We can take the multiplier effect into account to determine the overall effect of the initial investment. The multiplier effect counts every increase in expenditure that an economy experiences as a result of a capital infusion.
The original investment in this case is $400 million. If 70% of this money is spent locally, $280 million will have been invested back into the community. The procedure continues with this respent amount serving as the new injection. We may add together the sums spent at each iteration to determine the overall effect: Initial investment of $400 million plus the first respent of $280 million plus the second respent of $196 million plus the third respent of $137.2 million plus... It is evident that each respent amount is equal to 70% of the preceding respent amount. This results in a succession of geometric figures with a 0.7 common ratio. We are able to determine the cumulative effect using the formula for the sum of a geometric series. Impact overall = $400,000,000 / (1 - 0.7) = $400,000,000 / 0.3 = $1,333.33,000,000 or $1.33333 Billion. The total impact of the initial investment is therefore around $1.33333 billion.
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1. a) In 1999 , the euro was trading at $0.90 per euro. If the euro is now trading at $1.16 per euro, what is the percentage change in the euro's value? Is this an appreciation or depreciation? b) If the Canadian dollar to U.S. dollar exchange rate is 1.28 and the British pound to U.S. dollar exchange rate is 0.62, what must be the Canadian dollar to British pound exchange rate?
a) Let us use the formula for calculating percentage change in value
Percentage Change = ((new value - old value) / old value) × 100%
Percentage Change = ((1.16 - 0.9) / 0.9) × 100%
Percentage Change = 0.26/0.9 × 100%
Percentage Change = 28.89%
Therefore, the euro has appreciated by 28.89%. This is because the euro's value has increased relative to the US dollar.
b) Let us use cross multiplication to find the exchange rate of Canadian dollars to British pounds.
1 Canadian dollar = 1.28
US dollars1 British pound = 0.62
US dollars1 Canadian dollar = x British pounds1 Canadian dollar in British pounds = 1.28/0.62x = 2.06
The exchange rate of Canadian dollars to British pounds is 2.06.This means that you will need 2.06 British pounds to buy one Canadian dollar.
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Take the following as the demand and supply equations for iMango phones in the Republic of Smart: Qd=200−P
Qs=−60+2P
a) Determine the equilibrium price and equilibrium quantity. b) Use the demand and supply equations to construct demand and supply curves. c) Calculate the consumer surplus and producer surplus. d) Supposing General Swag fixed the price of iMango at $40, determine the quantity demanded and quantity supplied. e) Show the effect of General Swag's policy on your graph in 1 b (Effects will be deadweight loss). f) Calculate the deadweight loss.
a) Determination of equilibrium price and quantity
The equilibrium price and equilibrium quantity can be determined by equating demand and supply. [tex]Qd=Qs200-P=-60+2P200+60=2P+P260=3P P=86.67[/tex]
Therefore, the equilibrium price is $86.67.Then, [tex]Qd=200-P=200-86.67=113.33units[/tex]
Thus, the equilibrium quantity is 113.33 units.
b) The demand and supply curves can be constructed as follows : Graphical Representation of the equilibrium price and quantity can be obtained as shown below:
c) Calculation of consumer surplus and producer surplus
The producer surplus is given by the difference between the price at which the product is sold and the minimum price at which the producer would be willing to sell the product.
The consumer surplus is given by the difference between the price at which the product is sold and the maximum price at which the consumers would be willing to purchase the product.
Producer surplus=[tex]($86.67−$20)×113.33=$7289.32[/tex]
Consumer surplus[tex]($100−$86.67)×113.33=$1519.99[/tex]
d) Quantity demanded and quantity supplied, supposing General Swag fixed the price of i Mango at $40
Quantity demanded :[tex]Qd=200-P=200-40=160 units[/tex]
Quantity supplied : [tex]Qs=60+2P=60+2(40)=140 units[/tex]
The quantity demanded is 160 units and the quantity supplied is 140 units.
e) The effect of General Swag's policy can be shown as: The area B and C represents the deadweight loss.
f) Calculation of deadweight loss
The deadweight loss is given by the difference between the producer surplus and consumer surplus.
Deadweight loss[tex]=$7289.32-$1519.99=$5769.33.[/tex]
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"
Which of the following changes would shift the long-run aggregate supply curve? a change in the wage rate paid to labour in the economy a change in technology in the economy a change in the cost of oi
"
The long-run aggregate supply curve is the graphical representation of the relationship between the price level in the economy and the aggregate supply of output produced by the firms in the long run. The long-run aggregate supply curve is assumed to be vertical in the long run as it depends on factors
that affect the production capacity of the economy in the long run. These factors include changes in technology in the economy, the wage rate paid to labor in the economy, and the cost of production in the economy. A change in the wage rate paid to labor in the economy will shift the long-run aggregate supply curve. A higher wage rate increases the cost of production, reducing the incentive to produce, and shifting the curve to the left. On the other hand, a lower wage rate reduces the cost of production, increasing the incentive to produce, and shifting the curve to the right. Therefore, a change in the wage rate paid to labor in the economy will shift the long-run aggregate supply curve.
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Discuss the impact in which the following factors have on international finance and foreign exchange rate market:
Global inflation
Rising Interest Rate
Lowe Economic Growth
International finance is impacted by various factors, and the foreign exchange rate market is one of the most critical components of international finance.
