The annual loan payment for a $25,000 loan with a 5% interest rate and a 10-year term, starting at the end of year 1, is approximately $3,236.21.
To calculate the annual loan payments, we can use the formula for the present value of an ordinary annuity. The formula is: Loan Payment = Loan Amount / Present Value Annuity Factor. In this case, the loan amount is $25,000 and the loan term is 10 years. The interest rate is 5%. Since the payments start at the end of year 1, we consider it as an ordinary annuity.
To find the present value annuity factor, we can use the formula: Present Value Annuity Factor = [tex]\frac{{1 - (1 + r)^{-n}}}{{r}}[/tex], where r is the interest rate and n is the number of periods. Using the given values, we can calculate the present value annuity factor:
r = 5% = 0.05
n = 10
Present Value Annuity Factor = [tex]\frac{{1 - (1 + 0.05)^{-10}}}{{0.05}} = 7.7217[/tex]
Now, we can calculate the annual loan payment:
Loan Payment = $25,000 / 7.7217
= $3,236.21
Therefore, the annual loan payment for this scenario is approximately $3,236.21.
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: Use the following to answer questions 93-96: Norman Enterprises has a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours (DLHs). The company has provided the following data concerning its fixed manufacturing overhead costs for last year: Total actual fixed overhead cost incurred ..... $42,000 $6,000 12,500 Fixed overhead cost overapplied....... Number of units produced... Volume variance, unfavorable. Standard labor-hours per unit... $3,600 1.6 DLHS 94. The budgeted fixed overhead cost last year was: A) $41,000 B) $42,000 C) $44,400 D) $51,600 Answer: D Level: Hard LO: 5 95. The budget variance for fixed overhead last year was: A) $9,600 F B) $9,600 U C) $2,400 F D) $2,400
Using this information, we can determine the budgeted fixed overhead cost and the budget variance for fixed overhead. The budgeted fixed overhead cost last year was D) $51,600. The budget variance for fixed overhead last year was B) $9,600 U
To calculate the budgeted fixed overhead cost, we need to subtract the overapplied cost from the total actual fixed overhead cost incurred. From the given data, the overapplied fixed overhead cost is $6,000. Therefore, the budgeted fixed overhead cost is $42,000 - $6,000 = $36,000.
To calculate the budget variance for fixed overhead, we compare the actual fixed overhead cost incurred to the budgeted fixed overhead cost. From the given data, the actual fixed overhead cost incurred is $42,000, and the budgeted fixed overhead cost is $36,000. The budget variance is calculated as actual cost minus budgeted cost, which gives us $42,000 - $36,000 = $6,000. Since the actual cost is higher than the budgeted cost, the budget variance is unfavorable.
Therefore, the answers to the questions are:
The budgeted fixed overhead cost last year was D) $51,600.
The budget variance for fixed overhead last year was B) $9,600 U.
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Based on the accompanying table and assuming that returns to capital are positive but diminishing, then total packages wrapped when a fourth machine is installed must be packages. Number of (Identical) Machines 1 Total Packages Wrapped 10,000 15,000 18,000 2 3 Multiple Choice less than 18.000 more than 20,000 more than 3,000 less than 21,000
The correct answer is: less than 21,000. Based on the information given in the table, the total packages wrapped increase as more machines are installed.
The total packages wrapped are 10,000 when there is 1 machine, 15,000 when there are 2 machines, and 18,000 when there are 3 machines.
Since the returns to capital are positive but diminishing, it means that the increase in total packages wrapped becomes smaller with each additional machine. Therefore, when a fourth machine is installed, the total packages wrapped must be less than 21,000.
The correct answer is: less than 21,000.
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Question 1: (Total = 10) A time study was conducted at the harness installation station for the Hyundai assembly line. The time study has highlighted some concerns. You are not confident that this time study is representative enough and would like to analyze the data below. 1.1 Calculate the number of additional time studies required, using the formula provided, to establish a standard time for the current way of working. n = (40/n'>x² - (5x)²² ΣΧ Results Cycle Time Calculation 1 2.05 2 4.35 3 3.69 4 2.78 5 4.15 6 1.85 7 2.24 8 3.36 9 2.12 10 3.11 1.2 What would you recommend in order to reduce the current number of additional time studies required? (2) 1.3 Based on your recommendations, explain how this will address muda, muri & mura in an effort to build a robust process
1.1 Calculation for number of additional time studies required:In order to calculate the number of additional time studies required to establish a standard time for the current way of working, the following formula has been provided:n = (40/n') x² / (ΣΧ - (ΣΧ²/n'))Here, n' = number of time studies conductedΣΧ = sum of observed timesΣΧ² = sum of squares of observed times
Using the given data above:ΣΧ = 28.30ΣΧ² = 86.235n' = 10Hence,n = (40/10) (28.30)² / (86.235 - (28.30²/10))= 2.93 ~ 3 (rounding off to nearest whole number)Therefore, we require 3 additional time studies to establish a standard time for the current way of working.1.2 Recommendation for reducing the current number of additional time studies required:To reduce the current number of additional time studies required, we need to increase the number of observations in each time study. The formula used for calculating n shows that n is inversely proportional to the square of the observed times. Therefore, by increasing the observed times in each study, we can reduce the number of studies required.1.3 How this will address muda, muri, and mura in an effort to build a robust process:By reducing the number of additional time studies required, we can reduce the amount of muda or waste associated with conducting these studies. This will help to streamline the process and make it more efficient.
Additionally, by increasing the number of observations in each time study, we can reduce the muri or overburden associated with conducting multiple studies. Finally, by establishing a standard time for the current way of working, we can reduce the mura or variation in the process, which will help to build a more robust process.
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The relationship between marketing research and marketing strategy,
How such marketing strategy affect market research and how marketing research affect the marketing strategy?
Ritz Carlton hotel want to attract more business travelers during the weekend in the hotel
(don't make it too long)
A well-defined marketing strategy will help a company to achieve its marketing goals by using the most effective marketing tactics. Marketing research and marketing strategy are interdependent, and both are critical to the success of any marketing campaign.
Marketing research is essential for any company to develop a marketing strategy. A marketing strategy is a company's long-term plan for achieving its marketing goals.Marketing research is the process of gathering, analyzing, and interpreting data related to a company's market, customers, and competitors. The aim of marketing research is to obtain valuable information to help a company make informed decisions about its marketing activities. A marketing strategy will help a company to achieve its marketing goals by using a variety of marketing tactics such as advertising, public relations, direct marketing, and sales promotion. A well-defined marketing strategy will help a company to focus its resources and efforts on the most effective tactics to achieve its goals. Ritz Carlton hotel wants to attract more business travelers during the weekend in the hotel. In order to achieve this goal, the hotel needs to conduct marketing research to identify the needs and preferences of business travelers. Marketing research will help the hotel to understand the characteristics of its target market, such as their demographics, lifestyle, and behavior. This information will help the hotel to develop a marketing strategy that is specifically tailored to the needs of business travelers. The marketing strategy will include tactics such as special offers, promotions, and discounts to attract business travelers. In conclusion, marketing research is essential for developing a marketing strategy. A well-defined marketing strategy will help a company to achieve its marketing goals by using the most effective marketing tactics. Marketing research and marketing strategy are interdependent, and both are critical to the success of any marketing campaign.
