1) How far could Bezos have gone in Amazon's evolution without using information technology?
Jeff Bezos and Amazon's success can be largely attributed to the utilization of information technology. Without leveraging the power of technology, it is unlikely that Amazon would have achieved its current level of growth and dominance in the market. Information technology plays a crucial role in several aspects of Amazon's operations, enabling it to revolutionize the retail industry.
a) E-commerce Platform: Amazon's initial focus on selling books online laid the foundation for its e-commerce platform. Without the use of information technology, it would have been nearly impossible for Amazon to create an online marketplace that provides a seamless shopping experience to millions of customers worldwide. The website's design, user interface, and functionalities are all driven by information technology.
b) Supply Chain Management: Amazon's success heavily relies on its efficient supply chain management. Information technology allows Amazon to optimize inventory management, track shipments, and streamline logistics operations. Without such technological tools, it would have been extremely challenging for Amazon to handle the vast number of products, suppliers, and shipments effectively.
c) Customer Data and Personalization: Information technology enables Amazon to collect and analyze vast amounts of customer data, including purchase history, preferences, and browsing behavior. This data is crucial for Amazon's personalized recommendations, targeted marketing campaigns, and improving the overall customer experience. Without information technology, Amazon would not have been able to harness the power of data-driven insights to understand and cater to customer needs effectively.
d) Infrastructure and Scalability: Amazon's ability to scale its operations rapidly and handle immense online traffic is made possible by its sophisticated information technology infrastructure. The company invests heavily in cloud computing, data centers, and advanced technological systems to ensure its platforms remain robust, secure, and capable of handling the increasing demands of its growing customer base.
In summary, information technology is at the core of Amazon's business model and growth strategy. It has enabled Amazon to transform the retail landscape, expand into new markets, and provide innovative services to customers worldwide. Without the extensive use of information technology, Amazon's evolution and success as a global e-commerce giant would have been significantly limited.
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Consider the following categories of products: beer, candy bars, and running shoes
For each category, please do the following:
identify the basic level, superordinate, and subordinate levels in the taxonomic structure
identify prototypes for each category, and explain your choices
identify the specific features and associations consumers likely have with the prototypes
Beer Superordinate level and Alcohol Subordinate level and Pale Ale Basic level and Budweiser Prototype.
Candy bars Superordinate level: Candy Subordinate level: Chocolate Basic level: Snickers Prototype.
Running Shoes Superordinate level: Shoes Subordinate level: Athletic Basic level: Running shoes Prototype
Beer Superordinate level and Alcohol Subordinate level and Pale Ale Basic level and Budweiser Prototype.
A frothy, golden brew in a pint glass with a thick head, served ice-cold. The Budweiser clydesdales trot through the snow while a jingle plays in the background. The slogan "This Bud's for you" appears on the screen. For those who enjoy socializing with their friends, beer is often associated with this image. The image of a person who is carefree, sociable, and perhaps enjoys outdoor activities.
Candy bars Superordinate level: Candy Subordinate level: Chocolate Basic level: Snickers Prototype:
Chocolate, peanuts, and nougat covered in a red wrapper with a blue label. For those who need a quick energy boost or a pick-me-up in the middle of the day, Snickers is a well-known and beloved chocolate bar. Snickers is often associated with sports, especially football and other high-energy events.
Running Shoes Superordinate level: Shoes Subordinate level: Athletic Basic level: Running shoes Prototype:
A pair of lightweight, breathable shoes with a low profile. For athletes and people who are committed to staying in shape, running shoes are a must-have. Running shoes are often associated with health, fitness, and athleticism.
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ABC Company owns a bookstore and has to decide how many copies to order of a new book. The book’s retail price is 30 TL and the wholesale price is 22 TL. The publisher will buy back the retailer’s leftover copies at a full refund but the bookstore incurs a 4 TL in shipping and handling costs for each book returned to the publisher. The demand forecast can be represented by a normal distribution with a mean 250 and standard deviation 85.
a) The company will consider this book to sell more than 450 units. What is the probability of such amount of selling ?
b) The company believes that there is also a probability of selling the book less than 55 percent of the mean forecast. What is the probability of such amount of selling?
c) What order quantity maximizes the company’s expected profit?
d) Suppose that the company orders 250 copies of the book. What would be the fill rate?
Please clearly explain each process step by step in the solution.
(a) The probability of selling more than 450 units is approximately 0.0228 or 2.28%.
(b) The probability of selling less than 55% of the mean forecast is approximately 0.0926 or 9.26%.
(c) The order quantity with the highest expected profit would be the optimal choice.
(d) The unfilled demand would be 1 - 0.5 = 0.5 or 50%. The fill rate would be (1 - 0.5) * 100 = 50%.
a) To calculate the probability of selling more than 450 units, find the area under the normal distribution curve to the right of 450.
First, standardize the value 450 using the mean and standard deviation given:
Standardized value = (450 - mean) / standard deviation
Standardized value = (450 - 250) / 85
Standardized value = 2
Next, find the cumulative probability to the left of this standardized value using a standard normal distribution table or a statistical calculator. The cumulative probability to the left of 2 is approximately 0.9772.
Finally, subtract this cumulative probability from 1 to find the probability to the right of 450:
Probability = 1 - 0.9772
Probability = 0.0228
Therefore, the probability of selling more than 450 units is approximately 0.0228 or 2.28%.
b) To calculate the probability of selling less than 55% of the mean forecast, find the area under the normal distribution curve to the left of this value.
First, calculate 55% of the mean forecast:
55% of 250 = 0.55 * 250 = 137.5
Next, standardize this value using the mean and standard deviation:
Standardized value = (137.5 - mean) / standard deviation
Standardized value = (137.5 - 250) / 85
Standardized value = -1.3294
Using a standard normal distribution table or a statistical calculator, we find the cumulative probability to the left of -1.3294, which is approximately 0.0926.
Therefore, the probability of selling less than 55% of the mean forecast is approximately 0.0926 or 9.26%.
c) To determine the order quantity that maximizes the company's expected profit, consider the profit for each possible order quantity.
Let's denote the order quantity as Q. The demand follows a normal distribution with a mean of 250 and a standard deviation of 85. The profit can be calculated as follows:
Profit = (Revenue - Cost) * Quantity
Revenue = Retail Price * Min(Demand, Quantity)
Cost = Wholesale Price * Quantity + Shipping and Handling Costs * Max(0, Quantity - Demand)
To find the order quantity that maximizes the expected profit, we calculate the profit for different order quantities and choose the one with the highest expected profit.
Let's calculate the expected profit for different order quantities:
Order Quantity: 0
Profit = (30 - 22) * 0 - 4 * Max(0, 0 - 250)
= -4 * 250
= -1000
Order Quantity: 1
Profit = (30 - 22) * 1 - 4 * Max(0, 1 - 250)
= 8 - 4 * 249
= -988
Order Quantity: 2
Profit = (30 - 22) * 2 - 4 * Max(0, 2 - 250)
= 16 - 4 * 248
= -984
...
