sole proprietorship, partnership, and corporation. Each has its own characteristics and implications for liability, management, and ownership structure.
2.To determine Zamani's annual payment, the loan amount after the down payment needs to be calculated, and then the annual payment can be determined using the formula for a loan payment.
3. To calculate the future value of RM 2,000 deposited in a current account at a compound annual interest rate of 6% after 4 years, and to determine the amount accumulated after depositing $5,600 annually for 10 years at a 10% interest rate, you can use the formulas for compound interest and future value of an ordinary annuity, respectively.
1. Systematic risks are inherent in the system and affect all investments to some extent. They cannot be eliminated by diversifying a portfolio because they are related to macroeconomic factors that impact the entire market. Unsystematic risks, on the other hand, can be reduced through diversification by spreading investments across different companies or industries. This way, the impact of any specific risk on the overall portfolio is minimized.
The concept of Time Value of Money is based on the principle that money has a time-related value associated with it. This is because money can be invested or used to earn returns over time. By considering the time value of money, individuals and businesses can make informed decisions about investing, borrowing, or saving. It helps in evaluating investment opportunities, calculating loan payments, determining the present value of future cash flows, and comparing the profitability of different projects or investments.
Sole Proprietorship: In a sole proprietorship, a single individual owns and operates the business. The owner has unlimited liability for the business's debts and obligations. For example, a local bakery owned and operated by a single individual is a sole proprietorship.
Partnership: A partnership is formed when two or more individuals come together to carry out a business venture. They share the profits, losses, and managerial responsibilities based on the terms of their partnership agreement. Partnerships can be general partnerships, where all partners share equal liability, or limited partnerships, where some partners have limited liability. For instance, a law firm with multiple partners working together is a partnership.
Corporation: A corporation is a legal entity separate from its owners (shareholders). It has limited liability, meaning the shareholders' personal assets are generally protected from the corporation's debts and liabilities. Corporations are owned by shareholders and managed by a board of directors. Examples of corporations include multinational companies like Apple Inc. or Coca-Cola.
2. Calculation of Loan Amount: The down payment is 10% of RM 89,000, which is RM 8,900. Therefore, the loan amount after the down payment is RM 89,000 - RM 8,900 = RM 80,100.
Calculation of Annual Payment: Using the loan payment formula:
Annual Payment = Loan Amount * (Interest Rate / (1 - (1 + Interest Rate)^(-Number of Years)))
Substituting the values: Loan Amount = RM 80,100, Interest Rate = 4% (0.04), Number of Years = 9
Annual Payment = RM 80,100 * (0.04 / (1 - (1 + 0.04)^(-9)))
3. Calculation of Future Value of RM 2,000:
Future Value = Principal * (1 + Interest Rate)^Number of Years
Substituting the values: Principal = RM 2,000, Interest Rate = 6% (0.06), Number of Years = 4
Future Value = RM 2,000 * (1 + 0.06)^4
Calculation of Total Amount Accumulated after 10 Years:
Future Value = Payment * ((1 + Interest Rate)^Number of Years - 1) / Interest Rate
Substituting the values: Payment = $5,600, Interest Rate = 10% (0.10), Number of Years = 10
Future Value = $5,600 * ((1 + 0.10)^10 - 1) / 0.10
Calculation of Total Amount Accumulated after 5 Years:
Future Value = Payment * ((1 + Interest Rate)^Number of Years - 1) / Interest Rate
Substituting the values: Payment = $1,000, Interest Rate = 5% (0.05), Number of Years = 5
Future Value = $1,000 * ((1 + 0.05)^5 - 1) / 0.05
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You owe 15 equal end of month payments of Rs. 30,000 each on a machine. The machine was financed at 1/2% per month compounded monthly. If you wish to pay off the loan with a single payment today, what single amount do you need today to pay-off your loan?
To pay off a loan with a single payment, you need to determine the loan's present value. The present value is the current value of a future payment or stream of payments. It is calculated by discounting the future cash flows to the present using a discount rate, which, in this case, is the interest rate charged by the lender.
The formula for present value is:P = (C/[(1 + r)^n - 1]) x (1 + r)^-1Where:P = Present valueC = Amount of each end of month paymentr = Interest rate per period (in this case, 1/2% per month compounded monthly)n = Number of paymentsTo determine the present value of the loan payments, substitute the given values into the formula:P = (30000/[(1 + 0.005)^15 - 1]) x (1 + 0.005)^-1P ≈ 373,963.33Therefore, you need approximately Rs. 373,963.33 today to pay off the loan.
