In summary, MacAskill's arguments suggest that fair trade lacks a feedback mechanism, boycotting sweatshops can worsen the situation for the global poor, and high-income earners have the potential to make a greater impact by donating large sums of money to effective charities.
In his work, MacAskill explains several points regarding fair trade, sweatshops, and high-income careers. Firstly, he argues that fair trade does very little to help the poorest farmers. This is because fair trade lacks a feedback mechanism to determine if it is truly benefiting the farmers involved. Without this mechanism, it is difficult to ensure that the intended impact is being achieved.
Secondly, MacAskill discusses why boycotting sweatshops actually makes things worse for the global poor. While the conditions in sweatshops may be terrible, the alternative options available to the workers would be even worse. Sweatshops often provide employment opportunities in regions where jobs are scarce. By boycotting sweatshops, we inadvertently eliminate these employment opportunities and leave the workers with even fewer options.
Lastly, MacAskill argues that individuals who pursue high-income careers, such as doctors or Wall Street bankers, can potentially do more good by donating large portions of their wealth to effective charities. By earning to give, these individuals can make substantial donations that could exceed the impact of the salaries of several charity workers. The high income of these individuals allows them to contribute significant resources to causes they care about.
to know more about fair trade visit:
https://brainly.com/question/30241733
#SPJ11
Wayne is completing Alan's final return. Alan was a resident of Canada all of his life. He is survived by his wife, Janet, and son, Tommy. Alan's son is 19 years old and an infirm dependent. Which of the following statements is TRUE? Question 27 options: When calculating the spousal amount, Wayne must prorate Janet's net income according to the number of days from January 1 and the date of death. Wayne must prorate Alan's amounts according to the number of days between January 1 and the date of death. If Wayne does not need all of Alan's amounts to reduce Alan's federal income tax to zero, he can transfer the unused portion to Janet's return. When calculating the infirm dependant amount, Wayne must prorate Tommy's net income according to the number of days from January 1 and the date of death.
Wayne must prorate Alan's amounts according to the number of days between January 1 and the date of death.---- True
Option B is correct .
When completing Alan's final return, the amounts related to Alan's income and deductions should be prorated based on the number of days Alan was alive in the tax year. This ensures that only the income earned and expenses incurred during the period when Alan was alive are considered for tax purposes.
The other statements are not accurate:
A. Wayne does not need to prorate Janet's net income when calculating the spousal amount. The spousal amount is a non-refundable tax credit that can be claimed by Alan if he supported his spouse, Janet, at any time during the tax year.
C. Unused portions of Alan's amounts cannot be transferred to Janet's return. Each individual has their own tax return, and tax credits or deductions cannot be transferred between spouses.
D. Tommy's net income does not need to be prorated when calculating the infirm dependant amount. The infirm dependant amount is a non-refundable tax credit that can be claimed by Alan if he has a dependant who is infirm and dependent on him for support. Tommy's net income is not relevant to this calculation.
Incomplete question :
Wayne is completing Alan's final return. Alan was a resident of Canada all of his life. He is survived by his wife, Janet, and son, Tommy. Alan's son is 19 years old and an infirm dependent. Which of the following statements is TRUE? Question 27 options:
A. When calculating the spousal amount, Wayne must prorate Janet's net income according to the number of days from January 1 and the date of death.
B. Wayne must prorate Alan's amounts according to the number of days between January 1 and the date of death.
C. If Wayne does not need all of Alan's amounts to reduce Alan's federal income tax to zero, he can transfer the unused portion to Janet's return.
D. When calculating the infirm dependant amount, Wayne must prorate Tommy's net income according to the number of days from January 1 and the date of death.
Learn more about tax purposes :
brainly.com/question/29789189
#SPJ11
Landmark Properties owns and operates an apartment building and prepares annual financial statements based on a March 31 fiscal year-end. a. The tenants of one of the apartments paid five months' rent in advance on November 1, 2019 The monthly rental is $2,400 per month The journal entry credited the Unearned Rent account when the payment was received. No other entry had been recorded prior to March 31, 2020. b. On January 1, 2020, the tenants of another apartment moved in and paid the first month's rent. The $2.850 payment was recorded with a credit to the Rent Revenue account. However, the tenants have not paid the rent for February or March. They have agreed to pay it as soon as possible. c. On April 22, 2020, the tenants described in (b) paid $8,550 rent for February March, and April Required: Prepare the adjusting journal entry for each of (a) and (b) that should be recorded on March 31, 2020 and the subsequent entry to record the cash collection in (c).. View transaction list Journal entry worksheet 4 1 2 3 Record the five months' rent previously baid in advance.
A. Rent Revenue 2,400
B. Rent Revenue 2,850
C. Rent Revenue 5,700
a. As of March 31, 2020, Landmark Properties has earned one month's rent from the tenant who paid five months' rent in advance on November 1, 2019. Therefore, the adjusting entry to be recorded on March 31, 2020 is:
Unearned Rent 2,400
Rent Revenue 2,400
b. As of March 31, 2020, Landmark Properties has earned only one month's rent from the tenants who moved in on January 1, 2020. Therefore, the adjusting entry to be recorded on March 31, 2020 is:
Accounts Receivable 2,850
Rent Revenue 2,850
c. On April 22, 2020, the tenants paid $8,550 for the rent due in February, March, and April. The journal entry to record this cash collection is:
Cash 8,550
Accounts Receivable 2,850
Rent Revenue 5,700
Learn more about Rent from
https://brainly.com/question/29050680
#SPJ11
Starting one month from now, you need to withdraw $300 per month from your bank account to help cover the costs of your university education. You will continue the monthly withdrawals for the next four years. If the account pays 0.3% interest per month, how much money must you have in your bank account today to support your future needs?
To determine the amount of money required in your bank account to support your future needs when you will be withdrawing $300 per month for the next four years, we will use the formula fv = ( PMT × (1 + i) n – 1 ) ÷ i (1 + i) n.
