Option A refers to a document issued by a common carrier confirming receipt of goods for shipment, while option B pertains to a bank guarantee for payment if all necessary export documents are provided.
Option A: A document issued by a common carrier confirming that it has received the goods for shipment is known as a bill of lading. This document serves as proof of contract between the shipper and the carrier, outlining the details of the goods being transported, such as their quantity, description, and destination. The bill of lading is crucial for tracking and transferring ownership of the goods during transit.
Option B: A guarantee from the importer's bank to act on behalf of the importer and pay the exporter for the merchandise if all the relevant documents are presented is called a letter of credit. This financial instrument ensures that the exporter receives payment for their goods as long as they comply with the terms and conditions specified in the letter of credit. It provides assurance to the exporter and mitigates the risk of non-payment or default by the importer.
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Summarize common internal controls over cash receipts and cash disbursements. Assess the purpose of a bank confirmation and why bank confirmations are an important piece of audit evidence. What are some errors and frauds that can occur in the revenue cycle? Review the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?
Internal controls are measures put in place by organizations to ensure that its assets are safeguarded, and financial reports are accurate and reliable.
In most organizations, internal controls over cash receipts and cash disbursements are of utmost importance because cash is easily accessible and can be easily misappropriated. Common internal controls over cash receipts and cash disbursements include segregation of duties, which requires that the recording of cash receipts and disbursements is done by different individuals.
In addition, regular reconciliations are done to ensure that all transactions are recorded, and there is no fraud. Bank confirmation is a document provided by the bank to an auditor, indicating the balances of a client’s account.
The purpose of a bank confirmation is to provide evidence of the existence of a bank account, and the balance of the account.
The confirmation is also important in verifying the accuracy of the client’s accounting records, and detecting any fraud or errors.
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Suppose that the marginal benefit of a product's consumption is given by MB = 300 - 3Q and the marginal private cost of its production is given by MPC= 100 + 2Q. The marginal damage from pollution caused by its production is MD = 5Q. The government imposes a Pigouvian tax on each unit sold in order to solve the externality. In order to obtain the socially optimal amount of Q, the tax should be_____?
The tax should be $40 per unit sold to obtain the socially optimal amount of Q.
To determine the socially optimal quantity, we need to equate the marginal benefit (MB) with the sum of the marginal private cost (MPC) and the marginal damage (MD) from pollution.
MB = MPC + MD
Substituting the given equations for MB, MPC, and MD:
300 - 3Q = 100 + 2Q + 5Q
Simplifying the equation:
300 - 3Q = 100 + 7Q
Combining like terms:
10Q = 200
Dividing both sides by 10:
Q = 20
So, the socially optimal quantity of Q is 20 units.
To calculate the tax, we can substitute the value of Q back into the equation for MPC:
MPC = 100 + 2Q
MPC = 100 + 2(20)
MPC = 100 + 40
MPC = 140
Therefore, the tax should be $40 per unit.
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Elite Engineering has a market value of equity of $20.5 million and 200,000 preference shares in issue worth $1.8 million. The company’s debt is $7 million. Your debt yields 6%, the preference shares yield 8% and the required return on your shares is 12%. If your company pays taxes at 32% what is the weighted average cost of capital (WACC) of the company? (8)
You are considering an investment in Assam Asset Management. Assam tells you that the last dividend that they paid was $2.75 per share and they have been increasing the dividend at 1.25% a year lately. If your required rate of return is 7.5%, what would you be prepared to pay per share for an investment?
The price per share that the investor is willing to pay is $49.67.
Calculation of weighted average cost of capital (WACC) of the company is as follows:
Calculation of cost of debt is as follows:
Cost of debt = 6% × (1 - 0.32) = 4.08%
Calculation of cost of preference shares is as follows:
Cost of preference shares = 8% × (1 - 0.32) = 5.44%
Weighted average cost of capital (WACC) can be calculated as follows:
WACC = [(E / (D + E)) × R_E] + [(D / (D + E)) × R_D]Where, D is the total debt E is the total equity R_D is the cost of debtR_E is the cost of equityR_P is the cost of preference shares. Thus, the weighted average cost of capital (WACC) of the company is 7.26%.
Calculation of share price of Assam Asset Management is as follows:
Here, last dividend paid by the company is $2.75 per share and growth rate in dividends is 1.25% per year.Required rate of return is 7.5%.Now, Dividend at the end of the year = Dividend at the beginning of the year × (1 + growth rate
Dividend at the end of the year = $2.75 × (1 + 1.25%) = $2.78
Dividend growth rate, g = 1.25%Required rate of return, R = 7.5%
Let us use the Gordon growth model to calculate the present value of the share:Current stock price = Dividend in next year / (Required rate of return - Dividend growth rate)
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A sitcom actor (Peter), agrees to buy a briefcase of cocaine from the local cocaine dealer (Paul) for $15,000. Peter and Paul have a contract 1. Valid 2. Unenforceable 3. Voidable 4. Void 4. Void 3. Voidable 1. Valid 2. Unenforceable
The contract between the sitcom actor, Peter, and the local cocaine dealer, Paul, to purchase a briefcase of cocaine for $15,000 is void.
In this scenario, the contract is void because it involves an illegal activity, namely the purchase and sale of cocaine. Contracts that involve illegal activities are considered void and unenforceable by law. Void contracts are essentially treated as if they never existed, and the parties involved cannot seek legal remedies or enforce any terms or obligations under the contract.
The purchase and sale of illegal substances, such as cocaine, is against the law in most jurisdictions. As a result, any contract related to such activities is automatically void. The illegality of the subject matter renders the contract null and void from the beginning, making it unenforceable in a court of law. Therefore, in the given situation, the contract between Peter and Paul is void and cannot be enforced.
It's important to note that engaging in illegal activities, including drug-related offenses, can have serious legal consequences. This answer does not endorse or promote illegal behavior and is provided solely for informational purposes.
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Can you help me to find value chain analysis for UNIQLO in term of digital business
DIGITAL BUSINESS Value chain - Support activities I. Human resource ii. Firm infrastructure iii. Technology development Iv. Procurement
In the context of UNIQLO's digital business, the value chain analysis can be applied to identify and evaluate the key support activities that contribute to its digital operations.