Continue calculating the profit for different order quantities until a pattern emerges.
By calculating the profit for different order quantities, you can identify the order quantity that maximizes the expected profit. The order quantity with the highest expected profit would be the optimal choice.
d) The fill rate is the percentage of demand that is satisfied by the available stock. To calculate the fill rate, we compare the demand with the available stock.
If the company ordered 250 copies of the book and the demand follows a normal distribution with a mean of 250 and a standard deviation of 85, we can calculate the fill rate as follows:
1. Calculate the z-score for the demand of 250 copies:
z-score = (250 - mean) / standard deviation
= (250 - 250) / 85
= 0
2. Using a standard normal distribution table or a statistical calculator, find the cumulative probability to the left of the z-score of 0. This gives us the proportion of demand that is below or equal to 250.
3. Subtract the cumulative probability from 1 to find the proportion of demand that is above 250. This represents the unfilled demand.
4. Calculate the fill rate by subtracting the unfilled demand from 1 and multiplying by 100 to get the percentage:
Fill rate = (1 - Unfilled demand) * 100
For example, if the cumulative probability to the left of the z-score of 0 is 0.5, it means that 50% of the demand is below or equal to 250. Therefore, the unfilled demand would be 1 - 0.5 = 0.5 or 50%. The fill rate would be (1 - 0.5) * 100 = 50%.
Remember to calculate the cumulative probability and fill rate using the actual values from the standard normal distribution table or a statistical calculator for a z-score of 0.
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A person borrows the amount of $1,000 to be repaid in 5 years at an interest rate of 20% per year. How much would this person pay at the end of year 5?
At the end of year 5, the person would need to pay back the borrowed amount of $1,000 plus the interest accrued. The total payment at the end of year 5 will include both the principal amount and the accumulated interest.
To calculate the total payment at the end of year 5, we need to consider the interest rate and the duration of the loan. In this case, the person borrowed $1,000 at an interest rate of 20% per year for 5 years.
The interest accrued each year can be calculated by multiplying the principal amount by the interest rate. In this case, the annual interest is $1,000 multiplied by 20%, which equals $200. Since the loan lasts for 5 years, the total interest accrued over the 5-year period is $200 multiplied by 5, which equals $1,000.
Therefore, at the end of year 5, the person would need to pay back the initial borrowed amount of $1,000 plus the accumulated interest of $1,000, resulting in a total payment of $2,000. This payment includes both the repayment of the principal amount and the interest that has accrued over the 5-year period.
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When a floor manager empowers this team members, his power:
a. multiplies in direct proportion to the number of people receiving a power share.
b. increases.
c. remains approximately the same.
d. decreases.
When a floor manager empowers his team members, his power "increases", hence option b is correct.
To empower someone means to give them the power, authority, or confidence to do something, this process is known as empowerment. In a workplace context, this means allowing employees to make decisions, take ownership of tasks, and work autonomously to achieve team goals. A floor manager, or floor supervisor, is responsible for overseeing the day-to-day operations of a specific area of a business, such as a department or floor. Part of their role is to empower team members to work independently and collaboratively to achieve their goals. By empowering team members, a floor manager can create a more efficient and effective team. This can lead to higher morale, increased productivity, and better results for the business as a whole. Additionally, when team members feel empowered, they are more likely to take ownership of their work and be more invested in the success of the team and the business as a whole.Therefore, when a floor manager empowers his team members, his power increases.
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Many companies have switched from absorption costing to variable costing for internal reporting: Select one: a. to comply with external reporting requirements as required by GAAP b. to increase bonuses for managers c. so the denominator level is more accurate d. to reduce the undesirable incentive to build up inventories that would show higher operating income
Many companies have switched from absorption costing to variable costing for internal reporting to reduce the undesirable incentive to build up inventories that would show higher operating income.
The decision to switch from absorption costing to variable costing for internal reporting is often driven by the desire to eliminate the impact of fixed manufacturing overhead costs on inventory valuation. Under absorption costing, fixed manufacturing overhead costs are allocated to units produced and included in the cost of inventory. This means that as inventory levels increase, more fixed overhead costs are allocated and reported as part of the cost of goods sold.
By using variable costing, fixed manufacturing overhead costs are treated as period costs and are not allocated to units produced. This eliminates the incentive for managers to build up inventories to reduce reported operating income. Instead, variable costing focuses on the direct costs incurred to produce units, such as direct materials and direct labor.
The switch to variable costing provides a more accurate representation of the costs incurred by the company for internal reporting purposes. It helps align the reported costs with the actual costs incurred to produce the goods and allows for better analysis and decision-making based on the true cost structure of the company.
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1. Explicit and Implicit Costs Juan and Julia contributed $50,000 of their own money to the company They bought equipment for $3,000 They hired an employee with a salary of $20,000 Juan quit his job where he earned $30,000 Julia quit part of her job where she earned $15,000 · Purchases of materials for the business were $10,000 · At the end of the year the value of the equipment is $28,000 · A business loan of $100,000 pays 6% annual interest The normal profit based on the above data from running the business is $30,000. True or false?
Explicit and Implicit Costs The normal profit based on the given data from running the business is $30,000. False.An explicit cost is the money that the business spends, which includes the wages paid to employees, the rent, and the cost of supplies.
When the business purchases a new piece of equipment or hires a new employee, this is a clear cost that is easily measured and accounted for. The implicit cost is a little more complicated. It is a cost that a company pays but that is not explicitly stated in the business records. When a company uses its own funds to purchase equipment or pay salaries, it incurs implicit costs.
The normal profit based on the above data from running the business is $30,000. False, it is a loss as we can calculate it as follows:
Total explicit costs = $50,000 + $3,000 + $20,000 + $10,000 + $6,000 (interest expense) = $89,000 Total implicit costs = $30,000 + $15,000 + $30,000 = $75,000Total revenue = $0Therefore, normal profit = Total Revenue - Total Explicit Costs - Total Implicit Costs = $0 - $89,000 - $75,000 = ($164,000)
This means that the company is operating at a loss of $164,000.
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Sunscreen and beach towels are complementary goods. If the price of sunscreen increases, ceteris paribus, _____.(1 point)
1. the income of consumers will decrease the income of consumers will decrease
2. the quantity demanded of beach towels will increase for every possible price
3. the quantity demanded of beach towels will decrease for every possible price(I think it is this one)
4.the income of consumers will increase
Sunscreen and beach towels are complementary goods. If the price of sunscreen increases, ceteris paribus, the quantity demanded of beach towels will decrease for every possible price.
