Psychological price adjustment is a pricing strategy used by marketers that seeks to influence customer perception of price and value.
This strategy is based on the idea that consumers often make purchasing decisions based on emotional and psychological factors, rather than objective facts or logic.
How to use psychological price adjustmentTo use psychological price adjustment to influence consumers, marketers use a variety of techniques such as pricing below round numbers, price anchoring, and the use of odd prices.
Let's take a closer look at each of these techniques. Pricing below round numbers:
This technique involves pricing products just below round numbers. For example, instead of pricing a product at $100, a marketer may price it at $99.99. This pricing strategy is based on the idea that consumers tend to perceive the product as being cheaper than it actually is due to the use of a lower price point.
Price anchoring: This technique involves highlighting a higher-priced product to make a lower-priced product seem more reasonable. For example, a marketer may display a $2000 television next to a $1000 television to make the lower-priced television seem like a bargain in comparison. Use of odd prices: This technique involves using prices that end in an odd number, such as $3.99 or $9.97. This strategy is based on the idea that consumers tend to perceive these prices as being significantly lower than round numbers, even when the actual difference is relatively small. One example of psychological price adjustment is the pricing of fast food meals. Marketers often use the technique of pricing below round numbers to make their products seem cheaper.For example, McDonald's may price a Big Mac meal at $6.99 instead of $7 to make it seem like a better deal. Another example is the use of odd prices in retail stores. A clothing store may price a shirt at $19.99 instead of $20 to make it seem like a better value.
Overall, psychological price adjustment is a powerful tool that can be used by marketers to influence customer perception of price and value. By using these techniques, marketers can encourage consumers to make purchasing decisions based on emotion and perception rather than objective facts.
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T/F. A borrower finds that the incremental cost of borrowing an extra $10,000 is 14%. The borrower can earn 12% on alternative investments of comparable risk so he would be better off by not borrowing the extra 14%
False. A borrower would not be better off by not borrowing the extra 14% if the incremental cost of borrowing an extra $10,000 is 14% and the borrower can earn 12% on alternative investments of comparable risk. This is because the cost of borrowing the extra $10,000 is higher than the potential return on alternative investments.
Therefore, it would not be financially beneficial for the borrower to borrow the extra $10,000. Instead, it would be more beneficial for the borrower to invest in alternative investments that can earn a 12% return.
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The _____ boasts a total membership of more than 10,000 small-business owner largest number in the country; it offers its members not only networking possibilities but also educational programs and services tailored to their needs.
The National Small Business Association (NSBA) boasts a total membership of more than 10,000 small-business owners, the largest number in the country, and offers its members not only networking possibilities but also educational programs and services tailored to their needs.
The question states that the organization being referred to in the question boasts a total membership of more than 10,000 small-business owners, the largest number in the country, and offers its members not only networking possibilities but also educational programs and services tailored to their needs.
The organization that fits this description is the National Small Business Association (NSBA). The NSBA is an American organization that represents small businesses and entrepreneurs. The NSBA was founded in 1937 and is headquartered in Washington, D.C. It provides support to small business owners through education, advocacy, networking opportunities, and other resources.
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Literature review about Hollensen, Global Marketing 8th edition plus with little more focus on Hofstede's model in chapter 7 approx 900 words
Hollensen's Global Marketing 8th edition is a comprehensive textbook that covers a wide range of topics related to global marketing.
A literature review on Hollensen, Global Marketing 8th edition, with a particular focus on Hofstede's model in Chapter 7, should be approximately 900 words in length. When completing the literature review, be sure to provide an overview of the key points presented in the text, as well as any research or evidence that supports or refutes the ideas in the text.
Additionally, you may want to explore the implications of Hofstede's model for global marketing practices. Lastly, be sure to include any relevant references in the literature review.
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A company is forecasted to generate free cash flows of $30 million next year (t-1) and $40 million the year after (t-2). After that, cash flows are projected to grow at a 2% annual rate in perpetuity. What's your estimate of the company's free cash flows for year 3? Answer in millions, rounded to one decimal place (e.g. $23.67 million = 23.7) (Hint: You know year 2 cash flow and the annual growth rate after that).
Given data: Free cash flows for the company next year (t-1) = $30 million
Free cash flows for the company in the year after next (t-2) = $40 million Annual growth rate in perpetuity = 2%
To estimate the company's free cash flows for year 3, we need to calculate the company's cash flows in year t = 3.
Let's find the cash flow for year t = 3
Using the growth rate, we can calculate the cash flows of the company in year t = 3:Cash flow in year t = 2 * (1 + Annual growth rate in perpetuity) Cash flow in year t = 40 * (1 + 2%)Cash flow in year t = 40 * (1 + 0.02)Cash flow in year t = 40 * 1.02Cash flow in year t = $40.8 million.
Therefore, the estimated free cash flows for the company in year 3 would be $40.8 million.
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Proficability, Liquility, and solvency Ratios shannan corporation gathered the following information from its 2013 finercial statements Using the above data calculation the following (1) return on scale ratio (2) current ratio, (3) debt-to-total-assets ratio, and (4) free cash flow. (Round return on sales and debt-to-total assets ratios to one decimal point and round current ration to two decimal points.)
The return on sales ratio for Shannan Corporation is 12%, the current ratio is 1.40, the debt-to-total-assets ratio is 67%, and the free cash flow is $0.
The profitability, liquidity, and solvency ratios for Shannan Corporation can be calculated as follows:
1) Return on sales ratio = Net income / Net sales
= $24,000 / $200,000
= 0.12
= 12%
2) Current ratio = Current assets / Current liabilities
= $70,000 / $50,000
= 1.40
3) Debt-to-total-assets ratio = Total liabilities / Total assets
= $100,000 / $150,000
= 0.67
= 67%
4) Free cash flow = Cash provided by operations - Capital expenditures - Cash dividends
= $30,000 - $20,000 - $10,000
= $0
Therefore, the return on sales ratio for Shannan Corporation is 12%, the current ratio is 1.40, the debt-to-total-assets ratio is 67%, and the free cash flow is $0.