Here is an overview of the support activities in the digital business value chain for UNIQLO:
I. Human Resource: UNIQLO's human resource management plays a crucial role in supporting its digital business. This includes recruiting and retaining skilled professionals in areas such as digital marketing, e-commerce, data analytics, and technology development. The company needs to have a competent workforce capable of driving its digital initiatives and adapting to technological advancements.
II. Firm Infrastructure: The firm infrastructure aspect of the value chain focuses on establishing the necessary organizational structures and processes to support UNIQLO's digital business. This involves developing strategies, allocating resources, managing budgets, and ensuring compliance with regulations and industry standards related to digital operations.
III. Technology Development: Technology development is vital for UNIQLO's digital business success. This involves investing in research and development to enhance digital platforms, improve user experience, and leverage emerging technologies such as artificial intelligence, data analytics, and mobile applications. Continuous innovation and technological advancements are crucial to stay competitive in the digital landscape.
IV. Procurement: In the context of UNIQLO's digital business, procurement activities involve sourcing and acquiring digital assets, software, hardware, and technology infrastructure required to support its digital operations. This includes partnerships with technology vendors, negotiating contracts, and ensuring the availability of necessary resources for effective digital implementation.
By analyzing these support activities within the digital business value chain, UNIQLO can identify areas for improvement, optimize its digital operations, and enhance its competitive advantage in the digital marketplace.
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Which of the following is accurate regarding the quick ratio? The quick ratio includes inventory in the numerator. The quick ratio excludes inventory from its calculation. The quick ratio focuses only on long-term debt. None of the above
The statement that is accurate regarding the quick ratio is: The quick ratio excludes inventory from its calculation.
What is Quick Ratio?
The quick ratio is a measure of a company's financial stability. The quick ratio is also known as the acid test ratio. It is a more stringent financial metric than the current ratio. This is due to the fact that it includes only the most liquid assets, rather than all current assets.
As a result, it reveals a company's capacity to pay its obligations promptly.
What does the quick ratio calculate?
The quick ratio takes into account a company's cash, marketable securities, and accounts receivable. The following formula is used to calculate it:
Quick Ratio = (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities
The quick ratio, like the current ratio, measures a company's financial soundness. However, because inventory is removed from the equation, it gives a more accurate picture of the company's liquidity. A high quick ratio implies a company's ability to meet its obligations without having to sell its inventory.
Therefore, the quick ratio excludes inventory from its calculation.
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30) As the interest rate increases, the quantity of loanable funds demanded A) real; increases B) real; decreases C) nominal; increases D) nominal; decreases E) none of the above. There is no relation
Answer: As the real interest rate increases the quantity of loanable funds demanded decreases. Hence option B is the answer.
Explanation: The interest rate is the rate at which you have to pay extra on the loan taken.
Hence if the interest rate increases, it means you are paying more on the borrowed money and so the quantity of loan taken will be low or will decrease when the interest rates are high.
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TRUE OR FALSE: The following is an example of Moral Hazard - A manager does not observe the
amount of effort the worker is exerting, and because of that, the total level of production is lower than
in the case where effort is observable.
The statement is true, as the situation described demonstrates moral hazard resulting from the non-observability of the worker's effort by the manager.
Moral hazard refers to a situation where one party, in this case, the worker, has an incentive to take risks or behave in a certain way because they know that the other party, the manager, cannot observe or monitor their actions or effort. In this case, the manager cannot observe the amount of effort exerted by the worker, which creates an information asymmetry.
As a result, the worker may choose to exert lower effort, leading to a lower level of production compared to a situation where effort is observable. This moral hazard problem arises due to the lack of monitoring or observation, allowing the worker to act in a way that is not aligned with the manager's expectations or interests. Hence, the statement is true.
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Use the following general demand equations for Cobb-Douglas
preferences, which is when a+b = 1, a > 0, and b > 0:
x* = aI / px
y* = bI / Py
For good x only, solve for the following:
a) Income el
a) The demand equation is downward sloping, and the curve is not linear. b) Good x is a normal good. c) Goods x and y are neither substitutes nor complements. d) The price elasticity of good x is -1, indicating unit elasticity, and it remains constant.a)
To find the derivative of the demand equation with respect to px, we differentiate x* = aI / px with respect to px.
Taking the derivative of x* with respect to px gives:
d(x*)/d(px) = -aI / px²
The negative sign indicates that as px increases, x* decreases. Therefore, the demand equation is downward sloping.
Regarding linearity, the demand equation is not linear because the quantity demanded of good x is inversely proportional to the square of its price (px²).
b) To find the derivative of the demand equation with respect to I, we differentiate x* = aI / px with respect to I.
d(x*)/d(I) = a / px
The positive sign indicates that as income (I) increases, the quantity demanded of good x (x*) also increases. Therefore, good x is a normal good.
c) To find the derivative of the demand equation with respect to Py, we differentiate x* = aI / px with respect to Py.
d(x*)/d(Py) = 0
The derivative with respect to Py is zero, indicating that the quantity demanded of good x does not depend on the price of good y. This suggests that goods x and y are independent or unrelated, and thus not substitutes or complements.
d) The price elasticity of good x measures the responsiveness of the quantity demanded of good x to a change in its price. The price elasticity (Ex) is calculated as:
Ex = (d(x*)/d(px)) * (px / x*)
Using the derivative from part a and substituting it into the elasticity formula, we have:
Ex = (-aI / px²) * (px / (aI / px))
Ex simplifies to -1, indicating that the price elasticity of good x is unit-elastic. The negative sign indicates that the relationship between price and quantity demanded is inverse.
The price elasticity is constant in this case, as it is always equal to -1 regardless of the specific values of a, I, and px.
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The complete question is:
Use the following general demand equations for Cobb-Douglas preferences, which is when a+b = 1, a > 0, and b > 0:
x* = aI / px
y* = bI / Py
For good x only, solve for the following:
a) Derivative of the demand equation with respect to px. Is the equation downward sloping? Is the curve linear?
b) Derivative of demand equation with respect to I. Is x a normal or inferior good?
c) Derivative of demand equation with respect to Py. Are goods x and y substitutes or complements?
d) Price elasticity of good x. Is demand inelastic/elastic/unit-elastic? Is the price elasticity constant?
to write in report format a 1500-word content entitled.
‘The Philosophies of Service’
Within this report, you will consider why hospitality should appear effortless and spontaneous for the guest, including hotel standards, reputation management, building and retaining customer loyalty, customer service standards, how they vary between different types of hotels and how this relates to brand-consistency standards, grading systems and corporate culture.
