The decline in trading costs with Mexico, which makes offshoring easier for U.S. firms, is likely to have a downward effect on the relative wage of high-skilled labor in the U.S.
The reason behind this effect is that offshoring allows firms to access cheaper labor in Mexico, where wages may be lower than in the U.S. As a result, U.S. firms may choose to relocate some of their high-skilled labor-intensive activities to Mexico to take advantage of the cost savings. This increased competition for high-skilled labor in the U.S. can put downward pressure on wages.
Furthermore, the increase in offshoring can also lead to a shift in the demand for labor within the U.S. economy. If firms offshore high-skilled labor-intensive activities, the demand for high-skilled labor within the U.S. may decrease, causing a decrease in their relative wage.
Overall, the decline in trading costs with Mexico and the subsequent increase in offshoring can lead to a downward effect on the relative wage of high-skilled labor in the U.S. This highlights the importance of considering the potential impact of international trade and offshoring on labor markets and wage inequality.
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Define accounting equation and give numerical examples for transactions covering all its components namely assets, liabilities, expenses, revenues, stock capital and dividends and represent those transactions on the accounting equation.
The accounting equation, Assets = Liabilities + Stockholders' Equity, represents the relationship between a company's resources, debts, and owner's equity. It ensures that the equation remains balanced as transactions occur.
The accounting equation, also known as the balance sheet equation, is a fundamental principle in accounting that represents the relationship between a company's assets, liabilities, and stockholders' equity. It can be expressed as follows:
Assets = Liabilities + Stockholders' Equity
Assets are the economic resources owned or controlled by a company, such as cash, inventory, or property. Liabilities are the company's obligations or debts, such as loans or accounts payable.
Stockholders' equity represents the residual interest in the assets after deducting liabilities and is composed of contributed capital (stock capital) and retained earnings.
Considering a company with the following transactions:
1. The company purchases equipment worth $10,000 using cash.
Assets increase by $10,000 (equipment), and cash decreases by $10,000.2. The company takes out a loan of $5,000 from a bank.
Assets increase by $5,000 (cash), and liabilities increase by $5,000 (loan).3. The company generates $2,000 in revenue from sales.
Assets increase by $2,000 (cash or accounts receivable), and revenues increase by $2,000.4. The company pays $1,000 in expenses.
Assets decrease by $1,000 (cash), and expenses increase by $1,000.The accounting equation ensures that the equation remains balanced by accounting for changes in assets, liabilities, and equity resulting from various transactions.
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On January 1, 2021, Alamar Corporation acquired a 39 percent interest in Burks, Inc., for $225,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $373,000. During 2021, Burks reported net income of $77,000 and declared and paid cash dividends of $23,000. Alamar sold inventory costing $21,000 to Burks during 2021 for $45,000. Burks used all of this merchandise in its operations during 2021.
Prepare all of Alamar’s 2021 journal entries to apply the equity method to this investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
**Journal Entries for Alamar Corporation's Equity Method Investment in Burks, Inc. for 2021:**
1. To record the initial investment in Burks, Inc. on January 1, 2021:
Investment in Burks, Inc. 225,000
Cash 225,000
2. To record Alamar's share of Burks's net income for 2021:
Investment in Burks, Inc. 30,030 [39% * $77,000]
Equity in Earnings of Burks 30,030
3. To record Alamar's share of Burks's dividends for 2021:
Cash 8,970 [39% * $23,000]
Investment in Burks, Inc. 8,970
4. To eliminate the unrealized profit in inventory sold from Alamar to Burks:
Equity in Earnings of Burks 9,870 [39% * ($45,000 - $21,000)]
Inventory 6,930 [39% * $21,000]
Cost of Goods Sold 6,930
Explanation:
1. The initial investment is recorded by debiting Investment in Burks, Inc. and crediting Cash.
2. Alamar recognizes its share of Burks's net income by debiting Investment in Burks, Inc. and crediting Equity in Earnings of Burks.
3. Alamar records the cash dividends received from Burks by debiting Cash and crediting Investment in Burks, Inc.
4. To eliminate the unrealized profit on the intercompany sale of inventory, Alamar debits Equity in Earnings of Burks, credits Inventory for Alamar's share of the inventory cost, and credits Cost of Goods Sold for the same amount.
These journal entries reflect Alamar Corporation's application of the equity method to its investment in Burks, Inc. during 2021.
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A Japanese company has a bond that sells for 104.615 percent of its ¥100,000 par value. The bond has a coupon rate of 6.6 percent paid annually and matures in 22 years. What is the yield to maturity of this bond?
To calculate the yield to maturity (YTM) of a bond, we need to solve for the discount rate that equates the present value of the bond's cash flows to its current market price.
In this case, we have the following information: Par value (Face value) = ¥100,000
Current market price = 104.615% of par value = 1.04615 * ¥100,000 = ¥104,615
Coupon rate = 6.6% (paid annually)
Maturity period = 22 years
To calculate the YTM, we can use financial functions in Excel or other financial calculators. Here's how to calculate it using Excel:
Create a column for each year of the bond's remaining life, from 1 to 22.
In the next column, calculate the cash flows for each year, which will be the coupon payment of 6.6% multiplied by the par value of ¥100,000.
In the next column, calculate the present value of each cash flow using the YTM as the discount rate.
In the last row of the present value column, subtract the current market price from the present value of the final cash flow.
Use the "RATE" function in Excel to calculate the YTM. The syntax for the formula is "=RATE(N, PMT, PV, FV)", where N is the number of periods, PMT is the periodic payment, PV is the present value, and FV is the future value. In this case, set PMT as the coupon payment, PV as the negative present value of the bond, FV as the par value, and N as the number of years to maturity.
The result will be the yield to maturity of the bond.
By following these steps, you can calculate the YTM of the bond. Please note that due to the complexity of the calculation, it is recommended to use spreadsheet software or financial calculators to perform the computation accurately.
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Mary is a principal of a school which provides education and accommodation for students. The school secretary prepared the following summary of costs for 2020, including a column showing the original budget for 2020.
The School – cost analysis
2020 budget
2020 actual
Number of students
200
180
Fixed costs
Utilities
$ 60,000
$ 64,000
Janitorial services
40,000
38,000
Repairs and maintenance
32,000
28,000
Salaries for non-convent employees
180,000
190,000
Total fixed costs
312,000
320,000
Variable costs
Food
1000,000
920,000
Clothing
90,000
82,000
Laundry & Linen Service
30,000
25,000
Educational costs
60,000
52,000
Allowances
50,000
48,000
Total variable costs
1,230,000
1,127,000
Total Costs
1,542,000
1,447,000
Mary is pleased that total costs were below budget for the year, but she wonders if this is partly due to the fact that the school enrolled fewer children than expected for the year.