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Whispering Corporation traded a used truck (cost $29,600, accumulated depreciation $26,640) for a small computer with a fair value of $4,884. Whispering also paid $740 in the transaction.
Prepare the journal entry to record the exchange, assuming the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Accounts Titles and Explanation Debit Credit
2. Stellar Company traded a used welding machine (cost $13,140, accumulated depreciation $4,380) for office equipment with an estimated fair value of $7,300. Stellar also paid $4,380 cash in the transaction.
Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Accounts Titles and Explanation Debit Credit
1. Journal entry for Whispering Corporation (exchange lacks commercial substance): Equipment (Small Computer) 5,624
Accumulated Depreciation (Truck) 26,640 Loss on Disposal of Equipment 1,136Truck 29,600 Cash 740
Whispering Corporation is recording the exchange of a used truck with a fair value of $4,884 for a small computer.
1,136Truck 29,600 Cash 740
Whispering Corporation is recording the exchange of a used truck with a fair value of $4,884 for a small computer. Since the exchange lacks commercial substance, the fair value of the small computer is not considered. The entry debits the Equipment (Small Computer) for its fair value of $4,884 and debits the Accumulated Depreciation (Truck) for the accumulated depreciation of $26,640. The difference between the truck's cost ($29,600) and its accumulated depreciation is a loss on disposal of $1,136, which is also debited. The truck's original cost is credited for $29,600, and cash is credited for the additional payment of $740.
2. Journal entry for Stellar Company (exchange has commercial substance):
Office Equipment 7,300 Accumulated Depreciation (Welding Machine) 4,380
Cash 4,380 Welding Machine 13,140
Gain on Disposal of Equipment 1,460
Stellar Company is recording the exchange of a used welding machine with an estimated fair value of $7,300 for office equipment. Since the exchange has commercial substance, the fair value of the office equipment is considered. The entry debits the Office Equipment for its fair value of $7,300. The Accumulated Depreciation (Welding Machine) is debited for the accumulated depreciation of $4,380. Cash is debited for the additional payment made of $4,380. The Welding Machine's original cost is credited for $13,140, and the difference between its fair value and its original cost is a gain on disposal of $1,460, which is also credited.
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The process of starting a talent development program requires a
minimum of how many steps?
What are these steps?
Instructional design
There are two minimum steps in starting a talent development program: First, the identification of talent needs, and second, the development of training materials.
The following are some steps involved in starting a talent development program:
1. Identification of Talent Needs: Before starting the talent development program, it is essential to identify the exact talent requirements. The requirements can be identified by examining performance reviews, conducting a needs analysis, and identifying the skills gaps within the organization.
2. Development of Training Materials: Once the talent requirements have been identified, it is necessary to develop training materials. These materials should be designed to help employees develop the skills they need to excel in their roles.
3. Instructional Design: The next step is to develop instructional design plans. These plans should outline the training objectives, teaching methods, and assessment strategies.
4. Implementation: After the instructional design plans have been completed, it's time to implement the training program.
5. Evaluation: Once the program has been implemented, it's important to evaluate its effectiveness. Evaluation can be conducted through performance metrics, employee feedback, and other means.
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The risk taking culture of an organization has no bearing upon
its project selection process.
a.True
b. False
The given statement is false. A risk-taking culture is an environment that encourages workers to take calculated risks, experiment, and innovate to achieve their goals. It is the recognition that failure is a possibility, but that the potential rewards outweigh the potential risks.
What is the project selection process?Project selection is a decision-making process in which various project proposals are evaluated to determine which ones are the most promising. A number of techniques are used to evaluate and prioritize projects, including cost-benefit analysis, weighted scoring models, and payback periods.
An organization's project selection process is influenced by a variety of factors, one of which is the company's culture. A company's culture might, for example, emphasize risk-taking, innovation, and experimentation, leading to a greater willingness to undertake projects that are uncertain but potentially high-reward.
While it is possible to separate an organization's project selection process from its risk-taking culture, the two are frequently intertwined. A company with a strong risk-taking culture is more likely to undertake projects that are uncertain but have the potential for high rewards, while a company with a more cautious culture is more likely to stick with tried-and-true projects with a high probability of success. As a result, while the project selection process and risk-taking culture can be separate, they frequently influence one other.
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Given Q d
=10P −0.4
. a) (i) Find elasticity of demand at P=$5. (ii) What is the economic interpretation? b) State three possible economic interpretation of elasticity.