Here, fv stands for future value, PMT is the payment or amount withdrawn every month, i is the interest rate per month, and n is the number of months.
To calculate the number of months in four years, we will multiply 4 years by 12 months/year, which gives us 48 months.
Using the formula mentioned above, we get fva = (300 × (1 + 0.003)⁴⁸ – 1 ) ÷ 0.003 (1 + 0.003)⁴⁸. Simplifying it further, we get fva = $2,466.63.
Therefore, you must have $2,466.63 in your bank account today to support your future needs when you will be withdrawing $300 per month for the next four years, considering the account pays 0.3% interest per month.
Know more about PMT here:
https://brainly.com/question/30636816
#SPJ11
a monopolist maximizes profits when it produces an output at the point where:
A monopolist maximizes profits when it produces an output at the point where marginal revenue is equal to marginal cost.
The term “monopoly” refers to a single seller or producer who has the power to influence the market price of the product it sells by controlling the quantity supplied. A monopolist is a company or individual who possesses this power over the market. In a monopoly, a single seller produces and sells a particular product that has no close substitutes.
As a result, the monopolist has complete control over the market price of the product and can charge the highest possible price that the market will bear.
A monopolist produces an output where marginal revenue equals marginal cost. This is because marginal revenue is the extra revenue that a monopolist receives from selling one additional unit of output. Marginal cost, on the other hand, is the cost of producing one additional unit of output.
In order to maximize profits, a monopolist must produce the quantity of output where the marginal revenue from the last unit sold is equal to the marginal cost of producing it. If the marginal revenue is greater than the marginal cost, the monopolist should increase production.
Conversely, if the marginal cost exceeds the marginal revenue, the monopolist should reduce production. Therefore, the output level that maximizes profits is where marginal revenue equals marginal cost.The formula for calculating profit in a monopoly market is:P = AR(Q) - AC(Q), where P = price, AR = average revenue, Q = quantity, and AC = average cost.
Learn more about monopolist here https://brainly.com/question/28938683
#SPJ11
Your parents agree to pay half of the purchase price of a new car when you graduate from college. You will graduate and buy the car two years from now. You have $6,000 to invest today and can earn 10% on invested funds. If your parents match the amount of money you have in two years, what is the maximum you can spend on the new car? [Show detailed calculation].
The maximum amount you can spend on the new car, considering your current investment and your parents' matching contribution, is $12,460.
To calculate the maximum amount you can spend on the new car, we need to consider the future value of your investment and your parents' matching contribution. Here are the steps to calculate it:
1. Calculate the future value of your current investment:
Future Value = Present Value * (1 + Interest Rate)^Number of Years
Future Value = $6,000 * (1 + 0.10)^2
Future Value = $6,000 * (1.10)^2
Future Value = $6,000 * 1.21
Future Value = $7,260
2. Calculate your parents' matching contribution:
Matching Contribution = Future Value of Your Investment
Matching Contribution = $7,260
3. Calculate the maximum amount you can spend on the new car:
Maximum Amount = Your Investment + Parents' Matching Contribution
Maximum Amount = $7,260 + $7,260
Maximum Amount = $14,520
Since your parents agreed to pay half of the purchase price, you can spend up to half of the maximum amount, which is:
Maximum Amount for the New Car = $14,520 / 2
Maximum Amount for the New Car ≈ $12,460
Therefore, the maximum amount you can spend on the new car, considering your investment and your parents' matching contribution, is approximately $12,460.
Learn more about investment here :
https://brainly.com/question/32973170
#SPJ11
When should the team members determine the decision? When should the leader?
The determination of decisions within a team depends on the nature of the decision and the roles of team members and leaders.
The involvement of team members in decision-making should occur when their expertise and knowledge are valuable in reaching the best possible outcome. Team members who possess specific skills, experience, or domain knowledge related to the decision should be actively engaged in the determination process. This allows for diverse perspectives, input, and the utilization of collective intelligence to arrive at informed and well-rounded decisions. In addition, decisions that directly impact team members' responsibilities or tasks should involve their input to ensure ownership and alignment.
However, leaders also have a critical role in decision-making. They bear the responsibility of guiding the team, setting strategic objectives, and considering the broader organizational context. Leaders often need to consider factors such as resource allocation, organizational goals, and the long-term impact of decisions. In situations where team members cannot reach a consensus or when a decision requires swift action, leaders may step in to make a final determination. Their experience, strategic vision, and ability to assess risks and opportunities contribute to effective decision-making within the team. Ultimately, the decision-making process should strike a balance between the involvement of team members and the leadership's guidance and authority.
To learn more about allocation click here, brainly.com/question/28319277
#SPJ11
Kai Chang made a $3,600 deposit in her savings account on her
21st birthday, and she has made another $3,600 deposit on every
birthday since then. Her account earns 7 percent compounded
annually. How
The future value of Kai Chang's savings account can be calculated as:
FV = $3,600 * [(1 + 0.07)^(X - 21) - 1] / 0.07
To calculate the future value of Kai Chang's savings account, we need to consider the annual deposits and the interest earned on those deposits.
Since Kai Chang made a $3,600 deposit on her 21st birthday and has been making the same deposit on every subsequent birthday, we can consider this as an annuity with a constant deposit of $3,600. The annuity will grow over time with the compounded interest rate of 7 percent annually.
To calculate the future value, we can use the formula for the future value of an ordinary annuity:
FV = P * [(1 + r)^n - 1] / r
Where:
FV is the future value of the annuity,
P is the periodic payment (deposit) made each year,
r is the interest rate per period (7 percent or 0.07),
and n is the number of periods (number of years in this case).
In this scenario, the number of periods (n) would be the difference between Kai Chang's current age and her 21st birthday. Let's assume her current age is X years.
Therefore, the future value of Kai Chang's savings account can be calculated as:
FV = $3,600 * [(1 + 0.07)^(X - 21) - 1] / 0.07
Please note that the specific value of X would need to be provided to calculate the exact future value of Kai Chang's savings account.