You must include the importance of the five service systems of the secret weapons of service : Preparation, Execution, Guest preference and experience tracking, Recovery and Continuous improvement. With examples as well as examples of the recovery models that have been discussed within the module and comment on the benefit of following these, such as ARFFD, AREC, LEARN etc., describe which hotels use them and why. You should include your own recommendations for customer experience failure recovery for a business. How would these be implemented and what are the benefits? You should be able to link to industry trends and future opportunities in the industry.
In your report, you will need to include recommendations. Recommendations are often included with a report’s conclusion, although they serve different purposes. Whereas a conclusion offers you the opportunity to summarise or review your report’s main ideas, recommendations suggest actions to be taken in response to the findings of a report.
Industry examples should be referred to throughout your report, think of the case studies that have been discussed within lectures, and those that you will source to support your content
Introduction The philosophy of service is an important aspect of the hospitality industry, and it is necessary to ensure that the guests' experience is effortless and spontaneous.
This report aims to explore why hospitality should appear effortless and spontaneous for the guest, including hotel standards, reputation management, building and retaining customer loyalty, customer service standards, and how they vary between different types of hotels and how this relates to brand-consistency standards.
grading systems, and corporate culture. The report will also highlight the importance of the five service systems of the secret weapons of service: Preparation, Execution, Guest preference and experience tracking, Recovery and Continuous improvement.Industry examples should be referred to throughout the report, including the case studies .
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30) For each good produced in a market economy, demand and supply determine (5pts) both price and quantity. the quantity of the good, but not the price. the price of thè good, but not the quantity. neither price nor quantity is determined by demand and supply, because prices are ultimately set by producers.
In a market economy, both price and quantity of a good are determined by the forces of demand and supply.
In a market economy, the interaction between demand and supply determines both the price and quantity of a good. Demand refers to the willingness and ability of consumers to purchase a particular good at various price levels, while supply represents the willingness and ability of producers to offer the good at different price levels.
The equilibrium price and quantity in the market are determined at the point where the demand and supply curves intersect. This is known as the market equilibrium. At this equilibrium, the price is set such that the quantity demanded by consumers matches the quantity supplied by producers.
If the demand for a good increases, holding supply constant, the equilibrium price will rise, incentivizing producers to increase their quantity supplied. Conversely, if the supply of a good increases, holding demand constant, the equilibrium price will decrease, leading to an increase in quantity demanded.
Therefore, it is the interplay between demand and supply that determines both the price and quantity of a good in a market economy.
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Classical City holds $40,000 worth of 7% bonds (par value) as debt investments. The journal entry to record receipt of the semi- annual interest payment includes a debit to Cash for $2,800 and a credit to Interest Income for $2,800. True FALSE
Classical City holds $40,000 worth of 7% bonds (par value) as debt investments. The journal entry to record receipt of the semi-annual interest payment includes a debit to Cash for $2,800 and a credit to Interest Income for $2,800.
The given statement is True.What is the significance of interest income?Interest income refers to money earned on savings accounts, certificates of deposit, and other interest-bearing investments. In the financial world, interest income is also known as "investment income" or "yield."
The interest is usually paid at a fixed interval of time, such as monthly or quarterly. When we make investments, we expect to receive a return on them, which may be in the form of capital appreciation, dividends, or interest. As a result, interest income is one type of investment income.
What is the journal entry to record receipt of the semi-annual interest payment?The journal entry to record receipt of the semi-annual interest payment is as follows:DebitCash$2,800CreditInterest Income$2,800Explanation:Classical City holds $40,000 worth of 7% bonds (par value) as debt investments.
Since they are 7% bonds with a par value of $40,000, the interest to be paid twice a year is ($40,000 × 7% × 6/12) = $1,400. To record the receipt of the semi-annual interest payment, the following journal entry will be made:DebitCash$2,800 (2 x $1,400) CreditInterest Income$2,800 (2 x $1,400)Hence, the given statement is True.
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Merger Company has 10 employees, each of whom earns $1,800 per month and has been employed since January 1 . FICA Social Security taxes are 6.2% of the first $137,700 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Prepare the March 31 journal entry to record the March payroll taxes expense.
To prepare the March 31 journal entry to record the payroll taxes expense for Merger Company, we need to calculate the amounts for each tax and determine the total expense.
Let's break down the calculations step by step:
Calculate FICA Social Security taxes for each employee:
FICA Social Security tax rate: 6.2%
Maximum taxable earnings for Social Security: $137,700
FICA Social Security tax per employee: 6.2% * $1,800 = $111.60 (as this amount is less than the maximum taxable earnings)
Calculate FICA Medicare taxes for each employee:
FICA Medicare tax rate: 1.45%
FICA Medicare tax per employee: 1.45% * $1,800 = $26.10
Calculate FUTA taxes for each employee:
FUTA tax rate: 0.6%
FUTA tax per employee: 0.6% * $1,800 = $10.80
Calculate SUTA taxes for each employee:
SUTA tax rate: 5.4%
Maximum taxable earnings for SUTA: $7,000
SUTA tax per employee: 5.4% * $7,000 = $378 (as this amount is less than the maximum taxable earnings)
Determine the total payroll taxes expense for March:
Total payroll taxes expense = FICA Social Security taxes + FICA Medicare taxes + FUTA taxes + SUTA taxes
Total payroll taxes expense = ($111.60 + $26.10 + $10.80 + $378) * 10 employees = $5,260.50
Now we can record the journal entry to reflect the payroll taxes expense for March 31:
Date: March 31, 20XX
Account Debit Credit
Payroll Taxes Expense $5,260.50
FICA Social Security Taxes Payable $1,116.00
FICA Medicare Taxes Payable $261.00
FUTA Taxes Payable $108.00
SUTA Taxes Payable $3,775.50
The Payroll Taxes Expense account is debited for the total expense, and the individual tax payable accounts (FICA Social Security Taxes Payable, FICA Medicare Taxes Payable, FUTA Taxes Payable, and SUTA Taxes Payable) are credited for their respective amounts.