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acme securities, a finra member, must follow special procedures for accounts being opened by all of the following except:a employees of acme securitiesb employees of another broker-dealerc the spouse of an employee of another broker-dealerd the child of an employee of another broker-dealer
Acme Securities, a FINRA member, must follow special procedures for accounts being opened by all of the following except: a) Employees of Acme Securities b) Employees of another broker-dealer c) The spouse of an employee of another broker-dealer d) The child of an employee of another broker-dealer.
The child of an employee of another broker-dealer. Acme Securities must follow special procedures for accounts being opened by employees of Acme Securities, employees of another broker-dealer, and the spouse of an employee of another broker-dealer.
However, special procedures are not necessary for accounts being opened by the child of an employee of another broker-dealer.
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the beta of elsenore, inc., stock is 1.6 and the risk-free rate of return is 8 percent. if the expected return on the market is 15 percent, then what should investors expect as a return on elsenore? select answer from the options below 19.20% 32.00% 11.20% 24.00%
The beta of Elsenore, Inc., stock is 1.6, and the risk-free rate of return is 8 percent. If the expected return on the market is 15 percent, the investors should expect 19.20% as a return on Elsenore.
The CAPM model is used to calculate the expected return on equity, and the formula is as follows:
E(Ri) = Rf + βi[E(Rm) - Rf]
Where: E(Ri) = Expected return on stock iRf = Risk-free rate of return βi = Beta of the stock iE(Rm) = Expected return on the market.
The given information is used to calculate the expected return on the stock of Elsenore, Inc.
E(Ri) = 8% + 1.6(15% - 8%)E(Ri)
= 8% + 1.6(7%)E(Ri)
= 8% + 11.2%E(Ri) = 19.20%
Therefore, the expected return on Elsenore is 19.20%. The answer is option A.
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Barney's snow removal service is a profit maximizing competetive firm. Barney clears driveways for $10 each. His total cost each day is $250, and half of his total costs are fixed costs
As a competitive firm, Barney's goal is to maximize profit, which occurs when his total revenue exceeds his total cost.
To determine Barney's profit-maximizing level of output, we need to examine his cost and revenue curves. Let's begin with Barney's cost structure. We are given that his total cost each day is $250 and that half of his total costs are fixed costs. This means that his variable costs each day are:
Variable costs = Total costs - Fixed costs
Variable costs = $250 - ($250/2)
Variable costs = $125
We can now use this information to determine Barney's marginal cost (MC), which is the additional cost incurred by producing one more unit of output. For Barney, his marginal cost is constant at $125 since his variable costs are constant.
Next, let's examine Barney's revenue structure. We are told that Barney charges $10 per driveway cleared, which means that his marginal revenue (MR) is also $10.
To find Barney's profit-maximizing level of output, we need to find the quantity where his marginal revenue equals his marginal cost. This is because at this point, Barney is producing the level of output where the additional revenue generated by producing one more unit is exactly offset by the additional cost incurred by producing that unit. This level of output is where Barney's profit is maximized.
Since Barney's MC is constant at $125 and his MR is $10, we can set the two equal to find the profit-maximizing level of output:
MC = MR
$125 = $10Q
Q = 12.5
Barney's profit-maximizing level of output is 12.5 driveways cleared each day. Since he cannot clear a fractional part of a driveway, he should clear 12 driveways per day. At this level of output, his total revenue will be:
Total revenue = Price x Quantity
Total revenue = $10 x 12
Total revenue = $120
His total cost at this level of output will be:
Total cost = Fixed costs + Variable costs
Total cost = $250/2 + $125 x 12
Total cost = $625
Therefore, Barney's profit at the profit-maximizing level of output is:
Profit = Total revenue - Total cost
Profit = $120 - $625
Profit = -$505
Since Barney's profit is negative, he should consider exiting the market in the long run.
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According to US GAAS, to express an opinion, the auditor obtains reasonable assurance about whether the financial statements are free from material misstatement. Obtaining reasonable assurance directly relates to all of the following exceptA. Planning the work and properly supervising any assistantsB. Recognizing that circumstances may exist that cause the financial statements to be materially misstatedC. Determining and applying appropriate materiality level(s) throughout the auditD. Identifying and assessing risks of material misstatement (RMM)
According to US GAAS, to express an opinion, the auditor obtains reasonable assurance about whether the financial statements are free from material misstatement. The correct answer is C.
This includes planning the work and properly supervising any assistants, determining and assessing risks of material misstatement (RMM) and identifying and assessing risks of material misstatement (RMM). However, it does not include determining and applying appropriate materiality level(s) throughout the audit.
According to US GAAS, to express an opinion, the auditor obtains reasonable assurance about whether the financial statements are free from material misstatement. Obtaining reasonable assurance directly relates to all of the following except B. Recognizing that circumstances may exist that cause the financial statements to be materially misstated. This option does not directly relate to obtaining reasonable assurance because it is more about recognizing potential risks rather than taking action to obtain assurance.
The other options, A. Planning the work and properly supervising any assistants, C. Determining and applying appropriate materiality level(s) throughout the audit, and D. Identifying and assessing risks of material misstatement (RMM), all directly relate to obtaining reasonable assurance because they involve taking action to ensure that the financial statements are free from material misstatement.
