To calculate asset's historical rate we need to consider Select the Date Range: Choose the precise time frame for which you wish to determine the historical value of the item. It could be any length of time, whether a single day, a month, a year, or more.
Gather Historical Information: Compile the information required to determine the asset's worth during the selected time frame. Depending on the frequency of the information supplied, this data could contain daily, weekly, or monthly figures.
Select a Valuation Method: The best method for evaluating assets historically relies on the kind of asset. There are various approaches to doing so. Market-based, income-based, and cost-based valuation techniques are a few prevalent ones.
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Go through the following case study and answer the question below: Coca Cola traced it's history back to 1886 and Pepsi in 1898. By the time Pepsi came along, the rival was already selling more than a million gallons of its product per year. Coca-Cola also had its first celebrity endorsement. During the early years, Coke had the edge over Pepsi in advertising thanks to a series of memorable and impactful ads. However, Pepsi soon countered Coca-Cola’s successful ad campaigns of the 1930’s and 40’s with the debut of the advertising jingle. Coca Cola was quick to take the advantage of the emerging power of television in the 1950’s. On Thanks giving day, 1950, the company broadcast a half hour commercial on CBS. The company also debuted its radio friendly ditty, called "Coke Time," in 1953. Meanwhile, Pepsi’s President at the time decided to shift the company’s advertising strategy. His wife, actress Joan Crawford, suggested making Pepsi more of a lifestyle brand rather than one that emphasized value. Another important aspect of the Coke VS Pepsi marketing battle is the product choices each company has offered over the years. Coincidentally both the companies took steps to present more options other than Cola to customers starting in the 1960’s. Coke’s big move was the purchase of the Minute Maid corporation in 1960. Sprite, the company’s most successful spin-off product, was launched in 1961. Pepsi later acquired the distribution rights for 7-Up. The battle is still continuing. However, in recent years, Coca-Cola went down.
QA. Coca-Cola wants to apply new marketing strategies to increase its presence in the market. Coca-Cola decided to launch a new advertising campaign, But before that, it conducted market research to understand whether there is any relationship between advertisement and sales. Based on the above research problem, identify the statistical method which needs to be used for analysis. Explain the method in brief.
QB. After determining that there exists a relationship between advertising cost and sales, the marketing head asked his team to predict the future sales value based on the historical sales and advertising data. Identify the statistical test that can be used by the marketing team to get the results. Explain the test in brief.
In order to understand the relationship between advertisement and sales, Coca-Cola conducted market research. To analyze the data collected, a statistical method needs to be applied. Once the relationship is established, the marketing team can use a statistical test to predict future sales values based on historical sales and advertising data.
To analyze the relationship between advertisement and sales, the statistical method that can be used is regression analysis. Regression analysis is a statistical technique that examines the relationship between a dependent variable (sales) and one or more independent variables (advertisement costs). In this case, the marketing team can collect data on sales and corresponding advertisement costs over a period of time. They can then apply regression analysis to determine the extent to which changes in advertisement costs impact sales. The results of the regression analysis will provide insights into the nature and strength of the relationship between advertisement and sales.
Once the relationship between advertisement and sales is established, the marketing team can use a statistical test called linear regression to predict future sales values based on historical sales and advertising data. Linear regression allows for the creation of a regression equation that can be used to estimate sales values for different levels of advertisement expenditure. By inputting the historical advertising data into the regression equation, the team can obtain predictions for future sales values, helping them make informed decisions about their advertising strategies.
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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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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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A project has an initial cost of $7.900 and cash inflows of $2,100, $3,140, $3,800, and $4,500 per year over he next four years, respectively. What is the payback period? 3.70 years 2.28 years 2.70 years 3.36 years 3.28 years
The payback period of a project is the amount of time it takes to recoup the initial investment or cost of the project. To find out the payback period, divide the initial cost by the annual cash inflows until you have recovered the initial cost.
What is the payback period?
To find out the payback period, we divide the initial cost by the annual cash inflows until the initial cost is recovered. To find the payback period, we use the following formula:Payback period = Initial cost / Annual cash inflowYear 1 cash inflow = $2,100Year 2 cash inflow = $3,140Year 3 cash inflow = $3,800Year 4 cash inflow = $4,500Initial cost = $7,900When we divide the initial cost by the annual cash inflow for each year until the initial cost is recovered, we get:Year 1: $7,900 - $2,100 = $5,800Year 2: $5,800 - $3,140 = $2,660Year 3: $2,660 - $3,800 = -$1,140The third year cash inflow is less than the remaining cost, so we need to use a weighted average to estimate the payback period.WA = Year 3 cash flow / Year 3 - Year 2 cash flowWA = -$1,140 / $3,800 - $3,140WA = -$1,140 / $660WA = -1.727We can estimate that it will take approximately 2.727 years to recover the initial investment using the weighted average. Hence, the correct answer is 2.70 years.
