Competition between investors is the main factor that makes markets efficient. When multiple investors compete to buy or sell securities based on their own analysis and beliefs, it creates a balance between supply and demand.
This competition leads to more accurate pricing of securities, as investors strive to outperform each other by identifying undervalued or overvalued assets. The presence of competition ensures that information is quickly incorporated into market prices and that no single entity can manipulate the market for personal gain. Government regulation plays a crucial role in maintaining fair and transparent markets, preventing fraud and insider trading, and providing a level playing field for all participants. Financial reporting standards also contribute to market efficiency by providing reliable and comparable information to investors, enabling them to make informed decisions.
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You have just purchased a home and taken out a $420,000 mortgage. The mortgage has a 30 -year term with monthly payments and an APR of 6.32%. a. How much will you pay in interest, and how much will you pay in principal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the 20th year (i.e., between 19 and 20 years from now)?
To calculate the interest and principal payments during the first year and the 20th year of the mortgage, we'll need to use the loan amount, loan term, and APR. Here's how you can calculate them:
a. First Year:
Step 1: Calculate the monthly interest rate:
Monthly Interest Rate = (APR / 12) / 100
Monthly Interest Rate = (6.32 / 12) / 100
Monthly Interest Rate = 0.00527
Step 2: Calculate the total number of months in the first year:
Total Number of Months in First Year = 12
Step 3: Calculate the monthly payment using the loan amount, loan term, and APR:
Monthly Payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
Where P is the loan amount, r is the monthly interest rate, and n is the total number of months.
Monthly Payment = $420,000 * (0.00527 * (1 + 0.00527)^360) / ((1 + 0.00527)^360 - 1)
Step 4: Calculate the interest paid during the first year:
Interest Paid in First Year = Monthly Payment * Total Number of Months in First Year - Principal Paid in First Year
Principal Paid in First Year = Monthly Payment * (1 - (1 + r)^(-Total Number of Months in First Year)) / r
b. 20th Year:
Step 1: Calculate the total number of months between the 19th and 20th year:
Total Number of Months in 20th Year = (30 - 19) * 12 = 132
Step 2: Calculate the interest paid during the 20th year:
Interest Paid in 20th Year = Monthly Payment * Total Number of Months in 20th Year - Principal Paid in 20th Year
Principal Paid in 20th Year = Monthly Payment * (1 - (1 + r)^(-Total Number of Months in 20th Year)) / r
Perform the calculations using the provided formulas and substitute the values to find the interest and principal payments during the first year and the 20th year.
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Gotham Company purchased a new machine on October 1, 2022, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8-year life. Compute the depreciation expense under the straight-line method for 2022 and 2023, assuming a December 31 year-end.
To calculate the depreciation expense under the straight-line method for 2022 and 2023, we need to determine the depreciable cost of the machine and the annual depreciation amount.
The depreciable cost is the cost of the machine minus its salvage value. In this case, the depreciable cost is $90,000 - $8,000 = $82,000.
To calculate the annual depreciation amount, we divide the depreciable cost by the expected life of the machine. In this case, the expected life is 8 years.
Therefore, the annual depreciation expense for the straight-line method is $82,000 / 8 = $10,250 per year.
For 2022, since the machine was purchased on October 1, 2022, we need to determine the portion of the year it was used. From October 1 to December 31, there are 3 months or 1/4 of the year. Therefore, the depreciation expense for 2022 is 1/4 * $10,250 = $2,562.50.
For 2023, the machine will be used for the full year, so the depreciation expense is $10,250.
Therefore, the depreciation expense under the straight-line method for 2022 is $2,562.50, and for 2023 is $10,250.
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Keller Cosmetics maintains an operating profit margin of 5% and asset turnover ratio of 6. a. What is its ROA? Note: Round your answer to 2 decimal places. b. If its debt-equity ratio is 1 , its interest payments and taxes are each $9,600, and EBIT is $28,000, what is its ROE? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
a. The ROA for Keller Cosmetics is 0.30 or 30%.
b. The ROE for Keller Cosmetics is 0.60 or 60%.
a. To calculate the return on assets (ROA), we can use the formula:
ROA = Operating Profit Margin * Asset Turnover Ratio
Given that the operating profit margin is 5% and the asset turnover ratio is 6, we can substitute these values into the formula:
ROA = 0.05 * 6 = 0.30
Therefore, the ROA for Keller Cosmetics is 0.30 or 30%.
b. To calculate the return on equity (ROE), we can use the formula:
ROE = ROA * Equity Multiplier
The equity multiplier is calculated as:
Equity Multiplier = 1 + Debt-to-Equity Ratio
Given that the debt-to-equity ratio is 1, we can substitute this value into the formula:
Equity Multiplier = 1 + 1 = 2
Now we can calculate the ROE:
ROE = ROA * Equity Multiplier = 0.30 * 2 = 0.60
Therefore, the ROE for Keller Cosmetics is 0.60 or 60%.
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Identical products, as well as a large number of buyers and sellers, are characteristics of a sellers of goods influence the prevailing market price, giving them the role of price in the market.
a. true
b. false
b. false - Sellers of goods in a perfectly competitive market do not have influence over the prevailing market price.
The statement is false. Identical products, as well as a large number of buyers and sellers, are characteristics of a perfectly competitive market, where individual sellers do not have influence over the prevailing market price. In a perfectly competitive market, no single buyer or seller has the ability to influence prices due to the presence of numerous participants and standardized products. The market price is determined by the forces of supply and demand, and each individual seller is a price taker, meaning they must accept the prevailing market price.
In a perfectly competitive market, sellers are price takers because they have no control over the market price. They have to accept the price determined by the interaction of supply and demand. Since there are many buyers and sellers in the market, no individual seller has enough market power to influence the price. The products sold by different sellers are identical, meaning there are no distinguishing features or quality differences, further reinforcing the notion that sellers have no influence over the prevailing market price.
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You buy a 30-day 4% CD with a face value of GBP 20 million at par when it is issued. You sell it in the secondary market after 10 days at 4.05 %. What is your holding period return? A.4.05% B. 3.891% C. 3.838% D. 1.946%
The holding period return for selling the 30-day 4% CD after 10 days at 4.05% is 3.891%.