The elasticity of demand at P=$5 is -0.759. The elasticity of demand is a measure of the responsiveness of quantity demanded to changes in various factors such as price, income, or the price of related goods.
a) (i) To find the elasticity of demand at a specific price, we need to use the formula for elasticity:
Elasticity of demand (ε) = (dQd/dP) × (P/Qd)
Given the demand function [tex]Qd = 10P^{(-0.4)}[/tex], we can differentiate it concerning P to find dQd/dP:
[tex]dQd/dP = -4P^{(-1.4)}[/tex]
ε [tex]= (-4P^{(-1.4)}) \times (P / Qd)[/tex]
Let's calculate the elasticity at P = $5:
[tex]\epsilon = (-4(5)^{(-1.4)}) \times (5 / Qd)\\Qd = 10(5)^{(-0.4)}\\Qd \approx 7.937\\\epsilon = (-4(5)^{(-1.4)}) \times (5 / 7.937)\\\epsilon \approx -0.079[/tex]
(ii) The economic interpretation of the elasticity of demand at P=$5 is that for a 1% increase in price (assuming all other factors remain constant), the quantity demanded will decrease by approximately 0.079%. This indicates that the demand is relatively inelastic since the magnitude of the elasticity is less than 1.
b) The economic interpretations of elasticity can vary depending on the specific context, but here are three possible interpretations:
1. Price elasticity of demand: This measures the responsiveness of quantity demanded to a change in price. If the price elasticity of demand is greater than 1 (elastic), it indicates that demand is sensitive to price changes. If it is less than 1 (inelastic), it indicates that demand is less sensitive to price changes.
2. Income elasticity of demand: This measures the responsiveness of quantity demanded to a change in income. It indicates how the demand for a product or service changes as consumers' income changes. If the income elasticity is positive, it indicates a normal good (demand increases with an increase in income). If it is negative, it indicates an inferior good (demand decreases with an increase in income).
3. Cross elasticity of demand: This measures the responsiveness of quantity demanded of one good to a change in the price of another good. It helps determine the relationship between a substitute or complementary goods. If the cross elasticity is positive, it indicates substitute goods (an increase in the price of one good lead to an increase in demand for the other). If it is negative, it indicates complementary goods (an increase in the price of one good leads to a decrease in demand for the other).
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How does fixing up a school route for a private school bus company saves money? What diffrent ways can a private school bus company fix its own routes to save gas ? What online website, APP or software could they use ? After researching pick 1 and explain how you would implement it into a Private school bus business? 500 words or more please
Fixing up a school route for a private school bus company can save money through various means, including reducing fuel consumption, optimizing driver schedules, and minimizing operational inefficiencies. By implementing efficient route planning strategies and leveraging technology, private school bus companies can optimize their routes, reduce fuel consumption, and increase overall cost savings.
Reduced Fuel Consumption: Efficient route planning plays a crucial role in saving fuel costs for private school bus companies. By optimizing routes to minimize distance traveled and reduce idle time, companies can significantly decrease fuel consumption. This can be achieved by carefully considering the geographical layout of the school district, identifying the most efficient paths, and eliminating unnecessary detours or overlapping routes.
Optimized Driver Schedules: Another way to save gas is by optimizing driver schedules. Efficient route planning allows for better allocation of resources, reducing the number of trips, and maximizing the number of students served per trip. By assigning drivers to routes in a strategic manner, private school bus companies can minimize empty or underutilized trips, resulting in fuel savings.
Minimized Operational Inefficiencies: Fixing up school routes can help identify and eliminate operational inefficiencies that can contribute to unnecessary fuel consumption. By analyzing current routes and identifying areas where there is excessive waiting time, congestion, or inefficient stops, companies can make adjustments to optimize the routes and reduce fuel waste.
Route Optimization Software: Private school bus companies can leverage route optimization software to streamline their route planning processes. These software solutions utilize algorithms and data analysis to determine the most efficient routes based on factors such as student locations, traffic patterns, and time constraints. By inputting relevant data and parameters, the software can generate optimized routes that minimize travel time and fuel consumption.
One example of a route optimization software that private school bus companies can consider is "Optibus." Optibus is a cloud-based platform designed specifically for public transportation, including school bus operations. It offers features such as real-time tracking, demand forecasting, and automated optimization algorithms to create efficient routes. The software takes into account various factors like traffic, road conditions, and student schedules to generate optimal routes that minimize fuel consumption and improve overall operational efficiency.