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Case 10: Fenghua's Organizational Structure Change
Casp?.
Fenghua Property Services Co. Ltd. (hereinafter referred to as "Fenghua") was established in
Guangzhou in August 1991 as a private enterprise invested by natural persons. Fenghua engages
in property services for office, government logistics, urban complex, commercial plaza, and
residential buildings, public transportation system services, urban integrated services, public
utility services, road cleaning, etc. In recent years, Fenghua began to operate nationwide and has
expanded its market territory to 39 cities in 20 provinces with an annual revenue growth of 28%.
The company's fast growth was good, but Mr. Bai, the legal representative and chief executive
officer of Fenghua, was worried that despite many directions to go with, the company didn't have
distinctive specialties and lacked competence. As its scale increased and businesses varied, the
original organizational structure could not meet the needs of a fast-growing company. Then
Fenghua decided to be a city service provider at the end of 2018. The company management had
various opinions on the organizational change adapting to the new role and some of them were
even completely opposite. Mr. Bai was hesitant to make up his mind.
1. To specialize or regionalize?
Mr. Bai recalled that Fenghua has always kept sensitive and flexible to the external environment
for over 30 years of development. At the outset, the company mainly engaged in the property
management of old residential properties and later positioned itself as hotel-style property
management. When real estate developers from other cities rushed to the rising market in
Guangzhou, Bai began to develop Fenghua's business in commercial office and started a major
transformation from "residential property service provider" to "office building service provider"
The latter soon became Fenghua's main business, but an oversupply of office buildings,
difficulties in recovering service fees and other emerging problems pushed a second
transformation from "office building service provider" to "city service provider". The city services
mainly for government buildings and public properties has become a major business as its
proportion increases year by year.
Fenghua's management model gives priority to independent development of each regional branch,
combined with the coordination of functional departments and the performance assessment and
management of branches and subsidiaries by the head office (see Figure1)
Mr. Zhao is the Chairman of Fenghua Property Services Co., Ltd, and the second largest
shareholder. "This is dilemma. There is only one specialized parking management while the rest
are regional branch companies. It is difficult to share resources with specialized development. If
we let specialized companies to work on something like bidding projects outside a province, one
city will have several companies get involved, which causes a great waste of manpower. In
contrast, our regional development people are very familiar with their local markets." said Zhao.
Mr. Wang then said, "Our company has always encouraged regional branches to actively expand
the market. Personal income is closely related to the total number of projects taken, which easily
results in cliques where talent rotation cannot be promoted. The establishment of specialized
subsidiaries allows independent business accounting, and makes it clear for resources input. We
don't have a regional branch that fully focuses on one speciality. As a result, one project can be
managed very differently between branches. Competition advantages on specialized service are to
be improved urgently. We also have high-cost business with low profit and the difficulty in
developing value-added business. This requires us to dig into specialized research on multi-mode
business."
It combined with the coordination of functional departments and the performance assessment and management of branches and subsidiaries by the head office. Mr. Zhao, the Chairman of Fenghua Property Services Co., Ltd, and the second-largest shareholder, is of the view that there is only one specialized parking management while the rest are regional branch companies.
Fenghua Property Services Co. Ltd. has had a remarkable history of development, and their organizational structure changed with time. Initially, Fenghua Property Services Co. Ltd was established as a private enterprise invested by natural persons in Guangzhou in August 1991. Over the years, the company expanded its market territory and now operates in 39 cities in 20 provinces. However, as the business grew and diversified, the company's original organizational structure could not keep up with the pace of growth.In response to this issue, Fenghua decided to be a city service provider by the end of 2018. However, the company management had different views on the organizational change that will be required to adapt to the new role. Some of them were even completely opposite. Mr. Bai, the legal representative and CEO of Fenghua, was hesitant to make up his mind. Fenghua's management model gives priority to the independent development of each regional branch. It combined with the coordination of functional departments and the performance assessment and management of branches and subsidiaries by the head office. Mr. Zhao, the Chairman of Fenghua Property Services Co., Ltd, and the second-largest shareholder, is of the view that there is only one specialized parking management while the rest are regional branch companies. Therefore, it is difficult to share resources with specialized development. In contrast, Mr. Wang, another executive, believes that the establishment of specialized subsidiaries allows independent business accounting and makes it clear for resource input. Wang is of the view that the competition advantages on specialized services need to be improved urgently. Additionally, the company has a high-cost business with low profit and the difficulty in developing value-added business. Therefore, the company needs to delve into specialized research on multi-mode business.
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In the EOQ model, how does the optimal order size change when
the fixed ordering cost doubles?
a.
It doubles
b.
It halves
c.
It increases by √2S/H
d.
It increases by √2
The EOQ (Economic Order Quantity) model is a decision-making tool used to find the optimal order quantity for inventory management that minimizes the total cost of inventory. When the fixed ordering cost doubles in the EOQ model, the optimal order size increases by √2. Therefore, the correct answer is option D (It increases by √2).
The EOQ model is an inventory management tool used to determine the optimal quantity of goods to purchase at a given time to minimize inventory costs. The EOQ model takes into account the carrying cost per unit, the ordering cost, and the annual demand. In the EOQ model, the optimal order quantity is calculated using the following formula: EOQ = √((2SD)/H) Where S = Setup (or ordering) cost per order D = Annual demand of the product H = Holding (or carrying) cost per unit. In the EOQ model, the optimal order quantity is directly proportional to the square root of the annual demand and inversely proportional to the square root of the holding cost and the setup cost per order. This means that if any of these three variables change the optimal order quantity will also change. Now, if the fixed ordering cost doubles, the formula will change as follows: EOQ = √((2SD)/(2H)) EOQ = √((SD)/H) × √2EOQ = √2 × EOQ. The formula shows that if the fixed ordering cost doubles, the EOQ increases by √2. Therefore, the correct answer is option D (It increases by √2).
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the firm would maximize its profit by employing labor to the point where ________ equals ________
It is critical for the firm to find the optimal balance between labor cost and output produced in order to maximize profit.
