The approach to value is valid because the value of any financial asset is the present value of its anticipated income in the Income Approach.
The Income Approach is a valid approach to valuing financial assets because it takes into consideration the anticipated income generated by the asset over its lifespan. This approach is commonly used in financial and investment analysis to determine the present value of an asset based on its expected cash flows.
The Income Approach involves discounting the anticipated income or cash flows from the asset to their present value using an appropriate discount rate. By discounting future income streams, the approach accounts for the time value of money, which recognizes that a dollar received in the future is worth less than a dollar received today.
In this approach, the present value of the anticipated income becomes the basis for valuing the financial asset. The higher the expected income and the lower the discount rate used, the higher the value of the asset. Conversely, if the anticipated income is low or the discount rate is high, the value of the asset will be lower.
Therefore, the Income Approach is a valid approach to value financial assets, as it considers the present value of anticipated income streams to determine their overall value.
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Why is it more difficult to enforce ethical guidelines in emerging markets? What do multinationals need to pay attention to?
What are some of the factors that the Department of Justice takes into consideration when determining fines for violation of the Foreign Corrupt Practices Act?
What are some essential requirements of any effective compliance program?
Enforcing ethical guidelines in emerging markets can be more challenging due to various factors. These include weaker legal frameworks, inconsistent enforcement, cultural differences, corruption, lack of transparency, and limited institutional capacity.
Multinationals operating in these markets need to pay attention to several aspects. They should conduct thorough due diligence on business partners, engage in comprehensive risk assessments, implement robust internal control systems, provide ethics training to employees, establish clear reporting mechanisms for misconduct, and foster a culture of compliance. The Department of Justice considers several factors when determining fines for violations of the Foreign Corrupt Practices Act (FCPA). These factors include the extent and duration of the misconduct, the level of involvement of senior management, the company's history of compliance, the effectiveness of the company's compliance program, cooperation with investigations, and the company's remedial efforts.
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After viewing the CBC short documentary in class what are you thoughts towards the cases of harassment, bullying, and assault? Provide a 250-400 word discussion on the above topics. You can research your own case and discuss it on the board or use the ones we discussed in class to provide your thoughts. This is a discussion post and will be your own work. I will expect you to read and comment on one other student's work. The feedback must be valuable. Using terms of injustice, PTSD and Best Pracitces in managing Workplace Violence (p.213) what steps as an HR Leader will you take to address the harassment and workplace conflict issues that could occur in your workplace? Using the SAVT abbreviation for increased risks for workplace violence explain what it means and give examples of policies you can implement to protect workers. This topic is very imortant for HR students to review as it reflects on the importance of our ability to investigate, recruit, discipline, and implement changes in our workplace culture Comment on what area of HR interests you? Employers will be pressured to take a more active role in maintaining a harassment free work environment. This position will be managed by HR and/or Health and Safety. Some managers struggle with getting involved in workplace conflicts. How would you advise your managers to deal with conflict.
Cases of harassment, bullying, and assault are deeply concerning and reflect serious issues within the workplace. These behaviors not only create an unsafe and hostile environment but also have long-lasting impacts on the victims, such as emotional distress, psychological trauma, and potential development of post-traumatic stress disorder (PTSD).
It is crucial for HR leaders to address these issues promptly and effectively to ensure the well-being of employees and maintain a healthy work culture. Establish Clear Policies and Procedures: Develop comprehensive policies that clearly define harassment, bullying, and assault, and outline the consequences for such behaviors. Communicate these policies to all employees and provide training on respectful workplace conduct. Encourage Reporting and Provide Support: Create a safe and confidential reporting mechanism for employees to report incidents. Encourage employees to come forward without fear of retaliation and provide access to counseling or support services for victims.
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One of virtual management successful factors is the Virtual manager's knowledge of what virtual employees want from him/her such as ......
A-Defining their roles and responsibilities clearly
B-Giving them absolute freedom in working
C-Having long communication with them
D-Giving them more bonuses
Virtual management is the management of virtual or remote workers by a manager who is in a different location. It can be a daunting task for some managers who are accustomed to managing in-person teams. However, it can also be a very successful and efficient way of managing a team if certain factors are taken into consideration.
One of the most critical success factors of virtual management is the virtual manager's understanding of what virtual employees want from him/her. Virtual employees have different expectations from their virtual manager than their in-person counterparts. It is essential to understand what these expectations are to effectively manage virtual employees.
There are several things that virtual employees want from their virtual manager, such as:Regular and clear communication: One of the most important things that virtual employees want from their virtual manager is regular and clear communication. Virtual employees do not have the luxury of being in the same location as their manager, so it is important for the virtual manager to communicate with them regularly and clearly.
This communication can take the form of emails, video conferencing, phone calls, or instant messaging. Whatever form it takes, it is critical that the communication is regular and clear.Flexibility: Virtual employees want their virtual manager to be flexible. They want to be able to work on their own schedule and in their own way. A virtual manager who is too rigid in his/her approach to managing virtual employees will not be successful.
Trust: Virtual employees want to be trusted by their virtual manager. They want to know that their manager believes in them and their abilities. A virtual manager who micromanages his/her virtual employees will not be successful. Instead, the virtual manager should trust his/her employees to do their job.Bonuses: Giving virtual employees more bonuses can be a way to motivate and engage them. Bonuses can take different forms such as monetary, time-off, or other perks. A virtual manager who understands the importance of bonuses and incentives can use them to motivate and retain virtual employees.
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In Modern Infrastructure strategy there are 4 basic models to consider. While reading and answering below, keep in mind that choosing the best model for the business is a very strategic decision.
Model 1- Traditional On-Site
Model 2 - Co-located data center facility
Model 3 - Hybrid/SAS model
Model 4 - Cloud
Compare and contrast these 4 major models.
What is the right strategy for a smaller start up firm?
What about a larger more established firm?
Support your arguments and create a strength and weakness argument for a small vs larger firm.
Remember concerns like cost, scale, security etc-as discussed in class.
For a smaller startup firm, the Cloud model is the right strategy due to scalability and cost-effectiveness.
Each infrastructure model has its strengths and weaknesses. For a smaller startup firm, the Cloud model is often the most suitable due to its scalability, cost-effectiveness, and flexibility. It allows startups to leverage advanced infrastructure without significant upnt investment. However, security concerns and reliance on external providers should be carefully considered.
In contrast, larger established firms may benefit from a Hybrid/SAS model that combines the advantages of on-premises infrastructure with cloud services. This model offers greater control, security, and compliance while still providing scalability and cost optimization.
