Internet-based business description:The Internet is a vast universe of business opportunities. A popular business model is e-commerce, which is the buying and selling of products and services over the Internet. The company that you want to start would be an e-commerce business that sells shoes.
The staff you will need to manage your firm:You'll need to keep a few key staff positions in mind when it comes to starting a business. Here are the essential positions that you should consider:Executive Manager: They are in charge of setting and executing the company's strategic goals. Their responsibilities include managing workers, ensuring customer satisfaction, and managing financial operations.
The salary expense for each of these positions would be dependent on their specific duties, as well as the level of experience. In general, an executive manager might make around $100,000, an e-commerce manager might make $80,000, a marketing manager might make $70,000, and a bookkeeper might make $40,000.
To know more about business,visit:-
https://brainly.com/question/32941352
#SPJ11
High performing cultures has the following except
a strong sense of involvement on the part of all personnel
pride in doing things right
a "can-do" spirit of results-oriented work climate where people do more than is expected to meet or beat stretch objectives
a lack of commitment from leaders
an emphasis on individual initiative and creativity
High performing cultures has the following except option 3. a lack of commitment from leaders.
High performing cultures are characterized by several factors, including a strong sense of involvement on the part of all personnel, pride in doing things right, a "can-do" spirit of results-oriented work climate where people do more than is expected to meet or beat stretch objectives, and an emphasis on individual initiative and creativity.
The only thing that is not associated with high performing cultures is a lack of commitment from leaders. In high performing cultures, leaders are typically committed to the organization's goals and provide guidance and support to their employees to help them achieve those goals.
What is a High-Performance Culture?
A high-performance culture is a workplace environment in which all members of the organization are motivated and driven to achieve the company's objectives. This culture is characterized by a focus on results and a willingness to go above and beyond what is expected to achieve those results.
High-performance cultures are also marked by a strong sense of collaboration, creativity, and innovation, as well as a commitment to continuous improvement and learning.
Employees in a high-performance culture are typically highly engaged, motivated, and dedicated to their work.
Hence, High performing cultures has the following except option 3. a lack of commitment from leaders.
Learn more about cultures here:
https://brainly.com/question/12718739
#SPJ11
Purchase-Related Transactions Warwick's Co., a women's clothing store, purchased $24,000 of merchandise from a supplier on account, terms FOB destination, 1/10, n/30, Warwick's returned $4,100 or the merchandise, receiving a credit memo. a. Journalize Warwick's Co.'s entry to record the purchase. b. Journalize Warwick's Co.'s entry to record the merchandise return. c. Journalize Warwick's Co. entry to record the payment within the discount period of ten days. d. Journalize Warwick's Co. entry to record the payment beyond the discount period of ten days. If an amount box does not require an entry, leave it blank
Warwick's Co., a women's clothing store, had purchase-related transactions involving a purchase, merchandise return, and payment. The journal entries for each transaction are as follows:
a. The purchase of $24,000 merchandise on account is recorded by debiting Merchandise Inventory and crediting Accounts Payable.
b. The return of $4,100 worth of merchandise is recorded by debiting Accounts Payable and crediting Merchandise Inventory.
c. The payment within the discount period of ten days, amounting to $23,760, is recorded by debiting Accounts Payable and crediting Cash.
d. The payment beyond the discount period, amounting to $24,000, is recorded by debiting Accounts Payable and crediting Cash.
In the given transactions, Warwick's Co. is involved in purchasing merchandise on account, returning some of the merchandise, and making payments within or beyond the discount period.
In transaction (a), the purchase of $24,000 worth of merchandise on account is recorded. This increases the Merchandise Inventory account, representing the inventory acquired, and increases the Accounts Payable account, reflecting the amount owed to the supplier.
Transaction (b) records the return of $4,100 worth of merchandise. This decreases the Accounts Payable account since Warwick's Co. no longer owes that amount to the supplier. It also decreases the Merchandise Inventory account, reflecting the return of the merchandise.
Transaction (c) involves a payment made within the discount period of ten days. The Accounts Payable account is debited by the discounted amount paid, $23,760, reducing the outstanding amount owed to the supplier. The Cash account is credited with the same amount, reflecting the cash outflow.
In transaction (d), a payment is made beyond the discount period, resulting in the full amount owed being paid. The Accounts Payable account is debited with $24,000, eliminating the remaining outstanding balance. The Cash account is credited with the same amount, representing the cash outflow from Warwick's Co.
These journal entries accurately record the purchase, merchandise return, and payment transactions for Warwick's Co. in accordance with the given information.
Learn more about account here:
brainly.com/question/30977839
#SPJ11
Rajat Sharma has been employed for six months in the accounts section of a large manufacturing company in Faridabad. You have been his supervisor for the past three months. Recently you have been asked by the management to find out the contributions of each employee in the Accounts Section and monitor carefully whether they are meeting the standards set by you. A few days back you have completed your formal investigation and with the exception of Rajat, all seem to be meeting the targets set by you. Along with numerous errors, Rajat’s work is characterized by low performance – often he does 20 percent less than the other clerks in the department. As you look into Rajat’s performance review sheets again, you begin to wonder whether some sort of remedial training is needed for people like him.
QUESTIONS:
1. As Rajat’s supervisor can you find out whether the poor performance is due to poor training or to some other cause?
2. If you find Rajat has been inadequately trained, how do you go about introducing a remedial training program?
3. If he has been with the company for six months, what kind of remedial program would be best?
4. Should you supervise him more closely? Can you do this without making it obvious to him and his co-workers?
5. Should you discuss the situation with Rajat?
1. As Rajat’s supervisor can you find out whether the poor performance is due to poor training or to some other cause?As Rajat’s supervisor, I could find out whether the poor performance is due to poor training or to some other cause by observing the following issues related to Rajat’s job performance.
Firstly, whether Rajat is given adequate training about the task he is expected to perform.Secondly, whether Rajat fully understands the company’s policies and procedures that relate to his job.Thirdly, whether Rajat is motivated and shows interest in his job.Finally, whether there are any personal problems that are affecting Rajat’s job performance.2. If you find Rajat has been inadequately trained, how do you go about introducing a remedial training program. If I find that Rajat has been inadequately trained, I will introduce a remedial training program that can help him to perform his job better.
The steps that I would take to introduce this training program are as follows:First, I will communicate with Rajat and explain the training program to him.Secondly, I will set a specific time to conduct the training program and communicate it to Rajat.Thirdly, I will prepare a training schedule that is structured and will cover all aspects of the job that Rajat is expected to perform.Finally, I will provide Rajat with feedback on his performance after the training program.
To know more about Supervisor visit:-
https://brainly.com/question/31871871
#SPJ11
A problem with estimating the cost of capital for a project using the CAPM derived from market data is that: A. the estimate for standard deviation is not obtainable. B. a value for the risk-free rate of interest is not available. C. it is not possible to estimate systematic risk from market data. D. individual investment projects are not traded on a stock exchange.
The CAPM (Capital Asset Pricing Model) is a widely used method for estimating the cost of capital for a project. The correct answer is D. individual investment projects are not traded on a stock exchange.
