a. The monthly payment on the mortgage is approximately $5,315.67.
b. Here is an example of an amortization schedule for the twenty years:
| Month | Payment | Interest | Principal | Balance |
|-----------|----------------|----------------|--------------|-----------------------|
| 1 | $5,315.67 | $3,250.00 | $2,065.67 | $647,934.33 |
| 2 | $5,315.67 | $3,885.37 | $1,430.30 | $646,504.03 |
| 3 | $5,315.67 | $3,881.13 | $1,434.54 | $645,069.49 |
| ... | ... | ... | ... | ... |
| 240 | $5,315.67 | $127.84 | $5,187.83 | $0.00 |
c. If Sherry and Sam increase their monthly payment to $7,600 and apply all the extra dollars above the original payment to the principal, they will fully repay the mortgage in approximately 13.2 years.
a. Monthly payment on the mortgage:
To calculate the monthly payment on the mortgage, we can use the formula:
EMI = (P * r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
P = Loan amount = $650,000
r = Monthly interest rate = 7.2% / 12 = 0.6% or 0.006 (decimal)
n = Number of payments = 20 years * 12 months = 240
Plugging in the values, we have:
EMI = ($650,000 * 0.006 * (1 + 0.006)^240) / ((1 + 0.006)^240 - 1)
Calculating this value, the monthly payment on the mortgage is approximately $5,315.67.
b. Amortization schedule for the twenty years:
The amortization schedule can be constructed using a spreadsheet, calculating the interest cost, principal reduction, and ending balance for each month. Here's an example of how the amortization schedule might look:
Month | Payment | Interest | Principal | Balance
-------------------------------------------------------
1 | $5,315.67 | $3,250.00 | $2,065.67 | $647,934.33
2 | $5,315.67 | $3,887.60 | $1,428.07 | $646,506.26
3 | $5,315.67 | $3,879.04 | $1,436.63 | $645,069.63
... | ... | ... | ... | ...
240 | $5,315.67 | $129.16 | $5,186.51 | $0.00
The amortization schedule will show the monthly payment, interest paid, principal reduction, and the remaining balance for each month.
c. If Sherry and Sam increase their monthly payment to $7,600 and apply all the additional dollars above the original payment to the principal, we need to determine the number of additional months required to fully repay the mortgage.
Using the same formula but with an increased payment of $7,600, we can calculate the remaining balance after the nth payment:
P_n = P_0 (1 + r)^n - (EMI - additional payment) ((1 + r)^n - 1) / r
Where:
P_n = Remaining balance after the nth payment
P_0 = Initial loan amount = $650,000
r = Monthly interest rate = 0.6%
EMI = Original monthly payment = $5,315.67
Additional payment = $7,600 - $5,315.67 = $2,284.33
We need to solve for n when P_n = 0:
0 = $650,000 * (1 + 0.006)^n - ($5,315.67 - $2,284.33) * ((1 + 0.006)^n - 1) / 0.006
Using an iterative approach or financial software, we find that n is approximately 158.5 months or approximately 13.2 years.
Therefore, Sherry and Sam will fully repay the mortgage after 10 years + 13.2 years = 23.2 years from the start of the mortgage.
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During 2014, Paul Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2012 $60,000 understated $75,000 overstated 2013 Paul uses the periodic inventory system. Prior to any adjustments for these errors and ignoring income taxes, Paul's retained earnings at December 31, 2014, would be: Select one: O a. Correct O b. $15,000 overstated Oc $75,000 overstated O d. $135,000 overstated O e $15,000 understated
Prior to any adjustments for these errors and ignoring income taxes, Paul's retained earnings on December 31, 2014, would be $15,000 overstated. Therefore, the correct answer is option b, $15,000 overstated.
To determine the impact of the inventory errors on Paul Company's retained earnings at December 31, 2014, we need to calculate the cumulative effect of the errors on the company's net income for the years 2012 and 2013.
For 2012:
The ending inventory was understated by $60,000. This means that the cost of goods sold (COGS) was overstated by $60,000, leading to an understatement of net income by the same amount.
For 2013:
The ending inventory was overstated by $75,000. This means that the COGS was understated by $75,000, leading to an overstatement of net income by the same amount.
To calculate the cumulative effect on retained earnings, we subtract the total of the understatement ($60,000) from the total of the overstatement ($75,000):
$75,000 - $60,000 = $15,000
Therefore, the errors resulted in an overstatement of net income by $15,000. Since retained earnings is derived from net income, Paul Company's retained earnings at December 31, 2014, would be $15,000 overstated. Therefore, the correct answer is option b, $15,000 overstated.
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what the implication of changes that have been implemented by
samsung organization due to pandemic covid 19?
The COVID-19 pandemic has had an impact on the global economy. It's forced organizations and companies to adapt corporations that was affected by the pandemic. Let's take a look at the changes implemented by Samsung due to the COVID-19 pandemic.
The pandemic had forced Samsung to shift to remote work. This was done to reduce the risk of exposure to the virus employees. Samsung implemented remote work policies to make it easier for employees to work from home. This allowed employees to continue their work from a safe location while maintaining their productivity.
Samsung has increased its focus on online shopping as a result of the COVID-19 pandemic. Since people are staying at home to prevent the spread of the virus, online shopping has become more prevalent. Samsung has made its products available through its website, as well as other online shopping platforms.
