Finance is the study of how money is managed by individuals, companies, and governments. Option d is correct choice.
Finance is a field of study that deals with the management of money and assets, including investments, savings, borrowing, lending, and budgeting. It involves understanding how individuals, businesses, and governments make financial decisions and how they manage their financial resources to achieve their goals.
Finance includes a wide range of topics such as financial markets and institutions, risk management, financial analysis, portfolio management, and financial planning. The ultimate goal of finance is to optimize the allocation of financial resources to achieve the best possible return on investment while managing risk and maintaining financial stability. Option d is correct choice.
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MF Corp. has an ROE of 16% and a plowback ratio of 50%. If the coming year’s earnings are expected to be $2 per share, at what price will the stock sell? The market capitalization rate is 12%.
b. What price do you expect MF shares to sell for in three years?
a. $25
b. $31.49
The expected stock price in three years is $54, not $31.49 as provided in option b.
To determine the stock price of MF Corp., we can use the Gordon Growth Model, which calculates the intrinsic value of a stock based on its expected future earnings, return on equity (ROE), and the market capitalization rate.
a. To calculate the stock price for the coming year:
Plowback ratio = 50% = 0.5
ROE = 16% = 0.16
Earnings per share (EPS) = $2
Retention ratio (b) = 1 - Plowback ratio = 1 - 0.5 = 0.5
Dividend payout ratio (d) = 1 - b = 1 - 0.5 = 0.5
Using the Gordon Growth Model formula:
Stock price = (EPS * (1 + g)) / (r - g)
Where:
g = growth rate = ROE * b = 0.16 * 0.5 = 0.08 (8%)
r = market capitalization rate = 12% = 0.12
Stock price = ($2 * (1 + 0.08)) / (0.12 - 0.08) = $2.16 / 0.04 = $54
Therefore, the expected stock price for the coming year is $54, not $25 as provided in option a.
b. To calculate the expected stock price in three years, we can use the same formula but with a modified growth rate.
g = ROE * b = 0.16 * 0.5 = 0.08 (8%)
Stock price = ($2 * (1 + 0.08)^3) / (0.12 - 0.08) = $2.16 / 0.04 = $54
Therefore, the expected stock price in three years is $54, not $31.49 as provided in option b.
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Calculate the ANNUAL percentage interest rate (APR):
Regular customers: borrow $200 today and return $230 after two weeks.
Group of answer choices
A. 391.07%
B. 5.99%
C. 11.99%
D. 59.99%
E. 29.99%
F. can not be determined
The ANNUAL percentage interest rate (APR) for regular customers who borrow $200 today and return $230 after two weeks is 391.07%.
To calculate the Annual Percentage Rate (APR), we first need to find the interest paid over the two-week period and then annualize it.
1. Calculate the interest paid for the two weeks:
Interest = $230 - $200 = $30
2. Calculate the interest rate for the two weeks:
Interest rate = (Interest / Principal) * 100
Interest rate = ($30 / $200) * 100 = 15%
3. Calculate the number of two-week periods in a year:
Number of periods = 365 days / 14 days = 26.07 periods (approx.)
4. Annualize the interest rate:
APR = (1 + Interest rate)^(Number of periods) - 1
APR = (1 + 0.15)^(26.07) - 1
APR ≈ 3.91 or 391%
Therefore, the correct answer is A. 391.07%.
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Applying the COBIT5 framework, monitoring is the responsibility of
A. The CEO.
B. The CFO.
C. The board of directors.
D. All of the above.
In the COBIT 5 framework, monitoring is the responsibility of The board of directors. The correct answer is option c.
The COBIT 5 framework is a widely recognized governance and management framework for enterprise IT. It provides guidance and best practices for ensuring effective and efficient management and governance of information and technology within an organization.
Monitoring, in the context of COBIT 5, refers to the ongoing supervision, assessment, and evaluation of the organization's IT processes and controls. It involves activities such as measuring performance, conducting audits, and reviewing compliance with policies and regulations.
While the CEO (A) and the CFO (B) may have oversight and accountability for various aspects of the organization's operations, including IT, in the COBIT 5 framework, the ultimate responsibility for monitoring and governance lies with the board of directors (C).
The board is responsible for setting strategic objectives, overseeing risk management, ensuring compliance, and monitoring the overall performance and effectiveness of IT governance within the organization.
Therefore, the correct answer is C. The board of directors.
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Bob Pirtle won $1 million in a state lottery. He was surprised to learn that he will not receive a check for $1 million. Rather, for twenty years, he will receive an annual check from the state for $50,000. The state finances this series of checks by buying Bob a payout annuity. Find what the state pays for Bob’s payout annuity if the interest rate is 8%
The state pays approximately $490,905 for Bob's payout annuity at an 8% interest rate. When Bob Pirtle won $1 million in the state lottery, he was probably expecting a lump sum payout. However, the state will be paying him an annual amount of $50,000 for the next twenty years.
To finance this payout, the state has to buy Bob a payout annuity. An annuity is a financial product that pays out a fixed amount of money at regular intervals for a set period of time. In this case, the state will be purchasing a payout annuity for Bob.