To calculate the holding period return, we need to consider the interest earned and the period. The CD has a face value of GBP 20 million and a 30-day maturity with an initial interest rate of 4%. However, the CD is sold after 10 days at a rate of 4.05%.
First, we calculate the interest earned on the CD during the holding period. The interest can be calculated using the formula:
Interest = Principal × Rate × Time.
In this case, the principal is GBP 20 million, the rate is 4%, and the time is 10/30 (10 days out of the 30-day maturity).
Interest = GBP 20 million × 0.04 × (10/30) = GBP 266,666.67
Next, we calculate the sale proceeds by adding the interest earned to the face value of the CD:
Sale Proceeds = GBP 20 million + GBP 266,666.67 = GBP 20,266,666.67
Finally, we calculate the holding period return using the formula: Holding Period Return = (Sale Proceeds - Principal) / Principal × 100.
Holding Period Return = (GBP 20,266,666.67 - GBP 20 million) / GBP 20 million × 100 = 3.891%
Therefore, the holding period return for selling the CD after 10 days at a rate of 4.05% is 3.891%, which corresponds to option B.
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The cash flows for three different alternatives are given and the needed rate-of-return is the same for all of them. You should find the best alternative by: a. Finding the future value b. Including method of depreciation in the analysis c. Finding the MARR of the project d. Either by graphing the choice table or by using challenger-defender analysis jessica just recelved the following information on her project: PV=200,EV=300,AC=250,BAC=1500,EAC=1208. In terms of cost at completion.
a. The project will currently finish under budget. b. The project will currently finish over budget. c.The project will currently finish on budget.
d. The project will currently finish behind schedule. e. There is insufficent information to draw conclusions. The earned value of a project is the: a. Project cost to date adjusted for project scope changes
b. Total project cost to date c. Cost incurred minus the planned cost d. Percent of the original budget that has been earned by actual work e. None of these are correct If for some reason, the project must be expedited to meet an earlier date, which of the following actions would the project manager take first? a. Check to see which activities cost the least b. Check to see which activities have the longest duration
c. Check to see which activities are on the critical path d. Check to see which activities have the most slack e. Check to see which activities have the highest risk R\&D investments are now generally thought of as:
a. Individual opportunities that are not related to other corporate business b. Only acceptable if a joint venture is involved c. Too risky for any company in an uncertain economy d. Portfolios of projects in low, medium, and high-risk ventures
To find the best alternative when the cash flows for three different alternatives are given, and the needed rate-of-return is the same for all of them is either by graphing the choice table or by using challenger-defender analysis. Thus, the correct option is d. Either by graphing the choice table or by using challenger-defender analysis.
Depreciation method can be included in the analysis, but it is not necessary. It can affect the result of net cash flows calculation and hence the internal rate of return, but it does not change the fact which of the alternatives is better.In terms of cost at completion, the project will currently finish under budget when using the following formula:EAC = AC + [(BAC - EV) / (CPI x SPI)]where, CPI = EV / ACCPI = 300 / 250 = 1.2SPI = EV / PVSPI = 300 / 200 = 1.5EAC = 250 + [(1500 - 300) / (1.2 x 1.5)] = 1208Thus, EAC is 1208, which is less than BAC of 1500. Therefore, the project will currently finish under budget. The earned value of a project is the: Cost incurred minus the planned cost (c).
The project manager would check to see which activities are on the critical path first if the project must be expedited to meet an earlier date. R&D investments are now generally thought of as portfolios of projects in low, medium, and high-risk ventures.
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Byron Books Inc. recently reported $6 million of net income. Its EBIT was $8.4 million, and its tax rate was 25%. What was its interest expense? (Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $6 million of net income by (1−T)=0.75 to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.) Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar; if necessary. Do not round intermediate calculations. Satterson Brothers recently reported an EBITDA of $7.5 million and net income of $1.125 million. It had $1.5 million of nterest expense, and its corporate tax rate was 25%. What was its charge for depreciation and amortization? Write out our answer completely. For example, 25 million should be entered as 25,000,000. Do not round intermediate alculations. Round your answer to the nearest dollar, if necessary.
To find the interest expense for Byron Books Inc., we can use the formula:
Interest Expense = EBIT - Taxable Income
Given:
Net Income = $6,000,000
EBIT = $8,400,000
Tax Rate = 25% (0.25)
First, we calculate the taxable income:
Taxable Income = Net Income / (1 - Tax Rate)
Taxable Income = $6,000,000 / (1 - 0.25)
Taxable Income = $6,000,000 / 0.75
Taxable Income = $8,000,000
Now, we can calculate the interest expense:
Interest Expense = EBIT - Taxable Income
Interest Expense = $8,400,000 - $8,000,000
Interest Expense = $400,000
Therefore, the interest expense for Byron Books Inc. is $400,000.
For Satterson Brothers, to find the depreciation and amortization charge, we can use the formula:
Depreciation and Amortization = EBITDA - Net Income + Interest Expense
Given:
EBITDA = $7,500,000
Net Income = $1,125,000
Interest Expense = $1,500,000
Tax Rate = 25% (0.25)
Depreciation and Amortization = $7,500,000 - $1,125,000 + $1,500,000
Depreciation and Amortization = $7,500,000 - $1,125,000 + $1,500,000
Depreciation and Amortization = $7,875,000
Therefore, the depreciation and amortization charge for Satterson Brothers is $7,875,000.
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Doctor Franco worked for 10 years as an employee of MedBest.. He signed a non-compete clause in indicating that he cannot practice medicine for two years within a 15 mile radius of Med Best. After one year, Med Best is no longer in the business of practicing medicine because it was brought by a large corporation. Can the noncompete clause be enforced? Please discuss.
I am not a lawyer, but I can provide some general information on non-compete clauses. The enforceability of a non-compete clause depends on various factors, including jurisdiction-specific laws and the specific terms and conditions outlined in the contract.
It's always advisable to consult with a legal professional for a definitive based on the specific circumstances and applicable laws in your jurisdiction.
In many jurisdictions, the enforceability of a non-compete clause depends on whether it is considered reasonable in terms of its duration, geographic scope, and the legitimate business interests it seeks to protect. Let's discuss the scenario you presented:
1. Duration: The non-compete clause in this case states that Doctor Franco cannot practice medicine for two years within a 15-mile radius of MedBest.