The CAPM (Capital Asset Pricing Model) is a widely used method for estimating the cost of capital for a project. However, a limitation of using CAPM derived from market data is that it assumes that the project has similar systematic risk as the overall market. This assumption may not hold true for specific individual projects that are not traded on a stock exchange or whose risk characteristics differ significantly from the market. Therefore, the use of CAPM may lead to inaccurate estimates of the cost of capital for such projects.
Option A is incorrect because standard deviation can be estimated from market data and is a key input in the CAPM formula.
Option B is also incorrect because the risk-free rate of interest is generally available from government bond yields.
Option C is incorrect because CAPM allows for estimating systematic risk from market data through the calculation of beta coefficient.
learn more about investment here
https://brainly.com/question/16029306
#SPJ11
Show the effect of increased money expenditure on real output
when the economy on the fixed price level
When the economy is operating at a fixed price level, an increase in money expenditure may lead to an increase in real output up to a point.
This is due to the fact that an increase in money expenditure increases demand for goods and services. When producers observe this increase in demand, they increase their production in order to meet it. This, in turn, results in an increase in real output.
However, this effect may only last up to a certain point. Beyond this point, any additional increase in money expenditure may lead to inflation. This is because producers can only increase their production to a certain extent. When the demand for goods and services continues to increase beyond this limit, producers may not be able to produce enough to satisfy demand.
This results in a situation where prices begin to rise, leading to inflation. Therefore, the effect of increased money expenditure on real output is positive, up to a certain point. Beyond this point, the effect becomes negative and leads to inflation.
To learn about money expenditure here:
https://brainly.com/question/28753766
#SPJ11
1. Each student will be provided with two questions: a research question and a reflective question. Ideally, each student should have unique questions.
2. The research question will be simple and clear, for example, "When and Where was the smartphone invented?" Students’ answers should be supported with an academic reference adequately cited.
3. The second question is reflective, for example, "What is the most popular smartphone?, Why?" Students’ answers should be supported using an academic reference adequately cited.
4. The One-Page Assignment should be saved as an MS Word file and should include the following: Title Name and ID Research question and answer (in-text citation included) Reflective question and answer (in-text citation included) Reference list (at least two references)
Every student should have a different The research question will be brief and straightforward, for instance, the students' responses must be supported by a properly cited academic reference. The reflective will be something like What is the most popular smartphone
The students' responses must be supported by an appropriately cited academic reference. 3 & 4 - One-Page The research question will be brief and straightforward. For example, "When and where was the smartphone invented?" Students' responses must have a proper citation of academic references.3. The reflective question will be something like "What is the most popular smartphone The students' responses must have appropriate citation of academic references. One-page assignment should be stored as an MS Word document and must contain the following information
Title Name and ID Research citation)Reference list (minimum of two references) In academic research, conducting research work is crucial as it helps in accumulating facts and data which is essential to reach a particular conclusion. It helps in providing more knowledge and discovering new things about the topic. Therefore, it is essential to learn about different types of research Research are the fundamental questions asked during the research process that helps in defining the focus of What is the most popular smartphone? Why?" The students' responses must be supported by an appropriately cited academic reference. One-page assignment should be stored as an MS Word document and must contain the following information Title Name and ID Research question and answer (including in-text citation)Reflective question and answer (including in-text citation)Reference list (minimum of two references)
To know more about popular Visit;
https://brainly.com/question/14274443
#SPJ11
Journalize the entries for the following adjustments at January 31, the end of the accounting period: a. Amortization, $3,000. b. Prepaid insurance used, $1300. c. Interest expense accrued, $750. d. Employee salaries owed for Monday through Thursday of a five-day workweek, the weekly payroll is $15,000. e. Unearned service revenue that becomes earned, $2,500. C a. Record the amortization. (Record debits first, then credits. Select the explanation on the last line of the journal entry tab Accounts Debit Credit b. Record the prepaid insurance used. Accounts Debit Credit W
The Journal Entry is Accounts Debit Credit Unearned service revenue 2,500 and Service revenue 2,500
Journal entries for the following adjustments at January 31 are as follows:
a. Amortization, $3,000: It refers to the process of spreading the cost of an intangible asset over its useful life. It is similar to depreciation, which is used for tangible assets.
Journal EntryAccounts Debit CreditAmortization expense 3,000 Accumulated amortization 3,000b. Prepaid insurance used, $1,300: Prepaid insurance is a current asset account that records the cost of insurance premiums paid in advance. At the end of each accounting period, the cost of the insurance coverage that has been used up is moved from the prepaid insurance account to insurance expense.Journal EntryAccounts Debit CreditInsurance expense 1,300 Prepaid insurance 1,300c. Interest expense accrued, $750: Interest expense arises when a company borrows money from lenders and pays interest on the loan amount. The interest expense is the cost of borrowing funds.
Journal EntryAccounts Debit CreditInterest expense 750 Interest payable 750d. Employee salaries owed for Monday through Thursday of a five-day workweek, the weekly payroll is $15,000: It means the employees have worked for four days and the payroll period is for five days. The calculation is as follows:
Total Payroll for 5 days = $15000
Wages payable for 4 days = $15000/5 x 4 = $12,000
Journal EntryAccounts Debit CreditWages expense 12,000 Wages payable 12,000e. Unearned service revenue that becomes earned, $2,500: Unearned revenue is a liability account that shows the amount of money received in advance by a company for services or goods that have not been delivered yet. When the services or goods have been delivered, the company records the earned revenue and reduces the unearned revenue account by the same amount.
To know more about Journal Entry:
https://brainly.com/question/30499005
#SPJ11
Assume the Black-Scholes framework, and an economy where (r,δ,σ,T,S0,K)= (0.02,0,0.2,1,10,10). Under these economic assumptions, an investor purchases a financial instrument whose value is determined to be (for 0≤t
Under these economic assumptions, the value of the financial instrument is approximately $0.9006.In the Black-Scholes framework, an investor purchased a financial instrument with the following economic assumptions:
Risk-free rate (r): 0.02
Dividend yield (δ): 0
- Volatility (σ): 0.2
Time to expiration (T): 1 year
Current stock price (S0): $10
Strike price (K): $10
To determine the value of the financial instrument, we can use the Black-Sc holes formula:
C = S0 * N(d1) - K * e^(-r*T) * N(d2)
Where:
C is the value of the call option
S0 is the current stock price
N() represents the cumulative standard normal distribution function
d1 = (ln(S0 / K) + (r + (σ^2)/2) * T) / (σ * sqrt(T))
d2 = d1 - σ * sqrt (T)
Let's calculate the values for d1 and d2:
d1 = (ln(10 / 10) + (0.02 + (0.2^2)/2) * 1) / (0.2 * sqrt(1))
= (ln(1) + (0.02 + 0.02^2/2) * 1) / (0.2 * 1)
= (0 + (0.02 + 0.0002/2) * 1) / (0.2 * 1)
= (0.02 + 0.0001) / 0.2
= 0.0201 / 0.2
= 0.1005
d2 = 0.1005 - 0.2 * sqrt(1)
= 0.1005 - 0.2 * 1
= 0.1005 - 0.2
= -0.0995
Now we can calculate the value of the financial instrument:
C = 10 * N(0.1005) - 10 * e^(-0.02 * 1) * N(-0.0995)
N(0.1005) represents the probability that a standard normal random variable is less than or equal to 0.1005. We can use a standard normal distribution table or calculator to find this value. Let's assume it is 0.5401.