To calculate the cost of the annuity, we need to use the formula:
Present value of an annuity = (Annual payment) x (1 - (1 + i)^-n) / i
Where i is the interest rate and n is the number of periods.
In this case, the annual payment is $50,000, the interest rate is 8%, and the number of periods is 20 (since the annuity pays out for twenty years).
Using the formula, we get:
Present value of an annuity = $50,000 x (1 - (1 + 0.08)^-20) / 0.08
Present value of an annuity = $642,734.67
Therefore, the state pays $642,734.67 for Bob's payout annuity.
Hi! I'd be happy to help you with your question. To find the cost of the payout annuity for Bob, we need to calculate the present value of the annuity payments he will receive.
Given information:
- Annual check amount: $50,000
- Number of years: 20
- Interest rate: 8% (0.08 as a decimal)
Step 1: Calculate the annuity discount factor (ADF).
ADF = (1 - (1 + i)^(-n)) / i
Where i = interest rate, and n = number of years.
ADF = (1 - (1 + 0.08)^(-20)) / 0.08
ADF ≈ 9.8181
Step 2: Calculate the present value of the annuity.
Present Value = Annual check amount × ADF
Present Value = $50,000 × 9.8181
Present Value ≈ $490,905
So, the state pays approximately $490,905 for Bob's payout annuity at an 8% interest rate.
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At December 31, 2020, Coronado Inc. had a deferred tax asset of $29,00. At December 31, 2021, the deferred tax asset is $55,300. The corporation’s 2021 current tax expense is $57,900. What amount should Coronado report as total 2021 income tax expense?
Total income tax expense for 2021?
Coronado Inc. should report a total 2021 income tax expense of $84,200.
To calculate the total income tax expense for Coronado Inc. for 2021, we will consider the deferred tax asset at December 31, 2020, the deferred tax asset at December 31, 2021, and the current tax expense for 2021. Here are the steps to find the total income tax expense for 2021:
1. Determine the change in deferred tax asset between December 31, 2020, and December 31, 2021.
Deferred tax asset at December 31, 2021: $55,300
Deferred tax asset at December 31, 2020: $29,000
Change in deferred tax asset: $55,300 - $29,000 = $26,300
2. Calculate the total income tax expense for 2021.
Current tax expense for 2021: $57,900
Change in deferred tax asset: $26,300
Total income tax expense for 2021 = Current tax expense + Change in deferred tax asset
Total income tax expense for 2021 = $57,900 + $26,300 = $84,200
Coronado Inc. should report a total 2021 income tax expense of $84,200.
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in order to practice price discrimination, a firm must be in a market such that the consumers in its market
a.All have identical tastes.
b.All have identical price elasticities of demand
c.Have different price elasticities of demand
d.Have the same demand for product
To rehearse Price Discrimination a firm should be in a market with the end goal that the purchasers in its market have different value versatilities of interest. It is choice C.
Three variables should be met for price discrimination to happen: The company must have market power, be able to identify variations in demand, and be able to prevent arbitration or the resale of the product.
The practice of charging customers different prices for the same product or service based on what the seller thinks the customer will agree to is known as price discrimination.
The seller sets the highest possible price for each customer in pure price discrimination. The seller divides customers into groups based on particular characteristics and charges each group a different price in more common forms of price discrimination.
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how might liability dollarization worsen the financial market disruption caused by a sharp depreciation of the domestic currency against the dollar?
Liability dollarization can worsen the financial market disruption caused by a sharp depreciation of the domestic currency against the dollar.
Liability dollarization refers to the practice of borrowing in a foreign currency, typically the US dollar, rather than in the domestic currency. Liability dollarization can exacerbate these disruptions in several ways. First, liability dollarization can lead to a large increase in the debt burden of borrowers when the domestic currency depreciates sharply against the dollar. This can lead to defaults and bankruptcies, which can further disrupt financial markets.
Second, liability dollarization can make it more difficult for banks to obtain funding, as foreign lenders may become reluctant to lend in a depreciating currency. This can lead to a credit crunch, which can further disrupt financial markets.
Finally, liability dollarization can lead to currency mismatches in banks' balance sheets, as their liabilities are denominated in foreign currency but their assets are denominated in domestic currency. This can increase the vulnerability of banks to currency fluctuations and financial market disruptions.
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question content areaa feasible solution is a global optimum if no other feasible points with a better objective function value are found in the feasible region. true false
True. A feasible solution is a point in the feasible region of a problem that satisfies all of its constraints.
A global optimum is the best feasible solution among all feasible solutions in the feasible region. If there are no other feasible points with a better objective function value, then the current feasible solution is a global optimum. However, if there are other feasible solutions with better objective function values, then the current solution is not a global optimum. Therefore, it is important to consider all feasible points in the feasible region before determining if a solution is a global optimum or not.
he statement "A feasible solution is a global optimum if no other feasible points with a better objective function value are found in the feasible region" is true. In optimization problems, the feasible region represents the set of all possible solutions that satisfy the given constraints. A global optimum is the best possible solution, considering the entire feasible region.
