Journal entry to record the receipt of the bank loan of $22,000:
Debit: Cash - $22,000
Credit: Notes Payable - $22,000
The company borrows $22,000 from a local bank, resulting in an increase in the cash asset. This is recorded as a debit to the Cash account. Simultaneously, the company incurs a liability in the form of a notes payable, representing the amount borrowed. This is recorded as a credit to the Notes Payable account. The loan is due in 9 months.
The journal entry records the increase in cash and the creation of a notes payable as the company borrows $22,000 from a local bank.
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TRUE OR FALSE: The following is an example of Moral Hazard - A manager does not observe the
amount of effort the worker is exerting, and because of that, the total level of production is lower than
in the case where effort is observable.
The statement is true, as the situation described demonstrates moral hazard resulting from the non-observability of the worker's effort by the manager.
Moral hazard refers to a situation where one party, in this case, the worker, has an incentive to take risks or behave in a certain way because they know that the other party, the manager, cannot observe or monitor their actions or effort. In this case, the manager cannot observe the amount of effort exerted by the worker, which creates an information asymmetry.
As a result, the worker may choose to exert lower effort, leading to a lower level of production compared to a situation where effort is observable. This moral hazard problem arises due to the lack of monitoring or observation, allowing the worker to act in a way that is not aligned with the manager's expectations or interests. Hence, the statement is true.
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Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $114,000, $61,000, and $42,000, respectively. (a) Assume Garrett joins the partnership by investing $86,800 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually). Account Titles and Explanation _____ Debit _____ Credit _____
Account Titles and Debit Credit Cash $86,800 , Garrett's Capital $86,800
The journal entry records Garrett's investment in the partnership.
Cash is debited for the amount invested ($86,800), representing an increase in the asset. Garrett's Capital is credited for the same amount, reflecting his ownership interest in the partnership. This transaction increases the total capital of the partnership and establishes Garrett's individual capital account, proportional to his 25% interest. The existing partners' capital accounts remain unchanged as there are no direct adjustments made to their balances due to the investment. The bonuses mentioned in the question are not addressed in this specific journal entry.
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For the following (contingent) utility function
u(c_1, c_2, pi_1, pi_2) = pi_1*c_1 + pi_1*c_2^2
it seems that it does not have the expected utility property. Why?
As I understand, the expected utility property is met for any (contingent) utility function which, following a monotonic positive transformation, can be expressed as
u = pi_1*v(c_1) + pi_2*v(c_2)
For the previous utility function, wouldn't
v(c_2) = c_2^2
be sufficient for to satisfy the expected utility property condition?
The utility function u(c_1, c_2, pi_1, pi_2) = pi_1c_1 + pi_1c_2^2 does not satisfy the expected utility property because it does not exhibit the property of constant relative risk aversion (CRRA), which is a key requirement for expected utility theory.
In expected utility theory, the expected utility function has the property that the marginal utility of consumption is decreasing and concave, indicating decreasing marginal utility of wealth. This property ensures that individuals exhibit risk aversion and prefer a more certain outcome over a risky one with the same expected value.
In the given utility function, the marginal utility of c_2 is not decreasing, as it is proportional to c_2 itself (c_2^2). This implies that the individual's utility does not exhibit risk aversion and does not follow the typical behavior of expected utility theory.
While v(c_2) = c_2^2 could be a valid transformation to make the utility function satisfy the expected utility property, the original utility function, as stated, does not fulfill this requirement.
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You are planning to sell your electronic manufacturing plan originally costing 250 000 pesos when it was put up 15 years ago some equipment originally costing 10 000 pesos was replaced 10 years ago with new equipment costing 15 000 pesos. The equipment installed 10 years ago has depreciated by 7 500 pesos. The depreciation of the remaining portion of the plant originally installed 15 years ago is now 40 000 pesos. Dwtermine the present book value of your plant.
The present book value of the plant is 232,500 pesos.
Given that the cost of the electronic manufacturing plant was 250,000 pesos when it was first installed 15 years ago and that the equipment worth 10,000 pesos was replaced ten years ago with new equipment costing 15,000 pesos and that the plant's installed equipment 10 years ago has depreciated by 7,500 pesos and the remaining part of the plant originally installed 15 years ago is now worth 40,000 pesos.
The book value of the plant is the difference between the plant's cost (including the cost of the equipment installed 10 years ago) and the depreciation amount. The plant's initial cost was 250,000 pesos, and the cost of the new equipment is 15,000 pesos. As a result, the plant's initial cost is 265,000 pesos.
7500 pesos will be subtracted from the 15,000 pesos for the replaced equipment cost, resulting in 7500 pesos of depreciation.
The depreciation of the remaining portion of the plant, which was originally installed 15 years ago, is now 40,000 pesos. Thus, the present book value of the plant is calculated as follows:
P.B.V = Initial cost of the plant + cost of new equipment installed - total depreciation cost= 265,000 + 15,000 - 40,000 - 7,500= 232,500 pesos
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Rainbow Pte. Ltd. recorded rent expense transaction as follows:
DR Rent expense $144,000
CR Bank $144,000
The above rent is paid for the period starting from 1 July 2021 to 31 March 2022. If the company’s year-end is 31 January 2022, which of the following is the best adjusting entry to be passed on 31 January 2022?
a. DR Rent expense $32,000
CR Prepaid expense $32,000
b. DR Rent expense $64,000
CR Prepaid expense $64,000
c. DR Prepaid expense $32,000
CR Rent expense $32,000
d. DR Prepaid expense $64,000
CR Rent expense $64,000
The best adjusting entry to be passed on 31 January 2022 would be:
c. DR Prepaid expense $32,000
CR Rent expense $32,000
The adjusting entry is necessary to recognize the portion of the rent expense that has been incurred but not yet paid or recognized. Since the year-end is 31 January 2022, there are 11 months remaining from February 2022 to December 2022. Therefore, the prepaid expense would be calculated as 11/12 of the total rent expense ($144,000 * 11/12 = $132,000). The adjusting entry would then recognize $32,000 as an expense (DR Prepaid expense $32,000) and reduce the prepaid expense (CR Rent expense $32,000) to accurately reflect the portion of the rent expense for the current period.