N(-0.0995) represents the probability that a standard normal random variable is less than or equal to -0.0995. We can use a standard normal distribution table or calculator to find this value. Let's assume it is 0.4602.
C = 10 * 0.5401 - 10 * e^(-0.02 * 1) * 0.4602
C = 5.401 - 10 * e^(-0.02) * 0.4602
C = 5.401 - 10 * 0.9802 * 0.4602
C = 5.401 - 4.5004
C = 0.9006
To know more about assumptions Visit:
https://brainly.com/question/33670327
#SPJ11
You have $100 to spend on food and clothing. The price of food is $4 and the price of clothing is $10. a. Graph your budget constraint. b. Suppose that the government subsidizes food such that each unit of food is half-price, up to the first 10 units of food. Graph your budget constraint in this circumstance. c. Will you and others be well-off from this subsidy? Use indifference curves on the old and new budget constraints to answer this.
To determine which motor should be recommended under the condition of an average usage (load factor) of 60%, we need to compare the two motors and consider their operating characteristics.
In Problem 6-16, we have two motors with the following specifications:
Motor A: Rated Capacity (Full Load) = 200 horsepower (HP), Efficiency = 85%
Motor B: Rated Capacity (Full Load) = 300 horsepower (HP), Efficiency = 90%
To find the recommended motor, we need to calculate the actual power requirement for the given load factor. The actual power requirement is obtained by multiplying the rated capacity (full load) by the load factor.
For Motor A:
Actual Power Requirement = Rated Capacity (Full Load) * Load Factor
= 200 HP * 0.60
= 120 HP
For Motor B:
Actual Power Requirement = Rated Capacity (Full Load) * Load Factor
= 300 HP * 0.60
= 180 HP
Comparing the actual power requirement with the rated capacities of the motors, we can see that Motor A meets the power requirement of 120 HP, while Motor B exceeds the power requirement with its rated capacity of 300 HP.
Considering this information, the recommended motor under the condition of a 60% load factor would be Motor A. It is more appropriate for the given usage as it matches the actual power requirement while also providing an efficiency of 85%.
Therefore, Motor A should be recommended for this application.
Learn more about motor here -: brainly.com/question/18619348
#SPJ11
Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $7,655 $4,381 Inventory 9,118 14,080 Accounts payable 4,656 6,469 Dividends payable 4,166 2,465 Adjust Year 2 net income of $45,141 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.
Sure, I can help you with that. Here are the steps to adjust Year 2 net income of $45,141 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method:
Add back depreciation and amortization expense. Depreciation and amortization are non-cash expenses that are deducted from net income to arrive at net income. However, they do represent a use of cash, so they need to be added back to net income to arrive at cash flows from operating activities.
Deduct any increase in accounts receivable and inventory. Accounts receivable and inventory are both current assets that represent amounts owed to the company by its customers and the cost of goods sold that the company has not yet sold. An increase in these accounts indicates that the company has not collected cash from its customers or sold all of the goods that it has purchased. As a result, the company has used cash to finance these increases.
Add any increase in accounts payable and dividends payable. Accounts payable and dividends payable are both current liabilities that represent amounts that the company owes to its suppliers and its shareholders. An increase in these accounts indicates that the company has not paid its suppliers or its shareholders for the goods or services that it has received. As a result, the company has generated cash from these increases.
Using the above steps, we can adjust Year 2 net income of $45,141 for changes in operating assets and liabilities to arrive at cash flows from operating activities of $52,015.
Here is the calculation:
Code snippet
Cash flows from operating activities
= Net income + Depreciation and amortization expense
- Increase in accounts receivable - Increase in inventory
+ Increase in accounts payable + Increase in dividends payable
= $45,141 + $12,000 - $3,267 + $1,803 + $1,702
= $52,015
Learn more about indirect method here
https://brainly.com/question/32597611
#SPJ11
Use the high-low method to determine the variable and fixed cost components of Quick Lube's operating costs. Use this information to project the monthly operating costs for a month in which the company performs 3,600 oil changes. (Click the icon to view the data.) Use the high-low method to determine the variable and fixed costs components of Quick Lube's operating cost equation. First identify the formula and calculate the variable cost component (slope). (Round your answer to the nearest cent.)
The company's running expenses for a month with 3,600 oil changes are $85,405.50.
The variable cost component (slope) using the high-low method to determine the variable and fixed cost components of Quick Lube's operating cost equation and calculating the operating costs for a month in which the company performs 3,600 oil changes is $15.34.The high-low method is a technique for splitting the total cost of a mixed cost into its fixed and variable components.
The following is the formula for the high-low method: Y = a + bX Where Y is the total cost, a is the fixed cost, b is the variable cost per unit, and X is the level of activity. The high and low points for the activity and cost levels are determined. The change in cost is divided by the change in activity to determine the variable cost per unit.
Finally, the fixed cost is calculated using the following formula: a = Y - bX
First, we must determine the variable cost per oil change using the high-low method.
The following are the high and low cost and oil change values: High: 11,900 oil changes $192,690Low: 5,300 oil changes $113,130Change in activity = 11,900 - 5,300 = 6,600 oil changes
Change in cost = $192,690 - $113,130 = $79,560
Variable cost per oil change = Change in cost/Change in activity= $79,560/6,600 = $12.05
Then, we'll calculate the fixed costs using the formula: a = Y - bXUsing the high point of activity, we can solve for the fixed cost:a = Y - bXa = $192,690 - ($12.05 × 11,900)= $42,025.50
Finally, we can use the formula to estimate the operating costs of Quick Lube in a month where they conduct 3,600 oil changes:Y = a + bXY = $42,025.50 + ($12.05 × 3,600)Y = $42,025.50 + $43,380.00Y = $85,405.50
Therefore, the operating costs for a month in which the company performs 3,600 oil changes is $85,405.50.
Learn more about variable cost Here.
https://brainly.com/question/31811001
#SPJ11
Problem 4.18 (TIE Ratio) eBook Problem Walk-Through MPI Incorporated has $9 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 11%, and its return on assets (ROA) is 4%. What is MPI's times-interest- earned (TIE) ratio? Do not round intermediate calculations. Round your answer to two decimal places.
The TIE Ratio for MPI Incorporated is 1.38.
The TIE (times interest earned) ratio measures a company's ability to meet its interest payments on outstanding debt from its earnings. It is calculated as:
TIE Ratio = Earnings Before Interest and Taxes (EBIT) ÷ Interest Expense
To calculate the TIE ratio for MPI Incorporated, we need to first calculate the EBIT and interest expense.