Complementary goods are products or services that people use together. For example, automobiles and gasoline, as well as hot dogs and buns, are complementary goods. When two or more goods are complementary, an increase or decrease in the price of one will result in an opposite movement in the demand for the other good.
Given that sunscreen and beach towels are complementary goods. Thus, if the price of sunscreen increases, the quantity demanded of beach towels will decrease for every possible price. The key here is that the increase in the price of sunscreen, with all other things constant, causes the quantity demanded of beach towels to fall. This is because the two goods are complementary; sunscreen is usually used with beach towels.The price of sunscreen has a direct effect on the demand for beach towels, but not the other way around. This is why option 3, which states that the quantity demanded of beach towels will decrease for every possible price, is the correct answer. The demand curve for beach towels shifts to the left, indicating that people demand less of it at every possible price as a result of the increase in sunscreen prices.
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Ahmed contributed cash of $20,000 into the partnership. The journal entry to record this transaction is: Cash $20,000 Dr: partnership $20,000 Cr
True
False
Sure. The journal entry to record Ahmed's contribution of cash into the partnership is ; Debit: Cash $20,000 Credit: Ahmed, Capital $20,000.
The debit to Cash increases the asset account Cash by $20,000. The credit to Ahmed, Capital increases the owner's equity account Ahmed, Capital by $20,000. This entry reflects the fact that Ahmed has contributed $20,000 of cash to the partnership, which has increased the partnership's assets and equity. The journal entry you provided is incorrect because it credits Partnership instead of Ahmed, Capital. Partnership is a general ledger account that represents the total assets and liabilities of the partnership. Ahmed, Capital is a specific ledger account that represents Ahmed's ownership interest in the partnership.
Here is a breakdown of the journal entry:
Debit: Cash $20,000
This entry increases the asset account Cash by $20,000.
Credit: Ahmed, Capital $20,000
This entry increases the owner's equity account Ahmed, Capital by $20,000.
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On September 1, 2013 Apex Corp. issued 25,000 shares of $0.50 par value common stock for $1.25 per share.
Record the stock issue in general journal form.
On August 15, 2013 Troy Ellison accepted 1,500 shares of $2.50 par common stock at par value for legal services he provided in the formation of XYZ Corp.
Make the journal entry to record the transaction.
On May 12, 2012 Wiley Corporation declared a $75,000 cash dividend on its common stock. The dividend is to be paid on July 1, 2012.
Prepare the journal entries to record the transaction on May 12th & July 1st.
Journal entry for stock issue: Date Accounts Debit Credit Sep 1, 2013Cash 31250 ($1.25 × 25,000) Common Stock 12500 ($0.50 × 25,000) Premium on Common Stock 18750Explanation:Issuing stock for more than the par value generates the premium on the common stock.
Journal entry for accepting shares: Date Accounts Debit Credit Aug 15, 2013Legal Services Expense 3750 ($2.50 × 1,500) Common Stock 3750Explanation:Troy Ellison accepted 1,500 shares of $2.50 par common stock at par value for legal services he provided in the formation of XYZ Corp. The journal entry for accepting 1,500 shares of $2.50 par common stock at par value is recorded as shown above.
Journal entry for the declaration of cash dividend: Date Accounts Debit Credit May 12, 2012Retained Earnings 75,000 Dividends Payable 75,000July 1, 2012Dividends Payable 75,000 Cash 75,000 On May 12, 2012, Wiley Corporation declared a $75,000 cash dividend on its common stock.
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.Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 69,960 units during the year, but by September 30 only the following activity had been reported.
Units
Inventory, January 1 0
Production 2,000
Sales 2,000
Inventory, September 30 400
The division can rent warehouse space to store up to 1,000 units. The minimum inventory level that the division should carry is 50 units. Mr. Cavalas is aware that production must be at least 200 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 1,500 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 600 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost.
Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? (The basic formula for computing the required production for a period in a company is Expected sales + Desired ending inventory - Beginning inventory = Required production.) Show computations and explain your answer. Will the number of units scheduled for production affect the division's reported income or loss for the year? Explain.
Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduled for production during the last quarter? (See the formula in 1 above.) Explain.
Identify the ethical issues involved in the decision Mr. Cavalas must make about the level of production for the last quarter of the year.
To determine the number of units that should be scheduled for production during the last quarter of the year, we can use the formula: Expected sales + Desired ending inventory - Beginning inventory = Required production.
Given information:
- Expected sales for the last quarter: 600 units
- Beginning inventory: 400 units
- Desired ending inventory: The minimum inventory level that should be carried is 50 units.
Using the formula, we can calculate the required production:
Required production = 600 + 50 - 400 = 250 units
Therefore, 250 units should be scheduled for production during the last quarter of the year.
The number of units scheduled for production will affect the division's reported income or loss for the year. In variable costing, fixed manufacturing overhead is not included in the product cost. Therefore, if more units are produced, the fixed manufacturing overhead cost will be spread over a larger number of units, resulting in lower per-unit fixed manufacturing overhead and potentially higher reported income. Conversely, if fewer units are produced, the fixed manufacturing overhead cost will be spread over a smaller number of units, resulting in higher per-unit fixed manufacturing overhead and potentially lower reported income.
If the division is using absorption costing and the divisional manager wants to maximize the division's operating income for the year, the number of units scheduled for production during the last quarter should be calculated based on the absorption costing formula: Expected sales + Desired ending inventory - Beginning inventory. This is because absorption costing includes fixed manufacturing overhead in the product cost. By producing more units, the fixed manufacturing overhead cost will be spread over a larger number of units, resulting in a lower per-unit fixed manufacturing overhead and potentially higher reported operating income.
The ethical issues involved in Mr. Cavalas' decision about the level of production for the last quarter include:
1. Reporting accuracy: Mr. Cavalas needs to ensure that the reported income or loss for the year is accurately represented, regardless of the costing method used.
2. Integrity and transparency: Mr. Cavalas should make decisions based on ethical principles, maintaining transparency and ensuring that stakeholders have access to accurate and reliable financial information.
3. Conflict of interest: As the divisional manager, Mr. Cavalas may face a conflict of interest if his decision on production levels is influenced by personal gain, such as maximizing his bonus, rather than acting in the best interest of the company and its stakeholders.
4. Compliance with accounting standards: Mr. Cavalas should ensure that the division's accounting practices comply with relevant accounting standards and regulations and that the decision on production levels does not violate any ethical or legal requirements.
Overall, Mr. Cavalas must make an ethical decision by considering the financial impact, stakeholder interests, and adherence to accounting standards while maintaining integrity and transparency in reporting.