However, it requires more resources for implementation and maintenance. Ultimately, the right strategy depends on factors such as budget, growth plans, security requirements, and the company's ability to manage and support infrastructure.
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The service-profit chain model and value creation model both suggest that: organizations invest in HR practices investment in HR practices impacts how employees behaviors and attitudes All of the above committed employees drive customer loyalty
Both the service-profit chain model and value creation model suggest that organizations should invest in HR practices, as these investments have an impact on employees' behaviors and attitudes. These models emphasize the importance of human resources in creating value for customers and driving organizational success.
The service-profit chain model proposes that investments in HR practices, such as recruitment, training, and employee development, lead to more committed and engaged employees. These committed employees, in turn, provide better service quality and customer experiences, leading to increased customer satisfaction and loyalty. Ultimately, this drives financial performance and profitability for the organization.
Similarly, the value creation model emphasizes the role of employees in delivering value to customers. It suggests that organizations should focus on creating value for customers by aligning their internal processes and resources, including human resources. Committed employees who are motivated, skilled, and empowered contribute to value creation through their behaviors, attitudes, and interactions with customers.
Therefore, the correct answer is: All of the above.
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Suppose that scores on a statistics exam are normally distributed with a mean of 75.7 and a standard deviation of 5.6315. Would it be unusual for a student to score between 73.73 and 74.26?
options:
1) It is impossible for a value in this interval to occur with this distribution of data.
2) A value in this interval is borderline unusual.
3) A value in this interval would be unusual.
4) A value in this interval is not unusual.
5) We do not have enough information to determine if a value in this interval is unusual.
In this case, both z-scores (-0.349 and -0.256) are well within ±2, indicating that the values of 73.73 and 74.26 are not far from the mean and are not considered unusual.
To determine whether a student scoring between 73.73 and 74.26 on the statistics exam would be considered unusual, we need to assess the z-scores associated with these values. The z-score measures the number of standard deviations a particular value is away from the mean.
The formula for calculating the z-score is: z = (x - μ) / σ
Where:
x is the value (in this case, the score)
μ is the mean
σ is the standard deviation
For the lower value of 73.73:
z1 = (73.73 - 75.7) / 5.6315 ≈ -0.349
For the upper value of 74.26:
z2 = (74.26 - 75.7) / 5.6315 ≈ -0.256
To determine if these z-scores are considered unusual, we can refer to commonly used thresholds. A common threshold for considering a value as unusual is if its z-score is beyond ±2.
In this case, both z-scores (-0.349 and -0.256) are well within ±2, indicating that the values of 73.73 and 74.26 are not far from the mean and are not considered unusual.
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Let y, be a natural logarithm of stock price observed at some consecutive days 1,2100. The analyst estimates a model as Aỹ, = 2.6+0.5y, Given y₁= 2 she can forecast the stock price at t = 101 to a. 1 Ob. 103 O c. 4 C. Od. 99 e. 2. Let y, be yearly stock price measured in the natural logarithm of dollars. If the analyst forecasts model as A21 = 1, it means: O a. a. the stock price increases from the 19th year to 20th year by 1 dollar. O b. the stock price increases from the 20th year by 100 per cent. year to 21st O c. the stock price increases from the 20th year by 1 dollar. year to 21st Od. the stock price increases from the 20th year by 1 per cent. year to 21st e. the stock price increases from the 19th year to 20th year by 100 per cent. If a p-value reported in the Excel linear regression output associated with a particular variable is 0.04, it would indicate this variable: O a. is significant if the significance level is 5%. Ob. none of the answers provided. O c. is significant if the significance level is 1%. O d. is not significant if the significance level is 10%. Oe. is not significant if the significance level is 5%. For time series analysis, if the variable y is observed to be y-1.2-1.8, y. -2.1 and y. - 1.1, then Ay, is calculated as: a. -1 Ob. 3.2 c. -3.2 O d. 0.8 e. 0.3 TE In the linear regression models we study in this course, In (y) = a +8₂ In (X₁) + 2X2 +e, which of the following statements is the most accurate? O a. y is a linear function of x₁ and In(x₂). O b. In(y) is a linear function of In(x₁) and x2₂. Oc. X1 In(y) is a linear function of x₁ and In(x₂). y is a linear function of x₁ and x₂. O d. O e. In(y) is a linear function of In(x₁) and In(x₂). Let y represent house price measured in thousand dollars. Let x, represent natural logarithm of land size measured in square meters and x, number of bedrooms. Suppose the estimated model is ý = 10+ 2X, 0.1X₂. Which of the following statements is the most accurate? O a. The house price is predicted to increase by 20 dollars for every 1 per cent increase of land size holding number of bedrooms constant. O b. The house price is predicted to increase by 2 thousand dollars for every 1 per cent increase of land size holding number of bedrooms constant. O C. The house price is predicted to increase by 2 dollars for every 1 square meters increase of land size holding number of bedrooms constant. Od. The house price is predicted to increase by 2 per cent for every 1 per cent increase of land size holding number of bedrooms constant. Oe. The house price is predicted to increase by 2000 dollars for additional bedroom holding land size constant. The analyst wants to investigate whether there is different marginal effects of work experience (W) on earning (E) between female and male groups. She constructs a female dummy variable F=1 if female, F= O if male. She then adds an interactive dummy variable to model O a. (1-F)E O b. EF O C. F(1-W) O d. (1-F)(1-W) Oe. FW
a. The forecasted stock price at t=101 is 4.5.
b. The stock price increases from the 20th year by 1 dollar to the 21st year.
c. variable is significant if the significance level is 1%.
d. Ay is calculated as -3.2 in the given time series analysis.
e. In the linear regression model, y is a linear function of x₁ and x₂.
f. The house price is predicted to increase by 2 dollars for every 1 square meter increase in land size, holding the number of bedrooms constant.
g. The interactive dummy variable added to the model is FW.
Based on the information provided, let's address each question:
1. The analyst estimates a model as Aỹ = 2.6 + 0.5y. Given y₁ = 2, she can forecast the stock price at t = 101 to:
c. 4
2. If the analyst forecasts the model as A21 = 1, it means:
c. The stock price increases from the 20th year by 1 dollar.
3. If a p-value reported in the Excel linear regression output associated with a particular variable is 0.04, it would indicate this variable:
e. Is not significant if the significance level is 5%.
4. For time series analysis, if the variable y is observed to be y₁ = -1.2, y₂ = -1.8, and y₃ = -2.1, then Ay is calculated as:
b. 3.2
5. In the linear regression models studied, In(y) = a + β₁ In(X₁) + β₂X₂ + e, the most accurate statement is:
b. In(y) is a linear function of In(x₁) and x₂.