When no other feasible points with a better objective function value are found within the feasible region, it indicates that the feasible solution being considered is the global optimum. This is because the global optimum must provide the best objective function value among all feasible solutions. By not finding any other feasible points with a better objective function value, we can conclude that the current feasible solution is indeed the global optimum.
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a company wants to know the cost of inventory sold at the end of the current period. which financial statement should the company refer to?
The financial statement that the company should refer to in order to know the cost of inventory sold at the end of the current period is the income statement. This statement shows the company's revenues, expenses, and net income for a particular period.
The cost of goods sold (COGS), which includes the cost of inventory sold, is deducted from the company's revenue to determine its gross profit. The formula for COGS is beginning inventory plus purchases minus ending inventory. Therefore, by subtracting the ending inventory from the sum of the beginning inventory and purchases, the company can determine the cost of inventory sold. It is important for companies to have accurate information on the cost of inventory sold, as it impacts their profitability and can affect their decision-making processes.
A company wanting to know the cost of inventory sold at the end of the current period should refer to the income statement. The income statement provides a summary of a company's revenues, expenses, and profits or losses over a specific period of time. It includes the cost of goods sold (COGS), which is the direct cost of producing or purchasing the inventory that has been sold during the period.
To find the cost of inventory sold, the company can look at the COGS line item on the income statement. By examining the income statement, the company can gain insight into its financial performance and determine the cost of inventory sold at the end of the current period.
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FILL THE BLANK. A ___ is used in areas where dockworkers cannot read but need a method to keep documents and shipments together
A pallet tag is used in areas where dockworkers cannot read but need a method to keep documents and shipments together.
In logistics and shipping environments, a pallet tag serves as a visual identification and documentation tool to keep documents and shipments together, particularly in areas where dockworkers may not have the ability to read or understand written information. Here's a more detailed explanation:
Purpose of a Pallet Tag: A pallet tag is a physical tag or label that is attached to a pallet, typically containing relevant information about the contents of the pallet or the shipment it is part of. It provides a way to identify and track pallets during the shipping and receiving processes.
Visual Identification: Pallet tags are designed to be easily recognizable and identifiable through visual cues. They often use color-coded systems, symbols, or pictograms to convey information quickly and efficiently. This visual identification allows dockworkers to associate specific tags with particular shipments or handling instructions without needing to read written text.
Document and Shipment Management: Pallet tags are used to keep documents and shipments together. They can be used to attach important paperwork, such as shipping labels, bills of lading, or customs documentation, directly to the pallet. This ensures that the necessary documents are readily accessible and visible alongside the corresponding shipment.
Non-Literate Work Environments: Pallet tags are particularly useful in situations where dockworkers may not be able to read or understand written information due to language barriers or low literacy levels. By utilizing visual cues on the pallet tags, workers can still effectively manage shipments and follow handling instructions without relying on written communication.
Overall, pallet tags provide a practical solution in logistics and shipping environments where non-literate dockworkers need a method to keep documents and shipments together. By employing visual identification and attachment of relevant paperwork, pallet tags facilitate efficient tracking, handling, and management of pallets throughout the shipping and receiving processes.
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A pictorial or visual system is used in areas where dockworkers cannot read but need a method to keep documents and shipments together.
What is a pictorial or visual system?
A pictorial or visual system is used to organize and manage documents and shipments in areas where dockworkers may have limited or no literacy skills. To convey information and instructions, this system employs easily recognizable symbols, images, or icons rather than written text.
This system's goal is to ensure effective communication and coordination among dockworkers and other personnel involved in shipment handling.
Dockworkers can quickly and accurately identify and match documents with corresponding shipments using a visual system, ensuring that the correct packages are processed and delivered to their intended destinations.
Therefore, this method helps to reduce errors, delays, and confusion that may occur as a result of language barriers or limited reading abilities.
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Nelson, Inc., has an odd dividend policy. The company has just paid a dividend of $4 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 12 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The approximately amount paid per share is approximately equal to $721.58 for a share of the stock today.
Starting value of dividend per share = $4
Increase in value of dividend per share = $6
Require return = 12 percent
To determine the present value of the stock,
Calculate the present value of the future dividends and the present value of the stock price at the end of the fifth year.
The dividends for the next five years will increase by $6 per share each year, starting from $4 per share.
The future dividends will be as follows,
Year 1,
$4 + $6 = $10
Year 2,
$4 + 2($6) = $16
Year 3,
$4 + 3($6) = $22
Year 4,
$4 + 4($6) = $28
Year 5,
$4 + 5($6) = $34
To calculate the present value of these future dividends,
Use the formula for the present value of a growing annuity,
PV = CF / (r - g) × (1 - (1 + g)⁻ⁿ)
Where,
PV = Present value
CF = Cash flow
r = Required return
g = Growth rate
n = Number of periods
Using a required return of 12% and a growth rate of 0% since there will be no more dividends after year 5,
calculate the present value of the dividends,
PV_dividends
= $10 / (0.12 - 0) × (1 - (1 + 0)⁻⁵) + $16 / (0.12 - 0) ×(1 - (1 + 0)⁻⁴) +$22 / (0.12 - 0) × (1 - (1 + 0)⁻³) +$28 / (0.12 - 0) × (1 - (1 + 0)⁻²) +$34 / (0.12 - 0) × (1 - (1 + 0)⁻¹)
= $10 / 0.12 × (1 - 1) +$16 / 0.12 ×(1 - 0.8929) +$22 / 0.12 × (1 - 0.7972) +
$28 / 0.12 × (1 - 0.7118) +$34 / 0.12 × (1 - 0.6355)
≈ $41.67 + $93.33 + $122.22 + $163.33 + $283.33
≈ $703.88
Next, calculate the present value of the stock price at the end of the fifth year.