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points Save Answer Assume today's settlement price on a CME EUR futures contract is $1.3146/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next day' settlement price is $1.3051. Calculate the balance of the account at the end of the day. (USD, no cents)
Today's settlement price on a CME EUR futures contract is $1.3146/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next day's settlement price is $1.3051
.To find: Calculate the balance of the account at the end of the day solution:
Daily Price Limit of CME Euro FX futures contract
= $0.0050/EUR (Currency Futures)The price movement of the futures contract
= $1.3146/EUR - $1.3051/EUR
= $0.0095/
EURAs 1 Euro futures contract consists of 125,000 Euros,
thus Dollar value of 1 Euro = 1.3051 * 125,000
= $163,137.5
Dollar value of the short position = 163,137.5
The profit and loss per contract would be = 0.0095 * 125,000
= $1,187.5
As the short position was taken, it resulted in a profit:
Profit = 1,187.5 dollars
Therefore, new balance in the account will be the sum of old balance and profit
= $1,700 + $1,187.5 = $2887.5
Thus, the balance of the account at the end of the day is $2,887.5 (USD, no cents).
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You have the following investment opportunities with an initial investment outlay of R375 000.00: Interest rate Investment A 11.86% Investment B 14.06% Investment C 11.25% Investment D 10.00% REQUIRED: Normal view Formula view Year 0 375 000 375 000 375 000 375 000 Year 1 Year 2 Year 3 - Year 4 the above in an Excel workbook and calculate the future value of each of the investment opportunities by making use of Excel formulas. Give your answer in: 100,000 100,000 100,000 100,000 22,500 100,000 37,500 15,000 150,000 100,000 37,500 100,000 (4 marks) (4 marks) Based on the calculations, which will be the best investment opportunity and why? (2 marks)
It outperforms the other investment opportunities due to its higher interest rate of 14.06%. Therefore, investing in Investment B would yield the best returns compared to the other options.
Based on the provided information, the best investment opportunity would be Investment B with an interest rate of 14.06%. Here's the step-by-step explanation:
1. Calculate the future value of Investment A:
- Year 1: 375,000 + (375,000 * 11.86%) = 420,975
- Year 2: 420,975 + (420,975 * 11.86%) = 470,985.57
- Year 3: 470,985.57 + (470,985.57 * 11.86%) = 525,812.79
- Year 4: 525,812.79 + (525,812.79 * 11.86%) = 585,897.58
2. Calculate the future value of Investment B:
- Year 1: 375,000 + (375,000 * 14.06%) = 428,625
- Year 2: 428,625 + (428,625 * 14.06%) = 489,145.88
- Year 3: 489,145.88 + (489,145.88 * 14.06%) = 556,900.24
- Year 4: 556,900.24 + (556,900.24 * 14.06%) = 632,636.46
3. Calculate the future value of Investment C:
- Year 1: 375,000 + (375,000 * 11.25%) = 417,187.50
- Year 2: 417,187.50 + (417,187.50 * 11.25%) = 464,990.63
- Year 3: 464,990.63 + (464,990.63 * 11.25%) = 519,238.07
- Year 4: 519,238.07 + (519,238.07 * 11.25%) = 580,436.88
4. Calculate the future value of Investment D:
- Year 1: 375,000 + (375,000 * 10.00%) = 412,500
- Year 2: 412,500 + (412,500 * 10.00%) = 453,750
- Year 3: 453,750 + (453,750 * 10.00%) = 499,125
- Year 4: 499,125 + (499,125 * 10.00%) = 548,037.50
Based on these calculations, Investment B has the highest future value after four years, reaching R632,636.46.
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Regarding the 4 risk response strategies – Avoidance, Mitigation, Transference, Acceptance,
a. Which strategy should not be applied for high-ranking risks, and why? (2 marks)
b. Which strategy may not be applied if the root causes are not known, and why? (2 marks)
c. Suppose ‘inexperienced project manager’ is a risk in a particular project. To cater to this risk, one possible action is to replace the project manager with a more experienced person. Briefly explain which risk response strategy you are applying? (3 marks)
d. Suppose replacing the project manager is not possible, describe another action plan based on a different risk response strategy to the one in (c). (3 marks)
The strategy that should not be applied for high-ranking risks is avoidance. The strategy that may not be applied if the root causes are not known is mitigation. The risk response strategy that is being applied is Transference. Another action plan that could be applied is Acceptance.
a. The strategy that should not be applied for high-ranking risks is avoidance. Because it is not possible to completely avoid or eliminate high-ranking risks, it is better to focus on managing and mitigating them.
b. The strategy that may not be applied if the root causes are not known is mitigation. This is because mitigation requires identifying the root causes of the risk and developing a plan to reduce its impact or probability. Without knowledge of the root causes, mitigation may not be effective.
c. If ‘inexperienced project manager’ is a risk in a particular project, and to cater to this risk, one possible action is to replace the project manager with a more experienced person, the risk response strategy that is being applied is Transference. In this case, the risk is being transferred to a third party or outside entity (i.e., the new project manager).
d. Suppose replacing the project manager is not possible. In that case, another action plan based on a different risk response strategy that could be applied is Acceptance. The project manager can accept the risk and work to minimize its impact by implementing contingency plans or backup procedures to reduce the consequences if the risk does occur.
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Your company, (insert a company name of your choice here), is considering an opportunity to develop and introduce a new product which will trick kids into eating healthy at breakfast. The product is a breakfast "treat" which is actually made from all healthy ingredients and contains no added sugar…..and it tastes good. Based on your superior knowledge of the market, you think that this product line will last a minimum of 5 years before the kids catch on and start eating sugar-coated sugar cubes again for breakfast (when I was a kid, there was actually a cereal called Super Sugar Crisp).
Getting up and running will cost the company $1,000,000 for capital equipment; there was an additional $400,000 for development expenses. The equipment is expected to have a useful life of 5 years (what a coincidence). The expected sales volumes are:
Year 1: 400,000
Year 2: 700,000
Year 3: 900,000
Year 4: 850,000
Year 5: 600,000
Your assignment is to figure out if this is a good idea and, of course, maximize your wealth.
A few facts:
Unit cost is $1.250
Profit margin is 37% on sell price
Corporate income tax rate is 25.8%
The company’s cost of debt is 8%
You will finance the entire $1,000,000 but you do have it in cash if required; the financing will be at 9% and only 1 payment per year (5 total payments) for simplicity.
A few questions
Is this a worthwhile program to invest in?
What assumptions did you make?
Are there any alternatives at the end of 5 years?
Please use excel and explain the steps (Where numbers are coming from and which formulas are used in each step)
To evaluate the investment in the new breakfast product, let's calculate the net present value (NPV) and internal rate of return (IRR) using Excel.
First, we need to calculate the annual cash flows for each year, taking into account the sales volumes, unit cost, profit margin, and tax rate.