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You believe that your boss insulted you and placed you in a bad light in the eyes of your peers. You are angry. Is this constructive or destructive conflict? Which strategy will be most effective? Why?
The situation described can be classified as a destructive conflict due to the negative impact it has on relationships and morale. Employing a strategy of assertive communication and addressing the issue directly with the boss can be the most effective approach to resolving the conflict.
The scenario where the boss insults and undermines an employee, causing anger and negative perceptions among peers, represents a destructive conflict. Destructive conflicts are characterized by their detrimental effects on relationships, trust, and overall work environment. They can lead to decreased productivity, lower job satisfaction, and strained interpersonal dynamics.
To address this conflict effectively, employing a strategy of assertive communication is crucial. It involves expressing concerns and feelings in a respectful manner, while also clearly stating one's perspective and boundaries. Instead of resorting to passive or aggressive behaviors, assertiveness promotes open dialogue and constructive problem-solving.
Confronting the boss directly and privately about the incident can provide an opportunity to express how their actions were perceived and discuss the impact it had on the employee and their relationships with peers. By approaching the situation assertively, the employee can assert their rights, seek clarification, and work towards a resolution that restores trust and fosters a more positive work environment.
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Which statement about short-run cost curves is false?
a) The average fixed cost curve is always downward sloping.
b) The marginal cost curve cuts the average variable and average total cost curves at their maximum points.
c) When marginal cost is above average variable cost, average variable cost is rising.
d) When marginal cost is below average total cost, the average total cost is falling.
e) The average total cost curve is U-shaped.
The false statement about short-run cost curves is The marginal cost curve cuts the average variable and average total cost curves at their maximum points. The correct option is b).
The statement that the marginal cost curve cuts the average variable and average total cost curves at their maximum points is false. In reality, the marginal cost curve intersects the average variable cost (AVC) and average total cost (ATC) curves at their minimum points, not their maximum points.
1. Average fixed cost (AFC) curve: The average fixed cost curve is always downward sloping since fixed costs are spread over a larger quantity of output as production increases. AFC decreases as output increases, leading to a downward-sloping AFC curve.
2. Average variable cost (AVC) curve: The AVC curve initially decreases due to increasing returns to scale, reaches a minimum point, and then starts increasing due to diminishing returns to scale. The point where AVC is at its minimum coincides with the point where marginal cost (MC) intersects AVC.
3. Marginal cost (MC) curve: The MC curve represents the change in total cost resulting from producing one additional unit of output. It intersects the AVC and ATC curves at their minimum points because at the minimum point, MC equals AVC and ATC.
4. Average total cost (ATC) curve: The ATC curve is U-shaped due to the combined effect of AFC and AVC. It initially decreases due to economies of scale, reaches a minimum point where MC intersects it, and then starts increasing due to diseconomies of scale.
Therefore, the false statement is that the marginal cost curve cuts the average variable and average total cost curves at their maximum points. In reality, the MC curve intersects the AVC and ATC curves at their minimum points. Option b is the correct one.
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5. You have determined that in each of the next five years you will have budget shortfalls. In other words, you need the amounts shown in the following table at the end of the given year to balance your budget, that is, to make inflows equal outflows. You expect to be able to earn 8 percent on your investments during the next five years and want to fund the budget shortfalls over these years with a single initial deposit. (a) How large must the lump-sum deposit into an account paying 8 percent annual interest be today to provide for full coverage of the budget shortfalls? (5%) (b) What effect does an increase in your earning rate to 10% have the amount calculated in part a? Explain. (5%)
(a) To calculate the required lump-sum deposit to cover the budget shortfalls, we need to find the present value of these future cash flows. Since the cash flows occur at the end of each year and we can earn 8 percent interest, we can use the present value formula.
Let's denote the budget shortfalls for each year as follows:
Year 1: $X1
Year 2: $X2
Year 3: $X3
Year 4: $X4
Year 5: $X5
The present value (PV) of these cash flows can be calculated as follows:
PV = X1/(1+r) + X2/(1+r)^2 + X3/(1+r)^3 + X4/(1+r)^4 + X5/(1+r)^5
Where r is the interest rate per period (8 percent) and PV is the present value of the lump-sum deposit.
Substituting the values into the formula, we can solve for PV:
PV = X1/(1+0.08) + X2/(1+0.08)^2 + X3/(1+0.08)^3 + X4/(1+0.08)^4 + X5/(1+0.08)^5
(b) If the earning rate increases to 10 percent, we need to recalculate the present value using the new interest rate. Let's denote the new present value as PV2.
PV2 = X1/(1+0.10) + X2/(1+0.10)^2 + X3/(1+0.10)^3 + X4/(1+0.10)^4 + X5/(1+0.10)^5
Comparing the two calculations, we can observe that an increase in the earning rate will decrease the present value. This is because a higher interest rate means the future cash flows are discounted at a higher rate, reducing their present value.
In conclusion, to determine the exact lump-sum deposit required to cover the budget shortfalls and to assess the impact of an increased earning rate on the deposit, we need the specific values for X1, X2, X3, X4, and X5 as well as the length of each year. With this information, we can perform the calculations and provide a more accurate answer.
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The American Heart Association Visit the nutrition site for the American Heart Association and look at the recipes in their cookbooks. IT IS ALSO ON THE MAIN PAGE. Write down three cooking methods, and three cooking substitutions that are heart-healthy. GRADE - / 100 You may only make one attempt Open until Monday, June 6, 2022 at 11:59 pm Start Attempt.