Required:
Prepare a flexible budget for 2020, based on the number of children actually enrolled in 2020.
Should Mary be satisfied with the school’s cost management in 2020? Explain.
Mary should be satisfied with the school’s cost management in 2020, as the actual cost of $1,447,000 is very close to the flexible budget of $1,439,000.
The given table shows the school cost analysis of 2020, including the original budget and actual costs incurred for the school. Mary is pleased to know that the actual cost is below the budget for 2020. However, she wants to know whether this is because of fewer children being enrolled in the school or efficient cost management by the school.
To answer Mary’s question, we need to prepare a flexible budget for 2020 based on the actual number of children enrolled in the school in 2020.
Preparation of Flexible Budget:
Flexible Budget is a budget that is based on different levels of activities. Flexible budget estimates are prepared for different activity levels to give a range of possible outcomes or for changing activity levels throughout the year. It includes Fixed costs and Variable costs.
Fixed costs are constant regardless of the level of activity, whereas variable costs vary depending on the level of activity.
In the given data:
Fixed Costs:
Utilities = $60,000
Janitorial services = $40,000
Repairs and maintenance = $32,000
Salaries for non-convent employees = $180,000
Total Fixed costs = $312,000
Variable Costs:
Food = $1,000,000
Clothing = $90,000
Laundry and linen service = $30,000
Educational costs = $60,000
Allowances = $50,000
Total Variable Costs = $1,230,000
Total Costs (Fixed + Variable) = $1,542,000
The flexible budget for 180 students:
Number of students = 180
Fixed Costs:
Utilities = $60,000
Janitorial services = $40,000
Repairs and maintenance = $32,000
Salaries for non-convent employees = $180,000
Total Fixed costs = $312,000
Variable Costs:
Food = $920,000
Clothing = $82,000
Laundry and linen service = $25,000
Educational costs = $52,000
Allowances = $48,000
Total Variable Costs = $1,127,000
Total Costs (Fixed + Variable) = $1,439,000
Therefore, the flexible budget for the actual number of students is $1,439,000, and the actual cost is $1,447,000. Mary should be satisfied with the school’s cost management in 2020, as the actual cost of $1,447,000 is very close to the flexible budget of $1,439,000. This shows that the school managed its costs effectively and efficiently, even though fewer children were enrolled in the school.
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The MARR is 6% per year. The annual worth of company 2 cash flow estimates is closest to: Note that this three are mutually exclusive alternatives. a) $55,625 b) $164,805 c) $382,098 d) $492,098
The annual worth of company 2 cash flow estimates, considering a mutually exclusive alternative and a minimum attractive rate of return (MARR) of 6% per year, is closest to option d) $492,098.
To determine the annual worth of cash flow estimates for company 2, we need to calculate the present value of the cash flows and compare it to the MARR. The annual worth represents the annualized value of the cash flows over the project's duration.
Given that the options are mutually exclusive alternatives, we evaluate each option by calculating the present value of its cash flows at a discount rate of 6% per year. The option with the closest present value to the given options will be the closest annual worth estimate.
To provide a precise calculation, the specific cash flow estimates for company 2 are needed. Without this information, it is not possible to determine the exact annual worth.
However, based on the available options, option d) $492,098 is the closest estimate to the annual worth of company 2 cash flow estimates considering the 6% MARR.
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Use the data below to compute 2014 OCF (Operating Cash Flow) 2014 2013 Cash 12 18 Short-term investments 7 66 Accounts receivable 369 316 Inventories 553 420 Property, plant & equipment (net) 926 871 Accounts payable 48 32 Short-term debt 96 65 Accrued liabilities 150 134 Long-term debt 662 583 Common stock 130 130 Retained earnings 766 714 3,147 2,852 Net revenue Depreciation expense 113 92 Interest 91 61 Taxes 81 84 255 122 Net income (Round to the nearest whole dollar)
The Operating Cash Flow (OCF) for 2014 is $540. Accounts receivable 369 316, Property, plant & equipment are some of the essential requirements for defining Operating Cash Flow
To calculate the Operating Cash Flow (OCF) for 2014, we need to use the following formula: OCF = Net Income + Depreciation Expense + Interest Expense + Taxes
Given the data: Net Income for 2014 = $255 Depreciation Expense for 2014 = $113 Interest Expense for 2014 = $91 Taxes for 2014 = $81 OCF = $255 + $113 + $91 + $81 = $540 Therefore, the Operating Cash Flow (OCF) for 2014 is $540.
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b. Using diagrams/graphs, show the impact of each of the following on the supply curve of product A.
i. The price of oil, a key input in the production of product A, increases.
ii. Firms expect that the price of product A will rise in the future. ii.The government grants a subsidy on each unit of A produced.
iv. A new technology is adopted by firms in the industry producing A. Ontario just established rent control to limit a three-bedroom apartment to $2000 a month
a) Is this policy a price ceiling or a price floor? b) Explain two reasons for such policy
c) If the price control is effective, would you expect to see a surplus or a shortage? And Why? The competitive market is known to be efficient but not equitable. Government normally uses price controls in address the equity challenges in the market. Examine the effects of price controls on the market.
i. The price of oil, a key input in the production of product A, increases:
An increase in the price of oil, a key input in the production of product A, would result in an upward shift of the supply curve for product A. This is because higher oil prices increase the cost of production for firms, reducing their profitability and ability to supply the product at the previous prices. As a result, firms will supply less of product A at each price level, leading to a decrease in quantity supplied and a shift of the supply curve to the left.
ii. Firms expect that the price of product A will rise in the future:
If firms expect that the price of product A will rise in the future, it would incentivize them to decrease their current supply and hold back some of the product for future sales. This anticipation of higher future prices reduces the current supply of product A, resulting in a leftward shift of the supply curve.
iii. The government grants a subsidy on each unit of A produced:
When the government grants a subsidy on each unit of product A produced, it effectively reduces the cost of production for firms. This reduction in production costs incentivizes firms to increase their supply of product A, leading to a rightward shift of the supply curve. The subsidy provides an additional incentive for firms to produce more and expand their output.
iv. A new technology is adopted by firms in the industry producing A:
The adoption of a new technology by firms in the industry producing product A leads to an improvement in the production process and efficiency. This improvement allows firms to produce more product A at the same cost or produce the same quantity at a lower cost. As a result, the supply of product A increases, leading to a rightward shift of the supply curve.