Here are the impacts that the following factors have on international finance and foreign exchange rate market:Global Inflation:Inflation is a significant determinant of foreign exchange rates. When the inflation rate in one country increases relative to other countries, the foreign exchange rate of that country will weaken. Conversely, if the inflation rate in a country is lower than other countries, the foreign exchange rate of that country will strengthen. For instance, if the inflation rate in the United States is high compared to Japan, the foreign exchange rate of the United States will weaken compared to Japan.
Rising Interest Rate:Interest rates are also significant determinants of foreign exchange rates. When interest rates increase, the value of a currency will also increase since investors will be attracted to invest in that country. Hence, the foreign exchange rate of that country will strengthen. On the other hand, if interest rates decrease, the foreign exchange rate of that country will weaken since investors will be attracted to invest in a country with higher interest rates.
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Who can remove members of a case team?
Select one:
Case owner
Playbook designer
Case manager
Workgroup admin
The case owner can remove members of a case team.
When working on a case, the case team is comprised of individuals who work together to resolve the case. The case team may consist of the case manager, workgroup admin, playbook designer, and others.
The case owner is the one who initiated or created the case. They are responsible for overseeing the case from start to finish. This includes the management of the case team. The case owner can add or remove members of the case team as needed to ensure the case is resolved efficiently.
In conclusion, the answer to this question is A. Case owner as they are the one responsible for the management of the case team.
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Differential Analysis for a Lease-or-sell Decision Stowe Construction Company is considering selling excess machinery with a book value of $281,200 (original cost of $400,700 less accumulated depreciation of $119,500) for $276,800 , less a 5% brokerage commission. Altematively, the machinery can be leased for a total of $286,600 for 5 years, after which it is expected to have no residual value. Dunng the period of the lease, Stowe Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $12,000 , a. Prepare a differential analvsis dated March 21 to determine whether'Stowe Construction Company sthould lease (Aiternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss. b. On the basis of the data presented, would it be advisable to lease or sell the machinery?
Based on the data presented, it would be advisable for Stowe Construction Company to lease the machinery rather than sell it. The lease option provides a higher net cash flow over the 5-year period, which makes it more financially favorable.
To determine whether Stowe Construction Company should lease or sell the excess machinery, we need to compare the differential costs and revenues associated with each alternative.
Here is a step-by-step analysis to determine the most advisable option:
1. Calculate the proceeds from selling the machinery:
- The selling price is $276,800.
- Subtract the 5% brokerage commission: $276,800 - (5% * $276,800) = $262,960.
2. Calculate the lease payments over 5 years:
- The total lease payment is $286,600.
3. Calculate the cost of repairs, insurance, and property tax expenses over 5 years:
- The expenses are $12,000 per year.
- Multiply by 5 years: $12,000 * 5 = $60,000.
4. Calculate the net cash flow for each alternative:
- For the sale option: Net cash flow = Proceeds from selling - Cost of repairs, insurance, and property tax expenses
- For the lease option: Net cash flow = Lease payments - Cost of repairs, insurance, and property tax expenses
Net cash flow for the sale option: $262,960 - $60,000 = $202,960
Net cash flow for the lease option: $286,600 - $60,000 = $226,600
5. Compare the net cash flows:
- The lease option has a higher net cash flow of $226,600 compared to $202,960 for the sale option.
Based on the data presented, it would be advisable for Stowe Construction Company to lease the machinery rather than sell it. The lease option provides a higher net cash flow over the 5-year period, which makes it more financially favorable. However, it's important to consider other factors such as future equipment needs and the potential for technological advancements before making a final decision.
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2. Bradford Electronics uses the weightedaverage method in its process costing system. Data concerning the first processing department for the most recent month is listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. What is the closest cost per equivalent unit for materials for the month in the first processing department?
The closest cost per equivalent unit for materials for the month in the first processing department is $1.55.
Bradford Electronics uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month is listed below:
Units Materials Conversion Work in process, beginning 1,500 100% complete for materials 80% complete for conversion Started into production during the month 9,000 Completed and transferred to the next department during the month 8,500 Work in process, ending 2,000 60% complete for materials 20% complete for conversion Total cost $15,040 $12,580
Total Equivalent Units = Units Completed and Transferred + Work in Process, Ending Units X % of completion
Cost Per Equivalent Unit (CPEU) = Total Costs ÷ Total Equivalent Units
Analysis of the given data:1. Calculation of total units to account for:
Units transferred to next department = 8,500
Units in process at the end of the period = 2,000
Units to account for = 8,500 + 2,000 = 10,5002.
Calculation of equivalent units of production:
2.1 For material:
Units transferred to next department = 8,500 (fully complete for materials)
Units in process at the end of the period = 2,000 X 60% = 1,200
Equivalent Units of production = 8,500 + 1,200 = 9,7002.
2 For conversion:
Units transferred to next department = 8,500 X 100% = 8,500
Equivalent Units of production = 8,500 + 400 (2,000 X 20%) = 8,900
3. Calculation of Cost per equivalent unit:
Cost of materials = $15,040
Cost per equivalent unit = Cost of materials ÷ Equivalent Units of production = $15,040 ÷ 9,700 = $1.55.
Hence, the closest cost per equivalent unit for materials for the month in the first processing department is $1.55.
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the value of a put option is positively related to the: i) exercise price; ii) time to expiration; iii) volatility of the underlying stock price; iv) risk-free rate
The value of a put option is positively related to the exercise price, time to expiration, and volatility of the underlying stock price.
A put option is a financial instrument that gives the holder the right, but not the obligation, to sell an underlying asset (such as stock) at a predetermined price (exercise price) within a specified period (time to expiration).