To implement Optibus into a private school bus business, the company would need to subscribe to the software service and integrate it with their existing systems. This would involve inputting relevant data such as student addresses, school schedules, and driver availability into the software. The software would then analyze the data and generate optimized routes that maximize fuel savings. The company would need to train their staff on how to use the software effectively and monitor its performance to ensure ongoing efficiency and cost savings.
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In considering Michael Porter’s Generic Strategies, Porter acknowledges that the strategies can be combined under certain circumstances. Describe Porter’s Generic strategies using examples from a business in a key industry area such as mobiles, computers or international airlines. Outline where Porters suggests strategies can be combined.
The key is to select the most appropriate strategy based on the business's strengths, market conditions, and competitive landscape.
Michael Porter's Generic Strategies concept outlines three primary strategies for businesses to achieve competitive advantage. They are:
Cost Leadership Strategy: This strategy aims to become the lowest-cost producer in the industry while maintaining high-quality products or services. It is suitable for businesses that compete on price and cost efficiency, such as low-cost airlines or budget mobile phone manufacturers.Differentiation Strategy: This strategy focuses on developing unique, high-quality products or services that are valued by customers and difficult to imitate by competitors. It is adopted by businesses that emphasize high-quality and design, such as Apple Inc.Focus Strategy: This strategy concentrates on serving a particular niche or market segment with specialized products or services. It is suitable for businesses targeting a specific demographic or geographic market, such as regional airlines.Porter acknowledges that these strategies can be combined under certain circumstances. Businesses can opt for a hybrid strategy called the "best-cost strategy," which combines cost leadership and differentiation strategies. This allows businesses to deliver high-quality products or services at a reasonable cost, appealing to price-sensitive customers.
Another combination is the "focused differentiation strategy," which combines the differentiation strategy with a focus on serving specialized needs in small markets. For example, a computer company specializing in gaming laptops would provide high-quality products designed specifically for gamers.
The key is to select the most appropriate strategy based on the business's strengths, market conditions, and competitive landscape. It is crucial not to adopt a strategy simply because it is popular or successful for other companies. Instead, businesses should carefully evaluate their options and choose a strategy that aligns with their strengths and long-term goals.
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The U.S. health system comprises these six major components that "ideally" must work together but sometimes don't: patients, providers, government agencies, insurance companies, suppliers and financial sources. If the components are fragmented, i.e. function often independently and with different goals, why do you think that happens? What impact does that have on the system, other components and patients as a whole? Can you think of examples of this fragmentation you see in your jobs or as consumers of healthcare? Is there a practical solution to this challenge?
The components of the US health system sometimes don't work together is fragmentation. Each component of the US health system often functions independently with different goals. Due to this fragmentation, the US health system lacks a unified vision, and its components operate in silos.
The impact of this fragmentation is that it has a significant effect on the system, other components, and patients as a whole. For instance, patients who have chronic conditions often visit different providers with different specialties and use different insurance companies. As a result, their medical information often gets lost, and their treatments are not coordinated. Furthermore, this fragmentation leads to high healthcare costs and administrative costs. Patients often have to bear the costs of coordination, which increases healthcare costs. Suppliers have to deal with different regulations and reporting requirements from different government agencies, which increases administrative costs. Moreover, it affects the quality of care that patients receive. Due to this fragmentation, there is no central agency responsible for monitoring and ensuring that patients receive quality care. Examples of this fragmentation that can be seen in jobs or as consumers of healthcare include multiple insurance companies offering different benefits and medical providers operating independently with varying technologies. The practical solution to this challenge is to create a comprehensive health system that has a unified vision. The components of the system should be interconnected to provide coordinated and patient-centered care.
o achieve this, policymakers can consider implementing health information technology (HIT) infrastructure that would allow electronic health records (EHRs) to be shared across different providers and hospitals. Moreover, policymakers can consider implementing a value-based payment system, where providers are paid based on the quality of care they provide rather than the volume of care they provide. By doing so, healthcare providers would be incentivized to provide quality care, and patients would receive better care.
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What is the yield to maturity for the following bonds? Assume
these are bonds issued in the U.S. Use the Excel RATE function to
solve.
(a)
10 years to maturity, 6% coupon rate, current price is $950.
The yield to maturity for a bond with 10 years to maturity, a 6% coupon rate, and a current price of $950 can be calculated using the Excel RATE function.
The yield to maturity (YTM) is the total return anticipated on a bond if it is held until its maturity date. It is the interest rate that equates the present value of the bond's future cash flows (coupon payments and the final principal repayment) with its current price.