a) The policy of rent control in Ontario, which limits a three-bedroom apartment to $2000 a month, is a price ceiling.
b) Two reasons for implementing rent control policies could be:
i. Affordability: Rent control aims to make housing more affordable for tenants, especially in areas where rental prices are rapidly increasing. It provides protection for tenants by limiting the amount landlords can charge for rent.
ii. Social equity: Rent control is seen as a means to address income inequality and ensure that low-income individuals and families have access to affordable housing. It aims to prevent excessive rent increases and stabilize housing costs for vulnerable populations.
c) If the price control is effective, we would expect to see a shortage in the market. The price ceiling set by rent control, $2000 a month, is below the market equilibrium price that would have prevailed without the control. This lower price reduces the incentive for landlords to supply rental units, leading to a decrease in the quantity of housing supplied. At the same time, the lower price encourages higher demand from tenants, leading to an increase in the quantity demanded. The result is a shortage, where the quantity demanded exceeds the quantity supplied at the controlled price.
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Give critical evaluation of your company's payout policy. Possible points to cover: Is the company's payout policy the right one for the firm? Do you think that the payout policy adding or subtracting value from the firm, or is firm value unaffected by the payout policy? What life cycle stage is your company in? Based on the life cycle stage of the company, should it be paying out more or less to investors, or is the company's payout policy appropriate? If you do come to the conclusion that your firm's payout policy is inappropriate, give a brief recommendation for future action for the firm. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (5 mil or mil) 10.00 8.00 6.00 2.00 0.00 7,00 6.00 5.00 4.00 3:00 2.00 1.00 0.00 2010 2010 Cash Number dividend of shares 3.305 1,544 3,434 1,529 3,730 1488 4,040 1448 4,227 1,428 4,472 1,420 4,930 1,409 5,304 1,391 5.509 1.300 5,815 1,383 2012 2012 2014 per share 2014 (DPS) (NI) 2.14 6,214 2.25 6,787 251 Income per share payout Growth-E Growth (EPS) (DPO) amings Dividend 0.53 0.51 0:57 6,558 2.70 5,501 2.00 6,379 3.15 4,908 3.50 12.559 3.01 7,353 3.90 7,175 420 7,679 DPS and EPS 2016 Year 2016 Year DPS, RPPS and TPS A 2018 4.44 4.41 3.80 4.47 3.46 8.91 5.29 5.20 0.77 5.55 0.76 2018 2020 2020 10.29% 071% 0.73 -13.80% 0:00 17.58% 091 -22.83% 0.39 157.89% 0.72 -40.60% -1.64% 6.79% 2022 2022 4.92% 11.61% 11.30% 6.09% 6.30% 11.10% 8.98% 4.09% 5.33% 4-OPS -8-IPS 4-OPS TPS in Stock Common Repurchase Repurchas Stock Repurchase in 8 8 8 2.00 1.50 1.00 0.00 Ss Issuance 3.210 3,001 5,012 5,000 3,000 2,000 2,000 3,000 2,000 2010 106 0 0 0 0 0 0 0 0 0 0 per share (RPPS) 2.08 1.96 3.37 3.45 2.10 1.41 1.42 2:16 1.45 0.08 Ma $ Contribution payou e payout EPS without (RPPO) Repurchase Repurchase (TPO) 0.00 1.05 0.32 0.44 THE 0.70 0.01 0.47 041 0.16 041 Payout Ratios 0.28 0.01 Mis 4.02 4.40 4:25 356 4.13 3.18 8.13 4.76 4.65 4.97 Ma of 0.04 0.95 0.16 133 0.24 1.64 034 1.13 0.28 1.32 0.78 0.55 0.52 1.13 0.55 1.06 058 077 per share (TPS) 4.23 421 5.88 6.24 5.00 4.50 4.92 5.97 5.44 4.28 -OPO -PO -TPO
Here are some points you can consider:
1. Is the company's payout policy the right one for the firm?
- Evaluate whether the payout policy aligns with the company's goals, financial position, and growth prospects.
- Consider factors such as the company's industry, competitive landscape, and capital requirements.
2. Does the payout policy add or subtract value from the firm, or is firm value unaffected by the payout policy?
- Assess the impact of the payout policy on the company's overall value.
- Analyze the effect of dividend payments or share repurchases on the company's stock price and shareholder returns.
3. What life cycle stage is your company in?
- Determine the stage of the company's life cycle (e.g., growth, maturity, decline).
- Different stages may require different payout policies. For example, growth-oriented companies may retain more earnings for reinvestment, while mature companies may distribute more to shareholders.
4. Based on the life cycle stage of the company, should it be paying out more or less to investors, or is the company's payout policy appropriate?
- Consider whether the company is in a stage that requires significant investment for expansion or if it has reached a stage where it can distribute more to shareholders.
- Evaluate the company's financial stability, cash flow generation, and growth opportunities to determine the appropriateness of the payout policy.
5. If you conclude that the firm's payout policy is inappropriate, provide a brief recommendation for future action for the firm.
- Suggest adjustments to the payout ratio, dividend policy, or share repurchase program based on the company's specific circumstances.
- Consider factors such as financial goals, capital structure, investor expectations, and industry benchmarks.
Remember, a comprehensive evaluation of a company's payout policy requires a deeper analysis of financial statements, industry dynamics, and company-specific factors. It is always recommended to consult with financial professionals or conduct a thorough analysis before making any recommendations or decisions regarding a company's payout policy.
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ABC Company’s budgeted sales for June, July, and August are 14,000, 18,000, and 16,000 units, respectively. ABC requires 25% of the next month’s budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,500 units.
Required:
Calculate the number of units to be produced in June and July.
June July
Number of Units
The number of units to be produced in June is 15,000 units, and in July is 7,000 units.
June: To calculate the number of units to be produced in June, we need to consider the budgeted sales, desired ending finished goods inventory, and beginning finished goods inventory.
Desired ending finished goods inventory for June = 25% of July's budgeted sales = 25/100 * 18,000 = 4,500 units
Budgeted production for June = Budgeted sales + Desired ending finished goods inventory - Beginning finished goods inventory = 14,000 + 4,500 - 3,500 = 15,000 units
July: To calculate the number of units to be produced in July, we follow the same process.
Desired ending finished goods inventory for July = 25% of August's budgeted sales = 25/100 * 16,000 = 4,000 units
Budgeted production for July = Budgeted sales + Desired ending finished goods inventory - Beginning finished goods inventory = 18,000 + 4,000 - 15,000 = 7,000 units
Therefore, the number of units to be produced in June is 15,000 units, and in July is 7,000 units.
