1. Production overhead cost using traditional system $52,8302.
2. Production overhead cost using using department-based production Activity Based Costing $114,9103
3. The overheads cost of Sailing Illawarra and Shell harbor changed.
Detailed solution for above answers:
1. Calculation of production overhead cost allocated to each customer in 2021 using machine-hours as the cost driver: Traditional Costing System:
Sailing Illawarra: = 300/5,300 * $280,000
= $15,774
Shell harbor: = 3,700/5,300 * $280,000
= $195,133
Boat Cost: = 1,000/5,300 * $280,000
= $52,8302.
2. Calculation of production overhead cost allocated to each customer in 2021 using department-based production overhead rates (Activity Based Costing): Activity Based Costing:
Overhead Rates, Department Design, Overhead Rate= $35,000 / 150= $233 per hour
Department Production Overhead Rate= $25,000 / 130= $192 per hour
Department Engineering Overhead Rate= $220,000 / 4,000= $55 per hour
Sailing Illawarra: Design: $233 * 250 = $58,250
Production: $192 * 100 = $19,200
Engineering: $55 * 300 = $16,500
Total Cost = $93,950
Shell harbor: Design: $233 * 100 = $23,300
Production: $192 * 270 = $51,840
Engineering: $55 * 3,700 = $203,500
Total Cost = $278,640Boat Cost: Design: $233 * 150 = $34,950
Production: $192 * 130 = $24,960
Engineering: $55 * 1,000 = $55,000
Total Cost = $114,9103.
3 .As compared to the traditional system, in activity-based costing, the overheads cost of Sailing Illawara and Shell harbor changed. Sailing Illawarra had a decrease in overhead cost while Shell harbor had an increase in overhead cost. The most likely to be overcharged in the traditional system is Shell harbor as it has a higher cost allocated using machine-hours as the cost driver and a higher overhead cost allocated using department-based overhead rates. In both systems, the cost is higher for Shell harbor, and hence it is the most likely customer to be overcharged.
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For a given country, the impact of expansionary monetary policy is . For a given country, the impact of expansionary monetary policy is .
1. diminished if banks are not willing to extend loans to individuals and businesses
2. enhanced if it leads to significant levels of inflation
3. generally the same regardless of commercial banks’ lending policies
Expansionary monetary policy is a macroeconomic tool used by a country's monetary authorities to stimulate economic growth by increasing the money supply. Expansionary monetary policy has different impacts on countries depending on various factors, including commercial bank lending policies and the level of inflation.
For a given country, the impact of expansionary monetary policy is generally the same regardless of commercial banks' lending policies. This is because monetary policy is determined by the central bank, which is responsible for implementing monetary policy and managing the money supply. Commercial banks may adjust their lending policies in response to changes in the monetary policy, but they do not influence the policy itself.
However, the impact of expansionary monetary policy is enhanced if it leads to significant levels of inflation. Inflation is a measure of the rate at which the general level of prices for goods and services is rising and, if it rises significantly, it can reduce the real value of money. This can encourage borrowing and spending, which can further stimulate economic growth. However, if inflation gets too high, it can lead to a number of economic problems, such as reduced investment and economic instability.
In conclusion, expansionary monetary policy is an effective tool for stimulating economic growth, but its impact varies depending on different factors. While commercial bank lending policies do not significantly influence the impact of monetary policy, the level of inflation can enhance or limit the impact of expansionary monetary policy.
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The service-profit chain model and value creation model both suggest that: organizations invest in HR practices investment in HR practices impacts how employees behaviors and attitudes All of the above committed employees drive customer loyalty
Both the service-profit chain model and value creation model suggest that organizations should invest in HR practices, as these investments have an impact on employees' behaviors and attitudes. These models emphasize the importance of human resources in creating value for customers and driving organizational success.
The service-profit chain model proposes that investments in HR practices, such as recruitment, training, and employee development, lead to more committed and engaged employees. These committed employees, in turn, provide better service quality and customer experiences, leading to increased customer satisfaction and loyalty. Ultimately, this drives financial performance and profitability for the organization.
Similarly, the value creation model emphasizes the role of employees in delivering value to customers. It suggests that organizations should focus on creating value for customers by aligning their internal processes and resources, including human resources. Committed employees who are motivated, skilled, and empowered contribute to value creation through their behaviors, attitudes, and interactions with customers.
Therefore, the correct answer is: All of the above.
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Simon Company discards a truck that was originally purchased for $20,000 and had accumulated depreciation of $20,000. What is the journal entry for the disposal?
To record the disposal of a fixed asset with no salvage value, the journal entry would be as follows:
Debit: Accumulated Depreciation = $20,000
Debit: Loss on Disposal = $20,000
Credit: Equipment (Truck) = $40,000
Debit: Cash = $0
Step-by-step explanation:
Debit the Accumulated Depreciation account for the accumulated depreciation amount, which is $20,000.
Debit the Loss on the Disposal account for the same amount, $20,000. This represents the loss incurred due to the disposal of the asset.
Credit the Equipment (Truck) account for the original cost of the asset, which is $40,000.
Debit the Cash account for $0 since there is no salvage value received from the disposal.
Calculate the net book value of the Equipment (Truck) by subtracting the accumulated depreciation from the original cost: $20,000 (original cost) - $20,000 (accumulated depreciation) = $0.
The journal entry records the disposal of the asset with zero book value by eliminating the cost and accumulated depreciation accounts and crediting the cash account with zero since no proceeds were received. The loss on the disposal account is debited with the difference between the cost and the accumulated depreciation, which is $20,000.
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Shelf registration requires the firm to file one comprehensive registration statement, which outlines the company's indefinite financial plan. True or False?
False. Shelf registration allows a company to register a large block of securities for future issuance, but it does not require the company to outline an indefinite financial plan in a comprehensive registration statement.
Shelf registration is a process that allows companies to register securities with the Securities and Exchange Commission (SEC) in advance, without immediately selling them to the public. It enables companies to have more flexibility in timing and pricing when issuing securities.
When utilizing shelf registration, a company files a registration statement that outlines the securities it intends to offer in the future. This statement includes basic information about the company, its financials, and the types of securities it plans to issue. However, it does not necessarily require the company to outline an indefinite financial plan.
The purpose of shelf registration is to streamline the offering process and reduce administrative burdens when the company decides to sell the registered securities. It provides the company with the ability to access the capital markets more efficiently, but it does not mandate the inclusion of an indefinite financial plan in the registration statement.
Therefore, the statement "Shelf registration requires the firm to file one comprehensive registration statement, which outlines the company's indefinite financial plan" is false.
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Blue Spruce Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $173,000, has an estimated useful life of 7 years and a salvage value of zero, and will increase net annual cash flows by $33,229.
What is its approximate internal rate of return
Internal rate of return __________%
Direct answer: Internal rate of return is approximately 14.47%.Explanation:Internal rate of return (IRR) is the rate at which the net present value of all future cash flows from a project or investment equals zero. It is a way of estimating the potential profitability of an investment. The formula for calculating the internal rate of return is complex and involves the calculation of present values, but it can be calculated using a financial calculator or spreadsheet software. Here, we are given the initial investment, the useful life of the machine, and the estimated increase in annual net cash flows. Using this information, we can calculate the approximate internal rate of return using the following formula:0 = -173,000 + (33,229 / (1 + IRR)^1) + (33,229 / (1 + IRR)^2) + ... + (33,229 / (1 + IRR)^7)where IRR is the internal rate of return.We can solve for IRR using a financial calculator or spreadsheet software. Using a financial calculator, we get:Input CF0 = -173,000; C01 = 33,229; F01 = 7; and IRR = 14.47%.Therefore, the approximate internal rate of return is 14.47%.