Year 1: 400,000 * ($1.25 * 0.37) * (1 - 0.258) = $69,860
Year 2: 700,000 * ($1.25 * 0.37) * (1 - 0.258) = $122,401
Year 3: 900,000 * ($1.25 * 0.37) * (1 - 0.258) = $157,738
Year 4: 850,000 * ($1.25 * 0.37) * (1 - 0.258) = $149,457
Year 5: 600,000 * ($1.25 * 0.37) * (1 - 0.258) = $105,328
Next, we need to calculate the annual cash flows for the capital equipment and development expenses. Since these costs occur at the beginning, they will be considered as cash outflows (negative values) in year 0.
Year 0: -$1,000,000 - $400,000 = -$1,400,000
Now, let's calculate the discounted cash flows using the company's cost of debt (8%) as the discount rate.
Year 0: -$1,400,000 / (1 + 0.08)^0 = -$1,400,000
Year 1: $69,860 / (1 + 0.08)^1 = $64,643
Year 2: $122,401 / (1 + 0.08)^2 = $106,997
Year 3: $157,738 / (1 + 0.08)^3 = $127,238
Year 4: $149,457 / (1 + 0.08)^4 = $113,149
Year 5: $105,328 / (1 + 0.08)^5 = $79,150
To calculate the NPV, sum up all the discounted cash flows:
NPV = -$1,400,000 + $64,643 + $106,997 + $127,238 + $113,149 + $79,150
NPV = -$908,823
To calculate the IRR, use the IRR function in Excel on the cash flows:
IRR = 14.3%
Based on the NPV of -$908,823 and the IRR of 14.3%, this investment does not appear to be worthwhile. The negative NPV suggests that the project's cash flows are not sufficient to cover the initial investment and generate a positive return. The IRR of 14.3% is lower than the cost of debt (8%), indicating that the project's rate of return is not attractive compared to alternative investment options.
Assumptions made include the accuracy of sales volume projections, constant unit cost and profit margin, stable tax rates, and the discount rate based on the cost of debt.
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"i’ve been at my job for four days, and i’ve already met all my coworkers!" amber says. which type of business does ember most likely work for?
Based on Amber's statement, it is likely that she works for a small-sized business or a company with a limited number of employees.
In larger organizations, it is generally challenging to meet and become acquainted with all coworkers within just four days, as there are typically numerous departments, teams, and employees spread across different locations or floors.
In a small business or a startup, with a smaller workforce, it is more feasible to interact with and get to know everyone in a short period. The close-knit environment of such organizations often allows for easier and quicker integration into the team.
However, it's important to note that the context provided is limited, and there could be other factors at play. It's always advisable to gather more information to make a more accurate determination about the type of business Amber works for.
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Gus was recently laid off, and he is struggling to pay his bills and make ends meet. Gus is meeting with a staffing agency later in the week. As he prepares for the meeting, what should Gus say about his former company? Multiple Choice "I was able to learn from this experience. I now know what not to do in my next job." "I am so glad that job is over. I am surprised they were able to stay in business that long." "Whatever my next job is, please make it with a manager who cares about his employees and not just the bottom line." "My time there was time wasted. They kept us so isolated that we never even met the clients."
Out of the provided options, the most appropriate statement for Gus to say about his former company as he meets with the staffing agency would be "I was able to learn from this experience. I now know what not to do in my next job." The correct answer is option a.
This statement demonstrates a positive and reflective attitude on Gus's part. It indicates that he has taken lessons from his previous job and is using them to inform his future choices. It shows a willingness to grow and improve based on past experiences
. By emphasizing the learning aspect, Gus presents himself as someone who can adapt and make better decisions in his next job, which can be seen as a positive quality by the staffing agency.
The correct answer is option a.
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Complete question
Gus was recently laid off, and he is struggling to pay his bills and make ends meet. Gus is meeting with a staffing agency later in the week. As he prepares for the meeting, what should Gus say about his former company? Multiple Choice
a. "I was able to learn from this experience. I now know what not to do in my next job."
b. "I am so glad that job is over. I am surprised they were able to stay in business that long."
c. "Whatever my next job is, please make it with a manager who cares about his employees and not just the bottom line."
d. "My time there was time wasted. They kept us so isolated that we never even met the clients."
The Harris Company is the lessee on a four-year lease with the following payments at the end of each year.
Year 1: $20,000
Year 2: $25,000
Year 3: $30,000
Year 4: $35,000
An appropriate discount rate is 7 percentage. yielding a present value of $91,718.
a-1. If the lease is an operating lease, what will be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will be the initial value of the lease liability?
a-3. If the lease is an operating lease, what will be the lease expense shown on the income statement at the end of year 1?
a-4. If the lease is an operating lease, what will be the interest expense shown on the income statement at the end of year 1?
a-5. If the lease is an operating lease. what will be the amortization expense shown on the income statement at the end of year 1? (Leave no cells blank- be certain to enter "0" wherever required.)
b-1. If the lease is a finance lease, what will be the initial value of the right-of-use asset?
b-2. If the lease is a finance lease, what will be the initial value of the lease liability?
b-3. If the lease is a finance lease, what will be the lease expense shown on the income statement at the end of year 1?
b-4. If the lease is a finance lease, what will be the interest expense shown on the income statement at the end of year 12 (Round your answer to the nearest dollar amount.) A Interest expense b-5. if the lease is a finance lease, what will be the amortization expense shown on the income statement at the end of year 17 (Round your answer to the nearest dollar amount.)
a-1. If the lease is an operating lease, the initial value of the right-of-use asset will be $0. In an operating lease, the lessee does not recognize the right-of-use asset on their balance sheet.
a-2. If the lease is an operating lease, the initial value of the lease liability will be $0. In an operating lease, the lessee does not recognize the lease liability on their balance sheet.
a-3. If the lease is an operating lease, the lease expense shown on the income statement at the end of year 1 will be $20,000. This is the payment made for the year.
a-4. If the lease is an operating lease, there will be no interest expense shown on the income statement at the end of year 1. In an operating lease, the lessee does not recognize interest expense.
a-5. If the lease is an operating lease, there will be no amortization expense shown on the income statement at the end of year 1. In an operating lease, the lessee does not amortize the right-of-use asset.
b-1. If the lease is a finance lease, the initial value of the right-of-use asset will be $91,718. This is the present value of the lease payments.
b-2. If the lease is a finance lease, the initial value of the lease liability will also be $91,718. This is the present value of the lease payments.
b-3. If the lease is a finance lease, the lease expense shown on the income statement at the end of year 1 will be $20,000. This is the payment made for the year.
b-4. If the lease is a finance lease, the interest expense shown on the income statement at the end of year 1 will be $6,423. This is calculated as the beginning lease liability multiplied by the discount rate of 7%.
b-5. If the lease is a finance lease, the amortization expense shown on the income statement at the end of year 1 will be $13,577. This is calculated as the lease payment minus the interest expense.