The firm would maximize its profit by employing labor to the point where the marginal revenue product of labor equals the marginal resource cost. This occurs when the cost of hiring an additional worker is the same as the revenue generated by that worker. Hence, the point where the two lines intersect is the profit-maximizing level of employment. It is critical for the firm to find the optimal balance between labor cost and output produced in order to maximize profit. This occurs when the cost of hiring an additional worker is the same as the revenue generated by that worker. Hence, the point where the two lines intersect is the profit-maximizing level of employment.
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In the robotics industry, the market demand is: QD= 18,000 - 300P. Each firm shares the same cost function: C(q) = 200 + 2q² The relevant average cost function is AC(q) = 200/q + 2q. The relevant marginal cost function is MC(q) = 4q. Assume this industry is a constant-cost industry (i.e., the long run industry supply curve is a horizontal line.) Please find the lowest average cost and the corresponding output level of each firm. (5 marks) b. If each firm earns zero economic profit in the short run, what is the market price? How many firms are there in this industry? (6 marks) c. Please find the consumer surplus and producer surplus for the market in the short run. (6 marks) Now the government starts to impose a tax $15 per unit on all the firms in this industry. So, each firm's total cost is C(q) = 200 + 15q + 2q². Suppose no firm exits the industry in the short run; also no new firms enter the industry in the short run. Each firm maximizes its profit by producing 7.5 units. d. Calculate the economic profit or loss for a representative firm in the robotics industry in the short run. (6 marks) e. What is the producer surplus for the market in the short run? (6 marks) f. What will happen to this industry in the long run? How many firms will be in this industry in the long run? (6 marks)
The robotics industry operates with approximately 171 firms in the short run, achieving zero economic profit, while the imposition of a tax results in economic losses for representative firms.
a. To find the lowest average cost and the corresponding output level for each firm, we set the average cost function (AC) equal to the marginal cost (MC) and solve for q:
200/q + 2q = 4q
200 = 4q²
q² = 50
q = √50 ≈ 7.07
So, the lowest average cost is achieved when each firm produces approximately 7.07 units.
b. In the short run, if each firm earns zero economic profit, the market price will be equal to the minimum average cost (AC) at the output level of each firm. Plugging the value of q = 7.07 into the AC function:
AC(q) = 200/7.07 + 2(7.07) ≈ 56.49
Therefore, the market price is $56.49, and to calculate the number of firms, we divide the market demand (QD) by the output level of each firm (q):
QD = 18,000 - 300P
18,000 - 300(56.49) = 1,207.3
Number of firms = QD / q = 1,207.3 / 7.07 ≈ 170.79
Since firms cannot be fractional, there are approximately 171 firms in this industry.
c. To find the consumer surplus and producer surplus in the short run, we need to calculate the area between the market demand curve and the market price (P) and multiply it by the quantity (QD). Given the market price of $56.49:
Consumer Surplus = 0.5 x (QD x P) = 0.5 x (171 x 56.49) = $4,828.995
Producer Surplus = (P - AC) x QD = (56.49 - 56.49) x 171 = $0 (since economic profit is zero in the short run).
d. In the short run, with the tax imposed, the total cost function for each firm becomes C(q) = 200 + 15q + 2q². To calculate the economic profit or loss for a representative firm, we subtract the total cost from the market price:
Total Cost = C(7.5) = 200 + 15(7.5) + 2(7.5)² = $548.75
Economic Profit/Loss = Market Price - Total Cost = 56.49 - 548.75 = -$492.26 (a loss)
e. In the short run, with the tax imposed, the producer surplus for the market is calculated by multiplying the price (P) minus the average cost (AC) by the quantity (QD):
Producer Surplus = (P - AC) x QD = (56.49 - 56.49) x 171 = $0 (as there is no economic profit).
f. In the long run, firms can enter or exit the industry. Since the market price is equal to the minimum average cost, firms earn zero economic profit, and there are no incentives for new firms to enter or existing firms to exit. Thus, in the long run, the number of firms will remain the same, approximately 171.
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Which of the following statement is true:
a) Since the subsidy increases both consumer surplus and producer surplus, subsidy does not create any deadweight loss.
b) In general, the burden of the tax falls on the more elastic side of the market.
c) None of the other answers is correct.
d) The economic incidence of the tax depends on who must legally pay the tax.
e) There can never be price ceiling and price floor that are simultaneously binding in the same market.
Answer:
the answer is A)Since the subsidy increases both consumer surplus and producer surplus, subsidy does not create any deadweight loss.
Explanation:
The true statement is: d) The economic incidence of the tax depends on who must legally pay the tax.
Tax is a financial obligation imposed by the government on individuals and businesses to generate revenue for public services and programs. It is typically calculated as a percentage of income, profits, or the value of goods and services. Taxes can be levied at various levels, such as federal, state, and local. Common types of taxes include income tax, sales tax, property tax, and corporate tax. The funds collected from taxes are used to fund infrastructure projects, education, healthcare, defense, social welfare programs, and other government initiatives essential for the functioning of a society.
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Explain the Diamond and Dybvig (1983) model and discuss how it
predicts the susceptibility of banks to runs
The Diamond and Dybvig model, proposed in 1983 by Douglas Diamond and Philip Dybvig, is an economic model that explains the possibility of bank runs in a fractional reserve banking system.
The model demonstrates how the inherent vulnerability of banks to runs arises from the maturity mismatch between their assets and liabilities.
In the Diamond and Dybvig model, there are two types of depositors: those who have short-term liquidity needs and those who have longer-term investment needs. The model assumes that depositors are rational and seek to maximize their individual utility. Depositors have the option to either keep their funds in the bank or withdraw them early.
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General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant:
Cost$38,500,000
Accumulated depreciation 14,800,000
General’s estimate of the total cash flows to be generated by selling the products
manufactured at its Arizona plant, not discounted to present value 16,200,000
The fair value of the Arizona plant is estimated to be $14,000,000.
Required:
1. & 2. Determine the amount of impairment loss. If a loss is indicated, where would it appear in General Optic’s multiple-step income statement?
3. If a loss is indicated, prepare the entry to record the loss.
4. & 5. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is $15,000,000 instead of $16,200,000 and $24,350,000 instead of $16,200,000.
1. Amount of impairment loss: Recoverable Amount= $23,700,000 - $14,000,000= $9,700,000
2. Income statement presentation: "Other expenses and losses”
3. Entry to record the loss: Impairment Loss = $9,700,000 Credit Accumulated Depreciation = $9,700,000
4. Impairment loss at the estimated undiscounted sum of future cash flows Impairment Loss = Carrying Amount - Recoverable Amount= $23,700,000 - $24,350,000= $0.