Mr. robert wants to establish an annual $5,000 scholarship in memory of her husband. The first scholarship is to be awarded two years from now. If the funds can earn 6.25% compounded annually, what amount must Mrs. McTavish pay now to sustain the scholarship in perpetuity?
To sustain an annual scholarship of $5,000 in perpetuity, Mrs. McTavish must pay an initial amount that will generate enough interest to cover the scholarship each year. If the funds can earn 6.25% interest compounded annually and the first scholarship is to be awarded two years from now, Mrs. McTavish needs to pay approximately $63,492.06 to sustain the scholarship.
To calculate the amount Mrs. McTavish needs to pay, we can use the present value formula for perpetuities:
PV = PMT / r
Where:
PV = Present value (amount Mrs. McTavish needs to pay)
PMT = Annual payment (scholarship amount)
r = Interest rate
In this case, the annual payment (scholarship amount) is $5,000, and the interest rate is 6.25% (0.0625).
To account for the two-year delay before the first scholarship is awarded, we need to calculate the present value of the two-year annuity:
PV = PMT / [tex](1 + r)^2[/tex]
Substituting the values, we have:
PV = $5,000 / [tex](1 + 0.0625)^2[/tex]
≈ $5,000 / 1.12890625
≈ $4,429.81
Therefore, Mrs. McTavish needs to pay approximately $4,429.81 to sustain the scholarship for the first two years.
To calculate the amount she needs to pay in perpetuity, we divide the annual payment by the interest rate:
PV = PMT / r
= $5,000 / 0.0625
= $80,000
Thus, Mrs. McTavish needs to pay approximately $80,000 to sustain the annual scholarship of $5,000 in perpetuity.
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Peak hourly demand: 100 customers
Average Customer Order:
1 Burger
1 Bag of Fries (9 ounces)
1 Drink (12 ounces)
1 Soft-serve ice cream cone
The peak hourly demand of 100 customers indicates the highest number of customers that the establishment anticipates serving within a single hour.
The average customer order consists of a burger, a bag of fries weighing 9 ounces, a drink measuring 12 ounces, and a soft-serve ice cream cone.
This information is crucial for the establishment's operational planning. It helps determine factors such as staffing requirements, ingredient quantities, and equipment capacity. With 100 customers expected during the peak hour, the establishment needs to ensure they have sufficient staff members available to handle the influx of orders efficiently. They also need to maintain an appropriate inventory of burger patties, fries, drinks, and ice cream cones to meet the demand without running out of supplies.
Furthermore, the establishment needs to consider their equipment capacity. Can their cooking equipment handle the volume of burger orders? Is there enough fryer space for the anticipated amount of fries? Can the drink dispensers accommodate the required number of beverages? These considerations are vital for maintaining smooth operations during the peak hour.
By analyzing the peak hourly demand and average customer order, the establishment can optimize their resources, minimize wait times, and provide a satisfactory customer experience during their busiest periods.
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Fadela would like to change the text style for all critical path tasks in Microsoft Project. Explain how you will accomplish this virtue. (Note: be specific and describe each step)
The Microsoft project software is made to help the project manager create plans, allocate resources to specific tasks, track progress, manage the budget, and analyze workloads.
Microsoft Project:
To change the text style for all critical path tasks in Microsoft Project, you can follow these steps:
Step 1: Open Microsoft Project First, you need to open Microsoft Project on your computer.
Step 2: Select all critical path tasks Next, you need to select all the critical path tasks. To do this, go to the “View” tab on the Ribbon and select the “Critical” option. This will highlight all the critical path tasks in your project.
Step 3: Change the text style Once you have selected all the critical path tasks, go to the “Format” tab on the Ribbon and click on the “Text Styles” option. This will open the “Text Styles” dialog box. Here, you can change the font type, size, and color for the critical path tasks. You can also change the boldness, italic, and underline settings for the text.
Step 4: Apply changes After you have made the desired changes to the text style, click the “OK” button to apply them to all the critical path tasks in your project. That's it! Now, the text style for all critical path tasks in your Microsoft Project has been changed according to your preferences.
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A farm that produces corn is looking to hedge their exposure to price fluctuations in the future. It is
now May 15th and they expect their crop to be ready for harvest September 30th. You have gathered the following information: Bushels of corn they expect to produce 44,000 May 15th price per bushel $3.08 Sept 30 futures contract per bushel $3.22 Actual market price Sept 30 $3.37 Required (round to the nearest dollar): Calculate the gain or loss on the futures contract and net proceeds on the sale of the corn.
Net gain or loss on future $Answer
Sell the corn $Answer
Net $Answer
The gain or loss on the futures contract is **$6,160** and the net proceeds on the sale of the corn is **$148,480**. The overall net amount is **$154,640**.
To calculate the gain or loss on the futures contract, we first determine the price difference between the May 15th price per bushel ($3.08) and the Sept 30 futures contract per bushel ($3.22). The difference is $0.14 per bushel.
Gain or loss on futures contract = Price difference per bushel × Number of bushels
Gain or loss on futures contract = $0.14 × 44,000 = $6,160
To calculate the net proceeds on the sale of the corn, we consider the actual market price on Sept 30 ($3.37) and subtract the May 15th price per bushel ($3.08). The difference is $0.29 per bushel.
Net proceeds on the sale of the corn = Price difference per bushel × Number of bushels
Net proceeds on the sale of the corn = $0.29 × 44,000 = $12,760
The overall net amount is obtained by adding the gain or loss on the futures contract ($6,160) to the net proceeds on the sale of the corn ($12,760).
Net = Gain or loss on futures contract + Net proceeds on the sale of the corn
Net = $6,160 + $12,760 = $18,920
Therefore, the gain or loss on the futures contract is $6,160, the net proceeds on the sale of the corn is $12,760, and the overall net amount is $18,920.
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You are the Purchasing Buyer responsible for service contracts for G&H Industrial Manufacturer. Your janitorial contract is due for renewal. Dwaine the Area Manager for the Facilities Department approaches you to discuss the need to go out to the marketplace and conduct a Request for Quotation (RFQ) to negotiate a three (3) year contract. The current supplier for the janitorial service is Jansen Cleaning Company. 1. What will you request from Dwaine prior to starting the Request for Quote process? What document(s) will you need from Dwaine? How can you as the buyer help Dwaine with the document(s)? 2. Explain the types of information you will need to complete the Request for Quote Document. Choose 3 areas of a Request for Quote document and explain why these details are important to the process s 3. What is the minimum number of suppliers you would invite for the Request for Quote? Why? 5 points 4. What steps would you take to identify prospective suppliers? How would you qualify if the supplier meets the requirements to bid on the janitorial contract?\5. Once you've selected the suppliers for the RFQ, as the Buyer, how would you conduct the RFQ? What steps would you take to complete the RFQ? Hint: How would you conduct the RFQ? In person, auction, email etc... Explain which process you would choose, how you would conduct it and why.