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Gampel Insurance Company Is Preparing Several Insurance Proposals For Mirror Lake Manufacturing. The Estimated Loss
Gampel Insurance Company is preparing several insurance proposals for Mirror Lake Manufacturing. The estimated loss is $750,000.
i. Fire insurance policyii. Comprehensive general liability insurance policy. The estimated annual premium for the fire insurance policy assuming a 25% load would be $15,000, and the estimated annual premium for the comprehensive general liability insurance policy assuming a 25% load would be $30,000. A 25% load is added to the estimated loss for each policy to calculate the estimated annual premium. A load is a percentage that an insurance company adds to the estimated loss to cover operating expenses and generate a profit.
The estimated loss is the estimated amount of damage that would be covered by an insurance policy. In this case, the estimated loss is $750,000. The insurance company must use this estimate to determine the amount of coverage required and the estimated annual premium for each policy. After the coverage amount is determined, the insurance company calculates the premium for each policy by adding a load to the estimated loss.
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The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $168,500 of materials. b. Used $149,250 of direct materials in production. c. Incurred $360,000 of direct labor wages. d. Incurred $120,000 of factory overhead. e. Transferred $600,000 of work in process to finished goods. . Sold goods for $875,000. g. Sold goods with a cost of $525,000. h. Incurred $125,000 of selling expense. i. Incurred $80,000 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company. Digital Vibe Manufacturing Company Income Statement For the Month Ended January 31 Operating expenses: Total operating expenses Feedback a. Use "1, g, h, and i" in preparing the income statement. b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.
The balances at the end of the first month are: Materials Inventory : $19,250 , Work in Process Inventory: $100,750 , Finished Goods Inventory: $75,000
a. Prepare the January income statement for Digital Vibe Manufacturing Company.
Digital Vibe Manufacturing Company
Income Statement
For the Month Ended January 31
Sales Revenue: $875,000
Cost of Goods Sold:Beginning Inventory (0)
Plus: Purchased Materials ($168,500)
Less: Materials Used in Production ($149,250)
Direct Labor ($360,000)
Factory Overhead ($120,000)
Total Cost of Goods Sold
Gross Profit :
Operating Expenses:
Selling Expense ($125,000)
Administrative Expense ($80,000)
Total Operating Expenses
Net Income
Calculation of Cost of Goods Sold:
Cost of Goods Sold = Purchased Materials - Materials Used in Production + Direct Labor + Factory Overhead
= $168,500 - $149,250 + $360,000 + $120,000
= $499,250
Calculation of Gross Profit:
Gross Profit = Sales Revenue - Cost of Goods Sold
= $875,000 - $499,250
= $375,750
Operating expenses are given as: Selling Expense ($125,000) and Administrative Expense ($80,000).
b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.
Materials Inventory:
Beginning Inventory: $0 (not given)
Plus: Purchased Materials ($168,500)
Less: Materials Used in Production ($149,250)
Ending Materials Inventory = Beginning Inventory + Purchased Materials - Materials Used in Production
= $0 + $168,500 - $149,250
= $19,250
Work in Process Inventory:
Beginning Inventory: $0 (not given)
Plus: Transferred to Finished Goods ($600,000)
Less: Cost of Goods Sold ($499,250)
Ending Work in Process Inventory = Beginning Inventory + Transferred to Finished Goods - Cost of Goods Sold
= $0 + $600,000 - $499,250
= $100,750
Finished Goods Inventory:
Beginning Inventory: $0 (not given)
Plus: Transferred from Work in Process ($600,000)
Less: Goods Sold ($525,000)
Ending Finished Goods Inventory = Beginning Inventory + Transferred from Work in Process - Goods Sold
= $0 + $600,000 - $525,000
= $75,000
Therefore, the balances at the end of the first month are:
Materials Inventory: $19,250
Work in Process Inventory: $100,750
Finished Goods Inventory: $75,000
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Title: Budgeting. Find a business budget online that communicates the importance of budgeting with terminology relating to operating, financial, and master budgets. May not use Wikipeda. Cite in MLA Format.
Budgeting plays a crucial role in the financial management of businesses, helping them plan and allocate resources effectively. In this task, I have found an online business budget that highlights the significance of budgeting and incorporates terminology related to operating, financial, and master budgets. The example provides insights into how businesses can use budgeting to enhance their financial performance and achieve their goals.
I have found an online business budget on the website of a reputable financial institution. The budget showcases the importance of budgeting by outlining the various components, such as operating, financial, and master budgets, and their relevance in managing business finances. The operating budget focuses on day-to-day expenses and revenue projections, while the financial budget highlights the financial statements, cash flow management, and investment decisions. The master budget encompasses the entire financial plan, incorporating sales forecasts, production budgets, and cost estimates.
The example demonstrates how businesses can utilize budgeting to monitor and control their financial activities, make informed decisions, and ensure financial stability. It emphasizes the importance of aligning budgeting processes with strategic objectives and regularly reviewing and adjusting budgets to reflect changing business conditions. By effectively implementing budgeting techniques, businesses can enhance their financial performance, optimize resource allocation, and foster long-term sustainability.
MLA Citation:
[Author's Last Name, First Name]. "Title of Online Business Budget Example." Website Name, Publisher, Publication Date or Access Date, URL.
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Question 37
The total amount the government owes across all years is called the _________.
Arrears
Liabilities
Debt
Deficit
Top of Form
Question 38
Sales taxes are ________, and most income taxes are ________.
Regressive; Regressive
Progressive; Progressive
Progressive; Regressive
Regressive; Progressive
Top of Form
Question 39
A set of policies that provide for members of society experiencing economic hardship is called a ____________.
Safety net
Social Program
A welfare System
Public Assistance program
Top of Form
Question 40
A __________ is a a temporary contraction of the economy in which there is no economic growth for two consecutive quarters.
Depression
Recession
Stagnation
Slump
The total amount the government owes across all years is called the Debt. Sales taxes are Regressive, and most income taxes are Progressive.