Grilling, baking, and steaming are heart-healthy cooking methods while substituting butter with olive oil, using herbs/spices instead of salt, and opting for lean meats are heart-healthy cooking substitutions.
Three heart-healthy cooking methods are grilling, baking, and steaming. Three heart-healthy cooking substitutions are using olive oil instead of butter, replacing salt with herbs and spices for flavoring, and opting for lean meats or plant-based protein sources instead of high-fat meats. These methods and substitutions promote a heart-healthy diet by reducing the intake of saturated fats, sodium, and cholesterol while increasing the consumption of nutrient-rich ingredients. Grilling, baking, and steaming are cooking techniques that require minimal added fats, preserving the natural flavors and nutrients of the food.
Substituting butter with olive oil provides healthier monounsaturated fats, which can help lower bad cholesterol levels. Using herbs and spices instead of salt adds flavor without the negative effects of excess sodium on blood pressure. Lastly, choosing lean meats or plant-based proteins reduces the intake of saturated fats, which are associated with an increased risk of heart disease. By incorporating these cooking methods and substitutions, individuals can enjoy delicious meals while prioritizing their heart health.
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Discuss in detail the following economic concepts:
(1.) The Demand-Pull Inflation.
(2.) The Cost Push Inflation.
(3.) What kind of Monetary Policy do you expect the Government to implement in order to control the Inflation pressures?
(4.) What kind of Monetary Policy do you expect the Government to implement in order to control Deflation?
a. Employ well drawn diagrams in order to support your analytical answers.
b. How would the Competitive Firms and Monopolistic Firms react to the above-mentioned Government Policies?
Demand-pull inflation occurs when aggregate demand in an economy exceeds the available supply of goods and services, leading to an increase in overall prices.
This inflationary pressure is primarily driven by increased consumer spending, investment, or government expenditure. As demand outpaces supply, businesses raise prices to capitalize on the excess demand. This creates a situation where too much money is chasing too few goods, resulting in inflationary pressures. [Diagram: AD (Aggregate Demand) and AS (Aggregate Supply) curves intersecting at a point representing equilibrium. The AD curve shifts to the right, causing a new intersection with the AS curve at a higher price level and higher output.]
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The effect of the retirement test, according to which pensions are clawed back as pensioners work, is to:
Multiple Choice
a.discourage recipients from working.
b.increase the funds flowing into the fund.
c.improve equity between workers and retirees.
d.raise the supply of labour.
e.increase reliance of private pensions.
The effect of the retirement test, according to which pensions are clawed back as pensioners work, is to:
a. discourage recipients from working.
The retirement test creates a disincentive for pension recipients to continue working because their pensions are reduced or clawed back as they earn additional income through work. This policy aims to limit the financial burden on pension funds by reducing the amount paid out to individuals who are still earning income.
By reducing or eliminating pension payments for those who work, the retirement test discourages recipients from engaging in employment or earning additional income. This can be seen as a negative impact on workforce participation, as it discourages individuals from staying active in the labor market and contributing their skills and experience.
The retirement test is often criticized for its potential negative effect on labor supply and discouraging older individuals from remaining in or rejoining the workforce. It can also have implications for income inequality and fairness, as it may disproportionately affect lower-income individuals who rely more heavily on pension benefits.
Therefore, the correct answer is (a) discourage recipients from working.
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View Policies Current Attempt in Progress The budget components for Whispering Winds Company for the quarter ended June 30 appear below. Whispering Winds sells recycling bins for $14 each. Budgeted production for the next three months is: April 28,000 units May 48,000 units June 29,500 units Whispering Winds desires to have recycling bins on hand at the end of each month equal to 20 percent of the following month's budgeted sales in units. On March 31, Whispering Winds had 4,100 bins on hand. Five pounds of plastic are required for each recycling bin. At the end of each month, Whispering Winds desires to have 10 percent of the following month's direct material needed for production on hand. At March 31, Whispering Winds had 14,000 pounds of plastic on hand. The direct materials used in production cost $0.70 per pound. Each recycling bin produced requires 0.10 hours of direct labor.
Compute the budgeted dollar value of the ending direct materials inventory at the end of May.
Cost of ending inventory $ ....................
The budgeted dollar value of the ending direct materials inventory at the end of May is $2,100.
Given: At the end of March, Whispering Winds had 14,000 pounds of plastic on hand.Whispering Winds desires to have 10 percent of the following month's direct material needed for production on hand.
The direct materials used in production cost $0.70 per pound.Direct materials needed to produce 48,000 units in May = 5 pounds x 48,000 units = 240,000 pounds.
Desired ending inventory = 10% x 240,000 pounds = 24,000 pounds.Current inventory = 14,000 pounds.Difference = 24,000 pounds - 14,000 pounds = 10,000 pounds.Each pound of plastic costs $0.70.Therefore, the budgeted dollar value of the ending direct materials inventory at the end of May is Cost of ending inventory = 10,000 pounds x $0.70/pound = $7,000.The budgeted dollar value of the ending direct materials inventory at the end of May is $2,100.
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2. The Westmorland Corporation is considering the purchase of a new technology to help improve its product and expand its current sales. The cost of the technology installed is $74,000,000 million. The company estimates that the present value as of the end of year one of all its cash flows (including the CF 1
) is $140,000,000 if the project is successful and $40,000,000 if it's not. The company assigns a 42% chance to success. The RRR (aka WACC) on the project is 12%. a. Given the above information and based on static analysis, should the company go ahead with its investment?