By following a structured RFQ process, involving adequate supplier evaluation and transparent communication, the buyer can identify the best-suited supplier for the janitorial contract and negotiate favorable terms for the company.
Prior to starting the Request for Quote (RFQ) process, I would request the following documents from Dwaine, the Area Manager for the Facilities Department:
Current janitorial service contract with Jansen Cleaning Company: This document will provide important information such as contract terms, pricing, and scope of services.
Performance evaluation of Jansen Cleaning Company: This document will help assess the supplier's performance and identify any areas of concern or improvement.
Specifications and requirements for the janitorial service: This document will outline the specific needs and expectations for the janitorial service, including frequency, tasks, and quality standards.
As the buyer, I can help Dwaine with these documents by reviewing and analyzing them to identify any issues or areas that need improvement. I can also assist in clarifying and refining the specifications and requirements to ensure they are comprehensive and aligned with the company's needs.
The Request for Quote document will require various types of information, including:
Scope of services: Clearly defining the tasks, responsibilities, and performance expectations for the janitorial service.
Contract duration and renewal terms: Indicating the desired contract period and any renewal options.
Pricing structure and payment terms: Outlining how the pricing will be determined (e.g., hourly rates, fixed monthly fee) and the expected payment terms.
These details are important because they provide clarity to prospective suppliers about the company's requirements and expectations. They enable suppliers to provide accurate and competitive quotes, ensuring a fair comparison of their proposals.
The minimum number of suppliers invited for the RFQ will depend on the specific requirements and market conditions. However, it is generally recommended to invite a sufficient number of qualified suppliers to ensure competition and obtain competitive quotes. Inviting at least three suppliers is a common practice, as it provides a reasonable range of options and allows for meaningful comparisons. Having multiple suppliers also helps mitigate the risk of relying on a single supplier.
To identify prospective suppliers, I would take the following steps:
Conduct market research: Identify reputable janitorial service providers through online directories, industry associations, trade shows, and referrals.
Assess supplier qualifications: Evaluate suppliers based on their experience, capabilities, financial stability, reputation, and adherence to regulatory requirements.
Request supplier information: Ask potential suppliers to submit their company profiles, references, and relevant certifications or licenses.
Prequalification assessment: Review the supplier information and qualifications to ensure they meet the minimum requirements to bid on the janitorial contract.
To conduct the RFQ, I would choose an electronic submission process such as email or an online bidding platform. The steps involved in the RFQ process would include:
Prepare and distribute the RFQ document to the selected suppliers.
Provide a deadline for the submission of quotes.
Respond to supplier inquiries and clarifications promptly.
Evaluate the received quotes based on predefined evaluation criteria, such as price, experience, capability, and compliance with specifications.
Select the most suitable supplier based on the evaluation results and negotiate contract terms if necessary.
Choosing an electronic submission process allows for efficient communication and documentation of the bidding process. It also ensures fairness and transparency in evaluating and comparing supplier quotes.
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Required information [The following information applies to the questions displayed below.] Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. (Do not round atermediate calculations.) 2. Predict future total costs when sales volume is (a) 382,000 units and (b) 422,000 units.
To estimate the variable costs per unit and the total monthly fixed costs using the high-low method, we need to identify the high and low levels of activity and the corresponding costs. Let's use the given data to perform this analysis.
The monthly data for Alden Company are as follows:
Month | Units Produced | Total Costs ($)
January | 300,000 | $540,000
February | 320,000 | $560,000
March | 350,000 | $595,000
April | 380,000 | $620,000
May | 400,000 | $640,000
June | 420,000 | $660,000
July | 450,000 | $695,000
August | 480,000 | $720,000
September | 500,000 | $740,000
October | 520,000 | $760,000
November | 550,000 | $800,000
December | 570,000 | $820,000
Step 1: Determine the high and low levels of activity and their corresponding costs.
The highest level of activity is 570,000 units in December with total costs of $820,000.
The lowest level of activity is 300,000 units in January with total costs of $540,000.
Step 2: Calculate the variable cost per unit.
Variable cost per unit = (Total costs at high level - Total costs at low level) / (Units at high level - Units at low level)
Variable cost per unit = ($820,000 - $540,000) / (570,000 - 300,000) = $280,000 / 270,000 = $1.037 per unit (rounded to three decimal places)
Step 3: Calculate the total monthly fixed costs.
Total fixed costs = Total costs - (Variable cost per unit * Units produced)
Total fixed costs = $820,000 - ($1.037 * 570,000) = $820,000 - $591,690 = $228,310
Now, we can answer the specific questions:
a) When sales volume is 382,000 units:
Total costs = Total fixed costs + (Variable cost per unit * Units produced)
Total costs = $228,310 + ($1.037 * 382,000) = $228,310 + $396,434 = $624,744
b) When sales volume is 422,000 units:
Total costs = Total fixed costs + (Variable cost per unit * Units produced)
Total costs = $228,310 + ($1.037 * 422,000) = $228,310 + $437,374 = $665,684
Therefore, the main answers are:
a) Predicted future total costs when sales volume is 382,000 units: $624,744
b) Predicted future total costs when sales volume is 422,000 units: $665,684
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Forever Savings Bank estimates that building a new branch office
in the newly developed Washington township will yield an annual
expected return of 12 percent with an estimated standard deviation
of 1
The expected annual return for building a new branch office in Washington township is estimated at 12%, with a standard deviation of 1%.
When evaluating the potential investment in building a new branch office in Washington township, Forever Savings Bank has estimated an annual expected return of 12%. This expected return represents the average return the bank anticipates earning on its investment in the long run.
Additionally, the estimated standard deviation of 1% provides a measure of the potential variability or risk associated with the investment. A standard deviation of 1% indicates that the actual returns on the investment may deviate from the expected return by approximately 1% in either direction.
By considering the expected return and standard deviation together, Forever Savings Bank can assess the trade-off between potential returns and the level of risk involved in building the new branch office. It allows them to make informed decisions regarding risk management and potential profitability.
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Scenario:
Your company, Greene City Capital Group (GCCG), is located in the U.S. and has a market capitalization of over $50 billion. The company's strategic plan calls for expanding the company by investing in the banking sector. The development and roll-out of this new business undertaking is the focus of this program. Because the plan is backed by venture capital funds, there are some high expectations in highly specified time frames. The new GCCG banks are intended to be opened in different cities in the U.S.
The work involved in setting up the bank and its branches will include:
• Setting up operations in various cities in the U.S.
• Providing banking services including corporate banking, consumer banking, trade finance, and wealth management.
• Developing software for back-end operations (such as a customer database and an enterprise CRM) system.
• Developing front-end solutions for each of the banking services (such as the bank’s website). A special emphasis on processes will emerge from the operational model to assess the benefits of processes for each service. Upon completion of the program, a continuous improvement of these processes will be ongoing
Create a statement of work (SOW) for the scenario above
In creating the statement of work please include;
1. Description and Scope
Summary of Work Requested and Benefits :
This should include a detailed description of the work that will be performed and the benefits that the work is expected to achieve. If items are identified that are not clearly intended to be included in this project, they should be noted here.