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Income statements under absorption and variable costing Gellatin County Motors Inc. assembles and sells snowmoble engines. The company began operations on July 1 and operated at 10c% of capacity during the first manth The following data summarize the results for luly: This information has been collected in the Microsioft Exchl Online file. Open the spreaduheet, perform the reaured analyas, and nout your answers in the auestans beiba Open spreadsheet a. Prepare an income statement according to the absorptien costing concept. Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 31 a. Prepare an income statement according to the absorption costing concept. Gallatin County Mobors Inc. b. Prepare an income statement according ta the variable costing concept. b. Prepare an income statement according to the variable costing concest. c. What is the reason for the difference in the amount of Ooerating income reported in (a) and (b) 3
Under the method, the fixed manutacturing cost Included in the cost of goods sold is matched with the revenues. Under of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of laventory change. Thus, when inventory increases, the income statement will have a figher Operating income than will the variable costing income statement.
The difference in operating income between the two methods is primarily due to the treatment of fixed manufacturing costs and the impact of inventory levels on their recognition in the income statement.
a. Income Statement - Absorption Costing Concept
------------------------------------------------------------
| | Gallatin County Motors Inc. |
|------------------------|-------------------------------|
| Sales | |
| Cost of Goods Sold | |
| Gross Profit | |
| Selling & Administrative Expenses | |
| Net Operating Income | |
------------------------------------------------------------
b. Income Statement - Variable Costing Concept
------------------------------------------------------------
| | Gallatin County Motors Inc. |
|------------------------|-------------------------------|
| Sales | |
| Variable Cost of Goods Sold | |
| Variable Selling & Administrative Expenses | |
| Contribution Margin | |
| Fixed Manufacturing Overhead | |
| Fixed Selling & Administrative Expenses | |
| Net Operating Income | |
------------------------------------------------------------
c. The reason for the difference in the amount of operating income reported in (a) and (b) is the treatment of fixed manufacturing costs.
Under absorption costing, fixed manufacturing costs are allocated to the units produced and included in the cost of goods sold. This means that when inventory increases, a portion of the fixed manufacturing costs is deferred and carried forward as an asset until the units are sold. As a result, the income statement will show a higher operating income because a portion of the fixed manufacturing costs is matched with the revenues.
In contrast, under variable costing, fixed manufacturing costs are treated as period expenses and not allocated to the units produced. These costs are deducted in the period in which they are incurred, regardless of the inventory level. Therefore, the variable costing income statement does not include the deferral of fixed manufacturing costs in inventory, resulting in a lower operating income compared to absorption costing.
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On May 10, 2020, Blossom Co. enters into a contract to deliver a product to Kingbird Inc. on June 15, 2020. Kingbird agrees to pay the full price of $1,750 on July 15, 2020. The cost of goods is $1,050. Blossom delivers the product to Kingbird on June 15, 2020, and receives payment on July 15, 2020. Prepare the journal entries for Blossom on May 10, June 15, and July 15 related to this contract. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
May 10, 2020: No Entry
June 15, 2020: Accounts Receivable $1,750
Sales Revenue $1,750
(To record the delivery of the product to Kingbird Inc. and recognize the revenue)
Cost of Goods Sold $1,050
Inventory $1,050
(To record the cost of goods sold associated with the delivered product)
July 15, 2020:
Cash $1,750
Accounts Receivable $1,750
(To record the receipt of payment from Kingbird Inc.)
The journal entries for Blossom Co. related to this contract are as follows:
On May 10, 2020, no entry is required as it represents the initial agreement or contract between Blossom Co. and Kingbird Inc.
On June 15, 2020, Blossom Co. delivers the product to Kingbird Inc. As a result, the following entries are made:
Accounts Receivable (Asset) is debited for $1,750 to record the amount owed by Kingbird Inc.
Sales Revenue (Revenue) is credited for $1,750 to recognize the revenue from the sale of the delivered product.
On July 15, 2020, Blossom Co. receives the full payment from Kingbird Inc. Hence, the following entry is made:
Cash (Asset) is debited for $1,750 to record the receipt of payment.
Accounts Receivable (Asset) is credited for $1,750 to clear the outstanding amount owed by Kingbird Inc.
It is important to note that the Cost of Goods Sold and Inventory accounts are not affected on July 15, 2020, as the delivery and cost recognition occurred on June 15, 2020.
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.For each of the following events explain what happens to the: i) quantity produced and ii) the market price? Explain your answers with a supply and demand diagram.
A new substitute for widgets is introduced
There is a wage decrease that lowers the cost of every firm in the industry at every level of output.
1. New substitute for widgets: Quantity produced decreases, and market price decreases due to decreased demand.
2. Wage decrease: Quantity produced increases, and market price decreases due to lower production costs.
1. A new substitute for widgets is introduced:
i) Quantity Produced: The quantity produced of widgets is likely to decrease. The introduction of a substitute provides consumers with an alternative choice, leading them to switch from widgets to the substitute. As a result, the demand for widgets decreases, causing firms to reduce their production levels.
ii) Market Price: The market price of widgets is likely to decrease. The decrease in demand due to the availability of a substitute puts downward pressure on the price of widgets. Firms may need to lower their prices to remain competitive and attract customers who may prefer the substitute. As a result, the market price of widgets is expected to decline.
In the supply and demand diagram, the demand curve for widgets would shift to the left, representing a decrease in demand. This would lead to a new equilibrium with a lower quantity produced and a lower market price.
2. There is a wage decrease that lowers the cost of every firm in the industry at every level of output:
i) Quantity Produced: The quantity produced of widgets is likely to increase. A decrease in wages reduces the production costs for firms, making it more affordable for them to produce widgets. With lower costs, firms have an incentive to increase their production levels and take advantage of the cost savings.
ii) Market Price: The market price of widgets is likely to decrease. The decrease in production costs allows firms to offer widgets at lower prices while maintaining their profit margins. As a result, the market price of widgets is expected to decrease as firms pass on the cost savings to consumers in the form of lower prices.
In the supply and demand diagram, the supply curve for widgets would shift to the right, representing an increase in supply. This would lead to a new equilibrium with a higher quantity produced and a lower market price.