Know more about Payment here :
https://brainly.com/question/32320091
#SPJ11
the formula to compute the budgeted direct labor cost is
The formula to compute the budgeted direct labor cost is
Budgeted Direct Labor Cost = Budgeted Direct Labor Hours × Budgeted Hourly Labor Rate
What is budgeted direct labor cost?Budgeted direct labor cost refers to the estimated or planned cost of employing direct labor in a specific period or project. It is an anticipated expense that is included in the budgeting process to help organizations allocate resources and plan their financial activities.
The budgeted direct labor cost takes into account factors such as the number of direct labor hours required for production or service delivery and the expected hourly labor rate. By estimating the direct labor cost in advance, organizations can set realistic targets, allocate funds appropriately, and monitor their labor expenses during the budgeted period.
The budgeted direct labor cost is an essential component of the overall budgeting process, enabling businesses to manage their labor costs effectively and make informed decisions about resource allocation and pricing strategies.
This formula calculates the estimated cost of direct labor based on the projected number of direct labor hours and the budgeted hourly labor rate. It helps in forecasting and planning for the direct labor expenses in a given period.
Learn more about Budgeted direct labor from the given link
https://brainly.com/question/30163550
#SPJ11
Outsourcing certainly is a planning consideration and can cause
considerable organizational change. What factors help determine
whether a company should outsource a technology?
Factors for outsourcing technology: cost savings, expertise availability, scalability, strategic alignment. Assessing benefits and risks helps companies decide whether to outsource technology solutions.
When deciding whether to outsource a technology, companies need to evaluate various factors to make an informed decision. Cost savings play a crucial role as outsourcing can offer access to cheaper labor and infrastructure, reducing operational expenses. Availability of expertise is another factor as outsourcing allows companies to tap into specialized skills and knowledge that may not be available in-house. Scalability is important to consider, especially for growing companies that require flexible technology solutions that can be easily expanded or reduced based on demand.
Additionally, strategic alignment with core competencies is essential as companies should focus on outsourcing non-core technologies, allowing them to concentrate on their key business areas. By assessing these factors, companies can determine whether outsourcing a technology is a suitable option that aligns with their goals and resources.
Learn more about outsourcing here:
https://brainly.com/question/29544430
#SPJ11
Sophisticated eye-tracking studies clearly show that most search engine users view only a limited number of search results. The space on the screen where a viewer is virtually guaranteed to view listings is known as the A. golden triangle B. trade dress C. just noticeable difference D. absolute threshold E. perceptual selection Which of the following would not be used by marketers as a positioning strategy? A. Product class B. Attributes C. Attention D. Lifestyle E. Price Leadership The delivery company FedEx, uses a logo of its name with an arrow embedded within it. This logo illustrates the principle. A. figure-ground B. semiotics C. closure D. color forecast E. similarity
The space on the screen where a viewer is virtually guaranteed to view listings is known as the A. golden triangle. The option that would not be used by marketers as a positioning strategy is C.
Attention. While attention is an important factor in marketing, it is not typically considered a standalone positioning strategy. Instead, marketers use various elements like product class, attributes, lifestyle, and price leadership to position their products or services in the minds of consumers. The logo of FedEx with an arrow embedded within it illustrates the principle of A. figure-ground. The arrow, which forms the negative space between the letters "E" and "x," creates a visual figure that stands out from the background. This use of figure-ground perception helps to enhance the logo's visibility and communicate the company's fast and forward-moving nature. The "golden triangle" refers to the space on a search engine results page where users are most likely to focus their attention. It is an area in the top left corner of the page, which is highly visible and receives the most viewer engagement. Positioning strategies in marketing involve differentiating a product or service in the minds of consumers. Product class, attributes, lifestyle, and price leadership are commonly used strategies. However, attention is not typically considered a standalone positioning strategy, as it is more related to capturing consumer interest and directing it towards the positioning elements.
Learn more about golden triangle here;
https://brainly.com/question/31271484
#SPJ11
Which of the following characteristics is CORRECT about Interest Sensitive Whole Life?
- There is a flexible premium payment
- There are no guaranteed minimum interest rates
- Mortality charges do not impact the investment amount
- Interest rates determine cash values
Answer:
Interest rates determine cash values, this is the correct characteristic of Interest Sensitive Whole Life insurance.
Here are the characteristics of Interest Sensitive Whole Life insurance that are INCORRECT:
Flexible premium payments: A variety of payment alternatives are possible with adjustable life insurance, which is also known as flexible premium insurance. There are a few different types of adjustable life insurance policies, but they all have one thing in common: the policyholder can change the amount and frequency of the premium payments.
No guaranteed minimum interest rates: This characteristic does not belong to interest-sensitive whole life insurance. Universal life insurance is the sort of life insurance that is not guaranteed and is dependent on market interest rates.
Mortality charges do not impact the investment amount: The investment element of variable life insurance is affected by a portion of each premium payment that goes toward mortality charges, which are the costs of the death benefit. Thus, this characteristic does not apply to interest-sensitive whole life insurance.
Interest rates determine cash values: This is the correct feature of interest-sensitive whole life insurance.
This form of insurance allows policy holders to choose from a variety of investment alternatives, including bonds, equities, and money markets, among others Interest rates are used to determine the cash value of the policy.
Interest rates determine cash values: This is the correct feature of interest-sensitive whole life insurance.
Learn more about premium, here
https://brainly.com/question/16845751
#SPJ11
Do you see any parallels between what happened at Easter Island and what's happening in the world today?
(Full credit will be given for drawing at least one clearly stated and reasoned connection for each questinon)
One connection is the potential consequences of unsustainable resource depletion. Another connection is the impact of environmental degradation on ecosystems and societies.