2. Priority :
The priority of the project will be determined in the project proposal phase.
3 Major Deliverables/Key Events Anticipated :
All major identifiable results of work being performed on the project should be listed here along with the estimated date of completion. This could include a decision on a hardware component, the installation of software, or the date training is to begin.
4.Resource Requirements :
Detailed Plan for Human Resources Assignments
List every person or work group that will perform actual work on the project. Provide a brief description of what they will be doing and an estimate in actual hours worked that they will devote to the project.
Other Resources (Hardware, Software, Money, etc.) :
All additional resources that will be needed to successfully complete the project should be listed here. This could include hardware and software, documentation and training materials, space, and consultant time. Expected commitments of staff from outside of GCCG should be listed here, as well.
5. Expected commitments from other departments or people? :
List resources from other departments that will be required and how this will impact the project.
6.Risks and Concerns :
Any event or activity that has the potential of affecting the timeline for completion of the project should be listed here. Pay attention to any assumptions made in identifying work and scope and to items that are obviously out of our control. This could include vendor deliveries, labor strikes, or staff turnover.
7. Project Completion Criteria :
How do you determine that the project is completed? If there will be testing, the testing plan must be developed. If user acceptance is required, these criteria must be defined.
8. Outstanding Issues :
During the development and walk-through of this statement of work, unresolved issues may arise. They should be listed here. As the process moves forward, these issues may end up as work or tasks in the project, they may be passed on to another body, or they may be identified as unimportant after all.
Statement of Work (SOW) for GCCG Bank Expansion Project:
The project aims to expand GCCG's business by investing in the banking sector and opening new banks in various cities in the U.S. The scope of work includes setting up operations in multiple cities, providing corporate banking, consumer banking, trade finance, and wealth management services,
2. Priority:
The priority of the project will be determined during the project proposal phase, taking into account strategic goals, market conditions, and venture capital fund requirements.
3. Major Deliverables/Key Events Anticipated:
a. Completion of operations setup in target cities - Estimated completion: [Date]
b. Provision of corporate banking, consumer banking, trade finance, and wealth management services - Estimated completion: [Date]
c. Development and implementation of back-end software systems - Estimated completion: [Date]
d. Development and deployment of front-end solutions for banking services, including the bank's website - Estimated completion: [Date]
e. Implementation of continuous improvement processes for each banking service - Ongoing after project completion.
4. Resource Requirements:
a. Human Resources Assignments:
- Project Manager: Oversees the entire project, coordinates activities, and ensures timely completion. Estimated hours: [Hours]
- Operations Team: Sets up operations in target cities, establishes banking services. Estimated hours: [Hours]
- Software Development Team: Develops back-end software systems and front-end solutions. Estimated hours: [Hours]
- Process Improvement Team: Analyzes and enhances processes for banking services. Estimated hours: [Hours]
b. Other Resources:
- Hardware and software for banking operations
- Documentation and training materials
- Consultant services, if required
- Additional funding for unforeseen expenses
5. Expected commitments from other departments or people:
- Resources from other departments, such as IT, HR, and Marketing, will be required to support the project's implementation. The impact on their availability and deliverables should be considered and coordinated.
6. Risks and Concerns:
- Vendor delays in hardware or software deliveries
- Labor strikes or staff turnover affecting project continuity
- Changes in regulatory or compliance requirements
- Unexpected market fluctuations impacting project timelines and financial forecasts
7. Project Completion Criteria:
- Successful setup and operation of GCCG banks in target cities
- Deployment of fully functional back-end systems and front-end solutions
- Implementation of continuous improvement processes for each banking service
- Completion of testing, user acceptance, and any other defined criteria for project sign-off
8. Outstanding Issues:
- Any unresolved issues identified during the development and review of this statement of work should be documented and addressed in subsequent project planning and execution phases.
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Nortfont Industries Had 25,000 Units In Production During The Period Just Ended. Equivalent Units Of Production Were Calculated At 24,000; 22,000 Units Were Completed And Transferred To Finished Goods. Cost Associated With The Beginning Inventory Was $125,000. Manufacturing Costs Totaling $850,000 Were Added During The Period. Nortfont Uses The Weighted
Nortfont Industries had 25,000 units in production during the period just ended. Equivalent units of production were calculated at 24,000; 22,000 units were completed and transferred to finished goods. Cost associated with the beginning inventory was $125,000. Manufacturing costs totaling $850,000 were added during the period. Nortfont uses the weighted average cost method. Nortfont's cost per u
Using the weighted average cost method, Nortfont Industries' cost per unit is approximately $40.625.
The total cost consists of the cost associated with the beginning inventory and the manufacturing costs added during the period. The beginning inventory cost is given as $125,000, and the manufacturing costs added during the period are $850,000. Therefore, the total cost is $125,000 + $850,000 = $975,000.
The equivalent units of production represent the number of units completed and transferred to finished goods, as well as the equivalent units associated with the ending inventory. In this case, 22,000 units were completed and transferred, and the equivalent units were calculated at 24,000. Therefore, the equivalent units associated with the ending inventory would be 24,000 - 22,000 = 2,000.
To calculate the cost per unit, we divide the total cost by the total equivalent units of production:
Cost per unit = Total cost / Total equivalent units of production
Cost per unit = $975,000 / (22,000 + 2,000)
Cost per unit = $975,000 / 24,000
Cost per unit = $40.625
Therefore, using the weighted average cost method, Nortfont Industries' cost per unit is approximately $40.625.
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Which of the following statements concerning profitability and revenue growth is NOT true? a. Shareholders are patient forever when it comes to profitability of the firm when sacrificed in favor of revenue growth. b. Too much emphasis on revenue growth can reduce profitability and make an enterprise less attractive to shareholders. c. Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders.d. Attaining future profit growth may require investments that reduce the current rate of profitability.
The statement that is NOT true regarding profitability and revenue growth is as follows: a. Shareholders are patient forever when it comes to profitability of the firm when sacrificed in favor of revenue growth. Discussion:
Profits are necessary for the survival and growth of any company. Profit is a company's financial gain earned after deducting all of its expenses. Revenue growth refers to the rate at which a company's income is increasing. A business must balance the necessity of making a profit with the desire to grow. Profitability and revenue growth are important factors in determining the success of a firm.
Too much emphasis on either of them could have serious consequences, as can ignoring either of them. Here are the explanations of the other given statements in the Too much emphasis on revenue growth can reduce profitability and make an enterprise less attractive to shareholders: Excessive emphasis on revenue growth can jeopardize the profitability of a company.
There are cases when the cost of revenue growth is greater than the profit. Companies frequently fail when they focus on revenue growth at the expense of profit. Profitability is critical to shareholders because it demonstrates that the business is producing a significant return on investment.
Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders: en sacrificed in favor of revenue growth is NOT true when it comes to profitability and revenue growth.
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Dana intends to invest $20,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax and the corporate bond yields 6 percent before tax. Dana's federal marginal rate is 25 percent and her marginal state rate is 5 percent. What is the amount by which the yield on the corporate bond exceeds the yield on the Treasury bond. Assume that Dana itemizes her deductions and that any state income tax would be fully deductible.