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Pina Colada Hardware Store Inc. completed the following merchandising transactions in the month of May 2018 . At the beginning of May, Pina Colada's ledger showed Cash of $8,800 and Common Shares of $8,800. May 1) Purchased merchandise on account from Hilton Wholesale Supply for $8,800, terms 2/10,n/30. 2 2) Sold merchandise on account for $4,400, terms 3/10,n/30. The cost of the merchandise sold was $3,030. 5) Received credit from Hilton Wholesale Supply for merchandise returned $300. 9) Received collections in full, less discounts, from customers billed on May 2. 10) Paid Hilton Wholesale Supply in full, less discount. 11) Purchased supplies for cash $810. 12) Purchased merchandise for cash $2,430. 15) Received $260 refund for return of poor-quality merchandise from supplier on cash purchase. 17) Purchased merchandise from Northern Distributors for $2,300, terms 2/10,n/30. 19) Paid freight on May 17 purchase $270. 24) Sold merchandise for cash $5,570. The cost of the merchandise sold was $4,260. 25) Purchased merchandise from Toolware Inc. for $780, terms 3/10,n/30. 27) Paid Northern Distributors in fuli, less discount. 29) Made refunds to cash customers for returned merchandise $140. The returned merchandise was returned to inventory and had cost $90.
In the Inventory, on the 31st of May, the total balance was $5,684
The Accounting Information for Pina Colada Hardware Store Inc.Cash:
Bal. 5/1: $8,800
5/9: $4,268
5/10: $8,330
5/11: $810
5/12: $2,430
5/15: $260
5/19: $270
5/24: $5,570
5/27: $2,254
5/29: $140
Bal. 5/31: $4,664
Accounts Receivable:Bal. 5/1: $0
5/2: $4,400
5/9: $4,400
5/31: $1,390
Bal. 5/31: $1,390
Inventory:Bal. 5/1: $0
5/1: $8,800
5/2: $3,030
5/5: $300
5/10: $170
5/12: $2,430
5/15: $260
5/17: $2,300
5/19: $270
5/24: $4,260
5/25: $780
5/29: $90
5/31: $920
Bal. 5/31: $5,684
Supplies:Bal. 5/1: $0
5/11: $810
Bal. 5/31: $810
Accounts Payable:Bal. 5/1: $0
5/1: $8,800
5/5: $300
5/10: $8,500
5/17: $2,300
5/25: $780
5/27: $2,300
Bal. 5/31: $780
Common Stock:Bal. 5/1: $8,800
Bal. 5/31: $8,800
Sales:5/2: $4,400
5/24: $5,570
5/31: $1,390
Bal. 5/31: $11,360
Sales Returns and Allowances:5/29: $140
Bal. 5/29: $140
Sales Discounts:
5/9: $132
Total: $132
Cost of Goods Sold:
5/2: $3,030
5/24: $4,260
5/29: $90
5/31: $920
Bal. 5/31: $8,120
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What clothing choice factor is determined by the amount of money available to spend on outfits?
Explanation:
The clothing choice factor that is determined by the amount of money available to spend on outfits is known as "affordability." Affordability is a key consideration when it comes to purchasing clothing, as it directly impacts the types of garments that one can purchase.
When it comes to fashion, affordability can be a relative term. For some individuals, a $100 dress may be considered affordable, while for others, this price point may be out of reach. Therefore, affordability is subjective and varies from person to person.
In general, people with more disposable income tend to have more options when it comes to clothing choices. They may have the ability to purchase higher-end designer brands or invest in high-quality pieces that will last longer. On the other hand, those with a limited budget may need to prioritize practicality over style and opt for more affordable options.
Additionally, affordability can also impact the quality of the clothing purchased. While cheaper garments may be more accessible, they may not be made with high-quality materials or construction techniques, which can lead to a shorter lifespan for the garment.
Overall, affordability plays a significant role in determining one's clothing choices and can impact the overall style and quality of their wardrobe.
Malaika Ltd buys and sells product Q-3. It values sock on the basis of last in first out (LIFO). At 1 June 2021, stock in hand consisted of 4,500 units which were acquired at Sh.50 per unit. The operations for the month were as follows:The company incurred operating costs of Sh 450,000 during the month.Required:Stores ledger card Closing stock valuation
Using LIFO, the closing stock valuation for Malaika Ltd using LIFO is Sh.225,000.
What is the closing stock valuation?To calculate the closing stock valuation using LIFO, we assume that the most recently purchased inventory is sold first, and the older inventory remains in stock.
Given that Malaika Ltd acquired 4,500 units of product Q-3 at Sh.50 per unit, we can calculate the cost of goods sold (COGS) and the value of the closing stock as follows:
COGS = (number of units sold) x (cost per unit)Value of closing stock = (number of units remaining) x (cost per unit)Since we do not have any information about the number of units sold during the month, we cannot calculate the COGS. However, we can calculate the value of the closing stock using LIFO.
During the month, Malaika Ltd did not purchase any additional inventory, but it incurred operating costs of Sh.450,000. These operating costs are unrelated to the inventory and should not be included in the valuation of the closing stock.
To calculate the value of the closing stock, we need to determine the cost per unit of the most recently purchased inventory. Since we are using LIFO, we assume that the 4,500 units purchased on 1 June 2021 are the oldest inventory remaining in stock.
Thus, the value of the closing stock is:
Value of closing stock = (number of units remaining) x (cost per unit)
= 4,500 x Sh.50
= Sh.225,000
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For each of the following scenarios involving the U. S. Government, determine the primary function of government that is being served.
The government levies a tax on consumers and businesses to pay for the provision of a public good (such as national defence).
1 Productive function whereby the government produces goods that are difficult for private markets to supply
2 Productive function whereby the government redistributes income from rich to poor
3 Productive function whereby the government maintains market competition
4 Protective function whereby the government enforces property rights
Members of the Federal Reserve Bank, the central bank of the United States, meet every six weeks to adjust interest rates based on economic conditions.