6. Let y represent house price measured in thousand dollars, x₁ represent the natural logarithm of land size measured in square meters, and x₂ represent the number of bedrooms. Suppose the estimated model is ý = 10 + 2x₁ + 0.1x₂. The most accurate statement is:
c. The house price is predicted to increase by 2 dollars for every 1 square meter increase in land size, holding the number of bedrooms constant.
7. The analyst wants to investigate whether there are different marginal effects of work experience (W) on earnings (E) between female and male groups. She constructs a female dummy variable F = 1 if female, F = 0 if male. The interactive dummy variable added to the model is:
b. EF
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The following section is taken from Sheridan Ltd.s balance sheet at December 31.2019. Bond interest is payable annually on January 1 . The bonds are callable on any interest date. Joumalize the payment of the bond interest on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Bond interest is payable annually on January 1 . The bonds are callable on any interest date. Journalize the payment of the bond interest on January 1. 2020.
The journal entry for the payment of bond interest on January 1, 2020, would be as follows:
Interest Expense Dr.
Dr. [Amount of interest payment]
Cash Cr. [Amount of interest payment]
The interest expense account is debited to recognize the expense incurred by the company for the bond interest payment. The cash account is credited to reflect the outgoing payment made by the company.
Please note that specific amounts were not provided in the question, so the actual values would need to be inserted into the journal entry.
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23. You have an income of $12 to spend on commodity 1 (X₁) and commodity 2 (X2). Commodity 1 cost $2 per unit and commodity 2 costs $6 per unit. The equation for your budget line can be written as:
A budget line is a straight line that shows all possible combinations of goods that someone can buy given their budget. The budget line can be found using the equation: M = P1X1 + P2X2, where M i amount of money available to spend, P1 and P2 are prices of commodities 1 and 2.
X1 and X2 are the quantities of commodities 1 and 2 that can be purchased. In this case, you have an income of $12 to spend on commodity 1 (X₁) and commodity 2 (X2), with commodity 1 costing $2 per unit and commodity 2 costing $6 per unit.
The equation for your budget line can be written as: 12 = 2X1 + 6X2 To find the slope of the budget line, we need to rearrange the equation to solve for X2 in terms of X1: X2 = (12 - 2X1) / 6
This equation shows the maximum amount of commodity 2 that can be purchased for each unit of commodity 1. The slope of the budget line is the ratio of the price of commodity 1 to the price of commodity 2, which is -1/3 in this case.
To graph the budget line, we can choose any two values of X1 and find the corresponding value of X2 using the equation we derived. For example, if X1 = 4, then X2 = (12 - 2(4)) / 6 = 1, giving us the point (4,1) on the budget line. Similarly, if X1 = 6, then X2 = (12 - 2(6)) / 6 = 0, giving us the point (6,0) on the budget line. We can plot these two points and draw a straight line through them to get the budget line.
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Phong is an insurance agent and he previously met with his client, Tuyen, to complete a life insurance application. The underwriting process is now complete and the policy has been approved and sent to Phong's office. Phong meets with Tuyen to deliver the policy. When Phong delivers the policy, he highlights an important clause. Which is the CORRECT clause that Phong would highlight? Tuyen can exercise her right of rescission for up to 10 days for a full refund of all premiums. Tuyen can reinstate her policy within two years of lapse without proof of insurability. Tuyen can exercise her right of rescission for up to 30 days for a full refund of all premiums. Tuyen can reinstate her policy within three years of lapse without proof of insurability.
When delivering the life insurance policy to Tuyen, the important clause that Phong would highlight is that Tuyen can exercise her right of rescission for up to 10 days for a full refund of all premiums.
The right of rescission in insurance refers to the policyholder's ability to cancel the policy within a specified timeframe and receive a full refund of all premiums paid. This clause provides a safety net for the policyholder in case they change their mind or find the policy unsuitable for their needs.In this scenario, the correct clause that Phong would highlight is that Tuyen can exercise her right of rescission for up to 10 days for a full refund of all premiums. This means that Tuyen has a period of 10 days after receiving the policy to review its terms and conditions and decide if she wants to proceed with the coverage. If she chooses to cancel the policy within this timeframe, she will receive a full refund of the premiums paid.
The other clauses mentioned in the options, such as reinstating the policy within two or three years of lapse without proof of insurability, may be relevant in different circumstances but are not the specific clause that Phong would highlight when delivering the policy to Tuyen.
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Assume arbitrage fund RM1,000,000, Spot exchange rate (MYR/RMB) 0.66, 1-month forward rate (MYR/RMB) 0.70, RMB 1-month interest rate 0.36% and MYR 1-month interest rate 0.16%.
1.How to calculate CIA using international parity condition?
2.Is CIA's opportunity exist or bring profit?
3.If the Spot exchange rate change to 0.60, what is the new percentage arbitrage profit or loss for
a)'cover' arbitrage investment?
b)'non cover' arbitrage investment?
Calculation of CIA using international parity condition
The Covered Interest Arbitrage (CIA) can be calculated using the formula:
CIA = [(F/S) - (1+r_base)/(1+r_quote)] * S
where:
F is the forward exchange rate
S is the spot exchange rate
r_base is the interest rate in the base currency
r_quote is the interest rate in the quote currency
In this case, the base currency is the RMB and the quote currency is the MYR. Therefore, the formula can be applied as follows:
CIA = [(0.70/0.66) - (1+0.0036)/(1+0.0016)] * 0.66
CIA = 0.0325 or 3.25%
Is CIA's opportunity exist or bring profit?
Yes, the CIA opportunity exists and it brings a profit of 3.25%.
If the Spot exchange rate change to 0.60, what is the new percentage arbitrage profit or loss for
a) 'Cover' arbitrage investment?
For 'Cover' arbitrage investment, the CIA can be calculated as follows:
CIA = [(F/S) - (1+r_base)/(1+r_quote)] * S
CIA = [(0.70/0.60) - (1+0.0036)/(1+0.0016)] * 0.60
CIA = 0.125 or 12.50%
Therefore, the new percentage arbitrage profit is 12.50% and the investment is profitable.
b) 'Non-cover' arbitrage investment?
In 'Non-cover' arbitrage investment, the profit and loss can be calculated using the formula:
Profit (or loss) = [(F - S)/S] * 100
if F > S, then the investor gains a profit
if F < S, then the investor incurs a loss
Profit (or loss) = [(0.70 - 0.60)/0.60] * 100
Profit (or loss) = 16.67% or 16.67% profit
Therefore, in 'Non-cover' arbitrage investment, the investor gains a profit of 16.67%.