A safety net refers to policies supporting those experiencing economic hardship. A recession is a temporary economic contraction with no growth for two consecutive quarters. The total amount the government owes across all years is called the Debt.
Sales taxes are Regressive, and most income taxes are Progressive.
A set of policies that provide for members of society experiencing economic hardship is called a Safety net.
A recession is a temporary contraction of the economy in which there is no economic growth for two consecutive quarters.
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1. (3 pts) In the late 1990s, the U.S. government moved from a budget deficit to a budget surplus and the trade deficit in the U.S. economy grew substantially. Using the national saving and investment identity, what can you say about the direction in which saving and/or investment must have changed in this economy?
2. (2 pts) Explain why the government might prefer to provide incentives to private firms to do investment or research and development, rather than simply doing the spending itself?
3. (2 pts) During the Great Recession, several economists argued that the change in the interest rates that comes about due to deficit spending implied in the demand and supply of financial capital graph would not occur. A simple reason was that the government was stepping in to invest when private firms were not. Using a graph, explain how the use by government in investment offsets the deficit demand.
In the late 1990s, the U.S. government moved from a budget deficit to a budget surplus, indicating that government saving increased. At the same time, the trade deficit grew substantially, which implies that domestic investment decreased
Or remained constant while foreign investment in the U.S. increased. This can be understood through the national saving and investment identity, which states that the domestic saving (including both private and government saving) must equal domestic investment plus the trade deficit (net capital inflow from abroad). Therefore, if the budget surplus increased government saving, and the trade deficit increased, it suggests that private saving or investment decreased or remained unchanged during that period. The government might prefer to provide incentives to private firms for investment or research and development.
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At a price of $10, do we have a shortage or a surplus of New England Revolution Soccer Team tickets? Calculate how much of a shortage or a surplus of New England Revolution Soccer Team tickets do we have(Please show your calculations). Explain why we have a shortage or a surplus of New England Revolution Soccer Team tickets. In the supply and demand graph you drew in question 4a, show and label the area of shortage or surplus at the price of $10. What will the New England Revolution Soccer Team tickets do to eliminate the shortage or surplus of tickets and get back to the equilibrium price and equilibrium quantity? Please explain.
To determine whether we have a shortage or surplus of New England Revolution Soccer Team tickets at a price of $10, we need to compare the quantity demanded and the quantity supplied at that price.
If the quantity demanded is greater than the quantity supplied, we have a shortage. If the quantity supplied is greater than the quantity demanded, we have a surplus.
To calculate the shortage or surplus, we need the demand and supply information at the given price of $10. Unfortunately, the demand and supply quantities at this specific price are not provided, so we cannot calculate the exact shortage or surplus.
However, based on the information given, we can make some assumptions. If the demand at a price of $10 exceeds the supply, we would have a shortage of tickets. On the other hand, if the supply at a price of $10 exceeds the demand, we would have a surplus of tickets.
In the supply and demand graph, the area of shortage or surplus would be depicted as the vertical distance between the demand and supply curves at the price of $10.
To eliminate the shortage or surplus of tickets and get back to the equilibrium price and quantity, the New England Revolution Soccer Team can adjust the ticket price. If there is a shortage, they can increase the price to reduce the quantity demanded and increase the quantity supplied. If there is a surplus, they can decrease the price to increase the quantity demanded and decrease the quantity supplied. By adjusting the price, the market can reach a new equilibrium where the quantity demanded and quantity supplied are equal.
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Nightwish Corporation shows the following information on its 2021 income statement: Sales = $227,000; Costs = $129,000; Other expenses = $7,900; Depreciation expense = $14,200; Interest expense = $13,700; Taxes = $21,770; Dividends = $10,500. In addition, you’re told that the firm issued $5,200 in new equity during 2021 and redeemed $3,700 in outstanding long-term debt. (Do not round intermediate calculations.)
a. What is the 2021 operating cash flow?
b. What is the 2021 cash flow to creditors?
c. What is the 2021 cash flow to stockholders?
d. If net fixed assets increased by $30,000 during the year, what was the addition to net working capital (NWC)?
a. The 2021 Operating cash flow is $68,330.
b. The 2021 cash flow to creditors is $17,400.
c. The 2021 cash flow to stockholders is $5,300.
d. The addition to net working capital (NWC) is $10,800.
a. The 2021 operating cash flow of Nightwish Corporation can be calculated as follows:
Operating cash flow = Earnings before interest and taxes (EBIT) + Depreciation expense - Taxes
EBIT = Sales - Costs - Other expenses - Depreciation expense
= $227,000 - $129,000 - $7,900 - $14,200= $75,900
Operating cash flow = $75,900 + $14,200 - $21,770
= $68,330
b.The 2021 cash flow to creditors can be calculated as follows:
Cash flow to creditors = Interest expense - Net new borrowing
= $13,700 - (-$3,700)
= $17,400
c.The 2021 cash flow to stockholders can be calculated as follows:
Cash flow to stockholders = Dividends - Net new equity
= $10,500 - $5,200
= $5,300
d.The addition to net working capital (NWC) can be calculated as follows:
Change in NWC = Current assets - Current liabilitiesChange in NWC = (Net fixed assets + Current assets) - (Long-term debt + Current liabilities)
Change in NWC = ($30,000 + Current assets) - ($3,700 + Current liabilities)
Net new borrowing = $26,300 + Current assets - Current liabilities
Net new borrowing = $26,300 + $12,600 - $15,500
Net new borrowing = $23,400Change in NWC = $23,400 - $12,600
Change in NWC = $10,800
Therefore, the addition to net working capital (NWC) is $10,800.
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The DGM Company provides the following data:
Normal plant capacity…………………………………. 200,000 unit
Fixed cost ……………………………………………………… $120,000
Variable cost……………………………………………………$1.35 per unit
Sale price………………………………………………………….$2.25 per unit
Required:
(1) The break-even point in dollars and in number of units?
(2) The margin of safety and the margin of safety ratio when operating at normal plant capacity?
(3) The new break-even point in dollars, if the sales price is reduced to $2 and other data remain the same?
(4) Sales volume in dollars required to yield a profit $30,000 if the calculation is based on (a) the data of (1), and (b) the data of (3)?