Since the stock will no longer pay dividends,
The stock price at the end of the fifth year will be the present value of $34 using the required return of 12%,
PV_stockprice = $34 / (1 + 0.12)⁵
≈ $17.70
Finally, calculate the present value of the stock today by summing up the present values of the dividends and the stock price,
PV_stock
= PV_dividends + PV_stock_price
≈ $703.88 + $17.70
≈ $721.58
Therefore, one should pay approximately $721.58 for a share of the stock today.
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a stock has a beta of 1.15, the expected return on the market is 11.1 percent, and the risk-free rate is 3.8 percent. what must the expected return on this stock be?
The expected return on this stock would be approximately 12.195%. However, it's important to consider that the CAPM is a simplified model with certain assumptions and limitations.
To calculate the expected return on a stock, we can use the capital asset pricing model (CAPM). The CAPM formula is as follows:
Expected Return = Risk-Free Rate + Beta × (Expected Market Return - Risk-Free Rate)
In this case, the beta of the stock is given as 1.15, the expected return on the market is 11.1 percent, and the risk-free rate is 3.8 percent. Plugging these values into the formula, we can calculate the expected return on the stock.
Expected Return = 3.8% + 1.15 × (11.1% - 3.8%)
Expected Return = 3.8% + 1.15 × 7.3%
Expected Return = 3.8% + 8.395%
Expected Return = 12.195%
Therefore, the expected return on this stock, based on the given information, would be approximately 12.195%.
It's important to note that the CAPM is a simplified model that assumes efficient markets and has its limitations. Other factors such as company-specific risks, market conditions, and other financial indicators should also be considered when making investment decisions.
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senior management at elz corporation, an athletic shoe manufacturer, has hired you as a consultant to help them develop a strategy to enhance the ability to be efficient and to minimize costs in a brutally competitive and price-sensitive industry. when meeting with management, the ceo asks you about the possibility of pursuing a lean-thinking strategy and what it attempts to do. your response should be that when a company participates in lean thinking, it evaluates current practices to
Senior management at Elz Corporation, an athletic shoe manufacturer, has hired you as a consultant to help them develop a strategy to enhance the ability to be efficient and to minimize costs in a brutally competitive and price-sensitive industry. When meeting with management, the CEO asks you about the possibility of pursuing a lean-thinking strategy and what it attempts to do.
Lean thinking, also known as lean manufacturing, involves examining current business processes to identify areas of waste and inefficiency. This approach aims to eliminate waste and improve efficiency to maximize profitability. Lean thinking is a continuous improvement process, meaning that it is an ongoing effort to streamline processes and cut costs.Lean thinking is built on the principle that by minimizing waste, companies can operate more efficiently and effectively, which results in increased profitability. In the context of Elz Corporation, implementing a lean-thinking strategy could involve streamlining the manufacturing process, reducing inventory levels, and eliminating non-value-added activities. This could help the company be more responsive to changing market conditions and remain competitive in a price-sensitive industry.
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Which of the following events could cause inflation in the United States—a country that uses fiat money?
a. The government decides to transition to a commodity-backed money.
b. The government decides to print more money.
c. There is a discovery of a new silver mine.
d. There has been a decision made to switch from a currency based on the amount of gold (a scarce metal) to a currency based on the amount of silver (a plentiful metal).
e.Individuals are frustrated by the infrequent occurrence of the double coincidence of wants.
Printing more money could cause inflation in the United States. Inflation is defined as a sustained increase in the general price level of goods and services over time. Thus, option A is correct.
When the government prints more money, the supply of money increases, and this can lead to an increase in the demand for goods and services. As demand increases, the prices of goods and services also increase, causing inflation.
Fiat money is a currency that is not backed by any physical commodity such as gold or silver. The value of fiat money is determined by the government's ability to maintain its value and the trust of the public in the currency.
When the government prints more money, it can reduce the value of the currency and increase inflation. The discovery of a new silver mine or switching to a currency based on silver, while it may affect the value of the currency, is unlikely to cause inflation on its own.
Similarly, frustration with the double coincidence of wants, which refers to the difficulty of finding someone who has what you want and wants what you have, is not directly related to inflation.
In summary, printing more money could cause inflation in the United States. This is because an increase in the money supply can lead to an increase in demand for goods and services, driving up prices and causing inflation.
Other events such as the discovery of a new silver mine, switching to a currency based on silver, or frustration with the double coincidence of wants are unlikely to cause inflation on their own. Thus, option A is correct.
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you are considering a project with an initial cost of $10,140. what is the payback period for this project if the cash inflows are $2,300, $4,500, $9,100, and $13,000 for years 1 to 4, respectively?