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Aggregate Demand I-Work It Out: Question 3 Consider an economy with the given equations. Y=C+I+G • C= 58+0.6(Y-T) I= 140-10r (¹=Y-15r G= $60 • T = $30 .M= $1200 P-3.0 Use the relevant set of equations to derive the LM curve. Move points A and B to graph the LM curve. 30 . Which equation represents the LM curve? Use the relevant set of equations to derive the LM curve. Move points A and B to graph the LM curve. 30 25 20 (%) - 15 10 5 Se D 100 200 400 500 600 300 Y 700 800 Which equation represents the LM curve? OY = 400 + 15r Y = 400r + 15 OY = 15r - 400 OY = 400-15r 10 0 0 100 200 300 400 500 600 700 800 Y Calculate the equilibrium level of income (Y) and the equilibrium interest rate (r). 7= Y=S
The equation that represents the LM curve is M/P = L(r,Y), where M is the nominal money supply, P is the price level, L is the money demand function, r is the interest rate, and Y is the level of income.
The LM curve represents the combination of interest rates and income levels at which the money market is in equilibrium. In other words, it shows the points in the income-interest rate space where the demand for money equals the supply of money.
The LM curve is derived from the money demand function and the money supply function. The money demand function reflects the inverse relationship between the interest rate and the demand for money. The higher the interest rate, the lower the quantity of money demanded, and vice versa. The money supply function represents the relationship between the nominal money supply and the price level.
To derive the LM curve, we need to solve for the equilibrium level of income and interest rate that satisfies both the money demand function and the money supply function. This involves finding the point where the quantity of money demanded equals the quantity of money supplied.
In conclusion, the LM curve equation that represents the equilibrium of the money market in the given economy is M/P = L(r,Y) = 1200/3 = (1/3)(Y - 15r) = 400. The equilibrium level of income is Y = 400, and the equilibrium interest rate is r = 0.
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If variable costs increase by 5% without a corresponding increase in selling price, the number of units needed to breakeven will A) remain the same B) increase C) decreasé D) cannot be determined
The correct answer is B) increase. If variable costs increase by 5% without a corresponding increase in the selling price, it means that the cost per unit of producing the product has increased.
To breakeven, the revenue generated from selling the product must cover both fixed costs and variable costs. With an increase in variable costs, more units need to be sold to generate enough revenue to cover the higher costs.
Therefore, the number of units needed to breakeven will increase.
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Y = (AN)aKbEy. (Where Y = GDP, A = technology, K = capital, N = labor, E = energy and a = b = y = 1/3 )
1) Use the growth accounting equation (by taking logs of the above equation) to compute the rate of growth of A. Let Y growth rate = 4%, growth rate of N = 2%, K increased by 3%, and E increased by 4%.
Growth accounting equation relates growth rates of GDP, capital, labor, and technology. It enables us to estimate the contribution of various inputs to economic growth. Here's the solution to the given problem:
We are given, Y = (AN)a(Kb )(Ey)
Taking the natural logarithm of both sides: ln(Y) = ln[(AN)a(Kb) (Ey)]ln(Y) = aln(A) + bln(K) + cln(N) + dln(E)Where a = b = c = 1/3, and d = 1 - a - b - c = 0
Plug in the values we are given : Natural log of Y growth rate = ln(1.04) = 0.04Natural log of N growth rate = ln(1.02) = 0.0198
Natural log of K growth rate = ln(1.03) = 0.0296Natural log of E growth rate = ln(1.04) = 0.0392
Substituting all the values in the equation, we get;0.04 = (1/3)ln(A) + (1/3)ln(K) + (1/3)ln(N) + 0
Substitute (1/3) as xln(A) = 3(0.04 - xln(K) - xln(N)ln(A) = 3(0.04 - x) - 3ln(K) - 3ln(N)ln(A) = 0.12 - 3x - 3ln(K) - 3ln(N)
Differentiate the above expression with respect to time to get the growth rate of A:d(ln(A))/dt = -3(d(ln(K))/dt) - 3(d(ln(N))/dt)
Plug in the values we are given : d(ln(K))/dt = 0.03 and d(ln(N))/dt = 0.02
Therefore, d(ln(A))/dt = -3(0.03) - 3(0.02)=-0.15
Hence, the rate of growth of technology (A) is -0.15 or -15%.