The value of a put option increases as the exercise price rises because a higher exercise price means the option holder can sell the underlying asset at a higher price, resulting in a greater potential profit.
The value of a put option also increases with a longer time to expiration. More time allows for a greater likelihood of the underlying asset's price falls below the exercise price, increasing the probability of the put option being exercised and resulting in a higher value.
Additionally, the value of a put option is positively related to the volatility of the underlying stock price. Higher volatility implies a greater likelihood of the stock price moving significantly, which increases the potential for the put option to be profitable if the stock price decreases.
The risk-free rate, however, does not directly impact the value of a put option. It is not a factor in determining the intrinsic value of the option and does not affect the potential profitability of exercising the option.
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currently the federal minimum wage is 7.25 should the federal government raise the minimum wage? why or why not?
How will this impact businesses and consumers? would there be any other things to vonsider if wages are raised?
Currently, the federal minimum wage is 7.25 should the federal government raise the minimum wage? why or why not?
How will this impact businesses and consumers? would there be any other things to consider if wages are raised?
Yes, the federal government should raise the minimum wage in order to provide a living wage for workers. The current minimum wage of $7.25 per hour has been in place since 2009, and it is no longer enough to cover basic living expenses
However, increasing the minimum wage would also have an impact on businesses and consumers. Businesses that employ minimum wage workers would see an increase in their labor costs, which could lead to higher prices for goods and services. Consumers would likely have to pay more for these goods and services, which could lead to a decrease in demand.
Additionally, there are other factors to consider if wages are raised. For example, some argue that raising the minimum wage could lead to job loss, as businesses may be forced to cut back on staff in order to offset the increased labor costs. Others argue that raising the minimum wage could lead to increased automation, as businesses look for ways to reduce their labor costs.
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which of the following explains why purchasing power parity does not hold? select an answer and submit. for keyboard navigation, use the up/down arrow keys to select an answer. a not all goods are traded. b shipping costs could explain differences in exchange rates. c there may be import taxes or restrictions which alter prices. d all of the above are reasons why purchasing power parity does not hold.
Purchasing power parity (PPP) does not hold due to various reasons. One of the reasons is that not all goods are traded, which is answer choice (a). This means that the prices of non-traded goods can differ across countries, affecting the overall PPP.
Another reason why PPP does not hold is the influence of shipping costs, as mentioned in answer choice (b). Shipping costs can vary depending on the distance between countries and the transportation methods used. These costs can affect the final price of goods, leading to differences in exchange rates.
Import taxes or restrictions, as stated in answer choice (c), also play a role in why PPP may not hold. Governments often impose tariffs or quotas on imported goods, which can alter their prices and distort the exchange rates between countries.
In summary, all of the above factors (not all goods being traded, shipping costs, and import taxes/restrictions) contribute to why purchasing power parity does not always hold. These factors introduce variations in prices across countries, affecting the relationship between exchange rates and the purchasing power of different currencies.
Hence Option a is correct.
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Give an example of a linear program such that at least three distinct vertices of the feasible region are optimal points. Justify your answer.
Linear programming refers to a method used to find an optimal value within a mathematical model that is subjected to several linear constraints. Linear programming models may have several optimal solutions or none. The optimal solutions in linear programming are usually found at the corners or vertices of the feasible region.
The feasible region represents all the points that satisfy the given constraints. Each optimal point is considered a vertex. A feasible solution is an optimal solution when the objective function has its maximum or minimum value. The objective function is a linear equation used to measure the optimal value of the linear programming model.
For a linear program to have at least three distinct optimal vertices, it must satisfy the following conditions: There must be at least three optimal solutions. The optimal solutions must occur at distinct vertices of the feasible region.
Each optimal solution must have an optimal value that is different from the others. An example of a linear program that has at least three distinct optimal vertices is as follows: Maximize Z = 5x + 4ySubject to:2x + 3y ≤ 123x + 2y ≤ 18x + y ≤ 10x, y ≥ 0.
The feasible region for the linear program is a triangular region with vertices at (0,0), (0,6), and (7,0). These vertices represent the optimal solutions to the linear program. All of them are optimal because the objective function attains the same maximum value of 30 at all three vertices.
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The total of income plus capital gains earned on an investment
is known as the return.
True or False
The given statement "The total of income plus capital gains earned on an investment is known as the return" is a true statement.
Want to know more about income and capital gains? Income is money earned from wages, salary, tips, interest on savings accounts, dividends on investments, rental income, and royalties on creative work. Capital gains, on the other hand, are earnings made by selling capital assets. It is the amount by which the price of an asset increases from the time of purchase to the time of sale. For example, if you purchased a stock for $100 and sold it for $150, your capital gain is $50.The total of income plus capital gains earned on an investment is known as the return. It is the total amount of money received on an investment. It is usually expressed as a percentage of the original investment. A higher return usually indicates a higher risk involved in an investment.
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market's structure is described by
Select one:
A.
the ease with which firms can enter and exit the market.
B.
the ability of firms to differentiate their product.
C.
the number of firms in the market.
D.
All of the above.
The market structure is described by the ease with which firms can enter and exit the market, the ability of firms to differentiate their product and the number of firms in the market. Hence, the correct option is D. All of the above. Market structure is defined as the organisational and other related characteristics of a market.
It is also defined as the degree to which companies in an industry can compete with one another. A market structure is essential in determining the degree and forms of competition that exist in a market. The market structure in the industry determines how companies behave and compete with each other.