The payback period for this project is approximately 3.443 years.
Let's calculate the cumulative cash inflows for each year:
Year 1: $2,300
Year 2: $2,300 + $4,500 = $6,800
Year 3: $6,800 + $9,100 = $15,900
Year 4: $15,900 + $13,000 = $28,900
Fractional period = (Cumulative cash inflows at the end of Year 3 - Initial cost) / Cash inflow in Year 4
= ($15,900 - $10,140) / $13,000
= $5,760 / $13,000
≈ 0.443
To calculate the payback period, we add the whole number of years (3 in this case) to the fractional period:
Payback period = 3 + 0.443
≈ 3.443 years
The payback period is a financial metric used to assess the length of time it takes for an investment or project to recoup its initial cost. It is a simple and commonly used measure of investment profitability and risk. The payback period calculates the time required for the cumulative cash inflows from the investment to equal or exceed the initial cash outflow.
To calculate the payback period, one needs to determine the cash inflows generated by the investment or project on an annual basis. These cash inflows can include revenue, cost savings, or any other monetary benefits. The cumulative cash inflows are then calculated by adding up the cash inflows for each period until they equal or exceed the initial investment.
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Bria Furniture sells bed frames and mattresses. One of its products is a premium therapeutic bed set produced by OmniSleep, which comes with a mattress and a bed frame. Bria offers a package consisting of the mattress, the frame, and on-site installation by its staff. All of these components can be sold separately, as often done by other vendors, so Bria concludes that these are separate performance obligations. Bria sells the OmniSleep package for $3,400. The mattress and the frame are sold separately for $2,200 and $1,085, respectively. Other vendors in the same area typically charge $230 for on-site installation. Bria does not sell on-site installation separately. On average, the prices charged by Bria are 10% higher than those of its competitors. Bria estimates that it incurs about $115 of compensation and other costs to provide the installation service. The profit margin over cost is estimated to be approximately 40%. Required: (a) Estimate the stand-alone selling price of the installation service using the adjusted market assessment approach. (b) Estimate the stand-alone selling price of the installation service using the expected cost plus margin approach. (c) Estimate the stand-alone selling price of the installation service using the residual approach. (a) Stand-alone selling price (b) Stand-alone selling price (c) Stand-alone selling price
(a) The estimated stand-alone selling price of the installation service using the adjusted market assessment approach is approximately $253.
(b) The estimated stand-alone selling price of mattress is the installation service using the expected cost plus margin approach is approximately $191.67.
(c) The estimated stand-alone selling price of the installation service using the residual approach is approximately $115.
(a) The changed market evaluation approach gauges the independent selling cost in light of noticeable costs on the lookout. For this situation, Bria sees that different merchants charge $230 for on location establishment, yet they don't sell it independently.
Since Bria incorporates the establishment administration as a component of the bundle, it very well may be derived that clients will pay an extra sum for this help.
Taking into account that Bria's costs are ordinarily 10% higher than contenders, the independent selling cost of the establishment administration can be assessed by adding 10% to the noticed cost of $230.
Subsequently, the assessed independent selling cost of the establishment administration utilizing the changed market evaluation approach is around $253 ($230 + 10% of $230).
(b) The normal expense in addition to edge approach gauges the independent selling cost by considering the expenses caused to offer the support and adding an ideal net revenue. Bria gauges that it causes $115 of pay and different expenses to give the establishment administration.
Taking into account a net revenue of 40% over cost, the independent selling cost can be assessed by separating the expenses by (1 - overall revenue). Thusly, the assessed independent selling cost of the establishment administration utilizing the normal expense in addition to edge approach is around $191.67 ($115/(1 - 40%)).
(c) The remaining methodology assesses the independent selling cost by taking away the independent selling costs of recognized parts from the all out selling cost of the bundle.
For this situation, the absolute selling cost of the bundle is $3,400, and the independent selling costs of the sleeping cushion and edge are $2,200 and $1,085, individually. Deducting the amount of these costs from the absolute selling cost gives the remaining worth, which addresses the assessed independent selling cost of the establishment administration.
Consequently, the assessed independent selling cost of the establishment administration utilizing the lingering approach is around $115 ($3,400-$2,200-$1,085).
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Problem 13-10 Prepare a Statement of Cash Flows; Free Cash Flow [LO13-1, LO13-2, LO13-3]
Joyner Company’s income statement for Year 2 follows:
Sales $ 705,000
Cost of goods sold 208,000
Gross margin 497,000
Selling and administrative expenses 217,000
Net operating income 280,000
Nonoperating items: Gain on sale of equipment 7,000
Income before taxes 287,000
Income taxes 114,800
Net income $ 172,200
Its balance sheet amounts at the end of Years 1 and 2 are as follows:
Year 2 Year 1
Assets Cash and cash equivalents $ 122,800 $ 63,500
Accounts receivable 265,000 133,000
Inventory 319,000 271,000
Prepaid expenses 10,000 20,000
Total current assets 716,800 487,500
Property, plant, and equipment 625,000 513,000
Less accumulated depreciation 166,600 130,500
Net property, plant, and equipment 458,400 382,500
Loan to Hymans Company 47,000 0
Total assets $ 1,222,200 $ 870,000
Liabilities and Stockholders' Equity Accounts payable $ 319,000 $ 253,000
Accrued liabilities 47,000 59,000
Income taxes payable 85,100 80,000
Total current liabilities 451,100 392,000
Bonds payable 194,000 103,000
Total liabilities 645,100 495,000
Common stock 344,000 282,000
Retained earnings 233,100 93,000
Total stockholders' equity 577,100 375,000
Total liabilities and stockholders' equity $ 1,222,200 $ 870,000
Equipment that had cost $31,200 and on which there was accumulated depreciation of $11,200 was sold during Year 2 for $27,000. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.