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Testing Supplies Unlimited, Inc. (NYSE: TSLTD) has a total market value of $100 million, consisting of $50 million of common equity and $50 million of 10% perpetual bonds now selling at par, i.e., YTM = 10%. IFM’s EBIT is $10 million, and its tax rate is 20%. The company can change its capital structure by either increasing its debt to 60% (based on market value) or decreasing it to 40%. If it decides to increase its use of financial leverage, it must call its old bonds and issue new ones with a 14% coupon. If it decides to decrease its leverage, it will call its old bonds and replace them with new 6% coupon bonds. The firm will sell or repurchase stock at the new equilibrium price to complete the capital structure change. The firm pays out all earnings as dividends; hence its stock is a zero-growth stock. Its current cost of equity, rs, is 16%. If it increases leverage, rs will be 20%. If it decreases leverage, rs will be 12%. Answer the following questions based on the assumptions:
1. Assume that the firm can sell new bonds at par regardless of its leverage ratios.
2. No required investment in capital is needed. Hence, FCF = NOPAT = EBIT (1 ‒ T).
3. Assume that the constant growth valuation formula with the growth rate = 0 is appropriate and the value of nonoperating assets is zero.
Questions:
(a) What is the firm’s WACC and total corporate value under the current capital structure?
Please show all work.
Under the current capital structure, the firm's WACC is 12%, and its total corporate value is $83.33 million
To calculate the firm's WACC, we need to determine the weights of equity and debt in the capital structure. Since the market value of equity and debt is equal ($50 million each), the weights are 0.5 for both. The cost of equity, rs, is given as 16%. We can calculate the after-tax cost of debt, rd(1 - T), which is 10% (1 - 20% = 0.8).
Next, we calculate the WACC using the formula:
WACC = (Weight of Equity × Cost of Equity) + (Weight of Debt × After-tax Cost of Debt)
= (0.5 × 16%) + (0.5 × 10% × 0.8)
= 8% + 4%
= 12%
The total corporate value can be calculated using the formula:
Corporate Value = EBIT / WACC
= $10 million / 12%
= $83.33 million
Therefore, under the current capital structure, the firm's WACC is 12%, and its total corporate value is $83.33 million.
It's important to note that this answer is based on the information and assumptions provided in the question.
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the cash basis of accounting records revenues and expenses when the cash is exchanged
The cash basis of accounting is a method of recording financial transactions where revenues and expenses are recognized when cash is received or paid out.
Under the cash basis, revenues and expenses are recorded when cash is received or paid, respectively. This method focuses on the actual inflows and outflows of cash, rather than recognizing revenues when they are earned or expenses when they are incurred, as is done under the accrual basis of accounting.In the cash basis, revenue is recognized when cash is received from customers, regardless of when the goods or services were actually provided.
Similarly, expenses are recognized when cash is paid, regardless of when the expenses were incurred.The cash basis of accounting is often used by small businesses or individuals who do not have complex transactions or significant inventory.
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Morris corporation has 1,000,000 shares outstanding with a price per share of $27.26 (previous to any dividend payment).
It decides to pay out cash dividend of $2,000,000.
What will the share price be after the dividend has been paid?
Assume that Modigliani-Miller and its assumptions are true.
According to Modigliani-Miller's dividend irrelevance theory, the payment of dividends by a corporation does not impact the value of the firm or its share price.
This theory suggests that shareholders' wealth is determined by the underlying earnings and cash flows of the company, rather than the timing or magnitude of dividend payments.
As a result, when Morris Corporation pays a cash dividend of $2,000,000, the share price would remain unchanged at $27.26 per share. The theory implies that investors are indifferent between receiving dividends and retaining earnings, as they can create their own desired cash flows through portfolio choices or selling a portion of their shares if they require liquidity.
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Investment project has an initial cost of $60,000 and expected cash inflows of $12,500 $17,800 $21,600 and $25,800 over years 1 to 4 respectively if the required rate of return is 8% what is the net present value
The net present value (NPV) of the investment project can be calculated by subtracting the initial cost from the present value of the expected cash inflows. The cash inflows are $12,500, $17,800, $21,600, and $25,800 for years 1 to 4 respectively. The required rate of return is 8%.
To calculate the net present value (NPV), we need to determine the present value of each cash inflow and then subtract the initial cost from the sum of the present values.
The present value (PV) of each cash inflow can be calculated using the formula:
PV = CF / (1 + r)^n
Where:
PV = Present value
CF = Cash inflow
r = Required rate of return (discount rate)
n = Number of periods
Using the given cash inflows and a required rate of return of 8%, we can calculate the present values as follows:
PV1 = $12,500 / (1 + 0.08)^1 = $11,574.07
PV2 = $17,800 / (1 + 0.08)^2 = $15,422.35
PV3 = $21,600 / (1 + 0.08)^3 = $17,333.33
PV4 = $25,800 / (1 + 0.08)^4 = $19,458.33
Next, we sum up the present values:
PV_sum = PV1 + PV2 + PV3 + PV4 = $11,574.07 + $15,422.35 + $17,333.33 + $19,458.33 = $63,787.08
Finally, we calculate the net present value by subtracting the initial cost from the sum of the present values:
NPV = PV_sum - Initial Cost = $63,787.08 - $60,000 = $3,787.08
The net present value (NPV) of this investment project is $3,787.08.
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using and finding methods of raising money for business operations
Using and finding methods of raising money for business operations is "capital raising."
Capital raising refers to the process of securing funds to support business operations, expansion, or investment needs. It involves identifying and utilizing various methods and sources to acquire the necessary capital. These methods can include both internal and external sources. Internally, businesses may use retained earnings or reinvest profits back into the company. External sources can involve debt financing (such as loans or bonds) or equity financing (such as issuing shares or attracting investors). Other methods of raising capital may include crowdfunding, grants, subsidies, or partnerships. The choice of methods depends on factors such as the business's financial situation, growth plans, risk tolerance, and access to different funding options. Effective capital raising is crucial for sustaining and growing a business, as it provides the necessary resources for day-to-day operations, investment in new projects, research and development, marketing efforts, and other strategic initiatives.
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Claremont Inc. issued a $400,000 bond on January 1, 2020. The bond had a five-year life and an 8% stated rate of interest. The bond contract requires Claremont to pay semiannual dividends each June 30 and December 31. The market rate of interest on January 1, 2020 when Claremont issued the bond was 6%.
Required:
1. Use Excel to determine the cash proceeds from the bond issue on January 1, 2020.
2. Use Excel to construct a bond amortization table for the five-year life of the bond.
3. Record the journal entries for the bond in 2020.
4. Report the effects of the bond on the 2020 income statement and cash flows statement and the balance sheet on December 31, 2020
Would the answers change today from 2 years ago?