In the study of market structure, some of the important factors that are considered include the nature of the product, number of sellers, ease of entry or exit, availability of substitutes, and the market's level of concentration. All of these factors play an important role in determining the nature and extent of competition that exists in the market.
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1 Employees earned $250,000,$26,775 was deducted for FICA and $62,000 for income taxes 2 Company recorded the emplover's share of FICA. 3 Company borrowed $100,00 n June 1, 2014, 6% interest. Note was due on May 31,2015 4 Prepare the adjusting entry to record interest owed at December 31, 2014. 5 Prepare the journal entry to record the interest and principal payments on May 31, 2015 6 On July 1,2014 , the company received $2,000 for one year's worth of services (retainer). 7 As of the December 31 , one half of the services were earned. 8 On June 30 th the remainder was earned.
1. The employees' earned $250,000; $26,775 was deducted for FICA, and $62,000 for income taxes. The employees' earned income is $250,000, while $26,775 is deducted for FICA (Federal Insurance Contributions Act) and $62,000 for income taxes.
2. The company recorded the employer's share of FICA. The employer's share of FICA (Federal Insurance Contributions Act) has to be recorded.
3. The company borrowed $100,000 on June 1, 2014, at 6% interest. The note was due on May 31, 2015.On June 1, 2014, the company borrowed $100,000 at 6% interest. The due date of the note is May 31, 2015.
4. Prepare the adjusting entry to record interest owed at December 31, 2014.The adjusting entry is as follows:
Interest Payable - $3,000 (calculated as $100,000 x 6% x 7/12)
Interest Expense - $3,000
5. Prepare the journal entry to record the interest and principal payments on May 31, 2015.
Interest - $6,000 (calculated as $100,000 x 6% x 12/12)
Notes Payable - $100,000
Interest Payable - $3,000
Cash - $109,000 ($100,000 + $6,000 + $3,000)
6. On July 1, 2014, the company received $2,000 for one year's worth of services (retainer).On July 1, 2014, the company received $2,000 as a retainer for one year's worth of services.
7. As of December 31, one-half of the services were earned. The following adjusting entry needs to be made on December 31, 2014:Unearned Revenue - $1,000 (calculated as $2,000 x 1/2)
Service Revenue - $1,0008. On June 30, the remainder was earned. The following journal entry is made on June 30:Unearned Revenue - $1,000Service Revenue - $1,000
Note: The company has earned the remaining half of the retainer, and the revenue needs to be recognized.
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Suppose that GDP (Y) iS 5.000. Consumption (C) is given by the equation C=500+.5(Y−T). Investment (I) is given by the equation I=2,000−100 r, where r is the real interest rate in percent. Government spending (G) is, 1000, and Taxes (T) are also 1,000. When a technological innovation changes the investment function to I=3,000−100r. I rises by 1,000 and r rises by 10 percentage points. I rises by 1,000 and r is unchanged. 1 is unchanged and r rises by 10 percentage points. I is unchanged and r rises by 15 percentage points.
ANSWER: r rises by 19 percentage points if I rises by 1000.
"I falls by 1000 and r rises by 19 percentage points."
Given Y = 5,000
C = 500 + 0.5(Y - T)
I = 2,000 - 100r
I' = 3,000 - 100r'
G = 1,000
T = 1,000
Let's first calculate the value of C Substitute the values in the given equation
C = 500 + 0.5(Y - T)
C = 500 + 0.5(5,000 - 1,000)
C = 500 + 0.5(4,000)
C = 500 + 2,000C = 2,500
Now let's calculate the value of I using the initial investment functionI = 2,000 - 100r
I = 2,000 - 100(r = 0) [r = 0 because the initial value of r is not given]
I = 2,000 And the value of r cannot be determined without its initial value.
Now, we will use the new investment function I' = 3,000 - 100r'
To find the change in I if r rises by 10 percentage points,
substitute r = r' + 10I' = 3,000 - 100r
'I' = 3,000 - 100(r + 10)I' = 3,000 - 100r - 1,000
I' = 2,000 - 100r
Therefore, I falls by 1000.Now to find the change in r if I rises by 1000,
substitute I = 3,000 - 100rI + 1,000
I = 3,000 - 100r(I + 1,000)/100
I = 30 - r/100r/100
I = 30 - (I + 1,000)/100
r = 2,900 - I/100
r = 2,900 - 1,000/100
r = 1,900/100
r = 19
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why are governments concerned with the apparent monopoly enjoyed by companies like amazon?
Governments worry about monopolies like Amazon due to their negative impact on competition, innovation, and consumer choice. Monopolistic control over pricing and market access raises concerns about fair competition and consumer welfare.
Monopoly refers to a situation where a single company dominates a particular market or industry, often resulting in limited or no competition. Governments are concerned about monopolies because they can lead to various negative consequences.
By having exclusive control over the market, a monopolistic company can potentially abuse its power, such as by setting high prices, restricting consumer choice, suppressing innovation, and impeding the entry of new competitors.
These actions can harm market dynamics, hinder fair competition, and negatively impact both consumers and other businesses operating in the industry.
Therefore, governments intervene to address monopolistic practices and promote a more competitive marketplace.
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Objective and subjective product criteria are developed during the _____ stage of the purchase decision process so that the decision can be made in the next stage.alternative evaluation
Objective and subjective product criteria are developed during the alternative evaluation stage of the purchase decision process so that the decision can be made in the next stage.
During the alternative evaluation stage of the purchase decision process, consumers assess and compare different options available to them. To make a well-informed decision, they develop objective and subjective product criteria.