The Covered Interest Arbitrage (CIA) is a strategy that can be used to make a profit from the interest rate differential between two currencies. It is calculated using the formula [(F/S) - (1+r_base)/(1+r_quote)] * S. The CIA opportunity exists and it brings a profit of 3.25% in this case. If the spot exchange rate changes to 0.60, the new percentage arbitrage profit would be 12.50% in 'Cover' arbitrage investment and 16.67% in 'Non-cover' arbitrage investment.
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Gabriele Enterprises has bonds on the market making annual payments, with 13 years to maturity, a par value of $1,000, and selling for $930. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds?
The coupon rate on the bonds must be 11%.
Given, The bonds yield 10 percent. Therefore, the yield to maturity is 10%.Par value of the bond is $1,000.The selling price of the bond is $930.Number of years to maturity is 13.The formula to calculate the coupon rate is: Total Return on Bond = Interest Income + Capital Gain (or loss)Interest Income = Coupon Rate * Par Value of Bond Interest Income = Coupon Rate * $1,000 Capital Gain (or loss) = Purchase Price of Bond - Selling Price of Bond Total Return on Bond = (Interest Income + Capital Gain) / Purchase Price of Bond Now, Let’s plug in the given values in the above formula.10% = Coupon Rate * $1,000 + ($1,000 - $930) / 13Coupon Rate * $1,000 = $70 + $70Coupon Rate = $140 / $1,000Coupon Rate = 0.14 or 14%Therefore, the coupon rate on the bonds must be 11%.
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Market failure exists if Mr. Smith cannot purchase watermelons in his town. buyers and sellers must pay the true opportunity costs of their actions. third parties are injured and are not compensated. the government must provide government-sponsored goods.
Market failure is a situation in which the market cannot allocate resources in an economically efficient manner. This is caused by various reasons such as the non-existence of information, externalities, and public goods.
When the price mechanism of a market does not reflect the true opportunity cost of production, allocation or consumption of goods and services, there is a market failure. Smith is a buyer of watermelons.
If he cannot purchase watermelons in his town, it could be due to various reasons such as the non-existence of information on the availability of watermelons, poor infrastructure for transportation, inadequate storage facilities, high prices or low-quality watermelons.
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A North Carolina blogger was criminally charged with practicing dietetics or nutrition without a license for offering potentially dangerous nutritional advice about the Paleo diet while posing as an expert. This is an example of what type of evidence? personal observation/experience example testimony factual statement/statistic O analogy
The North Carolina blogger being charged with practicing dietetics or nutrition without a license for providing potentially harmful nutritional advice about the Paleo diet while pretending to be an expert is an example of personal observation/experience evidence.
Personal observation/experience evidence refers to firsthand accounts or direct experiences that support a claim or argument. In this case, the evidence comes from the observation of the blogger's actions and the experience of individuals who interacted with the blogger and received their dietary advice.
The charges against the blogger indicate that their actions were observed and deemed as practicing dietetics or nutrition without a license. The claim of posing as an expert in the field of nutrition is based on the observation of the blogger's behavior and the advice they provided. This evidence is specific to the situation at hand and relies on the direct experience of those involved, making it an example of personal observation/experience evidence.
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How much will you have in 9 years if you save $154.00 per month for 9 years, your first savings contribution is in one month, and your expected return is 9.10 percent?(Round the value to 2 decimal places)
You will have $30,191.81 in 9 years if you save $154.00 per month for 9 years, your first savings contribution is in one month, and your expected return is 9.10 percent (rounded to 2 decimal places).
To calculate the amount, you'll have in 9 years if you save $154.00 per month for 9 years and your expected return is 9.10%, you can use the formula for future value of an annuity:
Future Value of an Annuity [tex]= Payment x ((1 + r)^n - 1) / r[/tex]
where
Payment = $154.00r = 9.10% = 0.0910 (decimal form) (rate of return)n = 9 x 12 = 108 (number of monthly payments)
Now we can substitute the values into the formula and calculate:
[tex]FV = $154.00 * ((1 + 0.0910)^{108} - 1) / 0.0910FV = $30,191.81[/tex]
Therefore, you will have $30,191.81 in 9 years if you save $154.00 per month for 9 years, your first savings contribution is in one month, and your expected return is 9.10 percent (rounded to 2 decimal places).
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The Robbins Corporation is an oil wholesaler. The firm's sales last year were $1.04 million, with the cost of goods sold equal to $630,000. The firm paid interest of $194,500 and its cash operating expenses were $105,000. Also, the firm received $42,000 in dividend income from a firm in which the firm owned 22% of the shares, while paying only $15,000 in dividends to its stockholders. The depreciation expense was $51,000. Use the corporate tax rates shown in the popup window, to compute the firm's tax liability. What are the firm's average and marginal tax rates?
The Robbins Corporation's tax liability for the year is $_____________.
The Robbins Corporation's tax liability for the year is $106,750, with an average tax rate and marginal tax rate of 35%. Tax liability refers to the amount of tax an individual or entity owes to the government based on their taxable income or activities.
To calculate The Robbins Corporation's tax liability, we need to consider the various components of the firm's income and apply the relevant tax rates. Let's break down the information provided:
Sales: $1,040,000
Cost of Goods Sold: $630,000
Interest Expense: $194,500
Cash Operating Expenses: $105,000
Dividend Income: $42,000
Dividends Paid: $15,000
Depreciation Expense: $51,000
To calculate taxable income, we start with sales and subtract the cost of goods sold and operating expenses:
Taxable Income = Sales - Cost of Goods Sold - Operating Expenses
Taxable Income = $1,040,000 - $630,000 - $105,000 = $305,000
Next, we calculate the firm's tax liability by applying the appropriate tax rates: Tax Liability = Taxable Income x Tax Rate
Using the given tax rates, we can calculate the tax liability. Let's assume a tax rate of 35% for incomes between $100,000 and $335,000:
Tax Liability = $305,000 x 35% = $106,750
Therefore, The Robbins Corporation's tax liability for the year is $106,750.
To determine the average and marginal tax rates, we need to consider the tax liability in relation to the taxable income. The average tax rate is the tax liability divided by the taxable income, and the marginal tax rate is the tax rate applicable to the next additional dollar of taxable income.
Average Tax Rate = Tax Liability / Taxable Income
Average Tax Rate = $106,750 / $305,000 = 0.35 or 35%
Since the given tax rate is constant for the entire taxable income, the marginal tax rate is also 35%.
In conclusion, The Robbins Corporation's tax liability for the year is $106,750, with an average tax rate and marginal tax rate of 35%. These calculations are based on the provided income and expense figures and the given tax rates.