1. Amount of impairment loss:The carrying amount of the assets = Cost - Accumulated Depreciation= $38,500,000 - $14,800,000 = $23,700,000 Recoverable amount = Fair Value = $14,000,000 Impairment Loss = Carrying Amount - Recoverable Amount= $23,700,000 - $14,000,000= $9,700,000
2. Income statement presentation:Impairment loss will appear on the income statement under the “Other expenses and losses” section of the multiple-step income statement.
3. Entry to record the loss:Debit Impairment Loss = $9,700,000 Credit Accumulated Depreciation = $9,700,000 The journal entry to record the loss due to impairment is given above.
4. Impairment loss at the estimated undiscounted sum of future cash flows of $15,000,000:Recoverable amount = $15,000,000 Impairment Loss = Carrying Amount - Recoverable Amount= $23,700,000 - $15,000,000= $8,700,0005. Impairment loss at the estimated undiscounted sum of future cash flows of $24,350,000:Recoverable amount = $24,350,000 Impairment Loss = Carrying Amount - Recoverable Amount= $23,700,000 - $24,350,000= $0
As the carrying amount of the assets is not greater than the recoverable amount in this case, no impairment loss will be recognized. Note that carrying amount refers to the value of assets less accumulated depreciation.
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X Company also has preferred stock outstanding with par value of
$76, dividend per share of $7, and a current market value of $56
per share. Calculate the company cost of preferred stock.
The cost of preferred stock can be calculated by dividing the dividend per share by the market value per share of the preferred stock. In the case of X Company, with a par value of $76, a dividend per share of $7, and a market value per share of $56, the cost of preferred stock can be determined.
The cost of preferred stock represents the rate of return required by investors who hold the preferred shares. It is calculated by dividing the dividend per share by the market value per share. In this case, the dividend per share is $7 and the market value per share is $56. By dividing the dividend per share by the market value per share, we can determine the cost of preferred stock.
The cost of preferred stock for X Company can be calculated as follows:
Cost of Preferred Stock = Dividend per Share / Market Value per Share
Cost of Preferred Stock = $7 / $56
Cost of Preferred Stock ≈ 0.125 or 12.5%
Therefore, the cost of preferred stock for X Company is approximately 12.5%. This indicates the rate of return expected by investors who hold the preferred shares of the company, considering the dividend payments and the market value of the preferred stock.
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Shin likes to spend a (relatively small) portion of his income on vacations to Cabo San Lucas (a popular resort area in Mexico). On these trips, he either stays at a four star resort with panoramic ocean views or a more modest, and slightly deteriorating hotel in the noisy part of town. Understandably, the four star hotel is significantly more expensive. Suppose that the four-star hotel costs $5000/trip while the hotel costs just $500/trip. In recent years, the price of airfare has risen significantly, a change that effects the cost of his trips the same regardless of where he stays. Suppose that airfare has increased from $300/trip to $1000/trip. Why is it that following the higher travels prices, Shin is likely to spend more of his vacations at the four star resort when he travels. (Assume that the hotel rates and Shin's preferences are fixed).
When Shin spends a (relatively small) portion of his income on vacations to Cabo San Lucas (a popular resort area in Mexico), he likes to stay at either the four-star hotel with panoramic ocean views or a more modest hotel in the noisy part of town. The increase in airfare prices will lead to a positive income effect, which will cause Shin to spend more of his vacations at the four-star resort.
The four-star hotel is significantly more expensive than the more modest one, costing $5000 per trip compared to $500 per trip for the modest hotel. In recent years, the price of airfare has risen significantly, from $300 per trip to $1000 per trip. Despite the increase in travel prices, Shin is likely to spend more of his vacations at the four-star resort when he travels, and this is due to the income effect. A change in the price of a good or service has two opposing effects on a consumer's budget. The first effect is the substitution effect, which occurs when a consumer switches to a substitute good or service due to a price change.
The second effect is the income effect, which occurs when the consumer's income changes as a result of the price change. The income effect can be positive or negative depending on whether the good is normal or inferior. If a good is normal, the income effect will be positive, meaning that the consumer will consume more of the good when their income increases. If a good is inferior, the income effect will be negative, meaning that the consumer will consume less of the good when their income increases. The increase in airfare prices reduces Shin's real income, and he will have less money to spend on vacations. Because the four-star hotel is significantly more expensive than the more modest one, it would seem logical for Shin to switch to the cheaper option to save money.
However, Shin likes to stay at the four-star hotel because it provides him with a better vacation experience. As a result, he is willing to spend more of his remaining income on the four-star hotel to maintain the same level of satisfaction that he had before the price change. Therefore, the increase in airfare prices will lead to a positive income effect, which will cause Shin to spend more of his vacations at the four-star resort.
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Which of the following statements relating to debt covenants is incorrect?
covenants are written into loan contracts
if a company breaches a debt covenant it will not need to renegotiate or repay the loan
covenants restrict a company's activities
companies enter into debt covenants with banks when they borrow a significant amount
"If a company breaches a debt covenant, it will not need to renegotiate or repay the loan."
When a company breaches a debt covenant, it typically triggers a default event. In such cases, the company is required to negotiate with the lender to either modify the terms of the loan agreement or repay the loan in accordance with the original terms. Breaching a debt covenant does not exempt the company from the obligation to renegotiate or repay the loan.The possibility that the auditor would miss major inaccuracies or omissions in the financial statements is referred to as the first component of audit risk, known as inherent risk. Inherent risk is influenced by factors such as the complexity of transactions, the industry in which the entity operates, the effectiveness of internal controls, and the integrity of management.
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Managerial Practice 2.1: "Customer Involvement at eBay" [MO2.1, MO2.2, MO2.3, MO2.4] How does customer involvement at eBay compare to customer involvement at Amazon and Craigslist? What are the major similarities and differences? What would you change about customer involvement in these companies, and why? What are some of the challenges eBay may encounter by deeply involving customers in its process strategy? How can these challenges be effectively mitigated? As a senior consultant for eBay, Amazon, and Craigslist, what strategic process improvements would you recommend to their boards of directors? What are some possible organizational barriers to implementing these valuable competitive processes? Managerial Practice 3.1: "Quality at Verizon Wireless" [MO2.5, MO2.6] What are some potential impacts of the costs of quality related to Verizon’s extensive testing procedures, including impacts on manufacturers whose phones are not selected by Verizon to be sold to its customers? How can Verizon use Six Sigma, statistical process control, and acceptance sampling in determining which cell phones are selected to be sold? Present diagrams for these processes. Would utilizing X-charts, R-charts, assignable causes of variation, and common causes of variation be useful tools for qualifying the cell phones for adoption by Verizon? Why or why not? Share your rationale for each process.
2.1. Customer involvement at eBay is more focused on facilitating transactions between buyers and sellers.
2.2. The major similarities between the three companies include the use of online marketplaces.
2.3. eBay could increase customer involvement by offering .
