A student borrows $95,000 for business school at 4.5% stated annual interest with monthly repayment over 9 years. Consider this as a loan with no payments or interest during school so that the problem structure is equivalent to a standard loan received one period before the first payment. Suppose that to better match expected student salary growth over time, the loan is structured as a growing annuity with each monthly payment growing by 0.3% compared to the previous monthly payment. How much is the first monthly payment

Answers

Answer 1

Answer:

$918.70 or $900

Explanation:

The computation of the first monthly payment is given below:

Interest rate per Month is

= Annual Rate ÷ 12

= 4.50% ÷ 12

= 0.375%

Now

Present Value of Growing Annuity = First payment × (1 - ((1 + Growth Rate) ÷ (1 + Interest Rate))^Periods) × 1 ÷  (Interest Rate - Growth Rate)

95000 = First payment × (1 - ((1 + 0.30%) ÷ (1 + 0.375%))^108) × 1 ÷ (0.375% - 0.30%)

95000 = First payment × (1 - 0.999252^108) × 1 ÷ (0.075%)

95000 = First payment × (1 - 0.92244) × 1 ÷ (0.075%)

95000 = First payment × 103.4067

First payment = $918.70 or $900


Related Questions

A company using the FIFO method had beginning work in process inventory of 10,000 units and completed 75,000 units. They also had 5,000 units in ending work in process inventory. The number of units started and completed equals_________

Answers

Answer:

the number of units started and completed is 65,000 units

Explanation:

The computation of the number of units started and completed is given below:

= Units completed - beginning work in process inventory units

= 75,000 units - 10,000 units

= 65,000 units

Hence, the number of units started and completed is 65,000 units

A factory wishes to maximize its profit by choosing how many of each of its products to produce every week. The factory cannot produce more than 32 units in total each week. A linear programming problem is formed and the part of the sensitivity report corresponding to this constraint is provided below. If the company could produce 10 more units each week, which of the following can be concluded about the optimal profit?
Nam Final Value Shadow Constraint R.H. Allowable Allowable
Price Side Increase Decrease
Total
Production 32 32 90 15.333 8.667
a. Optimal profit increases by 90.
b. Optimal profit increases by 900.
c. Optimal profit increases by 15.3.
d. Optimal profit increases by 153.3.
e. The impact on optimal profit cannot be determined with the given information.

Answers

Ask Siri to help you and there is the answer

One of the best sources of precall information is a prospect's own salespeople because they empathize with the salesperson's situation.
a. True
b. False

Answers

Answer:

a. True

Explanation:

In the case when the information is precalled so here the sources that considered to be best should be the own salespeople as it would emphathize the situation of the sales person

So as per the given situation, the given statement is true

Hence, the option a is correct

Therefore, the second option is wrong

Backus Inc. makes and sells many consumer products. The firm’s average contribution margin ratio is 26%. Management is considering adding a new product that will require an additional $12,000 per month of fixed expenses and will have variable expenses of $9 per unit.Required:a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 25%. (Round your answer to 2 decimal places.)b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $7,500. (Do not round intermediate calculations.)

Answers

Answer and Explanation:

a. The computation of the selling price is given below:

= $9 ÷ (1 - 0.25)

= $12 per unit

b. The number of units that should be sold in the case when the operating income is increased by $7,500

= ($12,000 + $7,500) ÷ ($12 - $9)

= 6,500 units

Hence, the same should be considered and relevant

Managerial implications for the SDT theory include: Group of answer choices to motivate high performance for uninteresting jobs make performance contingent on extrinsic rewards. All of these. to motivate high performance for uninteresting jobs make performance contingent on intrinsic rewards. focus on the hygiene factors in order to reduce dissatisfaction and increase intrinsic motivation to enhance intrinsic motivation for interesting jobs be sure individuals receive large pay bonuses for high achievement

Answers

Answer:

to motivate high performance for uninteresting jobs make performance contingent on extrinsic rewards.

Explanation:

Extrinsic rewards means the motivation i.e. controlled and produced via payment, awards and appreciations. In the case when the job is not interesting so the motivation level should be high in this situation and when the job is interesting the motivation level should not high

So as per the given situation, the above statement should be considered as an answer

At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of cash sales for the day. However, when the clerk and the supervisor count the cash in the register, the count reveals that $1,050 was actually collected from customers.
Complete the journal entry.