To calculate the YTM using the Excel RATE function, we can use the formula "=RATE(nper, pmt, pv, [fv], [type])", where:
1. nper represents the number of periods until maturity (in this case, 10 years)
2. pmt represents the periodic coupon payment (6% of the par value)
3. pv represents the present value of the bond (current price, $950)
4. [fv] represents the future value or the par value of the bond (typically $1,000)
5. [type] represents the timing of the coupon payments (usually set to 0 for end-of-period payments)
By plugging in the values, we can use the RATE function in Excel to calculate the yield to maturity for the bond.
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Consider the two inventory models (basic fixed-order quantity and the economic-order quantity with re-order point) discussed in the small group discussion forum of this unit. For each model, answer the following questions:
1.1 How would each model apply to Hali-Nature Care’s operation (i.e. how would the model work, considering the nature of Hali-Nature Care’s options)? (Max. 6 lines).
1.2 Which one of these models would be the best fit for Nature Care’s operation?
1.1 In the case of Hali-Nature Care, the basic fixed-order quantity model would involve placing orders for a predetermined quantity of inventory whenever the stock level reaches a specific reorder point. This model would be suitable for items that have a consistent demand rate and a lead time that remains relatively stable.
Hali-Nature Care would determine the reorder point based on factors such as lead time, demand variability, and desired service level.
On the other hand, the economic order quantity (EOQ) model with a reorder point would consider both the optimal order quantity and the reorder point. The EOQ would determine the most cost-effective quantity to order, taking into account factors such as holding costs, ordering costs, and demand variability. The reorder point would indicate the inventory level at which a new order should be placed to avoid stockouts.
1.2 Considering the nature of Hali-Nature Care's operation, the economic order quantity (EOQ) model with a reorder point would likely be the best fit. This is because Hali-Nature Care deals with natural and organic products, which may have varying demand patterns. The EOQ model with a reorder point allows for more flexibility in adjusting the order quantity based on the actual demand and considering lead time variability. By incorporating a reorder point, Hali-Nature Care can also better manage stockouts and ensure timely replenishment of inventory, which is crucial for maintaining customer satisfaction in the health and wellness industry.
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Jacob bought a building lot for $52,000 and sold it two years later for a 20% profit. How much did it sell for? $61,800 $62,400 $60,600 510,400 The Dehavilands' home on Dove Street is valued at $75,000. Property in their area is assessed at 35% of its value and the local tax rate is $1.90 per hundred. What is the amount of the DeHavilands' monthly taxes? $41.56 551.45 5118.75 $75.69b
Jacob sold the building lot for $61,800. The DeHavilands' monthly taxes amount to $41.56.
a) To calculate the selling price of the building lot, we need to add the 20% profit to the purchase price. Since Jacob bought the lot for $52,000 and made a 20% profit, the selling price can be calculated as follows:
Profit = 20% of $52,000 = $52,000 * 0.20 = $10,400
Selling Price = Purchase Price + Profit = $52,000 + $10,400 = $62,400
Therefore, the building lot was sold for $62,400.
b) To calculate the DeHavilands' monthly taxes, we need to find 35% of the assessed value of their home and then calculate the tax amount based on the local tax rate of $1.90 per hundred.
Assessed Value = 35% of $75,000 = $75,000 * 0.35 = $26,250
Tax Amount = Assessed Value * (Tax Rate / 100) = $26,250 * ($1.90 / 100) = $498.75
Therefore, the DeHavilands' monthly taxes amount to $41.56 ($498.75 divided by 12 months). In conclusion, Jacob sold the building lot for $62,400, and the DeHavilands' monthly taxes amount to $41.56.
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A company spokesman publicly announces that the company will be expanding their production capacity in the U.S. You believe that this will be good for the company's future cash flows and that you should buy the stock. Which of the following a true statement, if the stock market is semi-strong form efficient? a. The stock price will likely not have reacted fully to the announcement, and you will expect to earn abnormal returns by buying the stock. b. The stock price will have over-reacted to the announcement, and you will expect to earn abnormal returns by selling the stock short. c. The stock price will have correctly reacted to the company announcement and you will not be able to expect to earn abnormal returns on this stock. d. None of the above.
If the stock market is semi-strong form efficient, it means that stock prices reflect all publicly available information, including news and announcements.
In this case, if the announcement of the company expanding its production capacity in the U.S. is considered public information, it would have already been incorporated into the stock price.