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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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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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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."
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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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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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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Redesigning jobs is a way for organizations to manage situations where workers are being paid more than they are contributing in terms of long-term productivity. True False
False. Redesigning jobs is not solely aimed at managing situations where workers are being paid more than they are contributing in terms of long-term productivity.
While job redesign can be a strategy to optimize productivity and align compensation with performance, its purpose goes beyond just addressing overpayment issues. Job redesign involves making changes to the tasks, responsibilities, and structure of a job to enhance job satisfaction, employee engagement, and overall performance. It may include factors such as task variety, autonomy, skill development, and meaningfulness of work. The goal is to create a better fit between the job and the individual, leading to improved productivity and employee well-being. Compensation management, on the other hand, deals specifically with aligning pay with performance and market rates.
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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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Which of the following standards is required by the Fair Labor Standards Act?
A. Paying a minimum wage
B. Notifying employees of a plant closing
C. Verifying employment eligibility
D. Avoiding discrimination
The Fair Labor Standards Act (FLSA) requires the payment of a minimum wage. So, the correct answer is A.
The Fair Labor Standards Act (FLSA) mandates that employers must pay employees a minimum wage. This means that employers must compensate their workers at least the federal minimum wage (or the state minimum wage if it is higher) for each hour worked. The minimum wage is established to ensure that workers receive fair compensation for their labor and to protect them from exploitation or unfair wages.
The FLSA does address other important labor standards as well, but they are not the options listed. For example, the FLSA sets guidelines for overtime pay, child labor restrictions, record-keeping requirements, and regulations on working hours. However, among the given options, the requirement of paying a minimum wage is specifically mandated by the Fair Labor Standards Act.
While notifying employees of a plant closing, verifying employment eligibility, and avoiding discrimination are also important considerations for employers, they are not specifically mandated by the Fair Labor Standards Act. These standards may be addressed by other laws or regulations, such as the Worker Adjustment and Retraining Notification (WARN) Act, immigration laws, or anti-discrimination laws.
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You are working as a researcher in an economic Institute, you want to study the relation between the Unit sales as a Dependent variable and the following independent variables (selling expenditure, advertising, competitive price) As shown in the following model Unit Sales += b0+b1 Exp + + b2 Adv t+ b3 comp + + Ut After collecting your data, and estimating your linear regression over the data, you got the following regression equation Unit Sales + = -10.5 0.51 Expt + 0.09 Adv t+ 3.05 b3 compt t- value (2.45) (-1.5) (4.2) (2.94) R² = 0.24 F- Value 0.33 " 1- What is the economic meaning of the coefficient b0 (-10.5 ) 2- Describe the meaning of R2 and its value, F - Value 3- What do you think about the Model as a whole, with F, R² values ....is it significant or not ....explain your answer
The economic meaning of the coefficient b0 (-10.5) is known as the intercept of the regression line, which is the point at which the line crosses the Y-axis when X=0.
In the economic interpretation, b0 represents the expected value of the dependent variable, that is Unit Sales, when the independent variables are 0. The coefficient b0 of -10.5, in this case, implies that when the independent variables (selling expenditure, advertising, competitive price) are zero, then the unit sales are expected to be -10.5 units. 2. The meaning of R² and its value, F - ValueR-squared (R²) is a statistical tool used to determine how close the data is to the fitted regression line. It is a statistical measure that represents the proportion of variation in the dependent variable that can be explained by the independent variables. The R-squared value ranges between 0 and 1, with a higher value indicating that the regression line fits the data well. In this case, the R-squared value of 0.24 means that only 24% of the variation in the unit sales can be explained by the independent variables.
The F-value is a statistical tool that tests the overall significance of the regression model. It is calculated by dividing the regression mean square by the residual mean square. In this case, the F-value of 0.33 is less than 1, which indicates that the regression model is not significant. 3. The significance of the Model as a whole. The model is not significant based on the F-value and R-squared value. This implies that there are other factors that influence unit sales that are not captured in the model. Thus, it would be essential to look for other variables or factors that affect unit sales and add them to the model to improve its accuracy and make it more significant.
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If the automobile industry decided to move to online sales, what distribution network they might use and why they would use your choice (Provide examples of benefits, opportunities, and challenges).
If the automobile industry decided to move to online sales, one distribution network they might use is a combination of centralized distribution centers and a direct-to-consumer model.
This approach would involve establishing a network of regional or national distribution centers strategically located to efficiently serve customers across different areas. Here are some benefits, opportunities, and challenges associated with this distribution network:
Benefits:
Cost savings: By eliminating the need for physical dealerships and reducing inventory holding costs, online sales can lead to significant cost savings for automakers.