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Quary Company is considering an investment in machinery with the following information.
Initial investment $ 362,000 Materials, labor, and overhead (except depreciation) $ 81,450
Useful life 9 years Depreciation—Machinery 38,000
Salvage value $ 20,000 Selling, general, and administrative expenses 9,050
Expected sales per year 18,100 units Selling price per unit $ 10
(a) Compute the investment’s annual income and annual net cash flow.
(b) Compute the investment’s payback period.
Compute the investment’s annual income and annual net cash flow.
Annual Amounts Income Cash Flow
Expenses ____ Income ____
Net cash flow ______ Compute the payback period for this investment.
Payback Period
Numerator: / Denominator: ________ / ______ = Payback period
=
Initial investment = $ 362,000 Materials, labor, and overhead (except depreciation) = $ 81,450
Depreciation—Machinery = 38,000
Salvage value = $ 20,000
Selling, general, and administrative expenses = $ 9,050
Expected sales per year = 18,100
unit selling price per unit = $ 10
(a) Compute the investment's annual income and annual net cash flow.
Annual Income = Sales - Cost of goods sold - Operating expenses
Sales = expected sales per year * selling price per unit= 18,100 * $10= $181,000
Cost of goods sold = Materials, labor, and overhead = $81,450
Operating expenses = Selling, general, and administrative expenses = $9,050
Total operating expenses = 81,450 + 9,050 = $90,500
Annual Income = $181,000 - $90,500= $90,500
Net cash flow = Annual income - Depreciation
Depreciation = (Initial cost - Salvage value) / Useful life= (362,000 - 20,000) / 9= $35,556
Net cash flow = $90,500 - $35,556= $54,944
(b) Compute the investment's payback period. Payback Period = Initial cost / Net cash flow payback Period = $362,000 / $54,944 Payback Period = 6.6 years
Therefore, the payback period of the investment is 6.6 years.
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Which of the following statements concerning profitability and revenue growth is NOT true? a. Shareholders are patient forever when it comes to profitability of the firm when sacrificed in favor of revenue growth. b. Too much emphasis on revenue growth can reduce profitability and make an enterprise less attractive to shareholders. c. Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders.d. Attaining future profit growth may require investments that reduce the current rate of profitability.
The statement that is NOT true regarding profitability and revenue growth is as follows: a. Shareholders are patient forever when it comes to profitability of the firm when sacrificed in favor of revenue growth. Discussion:
Profits are necessary for the survival and growth of any company. Profit is a company's financial gain earned after deducting all of its expenses. Revenue growth refers to the rate at which a company's income is increasing. A business must balance the necessity of making a profit with the desire to grow. Profitability and revenue growth are important factors in determining the success of a firm.
Too much emphasis on either of them could have serious consequences, as can ignoring either of them. Here are the explanations of the other given statements in the Too much emphasis on revenue growth can reduce profitability and make an enterprise less attractive to shareholders: Excessive emphasis on revenue growth can jeopardize the profitability of a company.
There are cases when the cost of revenue growth is greater than the profit. Companies frequently fail when they focus on revenue growth at the expense of profit. Profitability is critical to shareholders because it demonstrates that the business is producing a significant return on investment.
Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders: en sacrificed in favor of revenue growth is NOT true when it comes to profitability and revenue growth.
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Spreading Knowledge Group of answer choices is a hypothesis on improving society allows for the best ideas to be improved upon helps to not recreate ideas that have already been solved all of the above
Spreading knowledge in society encompasses various benefits that can contribute to improving society. The correct answer is option d "all of the above."
Firstly, it allows for the best ideas to be identified and enhanced through collaboration and collective intelligence. By sharing knowledge and experiences, individuals can build upon existing ideas, refine them, and generate innovative solutions.
Secondly, spreading knowledge helps to avoid duplicating efforts by providing access to existing information and solutions. This prevents the unnecessary reinvention of the wheel and promotes efficiency in problem-solving.
Lastly, by fostering a culture of knowledge sharing, society can continuously evolve and progress by leveraging the collective wisdom and experiences of its members.
Overall, embracing the principles of spreading knowledge enables society to tap into its full potential, promote innovation, and address complex challenges effectively.
The correct answer is "all of the above."
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Complete Question
Spreading Knowledge Group of answer choices
a. is a hypothesis on improving society
b. allows for the best ideas to be improved upon
c. helps to not recreate ideas that have already been solved
d. all of the above
To break out of the reputation of an inexperienced newcomer, a person should Multiple Choice 0 incorporate the l-voice in business messages as often as possible. 0 attend a lot of meetings to get to know as many colleagues as possible, 0 stand out from the corporate culture in terms of dress and communication, 0 avoid taking on projects that will reveal inexperience. 0 be careful not to waste time on extras like creating a professional blog.
To break out of the reputation of an inexperienced newcomer, a person should stand out from the corporate culture in terms of dress and communication.
The correct answer is to stand out from the corporate culture in terms of dress and communication. By presenting oneself professionally and confidently, dressing appropriately, and communicating effectively, an individual can create a positive impression and demonstrate competence in their role. This can help overcome the perception of being inexperienced and establish credibility among colleagues and superiors.
Incorporating the l-voice in business messages as often as possible (option 1) may not necessarily address the issue of being seen as an inexperienced newcomer.
Attending a lot of meetings to get to know as many colleagues as possible (option 2) can be beneficial for networking and building relationships, but it may not directly address the perception of inexperience.
Avoiding taking on projects that will reveal inexperience (option 4) may limit growth opportunities and prevent the individual from gaining valuable experience and learning.
Creating a professional blog (option 5) can be a valuable tool for showcasing expertise and building a professional brand, which can help overcome the reputation of being inexperienced.
Therefore, the most effective approach is to stand out from the corporate culture in terms of dress and communication, as it demonstrates professionalism and confidence, helping to break out of the reputation of an inexperienced newcomer.
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Consider the information below for a 2-assets portfolio. Calculate aggregate DEAR (daily earnings at risk) for this portfolio. DEAR of five-year zero-coupon bonds = $17980 DEAR of Australian dollar (AUD) spot contract = $5580 Correlation of zero-coupon bonds and AUD spot position = -0.2
The aggregate DEAR (daily earnings at risk) for the 2-assets portfolio is $21,284.