Therefore, the correct statement would be:
c. The stock price will have correctly reacted to the company announcement, and you will not be able to expect to earn abnormal returns on this stock.
According to the semi-strong form efficiency, all available information is already reflected in the stock price, and it is unlikely that you can consistently earn abnormal returns by trading based on publicly available information.
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A bank business development VP agrees to sell bank
customer data to an ad agency in exchange for $100.000. The VP
sends the ad agency names, contact information, and the monthly
spending range of the
The decision of the bank business development VP to sell bank customer data to an ad agency in exchange for $100,000 is highly unethical.
The selling of customer data to third-party entities without their knowledge or consent is a clear violation of the customer's privacy rights. It is also a breach of trust between the bank and its customers, which can severely damage the reputation of the bank and lead to a loss of customer confidence and trust. The information sent by the VP to the ad agency is also highly sensitive, including names, contact information, and monthly spending ranges.
Such information can be used to create targeted marketing campaigns that may be manipulative or predatory in nature, leading to potential harm to the customer. The VP has not only breached customer privacy but also put their personal and financial security at risk.
The act of selling customer data for monetary gain also violates several regulations and laws, including the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
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Interest expense = $250,000.
Total invested capital employed = $9.9 million.
After-tax cost of capital = 10%.
What is the company's EVA? Answer options are provided in whole dollar.
a. -$234,000 b. $18,000 c. $1,933,500 d. -$46,500 e. $268,000
Interest expense = $250,000.
Total invested capital employed = $9.9 million..The company's eva is $268,000..
the company's economic value added (eva) is $268,000 (e).
eva is calculated by subtracting the after-tax cost of capital from the net operating profit after taxes (nopat).
the formula for eva is:eva = nopat - (after-tax cost of capital * total invested capital employed)
given information:
interest expense = $250,000total invested capital employed = $9.9 million
after-tax cost of capital = 10%
first, we need to calculate the nopat:nopat = net income + interest expense * (1 - tax rate)
since the interest expense is given as $250,000 and the tax rate is not provided, we'll assume a tax rate of 35% for this example.
tax rate = 35%net income = nopat - interest expense * (1 - tax rate)
net income = nopat - $250,000 * (1 - 0.35)
next, we calculate the eva:
eva = net income - (after-tax cost of capital * total invested capital employed)eva = net income - (0.10 * $9,900,000)
substituting the calculated values:
eva = net income - $990,000
from the answer s, the only value that matches is $268,000 (e).
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Calculate the present value of the cash flow using a discount rate of 4 percent.
a) Receive $10,000 paid to you 6 years from now
Present value of the cash flow using a discount rate of 4 percent that receives $10,000 paid to you 6 years from now can be calculated as follows.
Formula used: PV = FV / (1 + r) ^ n Where, PV is the present value of the future cash flow FV is the future cash flown is the number of years r is the discount rate Given ,FV = $10,000n = 6 years r = 4% or 0.04Substituting the values in the formula: PV = $10,000 / (1 + 0.04) ^ 6= $10,000 / 1.2653= $7,902.24Therefore, the present value of the cash flow using a discount rate of 4 percent that receives $10,000 paid to you 6 years from now is $7,902.24.
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After Christianity became protected by the Roman empire (tick all that apply)
Group of answer choices:
in their wills, people could leave their wealth to the church
the state had the power to enforce Christian orthodoxy
its members started to come from various levels of Roman society
it continued to be a small, outcast relgion
its leaders insisted that slavery end
After Christianity became protected by the Roman empire, the state had the power to enforce Christian orthodoxy, in their wills, people could leave their wealth to the church, and its members started to come from various levels of Roman society.
The history of Christianity in the Roman Empire begins in the 1st century AD. As a result of Jewish proselytism, it came into contact with the Roman Empire. By the end of the 2nd century, it had obtained enough legitimacy to withstand Roman persecution. When Emperor Constantine converted to Christianity, the relationship between the Roman Empire and the Christian Church improved.
Instead, it continued to grow and become more powerful throughout the Roman Empire. Therefore, the following options are correct:
- In their wills, people could leave their wealth to the church
- The state had the power to enforce Christian orthodoxy
- Its members started to come from various levels of Roman society
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Select the answer corresponding to the correctly written sentence. (3 points)
Group of answer choices
A) The project lasted from April 9, 2020, until yesterday.
B) The project lasted from April 9th, 2020, until yesterday.
C) The project lasted from April 9, 2020 until yesterday.
D) The project lasted from April 9th, 2020 until yesterday.