Improved customer experience: Online sales offer convenience and a seamless purchasing process, allowing customers to browse and buy vehicles from the comfort of their homes.
Expanded reach: With an online distribution network, automakers can reach customers in remote areas where traditional dealerships may be limited.
Opportunities:
Customization and personalization: Online sales platforms can offer interactive tools for customers to customize their vehicles, enhancing the buying experience.
Data-driven insights: With online sales, automakers can gather valuable customer data and insights, enabling targeted marketing and personalized offerings.
Challenges:
Test drives and inspections: Overcoming the challenge of customers not being able to physically test drive or inspect vehicles before purchase. Solutions such as offering home test drives or virtual reality experiences may be explored.
Service and support: Ensuring efficient after-sales service, including maintenance, repairs, and warranty support, in the absence of physical dealerships.
Overall, the combination of centralized distribution centers and a direct-to-consumer model in online sales offers cost savings, improved customer experience, expanded reach, customization opportunities, and data-driven insights. However, challenges related to test drives, inspections, and service/support need to be addressed to ensure customer satisfaction and maintain trust in the online buying process.
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You are the manager of a large crude-oil refinery. As part of the refining process, a certain heat exchanger (operated at high temperatures and with abrasive material flowing through it) must be replaced every year. The replacement and downtime cost in the first year is $175,000. This cost is expected to increase due to inflation at a rate of 8% for five years, at which time this particular heat exchanger will no longer be needed. If the company's cost of capital is 18% per year, how much could you afford to spend for a higher quality heat exchanger so that these annual replacement and downtime costs could be eliminated?
Answer:
The company could afford to spend up to $121,701.52 for a higher quality heat exchanger.
Explanation:
To determine the affordability of a higher quality heat exchanger, we need to calculate the present value of the annual replacement and downtime costs and compare it to the cost of the higher quality heat exchanger.
Given that the replacement and downtime cost in the first year is $175,000 and it is expected to increase at a rate of 8% per year for five years, we can calculate the total replacement and downtime costs over the five-year period using the formula for the future value of a growing annuity:
Future Value = Cost in Year 1 * (1 + Growth Rate)^Number of Years
Future Value = $175,000 * (1 + 0.08)^5 = $271,566.40
Next, we need to calculate the present value of the future replacement and downtime costs by discounting the future value at the company's cost of capital. The formula for the present value of a future cash flow is:
Present Value = Future Value / (1 + Discount Rate)^Number of Years
Present Value = $271,566.40 / (1 + 0.18)^5 = $121,701.52
Therefore, the company could afford to spend up to $121,701.52 for a higher quality heat exchanger so that the annual replacement and downtime costs could be eliminated.
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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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Mike Wazovsky runs a business that produces marmalade in small jars. He is proud of his business degree and brags a lot about how great and efficient his business is. Mike points that his biggest achievement is that his business currently has ATC < MC < MR. (a) Does Mike make positive profit? How do you know? (b) Is it possible to improve profit in the short-run in Mike's business? If yes, how? if no, why? (c) If Mike were to maximize proft, what will happen with the output of marmalade in Mike's business in the long-run (assuming anyone can easily make similar and same quality marmalade) relative to the current output?
To maximize profit, Mike would need to adjust his output to a level where marginal cost (MC) equals marginal revenue (MR) in the long run. This equilibrium output may be lower than the current output, as Mike would aim to balance the costs and revenues to maximize overall profit in a more competitive market environment.
(a) Mike does make positive profit.
Since Mike's business has ATC (Average Total Cost) less than MC (Marginal Cost), it implies that the cost of producing an additional unit of marmalade (MC) is lower than the average cost of producing each unit (ATC). This suggests that each unit contributes more to revenue (MR - Marginal Revenue) than the cost to produce it. Therefore, the difference between total revenue and total cost is positive, indicating that Mike's business is making a profit.
(b) It is possible to improve profit in the short-run in Mike's business.
To improve profit in the short-run, Mike can consider various strategies. One approach is to increase production as long as the marginal revenue (MR) exceeds the marginal cost (MC). By expanding output, Mike can capture additional revenue that surpasses the cost of producing each additional unit, thereby increasing profit. However, it is important for Mike to carefully evaluate market demand and ensure that the increase in production does not result in diminishing returns or a decrease in marginal revenue.
(c) If Mike were to maximize profit, the output of marmalade in his business would decrease in the long run relative to the current output.
Assuming anyone can easily make similar and same quality marmalade, the market would attract more competitors over time. As a result, the market supply of marmalade would increase, leading to greater competition and potentially lower prices.