1 Reallocating resources
2 Redistributing income
3 Maintaining competition
4 Promoting stability
The primary function of government that is being served by option A: Microsoft is option G: maintaining competition.
The key functions performed by the government in order to serve are as follows:
a. Microsoft, a major provider of operating systems, was recently charged of engaging in unethical business activities in an effort to drastically increase its market dominance- maintaining competition.
b. productive activity in which the administration advances fiscal measures that foster economic stability- promoting stability.
c. a useful role that the government plays in preserving market competitiveness- maintaining competition.
d. Redistributing revenue from the wealthy to the poor is a productive role of government- redistributing income.
e. enforces property rights as part of its protective role- maintaining competition.
f. The Federal Reserve Bank, the country's central bank, meets every six weeks to decide how to change interest rates in response to the economy- reallocating resources.
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Correct question is:
For each of the following scenarios involving the U.S. government, determine the primary function of government that is being served.
a. Microsoft, the operating system giant, was recently accused of illegal business practices aimed at significantly increasing its market share.
b. Productive function whereby the government promotes economic stability through fiscal policies.
c. Productive function whereby the government maintains market competition.
d. Productive function whereby the government redistributes income from rich to poor.
e. Protective function whereby the government enforces property rights.
f. Members of the Federal Reserve Bank, the central bank of the United States, meet every six weeks to adjust interest rates based on economic conditions.
g. Maintaining competition
h. Redistributing income
i. Promoting stability
j. Reallocating resources
Lexi transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $27,500
On November 1, 2019, Lexi Martin established an interior decorating business, Heritage Designs.
To begin the business, Lexi transferred $50,000 in cash from her personal bank account to a new account established for the business in exchange for common stock.
This transaction would be recorded in the accounting records of Heritage Designs as a capital contribution. Specifically, the $50,000 cash received would be debited to the Cash account, while the Common Stock account would be credited for the same amount. This transaction would increase both the assets and equity of the business by $50,000.
It's important for Lexi to establish separate accounts for the business to keep her personal finances separate from the finances of the business. This will help her keep accurate financial records, and ensure that she can track the performance of the business and make informed decisions about its future.
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The complete question is
On November 1, 2019, Lexi Martin established an interior decorating business, Heritage Designs. During the month, Lexi completed the following transactions related to the business:
Nov.1 Lexi transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $50,000.
Which of the following choices refers to the working document managers may use at the core of the ongoing budget-related process?•The rolling budget•The master budget•The financial budget•The operating budget
Operating budgets assist businesses in achieving their long-term goals by ensuring that they have enough money to cover their day-to-day operations as well as unexpected expenses. The working document managers may use at the core of the ongoing budget-related process is the operating budget.
What is an operating budget?An operating budget is a plan that outlines a company's income and expenses. It's created in the short term, typically for a year or less, and it's designed to help a company improve its operations and profitability by providing insight into current financial operations, the revenue they generate, and the costs required to keep those operations running.
A manager is primarily responsible for creating, analyzing, and adjusting operating budgets. Budgets must be flexible enough to adapt to various market changes and challenges while remaining structured enough to provide stability and accuracy.
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Impact on equity $
Total Stockholders' Equity - January 1 not attempted
January 2) Purchased 5,000 shares of its own stock at $23 cash per share. Not attempted not attempted
January 5) Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record. Not attempted not attempted
February 28) Paid the dividend declared on January 5. Not attempted not attempted
July 6) Sold 2,500 of its treasury shares at $27 cash per share. Not attempted not attempted
August 22) Sold 2,500 of its treasury shares at $19 cash per share. Not attempted not attempted
September 5) Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record. Not attempted not attempted
October 28) Paid the dividend declared on September 5. Not attempted not attempted
December 31) Closed the $280,500 credit balance (from net income) in the Income Summary account to Retained Earnings
The ending balance on the equity account after the given transactions would be $504,000, which is calculated by subtracting the total decreases in equity from the beginning balance and adding the total increases in equity.
The impact on equity for the given transactions.
January 2: The company purchased 5,000 shares of its own stock at $23 per share, reducing equity by $115,000 ($23 x 5,000).
January 5: The company declared a cash dividend of $2 per share payable on February 28 to the stockholders of record on February 5, but this has no impact on equity yet.
February 28: The company paid the dividend declared on January 5, reducing equity by $10,000 ($2 x 5,000 shares).
July 6: The company sold 2,500 of its treasury shares at $27 per share, increasing equity by $67,500 ($27 x 2,500).
August 22: The company sold 2,500 of its treasury shares at $19 per share, decreasing equity by $47,500 ($19 x 2,500).
September 5: The company declared a cash dividend of $2 per share payable on October 28 to the stockholders of record on September 25, but this has no impact on equity yet.
October 28: The company paid the dividend declared on September 5, reducing equity by $10,000 ($2 x 5,000 shares).
December 31: The company closed the credit balance of $280,500 in the Income Summary account to Retained Earnings, increasing equity by $280,500.
Therefore, the ending balance on equity account would be $504,000 ($400,000 - $115,000 - $10,000 + $67,500 - $47,500 - $10,000 + $280,500).
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_____The given question is incomplete, the compete question is given below:
The begining balance on equity account is 400,000 . Impact on equity $
Total Stockholders' Equity - January 1 not attempted
January 2) Purchased 5,000 shares of its own stock at $23 cash per share. Not attempted not attempted
January 5) Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record. Not attempted not attempted
February 28) Paid the dividend declared on January 5. Not attempted not attempted
July 6) Sold 2,500 of its treasury shares at $27 cash per share. Not attempted not attempted
August 22) Sold 2,500 of its treasury shares at $19 cash per share. Not attempted not attempted
September 5) Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record. Not attempted not attempted
October 28) Paid the dividend declared on September 5. Not attempted not attempted
December 31) Closed the $280,500 credit balance (from net income) in the Income Summary account to Retained Earnings
Question: Can he? 5. Farley's Last Problem has perplexed mathematicians for decades. Before she retired from mathematics and disappeared, Farley wrote on the back of an envelope a challenge to prove a long-standing conjecture, together with some enigmatic hints. Although thousands tried, no one else proved the truth of the conjecture, before or after that time. Finally, after years of work in her attic, Trig sets forth an iron-clad proof of the conjecture.