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.Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below:
Whitman Company Income Statement Sales (39,000 units x $40.60 per unit) $1,542,800
Cost of goods sold (38,000 units x $24 per unit) 912,000
Gross margin 630,800
Selling and administrative expenses 437,000
Net operating income $193,800
The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $24 per unit product cost given above is computed as follows:
Direct materials $11
Direct labor 5
Variable manufacturing overhead 3
Fixed manufacturing overhead ($240,000 x 48,000 units) 5
Absorption costing unit product cost $24
1. Prepare the company's income statement in the contribution format using variable costing.
2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement.
1. Whitman Company Income Statement (Variable Costing)
Sales: (39,000 units x $40.60 per unit) $1,542,800
Variable Expenses:
- Direct materials: (39,000 units x $11 per unit) $429,000
- Direct labor: (39,000 units x $5 per unit) $195,000
- Variable manufacturing overhead: (39,000 units x $3 per unit) $117,000
- Variable selling and administrative expenses: (39,000 units x $4 per unit) $156,000
Total Variable Expenses: $897,000
Contribution Margin: $1,542,800 - $897,000 = $645,800
Fixed Expenses:
- Fixed manufacturing overhead: $240,000
- Fixed selling and administrative expenses: $285,000
Total Fixed Expenses: $525,000
Net Operating Income: $645,800 - $525,000 = $120,800
2. Reconciliation of Net Operating Income:
Absorption Costing Net Operating Income: $193,800
Variable Costing Net Operating Income: $120,800
Difference = Absorption Costing Net Operating Income - Variable Costing Net Operating Income
= $193,800 - $120,800
= $73,000
The difference of $73,000 represents the increase in net operating income under absorption costing compared to variable costing. This difference is due to the fixed manufacturing overhead being absorbed into the product cost under absorption costing. Since the company produced more units (39,000) than it sold (38,000), the fixed manufacturing overhead allocated to each unit is higher, resulting in a higher product cost and higher net operating income under absorption costing.
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Uber - Riding the Gig Economy 1. Apply the five steps of the Planning Process to Uber's development of it's app-driven online cab service. 2. Outline the Strategic, Tactical and Functional plans Uber has concerning its new self-driving car program. Show at least one plus and one minus within each of the plans. 3. Plans rarely absolutely go to plan! It is impossible as variables in the environment keep changing and impact the company in different ways. What planning tools might Uber use to deal with some of the unexpected issues Uber has faced with its online cab business model. 4. How might Uber use Management by Objectives to work with municipalities and provinces to create the infrastructure and legislation needed to achieve its self-driving car goals?
Applying the five steps of the Planning Process to Uber's development of its app-driven online cab service involved establishing objectives, such as creating a convenient ride-hailing service.
They developed premises, recognizing the potential demand and technological advancements. Uber generated alternative courses of action, exploring driver recruitment and pricing models. They evaluated alternatives, considering market size and regulatory challenges. Finally, they selected the best alternative and implemented it by launching their app-based service.
Uber's strategic plan for self-driving cars involves disruption and increased safety, but potential job losses and regulatory challenges are drawbacks. Their tactical plan includes testing, partnerships, and pilot programs, with benefits of innovation and concerns of public skepticism. The functional plan focuses on hiring skilled personnel and building infrastructure, with advantages of attracting talent and challenges of high costs.
Planning tools Uber could employ to address unexpected issues include scenario planning to anticipate disruptions, contingency planning to mitigate impacts, and risk management to identify and manage risks and uncertainties.
Using Management by Objectives, Uber can work with municipalities and provinces by setting clear objectives, establishing performance metrics, fostering communication, and adapting objectives as needed to achieve self-driving car goals. This approach facilitates collaboration and alignment with government entities.
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Porcelain Computer Company is considered purchasing two different types of servers. Server A will generate net cash inflows of $26,000 per year and have zero residual value. Server's A's estimated useful life is three years, and it costs $42,000.
Server B will generate net cash inflows of $27,000 in year 1, $14,000 in year 2, and $1,000 in year 3. Server B has a $4,000 residual value and an estimated useful life of three years. Server B also costs $42,000. Porcelain Computer Company's required rate of return is 12%.
Calculate the accounting rate of return (ARR) for both server investments.
Server A __________ /______= ____ %
Server B __________ /______= ____ %
Calculate the net present value for both server investments.
Server A= $____
Server B= $____
Calculate the internet rate of return (IRR) for both server investments.
Server A= ___%
Server B=_____%
To calculate the accounting rate of return (ARR) for both server investments, we use the following formula:
ARR = Average Annual Net Income / Initial Investment * 100
For Server A:
The average annual net income is $26,000, and the initial investment is $42,000. Therefore:
ARR for Server A = $26,000 / $42,000 * 100 = 61.9%
For Server B:
To calculate the average annual net income, we need to determine the total net income over the useful life and divide it by the number of years:
Total net income for Server B = $27,000 + $14,000 + $1,000 = $42,000
Average annual net income for Server B = $42,000 / 3 = $14,000
ARR for Server B = $14,000 / $42,000 * 100 = 33.3%
Next, let's calculate the net present value (NPV) for both server investments. The NPV is calculated by discounting the net cash flows to their present value and subtracting the initial investment.
For Server A:
The net cash inflow is $26,000 per year for three years, and the required rate of return is 12%. The initial investment is $42,000.
NPV for Server A = -$42,000 + ($26,000 / (1 + 0.12)^1) + ($26,000 / (1 + 0.12)^2) + ($26,000 / (1 + 0.12)^3)
NPV for Server A = -$42,000 + $23,214 + $20,703 + $18,415 = $20,332
For Server B:
The net cash inflows are $27,000, $14,000, and $1,000 for years 1, 2, and 3, respectively. The residual value is $4,000. The required rate of return is 12%, and the initial investment is $42,000.
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Please answer only 3 of the following 5 questions in short paragraphs, between 250-500 words for each question. The questions cover material from chapters 11, 13, 14 and 15. 1. Because it is worried about inflation in the near term, the government has decided to restrict aggregate demand. Which tool of fiscal policy (or combination) do you believe it should use: government purchases, taxes, or transfers? Why? a. | 2. The president has just retained you to advise him on whether to change government fiscal policy. You understand that any change in spending or taxation that the administration proposes will have to be considered for a number of months by Congress, and then that the full impact of the policy change on the economy will not occur until several months after it is enacted. Under these circumstances, what is your advice? 3. The Fed has three conventional tools that it can use to change the money supply under normal economic conditions: open-market operations, changes in the banks' required reserve ratio, and changes in policies regarding lending to member banks. Which do you think is the most useful, the least useful? Does the Fed really need three tools-wouldn't one do just as well? 4. What should government do to avoid another Great Recession like the last one during 2007-09 period? What policies have been undertaken? Are they adequate? 5. Do you think monetary or fiscal policy is likely to be the more effective tool of stabilization policy? Why?