To calculate the aggregate DEAR, we need to consider the individual DEAR values for each asset and the correlation between them. The formula for calculating aggregate DEAR is:
Aggregate DEAR = √(DEAR1^2 + DEAR2^2 + 2 * DEAR1 * DEAR2 * Correlation)
Given that DEAR of zero-coupon bonds (DEAR1) is $17,980, DEAR of AUD spot contract (DEAR2) is $5,580, and the correlation between them is -0.2, we can substitute these values into the formula:
Aggregate DEAR = √(17980^2 + 5580^2 + 2 * 17980 * 5580 * -0.2)
= √(323204400 + 31161600 + (-399420960))
= √(−645924960)
= $21,284
Therefore, the aggregate DEAR for the portfolio is $21,284. This value represents the potential loss the portfolio may experience on a daily basis, taking into account the individual DEAR values and the correlation between the assets.
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Which of the following statements about the market maneuvering for buyer patronage that goes on among rival sellers of a product or service is false? Each competing company endeavors to deploy whatever means in its business arsenal it believes will attract and retain buyers. enhance its competitive strength vis-a-vis rivals, and yield good profits. The ever-changing competitive maneuvering among industry rivals produces a continually evolving competitive landscape where the market battle ebbs and flows, sometimes takes unpredictable tyists and turns, and produces winners and losers The ongoing jooreying of rivals leads to some companies gaining or tosing momentum in the: marketplace based on the success or failure of their latest competitive efforts and maneuvering in the marketplace. When one industry competitor makes a new strategic move or boosts its competitive efforts in ways that yield good results its rivals typically respond with offensive or defensive countermoves of their own A market is a competitive battlefield where the winners are usually companies with a large market share of industry sales and the losers are companies with a small market share. A Copying. redistributing or website posting is expressly prohibited and conslitutes
The statement that winners are usually companies with a large market share and losers are companies with a small market share oversimplifies the dynamics of market competition and does not accurately reflect the complexities involved.
The false statement is: "a market is a competitive battlefield where the winners are usually companies with a large market share of industry sales and the losers are companies with a small market share."
while market share can be a factor in determining success or failure, it is not always the sole determinant. companies with a small market share can still be successful and profitable if they have a niche market, unique offerings, or a differentiated value proposition. market dynamics are complex, and success can be influenced by various factors such as product quality, customer service, innovation, pricing strategies, and effective marketing campaigns.
additionally, companies with a large market share are not guaranteed to be winners. they may face challenges from smaller competitors, disruptive technologies, changes in consumer preferences, or external market forces. success in the market is contingent on a range of factors beyond just market share.
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A farm that produces corn is looking to hedge their exposure to price fluctuations in the future. It is
now May 15th and they expect their crop to be ready for harvest September 30th. You have gathered the following information: Bushels of corn they expect to produce 44,000 May 15th price per bushel $3.08 Sept 30 futures contract per bushel $3.22 Actual market price Sept 30 $3.37 Required (round to the nearest dollar): Calculate the gain or loss on the futures contract and net proceeds on the sale of the corn.
Net gain or loss on future $Answer
Sell the corn $Answer
Net $Answer
The gain or loss on the futures contract is **$6,160** and the net proceeds on the sale of the corn is **$148,480**. The overall net amount is **$154,640**.
To calculate the gain or loss on the futures contract, we first determine the price difference between the May 15th price per bushel ($3.08) and the Sept 30 futures contract per bushel ($3.22). The difference is $0.14 per bushel.
Gain or loss on futures contract = Price difference per bushel × Number of bushels
Gain or loss on futures contract = $0.14 × 44,000 = $6,160
To calculate the net proceeds on the sale of the corn, we consider the actual market price on Sept 30 ($3.37) and subtract the May 15th price per bushel ($3.08). The difference is $0.29 per bushel.
Net proceeds on the sale of the corn = Price difference per bushel × Number of bushels
Net proceeds on the sale of the corn = $0.29 × 44,000 = $12,760
The overall net amount is obtained by adding the gain or loss on the futures contract ($6,160) to the net proceeds on the sale of the corn ($12,760).
Net = Gain or loss on futures contract + Net proceeds on the sale of the corn
Net = $6,160 + $12,760 = $18,920
Therefore, the gain or loss on the futures contract is $6,160, the net proceeds on the sale of the corn is $12,760, and the overall net amount is $18,920.
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You are the Purchasing Buyer responsible for service contracts for G&H Industrial Manufacturer. Your janitorial contract is due for renewal. Dwaine the Area Manager for the Facilities Department approaches you to discuss the need to go out to the marketplace and conduct a Request for Quotation (RFQ) to negotiate a three (3) year contract. The current supplier for the janitorial service is Jansen Cleaning Company. 1. What will you request from Dwaine prior to starting the Request for Quote process? What document(s) will you need from Dwaine? How can you as the buyer help Dwaine with the document(s)? 2. Explain the types of information you will need to complete the Request for Quote Document. Choose 3 areas of a Request for Quote document and explain why these details are important to the process s 3. What is the minimum number of suppliers you would invite for the Request for Quote? Why? 5 points 4. What steps would you take to identify prospective suppliers? How would you qualify if the supplier meets the requirements to bid on the janitorial contract?\5. Once you've selected the suppliers for the RFQ, as the Buyer, how would you conduct the RFQ? What steps would you take to complete the RFQ? Hint: How would you conduct the RFQ? In person, auction, email etc... Explain which process you would choose, how you would conduct it and why.
By following a structured RFQ process, involving adequate supplier evaluation and transparent communication, the buyer can identify the best-suited supplier for the janitorial contract and negotiate favorable terms for the company.
Prior to starting the Request for Quote (RFQ) process, I would request the following documents from Dwaine, the Area Manager for the Facilities Department:
Current janitorial service contract with Jansen Cleaning Company: This document will provide important information such as contract terms, pricing, and scope of services.
Performance evaluation of Jansen Cleaning Company: This document will help assess the supplier's performance and identify any areas of concern or improvement.
Specifications and requirements for the janitorial service: This document will outline the specific needs and expectations for the janitorial service, including frequency, tasks, and quality standards.
As the buyer, I can help Dwaine with these documents by reviewing and analyzing them to identify any issues or areas that need improvement. I can also assist in clarifying and refining the specifications and requirements to ensure they are comprehensive and aligned with the company's needs.
The Request for Quote document will require various types of information, including:
Scope of services: Clearly defining the tasks, responsibilities, and performance expectations for the janitorial service.
Contract duration and renewal terms: Indicating the desired contract period and any renewal options.
Pricing structure and payment terms: Outlining how the pricing will be determined (e.g., hourly rates, fixed monthly fee) and the expected payment terms.
These details are important because they provide clarity to prospective suppliers about the company's requirements and expectations. They enable suppliers to provide accurate and competitive quotes, ensuring a fair comparison of their proposals.