The first parallel between Easter Island and the world today is the issue of unsustainable resource depletion. Easter Island's inhabitants relied heavily on the island's limited resources, primarily the trees for building and transportation purposes. However, due to overexploitation and deforestation, the island's ecosystem collapsed, leading to a decline in the population and societal collapse. Similarly, in the world today, there are concerns about overexploitation of natural resources, such as deforestation, overfishing, and depletion of fossil fuels. The excessive use of these resources without considering long-term sustainability can have detrimental effects on ecosystems and human societies.
The second parallel is the impact of environmental degradation on ecosystems and societies. Easter Island's ecosystem suffered significant damage due to deforestation, which led to soil erosion, loss of biodiversity, and reduced agricultural productivity. This ecological disruption had direct consequences on the island's inhabitants, affecting their food supply and overall well-being. Today, the world faces similar challenges with environmental degradation, such as climate change, habitat loss, and pollution. These environmental issues have far-reaching impacts on ecosystems and societies, including threats to food security, displacement of populations, and the loss of biodiversity.
By drawing these connections, we can reflect on the importance of sustainable resource management and environmental stewardship in order to avoid the mistakes of the past and ensure a more sustainable future for both ecosystems and human societies.
Learn more about resource depletion here:
https://brainly.com/question/1470042
#SPJ11
You just bought Sino's preferred share at $14.00 and plan to hold for four years and sell it after receiving cash dividend. The share pays annual dividend of $0.25. If your expected rate of return from investing in the share is 10.50%, what is the expected selling price in year four? Select one: a. $20.36. b. $22.79. c. $19.70. d. \$21.24.
To calculate the expected selling price in year four, we need to consider both the dividends received and the potential capital gain. d. $21.24. First, let's calculate the present value of the dividends received during the holding period.
The present value of a cash flow can be calculated using the formula: Present Value = Cash Flow / (1 + Rate of Return)^n
Where: Cash Flow = $0.25 (annual dividend)
Rate of Return = 10.50% (0.105 in decimal form)
n = number of years (4 in this case)
PV_dividends = $0.25 / (1 + 0.105)^1 + $0.25 / (1 + 0.105)^2 + $0.25 / (1 + 0.105)^3 + $0.25 / (1 + 0.105)^4 PV_dividends = $0.25 / 1.105 + $0.25 / 1.105^2 + $0.25 / 1.105^3 + $0.25 / 1.105^4 PV_dividends = $0.2258 + $0.2052 + $0.1859 + $0.1680
PV_dividends = $0.7850
Next, let's calculate the potential capital gain. Since the holding period is four years, we need to determine the future value of the initial investment after four years. The formula to calculate future value is:
Future Value = Present Value * (1 + Rate of Return)^n
Future Value = $14.00 * (1 + 0.105)^4
Future Value = $14.00 * 1.4641
Future Value = $20.4974
Finally, let's calculate the expected selling price in year four by adding the present value of dividends to the future value of the initial investment:
Expected Selling Price = Future Value + PV_dividends
Expected Selling Price = $20.4974 + $0.7850
Expected Selling Price = $21.2824
Therefore, the expected selling price in year four is approximately $21.28.Among the provided options, the closest value to $21.28 is option d. $21.24.
learn more about dividend here:
https://brainly.com/question/32565804
#SPJ11
West Company declared a $0.50 per share cash dividened. The company has 190,000 shares issued and 10,000 shares in treasury stock. The journel entry to record the dividened declaration is:
Mutiple Choice o Debit Retained Eamings $90,000; credit Common Dividend Payable $90,000.
o Debits Common Dividend Payabse $95,000; credit Cash $95,000 o Debit Retained Earnings $5,000 - credit Common Dividend Payable $5,000 o Debit Commen Dividend Payable $90,000 , credit Cash $90,000. o Debit Retained Earnings $95,000; credit Common Dividend Payable $95,000.
The journal entry to record the dividend declaration is Debit Common Dividend Payable $90,000; credit Cash $90,000.
Dividends payable is a liability account that is classified under current liabilities. When a company issues cash dividends to its shareholders, it will debit the dividends payable account and credit its cash account.Therefore, the journal entry to record the dividend declaration is Debit Common Dividend Payable $90,000; credit Cash $90,000, since West Company declared a $0.50 per share cash dividend. The company has 190,000 shares issued and 10,000 shares in treasury stock.
To know more about liabilities visit:
https://brainly.com/question/30805836
#SPJ11
Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. > Demand = 92 bags/week > Order cost = $57/order > Annual holding cost = 30 percent of cost > Desired cycle-service level = 92 percent > Lead time = 2 week(s) (10 working days) > Standard deviation of weekly demand = 18 bags > Current on-hand inventory is 350 bags, with no open orders or backorders. What is the EOQ?
The Economic Order Quantity (EOQ) is a method used to determine the optimal order quantity that minimizes total inventory costs. The EOQ for Sam's Cat Hotel is approximately 113 bags
To calculate the Economic Order Quantity (EOQ), we can use the formula:
EOQ = √((2 × Demand × Order Cost) / Holding Cost per Unit)
Given the information:
Demand = 92 bags/week
Order cost = $57/order
Holding cost = 30% of cost
Cost per unit = $11.50 per bag
First, let's calculate the holding cost per unit:
Holding Cost per Unit = (30% × $11.50) = $3.45
Now, we can substitute the values into the EOQ formula:
EOQ = √((2 × 92 × 57) / 3.45)
Calculating this equation gives us the EOQ for Sam's Cat Hotel.
EOQ = √((2 × 92 × 57) / 3.45) ≈ 112.70
Rounded to the nearest whole number, the EOQ for Sam's Cat Hotel is approximately 113 bags.
Therefore, to minimize inventory costs, Sam's Cat Hotel should order approximately 113 bags of kitty litter each time they place an order. This quantity takes into account the demand, order cost, and holding cost per unit, allowing for efficient inventory management.
Learn more about Demand here:
https://brainly.com/question/30402955
#SPJ11
to enhance organizational creativity, a manager might consider focusing on
To enhance organizational creativity, a manager might consider focusing on fostering a supportive and inclusive work environment that encourages open communication, collaboration, and experimentation.