Answers

Answer:

Date                   Account Title                                             Debit               Credit

Sept. 1               Cash                                                         $1,050

                         Cash short and over                               $       9

                         Sales                                                                               $1,059

Cash short and over is calculated thus:

= 1,059 - 1,050

= $9.00

During its first year of operations, Mario Lupo formed Lupo Company as a corporation and personally invested $15,000 in the business in exchange for common stock. Lupo Company also paid dividends of $2,000. The company earned $35,000 of revenues and incurred $23,000 of expenses. At the end of the year, the company's equity totaled:_____.
a. $13,000.
b. $15,000.
c. $25,000.
d. $75,000.

Answers

Answer:

c. $25,000

Explanation:

Calculation to determine At the end of the year, the company's equity totaled:

First step is to calculate the Net income using this formula

Net income= Revenues- Expense

Let plug in the formula

Net income= 35000-23000

Net income=12000

Second step is to calculate Net income added to capital using this formula

Net income added to capital = Net income-Cash dividend

Let plug in the formula

Net income added to capital=12000-2000

Net income added to capital=10000

Now let determine the Ending company total equity using this formula

Ending company total equity= Opening invested capital + Net income added to capital

Let plug in the formula

Ending company total equity=15000+10000

Ending company total equity=$25000

Therefore At the end of the year, the company's equity totaled:$25,000

On June 10, Pais Company purchased $9,000 of merchandise from MacGyver Company, on account, terms 3/10, n/30. Pais pays the freight costs of $400 on June 11. Goods totaling $600 are returned to MacGyver for credit on June 12. On June 19, Pais Company pays McGiver Company in full, less the purchase discount. Both companies use a perpetual inventory system. Journalize perpetual inventory entries. Instructions a. Prepare separate entries for each transaction on the books of Pais Company. b. Prepare separate entries for each transaction for MacGyver Company. The merchandise purchased by Pais on June 10 cost MacGyver $5,000, and the goods returned cost McGiver $310.

Answers

Solution :

Pais Company

June 10   Inventory                                  9000

              Accounts payable                                              9000

June 11   Inventory                                   400

               Cash                                                                   400

              No entry                                     0

June 12   Accounts payable                    600

                 Inventory                                                       600

June 19    Accounts payable                 8400

              Inventory                                                          252           = 8400 x 3%

              Cash                                                                 8148

McGiver Company

June 10    Accounts Receivable           9000

                Sales revenue                                            9000

               Cost of goods sold                5000

                Inventory                                                   5000

June 12    Sales return and allowances  600

                 Accounts receivable                               600

                 Inventory                                310

                Cost of goods                                           310

June 19    Cash                                      8148

                  Sales discount                     252                                =8400 x 3%

                Account receivable                                   8400

Which of the strategies to enter global markets do you think would be best for a small, 100 person company manufacturing special dog collars

Answers

Answer:

Exporting by means of:

Local representative Online sales

Explanation:

It would be best that the company engages in exports for the time being because it dos not require much funds to be used and so expenses are less.

The company could find a local representative in the countries that it would like to sell to and use that representative as a middleman to sell their goods there.

The company could also cut out the middle man and directly sell to consumers on the internet through websites dedicated to the sale of their kind of goods.

The Bretton Woods system ended when: A. several countries tied the value of their currencies to the U.S. dollar.
B. the United States decided to stop backing the U.S. dollar with gold reserves C. the United States experienced its second Industrial Revolution
D. the gold standard became more popular in countries around the world​

Answers

Answer:

B

Explanation:

There is no other answer but B. That was Nixon's doing. He took the American dollar off the Gold system. Gold in 1980 eventually went from 35 dollars to 800 which is a stupendous move. Many people, unfortunately for them, bought at the top and it took 31 years (I think) for them to recover their money.

Answer:

B

Explanation:

Ken Jones, an architect, organized Jones Architects on April 1, 20Y2. During the month, Jones Architects completed the following transactions: Transferred cash from a personal bank account to an account to be used for the business in exchange for Common Stock, $30,000. Purchased used automobile for $20,000, paying $4,500 cash and giving a note payable for the remainder. Paid April rent for office and workroom, $3,000. Paid cash for supplies, $1,440. Purchased office and computer equipment on account, $6,000. Paid cash for annual insurance policies on automobile and equipment, $2,000. Received cash from a client for plans delivered, $7,500. Paid cash to creditors on account, $1,740. Paid cash for miscellaneous expenses, $375. Received invoice for blueprint service, due in May, $1,000. Recorded fees earned on plans delivered, payment to be received in May, $5,200. Paid salary of assistant, $1,600. Paid cash for miscellaneous expenses, $810. Paid installment due on note payable, $240. Paid gas, oil, and repairs on automobile for April, $390.