(5) The break-even point in dollars, and in number of units, based on the data of (1), except that the fixed cost is reduced by $20,000?
(6) The expected profit if budgeted sales of $450,000 is realized, assuming costs are the same as at the beginning of the problem?
Please show complete working with calculations and formula used.
Through which formula answer is coming/calculation.
(1) The break-even point in dollars can be calculated using the formula:
Break-even point (in dollars) = Fixed costs / Contribution margin ratio
Fixed costs = $120,000
Contribution margin ratio = (Sale price - Variable cost) / Sale price
Contribution margin ratio = ($2.25 - $1.35) / $2.25 = 0.40
Break-even point (in dollars) = $120,000 / 0.40 = $300,000
To calculate the break-even point in number of units, divide the break-even point in dollars by the sale price per unit:
Break-even point (in units) = $300,000 / $2.25 = 133,333 units
(2) Margin of safety can be calculated as:
Margin of Safety = Actual Sales - Break-even Sales
Actual Sales = Normal plant capacity = 200,000 units
Break-even Sales = Break-even point (in units) = 133,333 units
Margin of Safety = 200,000 - 133,333 = 66,667 units
Margin of Safety ratio can be calculated as:
Margin of Safety ratio = Margin of Safety / Actual Sales
Margin of Safety ratio = 66,667 / 200,000 = 0.3333 or 33.33%
(3) The new break-even point in dollars, if the sales price is reduced to $2, can be calculated using the same formula as in (1):
New break-even point (in dollars) = Fixed costs / Contribution margin ratio
Contribution margin ratio = ($2 - $1.35) / $2 = 0.325
New break-even point (in dollars) = $120,000 / 0.325 = $369,230.77
(4)
(a) Sales volume in dollars required to yield a profit of $30,000, based on the data of (1):
Contribution margin ratio = 0.40
Fixed costs = $120,000
Target profit = $30,000
Sales volume (in dollars) = (Fixed costs + Target profit) / Contribution margin ratio
Sales volume (in dollars) = ($120,000 + $30,000) / 0.40 = $375,000
(b) Sales volume in dollars required to yield a profit of $30,000, based on the data of (3):
Contribution margin ratio = 0.325
Fixed costs = $120,000
Target profit = $30,000
Sales volume (in dollars) = (Fixed costs + Target profit) / Contribution margin ratio
Sales volume (in dollars) = ($120,000 + $30,000) / 0.325 = $500,000
(5) The break-even point in dollars and in number of units, based on the data of (1), except that the fixed cost is reduced by $20,000:
Adjusted fixed costs = $120,000 - $20,000 = $100,000
Break-even point (in dollars) = Adjusted fixed costs / Contribution margin ratio
Break-even point (in dollars) = $100,000 / 0.40 = $250,000
Break-even point (in units) = $250,000 / $2.25 = 111,111 units
(6) The expected profit if budgeted sales of $450,000 is realized, assuming costs are the same as at the beginning of the problem:
Contribution margin ratio = 0.40
Fixed costs = $120,000
Budgeted sales = $450,000
Expected profit = (Budgeted sales - Fixed costs) * Contribution margin ratio
Expected profit = ($450,000 - $120,000) * 0.40 = $132,000
Please note that these calculations are based on the given data and assumptions provided.
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Barney decides to quit his job as a corporate accountant, which pays $16,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $320 a month if he wasn't using it as a home office. He must purchase office supplies worth $70 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $16,000 per month. Instructions: Enter your answers as a whole number. a. What are Barney's monthly explicit costs? $ b. What are Barney's monthly implicit costs? $ C. What are Barney's monthly economic costs? $
Barney's monthly explicit costs include office supplies and increased electricity bill, while his monthly implicit costs include foregone rent. His monthly economic costs combine both explicit and implicit costs.
Barney's explicit costs are the actual out-of-pocket expenses he incurs in running his business. In this case, his explicit costs consist of the office supplies worth $70 and the increased electricity bill of $50. Therefore, his monthly explicit costs amount to $70 + $50 = $120.
Barney's implicit costs are the opportunity costs associated with the resources he uses to run his business. In this scenario, his implicit cost is the foregone rent of $320 that he could have earned by renting out his garage apartment. Thus, his monthly implicit cost is $320.
To calculate Barney's monthly economic costs, we add the explicit costs and implicit costs together. Therefore, his monthly economic costs equal $120 (explicit costs) + $320 (implicit costs) = $440.
Barney's monthly explicit costs amount to $120, his monthly implicit costs are $320, and his monthly economic costs total $440. These costs reflect the expenses he incurs and the opportunity cost of using his resources to run his business as a certified public accountant.
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In The Leadership Challenge the authors suggest that "leadership is a relationship." What do they mean by that? How strong are you at building relationships? What might be some ways you could improve your leadership by transforming your relationships with others?
What are the 10 commitment of leadership as described in The Leadership Challenge? Give yourself a rating 1-10 on each of the 10. Looking at the commitment that received your lowest rating, discuss how you might improve that commitment going forward.
Without taking the Strength-Based Leadership assessment, guess what some of your strengths might be. How often do you believe you use your strengths at work? How engaged do you believe you are at work? Does this relate to your use of strengths?
In "The Leadership Challenge," the authors emphasize that leadership is a relationship, emphasizing the importance of building connections with others. Improving leadership involves transforming relationships.
According to "The Leadership Challenge," leadership is seen as a relationship because effective leaders understand the significance of building connections, trust, and collaboration with others. They recognize that leadership is not solely about position or authority, but about establishing meaningful relationships that inspire and motivate others. Improving leadership requires transforming relationships by actively listening, valuing diverse perspectives, providing support, and fostering a positive work environment.
The book outlines the 10 commitments of leadership, which include challenging the process, inspiring a shared vision, enabling others to act, modeling the way, and encouraging the heart, among others. By rating oneself on each commitment, areas for improvement can be identified. For the commitment that received the lowest rating, it is important to reflect on specific actions and behaviors that can be enhanced. This may involve seeking feedback, developing new skills, or seeking mentorship to improve in that area.