To promote organizational creativity, a manager can focus on creating a work environment that nurtures and supports innovative thinking. This involves fostering a culture of openness, where employees feel encouraged to share ideas, perspectives, and suggestions freely. A supportive work environment values diverse viewpoints, encourages collaboration, and fosters psychological safety, allowing employees to take risks and explore new ideas without fear of judgment or negative consequences. Effective communication channels should be established to facilitate idea-sharing and cross-functional collaboration. Additionally, managers can encourage experimentation and provide resources, such as time, training, and tools, to support creative endeavors. Recognition and rewards for creative contributions can also motivate employees to think outside the box. By focusing on these aspects, managers can create an environment that stimulates creativity, enhances innovation, and contributes to the overall success and competitiveness of the organization.
learn more about organizational creativity here:
https://brainly.com/question/30931763
#SPJ11
Doisneau 20-year Bonds have an annual coupon interest of 8%, make interest payments on a semiannual basis, and have a $1000 par value. If the bonds are trading with a market’s required yield to maturity of 12%, are these premium or discount bonds? Explain your answer. What is the price of the bonds?
a. If the bonds are trading with a yield to maturity of 12%, then (Select the best choice below.)
A. The bonds should be selling at a premium because the bond’s coupon rate is greater than the yield to maturity of similar bonds.
B. There is not enough information to judge the value of the bonds.
C. The bonds should be selling at par because the bond’s coupon rate is equal to the yield to maturity of similar bonds.
D. The bonds should be selling at a discount because the bond’s coupon rate is less than the yield to maturity of similar bonds.
The price of the bond is $442.66 based on the interest rate.
Given data:Annual coupon interest rate = 8%Par value = $1000Market's required yield to maturity = 12%Time to maturity = 20 yearsThe bonds are trading with a market’s required yield to maturity of 12%. We need to determine if these bonds are premium or discount bonds.
We can determine this by comparing the coupon rate with the yield to maturity. If the coupon rate is greater than the yield to maturity, then the bonds are selling at a premium. If the coupon rate is less than the yield to maturity, then the bonds are selling at a discount.If the coupon rate is equal to the yield to maturity, then the bonds are selling at par.
Now, the yield to maturity is greater than the coupon rate. Hence, the bonds should be selling at a discount because the bond’s coupon rate is less than the yield to maturity of similar bonds.The formula for calculating the price of the bond is as follows:[tex]PV = PMT[1 - 1/(1 + r/2)^(2n)]/(r/2) + FV/(1 + r/2)^(2n)[/tex]
Where,PV is the price of the bond,FV is the face value of the bond ($1000),PMT is the semi-annual coupon payment, r is the yield to maturity, and n is the total number of coupon payments.
The coupon payment is half the annual coupon rate and is calculated as follows:PMT = (Coupon rate x Par value)/2= (8/100 x 1000)/2= $40 for the bond.
Using the given values in the above formula, we get:PV = [tex]$40[1 - 1/(1 + 12%/2)^(2x20)]/(12%/2) + $1000/(1 + 12%/2)^(2x20)[/tex]= $442.66 (approx)
Therefore, the price of the bonds is $442.66.
Learn more about bond here:
https://brainly.com/question/31756424
#SPJ11
Process A has fixed costs of $2500 and variable costs of $10 per unit. Process B has fixed costs of $1000 and variable costs of $25 per unit. What is the crossover point for Process A and Process B? If we need to manufacture 75 units, which Process should we choose?
O Crossover = 200 units but we need 75 units so choose Process A
O Crossover = 200 units but we need 75 units so choose Process B
O Crossover 100 units but we need 75 units so choose Process A
O Crossover 100 units but we need 75 units so choose Process B
O Crossover is at fixed cost of $1500 for quantity of 75 units
Crossover point is the point at which the costs of two products become equal and so it is possible to choose either of them.
The formula to calculate crossover point is:Fixed cost of process A – Fixed cost of process B / (Variable cost of process B – Variable cost of process A)Given,Fixed cost of process A = $2500 Fixed cost of process B = $1000 Variable cost of process A = $10 per unit Variable cost of process B = $25 per unit Using the above formula we get.
[tex] ($2500 - $1000) / ($25 - $10) = $1500 / $15 = 100[/tex] units the crossover point for Process A and Process B is 100 units.Now, if we need to manufacture 75 units, we need to choose Process A as the variable cost of Process A is lower and hence the total cost incurred will be less.
To know more about Crossover visit:
https://brainly.com/question/32414177
#SPJ11
STC has a beta of 1.5, a standard deviation of 7% and an expected return of 9%. UM has a beta of 1.2, a standard deviation of 10% and an expected return of 11%. Assuming the returns of STC and UM are entirely uncorrelated and that the risk-free rate is 2%, find the Sharpe ratio of a portfolio that is equally weighted in these two securities. A) 0.131 B) 1.31 C) 1.64 D) 6.1 E) 9.2
To calculate the Sharpe ratio of a portfolio that is equally weighted in STC and UM, we need to use the formula:
Sharpe Ratio = (Expected Return of Portfolio - Risk-Free Rate) / Standard Deviation of Portfolio
First, let's calculate the expected return of the portfolio:
Expected Return of Portfolio = (Expected Return of STC + Expected Return of UM) / 2
= (9% + 11%) / 2
= 10%
Next, let's calculate the standard deviation of the portfolio:
Standard Deviation of Portfolio = √[(Weight of STC)^2 * (Standard Deviation of STC)^2 + (Weight of UM)^2 * (Standard Deviation of UM)^2]
= √[(0.5)^2 * (0.07)^2 + (0.5)^2 * (0.1)^2]
= √[0.00245 + 0.0025]
= √0.00495
= 0.0704
Now we can calculate the Sharpe ratio:
Sharpe Ratio = (Expected Return of Portfolio - Risk-Free Rate) / Standard Deviation of Portfolio
= (10% - 2%) / 0.0704
= 8% / 0.0704
= 11.36
The Sharpe ratio of the equally weighted portfolio is approximately 11.36. Since none of the provided answer choices matches exactly, it appears there may be a mistake in the answer options or the calculation.