2. Change in Business: After one year, MedBest is no longer in the business of practicing medicine because it was acquired by a large corporation.
In general, if the business that imposed the non-compete clause is no longer engaging in the specific activities covered by the clause (in this case, practicing medicine), it may weaken the enforceability of the non-compete clause. The clause may no longer serve a legitimate business interest since MedBest is no longer in the medical practice.
However, the enforceability of the non-compete clause can also be influenced by other factors, such as the specific language used in the contract, applicable laws in the jurisdiction, and whether the large corporation that acquired MedBest is engaged in a similar line of business or could be considered a successor to MedBest.
To determine the enforceability of the non-compete clause in this scenario, it is crucial to consult with a legal professional who can review the specific terms of the contract and applicable laws in your jurisdiction. They will be able to provide you with accurate advice based on the specifics of the situation.
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A drilling process has an upper specification of 1.964 millimeters and a lower specification of 1.777 millimeters. A sample of parts had a mean of 1.87 millimeters with a standard deviaiton of 0.026 millimeters. What is the process capability index for this system? Note: Round your answer to 4 decimal places.
The process capability index (Cp) for this system is approximately 1.1974.
To calculate the process capability index (Cp) for this system, we need to use the formula:
Cp = (USL - LSL) / (6 * σ)
Where:
USL: Upper Specification Limit
LSL: Lower Specification Limit
σ: Standard Deviation
In this case, the Upper Specification Limit (USL) is 1.964 millimeters, the Lower Specification Limit (LSL) is 1.777 millimeters, and the Standard Deviation (σ) is 0.026 millimeters.
Plugging in these values into the formula, we have:
Cp = (1.964 - 1.777) / (6 * 0.026)
Calculating the numerator first:
1.964 - 1.777 = 0.187
Now calculating the denominator:
6 * 0.026 = 0.156
Finally, dividing the numerator by the denominator:
Cp = 0.187 / 0.156
Cp ≈ 1.1974
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Using the Accounting Equation Assets = Liabilities + Equity, analyze each transaction and show its effects as increases or decreases in the appropriate column. Determine the total balance for both the Assets side and the Liabilities + Equity side showing that both sides are equal.
Owner Jiwanjot Kaur invested cash $10,000
Owner billed a customer $600 cash for services done $600 Cash received for work done for a client $7,000
Government grant applied for but still in processing, no approval yet. $ 10,000
Salary paid to assistant $ 4,500
Work completed for a customer on credit $1,250
Using the Accounting Equation Assets = Liabilities + Equity, If the accounting equation is balance in both the sides.
Total balance for Assets = $10,000 + $600 + $7,000 + $6,250
Total balance for Assets = $23,850
Total balance for Liabilities + Equity = $0 + $10,000 + $600 + $0 + $6,250 + $7,000 - $4,500
Total balance for Liabilities + Equity = $23,850
Owner Jiwanjot AUR made a $10,000 cash investment.
An increase of $10,000 in fundsOwner's Equity Rises by $10,000The owner charged a client $600 in cash for the services rendered.
Increase of $600 in Accounts Receivablea $600 increase in revenue$7,000 was paid for services rendered to a client.
An increase of $7,000 in funds
$7.00 increase in revenue
Government grant application submitted; however, approval is still pending. $10,000
Assistant's pay was $4,500.
Cash decrease of $4,500
Owner's Equity Drops by $4,500
accomplished work for a client on credit $1,250
$1,250 more in accounts receivable
An increase of $1,250 in sales
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What are the advantages and disadvantages for BMW as it responds to moves by its competitors?
BMW should strike a balance between monitoring competitors and focusing on its own strengths and customer needs. It should prioritize sustainable differentiation, continuous innovation, and customer-centric strategies, ensuring that responses to competitors align with its overall business objectives and long-term success.
Advantages for BMW as it responds to moves by its competitors:
1. Market Positioning: Responding to competitors' moves allows BMW to maintain or strengthen its market position. By closely monitoring and reacting to competitive actions, BMW can adapt its strategies and offerings to remain competitive and retain its customer base.
2. Innovation and Differentiation: Competitor moves can provide valuable insights into emerging trends, new technologies, or innovative business practices. By responding effectively, BMW can leverage these insights to innovate and differentiate its products or services, staying ahead of the competition and attracting customers with unique offerings.
3. Customer Retention: Responding to competitors' actions can help BMW address customers' evolving needs and preferences. By staying attuned to market dynamics, BMW can introduce improvements or new features to its products, enhancing customer satisfaction and loyalty.
Disadvantages for BMW as it responds to moves by its competitors:
1. Increased Costs: Rapidly responding to competitors' moves often requires significant investments in research, development, marketing, and production. These increased costs may impact BMW's profitability and financial performance, especially if the response is not executed efficiently or effectively.
2. Competitive Escalation: When responding to competitors, there is a risk of entering a cycle of competitive escalation. Competitors may counter BMW's moves with their own aggressive strategies, leading to a constant race to outdo each other. This can lead to heightened rivalry and price wars, potentially eroding profit margins for all parties involved.
3. Loss of Focus: Devoting excessive attention to competitors' moves may divert BMW's focus from its own long-term strategic goals and unique value proposition. Overemphasis on reacting to competitors can hinder BMW's ability to pursue its own vision, innovate proactively, and set trends in the industry.
To mitigate these disadvantages, BMW should strike a balance between monitoring competitors and focusing on its own strengths and customer needs. It should prioritize sustainable differentiation, continuous innovation, and customer-centric strategies, ensuring that responses to competitors align with its overall business objectives and long-term success.
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Five years ago, you decided to purchase the stock of Blue Corp.. This stock has had returns of 6 percent, -21 percent, 17 percent, 10 percent, and 2 percent over these past five years. What is the standard deviation of these returns?
The standard deviation of the returns for Blue Corp stock over the past five years will be calculated.
To calculate the standard deviation of the returns, follow these steps:
Calculate the average (mean) of the returns by summing up all the returns and dividing by the number of returns. In this case, the sum of the returns is 6 + (-21) + 17 + 10 + 2 = 14, and since there are five returns, the mean is 14/5 = 2.8%.