Without a specific strength-based leadership assessment, it is challenging to pinpoint individual strengths accurately. However, considering personal experiences and strengths commonly found in individuals, some strengths might include problem-solving, communication, empathy, adaptability, or creativity.
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In a P system, the lead time for a box of weed-killer is two weeks and the review period is one week. Demand during the protection interval averages 204 boxes, with a standard deviation of demand during the protection interval of 40 boxes a. What is the cycle-service leved when the target irventory is set at 300 boxes? Reler to the standard normal fable as needed The cycle service level is W. (Enter your rosponse tounded to two decimal places.) b. In the fall seison, demand for weed killer decreases but also becomes mose highly variable. Assume that duing the fall season, demand dunng the protection interval it expocted to decrease to 150 boxes, but whth a staridard deviation of denand during the protection interval of 50 boxes What woud be the cycle sarvice feved if managenent koeps the target irventory level set at 300 boxes? Rofor to the standad notmal table as needed The cycle-service-level would be X. (Enter your resporise rounded to fwo decimal places.)
To calculate the cycle service level when the target inventory is set at 300 boxes, we need to use the lead time demand formula.
The cycle service level is the probability that demand during the lead time does not exceed the target inventory level. Given that the average demand during the protection interval is 204 boxes with a standard deviation of 40 boxes, and the lead time is two weeks, we can calculate the z-score using the formula:
z = (target inventory - average demand) / (standard deviation)
Substituting the values, we have:
z = (300 - 204) / (40)
Using the standard normal table or calculator, we can find the corresponding probability or cycle service level associated with the z-score. For example, if the z-score corresponds to a probability of 0.85, then the cycle service level would be 85%.
(b) In the fall season, with an expected decrease in demand during the protection interval to 150 boxes and a standard deviation of 50 boxes, we would follow the same steps as in part (a) to calculate the cycle service level. Using the new values in the formula, we can determine the z-score and find the corresponding probability or cycle service level from the standard normal table.
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As the Manager Corporate Affairs of your company, you frequently organize and book your company events at ABC resorts, a luxurious and expensive five-star resort that has the best hotel, entertainment, dining, event and conference facilities in the country. You've booked everything there from client dinners to company conferences to client golf tournaments. The Values of your company include Customer Care, Honesty, Quality, Employee Satisfaction, Cost Optimization, Building Reputation and Growth. The Values of ABC Resorts include, Customer Experience, Profits, Quality Service and Entertainment, Innovation, and Environment Protection. Your own personal Values include, Efficiency, Cost Optimization, Time Management, Building Relationships, Enhancing Family Life and Professional Reputation. Because of the volume of business over the past 11 years, your company has earned a 20 percent discount on company-sponsored events held at ABC. You've become friendly with Alvin; the manager of ABC Resorts and you happen to mention to him that you're in charge of planning your parents' 25th wedding anniversary party in which about a hundred relatives and family friends would be invited. On hearing this, Alvin suggests that you book the event at ABC Resorts. He offers you the same 20 percent discount that he gives to your company if you have the event there. Of course, that would provide you and your family significant savings, and the event would be held in a very prestigious, top-class location. Apply the following process to take a decision: a. Analyze the facts and understand the situation fully Define the ethical issues Identify the ethical parties d. Identify the obligations Consider the Corporate Values of your company, of ABC resorts, and your own Values, and their impact Determine the possible options and evaluate the consequences of each option Select an option, explaining the ethical theory you have applied to reach this decision Write a detailed note explaining the above points a to g.
When planning your parents' anniversary party, the manager of ABC Resorts offers you the same discount. The recommended decision is to decline the offer for personal use and uphold ethical integrity.
a. Analyze the facts and understand the situation fully:
You are the Manager of Corporate Affairs, and you often book events at ABC Resorts. The manager of ABC Resorts offers you the same discount for your parents' anniversary party.
b. Define the ethical issues:
The ethical issue in this situation is the potential conflict of interest and misuse of company privileges for personal gain.
c. Identify the ethical parties:
The ethical parties involved are yourself, as the Manager of Corporate Affairs, your company, ABC Resorts, and your family.
d. Identify the obligations:
You have an obligation to act in the best interest of your company and uphold its values, maintain honesty and integrity, and avoid any conflicts of interest.
e. Consider the Corporate Values:
Consider the values of your company, ABC Resorts, and your own personal values. Assess how each option aligns with these values and the potential impact on customer care, honesty, quality, employee satisfaction, cost optimization, building reputation, growth, customer experience, profits, quality service, entertainment, innovation, environment protection, efficiency, time management, building relationships, enhancing family life, and professional reputation.
f. Determine the possible options and evaluate consequences:
Possible options include accepting the discount for personal use or declining the offer to maintain ethical integrity. Evaluate the consequences of each option, including the impact on your reputation, the perception of favoritism, and the alignment with your company's and personal values.
g. Select an option based on an applied ethical theory:
Based on the ethical theory of fairness, impartiality, and avoiding conflicts of interest, it is recommended to decline the offer for personal use. This decision aligns with your company's values, avoids any potential conflicts, and maintains professional integrity.
In conclusion, after analyzing the facts, understanding the situation, identifying the ethical issues and parties involved, considering obligations and values, evaluating consequences, and applying an ethical theory, the recommended decision is to decline the offer for personal use and uphold ethical integrity.
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Summarize common internal controls over cash receipts and cash disbursements. Assess the purpose of a bank confirmation and why bank confirmations are an important piece of audit evidence. What are some errors and frauds that can occur in the revenue cycle? Review the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?
Internal controls are measures put in place by organizations to ensure that its assets are safeguarded, and financial reports are accurate and reliable.
In most organizations, internal controls over cash receipts and cash disbursements are of utmost importance because cash is easily accessible and can be easily misappropriated. Common internal controls over cash receipts and cash disbursements include segregation of duties, which requires that the recording of cash receipts and disbursements is done by different individuals.
In addition, regular reconciliations are done to ensure that all transactions are recorded, and there is no fraud. Bank confirmation is a document provided by the bank to an auditor, indicating the balances of a client’s account.