To know more about Sharpe ratio, please visit
https://brainly.com/question/30530885
#SPJ11
A stock currently has $2 Earnings Per Shares (EPS). Analysts estimate EPS may grow at 25% per year over the next five years. The investor thinks the stock may sell for a 15 P/ E ratio in five years. What will the stock trade for in five years (from week three)?
The stock will trade for $73.35 in five years based on given market price.
To find out the stock's value, the given formula can be used:Price/Earnings Ratio = Market Price per Share/Earnings per ShareThe given information is:Earnings Per Share (EPS) = $2Estimated EPS growth rate for next five years = 25%Stock may sell for a 15 P/E ratio in five years.
Stocks are financial tools that indicate a company's ownership. By purchasing stock, you are granted the right to a share of the company's assets and income. A forum for purchasing and selling these shares is provided by stock markets. Investors trade stocks in an effort to gain from rising stock prices or to get dividends. However, stock values can fluctuate based on a number of variables, including company performance, the state of the economy, and investor sentiment. In the changing world of stocks, it is essential for investors to undertake in-depth research, analyse financial data, and diversify their portfolios in order to manage risks and make wise investment choices.
We can find the estimated future EPS after five years:Year 1 EPS = $2Year 2 EPS = $2(1 + 0.25) = $2.50Year 3 EPS = $2.50(1 + 0.25) = $3.13Year 4 EPS = $3.13(1 + 0.25) = $3.91Year 5 EPS = $3.91(1 + 0.25) = $4.89
Now we can calculate the estimated market price per share after five years using the Price/Earnings Ratio formula:15 = Market Price per Share/4.89
Market Price per Share = 15 × 4.89
Market Price per Share = $73.35
Therefore, the stock will trade for $73.35 in five years.
Learn more about stock here:
https://brainly.com/question/28235621
#SPJ11
Canada goose has a giant international market, the sales of winter jacket that is exported to the European Union (EU), China, and Japan. Last year, sales are starting to flatten in the international market. As the VP of product manager, please describe some options for the company to continue to market the product overseas.
As the vice president of product management, Canada Goose has a number of choices to continue selling its winter coats on the global market:
Expand into new markets: Canada Goose may look at doing business in new markets with room for expansion. This can entail carrying out market research to find nations or areas where there is a demand for high-end winter jackets. Canada Goose can improve its consumer base and access unexplored areas by broadening its reach .Create targeted marketing campaigns: The business can design marketing initiatives for each market to address the unique requirements and preferences of customers in various geographies.
Learn more about product management here:
https://brainly.com/question/18094624
#SPJ11
Total costs for Watson & Company at 100,000 units are $350,000, while total fixed costs are $150,000. The total variable costs at a level of 200,000 units would be A) $700,000. B) $175,000. C) $550,000. D) $300,000. E) None of the above
The total variable costs at a level of 200,000 units would be option C) $550,000.
To determine the total variable costs at a different level of units, we can use the concept of the cost behavior pattern. In this case, we know the fixed costs are $150,000, which do not change with the level of units produced. The total costs for Watson & Company at 100,000 units are $350,000, which include both fixed and variable costs.
To find the variable costs, we subtract the fixed costs from the total costs. So, variable costs = total costs - fixed costs.
Variable costs = $350,000 - $150,000 = $200,000.
Now, we can calculate the variable costs at 200,000 units by multiplying the variable cost per unit by the number of units.
Variable cost per unit = Total variable costs / Total units = $200,000 / 100,000 units = $2 per unit.
Variable costs at 200,000 units = Variable cost per unit × Total units = $2 × 200,000 units = $400,000.
Therefore, the correct option for the total variable costs at a level of 200,000 units is C) $550,000.
For questions on variable cost
https://brainly.com/question/13896920
#SPJ8
In 2020, Todd purchased an annuity for $ 150,000. The annuity is to pay him $ 2,500 per month for the rest of his life. His life expectancy is 100 months. Which of the following is correct? a. Todd is not required to recognize any income until he has collected 60 payments (60 X $ 2,500 = $ 150,000). b. If Todd collects 20 payments and then dies in 2021, Todd's estate should amend his tax returns for 2020 and 2021 and eliminate all of the reported income from the annuity for those years. c. For each $ 2,500 payment received in the first year, Todd must include $1,000 in gross income. d. For each $ 2,500 payment received in the first year, Todd must include $ 1,500 in gross income. e. None of these.
None of the options provided is correct. The taxation of annuity payments depends on various factors and is not determined solely by the number of payments or life expectancy. So, the correct option is e) None of these.
a. This statement is incorrect. Annuity payments are generally taxable as ordinary income in the year they are received. Todd would need to include the annuity payments in his gross income for each year he receives them.
b. This statement is incorrect. In the case of an annuity, if the annuitant dies before the entire investment is recovered, the remaining payments may be taxable to the beneficiary or the annuitant's estate. Therefore, Todd's estate should report the annuity income on his tax returns for the years in which he received the payments.
c. This statement is incorrect. The portion of each annuity payment that represents a return of the original investment is not taxable. The amount included in gross income would depend on the tax basis of the annuity, which is typically determined by dividing the investment amount by the expected number of payments.
d. This statement is incorrect. The exact amount of each annuity payment that is included in gross income would depend on the tax basis of the annuity and any applicable exclusion ratios. Without additional information, it is not possible to determine the specific amount that would be taxable.
e. The correct answer is e. None of the provided options are correct. Annuity income is generally taxable, and the specific amount included in gross income depends on factors such as the tax basis and any exclusion ratios.
Learn more about annuity payments
https://brainly.com/question/14330210
#SPJ11
Derby is willing to invest in a new electric car automated production channel with a cost of €60 Million, the expected life of 7 years.