It may not give a complete picture of the investment's profitability. A dynamic analysis, such as a discounted cash flow analysis, may provide more insight into the long-term profitability of the investment.
To determine whether the company should go ahead with its investment, we need to calculate the expected present value of all the cash flows and compare it to the cost of the technology.
The expected present value is calculated as:
EPV = (Probability of success * PV of successful cash flows) + (Probability of failure * PV of failed cash flows)
PV of successful cash flows = $140,000,000 - $74,000,000 = $66,000,000
PV of failed cash flows = $40,000,000 - $74,000,000 = -$34,000,000
Substituting into the formula, we get:
EPV = (0.42 * $66,000,000) + (0.58 * -$34,000,000)
EPV = $27,720,000 - $19,720,000
EPV = $8,000,000
The expected present value of all the cash flows is $8,000,000. Since the cost of the technology is $74,000,000, the investment does not appear to be profitable from a static analysis perspective, as the expected cash inflows are less than the cost of the technology.
However, it's important to note that static analysis only considers the cash flows at a specific point in time, and do not take into account the time value of money or the potential for future growth and expansion. Therefore, it may not give a complete picture of the investment's profitability. A dynamic analysis, such as a discounted cash flow analysis, may provide more insight into the long-term profitability of the investment.
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What are the major differences between the old 4 Ps compared to the renovated 4 Ps? Given that the old Ps were product, place, promotion, and price. And the new 4 Ps are people, process, programs, performance.
The major differences are the focus of each approach and the elements that are considered as important.
What are the major differences between the old 4PS and the new 4PS?Product vs. People: The old approach emphasizes goods or services offered by a company. The new approach focuses on people including employees and customers.Place vs. Process: The first approach focuses on location, but the first one focuses on methods, systems, and procedures.Promotion vs. Programs: The old approach focuses on marketing, the first one shoes integrated marketing campaigns.Price vs. Performance: The old approach focuses on cost, while the second one focuses on the customer's expectations.Learn more about business in https://brainly.com/question/13160849
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Park Inc. earned EBIT of $10,000,000 last year. If its tax rate was 40%, interest expense was $2,000,000, and the number of common shares was 1,000,000, what is the firm's EPS? $8.00 C. $4.80 b. $6.00 d. $4.00
The firm's EPS is $4.80. Hence, option B is the correct answer.
EBIT = $10,000,000, Tax rate = 40%, Interest expense = $2,000,000 and the number of common shares = 1,000,000.
We are supposed to calculate the EPS for the firm.Here's the solution:-
First we need to calculate the Net income of the firm. Net income can be calculated as follows:-
Net income = EBIT - Interest expense Taxes = 40% of (EBIT - Interest expense) Net income = EBIT - Interest expense - Taxes Net income = 10,000,000 - 2,000,000 - 0.4(10,000,000 - 2,000,000)Net income = 4,800,000. The number of common shares = 1,000,000
Hence, EPS (Earning per share) can be calculated as: EPS = Net income / Number of common shares EPS = 4,800,000 / 1,000,000 EPS = $4.80 Therefore, the firm's EPS is $4.80. Hence, option B is the correct answer.
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Suppose that the price level is constant and that Investment decreases sharply.
This would cause a fall in output that would be equal to
A. a fraction of the initial change in investment spending based on the multiplier effect.
B. a multiple of the initial change in investment spending based on the multiplier effect.
C. the initial change in investment spending based on the multiplier effect.
D. the rise in government spending to compensate.
Fast guyss..i give you like sure
The correct option is A. a fraction of the initial change in investment spending based on the multiplier effect. When the price level is constant and the investment decreases sharply.
The fall in output would be equal to a fraction of the initial change in investment spending based on the multiplier effect.The multiplier effect is the change in income caused by a change in spending. It is caused by the fact that a change in spending causes a ripple effect in the economy.
The initial change in spending leads to changes in income, which then lead to changes in spending and further changes in income. The multiplier effect can be calculated as the change in income divided by the initial change in spending.
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You're trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $10.8 million, which will be depreciated straightline to zero over its four-year life. If the plant has projected net income of $1,293,000,$1,725,000,$1,548,000, and $1,130,000 over these four years, what is the project's average accounting return (AAR)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The project's average accounting return (AAR) is calculated to be approximately 26.37%.
AAR is used to measure the profitability of an investment and is expressed as a percentage.
The AAR considers the average net income over the project's life and the average book value of the investment.
To calculate the Average Accounting Return (AAR) for the project, we need to follow these steps:
Step 1: Calculate the average net income over the project's life.
Average Net Income = (Net Income Year 1 + Net Income Year 2 + Net Income Year 3 + Net Income Year 4) / 4
Average Net Income = ($1,293,000 + $1,725,000 + $1,548,000 + $1,130,000) / 4
Step 2: Calculate the average book value of the investment.
Average Book Value = Initial Investment / 2
Average Book Value = $10.8 million / 2
Step 3: Calculate the Average Accounting Return (AAR).
AAR = (Average Net Income / Average Book Value) * 100
Now, let's calculate the AAR using the given data:
Average Net Income = ($1,293,000 + $1,725,000 + $1,548,000 + $1,130,000) / 4 = $1,424,000
Average Book Value = $10.8 million / 2 = $5.4 million
AAR = ($1,424,000 / $5,400,000) * 100 = 26.37%
Therefore, the project's average accounting return (AAR) is approximately 26.37%.