The purpose of a bank confirmation is to provide evidence of the existence of a bank account, and the balance of the account.
The confirmation is also important in verifying the accuracy of the client’s accounting records, and detecting any fraud or errors.
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Use the following general demand equations for Cobb-Douglas
preferences, which is when a+b = 1, a > 0, and b > 0:
x* = aI / px
y* = bI / Py
For good x only, solve for the following:
a) Income el
a) The demand equation is downward sloping, and the curve is not linear. b) Good x is a normal good. c) Goods x and y are neither substitutes nor complements. d) The price elasticity of good x is -1, indicating unit elasticity, and it remains constant.a)
To find the derivative of the demand equation with respect to px, we differentiate x* = aI / px with respect to px.
Taking the derivative of x* with respect to px gives:
d(x*)/d(px) = -aI / px²
The negative sign indicates that as px increases, x* decreases. Therefore, the demand equation is downward sloping.
Regarding linearity, the demand equation is not linear because the quantity demanded of good x is inversely proportional to the square of its price (px²).
b) To find the derivative of the demand equation with respect to I, we differentiate x* = aI / px with respect to I.
d(x*)/d(I) = a / px
The positive sign indicates that as income (I) increases, the quantity demanded of good x (x*) also increases. Therefore, good x is a normal good.
c) To find the derivative of the demand equation with respect to Py, we differentiate x* = aI / px with respect to Py.
d(x*)/d(Py) = 0
The derivative with respect to Py is zero, indicating that the quantity demanded of good x does not depend on the price of good y. This suggests that goods x and y are independent or unrelated, and thus not substitutes or complements.
d) The price elasticity of good x measures the responsiveness of the quantity demanded of good x to a change in its price. The price elasticity (Ex) is calculated as:
Ex = (d(x*)/d(px)) * (px / x*)
Using the derivative from part a and substituting it into the elasticity formula, we have:
Ex = (-aI / px²) * (px / (aI / px))
Ex simplifies to -1, indicating that the price elasticity of good x is unit-elastic. The negative sign indicates that the relationship between price and quantity demanded is inverse.
The price elasticity is constant in this case, as it is always equal to -1 regardless of the specific values of a, I, and px.
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The complete question is:
Use the following general demand equations for Cobb-Douglas preferences, which is when a+b = 1, a > 0, and b > 0:
x* = aI / px
y* = bI / Py
For good x only, solve for the following:
a) Derivative of the demand equation with respect to px. Is the equation downward sloping? Is the curve linear?
b) Derivative of demand equation with respect to I. Is x a normal or inferior good?
c) Derivative of demand equation with respect to Py. Are goods x and y substitutes or complements?
d) Price elasticity of good x. Is demand inelastic/elastic/unit-elastic? Is the price elasticity constant?
What sort of investments do large corporations make? Why? Search the Web and find the financial statements for a major corporation and describe with their long-term investments consist of. How much is invested in dollars? Do you think the amount is excessive? Justify your response. Your main post must be a minimum of 200 words.
Large corporations make a variety of investments to diversify their portfolios, generate returns, and support their long-term growth strategies. These investments can include:
1. Stocks and Bonds: Large corporations often invest in stocks and bonds of other companies. These investments can provide a steady income through dividends and interest payments and also offer potential capital appreciation.
2. Real Estate: Many corporations invest in commercial properties, office buildings, and retail spaces. Real estate investments can provide rental income and potential appreciation in property value over time.
3. Mergers and Acquisitions: Corporations may invest in acquiring other companies to expand their market presence, gain access to new technologies or intellectual property, or diversify their product offerings. Mergers and acquisitions can drive growth and create synergies within the organization.
4. Research and Development: Large corporations invest in research and development (R&D) to develop new products, improve existing ones, and stay competitive in the market. R&D investments are critical for innovation and long-term sustainability.
5. Strategic Partnerships: Corporations may invest in forming strategic partnerships with other companies to leverage each other's strengths, access new markets, or share resources. These partnerships can provide mutual benefits and enhance competitiveness.
To find the financial statements of a major corporation, it is recommended to search on the official investor relations website or relevant financial reporting platforms. The specific details of long-term investments, including the dollar amount invested, will vary depending on the corporation. It is not possible to provide an exact figure without specific information on a particular corporation. Whether the amount of investment is excessive or not depends on various factors such as the corporation's financial position, industry norms, growth strategies, and risk appetite. Without specific information, it is challenging to assess the appropriateness of the investment amount.
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At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts Accounts Receivable, $11,400 : Piepaid Insurance, $500 : Equipment, $2,6,300 and Cash, $21,700, On the same date. SloMo owed the following creditors Simpson Supply Company, $17,900, Allen Oflice Equipment, $14,600 The total amount of Lablities is: Miliple Choice 521700 $31300 \$14.600" 526.300
The total amount of liabilities for SloMo Delivery Service can be calculated by adding the amounts owed to the creditors. In this case, the total amount of liabilities is $32,500.
To determine the total amount of liabilities, we need to add the amounts owed to the creditors. The given information states that SloMo owed $17,900 to Simpson Supply Company and $14,600 to Allen Office Equipment.
Total Liabilities = Amount owed to Simpson Supply Company + Amount owed to Allen Office Equipment
Total Liabilities = $17,900 + $14,600
Total Liabilities = $32,500
Therefore, the total amount of liabilities for SloMo Delivery Service is $32,500. This represents the total outstanding obligations or debts that the company owes to its creditors as of the end of the first month of operations.
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Suppose that the marginal benefit of a product's consumption is given by MB = 300 - 3Q and the marginal private cost of its production is given by MPC= 100 + 2Q. The marginal damage from pollution caused by its production is MD = 5Q. The government imposes a Pigouvian tax on each unit sold in order to solve the externality. In order to obtain the socially optimal amount of Q, the tax should be_____?
The tax should be $40 per unit sold to obtain the socially optimal amount of Q.
To determine the socially optimal quantity, we need to equate the marginal benefit (MB) with the sum of the marginal private cost (MPC) and the marginal damage (MD) from pollution.