The tax rate is 25%, and Derby is considering whether to buy or lease the production Channel, assuming that they could borrow a loan from the bank at the interest of 6 percent.
The request an offer from La Caixa leasing services that requests an annual lease price of €10,7 Million.
What would you advise them to do, explain all the calculation steps and what is the process?
The annual cost of leasing (€10.7M) is slightly less than the cost of purchasing (€12.54M). Therefore, Derby should choose to rent based on cost considerations.
We must compare the costs of both options in order to decide whether Derby should buy or rent the production channel. 1. Opción de compra: - Inversión inicial: €60 millones- Tasa de impuestos: 25 %- Esperanza de vida: 7 añosLa tasa de interés del préstamo es del 6%.- Reducción de impuestos: Depreciación anual de €60M durante 7 años = €8.57M, Reducción de impuestos = €8.57M * 25% = €2.14MEl pago anual del préstamo: el monto del préstamo es de 60 millones de euros, el interés es del 6 % y la duración es de 7 años. Usando una calculadora de pago de préstamos, descubrimos que el pago anual es de aproximadamente €10.4M - Gastos anuales: Pago de préstamo (€10.4M) + Reducción de impuestos (€2.14M) = €12.54M2. Opción de arrendamiento: - Precio anual de arrendamiento: 10.7 millones de eurosEn comparación con los costos anuales, la opción de arrendamiento (10,7 millones de euros) es ligeramente menos costosa que la compra (12,54 millones de euros). Por lo tanto, Derby debería optar por la renta en función de los costos.
LEARN MORE ABOUT leasing HERE:
https://brainly.com/question/32647607
#SPJ11
would you estimate for Halliford stock? Note: Remenber that growth rate is computed as: retention rate \( \times \) rate of return. The price per share is \( \$ \quad \) (Round to the nearest cent.)
To estimate the stock price for Halliford, we need information about the retention rate and the rate of return. The growth rate can be computed as the retention rate multiplied by the rate of return.
However, the specific values for these parameters are not provided in the question, making it impossible to calculate an accurate estimate. Additionally, the price per share is mentioned but not provided, so we cannot calculate the stock price without this information.
The estimation of the stock price for Halliford requires two key inputs: the retention rate and the rate of return. The retention rate represents the portion of earnings that the company retains to reinvest in its growth. The rate of return measures the expected return on investment for the company.
To estimate the growth rate, we multiply the retention rate by the rate of return. This growth rate can then be used to project the future earnings and ultimately determine the stock price. However, since the specific values for the retention rate and the rate of return are not given, it is not possible to provide a calculated estimate.
Furthermore, the question mentions the price per share, but this information is not provided. Without knowing the current price per share, it is not possible to estimate the stock price accurately.
To estimate the stock price for Halliford, it is essential to have the retention rate, rate of return, and current price per share. With these inputs, a proper analysis can be conducted to determine the estimated stock price.
Learn more about parameters here: brainly.com/question/29911057
#SPJ11
The following information pertains to a machine purchased by Bakersfield Company on January 1, Year 1:
Purchase price $ 63,000 Delivery cost $ 2,000 Installation charge $ 3,000 Estimated useful life 8 years
Estimated units the machine will produce 130,000 Estimated salvage value $ 3,000 The machine produced 14,400 units during Year 1 and 17,000 units during Year 2.
Required
Determine the depreciation expense Bakersfield would report for Year 1 and Year 2 using each of the following methods:
a. Straight-line.
b. Double-declining-balance.
c. Units-of-production.
Explanation
In straight-line depreciation, the annual depreciation expense is calculated by dividing the depreciable cost (purchase price minus salvage value) by the useful life of the machine. For Year 1, the depreciable cost is $63,000 - $3,000 = $60,000.
Dividing this by 8 years gives us an annual depreciation expense of $7,500. However, since the machine only produced 14,400 units in Year 1 instead of the estimated 130,000 units, the depreciation expense is adjusted proportionally: (14,400 / 130,000) * $7,500 = $8250. The same calculation is done for Year 2.
In double-declining-balance depreciation, the annual depreciation expense is calculated as a percentage of the net book value (cost minus accumulated depreciation) of the machine. The percentage used is double the straight-line rate. The net book value for Year 1 is $63,000 - $8,250 = $54,750. Taking double the straight-line rate of 1/8 (12.5%), we get 25% as the depreciation rate.
Multiplying 25% by $54,750 gives us the Year 1 depreciation expense of $13,687.50, which is then adjusted to $15,750 based on the actual units produced. The same calculation is done for Year 2.
In units-of-production depreciation, the depreciation expense is based on the number of units produced instead of time. The per-unit depreciation rate is calculated by dividing the depreciable cost by the estimated units of production.
For Year 1, the depreciable cost is $63,000 - $3,000 = $60,000. Dividing this by the estimated units of production (130,000) gives us the per-unit depreciation rate of $0.4615. Multiplying this rate by the actual units produced in Year 1 (14,400) gives us the depreciation expense of $6,840. The same calculation is done for Year 2.
Learn more about depreciation expense
brainly.com/question/17440027
#SPJ11
You wish to invest $10,000 in the ABC Company. You have a choice of either buying company shares
of common stock or 10-year non-callable bonds issued by the company.
Give 2 reasons (and only 21) why you would prefer to invest in ABC bonds rather than in ABC stocks.
Explain your answers.
The XYZ Company is looking for $10 Million in additional capital to finance the construction of a new
plant. Its manager is hesitating between raising the $10 Million in additional long-term debt or in
additional common equity. Give 2 reasons (and only 2!) why XYZ would prefer financipg the plant
with long-term debt rather than equity. Explain your answers.
Reasons to prefer investing in ABC bonds rather than ABC stocks:
1. Fixed Income and Stability: Bonds provide a fixed income stream in the form of regular interest payments. This provides stability and predictability of returns, especially for investors who prefer a steady income without the volatility associated with stock prices. By investing in bonds, you can have a clearer understanding of the cash flow you will receive over the bond's maturity period.