The minimum number of suppliers invited for the RFQ will depend on the specific requirements and market conditions. However, it is generally recommended to invite a sufficient number of qualified suppliers to ensure competition and obtain competitive quotes. Inviting at least three suppliers is a common practice, as it provides a reasonable range of options and allows for meaningful comparisons. Having multiple suppliers also helps mitigate the risk of relying on a single supplier.
To identify prospective suppliers, I would take the following steps:
Conduct market research: Identify reputable janitorial service providers through online directories, industry associations, trade shows, and referrals.
Assess supplier qualifications: Evaluate suppliers based on their experience, capabilities, financial stability, reputation, and adherence to regulatory requirements.
Request supplier information: Ask potential suppliers to submit their company profiles, references, and relevant certifications or licenses.
Prequalification assessment: Review the supplier information and qualifications to ensure they meet the minimum requirements to bid on the janitorial contract.
To conduct the RFQ, I would choose an electronic submission process such as email or an online bidding platform. The steps involved in the RFQ process would include:
Prepare and distribute the RFQ document to the selected suppliers.
Provide a deadline for the submission of quotes.
Respond to supplier inquiries and clarifications promptly.
Evaluate the received quotes based on predefined evaluation criteria, such as price, experience, capability, and compliance with specifications.
Select the most suitable supplier based on the evaluation results and negotiate contract terms if necessary.
Choosing an electronic submission process allows for efficient communication and documentation of the bidding process. It also ensures fairness and transparency in evaluating and comparing supplier quotes.
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For a given country, the impact of expansionary monetary policy is . For a given country, the impact of expansionary monetary policy is .
1. diminished if banks are not willing to extend loans to individuals and businesses
2. enhanced if it leads to significant levels of inflation
3. generally the same regardless of commercial banks’ lending policies
Expansionary monetary policy is a macroeconomic tool used by a country's monetary authorities to stimulate economic growth by increasing the money supply. Expansionary monetary policy has different impacts on countries depending on various factors, including commercial bank lending policies and the level of inflation.
For a given country, the impact of expansionary monetary policy is generally the same regardless of commercial banks' lending policies. This is because monetary policy is determined by the central bank, which is responsible for implementing monetary policy and managing the money supply. Commercial banks may adjust their lending policies in response to changes in the monetary policy, but they do not influence the policy itself.
However, the impact of expansionary monetary policy is enhanced if it leads to significant levels of inflation. Inflation is a measure of the rate at which the general level of prices for goods and services is rising and, if it rises significantly, it can reduce the real value of money. This can encourage borrowing and spending, which can further stimulate economic growth. However, if inflation gets too high, it can lead to a number of economic problems, such as reduced investment and economic instability.
In conclusion, expansionary monetary policy is an effective tool for stimulating economic growth, but its impact varies depending on different factors. While commercial bank lending policies do not significantly influence the impact of monetary policy, the level of inflation can enhance or limit the impact of expansionary monetary policy.
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Dana intends to invest $20,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax and the corporate bond yields 6 percent before tax. Dana's federal marginal rate is 25 percent and her marginal state rate is 5 percent. What is the amount by which the yield on the corporate bond exceeds the yield on the Treasury bond. Assume that Dana itemizes her deductions and that any state income tax would be fully deductible.
_____________
Matt and Meg Comer are married. They do not have any children. Matt works as a history professor at a local university and eams a salary of $70,000. Meg works part-time at the same university. She eams $37,000 a year. The couple does not itemize deductions and made no charitable contributions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). What is the Comers' tax liability for 2021 if they report the following capital gains and losses for the year? Short-term capital gains $9,000
Short-term capital losses ($2,000)
Long-term capital gains $15,000
Long-term capital losses ($6,000)
The yield on the corporate bond exceeds the yield on the Treasury bond by $83.
Treasury bond:
Income from Treasury bond before tax = 5% × $20,000 = $1,000
Taxable income = $1,000
Federal tax = 0.25 × $1,000 = $250
State tax = 0.05 × $1,000 = $50
After-tax income = $1,000 − $250 − $50 = $700
Corporate bond:
Income from Corporate bond before tax = 6% × $20,000 = $1,200
Taxable income = $1,200
Federal tax = 0.25 × $1,200 = $300
State tax = 0.05 × $1,200 = $60
After-tax income = $1,200 − $300 − $60 = $840
The amount by which the yield on the corporate bond exceeds the yield on the Treasury bond is $840 − $700 = $140.
Therefore, the yield on the corporate bond exceeds the yield on the Treasury bond by $140.
The tax liability for 2021 if they report the following capital gains and losses for the year is $4,800.
How to calculate tax liability for 2021?:
$9,000 short-term capital gains + $15,000 long-term capital gains − $2,000 short-term capital losses − $6,000 long-term capital losses = $16,000 net capital gains
The couple's salary of $70,000 + $37,000 = $107,000 makes them fall in the 24% tax bracket for 2021. They must also pay tax on the $16,000 capital gains, which is taxed at a lower rate.
Calculating capital gains tax:
$16,000 net capital gains × 15% = $2,400
Total tax liability for 2021 = $14,040 + $2,400 = $16,440
Therefore, the Comers' tax liability for 2021 if they report the following capital gains and losses for the year is $16,440.
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Which one of the following statements on the rebound effect is correct?
a. It is only due to an increase in income.
b. It is the reduction in energy savings due to the implicit energy price decrease that occurs with an increase in energy efficiency.
c. It has no effect on energy use.
d. It increases savings in energy.
b: It is the reduction in energy savings due to the implicit energy price decrease that occurs with an increase in energy efficiency.
This concept refers to the unintended increase in overall energy use resulting from more efficient usage, commonly seen in various sectors. The rebound effect occurs when advancements in energy efficiency reduce the cost of using energy, leading to increased consumption. It's a complex phenomenon that is subject to different factors such as behavioral changes, economic adjustments, and systemic effects. Thus, it doesn't necessarily result in an increase in energy savings, nor is it purely driven by income rise, and it does impact overall energy usage.
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Show the relationship between financial markets, instruments and financial institutions using a diagramme or a model to reflect your understanding. Be sure to explain your model and the relationship between the parts
Financial markets, instruments, and institutions form a complex ecosystem, with each component relying on and influencing the others. Financial institutions bridge the gap between savers and borrowers, using financial instruments available in the markets to facilitate capital allocation and wealth creation.