Yes, Trig can prove Farley's Last Problem. By utilizing Farley's hints and spending years of work in her attic, Trig was able to develop a rigorous proof of the conjecture.
The proof of the conjecture requires careful consideration of the hints Farley left behind and requires logical deduction and reasoning to derive the proof.
Trig was able to successfully provide an iron-clad proof of Farley's Last Problem, thus finally solving the conundrum.
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Mini Case (Amazon)
Strategic thinking focuses on the longer term and on taking different approaches to deliver customer value; on choosing different sets of activities that cannot easily be imitated, thereby providing a basis for an enduring competitive advantage. Amazon is a good example. Today, Amazon offers 230 million items for sale in America—some 30 times the number sold by Wal-Mart, the world’s biggest retailer, which has its own fast-growing online business. Its total 2013 revenues were $74.5 billion, but when one takes into account the merchandise that other companies sell through its "marketplace" service the sales volume is nearly double that. Though by far the biggest online retailer in America, Amazon is still growing faster than the 17 percent pace of e-commerce as a whole. It is the top online seller in Europe and Japan, too, and has designs on China’s vast market. Last year Amazon was the world’s ninth biggest retailer ranked by sales; by 2018 it may well be in the top two. On top of its online-retail success, Amazon has produced two other transformative businesses. The Kindle e-reader pioneered the shift from paper books to electronic ones, creating a market that now accounts for more than a 10th of spending on books in America and which Amazon dominates. Less visible but just as transformative is Amazon’s invention in 2006 of cloud-computing as a pay-as-you-go service, now a $9 billion market. That venture, called Amazon Web Services (AWS), has slashed the technology costs of starting an enterprise or running an existing one. And Amazon enjoys an advantage most competitors envy: Remarkably patient shareholders. The company made a net profit of just $274 million last year, a minuscule amount in relation to its revenues and its $154 billion value on the stock exchange; its shares are valued at more than 500 times last year’s earnings, 34 times the multiple for Wal-Mart. Its core retail business is thought to do little better than break-even; most of its profits come from the independent vendors who sell through Amazon’s marketplace. Such long-termism takes investment. In its early days Amazon avoided direct competition with retailers because its lack of stores made it "capital light". Today its empire of warehouses and data centers has changed that. Now its pitch to merchants and technologists is that it will build physical assets so that they do not have to. By doing so, it keeps its competitors close and makes them depend on Amazon for key parts of their business models.
Source: Amazon - Relentless.com, The Economist, Print edition, June 21, 2014.
a) What is strategic thinking?
b) Why long-term perspective is important for strategic thinking?
c) What are the sources of Amazon’s success described in the mini case above?
A person uses strategic thinking as a mental or intellectual strategy to accomplish a goal or set of goals. It causes thought since it is a cognitive activity.
Why long-term perspective is important for strategic thinking?
Long-term in strategic thinking is defined as more than five years. Most strategic plans have a three to five-year time horizon. Tracking your progress toward goals may be made possible by having a strategic strategy in place. The success of your firm may be directly impacted by each department's and team's development when they are aware of the overall plan of the business, resulting in a top-down approach to measuring key performance indicators (KPIs).
Long-term goals are things you desire to accomplish in the months or years to come. This kind of goal-setting gives your job meaning, improves your decision-making, and provides plenty of everyday drive. In this post, we provide examples to help you understand how to employ long-term objectives to achieve significant things over time.
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You know the following details about stock KDE. The EPS next year will be $1.14, the dividend payout rate will be 0.37, the return on new investment will be 0.079, and the current fair price under the DDM is $35. What is KDE's equity cost of capital?
KDE's total capital expenditure is 6.12% as a result.
What is KDE's equity cost of capital?We may employ the dividend discount model (DDM) to determine the equity cost of capital for KDE:
P = D / (r - g)
where P is the stock's fair market value, D is the anticipated dividend for the upcoming period, r is the equities cost of capital, and g is the anticipated dividend growth rate. We can determine r by using the stock's current fair price, which is provided to us:
r = (D / P) + g
With the anticipated earnings per share and the dividend payout rate, we can determine the anticipated dividend for the following period as follows:
D=EPS*payout rate=1.14*0.37=0.4218
Also, the return on capital funding is provided to us, and this number can be used to calculate the anticipated growth rate of dividends. When we apply the sustainable economic rate formula, we obtain:
g = retention rate * return on fresh investment
in which the retention rate (1 - payout rate). Inputting the values provided yields:
g = 0.079 * (1 - 0.37) = 0.04993
Now that all the values have been substituted, we can calculate the equity cost of capital as follows:
r = (0.4218 / 35) + 0.04993 = 0.0612 or 6.12%
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ebenezer scrooge has just been elected the new president of christmasland. as his first action, he is thinking of introducing an excise (or commodity) tax on either santa hats or christmas lights. the demand and supply curves for both products are shown on the graphs. use the graphs to answer the questions. what would be the total deadweight loss of a $3 tax on santa hats?
Unfortunately, without the graphs mentioned in the prompt, it is not possible to provide a specific answer to the question about the total deadweight loss of a $3 tax on Santa hats.