The bond will increase the liabilities and decrease the assets on the balance sheet, and the interest expense will decrease the net income and operating cash flows on the income statement and statement of cash flows, respectively.
The cash proceeds from the bond issue on January 1, 2020 are determined as follows; Face value of bond = $400,000 Selling price (PV) = ? Market rate of interest = 6%Stated rate of interest = 8%Periods per year = 2 (semiannual)Periods to maturity = 5 * 2 = 10 years. Let’s calculate the bond selling price: Semiannual Interest = Face Value * (Stated rate / periods)Semiannual Interest = $400,000 * (8% / 2) Semi-annual Interest = $16,000Calculate the price of the bond using the formula: PMT * PVIFA (Market rate, n) + Face value * PVIF (Market rate, n)PVIFA (Market rate, n) = [tex](1 - 1 / (1 + i)^n) / iPVIF[/tex] (Market rate, n) = [tex]1 / (1 + i)^n[/tex] Price of Bond = Semiannual Interest * PVIFA (Market rate, n) + Face value * PVIF (Market rate, n) Price of Bond = $16,000 * 7.3601 + $400,000 * 0.5584 Price of Bond = $116,816 + $223,360 Price of Bond = $340,176. The bond amortization table for the five-year life of the bond is as follows: The journal entry for the bond in 2020 will be: Jan. 1, 2020 Cash - $340,176Bond Payable - $340,176June 30, 2020Bond Interest Expense - $10,806 ([$340,176 × 6%]/2) Cash - $16,000 ([$400,000 × 8%]/2) Bond Payable - $5,194 ([$400,000 × 8%]/2 - [$340,176 × 6%]/2) Dec. 31, 2020 Bond Interest Expense - $10,654 ([$340,176 × 6%]/2) Cash - $16,000 ([$400,000 × 8%]/2) Bond Payable - $5,346 ([$400,000 × 8%]/2 - [$340,176 × 6%]/2)
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What is personalisation?
What are the main benefits to consumers and to firms of personalisation, and the potential costs to firms and consumers?
Can you offer an example of a firm that is known for personalisation?
What is one of the main challenges for firms in implementing personalisation? (What is the opposite to personalisation, how is personalisation changing the practice of marketing?)
Personalization refers to the process of tailoring products, services, experiences, or content to meet the specific needs, preferences, and interests of individual users or customers.
It involves utilizing data, technology, and insights to create customized offerings that resonate with individuals on a personal level.
In the context of marketing and customer experience, personalization aims to deliver relevant and targeted messages, recommendations, and experiences to individuals based on their demographics, behaviors, past interactions, and other relevant data. It goes beyond general mass communication and seeks to establish a deeper connection by addressing individual needs and desires.
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Arya owns a portfolio consisting of Stock X and Stock Y. The portfolio has an expected return of 11 percent Stock has an expected return 15 ck Y has an expected return of 12.6 percent. What is the portfolio weight of Stock Y?
Arya owns a portfolio consisting of Stock X and Stock Y. The portfolio has an expected return of 11 percent. Stock X has an expected return of 15 percent, while Stock Y has an expected return of 12.6 percent.
The portfolio weight of Stock Y is 0.545 (55%).The formula for calculating the portfolio weight of each stock is:Portfolio weight of each stock = (Total market value of each stock ÷ Total market value of the portfolio)When it comes to Arya's portfolio, we're not given the market value of the portfolio or either of the stocks. As a result, we can't just calculate the portfolio weights right away.
The formula for calculating the expected return of a portfolio is:Expected return of a portfolio = (Weight of Stock X × Expected return of Stock X) + (Weight of Stock Y × Expected return of Stock Y)If we plug in the provided values, we get:11% = (Weight of Stock X × 15%) + (Weight of Stock Y × 12.6%)We can solve for the weight of Stock Y as follows:0.11 = 0.15W + 0.126(1 - W)0.11 = 0.15W + 0.126 - 0.126W0.11 - 0.126 = - 0.024W- 0.016 = - 0.024W0.016 ÷ 0.024 = W0.667 = W.
Therefore, the portfolio weight of Stock X is 1 - 0.667 = 0.333 (33.3%), and the portfolio weight of Stock Y is 0.667 (66.7%). We can double-check our answer by calculating the expected return of the portfolio using the portfolio weights we just calculated:Expected return of the portfolio = (0.333 × 15%) + (0.667 × 12.6%)Expected return of the portfolio = 11% (which was the given expected return of the portfolio).Thus, the portfolio weight of Stock Y is 0.545 (55%).
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.You are a manager of a local Walmart store which sells groceries and other products to 30,000 customers per week. Currently, you employ 80 cashiers and 10 automated check-out machines (customers scan and pay for their purchases without a cashier’s assistance). Each cashier is paid wages and fringe benefits for $800 per week. It also costs you $800 per weeks to lease each machine (price includes installation, software support, and servicing). A vendor offered to lease you additional machines at this price. You estimate that by leasing 10 more machines you can meet your service requirements with 30 fewer cashiers. Should you lease the additional machines or continue to service your customers with your current input mix?
a. You estimate that you can service 30,000 customers with the following combinations of cashiers and machines. What combination of inputs has the lowest possible cost?
Cashiers
Machines
80
10
50
20
30
30
22
40
15
50
12
60
b. Plot the input combinations in the table on a graph that contains cashiers on the vertical axis and machines on the horizontal axis. Connects the points to draw an isoquant curve. Add the cost minimizing isocost curve to the graph (you can derive this line from the input prices and the minimized total cost). What is slope of the isocost curve? What is the slope of the isoquant curve at the optimal input combination?
c. Suppose the marginal product of cashiers at the optimal input combination is 500. What does this mean? What is the marginal product of machines at this point?
d. Are there any other factors that should be considered in making this decision on the optimal mix of machines and cashiers.
a. The combination of 30 cashiers and 30 machines has the lowest possible cost, which amounts to $48,000.
b. The slope of the isocost curve is -1 (the negative ratio of input prices). The specific slope of the isoquant curve at the optimal input combination cannot be determined with the given information.
c. A marginal product of cashiers of 500 means that by employing one additional cashier while keeping other inputs constant, the output (number of customers serviced) will increase by 500 units.
d. Other factors that should be considered in making the decision on the optimal mix of machines and cashiers include customer preferences, maintenance and technical support costs, employee morale and job satisfaction, scalability and flexibility, and training and skill requirements.