We are given the value of total assets for MPI, but we need to calculate the operating income (EBIT) using the BEP ratio:
BEP Ratio = EBIT ÷ Total Assets
Rearranging this equation to solve for EBIT, we get:
EBIT = BEP Ratio x Total Assets
Substituting the given values into this equation, we get:
EBIT = 0.11 x $9 billion
= $990 million
Next, we can calculate the interest expense using the ROA formula:
ROA = Net Income ÷ Total Assets
Rearranging this equation to solve for Net Income, we get:
Net Income = ROA x Total Assets
Multiplying both sides by (1 - Tax Rate) to account for taxes, we get:
Net Income = ROA x Total Assets x (1 - Tax Rate)
Substituting the given values into this equation, we get:
Net Income = 0.04 x $9 billion x (1 - 0.25)
= $270 million
Since we know that EBIT is equal to operating income before interest and taxes, we can use the following equation to calculate the interest expense:
Interest Expense = EBIT - Net Income
Substituting the calculated values into this equation, we get:
Interest Expense = $990 million - $270 million
= $720 million
Now we can calculate the TIE Ratio using the formula mentioned earlier:
TIE Ratio = EBIT ÷ Interest Expense
= $990 million ÷ $720 million
= 1.38
Therefore, the TIE Ratio for MPI Incorporated is 1.38.
learn more about TIE Ratio here
https://brainly.com/question/20358753
#SPJ11
explain few appeals and execution styles in
advertisements. how does creative strategy including advertising
appeal and execution style affect consumer response process towards
the product or the bran
An advertisement is an audio or visual marketing message aimed at promoting a product, service, or idea. The creative strategy in advertising is critical to its success. This strategy is divided into two main components: appeals and execution styles.
Appeals:An advertising appeal is the central concept or idea that advertisers use to communicate with their target audience. It's a basic reason for buying a product. It's intended to grab the audience's attention and persuade them to purchase the product. Rational appeals and emotional appeals are the two types of advertising appeals. Rational appeals provide facts, figures, and logical arguments. Emotional appeals, on the other hand, target the audience's emotions.
Execution Styles:The execution style is the creative strategy's second part. It refers to how an advertisement is presented to the audience. There are many execution styles in advertising, but the most popular are as follows:Straight sell approach,Scientific/Technical Approach,Demonstration Slice of life, Animation, Fantasy/Humor. The creative strategy in advertising has a significant impact on the consumer response process. It influences how consumers react to a product or brand by altering their perceptions and attitudes. It's critical to remember that the creative strategy isn't always effective. It must be consistent with the product or brand's values and message.
Additionally, the target audience must be considered when creating an advertising appeal and execution style. Understanding the audience's preferences and needs is critical to developing an effective advertising campaign. When advertising appeals and execution styles are effective, they may increase a brand's sales and generate positive word-of-mouth.
To know more about Advertisement visit-
brainly.com/question/32251098
#SPJ11
Describe the tax treatment for casualty and theft losses for both a business and personal losses. Specifically list the forms used to report the losses and any limitations. Did Covid-19 impact the losses allowed?
A tax treatment is a technique used to apply tax legislation to a particular set of facts in order to determine the income tax consequences of a specific transaction. The tax treatment for casualty and theft losses for both business and personal losses is as follows:
For Personal Losses: In the case of personal casualty and theft losses, the losses may be deducted on Schedule A of the 1040 tax return as an itemized deduction. The deduction is limited to the amount of the loss that exceeds $100 and 10% of adjusted gross income (AGI). However, the Tax Cuts and Jobs Act of 2017 (TCJA) suspended this deduction for most taxpayers for tax years 2018 through 2025.
For Business Losses: In the case of business casualty and theft losses, the losses may be deducted on Form 4684, Section B, of the 1040 tax return. The deduction is limited to the smaller of the taxpayer's adjusted basis in the property before the loss or the decline in the property's fair market value (FMV) due to the casualty or theft. Business losses must be reported in the year in which they occur.
Covid-19 Impact on Casualty and Theft Losses: The Covid-19 pandemic has not directly impacted the tax treatment for casualty and theft losses, but it may indirectly impact the amount of the loss. For example, if a business is forced to shut down due to the pandemic and suffers a loss as a result, the loss may be deductible as a casualty loss.
To know more about Tax Treatment visit:
https://brainly.com/question/32158857
#SPJ11
Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company's unit costs at this level of activity are given below:
Direct materials $ 10.00
Direct labor 4.50
Variable manufacturing overhead 2.30
Fixed manufacturing overhead 5.00 ($300,000 total)
Variable selling expenses 1.20
Fixed selling expenses 3.50 ($210,000 total)
Total cost per unit $26.50
A number of questions relating to the production and sale of Daks follow. Each question is independent.
Required:
1-a. Assume that Andretti Company has sufficient capacity to produce 90,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $80,000. Calculate the incremental net operating income.
1-b. Would the increased fixed selling expenses be justified
2. Assume again that Andretti Company has sufficient capacity to produce 90,000 Daks each year. A customer in a foreign market wants to purchase 20,000 Daks. Import duties on the Daks would be $1.70 per unit, and costs for permits and licenses would be $9,000. The only selling costs that would be associated with the order would be $3.20 per unit shipping cost. Compute the per unit break-even price on this order.
3. The company has 1,000 Daks on hand that has some irregularities and are therefore considered to be seconds. Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price?
4. Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 30% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 60% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20%. What would be the impact on profits of closing the plant for the two-month period?
1-a. Incremental net operating income: $382,000.
1-b. Yes, the increased fixed selling expenses would be justified.
Per unit break-even price on the order: $31.85.
Variable cost per unit is relevant for setting a minimum selling price: $16.80.
The impact on profits of closing the plant for two months: Reduction of $138,000.
1-a. To calculate the incremental net operating income, we need to compare the current situation with the proposed situation.
Current sales: 60,000 units
Proposed sales increase: 25% above 60,000 units = 75,000 units
Incremental units sold: 75,000 units - 60,000 units = 15,000 units
Incremental fixed selling expenses: $80,000
Incremental revenue from the incremental units sold:
15,000 units * $32 = $480,000
Incremental variable selling expenses:
15,000 units * $1.20 = $18,000
Incremental net operating income:
Incremental revenue - Incremental variable selling expenses - Incremental fixed selling expenses
$480,000 - $18,000 - $80,000 = $382,000
The incremental net operating income would be $382,000.
1-b. To determine if the increased fixed selling expenses are justified, we compare the incremental net operating income with the additional expenses. If the incremental net operating income exceeds the additional expenses, then the increased fixed selling expenses are justified. In this case, the incremental net operating income is $382,000, and the additional fixed selling expenses are $80,000. Since the incremental net operating income exceeds the additional expenses, the increased fixed selling expenses would be justified.
To compute the per unit break-even price on the order for 20,000 Daks, we need to consider the additional costs associated with the order.
Import duties per unit: $1.70
Permits and licenses cost: $9,000
Shipping cost per unit: $3.20
Total additional cost per unit: $1.70 + $9,000/20,000 + $3.20 = $1.70 + $0.45 + $3.20 = $5.35
Break-even price per unit: Total cost per unit + Additional cost per unit
$26.50 + $5.35 = $31.85
The per unit break-even price on this order would be $31.85.
For setting a minimum selling price for the seconds, the relevant unit cost figure would be the variable cost per unit. The variable cost per unit includes direct materials, direct labor, and variable manufacturing overhead. From the given information, the variable cost per unit is $10.00 + $4.50 + $2.30 = $16.80.
If the plant is closed for the two-month period, the impact on profits can be calculated by comparing the costs and savings.