2.4 Challenges eBay may encounter by deeply involving customers in its process strategy.
2.1. Amazon and Craigslist have a more community-driven approach, where customers can engage in discussions and reviews about products. eBay's approach is more transactional, while Amazon and Craigslist offer more of a marketplace experience.
2.2. The major similarities between the three companies include the use of online marketplaces to facilitate transactions, customer reviews, and the ability for customers to interact with each other. The major differences lie in the level of customer involvement and the focus of the companies.
2.3. eBay could increase customer involvement by offering more personalized recommendations based on customer browsing and purchase history, as well as allowing customers to create their own storefronts or profiles to showcase their products or services.
2.4. Challenges eBay may encounter by deeply involving customers in its process strategy include managing customer feedback and reviews, as well as ensuring that the customer experience is consistent across all channels.
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Essay 1 (10 marks) (Approximately 1,000 words) Drawing on your knowledge of the theory of demand and supply - supplemented by appropriate media reports - explain what has been happening to the price o
The price of a commodity is determined by the interaction of demand and supply in the market. According to the theory of demand and supply, an increase in demand or a decrease in supply tends to drive prices higher.
while a decrease in demand or an increase in supply tends to push prices lower.
To analyze what has been happening to the price of a specific commodity, we need to consider the factors affecting both demand and supply. These factors can include changes in consumer preferences, population growth, Income levels, prices of substitute and complementary goods, technological advancements, production costs, government regulations, and global economic conditions.
Media reports can provide valuable insights into these factors and their impact on the price of the commodity. For example, if there is a surge in consumer demand for a particular product due to changing consumer preferences or innovative marketing strategies, the price of that commodity is likely to increase. On the other hand, if there is a decrease in demand due to economic downturns or shifts in consumer behavior, the price may decrease.
Similarly, changes in supply can also influence the price of a commodity. For nce, if there are disruptions in the supply chain, such as natural disasters or geopolitical tensions, the supply of the commodity may decrease, leading to higher prices. Conversely, if there are advancements in production techniques or an increase in the number of suppliers, the supply may increase, resulting in lower prices.
In conclusion, understanding the price movements of a commodity requires an analysis of the factors influencing both demand and supply. The theory of demand and supply provides a framework for understanding these price dynamics. By considering factors such as consumer preferences, population growth, technological advancements, production costs, and global economic conditions, along with media reports and market data, we can gain insights into the forces driving price changes.
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Prepare a brief project plan (max 3 A4 pages)
· prepare a swot overview to clarify the current motivation for the project launch
· clarify objectives and benefits, to convince sponsors to invest
· define the scope (what to do and not to do), create a timeline, mark interdependencies,
· include a plan to measure implementation and deliverables
· identify risks (top 5)
· recommend some apps, software available to you, to visualize your project plan. Here, compare at least 3 apps /software for project planning (add a critical summary of pros and cons)
SWOT Overview:
The current motivation for launching the project is driven by a comprehensive SWOT analysis:
Strengths:
Strong market demand for the product/service
Experienced and dedicated project team
Access to advanced technology and resources
Support from key stakeholders and sponsors
Weaknesses:
Limited budget and financial resources
Potential lack of expertise in certain areas
Possibility of resistance to change from employees
Opportunities:
Growing market potential and customer base
Potential for strategic partnerships and collaborations
Scope for innovation and differentiation in the market
Threats:
Intense competition from existing and emerging players
Technological advancements that may disrupt the industry
Economic and regulatory uncertainties
Objectives and Benefits:
The objectives of the project are to:
Develop and launch a new product/service that meets customer needs and demands.
Increase market share and profitability.
Enhance customer satisfaction and loyalty.
Improve operational efficiency and productivity.
The benefits of the project include:
Revenue growth and increased profitability.
Competitive advantage in the market.
Improved brand reputation and customer perception.
Enhanced employee morale and motivation.
Scope and Timeline:
The project scope includes:
Research and development of the new product/service.
Testing and refinement.
Marketing and promotional activities.
Launch and post-launch support.
The timeline will be divided into phases with specific milestones and deliverables, ensuring interdependencies are identified and managed effectively.
Measurement and Deliverables:
To measure implementation and deliverables, key performance indicators (KPIs) will be established, such as:
Sales revenue and market share.
Customer satisfaction and retention rates.
Time-to-market and project milestones achievement.
Return on investment (ROI) and cost savings.
Risks:
The top 5 identified risks are:
Market competition leading to lower-than-expected market share.
Technological challenges and potential delays in product development.
Financial constraints impacting project execution.
Resistance to change from employees affecting adoption and implementation.
Regulatory changes impacting product/service compliance.
Project Planning Apps/Software:
Microsoft Project: This software offers comprehensive project planning and scheduling features. Pros include its robust functionality, Gantt chart visualization, and integration with other Microsoft tools. However, it can be complex for beginners and requires a license for access.
Trello: Trello is a user-friendly, visual project management tool. Its pros include ease of use, collaboration features, and integration with third-party apps. However, it may lack advanced features for complex project planning.
Asana: Asana provides a flexible project management platform with features like task management, timeline visualization, and team collaboration. Pros include its intuitive interface, customizable workflows, and integration options. However, some users may find it overwhelming due to its extensive features.
The project plan incorporates a comprehensive SWOT analysis, clearly defines objectives and benefits, outlines the scope and timeline, and establishes measures for implementation and deliverables. Identified risks will be mitigated through proactive management strategies. Based on your requirements, Microsoft Project, Trello, and Asana are recommended project planning apps/software, each with their own strengths and limitations. Consider your specific needs and the complexity of your project when selecting the most suitable tool
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what difficulties do small-scale producers fave in competing in
markets where multinational corporations with high brand awareness
operate?
Small-scale producers often face significant difficulties in competing with multinational corporations with high brand awareness. These challenges include a lack of resources, limited access to capital, and a lack of access to international markets.
The following are the difficulties that small-scale producers face in competing in markets where multinational corporations with high brand awareness operate:
Limited Resources:Small-scale producers often lack the resources to compete with multinational corporations. They may have limited access to the latest technology and equipment and may not be able to afford the latest marketing and advertising strategies.
Limited Access to Capital:Small-scale producers may not have access to the same level of capital as multinational corporations. This can make it difficult for them to invest in the latest technology, purchase new equipment, and expand their operations.
Limited Access to International Markets:Small-scale producers may not have access to international markets due to a lack of resources or knowledge of the market. Multinational corporations have the resources and expertise to expand into new markets and reach a global audience.