Subtract the mean from each individual return to calculate the deviation from the mean for each year. The deviations are: 6 - 2.8 = 3.2%, -21 - 2.8 = -23.8%, 17 - 2.8 = 14.2%, 10 - 2.8 = 7.2%, and 2 - 2.8 = -0.8%.
Square each deviation to eliminate negative values and emphasize differences from the mean. The squared deviations are: 3.2^2 = 10.24%, (-23.8)^2 = 566.44%, 14.2^2 = 201.64%, 7.2^2 = 51.84%, and (-0.8)^2 = 0.64%.
Calculate the average of the squared deviations by summing them up and dividing by the number of returns. The sum of squared deviations is 10.24 + 566.44 + 201.64 + 51.84 + 0.64 = 830.8, and since there are five returns, the average is 830.8/5 = 166.16%.
Take the square root of the average squared deviation to obtain the standard deviation. The square root of 166.16% is approximately 12.88%.
Therefore, the standard deviation of the returns for Blue Corp stock over the past five years is approximately 12.88%.
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1) What is the difference between current account balance and
overall balance?
2) To stimulate the Malaysian economy, the government has
increased investment incentives. Explain its effects on Malaysi
Increasing investment incentives can attract more capital inflows, enhance business competitiveness, promote sectoral development, and have long-term positive impacts on Malaysia's economic growth and diversification.
What are the effects of increasing investment incentives on the Malaysian economy?1) The difference between current account balance and overall balance lies in the components they consider and the broader context in which they are used. The current account balance is a component of the overall balance, also known as the balance of payments. The current account balance focuses specifically on the trade of goods and services, including exports and imports, as well as income flows such as foreign investments, remittances, and tourism. It measures the net inflow or outflow of funds from these transactions.
On the other hand, the overall balance, or balance of payments, encompasses not only the current account balance but also the capital account and financial account. The capital account includes transfers of non-financial assets, while the financial account captures changes in ownership of financial assets and liabilities, such as direct investments, portfolio investments, and loans. The overall balance reflects the total inflows and outflows of funds in an economy, considering both current and capital/financial transactions.
2) By increasing investment incentives, the Malaysian government aims to stimulate the economy by encouraging more investment activities. This can have several effects on Malaysia:
a) Increased capital inflows: Investment incentives can attract both domestic and foreign investors, leading to an increase in capital inflows. This can provide additional funds for businesses to expand, create job opportunities, and contribute to economic growth.
b) Enhanced business competitiveness: Investment incentives can improve the competitiveness of Malaysian businesses by reducing costs, providing tax benefits, or offering grants and subsidies. This can attract more investors and promote innovation and productivity.
c) Sectoral development: The government may target specific sectors for investment incentives, such as technology, manufacturing, or infrastructure. This can spur growth in these sectors, boost employment, and contribute to overall economic development.
d) Long-term economic impact: Increased investment can lead to the development of new industries, improved infrastructure, and technology transfer. These factors can enhance Malaysia's capacity for sustainable economic growth and diversification.
It is important for the government to carefully design and monitor these incentives to ensure their effectiveness in achieving the desired economic outcomes and to maintain fiscal sustainability.
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Describe how a business decision made in a business simulation would have an ethical implication if the simulated business were a real-world business. Focus on at least one of the following topics in your explanation:
• socially responsible business practices
• fair business practices
• rights and well-being of workers
• rights of customers and other stakeholders
• diversity of the workforce
a reference please
Business Decision: In a business simulation, a decision is made to maximize short-term profits by outsourcing production to a foreign country with lower labor costs, resulting in layoffs for local employees.
Ethical Implication: This decision would have an ethical implication related to the rights and well-being of workers. In the real-world business context, prioritizing short-term profits over the welfare of local workers can be seen as unfair and socially irresponsible. It disregards the impact on employees who may lose their livelihoods and potentially face economic hardships. Additionally, it raises concerns about the exploitation of workers in the foreign country, where labor standards may be lower, violating fair business practices and the rights of workers.
The decision to outsource production to a foreign country with lower labor costs, resulting in layoffs for local employees, raises ethical concerns regarding the rights and well-being of workers. In the real world, businesses are expected to consider the impact of their decisions on employees and act in a socially responsible manner. Prioritizing short-term profits at the expense of local workers' job security and economic well-being is not considered fair business practice.
Outsourcing can have adverse effects on the local workforce, such as unemployment, reduced wages, and limited career prospects. These consequences can lead to social and economic hardships for the affected individuals and their families. Ethical considerations dictate that businesses should value the rights and well-being of workers and strive to create fair and inclusive workplaces.
Furthermore, outsourcing to countries with lower labor costs may involve employing workers in environments where labor standards are not adequately protected. This could include long working hours, unsafe working conditions, inadequate wages, and limited access to labor rights and protections. Such practices undermine fair business practices and disregard the rights of workers in the foreign country.
In summary, the business decision made in the simulation to prioritize short-term profits through outsourcing has ethical implications related to the rights and well-being of workers. Businesses should take into account the broader impact of their decisions on employees and aim to uphold fair business practices, ensuring the welfare and rights of workers are protected.
Reference:
Ethical Decision Making in Business: Behavioral Issues and Challenges by Patrick E. Murphy and Charles E. Peck
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chun shen invested in security mas that plans to provide a cash flow of 100 at time 1, 150 at time 4, and 200 at time 8. chun shen calculates the modified duration of this investment as x at an effective rate of 5%. calculate x.
The modified duration of the investment is a) 4.30.
To calculate the modified duration of an investment, we need to use the formula:
Modified Duration = (Present Value of Cash Flows * Time) / (Sum of Present Values of Cash Flows)
Let's calculate the present values of the cash flows first. We'll use the effective rate of 5% and the time periods given:
Present Value at time 1 = 100 / [tex](1 + 0.05)^1[/tex] = 95.24
Present Value at time 4 = 150 / [tex](1 + 0.05)^4[/tex] = 123.97
Present Value at time 8 = 200 / [tex](1 + 0.05)^8[/tex] = 148.64
Now, let's calculate the sum of the present values:
Sum of Present Values = 95.24 + 123.97 + 148.64 = 367.85
Finally, we can calculate the modified duration using the formula:
Modified Duration = (95.24 * 1 + 123.97 * 4 + 148.64 * 8) / 367.85 ≈ 4.30
Therefore, the modified duration of this investment is approximately 4.30.