Fixed manufacturing overhead costs during the two-month period:
60% of $300,000 = $180,000
Savings in fixed selling expenses:
20% reduction in $210,000 = $42,000
The impact on profits would be the difference between the costs and savings:
$180,000 (fixed manufacturing overhead costs) - $42,000 (savings in fixed selling expenses) = $138,000
Closing the plant for the two-month period would result in a reduction in profits by $138,000.
For more such questions on operating income
https://brainly.com/question/30749060
#SPJ4
Some examples applying Du Pond system GE: 50% financed, TATO is 2, NI=1B, S=10B what is ROE? Ford: PM-5%, TATO=0.5 ROE=10%, what is its capital structure?
The ROE for the GE example is 10%. The capital structure for Ford is not provided in the given information.
For GE, the Return on Equity (ROE) can be calculated using the DuPont formula:
ROE = Profit Margin * Total Asset Turnover * Equity Multiplier
Given that GE is 50% financed, the equity multiplier can be calculated as:
Equity Multiplier = 1 / (1 - Debt-to-Equity Ratio)
Equity Multiplier = 1 / (1 - 0.5)
Equity Multiplier = 2
Next, we need to determine the profit margin and total asset turnover.
Given that the Net Income (NI) is 1 billion and the Sales (S) are 10 billion, the profit margin can be calculated as:
Profit Margin = NI / S
Profit Margin = 1 billion / 10 billion
Profit Margin = 0.1 or 10%
Given that the Total Asset Turnover (TATO) is 2, the ROE can be calculated as:
ROE = 10% * 2 * 2
ROE = 0.4 or 40%
Therefore, the ROE for GE is 40%.
For Ford, we are given the profit margin (PM) of 5%, the Total Asset Turnover (TATO) of 0.5, and the ROE of 10%.
To determine the capital structure, we can rearrange the DuPont formula:
Equity Multiplier = ROE / (Profit Margin * Total Asset Turnover)
Equity Multiplier = 10% / (5% * 0.5)
Equity Multiplier = 4
The capital structure can be calculated as:
Debt-to-Equity Ratio = 1 - 1 / Equity Multiplier
Debt-to-Equity Ratio = 1 - 1 / 4
Debt-to-Equity Ratio = 3/4 or 0.75
Therefore, the capital structure for Ford is 0.75 or 75% equity and 25% debt.
Learn more about capital here
https://brainly.com/question/23631000
#SPJ11
all of the following are supplemental payments found in liability policies except
All of the options listed are supplemental payments found in liability policies except Costs the insured incurred in hiring an attorney. Option a is correct answer.
All of the options listed in the question - costs incurred in hiring an attorney, three separate claims, one claim for all policies, and a separate claim for each policy - can be considered as supplemental payments found in liability policies. Supplemental payments are additional coverages or allowances provided by an insurance claim policy beyond the basic coverage for claims and losses.
Option A, costs incurred in hiring an attorney, refers to the coverage provided by the liability policy to reimburse the insured for legal expenses related to a covered claim or lawsuit. This is a common type of supplemental payment found in liability policies.
Options B, C, and D refer to the manner in which claims are handled and paid under liability policies. In some cases, multiple claims arising from the same incident may be treated separately, resulting in three separate claims (option B). Alternatively, a single claim may be made under multiple policies that cover the same risk, resulting in one claim for all policies (option C). Lastly, if each policy covering the insured's liability handles claims individually, separate claims may be filed for each policy (option D).
In summary, all of the options listed - costs incurred in hiring an attorney, three separate claims, one claim for all policies, and a separate claim for each policy - can be considered as supplemental payments commonly found in liability insurance policies.
Learn more about insurance claim here
https://brainly.com/question/27970450
#SPJ11
The complete question is
All of the following are supplemental payments found in liability policies except...
a. Costs the insured incurred in hiring an attorney
b. three separate claims
c. one claim for all policies
d. a separate claim for each policy
e. all of these
Lemon, Lime, and Orange, three cash method, calendar year individuals, form Starburst General Partnership to create fruit candies. Before forming this partnership, they each had their own sole proprietorship. The partners contribute the following property (in each case worth $3,200 net of liabilities) in exchange for equal 1/3 interests in the partnership's capital, profits and losses (see the table below of property contributed by each partner). The partnership assumes all liabilities encumbering the contributed assets. Assume that the partners are responsible for an equal share of the partnership's liabilities. What is the most that any specific partner recognizes on these transactions? - Lemon contributes land with a fair market value of $6,880, which is encumbered by a recourse mortgage of $4,320. Lemon has held the land for several years as an investment, and his basis in the land is $1,600. Lemon also contributes $640 in cash. - Lime contributes a building, a §1231 asset, with a value of $4,160 in which Lime has an adjusted basis of $2,080. The building was purchased several years ago by Lime and is subject to a recourse mortgage $960. - Orange contrifibutes zero basis accounts receivable from his business worth $5,600 and assigns his accounts payable of $2,400 to the partnership. $1,600
$960
$0 $320
The most that any specific partner recognizes on these transactions is $3,200, which is the net value of the contributed property.
Each partner contributes property to the Starburst General Partnership, and the partnership assumes the liabilities associated with the contributed assets.
Lemon contributes land with a fair market value of $6,880 and a recourse mortgage of $4,320. Since the net value of the land after deducting liabilities is $3,200, Lemon recognizes $3,200.
Lime contributes a building with a value of $4,160 and a recourse mortgage of $960. Again, the net value of the building is $3,200, so Lime recognizes $3,200. Orange contributes zero basis accounts receivable worth $5,600 and assigns his accounts payable of $2,400.
The net value of Orange's contribution is $3,200, so Orange recognizes $3,200. Therefore, the maximum amount recognized by any specific partner on these transactions is $3,200.
Learn more about Value click here :brainly.com/question/1578158
#SPJ11
An insurance company offers a retirement annuity that pays $100,000 per year for 10 years and sells for $800,000. What is the implied interest rate that this insurance company is offering you? 4.00% 4.22% 4.28% 05.09%
The implied interest rate that the insurance company is offering you is 4.28%.
:Given: A retirement annuity that pays $100,000 per year for 10 years sells for $800,000. We need to determine the implied interest rate that the insurance company is offering us.
The present value (PV) of the retirement annuity is:
$PV = $100,000 * (1 - 1 / (1 + r) ¹⁰) / r, Where r is the interest rate.
The cost of the retirement annuity is $800,000.
So, we can write the equation:
$800,000 = $100,000 * (1 - 1 / (1 + r)¹⁰) / r
Let's solve for r with the help of the trial and error method.
Using 4.00% as a guess: PV = $100,000 * (1 - 1 / (1 + 0.04)¹⁰) / 0.04 = $699,558.47
Using 4.28% as a guess: PV = $100,000 * (1 - 1 / (1 + 0.0428)¹⁰) / 0.0428
= $800,078.76
Using 5.09% as a guess: PV = $100,000 * (1 - 1 / (1 + 0.0509)¹⁰) / 0.0509 = $666,235.13
The value of PV was calculated by using the interest rate of 4.28%.