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Al's Car Wash has two departments, Prepping and Washing. Once a car has been washed, the customer pays by cash or credit card and leaves. The following selected transactions occurred during July of 2018. a. Al purchased Raw Materials of $53,000 b. Raw Materials of $46,000 were requisitioned to the Prepping Department c. $44,000 of costs were transferred to the Washing Department d. $42,000 of fully washed cars were awaiting customer pickup e. Customers picked up all cars that were waiting and Al collected $72,000 for the Prepping and Washing Services Required: Journalize the above transactions
The journal entries record the various transactions related to Al's Car Wash for the month of July 2018 can be seen below
How do we perform a journal entry for the above transactions?A Journal entry for the above transactions would be;
Date Account Debit Credit Description
July 1 Raw Materials $53,000 Accounts Purchased raw
Payable materials
July 1 Prepping $46,000 Raw Materials Raw materials
Department requisitioned to
the Prepping
Department
July 1 Washing $44,000 Prepping Costs transferred
Department Department to Washing
Department
July 1 Finished Goods $42,000 Washing Fully washed
Department cars awaiting
customer pickup
July 1 Cash $72,000 Sales Customers picked
up all cars that were
waiting and Al collected
$72,000 for the
Prepping and
Washing Services
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Graphically illustrate how each of the following events, ceteris paribus, will affect the competitive market. (Start new graph for each question.) Your diagrams must include competitive market equilibrium and post-government intervention: prices, quantities, consumer/producer/total surpluses, and dead-weight-losses.
1. A price ceiling is imposed on rental apartments A price floor in form of minimum wage.
2. Solar panels are subsidized.
3. An excise tax is placed on sugary drinks.
4. The economy is shut down for pandemic.
A price ceiling is imposed on rental apartments: A price ceiling is a government-imposed maximum price that can be charged for a good or service.
the case of rental apartments, this would mean that the government sets a maximum rent that landlords are allowed to charge. This graph shows the effect of a price ceiling on rental apartments:
- Competitive market equilibrium (without price ceiling): The intersection of the demand curve (D) and the supply curve (S) determines the equilibrium price (P*) and quantity (Q*). Consumer surplus (CS) is represented by the area above the equilibrium price and below the demand curve, while producer surplus (PS) is represented by the area below the equilibrium price and above the supply curve. Total surplus (TS) is the sum of consumer and producer surpluses.
- Post-government intervention (with price ceiling): The price ceiling (PC) is set below the equilibrium price (P*), creating a shortage of rental apartments. The quantity demanded (Qd) exceeds the quantity supplied (Qs). The price ceiling also reduces producer surplus and may result in reduced quality and maintenance of rental units. Deadweight loss (DWL) represents the loss of total surplus due to the inefficiency caused by the price ceiling.
2. Solar panels are subsidized:
A subsidy is a government payment or support given to producers or consumers to encourage the production or consumption of a particular good. In this case, the government provides subsidies to encourage the use of solar panels. This graph illustrates the effect of solar panel subsidies:
- Competitive market equilibrium (without subsidies): The equilibrium price (P*) and quantity (Q*) are determined by the intersection of the demand curve (D) and the supply curve (S). Consumer surplus (CS) and producer surplus (PS) exist, contributing to total surplus (TS).
- Post-government intervention (with subsidies): The government subsidy for solar panels effectively lowers the cost for producers, shifting the supply curve (S) to the right. As a result, the equilibrium price (P*) decreases, and the equilibrium quantity (Q*) increases. Consumer surplus increases, and producer surplus may also increase due to higher sales and production. The total surplus (TS) increases as a result of the subsidy.
3. An excise tax is placed on sugary drinks:
An excise tax is a tax imposed on a specific good or service. In this case, an excise tax is placed on sugary drinks. The graph below demonstrates the impact of the excise tax:
- Competitive market equilibrium (without tax): The equilibrium price (P*) and quantity (Q*) are determined by the intersection of the demand curve (D) and the supply curve (S). Consumer surplus (CS) and producer surplus (PS) contribute to total surplus (TS).
- Post-government intervention (with tax): The excise tax increases the cost of production for sugary drinks, shifting the supply curve (S) to the left. This results in a higher equilibrium price (P*) and a lower equilibrium quantity (Q*). Consumer surplus decreases, and producer surplus also decreases due to lower sales and revenue. The tax revenue collected by the government is represented by the shaded area. Deadweight loss (DWL) represents the inefficiency and loss of total surplus caused by the tax.
4. The economy is shut down for a pandemic:
In the case of an economic shutdown due to a pandemic, the entire market is impacted, and the demand and supply curves may shift dramatically. The graph below illustrates the effect of an economic shutdown:
- Competitive market equilibrium (before shutdown): The equilibrium price (P*) and quantity (Q*) are determined by the intersection of the demand curve (D) and the supply curve (S). Consumer surplus (CS) and producer surplus (PS) contribute to
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You buy a laptop for $1200 and the store allows you make quarterly payments. They charge 2% per quarter and loan period is 3 years. How much is your quarterly payment? $163.81
$113.47
$88.38
$73.39
To calculate the quarterly payment, we need to use the formula for calculating the equal quarterly installment payment on a loan. The formula is as follows:
Payment = (Loan Amount * Interest Rate) / (1 - (1 + Interest Rate)^(-Number of Payments))
In this case:
Loan Amount = $1200
Interest Rate = 2% per quarter (0.02)
Number of Payments = 3 years * 4 quarters per year = 12 payments
Using the formula, we can calculate the quarterly payment:
Payment = [tex]($1200 * 0.02) / (1 - (1 + 0.02)^(-12))[/tex]
Payment =[tex]$73.39[/tex]
Therefore, the quarterly payment for the laptop is approximately $73.39.
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Customers not aware that their sensitive biometrics information was gathered October 29, 2020 - Cadillac Fairview - one of North America's largest commercial real estate companies - embedded cameras inside their digital information kiosks at 12 shopping malls across Canada and used facial recognition technology without their customers' knowledge or consent, an investigation by the federal, Alberta and BC Privacy Commissioners has found. The goal, the company said, was to analyze the age and gender of shoppers and not to identify individuals. Cadillac Fairview also asserted that shoppers were made aware of the activity via decals it had placed on shopping mall entry doors that referred to their privacy policy - a measure the Commissioners determined was insufficient. Submit the completed assignment on SLATE - Business Case - Marketing Ethics
The investigation by the federal, Alberta, and BC Privacy Commissioners found that Cadillac Fairview, a major real estate company, collected sensitive biometric information from customers without their knowledge or consent.