The correct option is a) 4.30.
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Correct Question:
Chun Shen invested in security mas that plans to provide a cash flow of 100 at time 1, 150 at time 4, and 200 at time 8. Chun Shen calculates the modified duration of this investment as x at an effective rate of 5%. calculate x.
a) 4.30
b) 4.40
c) 4.50
d) 4.60
e) 4.70
An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n)
a) Audit of financial statements
b) Compliance Audit
c) Operational Audit
d) Production Audit
An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a Compliance Audit.
A compliance audit is conducted to assess whether an entity is adhering to specific procedures, rules, regulations, or standards established by a higher authority. This type of audit focuses on verifying whether the entity is meeting legal requirements, industry standards, contractual obligations, or internal policies. The objective is to ensure that the entity is operating in accordance with the prescribed guidelines and to identify any instances of non-compliance.
During a compliance audit, auditors evaluate the entity's systems, processes, and activities to determine whether they align with the established rules. They examine documentation, conduct interviews, and perform tests to assess compliance. The audit scope may cover various areas such as financial practices, data privacy, environmental regulations, workplace safety, or government regulations.
The findings of a compliance audit provide insights into the entity's adherence to the prescribed procedures and rules. If any non-compliance is identified, recommendations are made to rectify the issues and ensure future compliance. Compliance audits play a crucial role in ensuring organizations meet legal and regulatory requirements, mitigate risks, and maintain integrity in their operations.
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A project that provides annual cash flows of $13851 for eight
years costs $75748 today. At what discount rate would you be
indifferent between accepting the project and rejecting it? Round
two.
At discount rate of 11.14% (rounded to two decimal places), we would be indifferent between accepting or rejecting the project.
To find the discount rate at which we would be indifferent between accepting or rejecting the project, we can use the net present value (NPV) formula:
NPV = -Cost + (Cash Flow / Discount Rate) * [(1 - (1 / (1 + Discount Rate)^n))]
where:
Cost = $75,748
Cash Flow = $13,851 per year for 8 years
n = 8 (number of years)
We want to find the discount rate that will make the NPV equal to zero, since this is the rate at which the cost of the project is exactly offset by the present value of the future cash flows.
Setting NPV = 0 and solving for the discount rate, we get:
0 = -$75,748 + ($13,851 / r) * [(1 - (1 / (1 + r)^8))]
Simplifying the equation, we get:
($13,851 / r) * [(1 - (1 / (1 + r)^8))] = $75,748
Dividing both sides by $13,851, we get:
[(1 - (1 / (1 + r)^8))] / r = 5.46
We can solve for r numerically using a financial calculator or spreadsheet software. Using a spreadsheet, we can use the Goal Seek function to find the discount rate that makes the NPV equal to zero. Setting the cell containing the NPV formula to zero by changing the discount rate, we get a result of approximately 11.14%.
Therefore, at a discount rate of 11.14% (rounded to two decimal places), we would be indifferent between accepting or rejecting the project.
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Based on the economy described in and your conclusions from the question above on early agricultural communities, explain how you would expect this society to develop. Explain your answer fully. Your Answer: Eventually, there will be a coercive authority to divide the work between the people and allow time for individuals to have to themselves. They would compare their current way of life, to a life where their work time is set and there is a government in charge of controlling certain things in the market. If that world seems better they will change their separate lands and have a shared one. There will be a job for everyone and the advantage of being close to the river is not just for the ones who own the land close to the river. However, the issue that may arise with the development is that there might be gaps in their wealth as it is with our world right now. As people give power to that central planner who is assumed to be benevolent, eventually that person will act in a way that will benefit himself. Another thing to note is that when the prices are set, if the demand is higher than the supply there will be an adjustment to the price, and this would mean that certain people will be left with nothing as they may not be able to afford food. Intuitive and considers almost all concepts related to question in an appropriate manner.
In the development of early agricultural communities, it is likely that a coercive authority will emerge to allocate work and establish a government-controlled market. This would result in a shared land and job opportunities for everyone, irrespective of their proximity to the river. However, potential issues may arise, such as wealth gaps and the risk of the central planner acting in self-interest.
As early agricultural communities evolve, it is probable that they will eventually establish a coercive authority to manage and divide labor among individuals. This authority would aim to create a balanced distribution of work and provide individuals with leisure time. It would also introduce a government-controlled market, where certain aspects of the economy are regulated. This change would allow for a comparison between the existing decentralized way of life and the benefits of a centralized system.
The transition to a shared land and job opportunities for everyone, irrespective of their proximity to the river, would be a significant development. This shift would mean that the advantage of being close to the river is no longer limited to a few landowners. It would provide equal access to resources and potentially enhance overall productivity and prosperity within the community.
However, there are potential challenges in this development. One concern is the emergence of wealth gaps, similar to what we observe in our contemporary world. Despite the assumed benevolence of the central planner, there is a risk that this individual may eventually act in their self-interest, potentially exacerbating wealth disparities within the society.
Furthermore, in a government-controlled market where prices are set, adjustments may occur based on supply and demand dynamics. If demand exceeds supply for certain goods, the price would increase, potentially leaving individuals with limited means unable to afford essential resources. This could lead to economic inequality and social repercussions.
In conclusion, the development of early agricultural communities towards a centralized system with a coercive authority and a government-controlled market may provide certain benefits such as shared resources and job opportunities. However, it also presents potential challenges such as wealth gaps and the risk of self-interest among those in power. Additionally, price adjustments based on supply and demand could create affordability issues for some members of the society.
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Due to its importance in the economy, Chinese SOEs have a higher return on assets than private companies.
a. True
b. False
b. False The statement is false. Return on assets (ROA) is a financial ratio that measures a company's profitability by comparing its net income to its total assets. The claim that Chinese state-owned enterprises (SOEs) have a higher ROA than private companies is not universally true.