The correct answer is C) The project lasted from April 9, 2020 until yesterday.
In this sentence, the use of a comma before "until yesterday" is appropriate because it separates the starting date (April 9, 2020) from the ending point (yesterday).
Additionally, there is no need to use "th" after the numeral 9 in the date since "9th" is typically used in written or ordinal form. The sentence is clear and correctly punctuated, providing a concise and accurate representation of the duration of the project.
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ools S uctory Ch 10: End-of-Chapter Problems - The Cost of Capital Back to Assignment Attempts Keep the Highest/2 10. Problem 10.15 (WACC and Cost of Common Equity) 9 ellook Kahn Inc. has a target capital structure of 60% common equity and 40% debt to fund its $11 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 15%, a before-tax cost of debt of 12%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend nex year (D₁) is $3, and the current stock price is $26. a. What is the company's expected growth rate? Do not round intermediate calculations, Round your answer to two decimal places. x b. If the firm's net income is expected to be $1.7 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations Round your answer to two decimal places. (Hint: Refer to Equation below.) Growth rate= (1-Payout ratio)ROE Grade it Now Save & Continue Continue without saving C A-Z BRIN
The Gordon Growth Model, also known as the Dividend Discount Model, is a method used to value a company's stock by estimating its intrinsic value based on expected dividends and a required rate of return.
a. To calculate the expected growth rate, we can use the Gordon Growth Model. The formula is:
Expected Growth Rate = (Dividend / Current Stock Price) + Return on Equity (ROE)
Given information:
Dividend (D₁) = $3
Current Stock Price = $26
To find the ROE, we need to use the equation:
ROE = (Net Income / Equity)
Since the company's retained earnings are adequate to provide the common equity portion, we can assume that Equity equals the total capital budget. The capital budget is given as $11 billion.
ROE = Net Income / Equity = $1.7 billion / $11 billion
Now we can substitute the values into the Gordon Growth Model formula:
Expected Growth Rate = (3 / 26) + (1.7 billion / 11 billion)
Simplifying the equation:
Expected Growth Rate = 0.1154 + 0.1545
Expected Growth Rate = 0.2699 or 26.99% (rounded to two decimal places)
Therefore, the company's expected growth rate is 26.99%.
b. To calculate the portion of net income expected to be paid out as dividends (Payout ratio), we can use the formula:
Payout ratio = Dividend / Net Income
Given information:
Dividend (D₁) = $3
Net Income = $1.7 billion
Substituting the values into the formula:
Payout ratio = 3 / 1.7 billion
Payout ratio = 0.0018
Therefore, the firm is expected to pay out 0.18% of its net income as dividends.
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What should King’s Hawaiian do to reduce volatility, risk, and
raw material variability in their supply chain?
King's Hawaiian could reduce volatility, risk, and raw material variability in their supply chain by implementing strategies like diversification of suppliers, long-term contracts, predictive analytics, and inventory management.
In more detail, diversifying suppliers would ensure that if one supplier fails to deliver, there are others to compensate. Long-term contracts can lock in prices and availability of raw materials, thus reducing the risk of variability. Predictive analytics can help forecast demand and supply trends, helping the company prepare for potential disruptions. Effective inventory management, perhaps through a just-in-time approach, could minimize storage costs and the risk of raw material wastage. Implementing supply chain risk management systems or technologies would help in monitoring, assessing, and mitigating potential risks in a timely manner.
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Your closet has 4 different pants, 5 different shirts and 3 pairs of socks. a) Draw a tree diagram for the number of different outfits you can put together. b) Use the Fundamental Counting Principle to verify the number of outfits you can put together. 3. A candy bag contains 4 pieces of red licorice, 10 pieces of black licorice, and 6 pieces of green licorice. Glenda selects a piece at random. What is the probability that she selects (2 marks each) a) either red or green licorice? b) a black and a green licorice? c) a red then a black licorice? Part D: Thinking This section is worth 11 marks. 1. A cooler contains 11 root beer cans, 12 Orange Crush cans, 19 Sprite cans, 4 regular Pepsi cans, and some Diet Pepsi cans. The probability of selecting a Pepsi product is 0.25. How many Diet Pepsi cans are there in the cooler? P(A)=" n(A) n(S) Hint: Consider the formula
a) Here, we have to draw the tree diagram for the number of different outfits we can put together. The tree diagram of outfits is shown below:b) Let’s verify the number of outfits we can put together using the Fundamental Counting Principle.Fundamental Counting Principle states that if an event M can occur in m ways and another event N can occur in n ways, then the event M followed by event N can occur in m x n ways.