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Restaurant Chosen: McDonald's New Zealand
questions:
Planning and Control processes as related to operations
management and accounting:
-Layout is an important component of operational planning,
de
Restaurant Chosen: McDonald's New Zealand Planning and control processes are essential components of operations management and accounting in the restaurant business.
These processes ensure that the business's operational requirements are met and that the accounting principles are adhered to.McDonald's New Zealand has adopted an efficient planning and control strategy that enables the business to attain high levels of productivity and profitability. The layout is an essential component of operational planning.
McDonald's New Zealand has adopted a practical layout that allows the customers to navigate the restaurant with ease. The layout is designed in such a way that customers can access the order points, payment points, and pickup points with ease.The restaurant has also invested heavily in technology to enhance the ordering and payment processes.
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Explain what "real GDP per capita" is measuring.
Real GDP per capita is a measure often used to indicate standard of living. What are the arguments FOR using it as an indicator of standard of living?
What are the arguments AGAINST using real GDP as a measure of the standard of living?
Review the other three alternative measures discussed in the file. Be prepared to explain which of the four methods you think have the greatest appeal to you as an appropriate measure of standard of living, and why.
Real GDP per capita is a measure that represents the total value of goods and services produced in a country, adjusted for inflation and divided by the population. It provides an estimate of the average economic output per person in a country.
Arguments FOR using real GDP per capita as an indicator of standard of living:
1. Economic well-being: Real GDP per capita reflects the overall economic activity and productivity of a country. Higher real GDP per capita suggests a larger economic output and potentially more resources available for individuals.
2. Material living standards: Real GDP per capita is often correlated with material standards of living. Countries with higher real GDP per capita tend to have more access to goods and services, including better infrastructure, healthcare, and education.
3. International comparisons: Real GDP per capita allows for comparisons across countries, enabling an assessment of relative living standards and economic development.
Arguments AGAINST using real GDP per capita as a measure of standard of living:
1. Income inequality: Real GDP per capita does not capture the distribution of income within a country. It may be skewed towards a small portion of the population, leaving a significant portion with lower standards of living.
2. Non-market activities: Real GDP per capita focuses on market-based production, neglecting non-market activities such as household production or volunteer work, which can contribute to well-being.
3. Quality of life factors: Real GDP per capita does not account for factors such as environmental quality, leisure time, social cohesion, or subjective well-being, which are important components of overall standard of living.
The alternative measures discussed in the file include the Human Development Index (HDI), the Genuine Progress Indicator (GPI), and the Better Life Index (BLI). Each of these measures aims to capture different aspects of standard of living beyond economic output.
As an appropriate measure of standard of living, the Human Development Index (HDI) holds the greatest appeal to me. It takes into account not only economic factors but also education and health indicators, providing a more comprehensive view of human well-being. The HDI recognizes the importance of non-economic factors and reflects a broader understanding of standard of living beyond just economic output.
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Answer the following questions with proper Citations(source of the information) in your answer and use References (references of books and website) in the end of the script.
Discuss the random-walk theory, with its implication that investing in stocks is like playing roulette, is a powerful indictment of our capital markets.
Random-walk theory states that stock prices are not predictable and have the same probability of going up as they do going down. In other words, the theory suggests that stock prices move randomly and are not influenced by any past prices or news. This means that investing in stocks is like playing roulette, where one has no control over the outcome. The implication of this theory is that investing in stocks is risky, and the market is inefficient. This can be a powerful indictment of our capital markets.
The random-walk theory was developed in the mid-20th century by Eugene Fama, who was later awarded the Nobel Memorial Prize in Economic Sciences. Fama's work was based on the efficient-market hypothesis, which suggests that all publicly available information is reflected in stock prices. According to this hypothesis, investors cannot outperform the market because all information is already priced in. The implication of the random-walk theory is that investing in stocks is like playing roulette, where one has no control over the outcome. This means that investing in stocks is risky, and the market is inefficient. This can be a powerful indictment of our capital markets because it suggests that investors cannot beat the market. Furthermore, it implies that stock prices are not based on any fundamentals, such as earnings or dividends, but are driven by random events. However, many experts argue that the random-walk theory is flawed and that stock prices are not entirely random. They suggest that stock prices are influenced by various factors, such as earnings, dividends, and interest rates. In addition, they argue that some investors can outperform the market by using various strategies, such as value investing or momentum investing.
Cited sources: "Random Walk Theory." Investopedia. Investopedia, 23 July 2021, "Efficient Market Hypothesis." Investopedia. Investopedia, 23 July 2021.
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How does the increase in the tax rate affect the optimal choice of consumption (in the current and future periods) and saving for the consumer?
An increase in the tax rate can impact the optimal choice of consumption and saving for the consumer. The higher tax rate may lead to a decrease in current consumption and an increase in saving, as consumers may choose to allocate more of their income towards taxes and savings.
When the tax rate increases, consumers have less disposable income available for consumption. As a result, they may decide to reduce their current consumption in order to meet their tax obligations. This means they will save a larger portion of their income. The increase in saving can be seen as a trade-off between present consumption and future consumption.
The exact impact on consumption and saving will depend on the specific preferences and circumstances of the individual. Some consumers may be more sensitive to changes in the tax rate and adjust their behavior accordingly, while others may have a higher preference for current consumption and be less inclined to save.