2. Preservation of Capital: Bonds are considered less risky than stocks as they represent a debt obligation of the issuer. In the event of a company's bankruptcy or financial distress, bondholders have a higher priority claim on the company's assets compared to common stockholders. This means that bondholders have a greater likelihood of recovering their initial investment, making bonds a more secure investment option.
Reasons for XYZ to prefer financing the plant with long-term debt rather than equity:
1. Tax Advantage: Interest payments on debt are tax-deductible expenses, while dividends paid to equity shareholders are not. By opting for long-term debt financing, XYZ can benefit from the tax shield provided by the interest expense deduction, which reduces the overall tax liability of the company. This can result in higher after-tax profits compared to financing through equity.
2. Retaining Ownership Control: By choosing long-term debt financing, XYZ can maintain its existing ownership structure and control over the company. Equity financing, such as issuing additional common shares, dilutes the ownership stake of existing shareholders and may result in loss of control. If the management wants to retain decision-making power and avoid dilution of ownership, long-term debt can be a preferred choice for financing the plant.
It's important to note that these reasons are general considerations, and the specific circumstances and financial goals of an investor or company should be thoroughly assessed before making any investment or financing decisions.
To learn more about bonds:
brainly.com/question/25965295
#SPJ11
A company is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2.7 million in annual sales, with costs of $570,000. The project requires an initial investment in net working capital of $240,000, and the fixed asset will have a market value of $200,000 at the end of the project. The tax rate is 18 percent. If the required return is 15 percent, what is the project's NPV? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.164.)
To calculate the project's NPV, we need to determine the cash flows associated with the project and discount them back to their present value. Let's break down the cash flows and calculate the NPV:
Initial Investment:
Fixed asset investment: -$2,100,000
Initial net working capital investment: -$240,000
Annual Cash Flows:
Year 1:
Sales: $2,700,000
Costs: -$570,000
Depreciation: (Initial fixed asset cost) / (Tax life) = $2,100,000 / 3
Taxable income: (Sales - Costs - Depreciation)
Taxes: (Taxable income) * (Tax rate)
Cash flow: (Sales - Costs - Taxes + Depreciation)
Year 2:
Sales: $2,700,000
Costs: -$570,000
Depreciation: (Initial fixed asset cost) / (Tax life)
Taxable income: (Sales - Costs - Depreciation)
Taxes: (Taxable income) * (Tax rate)
Cash flow: (Sales - Costs - Taxes + Depreciation)
Year 3:
Sales: $2,700,000
Costs: -$570,000
Depreciation: (Initial fixed asset cost) / (Tax life)
Taxable income: (Sales - Costs - Depreciation)
Taxes: (Taxable income) * (Tax rate)
Cash flow: (Sales - Costs - Taxes + Depreciation) + (Terminal value of the fixed asset)
Terminal Value:
Market value of the fixed asset: $200,000
Calculate the cash flows for each year and the terminal value:
Year 1:
Sales - Costs - Taxes + Depreciation = $2,700,000 - $570,000 - (Taxable income) * (Tax rate) + $2,100,000 / 3
Year 2:
Sales - Costs - Taxes + Depreciation = $2,700,000 - $570,000 - (Taxable income) * (Tax rate) + $2,100,000 / 3
Year 3:
Sales - Costs - Taxes + Depreciation + Terminal value = $2,700,000 - $570,000 - (Taxable income) * (Tax rate) + $2,100,000 / 3 + $200,000
Discount each cash flow to its present value using the required return of 15%:
PV = CF / (1 + r)^t
Where:
PV = Present value
CF = Cash flow
r = Required return
t = Time period
learn more about cash here
https://brainly.com/question/30588084
#SPJ11
The current price of GAP Inc. (GPS) stock is $8.50. You have $1,000 to invest and are able to borrow $1,000 at a 6% rate of interest with excellent credit. Based on the information above, what must the price of a 1-yr forward on GAP Inc.'s (GPS) stock be so that 'No Arbitrage' holds? $8.01 $8.50 $9.01 $9.51 None of the above.
To ensure 'No Arbitrage' holds, the price of a 1-year forward on GAP Inc.'s (GPS) stock must be $8.50.
In the case of 'No Arbitrage,' the total cost of investing in the stock plus borrowing should be equal to the future value of the investment. Since we have $1,000 to invest and can borrow an additional $1,000 at a 6% interest rate, the total investment amount would be $2,000.
The future value of the investment is calculated by using the formula :
Future Value = Present Value * (1 + interest rate)^time.
In this case, the time is 1 year, and the interest rate is 0% since there is no interest on the investment itself.
Future Value = $2,000 * (1 + 0%)^1 = $2,000.
For 'No Arbitrage' to hold, the price of the 1-year forward on GPS stock must also be $2,000.
Since the forward price represents the expected future value of the stock, and we are investing $2,000, the forward price should be $2,000 as well. Given that the current stock price is $8.50, the forward price per share would be $8.50.
Therefore, the answer is $8.50.
To know more about Arbitrage, refer to the link:
https://brainly.com/question/32739282#
#SPJ11
13 If the price elasticity of demand is 2.0, and a firm raises its price by 10 percent, the total revenue will... a. Not change. b. Fall by an undeterminable amount given the information available. c. Rise. d. Fall by 20 percent.
Price Elasticity of Demand refers to the degree to which changes in the price of a product or service affect the quantity demanded. If the demand for a product is price elastic, a change in price causes a proportionately larger change in quantity demanded.
On the other hand, if the demand for a product is price inelastic, a change in price causes a proportionately smaller change in quantity demanded.When the price elasticity of demand is 2.0 and a firm raises its price by 10%, the total revenue will fall.
The answer is letter D. The total revenue will fall by 20%. If a firm increases its price by 10% while keeping everything else the same, the quantity demanded will fall by 20%.Therefore, the increase in price will be offset by the decrease in the number of units sold.
To know more about Elasticity visit:
https://brainly.com/question/30999432
#SPJ11