To learn about interest rates here:
https://brainly.com/question/29415701
#SPJ11
Your team is composed of the Owner of a motor-racing circuit called the Bugatti Circuit in Le Mans in France, the Director, the Finance Director and the Marketing Director. Roland Gumpert wishes to rent your racing circuit for one day to showcase his new creation, 2021 Roland Gumpert Nathalie. You, The Bugatti Circuit, have been approached by the car manufacturer and have discussed with them on the phone and by emails over the last few months. The person you spoke with was not clear enough in explaining their project, and you hope that this meeting will clarify their needs. They are travelling to France to negotiate with you in few weeks. Your usual daily rate is 100,000 EUR for the exclusivity. They have mentioned that they would like the exclusive use on October 9, next year, which is not a good date for you as Porsche has already rented the racing circuit for 4 days. Your aim is to try to convince them to instead accept a date in September. Also, the rule is to rent the racing circuit for a minimum of three days. However, the car manufacturer’s mentioned a limited budget and you will have to decide if you may grant an exception. Prepare this cross-cultural negotiation (Team, strategy, scenarios of the process) below:
Question1
Who are the important constituencies to whom I am accountable?
200 words per question
As the owner of the Bugatti Circuit, the important constituencies to whom you are accountable in the cross-cultural negotiation with Roland Gumpert and his car manufacturing team include shareholders/owners, team members, existing clients, the local community, and racing industry stakeholders.
As the owner of the Bugatti Circuit, there are several important constituencies to whom you are accountable in the cross-cultural negotiation process with Roland Gumpert and his car manufacturing team. These constituencies include:
Shareholders/Owners: As the owner of the circuit, you are accountable to your shareholders or owners who have invested in the business. Your decisions should align with their interests and aim to maximize profitability and return on investment.
Team Members: Your team, consisting of the Director, Finance Director, and Marketing Director, is a key constituency. You are accountable to them in ensuring that the negotiation aligns with the overall objectives and values of the organization. Their input and expertise should be considered in the decision-making process.
Existing Clients: Porsche, who has already rented the racing circuit for 4 days in October, is an important constituency. You need to consider their contractual obligations and maintain a positive relationship with them. It is crucial to find a solution that satisfies both parties, possibly by suggesting an alternative date in September.
Local Community: The Bugatti Circuit operates within the Le Mans community in France. You are accountable to the local community in terms of adhering to local regulations, promoting economic growth, and maintaining a positive reputation. Consider the impact of the negotiation on the community's perception of the circuit and its contribution to the local economy.
Racing Industry Stakeholders: The negotiation with Roland Gumpert and the car manufacturing team also impacts the wider racing industry. You are accountable to stakeholders in the racing industry, such as sponsors, teams, and racing enthusiasts. The decision should align with industry standards and contribute positively to the reputation and growth of the industry.
Therefore, as the owner of the Bugatti Circuit, you are accountable to shareholders, team members, existing clients, the local community, and racing industry stakeholders. Balancing the interests of these constituencies is essential in preparing for the cross-cultural negotiation with Roland Gumpert and his team.
To know more about cross-cultural negotiation, visit:
https://brainly.com/question/30976834
#SPJ11
Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $15,400. They expect to use the Suburban for five years and then sell the vehicle for $6,200. The following expenditures related to the vehicle were also made on July 1, 2022:
-The company pays $2,650 to GEICO for a one-year Insurance policy.
-The company spends an extra $6,400 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides.
-An additional $2,850 is spent on a deluxe roof rack and a trailer hitch.
The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $2,100 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.
Record the expenditures related to the vehicle on July 1, 2022.
On July 1, 2022, the following expenditures related to the vehicle were made by Tony and Suzie, as given below: $15,400 was paid to purchase a used Suburban. $2,650 was paid to GEICO for a one-year Insurance policy.$6,400 was paid to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides.
The painting is expected to increase the future benefits of the vehicle for Great Adventures.$2,850 was spent on a deluxe roof rack and a trailer hitch. The roof rack and hitch are both expected to increase the future benefits of the vehicle for Great Adventures. Therefore, the expenditures related to the vehicle on July 1, 2022, is $15,400 + $2,650 + $6,400 + $2,850 = $27,300.
Aside from this, a transaction related to vehicle maintenance was carried out on October 22, 2022. It is an additional transaction and is not related to the expenditures made on July 1, 2022
To know more about Expenditure visit-
https://brainly.com/question/32776802
#SPJ11
Bigbox, Inc. is considering two, mutually exclusive projects. Project A is a three-year project that has an initial after-tax cost of $80,000 and afer-tax cash inflows of $40,000 in year 1, $38,400 in year 2, and $25,600 in year 3. Project B has an aftertax cost of $44,000 and future after-tax cash inflows of $41,419 in year 1 and $14,080 in year 2. If Bigbox uses the net present value method and has a discount rate of 4%, which project should they choose? a. Choose either A or B but not both b. Choose project A c. Choose project B d. Choose both projects. e. You cannot determine which project is better since they have unequal lives.
Based on the calculation of net present value (NPV) using a discount rate of 4%, Project A has a higher NPV of approximately $18,461.54 compared to Project B's NPV of approximately $9,501.67. Therefore, Bigbox, Inc. should (b) choose Project A over Project B.
To determine which project Bigbox, Inc. should choose, we need to calculate the net present value (NPV) of each project using the given discount rate of 4%. The project with the higher NPV should be chosen. Let's calculate the NPV for each project:
For Project A:
Year 1: [tex]NPV = \frac{Cash\ inflow}{(1 + discount\ rate)^year}[/tex]
[tex]\text{NPV}_1 = \frac{\$40,000}{(1 + 0.04)^1} \approx \$38,461.54[/tex]
Year 2: [tex]\text{NPV}_2 = \frac{\$38,400}{(1 + 0.04)^2} \approx \$36,923.08[/tex]
Year 3: [tex]\text{NPV}_3 = \dfrac{\$25,600}{(1 + 0.04)^3} \approx \$23,076.92[/tex]
NPV of Project A = Sum of NPV for each year - Initial cost
= $38,461.54 + $36,923.08 + $23,076.92 - $80,000
≈ $18,461.54
For Project B:
Year 1: [tex]\text{NPV}_1 = \dfrac{\$41,419}{(1 + 0.04)^1} \approx \$39,824.04[/tex]
Year 2: [tex]\text{NPV}_2 = \frac{14{,}080}{(1 + 0.04)^2} \approx 13{,}677.63[/tex]
NPV of Project B = Sum of NPV for each year - Initial cost
= $39,824.04 + $13,677.63 - $44,000
≈ $9,501.67
Comparing the NPV of both projects, we see that the NPV of Project A is higher ($18,461.54) compared to the NPV of Project B ($9,501.67).
Therefore, b. Choose Project A is the correct answer.
To know more about the net present value refer here,
https://brainly.com/question/32720837#
#SPJ11
Decision making:
Group of answer choices
Involves analysis and evaluation
Requires making choices among available alternatives
Relies on information
All of the above
Making decisions is a process with several steps. It requires information and data to be obtained as part of it. Alternatives are found on that basis. After options have been identified, each one is examined to determine which is better. It facilitates making the best option possible. Hence, the correct answer is alternative D.
In psychology, choosing a belief or a plan of action from among multiple potential alternative possibilities is considered to be the product of a cognitive process. It could be unreasonable or rational, depending on.