Required:
Record the above transactions in T accounts.

Answers

Answer:

Jones Architects

T-accounts:

Cash

Account Titles               Debit      Credit

Common Stock,       $30,000

Automobile                                 $4,500

Rent expense                             $3,000

Supplies                                      $1,440

Prepaid Insurance                     $2,000

Service Revenue       $7,500

Accounts Payable                      $1,740

Miscellaneous expenses,            $375

Salary Expense                         $1,600

Miscellaneous expenses,            $810

Note payable,                              $240

Automobile expense                  $390

Common Stock

Account Titles               Debit      Credit

Cash                                           $30,000

Note payable

Account Titles               Debit      Credit

Automobile                                $15,500

Cash                              $240

Automobile

Account Titles               Debit      Credit

Cash                             $4,500

Note payable             $15,500

Rent expense

Account Titles               Debit      Credit

Cash                             $3,000

Supplies

Account Titles               Debit      Credit

Cash                             $1,440

Office and computer equipment

Account Titles               Debit      Credit

Accounts Payable      $6,000

Accounts Payable

Account Titles               Debit      Credit

Office and computer equipment $6,000

Cash                            $1,740

Blueprint expense                        $1,000

Prepaid Insurance

Account Titles               Debit      Credit

Cash                             $2,000

Service Revenue

Account Titles               Debit      Credit

Cash                                              $7,500

Accounts receivable                    $5,200

Miscellaneous expenses

Account Titles               Debit      Credit

Cash                               $375

Cash                               $810

Blueprint expense

Account Titles               Debit      Credit

Accounts payable        $1,000

Accounts Receivable

Account Titles               Debit      Credit

Service Revenue        $5,200

Salary Expense

Account Titles               Debit      Credit

Cash                              $1,600

Automobile expense

Account Titles               Debit      Credit

Cash                               $390

Explanation:

a) Data and Analysis:

Cash $30,000 Common Stock, $30,000

Automobile $20,000 Cash $4,500 Note payable $15,500

Rent expense $3,000 Cash $3,000

Supplies $1,440 Cash $1,440

Office and computer equipment $6,000 Accounts Payable $6,000

Prepaid Insurance $2,000 Cash $2,000

Cash $7,500 Service Revenue $7,500

Accounts Payable $1,740 Cash $1,740

Miscellaneous expenses, $375 Cash $375

Blueprint expense $1,000 Accounts payable $1,000

Accounts receivable $5,200 Service Revenue $5,200

Salary Expense $1,600 Cash $1,600

Miscellaneous expenses, $810 Cash $810

Note payable, $240 Cash $240

Automobile expense $390 Cash $390

Resource X is necessary to the production of good Y. If the price of resource X falls, the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.

Answers

Answer:

fall

rise

Explanation:

If the cost of  resource x falls, it becomes cheaper to produce good y. This leads to an increase in supply of y. the supply curve of good y shifts out. As a result, equilibrium price falls and quantity rises

A bond that pays interest semiannually has a price of $941.35 and a semiannual coupon payment of $26.00. If the par value is $1,000, what is the current yield

Answers

Answer:

5.52%

Explanation:

Calculation to determine the current yield

Current yield = ($26.00 × 2)/$941.35

Current yield=$52/$941.35

Current yield= .0552*100

Current yield= 5.52%

Therefore the Current yield is 5.52%

On December 30, you decide to make a $2,500 charitable donation. (Assume you itemize your deductions.) (a) If you are in the 24 percent tax bracket and you expect to itemize your deductions, how much will you save in taxes for the current year

Answers

Answer:

$600

Explanation:

Calculation to determine how much will you save in taxes for the current year

Using this formula

Tax savings = Tax rate × Tax deduction

Let plug in the formula

Tax savings= 0.24 × $2500

Tax savings =$600

Therefore how much will you save in taxes for the current year is $600

Colette Value Inc., a game development firm, has received a new project that involves the development of a mobile game. The project must be completed within a year. The company, however, is facing a shortage of mobile game developers and must hire 50 developers to ensure the timely completion of the project. As a result, the firm decides to take part in a job-related event that would give the firm access to a large pool of applicants at the same time. Which of the following recruitment options has Colette Value decided to use to find a large number of suitable candidates in a short time?
a. Alumni networks.
b. Job fairs.
c. Job posting systems.
d. Employee referrals.