However, in general, deadweight loss refers to the loss of economic efficiency that occurs when a tax or other market intervention causes a reduction in the quantity of goods or services traded. Deadweight loss is calculated as the difference between the consumer and producer surplus before and after the intervention.To calculate the deadweight loss of a tax on Santa hats, we would need to know the exact shape of the supply and demand curves, as well as the equilibrium quantity and price of Santa hats in the absence of the tax. From there, we could calculate the change in consumer and producer surplus resulting from the tax and use that to estimate the deadweight loss. while it is not possible to provide a specific answer without the necessary graphs, calculating deadweight loss requires an understanding of the supply and demand curves and the effects of the tax on consumer and producer surplus.
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Explain why if an insurance company’s CFO immunizes the
company’s balance sheet it will not necessarily remain immunized in
six months time.
If an insurance company’s CFO immunizes the company’s balance sheet it will not necessarily remain immunized in six months time because of the following reasons:
Interest rate changes: If interest rates change over time, the immunization will be broken. When interest rates increase or decrease, it affects the value of the company's investments in securities that are used to immunize the portfolio. As a result, the immunization strategy will have to be modified to account for the new interest rate environment.Restructuring the bond portfolio: Companies may also choose to sell a portion of their bonds to raise cash for new opportunities, such as growth investments or business acquisitions. As a result, immunization will be lost because there will be more bonds sold than purchased.This will impact the company's ability to earn income on their investments, which could lead to a decline in the value of the portfolio.
Changes in market conditions: When market conditions change, it can cause fluctuations in interest rates and bond prices. These changes may result in changes in the values of the bonds, causing the immunization to break down.Inflation: As inflation rises, it will impact the future value of the bond's cash flows. As a result, the bond may no longer be worth as much as the company originally paid for it, which can lead to a break down of immunization.If an insurance company’s CFO immunizes the company’s balance sheet it will not necessarily remain immunized in six months time because of the above reasons.
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billie spends all of her income on soccer balls and jeans, and the price of a pair of jeans is three times the price of soccer balls. in order to maximize total utility, billie should
Billie spends all of her income on soccer balls and jeans, and the price of a pair of jeans is three times the price of soccer balls. In order to maximize total utility, Billie should buy an equal amount of soccer balls and jeans.
What is Utility?Utility refers to the satisfaction obtained by using a particular commodity or service. It is the measure of how much an individual enjoys something. To get the most out of a given resource, the consumer must have a total utility.To maximize the total utility of her income, Billie must spend it on an equal amount of soccer balls and jeans.
If Billie purchases more soccer balls, the marginal utility gained from each successive soccer ball will diminish, resulting in a decrease in total utility. The same will happen with jeans. As a result, Billie's optimal consumption bundle is one in which she spends an equal amount of money on soccer balls and jeans.
Therefore, to maximize total utility, Billie should buy an equal amount of soccer balls and jeans.
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How does knowledge that non-market stakeholders existmake you a more valuable employee or job applicant?
Having knowledge of non-market stakeholders can make you a more valuable employee or job applicant in a number of ways. Non-market stakeholders are entities that can affect or be affected by an organization’s activities but are not a part of the traditional marketplace. Examples of non-market stakeholders include governmental organizations, activist groups, industry groups, the media, and society at large.
Having knowledge of the interests of non-market stakeholders can help an employee or job applicant make well-informed decisions and accurately predict potential impacts of business decisions. Being aware of non-market stakeholders can also help to foster more successful relationships with them and build a more favorable public image. Additionally, knowledge of non-market stakeholders can inform a deeper understanding of the legal and ethical ramifications of certain decisions, and make an employee or job applicant better able to respond quickly and effectively to unexpected changes.
Ultimately, knowledge of non-market stakeholders can give an employee or job applicant a more comprehensive view of the business environment and help them anticipate, identify, and analyze potential opportunities or risks. This can be invaluable to the overall success of an organization and make an employee or job applicant a valuable asset.
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answer the 5 part question to 1. round to the nearest two decimal places. DO not round until the end. show all work
1A. A $1,000 par value bond that pays interest annually just paid $86 in interest. What is the coupon rate? Please share your answer as a %.
1B. A 7.5% coupon, 9-year annual bond is priced at $824. What is the current yield for this bond? Please share your answer as a %.
1C. What is the price of a $1,000 par value, semi-annual coupon bond with 20 years to maturity, a coupon rate of 10.68% and a yield-to-maturity of 8.15%?
1D. What is the price of a $1,000 par value, 11 year, annual coupon bond with a 8.04% coupon rate and a yield to maturity of 4.52%?
1E. You bought a 15-year, 6.33% semi-annual coupon bond today and the current market rate of return is 5.64%. The bond is callable in 4 years with a $56 call premium. What price did you pay for your bond?
After the calculations, the coupon rate is 8.60%, the current yield is 9.12% and the different prices of the bond are $1,201.87, $1,459.72 and $1,097.90.
1A. To calculate the coupon rate of a bond, divide the annual interest paid by the par value of the bond. In this case, $86/$1,000 = 0.086. Therefore, the coupon rate of the bond is 8.60%.
1B. To calculate the current yield of a bond, divide the coupon rate by the bond's price. In this case, 7.5%/ $824 = 0.0912. Therefore, the current yield of the bond is 9.12%.
1C. To calculate the price of a bond, use the formula: Price = ([Annual Interest/2] x (1 - (1/(1+[Yield/2]^[Years to Maturity x 2]))) / ([Yield/2]) + [Par Value]
In this case, Price = ([10.68%/2] x (1 - (1/(1+[8.15%/2]^[20x2]))) / ([8.15%/2]) + $1,000
Therefore, the price of the bond is $1,201.87.
1D. To calculate the price of a bond, use the formula: Price = ([Annual Interest] x (1 - (1/(1+[Yield]^[Years to Maturity]))) / ([Yield]) + [Par Value]
In this case, Price = ([8.04%] x (1 - (1/(1+[4.52%]^[11]))) / ([4.52%]) + $1,000
Therefore, the price of the bond is $1,459.72.