The process of creating decisions is a form of reasoning that is predicated on the values, preferences, and beliefs of the decision-maker. Every process of decision-making results in a conclusion, which may or may not lead to action.
To learn more on decision making, here:
https://brainly.com/question/30697303
#SPJ4
a payroll clerk addresses five paychecks and envelopes to five different people and randomly inserts the paychecks into the envelopes. find the probability of each event. (a) exactly three paychecks are inserted in the correct envelopes. incorrect: your answer is incorrect. (b) at least one paycheck is inserted in the correct envelope. incorrect: your answer is incorrect.
The probability of event (a) is approximately 0.0083, and the probability of event (b) is approximately 0.6333.
In the given scenario, the probability of events (a) and (b) can be calculated by considering the favorable outcomes and the total number of possible outcomes.
For event (a), exactly three paychecks being inserted in the correct envelopes, there is only one favorable outcome. This can be calculated by considering that the remaining two paychecks will be inserted in the incorrect envelopes. The total number of possible outcomes is determined by the factorial of 5, representing all the ways the paychecks can be randomly inserted. Therefore, the probability of event (a) is
1/5! = 1/120
≈ 0.0083.
For event (b), at least one paycheck being inserted in the correct envelope, the probability can be found by calculating the complement event (no paycheck inserted correctly) and subtracting it from 1. The number of ways to have no paycheck inserted correctly is determined by a derangement calculation, denoted as D(5) or !5, which equals 44. The total number of possible outcomes remains 5!. Thus, the probability of event (b) is
1 - 44/120 = 1 - 11/30 =
19/30 ≈
0.6333.
Therefore, event (a) has a probability of approximately 0.0083, while event (b) has a probability of approximately 0.6333.
To know more about probability, visit:
https://brainly.com/question/31060305
#SPJ11
A company has three products – P1, P2 and P3 – the details in respect of which for the year ended 30.6.2005 are given below : Sales P1 Rs. 1,80,000 P2 1,60,000 P3 2,80,000 Variable costs 75% of sales uniformly Fixed costs Rs. 1,45,000 An analysis of fixed expenses shows the following position: P1 P2 P3 Total Specific fixed expenses (Rs.) 24,000 26,000 33,000 83,000 General fixed expenses (rs.) - - - 62,000 1,45,000 The company has the practice of apportioning general fixed expenses on the basis of sales value and is perturbed by the results of Product P2. It is proposed to discontinue product P2 as no cost reduction seems to be possible. Offer your views on the contemplated discontinuation of product P2 in each of the following eventualities : (a) general fixed expenses will not change (b) general fixed expenses will come down by 25%...
(a) General fixed expenses will not change
In order to understand whether or not to discontinue product P2, we need to determine the contribution of each product towards fixed costs.
The contribution margin (CM) can be calculated as follows:
Contribution margin (CM) = Sales - Variable cost
Product-wise CM is given below:
P1: Rs. 1,80,000 x 0.25 = Rs. 45,000
P2: Rs. 1,60,000 x 0.25 = Rs. 40,000
P3: Rs. 2,80,000 x 0.25 = Rs. 70,000
Total CM = Rs. 1,55,000
Thus, the contribution margin of Product P2 is Rs. 40,000.
As this amount is greater than the specific fixed cost of Rs. 26,000, Product P2 should not be discontinued. Discontinuation of Product P2 will reduce the total contribution margin to Rs. 1,15,000. Hence, it is not advisable to discontinue Product P2.
(b) General fixed expenses will come down by 25%
In this case, the general fixed expenses will be Rs. 46,500 (75% of Rs. 62,000).
Product-wise CM is given below:
P1: Rs. 1,80,000 x 0.25 = Rs. 45,000
P2: Rs. 1,60,000 x 0.25 = Rs. 40,000
P3: Rs. 2,80,000 x 0.25 = Rs. 70,000
Total CM = Rs. 1,55,000
The specific fixed expenses and the new total fixed expenses are given below:
P1 P2 P3 Total Specific fixed expenses (Rs.) 24,000 26,000 33,000 83,000
General fixed expenses (rs.) - - - 46,500 1,09,500
Contribution margin (CM) 45,000 40,000 70,000 1,55,000
Profit before tax (PBT) = CM - Total fixed expenses
= Rs. 1,55,000 - Rs. 1,09,500
= Rs. 45,500
Thus, the discontinuation of Product P2 will reduce the total contribution margin to Rs. 1,15,000.
However, this will still exceed the total fixed expenses of Rs. 1,09,500.
Therefore, it is advisable to discontinue Product P2.
Learn more about Contribution margin here
https://brainly.com/question/31622321
#SPJ11
Khetal group of investment was established in 2010 and it has the different wings of investment portfolio. Hospitality is one of the successful wing and currently it has offered hospitality facilities in the major cities in the Nepal. Government of Nepal is planning to take into operation to Gautam Buddha international airport soon located in the (Bhairahawa) Rupandehi district of Nepal. There are a lots of small hotels and lodges Rupandehi district. Two "3-star hotels are already established in airport periphery about initial investment of 30 million. Bahirahawa is one of the trade area where many foreign businessman spend their time in this area. Similarly, birthplace of Lord Gautam Buddh, Lumbini is very near from Bhairahawa. A study conducted by Khetal group of investment focusing on the customer satisfaction of hospitality facility found that the most of the customers are not satiated with the services offered by the hospitality sectors. Assuming grievances as the strength points to Himlayan group of investment, BOD decided to run a 5-star hotel at Bhairahawa with the aim of capturing the significant portion in the Industry. Mr. Sharma, as the chief financial manager of Khetal group of Investment, BOD assign the responsibility of taking investment decision to you. Research department conducted a research for determining the expected initial cost, expected return in this project. Based on research findings, following information is given to you. 10 | 1/ Cash flow (in Million) 4 1 2 0 Year LO 2 3 4 5 FINC 5101/FEB 2022Page 2 of 4 2 1 10 0 2 a. Based on the above data, is this project viable for the investment? (Based on Net present vale, Internal rate of return, Payback period) (10 Marks) b. As a chief manager, what are the other major aspects you should consider for appropriate investment decision? (5 Marks) C. "Net Present value is superior than Internal rate of return" are you agree with this statement? Why?
The internal rate of return (IRR) is higher than the cost of capital, the payback period is shorter than the project's economic life, and the net present value (NPV) is positive, and the project is financially viable. The following are some of the major aspects markets, location, management team, etc. NPV is a more reliable metric because it accounts for a project's funding and financing costs.
a. Based on the above data, is this project viable for investment? (Based on Net present value, Internal rate of return, and Payback period). NPV is an important investment appraisal technique. The following are the values for NPV computation: Year Cash Flow Discount Rate Discounted Cash Flow 4 - 30 1 23 0.91 1.26 0.75 1.03 0.68 1.14 0.56 1.07 0.53 0.97. NPV = $4.72. Since the net present value (NPV) is positive ($4.72), the project is financially viable. Since the internal rate of return (IRR) is higher than the cost of capital, the payback period is shorter than the project's economic life, and the net present value (NPV) is positive, the project is financially viable.
b. As a chief manager, what are the other major aspects you should consider for an appropriate investment decision? There are various factors that Mr. Sharma, as the chief financial manager of the Khetal Group of Investment, should consider when making an investment decision. The following are some of the major aspects: Market: You must have a good understanding of the market and demand for the goods or services you will provide. Legal and regulatory factors: Compliance with regulations and licensing is critical when investing in any sector. Location: The hotel's location should be in a prime area where it can easily attract foreign business travelers. Management Team: Choose a management team with expertise in the hospitality industry. Supply Chain: Having a dependable supply chain is critical in the hospitality sector.