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Research other types of apps that rely on smartphone cameras to redeem a sales promotion offer. Explain how they work and how they are similar to and different from SnipSnap. The profitable growth potential for SnipSnap is in the enterprise market where it provides mobile promotion services to retailers. SnipSnap is working with retailers to create and manage geo-conquesting campaigns. Research what this is and explain how it works.
that rely on smartphone cameras to redeem a sales promotion offer are Shop kick, Checkout 51, Coupons.com, and Groupon Shop kick app It is a mobile app that rewards users for walking into stores The app detects the location of a user's smartphone and rewards points for stepping into a store.
This app is similar to Snip Snap because it offers a database of coupons for a wide range of retailers. It allows users to scan in-store coupons and sync them to their loyalty cards .Groupon app are This app offers discounted deals for local activities, goods, and services. It also includes deals for restaurants and beauty treatments that can be redeemed using the smartphone's camera. Long answer: Snip Snap app allows users to take a picture of a printed coupon and the app will automatically digitize it. The app will then create a barcode that can be scanned at checkout for the discount. This app is similar to other coupon apps because they all offer an easy and convenient way to redeem discounts and deals on a mobile device.
These apps work by using the smartphone's camera to scan barcodes or take a picture of a receipt difference are between Snip Snap and other apps is that it allows users to digitize printed coupons and store them in one place of the Profitable growth potential for Snip Snap is in the enterprise market where it provides mobile promotion services to are retailers. Snip Snap is working with retailers to create and manage geo-conquesting campaigns. Geo-conquesting is a location-based marketing technique that targets consumers who are in close proximity to a competitor's location. This technique uses GPS data to push mobile ads or coupons to consumers in real-time when they are near a competitor's location. This technique is an effective way for retailers to attract new customers and increase their sales.
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If an agent has access to the lit market and also to a dark
pool, what exposure could she/he have?
If an agent has access to both the lit market and a dark pool, they can have exposure to both types of trading venues. The exposure will depend on the specific trading activities and strategies employed by the agent.
In the lit market, the agent can have exposure to publicly displayed orders and market liquidity. They can place orders that are visible to other market participants and interact with the orders posted by other traders. The exposure in the lit market is typically more transparent and subject to public price discovery.
On the other hand, in a dark pool, the agent can have exposure to non-displayed orders and potentially access to a different pool of liquidity. Dark pools are private trading venues where orders are not publicly displayed, allowing for increased anonymity and potentially reduced market impact. The exposure in a dark pool is generally less transparent, as the details of the trading activity are not visible to the broader market.
By having access to both the lit market and a dark pool, the agent can diversify their trading strategies and potentially benefit from the advantages offered by each venue. However, it is important to note that trading in a dark pool comes with its own set of considerations and potential risks, such as limited price transparency and potential information asymmetry.
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What is the result of investments? An increase in loanable funds. An increase in loanable funds and leakages. O Expanded production capacity. An increase in leakages.
The result of investments is expanded production capacity.
When individuals, businesses, or governments make investments, it typically involves allocating resources towards the acquisition or creation of capital goods, such as machinery, equipment, or infrastructure. These investments contribute to expanding the productive capacity of an economy, allowing for increased output and economic growth over the long term.
While investments can lead to an increase in loanable funds (funds available for lending), it is not the primary result or purpose of investments. Additionally, the mention of leakages is unrelated to the direct result of investments. The focus is primarily on the expansion of production capacity and the subsequent positive impacts on output and economic development.
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for a firm producing at any level of output greater than the most profitable one, a reduction in output decreases total revenue _____ total cost.
For a firm producing at any level of output greater than the most profitable one, a reduction in output decreases total revenue below total cost.
For a firm producing at any level of output greater than the most profitable one, a reduction in output decreases total revenue below total cost. This can be better explained with the help of a graph where the total cost and total revenue curve are intersected by the marginal revenue and marginal cost curves at a single point. The most profitable level of output is determined by the intersection of marginal cost (MC) and marginal revenue (MR) curves. In a perfectly competitive market, this point will occur where the price (P) is equal to marginal cost. The output level corresponding to this point on the total revenue (TR) curve is the firm's profit-maximizing output level. After this point, the marginal cost of production increases with the increase in the level of production while the marginal revenue falls. In such a situation, the firm's profit margin decreases with an increase in output. If the firm reduces its output, then total revenue falls, and total cost falls by less than total revenue. Therefore, the difference between total revenue and total cost decreases. Hence, for a firm producing at any level of output greater than the most profitable one, a reduction in output decreases total revenue below total cost.
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please show all calculations. thank you
QUESTION 1 a. Distinguish between systematic risk and unsystematic risk. (4 marks) b. NCB stock Grace kennedy stock Rate of return. Rate of return Probability Probability 0.15 12 -10 0.20 15 0.20 17 0
Systematic risk and unsystematic risk are two components of total risk that investors face when investing in financial assets. Here are the distinctions between these two types of risks:
Systematic Risk:
Also known as market risk or non-diversifiable risk.
It is the risk that affects the entire market or a specific segment of the market.
Systematic risk arises from factors that are beyond the control of individual investors, such as economic conditions, political events, interest rates, inflation, and market volatility.
This type of risk cannot be eliminated through diversification since it is inherent in the overall market or economy.
Examples of systematic risk include recessions, changes in government policies, and market crashes.
Investors are exposed to systematic risk regardless of the specific securities they hold.
Unsystematic Risk:
Also known as specific risk, diversifiable risk, or idiosyncratic risk.
It is the risk that is specific to a particular company, industry, or investment.
Unsystematic risk arises from factors that are company-specific, such as management issues, competitive threats, product recalls, or lawsuits.
This type of risk can be reduced or eliminated through diversification. By spreading investments across different assets or asset classes, unsystematic risk can be mitigated.
Examples of unsystematic risk include the bankruptcy of a specific company, a labor strike affecting a particular industry, or a product failure impacting a single company's stock price.
Unsystematic risk is unique to individual investments and can be reduced through a well-diversified portfolio.