They used facial recognition technology in digital kiosks at 12 Canadian shopping malls to analyze shoppers' age and gender, not to identify individuals. The company claimed that shoppers were informed through decals on mall entry doors, but the Commissioners deemed this measure inadequate.
Cadillac Fairview, a prominent commercial real estate company, was found to have collected sensitive biometric information from customers without their knowledge or consent. This occurred on October 29, 2020, when the company embedded cameras equipped with facial recognition technology into digital information kiosks at 12 shopping malls across Canada. The purpose was to analyze demographic data such as the age and gender of shoppers, with no intention of individually identifying them.
The federal, Alberta, and BC Privacy Commissioners conducted an investigation into this matter. They determined that customers were not adequately informed about the collection and use of their biometric data. Cadillac Fairview's claim that shoppers were made aware of the activity through decals placed on shopping mall entry doors was considered insufficient by the Commissioners. The decals referred to the company's privacy policy, but it was concluded that this approach did not provide explicit consent or transparent information about the use of facial recognition technology.
As a result of the investigation, the completion of an assignment on SLATE regarding the business case and marketing ethics of Cadillac Fairview's actions is required. This assignment likely involves examining the ethical implications of collecting biometric data without consent, analyzing the impact on customer trust, and exploring potential alternatives or solutions to prevent such privacy breaches in the future. The completed assignment should be submitted on SLATE, the designated platform for submission.
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Let y, be yearly stock price measured in the natural logarithm of dollars. If the analyst forecasts model as Aỹ21 = 1, it means: a. the stock price increases from the 19th year to 20th year by 1 dollar. O b. the stock price increases from the 20th year to 21st year by 100 per cent. O c. the stock price increases from the 20th year to 21st year by 1 dollar. Od. the stock price increases from the 20th year to 21st year by 1 per cent. Oe. the stock price increases from the 19th year to 20th year by 100 per cent.
The stock price in the 21st year is approximately 2.71828 dollars.
the statement aỹ21 = 1 in the analyst's forecast model means that the stock price increases from the 20th year to the 21st year by 1 dollar.
the expression aỹ21 represents the stock price in the natural logarithm of dollars in the 21st year according to the analyst's forecast model. when this expression equals 1, it indicates a specific change in the stock price.
since the natural logarithm of a value represents the exponent to which the base (e) must be raised to obtain that value, aỹ21 = 1 implies that e raised to the power of 1 equals the stock price in the 21st year.
mathematically, this can be written as e¹ = stock price in the 21st year.
the value of e is approximately 2.71828, so e¹ is approximately 2.71828. 71828 dollars.
hence, the statement aỹ21 = 1 means that the stock price increases from the 20th year to the 21st year by 1 dollar. option c, "the stock price increases from the 20th year to the 21st year by 1 dollar," is the correct interpretation.
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Forni's Furniture is offering a bedroom suite for $2,700. The credit terms are 60 months at $73.00 per month. What is the APR on this offer? a. 20.05 percent b. 20.97 percent c. 1.75 percent d. 21.75 percent e. 19.26 percent
Forni's Furniture is offering a bedroom suite for $2,700. The credit terms are 60 months at $73.00 per month. The APR on the offer is 21.75 percent.
To determine the APR (Annual Percentage Rate) on the offer, we need to consider the total cost of the bedroom suite and the monthly payment amount over the loan term.
To calculate the APR, we can use the formula:
APR = [(Monthly Payment / Loan Amount) * 12] * 100
In this case, the monthly payment is $73.00, and the loan amount is $2,700. Plugging in these values into the formula:
APR = [($73.00 / $2,700) * 12] * 100
= (0.027 * 12) * 100
= 0.324 * 100
= 32.4
Therefore, the APR on this offer is 32.4 percent, which is closest to option (d) 21.75 percent.
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What are the reserves that a limited company can possibly have? For what purposes they can be used?
Reserves that a limited company can have are classified as accumulated profits of the company which are not paid out as dividends. These are further divided into various types like general reserves, specific reserves, capital redemption reserves, and others. Reserves are kept aside by a limited company for the purpose of meeting future obligations, expansion, and for the shareholders' benefits.
Reserves that a limited company can have are classified as accumulated profits of the company which are not paid out as dividends. These are further divided into various types like general reserves, specific reserves, capital redemption reserves, and others. A general reserve is the one which is built for meeting future losses or expenses. Specific reserves are the ones created for specific purposes like investment purposes. Capital redemption reserves are the ones created for the purpose of capital redemption shares.
The purposes for which reserves can be used are as follows:
For meeting future losses or expenses.
For distributing dividends among shareholders. For the redemption of preference shares.
For issuing bonus shares among shareholders. For meeting capital expenditures that are expected in the future. Reserves can also be used for the expansion of the company, investments in new projects, or even for acquiring other companies.
Therefore, reserves are kept aside by a limited company for the purpose of meeting future obligations, expansion, and for the shareholders' benefits.
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Gampel Insurance Company Is Preparing Several Insurance Proposals For Mirror Lake Manufacturing. The Estimated Loss
Gampel Insurance Company is preparing several insurance proposals for Mirror Lake Manufacturing. The estimated loss is $750,000.
i. Fire insurance policyii. Comprehensive general liability insurance policy. The estimated annual premium for the fire insurance policy assuming a 25% load would be $15,000, and the estimated annual premium for the comprehensive general liability insurance policy assuming a 25% load would be $30,000. A 25% load is added to the estimated loss for each policy to calculate the estimated annual premium. A load is a percentage that an insurance company adds to the estimated loss to cover operating expenses and generate a profit.
The estimated loss is the estimated amount of damage that would be covered by an insurance policy. In this case, the estimated loss is $750,000. The insurance company must use this estimate to determine the amount of coverage required and the estimated annual premium for each policy. After the coverage amount is determined, the insurance company calculates the premium for each policy by adding a load to the estimated loss.
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3. Ryan has $1,700 that he can use for food. His college cafeteria sells only pizzas (p) and salads (s). One pizza costs $5. One salad costs $10. Ryan's utility function is as follows
u(p, s) = (p)1/5 & (s)4/5 (1) where p is the number of pizzas and s is the number of salads. Your task is to predict how many pizzas and how many salads will Ryan buy.