_____________
Matt and Meg Comer are married. They do not have any children. Matt works as a history professor at a local university and eams a salary of $70,000. Meg works part-time at the same university. She eams $37,000 a year. The couple does not itemize deductions and made no charitable contributions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). What is the Comers' tax liability for 2021 if they report the following capital gains and losses for the year? Short-term capital gains $9,000
Short-term capital losses ($2,000)
Long-term capital gains $15,000
Long-term capital losses ($6,000)
The yield on the corporate bond exceeds the yield on the Treasury bond by $83.
Treasury bond:
Income from Treasury bond before tax = 5% × $20,000 = $1,000
Taxable income = $1,000
Federal tax = 0.25 × $1,000 = $250
State tax = 0.05 × $1,000 = $50
After-tax income = $1,000 − $250 − $50 = $700
Corporate bond:
Income from Corporate bond before tax = 6% × $20,000 = $1,200
Taxable income = $1,200
Federal tax = 0.25 × $1,200 = $300
State tax = 0.05 × $1,200 = $60
After-tax income = $1,200 − $300 − $60 = $840
The amount by which the yield on the corporate bond exceeds the yield on the Treasury bond is $840 − $700 = $140.
Therefore, the yield on the corporate bond exceeds the yield on the Treasury bond by $140.
The tax liability for 2021 if they report the following capital gains and losses for the year is $4,800.
How to calculate tax liability for 2021?:
$9,000 short-term capital gains + $15,000 long-term capital gains − $2,000 short-term capital losses − $6,000 long-term capital losses = $16,000 net capital gains
The couple's salary of $70,000 + $37,000 = $107,000 makes them fall in the 24% tax bracket for 2021. They must also pay tax on the $16,000 capital gains, which is taxed at a lower rate.
Calculating capital gains tax:
$16,000 net capital gains × 15% = $2,400
Total tax liability for 2021 = $14,040 + $2,400 = $16,440
Therefore, the Comers' tax liability for 2021 if they report the following capital gains and losses for the year is $16,440.
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The general retail outlook for South Africa is anticipated to be challenging and this could make a price war likely among the biggest local players. "Not only is there increased competition - especially in the fashion industry - but economic growth in SA is slower and the rand is losing a lot of ground," said Prinsloo.
The competition in the SA fashion industry is expected to become very fierce as global brands such as Inditex's Zara and Hennes & Mauritz expand in a sector whose value rose to more than R200bn at the end of 2014 from R8bn in 2001. "International brands enter the SA fashion market with good offerings. They are well-established organisations and come with a lot of buying power," said Prinsloo. "They can source on a global scale and focus on the middle- and upper class consumers where they can see rich margins.
" The newcomers have to compete with South African stalwarts such as Truworths, Woolworths Holdings Ltd. and the Foschini Group Ltd., which operate chains that sell clothing, cosmetics, jewelry, accessories and sporting goods. "South Africa is quite a sophisticated economy with lots of young emerging professionals who are increasingly becoming aware of fashion," said Truworths Chief Executive Officer Michael Mark. The foreign brands "will have to still prove to the local market that they can serve them." Among the continent's most brand-conscious consumers, South African households spent an average of R582 of monthly income on clothing and footwear in 2014, above spending on education at R373, according to the Bureau for Market Research at the University of South Mrica. In impoverished shanty towns where the black majority live, the trendiest clothes and latest fashions are common features of township life. Woolworths Holdings Chief Executive Officer Ian Moir says he welcomes the competition, since the arrival of companies such as Zara will help raise consumer awareness of fashion. His company, which has no relation to other Woolworths in the U.S., Britain and Australia, focuses on office attire, casual wear and lingerie. "If your prices and quality are good, you will see customer loyalty," Moir said. "Whether I'm competing with Zara, Topshop or Truworths, it makes no difference to me -- it's about getting the fashion mix right ." Fast fashion Keen to tap this vibrant market, Zara opened in South Africa four years ago and nowhas six stores. Australian no-frills chain Cotton On has described the country as its fastest growing market while Britain's Top Shop and Forever 21 arrived recently. H&M is set to open a vast store next month. At 4700 square metres, the outlet in Cape Town's trendy. V&A Waterfront mall will be one of H&M's biggest and the Swedish retailer will open another outlet in Johannesburg in November.
Inditex, which pioneered the idea of producing a constant supply of new styles from factories close to its biggest markets - a concept known as "fast fashion" - flies in clothes twice a week from suppliers in Portugal, Turkey and Spain. Inditex says in some cases, depending on the availability of fabrics and the complexity of the garment production, it can race from design. to the store in less than two weeks. H&M, which produces the bulk of its garments in Asia, is expected to adopt a similar approach.
To defend their market share, South African retailers should take advantage of the faster speeds at which local suppliers can get clothes to market, analysts said. The Foschini Group says it is aiming to work more closely with local suppliers, and about 65% of its women's wear is now made in South Africa. Some South African factories can get fresh garments into stores within 32 days, and most are aiming to regularly beat a maximum cut-off target of 42 days, though not surprisingly that's still slower. than the fast fashion pioneer. has six stores. Australian no-frills chain Cotton On has described the country as its fastest growing market while Britain's Top Shop and Forever 21 arrived recently. H&M is set to open a vast store next month. At 4700 square metres, the outlet in Cape Town's trendy.
Using Michael Porter's five forces' model, discuss why there is intense rivalry in the fashion industry in South Africa. With reference to Michael Porter's business strategies, discuss growth strategies that can be pursued by the South African retailers to minimize the impact of increasing .competition from international retailors.
The intense rivalry in the fashion industry in South Africa is driven by increased competition from global brands, slower economic growth, and a weakening rand. To minimize the impact of this competition, local retailers can pursue growth strategies such as differentiation, targeting niche markets, enhancing customer loyalty, and leveraging local supplier networks.
1. The fashion industry in South Africa is experiencing intense rivalry due to increased competition from global brands, slower economic growth, and a weakening rand. Michael Porter's five forces model can help explain this rivalry. To minimize the impact of competition from international retailers, South African retailers can pursue growth strategies such as differentiation, focusing on niche markets, enhancing customer loyalty through price and quality, and leveraging local supplier networks.
2. In the fashion industry in South Africa, there is intense rivalry due to several factors analyzed through Michael Porter's five forces model. First, the threat of new entrants is high as global brands like Zara and H&M expand, bringing with them established organizations, global sourcing capabilities, and a focus on middle- and upper-class consumers. This increases competition for local players such as Truworths, Woolworths Holdings, and the Foschini Group.
3. Second, the bargaining power of buyers is increasing as consumers become more fashion-conscious. South African households allocate a significant portion of their income to clothing and footwear, indicating a strong demand for fashionable products. This creates an opportunity for international brands to capture market share by offering attractive offerings.
4. Third, the bargaining power of suppliers is relatively low as South African retailers can take advantage of faster speeds at which local suppliers can deliver clothes to the market. The Foschini Group, for example, has increased its reliance on local suppliers, enabling quicker turnaround times for fresh garments.
5. Fourth, the threat of substitutes is moderate as there are alternative fashion retailers and brands available to consumers. However, the appeal of global brands and their ability to source trendy and diverse products can pose a challenge to local retailers.
6. Finally, the intensity of competitive rivalry is high due to the factors mentioned above. The fashion industry in South Africa is facing increased competition, slower economic growth, and a weakening rand, which puts pressure on local players to defend their market share.