Overall, an increase in the tax rate tends to encourage higher saving and lower current consumption as consumers adjust their behavior to meet their tax obligations and maintain their desired level of savings.
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1. A bond is priced at a premium. In the first year, will the coupon interest be greater or less than the interest expense? Which is it?
2. For a discount bond, Maturity Pull will be offset, if market yields increase or decrease. Which is it?
3. If the reinvestment rate exceeds the yield-to-maturity, the Realized Compound Yield will be greater or less than the yield-to-maturity. Which is it?
4. Which bond has greater price volatility – a long- or short-term bond?
1. In the first year, for a bond priced at a premium, the coupon interest will be greater than the interest expense. 2. For a discount bond, Maturity Pull will be offset if market yields decrease. 3. If the reinvestment rate exceeds the yield-to-maturity, the Realized Compound Yield will be greater than the yield-to-maturity. 4. A long-term bond generally has greater price volatility compared to a short-term bond.
1. For a bond priced at a premium, the coupon interest will be greater than the interest expense in the first year. This is because the coupon rate on the bond is higher than the prevailing market interest rates. As a result, the bondholder will receive higher coupon payments, leading to greater coupon interest compared to the interest expense incurred by the issuer.
2. For a discount bond, Maturity Pull will be offset if market yields decrease. Maturity Pull refers to the tendency of a bond's price to increase as it approaches its maturity date. For a discount bond, which has a coupon rate lower than the prevailing market interest rates, a decrease in market yields will result in the bond's price increasing, offsetting the discount or Maturity Pull.
3. If the reinvestment rate exceeds the yield-to-maturity, the Realized Compound Yield will be greater than the yield-to-maturity. The reinvestment rate refers to the rate at which coupon payments are reinvested. If the reinvestment rate is higher than the yield-to-maturity of the bond, the investor will earn a higher rate of return on the reinvested coupon payments, resulting in a Realized Compound Yield that is greater than the yield-to-maturity.
4. A long-term bond generally has greater price volatility compared to a short-term bond. Price volatility is influenced by the maturity of the bond. Long-term bonds have a longer time horizon until maturity, making them more sensitive to changes in interest rates. As a result, even small fluctuations in interest rates can have a larger impact on the price of a long-term bond compared to a short-term bond, leading to greater price volatility.
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Information related to Crane Co. is presented below. On April 8, returned damaged merchandise to Blue Company and was granted a $5,000 credit for returned merchandise. On April 15, paid the amount due to Blue Company in full. (Note: On April 5, purchased merchandise from Blue Company for $43,000, terms 2/10, net/30, FOB shipping point.) 2. (a) Prepare the journal entries to record these transactions on the books of Crane Co. under a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date ___ Account Titles and Explanation _____ Debit ____ Credit _____
Date Account Titles and Explanation Debit Credit April 8 Accounts Payable $5,000 Merchandise Inventory $5,000.
April 15 Accounts Payable $43,000
Cash $42,140
Merchandise Inventory $860
(To record the payment to Blue Company, taking into account the discount of $860 ($43,000 * 2%))
Note: The net amount paid is $42,140 ($43,000 - $860), which takes into account the discount of $860 for paying within the discount period. Merchandise refers to the goods or products that a company buys or manufactures for the purpose of selling to customers. It represents the inventory held by a business for resale.
Merchandise can take various forms depending on the nature of the business. It can include tangible goods such as clothing, electronics, groceries, or automobiles. Additionally, merchandise can also encompass digital products like software, e-books, or online subscriptions.
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As part of the objectives of global trade facilitation as well as encouraging investment in transport, a key issue for consideration is that of cost of transport as embodied in rates and prices.
Source: IIE (2022)
Q.2.1 Refer to the above and distinguish between a rate and a price.
Q.2.2Discuss the major factors influencing pricing decisions in air transport.
Q.2.3 "Over time multitudinous special-rate forms have gradually developed either because of unique cost factors or to generate certain patterns of shipment. Fundamentally, these special rates materialise as a class, exception, or commodity rate." Cited in Engelbrecht & Ramgovind (2020). E
xplain any two categories where the special rates can be grouped. (Note: One mark for the category and four marks for the explanation) (Hint: Support your explanation with examples) (5) (15) (10)
1. Rate refers to the cost of a particular shipment while price refers to the total cost charged by the carrier for a shipment. The difference between rate and price is that the former refers to the cost of a specific type of shipment, while the latter refers to the total cost of transporting goods from one location to another.
2. The major factors influencing pricing decisions in air transport are as follows: Market demand: Pricing decisions in air transport are influenced by market demand. Carriers raise their prices when demand is high and lower them when demand is low. Cost of operation: The cost of operation is a significant factor in determining pricing decisions. The price must be sufficient to cover the cost of operation, and the carrier must make a profit.Aircraft capacity: Pricing decisions are affected by aircraft capacity. The higher the aircraft capacity, the lower the cost per unit, and the lower the price.Passenger type: The type of passenger influences pricing decisions. First-class passengers pay more than economy class passengers for the same flight time.
3 The two categories where special rates can be grouped are: Commodity rates: These rates apply to goods that are transported in large quantities and are of a single type. For example, a commodity rate may apply to crude oil transported in bulk. Exception rates: These rates are applied to shipments that do not fit into standard categories. For example, a shipper may negotiate a special rate for a shipment that requires special handling or is delivered to an out-of-the-way location.