While some Chinese SOEs may indeed have a higher ROA due to factors such as government support, monopolistic positions in certain industries, or access to preferential resources, it is not accurate to generalize this statement for all SOEs and private companies in China.
The performance and profitability of companies, whether SOEs or private, vary based on various factors such as industry dynamics, management effectiveness, market competition, and economic conditions. Many private companies in China have demonstrated strong profitability and outperformed certain SOEs in terms of ROA.
It is important to assess each company individually and consider the specific factors influencing their profitability rather than making a blanket statement about the ROA of SOEs versus private companies.
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Use the following information to prepare the September cash budget for PTO Company. Ignore the "Loan activity" section of the budget. a. Beginning cash balance, September 1,$47,000. b. Budgeted cash receipts from September sales, $263,000. c. Direct materials are purchased on credit. Purchase amounts are August (actual), $77,000; and September (budgeted), $100,000. Payments for direct materials follow: 65% in the month of purchase and 35% in the first month after purchase. d. Budgeted cash payments for direct labor in September, $38,000. e. Budgeted depreciation expense for September, $3,600. f. Budgeted cash payment for dividends in September, $56,000. g. Budgeted cash payment for income taxes in September, $10,800. h. Budgeted cash payment for loan interest in September, $1,800.
The cash budget for PTO Company for the month of September can be prepared by following the given steps: Cash Budget: It is an estimation of the inflows and outflows of cash during the budget period. It helps in determining the cash requirements of the company during the budget period.
Step 1: Determination of Receipts Beginning cash balance, September 1,$47,000 Budgeted cash receipts from September sales, $263,000Total cash receipts, $310,000
Step 2: Determination of Payments Budgeted cash payments for direct labor in September, $38,000
Budgeted cash payment for dividends in September, $56,000
Budgeted cash payment for income taxes in September, $10,800
Budgeted cash payment for loan interest in September, $1,800
Budgeted depreciation expense for September, $3,600
Payment for August material purchases (35% of $77,000), $26,950
Payment for September material purchases (65% of $100,000), $65,000
Total cash payments, $201,150
Step 3: Preparation of Cash Budget Cash balance, September 1, $47,000
Add: Total cash receipts, $310,000Total cash available, $357,000
Less: Total cash payments, $201,150 Excess cash over payments, $155,850
Ending cash balance, September 30, $202,850
Hence, the ending cash balance of PTO Company on September 30 is $202,850.
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What are the new changes in the new insolvency law and their potential repercussions?
Changes in insolvency laws can have wide-ranging implications, including impact on creditor rights, restructuring processes, liquidation procedures, and overall business environment, but specific details and repercussions depend on the jurisdiction and nature of the changes.
Changes in insolvency laws can have significant repercussions in the legal and business landscape. Some potential effects of new insolvency laws include enhanced creditor rights, streamlined restructuring processes, increased focus on rescue and rehabilitation of distressed businesses, and more efficient liquidation procedures. These changes aim to strike a balance between protecting the interests of creditors and facilitating the revival of financially troubled companies.
However, the specific repercussions depend on the nature and scope of the amendments, as well as the jurisdiction in which they are implemented. It is crucial for businesses, creditors, and insolvency professionals to stay informed about the new laws, understand their implications, and adapt their strategies accordingly to navigate the evolving landscape of insolvency proceedings.
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Dinners are prepared in a process with two sequential resources. The capacities of the resources are 35 and 43 dinners per hour. What is the capacity of this process in terms of dinners per hour? ANSW
The capacity of a process is determined by its bottleneck, which is the resource with the lowest capacity. In this case, the sequential process consists of two resources, with capacities of 35 and 43 dinners per hour.
The bottleneck is the resource with a capacity of 35 dinners per hour. This means that the process cannot produce more than 35 dinners per hour, as it is limited by the capacity of this particular resource. The capacity of the process in terms of dinners per hour is therefore 35. It is important to identify and address bottlenecks in a process to optimize efficiency and maximize output. By understanding the capacity limitations, appropriate measures can be taken to manage resources effectively and improve overall productivity.
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An investor is considering the acquisition of a "distressed property" which is on Northlake Bank’s REO list. The property is available for $202,600 and the investor estimates that he can borrow $160,000 at 4.5 percent interest and that the property will require the following total expenditures during the next year:
Inspection $ 539
Title search 1,078
Renovation 13,000
Landscaping 878
Loan interest 7,239
Insurance 1,839
Property taxes 6,039
Selling expenses 8,000
Required:
a. The investor is wondering what such a property must sell for after one year in order to earn a 20 percent return (IRR) on equity.
b. The lender is now concerned that if the property does not sell, investor may have to carry the property for one additional year. He believes that he could rent it (starting in year 2) and realize a net cash flow before debt service of $1,980 per month. However, he would have to make an additional $7,980 in interest payments on his loan during that time, and then sell. What would the price have to be at the end of year 2 in order to earn a 20 percent IRR on equity?
A. The property must sell for at least $224,073.40 after one year to earn a 20 percent return on equity.
B. The price at the end of year 2 should be at least $222,834.40 to earn a 20 percent return on equity when considering the rental scenario.
To calculate the required selling price after one year in order to earn a 20 percent return on equity, we need to consider the initial investment and the expected cash flows. Here are the calculations:
a. Initial Investment:
Purchase Price: $202,600
Down Payment: $202,600 - $160,000 (borrowed amount) = $42,600
Cash Outflow:
Down Payment: $42,600
Expenditures: $539 + $1,078 + $13,000 + $878 + $7,239 + $1,839 + $6,039 + $8,000 = $38,612
Total Initial Investment: $42,600 + $38,612 = $81,212
Expected Cash Inflow after one year:
Selling Price (to be determined): X
Net Cash Inflow: Selling Price - Loan Principal - Interest - Expenses
Net Cash Inflow: X - $160,000 - $7,239 - $1,980 - $38,612 = X - $207,831
To earn a 20 percent return on equity, the net cash inflow should be 20 percent of the initial investment:
0.20 * $81,212 = $16,242.40
Equating the net cash inflow to the desired return:
X - $207,831 = $16,242.40
Solving for X:
X = $207,831 + $16,242.40
X = $224,073.40
Therefore, the property must sell for at least $224,073.40 after one year to earn a 20 percent return on equity.