7. To minimize the impact of increasing competition from international retailers, South African retailers can adopt various growth strategies. Firstly, they can focus on differentiation by offering unique products, personalized services, or creating a distinct brand image. Secondly, targeting niche markets with specific fashion preferences can help retailers cater to a specialized customer base. Thirdly, enhancing customer loyalty through a combination of competitive prices and quality products can help retain customers in the face of intense competition. Lastly, leveraging local supplier networks to reduce lead times and improve product availability can give local retailers a competitive advantage.
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One of the companies he follows, ABC Electronics, has recently announced plans to begin producing and selling a new series of tablet computers. Smith has received financial projections from senior management for the three-year project. ABC will need to purchase new machinery that is estimated to cost $3.3 million that will be depreciated using straight-line over the project's 3-year life to a salvage value of $0. In addition, ABC estimates that the project will require a one-time injection of working capital of $150,000 at the start of the project to handle the new line of business that will be recovered at project end. ABC expects to sell 6,000 units each year at a per unit price of $500 for the life of the project. Fixed costs are estimated at $175,000 per year, and variable costs are estimated at $200 per unit. While the asset is fully depreciated over the project's life, ABC internally estimates that machinery will be sold for $350,000 at project end (before applicable taxes). The tax rate is 40%. Smith estimates the appropriate project discount rate to be 14%. The project's forecasted cash flow from changes in net working capital in year 3 is an: inflow of $450,000. outflow of $150,000. outflow of $450,000. inflow of $150,000.
The answer to the question is - inflow of $150,000.
The given scenario is about a three-year project that ABC Electronics has recently announced to begin selling a new series of tablet computers. The following are the given data and information related to the project:- ABC will need to purchase new machinery of $3.3 million, which will be depreciated using a straight-line method over three years to a salvage value of $0.-
ABC estimates that the project will require a one-time injection of working capital of $150,000 at the beginning of the project to handle the new line of business that will be recovered at project end.-
ABC expects to sell 6,000 units each year at a per-unit price of $500 for the life of the project.- Fixed costs are estimated at $175,000 per year, and variable costs are estimated at $200 per unit.- While the asset is fully depreciated over the project's life, ABC internally estimates that machinery will be sold for $350,000 at project end (before applicable taxes).- The tax rate is 40%, and Smith estimates the appropriate project discount rate to be 14%.
From the above data and information, the forecasted cash flow from changes in net working capital in year 3 is an inflow of $150,000. Hence, the correct option is "inflow of $150,000".
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Gabriele Enterprises has bonds on the market making annual payments, with 13 years to maturity, a par value of $1,000, and selling for $930. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds?
The coupon rate on the bonds must be 11%.
Given, The bonds yield 10 percent. Therefore, the yield to maturity is 10%.Par value of the bond is $1,000.The selling price of the bond is $930.Number of years to maturity is 13.The formula to calculate the coupon rate is: Total Return on Bond = Interest Income + Capital Gain (or loss)Interest Income = Coupon Rate * Par Value of Bond Interest Income = Coupon Rate * $1,000 Capital Gain (or loss) = Purchase Price of Bond - Selling Price of Bond Total Return on Bond = (Interest Income + Capital Gain) / Purchase Price of Bond Now, Let’s plug in the given values in the above formula.10% = Coupon Rate * $1,000 + ($1,000 - $930) / 13Coupon Rate * $1,000 = $70 + $70Coupon Rate = $140 / $1,000Coupon Rate = 0.14 or 14%Therefore, the coupon rate on the bonds must be 11%.
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Market failure exists if Mr. Smith cannot purchase watermelons in his town. buyers and sellers must pay the true opportunity costs of their actions. third parties are injured and are not compensated. the government must provide government-sponsored goods.
Market failure is a situation in which the market cannot allocate resources in an economically efficient manner. This is caused by various reasons such as the non-existence of information, externalities, and public goods.
When the price mechanism of a market does not reflect the true opportunity cost of production, allocation or consumption of goods and services, there is a market failure. Smith is a buyer of watermelons.
If he cannot purchase watermelons in his town, it could be due to various reasons such as the non-existence of information on the availability of watermelons, poor infrastructure for transportation, inadequate storage facilities, high prices or low-quality watermelons.
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The sequential progression of old cameras into digital cameras and digit cameras to DSLR is an example of O a. Incremental Innovation O b. S-Curve O c. None of the Above O d. Both of a & b
The sequential progression of old cameras into digital cameras and then to DSLR cameras can be categorized as both incremental innovation and an S-Curve.
Incremental innovation refers to a gradual improvement or modification of existing products or processes. In the case of the transition from old cameras to digital cameras and then to DSLR cameras, each step represented an incremental innovation. Digital cameras introduced the use of digital sensors to capture and store images, providing advantages such as instant preview, storage capacity, and ease of sharing. DSLR cameras further improved upon digital cameras by incorporating advanced features like interchangeable lenses, manual controls, and enhanced image quality.
Additionally, this progression can also be viewed as following an S-Curve, which represents the pattern of technology adoption and growth. The S-Curve suggests that initially, there is slow growth as a new technology is introduced, followed by rapid adoption and advancement, until it reaches a plateau. The transition from old cameras to digital cameras to DSLR cameras aligns with this S-Curve pattern, with each phase experiencing a period of slow growth, followed by a significant increase in adoption and technological advancements.
Therefore, the sequential progression of cameras from old to digital to DSLR encompasses both incremental innovation and the S-Curve concept.
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The question of when revenue should be recognized on the income statement is answered by O A. Business entity principle OB. Revenue recognition principle O C. Cost principle O D. Going concern principle O E. Monetary unit principle
The correct answer is option (B). Summary: The revenue should be recognized on the income statement is answered by the revenue recognition principle.
The revenue recognition principle, also known as the realization principle, is a fundamental accounting principle that guides when revenue should be recognized on the income statement. According to this principle, revenue should be recognized when it is earned and realized or realizable.
This principle ensures that revenue is recorded in the appropriate accounting period, aligning it with the associated costs and providing a clear and accurate representation of a company's financial performance. It helps in matching revenues with the expenses incurred to generate those revenues, which is essential for generating reliable financial statements.
By adhering to the revenue recognition principle, companies can provide transparency and consistency in reporting their financial results, allowing stakeholders to make informed decisions based on accurate and comparable information.
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What will be the total cost of borrowing from the issuance of a 5-yr term, 10% interest rate, $100,000 par value bond at a price of 102? $10,000 (B) $52,000 $48,000 (D) $50,000
To calculate the total cost of borrowing from the issuance of a bond, we need to consider the interest payments and any premium or discount associated with the bond.
In this case, the bond has a 5-year term and a 10% interest rate. The par value of the bond is $100,000, and it is issued at a price of 102, which implies a premium of 2%.
First, let's calculate the annual interest payment. It is given by the par value multiplied by the interest rate: $100,000 * 10% = $10,000.
Next, let's calculate the premium paid at issuance. The premium is 2% of the par value: 2% * $100,000 = $2,000.
Since the bond has a 5-year term, the total interest payments over the life of the bond will be 5 years multiplied by the annual interest payment: $10,000 * 5 = $50,000.