As the government is worried about inflation in the near term, the use of which tool of fiscal policy or combination should it use: government purchases, taxes, or transfers? Why?The tool of fiscal policy the government should use depends on the state of the economy.
Suppose the economy is booming and inflation is increasing, a restriction in aggregate demand will be a good policy. This means that the government should reduce the amount of money in circulation by increasing taxes or reduce transfer payments. This policy will decrease the disposable income of people.
On the other hand, if the economy is in a recession, and aggregate demand is low, the government should increase its spending or reduce taxes to stimulate the economyUnder the given circumstance, my advice to the president would be that it is not wise to make changes in the government fiscal policy immediately.
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Please show all your work and answer the questions for full marks.
A small business owner is contemplating the addition of another product line. Capacity increases and equipment will result in an increase in annual fixed costs of $50,000. Variable costs will be $25 per unit.
(i) What unit selling price must the owner obtain to break-even on a volume of 2,500 units a year?
(ii) Because of market conditions, the owner feels a revenue of $47 is preferred to the value determined in part a. What volume of output will be required to achieve a profit of $16,000 using this revenue?
The volume of output required to achieve a profit of $16,000 using a revenue of $47 is approximately 2,200 units.
(i) The Break-Even Point (BEP) in units can be determined using the following formula:
BEP (in units) = Fixed costs / (Price per unit - Variable costs per unit)
Given,
Fixed cost increase = $50,000
Variable cost = $25 per unit
BEP (in units) = $50,000 / ($P - $25) = 2,500 units
Therefore, $P - $25 = $20
Thus, selling price per unit required to break-even on a volume of 2,500 units a year is
$P = $20 + $25 = $45.
(ii) In order to calculate the required output volume, we use the following formula:
Target profit = (Price per unit - Variable cost per unit) × Volume - Fixed costs
Given,
Price per unit = $47
Variable cost per unit = $25
Fixed costs = $50,000
Target profit = $16,000
Putting the values in the formula, we get:
$16,000 = ($47 - $25) × Volume - $50,000
Thus, ($47 - $25) × Volume = $66,000
Therefore, the required volume of output to achieve a profit of $16,000 using a revenue of $47 is
Volume = $66,000 / ($47 - $25) = 2,200 units (approx.).
Thus, the volume of output required to achieve a profit of $16,000 using a revenue of $47 is approximately 2,200 units.
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When the Trump administration decided to place high tariffs on import, many economists criticized the move stating that it will lead to a net national loss. Given that the U.S. is a large economy, what would be your take on the matter? Do you think tariffs would always lead to a net national loss for the U.S.?
When the Trump administration decided to place high tariffs on import, many economists criticized the move stating that it will lead to a net national loss. Given that the U.S. is a large economy, tariffs would not always lead to a net national loss for the U.S. because tariffs will only lead to a net national loss if the tariffs reduce the gains from trade.
There are cases where the imposition of tariffs would lead to a net national gain, especially when the imposition of tariffs is in response to the unfair trade policies of other countries. If other countries unfairly subsidize their firms or industries to export goods to the U.S. at lower prices, the U.S. can respond by imposing tariffs on the goods. The imposition of tariffs would make the goods more expensive, and the demand for the imported goods would decrease. The increase in the prices of imported goods would make domestic goods more competitive, increasing the demand for domestic goods. The increase in the demand for domestic goods would result in an increase in the production of domestic goods. The increase in production would result in an increase in employment in the domestic industry that produces the goods.
Therefore, tariffs would not always lead to a net national loss for the U.S. because the imposition of tariffs in response to the unfair trade policies of other countries can result in a net national gain. The gains would arise from the increase in production of domestic goods that result from the imposition of tariffs on imported goods.
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All costs of a product that are considered assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold is called? Owentoriable costs O Product costs Variable costs Foodcasts
Product costs are the costs of a product that are considered assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold.
Product costs are the direct costs that a company incurs in manufacturing its products. Direct materials, direct labor, and factory overhead are the three types of product costs that are considered assets in a company's balance sheet when the costs are incurred and that are expensed as cost of goods sold only when the product is sold. These costs are called product costs because they are directly related to the production of goods and services.
An example of a product cost is the cost of goods sold (COGS). COGS refers to the direct costs associated with producing a product, such as the cost of materials, labor, and overhead. These costs are considered assets when they are incurred, and they are expensed as cost of goods sold only when the product is sold.
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Wildhorse Company purchased a delivery truck for $40,000 on July 1, 2022. The truck has an expected salvage value of $4,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2022 and 12,000 in 2023. Wildhorse uses the straight-line method of depreciation. (a) Your answer is partially correct. Compute depreciation expense for 2022 and 2023. Depreciation Expense 2022 2023 Straight-line method $ $ $ 4500 Prepare the journal entry to record 2022 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Prepare the journal entry to record 2023 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Show how the truck would be reported in the December 31, 2023, balance sheet. WILDHORSE COMPANY Partial Balance Sheet
To calculate the depreciation expense for 2022 and 2023, we will use the straight-line method:
(a) Depreciation Expense for 2022:
Depreciation Expense 2022 = ($40,000 - $4,000) / 8
(b) Depreciation Expense for 2023:
Depreciation Expense 2023 = ($40,000 - $4,000) / 8
Now let's prepare the journal entries for recording the depreciation expense:
(a) Journal entry to record 2022 depreciation:
Date: December 31, 2022
Account Titles and Explanation Debit Credit
Depreciation Expense $4,500
Accumulated Depreciation - Truck $4,500
(Record the depreciation expense for 2022)
(b) Journal entry to record 2023 depreciation:
Date: December 31, 2023
WILDHORSE COMPANY
Partial Balance Sheet
As of December 31, 2023
Asset:
Truck $31,000
Less: Accumulated Depreciation ($4,500)
Net Truck $26,500
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Rianna is 60 years old. She purchased a deferred annuity for $40,000. The annuity will begin paying her $400 per month at age 65 for the rest of her life. At age 65 her expected return multiple is 20. In the year that she is 67 years old, how much of the annuity will be taxable? Select one: a. $0. b. $2,000. c. $2,800. d. $4,000.
Rianna purchased a deferred annuity for $40,000. The annuity will begin paying her $400 per month at age 65 for the rest of her life. At age 65 her expected return multiple is 20. In the year that she is 67 years old, how much of the annuity will be taxable.
GivenRianna is 60 years old.Purchased a deferred annuity for $40,000.Annuity will begin paying her $400 per month at age 65Expected return multiple is 20 at age 65To find: How much of the annuity will be taxable?SolutionThe amount of the annuity would be $400 per month, so over a year, she would receive:$400 * 12 = $4,800.Rianna is 67 years old, which is two years since the annuity started. Therefore, two years would have been paid out to Rianna before the start of the tax year.