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Use Table 13.4 Fashionables is a franchisee of The UnLimited, the well-known retailer of fashionable clothing. Prior to the winter season, The UnLimited offers Fashionables the choice of five different colors of a particular sweater design. The sweaters are knit overseas by hand, and because of the lead times involved, Fashionables will need to order its assortment in advance of the selling season. As per the contracting terms offered by The UnLimited, Fashionables will also not be able to cancel, modify or reorder sweaters during the selling season. Demand for each color during the season is normally distributed with a mean of 400 and a standard deviation of 250. Further, you may assume that the demand for each sweater is independent of the demand for any other color. The Unlimited offers the sweaters to Fashionables at the wholesale price of $36 per sweater, and Fashionables plans to sell each sweater at the retail price of $66 per unit. The UnLimited does not accept any returns of unsold inventory. However, Fashionables can sell all of the unsold sweaters at the end of the season at the fire-sale price of $25 each. If a part of the question specifies whether to use Table 13.4, or to use Excel, then credit for a correct answer will depend on using the specified method. a. How many units of each sweater-type should Fashionables order to maximize its expected profit? Use Table 13.4 and round to nearest integer. 575 If Fashionables wishes to ensure a 97.5% in-stock probability, what should its b. order quantity be for each type of sweater? Use Table 13.4 and round to nearest integer. 900 C. Say Fashionables orders 750 of each sweater. What is Fashionables' expected profit? Use Table 13.4. ********* TABLE 13.4 The Distribution, RQ), and Expected Inventory, I(Q), Functions for the Standard Normal Distribution Function F(x) z 1(2) 2 F(z) F(z) 1(2) (2) -4.0 0000 0000 -1.3 0968 .9192 0455 14 1.4367 -3.9 0000 0000 -1.2, 1151 0561 1.5 9332 1.5293 -3.8 0001 0000 1357 .0686 1.6 9452 1.6232 -3.7 0001 0000 -1.0 1587 0833 1.7 9554 1.7183 -3.6 0002 0000 -0.9 1841) 1004 1.8 9641 1.8143 -3.5 0002 0001 -0.8 21191 1202 1.9 1.9111 9713 -3.4 0003 0001 -0.7 2420 1429 2.0 9772 2.0085 -3.3 0005 0001 -0.6 2743 1687 2.1 9821 2.1065 -3.2 0007 0002 -0.5 3085 1978 2.2 9861 2.2049 -3.1 0010 0003 -0.4 3446 2304 2.3 9893 2.3037 -3.0 0013 0004 -0.3 3821 2668 2.4 .9918 2.4027 -2.9 0019 0005 -0.2 4207 3069 2.5 9938 2.5020 -2.8 0026 .0008 -0.1 4602 3509 2.6 9953 2.6015 -2.7 0035 0011 .0 .5000 3989 2.7 9965 2.7011 -2.6 0047 0015 5398 4509 9974 2.8008 -2.5 0062 0020 .5793 5069 9981 2.9005 -2.4 0082 0027 6179 5668 9987 3.0004 -2.3 0107 0037 .6554 .6304 9990 3.1003 -2.2 0139 0049 6915 6978 9993 3.2002 -2.1 0179 0065 7257 .7687 9995 3,3001 -2.0 0228 0085 7580 8429 9997 3.4001 -1.9 0287 0111 7881 9202 9998 3.5001 -1.8 0359 0143 8159 1.0004 9998 3.6000 -1.7 0446 0183 8413 1.0833 9999 3.7000 -1.6 0548 0232 .8643 1.1686 9999 3.8000 -1.5 0668 0293 8849 1.2561 1,0000 3.9000 -1.4 0808 0367 .9032 1.3455 1.0000 4.0000 .1 2 3 A 5 6 7 .8 .9 1.0 1.1 1.2 1.3 2.8 2.9 3.0 3.1 3.2 3.3 3,4 3.5 3.6 3.7 3.8 3.9 4.0
To find the optimal order quantity for each color, we can calculate the expected profit for different order quantities and select the quantity that maximizes the expected profit
To answer the questions, we need to calculate the expected profit and order quantity based on the given information. We will use the provided Table 13.4 for the calculations.
a. To maximize expected profit, Fashionables should order the quantity that maximizes the expected profit for each sweater type. Since there are five different colors, we need to calculate the expected profit for each color separately.
For each color:
- Wholesale price per sweater (W) = $36
- Retail price per sweater (R) = $66
- Fire-sale price per sweater (F) = $25
- Mean demand (μ) = 400
- Standard deviation of demand (σ) = 250
The expected profit (EP) for each color can be calculated using the following formula:
EP = (R - W) * Q - (F - W) * (μ - Q) * P(Z ≤ (Q - μ) / σ)
where:
Q = Order quantity
P(Z ≤ (Q - μ) / σ) = Cumulative probability from Table 13.4
Calculating the expected profit for each color, we get:
Color 1 (Q1):
EP1 = (66 - 36) * Q1 - (25 - 36) * (400 - Q1) * P(Z ≤ (Q1 - 400) / 250)
Color 2 (Q2):
EP2 = (66 - 36) * Q2 - (25 - 36) * (400 - Q2) * P(Z ≤ (Q2 - 400) / 250)
Color 3 (Q3):
EP3 = (66 - 36) * Q3 - (25 - 36) * (400 - Q3) * P(Z ≤ (Q3 - 400) / 250)
Color 4 (Q4):
EP4 = (66 - 36) * Q4 - (25 - 36) * (400 - Q4) * P(Z ≤ (Q4 - 400) / 250)
Color 5 (Q5):
EP5 = (66 - 36) * Q5 - (25 - 36) * (400 - Q5) * P(Z ≤ (Q5 - 400) / 250)
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d) Calculate new Consumer and Producer Surplus, government revenue, and deadweight loss. Show graphically P CS = ? S+T CS DWL 21 9 G PS S D 14 PS = ? Q Min
To calculate the consumer surplus (CS), producer surplus (PS), government revenue, and deadweight loss (DWL), we need additional information such as the supply and demand curves, as well as the tax imposed on the market. Without this information, it's not possible to provide specific numerical values for each of these measures.
Consumer Surplus (CS): Consumer surplus represents the additional benefit or value that consumers receive when they are willing to pay more for a product than the actual market price. It is calculated as the area between the demand curve and the price line up to the quantity traded. In other words, it is the difference between what consumers are willing to pay (based on their demand) and what they actually pay.
Producer Surplus (PS): Producer surplus represents the additional benefit or profit that producers receive when they are willing to sell a product at a lower price than the market price. It is calculated as the area between the price line and the supply curve up to the quantity traded. In other words, it is the difference between the price producers receive and the minimum price they are willing to accept.
Government Revenue: Government revenue is the amount of money collected by the government through taxes or fees imposed on the market. It depends on the tax rate and the quantity traded. It can be calculated by multiplying the tax rate by the quantity traded.
Deadweight Loss (DWL): Deadweight loss represents the inefficiency or loss of economic welfare that occurs when the quantity traded in a market deviates from the optimal level. It is caused by market distortions such as taxes, subsidies, or price controls. DWL is calculated as the triangular area between the supply and demand curves, from the quantity traded to the quantity that would have been traded in the absence of the market distortion.
To provide a graphical representation of P, CS, PS, DWL, and S+T, I would need the specific equations for the supply and demand curves and information on the tax imposed. With that information, I can plot the curves and illustrate the areas representing CS, PS, DWL, and the sum of the supply and tax revenue.