Objective criteria are measurable and tangible factors such as price, features, and specifications, while subjective criteria are more personal and based on individual preferences and opinions.
By identifying these criteria, consumers can evaluate the alternatives based on their specific needs and priorities. Objective criteria provide a basis for comparing the functional aspects of products, while subjective criteria reflect emotional and subjective factors like brand reputation, aesthetic appeal, and user experience.
The development of both objective and subjective criteria allows consumers to weigh the pros and cons of each alternative and make a decision that aligns with their preferences and goals.
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X2 issued callable bonds on January 1, 2021. The bonds pay interest annueili \( \times 2 \) issued the bonds at:
A discount. Cannot be determinod from the given information. A premium. Face amount.
X2 issued callable bonds on January 1, 2021. The bonds pay interest annually. X2 issued the bonds at a premium.What are callable bonds?
Callable bonds are fixed-income securities that include an embedded call option that allows the issuer to repurchase or call back the bond before the bond's maturity date. In this case, the issuer, X2, has the right to repurchase the bond before the maturity date.Callable bonds come with a yield advantage.
This is because of the uncertainty of the bond's future cash flows when the call option is exercised before the maturity date.The price of callable bonds may differ from that of the bond's face value. The price difference depends on the prevailing market conditions during the bond's issuance.
Callable bonds may be issued at a discount or a premium. The opposite is also true: when interest rates are high, bond issuers must offer lower coupon payments to entice buyers, and bonds may be issued at a discount. In conclusion, X2 issued callable bonds at a premium.
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ABC Company provided $60.000 of services in Year 1 . ABC operates in a state with a 10% sales tax. All customers paid cash and ABC remitted the sales tax collected before the end of the year. What is ABC Net Income for Year 1 ? 554.000 $66,000 $60.000 None of these. Which transaction does the following journal entry depict? \begin{tabular}{lcc} \hline Accommt & Debit & Credit \\ \hline Sales Tax Expense & 100 & 100 \\ Sales Taxes Payable & & \end{tabular} Collecting on sales including sales tax. This journal entry does not depict any transaction we have learned about. Remitting sales taxes. Accruing sales taxes.
ABC Company's net income for Year 1 is $54,000.
To calculate ABC Company's net income, we need to consider the sales revenue and deduct any expenses. The $60,000 of services provided represents sales revenue. Since the state imposes a 10% sales tax, the tax collected on these sales would be $6,000.
However, this amount is not included in the company's net income as it is considered a liability. The journal entry provided shows a debit of $100 to Sales Tax Expense, indicating an increase in the expense, and a corresponding credit to Sales Taxes Payable.
This entry represents the accrual of sales taxes, recognizing the liability until the taxes are remitted to the relevant tax authorities. Therefore, the correct answer is None of these, as the net income for Year 1 is $54,000 ($60,000 - $6,000).
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ABC Company's net income for Year 1 is $54,000. To calculate ABC Company's net income, we need to consider the sales revenue and deduct any expenses.
The $60,000 of services provided represents sales revenue. Since the state imposes a 10% sales tax, the tax collected on these sales would be $6,000. However, this amount is not included in the company's net income as it is considered a liability. The journal entry provided shows a debit of $100 to Sales Tax Expense, indicating an increase in the expense, and a corresponding credit to Sales Taxes Payable.
This entry represents the accrual of sales taxes, recognizing the liability until the taxes are remitted to the relevant tax authorities. Therefore, the correct answer is None of these, as the net income for Year 1 is $54,000 ($60,000 - $6,000).
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Today you deposit $1000 in an account paying 6% interest. At the end of years 1, 2 and 3 you will deposit $100 in that account. What is the present value of that stream of cash flows?
The present value of the stream of cash flows, which includes a $1000 initial deposit followed by $100 deposits at the end of years 1, 2, and 3, can be calculated using the concept of present-value.
The present value (PV) of each cash flow is determined by discounting it back to its present-day value using the interest rate. In this case, the interest rate is 6% or 0.06. By discounting each cash flow, we can calculate their present values and then sum them up. The present value of the $1000 initial deposit is $1000, as it is not affected by the passage of time. For the subsequent deposits of $100 at the end of years 1, 2, and 3, we need to calculate their present values by dividing each cash flow by (1 + 0.06) raised to the power of the respective number of years. By summing up the present values of all the cash flows, we can determine the total present value of the stream of cash flows, representing its value in today's dollars.
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On 1 June 2022, Rhino Limited signed a two-year contract to rent a building in Whangarei. The agreed terms between the landlord and Rhino Ltd are as follows: - The monthly rent is $12,500. - Upon signing the agreement, the three-month rent should be paid as a security deposit/bond. The landlord holds the deposit for damages caused by the company or failure to pay rent. At the end of the two-year contract, the security deposit will be released subject to final inspection. - The landlord also requires that the company pays the two months' rent in advance on the date they signed the contract. Thereafter, monthly rent is to be paid to the landlord at the beginning of each month in advance. On 1 June 2022, Daniel made the necessary arrangements to pay a total of $62,500 to the landlord. The policy of Rhino Ltd regarding major transactions is transactions above $50,000 must be approved by the managing director of the company, Paul. At the time of the approval of the transaction, Daniel explained to Paul, that the total amount of $62,500 is expensed to the statement of profit and loss account at the time of payment. The company's year-end is 30 June 2022 . Required: Do you agree with Daniel's explanation to the Managing director, Paul, with regard to the treatment of the above payment of $62,500 ? Justify your answer in detail on how the company should define and recognise the above payment on 1 June 2022 and 30 June 2022. In your discussion, you must refer to specific paragraphs of the Conceptual Framework.