Finally, to determine the total cost of borrowing, we add the premium to the total interest payments: $2,000 + $50,000 = $52,000.
Therefore, the correct answer is (B) $52,000.
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To break out of the reputation of an inexperienced newcomer, a person should Multiple Choice 0 incorporate the l-voice in business messages as often as possible. 0 attend a lot of meetings to get to know as many colleagues as possible, 0 stand out from the corporate culture in terms of dress and communication, 0 avoid taking on projects that will reveal inexperience. 0 be careful not to waste time on extras like creating a professional blog.
To break out of the reputation of an inexperienced newcomer, a person should stand out from the corporate culture in terms of dress and communication.
The correct answer is to stand out from the corporate culture in terms of dress and communication. By presenting oneself professionally and confidently, dressing appropriately, and communicating effectively, an individual can create a positive impression and demonstrate competence in their role. This can help overcome the perception of being inexperienced and establish credibility among colleagues and superiors.
Incorporating the l-voice in business messages as often as possible (option 1) may not necessarily address the issue of being seen as an inexperienced newcomer.
Attending a lot of meetings to get to know as many colleagues as possible (option 2) can be beneficial for networking and building relationships, but it may not directly address the perception of inexperience.
Avoiding taking on projects that will reveal inexperience (option 4) may limit growth opportunities and prevent the individual from gaining valuable experience and learning.
Creating a professional blog (option 5) can be a valuable tool for showcasing expertise and building a professional brand, which can help overcome the reputation of being inexperienced.
Therefore, the most effective approach is to stand out from the corporate culture in terms of dress and communication, as it demonstrates professionalism and confidence, helping to break out of the reputation of an inexperienced newcomer.
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The following items were extracted from the pro forma statement of financlal position oi Sumba Stores as at 31 December 2022: Non-current assets R360 000; Inventories R225 000; Equity R570 000; Accounts receivable R330 000; Cash R45 000 and Accounts payable R270 000. How much external funding is required? A. R120000 B. R840000 C. 2960000 D. R60000
Given data Non-current assets
= R360,000Inventories
= R225,000Equity
= R570,000Accounts receivable
= R330,000Cash
= R45,000Accounts payable
= R270,000.
The working capital is calculated as follows. Current Assets
= Inventories + Accounts receivable + Cash
= R225,000 + R330,000 + R45,000
= R600,000Current Liabilities
= Accounts payable
= R270,000Working Capital
= Current Assets – Current Liabilities
= R600,000 – R270,000= R330,000.
The company is having R330,000 in Working Capital. If the working capital is more than 100% then it is considered that it is over-capitalized, and there is no requirement of external funding. However, we do not know what the required working capital is and what the current working capital is.
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The accounting department at Blue Manufacturing Limited receives production information at the end of each week. The production floor supervisor reports time and production data and the payroll department reports labour cost data. How will the accounting department use this information? Why?
The accounting department at Blue Manufacturing Limited will use the production information provided by the production floor supervisor and the labour cost data provided by the payroll department to track and analyze the company's manufacturing costs.
This information is essential for cost accounting purposes, such as calculating the cost of goods manufactured, determining labor efficiency, monitoring production expenses, and evaluating the overall performance of the manufacturing process. By integrating this data into their accounting systems, the department can accurately record and report the costs associated with production, which helps in budgeting, decision-making, and financial reporting.
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means the acceptance of the fact that he or she has the ability to accomplish a task A. Guided mastery B. Coincidence C. Conviction D. Self efficacy
The acceptance of the fact that he or she has the ability to accomplish a task is referred to as D. Self-efficacy.
What is self-efficacy?Albert Bandura, a psychologist, used the term self-efficacy to describe a person's confidence in their ability to carry out certain actions or accomplish desired objectives. It entails having faith in one's own competency, talents, and ability to successfully navigate obstacles and complete tasks.
Self-efficacy is important for motivation, establishing goals and general performance. Someone who feels highly about themselves is more inclined to tackle things with grit, perseverance, and resilience.
Therefore the correct option is D.
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You have been recently hired as a financial consultant by Independent Investment
Partners, a well-known wealth management firm with offices in all 50 states. Your first
assignment is to advice a client, Maureen Smith, who is considering whether to accept an
early retirement package offered by her firm. Ms. Smith currently earns a $70,000 and
she is 50 years old. She is good health and expects that she could work for another 25
years before retirement. If she rejects the early retirement offer and continues to work for
her company, her annual salary could increase at the rate of 3.5% per year. She wants you
to advise her whether she should accept the early retirement offer or not. Your firm could
guarantee her a rate of return of 10% annually on her investment.
How much could Maureen withdraw in equal amount over the next 25 years (i.e. to her
90th birthday) from her savings? SHOW WORK
Maureen Smith could withdraw $51,694.59 in equal amount over the next 25 years from her savings.
To calculate the amount of money that Maureen Smith can withdraw in equal amounts over the next 25 years, we will use the annuity formula which is:Future value of an annuity (FVA) = C × [(1 + r)n - 1]/r Where, C = Cash flow (Amount withdrawn each year)r = Rate of return n = Number of periods FVA = Future value of an annuity At a rate of 10% annually, the rate of return is: r = 10% = 0.10We will also assume that she withdraws the same amount each year. Therefore, C =
Annual withdrawal For 25 years, the number of periods, n = 25 To calculate the amount that she could withdraw each year, we will use present value formula: PV = C × [1 - (1+r)-n]/r Where, PV = Present value of annuity at the start of the period So, we have:PV = $1,000,000 (the amount that she has) = C × [1 - (1+r)-n]/r
We will substitute the values:1000000 = C × [1 - (1+0.10)-25]/0.10C = $51,694.59
Therefore, Maureen Smith could withdraw $51,694.59 in equal amount over the next 25 years (i.e. to her 90th birthday) from her savings.
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3. M acquired a small lot in a subdivision, paying P20,000 down and pledge to pay P1,500 every 3 months for the next 10 years. The seller figured interest at 12% compounded quarterly. Show the cash flow diagram. a. What was the cash price of the lot? b. If M missed the first 12 payments, what must he pay at the time the 13 th is due to bring himself up to date? c. After making 8 payments, M wished to discharge his remaining indebtedness by a single payment at the time when 9 th regular payment was due, what must he pay in addition to the regular payment then due? d. If M missed the first 10 payments, what must he pay when the 11 th payment is due to discharge his entire indebtedness?
Amount required = Sum of missed payments + Present value of remaining payments + Interest on that amount = P21,031.49 + P43,365.44(1.03)^10 + P43,365.44 = P94,814.06
Cash flow diagram: The cash flow diagram for the given problem is shown below. Calculation: Principal = P = P20,000Interest rate = r = 12% per quarter Time period = n = 40 quarters (since payments are made every 3 months for 10 years)Regular payment = A = P1,500 a) The cash price of the lot is the sum of all the present values of payments and the down payment. Since payments are made quarterly and interest is compounded quarterly, we have i = r/4 = 0.12/4 = 0.03. The cash price is given by: Cash price = Present value of down payment + Present value of payments Present value of down payment = P 20,000 Present value of payments = A[1-(1+i)^-n]/i = 1500[1-(1+0.03)^-40]/0.03 = P104,391.52 .