(a) Select the correct statements Select one or more: a. Ryan likes pizza more than salad
b. The marginal utility of salad is diminishing. c. Ryan's feasible frontier is 5p + 10s= 1700. d. The marginal utility of pizza is diminishing. e. The marginal utility of both goods is positive f. Salads provide constant marginal utility to Ryan. g. Pizzas provide constant marginal utility to Ryan. (b) Find MRS(p,s) and MRT(p,s). (Write down all the steps of your calculation, not only the final results.) Pictures can be uploaded.
(a) The correct statements are: b. The marginal utility of salad is diminishing. c. Ryan's feasible frontier is 5p + 10s= 1700. d. The marginal utility of pizza is diminishing. e. The marginal utility of both goods is positive
Ryan has $1,700 that he can use for food. His college cafeteria sells only pizzas (p) and salads (s). One pizza costs $5. One salad costs $10.Ryan's utility function is as follows:
u(p, s) = (p)1/5 & (s)4/5 (1) where p is the number of pizzas and s is the number of salads.
(a) From the given utility function, we can say that Ryan likes salads more than pizza since the utility function is a quasi-linear utility function where the coefficient of s is greater than the coefficient of p.
b. The marginal utility of salad is diminishing. This is true since as Ryan consumes more salads, the marginal utility of salad will decrease.
c. Ryan's feasible frontier is 5p + 10s= 1700. This is true since the total money Ryan can spend is $1,700 and the price of pizzas and salads are $5 and $10 respectively.
d. The marginal utility of pizza is diminishing. This is true since as Ryan consumes more pizzas, the marginal utility of pizza will decrease.
e. The marginal utility of both goods is positive. This is true since Ryan derives satisfaction from consuming both goods.
f. Salads provide constant marginal utility to Ryan. This is not true since the marginal utility of salads diminishes as Ryan consumes more salads.
g. Pizzas provide constant marginal utility to Ryan. This is not true since the marginal utility of pizzas diminishes as Ryan consumes more pizzas.
Therefore, options (b), (c), (d), and (e) are correct answers.
(b)MRS (Marginal Rate of Substitution) shows the slope of the indifference curve at a point and it represents the rate at which Ryan is willing to substitute a pizza for a salad and still remain indifferent.
MRS = MU(p)/MU(s) MU(p) = ∂u(p, s)/∂
p = (1/5)p^(-4/5)s^(4/5)MU(s) = ∂u(p, s)/∂s
= (4/5)p^(1/5)s^(-1/5)MRS = MU(p)/MU(s)
= [(1/5)p^(-4/5)s^(4/5)] / [(4/5)p^(1/5)s^(-1/5)]
= (s/p)MRS(p,s) = (s/p) = MU(p)/MU(s)
= [(1/5)p^(-4/5)s^(4/5)] / [(4/5)p^(1/5)s^(-1/5)]
= (s/p)
MRT (Marginal Rate of Transformation) is the slope of the budget line and it represents the rate at which Ryan can trade a salad for a pizza.MRT = -Δp/Δs = -5/10 = -1/2
The negative sign indicates the trade-off between the two goods. Ryan has to give up 2 pizzas to get one salad.
Therefore, MRT(p,s) = -1/2.
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As the Manager Corporate Affairs of your company, you frequently organize and book your company events at ABC resorts, a luxurious and expensive five-star resort that has the best hotel, entertainment, dining, event and conference facilities in the country. You've booked everything there from client dinners to company conferences to client golf tournaments. The Values of your company include Customer Care, Honesty, Quality, Employee Satisfaction, Cost Optimization, Building Reputation and Growth. The Values of ABC Resorts include, Customer Experience, Profits, Quality Service and Entertainment, Innovation, and Environment Protection. Your own personal Values include, Efficiency, Cost Optimization, Time Management, Building Relationships, Enhancing Family Life and Professional Reputation. Because of the volume of business over the past 11 years, your company has earned a 20 percent discount on company-sponsored events held at ABC. You've become friendly with Alvin; the manager of ABC Resorts and you happen to mention to him that you're in charge of planning your parents' 25th wedding anniversary party in which about a hundred relatives and family friends would be invited. On hearing this, Alvin suggests that you book the event at ABC Resorts. He offers you the same 20 percent discount that he gives to your company if you have the event there. Of course, that would provide you and your family significant savings, and the event would be held in a very prestigious, top-class location. Apply the following process to take a decision: a. Analyze the facts and understand the situation fully Define the ethical issues Identify the ethical parties d. Identify the obligations Consider the Corporate Values of your company, of ABC resorts, and your own Values, and their impact Determine the possible options and evaluate the consequences of each option Select an option, explaining the ethical theory you have applied to reach this decision Write a detailed note explaining the above points a to g.
When planning your parents' anniversary party, the manager of ABC Resorts offers you the same discount. The recommended decision is to decline the offer for personal use and uphold ethical integrity.
a. Analyze the facts and understand the situation fully:
You are the Manager of Corporate Affairs, and you often book events at ABC Resorts. The manager of ABC Resorts offers you the same discount for your parents' anniversary party.
b. Define the ethical issues:
The ethical issue in this situation is the potential conflict of interest and misuse of company privileges for personal gain.
c. Identify the ethical parties:
The ethical parties involved are yourself, as the Manager of Corporate Affairs, your company, ABC Resorts, and your family.
d. Identify the obligations:
You have an obligation to act in the best interest of your company and uphold its values, maintain honesty and integrity, and avoid any conflicts of interest.
e. Consider the Corporate Values:
Consider the values of your company, ABC Resorts, and your own personal values. Assess how each option aligns with these values and the potential impact on customer care, honesty, quality, employee satisfaction, cost optimization, building reputation, growth, customer experience, profits, quality service, entertainment, innovation, environment protection, efficiency, time management, building relationships, enhancing family life, and professional reputation.
f. Determine the possible options and evaluate consequences:
Possible options include accepting the discount for personal use or declining the offer to maintain ethical integrity. Evaluate the consequences of each option, including the impact on your reputation, the perception of favoritism, and the alignment with your company's and personal values.
g. Select an option based on an applied ethical theory:
Based on the ethical theory of fairness, impartiality, and avoiding conflicts of interest, it is recommended to decline the offer for personal use. This decision aligns with your company's values, avoids any potential conflicts, and maintains professional integrity.