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(a) Describe what it means if a new company decides to issue its ordinary shares to investors in instalments, and why they might sell shares this way. (2 marks) (b) John's Building Company needs to raise $100,000 cash from share investors and asks for your advice for designing the sale of the shares. He wants to sell ordinary shares. (4 marks) First, use your imagination to determine a reasonable sale price per share. Then, design a traditional 3 step instalment plan for collection of the cash from investors. Hint: you may consider that the Application period will commence on 1st February 2022. Outline the basic details of your plan, including beginning and ending dates for each stage of your plan.
(a) Issuing ordinary shares to investors in instalments allows a new company to offer shares in stages, making it more accessible to a wider range of investors.
(b) The reasonable sale price per share can be determined based on market analysis and valuation, while a traditional 3-step instalment plan can be designed with an application period, an initial payment stage, and subsequent payment stages.
What is the significance of selling shares in instalments, and why might a new company choose this method?Selling shares in instalments can be an attractive option for new companies for several reasons. Firstly, it can make investing more accessible to a wider range of potential investors. By breaking down the payment into smaller instalments, individuals or entities with limited capital can participate in the share offering. This broader investor base can help the company raise the necessary funds more effectively.
Additionally, issuing shares in instalments allows the company to maintain a steady cash flow. Instead of waiting for the full payment upfront, the company receives partial payments over a defined period. This helps in managing immediate financial needs and allocating resources efficiently.
Moreover, selling shares in instalments provides the company an opportunity to establish long-term relationships with investors. As investors continue to make payments, they remain engaged with the company's progress and performance. This ongoing connection fosters a sense of loyalty and commitment among shareholders.
In the case of John's Building Company, if they need to raise $100,000 cash from share investors, they can design a traditional 3-step instalment plan for collecting the funds. The plan can have the following basic details:
Application Period: The plan can start with an application period that commences on 1st February 2022. During this period, potential investors can submit their applications to purchase shares.
Initial Payment: After the application period ends, the first stage of the instalment plan can begin. Investors who were successful in their applications can be required to make an initial payment, which can be a percentage of the total share price. This payment will secure their allocated shares.
Subsequent Payments: Following the initial payment, the plan can include two additional stages with specific beginning and ending dates. These stages can involve investors making additional payments at specified intervals, gradually reaching the total investment amount of $100,000.
By implementing a structured instalment plan, John's Building Company can make the share sale more manageable for investors while ensuring a steady inflow of funds to meet their financial objectives.
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At your current production of carrot cakes, the average total cost of producing carrot cakes is $10 while the marginal cost is $5. What will happen if you produce more carrot cakes?
A. Marginal cost will fall
B. Marginal cost will rise
C. Average total cost will rise
D.Average total cost will fall
B. Marginal cost will rise.
When the marginal cost is less than the average total cost, it indicates that the average total cost is decreasing as more units of output are produced. However, as more carrot cakes are produced, the marginal cost is likely to increase.
This is because the marginal cost measures the additional cost incurred from producing one more unit of output. As production increases, it is common for marginal costs to rise due to factors such as diminishing returns, increased resource utilization, or capacity constraints. Therefore, option B is the correct answer.
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Q19 give correct answer in 10 mins i will thumb up
thanks
QUESTION 19 When preference shares are cumulative, preference dividends not declared in a period are considered a liability O called dividends in arrears O distributions of earnings O never paid
When preference shares are cumulative preference dividends not declared in a period are considered dividends in arrears.
When preference shares are cumulative, preference dividends not declared in a period are considered a liability and are called dividends in arrears. Cumulative preference shares entitle the shareholders to receive their dividends, even if they are not declared in a particular period. The unpaid dividends accumulate as a liability on the company's balance sheet and are typically paid out in future periods when the company has sufficient earnings available for distribution.
Distributions of earnings and dividends not paid refer to the general concept of distributing profits to shareholders, regardless of whether they are cumulative preference dividends. However, when it specifically comes to cumulative preference shares, the unpaid dividends are classified as dividends in arrears and are considered a liability.
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The computation of pension expense includes all the following except
expected return on plan assets.
amortization of prior service cost.
service cost component measured using current salary levels.
interest on projected benefit obligation.
The computation of pension expense includes all of the following except expected return on plan assets.
The computation of pension expense includes several components such as service cost, interest on the projected benefit obligation, amortization of prior service cost, and expected return on plan assets. However, the expected return on plan assets is not considered as an expense but rather as a reduction in the net pension liability or asset.
The computation of pension expense is a complex process that involves several components. These components include service cost, interest on the projected benefit obligation, amortization of prior service cost, and expected return on plan assets. The service cost component is the present value of the benefits earned by the employees during the current period, and it is measured using current salary levels. The interest cost component is the increase in the projected benefit obligation due to the passage of time, and it is calculated by multiplying the projected benefit obligation by the discount rate. The amortization of prior service cost is the recognition of the cost of plan amendments or curtailments over the average remaining service life of the affected employees. Finally, the expected return on plan assets is the rate of return that the plan assets are expected to earn over the long term. However, this component is not considered as an expense but rather as a reduction in the net pension liability or asset. This is because it is assumed that the plan assets will earn a certain rate of return, which is used to offset the expense associated with providing pension benefits.
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the formula to compute the markup percentage using the variable cost method is:
Markup percentage is a cost accounting tool used to determine the amount of money added to the cost of goods sold in order to generate a profit. The formula to compute the markup percentage using the variable cost method is based on the cost-volume-profit (CVP) relationship between sales, costs, and profits.
Unit selling price refers to the amount of money charged per unit of goods sold. It is the price that consumers pay for a product or service. This price is determined by the market demand for the product and the competition. Unit variable cost, on the other hand, refers to the total cost of producing one unit of goods. It includes only those costs that vary with the production level. It does not include fixed costs such as rent, salaries, and utilities.
The markup percentage is calculated by subtracting the unit variable cost from the unit selling price and dividing the result by the unit variable cost. The answer is then multiplied by 100% to express the result as a percentage.
Here is the formula: Markup percentage = (Unit selling price - Unit variable cost) ÷ Unit variable cost x 100%.
For example, if a product has a unit selling price of $20 and a unit variable cost of $10, the markup percentage would be Markup percentage = ($20 - $10) ÷ $10 x 100% = 100%. This means that the company is adding 100% to the cost of producing one unit of goods in order to generate a profit. The markup percentage can be used to determine the break-even point, which is the level of sales at which the company will begin to earn a profit.
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The variable cost method determines the markup percentage by subtracting the variable cost from the selling price, dividing the result by the variable cost, and multiplying by 100%.
Explanation:The formula to compute the markup percentage using the variable cost method is expressed as: Markup Percentage = (Selling Price - Variable Cost) / Variable Cost × 100%. This formula calculates how much more you are charging for a product than the variable cost of producing that item. For instance, if a product costs $10 to produce (variable cost) and is sold for $15 (selling price), the markup percentage would be ((15-10)/10) × 100% = 50%.
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