Required:
1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2.
2. Prepare a statement of cash flows for Year 2.
3. Compute the free cash flow for Year 2.
1. To compute the net cash provided by/used in operating activities for Year 2 using the indirect method, we start with net income of $172,200 and make adjustments for non-cash items and changes in working capital. We subtract the gain on the sale of equipment ($7,000), add back depreciation expense ($36,100), and adjust for changes in current assets and liabilities. The net cash provided by operating activities for Year 2 is $257,600.
How to prepare the statement of cash flows for Year 2?2. The statement of cash flows for Year 2 will include three sections: operating activities, investing activities, and financing activities. In the operating activities section, we present the net cash provided by operating activities ($257,600). The investing activities section will include the cash inflow from the sale of equipment ($27,000). In the financing activities section, we will include the cash outflow for the dividend payment. The net increase in cash and cash equivalents will be determined by summing the cash flows from each section.
How to calculate the free cash flow in Year 2?3. Free cash flow for Year 2 is computed by subtracting capital expenditures from net cash provided by operating activities. Capital expenditures can be calculated by taking the difference between the net property, plant, and equipment values for Year 2 and Year 1. The free cash flow for Year 2 is the amount remaining after deducting capital expenditures from net cash provided by operating activities.
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A major advantage of primary data collection is that it can be tailored to fit the pertinent research questions
a. true b. false
The statement "A major advantage of primary data collection is its ability to be tailored specifically to fit the pertinent research questions at hand" is true.
When conducting primary data collection, researchers have control over the design, methodology, and instruments used to gather data. This allows them to customize the data collection process to align with the specific objectives and research questions of their study.
Researchers can choose the most appropriate data collection methods, such as surveys, interviews, observations, or experiments, based on the nature of their research and the information they seek to obtain.
By tailoring the data collection process, researchers can ensure that the data collected is relevant, comprehensive, and directly addresses their research objectives. They can design and refine survey questions, interview protocols, or experimental conditions to target the specific variables and concepts of interest. This enables researchers to obtain high-quality and specific data that is directly aligned with their research questions.
Moreover, tailoring primary data collection allows researchers to control potential sources of bias, improve data validity and reliability, and increase the overall research validity. Researchers can implement rigorous quality control measures, ensure proper sampling techniques, and mitigate confounding factors, enhancing the accuracy and credibility of the data collected.
In summary, the major advantage of primary data collection is its flexibility to be customized and tailored to fit the pertinent research questions, enabling researchers to obtain specific, relevant, and high-quality data that directly addresses their research objectives.
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forward contracts, futures contracts, and option contracts are: spot contracts. common stock securities. preferred contracts. derivative securities.
Forward contracts, futures contracts, and option contracts are derivative securities. These contracts derive their value from an underlying asset, such as a commodity, currency, or stock index.
A spot contract is a type of contract where the buyer and seller agree to exchange an asset for cash at the current market price, with delivery and payment occurring immediately or within a short period of time. In contrast, a derivative contract is a type of contract where the value is based on the price of an underlying asset, but the delivery and payment may occur at a later date.
A forward contract is a type of derivative contract where two parties agree to exchange an asset at a future date for a fixed price that is agreed upon today. Futures contracts are similar to forward contracts, but they are standardized and traded on an exchange. Option contracts give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specific date.
Therefore, while spot contracts involve the immediate exchange of an asset for cash at the current market price, derivative contracts such as forward contracts, futures contracts, and option contracts derive their value from an underlying asset and involve delivery and payment at a later date.
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What is the future value of $1000 invested for 5 years at an interest rate of 5% pa?
According to the given question After calculating, the future value of the $1000 investment in 5 years at an interest rate of 5% per annum is approximately $1,276.28.
Assuming that the interest is compounded annually, the future value of $1000 invested for 5 years at an interest rate of 5% pa can be calculated using the formula FV = PV x (1 + r)^n, where FV is the future value. It is important to note that this calculation assumes that the interest is loaded annually and that no additional deposits or withdrawals are made during the 5 years.
To calculate this, we can use the formula for the future value (FV) of an investment:
FV = P(1 + r)^n
Where:
FV = future value of the investment
P = principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of years
Given the information you provided:
P = $1000
r = 5% = 0.05
n = 5 years
Now, let's apply these values to the formula:
FV = $1000(1 + 0.05)^5
FV = $1000(1.05)^5
FV = $1000 × 1.276281
After calculating, the future value of the $1000 investment in 5 years at an interest rate of 5% per annum is approximately $1,276.28.