Yes, I agree with Daniel's explanation to the Managing director, Paul, regarding the treatment of the above payment of $62,500.
The company should recognize the payment of $62,500 on 1 June 2022 and 30 June 2022 as per the guidelines of the conceptual framework. According to the conceptual framework, a liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of economic resources.
In the given case, Rhino Limited has an obligation to pay rent of $12,500 per month for two years and two months' rent in advance as per the agreed terms. As a result, the company must record a liability of
$3,12,500 (25*12,500), of which $1,87,500.
However, the payment of $62,500 should not be expensed to the statement of profit and loss account at the time of payment, as it does not fulfill the definition of an expense, which is a decrease in economic benefits that results in a decrease in equity (other than those arising from distributions to owners).
It should instead be recorded as a prepaid rent expense in the balance sheet until it is amortized over the period of the lease, the company should record a prepaid rent expense of $62,500 on 1 June 2022 and then recognize the monthly rent expense of $12,500 and $10,000.
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SND: Aqua Fish Farming Amongst several breeds, Omikou Fish Farm raises and sells golden trout to the food industry. Commercial Food Buyers expect the fish to be in uniform sizes for consumer sales. At the time of sale, the size of golden trout is normally distributed with a mean of 30 centimeters and and a standard deviation of 1.4. Commercial Food Buyer randomly measures one golden trout. What is the probability it's length is 31 centimeters or less?
The probability that the length of the golden trout is 31 centimeters or less is 0.9332.
The given data:
Mean = μ = 30 centimeters
Standard deviation = σ = 1.4 centimeters
The given distribution is normal distribution which is generally represented as,
N(μ,σ)
Where, μ is the mean of the distribution and σ is the standard deviation of the distribution.
Now we have to find the probability that the length of the golden trout is 31 centimeters or less.
To find the probability, we will standardize the value x = 31 by using the formula of z-score.
z-score formula is given as,
z = (x - μ) / σ
Where,
z is the z-score
x is the value of the random variable
μ is the mean of the population
σ is the standard deviation of the population
By substituting the given values, we get
z = (31 - 30) / 1.4z = 0.71
Now, we have to find the probability of the random variable x is less than or equal to 31, which means we have to find P(x ≤ 31)
We can also write this in terms of z-score, which is P(z ≤ 0.71)
Now, we will find this probability from the standard normal distribution table.
Standard Normal Distribution Table:
The standard normal distribution table is given below:
Calculation:
P(z ≤ 0.71) = 0.7580
We can also write this in percentage form, which is 75.80%.
Therefore, the probability that the length of the golden trout is 31 centimeters or less is 0.9332.
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A company receives $113, of which $13 is for HST (harmonized sales tax). The journal entry to record the sale would include a A. debit to HST Expense for $13. B. credit to HST Payable for $13. C. debit to Sales for $113. D. debit to Cash for $100.
The journal entry to record the sale would include: D. Debit to Cash for $100.
The company received a total of $113, but $13 of that amount is specifically for HST (harmonized sales tax), which the company collects on behalf of the government. The company will record the actual cash received, which is $100 ($113 - $13), as a debit to the Cash account. This reflects the increase in the company's cash balance. The HST portion will be recorded separately in the appropriate accounts.
A company is an organization that engages in business activities with the aim of generating profit. It is a legal entity separate from its owners, known as shareholders or stockholders, and is formed through a process of incorporation. Companies can be of various types, including sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
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The following balances were extracted from the books of TopWatch Sdn Bhd for the year ended 31 December \( 2021 . \) Additional information: i. Closing inventory at 31 December \( 20.1 \) was valued a
The following balances were extracted from the books of Top Watch Sdn Bhd for the year ended 31 December (2021):
Additional information:
Closing inventory at 31 December (20.1) was valued at RM37,700.
Depreciation is to be provided as follows: Buildings - 3% per annum on cost
Furniture and fittings - 10% per annum on reducing balance basis Motor vehicles - 25% per annum on reducing balance basis Required:
Prepare a trading, profit and loss account for the year ended 31 December 2021.2. Prepare a balance sheet as at 31 December 2021. Trading, Profit and Loss Account for the year ended 31 December 2021 Particulars RM RM Sales110,800
Less: Cost of goods sold Opening inventory (1 Jan 2021)21,300
Add: Purchases82,400 Carriage inwards4,200 Less: Closing inventory (31 Dec 2021)(37,700) (70,200) Gross profit40,600 Less: Expenses Depreciation Buildings(6,000)
Furniture and fittings [10% of (18,600 + 7,400)](2,260) Motor vehicles [25% of (30,000 + 12,000)](10,500) Salaries and wages23,600 Rent and rates7,400
Electricity2,100 Insurance3,200 Printing and stationery 900
Miscellaneous1,800 Bank charges420 Audit fees3,000 (60,180) Net loss(19,580) Balance Sheet as at 31 December 2021
Particulars Note Amount RM Amount RM Fixed assets CostBuildings1Furniture and fittings1Motor vehicles1Less: Accumulated depreciation Buildings Furniture and fittings Motor vehicles(74,000)(18,600)(30,000)(22,800)(5,100)(15,000)
Net book value25,100Current assetsStock2Debtors3Bank balance4 Cash at bank and in hand3,70021,8005,6003,700Total assets30,300Current liabilities Creditors and accruals5Taxation6(2,400)(5,100)
Net current assets23,800Financed by: Capital and reserves Opening capital Add: Net loss(29,200)19,580(9,620)
Long-term liabilities Loan from Bank Rakyat7(15,000)
Total financed by29,200
Notes:1. Fixed assets Buildings RM Furniture and fittings RM Motor vehicles RM Cost 85,000 28,000 48,000
Less: Accumulated depreciation 11,000 7,600 18,000 Net book value 74,000 20,400 30,000
Depreciation Buildings = 3% x RM85,000 = RM2,550 Furniture and fittings = 10% of (RM28,000 + RM10,000) = RM3,800 Motor vehicles = 25% of (RM48,000 + RM24,000) = RM18,7502.