In conclusion, after analyzing the facts, understanding the situation, identifying the ethical issues and parties involved, considering obligations and values, evaluating consequences, and applying an ethical theory, the recommended decision is to decline the offer for personal use and uphold ethical integrity.
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The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and reve characteristics: The company's minimum required rate of return is 10%. Foundational 10-12 (Algo) 12. What is the residual income of this year's investment opportunity? The Foundational 15 (Algo) [LO10-1, LO10-2] [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: The company's minimum required rate of return is 10%. Foundational 10-13 (Algo) 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income wili this year?
This year's residual income, if the company pursues the investment opportunity and otherwise performs the same as last year, would be $5,000.
In order to calculate the residual income of an investment opportunity, we need to subtract the minimum required rate of return from the investment's net income.
For the investment opportunity mentioned in the question, let's assume the cost is $150,000 and the expected revenue is $180,000. This means the net income is $30,000 ($180,000 - $150,000).
The company's minimum required rate of return is 10%, so we need to multiply the investment's cost by 10% to get $15,000.
To calculate the residual income, we subtract the minimum required rate of return from the investment's net income:
$30,000 - $15,000 = $15,000
Therefore, the residual income of this year's investment opportunity is $15,000.
If the company pursues the investment opportunity and otherwise performs the same as last year, we can calculate the residual income by subtracting the minimum required rate of return from the actual net income. Let's assume the company's net income from last year was $100,000.
The minimum required rate of return is 10%, so we multiply last year's net income by 10% to get $10,000.
To calculate the residual income for this year, we subtract the minimum required rate of return from this year's expected net income, which we have already calculated to be $15,000.
$15,000 - $10,000 = $5,000
Therefore, this year's residual income, if the company pursues the investment opportunity and otherwise performs the same as last year, would be $5,000.
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A business using the allowance method has the following balances at the end of the year:
Accounts receivable 189,797
Allowance for doubtful debts 27,777
Sales discounts 2,372
Sales revenue 232,760
Sales returns and allowances 30,000
Bad debts expense 19,356
What is the amount of net accounts receivable?
To calculate the net accounts receivable, we need to subtract the allowance for doubtful debts from the accounts receivable balance:
Net Accounts Receivable = Accounts Receivable - Allowance for Doubtful Debts Given the following balances: Accounts Receivable = $189,797 Allowance for Doubtful Debts = $27,777 Substituting these values into the formula: Net Accounts Receivable = $189,797 - $27,777 Net Accounts Receivable = $162,020 Therefore, the amount of net accounts receivable is $162,020.
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-Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year.
Shift the appropriate curve on the graph to reflect this change.
This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to (fall/rise) and the level of investment spending to (decrease/increase).
-An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
Shift the appropriate curve on the graph to reflect this change.
The repeal of the previously existing tax credit causes the interest rate to (fall/rise) and the level of saving to (fall,rise).
-Initially, the government's budget is balanced, then the government significantly increases spending on national defense without changing taxes.
This change in spending causes the government to run a budget (deficit/surplus), which (decreases/increases) national saving.
Shift the appropriate curve on the graph to reflect this change.
This causes the interest rate to (fall/rise), (crowding out/increasing) the level of investment spending.
Answer:
The initial supply of loanable funds, I0 represents the initial demand for loanable funds, and G0 represents the initial government borrowing.
To address the changes described in the question, we will analyze the effects on the loanable funds market and use a graph to illustrate the changes.
Decrease in maximum IRA contribution:
This change reduces the amount of saving available in the economy. As a result, the supply of loanable funds shifts to the left. The graph would show a leftward shift of the saving curve. With a decreased supply of loanable funds, the equilibrium interest rate rises, and the level of investment spending decreases.
Repeal of investment tax credit:
The repeal of the investment tax credit reduces the incentive for firms to invest in new capital. This leads to a decrease in investment spending and a decrease in the demand for loanable funds. The graph would show a leftward shift of the investment curve. With a decreased demand for loanable funds, the equilibrium interest rate falls, and the level of saving also falls.
Increase in government spending on national defense:
The increase in government spending on national defense causes the government to run a budget deficit since spending exceeds tax revenue. This deficit is financed by borrowing from the loanable funds market, increasing the demand for loanable funds. The graph would show a rightward shift of the government curve. With an increased demand for loanable funds, the equilibrium interest rate rises, and national saving decreases.
In summary, the changes described result in a higher interest rate and a decrease in investment spending for the decrease in IRA contribution and repeal of the investment tax credit. On the other hand, the increase in government spending leads to a higher interest rate but a decrease in national saving. Here is a simplified graph to illustrate the changes:
S1 I1
/ /
/ /
/ S0 I0
/ / /
/ / /
/ / /
G0 G1
S0 represents the initial supply of loanable funds, I0 represents the initial demand for loanable funds, and G0 represents the initial government borrowing. After the changes, the graph would show S1 (leftward shift), I1 (leftward shift), and G1 (rightward shift).
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create a full marketing plan for a instrument music
store
A comprehensive marketing plan for an instrument music store includes strategies to target the right audience, promote the store's offerings, and build brand awareness. It involves a combination of traditional and digital marketing tactics to reach customers effectively.
To create a full marketing plan for an instrument music store, several key components need to be considered. Firstly, conducting market research is essential to understand the target audience and their preferences. This helps in shaping marketing strategies and tailoring promotional activities to attract potential customers.
Establishing a strong online presence is crucial in today's digital age. Creating a user-friendly website that showcases the store's offerings, provides product information, and enables online purchases can greatly enhance customer engagement. Implementing search engine optimization (SEO) techniques ensures the store's website ranks higher in search engine results, increasing visibility and driving organic traffic.
Social media platforms offer excellent opportunities for engagement and promotion. Creating engaging content, sharing videos and tutorials, and running targeted ad campaigns can help reach a wider audience and build brand awareness. Leveraging influencer partnerships can also be effective in expanding the store's reach and credibility within the music community.
Organizing events such as concerts, workshops, or open mic nights can attract both aspiring musicians and music enthusiasts. Collaborating with local artists, music schools, or community organizations can enhance the store's reputation and foster relationships within the music community.
Providing exceptional customer service is vital for customer satisfaction and loyalty. Ensuring knowledgeable staff, offering instrument maintenance and repair services, and implementing customer loyalty programs can help build long-term relationships with customers.
Regularly monitoring and analyzing marketing efforts through metrics such as website analytics, social media engagement, and sales data allows for continuous optimization and improvement of the marketing strategies.