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Does the fact that tucker produced 50 cars prove that he had a viable plan for an automobile company why or why not
The fact that Tucker produced 50 cars does not necessarily prove that he had a viable plan for an automobile company.
Market demand, financial stability, profitability, scalability, competitive advantage, product quality, marketing strategy, and many other elements would all play a role in an automobile company's viability. In order to evaluate Tucker's car company's viable plan, it would be necessary to take into account a variety of aspects in addition to the production of 50 cars, such as the firm's long-term financial performance, market acceptance of the vehicles, capacity for scaling up production, sustainability of the business model, and overall success in the sector.
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What are the key factors on which external financing depends, as indicated in the AFN equation?
The external financing needed (AFN) equation takes into account various factors that influence the amount of external financing a company may require. Some key factors that affect external financing needs include projected sales growth, asset levels, profit margins, dividend policy, and retention rate.
The key factors that determine the amount of external financing needed, as indicated in the AFN equation, are:
Projected sales growth: The rate of projected sales growth is a key factor in determining the amount of external financing needed. As sales increase, the business may need to invest in additional assets, such as inventory or equipment, to support the higher level of sales.Asset requirements: The level of asset requirements is another important factor in determining the amount of external financing needed. If the business needs to invest in new assets, such as buildings or equipment, to support growth, it will require additional financing.Operating efficiency: Operating efficiency, as measured by the asset turnover ratio, can have an impact on the amount of external financing needed. A higher asset turnover ratio indicates that the business is using its assets more efficiently, which may reduce the need for additional external financing.Profit margin: The profit margin, or the percentage of sales that is earned as profit, can also affect the amount of external financing needed. A higher profit margin means that the business is earning more profit from each sale, which may reduce the need for additional financing.By considering these factors and using the AFN equation, businesses can better plan for their future financing needs and make informed decisions about how to finance their growth.
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Accountancy question
The journal calculation has been done below
If capitals are fluctuating: good will 36,000 If capitals are fixed: good will 36000 By raising and writing off goodwill: 21600How to solve for the goodwill(i) If capitals are fluctuating:
In this case, the adjustment for goodwill is made through the partners' capital accounts.
The journal entry for the adjustment of goodwill will be:
Particulars Debit Credit
Anil's Capital A/c 18,000
Sunil's Capital A/c 10,800
Ramesh's Capital A/c 7,200
To Goodwill A/c 36,000
(ii) If capitals are fixed:
In this case, the adjustment for goodwill is made through the partners' current accounts.
The journal entry for the adjustment of goodwill will be:
Particulars Debit Credit
Anil's Current A/c 18,000
Sunil's Current A/c 10,800
Ramesh's Current A/c 7,200
To Goodwill A/c 36,000
(iii) By raising and writing off goodwill:
In this case, goodwill is first raised and then written off. The journal entries for the adjustment of goodwill will be:
Particulars Debit Credit
Goodwill A/c 1,08,000
To Anil's Capital A/c 54,000
To Sunil's Capital A/c 32,400
To Ramesh's Capital A/c 21,600
Then, for the writing off of the goodwill:
Particulars Debit Credit
Anil's Capital A/c 18,000
Sunil's Capital A/c 10,800
Ramesh's Capital A/c 7,200
To Goodwill A/c 36,000
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data analytics and business intelligence are driving discovery and innovation. true or false
The given statement "data analytics and business intelligence are driving discovery and innovation." is true because data analytics and business intelligence have transformed the way organizations operate by enabling them to make informed decisions, uncover insights, and drive innovation.
Data analytics involves the process of extracting insights and patterns from large volumes of data to gain valuable and actionable information. Business intelligence, on the other hand, focuses on utilizing data and analytics tools to make informed business decisions and gain a competitive advantage.
By leveraging data analytics and business intelligence, organizations can gain deeper insights into customer behavior, market trends, and operational efficiencies. They can identify patterns, correlations, and predictive models that help in understanding customer preferences, optimizing marketing campaigns, and improving operational processes.
Furthermore, data analytics and business intelligence enable organizations to explore innovative ideas and develop new products or services. By analyzing data, businesses can identify gaps in the market, detect emerging trends, and make informed decisions on introducing innovative solutions.
In addition, data analytics and business intelligence facilitate evidence-based decision-making. Rather than relying solely on intuition or guesswork, organizations can utilize data to validate hypotheses, identify opportunities, and mitigate risks.
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The effort required to locate a suitable product is called:A) price discrimination.B) search costs.C) menu costs.D) shopping costs.E) location costs.
The effort required to locate a suitable product is called search costs, option B.
Search costs refer to the expenses, efforts, and time spent by consumers to find and identify a suitable product or service that meets their needs or preferences. These costs are incurred during the process of searching for information, comparing options, evaluating alternatives, and making a purchasing decision.
When consumers engage in product search, they invest their resources in activities such as visiting multiple stores, conducting online research, reading reviews, seeking recommendations, and comparing prices, features, and quality. These activities require time, energy, and sometimes monetary expenses.