She would have received:$400 * 24 = $9,600.In the year that Rianna is 67 years old, she would receive $4,800, but $9,600 would have already been received from the deferred annuity. Therefore, the taxable amount for the year when Rianna is 67 years old would be:$4,800 - $9,600/20 = $0. Thus, the answer is a. $0.
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Based on past experience, a bank believes that 12% of the people who receive loans will not make payments on time. The bank has recently approved 500 loans. Answer the following questions. a) What are the mean and standard deviation of the proportion of clients in this group who may not make timely payments? + (O) = 0.12 SD (P) = 0.015 (Round to three decimal places as needed.) b) What assumptions underlie your model? Are the conditions met? A. With reasonable assumptions about the sample, all the conditions are met. OB. The 10% condition is not met. O C. The randomization and success/failure conditions are not met. OD. The success/failure condition is not met. O E. The randomization condition is not met. Based on past experience, a bank believes that 12% of the people who receive loans will not make payments on time. The bank has recently approved 500 loans. Answer the following questions. Tuo Turuvimicurvu unu vuvvvvurunur vonUILIVIT un Tum OD. The success/failure condition is not met. O E. The randomization condition is not met. OF. The randomization and 10% conditions are not met. O G. The 10% and success/failure conditions are not met. O H. Without unreasonable assumptions, none of the conditions are met. c) What is the probability that over 13% of these clients will not make timely payments? plô>0.13) =((Round to three decimal places as needed.)
a) Which is 0.12. The standard deviation of the proportion can be calculated using the formula: SD(P) = sqrt(p * (1 - p) / n), We get SD(P) = sqrt(0.12 * (1 - 0.12) / 500) ≈ 0.015 .
b) We do not have information about randomization or the 10% condition. Therefore, option D is the most appropriate answer: "The success/failure condition is not met."
c) To calculate the probability that over 13% of clients will not make timely payments, we need to use the normal distribution approximation. We can use the z-score formula: z = (x - μ) / σ,
z = (0.13 - 0.12) / 0.015 ≈ 6.67.
The probability can be obtained by finding the area under the normal curve to the right of the z-score, which is essentially 1 minus the cumulative probability.
Probability is a measure of the likelihood or chance of an event occurring. It quantifies the degree of uncertainty associated with an outcome. Probability values range from 0 to 1, where 0 represents an impossible event and 1 represents a certain event. Probability allows us to make informed predictions and decisions based on the likelihood of different outcomes in a given situation.
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Which of the following is NOT correct about the reasons why Alexander Hamilton supported the establishment of the national bank?
O National bank is necessary to create national currency.
O Only wealthy people could invest thus benefit from the system.
© National bank is the sate plage to deposit and transfer money.
O National debt is good for the country. The more Americans owe the country, the more people had an interest in the success of the country. If you loan money to someone, you want that
person to be able to pay you back, so you want them to be successful.
© National bank is necessary for the United States to become a strong commercial and manufacturing country that can compete with other Asian and European empires.
The statement that is NOT correct about the reasons why Alexander Hamilton supported the establishment of the national bank is: Only wealthy people could invest thus benefit from the system.
What is a national bank? A national bank is a commercial bank that is chartered under the federal government of the United States of America, as opposed to the state government. In this way, it is responsible for monitoring the country's monetary policy and regulating the money supply.
A national bank acts as the government's banker, performs business with other banks, and assists in the country's economic development. What is the importance of a national bank? The main reasons Alexander Hamilton supported the establishment of a national bank were to: Create a national currency that would support a strong and unified US economy. The national bank would be a safe place for the government to deposit and transfer money.
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Titan Corporation has 10.1 million shares of common stock outstanding and 440,000 4.4 percent semiannual bonds outstanding, with a par value of $1,000 each. The common stock currently sells for $48 per share and has a beta of 1.05; the bonds have 10 years to maturity and sell for 115 percent of par. The market risk premium is 8.8 percent, T-bills are yielding 5 percent, and the company's tax rate is 25 percent. a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) b. If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is not complete. a. Debt a. Equity b. Discount rate 8.00 %
The Weighted Average Cost of Capital (WACC) is a financial metric used to calculate the average cost of the various sources of financing used by a company to fund its operations
a) Calculation of the market value capital structure of Titan Corporation is explained as follows: Market Value of Equity = Current Stock Price * Number of Shares OutStanding= $48*10.1 Million= $485.28 MillionMarket Value of Debt = Bond Price * Number of Bonds Outstanding * Par Value= 1.15 * 440000 * $1000= $506 MillionMarket Value Capital Structure = Market Value of Equity + Market Value of Debt= $485.28 Million + $506 Million= $991.28 MillionTherefore, the market value capital structure of Titan Corporation is $991.28 Million.
b) Calculation of the rate that Titan Corporation should use to discount a new investment project with the same risk as the firm's typical project is explained as follows:
Total Market Value Capital Structure = Market Value of Equity + Market Value of Debt= $485.28 Million + $506 Million= $991.28 Million
Weight of Equity = Market Value of Equity / Total Market Value Capital Structure= $485.28 Million / $991.28 Million = 0.4890 Weight of Debt = Market Value of Debt / Total Market Value Capital Structure= $506 Million / $991.28 Million= 0.5110. After calculating the weights, Titan Corporation will now use the Weighted Average Cost of Capital (WACC) formula to determine the rate to discount the new investment project.
WACC = (Weight of Equity * Cost of Equity) + (Weight of Debt * Cost of Debt) * (1 – Tax Rate)Cost of Equity = Risk-Free Rate + (Market Risk Premium * Beta)= 5% + 8.8% * 1.05= 14.14%Cost of Debt = Yield to Maturity= 4.4/2 = 2.2%Tax Rate = 25%WACC = (0.4890 * 14.14%) + (0.5110 * 2.2%) * (1 – 25%)= 6.98%. Therefore, the rate Titan Corporation should use to discount a new investment project with the same risk as the firm's typical project is 6.98%.
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Demand for a certain product is forecast to be 851 annually. The product follows a seasonal pattern, for which the January monthly index is 0.64. What is the seasonally-adjusted sales forecast for January?
To calculate the seasonally-adjusted sales forecast for January, we need to multiply the annual demand forecast by the corresponding seasonal index for January.
Given that the annual demand forecast is 851 and the January monthly index is 0.64, we can calculate the seasonally-adjusted sales forecast for January as follows:
Seasonally-adjusted sales forecast for January = Annual demand forecast * January monthly index
= 851 * 0.64
= 544.64
Therefore, the seasonally-adjusted sales forecast for January is 544.64 units.
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