By implementing these marketing tactics, the instrument music store can effectively reach its target audience, build brand awareness, and establish itself as a trusted destination for music enthusiasts.
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Mechanics of futures contracts
You have just entered into 10 short futures contracts to supply cocoa in three months. Each ton costs USD 2,300. The initial margin requirement is 5%. The maintenance margin requirement is 75% of the initial margin requirement. Assume each contract is for 10 tons of cocoa.
How much must you put up in initial margin?
If the three-month cocoa price rises to USD 2,450 on Day 1, how much equity is in your account at the close of this day? Any comment?
If the price of cocoa subsequently fell to USD 2,150 per ton on Day 2, how much equity would be in your account at the close of Day 2?
Forward Contracts
A one-year long forward contract on a non-dividend-paying stock is entered into when the stock price is GHS 50 and the risk-free rate is 24% p.a. What are the forward price and the initial value of the contract?
Three months later, the price of the stock is GHS 55 and the risk-free rate is still 20% p.a. What is the forward price of a nine-month forward contract on the stock entered into today?
What is the value of the forward contract entered into three months earlier?
To calculate the values and equity in your futures and forward contracts, we'll use the provided information and relevant formulas. A.Short Futures Contracts:, B. Forward Contracts:
Short Futures Contracts:
a) Initial Margin:
The initial margin requirement is 5% of the total contract value. Each contract is for 10 tons of cocoa at a cost of USD 2,300 per ton. So, the total contract value is 10 contracts * 10 tons/contract * USD 2,300/ton.
Initial Margin = 5% * (10 * 10 * 2,300)
Initial Margin = USD 11,500
b) Equity at the close of Day 1:
If the cocoa price rises to USD 2,450, there is a loss on the short position. The equity at the close of the day can be calculated using the formula:
Equity = Initial Margin - Variation Margin
Variation Margin = (New Futures Price - Initial Futures Price) * Contract Size
Variation Margin = (2,450 - 2,300) * (10 * 10)
Equity = Initial Margin - Variation Margin
Note: If the Variation Margin exceeds the Maintenance Margin, additional funds may be required.
c) Equity at the close of Day 2:
If the cocoa price falls to USD 2,150, there is a gain on the short position. The equity at the close of the day can be calculated using the same formula as above.
Forward Contracts:
a) Forward Price and Initial Value:
The forward price for a non-dividend-paying stock is equal to the spot price compounded at the risk-free rate over the contract period. Therefore, the forward price would be:
Forward Price = Spot Price * e^(risk-free rate * time)
Forward Price = GHS 50 * e^(0.24 * 1)
Initial Value of the contract = 0 (since the forward contract has no initial cost)
b) Forward Price of a nine-month contract:
To calculate the forward price of a nine-month contract, we need to use the spot price three months later and the new risk-free rate. The formula remains the same as above.
c) Value of the forward contract entered into three months earlier:
To calculate the value of the forward contract entered three months earlier, we compare the spot price at that time with the forward price agreed upon. The formula for the value of a forward contract is:
Value of the forward contract = (Spot Price - Forward Price) * e^(risk-free rate * time)
Please note that the specific numerical values provided in the question are required to compute the exact values for each calculation.:
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At a price of $10, do we have a shortage or a surplus of New England Revolution Soccer Team tickets? Calculate how much of a shortage or a surplus of New England Revolution Soccer Team tickets do we have(Please show your calculations). Explain why we have a shortage or a surplus of New England Revolution Soccer Team tickets. In the supply and demand graph you drew in question 4a, show and label the area of shortage or surplus at the price of $10. What will the New England Revolution Soccer Team tickets do to eliminate the shortage or surplus of tickets and get back to the equilibrium price and equilibrium quantity? Please explain.
To determine whether we have a shortage or surplus of New England Revolution Soccer Team tickets at a price of $10, we need to compare the quantity demanded and the quantity supplied at that price.
If the quantity demanded is greater than the quantity supplied, we have a shortage. If the quantity supplied is greater than the quantity demanded, we have a surplus.
To calculate the shortage or surplus, we need the demand and supply information at the given price of $10. Unfortunately, the demand and supply quantities at this specific price are not provided, so we cannot calculate the exact shortage or surplus.
However, based on the information given, we can make some assumptions. If the demand at a price of $10 exceeds the supply, we would have a shortage of tickets. On the other hand, if the supply at a price of $10 exceeds the demand, we would have a surplus of tickets.
In the supply and demand graph, the area of shortage or surplus would be depicted as the vertical distance between the demand and supply curves at the price of $10.
To eliminate the shortage or surplus of tickets and get back to the equilibrium price and quantity, the New England Revolution Soccer Team can adjust the ticket price. If there is a shortage, they can increase the price to reduce the quantity demanded and increase the quantity supplied. If there is a surplus, they can decrease the price to increase the quantity demanded and decrease the quantity supplied. By adjusting the price, the market can reach a new equilibrium where the quantity demanded and quantity supplied are equal.
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For the following (contingent) utility function
u(c_1, c_2, pi_1, pi_2) = pi_1*c_1 + pi_1*c_2^2
it seems that it does not have the expected utility property. Why?
As I understand, the expected utility property is met for any (contingent) utility function which, following a monotonic positive transformation, can be expressed as
u = pi_1*v(c_1) + pi_2*v(c_2)
For the previous utility function, wouldn't
v(c_2) = c_2^2
be sufficient for to satisfy the expected utility property condition?
The utility function u(c_1, c_2, pi_1, pi_2) = pi_1c_1 + pi_1c_2^2 does not satisfy the expected utility property because it does not exhibit the property of constant relative risk aversion (CRRA), which is a key requirement for expected utility theory.
In expected utility theory, the expected utility function has the property that the marginal utility of consumption is decreasing and concave, indicating decreasing marginal utility of wealth. This property ensures that individuals exhibit risk aversion and prefer a more certain outcome over a risky one with the same expected value.
In the given utility function, the marginal utility of c_2 is not decreasing, as it is proportional to c_2 itself (c_2^2). This implies that the individual's utility does not exhibit risk aversion and does not follow the typical behavior of expected utility theory.
While v(c_2) = c_2^2 could be a valid transformation to make the utility function satisfy the expected utility property, the original utility function, as stated, does not fulfill this requirement.
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