1E. To calculate the price of a bond, use the formula: Price = ([Annual Interest/2] x (1 - (1/(1+[Yield/2]^[Years to Maturity x 2] - [Call Premium]))) / ([Yield/2]) + [Par Value]
In this case, Price = ([6.33%/2] x (1 - (1/(1+[5.64%/2]^[15x2] - 56))) / ([5.64%/2]) + $1,000
Therefore, the price of the bond is $1,097.90.
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BMX Company has one employee. FICA Social Security taxes are 6. 2% of the first $128,400 paid to its employees, and FICA Medicare taxes are 1. 45% of gross pay. For BMX, its FUTA taxes are 0. 6% and SUTA taxes are 5. 4% of the first $7,000 paid to its employee.
Gross Pay through August 31 Gross Pay for September
A $5,100 $2,200
B 2,300 2,400
C 122,700 8,600
Compute BMX’s amounts for each of these four taxes as applied to the employee’s gross earnings for September under each of three separate situations A, B, and C. (Round your answers to 2 decimal places. Leave no cells blank. )
A. BMX tax in situation A is = $282.3
B. Then BMX tax in situation B is = $327.6
C. BMX tax in situation C is = $1600.4
Taxes on Social Security are calculated
Provided that, in response to the query
the first $128,400 when the FICA Social Security equals 6.2%
FICA Medicare then equals 1.45% of gross pay.
FUTA = 0.6% as well.
SUTA then equals 5.4% of the initial $7,000 paid.
At this time, gross pay through August 31 - gross pay for September
A - $2,200
B - $2,400
C - $8600
For example, A.
When the FICA is calculated, the tax rate is multiplied by the relevant sum.
Following that, $2,200 *.062 = $136.4 in FICA social security tax.
Medicare FICA:
Then, $2,200 * .0145 = $31.90
The extra amount is multiplied by the appropriate tax rate to determine FUTA and SUTA.
FUTA levies:
($7,000 - $5,100) * .006 = $11.40
SUTA fees
($7,000 - $5,100) * .054 = $102.60
Situation A's BMX tax is $136.4 plus $31.90 plus $11.40 plus $102.60.
BMX Tax therefore equals $282.3.
For example, B
Because the employee has not yet earned $7,000 in compensation, the gross pay is multiplied by the applicable tax rate in this instance. FICA social security tax:
Now, $2,400 * .062 = $148.8
Medicare FICA:
Again, $2,400 * .0145 = $34.80
FUTA levies:
$2,400 * .006 = $14.40
SUTA fees
$2,400 * .054 = $129.6
Situation B's BMX tax is $148.8 plus $34.80 plus $14.40 plus $129.6.
BMX Tax so equals $327.6.
For example, C
As $128,400 is the maximum amount of salaries due to social security tax, the FICA social security tax is determined by:
Then, ($128,400 - $122,700) * .062 = $353.40
Medicare FICA:
Following that, $8,600 *.0145 equals $1247.00.
Taxes for BMX total $353.40 plus $1247.00, or $1600.4
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A. Explain the four key important dates that existing and prospective shareholders have to pay attention to when dividends are declared. [7 Marks]
B. Some financial experts have argued that the size of dividends does not matter as investors can also manufacture homemade dividends according to their preferences. Discuss any four (4) criticisms that may be forwarded against this view and support the relevance of dividends. [8 Marks]
C. Using relevant examples, discuss any five (5) factors that you think are influencing the dividend policy at any company of your choice.
A. The four key important dates that existing and prospective shareholders have to pay attention to when dividends are declared are as follows:
What is shareholder?A shareholder, also referred to as a stockholder, is a person, company, or institution that owns at least one share of a company’s stock, which is known as equity. Equity represents ownership interest in a business and provides shareholders with a share of the company’s profits or losses.
1) Declaration Date: This is the date on which the company declares the dividend and informs shareholders of the amount and payment date.
2) Ex-Dividend Date: This is the date on which the share price adjusts to the amount of the dividend that is to be paid.
3) Record Date: This is the date on which the company records shareholders who are eligible to receive the dividend.
4) Payment Date: This is the date on which the dividend is paid out to shareholders.
B. Some of the criticisms that may be forwarded against the view that the size of dividends does not matter are as follows:
1) Dividends can act as a signal of a company’s financial health. A company that pays out a large dividend is seen as being financially stable and confident in its future prospects. Smaller or no dividends can indicate financial distress.
2) Dividends can be used to attract and retain investors who prefer to receive regular income. Companies that pay out dividends are more likely to be able to raise capital when needed.
3) Dividends are an important source of income for many investors, especially retirees who depend on the income to cover their living expenses.
4) Dividends can be used to reward shareholders for their loyalty and to incentivize them to invest in the company for the long-term.
C. The factors that are influencing the dividend policy at any company of my choice are as follows:
1) Profitability: The level of profitability of the company will influence the size of the dividend paid out. If the company is highly profitable, it is more likely to pay out a larger dividend.
2) Cash flow: The amount of cash flow a company has available to pay out dividends will influence the size of the dividend. If a company has limited cash flow, it may not be able to pay out a large dividend.
3) Share price: The share price of the company will influence the dividend policy. If the share price is high, the company may opt to pay out a smaller dividend in order to boost the share price.
4) Investment requirements: If a company needs to reinvest profits in order to grow and increase its competitiveness, this may lead to a lower dividend.
5) Taxation: The tax laws in the country may also influence the dividend policy. If dividend income is taxed at a higher rate, companies may opt to pay out a smaller dividend in order to reduce their tax burden.
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hadi co., a technology firm, pays a hefty rent for its office space as it is set up in one of the best commercial areas of paris. in the given scenario, the rent paid by the firm for its office space is an example of .
An illustration of an operating expense is the rent that Hadi Co. paid for its office premises.