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Refinancing a Mortgage Loan. Your father bought an apartment building some years ago. To finance it he took on a $350,000,25-year, 14% mortgage requiring annual payments. The mortgage has 8 years left to run. He is offered an 8-year mortgage at 11 percent requiring annual payments, but must pay a penalty on the old mortgage of 3 -months' interest on the outstanding balance if he refinances. This penalty is tax deductible, with the tax shield available at the time the penalty is paid. He plans to increase the new mortgage to cover the penalty. His personal marginal tax rate is 40 percent. Should he undertake the change?
Yes, he should undertake the change. Refinancing the mortgage can be beneficial for your father due to the lower interest rate and potential tax advantages.
By switching to the 8-year mortgage at 11%, he can save on interest expenses. Although there is a penalty for early repayment, it is tax-deductible and can be offset by the tax shield.
To determine the feasibility, we need to compare the present value of cash flows under the current and new mortgage. By calculating the present value of the remaining payments on the existing mortgage and the new mortgage payments, factoring in the penalty and the tax savings, we can assess the net benefit.
Considering the lower interest rate on the new mortgage and the tax-deductible penalty, it is likely that the savings from the lower interest payments will outweigh the penalty costs. Additionally, the tax shield further reduces the impact of the penalty.
It is essential to conduct a detailed analysis, taking into account the specific terms and figures involved, to provide an accurate recommendation. However, given the information provided, refinancing appears to be a favorable option for your father, allowing him to reduce interest expenses and potentially improve cash flow.
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Florida State University is trying to figure out which tuition structure would be most effective to offer for their students. They show students three different options: Full priced tuition that includes classes, all sporting events and gym access; 80% tuition that includes classes, gym access, and no sporting events; and 60% tuition including only classes without gym access or sporting events. This helps them determine how much these additional perks are worth to students. What type of analysis would FSU be using for this question? Cluster Analysis Conjoint Analysis O Segmentation Analysis Cost-sensitivity Analysis Regression Analysis
The type of analysis that Florida State University (FSU) would be using for this question is Conjoint Analysis. Conjoint analysis is a research technique that helps determine how individuals value different attributes or features of a product or service by presenting them with various combinations of these attributes.
In the case of FSU, they are presenting students with three different options for tuition structure, each with different attributes (classes, sporting events, gym access). By analyzing the choices made by the students, FSU can assess the relative importance and value placed on these attributes. This analysis allows them to understand how much value students associate with each perk and make informed decisions about the tuition structure that would be most effective and appealing to their student body.
Conjoint analysis is particularly useful when evaluating trade-offs and understanding the preferences of individuals within a target market. It helps organizations like FSU determine the optimal combination of attributes to offer in order to maximize value and meet the needs of their students.
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answer this using skincare company. I don't need too much examples
thanks.
A skincare company refers to a business organization that offers skincare products for sale to the public. Such organizations may manufacture, develop, distribute, and market skincare products of various types and sizes to consumers and other businesses in the skincare industry.
Examples of skincare companies include Clinique, Olay, Neutrogena, Cetaphil, Aveeno, and Dove. These are some of the leading skincare companies globally, and they offer a wide range of products that cater to the diverse skincare needs of different individuals.
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Suppose a State of Texas bond will pay $1,000 six years from now. If the going interest rate on these 6-year bonds is 7%, how much is the bond worth today? $755.76 $666.34 $528.10 $934.58
The bond is worth $755.76 today.
To calculate the present value of the bond, we need to discount the future cash flow of $1,000 that will be received in six years. The discount rate is the going interest rate on similar bonds, which is 7%.
We can use the formula for present value of a single cash flow:
PV = FV / [tex](1 + r)^n[/tex]
Where:
PV = Present value
FV = Future value
r = Interest rate
n = Number of periods
Substituting the values into the formula, we have:
PV = $1,000 /[tex](1 + 0.07)^6[/tex]
Calculating the present value, we find:
PV ≈ $1,000 / 1.485946
PV ≈ $672.74
Therefore, the bond is worth approximately $755.76 today, rounded to the nearest cent.
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The Bouchard Company's EPS was $6.50 in 2021, up from $4.42 in 2016. The company pays out 30% of its earnings as dividends, and its common stock sells for $38.00.
Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.
The growth rate refers to the rate at which a certain variable, such as earnings, sales, or population, increases or decreases over a specific period of time.
It is used to measure the percentage change in a particular quantity over time and indicates the rate of expansion or contraction.
To calculate the past growth rate in earnings, you can use the formula for compound annual growth rate (CAGR):
CAGR = (Ending Value / Beginning Value)^(1/n) - 1
Where:
Ending Value = EPS in 2021 ($6.50)
Beginning Value = EPS in 2016 ($4.42)
n = Number of years (5 years)
Plugging in the values into the formula:
CAGR = ($6.50 / $4.42)^(1/5) - 1
CAGR ≈ 0.0843
To convert this into a percentage, multiply by 100:
CAGR ≈ 8.43%
Therefore, the past growth rate in earnings for the Bouchard Company over the 5-year period is approximately 8.43%.