Closing inventoryRM37,7003. Debtors
RM Sales on credit125,000 Less: Cash sales14,200 110,800
Less: Bad debts1,200 109,6004. Bank balanceRM Loan repayment15,000
Add: Profit for the year19,580
Less: Drawings(30,000) 5,160 10,7605.
Creditors and accruals RM Creditors3,800 Accruals600 4,4006. Taxation RM RM Tax expense (see note 2)3,800
Less: Tax paid1,700 Tax payable2,1007. Loan from Bank Rakyat RM The loan was used to purchase motor vehicles.
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An
umbrella policy provision that REQUIRES the insured to pay a
portion of the loss NOT covered by underlying insurance is
A. a coinsurance clause.
B. a participation clause.
C. an excessive limit.
A coinsurance clause is the right response. Coinsurance clauses are umbrella policy clauses that compel the insured to pay a portion of the loss that is not covered by the underlying insurance.
This clause requires the insured to keep up a specific level of coverage under the underlying policies, usually a portion of the total value of the liability or property insured. The insured is responsible for the portion of the loss that the underlying insurance does not pay if the insured does not comply with this provision and a loss occurs. The coinsurance clause's purpose is to spread the risk between the insured and the insurer and encourage the insured to fully insure their assets.
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The Surf's Up issues 1,000 shares of 6%,$100 par value preferred stock at the beginning of 2020 . All remaining shares are common stock. The company was not able to pay dividends in 2020 , but plans to pay dividends of $18.000 in 2021 . Assuming the preferred stock is cumulative. how much of the $18.000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021 ?
The Surf's Up issues 1,000 shares of 6%,$100 par value preferred stock at the beginning of 2020. All remaining shares are common stock. The company was not able to pay dividends in 2020, but plans to pay dividends of $18.000 in 2021.
Assuming the preferred stock is cumulative. how much of the $18.000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021?
Given, The Surf's Up issues 1,000 shares of 6%,$100 par value preferred stock at the beginning of 2020. All remaining shares are common stock. The company was not able to pay dividends in 2020, but plans to pay dividends of $18.000 in 2021. Assuming the preferred stock is cumulative.
To calculate the amount of dividend paid to preferred stockholders and common stockholders in 2021, we first need to find the dividend for preferred stockholders before the dividend for common stockholders is calculated.
As preferred stocks are cumulative, preferred stockholders receive unpaid dividends from previous years in addition to current year dividends.
Before the dividend for common stockholders is calculated, the preferred stockholders must receive the unpaid dividend from the previous year, which was not paid.
Dividend for preferred stockholders= (Number of preferred shares × Par value per share × Dividend rate) + (Amount of unpaid dividends)1000 × $100 × 6% + 0 = $6,000.
The dividend to be paid to preferred stockholders is $6,000.
Therefore, the amount of dividend to be paid to common stockholders is: $18,000 − $6,000 = $12,000.
Hence, preferred stockholders will be paid $6,000 and common stockholders will be paid $12,000.
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Which strategy attempts to establish and maintain the image that an SBU's product or services are fundamentally unique from other products or services in the same market segment?
A) corporate strategy
B) differentiation strategy
C) related diversification strategy
D) unrelated diversification strategy
The strategy that attempts to establish and maintain the image that an SBU's product or services are fundamentally unique from other products or services in the same market segment is the differentiation strategy.
The differentiation strategy is focused on creating a unique and distinctive positioning for a product or service in the market. It involves developing features, qualities, or attributes that set the offering apart from competitors and create a perception of value and uniqueness among customers. By emphasizing the unique aspects of their products or services, companies implementing a differentiation strategy aim to attract customers based on their distinctive features rather than solely competing on price. This strategy helps to build a competitive advantage and create a perception of superiority in the market segment, thus distinguishing the SBU from its competitors.
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A bank has $2 million in checkable deposits. In the bank's balance sheet, this would be an example of:a liability.
The checkable deposits of $2 million in a bank's balance sheet would be classified as a liability. In a bank's balance sheet, checkable deposits represent the amount of money held by customers in their bank accounts.
It can be easily accessed and withdrawn through checks, debit cards, or other electronic means. Liabilities, on the other hand, are obligations or debts owed by a bank to external parties. They represent the bank's liabilities or responsibilities towards its customers and other stakeholders.Checkable deposits are considered liabilities for a bank because they represent the bank's obligation to return the deposited funds to customers upon their request.
By classifying checkable deposits as a liability, the bank acknowledges that it owes the deposited funds to its customers and is responsible for ensuring their availability for withdrawal.To summarize, the $2 million in checkable deposits in the bank's balance sheet is considered a liability because it represents the bank's obligation to return the deposited funds to its customers.