b. If the investor decides to rent the property in the second year and wants to earn a 20 percent return on equity, we need to calculate the selling price at the end of year 2. Here are the calculations:
Expected Cash Inflow in year 2:
Net Cash Flow before Debt Service: $1,980/month * 12 months = $23,760
Interest Payments: $7,980
Total Cash Inflow in year 2: $23,760 - $7,980 = $15,780
To earn a 20 percent return on equity, the net cash inflow in year 2 should be 20 percent of the initial investment:
0.20 * $81,212 = $16,242.40
Equating the net cash inflow to the desired return:
Selling Price - Loan Principal - Interest - Expenses = $16,242.40
Solving for the Selling Price:
Selling Price = $16,242.40 + $160,000 + $7,980 + $38,612
Selling Price = $222,834.40
Therefore, the price at the end of year 2 should be at least $222,834.40 to earn a 20 percent return on equity when considering the rental scenario.
It is important to note that these calculations are based on the provided information and assumptions, and actual market conditions and other factors may influence the final outcomes.
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Rannal Stores intents sailing a stove on credit. The selling price of the stove is R5 000 The mark-up on the coll price is 50% Credit terms of 2/10 net 60 were agreed upon. The cost of capital to Bennet Stores is 15%. Calculate the profit that Bennet Stores would make if the account is settled within the discount period. Should the customer fail to pay the amount due and the account is written off after 90 days, how much would be the loss to Bannet Stores?
If the account is written off after 90 days, Bennett Stores would incur a loss of R3,333.33.
To calculate the profit that Bennett Stores would make if the account is settled within the discount period, we need to determine the selling price after the discount and subtract the cost of the stove.
Given:
Selling price of the stove: R5,000
Markup on the cost price: 50%
Credit terms: 2/10 net 60
Cost of capital: 15%
First, let's calculate the cost price of the stove. Since the markup is 50%, the cost price can be calculated as:
Cost Price = Selling Price / (1 + Markup)
Cost Price = R5,000 / (1 + 0.50) = R3,333.33
Now, let's calculate the amount of discount the customer can get if the account is settled within the discount period. The discount is 2% of the selling price:
Discount = 2% of Selling Price
Discount = 0.02 x R5,000 = R100
The discounted selling price is the selling price minus the discount:
Discounted Selling Price = Selling Price - Discount
Discounted Selling Price = R5,000 - R100 = R4,900
The profit that Bennett Stores would make if the account is settled within the discount period is the discounted selling price minus the cost price:
Profit = Discounted Selling Price - Cost Price
Profit = R4,900 - R3,333.33 = R1,566.67
Therefore, if the account is settled within the discount period, Bennett Stores would make a profit of R1,566.67.
If the customer fails to pay the amount due and the account is written off after 90 days, the loss to Bennett Stores would be the cost price of the stove:
Loss = Cost Price
Loss = R3,333.33
Therefore, if the account is written off after 90 days, Bennett Stores would incur a loss of R3,333.33.
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Discuss the "Promotion" of the 4Ps of marketing plan of DayTwo(a gut microbiome precision medicine company).
Require about 300 words. DO NOT COPY AND PASTE. please be precise to the question and answer in OWN WORDS.
Promotion is a crucial element of the marketing mix, and it plays a significant role in creating awareness, generating interest, and driving adoption of products or services.
In the context of DayTwo, a gut microbiome precision medicine company, an effective promotion strategy is essential to educate and engage the target audience about the benefits of their offerings.
DayTwo's promotion strategy should focus on conveying the value proposition of their gut microbiome precision medicine solutions and building credibility in the market. Here are some key aspects to consider:
Integrated Marketing Communications: DayTwo should adopt an integrated approach to communicate their message consistently across various channels. This includes leveraging digital marketing, social media platforms, content marketing, and traditional advertising methods to reach their target audience effectively. They can utilize educational content, case studies, testimonials, and thought leadership pieces to establish their expertise and gain trust.
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TIA HAS VC/UNIT = $34.10. THE VC% = 55%.
TIA CURRENTLY HAS AFTER-TAX NET INCOME = $154,287.
WHAT IS AFTER-TAX NET INCOME IF TIA SELLS ANOTHER 2,000 UNITS? (ASSUME 21% TAX RATE)
The after-tax net income for TIA if they sell another 2,000 units with a 21% tax rate can be calculated as follows:
:Given, VC/Unit = $34.10, VC% = 55%After-tax net income = $154,287Let's first find out the selling price per unit and the contribution margin per unit.Selling price per unit = VC/ (100%- VC%) = $34.10/ (100%-55%) = $75.78Contribution margin per unit = Selling price per unit - VC/Unit= $75.78 - $34.10= $41.68After-tax net income = (Sales - Variable cost) × (1 - Tax rate) - Fixed costLet's find out the fixed cost.Fixed cost = Total cost - Variable cost = $154,287/ (1-55%) - ($34.10 × 2000)= $154,287/ 0.45 - $68,200= $206,860Now let's calculate the after-tax net income for the sale of another 2,000 units.After-tax net income = (Sales - Variable cost) × (1 - Tax rate) - Fixed cost = (2000 × $75.78 - $34.10 × 2000) × (1 - 21%) - $206,860= $110,684.8Thus, the after-tax net income if TIA sells another 2,000 units with a 21% tax rate is $110,684.8.
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13.
thank you !
Assume that you wish to make annual deposits into a savings account. The interest rate offered by the bank is \( 12 \% \), and you plan to save for the next 6 years. If your goal is for the present va
You need to deposit $1,444.06 per year to reach your goal of $10,000 in 6 years, If you are not sure how to save money or invest your money, you should talk to a financial advisor.
To calculate how much you need to deposit each year, you can use the following formula:
Present Value = Future Value / (1 + Interest Rate)^Number of Years
In this case, the future value is $10,000, the interest rate is 12%, and the number of years is 6.
Plugging these values into the formula gives us:
Present Value = 10,000 / (1 + 0.12)^6 = 1,444.06
As you can see, you need to deposit $1,444.06 per year to reach your goal of $10,000 in 6 years.