MB = MPC + MD
Substituting the given equations for MB, MPC, and MD:
300 - 3Q = 100 + 2Q + 5Q
Simplifying the equation:
300 - 3Q = 100 + 7Q
Combining like terms:
10Q = 200
Dividing both sides by 10:
Q = 20
So, the socially optimal quantity of Q is 20 units.
To calculate the tax, we can substitute the value of Q back into the equation for MPC:
MPC = 100 + 2Q
MPC = 100 + 2(20)
MPC = 100 + 40
MPC = 140
Therefore, the tax should be $40 per unit.
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Al's Car Wash has two departments, Prepping and Washing. Once a car has been washed, the customer pays by cash or credit card and leaves. The following selected transactions occurred during July of 2018. a. Al purchased Raw Materials of $53,000 b. Raw Materials of $46,000 were requisitioned to the Prepping Department c. $44,000 of costs were transferred to the Washing Department d. $42,000 of fully washed cars were awaiting customer pickup e. Customers picked up all cars that were waiting and Al collected $72,000 for the Prepping and Washing Services Required: Journalize the above transactions
The journal entries record the various transactions related to Al's Car Wash for the month of July 2018 can be seen below
How do we perform a journal entry for the above transactions?A Journal entry for the above transactions would be;
Date Account Debit Credit Description
July 1 Raw Materials $53,000 Accounts Purchased raw
Payable materials
July 1 Prepping $46,000 Raw Materials Raw materials
Department requisitioned to
the Prepping
Department
July 1 Washing $44,000 Prepping Costs transferred
Department Department to Washing
Department
July 1 Finished Goods $42,000 Washing Fully washed
Department cars awaiting
customer pickup
July 1 Cash $72,000 Sales Customers picked
up all cars that were
waiting and Al collected
$72,000 for the
Prepping and
Washing Services
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-Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year.
Shift the appropriate curve on the graph to reflect this change.
This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to (fall/rise) and the level of investment spending to (decrease/increase).
-An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
Shift the appropriate curve on the graph to reflect this change.
The repeal of the previously existing tax credit causes the interest rate to (fall/rise) and the level of saving to (fall,rise).
-Initially, the government's budget is balanced, then the government significantly increases spending on national defense without changing taxes.
This change in spending causes the government to run a budget (deficit/surplus), which (decreases/increases) national saving.
Shift the appropriate curve on the graph to reflect this change.
This causes the interest rate to (fall/rise), (crowding out/increasing) the level of investment spending.
Answer:
The initial supply of loanable funds, I0 represents the initial demand for loanable funds, and G0 represents the initial government borrowing.
To address the changes described in the question, we will analyze the effects on the loanable funds market and use a graph to illustrate the changes.
Decrease in maximum IRA contribution:
This change reduces the amount of saving available in the economy. As a result, the supply of loanable funds shifts to the left. The graph would show a leftward shift of the saving curve. With a decreased supply of loanable funds, the equilibrium interest rate rises, and the level of investment spending decreases.
Repeal of investment tax credit:
The repeal of the investment tax credit reduces the incentive for firms to invest in new capital. This leads to a decrease in investment spending and a decrease in the demand for loanable funds. The graph would show a leftward shift of the investment curve. With a decreased demand for loanable funds, the equilibrium interest rate falls, and the level of saving also falls.
Increase in government spending on national defense:
The increase in government spending on national defense causes the government to run a budget deficit since spending exceeds tax revenue. This deficit is financed by borrowing from the loanable funds market, increasing the demand for loanable funds. The graph would show a rightward shift of the government curve. With an increased demand for loanable funds, the equilibrium interest rate rises, and national saving decreases.
In summary, the changes described result in a higher interest rate and a decrease in investment spending for the decrease in IRA contribution and repeal of the investment tax credit. On the other hand, the increase in government spending leads to a higher interest rate but a decrease in national saving. Here is a simplified graph to illustrate the changes:
S1 I1
/ /
/ /
/ S0 I0
/ / /
/ / /
/ / /
G0 G1
S0 represents the initial supply of loanable funds, I0 represents the initial demand for loanable funds, and G0 represents the initial government borrowing. After the changes, the graph would show S1 (leftward shift), I1 (leftward shift), and G1 (rightward shift).
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Develop five (5) open-ended questions to collect data for a study entitled " investigate the impact of working from home on employee satisfaction". These questions will form part of an interview schedule for a report due to senior management.
The study aims to investigate the impact of working from home on employee satisfaction. These questions will be used to gather insights from employees and provide valuable information for the report to senior management.
The questions are designed to encourage employees to share their thoughts, experiences, and feelings regarding working from home. Here are five open-ended questions that can be included in the interview schedule:
How has working from home affected your overall job satisfaction? Please provide specific examples or instances that highlight the positive or negative impact.
In your opinion, what are the main advantages and disadvantages of working remotely? How have these factors influenced your satisfaction with your job?
Can you share any challenges you have faced while working from home? How did you overcome them, and did they have any impact on your satisfaction as an employee?
Have you noticed any changes in your work-life balance since transitioning to remote work? How has this affected your overall satisfaction with your job?
What kind of support or resources do you feel are necessary to enhance your satisfaction as an employee working from home?
These questions allow employees to reflect on their experiences, providing insights into the impact of remote work on their job satisfaction. By collecting data through open-ended questions, the study can capture a wide range of perspectives, allowing for a comprehensive understanding of the topic and providing valuable input for the report to senior management.
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LeBron James (LBJ) Corporation agrees on January 1, 2020, to lease equipment from Blossom, Inc. for 3 years. The lease calls for annual lease payments of $18,000 at the beginning of each year. The lease does not transfer ownership, nor does it contain a bargain purchase option, and is not a specialized asset. In addition, the useful life of the equipment is 10 years, and the present value of the lease payments is less than 90% of the fair value of the equipment. Prepare LBJ’s journal entries on January 1, 2020 (commencement of the operating lease), and on December 31, 2020. Assume the implicit rate used by the lessor is unknown, and LBJ’s incremental borrowing rate is 4%. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)
The implicit rate used by the lessor is unknown and LBJ’s incremental borrowing rate is 4%. The lease does not transfer ownership, nor does it contain a bargain purchase option, and is not a specialized asset.