Answers

Answer:

b. Job fairs.

Explanation:

Job fairs is the quickest method to bring the right talent as at the job fairs the people who wants to look for the job presently and on urgent basis so it will be considered. Also it considered the young and the latest talent plus the right candidates that hired in some days. Due to this, it saves the cost also received the best talent

So as per the given situation, the option b is correct

Compute a three-period moving average forecast given demand for shopping carts for the last five periods. (Round all your answers to two decimal points.) Period Demand 1 58 2 54 3 60 4 53 5 63

Answers

Answer:

Computation of a Three-Period Moving Average Forecast

Period  Demand   3-period moving average

1                58

2               54

3               60          57.33

4               53          55.67

5              63           58.67

Explanation:

a) Data and Calculations:

Period  Demand   3-period moving average

1                58

2               54

3               60          57.33 (58 + 54 + 60)/3

4               53          55.67 (54 + 60 + 53)/3

5              63           58.67 (60 + 53 + 63)/3

b) The three-period moving average is computed by summing the demand for periods 1, 2, and 3 and dividing it by 3.  The result becomes the moving average for period 3.  This process is repeated by eliminating the first one and adding the next number until the end.

Which of the following is NOT an accurate description of modern marketing?

Marketing involves managing profitable customer relationships.

Marketing involves satisfying customers' needs.

O Marketing is the creation of value for customers.

Marketing emphasizes selling and advertising exclusively.

O Marketing is building value-laden exchange relationships with customers.

Answers

I'm stuck between

Marketing is the creation of value for customers and

Marketing emphasizing selling and advertising exclusively l.

Suppose Cute Camel Woodcraft Company is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $400,000. The project is expected to generate the following net cash flows:

Year Cash Flow
Year 1 $325,000
Year 2 $500,000
Year 3 $400,000
Year 4 $475,000

Cute Camel Woodcraft Company's weighted average cost of capital is 8%, and project Alpha has the same risk as the firm's average project. Based on the cash flows, what is project Alpha's net present value (NPV)?

Answers

Answer:

$996,267.41

Explanation:

The Net Present Value of Alpha`s project can be determined by using the CFj Function of a Financial Calculator as follows :

- $400,000  CF0

$325,000     CF1

$500,000    CF2

$400,000    CF3

$475,000    CF4

I/YR = 8%

Then, SHIFT NPV gives $996,267.41

Thus, Alpha's net present value (NPV) is $996,267.41.

Many economists oppose a constitutional amendment that would require a balanced budget for the federal government because it would probably make the business cycle more volatile.
a. True
b. False

Answers

False is the correct answer

Answer:

The statement is False.

Explanation:

What is a constitutional balanced budget amendment?

The balanced budget amendment's requirement that total government spending cannot exceed total receipts collected in the same year has far-reaching ramifications for Social Security.

What is Balanced Budget?

A balanced budget is one in which total revenues equal or exceed total costs. After a full year of revenues and expenses have been incurred and recorded, a budget can be declared balanced. Budget deficits, according to proponents of a balanced budget, burden future generations with debt.

Example of Balanced Budget-

If Michael and Jessica earn $75,000 per year but spend only $70,000, they have a balanced budget because their expenses are equal to or less than their income. They can use the extra $5,000 in their budget to pay off debt or meet their savings goals in this situation.

Learn more about Balanced Budget here-

https://brainly.com/question/495298

#SPJ2

True or False: It was better for the united states not to receive this foreign investment because it decreases economic growth

Answers

Answer:

False

Explanation:

When the foreign investment should received so it generally complement the capital stock of the domestic one. ALso, the foreign investment includes both macro and micro impact. Like for macro, it is good for export, imprort and for micro it improved the labor force quality

So it increased the capital and the new business opportunities

Therefore the given statement is false

An example of fast tracking a project schedule would be to overlap the design and production phases for a design-to-production project, where the conventional approach would be to move on to construction only after completing the design phase.
a. True
b. False

Answers

Answer:

a. True

Explanation:

Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.

Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.

Furthermore, the main purpose of project management is working toward a common goal.

This ultimately implies that, project managers should ensure adequate attention and time is taken to identify, analyze and manage capital, raw materials, people, system of tasks and other resources, so as to effectively and efficiently achieve a common goal with all project stakeholders.

The fundamentals of Project Management includes;

1. Project initiation

2. Project planning

3. Project execution

4. Monitoring and controlling of the project.

5. Adapting and closure of project.

In the execution of a project, delaying a task normally affects the start or finishing time of the other tasks (successors) in a project.

The amount of time that is permitted for an activity to be delayed without delaying the early start date of any immediately following (succeeding) activities refers to the free slack or having an adverse effect on entire project.

A project schedule can be defined as a plan that comprises of the deliverables, activities and milestones with respect to a project, especially by including the intended start and finish dates.

The time for the implementation or execution of a project can be fast-tracked by a project manager.

For example, you can fast-track a design-to-production project by overlapping the design and production phases; especially by moving on to construction only after completing the design phase.

Alternative Financing Plans
Owen Co. is considering the following alternative financing plans:
Plan 1 Plan 2
Issue 7% bonds (at face value) $5,000,000 $3,400,000
Issue preferred $1 stock, $20 par — 3,600,000
Issue common stock, $25 par 5,000,000 3,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming income before bond interest and income tax is $750,000.
Enter answers in dollars and cents, rounding to the nearest whole cent.
Plan 1 $_____________________ Earnings per share on common stock
Plan 2 $_______________________ Earnings per share on common stock

Answers

Answer:

Owen Co.

Alternative Financing Plans

                                                    Plan 1              Plan 2

Earnings per share                     $1.20               $1.06

Explanation:

a) Data and Calculations:

                                                         Plan 1              Plan 2

Issue 7% bonds (at face value) $5,000,000      $3,400,000

Issue preferred $1 stock, $20 par     —                3,600,000

Issue common stock, $25 par   5,000,000         3,000,000

Income tax is estimated at 40% of income.

EBIT =                                           $750,000          $750,000

Interest on bonds                         350,000             238,000

Income before taxes                  $400,000           $512,000

Income tax                                     160,000             204,800

Net income                                 $240,000          $307,200

Preferred dividend                          -                     $180,000

Earnings available to common

stockholders                            $240,000           $127,200

Outstanding shares                   200,000             120,000

Earnings per share                          $1.20                 $1.06  

                    $1.20 ($240,000/200,000)           $1.06 ($127,200/120,000)

Preferred stock dividend rate = 5% ($1/$20 * 100)

Preferred stock dividend = $180,000 ($3,600,000/$20 * $1)

or 5% of $3,600,000

Rickett Corporation had a favorable direct-labor efficiency variance of $6,000 for the period just ended. The actual wage rate was $0.50 more than the standard rate of $12.00. If the company's standard hours allowed for actual production totaled 9,500, how many hours did the firm actually work

Answers

Answer:

Actual Quantity= 9,000 hours

Explanation:

Giving the following information:

Direct-labor efficiency variance= $6,000 favorable

Standard rate= $12.00.

Standard quantity=  9,500

To calculate the actual hours worked, we need to use the following formula.

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

6,000 = (9,500 - Actual Quantity)*12

6,000= 114,000 - 12Actual Quantity

12Actual Quantity = 108,000

Actual Quantity= 9,000 hours

A cleaning product company is having trouble with the pH control of one of their products. The product should be slightly basic but the pH is too high. What could the company try to correct the pH of the product

Answers

Answer:

sodium hydroxide to raise and acidic solutions to drop ph

Explanation:

how to lower and make highee

E Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 54,000 units per month is as follows: Per Unit Direct materials $ 49.60 Direct labor $ 9.50 Variable manufacturing overhead $ 2.50 Fixed manufacturing overhead $ 20.10 Variable selling & administrative expense $ 4.60 Fixed selling & administrative expense $ 22.00 The normal selling price of the product is $114.10 per unit. An order has been received from an overseas customer for 3,400 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.60 less per unit on this order than on normal sales. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $90.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:

Answers

Answer: $91120

Explanation:

The The monthly financial advantage (disadvantage) for the company will be calculated thus:

Incremental revenue = (3400 × $90.40) = $307360

Less: Incremental Cost

Direct material (3400 × $49.60) = $168640

Direct labor (3400 × $9.5) = $32300

Variable manufacturing overhead = (3400 × $2.5) = $8500

Variable selling & administrative expense = (3400 × $2) = $6800

Total incremental Cost = $216240

Therefore, the monthly financial advantage will be:

= $$307360 - $216240

= $91120

In this market, the equilibrium hourly wage is $ , and the equilibrium quantity of labor is thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a .