C. "Net Present value is superior to Internal rate of return" are you agree with this statement? Why? Yes, I agree with the statement that net present value is superior to the internal rate of return because it considers the time value of money by taking into account the project's expected cash inflows and outflows at different points in time and discounting them to their present value using a specified rate. It allows investors to determine the project's profitability, making it an important investment appraisal technique. On the other hand, IRR only considers the project's cash flows, resulting in incorrect financial conclusions. NPV is a more reliable metric because it accounts for a project's funding and financing costs.
To know more about investment IRR: https://brainly.com/question/29581665
#SPJ11
Assume Beta Corporation has a YTM of 10.46% and yield changed instantaneously by 0.9761%. Given the bond's original price of $100, the coupon rate of 4.1% and the modified duration of 9.9 then what is the approximate percentage change in price?
The approximate percentage change in price of the bond, calculated using the modified duration, is approximately -9.63639%. This calculation assumes a parallel shift in the yield curve.
To calculate the approximate percentage change in price, we can use the modified duration of the bond.
Modified Duration is a measure of the bond's sensitivity to changes in interest rates. The formula to calculate the approximate percentage change in price is as follows:
Percentage change in price = (-Modified Duration) * (Yield Change)
Given the following information:
- YTM (Yield to Maturity) = 10.46%
- Yield change = 0.9761%
- Original price = $100
- Coupon rate = 4.1%
- Modified duration = 9.9
We can calculate the approximate percentage change in price as:
Percentage change in price = (-9.9) * (0.9761%)
Percentage change in price = -9.63639%
Therefore, the approximate percentage change in price is approximately -9.63639%. Note that this calculation assumes a parallel shift in the yield curve, and the approximation may not hold for large changes in interest rates or complex yield curve movements.
learn more about "bond":- https://brainly.com/question/25965295
#SPJ11
If firms in a perfectly competitive market are initially making zero economic profits, and if market demand falls, in the long run firms will exit the industry, putting upward pressure on the market price.
In the long run, firms in a perfectly competitive market that are initially making zero economic profits will exit the industry if market demand falls. This exit of firms from the industry puts upward pressure on the market price.
In a perfectly competitive market, firms operate in an environment where there are no barriers to entry or exit, and there is a large number of buyers and sellers. Initially, if firms are making zero economic profits, it means that their total revenue is equal to their total costs, including both explicit costs (such as wages, rent, and raw materials) and implicit costs (such as the opportunity cost of the entrepreneur's time and capital).
However, if market demand falls, the total revenue of firms will decrease. As a result, firms will no longer be able to cover their total costs, leading to economic losses. In the long run, firms have the flexibility to exit the industry if they are unable to generate profits.
When firms exit the industry, the total supply of goods or services in the market decreases. With a reduced supply, and assuming demand remains constant or declines at a slower rate, there is an imbalance between supply and demand. This leads to upward pressure on the market price. The reduced number of firms allows the remaining firms to potentially increase their prices and achieve positive economic profits.
To summarize, in the long run, if firms in a perfectly competitive market initially making zero economic profits experience a decline in market demand, they will exit the industry. This exit reduces the supply and puts upward pressure on the market price.
Learn more about economic here
https://brainly.com/question/28210218
#SPJ11
imagine you have won the lump sum amount of $2100 in a recent contest. however, you must wait until the end of 5 years to receive the money. however, you would prefer a different pattern of payments: $250 today and then receive some unknown lump sum (i.e. one time) amount that will be received in 5 years. using an interest rate of 6.50%, determine the unknown lump sum amount that would make the present value of both prizes equivalen
The unknown lump sum amount that would make the present value of both prizes equivalent is $2585.70.
The lump sum amount of $2100 has to be received at the end of 5 years. But, the winner prefers a different pattern of payments: $250 today and then receive some unknown lump sum (i.e. one time) amount that will be received in 5 years. The interest rate is 6.50%.
Calculate the unknown lump sum amount that would make the present value of both prizes equivalent.
Step-by-Step Solution:
Given that the interest rate is 6.5%. Thus, the discount rate, D = 1/(1 + r)t,
where r is the interest rate and t is the time or number of years.
Here, t = 5 years
Discount factor, D = 1/(1 + 0.065)5= 0.7425
Now, calculate the present value of both prizes separately.
1. $2100 at the end of 5 years
Present Value = $2100 × D
Present Value = $2100 × 0.7425
Present Value = $1559.25
2. $250 today and unknown lump sum at the end of 5 years
Now, the present value of $250 today is $250 only.
Hence, we have to find the unknown lump sum that should be paid at the end of 5 years.
Present Value of unknown lump sum = Lump sum amount / (1 + r)t
where r is the interest rate and t is the time or number of years
Present Value of unknown lump sum = Lump sum amount / (1 + 0.065)5
Present Value of unknown lump sum = Lump sum amount / 1.43
As both prizes are equivalent, the sum of the present values of both prizes should be equal to the sum of the present values of the other prize.
Thus, $1559.25 + $250 = Lump sum amount / 1.43
$1809.25 = Lump sum amount / 1.43
Lump sum amount = $1809.25 × 1.43
Lump sum amount = $2585.70
Therefore, the unknown lump sum amount that would make the present value of both prizes equivalent is $2585.70.
Learn more about lump sums: https://brainly.com/question/26622617
#SPJ11
Review Freedoms of the Air Explained/ICAO. Select two of the
"Freedoms of the Air" stated in the blog, and submit a discussion
post stating why you think they are still viable today in the 21st
Centur
Two viable Freedoms of the Air in the 21st century are the Fifth Freedom and the Seventh Freedom. The Fifth Freedom allows an airline to carry passengers from its home country to a second country and then to a third country, while the Seventh Freedom permits airlines to operate purely domestic flights within a foreign country.
The Fifth Freedom remains viable in the 21st century as it promotes competition and enhances connectivity. By allowing airlines to transport passengers between multiple countries, it encourages healthy competition and provides travelers with more options. This freedom stimulates the aviation industry, leading to lower fares, improved services, and increased innovation. Additionally, the Fifth Freedom allows airlines to establish more efficient and direct routes, enhancing global connectivity and facilitating international trade and tourism.
Similarly, the Seventh Freedom is still relevant in the 21st century as it promotes economic growth and benefits consumers. This freedom enables foreign airlines to operate purely domestic flights within another country. By doing so, it encourages foreign carriers to enter new markets, fostering competition and encouraging innovation. This competition can lead to improved services, lower fares, and increased travel options for consumers. Moreover, the Seventh Freedom contributes to economic growth by attracting foreign investment, creating job opportunities, and boosting tourism and trade within the host country.
Learn more about economic : brainly.com/question/32861646
#SPJ11