Therefore, search costs encompass the time, effort, and expenses incurred by consumers in locating and evaluating suitable products or services. By understanding and addressing these costs, businesses can enhance customer satisfaction and increase the likelihood of sales. So, the correct option is B. Search costs.
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FILL IN THE BLANK you noticed that the economy's output increase while price levels also increased. this means that the _________ curve has shifted to the ____________.
If the economy's output increases while price levels also increase, it means that the aggregate demand curve has shifted to the right.
In macroeconomics, the aggregate demand curve represents the relationship between the price level and the total quantity of goods and services that households, businesses, the government, and foreign buyers are willing to purchase.
When the aggregate demand curve shifts to the right, it means that at any given price level, there is a higher quantity of goods and services demanded. As a result, producers increase their output to meet the increased demand, leading to an increase in the economy's output level.
It is important to note that while an increase in aggregate demand can lead to an increase in output, it can also result in an increase in the price level. This is because as demand increases, producers may need to increase their prices to cover their increased costs of production, leading to inflation.
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describe a time in which you went above and beyond for a customer. what did you do and what was the result? question
I strive to provide exceptional service to users by delivering accurate and concise information in a timely manner. One instance where I went above and beyond for a customer involved a user who was seeking a detailed explanation on a complex topic.
The user requested an answer within a specific time frame. Recognizing the importance of meeting the customer's expectations, I quickly gathered relevant information and synthesized it into a clear, concise response. Despite the request for a response more than 100 words, I kept the answer focused and informative to ensure its usefulness.
The result was that the customer received the necessary information within their desired time frame and was able to apply the knowledge to their project successfully. The user expressed gratitude and satisfaction with the prompt and accurate assistance provided. As a bot, my primary goal is to consistently exceed customer expectations in delivering valuable, timely, and professional support.
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Investment bank Canaccord's Think Childcare (TNK) initiation of coverage states: "TNK reported an impressive set of results following its first full year as a listed entity. Revenue of $46.5m was 7% above prospectus forecasts of $43.4m; however, the company acquired two centres during the year. On a like-for-like basis (backing out the acquisitions), revenue still came in 5% above the prospectus forecasts, at $45.5m."
Which of the following statements is NOT correct? It's important to assess how much performance exceeded forecasts on a like-for-like basis since:
Select one:
a.Expansion through acquisitions is typically more costly than organic expansion.
b.Successful word-of-mouth customer recommendations and advertising are less risky and more sustainable sources of growth compared to acquisitions.
c.Organic and acquisition-led growth both typically require extra external funding.
d.Acquisitions typically require a takeover premium which runs the risk of making them negative NPV investments.
The correct answer is b. Successful word-of-mouth customer recommendations and advertising are less risky and more sustainable sources of growth compared to acquisitions. Statement b is not correct because it implies that organic growth (such as word-of-mouth customer recommendations and advertising) is always less risky and more sustainable than growth through acquisitions. However, this is not necessarily the case.
The risks and sustainability of each growth strategy depend on various factors and circumstances.In the case of Think Childcare (TNK), the investment bank Canaccord notes that the company reported an impressive set of results in its first full year as a listed entity, with revenue exceeding prospectus forecasts both with and without acquisitions. This highlights the importance of assessing performance on a like-for-like basis to understand the true impact of acquisitions on growth. It's important to note that expansion through acquisitions is typically more costly than organic expansion and acquisitions typically require a takeover premium which runs the risk of making them negative NPV (net present value) investments. Therefore, the correct answer is b. Successful word-of-mouth customer recommendations and advertising are less risky and more sustainable sources of growth compared to acquisitions.
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wetlands are important to the global carbon balance because ________.
Wetlands are important to the global carbon balance because they play a crucial role in carbon sequestration and storage. They have the ability to capture and store significant amounts of carbon, helping to mitigate climate change and maintain the global carbon balance.
Wetlands, such as marshes, swamps, and bogs, are highly effective at sequestering and storing carbon. They do this through a process called carbon sequestration, which involves the uptake and storage of carbon dioxide (CO2) from the atmosphere. Wetlands contain vegetation that absorbs CO2 through photosynthesis, converting it into organic matter. This organic matter is then stored in the wetland soils, where it can remain for long periods, effectively removing CO2 from the atmosphere.
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Which of the following best describes the aleatory nature of an insurance contract?
A) Only one of the parties being legally bound by the contract
B) Ambiguities are interpreted in favor of the insured
C) Policies are submitted to the insurer on a take-it-or-leave-it basis
D) Exchange of unequal values
D) Exchange of unequal values. following best describes the aleatory nature of an insurance contract
The term "aleatory" refers to the element of chance or uncertainty in an insurance contract. In an insurance contract, there is an exchange of unequal values between the insured and the insurer. The insured pays a premium, which is typically a relatively small amount compared to the potential benefits they may receive in the event of a covered loss. The insurer, on the other hand, assumes the risk of potential claims and agrees to provide financial compensation if a covered loss occurs. This exchange of unequal values reflects the aleatory nature of insurance, as the outcome and benefits of the contract are dependent on uncertain events. It highlights the element of risk transfer inherent in insurance agreements.
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