Answers

Answer:

The equilibrium hourly wage is the wage where the curve of supply of labor intersects with that of the demand for labor. The same goes for the equilibrium quantity of labor.

The equilibrium hourly wage is $10, and the equilibrium quantity of labor is 450 thousand workers.

If a Senator introduces a minimum hourly wage, this is considered a Price Floor.

Price floors are prices that that the government mandates that one cannot charge below for a good or service. If there is a price floor on cake for instance, a person is not allowed to charge less than that price floor for cake. The Senator's bill is therefore saying that people should not be paid less than $6 an hour.

Assume that as their leader, you wanted to influence minimum wage earners in a plastic bottle recycling center to work faster. Which one or two influence tactics are likely to be effective

Answers

Answer:

An effective leader is one who is able to influence his team through his communication and interpersonal skills.

In order to achieve greater speed and productivity at work, some influencing tactics that can be effective in a recycling center where workers earn a minimum wage may be associated with the leader's ability to empathize with the team, recognizing the difficulties and challenges of the work, but acting in a comprehensive, ethical way and helping them in their demands, exercising practical leadership, where the leader is the first to set a positive example of what he wants to achieve.

mprudential, Incorporated, has an unfunded pension liability of $750 million that must be paid in 25 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 10.0 percent, what is the present value of this liability

Answers

Answer:

PV= $69,221,998.63

Explanation:

Giving the following information:

Future Value= $750,000,000

Number of periods (n)= 25 years

Discount rate (i)= 10%

To calculate the present value, we need to use the following formula:

PV= FV / (1 + i)^n

PV= 750,000,000 / (1.1^25)

PV= $69,221,998.63

A company receives a 10%, 90-day note for $2,700. The total interest due on the maturity date is: (Use 360 days a year.)

Answers

Answer:

Interest amount = $67.5

Explanation:

Use the below formula to find the interest amount:

Interest amount = The value of note x Interest rate x (90 / 360)

Given value of note = $2700

Interest rate = 10%

Time = 90/360

Now plug the value in the above formula and solve for the interest due:

Interest amount = The value of note x Interest rate x (90 / 360)

Interest amount = 2700 x 10% x (90 / 360)

Interest amount = $67.5

The CEO of Kwikee Shoppe, a chain of convenience stores, believes that some of his managers aren’t making decisions as effectively as they could. He has hired you as a consultant to analyze the types of bias that could be causing poor decisions. If you can identify the biases that may cloud their judgment, then they can be made aware of these tendencies so they can improve their performance. You gather data about Kwikee Shoppe managers’ most recent decisions.
Stella is in charge of the western region, and she has a strong track record of opening new stores that perform well and closing stores that could not contribute satisfactorily to the bottom line. Lately, however, many of her new stores have had below average performance, and she has closed some stores that probably could have been turned around by putting a different store manager in charge, advertising more, or offering more specials on popular products. Nonetheless, Stella knows that she is great at her job. Which of the following would not be a way for Stella overcome this bias?
A. Consult with other regional managers for their opinion before closing stores.
B. Before closing a store, replace the manager with one from a successful store and revisit the decision in 90 days.
C. Create a checklist of items to ask before closing stores, providing weights to each item based on their importance.
D. Focus on the stores that she closed that would not have improved with a different manager in place, additional advertising, or sales.

Answers

Answer:

Kwikee Shoppe

The way that Stella would overcome this bias is:

D. Focus on the stores that she closed that would not have improved with a different manager in place, additional advertising, or sales.

Explanation:

The other listed actions would enable Stella to overcome her personal bias, which may be clouding her sense of judgment.  The focus on the stores that she had closed would only puff her ego instead of reducing bias.  To focus on the past when Stella is proud of her achievements cannot allow her to objectively review the situation in order to improve on her decisions and performance.

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