Which of the following belongs in an employee handbook?The employer's vision statement, equal employment opportunity statement, contractual disclaimer, at-will employment statement (where permitted), reason for employee handbook, and company history should all be covered in the employee handbook.
Why is it crucial for an employer to be explicit and concise with an employee regarding the grounds for immediate dismissal?Why is it vital for an employer to provide an employee clear expectations before terminating them immediately. So that the employer can provide the employee advice regarding how to enhance, the employee's performance.
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if the fed decides to reduce bank reserves, it can group of answer choices purchase government bonds. extend discount loans to banks. sell government bonds. print more currency.
The Federal Reserve (FED) can purchase government bonds to reduce bank reserves. This process increases the amount of money circulating in the economy, but it also decreases the amount of money held by banks.
Bank reserves refer to the amount of money kept by a bank that is not loaned out or used to pay depositors. Bank reserves are held in the form of deposits with the central bank and cash in the bank's vault. Because of the reserve requirement set by the central bank, commercial banks hold reserves to ensure that they have sufficient liquidity in the event of a demand for withdrawals by depositors.
The FED has the authority to purchase or sell government securities, such as bonds and treasury bills, to change the amount of money available in the economy. This has an impact on interest rates, credit availability, and, as a result, the economy as a whole. It also influences the level of bank reserves, which has a significant impact on the amount of credit that banks can extend to customers. When the FED purchases or sells government securities, the reserves of the commercial banks rise or fall, and they adjust their lending rates in response. As a result, interest rates rise when the FED sells securities and bank reserves decrease, and interest rates fall when the FED buys securities and bank reserves increase.
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firm has two factories, 1 and 2, which can ship their output to four warehouses, A, B, C, D. The capacities of the factories for one month, and the requirements of the warehouses for one month, and the marginal profits made for one unit produced from each factory and sent to each warehouse are given below.
Factory
Capacity (units)
Warehouse
Requirements (units)
1
500
A
200
2
900
B
200
C
200
D
200
Shipping
Profit
Shipping
Profit
From
to
From
to
1
A
$15
2
A
$9
1
B
13
2
B
11
1
C
13
2
C
12
1
D
10
2
D
16
Suppose the firm just acquired three more warehouses that they supply units to, with the following characteristics:
Warehouse
Requirements (units)
E
100
F
300
G
100
Shipping
Profit
Shipping
Profit
From
to
From
to
1
E
$10
2
E
$13
1
F
11
2
F
9
1
G
12
2
G
10
The company incurs fixed costs of $5,000 per month for any factory that they choose to use for production and distribution. The firm has the option to double or triple the production capacity of any factory at double or triple the cost (e.g. having double capacity of factory 1 would cost a total of $10,000 of fixed costs per month; triple capacity would cost a total of $15,000).
- A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. With reference to the framework for network design decisions (please see Fig 5-2 of your textbook), which phase of the decision-making process does this problem belong to?
- A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. What is the optimal capacity (in units) of Factory 1?
- A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. What is the number of decision variables in this optimization problem?
- A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. Is this problem related to decision-making under risk, certainty, or uncertainty?
- A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. What is the optimal value of the objective function?
A. $26,100
B. 16
C. None of the given choices
D. Decision-making under certainty
E. Phase IV
F. 14
G. 20
H. Phase II
I. 500
J. Phase I
K. Phase III
L. 1000
M. Decision-making under risk
N. Decision-making under uncertainty
O. 1500
The problem belongs to Phase IV of the framework for network design decisions, which involves determining the optimal capacity and location of facilities.
The optimal capacity of Factory 1 is 500 units, as this is the maximum amount that it can produce in one month. The number of decision variables in this optimization problem is 20, as there are 2 factories, 7 warehouses, and 2 decision variables for each combination of factory and warehouse (shipping and profit).
This problem is related to decision-making under certainty, as all of the information needed to make a decision is provided. The optimal value of the objective function is $26,100, which is the maximum profit that can be made from shipping units from the factories to the warehouses.
Answer:
A. $26,100
B. 16
C. None of the given choices
D. Decision-making under certainty
E. Phase IV
F. 14
G. 20
H. Phase II
I. 500
J. Phase I
K. Phase III
L. 1000
M. Decision-making under risk
N. Decision-making under uncertainty
O. 1500
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Desirable characteristics of the tax system are that it should be
i. based on the marginal tax rate
ii. flexible and neutral
iii. have different provincial tax rates
iv. ensure same amount of tax for same economic level
a. i and iii
b. ii and iv
c. i, ii and iv
d. i and ii
The desirable characteristics of the tax system are that it should be based on the marginal tax rate, flexible and neutral, and ensure the same amount of tax for the same economic level. Thus, the correct option is c. i, ii, and iv.
What is a tax system?A tax system is a set of laws, rules, and regulations that establish how government taxes are collected and levied on persons and businesses within a given territory or jurisdiction.
A tax system is designed to fund the government's operations and expenditures, and it can take various forms depending on a country's economic, political, and social structures.
Characteristics of a desirable tax systemA tax system is considered desirable if it meets the following characteristics:
It should be based on the marginal tax rate. Marginal tax rate refers to the proportion of tax that an individual pays on each additional dollar of earnings. The tax rate should increase as an individual's income rises, ensuring that the tax system is progressive.It should be flexible and neutral. The tax system should be designed to adjust to changing economic, social, and political conditions to ensure that it is neutral and equitable across all sections of society.It should have a proportional rate of tax. All taxpayers should pay the same rate of tax regardless of their economic status, ensuring that the tax system is neutral and fair.It should ensure the same amount of tax for the same economic level. This means that taxpayers with the same level of income and assets should pay the same amount of tax to ensure that the tax system is neutral and equitable across all taxpayers.Learn more about tax system at
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