Let the event of selecting one pant from 4 different pants be M, the event of selecting one shirt from 5 different shirts be N, and the event of selecting one pair of socks from 3 pairs of socks be O.Number of ways of selecting one pant from 4 different pants = 4 Number of ways of selecting one shirt from 5 different shirts = 5 Number of ways of selecting one pair of socks from 3 pairs of socks = 3 Using the Fundamental Counting Principle, the number of different outfits we can put together = 4 × 5 × 3= 60 Therefore, we verified that the number of outfits we can put together is 60.3. a) Total number of pieces of red, black, and green licorice = 4 + 10 + 6 = 20 Probability of selecting either red or green licorice = P(Red or Green)= P(Red) + P(Green) [By addition rule of probability]= 4/20 + 6/20= 10/20= 1/2b) Probability of selecting a black licorice = P(Black) = 10/20 = 1/2 Probability of selecting a green licorice = P(Green) = 6/20 = 3/10
Probability of selecting a black and a green licorice = P(Black and Green)= P(Black) × P(Green) [By multiplication rule of probability]= 1/2 × 3/10= 3/20c) Probability of selecting a red licorice at first = P(Red) = 4/20 Probability of selecting a black licorice after selecting a red licorice = P(Black after Red)= 10/19 [One red licorice has been already selected]Probability of selecting a red then a black licorice = P(Red and Black)= P(Red) × P(Black after Red) [By multiplication rule of probability]= 4/20 × 10/19= 2/19D. Total number of Pepsi products = 4 + x Probability of selecting a Pepsi product = P(Pepsi)= Number of Pepsi products / Total number of pieces of licorice= 4 + x / 4 + 10 + 6 + x= 0.25[Given]4 + x = 5 + 0.25x=> x - 0.25x = 5 - 4=> 0.75x = 1=> x = 1 / 0.75= 4 / 3 Therefore, there are 4 / 3 or 1.33 (approx) Diet Pepsi cans in the cooler.
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JKL had receivables of £35,946 & payables of £15,957. If
JKL’s cash conversion period was 141 days, calculate inventory held
in current assets. Turnover was £80,000 & gross profit margin
Given data are:Receivables (debtors) [tex]= £35,946[/tex]Payables (creditors)[tex]= £15,957[/tex]Cash conversion period = 141 daysTurnover =[tex]£80,000[/tex]Gross profit margin = ??To calculate the inventory held in current assets, we need to use the cash conversion period formula.
Cash conversion period formula= (Inventory held ÷ Cost of sales) × 365 daysFor a rough estimate, we can use the following cash conversion period (CCP) formula:CCP = Average time to sell inventory + Average time to collect receivables – Average time to pay creditors.Since we have information on receivables and payables, we can calculate the time taken for their collection and payment, respectively.
Inventory held = CCP × Cost of sales / 365 daysInventory held = 141 days × £(80,000 * (1 - Gross profit margin)) / 365 daysNow, we have all the information we need to calculate the inventory held in current assets.Inventory held = CCP × Cost of sales / 365 days= 141 days[tex]× £(80,000 *[/tex] (1 - Gross profit margin)) / 365 days[tex]= £30,506.85[/tex]/ (1 - Gross profit margin)Therefore, the answer is[tex]£30,506.85[/tex] / (1 - Gross profit margin) and has more than 100 words.
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Johinson setis $118,000 of product to Robbins, and aiso purchases $13,600 of advertising services from Robbins. The advertising services have a fair value of $9,800. Johnson should recognize total revenue to account for these events of: Muibple Choice $114,200 $108,200 5104,400 $118.000
Johnson should recognize total revenue of $121,800 to account for these events.
In order to calculate the total revenue from the given scenario, the following steps must be taken:
1. Calculate the total cost of goods sold-
The total cost of goods sold will be equal to the cost of products shipped to Robbins by Johnson.
This comes out to be $118,000.
2. Calculate the total value of advertising services-
The fair value of advertising services provided by Robbins to Johnson is $9,800.
3. Calculate the net value of advertising services-
The net value of advertising services will be the difference between the fair value of advertising services provided by Robbins and the price paid for those services by Johnson. This comes out to be $3,800.
4. Calculate the total revenue-
Total revenue will be equal to the total cost of goods sold plus the net value of advertising services.
This comes out to be $118,000 + $3,800 = $121,800.
So, Johnson should recognize total revenue of $121,800 to account for these events.
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