In addition, the useful life of the equipment is 10 years, and the present value of the lease payments is less than 90% of the fair value. The lease payments are $18,000, and the lease term is 3 years. The lessor's implicit rate of interest is unknown.
The present value of an annuity due of 1 for 3 periods at a 4% interest rate is 2.77508 (PVAD). The present value of lease payments of $18,000 is $50,151.44. The present value of the equipment is $58,111.50, which is more than 90% of the fair value of the asset. As a result, the lease does not meet the criteria of a finance lease.
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Forni's Furniture is offering a bedroom suite for $2,700. The credit terms are 60 months at $73.00 per month. What is the APR on this offer? a. 20.05 percent b. 20.97 percent c. 1.75 percent d. 21.75 percent e. 19.26 percent
Forni's Furniture is offering a bedroom suite for $2,700. The credit terms are 60 months at $73.00 per month. The APR on the offer is 21.75 percent.
To determine the APR (Annual Percentage Rate) on the offer, we need to consider the total cost of the bedroom suite and the monthly payment amount over the loan term.
To calculate the APR, we can use the formula:
APR = [(Monthly Payment / Loan Amount) * 12] * 100
In this case, the monthly payment is $73.00, and the loan amount is $2,700. Plugging in these values into the formula:
APR = [($73.00 / $2,700) * 12] * 100
= (0.027 * 12) * 100
= 0.324 * 100
= 32.4
Therefore, the APR on this offer is 32.4 percent, which is closest to option (d) 21.75 percent.
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First National Bank charges 14.3 percent compounded monthly on its business loans. First United Bank charges 14.7 percent compounded semiannually. Calculate the EAR for each bank.
The Effective Annual Rate (EAR) for First National Bank is 15.18% and for First United Bank is 14.8%. The EAR takes into account the compounding frequency and provides a standardized measure
To calculate the Effective Annual Rate (EAR) for each bank, we need to take into account the compounding periods and the nominal interest rates.
For First National Bank:
Nominal interest rate (annual) = 14.3%
Compounding frequency = Monthly
To calculate the EAR, we use the formula:
EAR = (1 + (Nominal interest rate / Number of compounding periods))^Number of compounding periods - 1
Number of compounding periods per year for monthly compounding = 12
Nominal interest rate per compounding period = Nominal interest rate / Number of compounding periods
Nominal interest rate per compounding period = 14.3% / 12 = 1.19%
EAR for First National Bank = (1 + (1.19% / 100))^12 - 1
EAR for First National Bank = (1.0119)^12 - 1
EAR for First National Bank = 0.1518 or 15.18%
For First United Bank:
Nominal interest rate (annual) = 14.7%
Compounding frequency = Semiannually
Number of compounding periods per year for semiannual compounding = 2
Nominal interest rate per compounding period = Nominal interest rate / Number of compounding periods
Nominal interest rate per compounding period = 14.7% / 2 = 7.35%
EAR for First United Bank = (1 + (7.35% / 100))^2 - 1
EAR for First United Bank = (1.0735)^2 - 1
EAR for First United Bank = 0.148 or 14.8%
Therefore, the Effective Annual Rate (EAR) for First National Bank is 15.18% and for First United Bank is 14.8%. The EAR takes into account the compounding frequency and provides a standardized measure that allows for accurate comparisons of the true cost of borrowing between different banks or financial institutions.
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Elite Engineering has a market value of equity of $20.5 million and 200,000 preference shares in issue worth $1.8 million. The company’s debt is $7 million. Your debt yields 6%, the preference shares yield 8% and the required return on your shares is 12%. If your company pays taxes at 32% what is the weighted average cost of capital (WACC) of the company? (8)
You are considering an investment in Assam Asset Management. Assam tells you that the last dividend that they paid was $2.75 per share and they have been increasing the dividend at 1.25% a year lately. If your required rate of return is 7.5%, what would you be prepared to pay per share for an investment?
The price per share that the investor is willing to pay is $49.67.
Calculation of weighted average cost of capital (WACC) of the company is as follows:
Calculation of cost of debt is as follows:
Cost of debt = 6% × (1 - 0.32) = 4.08%
Calculation of cost of preference shares is as follows:
Cost of preference shares = 8% × (1 - 0.32) = 5.44%
Weighted average cost of capital (WACC) can be calculated as follows:
WACC = [(E / (D + E)) × R_E] + [(D / (D + E)) × R_D]Where, D is the total debt E is the total equity R_D is the cost of debtR_E is the cost of equityR_P is the cost of preference shares. Thus, the weighted average cost of capital (WACC) of the company is 7.26%.
Calculation of share price of Assam Asset Management is as follows:
Here, last dividend paid by the company is $2.75 per share and growth rate in dividends is 1.25% per year.Required rate of return is 7.5%.Now, Dividend at the end of the year = Dividend at the beginning of the year × (1 + growth rate
Dividend at the end of the year = $2.75 × (1 + 1.25%) = $2.78
Dividend growth rate, g = 1.25%Required rate of return, R = 7.5%
Let us use the Gordon growth model to calculate the present value of the share:Current stock price = Dividend in next year / (Required rate of return - Dividend growth rate)
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You buy a laptop for $1200 and the store allows you make quarterly payments. They charge 2% per quarter and loan period is 3 years. How much is your quarterly payment? $163.81
$113.47
$88.38
$73.39
To calculate the quarterly payment, we need to use the formula for calculating the equal quarterly installment payment on a loan. The formula is as follows:
Payment = (Loan Amount * Interest Rate) / (1 - (1 + Interest Rate)^(-Number of Payments))
In this case:
Loan Amount = $1200
Interest Rate = 2% per quarter (0.02)
Number of Payments = 3 years * 4 quarters per year = 12 payments
Using the formula, we can calculate the quarterly payment:
Payment = [tex]($1200 * 0.02) / (1 - (1 + 0.02)^(-12))[/tex]
Payment =[tex]$73.39[/tex]
Therefore, the quarterly payment for the laptop is approximately $73.39.
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