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7. Describe two PESTEL components that could or have impacted
APPLE’s Strategy?
PESTEL analysis is a strategic management tool that provides a comprehensive framework to analyze different external factors that could have an impact on a company.
The two PESTEL components that have or could impact Apple's strategy are as follows:
1. Economic factors:Apple is known to be one of the most valuable companies in the world. The global economic downturn due to the COVID-19 pandemic has impacted Apple's sales.
The impact of the pandemic could further lead to a recession, which would negatively affect Apple's sales and growth prospects. If people's income decreases, they may not be able to afford Apple products.
2. Technological factors:Apple is known for its innovative products and services. Technological advancements can impact the way Apple operates. The emergence of new technology can be an opportunity or a threat to Apple. Apple has to adapt to new technologies and continue to innovate to remain competitive.
For instance, the development of artificial intelligence can provide new opportunities for Apple to offer new products or services.
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QUESTION ONE participating in spoet betting she is contemplating investing Kes 5 millon in stocks ef Kiscrian Lid boday that pays a 6 ; annual dividead. The T-6ill rate is 7.90 and Diana eopects the market bo rise in value by 30 for per year. The Directors of Kiverian Lid have apgeved an ecpension popoct thon is ecpeced to increase the fim's ancual eash inflew by Kib 100 million. Infcemation on this pryoct wilt be relewed to the market logether with the amosecement of the eights issue. This dividend together with the company's camings is evpectod wo grow by 9% annually affer itseititg in the evpanisod project in ouder lo effectively manage it risk, Kiscrian lad imected in Zasset poetfolie to derersify it incomes. Their weiphes of the msets are 4% mal soe repectively, their standand deviatiens are 2th and 3.D and their botas ace 69 and 12 . rexpedively. Their muftal correlation coeffecient is 05. Reguiont: (a) Caloulate the expecied seturs of the portfolio (2. Miarks) (b) Calculare the pontotis bera (5 Marks) (60)Based on the results in (i) above, comment en the risk profile of Kiverian Management Limited, (3 Marks) felationt bo the maket (d) Do you think Diana has adopod the ripht inveameet stratezy convidering har age and itheckesen time berizon? Justify your anvwer 42 Marks) (e) Tleveting in shares is riakies than investing in fived-inceeme investmenti. Having a pontsolio of shares subjects" iavestors 10 an emodienal noller-ecaster". Thits was a cemment made by ene H Expert Pandist during an laxcsiment modia coverage at KTN TV. Comment on the statement alene and ciscuss fext key risks associaked with sharei. 43 Marks) QUESTION TWO (a) The following drata was oberincal form Befoum Microfinance- a lisensod microfinasce Black buring the financial year 2000−2021 : Net Income: \$. 1,500000 Number of equiry shares (20121): 2e0,000 Dividend paid: 3 . 4ncoio Requiont: Calculate the follereing marked value ratios foc Bakem Microfinance (i) Eamings per share (EPS) (2. Marias) (ii) Dividend per share (DMrS) (2) Marks) (iii) Divisend Payout ratio (2. Marks) (iia) Resention Patio (2. Marka) (b) Yew have been tasked by the lieksom Microfinance management to calculde the value of a 3 .
(a) Market value ratios of Bakem Microfinance:(i) Earnings per share (EPS):EPS = (Net Income - Dividends)/ Number of sharesEPS = (1,500,000 - 340,000)/200,000 = 7.8
(ii) Dividend per share (DPS):DPS = Dividends / Number of sharesDPS = 340,000/200,000 = 1.7
(iii) Dividend payout ratio:Dividend payout ratio = Dividends/Net IncomeDividend payout ratio = 340,000/1,500,000 = 0.23(iv) Retention ratio:Retention ratio = (Net Income - Dividends)/Net IncomeRetention ratio = (1,500,000 - 340,000)/1,500,000 = 0.77
(b) Calculation of the value of a 3.5% coupon bond:Let P be the price of the bond. Then:PV of the bond's cash flows = P*(1 - 1/(1+r)n)/r + FV/(1+r)nPV of the bond's cash flows = 35*(1 - 1/(1+0.1)10)/0.1 + 1000/(1+0.1)10PV of the bond's cash flows = 787.39 + 386.97 = 1174.36The value of the bond is $1174.36.
(a) Expected returns of the portfolio: Let P be the portfolio containing Kiscrian Lad.
Then:[tex]wP, = w1R1 + w2R2E(Rp) = w1E(R1) + w2E(R2) = (0.04 * 12) + (0.06 * 100) = 6.16%[/tex]
Expected returns of the portfolio are 6.16%
(b) Portfolio Beta:
[tex]βp = w1β1 + w2β2βp = (0.04 * 69) + (0.06 * 12) = 5.16[/tex]
Expected portfolio beta is 5.16.
(c)
Comments on risk profile of Kiverian Management Limited with respect to the market:Kiverian Management Limited is exposed to market risks, but this risk can be hedged against by investing in the assets with negative correlation coefficients with the market.(d) Whether Diana has adopted the right investment strategy:Yes, Diana's investment strategy is right because she is diversifying her income by investing in different assets with low correlation coefficients, therefore reducing the risk of her portfolio.
(e) Comment on the statement and key risks associated with shares:Shares are risky investments because they are volatile and their value is affected by many factors such as market trends, company earnings, economic conditions, etc. Therefore, investors must be prepared to deal with the volatility associated with shares and manage their emotions. Additionally, other key risks associated with shares include liquidity risks, concentration risks, and currency risks.
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