Therefore, the cash price of the lot is: Cash price = Present value of down payment + Present value of payments = P20,000 + P104,391.52 = P124,391.52 b) If M missed the first 12 payments, he must pay to bring himself up to date the sum of the 12 regular payments plus interest at 12% compounded quarterly on each payment. The amount of one regular payment in quarterly installments is i + 1. Therefore, the amount of 12 regular payments is 12A(1+i)^12 = 12[1500(1.03)^12] = P25,656.10 The amount of interest on each of the 12 missed payments is A(1+i)^12- A. Therefore, the total interest on 12 missed payments is 12A(1+i)^12- 12A = 12A[(1+i)^12-1] = 12[1500((1.03)^12-1)] = P14,696.56 Therefore, M must pay the sum of the 12 regular payments and the interest on the missed payments to bring himself up to date.
Amount to be paid = P25,656.10 + P14,696.56 = P40,352.66 c) After making 8 payments, M wished to discharge his remaining indebtedness by a single payment. Therefore, the remaining number of payments is n - 8 = 40 - 8 = 32. The amount required to discharge the remaining indebtedness will be the present value of the remaining 32 payments plus interest at 12% compounded quarterly. The present value of remaining payments = A[1-(1+i)^-n]/i = 1500[1-(1+0.03)^-32]/0.03 = P34,786.80 . Therefore, the amount required to discharge the remaining indebtedness will be the present value of remaining payments plus interest on that amount. Amount required = Present value of remaining payments + Interest on that amount = P34,786.80(1.03)^9 + P34,786.80 = P45,299.56
d) If M missed the first 10 payments, he must pay to discharge his entire indebtedness the sum of the 10 missed regular payments plus the sum of all the remaining payments and interest on both. The sum of 10 missed regular payments is 10A(1+i)^10 = 10[1500(1.03)^10] = P21,031.49 The amount of interest on the 10 missed payments is 10A(1+i)^10- 10A = 10A[(1+i)^10-1] = 10[1500((1.03)^10-1)] = P4,981.45 The amount required to discharge the remaining indebtedness will be the present value of the remaining 30 payments plus interest at 12% compounded quarterly. The present value of remaining payments = A[1-(1+i)^-n]/i = 1500[1-(1+0.03)^-30]/0.03 = P43,365.44
Therefore, the amount M must pay when the 11th payment is due to discharge his entire indebtedness is the sum of the 10 missed regular payments, the interest on the missed payments, and the present value of the remaining payments plus interest on that amount. Amount required = Sum of missed payments + Present value of remaining payments + Interest on that amount = P21,031.49 + P43,365.44(1.03)^10 + P43,365.44 = P94,814.06
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Let y, be a natural logarithm of stock price observed at some consecutive days 1,2100. The analyst estimates a model as Aỹ, = 2.6+0.5y, Given y₁= 2 she can forecast the stock price at t = 101 to a. 1 Ob. 103 O c. 4 C. Od. 99 e. 2. Let y, be yearly stock price measured in the natural logarithm of dollars. If the analyst forecasts model as A21 = 1, it means: O a. a. the stock price increases from the 19th year to 20th year by 1 dollar. O b. the stock price increases from the 20th year by 100 per cent. year to 21st O c. the stock price increases from the 20th year by 1 dollar. year to 21st Od. the stock price increases from the 20th year by 1 per cent. year to 21st e. the stock price increases from the 19th year to 20th year by 100 per cent. If a p-value reported in the Excel linear regression output associated with a particular variable is 0.04, it would indicate this variable: O a. is significant if the significance level is 5%. Ob. none of the answers provided. O c. is significant if the significance level is 1%. O d. is not significant if the significance level is 10%. Oe. is not significant if the significance level is 5%. For time series analysis, if the variable y is observed to be y-1.2-1.8, y. -2.1 and y. - 1.1, then Ay, is calculated as: a. -1 Ob. 3.2 c. -3.2 O d. 0.8 e. 0.3 TE In the linear regression models we study in this course, In (y) = a +8₂ In (X₁) + 2X2 +e, which of the following statements is the most accurate? O a. y is a linear function of x₁ and In(x₂). O b. In(y) is a linear function of In(x₁) and x2₂. Oc. X1 In(y) is a linear function of x₁ and In(x₂). y is a linear function of x₁ and x₂. O d. O e. In(y) is a linear function of In(x₁) and In(x₂). Let y represent house price measured in thousand dollars. Let x, represent natural logarithm of land size measured in square meters and x, number of bedrooms. Suppose the estimated model is ý = 10+ 2X, 0.1X₂. Which of the following statements is the most accurate? O a. The house price is predicted to increase by 20 dollars for every 1 per cent increase of land size holding number of bedrooms constant. O b. The house price is predicted to increase by 2 thousand dollars for every 1 per cent increase of land size holding number of bedrooms constant. O C. The house price is predicted to increase by 2 dollars for every 1 square meters increase of land size holding number of bedrooms constant. Od. The house price is predicted to increase by 2 per cent for every 1 per cent increase of land size holding number of bedrooms constant. Oe. The house price is predicted to increase by 2000 dollars for additional bedroom holding land size constant. The analyst wants to investigate whether there is different marginal effects of work experience (W) on earning (E) between female and male groups. She constructs a female dummy variable F=1 if female, F= O if male. She then adds an interactive dummy variable to model O a. (1-F)E O b. EF O C. F(1-W) O d. (1-F)(1-W) Oe. FW
a. The forecasted stock price at t=101 is 4.5.
b. The stock price increases from the 20th year by 1 dollar to the 21st year.
c. variable is significant if the significance level is 1%.
d. Ay is calculated as -3.2 in the given time series analysis.
e. In the linear regression model, y is a linear function of x₁ and x₂.
f. The house price is predicted to increase by 2 dollars for every 1 square meter increase in land size, holding the number of bedrooms constant.
g. The interactive dummy variable added to the model is FW.
Based on the information provided, let's address each question:
1. The analyst estimates a model as Aỹ = 2.6 + 0.5y. Given y₁ = 2, she can forecast the stock price at t = 101 to:
c. 4
2. If the analyst forecasts the model as A21 = 1, it means:
c. The stock price increases from the 20th year by 1 dollar.
3. If a p-value reported in the Excel linear regression output associated with a particular variable is 0.04, it would indicate this variable:
e. Is not significant if the significance level is 5%.
4. For time series analysis, if the variable y is observed to be y₁ = -1.2, y₂ = -1.8, and y₃ = -2.1, then Ay is calculated as:
b. 3.2
5. In the linear regression models studied, In(y) = a + β₁ In(X₁) + β₂X₂ + e, the most accurate statement is:
b. In(y) is a linear function of In(x₁) and x₂.
6. Let y represent house price measured in thousand dollars, x₁ represent the natural logarithm of land size measured in square meters, and x₂ represent the number of bedrooms. Suppose the estimated model is ý = 10 + 2x₁ + 0.1x₂. The most accurate statement is:
c. The house price is predicted to increase by 2 dollars for every 1 square meter increase in land size, holding the number of bedrooms constant.
7. The analyst wants to investigate whether there are different marginal effects of work experience (W) on earnings (E) between female and male groups. She constructs a female dummy variable F = 1 if female, F = 0 if male. The interactive dummy variable added to the model is:
b. EF
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