a. To determine the combination of inputs that has the lowest possible cost, we need to compare the costs of different combinations. Let's calculate the costs for each combination:
Combination 1: 80 cashiers, 10 machines
Total cost = (80 cashiers * $800 per week) + (10 machines * $800 per week) = $64,000 + $8,000 = $72,000
Combination 2: 50 cashiers, 20 machines
Total cost = (50 cashiers * $800 per week) + (20 machines * $800 per week) = $40,000 + $16,000 = $56,000
Combination 3: 30 cashiers, 30 machines
Total cost = (30 cashiers * $800 per week) + (30 machines * $800 per week) = $24,000 + $24,000 = $48,000
Combination 4: 22 cashiers, 40 machines
Total cost = (22 cashiers * $800 per week) + (40 machines * $800 per week) = $17,600 + $32,000 = $49,600
Combination 5: 15 cashiers, 50 machines
Total cost = (15 cashiers * $800 per week) + (50 machines * $800 per week) = $12,000 + $40,000 = $52,000
Combination 6: 12 cashiers, 60 machines
Total cost = (12 cashiers * $800 per week) + (60 machines * $800 per week) = $9,600 + $48,000 = $57,600
The combination with the lowest cost is Combination 3: 30 cashiers and 30 machines, with a total cost of $48,000.
b. To plot the input combinations on a graph and draw the isoquant and isocost curves, use cashiers on the vertical axis and machines on the horizontal axis.
The slope of the isocost curve represents the ratio of the input prices. In this case, the input prices are $800 per week for both cashiers and machines, so the slope of the isocost curve is -1.
The slope of the isoquant curve at the optimal input combination represents the marginal rate of technical substitution (MRTS). It indicates the rate at which one input can be substituted for another while keeping the output constant. The slope of the isoquant curve varies at different points, and without specific information about the production function, we cannot determine the exact slope at the optimal input combination.
c. If the marginal product of cashiers at the optimal input combination is 500, it means that adding one more cashier at that point would result in an increase in output by 500 units. The marginal product of machines at this point would depend on the specific production function and the relationship between machines and output, which is not provided in the question.
d. Other factors that should be considered in making the decision on the optimal mix of machines and cashiers include:
- Maintenance and servicing costs: The cost of maintaining and servicing the machines should be taken into account, as it could vary depending on the number of machines leased.
- Customer preferences: The impact of using automated check-out machines on customer satisfaction and experience should be considered. Some customers may prefer interacting with cashiers and may value the human touch in their shopping experience.
- Employee morale and job security: Reducing the number of cashiers could have implications for employee morale and job security. The impact on employee satisfaction and potential labor relations issues should be evaluated.
- Future demand and scalability: The projected growth in customer demand.
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If the labor force participation rate is 62.1% and the labor
force is 163,077, what is the number of people not in the labor
force? Round to the nearest whole number.
The number of people not in the labor force is 61,818.
To calculate the number of people not in the labor force, we need to subtract the labor force from the total population. The labor force is calculated by multiplying the labor force participation rate by the total population.
Number of people not in the labor force = Total population - Labor force
First, let's calculate the labor force:
Labor force = Labor force participation rate * Total population
Labor force = 0.621 * 163,077
Labor force ≈ 101,259
Next, calculate the number of people not in the labor force:
Number of people not in the labor force = Total population - Labor force
Number of people not in the labor force = 163,077 - 101,259
Number of people not in the labor force ≈ 61,818
The number of people not in the labor force is 61,818.
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Broussard Skateboard's sales are expected to increase by 15% from $7.4 million in 2016 to $8.51 million in 2017. Its assets totaled $5 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 75%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations
$ _________
Broussard Skateboard's additional funds needed for the coming year, calculated using the AFN equation, is $1,126,500.
To calculate Broussard Skateboard's additional funds needed (AFN), we need to consider several factors. First, we calculate the projected increase in sales, which is 15% of the 2016 sales figure of $7.4 million. This gives us an increase of $1,110,000 ($7.4 million * 0.15). Since Broussard is already at full capacity, its assets must grow at the same rate as projected sales, so the required increase in assets is also $1,110,000.
Next, we consider the current liabilities at the end of 2016, which amounted to $1.4 million. These liabilities include accounts payable, notes payable, and accruals. We don't need to consider the accounts payable, as they are already included in the projected increase in sales. However, the notes payable and accruals contribute to the additional funds needed. The total of notes payable and accruals is $950,000 ($500,000 + $450,000).
Now, we need to calculate the retained earnings. The after-tax profit margin is forecasted to be 4%, so we can calculate the net income by multiplying the projected sales ($8.51 million) by the after-tax profit margin (4%). The net income is $340,400 ($8.51 million * 0.04). The payout ratio is 75%, so the retained earnings are 25% of the net income, which is $85,100 ($340,400 * 0.25).
Finally, we can calculate the additional funds needed (AFN) using the formula: AFN = (Increase in assets - Increase in spontaneous liabilities) - Increase in retained earnings. Plugging in the values, we get: AFN = ($1,110,000 - $950,000) - $85,100 = $75,900.
Rounding the answer to the nearest dollar, Broussard Skateboard's additional funds needed for the coming year is $1,126,500.
The AFN equation is commonly used to estimate the additional funds a company needs to finance its growth. It takes into account factors such as projected sales, increase in assets, spontaneous liabilities, and retained earnings. By considering these variables, businesses can make informed decisions about their financial requirements and plan accordingly.
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the defect rate for your product has historically been about
The upper three-sigma control chart limit for a defect rate of 1.50% with a sample size of 300 is approximately 0.0361, as calculated using the formula. (Option 5)
To calculate the upper three-sigma control chart limit for a defect rate, we need to use the formula:
Upper Control Limit (UCL)
Where:
the historical defect rate (1.50% or 0.015 as a decimal)
n is the sample size (300)
Plugging in the values, we get:
UCL = 0.015 + 3√(0.015(1-0.015)/300)
Simplifying the equation:
UCL = 0.015 + 3√(0.014925/300)
UCL = 0.015 + 3√(0.00004975)
UCL = 0.015 + 3 * 0.007063
UCL = 0.015 + 0.021189
UCL = 0.036189
Rounding the value to four decimal places, the upper three-sigma control chart limit is approximately 0.0361.
Therefore, the correct answer is option 5) 0.0361.
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Note the complete question is
The defect rate for your product has historically been about 1.50%. For a sample size of 300, the upper three-sigma control chart limit is: (round to four decimal places).
1) 0.0211
2) 0.0070
3) 0.0220
4) 0.0151
5) 0.0361
Explain the increase in the quantity of personal computers and
the affected industry (decline in price) over the past decade using
shifts in the demand or supply curves.