Financial markets are platforms where buyers and sellers trade financial assets such as stocks, bonds, currencies, and commodities. These markets facilitate the flow of funds between borrowers (such as individuals, corporations, and governments) and lenders (such as investors and financial institutions). Financial instruments, on the other hand, are the specific contracts or securities that represent ownership, debt, or other financial rights. Examples include stocks, bonds, derivatives, and mutual funds.
Financial institutions play a crucial role in connecting financial markets and instruments. They act as intermediaries by providing various financial services, including lending, investing, and facilitating transactions. These institutions include banks, credit unions, insurance companies, investment banks, pension funds, and asset management firms. They gather funds from savers and channel them towards borrowers and investment opportunities.
The relationship between these components can be explained as follows: Financial institutions participate in financial markets as both buyers and sellers of financial instruments. For example, banks issue loans (financial instruments) to borrowers and also invest in stocks or bonds (financial instruments) for their own portfolios. Financial institutions also provide liquidity to the markets by acting as market makers, facilitating trading and ensuring there are buyers and sellers for various financial instruments.
Furthermore, financial markets provide a platform for investors and financial institutions to buy and sell financial instruments, enabling them to manage their portfolios and generate returns. Investors can access financial instruments through these markets, while financial institutions use their expertise to assess risks and make investment decisions.
Overall, financial markets, instruments, and institutions form a complex ecosystem, with each component relying on and influencing the others. Financial institutions bridge the gap between savers and borrowers, using financial instruments available in the markets to facilitate capital allocation and wealth creation. The interactions and relationships among these elements are crucial for the efficient functioning of the overall financial system.
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Harrison Company expects to sell 150,000 units of Its product next year, which would generate total sales of $12,000,000 Management predicts that income for next year will be $1,200,000 and that the contribution margin per unit will be $30. Complete the below table to calculate the next year's expected variable costs and fixed costs. HARRISON COMPANY Forecasted Contribution Margin Income Statement Units $ per unit Contribution margin 150,000 S 30
The below table will be completed to calculate next year's expected variable costs and fixed costs: Harrison Company's Forecasted Contribution Margin Income Statement Units $ per unit Contribution margin150,000 $30 $4,500,000
Calculation for Forecasted variable costs: Particulars Amount ($)Contribution margin $4,500,000Variable costs $3,300,000
Calculation :Variable costs= Contribution margin - Income
Forecasted variable costs for next year will be $3,300,000.
Calculation for Forecasted fixed costs: Particulars Amount($) Contribution margin $4,500,000Fixed costs $3,300,000
Calculation :Income = Contribution margin - Fixed costs
Fixed costs = Contribution margin - Income Forecasted fixed costs for next year will be $3,300,000.
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3. M acquired a small lot in a subdivision, paying P20,000 down and pledge to pay P1,500 every 3 months for the next 10 years. The seller figured interest at 12% compounded quarterly. Show the cash flow diagram. a. What was the cash price of the lot? b. If M missed the first 12 payments, what must he pay at the time the 13 th is due to bring himself up to date? c. After making 8 payments, M wished to discharge his remaining indebtedness by a single payment at the time when 9 th regular payment was due, what must he pay in addition to the regular payment then due? d. If M missed the first 10 payments, what must he pay when the 11 th payment is due to discharge his entire indebtedness?
Amount required = Sum of missed payments + Present value of remaining payments + Interest on that amount = P21,031.49 + P43,365.44(1.03)^10 + P43,365.44 = P94,814.06
Cash flow diagram: The cash flow diagram for the given problem is shown below. Calculation: Principal = P = P20,000Interest rate = r = 12% per quarter Time period = n = 40 quarters (since payments are made every 3 months for 10 years)Regular payment = A = P1,500 a) The cash price of the lot is the sum of all the present values of payments and the down payment. Since payments are made quarterly and interest is compounded quarterly, we have i = r/4 = 0.12/4 = 0.03. The cash price is given by: Cash price = Present value of down payment + Present value of payments Present value of down payment = P 20,000 Present value of payments = A[1-(1+i)^-n]/i = 1500[1-(1+0.03)^-40]/0.03 = P104,391.52 .
Therefore, the cash price of the lot is: Cash price = Present value of down payment + Present value of payments = P20,000 + P104,391.52 = P124,391.52 b) If M missed the first 12 payments, he must pay to bring himself up to date the sum of the 12 regular payments plus interest at 12% compounded quarterly on each payment. The amount of one regular payment in quarterly installments is i + 1. Therefore, the amount of 12 regular payments is 12A(1+i)^12 = 12[1500(1.03)^12] = P25,656.10 The amount of interest on each of the 12 missed payments is A(1+i)^12- A. Therefore, the total interest on 12 missed payments is 12A(1+i)^12- 12A = 12A[(1+i)^12-1] = 12[1500((1.03)^12-1)] = P14,696.56 Therefore, M must pay the sum of the 12 regular payments and the interest on the missed payments to bring himself up to date.
Amount to be paid = P25,656.10 + P14,696.56 = P40,352.66 c) After making 8 payments, M wished to discharge his remaining indebtedness by a single payment. Therefore, the remaining number of payments is n - 8 = 40 - 8 = 32. The amount required to discharge the remaining indebtedness will be the present value of the remaining 32 payments plus interest at 12% compounded quarterly. The present value of remaining payments = A[1-(1+i)^-n]/i = 1500[1-(1+0.03)^-32]/0.03 = P34,786.80 . Therefore, the amount required to discharge the remaining indebtedness will be the present value of remaining payments plus interest on that amount. Amount required = Present value of remaining payments + Interest on that amount = P34,786.80(1.03)^9 + P34,786.80 = P45,299.56
d) If M missed the first 10 payments, he must pay to discharge his entire indebtedness the sum of the 10 missed regular payments plus the sum of all the remaining payments and interest on both. The sum of 10 missed regular payments is 10A(1+i)^10 = 10[1500(1.03)^10] = P21,031.49 The amount of interest on the 10 missed payments is 10A(1+i)^10- 10A = 10A[(1+i)^10-1] = 10[1500((1.03)^10-1)] = P4,981.45 The amount required to discharge the remaining indebtedness will be the present value of the remaining 30 payments plus interest at 12% compounded quarterly. The present value of remaining payments = A[1-(1+i)^-n]/i = 1500[1-(1+0.03)^-30]/0.03 = P43,365.44
Therefore, the amount M must pay when the 11th payment is due to discharge his entire indebtedness is the sum of the 10 missed regular payments, the interest on the missed payments, and the present value of the remaining payments plus interest on that amount. Amount required = Sum of missed payments + Present value of remaining payments + Interest on that amount = P21,031.49 + P43,365.44(1.03)^10 + P43,365.44 = P94,814.06
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