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Burlap Company has 400,000 shares of $50 par, 1% cumulative preferred stock and 100,000 shares of $20 par common stock. The following amounts were distributed as dividends: Directions: Fill in the missing blanks in the table below. Format: If a box does not have an amount, enter 0. Round dividends per share to nearest TWO decimal places. (Example: DPS = .678 enter this as .68, or $1 enter as 1.00) DO NOT USE $ SIGN OR A COMMA IN ANY NUMBER! Amount distributed Preferred dividend (400,000 shares) Common dividend (100,000 shares) Dividends per share: Preferred stock Common stock (Current year preferred dividend in Year 1 $100,000 Year 2 $200,000 Year 3 $400,000
The Burlap Company has 400,000 shares of $50 par, 1% cumulative preferred stock and 100,000 shares of $20 par common stock.
How to find?The following amounts were distributed as dividends: Preferred dividend (400,000 shares)Common dividend (100,000 shares)Dividends per share: Preferred stock Common stock, Current year preferred dividend in Year 1 $100,000Year 2 $200,000Year 3 $400,000First, we will find the amount of dividend paid on preferred shares: Preferred dividend = 1% × $50 par value × 400,000 shares= 0.01 × $50 × 400,000= $200,000.
Thus, the preferred dividend paid is $200,000. Now, we will calculate the amount of common dividend paid for each year as follows: In year 1, the total dividend paid is $100,000. Let x be the dividend per share for common stock. Dividend paid on common stock = x × 100,000 shares, Dividend paid on preferred stock = $200,000Total dividend paid = $100,000$100,000 = x × 100,000 + $200,000x = ($100,000 − $200,000) ÷ 100,000x = −$1Thus, the common dividend paid per share is $1.00.In year 2, the total dividend paid is $200,000. Let y be the dividend per share for common stock.
Dividend paid on common stock = y × 100,000 sharesDividend paid on preferred stock = $200,000Total dividend paid = $200,000$200,000 = y × 100,000 + $200,000y = 0Thus, the common dividend paid per share is $0.00.In year 3, the total dividend paid is $400,000. Let z be the dividend per share for common stock.Dividend paid on common stock = z × 100,000 shares.
Dividend paid on preferred stock = $200,000Total dividend paid = $400,000$400,000 = z × 100,000 + $200,000z = $2.00Thus, the common dividend paid per share is $2.00.
Therefore, we can fill in the table as shown below: Amount distributed Preferred dividend (400,000 shares)$200,000Common dividend (100,000 shares)Dividends per share: Preferred stock, Common stock, Current year preferred dividend inYear 1$100,000$1.00Year 2$200,000$0.00Year 3$400,000$2.00.
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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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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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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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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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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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You are evaluating a project that requires an investment of $97 today and guarantees a single cash flow of $124 one year from now. You decide to use 100% debt financing, that is, you will borrow 97$. The risk-free rate is 5% and the tax rate is 37%. Assume that the investment is fully depreciated at the end of the year, so without leverage you would owe taxes on the difference between the project cash flow and the investment, that is, $27.
a. Calculate the NPV of this investment opportunity using the APV method.
b. Using your answer to part (a), calculate the WACC of the project.
c. Verify that you get the same answer using the WACC method to calculate NPV.
d. Finally, show that flow-to-equity method also correctly gives the NPV of this investment opportunity.
The APV method entails adjusting the unlevered cash flow to account for the present value of the financing tax shield.
WACC can be used to calculate the NPV of the project
The following is the calculation:
After-tax cost of debt is 6.33 percent [5 percent + (1-0.37)].
Interest payment is $6.14 [$97 x 6.33 percent].Tax savings are $2.27 [$6.14 x 0.37].
The present value of tax savings is $2.15 [$2.27 / (1 + 5%)].
The present value of cash flows is $117.07 [$124 / (1 + 5%)].
The present value of the investment is -$97.WACC = $124 / $97 + $117.07 - $97 = 32.3 percent.
NPV equals:($124 / (1 + 32.3 percent)) - $97 = $3.22.
Income before tax is $27, which is less than the $97 investment, so the investment is not profitable without leverage. Because of the interest payment tax shield, the present value of the project cash flow has increased to
$117.07 + $2.15 = $119.22.
The project is profitable after including the tax shield.
The APV approach resulted in a positive NPV of $22.3 million. Using the APV calculation, the WACC was 32.3 percent, which is consistent with the WACC calculated using the formula. The FTE method produced the same NPV as the APV method and the WACC method, which is to be expected. All three methods are consistent and produce the same answer.
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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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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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