Here are some additional things to keep in mind when saving money:
You should make sure that you can afford to make the monthly deposit. If you are struggling to make the deposit, you may want to consider saving less money or saving for a shorter period of time.
You should also consider the fees associated with the savings account. Some accounts charge monthly fees, while others charge fees for ATM withdrawals or other transactions.
It is important to track your progress and make sure that you are on track to reach your goal. You can do this by keeping a savings plan or using a financial planning app.
If you are not sure how to save money or invest your money, you should talk to a financial advisor. They can help you create a plan that meets your individual needs and goals.
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Which of the following were results of the Scots-Irish settlement in North America?. Check all that apply. - Increased violence between settlers and natives on the frontier - The creation of whiskey stills throughout the American colonies - An influx of educated professionals in the cities - More British support dotting the frontier - Quarrels on the western frontier over land
Increased violence between settlers and natives on the frontier, More British support dotting the frontier, Quarrels on the western frontier over land, and The creation of whiskey stills throughout the American colonies.
The Scots-Irish settlement in North America had multiple effects on the community. The following were the results of the Scots-Irish settlement in North America:Increased violence between settlers and natives on the frontier.
More British support dotting the frontier.Quarrels on the western frontier over land.The creation of whiskey stills throughout the American colonies.These were the effects of Scots-Irish settlement in North America.
The Scots-Irish brought their own culture and way of life with them, which were quite different from that of the people living in North America. This led to cultural clashes, which were often violent, and it was the natives who suffered the most.
The presence of the British helped ease the tension, but it also created a rift between the settlers and the British. The British were seen as outsiders, and many people were suspicious of their motives.The quarrels over land were inevitable, as the settlers needed land to farm and the natives were reluctant to give up their lands. This led to violent confrontations, which further worsened the relationship between the settlers and the natives.
The Scots-Irish brought with them the knowledge of how to make whiskey, and they quickly set up stills throughout the colonies. This led to the creation of a new industry, which helped the economy of the colonies to grow.Overall, the Scots-Irish settlement had a significant impact on North America, and their legacy is still felt to this day.
The answer to this question is Increased violence between settlers and natives on the frontier, More British support dotting the frontier, Quarrels on the western frontier over land, and The creation of whiskey stills throughout the American colonies.
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1.1 1.2 1.3 1.4 Explain in detail, the way in which the work sampling can be used as an approach to explore the work content. The systematic approach of discovering the work content using the work sampling. (20) Define work sampling and give three practical examples (5) Explain systematic approach when contacting two hand process. (10) Define with examples, the standard time, work study, work measurement, work sampling and activity sampling (10) in 140
Work sampling is a technique used to explore the work content by observing and recording the activities performed by workers at various intervals. It provides a systematic approach to understanding the work being done and helps in analyzing and improving productivity.
Work sampling is a technique used in work study and work measurement to explore the work content. It involves observing and recording the activities performed by workers at random intervals, allowing for a representative sample of work activities to be collected. This data is then analyzed to estimate the time spent on different tasks and understand the overall work pattern.
The systematic approach of work sampling begins with defining the objectives and scope of the study. The work area and activities to be observed are identified, and a suitable sampling method is chosen.
Random samples are taken at regular intervals, ensuring that the observations are unbiased and representative of the overall work. The observed data is then recorded and analyzed to determine the proportion of time spent on various tasks, the utilization of resources, and other relevant metrics.
By using work sampling, organizations can gain insights into their work processes and make informed decisions to improve productivity and efficiency.
For example, in a manufacturing plant, work sampling can be used to analyze the time spent on different production tasks, identify potential bottlenecks, and optimize resource allocation.
In a healthcare setting, work sampling can help understand the distribution of work activities among healthcare professionals and ensure optimal staffing levels. In a production facility, work sampling can be used to measure the utilization of machinery and identify opportunities for improvement.
Standard time refers to the predetermined time required to perform a specific task under defined conditions. Work study is a systematic examination of work methods and processes to improve productivity and efficiency.
Work measurement involves determining the time taken to perform tasks using various techniques such as time study or work sampling. Work sampling is a technique used to collect data on work activities at random intervals, while activity sampling is a similar technique used to collect data on specific activities within a broader work context.
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Task 5. Case Study: LEYA
LEYA is a fast growing mobile Internet education platform established in the end of 2015, focusing on offering English teaching using a shared economy business model. Children from the same neighbourhood form one class, and teachers provide on-site lecturing. In this way, it saves parents’ time and reduces cost.
The company’s founders are an international team, including two founders who are foreigners, and talented co-workers from XiaoMi, IBM, and Oracle.
In their own words:
We came together to do something meaningful for society. I believe that it is the value we share as a team that inspires everybody to make the effort. Hence, finding the people with similar values is vital.
In the beginning, I was very clear of my business goal. This requires deep thinking before starting the business, for example, what do you want and how do you reach your goal. You have to think of the resources you need, and what kind of partners to help you achieve the goal. Setting the goal is the first step in recognizing the required resources. Since I started the business, based on such a role, together with my previous experience, I was very clear of our business goal and the indispensable resources to achieve the goal.
LEYA connects teachers and students. We are an Internet firm, but we base our core competency on innovative organizational form.
Questions:
Map the LEYA case onto the VRIO Framework
What are the tangible and intangible resources that the company has?
Do you think their resources are rare and valuable?
What resources and capabilities are needed for Leya to achieve their competitive positions in the market?
LEYA's resources are both rare and valuable. Their shared economy business model and international team of founders, along with their collaboration with talented individuals from reputable companies, create a unique and valuable combination of resources.
Valuable: LEYA's shared economy business model and on-site lecturing approach are valuable resources as they save parents' time and reduce costs. Their international team of founders and talented co-workers from reputable companies like XiaoMi, IBM, and Oracle bring valuable expertise and experience to the organization. Rare: LEYA's international team of founders, including two foreigners, and the collaboration with talented co-workers from reputable companies create a rare combination of diverse skills and perspectives. Additionally, their innovative organizational form based on the shared economy model in the education sector is relatively rare. Inimitable: The specific combination of resources, including the international team, talent from reputable companies, and the shared economy model applied to education, can be difficult for competitors to imitate. The relationships, knowledge, and experience built by the founders over time also contribute to the inimitability of their resources.
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