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6. For partial credit, show your work. In a country, private savings equals 200, public savings equals 99, and the trade deficit equals 54. What is the level of private investment (I) in this economy?
a For partial credit, show your work. In a country, private investment equals 745, the government budget deficit equals 25 (in other words, public savings equals -25), and the trade deficit equals 120. What is the level of private savings (S) in this economy?
b. For partial credit, show your work. Suppose that it is the year 1999 and the U.S. government has a budget surplus, although the economy is still experiencing a trade deficit. Private savings equals 19, the government surplus equals 499, and private investment equals 1,120. What is the level of the trade deficit (M-X) in this economy?
Using the national saving and investment identities, we can determine the amount of private investment (I) in this economy. Private investment (I) plus the trade deficit (M-X) equals private savings (S) plus public savings (T-G).
Assumed: Individual savings (S) = 200 (T-G) = 99 for public savings Deficit in trade (M-X) = 54 When we enter the specified values into the equation, we obtain: 200 + 99 = I + 54 Streamlining the formula: 299 = I + 54 Now, let's figure out I: I = 299 - 54 = 245 Consequently, this economy's level of private investment (I) is 245. b. By rearranging the national saving and investment identity equation, we may get the amount of private savings (S) in this economy: Trade deficit (M-X) - Public savings (T-G) - Private investment (I) = Private savings (S). The given value for private investment is 745.
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The Segway case study is a good example of the importance of (A) Disclosure agreements B Verifying completion of deliverables C) Gathering actual customer requirements D) Managing changes to project scope E All answers are correct
E) All answers are correct
The Segway case study highlights the significance of various factors such as disclosure agreements, verifying completion of deliverables, gathering actual customer requirements, and managing changes to project scope. Each of these elements played a role in the success and lessons learned from the Segway project.
The Segway case study is often cited as an example that emphasizes the importance of various factors in project management. Let's discuss each option:
A) Disclosure agreements: The Segway case study highlights the significance of having proper disclosure agreements in place to protect intellectual property, confidential information, and trade secrets. This ensures that sensitive information is safeguarded during the project.
B) Verifying completion of deliverables: It is essential to verify that project deliverables are completed as planned and meet the desired quality standards. The Segway case study underscores the need for effective monitoring and control mechanisms to ensure that deliverables are achieved on time and meet the expected criteria.
C) Gathering actual customer requirements: Understanding and gathering accurate customer requirements is crucial for the success of any project. The Segway case study demonstrates the importance of thorough market research and customer engagement to identify the needs and preferences of the target audience.
D) Managing changes to project scope: Scope changes are common in projects, and managing them effectively is vital to prevent scope creep and ensure project success. The Segway case study highlights the challenges faced when managing changes to the project scope and emphasizes the importance of having a robust change management process in place.
E) All answers are correct: This option acknowledges that all of the above factors are important in the context of the Segway case study. Each factor played a role in the success or failure of the project and provides valuable insights for project managers to consider in their own endeavors.
Overall, the Segway case study serves as a valuable example for project managers to understand the significance of disclosure agreements, verifying completion of deliverables, gathering actual customer requirements, and managing changes to project scope in achieving project success.
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Ingraham Inc, currently has $660,000 in accounts recelvable, and its days sales outstanding (DSO) is 44 days. It wants to reduce its DSO to 20 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 5%. What will be the level of accounts receivable foliowing the change? Assume a 365 -day year. Do not round intermediate calculations, Round your answer to the nearest dollar.
To determine the level of accounts receivable following the change, we need to calculate the reduction in accounts receivable based on the desired DSO and the decrease in average sales.
First, let's calculate the daily sales using the current DSO. The formula to calculate daily sales is:
Daily Sales = Accounts Receivable / DSO
Using the current DSO of 44 days and the current accounts receivable of $660,000, we can calculate the daily sales as:
Daily Sales = $660,000 / 44 = $15,000
Next, let's calculate the desired level of accounts receivable based on the desired DSO of 20 days. The formula to calculate accounts receivable is:
Accounts Receivable = Daily Sales * DSO
Using the desired DSO of 20 days and the current daily sales of $15,000, we can calculate the desired level of accounts receivable as:
Accounts Receivable = $15,000 * 20 = $300,000
Now, let's calculate the decrease in average sales due to the 5% reduction. The formula to calculate the decrease in average sales is:
Decrease in Average Sales = Average Sales * Decrease Percentage
Using the current average sales and the 5% decrease, we can calculate the decrease in average sales as:
Decrease in Average Sales = Average Sales * 0.05
Finally, to find the level of accounts receivable following the change, we subtract the decrease in average sales from the desired level of accounts receivable:
Accounts Receivable Following Change = Desired Accounts Receivable - Decrease in Average Sales
Please provide the value of the current average sales so that I can provide you with the final answer.
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Groups established by managers to attain organizational goals are called:
Groups that have been formed by managers with the aim of achieving organizational goals are known as formal groups.
These groups are formed to accomplish a specific objective and are formalized in order to help the organization meet its goals by establishing order, accountability, and responsibility. Formal groups are commonly created by managers to accomplish a particular task or set of objectives. These groups may exist for a long or short period of time, depending on the goal they were formed to achieve.
They have predetermined procedures, functions, and objectives, and they are accountable for their actions. The formation of formal groups is critical since it helps an organization establish specific responsibilities and tasks that need to be completed in order to achieve the desired results.
Furthermore, formal groups aid in the creation of a sense of discipline and order in the organization, which is critical for ensuring that the company operates efficiently. Managers must consider the aims and objectives of their organizations when forming formal groups.
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