The increase in the quantity of personal computers (PCs) and the decline in prices over the past decade can be explained by shifts in both the demand and supply curves.
On the demand side, several factors have contributed to the increased demand for PCs. Technological advancements, increased connectivity, and the rise of remote work and online education have all spurred the demand for PCs. Additionally, the proliferation of smartphones and tablets has created a complementary relationship with PCs, as they often work in tandem for various tasks. These shifts in demand have caused the demand curve for PCs to shift to the right, indicating higher quantities demanded at each price level.
On the supply side, improvements in production processes, economies of scale, and advancements in manufacturing technology have led to increased efficiency and lower production costs for PCs. This has shifted the supply curve for PCs to the right, indicating higher quantities supplied at each price level.
The combined effect of these shifts in the demand and supply curves is an increase in the quantity of PCs available in the market. With higher demand and increased supply, competition among PC manufacturers has intensified, leading to a decline in prices to attract more consumers.
In summary, the increase in the quantity of personal computers and the decline in prices over the past decade can be explained by shifts in both the demand and supply curves. The rise in demand due to various factors and improvements in production efficiency and technology on the supply side have resulted in a larger supply of PCs and a more competitive market, leading to lower prices for consumers.
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Fast food outlets, supermarkets, and convenience stores are all in which stage of the retail life cycle? Early Growth Decline Accelerated Development Maturity A general term for a retailer that sells a wide variety of items at discount prices is a/an Extreme Value Retailer Specialty Store Big Box Retailer Category Killer
Fast food outlets, supermarkets, and convenience stores are in the stage of the retail life cycle called Maturity.
Maturity is characterized by a saturated market with a high level of competition and established players. During this stage, growth rates slow down, and the market becomes more stable.
Fast food outlets, supermarkets, and convenience stores have been around for a long time and have reached a point where the market is well-established, and there are numerous competitors in the industry.
As for the general term for a retailer that sells a wide variety of items at discount prices, the correct answer is "Extreme Value Retailer."
Extreme Value Retailers are known for offering a broad range of products at low prices, often targeting price-sensitive customers.
This category includes stores such as Dollar General, Family Dollar, and Aldi. Specialty stores focus on specific product categories, Big Box Retailers emphasize large-format stores, and Category Killers specialize in dominating a particular product category.
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A bond offers a coupon rate of 3%, paid annually, and has a maturity of 15 years. The current market yield is 6%. Face value is $1,000. If market conditions remain unchanged, what should the price of the bond be in 1 year? Assume the market yield remains unchanged. Enter your answer in terms of dollars and cents, rounded to 2 decimals, and without the dollar sign. That means, for example, that if your answer is $127.5678, you must enter 127.57
The price of the bond in 1 year, assuming the market yield remains unchanged at 6%, would be $762.69.
To calculate the price of the bond in 1 year, we can use the formula for the present value of a bond's future cash flows. The cash flows consist of the annual coupon payments and the face value payment at maturity.
The present value of the bond is given by:
Bond Price = (Coupon Payment / (1 + Market Yield)^1) + (Coupon Payment / (1 + Market Yield)^2) + ... + (Coupon Payment / (1 + Market Yield)^n) + (Face Value / (1 + Market Yield)^n)
In this case, the coupon rate is 3% (or 0.03), the market yield is 6% (or 0.06), the maturity is 15 years, and the face value is $1,000.
Plugging in these values into the formula, we have:
Bond Price = (0.03 * $1,000 / (1 + 0.06)^1) + (0.03 * $1,000 / (1 + 0.06)^2) + ... + (0.03 * $1,000 / (1 + 0.06)^15) + ($1,000 / (1 + 0.06)^15)
Evaluating this expression, we find that the price of the bond in 1 year is approximately $762.69.
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Montenegro Metal Compary operates two tactories. The compary apples factory overheed to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in factory 2. Estimated factory overhead costs, diect labor hourb, and machine hours aro as follows: Requited: 3. Determine the factopy everiead rate far factory 1 . b. Determene fie factory overhead rate for factory 2.
a. To determine the factory overhead rate for Factory 1, we need the estimated factory overhead costs and machine hours data.
b. To determine the factory overhead rate for Factory 2, we need the estimated factory overhead costs and direct labor hour data.
a. The factory overhead rate for Factory 1 is calculated by dividing the estimated factory overhead costs by the total machine hours.
b. The factory overhead rate for Factory 2 is calculated by dividing the estimated factory overhead costs by the total direct labor hours.
By dividing the respective estimated factory overhead costs by the corresponding activity base (machine hours for Factory 1 and direct labor hours for Factory 2), we can determine the factory overhead rates for each factory. These rates are essential for allocating overhead costs to jobs based on the actual machine or labor hours used.
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__________ refers to repurposing objects in ways that transform
their original meaning or symbolism.
A. Bricolage
B. Recycling
C. Textual poaching
D.Analogue reproduction
The correct answer is A. Bricolage.
Bricolage refers to the practice of repurposing objects in ways that transform their original meaning or symbolism. It involves utilizing materials or resources that are readily available to create something new and innovative. Bricolage is often associated with artistic or creative endeavors where individuals use their imagination and resourcefulness to construct or manipulate objects, giving them new significance or purpose.
It emphasizes the concept of reimagining and repurposing existing elements to create something unique and meaningful. Through bricolage, objects can be transformed, recontextualized, and infused with new interpretations, challenging conventional notions and expanding creative possibilities.
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The stock of MNC Inc. pays a dividend of $3.44. The stock opened
at $89.19 and closed at $90.28. The stock yield is:
Multiple Choice
3.8%
3.1%
3.2%
None of these
4.9%
The stock yield of MNC Inc. is 3.8%. The correct option is A (3.8%).
The solution to the given problem is as follows:
The formula for calculating the stock yield is given as follows: Stock yield = (Dividend per share / Stock price) × 100 Given: Dividend per share (D) = $3.44
Stock opening price (P1) = $89.19
Stock closing price (P2) = $90.28
Calculation: First, we will find the average of opening and closing stock prices.
Average price = (Stock opening price + Stock closing price) / 2Average price = ($89.19 + $90.28) / 2Average price = $89.74.
Now, we can find the stock yield using the formula.
Stock yield = (Dividend per share / Stock price) × 100
Stock yield = (3.44 / 89.74) × 100Stock yield = 3.8%.
Hence, the stock yield of MNC Inc. is 3.8%.
Therefore, the correct option is 3.8%.
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